ECJ to discuss the case of eBay & trademark infringement

By EDRi · December 15, 2010

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Deutsch: [EuGH behandelt Rechtssache eBay & Markenschutz |]

In the case introduced by L’Oreal against auction site eBay and referred by
the High Court of Justice (England and Wales) to the European Court of
Justice (ECJ) the Advocate General, Niilo Jaaskinen, published on 9
December 2010 its opinion that the site could not be considered liable for
trademark infringement committed by its users in case it was not expressly
notified regarding such infringements.

However, in case electronic marketplaces, such as eBay, do not take measures
to stop a trademark infringement when notified of it, they will no longer be
except from liability:
“Regarding the same user and the same trade mark an operator of an
electronic marketplace has actual knowledge in a case where the same
activity continues in the form of subsequent listings and can also be
required to disable access to the information the user uploads in the
future. In other words, exemption from liability does not apply in cases
where the electronic marketplace operator has been notified of infringing
use of a trade mark, and the same user continues or repeats the same
infringement,” says the Advocate General.

In 2007, L’Oréal notified eBay of its concerns about the sale of its goods
on eBay’s European websites and, dissatisfied with the site’s answer,
brought a legal action against eBay in Belgium, Britain, France, Germany and
Spain. L’Oreal claimed eBay was equally liable, together with its users, for
potential brand infringements which included eBay users selling L’Oréal
perfumes and cosmetics samples meant for free distribution, removing package
boxes from perfumes and cosmetics before selling them via eBay or selling
their products intended for markets outside of Europe. eBay argued the were
just hosting the auctions and therefore not directly liable, according to
the EU E-commerce directive.

In an earlier case this year dealing with the conflict between trademark
infringement and contextual adevertising brought by a group of luxury goods
companies in March 2010, the ECJ ruled that Google could continue selling
advertisements linked to searches for brand names. Similarly, the Advocate
General now believes eBay can continue to purchase keywords-based
advertising in order to direct users of Internet search engines to its site
(including L’Oréal trademarks) stating that “the use of the disputed
trademarks as keywords by eBay does not necessarily result in misleading the
consumers as to the origin of the goods offered.” Yet, he also expressed
himself in favour of L’Oréal, stating the company can prohibit the selling
of goods with the outer packaging removed if this is damaging for the
company’s reputation or the function or quality of its products. Also, trade
mark protection can be invoked where goods for sale on eBay haven’t been put
on the market within the EU.

It seems both eBay and L’Oreal have received Jaaskinen’s opinion positively:
“Despite the complexity of the issues and the preliminary nature of the
advocate general’s opinion, we are encouraged that the ECJ’s final judgment
will reinforce European consumers’ freedom to buy and sell authentic goods
online,” stated Steve Milton, Director of Corporate Communications at eBay

L’Oréal believes that the opinion is a balanced one and “is overall
consistent with the stance that L’Oréal has held for several years,” and
that it also supports “effective combating of internet-based counterfeit
product sales.”

The Advocate general’s opinion is not binding for the ECJ but, in most of
the cases the Court follows his recommendations. Usually,
the ECJ rules between three and six months after the advocate general’s

Also, in the US, the Supreme Court refused to hear an appeal in a similar
case, thus supporting the ruling made by the Appeal Court on 1 April 2010 in
the case brought by jeweller Tiffany against eBay in 2004 and consequently
making the ruling definitive. The Court of Appeal’s decision was that eBay
did not infringe trademarks when allowing counterfeit sales in its auction
sales. The court considered that eBay had fulfilled its duty by removing
certain items when so asked by Tiffany, and that its obligations went no
further than that. However, the Court of Appeal asked the lower court in the
case to rule on whether eBay adverts for Tiffany goods were infringing false
advertising regulations.

Opinion of Advocate Genral Jaaskinen in L’Oreal vs eBay case C 324/09

ECJ could increase online sellers’ liability for trade mark infringements

US ruling relieving eBay of trade mark liability over fakes will stand