LVMH suffers partial setback in eBay court challenge

PARIS May 3 (Reuters) - French luxury goods company LVMH suffered a setback in its attempts to stamp out counterfeit trading on eBay, as a French court partially overturned a previous ruling against the online auctioneer.

France's highest appeals court found that a lower court did not have jurisdiction over the San Jose, California-based company's U.S. website but upheld the earlier ruling as applied to its French and British sites.

A host of perfume and cosmetic brands under the LVMH umbrella, including Christian Dior, Givenchy and Guerlain, had sued eBay claiming that the site allowed trade in counterfeit goods.

LVMH also claimed that the sale of real perfumes through non approved distribution channels like eBay hurt its business.

In 2008 a lower court in France ordered eBay to pay LVMH 38.5 million euros. A subsequent appeals court reduced the sum to 5.7 million euros but affirmed that eBay had been in the wrong.

The decision on Thursday will likely lead to a reduction in the existing fine, the court said, once the lower court reviews the case again.

The court also overturned an injunction banning the trade in LVMH perfumes on the eBay site, noting that such trade did not violate the laws governing private commerce.