Montres Rolex S.A. filed the suit in a German court April 25 against eBay GMBH and eBay International AG, wholly owned subsidiaries of eBay.
Rolex alleges that users were selling counterfeit Rolex watches through the German Web site, infringing on Rolex's trademark and resulting in unfair competition. Rolex is seeking an order forbidding the sale of Rolex watches on the Web site as well as damages.
In the SEC filing, eBay said, "We have meritorious defenses against this claim and intend to defend ourselves vigorously."
eBay has programs in the United States and Germany that allow companies to monitor sales and notify eBay if they believe their intellectual property rights are being abused. An eBay spokesman said Rolex participates in the program in the United States but not in Germany.
In other news, eBay also revealed in the filings that it is seeking to renegotiate a contract with Walt Disney.
eBay signed a deal with Disney's Go.com subsidiary in February 2000 to provide auction services to the portal site. In that deal, eBay would pay a minimum of $30 million to Go.com over the four-year term.
Disney announced in January that it was shuttering the portal site, although modified versions of the portal and the auction site are still running. In addition, eBay hosts an auction site for Disney.