Legal News

Nations Torn over eBay Liability in Fake-Goods Cases

By Dan Slater

We’ve been tracking the many lawsuits over whether eBay is responsible for vetting counterfeit goods that are sold on its site. Why? Because circuit splits are nice, but country splits are even better.

So far here’s where we stand: Last month, a French court upheld a ruling that eBay pay LVMH Moët Hennessy Louis Vuitton and sister company Christian Dior $63.1 million in damages for auctioning fake goods. LVMH had accused eBay of not taking the necessary steps to ensure that the accessories sold on its site weren’t counterfeit. Some called it a hometown verdict. Then, a week later, across the pond, eBay’s fortunes turned. U.S. District Judge Richard Sullivan ruled that Tiffany, not eBay, must bear the burden of monitoring its trademark, including that lovely Tiffany Blue box, which helps us all aspire to a higher standard.

Today, reports Roger Parloff over at Fortune’s Legal Pad blog, the eBay counterfeit saga takes us back to Europe. In a case brought by L’Oréal Group, the Belgian Tribunal de Commerce exonerated eBay of any wrongdoing related to counterfeits of Lancôme perfumes.

The Belgian ruling, reports Parloff, finds that eBay is a passive provider of “host” services, as that term is defined in a European Community policy directive, and that it’s therefore entitled to more legal leeway than a brick-and-mortar auctioneer would receive if counterfeit goods were being sold on his premises.

“L’Oréal believes the court to be mistaken in its decision to minimise the role of eBay in the sale of products on its platform,” said the company in a statement. “L’Oréal believes that this judgment by the court digresses from the interpretation of the eCommerce Directive provided in recent months by the European Commission. . . . L’Oréal intends to appeal this decision.”

We’re not sure how country splits get resolved in such matters (or if they get resolved at all), but we’ll be sure to keep you posted on the next court to weigh it, be it in Moscow, Rio or Timbuktu.

Full post as published by Law Blog - WSJ.com on August 12, 2008 (boomark / email).