Handler said the underlying issue is whether the online retailer is liable and what steps it must take to prevent the sale of counterfeit merchandise.
"While Louis Vuitton argued [that] eBay and its fellow sites are not merely passive hosts, eBay contended that it already takes [such] steps and it cannot monitor such uses itself," she said. "The French court obviously sided with Louis Vuitton, and this ruling is likely to spark American litigation on this issue."
The decision in favor of LVMH comes on the heels of a similar decision by another French court that ordered eBay to pay US$31,000 to Hermes International for selling fake Hermes handbags. And in 2004, Tiffany & Co. sued eBay in federal court in New York, claiming that the company didn't do enough to keep counterfeit goods off its Web site.
But the eBay spokeswoman said the company has taken step to stop the sale of counterfeit goods with its Verified Rights Owners (VeRO) Program, which provides tools to help companies look for fake goods on the site. If a company determines that a user is selling counterfeit merchandise, it notifies eBay, which immediately takes down the auction, she said.
Sharpe said the company spends US$20 million annually on technology and manpower and has 2,000 employees worldwide who work on identifying and removing counterfeit property from its site.
"There are over 18,000 rights owners, like Nike and Coach, involved in the program, and in 2007 alone, we removed 2.2 million potentially counterfeit listings," she said.
Sharpe said eBay has also suspended 50,000 sellers who were selling fake goods and has made it harder for other sellers to offer counterfeit goods for sale.
However, in its complaint, Tiffany, which is a member of the VeRO program, said that eBay is forcing manufacturers to bear much of the cost of policing the auction site to look for counterfeit Tiffany goods being sold via eBay. A one-week trial was held in federal court in Manhattan late last year, and a decision on which company has to bear those expenses is still pending.
Espinosa said the LVMH decision could be bad sign for eBay in its fight with Tiffany.