L'Oreal v eBay: Online Marketplaces And Trade Mark Infringement By Their Users

Online marketplaces, such as eBay, enable users to advertise for sale a vast range of products. Some of those products (such as counterfeits and certain parallel imports) inevitably infringe the trade marks of brand holders. To what extent is the operator of the online marketplace required to provide assistance or bear responsibility for dealing with such infringement, including, ultimately, being liable for the infringement? A long awaited judgment from the Court of Justice of the European Union provides an answer.

To view the article in full, please see below:

Full Article

Online marketplaces, such as eBay, enable users to advertise for sale a vast range of products. Some of those products (such as counterfeits and certain parallel imports) inevitably infringe the trade marks of brand holders. To what extent is the operator of the online marketplace required to provide assistance or bear responsibility for dealing with such infringement, including, ultimately, being liable for the infringement? A long awaited judgment from the Court of Justice of the European Union provides an answer.

Background: a referral to the Court of Justice of the European Union

In May 2009 the High Court gave its judgment in the case of L'Oréal v eBay [2009] EWHC 1094 (Ch). Our Law Now article on the decision can be viewed here. By way of summary, L'Oreal alleged that eBay:

(1) should be jointly liable for its involvement in the trade mark infringements being committed by individual sellers through the eBay marketplace; (2) was infringing L'Oreal's trade marks by using them (via referencing services such as Google's AdWords and in its user's adverts on the ebay.co.uk website) to direct consumers to infringing goods on the marketplace; and, (3) that eBay's efforts to prevent the sale of counterfeit goods and parallel imports are inadequate. In his judgment, Arnold J. (High Court) rejected the first allegation, but in relation to the others he requested – despite being minded not to support all of L'Oreal's allegations – guidance on interpreting the relevant law from the Court of Justice of the European Union.

Following an Opinion given by Advocate General Jääskinen (reported in our Law Now article of November 2010, which can be viewed here), the Court of Justice has now handed down its judgment. A summary of the guidance this provides to the High Court (and to those potentially affected by the implications of the judgment) is set out below.

Private sellers: not infringing

The Court of Justice started its judgment by reminding trade mark proprietors that they may only rely on their rights (including, as against those who sell trade-marked goods online) in the context of commercial...