Legal News

An Egad for eBay; French Court Rules for LVMH in IP Dustup

By Ashby Jones

From time to time, we come across legal decisions from abroad that make us situp and wonder, wonder whether the case would have been decided the same way here stateside. Many of these come from France.

One such case came down today. A court in Paris found that Internet auctioneer eBay harmed the image of luxury-brand Louis Vuitton after eBay paid to have Internet searches directed to its site that included misspellings sometimes used to sell counterfeit goods. The court ordered eBay to pay Louis Vuitton €200,000 ($275,000) in damages and to stop paying search engines to direct certain key words to the eBay site. Click here for the WSJ story.

The case concerns payments made by eBay to search engines such as Google and Yahoo for directing searches using particular keywords to eBay’s site. That’s a fairly common practice. EBay, like many online businesses, pays to have large numbers of words call up a link to its site when typed into a search engine.

But Thursday’s ruling condemned eBay for buying terms such as “Louis Viton” or “Wuiton,” as these are often used to advertise fake Louis Vuitton products. Trading such products on eBay damages Louis Vuitton’s image, the court said.

“Louis Vuitton welcomes this decision, which confirms established case law that aims to protect the consumer from the illicit use of company trademarks,” a spokesperson for Louis Vuitton said in a prepared statement.

But eBay says the lawsuits are just a way for the luxury companies to tarnish eBay’s own image, so that they can control who sells luxury products and at what price. EBay France’s managing director, Yohan Ruso, said the search terms cited in the lawsuit were spelling errors and that eBay had no intention of aiding the sale of fake products.

“The fine is totally disproportionate,” Ruso said. “It shows that LVMH wants to damage the reputation of eBay.”

Would this be the case in the U.S.? Would eBay get in trouble for paying for ads that come up whenever Louis Vuitton is misspelled in a a Google search? Would LV’s claim that such practice diminishes the value of its trademark really fly? Any IP junkies out there want to take a whack at it?

Full post as published by Law Blog - WSJ.com on February 12, 2010 (boomark / email).