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eBay Victorious Over Rolex in Latest Counterfeiting Lawsuit
by
Anne Szustek
Online auction giant eBay won a lawsuit in Germany in a case brought by Rolex Group about counterfeit watches sold by third parties on the auction site.
eBay Wins German Lawsuit
A court in the German city of Dusseldorf on Tuesday ruled in favor of eBay on the grounds that the company had removed from its site auctions of counterfeit watches.
Court spokesperson Ulrich Egger told Bloomberg, “EBay now uses a filter program to detect offerings that blatantly violate trademark rights. … Ebay doesn’t have to review each item before it gets posted on its site, because it would jeopardize the whole business model.”
Rolex has already sued eBay over the alleged sale of counterfeit watches in 2001. That decision was partly overturned in 2007 by a Dusseldorf court, stipulating the auction site must take due diligence to curb the sale of fake goods.
eBay won a similar court case last July filed by jewelry company Tiffany. U.S. District Court Judge Richard Sullivan wrote in his decision, “Tiffany must ultimately bear the burden of protecting its trademark.”
That ruling, coupled with the verdict in the Rolex suit, provides a bit of solace for third-party online auctioneers, as it establishes that Web-based enterprises do not hold sole responsibility for patrolling how trademarks are used on their sites.
“If the Web companies shoulder too much of the burden, their ability to wring a profit from the sales or the advertising that appears alongside the commerce could be compromised,” wrote BusinessWeek.
Court spokesperson Ulrich Egger told Bloomberg, “EBay now uses a filter program to detect offerings that blatantly violate trademark rights. … Ebay doesn’t have to review each item before it gets posted on its site, because it would jeopardize the whole business model.”
Rolex has already sued eBay over the alleged sale of counterfeit watches in 2001. That decision was partly overturned in 2007 by a Dusseldorf court, stipulating the auction site must take due diligence to curb the sale of fake goods.
eBay won a similar court case last July filed by jewelry company Tiffany. U.S. District Court Judge Richard Sullivan wrote in his decision, “Tiffany must ultimately bear the burden of protecting its trademark.”
That ruling, coupled with the verdict in the Rolex suit, provides a bit of solace for third-party online auctioneers, as it establishes that Web-based enterprises do not hold sole responsibility for patrolling how trademarks are used on their sites.
“If the Web companies shoulder too much of the burden, their ability to wring a profit from the sales or the advertising that appears alongside the commerce could be compromised,” wrote BusinessWeek.
The rulings seem to directly contradict the European courts that found eBay liable earlier last summer for sales of fake Hermès and Louis Vuitton goods.
Fashion conglomerate LVMH, which owns high-end labels Louis Vuitton, Dior and others, found that some 90 percent of Dior and Louis Vuitton goods auctioned on eBay were fakes. The court awarded $63 million to LVMH for what it deemed eBay’s “culpable negligence,” and required eBay to pay nearly $20 million in additional damages for unauthorized sale of the brand's perfumes.
Less than a month earlier, French fashion house Hermès, known for such signature items as the pricey Birkin bag, won $30,000 in damages from eBay and sellers over auctions of two counterfeit Hermès bags. That court cited eBay for “failing to act within their powers to prevent reprehensible use of the site.”
Fashion fakes constitute a $600 billion worldwide industry—one that’s been linked to illegal activities much more tangible than infringement on intellectual property laws, including child labor and the financing of narcotics trafficking and terrorism. New York City Police Commissioner Ray Kelly alluded that fashion counterfeiting rings helped fund the 2004 Madrid train bombings.
Fashion conglomerate LVMH, which owns high-end labels Louis Vuitton, Dior and others, found that some 90 percent of Dior and Louis Vuitton goods auctioned on eBay were fakes. The court awarded $63 million to LVMH for what it deemed eBay’s “culpable negligence,” and required eBay to pay nearly $20 million in additional damages for unauthorized sale of the brand's perfumes.
Less than a month earlier, French fashion house Hermès, known for such signature items as the pricey Birkin bag, won $30,000 in damages from eBay and sellers over auctions of two counterfeit Hermès bags. That court cited eBay for “failing to act within their powers to prevent reprehensible use of the site.”
Fashion fakes constitute a $600 billion worldwide industry—one that’s been linked to illegal activities much more tangible than infringement on intellectual property laws, including child labor and the financing of narcotics trafficking and terrorism. New York City Police Commissioner Ray Kelly alluded that fashion counterfeiting rings helped fund the 2004 Madrid train bombings.
Background: Designer labels’ struggles against counterfeiting
A statement from eBay following the Paris court judgment favoring LVMH read that the “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. … We will fight this ruling on their behalf.”
Source: Time
BusinessWeek writes, “Alexandre Menais, who heads an anti-counterfeiting unit within eBay’s European operations, says the company has not decided whether to appeal” the Hermès ruling. Other cases pending against the online auctioneer could result in tightening of eBay’s policies for regulating sellers. The site “maintains that it actively fights counterfeiting through its Vero program that allows trademark owners to complain about suspicious listings.”
Source: BusinessWeek
The Web has toughened Louis Vuitton’s fight against fakes of its signature print. In 2004, the label requested that ISPs put a halt to over 205,000 online auctions and had 245 sites selling counterfeit goods shut down. Nikolay Livadkin, the manager of LV’s anti-counterfeiting unit, believes that online sales account for some 20 to 30 percent of the fake goods market worldwide.
Source: Managing Intellectual Property
Opinion & Analysis: “Judge to Tiffany: Police Your Own Brand”
BusinessWeek writes that the decision in Tiffany v. eBay “is indicative of other lawsuits that are trying to put more onus on Internet companies to police their pages and ensure they’re not being used as a conduit for copyrighted content and pirated or counterfeit goods.”
Source: BusinessWeek
Video: “Fakes are Never in Fashion”
“Modern technology, and especially digital technology, makes it easier to manufacture things and copy them at a relatively high level of standard,” said intellectual property expert Frederick Mostert on a clip hosted by Fakes are Never in Fashion, Harper’s Bazaar’s anticounterfeiting campaign Web site.
Source: Fakes are Never in Fashion
Reference: Guides to fashion and online selling
FindingDulcinea’s Web Guide to Fashion includes the best sites to stay abreast of trends and where to go to purchase legally branded apparel and accessories.
Source: findingDulcinea
FindingDulcinea’s Web Guide to Online Selling includes tips on protection for buyers and sellers and links to the most popular online auction sites, including eBay.
Source: findingDulcinea
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