Department for Culture Media and Sport

court judgements

Judgement of 12 July 2011 by European Court of Justice in the case involving L’Oreal and eBay: Case C-324/09

The European Court of Justice (ECJ) has given a ruling in the case brought by L’Oréal SA and three of its subsidiaries against eBay International AG, two of its subsidiaries and various individual defendants, in connection with unauthorised on-line sales of trademarked goods.
 
The ECJ has ruled that providers of on-line market places may be liable for trade mark infringements where they have been active in the promotion of goods in breach of trade mark rights, or where they either should have been aware that users of their site were selling infringing items via the site, or were aware but took insufficient action to prevent the sale.
 
The ruling in this case will clearly have implications for all of those service providers who offer a facility enabling third party sellers to sell goods on-line.
 
The ECJ’s ruling is summarised briefly here:
 
1. Where goods which bear a trade mark registered within a member State, or a Community trademark are marketed online to buyers in the territory covered by the trade mark, without the consent of the owner of the trade mark, the owner of the trade mark may prevent that sale.
 
2. Where the trade mark owner supplies trademarked items which are intended to be used for demonstrations or offered as free samples to authorised distributors, they have not been ‘put on the market’ by the trade mark owner within the meaning of the relevant Directives, unless there is evidence to the contrary. This means that the seller cannot claim the defence that the goods have already been put on the market in the EU by the trade mark owner.
 
3. The owner of a trade mark can oppose the selling of goods where packaging has been removed, or information that should be with the goods is missing, or where an unboxed item of perfume or cosmetics is being resold and this has damaged the image of the product or the reputation of the trade mark.
 
4. The owner of a trade mark may prevent the advertising of goods bearing that trademark by an on-line seller who wishes to use the trade mark as a search keyword, where it will not be obvious to potential buyers whether it is the holder of the trade mark, or some other party, that is selling them.
 
5. Where trade marks appear in offers for sale on an on-line market place, the owner of that on-line site is not themselves considered to ‘use’ (as described by the relevant Directives) those trade marks.
 
6. Where an operator of an on-line market place has actively assisted in the presentation or promotion of offers for sale, they may not be able to rely on the exemptions from liability within the E-commerce Directive. The operator cannot rely on the exemption from liability provided by that Directive, if they should have been aware that offers for sale were unlawful, and they have failed to take action.
 
7. National courts with jurisdiction over intellectual property rights may order an on-line market place operator to take measures not just to end existing infringements of those rights but to prevent future ones. In so doing, they must act effectively, proportionately and dissuasively, and not create barriers to legitimate trade.
 
The full judgement can be found on the European Union's website
 
Please note that responsibility for UK policy in this area rests with the Department for Culture Media and Sport in relation to e-commerce and the role of internet service providers, while the Intellectual Property Office has responsibility for intellectual property rights.