LVMH Moet Hennessy Louis Vuitton (LVMUY.PK, MC), a french fashion luxury products maker Friday said it received favorable ruling against the internet auction site eBay Inc. (EBAY) for brand counterfeiting from a French court. The court has also allowed LVMH 80,000 euros in damages from eBay, while warning eBay from continuing any such activities in future. The court said it would enforce a fine of EUR1,000 per future infringement.
The Tribunal also said it would announce these rulings by publishing them in three French and/or international newspapers as well as on the eBay.fr website and eBay.com, effective immediately.
This is the second time eBay is being sued successfully by LVMH over the issue of selling counterfeit goods on the internet. Earlier, in July 2008, eBay was ordered by a French court to pay 38.6 million euros in damages to LVMH in a similar issue. At that time, LVMH alleged that about 90% of the its products sold on eBay were fakes. eBay has also been engaged in long bitter battle with Tiffany &Co., Louis Vuitton and Rolex on issues related to counterfeit selling of goods.
Recently in a lawsuit with cosmetic company L'Oréal, eBay, however, got a favorable judgment from a London court which viewed that eBay has no legal duty to protect other companies trademark or stop users from infringing them.
However, in France eBay has been constantly on the receiving end with several legal challenges. As per the existing European commission rules, luxury goods manufacturers are protected amply, while they guard their brands strongly. The law also requires them to have a store before selling merchandise online. eBay, however, revolted against these by launching an online petition in early July. The European commission, however, is reportedly planning to amend its current laws that expires in May 2010.
Commenting on the success, LVMH said it is satisfied with today's ruling by the Paris Tribunal de Grande Instance which finds eBay responsible for brand counterfeiting. LVMH said the decision gives credence to the requests made by Parfums Christian Dior, Kenzo, Givenchy and Guerlain.
Pierre Gode, Director of LVMH Group said, "The Tribunal has ruled that eBay, in using in its advertisements the keywords of some of LVMH's brands, has committed acts of counterfeiting through reproduction or imitation."
EBAY closed Friday's regular trading at $24.34, down $0.09 or 0.37%, on a volume of 18.54 million shares. In after-hours, the stock gained $0.09 or 0.37%, to trade at $24.43.
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