eBay not liable for auctioning fake L'Oreal products, rules UK court
23 May 2009
eBay, the online auction and shopping website won a court case in the UK High Court against L'Oreal yesterday, when a judge ruled that the online shopping site was not jointly liable for the sale of any counterfeit L'Oreal products through its UK website.
Paris, France-based L'Oréal Group, the world's largest cosmetics and beauty company had dragged eBay to court in the UK in an attempt to block sales of counterfeit L'Oréal products from being auctioned on eBay's online auction website in the UK.
The L'Oréal group also wanted eBay to guarantee that all the cosmetic company's products auctioned on its website came from approved sources.
San Jose, California-based eBay showed the court that out of 2.7 billion items auctioned last year, only 0.15 per cent of items sold on its website were counterfeit and argued it could not be held responsible for any trademark infringements as it was L'Oréal's responsibility of tracking down and acting on traders selling their company products without approval.
L'Oreal, the owner of well-known brands like Lancome and Yves Saint Laurent Beaute, had filed similar cases against eBay in France, Germany, Spain, Belgium and the US.
While it lost the case in France, the US and Belgium with the Spanish and German verdict still to come, the company said that it is appealing against the ruling in Belgium.
eBay had said that the rulings given by the courts in Europe and the US reinforces that eBay website is a safe and trusted place to shop.
But L'Oreal is not the only company that has taken eBay to court on counterfeit items being sold on its website, Rolex Group had bought a case for counterfeit watches while Tiffany & Co over counterfeit jewelry. In both the cases, the rulings had gone in favour of eBay.
However, not all cases have gone eBay's way. In June, eBay was ordered by a French court to pay LVMH Moet Hennessy Louis Vuitton SA more than $61 million for selling counterfeit products of the company on its website.
Although the UK court ruled in eBay's favour yesterday, the judge advised eBay to take all sellers names addresses, filter listings, limit the volumes of high-risk products and pay heed to negative feedback from users.
L'Oreal said in a statement that the court had "agreed with the view held from the outset by L'Oreal, that eBay could do more to prevent trademark infringement."
Richard Ambrose, eBay's head of trust and safety said in a statement, "This is an important judgment because it ensures that consumers can continue to buy genuine products at competitive prices on eBay.''
"We reiterate again that co-operation and dialogue is what is needed, not litigation. Only by working together can we collectively address the issues that concerns eBay, rights owner and consumers," he added.
On 15 May, eBay released a revised user agreement on its website, where it said that it would address the problem of counterfeit items.
Under the revised agreement, eBay noted that if a buyer and seller cannot determine that the item is not counterfeit, buyers are required to send the item back to the seller. The buyer or eBay will pay cost of return shipping, unless both buyer and seller have agreed otherwise.
If eBay determines the buyer is not acting in good faith, eBay may restrict or eliminate their ability to return items or make future claims, Provide buyers assurances about the authenticity of the item received.
eBay said that these revisions were being made in order to protect seller's protections against inaccurate counterfeit claims, provide buyers assurances about the authenticity of the item received and maintain integrity of the eBay market place.