eBay To Europe: You Can't Expect Us To Know Whose Auctions Violate Copyright!
Louis Vuitton has one of the most recognizable brands in the world, and one of the most copied. Together with fake Rolexes, knock-offs of the iconic handbags are one of the most commonly sold products on the sidewalks of New York.
But French luxury-goods group LVMH (which owns Louis Vuitton, among other mega-brands) can't go after street peddlers. eBay (EBAY), however, is within legal reach, and the group just won a $63 million suit against the auction site in French court for allowing the sale of counterfeit merchandise on its servers.
eBay isn't taking this one lying down, and has vowed appeal. LVMH is out to protect an "anti-competitive business practice," the company charges in a furious press release, and the group is trying to restrict not only the sales of counterfeit goods, but also the thriving legal trade of second-hand goods and last year's models -- a key eBay market. Besides, eBay argues, we invest $20 million a year in fighting the counterfeit goods trade, what more would you have us do?
This case is a must-win for eBay, whose stock is already unloved by the market. The company's core model relies on the fact that so long as the software works, the number of auctions eBay hosts can scale exponentially with negligible marginal costs. If eBay loses on appeal, its options run from bad to worse. Either institute some sort of "authorized seller" program (contrary to -- and more expensive than -- the whole idea behind eBay), institute (expensive) extra reviews of auctions, or abandon entire markets altogether.
Ouch, ouch, or ouch.
See Also:
eBay Seller Goes Berzerk at eBay Live: Outraged Sellers Game New System To Survive
eBay Listings Still Strong, Stock Still Cheap
They deserve everything they get!
I have sold i-phones on Ebay and I will tell you that Ebay audited me within an inch of of my brain (and they started at the other end) to ensure what I sold was not stolen nor fakes.
They can do so with high brand goods but only if the tags for costly brands can stand up to the task. Currently, existing tags are mostly a joke and can be easily faked. Special key fobs could be attached to specific serial numbers to ensure the good in hand is really Coco's or Louis'.
The French court cannot punish the flea market for the actions of a few of it's sellers.
Also, LVMH cannot control the second hand market unless it does so with it's distributors. It isn't anyones fault that even in the high priced brand of Louis Vuitton, there are just some designs that end up at TJ Maxx. If LVMH wants to control the second hand market then it is up to them to buy back all the unsold goods at a better price than the liquidators.
I am sure that Ebay can get this fine down to a token level or thrown out if they take the right direction and work with the brand makers who have an obligation to secure their goods as much as eBay does to legitimize it's sellers.
PS. For you Ebay haters, grow up and stop selling crap you think is valuable. Anyone who is making even a little money did some homework to find out what people want. Take a look and see how much floor space in a mall can cost you sometime and then compare how cheap Ebay really is to sell in.
Up to two years ago eBay did not intrude into enough aspects of their seller's business to lose "venue" status.
eBay's legal problems are due to their new policies of micromanaging sellers, and hence ceasing to be a "venue."
And the more eBay pokes it's fingers into how sellers run THEIR business, the less legal standing there will be in the "venue" defense.
there aren't that much counterfeit LVMH goods on ebay. true, there are some, but they disappear fast, buyers catch on -leave negative feedback. it's all over.
the problem is that in many parts of europe, the goods can be 100% AUTHENTIC, but if the seller isn't authorised by LVMH to sell these goods, it's considered a copyright infringement & goods will be labeled counterfeit, even though they are not.
thankfully in the united states we don't have these silly laws, which are so anti-competitive. stores like wal-mart, costco & other discount chains in addition to all the major national drug chains can survive because our laws protect competition. in europe only the manufacturer can say who can sell the merchandise & for how much, if you break those rules you can go to prison for selling counterfeit goods even if the goods are 100% authentic.
http://news.bbc.co.uk/1/hi/business/7482556.stm
“The French court cannot punish the flea market for the actions of a few of its sellers.” (end)
--
A true flea market is merely a venue and is not responsible for the actions of any of its sellers, not just a few. This doesn’t mean that a certain flea market proprietor, knowing that a particular seller is regularly cutting through the walls into the bank next door and robbing the bank, doesn’t have a responsibility to take action to prevent known illegal activity. It’s the true anonymity of the market place that protects the proprietor, not the actions of the violators. We’ve heard that the vast majority of LV handbags sold on Ebay are fake. If that is true (I don’t know if it is), then Ebay is indicted and convicted on its own accord. The French court would therefore in a sense be finding them to be willing participants. Courts have the power to make a “finding” and thus they can construct a “yes” answer on behalf of Ebay to the question: “Are you a willing participant?”
I contend that, likewise, Article 512 of the DMCA should not be constructed so as to facilitate digital carriers depending solely on its protections to shield them from claims of copyright infringement when it could be shown that their raison d’être is born of their opportunity to disclaim being willing participants in what they clearly and unequivocally know is copyright infringement. Viacom wants that answer to be found to be "yes" as well.
Both of these cases will ultimately be settled on an examination of just how anonymous (conveniently ignorant) the core vendors can claim to be.
H Derzi,
From the moment any online Ebay-like site takes a commission that is directly related to the transactional value of the sale, they become a willing partner with the seller and no longer just the venue. Ebay has never been j-u-s-t a venue. The want ads section in the newspaper generally i-s an anonymous venue, just like a true flea market is.
Assume for a moment that Ebay were instead a site being paid by the buyers only. Their raison d’être would quickly become the validation of the authenticity of the seller, wouldn’t it? Otherwise their business would dry up. Now, suppose I found a 1964 ½ vintage Mustang on Ebay and bought it. Kind of hard to fake that, huh? But, if hundreds of fakes started showing up and Ebay recognized the vast majority of the Mustangs were fakes, then Ebay would be responsible for shutting the sales down. Ford might not take action, but various government and consumer protection authorities would for the benefit of the buyers, not the sellers. Let the sellers obey the law and tradename and copyright owners will have no claims against them.
az,
I don’t know where you’re going with the Costco, Wal-Mart and discount drugstore overture. Those places don’t sell trademark or copyright infringed goods. What do you mean? Examples?
For my own example: Items marked “GV” or Great Value at Wal-Mart and specific drugstore “house brands” are legal and approved products sold at a discount under contract with the manufacturer. The ingredient formula and possibly the construction of a product are things that can be tradename and copyright protected. The courts have ruled (rightfully) that style can NOT be protected. Haven't you noticed how similar cars look?
You can manufacture a handbag in the style of LV if you want to and copy it almost completely… but you can’t name it LV, no differently than you can call a Hyundai a Honda. What are you going to call it? “az exclusive handbags.” Nobody would pay you anything close to what it could be sold for under the fake name.
You haven’t cited any examples of illegal activity similar to what certain sellers of LV fakes are doing on Ebay.
Are there LV products (specific products of LV, not just stylistically similar to them) that are sold at TJ Maxx?
You've said LV should control its distributors?... Is TJ Maxx one of their distributors?