Legal Pioneering At The Online Auction Frontier

The Commercial Court of Paris gave three decisions in favor of LVMH in three separate cases. The first two cases were brought, respectively, by Louis Vuitton Malletier, the handbag and luggage section of the LVMH Group, and Christian Dior Couture, one of the Group's haute couture fashion houses. They alleged negligence on the part of eBay for not having taken steps to stop the sale of illegal copies of their trademarked goods on its website. The third case concerned the LVMH Group's perfume brands - namely Dior,TM Guerlain,TM KenzoTM and GivenchyTM - and alleged negligence by eBay in not having taken steps to prevent the sale of perfumes outside of the Group's selective distribution channel. Due to the similarity of the legal issues raised, this article analyzes the cases together.

French jurisdiction

EBay Inc., which is headquartered in the U.S., and eBay International AG, which is located in Switzerland, challenged the French court's jurisdiction, as the offending announcements were displayed on the U.S. website - eBay.com - and the French public was not the target of the advertisements. Additionally, it was argued that the servers which host the company's business are located in the U.S., limiting jurisdiction to that country.

The Court rejected the arguments put forward by eBay. It noted that under the Lugano Convention of 1988 it had jurisdiction over eBay International AG, the Swiss-based subsidiary of eBay Inc. The finding was based on Article 5-3, which provides that "A person domiciled in a Contracting State may, in another Contracting State, be sued: in matters relating to tort... in the courts for the place where the harmful event occurred." ¹ The Court, looking at European Union jurisprudence, indicated that "place" takes in both where the harm occurred as well as where a causal event could be established. ² It further noted that as Internet sites are accessible to the French public (even where not directed to that public), under the jurisprudence of the Cour de Cassation (French Court of Last Resort), French courts have jurisdiction to hear claims for damages caused in France. All together, the Court here found it had jurisdiction over eBay International AG.

In the matter of eBay Inc., the Court noted that the offences were the same as those alleged for eBay International AG. Although it was noted that there...