On record, LVMH just came out on top in a head to head trademark battle with eBay in Paris. A tribunal there decided that eBay had indeed violated LVMH trademarks and fined them 80,000 Euros for it. But this one really requires a closer look. While they did win, relatively speaking…. they didn’t win much. And this is no ordinary trademark discussion…
First of all… LVMH was seeking 4 MILLION Euros (why am I imagining the lawyer with his pinkie to his lip!) from eBay (a $50+ BILLION company)… and the courts set damages at just 2% of that sum… or only 80,000 Euros. It just kind of feels like this really is just a slap on the wrist. LVMH can not be happy with that.
But part of the reason why the punishment wasn’t more harsh- has got to be the fact that we’re not talking a traditional run of the mill trademark case here. You know the kind- and we TOTALLY support this type- where eBay gets sued for not doing more about fakes being listed on the site?
This was not one of those cases. This is a keyword violation case. eBay’s deputy General Counsel phrased the legal question this way:
“Is it trademark infringement to buy and sell adwords?”
So basically, Louis Vuitton did not like the fact that eBay was paying for the use of keywords that they have trademarked. These included words like Christian Dior, Givenchy, Kenzo, and Guerlain, and other LVMH owned perfume related & trademarked terms. The entire case hung on the question of whether it is wrong to buy and sell adwords that include trademarked names.
Pierre Gode… the LVMH Group director said,
“The Tribunal has ruled that eBay, in using in its advertisements the keywords of some of LVMH’s brands, has committed acts of counterfeiting through reproduction or imitation,”
IMO, this is going a bit far… I mean, I know that Louis Vuitton has always kept tight control over the use (and mis-use) of their good name. And I’m sure that’s partially why they have maintained such great status and reputation over the years. But, Louis Vuitton does not like any disruption of their distribution chain period. They’d much rather that no one but their own Boutiques or other establishments under their control be able to sell items that they produce. That sounds fine, but what it means in France, for example… is that if you buy an LVMH branded perfume, (Dior for example) and you bring it home- and just don’t like it, you are not allowed to sell it on eBay.fr. This was decided in the case that LVMH won against eBay last Fall.
Louis Vuitton controls items from production to sale- so any transactions going on outside of that chain- are basically considered countefeit. You can see this in practice, in any item that you buy from LV. Let’s say you pick up a brand new Louis Vuitton Pegase suitcase from the louisvuitton.com- and end up haveing a problem with the handle. The closest boutique is hours away- so you decide to bring it over to your local shoe repair for the quick fix. Louis Vuitton will no longer consider this item authentic. They will disassociate themselves with it, and will no longer accept it for repair. Louis Vuitton’s adwords battle is an effort in the same vein.
Like I said… I totally back any efforts to clean up all the fakes online & off. But I’m not into this Google fight at all. This is not the first time LVMH has sued in Keyword related trademark cases. They sued Google and won…. in a case that focuses on Google’s Adwords system being used by counterfeiters. The result of this is that we (and other legitimate sellers like us) are not allowed to purchase these keywords on Google. Basically this means that we can’t use any LV trademarked word in an adwords ad on Google. So, a person is searching Google for a pre-owned authentic Louis Vuitton Etoile- entering those terms in it’s search- shouldn’t find spondsored ad results that use those words. Seems like there is a win/win solution out there somewhere…
I actually applaud Louis Vuitton’s efforts in combatting counterfeits- and recognize that what they’ve done to control distribution has been fantastic in keeping their value and reputation high… But brand owners also need to recognize that part of what makes a luxury item valuable (think not only bags, but jewels, or art or boats or houses) is the value that item has on the resale market. Limiting the option of an owner to sell that piece down the road- is not good for the business and is restrictive for the owner.
Anyway… we’ll see where this goes. The 80,000 Euro fine may have been relatively small… but LVMH is sooo not done with them yet. It looks like the Tribunal also made sure that eBay knew in no uncertain terms- that additional violations would result in a fine of 1,000 Euros per infringement. eBay’s now waiting on the results of a couple of Google cases that are in the courts now that may have an impact.