LVMH 1 - eBay 0
LVMH, the luxury goods group has secured a judgment against eBay for failing to stop the on-line auctioning of goods that infringe LVMH's intellectual property rights.The French court ordered eBay to pay €40m to LVMH. The brands involved include Dior, Givenchy and Louis Vuitton. This is the second French judgment against e-bay this month with the owners of the Hermes brand successfully bringing an action against eBay and the actual seller of fake Hermes handbags.
One widely held view is that if eBay doesn't lose its wild west frontier image soon it could find itself prevented from listing any major brand name and as a result losing its attraction for all those bargain hunters who target branded luxury goods. But what can it do? It can ask its sellers to confirm that the goods offered for sale are legitimate. It can (and does) have a policy to deal with allegedly infringing goods and in my experience it is fairly good at removing goods quickly when a complaint is raised. The problem is how on earth can e-Bay tell if an article offered for sale in one of its auctions is the real McCoy?
eBay are now seeking leave to appeal against this latest judgment claiming that today's ruling was "an attempt by LVMH to protect uncompetitive practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers everyday". Your gut reaction might be "that is all very well but what about the law abiding customers who think that they have a genuine bargain, the individuals burnt by fake perfumes or disappointed by shoddy copies of luxury branded goods? eBay may be disinclined to bring in tighter supervision of its on-line auctions but it may be putting off the inevitable
The idea that entities like eBay should actively police their domains for infringement of third party rights provides fuel for the argument that the Internet should become highly regulated - possibly to the extent that user anonymity (there are many legitimate reasons for anonymity on the Internet) becomes compromised. Is this really somewhere we want to go?
