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Trademark Infringement Creates Problems for EBay and Others

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According to an article in the Atlanta Journal Constitution, a civil suit has recently been filed against EBay in France by Louis Vuitton and sister company Christian Dior Couture. These companies claim EBay is responsible for sales of counterfeit products that infringe on trademark rights. Louis Vuitton alleges that 90% of Vuitton bags offered during the first six months of this year on EBay were fakes.

Knock-off products that infringe on others trademarks are a big business. In a recent conference in Washington, D.C., the “Countering Global Counterfeiting and Piracy” conference sponsored by the U.S. Chamber of Commerce estimated that fake goods cost U.S. companies between $200 billion and $250 billion annually. According to the Chamber of Commerce, the No. 1 source of counterfeit products seized at the U.S. border is China, accounting for 68% of all seizures in 2005.

To combat its problems, EBay has created Vero, a program that allows companies to easily report misuse of their trademarks on the site. But the lawsuit is more focused on whether or not EBay is obliged to take a more active role in policing its site for known and unknown counterfeit auction items that infringe upon trademarks.

If Louis Vuitton is successful in its suit against EBay, it could result in EBay and others adopting more proactive and bolder measures in policing against counterfeiting.

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