COSMETICS giant L’Oréal took their multi-pronged legal tussle with online auction site eBay to the High Court in London last week.
The French company have now started legal proceedings in five European jurisdictions (France, Belgium, Germany, Spain and the UK) as they look to protect their brand from counterfeit goods and preserve the right to dictate where their products are sold.
It is a case that goes to the heart of the eBay business model. L’Oreal’s lawyers accuse the auction site of aiding the sale of counterfeit goods (or goods sourced from outside the European Economic Area).
By failing to adequately police fakes that appear in their listings – and receiving revenue from their sale – eBay were in effect acting in concert with the sellers of those goods, L’Oréal argued.
EBay firmly deny the claims and say they are simply providing a trading platform for consumers to buy and sell products. Responsibility for looking after L’Oréal’s trademarks, they contend, rests primarily with L’Oréal.
EBay have experienced mixed success in broadly similar cases, winning last year against Tiffany & Co. in New York and L’Oreal in Brussels, and recently (on February 26) against the Rolex Group in Germany. In these cases the courts have ruled that eBay do not have to vet every item on their site to prevent counterfeit products from being sold.
However, they lost to the LVMH Group and Hermès International in France where the courts also effectively ruled that luxury brands had the right to limit sales of their goods to licensed outlets.
This inconsistency in the rulings is increasing the pressure on the EU to provide clarity on the issue. Brussels bureaucrats could yet provide the rules that shape the future of online shopping.