Ebay has roped in the Intellectual Property Office (IPO) to help combat counterfeiting and piracy on its site.

It hopes that the Government body, which looks after intellectual rights in the UK, will encourage more companies to work with it, rather than sue it, in its fight to clamp down on traders selling counterfeit products.

Ebay has had many problems with rights holders because of traders selling counterfeit goods on the auction site, and been hauled before the courts in the US and Europe.

It is currently embroiled in the British High Court with an ongoing lawsuit brought by L’Oreal for allowing traders to sell fake versions of its products.

Ebay said it has always had an "absolute commitment" to fighting counterfeit goods on its site. It spends around $10 million a year and has a team of 2,000 people dedicated to fighting the trade in counterfeit goods.

It also set up the Verified Rights Owner Programme (Vero) in 1998. It hopes that the IPO will be able to attract more companies to join this anti counterfeiting programme which already has 31,000 rights holders including the BPI and the Federation Against Copyright Theft (Fact), as members.

These companies and organisations actively monitor the site for counterfeit products and inform Ebay so the auction site can remove the listings.

"We don’t want counterfeit products on our site. They are bad for sellers, buyers and rights owners. We hope by getting more members onboard we will be able to make it easier for consumers to buy without worrying about counterfeit goods" the company said.

But as well as court battles it is also facing stiff competition from other online auction sites. This month the popular French auction site, PriceMinister launched in the UK. This company was recently called to give evidence in L'Oreal's case.

PriceMinister, which is the second-busiest online marketplace in France released its Annual European Anti-Counterfeit report, to coincide with the UK launch.

This found that the sale of counterfeit goods increased by 45 per cent in the past year to an estimated value of £800m. Eighty per cent of these items were sold on the internet. To safeguard its users, it offers an anti-counterfeit guarantee.

It holds on to any money from sales until the buyer is satisfied with their purchase. It will refund any transaction if the buyer is not.