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EBay Found Guilty of Gross Misconduct towards the LVMH Group
PARIS-(Business Wire)-June 30, 2008 - The commercial court in Paris has, in a ruling announced today, upheld a claim made by Louis Vuitton Malletier and Christian Dior Couture against eBay.
The court has ruled that, by allowing the sale of counterfeit goods on its website to the detriment of Louis Vuitton Malletier and Christian Dior Couture, eBay was guilty of gross misconduct and of detrimental breach as, through accountable negligence, eBay had not taken the necessary measures to prevent the sale of the counterfeit goods on its site.
The court has also ruled that, in allowing the sale of perfumes carrying the brands Christian Dior, Guerlain, Givenchy and Kenzo, products which can only be sold through the network of distributors, agreed by the companies which own these brands, eBay was guilty of practicing unlawful sales.
To compensate for all damages, the court has ordered eBay to pay 16.4 million euros to Louis Vuitton Malletier, 19.28 million euros to Christian Dior, and 3.192 million euros to the perfume brands. The verdict is one of provisional execution. Moreover, the court has also added that a report of the decision must be published in three French or international newspapers. Finally, eBay must report the verdict on both its French and English sites.
The Paris commerce court's verdict will make case law. For the first time in France it clearly states the principle under which auction sites that operate on the web have to ensure that their activities do not permit unlawful dealings. The court has dismissed as without foundation the argument used by eBay to exonerate itself that its clients are solely responsible for their illegal undertakings when transacting. eBay is not a host but a broker.
This verdict represents an important step in the protection of brands and designs against parasitic practices. The court brings an important contribution to the protection of creative works which make up an important part of our national heritage and generate many jobs in France.
About LVMH
LVMH Moet Hennessy Louis Vuitton is the world's leading luxury goods group. The Group is represented in Wines and Spirits by a portfolio of brands that includes Moet & Chandon, Dom Perignon, Veuve Clicquot Ponsardin, Krug, Ruinart, Chateau d'Yquem, Hennessy, Glenmorangie, Ardbeg, Belvedere Vodka, Chopin, 10 Cane, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Green Point, Cape Mentelle, Newton.
Its Fashion and Leather Goods division includes Louis Vuitton, the world's leading luxury brand, as well as Celine, Loewe, Kenzo, Givenchy, Thomas Pink, Fendi, Emilio Pucci, Donna Karan, Marc Jacobs, Berluti, StefanoBi as well as eLUXURY, the authoritative online source for luxury goods on the Internet. LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Parfums Kenzo, Perfumes Loewe as well as other promising cosmetic companies (BeneFit Cosmetics, Make Up For Ever, Acqua di Parma and Fresh). LVMH is also active in selective retailing through DFS, Sephora in Europe and the United States, Le Bon Marche and la Samaritaine. LVMH's Watches and Jewelry division comprises TAG Heuer, Chaumet, Christian Dior Watches, Zenith, Fred and De Beers Diamond Jewellers Limited, a joint venture created with the world's leading diamond group.
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