eBay denied stay in LVMH case

July 11, 2008, 6:37 PM UTC

The French Court of Appeals today denied eBay’s petition to stay an injunction issued June 30 by a Parisian court that requires eBay to halt all sales of four LVMH perfumes over any site worldwide that is accessible from France, according to an eBay spokesperson.

An eBay spokesman says the company “will comply as technically and humanly possible” with the injunction while it continues to pursue its appeal of the ruling.

In a statement, LVMH says that today’s denial of the stay “confirms the seriousness of the faults committed by eBay’s sites . . . and confirms the significance of the legal precedent set by the Paris Commercial Court’s Judgment on June 30, 2008.” It’s press release is available here.

The perfumes brands affected are Kenzo, Guerlain, Christian Dior, and Givenchy.

The lower court’s order bans not just sales of counterfeits, but sales of genuine bottles of these perfumes, because LVMH chooses to limit sales of these products to exclusive licensed distributors, and it does not permit its licensed distributors to sell over eBay.

Thus, the order bans so-called graymarket sales — sales of genuine products through unauthorized channels — which are not considered illegal in the United States, but are in France. According to lawyers for both sides, the injunction even forbids individuals from reselling genuine LVMH products that they received as gifts.

The injunction apparently takes effect immediately, and violations will be punishable by daily fines of 50,000 euros (about $80,000).

For additional details, see this prior posting. I am trying to get more information from lawyers for each side. (Here is a notice eBay has placed on its French site about today’s ruling.)