Louis Vuitton and Dior Couture sued the online biddings website EBay for trademark infringement. The plaintiffs claim the website is not vigilant enough as regards the selling and purchasing of goods marked with their brands via EBay, and ask for 37 millions euros as damages.
This estimation is based on a study of the bidding offers on a three-month period, according to which 90% of the Dior and Vuitton items sold would be counterfeited ones.
Eventhough Vuitton and other luxury companies are used to suing people selling counterfeited goods via EBay, it’s the first time in France that the bidding company is directly concerned. In the United States, the jeweler Tiffany already engaged the same action, not settled yet. In its general conditions, EBay has always excluded any liability as to the quality or the origin of the sold goods.
Eventhough it deals with sales by auction, EBay considers that it does not have the same obligations as traditional auctioneers.
However the question is to determine whether EBay has an obligation to control the goods sold, and should the occasion arise, if it should be an obligation to use all reasonable means, or an obligation to achieve a particular result.
According to the EBay lawyers, French law relating to the trust in digital economy should be applied, and EBay could therefore not be held responsible for any activity or information entered by a user if Ebay had not been warned of its illegal character or if Ebay promptly acted to suppress the illegal activity or information.
Moreover, they explain that EBay does have a verification system named VeRo (Verified Rights Owners) which enables the intellectual property rights owners to ask for the withdrawal of one auction for a counterfeiting item.
On the other side, LVMH intends to use the Google case they won in which Google was condemned for proposing adwords counterfeiting Louis Vuitton’s rights and to apply the « landlord strategy » by directly suing the owner of the distribution network.
In our view, EBay should not be considered as a passive party to transactions done since they perceive a commission on the price, supply the payment system and sometimes even give place to real personal stores. Consequently they should be held liable, regarding the loyal business they are supposed to offer. We will keep you informed of the developments in the next issues!