By Star Chang, posted Jul 22, 2011 at 5:53 AM, 1,886 views,

Taobao Gets Sued by Omega for Selling Fake Watches

Omega and two other famous Swiss watch manufacturers have filed a lawsuit with Beijing court against leading Chinese e-commerce portal Taobao for selling counterfeit watches on its website. Omega claimed that the average price for a genuine Omega watch is around 37,000 yuan (US$5,730), but some Omega watches on Taobao are priced at only a few hundred yuan. The company said that no legitimate Omega retailer would agree to a price below 7,500 yuan (US$1,162), demanding that Taobao ban the sale of watches with prices below that mark on its shopping platform. However, Taobao argued that this was an arbitrary price point and countered the Swiss company’s claim that selling Omegas at prices below 7,500 yuan would risk infringing upon its trademark rights …

Omega, Longines and Rado claim that they have found fake watches being sold on Taobao, and they demanded that the portal should stop selling these watches in future if priced lower than 7,500 yuan (US$1,162) to prevent fake ones from being sold. Another web portal, qianlong.com, was also sued for displaying advertisements for counterfeit watches on Taobao. The three Swiss companies have asked for a total of 2 million yuan (US$310,000) in compensation from the two defendants. Taobao said that the sellers have been reminded that it is their legal obligation to offer genuine products when they get registered on Taobao. The portal has deleted some problematic links after they were informed by the three companies. Taobao further claimed that it is unfair to use a price tag (7,500 yuan) as the only standard to judge whether a product is genuine or not, as prices could vary depending on the sales channel. The firm said there was no evidence that Omega watches offered at lower than 7,500 yuan were fake.

Taobao argued it was simply a platform for members to sell goods and said it forbade members from publishing anything that infringed copyright. It said members selling counterfeit goods were solely responsible for advertising and selling those items. Taobao has tightened its rules on managing product information after receiving complaints from the watch makers. They had taken all Omega watches offered for under 3,000 yuan off the site. However, some users had evaded the ban by mentioning the brand name only in the picture. The site’s screening system was unable to identify illegal information contained inside the pictures.

Previously, Taobao is selling Fake Omega watch with prices as low as 890 yuan (US$135).

Taobao now only offer Omega watches which the price is not less then 3,000 yuan (US$464).

Many Chinese online shopping sites are selling luxury goods at a discount prices. As more and more online shops sell products at prices far below those of the physical market, conflicts of interest arise between these web retailers, traditional stores and the manufacturers. This is especially true for luxury goods. International brand companies do not want their products to be sold cheaply in China. Besides, extremely low prices offered by online stores could also affect the operations of the physical companies. On the other hand, it is not possible for e-commerce portals in China to examine and verify every single information posted on their websites, they are still obliged to delete all problematic links after they are informed about the cases, especially on counterfeit product.

Source: Want Chinatimes, GlobalTimes, Shanghai Daily