Friday, June 20, 2008

eBay Convicted in Counterfeit Case

eBay Convicted in Counterfeit Case

Finally something is happening, it's a small fine but it sets the precedent maybe now we will see some action in other areas.

eBay- Convicted- in-Counterfeit- Case


In what has the makings of a landmark decision, a court in Reims, France,
has ruled that eBay is directly responsible for the sale of bogus Hermes
bags on its auction site, and ordered the e-commerce giant to pay 20,000
Euros, or approximately $30,000, in damages. The ruling, handed down
Wednesday, stated that eBay "failed to act within [its] powers" to prevent
counterfeiting activity within its online community, according to a news
report, which stated the verdict was the first of its kind in France.

In a statement issued following the ruling, eBay said: "eBay takes the issue
of counterfeiting very seriously and we condemn it outright. Today's court
ruling relates to past seller verification issues. The court acknowledged
that eBay subsequently addressed these issues with its enhanced
anti-counterfeiting measures through its VeRO initiative."


A handful of similar cases are pending against eBay in five European
countries, and at least one is under review in the U.S. How heavily the
Hermes decision will factor in the direction of the remaining lawsuits
depends largely on the locality of the individual cases, notes Aaron
Kessler, senior research analyst with Piper Jaffray & Co. in East Palo Alto,

"The question is, who is the merchant of record, and how much is eBay
responsible for verifying the authenticity of the items sold on its site,"
Kessler says. "Each country might have its own interpretation of that. If
people don't trust what they're buying, that's a problem for eBay"

The material impact of the court fines will barely register at eBay-$30,000
is pocket change for the multibillion- dollar Internet goliath. However, eBay
has plenty to fear in terms of the psychological effect on buyers. While
it's probably close to impossible to completely eliminate illicit activity
on such an online venue, the company can and should take steps to increase
enforcement, Kessler says.

"There is continuing concern for buyers on issues of trust and safety. If
people don't trust what they're buying, that's a problem for eBay," he adds.
"We have been seeing slower buying activity on eBay the last couple of


According to an Agence France-Presse report, lawyers for The Hermes Group
asserted eBay is "an active player in the transaction because, not only does
it offer a number of services to improve the sale, but when it does not work
well enough or fast enough, they intervene with the client. They are
perfectly informed of the transactions since they take a percentage cut."

Several other European designer brands, including Louis Vuitton, Dior
Couture and cosmetics company L'Oreal have separately sued eBay for doing
too little to thwart counterfeit activity. Unifab, a French industry lobby
group, has also taken eBay to court, seeking action by eBay to better police
its site.

In the United States, a counterfeiting lawsuit filed by Tiffany in 2004 is
now being considered by a New York federal judge.