The Tribunal de Grande Instance in Troyes in eastern France ruled on June 4 that eBay was responsible for the sale of three counterfeit versions of Hermes bags and ordered the auction site to pay €20,000 in damages to the fashion house.

"This verdict was quite a surprise. It has got trade mark owners all over the world excited," said Jean-Philippe Bresson, a partner of French firm INLEX.

Bresson also noted that this was the first time a French court has found eBay liable in a counterfeiting case and that it could mean that trade mark owners will be encouraged to target the auction site rather than its users.

According to an excerpt of the ruling published by Agence France-Presse, the Court ruled that "by selling Hermes bags and branded accessories on the eBay.fr site, and by failing to act within their powers to prevent reprehensible use of the site", the user and eBay "committed acts of counterfeiting and imitation of French brand names ... to the detriment of Hermes international".

eBay has been ordered to pay the damages together with the eBay user and the court has also asked the company to publish the ruling on its website.

eBay say that it has a system in place to protect IP rights of third parties. The Verified Rights Owner (VeRO) programme allows IP owners to easily report listings that infringe their rights.

However, brand owners believe this system is inadequate. They say that the onus is on the brand owners to find out if counterfeit goods are being auctioned instead of it being on eBay who they feel should take more concrete steps to stop illegal products from being auctioned.

eBay issued a statement after the ruling reiterating that it takes counterfeiting very seriously and condemns it. "The court ruling relates to past issues of seller verification. The court acknowledged that eBay has closed these loopholes referencing the anti-counterfeiting measures spearheaded by the VeRO scheme which brings rights owners and eBay together to tackle the menace of counterfeit goods."

Ray Black, a partner of SJ Berwin in London, told Managing IP that it is "too early to say whether eBay will shudder because of this verdict and change their business practice". But he did say that brand owners will be pleased and more persuaded to take on eBay and will be waiting to see if this verdict affects other pending cases.

Bresson added that the decision related to an incident in 2006 and "the eBay system then was not as efficient as it is now so future cases might be slightly different".

eBay has a few similar cases pending in France and at least two verdicts are expected later this month.

French beauty company L'Oréal filed lawsuits in September last year against the online auction house in France, Germany, the UK, Belgium and Spain over the sale of fake fragrances on the site.

Louis Vuitton and Dior Couture have also sued eBay before the Paris Commercial Court, accusing the website of assisting in the sale of counterfeit goods.

It is expected that this verdict might impact these cases, and if it does then eBay will have to find a new way to tackle the sale of counterfeit goods on its online auctions.

The cases were analyzed as part of Managing IP's survey of important pending trade mark litigation, published in May. The article is available to subscribers and Managing IP triallists.