CHICAGO, USA: Footwear and accessories maker Steven Madden Ltd sued eBay Inc on Tuesday over purportedly fake watches being sold on the online marketplace's website.

The lawsuit filed in U.S. District Court in Manhattan claimed that unlicensed watches bearing the Steven Madden brand name made by former licensee Vestal Watch Inc were being sold on eBay. It accuses eBay of trademark infringement.

The complaint said that Steven Madden representatives sent letters to eBay, asking for the watches to be removed from the website, but it said the watches were not removed.

EBay's Deputy General Counsel, Mary Huser, said in a statement that the company "leads the industry in innovative solutions to fight the sale of counterfeit items."

She cited a ruling last year in New York in a case involving Tiffany & Co and eBay in which a judge found that eBay had adequate procedures in place to effectively address counterfeiting.

Tiffany is appealing that case.

"Over 99.85 per cent of goods sold on eBay have no suspicion of counterfeit," Huser wrote, adding that the company works with owners to immediately remove counterfeit listings.

Steven Madden is seeking unspecified compensatory and punitive damages.

Vestal Watch did not respond to a request for comment.

A host of companies from L'Oreal SA to French luxury giant LVMH have taken eBay to court in recent years over allegations of fake trademarked goods on its site.

EBay has always maintained that it is the brand holders who are best equipped to recognize fakes.

EBay said last year that it takes down more than 90 per cent of fake goods from its site within four hours of their posting after being alerted by trademark holders.

EBay's shares closed up 10 cents on Tuesday at $18.93 on the Nasdaq, while shares of Steven Madden closed down 18 cents at $27.94.