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When Johann takes on Koos...

This morning the Financial Times Deutschland (FTD) carried an article about a decision of a French court, which might be of interest to the people at Naspers and will definitely be of interest to the people at Richemont.

In fact, the court case has the potential to make dinners between the top functionaries of the two camps a tad less jovial in future.

Here is my translation of the full FTD article. Before you start, you should remember that Naspers bought the online auction platform Tradus (for something like €1.8 billion, if I remember correctly) in March this year and moved the head office to Switzerland shortly thereafter.

Tradus has online platforms in 13 EU countries, with the strongest sites in Eastern Europe. In a few EU countries where EBay is very dominant (like Germany), Tradus has no presence. France is another. In Switzerland the Tradus site Ricardo.ch is number one and EBay number two, or three.

Another hint: In the EU luxury goods manufacturers are intensifying their efforts to keep fakes (goods which infringe on their trademark rights) off online auction platforms, such as those of EBay and Tradus.

Here the article:

EBay ordered to pay Louis Vuitton damages

By Katja Wilke, Hamburg

A few weeks after losing a court case against luxury goods manufacturer Hermes, EBay this week had to stomach another defeat against a luxury goods manufacturer.

A French commercial court yesterday ordered the online auction house to pay the luxury goods concern Louis Vuitton (LVMH) more than €38 million as compensation for damages. LVMH accused EBay of offering traders a platform for selling fake LVMH products, specifically of the brands Dior, Givenchy and Kenzo. EBay has appealed against the decision, as it has also done against the Hermes decision.

Experts see the very tough decision as being dangerous for the whole sector, more specifically for all online companies selling goods and content of unknown outsiders.

"Should the decision stand, it could be the end of many online platforms," said lawyer and IT expert Sibylle Gierschmann of the partnership Taylor, Wessing. It is technically and from a personnel point of view impossible for online auction platforms to check every product before it is listed. In 2007 EBay sold goods valued at €60 billion. "The obligation to check should be reasonable for online companies," said Gierschmann. "A court which hands out damages too easily, undermines this basic rule," she added.

Experts reckon the size of the damages order is extremely high. In the recent Hermes case, a French court ordered EBay to pay only €20,000 compensation for damages.

In Germany similar actions have to date been less successful against online platforms. Watch manufacturer Rolex has, admittedly, been partly successful against EBay, but basically the Federal court stuck to its assessment that an online platform do not have to pay compensation for illegal goods and content on its platform - as long as it did not know the party listing the goods or content. But, platform operators are obliged to remove such goods and content from their sites as soon as they learn about their presence.

End of article.

One wonders how much longer before Hermes and Louis Vuitton find fakes on Tradus sites. And much worse...how much longer before Swiss-based Richemont finds fakes on Ricardo.ch, Tradus's Swiss site.

After all, all Johann has to do, is type in www.ricardo.ch and then click on "Markenuhren" or "Luxusmarkenuhren" to see what's on offer, and then phone his trademark attorneys to check out the legality of the listed stuff.
1.7.08 10:58


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Sleepless in Oranjezicht

The EBay/Louis Vuitton story continued to make waves in the German media today with, among others, another long story in the Financial Times Deutschland (FTD).

The article gave an indication of the dimensions of the problem. It quoted EBay as saying it checked (for legality) and removed 2,2 million "potential fakes" from the platform in 2007. Just imagine the costs involved with this policing action!

But, the most important paragraph (for the folks in Cape Town) came right at the end of the article:

"When it comes to trademark piracy, the officials of the EC Commission are stepping up the pressure. Commissioner of the internal market Charlie McCreevy demanded more engagement from web traders in the fight against falsified goods. "Brand owners and online platforms should get together to search for solutions," said McCreevy. "Should there be no solution, the pressure for legislation on the EU level will increase," he said.

Not a very comforting thought for online platform owners!

It looks like unavoidable additional costs are on their way to portals, such as the ones operated by Tradus.

Why? Because even when platforms and brand owners were "to get together to find a solution", there is no way the brand owners can "give" anything. In the trade mark world, there is no such thing as being soft on violators. As the owner of the rights you have to be seen as willing and able to defend your rights...and then do it.

The world of trademarks is where the rule "defend it, or lose it" governs. (OK, the rule "use it, or lose it", as well. But, that's a different story.)

Owners of trademark rights cannot, for instance, say to online platforms they'll stomach right-infringements for a period of, say, four weeks (to give the platforms time to check and remove), before they take legal action. Zero tolerance is the only way to go.

All in all, not a very comforting development for the proud, new Tradus owners down in the Mother City.
2.7.08 11:10


Firstcape passes first million

The UK drinks magazine Harpers had this good news for SA's wine industry today:

FirstCape passes 1m case sale mark

FirstCape has passed the 1 million case mark in the UK's so-called off trade, according to the latest Nielsen Report dated 14th June 2008.

Greg Wilkins, director of Brand Phoenix Ltd, co-owners of FirstCape, said "the brand is performing very well and is in line with all expectations".

“With the Lions Tour 2009 and the South African World Cup 2010 approaching, it should be a great couple of years for the South African category,” he added.

FirstCape is partner sponsor of the British and Irish Lions tour of South Africa 2009.

end of quote.

FirstCape was launched in the UK market about six years ago and by 2006 the number of partners already stood at five co-operatives (with 212 growers).
2.7.08 13:41


Comedy hour at SAB Miller head office

The guys at SAB Miller in Johannesburg and London must be laughing their backsides off. SAB Miller boss Graham Mackay reckons Inbev's $47 billion offer for Anheuser-Busch is far too high, for reasons which sound quite convincing (see interview below).

But, today Anheuser-Busch rejected the offer on the ground the price is too low! And Inbev said it's not giving up the chase.

This is shaping up to be a classic case of "two dogs fight...the third runs away with the bone".
2.7.08 13:57


Naspers has a new 'gatgabba' in Germany

For the second time in two weeks the names of SA-based media house Naspers and German media group Georg von Holtzbrinck popped up in articles with the two as partners.

The two groups seem to be strengthening their ties. If that is so, I can only say: Good choice, Naspers.

The first article referred to the two as partners in a German mobile TV project known as Mobile 3.0 (read article below titled "Naspers's German excursion threatens to derail").

This morning I stumbled across a second article (actually a press release...the link is below).

Like Naspers (since 1997), Holtzbrinck has also been extremely active in the web world for a number of years. I guess one could say Naspers is Africa's leading internet company? Well, Holtzbrinck is (in my opinion) Germany's most successful and most innovative publishing group when it comes to internet businesses.

Having worked for the one for 17 years and having lived 100 meters away from the front door of the other's head office in Germany for six years, my gut tells me the two fit together.

There's another reason why I think they fit together: Both love to throw money at interesting internet projects. Like this one:

(Please paste into your browser in a single line. Sorry for being so "agter die klip".)

http://www.prnewswire.co.uk/cgi/news/release?id=231605

Here again, the cooperation makes sense: Holtzbrinck is big in social networks (or so-called Web 2.0 portals), and will have many uses for an application like the one mentioned in the press release. As will Mobile 3.0, the joint venture mentioned above.
3.7.08 09:56


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