AN INCREASING number of businesses are finding themselves up against multi-national corporations for allegedly selling "grey market" goods, according to an intellectual property lawyer.
The so-called grey market can include the trade of any legal goods - often items such as technology or software - through unofficial, unintended or unauthorised distribution channels.
Auction website eBay was last week ordered by a French court to pay more than £31m in damages to a luxury goods group for offences including allowing online auctions of fake and illegal goods.
A key element of the claim by LVMH - owner of fashion brands Louis Vuitton, Christian Dior and Givenchy - was that sales of its genuine perfumes such as Kenzo and Givenchy on eBay's French site were unlawful as only authorised dealers are allowed to sell them.
Michael Sandys, a specialist in intellectual property law and partner at Merseyside firm Kirwans, has seen a sharp rise in the number of such cases.
"We have seen a major increase in the number of grey goods cases brought by a variety of multinationals against regional and national firms.
"The majority of our clients are forced to defend their position against much larger organisations and they often face a struggle of David versus Goliath proportions.
"Only last week, we were in the High Court representing a medium-sized software re-seller in an action involving software company Adobe.
" It was eventually settled by consent order meaning there are now tight restrictions in place."
The eBay case is the latest in a long line of high-profile claims involving grey goods trading.
Five years ago, it was ruled that Tesco had acted illegally by importing Levi's jeans from outside Europe and selling them in their supermarkets, while in April this year tobacco giant Philip Morris asked the International Trade Commission to take action on grey goods.
Large multinationals and suppliers of household brands are bringing claims against re-sellers whom they claim have sold their goods outside of their intended geographical market or without a distribution contract between the two parties.
Many suppliers buy products at a late stage in the supply chain in good faith, and are unaware of their origin or any market restrictions which might have been imposed by the manufacturer or licensees.
Mr Sandys defended one of his clients against Bill Gate's Microsoft Corporation last year after they allegedly sold goods outside of the intended marketplace.
"The client was forced to concede when the case became drawn out and they could no longer afford to contest the action," Mr Sandys said.
"There is no suggestion that such clients are selling fake goods but simply that the products are being sold in a manner or area not intended by the original manufacturer and trade mark owner.
"Multinationals exploit globalisation by choosing different markets and prices for their products based largely on how much they think consumers can afford to pay.
" In light of this, I think that it's very difficult for the man on the street to feel much sympathy as they attempt to cling on to control of their brands and profits."