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Lawsuit Filed against eBay, PayPal for Infringement and RICO Violations

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Bel Air, CAA lawsuit has been filed against eBay, PayPal and various eBay sellers for trademark infringement and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) linked to the sale of fake products on eBay.com. The plaintiff, who has registered trademarks for various products including iPhone cases and iPhone watch cases, alleges that as many as 2,000 eBay sellers, including the sellers named as defendants in the lawsuit, are using its trademark to sell fake products. The lawsuit claims eBay and PayPal knowingly and deliberately facilitate and profit from the sale of counterfeit products.

According to Deborah Klar, co-counsel with R. Rex Parris Law Firm on the lawsuit, the plaintiff, Wimo Labs, has sent more than 5,000 notices of claimed infringement to eBay since 2013, requesting the auction site remove the fake products. Notwithstanding, the same or similar fake products continue to be listed on eBay.com. This despite the fake sellers using colors and materials in their products that the plaintiff does not use, and despite the fact that the plaintiff does not sell its products on eBay, nor does it allow its licensed sellers to do so.

“As a result of the sale of these fake products on eBay, our client has suffered substantial damage,” Klar says.
“The sale of fake products causes consumer confusion, adversely affects the Lunatik brand and also means our client has lost sales.”

The lawsuit alleges eBay is also engaged in soliciting eBay buyers to purchase fake products and provides specific examples. In addition, according to court documents filed in the lawsuit, eBay has received a copy of The Counterfeit Report, a third-party that provided a report to eBay in November 2014 outlining listings of fake products on eBay; but rather than respond to the report in a responsible way, according to The Counterfeit Report, “eBay retaliated by blocking The Counterfeit Report’s corporate eBay accounts. eBay altered feedback, changed resolved case dispositions and removed counterfeit comments and warnings protecting consumers and legitimate trademark owners such as Plaintiff.”

“On the one hand, eBay says it wants to curtail these [counterfeit] practices but the program it has to do that, called the Vero program, appears to be a sham,” Klar says. “It doesn't accomplish what it’s supposedly intended to do.”

PayPal is named in the lawsuit because sellers are paid via PayPal, which Klar says should give eBay access to enough information about counterfeit sellers to be in a position to shut them down. Furthermore, the lawsuit argues that one of the best ways to shut down counterfeit sellers is to cut off their access to the money transmitters, such as PayPal, who also facilitate the purchase and sale of fake products on eBay.com.

The problem with counterfeit products, Klar says, is widespread on eBay and has implications for many legitimate manufacturers. According to court documents filed in relation to the lawsuit, counterfeiting costs US businesses between $200 and $250 billion every year. In addition to losing sales to counterfeit producers, legitimate producers have their trademark diluted. And, in cases where fake food or drugs are being sold, consumer health and safety are at risk.

Other legitimate manufacturers may be eligible to file a lawsuit against eBay for facilitating the sale of fake goods. Registered trademark holders who have submitted themselves - or through third parties - notices of claimed infringement to eBay or information that products are fake might want to speak with an attorney, to discuss their legal rights.

The lawsuit is Wimo Labs, LLC, v. eBay, Inc, et al., Case number 8:15-cv-01330, in U.S. District Court, Central District of California.

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READER COMMENTS

Posted by

on
Before you (the LunaTik) getting heated with this lawsuit, let's first talk about your after sale support, honor the request of the product that you sell which is MADE IN CHINA and PIECE OF CRAP, it DOES NOT even do what you advertised; waterproof? Yeah right, because of YOUR MANUFACTURE DEFECTS on the case I bought from you, it ruin my device, 799 USD iPhone... GONE!

So, I don't feel a bit or any sorry that someone selling fake case because CLEARLY, your company CAN'T even make a decent product to begin with, so I guess you have to use the lawsuit to make profit? Sham on all of you.

By the way, I did, in matter of fact bought a case that look just like your product from eBay and guess what, that case holds it's claim, waterproof and I dropped it several times without breaking it.

So... sorry to say... the FAKE PRODUCT THAT YOU'VE CLAIM, actually works 100% BETTER THAN your Lunatik cases. It's really sad...

Posted by

on
ebay just scammed me out of 300 bucks from a counterfeit item
and then refused to honor the money back guarantee.

the seller didnt even register with a real name and they still let him sell fake wares.

no more ebay for me

Posted by

on
Just this week I had Ebay take down a sale for the abortion drug Mifepristone. That alone is horrible, but the counterfeits are totally out of control. I've complained to Ebay about this since 2002. Around 2012 I sent numerous letters to the President's office at ebay documenting many hundreds counterfeit items on Ebay. All those sales were taken down, only to reappear in a few days. Most things from China on Ebay are counterfeit. Just in the last few years these fakes have gone from very easy to spot to much harder to spot. Many people don't realize that obscure items like fossils from China are almost all fakes (according to a field paleontologist Ph.D with 33 years experience). Highly prized items such as Magic: The Gathering cards (a one billion dollar a year industry), many of the cards from China are extremely high quality fakes (according to PSA and Beckett card authentication services). Guitars, optics like binoculars and scopes, computer memory, micro disks, cameras, you name it, if it comes from China it's most likely a fake on Ebay. Now China is selling these fakes directly to Americans to resell on Ebay, so it's harder and harder to protect yourself from these fakes. thecounterfeitreport.com has done a great service documenting many of the counterfeits on Ebay and explaining the shenanigans Ebay puts people through who try to report these fakes. Ebay also sells drugs requiring prescriptions, supplements previously recalled by the FDA, illegal US Government military equipment like F-14 aircraft parts, and stolen US government military equipment. (GAO report documenting that: http://www.gao.gov/new.items/d08644t.pdf) It's about time someone stepped up and tried to put a stop to this CRIMINAL ENTERPRISE.

Posted by

on
Bought 3 Fitbits as Christmas gifts. When setting up, got an error message saying the item was not authentic. eBay said it was outside there return guideline and of course the seller, alibabacommerce, declined the return. Out over $190.00--at Christmas time. Expensive learning experience.

Posted by

on
I've stopped doing a lot of purchases on Ebay cause 1) they create a labrinth to get ahold of someone to get the purchaser confused and exhausted, 2) They do NOT have a refund guaranteed if it's outside the US. Note that. This was my biggest grievance as I was duped into buying a fake diamond over seas for a couple hundred dollars. When I had it tested it was fake. The seller wouldn't contact me anymore and Ebay refused to assist cause they said they don't refund international purchases which it says in tiny tiny tiny print somewhere on the website. They are absolutely misleading and continue to let these people sell. It's laziness, they could easily set up some form of a verified seller system. Instead they let counterfeit sellers reign the entire site. Such a shame to be able to take advantage of consumers with no recourse.

Posted by

on
God people, any Ebay item is returnable. Just don't wait more than a week to figure out that you don't want the item.

Posted by

on
The problem has really gotten out of hand as far as fake designer handbags, shoes and cosmetics. Today at a swap meet in san luis obispo CA. I saw fake chanel handbags and chanel cosmetics that i was suspisious of. The cosmetics being faked could contain lead and other harmful ingredients.It is astounding to me how anyone can google hermes ,dior ect and find dealers in China ready and willing to sell you a fake birken bag fo $100.00. Ebay should know better.

Posted by

on
Guys Sold Me Copied DVD Monkees and PBS CONCERT DVDS. Never said was a copy. Blondie DVD set.

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