eBay and PayPal sued over counterfeit products

Phone accessory firm Wimo Labs is suing eBay and PayPal claiming they knowingly allowed the sale of counterfeit products.

The lawsuit - which accuses the two companies of racketeering under the Racketeer Influenced and Corrupt Organizations (RICO) Act - alleges that the defendants "knowingly and deliberately facilitate, proliferate and profit from the ongoing sale of counterfeit and fake products on ebay.com."

Wimo Labs sells mobile phone protective cases and other accessories under the Lunatik brand name and says that since February 2013 it has sent more than 5,500 Notices of Claimed Infringement (NOCI) by at least 2,200 individual eBay registered sellers.

"eBay knew, or wilfully ignored that thousands of eBay sellers have been and are continuing to be engaged in the offer and sale of obvious fake Lunatik Products on eBay.com," it continues.

The complaint also refers to specific instances where eBay buyers have been directly solicited by the online retailer to purchase 'obvious' fake Lunatik products.

The case comes amid increasing scrutiny of the activities of online retailers who have counterfeit products appearing on their marketplace listings, with Alibaba and Etsy both drawn into the firing line in recent months. 

For now, eBay and Paypal - which used to be owned by the online retailer but was spun off as a separate company last month - is keeping tight-lipped about the lawsuit.

"We have received a copy of the complaint and are reviewing it," it said in a statement.  "That said, 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.

"We will vigorously defend our practices in court."