In the past few years, courts in the U.S. and Europe have handed down rulings on the issue of eBay’s liability for the sale of counterfeit goods via its online marketplace. The plaintiffs in those cases own some of the best-known luxury brands in the world—Hermès, Louis Vuitton, Christian Dior, Rolex and Lancôme, to name a few. Interestingly, the lower court decisions in these cases have been widely varied, placing different obligations on trademark owners and online auction sites from country to country. Recent appellate decisions, however, have brought their outcomes closer together, though not completely in line.
To put these litigations in context, counterfeiting is an estimated $600 billion global industry. According to the International AntiCounterfeiting Coalition, many counterfeits are produced by sweatshops or child labor, and profits from the trade have been linked to terrorist activity, organized crime and drug trafficking. The counterfeit trade thrives on the Internet, which provides a convenient and relatively anonymous forum for counterfeiters to unload their spurious goods. The question in these cases is to what extent is an online auction house liable for infringements that take place via its site. The answer to that question is a work in progress.
