A Paris tribunal has found that eBay Inc violated LVMH Moet Hennessy Louis Vuitton SA trademarks in keyword searches, but the fine of 80,000 euros ($117,600) leveled against the Internet company was far less than the French luxury brand had hoped for.
EBay said the sum was far less than the 4 million euros in damages originally requested by LVMH. But the online company that connects buyers and sellers still faces a raft of pending litigation accusing it of selling counterfeit brands on its site, putting it at risk of far steeper fines.
A host of perfume and cosmetic brands under the LVMH umbrella -- including Christian Dior, Kenzo, Givenchy and Guerlain -- had sued eBay claiming the California-based company illegally used their brands in keyword searches powered by Google Inc technology.
Unlike other lawsuits brought against eBay by luxury brands such as Tiffany & Co and L'Oreal SA, the LVMH case did not accuse eBay of peddling counterfeit goods. The case targeted instead the practice of buying and selling adwords that feature a brand name.
The Tribunal has ruled that eBay, in using in its advertisements the keywords of some of LVMH's brands, has committed acts of counterfeiting through reproduction or imitation, Pierre Gode, director of LVMH Group, said in a statement.
Besides the 80,000 euro payment to LVMH, the Tribunal said it would fine eBay 1,000 euros for each future infringement, LVMH said.
Mary Huser, deputy general counsel for eBay, said the legal question was: Is it trademark infringement to buy and sell adwords?
DEFIES EU DECISION
The decision flies in the face of a recent victory for eBay in a Belgian appeals court in a case involving Polo Ralph Lauren Corp, eBay said in a statement.
We wait with anticipation for the European Court of Justice to rule on adwords-related issues in the two Google cases referred to it in the near future, eBay said.
The cases in Europe's high court involve accusations that Google's online ad system promotes trademark infringement. LVMH won a lower-court ruling in which it claimed Google's keyword advertising system was used by rivals to promote counterfeit Louis Vuitton handbags.
The European Union rulings [ID:nL2136007] could ultimately resolve a host of competing decisions made by various European courts, Huser said. She added that if the top court rules in Google's favor, eBay could go back to lower European courts to argue that rulings against eBay in keyword-related cases conflict with EU law.
In the multiple cases related to counterfeiting, companies such as eBay and Google argue it is not feasible to fully track intellectual property infractions. Luxury brands, meanwhile, say those Internet middleman must do more to police trademarked goods advertised on their sites.
(Reporting by Alexandria Sage; editing by Richard Chang, Andre Grenon and Carol Bishopric)