German Court Says EBay Must Work To Halt Sale Of Fake Rolexes

Despite its best efforts, eBay has been plagued by con artists attempting to sell a variety of counterfeit goods on its site.

W. David Gardner, Contributor

July 27, 2007

2 Min Read

EBay must do more to halt sales of counterfeit goods on its site because of a ruling in a German court involving the sale of fake Rolex watches.

EBay reported the measure Friday in a SEC filing, although the actual court decision was reached back in June.

The SEC filing was the latest event in a six-year dispute between eBay and Montres Rolex SA and its affiliates. EBay had won earlier decisions in the dispute.

EBay has been plagued by con artists attempting to sell a variety of counterfeit goods on its site. The auction firm has had some success in tightening up its policies governing the sale of goods. Last month, two men were cited for selling $6 million of counterfeit software on the auction site.

"The (German) court's decision found that eBay must take reasonable measures to prevent recurrence (of counterfeit Rolex postings) once it is informed of clearly identified infringement," eBay said in the SEC filing.

The firm noted that the decision will likely lead to additional cases in Germany, which is eBay's second largest auction market -- the U.S. is the largest.

"We expect that this ruling will likely result in increased litigation against us in Germany," eBay said, "although we do not currently believe that it will require a significant change in our business practices."

In addition to its legal cases in Germany, eBay is defending two lawsuits in French courts. Luxury apparel and clothiers Louis Vuitton Malletier and Christian Dior Couture claim eBay broke French law with its advertising keywords, which allows sellers to post items for counterfeit goods

EBay also is embroiled in legal tussles with several French perfume makers. The companies argue the San Jose, Calif.-based online marketplace interferes with their distribution network.

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