May 13 (Bloomberg) -- EBay Inc., the world’s largest Internet auctioneer, isn’t liable for sales of counterfeit L’Oreal SA perfumes on its Web site, a Paris court said today.

EBay meets its obligations to combat fake products, the court ruled. The tribunal called for the companies to go to mediation to develop a plan to work together on the issue that would be filed with the court on May 25.

By establishing “means to fight counterfeits on its online platform” EBay “has fulfilled its obligation in good-faith,” Judge Elisabeth Belfort wrote in a 24-page decision today. “Preventing counterfeits will only be effective through a close collaboration between rights holders and EBay.”

EBay’s victory follows earlier losses in France when it was ordered to pay compensation to Hermes International and LVMH Moet Hennessy Louis Vuitton SA in similar cases. L’Oreal, the world’s largest cosmetics maker, sued EBay in five European countries, claiming the site profits from sales of fakes and goes too far by asking brand owners to help police auctions.

“This is a tough decision for brand owners,” said Katie Withers, a lawyer with Eversheds LLP in London, who isn’t involved in the dispute. It should give Paris-based L’Oreal “food for thought, especially since France is the plum jurisdiction for brand owners.”

L’Oreal is awaiting verdicts in its lawsuits against EBay in the U.K. and Germany. A trial date hasn’t yet been scheduled in the company’s lawsuit in Spain. L’Oreal lost a decision in Belgium in August.

‘Victory’

“This is a clear legal victory for EBay,” said Alexander von Schirmeister, an EBay general manager in France, by telephone. Fighting counterfeit sales “has to be a shared responsibility.”

L’Oreal had sought 3.5 million euros ($4.8 million) for undermining its distribution system and the appointment of an expert to tally its lost income to counterfeiters.

“L’Oreal very willingly accepts the mediation requested by the court to specify a common accord,” the company said in an e-mailed statement.

Shares in San Jose, California-based EBay fell 61 cents, or 3.6 percent, to $16.46, at 12:42 p.m. in New York. L’Oreal shares fell 1.48 euros, or 2.6 percent, to 55.87 euros in Paris.

L’Oreal argued EBay’s software bids on behalf of buyers, handles payments and ensures the delivery of goods, making it a participant in sales, not just a sale venue.

$200 Billion

Today’s verdict by the Paris civil court specializing in trademark issues said that EBay is a host site and bears limited responsibilities.

LVMH had successfully argued its case before Paris’s commercial court on the grounds that EBay misrepresented itself as a host. LVMH said EBay was a party to the sales and therefore bore greater responsibility for verifying products.

EBay says it does all it can to fight fakes, with a team of 2,000 people including seven former prosecutors, and an online crime-fighting budget of $10 million a year. Less than 0.2 percent of the 2.7 billion listings on EBay’s site last year were identified as potentially counterfeit, the company said in a March report to the European Union.

Counterfeiting is a $200 billion-a-year industry, according to the Organization for Economic Cooperation and Development.

EBay has had mixed results in Europe on the legal fights over its responsibility for sales of counterfeit items. In addition to the win over L’Oreal in Brussels, EBay won a dispute with Rolex Group in Germany over counterfeit watches.

To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net

Last Updated: May 13, 2009 12:44 EDT