eBay Ebay became widely popular in its early years as a virtual place where customers could find cheap brand-name products. However, the cheap prices raised suspicions, leading to claims from luxury purveyors that counterfeit products were being sold.
It’s possible to hold eBay responsible if some counterfeit products are sold trough the web site?
2008 In 2008 LVMH accused eBay to of allowing trade in counterfeit goods. LVMH also claimed that the sale of real perfumes trough non approved distribution channels such as eBay hurt is business.
The dispute take place in front of the Paris Commercial Court.
On 30th June 2008 LVMH and several LVMH group compenies obtained a strong victory through three decision af the Paris Chamber of Commerce. The Court ruled that US Company eBay Inc. and Swiss company eBay International AG had been negligent in allowing the sale of counterfeit goods on their auction sites
…and ordered eBay to pay almost € 40 milion in damages to varius companies of the LVMH group, includin Dior e Louis Vuitton.
The appeal… In its recent decision of 3rd September 2010, the Paris Court of Appeal confirmed the three decision on the merits of the case and found eBay liable for infringment of the rights of LVMH. But the Court reduced the sum to € 5.7 milion.
The appeal court expressly referred to and quoted the decision of the Court of Justice of the European Union (ECJ) of 23rd March 2010 in LVMH v Google Inc, in which the judges considered that it followed from Recital 42 in the Preamble to the EU E-commerce Directive (2000/31/EC) that the exemptions from liability established in that directive cover only cases in which the activity of the information society service provider is “of a mere technical, automatic and passive nature”, which implies that that service provider "has neither knowledge of nor control over the information which is transmitted or stored".
The appeal court judges applied this definition to eBay's activities to rule that eBay could not be considered a mere hosting provider, but was also a broker, thereby confirming the commercial court's decisions. The appeal court considered that the service provided by eBay required eBay to verify that the goods promoted on its websites were not counterfeits, no matter how high the number of transactions.
In 2004, Tiffany, the luxury jewellery brand, commenced US proceedings against eBay for direct and contributory trade mark infringement. The allegation of direct infringement was the use of “Tiffany” advertising links, which eBay bought on internet search engines (e.g. Google and Yahoo). These advertising links led to sellers, some of whom were offering counterfeit goods on eBay. The contributory infringement allegation was that eBay knowingly facilitated trade mark infringement.
Tiffany’s research indicated that a massive proportion of the goods on sale online were fake. Effectively, Tiffany were asking eBay to authenticate all of the sales of “Tiffany” products.
In July 2008, the Federal District Court for the Southern District of New York ruled in favour of eBay.
The judge stated that in order for Tiffany’s case to succeed, US trade mark law required eBay to have more specific knowledge of the infringing items sold online (as opposed to general knowledge that a large percentage of the listings were for fakes) so they were held not to be liable for contributory trade mark infringement. He also held that Tiffany had to bear the ultimate burden of protecting its trade marks. There is little case law in the US which clarifies who should monitor the goods on online auction websites and also check the authenticity of the goods. Tiffany have appealed this decision to the US 2nd Circuit. Finally, the Supreme Court rejected the appeal.
"It is true that eBay did not itself sell counterfeit Tiffany goods; only the fraudulent vendors did, and that is in part why we conclude that eBay did not infringe Tiffany's mark" the appeals court said in its ruling.