EBay wins French case over liability for fakes

Out-Law News | 14 May 2009 | 3:06 pm | 1 min. read

Cosmetics firm L'Oréal has failed in its bid to hold eBay responsible for the sale of counterfeit goods in France. A French court said that the online auction site had done all that it had to to stop counterfeit sales.

EBay has faced many cases in many countries in which producers of goods have tried to hold it responsible for eBay users' sales of counterfeits. It has won some of those cases and lost others, but two of its defeats have come in France, whose courts are seen as offering that country's luxury brands legal protection.

Luxury goods firm LVMH won a €39 million payout in the French courts last year over the sale of fake goods, while eBay had to make a court-ordered €20,000 payout over the sale of fake Hermès bags.

Ebay does not pre-screen sales of branded goods, but it does suspend sales when rights owners contact it claiming that fakes are being sold. Brand owners have argued that they should not bear the administrative burden of spotting all fakes and notifying eBay of their sale.

Paris's Tribunal de Grande Instance has rejected L'Oréal's claim that eBay had liability for the sale of fake goods. L'Oréal had said that it was profiting from the sale of the fakes.

The Court ordered the two companies to work together to solve the problem, and they have agreed to enter mediation.

"We are confident that ultimately rights holders will realise that Ebay is not the enemy here," said Alex von Schirmeister, the general manager of eBay France, according to the Financial Times newspaper. "Ninety-nine per cent of the transactions on eBay are absolutely legitimate."

EBay won its case against L'Oréal in the Belgian courts last year in a similar case. "The litigation of counterfeits against eBay has been exposed as merely a stalking horse," said a company statement after that victory. "EBay provides a vibrant and trusted marketplace that gives European consumers a good deal. We work to tackle the menace of counterfeit through action and co-operation with rights owners."

It also won a US case last year in which jeweller Tiffany failed to hold it responsible for counterfeits. It had argued that eBay did not do enough to stop fake sales.