Luxury Retailers Want eBay To Police For Knockoffs A French court ruled this week that eBay must pay Louis Vuitton more than $60 million in damages for allowing fake goods to be sold through its site. Co-host Ari Shapiro talks with Chris Sprigman, a professor of intellectual property law at the University of Virginia, about the implications of the ruling.

Luxury Retailers Want eBay To Police For Knockoffs

Luxury Retailers Want eBay To Police For Knockoffs

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A French court ruled this week that eBay must pay Louis Vuitton more than $60 million in damages for allowing fake goods to be sold through its site. Co-host Ari Shapiro talks with Chris Sprigman, a professor of intellectual property law at the University of Virginia, about the implications of the ruling.

RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

ARI SHAPIRO, host:

And sitting in for Steve Inskeep, I'm Ari Shapiro. A French court ruling this week may make it harder to buy things like bags and perfume on eBay. The court said the auction site is responsible for the fake Louis Vuitton goods that people sold on the site. And here in the U.S., eBay is waiting for a New York judge to rule in a similar case filed by the jewelry company Tiffany.

We've called Chris Sprigman, who teaches intellectual property law at the University of Virginia, to talk with us about this.

Welcome.

Professor CHRIS SPRIGMAN (University of Virginia): Thanks.

SHAPIRO: Louis Vuitton claims that 90 percent of the bags sold on eBay as Louis Vuitton bags are actually fakes. eBay is not the one actually selling these bags, so to what extent is eBay responsible for this?

Prof. SPRIGMAN: Yes, there are counterfeit bags being sold, but of course eBay doesn't control what people list. They're a marketplace. They provide a service.

SHAPIRO: There are also counterfeits that people may never know are counterfeits, and is there any way that the Web site or the courts can protect consumers from being duped in that way?

Prof. SPRIGMAN: Well, you know, the difficulty of determining whether something is a counterfeit points up the difficulty with making eBay responsible. So remember, eBay is different from, say, a swap meet at a shopping center, because eBay never takes delivery of the goods. eBay, therefore, is the wrong party to be determining whether an auction can go ahead or not. And if it turns out that the U.S. court obliges eBay to do that, I would imagine it's going to be very difficult for them to be providing an auction service at all for luxury goods.

SHAPIRO: Let's just take a step back and discuss the trademark issues here. I understand that clothing designs, for example, cannot be trademarked, but something like the Louis Vuitton logo can. Where's the line there?

Prof. SPRIGMAN: Well, clothing designs are not subject to trademark protection and they're not, on the whole, subject to copyright protection either. And in the fashion industry - at least in the U.S. - you have a practice of relatively free appropriation, so fashion designers are free to take inspiration from other designers.

And this has been a good thing in the States, because the fashion industry uses copying to set trends and trends are what encourages consumers to buy apparel. But we have trademark law that protects logos, like Louis Vuitton's mark, and that's a different thing. And the law properly prohibits it.

SHAPIRO: So the line there is you could make a Louis Vuitton-style bag?

Prof. SPRIGMAN: Yes. And in fact Dooney & Bourke, which is another company that makes bags, does exactly that. They make a Louis Vuitton-style bag and instead of saying LV on it, it says DB. And Louis Vuitton has sued them, and Louis Vuitton has consistently lost.

SHAPIRO: Tell me about the difference between bags made by Louis Vuitton and the laws that govern them as compared with Tiffany jewelry, for example. Are the laws different if we're talking about a diamond ring as opposed to a handbag?

Prof. SPRIGMAN: Well, again, the case in New York - the Tiffany case against eBay - involves Tiffany products, accessories, jewelry, that are protected by trademark. The difference is that the rules for whether eBay can be held liable for trademark infringement in the States are much narrower than in France. What Tiffany would like to do is they'd like to establish a rule that because eBay knows that some auctions might involve trademark infringement, that they have a general duty to police every item that is offered for auction on the site.

SHAPIRO: It sounds like if eBay were required to police every item offered for sale on its site, that would just be logistically impossible, I would imagine.

Prof. SPRIGMAN: Well, eBay has one and a half billion listings or so annually. Again, they're the wrong party to police. The more effective policeman is Tiffany, but they don't want to spend the money policing. They'd like eBay to spend the money policing.

SHAPIRO: Chris Sprigman teaches intellectual property law at the University of Virginia.

Thank you very much.

Prof. SPRIGMAN: Sure.

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