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L’Oréal and eBay settle dispute in counterfeit case

L’Oréal and eBay have finally reached a settlement in a counterfeit case that has been rumbling on for over six years. Since 2007, the two firms were arguing about the sale of counterfeit L’Oréal goods that were being sold on the online marketplace EBay.

The French cosmetics company brought eBay to court in five European countries (UK, Germany, France, Belgium and Spain), accusing the online marketplace of being involved in trade mark infringements committed by users of its website. But this week the two companies have settled their differences and vowed to work together. “The parties believe that cooperation, rather than litigation, is the way forward to fight against counterfeiting”, L’Oréal announced in a joint statement with eBay.

The English High Court first ruled in favor of eBay, but it referred the case to the European Court of Justice in 2009 after it questioned if eBay could be held responsible for selling of counterfeit goods. The ruling from the European court said three years ago that websites like eBay can’t turn a blind eye to the unauthorized sale of counterfeit goods. When a website owner facilitates or fails to stop the unauthorized sale of these kinds of products, he may also be guilty of infringing a trademark owner’s rights.

Not the first time for eBay
eBay previously said that it has systems which make sure counterfeit goods are being removed when identified as such, but that it’s the responsibility or trademark holders to monitor for such merchandise. In the United Stated, there was previously a case between eBay and Tiffany & Co, which ruled in favor of eBay, saying the online marketplace wasn’t responsible for trademark infringements for selling counterfeit products via its site. In 2008 however, eBay had to pay LVMH 40 million euros for failing to prevent the sale of counterfeit goods of the French luxury goods firm.