After four-and-a-half years of crying money, Italian fashion house Versace has won a legal victory against Griffith Suisse Luxury Group, which is the misleading name of a Philippines- and Australia-based company which sold knock-off versions of the label on eBay.
Counterfeit designer goods have been a huge problem for the online auction giant. Tiffany & Co. sued the company after the jeweler determined that 83% of its listed products were in fact counterfeited. In 2010, eBay won a dismissal of the case.
Another high profile legal tangle: in 2008, a French court ordered the retailer to pay luxury group LVMH $61 million in damages — but the decision was overturned in 2012.
Pursuing legal action against eBay hasn't proven to be the most effective route for companies seeking to protect their trademark in online sales. eBay currently has a policy against counterfeiting, promising customers a full refund in case they inadvertently buy a knock-off. The retailer has also been hosting an anti-counterfeit online campaign, You Can't Fake Fashion, in partnership with the CFDA since 2011.
Versace's recent lawsuit and victory show the fashion industry taking a different approach to reducing online sales of designer fakes. Instead of holding eBay responsible for listed knock-offs, the Italian brand took action against the actual counterfeiting group. And won!
But the lengthy litigation seems like a testament to how inhospitable the legal climate can often be to companies hoping to protect themselves against even the most blatant forms of trademark infringement. For Versace, the process took almost five years and who knows how many millions of dollars.
[Update, July 15th, 2013: Griffith-Suisse Luxury Group has contacted me with a statement refuting the above report and claiming they were the ones to initiate a lawsuit.
"It was Griffith Suisse Luxury Group who first initiated the lawsuit against Versace and eBay in 2008. Versace was alleged to have abused its VERO rights by instructing eBay to take down multiple of Griffith-Suisse Luxury Group’s listings even though they were evidently all authentic. eBay took the listings down without the required NOIC (Notice of Claimed Infringement), clearly abetting the luxury brand’s attempt to control the market by removing goods without evidence or basis. As a matter of fact, eBay has not been able to produce a single properly filled out NOIC document for any luxury items de-listed on Griffith-Suisse Luxury Group’s eBay account. It is obvious that eBay has been making biased decisions in favor of the luxury brands at the detriment of it’s own sellers [sic]."
The company sent me a copy of the complaint filed with the Santa Clara County Court, urging me to verify it with the courts in California. The document is dated October 2011.
Versace's four-and-a-half year legal battle and subsequent victory was initially reported by WWD, and then broadly covered by many other media outlets.
I reached out to Versace for a comment on the victory back in May. Separately I also wrote to Susan Scafidi, a copyright lawyer who specializes in fashion law, for more context on whether this was, as some were claiming, a "landmark decision." I haven't heard back.]