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One of America’s leading intellectual property lawyers predicted yesterday that the ruling against eBay this week would trigger a series of lawsuits from designers seeking to block the sale of fake goods on the internet.
On Monday a French court ordered eBay to pay €38.6 million (£31 million) to LVMH, the designer company that owns Louis Vuitton. The haute couture group had sued eBay for allowing counterfeit handbags and clothes to be sold on its website. EBay, an online retailer, said that it would appeal against the ruling.
Robert Alpert, a litigation partner with Ladas & Parry, the intellectual property law firm in New York, said: “I expect this ruling to encourage a number of other designers to sue eBay as well.” EBay has already been sued by companies such as Rolex, the watchmaker, Tiffany, the jeweller, and L’Oréal, the cosmetics and perfume house, for selling counterfeit goods.
However, Aaron Kessler, technology analyst for Piper Jaffray, told The Times: “The real impact is two-fold. First, if the ruling is upheld, eBay may have to spend more on monitoring its listings. In the past they have relied on the marketplace being self-policing. Second, and this is a bigger issue, is that it will raise concerns among its customers about what is real and what is fake on the site. These are issues of trust and faith in the business.”
Mr Kessler is expecting the internet auctioneer to produce sales for 2008 of $9 billion, up from $7.7 billion last year. He is also forecasting earnings per share in 2008 of $1.71, compared with $1.53 last time. He does not expect the fine to impact on the group’s numbers.
LVMH argued this week that its business was hurt by the sale of fake handbags and clothes on eBay, and accused internet users of “the most hated, parasitic practices”. EBay said that it removed counterfeits from its site and added that LVMH was trying to “protect uncompetitive commercial practices”.
EBay is also contending with the US slowdown and the fact that it overpaid for Skype, the free computer-to-computer phone service. Its shares have slid from $40.60 in October to $27.09 yesterday.
As part of the group’s attempt to extract value from Skype, the company appointed Scott Durchslag, a former Motorola executive, as chief operating officer. The management change comes after months of executive upheaval — in March, Meg Whitman, chief executive, left the company she had led for a decade to co-chair John McCain’s US presidential campaign. She has been replaced by her own choice of successor — John Donahoe — whom she hired in 2005 to run the company’s main e-commerce division.
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In defence of eBay, their VERO (Verified Rights Owner) toolset is very good. I sell my own e-Books on eBay which have occasionally been copied and re-sold by other sellers. Using VERO I can simply 'zap' any other user's listing which infringes my copyright. No protracted dispute, no hassle. 10/10
Patrick, London, UK
Ebay doesn't give a damn about whether an item is fake or genuine, as long as ebay gets it's fees and commissions. Ebay could police it's site for scams or fakes, but that would take commitment on the part of ebay's management-something that would take time away from counting their stock options.
Bill Miller, Saginaw, USA
Sadly enough, greed and ignorance are to blame just as much as ebay. Ebay buyers are notoriously CHEAP, and have the seller rip-off artists (not all). You get what you pay for. Learn a lesson - stop buying on ebay - PERIOD. Go to a REAL store where they sell REAL stuff!
Patsi, New Bern, US
I am from the Philippines, I bought $920 worth of Chanel bag. When I arrived, had to pay for $200 for Customs dues. THE BAG IS FAKE. Contacted Ebay a millions times for their help but they were not at all helpful of what happened to me. I lost my money just like that.
ning.philippines, Metro Manila, Philippines
LVMH has fought this battle on the street markets too together with local councils. Nowadays its is near impossible to find a luxury bag in a market. However, smaller brands, equally copied, do not seem to have the same recognition by local council members and hence continue to be copied and sold.
Tom, London, UK
According to a story published today on the auctionbytes blog, counterfeit merchandise that is returned to paypal in exchange for a refund is then sold by paypal on a liquidation site used as a source by eBay sellers.
Thus, a single counterfeit may be sold on eBay any number of times.
Biagina, Los Angeles,
It takes less than 10 minutes to find a fake and it can take days to have that fake investigated. I once reported a fake 23 times over several days and the item eventually sold for over AU$500.00. Now I go straight to the live help section and report the item live. Sometimes I get a result.
jana, Perth, Australia
Whooooaaaaaa so that 5 quid rembrandt ain't real?
Ebay should tell the French court to go swing.
Ken.Wyatt, Todmorden, UK
I've even seen feedback left stating they were pleased with the copy. Although i'm no fan of designers with their ripoff prices, i'm glad Ebay is getting a few lawsuits as they never seem to care about complaints.
James, London, UK
As an Australian user of Ebay I agree - you just have to type in Tiffany to see how many fakes appear not only on the Australian site but worldwide - when advised of this Ebay takes so ling to take action that the goods have been sold.
Rita, Sydney, Australia
The majority of designer items on Ebay are too good to be true and seem to be fakes. I bought a 'designer' t-shirt only to find it was a fake and lost its shape and colour after one wash. Ebay is not interested in complaints - neither are journalists - its only the big money headlines.
warren, london,
and fake dvd's!!! Funny how they can allow all this to go on but when you have a genuine complaint about a seller on ebay the company is less than helpful. They make it so difficult to contact them too - ever tried calling fleabay?
Kevin Ash, Ashford, United Kingdom
If you log onto eBay now you will be able to find potential fake items in less than ten minutes. Strange that eBay cannot remove the items in the same amount of time. In the real world handlers of stolen or counterfeit merchandise are prosecuted. Looks like eBay just got real.
J Harker, London, UK
This is ridiculous, I can find seller of fake watches on ebay in seconds, I've just done it. After the news. Try it for yourself.
Adrian, London,