A WHIFF of perfume hangs over law courts in Paris and London this week as French consumer group L’Oréal and online retailer eBay square off in a series of legal tussles over counterfeit goods and the right of companies to dictate where their products are sold.

The case could have more far-reaching implications as the European Union is considering rules that could shape the future of online shopping.

Yesterday, L’Oréal launched a trademark infringement case in London’s high court, accusing the auction site of selling goods, ranging from perfume to mascara, that were either counterfeit or sourced from outside the European Economic Area via its website.

By failing to monitor fakes, eBay was in effect acting in concert with the sellers of those goods, L’Oréal’s lawyers argued.

Ebay denies the claims and says it is providing a trading platform. Responsibility for looking after L’Oréal’s trademarks, it contends, rests primarily with L’Oréal.

The dispute is the latest in a series of courtroom duels between the two companies, which have spanned five European jurisdictions and broadly similar claims.

Just as the UK case gets into full swing, the Tribunal de Grande Instance in Paris tomorrow gives its verdict in the French case.

Luxury goods makers LVMH and Hermes have won rulings in the French courts, suggesting eBay should have done more to prevent counterfeits. However eBay has won in other cases, including a Belgian battle with L’Oréal.

This inconsistency is increasing pressure on the EU. Officials are about to consider whether rules giving manufacturers discretion over how they distribute their goods should be changed.

A review is required before spring next year and lobbying is intense.

Fashion designer Karl Lagerfeld has even paid a visit to EU competition commissioner Neelie Kroes. – (Financial Times service)