Ben Moshinsky
French firm Jeantet Associés has scored a €40m win for retailer LVMH after a French court ruled that auction site Ebay failed to block the sale of counterfeit LVMH goods.
French firm Jeantet Associés has scored a €40m (£31m) win for luxury goods retailer LVMH, after a French court ruled that online auction site Ebay failed to block the sale of counterfeit LVMH goods.
Ebay will appeal the controversial ruling. The decision could damage its business model by suggesting the company is responsible for the counterfeit goods that appear on its website. The company issued a strongly-worded statement following the decision.
“If counterfeits appear on our sites we take them down swiftly, but today’s ruling is not about our fight against counterfeit, today’s ruling is about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers everyday.”
Name partner of Alain Bensoussan Avocats and internet specialist Alain Bensoussan acted for Ebay. The company said that it invests more than $20m (£10m) each year to ensure counterfeit goods are found and removed, but that it is not legally obliged to do so.
The decision from the Tribunal de Commerce comes weeks after another French court ordered Ebay to pay €20,000 (£15,000) to luxury goods group Hermès in a similar dispute.
Readers' comments (21)
IP or not IP | 3-Jul-2008 10:47 am
So surprised
What surprises me is that before this decision the High Court decided several times that Ebay was not liable as a seller because it is a platform for sales.
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Oliver Sacchi | 3-Jul-2008 12:30 pm
The 'real thing'?
From a consumer's point of view rather than a lawyer's, it does strike me that if people aren't able to tell that 90 per cent of these things are fake, it might be because the 'real thing' is not actually any better than the counterfeit - just more expensive.
Further to that point, if people are stupid and shallow enough to want something not because it's better but just to show other people how much money they have to waste, I don't feel very sorry for them when they get ripped off - or for a company that sells such ordinary goods at such extraordinary prices.
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Anonymous | 3-Jul-2008 3:50 pm
hanbags at dawn
two elements here - illegal use of trade marks (possible 10 years in chokey in the UK!) and the civil issues of eBays responsibility for these sales.
Also many eBay traders do not relaise they are in trade or business and ignore relevant laws
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Anonymous | 3-Jul-2008 4:44 pm
Another French lawyer ...
To French partner and to anonymous :
- should I tell my French clients that when they are brought before an English or a Scottish court, we already know where the judge's sympathy lies?
- the current decision has been rendered by the Tribunal de Commerce de Paris, which has been judging some of the biggest commercial cases in France each year and for a few centuries ... It's true they are lay magistrates but it 's certainly not a valid reason to cast some doubts on the soundness of the judgment .
I rather think that "French partner" is a lay lawyer ... ;-)
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Anonymous | 3-Jul-2008 5:12 pm
It is fake... is it not?
Mmm - are they (all) really fakes? There are many branded goods manufactured in China. Are we merely seeing less expensive versions of products not necessarily in the traditional 'counterfeit' sense?
LV and others are facing new levels of unfair competitive practices (from a Western perspective that is). Perhaps this action is more a meaure to ensure the integrity of their SDAs..?
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Anonymous | 3-Jul-2008 10:25 pm
Not so surprised ...
This decision appears (and I say "appears" as I have not yet read it) consistent with established French case law on the liability of on-line service providers.
On-line service providers who provide their users with "valued-added" services and functionalities and have a high degree of visibility of the types of activities which go on through or on their site cannot simply wring their hands of responsibility for infringing conduct of its customers.
It appears in this case that the court considered that eBay was acting as more than just a "mere conduit". Moreover, I would note that the Paris Tribunal de Commerce, although comprised of "lay" judges (whatever that may mean) is indeed a respected jurisdiction in commercial matters.
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Anonymous | 4-Jul-2008 9:54 am
And the appeal...?
Not the first surprising decision by a lay judge in favour of LVMH. In 2002 they sued Morgan Stanley over the bank's analyst research coverage of LVMH and were awarded EUR30 million. In 2006 LVMH had to reimburse Morgan Stanley with the full amount when the Paris Court of Appeal overturned the judgment. Wouldn't be surprised if this ruling is also overturned at appeal.
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Anonymous | 4-Jul-2008 10:41 am
Repercussions?
Does this mean that those who facilitate street markets will now be held responsible for counterfeit goods sold from stalls?
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Paul Carlyle, head of media and technology, Shepherd and Wedderburn | 4-Jul-2008 11:33 am
Ebay
This is a slightly surprising decision. French courts have not traditionally been seen as sympathetic to the needs of brand owners. Previous decisions have been more orientated toward the impact on the consumer.
This ruling has the potential to fundamentally alter the way that online auction sites do business. With the finding in one EU member state that eBay’s Verified Rights Owner programme is inadequate, it is more likely that courts in other jurisdictions may make similar findings.
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Anonymous | 6-Jul-2008 2:50 pm
Hermes counterfeit
Three years ago, I bought a Hermes scarf on [popular auction website] from the US. When it arrived by post to the UK it was a counterfeit. I tried to complain to [the site] and raised a claim against the seller and i lost. The seller who sold me the fake scarf won. I was not even allowed to return it.
I stopped buying anything on [the site] after that. I am so glad that LVMH and Hermes are raising this issue and winning.
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