Louis Vuitton, peers fight sale of fakes - Luxury retailers take eBay, other sellers to court to fight knockoffs

It's getting harder and harder to fake it.

Louis Vuitton's brown-and-gold entwined LV logo, one of the most widely duplicated, pops up on fake handbags and accessories sold on downtown Atlanta street corners and online. But luxury design companies, including David Yurman, Ermenegildo Zegna, Burberry and Tiffany & Co., are fighting vendors who sell blatant copies of their merchandise. Also, the U.S. Chamber of Commerce says counterfeit goods cost U.S. companies up to $250 billion a year.

Fakes are big business. At the recent "Countering Global Counterfeiting and Piracy" conference in Washington, D.C., the U.S. Chamber of Commerce estimated that fake goods cost U.S. companies between $200 billion and $250 billion annually. China is the No. 1 source of counterfeit products seized at the U.S. border, accounting for 68 percent of all seizures in 2005, according to the Chamber of Commerce.

Also, the government estimates that fakes are responsible for the loss of more than 750,000 U.S. jobs.

Louis Vuitton — owned by LVMH Moet Hennessy Louis Vuitton — and sister company Christian Dior Couture recently filed a civil suit in France against eBay. The luxury firms hold the online marketplace liable for sales of products they claim to be counterfeit. LVMH alleges that 90 percent of Vuitton bags offered on eBay during the first six months of this year were fakes. The luxury firm could not be reached for comment.

Under the category "designer handbags," eBay offered 50 Vuitton items in a recent search. One, "an authentic Louis Vuitton handbag/purse white with gold" was selling for $157.50. Another "authentic Louis Vuitton crescent-shape LV handbag" was selling for $105. Authentic Vuitton canvas handbags — sold in Vuitton stores and authorized retailers — start around $600.

EBay spokesman Hani Durzy said, "We believe this lawsuit is without merit and disappointing." EBay has 203 million registered members who have bought or sold $45 billion worth of goods this year.

"Counterfeiters are bad for eBay and undermine the trust that e-commerce shoppers have with us," Durzy said. "Oftentimes, there is no way we can tell if an item is counterfeit."

To combat the problem, the company has created Vero, a program for companies to easily report misuse of their trademarks on the site.

But, the crux of the suit, according to New York lawyer Helen Hill Minsker of Banner & Witcoff Ltd., is whether eBay is obliged to take a more active role in policing its site for known and unknown counterfeit auction items.

"This is the question that the courts in the United States, France and elsewhere are trying to resolve," Minsker said.

In June, LVMH successfully brought a similar suit in France against the Internet search engine Google. The French Court of Appeals ordered Google to pay nearly $400,000 in damages to LVMH. Tiffany & Co. has a similar case pending against eBay.

Online retailers aren't the only companies under attack.

In June, the Italian fashion group Fendi sued Wal-Mart, accusing the megaretailer of selling counterfeit handbags with the Fendi logo at its Sam's Club warehouse stores. In September, the menswear firm Ermenegildo Zegna filed a trademark infringement lawsuit against New York store 56th Street Menswear for allegedly selling a counterfeit suit. Coach handbag firm also filed a lawsuit against a Target store in Florida, accusing the store of selling fake Coach bags.

While Louis Vuitton rarely comments on lawsuits, New York jeweler David Yurman aggressively protects his cable jewelry designs. Turning a blind eye to counterfeiters diminishes the value of the brand, Yurman has said in recent interviews.

Pursuing counterfeiters "sends a message to those who bottom feed from American design talent — do so at your peril," said Susan Spagna, vice president and general counsel for the jewelry company.

When counterfeit goods flood the market, both company owners and customers get hurt. "The companies suffer loss of income and loss of reputation and goodwill," said Minsker of Banner & Witcoff Ltd. "The public suffers when it receives counterfeit goods instead of genuine ones.

"If LVMH is successful in this suit, then it may result in eBay and others adopting new safeguards to prevent, or at least police, counterfeiting.

Source: ajc.com