Estée Lauder says Walmart is selling knock off products in lawsuit

Estée Lauder is suing Walmart, alleging the big-box megastore of selling counterfeit versions of its personal care products on its website.

In the lawsuit filed in federal court Monday, Walmart were accused of selling counterfeit versions of skincare and fragrance products from Estée Lauder brands including Aveda, Clinique, La Mer, Le Labo, and Tom Ford. All of the brands are included as plaintiffs in the lawsuit, according to Reuters.

The products, sold by third-parties on Walmart’s online marketplace, "bear marks that are identical with, substantially indistinguishable from, or confusingly similar" to Estée Lauder trademarks, the lawsuit alleges.

It called Walmart's alleged lack of oversight “extreme, outrageous, fraudulent … despicable and harmful” and argued that “a person shopping on Walmart.com would have reasonably believed that Walmart, and not third-party sellers, was the seller.”

It is not illegal to make a knock-off version of a popular product, but it is illegal if the knock-off infringes on a trademark or patent.

Estée Lauder said it purchased some items from Walmart.com that bore its trademarks and tested the items. It claims the tests proved the items did not originate at Estée Lauder and were therefore fakes. The company claims Walmart.com wasn't only selling actual fakes but also products using near-identical marketing to its own.

Also in the filing, Estée Lauder included an image of a fragrance sold on Walmart's website called "Intense Peach" that was placed next to an image of a Tom Ford fragrance called "Bitter Peach." Both use a near-identical version of orange in their box marketing, both use similar bottle shapes, and both use square white labels with orange sans-serif, all-caps fonts.

Estée Lauder further alleges that not only did Walmart promote the counterfeit products through its website, but it also knew that it was allowing items that infringed on the company's trademark to be sold in its marketplace. The lawsuit alleges that Walmart does "very little" to make sure that the products it's selling online are authentic.

“This is readily apparent given the [counterfeits] were permitted to be sold on Defendants’ website despite their stated careful selection process in who they choose as a Marketplace seller/partner,” the complaint says. “Accordingly, Defendants know or had reason to know that the sellers they partnered with and ‘regularly review[ed]’ were selling products which infringe upon the Estée Lauder Marks.”

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Some of the other products Estée Lauder claims have been counterfeit and sold on Walmart's website include Aveda's hairbrushes, Clinique skin creams, La Mer lotions and moisturizers, and fragrances from both Le Labo and Tom Ford.

Estée Lauder is demanding monetary damages and for Walmart to stop selling not only its alleged counterfeits but also any products carrying Estée Lauder brands’ trademarks.:

“We are aware of the complaint and have zero tolerance for counterfeit products. We will respond appropriately with the court when we are served,” Walmart said in a statement to CNBC.

The Independent has requested comment from Walmart.