Payment juggernauts eBay and PayPal are facing a lawsuit for patent infringement centered on fake products.
In a Monday (Aug. 24) article from Lawyers and Settlements, the suit, filed by Wimo Labs, which has trademarks for products that include iPhone cases and Apple Watch cases, said that the plaintiff has sent more than 5,000 notices of infringement to eBay over the past two years. In those notices, Wimo had requested that eBay remove those counterfeit products, which as they continue to be listed on the site, allegedly allow the company — and PayPal, through which payments are processed — to profit at Wimo’s expense.
Key evidence cited by Wimo in its filing against the eCommerce and payments companies include the fact that there are materials used in the knockoff items that the plaintiff does not use, and there are colors that it does not use — not to mention the fact, Wimo notes, that it does not use eBay at all as a platform for its own sales via Wimo or through licensed sellers.
The suit also alleges that eBay is engaging in disruptive business practices. In one alleged case, rather than responding to a third-party report from The Counterfeit Report, the company instead opted to change commentary on the report’s sites and blocked The Counterfeit Report’s corporate accounts.
In reference to PayPal as a defendant, the article notes that the former eBay unit is the conduit for sellers to be paid, and according to Wimo’s counsel, that means the company is actually in a position to uncover and put a stop to eBay’s practices, simply by removing the ability for those sellers to get paid.
The filing itself notes that counterfeiting is big business, costing retailers, industry-wide, between $200 billion and $250 billion annually, with attendant brand and trademark dilution.
Earlier this year, Alibaba was similarly accused of selling luxury brand knockoffs, but the company denied any wrongdoing. That lawsuit was filed by companies owned by Paris-based Kering, with include Gucci and Yves St. Laurent.
“We continue to work in partnership with numerous brands to help them protect their intellectual property, and we have a strong track record of doing so. Unfortunately, Kering Group has chosen the path of wasteful litigation instead of the path of constructive cooperation. We believe this complaint has no basis and we will fight it vigorously,” Alibaba Spokesman Bob Christie said in a statement at the time.
Alibaba continues to be haunted by such issues, and it recently launched an English counterfeit reporting system after facing criticism for being soft on counterfeit sellers.
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