French court backs LVMH in eBay case

Online auction house eBay has been censured by the Paris commercial tribunal for counterfeiting brands of the major luxury products group LVMH and has been barred from selling four perfume brands. eBay has said it will appeal against the decision which would see it pay nearly €40m in damages and other charges to six LVMH brands. The court also ordered payment of €3.25m to the four perfume brands – Christian Dior, Givenchy, Kenzo and Guerlain – for damage to the selective distribution network. The tribunal barred eBay from any promotion of perfumery and cosmetic products in these brand ranges or which were "presented as such".

The particular point in relation to the perfume brands was that LVMH had never chosen ebay to market these products. The perfume brands had demanded over €12m in damages for "illicit sales" of their products, noting that ebay was selling these perfumes, including authentic products, although the entire market was organised around a selective distribution and re-seller system that had been established through agreement.

eBay has said that it had put control measures in place from 2006 and had assumed the brands themselves would check if the products on sale were counterfeit. A spokesman said they would appeal "in the name of the users of ebay", claiming that the issue was not about counterfeiting but about LVMH's desire to protect commercial practices "excluding all competition".

“It’s an important precedent,” LVMH’s Pierre Gode told Bloomberg News. “It’s a groundbreaking decision that will help protect creativity.”