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Sep 17 2008

When Johann takes on Koos

Published by at 1:20 pm under Companies

First published on my old blog on 1/7/2008. 

This morning the Financial Times Deutschland (FTD) carried an article about a decision of a French court, which might be of interest to the people at Naspers and will definitely be of interest to the people at Richemont. 

In fact, the court case has the potential to make dinners between the top functionaries of the two camps a tad less jovial in future. 

Here is my translation of the full FTD article. Before you start, you should remember that Naspers bought the online auction platform Tradus (for something like €1.8 billion, if I remember correctly) in March this year and moved the head office to Switzerland shortly thereafter. 

Tradus has online platforms in 13 EU countries, with the strongest sites in Eastern Europe. In a few EU countries where eBay is very dominant (like Germany), Tradus has no presence. France is another. In Switzerland the Tradus site Ricardo.ch is number one and eBay number two, or three. 

Another hint: In the EU luxury goods manufacturers are intensifying their efforts to keep fakes (goods which infringe on their trademark rights) off online auction platforms, such as those of eBay and Tradus. 

Here the article:

eBay ordered to pay Louis Vuitton damages

By Katja Wilke, Hamburg

A few weeks after losing a court case against luxury goods manufacturer Hermes, eBay this week had to stomach another defeat against a luxury goods manufacturer. 

A French commercial court yesterday ordered the online auction house to pay the luxury goods concern Louis Vuitton (LVMH) more than €38 million as compensation for damages. LVMH accused eBay of offering traders a platform for selling fake LVMH products, specifically of the brands Dior, Givenchy and Kenzo. eBay has appealed against the decision, as it has also done against the Hermes decision. 

Experts see the very tough decision as being dangerous for the whole sector, more specifically for all online companies selling goods and content of unknown outsiders.

“Should the decision stand, it could be the end of many online platforms,” said lawyer and IT expert Sibylle Gierschmann of the partnership Taylor, Wessing. It is technically and from a personnel point of view impossible for online auction platforms to check every product before it is listed. In 2007 eBay sold goods valued at €60 billion. “The obligation to check should be reasonable for online companies,” said Gierschmann. “A court which hands out damages too easily, undermines this basic rule,” she added. 

Experts reckon the size of the damages order is extremely high. In the recent Hermes case, a French court ordered eBay to pay only €20,000 compensation for damages. 

In Germany similar actions have to date been less successful against online platforms. Watch manufacturer Rolex has, admittedly, been partly successful against eBay, but basically the Federal court stuck to its assessment that an online platform do not have to pay compensation for illegal goods and content on its platform – as long as it did not know the party listing the goods or content. But, platform operators are obliged to remove such goods and content from their sites as soon as they learn about their presence. 

One wonders how much longer before Hermes and Louis Vuitton find fakes on Tradus sites. And much worse…how much longer before Swiss-based Richemont finds fakes on Ricardo.ch, Tradus’s Swiss site. After all, all Johann has to do, is to click here, and then click on “Markenuhren” or “Luxusmarkenuhren” to see what’s on offer, and then phone his trademark attorneys to check out the legality of the listed stuff.

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