eBay Sued for Bogus Rolex Auctions

Two European subsidiaries of eBay were sued by watchmaker Rolex over alleged auctions of counterfeit Rolex watches, according to a filing with the U.S. Securities and Exchange Commission (SEC) made Tuesday by the Internet auctioneer.

The suit, which was filed April 25th in the regional court of Cologne, Germany against eBay GMBH and eBay International AG, alleges that eBay infringed on Rolex's trademarks by allowing users to auction phony Rolex watches on eBay Germany. The suit also alleges unfair competition.

"We believe that we have meritorious defenses against this claim and intend to defend ourselves vigorously," eBay said in the SEC filing.

Rolex is seeking damages and an order forbidding the sale of Rolex watches on the site.

More Suits Coming?

The SEC filing also revealed that eBay anticipates additional infringement suits in the future "as laws such as the Digital Millennium Copyright Act are interpreted by the courts."

The Web auction giant said that, "meritorious or not," these suits could harm its business by resulting in costly litigation, service delay, or expensive changes in its way of doing business.

The filing also said that such lawsuits could result in eBay having to enter into costly licensing agreements.

Court Docket

eBay has had its share of legal conflicts recently, but has managed to come out on top in some key battles. In January, a California court dismissed a US$100 million class action lawsuit against eBay, ruling that the online auction house was not liable for the sale of phony sports memorabilia on its Web site.

And in March, the San Jose, California-based online auction house settled a lawsuit it had filed against online auction search site Bidder's Edge. The settlement called for Bidder's Edge to pay eBay an undisclosed amount and refrain from using its software to crawl listings on eBay's database.

Antiques Roadshow

In other news, eBay announced Tuesday that it is sponsoring the PBS series "Antiques Roadshow." eBay said the deal made it the first Internet company to be a national underwriter of the show.

eBay said it will host a page on its site called "Discovering America's Hidden Treasures," that will be updated weekly by "Antiques Roadshow" with content about appraisal and collecting topics.

eBay also plans to host an auction of a pair of 19th century Levi's jeans starting Friday. The jeans were found in 1998 in a Nevada mining town and will be featured on the History Channel's series "History's Lost & Found." The estimated value of the Levi's is between $25,000 and $35,000, the company said.