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Online retailer eBay and financial services company PayPal have been accused of “intentionally turning a blind eye” to the sale of counterfeit products online.
Wimo Labs, which owns the Lunatik brand of mobile phone cases, sued eBay and PayPal alleging that they are facilitating the sale of counterfeit iPhone and iWatch cases that bear the 'Lunatik' trademark.
A lawsuit was first filed in the dispute in August at the US District Court for the Central District of California but Wimo Labs filed an amended complaint on November 20.
In the amended lawsuit, Wimo Labs added a claim that eBay and PayPal set up the ePacket scheme to make it easier for overseas companies to ship fake products to the US.
“eBay recognised that the company and PayPal could reap tremendous profits from the sale of fake products if eBay.com could provide a platform for sellers to cheaply source those products overseas,” Wimo Labs claimed.
ePacket was established in 2011 to allow users to sell lightly weighted products such as mobile phone accessories.
“eBay and PayPal intentionally turn a blind eye to the infringing activity on ebay.com of many of its sellers.
“Because eBay and PayPal cannot continue to enjoy the enormous profits derived from the proliferation of fake products sold on the eBay website if the intentional infringing unauthorised sellers are excluded,” the court document added.
Wimo Labs said that since February 2013 it has alerted eBay 5,557 times to 2,200 accounts that are allegedly selling infringing products.
A spokesperson for eBay told TBO that it rejected Wimo Labs' claim.
"Counterfeits are not welcome on eBay and we have a number of sophisticated tools, policies and other measures in place to keep them off our site. Courts have repeatedly recognised that eBay's efforts are comprehensive and comply with the law."
eBay; PayPal; counterfeit; Wimo Labs; Lunatik; trademark