Louis Vuitton Wins Again

Or, eBay Loses Again in France.  Last week the Paris District Court held eBay liable for using LVM’s trademarks as AdWords to, according to an eBay spokesperson, “direct buyers’ listings for authentic goods from eBay sellers.”  The court ordered eBay to pay 230,000 € for damages and LVM’s legal fees and 1,000 € for every future violation.  LVM and eBay have duked it out before; in June 2008 LVM won a suit against eBay over auctions of counterfeit Louis Vuitton handbags, the court holding that eBay did not employ adequate measures to prevent the sale of fake goods.  Last year the Paris District Court fined eBay for continuing violations of the 2008 order.

Other luxury retailers have sued eBay for similar claims on both sides of the Atlantic.  In August 2008 a Belgian court ruled for eBay in a suit over the sale of counterfeit Lancome perfumes.  The court held “that eBay is a passive provider of ‘host’ services, as that term is defined in a European Community policy directive, and that it’s therefore entitled to more legal leeway than a brick-and-mortor auctioneer would receive if counterfeit goods were being sold on his premises,” reasoning that echoes what one would expect to be the outcome of the same claim under U.S. law.  In July 2008 (eBay had a busy summer) Tiffany and Company lost a suit in federal court in New York City for trademark claims arising from eBay auctions of counterfeit trademarked goods.  That court held “to the extent that eBay may have possessed general knowledge of infringement and dilution by sellers on its Web site, eBay did not possess knowledge or a reason to know of specific instances of trademark infringement or dilution as required under the law”–a clear expression of the difference between U.S. and French law on website liability.

eBay Liable for Counterfeits

A French court ordered eBay to pay Louis Vuitton and other makers of luxury bags €38.6 (variously reported as $60.8 and $63.2 million) in damages for sales of counterfeit handbags on the website, the largest damage award eBay has incurred in connection with its quality-assurance practices.  The court ruled eBay did not employ adequate measures to prevent the sale of fake bags.  eBay announced it will appeal the decision.  The New York Times reports that the decision “is unlikely to have a drastic effect on the way eBay conducts business because it has already made changes to police its site for counterfeit goods.”  eBay noted that it employs over 2,000 people to deal with sales of counterfeit goods and that it cuts of 95% of fraudulent sales before they occur.  Of course with millions of ongoing active sales at any moment, there remains considerable potential for fraud.