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Ebay Fined $61M By French Court For Sales of Fake Goods
from the france-v.-the-internet-continued dept.
A court in France ordered eBay to pay more than 61 mega-dollars to the parent company (LVMH) of Givenchy, Fendi, Marc Jacobs and Louis Vuitton, because a user sold fake goods on the website. eBay has been sued by other 'luxury goods' vendors (such as Tiffany's (US), Rolex (Germany) and L'Oreal (EU)). Problems stem from some companies demanding that their merchandise (even legal merchandise) not be displayed nor sold as it is a violation of their 'property.' Others have complained that eBay is too slow to take down claims. Apparently eBay was hit with two violations: 1) eBay illegally allowed legitimately purchased and owned products made by LVMH to be resold on its website by 3rd parties not under the control of LVMH, and 2) not doing enough to protect LVMH's brands from illegal sales. eBay has said it will appeal. So eBay is to know what products every company allows to be sold before allowing them to on auction?
(There's also coverage at Yahoo News.)
Update: 07/01 17:15 GMT by T : That's LVMH throughout, rather than LVHM, as originally rendered.
Even by petty French standards, this is sad (Score:5, Insightful)
Want to resell your Corrola? Sorry, you have to get Toyota's permission first.
Want to resell your house? Not unless the original builder says okay!
Want to sell your soul? Well, that one you can do. Just become a French judge!
Re:Even by petty French standards, this is sad (Score:5, Insightful)
The French companies are laughing until they're sued by the raw goods producing companies and told they can't distribute their handbags.
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Re:Even by petty French standards, this is sad (Score:4, Funny)
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Re:Even by petty French standards, this is sad (Score:5, Funny)
In other news, the cows have filed charged Louis Vuitton with Mass Moo-der as well as filing a Motion for Summary Judgemoont against the plaintiffs.
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Re:Even by petty French standards, this is sad (Score:5, Funny)
Even by pun standards, that's udderly horrible. I have quite a beef with you, my friend.
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Re:Even by petty French standards, this is sad (Score:5, Funny)
I've never seen someone so shamelessly milking a pun.
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Re:Even by petty French standards, this is sad (Score:5, Funny)
I don't know who you are, but you have quite a bit of nerve to come stampeding into a conversation you weren't involved in. Have you no manners? You act like you were born in a barn. I suggest you think before you post next time, lest you re-veal yourself to be more of a boor than you already have.
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Re:Even by petty French standards, this is sad (Score:4, Funny)
I think you should quit with this cock-and-bull story you keep slinging...those old style politics should be put out to pasture, along with the rest of the sour milk. Or perhaps you think the rules should be chucked? You keep trying to flank 'round and shank me in the ribs, but I will kick your runp 'til it's rare!
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Re:Even by petty French standards, this is sad (Score:5, Insightful)
That's a good point. Where does something become "restricted" from further sales -- at the retail level? At the wholesaler? at the initial processor of raw materials?? at the point of origin (mines, farms, sheep, etc.) for said raw materials?
I can just see it... "You may not resell this sweater without permission from all the sheep whose wool was used to create it."
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Re:Even by petty French standards, this is sad (Score:5, Insightful)
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Re:Even by petty French standards, this is sad (Score:4, Informative)
So basically like what we have in the music and software worlds pretty much? You don't quite own that CD, you're just allowed to use it because the product they leased to you is on it ... something like that?
I know what you're getting at but, under normal circumstances, there's nothing stopping you from buying and selling used CDs. Now, copying/distributing the content on those CDs via different media - That's where the system falls apart.
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Re:Even by petty French standards, this is sad (Score:5, Insightful)
And yet they wonder why the French Echonomy is sagging.
If the seller fears retribution from using and reslling french products. They will not get French products in the first place. 3rd party sales while doesn't direcly effect the bottom line it does get product awarenes of your goods.
If you get a used Toyota and you love it. If you choose to get a new car you may buy a Toyota. or other perople see that your used toyota has lased so long and they want a new car they would get a new Toyota, also the person who has sold the car if they liked it the chances are they would use the money to buy a new car of the same make, if they have brand loyality to that make.
I understand forgeries, as it could tarnish the brand names. But for legit items let them resell them.
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eBay doesn't care about finding real fakes (Score:5, Informative)
I understand forgeries, as it could tarnish the brand names. But for legit items let them resell them.
You are right of course but eBay's problem is that eBay cannot be bothered to seriously check. The ONLY way to be reasonably sure an item is not a fake is to inspect it in person and have a full documentation trail detailing who bought it, where they bought it, and when. This is what they do in the art world to authenticate pieces. Since eBay never physically inspects ANY merchandise sold on their site, there is no way they can possible determine if an item is a fake.
From my own experience I've sold some high end luxury goods on consignment through eBay. (Louis Vuitton, Gucci, Rolex, etc) In each case I had a full documentation trail, the parties were known to me or my close associates, and we had the items physically inspected by an expert in that merchandise to ensure authenticity. Through eBay's VeRO [ebay.com] program we were accused several times of pedaling fakes even though we had the real thing. There was no opportunity for us to prove that we had authentic merchandise though we certainly could have done so were there any means to plead our case. Our auctions were summarily taken down and we were given strikes with no recourse of any kind. To be sure there are a TON of actual fakes on eBay but eBay sure as hell can't tell the difference. Worse, to avoid lawsuits they've given brand holders full power to remove auctions that they should have no power to influence under the first sale doctrine [wikipedia.org].
The problem is that eBay's incentives are all wrong - they just want their fees and no lawsuits - and they've handed responsibility (through VeRO) to trademark and brand holders whose incentives actually contradict the law. Louis Vuitton doesn't want ANY of their products sold via eBay regardless of authenticity. So eBay users get screwed in the deal either way. Sellers can have their auctions pulled for no good reason and buyers can't be reasonably sure of authentic products because eBay refuses to check. The winners here are definitely not you and me.
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Re:eBay doesn't care about finding real fakes (Score:5, Interesting)
VERO is also the program through which Ebay has given Scientology carte blanche to illegally infringe on first-sale rights of people with used RTC gear. Until Ebay takes a modicum of responsibility for the rampant and obvious illegal abuse of VERO (or cancels it altogether) I want nothing to do with Ebay.
Unfortunately, everything Ebay's help pages say about canceling your account is a falsehood. I've been asking them to close my account since February and I am still able to log in and I still get their weekly spam messages about my favorite sellers.
Ebay was cool back when it had something resembling competition. Now it's just another bloated, useless pig doing the bare minimum it must to continue collecting monopoly rents.
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Seems VERO upsets all sides. (Score:4, Interesting)
Its funny to see the VERO program criticised for being too strict, as I'm sure given ebays incompetence, it can sometimes be.
My experience with VERO is that it is useless to actually do anything about blatantly stolen property (in other words, people duplicating full versions of games on a CD burner, and openly selling them on ebay). In cases like this, ebay are VERY VERY slow to respond, and take no serious action against the sellers, sometimes removing a listing, rarely banning an account (new account takes a few hours).
For smaller IP holders like me, ebay and google are both unresponsive, disinterested bastards. Try getting pirated content removed from a blogger blog, for example...
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Re:Even by petty French standards, this is sad (Score:5, Insightful)
I would say it DOES affect the bottom line. Let's say I'm choosing between a Toyota and a Honda, pretty much equivalent models for $20,000 each. If I know I can resell the Toyota five years from now for $10,000 but that Honda won't let me resell the Honda ever, well, the Toyota just became a lot cheaper than the Honda in the long run!
Now, some people may not think this way when it comes to designer bags - but a LOT do. There are many women who can only afford to carry around a collection of $500-1000 bags because they keep one for a couple of months then sell it to a consignment shop for half price to help buy the next one. Still an expensive hobby, but suddenly within the reach of someone who's upper-middle-class instead of only celebrities.
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Re:Even by petty French standards, this is sad (Score:5, Insightful)
The example you give is an extreme case where it sounds like the market was flooded with used items due to the company screwing over their resellers, plus those people could have afforded new ones if the used ones hadn't been available.
People buy cars with the intention of selling them after a few years. People who buy older used cars often can't afford the new ones anyhow. If a car manufacturer suddenly stopped allowing their cars to be sold used, they would get far fewer new purchases because of it. Same for these people and their handbags - all the people who buy designer items BECAUSE they can then sell them at a consignment shop later. The people who then buy them on consignment could never afford them new. Cutting off any sale of a used handbag would result in fewer new sales, because the people who had been buying then selling would stop AND the people who had been buying used couldn't afford to start buying new.
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Re: (Score:3, Interesting)
There are two pretty legitimate sides of this argument. (1) an individual has a right to sell the stuff that she owns, and (2) a company has a right to protect their "brand".
I don't know what the EBay policy is on selling "fake" items, but if the companies care so much about "defending their brand" they should feel obligated to "re-buy" their products from customers who no longer have a use for such things. That would seem to balance the resale market.
Basically, if Tiffany's, Rolex, and L'Oreal will
Re:Even by petty French standards, this is sad (Score:4, Informative)
Never buy anything with PayPal that you don't fund with your credit card. Then, when something like this happens, call your credit-card company and request a chargeback.
That will get PayPal's attention and your money refunded. PayPal doesn't understand any language that doesn't include the term "chargeback."
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Re:arrogant asshole (Score:4, Informative)
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Not about fake goods at all (Score:5, Insightful)
It will be interesting to see what Brussels has to say about this.
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Re:GO USA!!! (Score:4, Funny)
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Re:Even by petty French standards, this is sad (Score:5, Insightful)
"The French government and courts have a long history of issuing prejudiced laws and decisions in favor of French companies"
The US Government and courts have a long history of issuing prejudiced laws and decisions in favour of US companies (look at online gambling and a billion other things)
The British Government and courts have a long history of issuing prejudiced laws and decisions in favour of British companies (see the fiasco around BAE systems and the serious fraud office being stopped from investigating them for "National Security" reasons)
Everyone's at it. And the people of the whole world are the losers.
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Re:Even by petty French standards, this is sad (Score:4, Interesting)
Any companies that the government tries to pull this stunt on should just move elsewhere. I'm sure there would be a public outcry if eBay said "fine, we're not dealing with you jerks anymore". I've heard that the French public are quite good at their protesting - they brought the country to a standstill when the government tried to increase fuel taxes..
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Re:Even by petty French standards, this is sad (Score:4, Informative)
The "Not for Individual Sale" has to do with FDA regulations. Packaged food products sold in the USA are required to have certain information on the label, including, but not limited to, nutritional information and information about how to request a refund.
Those individual Reese cups do not have the nutrition information on the packages, and thus are not to be sold individually in the USA.
There are certain other types of products (health and beauty aids as well as medications) that fall under this general rubric as well. There are certain requirements on the labels that are needed to permit the sale of an individual package.
I find it curious that some stores where I live will sell individual cigarettes at a cost that is clearly about twice what the proportionate price from the pack would be. I have often wondered if that was illegal due to the Surgeon General's Warning required to be on all tobacco product packages.
Slightly different issue.
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Re:Even by petty French standards, this is sad (Score:5, Informative)
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First sale? (Score:5, Insightful)
Does France not have anything along the lines of the 'first sale' doctrine?
http://en.wikipedia.org/wiki/First-sale_doctrine [wikipedia.org]
Re: (Score:3, Funny)
No, but they really should have a "first, duck!" rule. Even public displays of their government at work [mirror.co.uk] can be very dangerous.
Re:First sale? (Score:5, Informative)
Indeed they do. It's called "Exhaustion of Rights" and is an EU-wide legal doctrine. At least in Germany, interpretations of this have gone so far as to completely void the "no resale" clauses in licenses for products like AutoCAD and various OEM releases from M$, but I'm not sure if the French interpret it quite as broadly.
Here's the Wikipedia article, for what its worth: http://en.wikipedia.org/wiki/Exhaustion_of_rights [wikipedia.org]
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Troll? Nice.... (Score:5, Interesting)
I take it someone with mod points and no knowledge of France had a stick up his butt.
Look. I lived there for nearly 20 years. Some things are great about it, some things suck. But there are a couple of things that are critical to know if you want to have any chance at understanding how the French work:
- The state - and its bureaucracy - is the foundation of the nation.
- It's a country that is split along many lines.
- It's a country with a (self-defined) mission.
- It is conservative, but has a history of progressing through revolutions.
- Art and culture come first.
- Anglo-Saxon style survival of the fittest and invididualism is abhorred.
Pretty much everything follows from that.
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L@@K (Score:5, Funny)
Reason to love America (Score:4, Insightful)
IIRC, Americans enjoy the right to sell any of their possessions, provided they acquired them legally.
I respectfully disagree (Score:3, Insightful)
While I am not certain of the law (especially internationally), if you purchase counterfeit goods without knowing they're counterfeit, you have committed no crime and thus acquired them legally. Of course, once they're recognized as counterfeit, the police are within their obligation to seize them. I don't think the person who purchased the goods, barring some complicity, would be in any trouble.
Slashlawyers?
Re:Reason to love America (Score:5, Informative)
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Re: (Score:3, Insightful)
So it is simply up to EBay to ensure it is not facilitating the anonymous selling of stolen or misrepresented products.
As for counterfei
Not 'property' (Score:4, Informative)
It doesn't matter that the term is enclosed in quotes in the submission. We're talking about trademarks here. If these companies don't take action regarding this they will be allowing their trademarks to be diluted, making them more and more difficult to defend.
This has nothing to do with IP.
Any defendant in court for trademark infringement can bring up the fact that the plaintiff is allowing eBay to sell thousands of cheap imitations. And they would win the case based on that, probably.
Trademark law pretty much requires things like these be done, and the companies have no choice but to go after the entity facilitating the sales.
It's not nice, but that's what it is.
Received from eBay yesterday, revised terms! (Score:5, Informative)
The important change is in the liability section:
Stupid and dangerous (Score:5, Interesting)
This is not the first time that French courts show a complete misunderstanding of how the Internet works... And this goes even further than net economics.
Most french used cars are still sold via a single newspaper called "La Centrale des Particuliers". Should this newspaper verify that each car is rightfully owned by its seller ? I cannot imagine any judge trying to enforce this...
Hopefully, this judgment shall be broken by the "Cour de Cassation", because it does not make any sense. Maybe the judge was only trying to get some publicity. This happens a lot,
Craig'slist has the right idea. (Score:5, Insightful)
While it is VERY silly to expect EBay to prevent all counterfeit items AND that whole resale of trademarked items is scary, it might point out a flaw in their business model. Consider a "consignment" store or pawn shop that takes a cut of each sale and is stocked with stolen and fake items. Eventually, if you have enough of this nonsense, I think it is fair to consider that store a fence and not a legitimate business.
The more EBay takes a "cut" of each sale, the more they become part of the transaction. Perhaps a flat fee. I am sure EBay wants to make as much profit as possible, but if they become a party to each transaction they can't help but take on some liability.
This hurts eBay how? (Score:3, Informative)
eBay, while not a friend of mine, is a great tool to ascertain value in various markets. I use eBay daily to judge pricing for items I want to buy, or items I may wish to sell, notably collectibles (I hate collectibles, but own some). eBay's overhead is always passed on to sellers.
When eBay gets hit with a judgment for allowing someone else to sell a product, that judgment will only be passed on to sellers in the future. $60m is not a big figure, and considering that eBay lists hundreds of millions of items annually, the cost to offset this judgment as passed on to sellers is less than a penny per item. Not a huge cost to eBay.
The trademark holders are the ones who have a lot to fear, though, which is why they're going after eBay in friendly jurisdictions. I've seen some knockoff items sold online, and they're fairly good, and in some cases better quality, than the originals. With the coming economic recession, I'm sure many previous buyers of the overpriced consumer goods are likely pulling out of buying new products, so the trademark holders need these judgments collected just to keep their heads above water.
eBay should fight this, strongly, because they are merely a middle man, and they do offer the ability of a company to pull auctions if they're deemed illicit or illegal. Yes, eBay is probably slow on pulling every auction, but the fact that the market shows a demand for a given product, even a knock-off, means that the market isn't going away. Surely it will only hurt the trademark holders more when the news media tells consumers that knock-off products are so readily available and so cheap.
Good luck, eBay, I hope you win the appeal. If not, you'll just pass the cost on to sellers, and no one will be concerned a year or two from now.
Sales tax revolt (Score:5, Interesting)
Sounds like a perfect excuse for the French to stop paying sales tax. If the item doesn't actually belong to you, why should you be responsible for paying for it?
Oh, and I think LVHM might want to explain to government why they've been hiding at least $61M of their property from the tax authorities.
Two problems and some sanity... (Score:5, Insightful)
Before everyone gets on their high horses about this, remember:
1) French companies sued mainly because fake goods were sold on eBay. Selling fake stuff (anywhere, on the net and off) is a big problem for French luxury companies.
2) French companies also sued to prevent people selling real luxury goods at cut prices. This is abusive since it criminalizes legal owners and sellers in order to protect their 'official' resellers. However, eBay has appealed and I am pretty certain this will be struck down by the French courts.
Finally, of course, this leaves the problem of certifying that, let's say a Chanel bag, is the real thing on eBay and not a fake. This could be helped by supplying some sort of authenticity voucher that sellers could produce if asked by eBay.
That would solve the problem: eBay could simply say to a seller "please show us the voucher that says this is the genuine article or pull your offer". Yes, I know, what's to say the seller is not going to produce a fake voucher, but still.
The thing with France right now is that they are trying to combine two things: e-commerce and checking that articles sold are genuine. Not an easy thing to pull off, and these fscking French companies are not taking the right path (suing instead of cooperating). Then again, maybe eBay just refused to cooperate, and they thought suing was the easiest way to obtain results and a more cooperative eBay.
So - as strange as it may seem right now - this could have a positive impact on the quality of eBay auctions. Think about it for a moment, before posting stupid French jokes.
Could you fix the Company name in the Summary ? (Score:3, Informative)
http://www.lvmh.com/ [lvmh.com]
At the very least if you are going to capitalize the company reference multiple times throughout the article, please work on getting the 4 letters in the correct order..
Playing Devil's Advocate (Score:3, Interesting)
eBay does let a lot of counterfeit and bootlegged products sell and they never seemed too concerned about removing them. I tried an experiment where I reported about 40 obviously bootlegged DVDs, and a few sellers who deal heavily in them. A few days later, not one auction pulled, not one user banned.
Until they get sued, they don't have a fiscal reason to pull an auction of bootlegs.
The "designers" need to be taken down a notch (Score:5, Interesting)
I'm sure everyone caught it, but for yet more emphasis:
1) eBay illegally allowed legitimately purchased and owned products made by LVMH to be resold on its website by 3rd parties not under the control of LVMH, and 2) not doing enough to protect LVMH's brands from illegal sales
LVMH can tell their retailers how to sell the products, as they have a direct contractual relationship. They CANNOT tell the end-user, or anyone else beyond that first hop, what to do with it, what to charge for it, or which orifice to insert it. There's no licensing agreement, you don't have to sign a 2-page contract in order to buy a stupid shiny watch or pink bag. There's no LVMH auditor that comes to your dressing room and checks your papers every time you spritz on a bit of Eau-de-Poopoo.
Next point: illegal sales (counterfeit items). Ebay does not handle the actual items. Ebay does not have omniscience and superman laser vision. Ebay has no way to even guess that a seller is peddling fakes. In many cases, even the end-user can't tell the fake from the original (which says a lot about how cheap the real one is!). With the intrinsic right of resale, you can't outlaw resale, so the guy selling fakes is indistinguishable from a reseller (well, except for his plentiful stock, delivered every week from Singapore)
The fact that a French court actually upheld this ridicule tells me Ebay should withdraw its services from France, along with all its subsidiaries and sister companies. If France wants to be hostile toward online businesses, then they're more than welcome to do without. Some smaller, skeevier company will fill in the void, until they get burned as well. The French government is a mockery, and everyone has the freedom to stand at their border, point, and laugh.
Re:Mega-dollars? (Score:5, Funny)
When the hell did that become any sort of standard?
Three kilodays ago.
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Re:Mega-dollars? (Score:4, Funny)
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Re:Mega-dollars? (Score:5, Funny)
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Re: (Score:3, Interesting)
As I remarked elsewhere the rules are being broken left right and center, but they're in place just the same and that makes no sense at all to me.
Especially not when parties would voluntarily use a different language (such as English).
I personally walked out of one meeting a couple of years ago after being told that only French was acceptable because of a government requirement.
Too bad I was the guy representing a well paying customer, yes, I speak French but not good enough to get the finer points in a ver
Blind to the facts (Score:5, Insightful)
"The Rolex trademark recordation with Customs indicates "Import of Goods Bearing Genuine Trademarks or Trade Names Restricted." This means that genuine Rolex products can only be imported with the permission of the trademark owner, Rolex Watch U.S.A. Inc. A private individual can hand carry one Rolex watch from a trip overseas without obtaining permission. Bring in more than one, and they will all be seized as a trademark violation. Purchasing a Rolex from overseas by mail is also a trademark violation." Title 19 U.S.C. 1526(a) and (b)
Buy a legitimate Rolex from a foreign seller on eBay and try having it sent to you, and see how your tune changes.
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