Ebay is to Pay Damages to Louis Vuitton

A Paris court ordered eBay Inc. to pay Louis Vuitton 200,000 euros ($275,000) in damage Thursday February 11, 2010. The court found that eBay was harming the Louis Vuitton, Moet Hennessy Louis Vuitton (LVMH), brand's image when the site allowed online auctioneers to use the misspelling of the name to be linked to the eBay site. The use of misspelling is sometimes associated with counterfeit items.

Many online businesses pay to have a large number of words call up link to a site, like eBay, when typed in to search engines. The court ‘s ruling reprimanded eBay for buying terms like “Louis Viton” or “Wuiton,” which is associated with selling knockoff LV products. The court said the trading of counterfeit products on eBay damages the Louis Vuitton image. Louis Vuitton will also receive 1,000 euros for every future violation, which will only be applicable in France.

A Louis Vuitton spokesperson said, “ Louis Vuitton welcomes this decision, which confirms established case law that aims to protect the consumer from the illicit use of company trademarks.” Over the years many luxury-good brands have been in legal disputes with eBay over the counterfeits sold on the site. Luxury brands feel the sale and production of knockoffs hurt their upscale image.

However eBay claims the lawsuits from luxury brands is a means to tarnish eBay’s image. Ebay feels these companies are trying to monopolize who sells luxury brands and at what price. Yohan Ruso, eBay France’s managing director, said eBay has no intention to aid the sale of fake products. The terms cited in the lawsuit were merely spelling errors. Ruso claims that eBay employs 2,000 people and spends millions of Euros a year just to combat the sale of counterfeit goods. Mr. Ruso said that eBay might consider appealing to the court. Ruso also feels the court decision and the fine eBay is force pay is “totally disproportionate.” Ruso says this case just proves how LVMH wants to damage the reputation of eBay.

I personally agree with the French courts and the decision. Counterfeits and knockoffs have been a plague for the fashion industry. Luxury brands and designers have tried to combat the problem but have been unsuccessful. Like the illegal music file sharing I think trying to stop the reproduction and selling of fake products is a never-ending battle. But I also feel targeting websites that aid in the sale of counterfeit and knockoff products is a good starting point.

Here is the link of the story:

http://online.wsj.com/article/SB10001424052748704337004575059523018541764.html