French Appeals Court Slashes EBay Fines in LVMH Dispute Over Counterfeits
A French appeals court slashed the fines EBay Inc. must pay in a suit over sales of counterfeit LVMH Moet Hennessy Louis Vuitton SA goods from almost 40 million euros ($51.3 million) to 5.6 million euros.
The appeals court reduced the fines in a ruling in Paris today, while upholding findings against San Jose, California- based EBay from the lower tribunal. The appeals court didn’t give any reasoning for the decision.
The case is part of an on-going dispute between EBay, the most visited U.S. e-commerce site, and French brand owners over online sales. The decision involves a trio of June 30, 2008, rulings by the Paris commercial court, awarding LVMH, the world’s largest luxury-goods maker, damages for trademark violations and harm to its brands’ images as well as halting the sale of some perfumes and cosmetics to French buyers.
“It’s LVMH that will have to repay over 33 million euros to EBay,” said Yohan Ruso, managing director of EBay in France, in a telephone interview today, because EBay has already paid the original fine. “It’s a victory for EBay.”
LVMH said the ruling supported its claims because it didn’t overturn the lower court’s findings and allows the Paris-based company to seek to “seek redress before foreign courts for damages suffered in their jurisdictions.”
“The Paris Court of Appeal has today found eBay liable for selling on its websites, between 2001 and 2006, counterfeit products,” the company said.
Givenchy, Christian Dior
Under today’s ruling, EBay can’t participate “directly or indirectly in violations of selective distribution networks put in place” by LVMH brands including Givenchy, Christian Dior and Kenzo. Still, the court cut the damages awarded to the brands to 706,000 euros from the lower court’s 3.19 million euros in 2008.
LVMH said in its statement that that upholds the principle that brand-owners can control how their products are sold and block sales on EBay, while EBay’s Ruso said the ban has “clearly been reduced in scope.” He declined to specify how the injunction was affected, saying EBay had to review the decision.
To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net
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