Update at 8:40 a.m. PDT: Reaction from L'Oreal has been added.
eBay has won another lawsuit over the sale of counterfeit goods on its site.
A U.K. court ruled Friday that eBay cannot be held accountable for the sale of fake cosmetics on its auction site, as L'Oreal alleged in its lawsuit filed in March.
The cosmetics giant has long criticized eBay for not doing enough to halt the hawking of phony products that bear the L'Oreal name. But eBay has insisted it merely provides the trading space for its users and has no direct involvement in the items bought and sold.
"This is an important judgment because it ensures that consumers can continue to buy genuine products at competitive prices on eBay," Richard Ambrose, head of trust and safety for eBay in the U.K., said in a statement. "Furthermore, following legal victories for eBay in the U.K., U.S., France, and Belgium we reiterate again that cooperation and dialogue is what is needed, not litigation. Only by working together can we collectively address the issues that concern eBay, rights owners and consumers."
L'Oreal put a positive spin on the ruling, saying that despite the verdict, the court agreed with its view that eBay can do more to stop trademark infringement. L'Oreal suggested 10 measures that eBay could adopt, such as filtering listings before they're posted, requiring listing sellers to disclose their names and addresses, and applying sanctions more rigorously.
eBay has maintained that the number of bogus items traded on its site is minimal, reporting that of the 2.7 billion listings it hosted globally in 2008, only 0.15 percent of them were identified as potentially counterfeit. The company says it works with more than 31,000 brand owners to ensure that only genuine products are offered for sale.
Still, eBay has been caught in a revolving door of lawsuits in the past few years by L'Oreal and other companies over the sale of counterfeit goods.
Last year, eBay won a suit against jewelry powerhouse Tiffany but lost a suit filed by LVMH, parent company of Louis Vuitton and Dior. Last week, a French court ruled for eBay in its L'Oreal suit, while another L'Oreal case filed in Spain is still awaiting a verdict.
Online auction company eBay has emerged a winner in its latest lawsuit over counterfeit goods.
A French court ruled in favor of eBay in a suit filed by L'Oreal, eBay said on Wednesday. The cosmetics giant sought $4.8 million in damages, accusing eBay of allowing counterfeit goods to be traded on its site. The judge, Elisabeth Belfort, said eBay couldn't be held accountable for sales of fake products on its site. The ruling added that through its anticounterfeiting measures, eBay has "fulfilled its obligations of loyalty to other operators on the market."
eBay has said it spends more than $20 million a year to combat the problem of fake goods and will remove a listing if a company questions its authenticity. But L'Oreal said it thinks eBay could do more to stop the sale of counterfeit items.
"This is a clear legal victory for eBay and important victory for French consumers," said Mary Huser, general counsel for eBay. "We are delighted that eBay's meaningful efforts to fight counterfeits online have been recognized by the court, as has our status as an Internet-hosting provider," she said. "We welcome the invitation to resolve the outstanding matters in an amicable way as we have always believed that cooperation is the best way to fight counterfeits."
This latest lawsuit comes on the heels of similar cases brought against eBay. L'Oreal has the been most persistent, filing several related suits over the past two years. Last year, jewelry designer Tiffany and fashion powerhouse LVMH, parent of Louis Vuitton and Dior, both brought action against eBay over the sale of fake versions of their products. eBay won the Tiffany case but lost the fight with LVMH over counterfeit handbags. The court fined eBay 40 million euros, or about $63 million.
The Software and Information Industry Association, an industry trade group, has also been eyeing legal action against eBay over sellers who push phony software.
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