Post by Lux on Jul 6, 2008 12:46:40 GMT 12
By ROB STOCK - Sunday Star Times | Sunday, 06 July 2008
TradeMe is being sued for an undisclosed sum in damages by an importer who claims it did not do enough to prevent counterfeit versions of his goods being sold in online auctions.
The case is being taken by Paul Meier, managing director of Brand Developers Ltd (BDL), the licensed importer of Ab King Pro exercise machines, which are sold mainly through TV infomercials.
Meier claims TradeMe auctions sold thousands of counterfeit Ab King Pros made from lower-grade steel and imported from China by TradeMe members.
He likens his action to the successful civil suit taken by luxury goods maker Louis Vuitton Moet Hennessy against online auction site eBay in France. LVMH was awarded $US61 million ($80m) after the court ruled the online auction operation had not done enough to prevent the sale of counterfeits. eBay is appealing that decision.
"TradeMe was very difficult to deal with on this," Meier said. "They didn't want to know anything about it. There were approximately 7000 auctions before they closed them down.
"My take on it is there is a big counterfeit market on TradeMe and it is technically not policed because they don't check any of the auctions before they just chuck them up there.
"It gets the whole black market economy happening in this country."
TradeMe's Mike O'Donnell confirmed that TradeMe had been named as one of a number of defendants in the civil suit, which was due to come before the courts in late 2009, but he said it was inappropriate to comment at this early stage.
He said TradeMe employed a fulltime investigator to work with firms at risk from counterfeit sales on TradeMe.
Those firms were asked to provide TradeMe with proof they were the sole licensed importer of a specific good or particular brand and TradeMe would identify and scrutinise suspect auctions.
That system parallels the Customs border protection notice system, where licensed importers of branded goods such as Prada, Dunhill, Playboy, Pumpkin Patch and Zippo can lodge notices that put Customs on alert for imports of those brands, counterfeit or not, coming in through unauthorised channels.
"Worldwide it is a problem, and New Zealand is no exception to that," said O'Donnell.
"Last week, for instance, we had 1.4 million auctions and over that time our compliance team warned or banned 250 of our members [for selling counterfeit goods, or goods they had no licence to sell]. It's a growing problem."
O'Donnell said TradeMe had a zero tolerance policy and it took as little as one auction to prompt it to respond. Members could easily be banned and TradeMe used its "audit trails" to help with civil or criminal prosecutions.
BDL is already running up a big legal bill to protect the Ab King Pro brand.
Meier said he had spent $250,000 already, and expected the bill to double. "What do you do? If I didn't stand up for the brand, it would be buggered by now."
FAKING IT
Counterfeiting is a huge global industry estimated to be worth $US450b-$US500b a year, compared to the estimated $US550b illicit drugs trade.
Between 1997 and 2007, Customs intercepted around 1.1m counterfeit items.
Counterfeits coming into the country include car parts, food, DVDs, cigarettes, clothing, drugs (usually erectile dysfunction drugs here, though in the developed world up to 40% of all drugs are counterfeit), toys, electronics, and high fashion items such as handbags and sunglasses.
