French Court Rules eBay is Liable for Counterfeit Sales of Hermes Goods

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hermes.jpgInternet businesses that are more that passive host sites should take note that a French court found that eBay is a “publisher of online brokering services” because it goes beyond “purely
technical, automatic and passive [site host] services.” As a result it ruled that eBay did not qualify for the host services infringement liability exception.

For example, the court found that eBay suggests purchases based on
visitors’ previous purchases, and it enables sellers to employ
cross-merchandising and to obtain litigation settlement services for payment or
delivery disputes.The court found that eBay profited from the sale of counterfeit Hermès bags because it received commissions on such sales amounts and that its site did not  have a passive
and automatic role. The court highlighted the fact that eBay “exercises a determining action on the content
of advertisements, in that it reuses, on its own initiative, information aimed
at attracting buyers” and that it misused Hermès trademarks by allowing users to list items, present them in an attractive way
and route potential buyers to other Hermès offers.

The court found that as a publisher, eBay did not ensure the site was not used for unlawful sale of
counterfeit products.

This decision could have significant ramifications for other site operators that are proactive in assisting sellers such that they are deemed to be a service publisher rather than just a internet host.