EU Court rules in favour of L’Oréal in law suit against eBay

By Pooja Kondhia

- Last updated on GMT

Related tags: Trademark, Ebay

The EU Court of Justice in its ruling in favour of L’Oréal, has stated eBay could be held liable for trade mark infringements if found to have an active role in the promotion and thus sale of fake products.

The lawsuit was brought against eBay in the UK by L’Oréal, who complained that eBay was involved in trade mark infringements committed by users of its website.

The French cosmetics giant also stated that by purchasing paid internet referencing services, such as Google Adwords, eBay directed its users to products infringing the trade mark law.

Furthermore, deeming eBay’s efforts to prevent the sale of fake goods on its website as inadequate, L’Oréal identified a range of infringements, such as the sale and offer for sale, to EU consumers, of products which bear the L’Oréal trade mark, in grey or parallel markets.

Liability clarification

The EU Court of Justice, in a bid to clear up liability issues, stated clarifications on a variety of points.

With regards to commercial activities directed towards the EU through online marketplaces such as eBay, the EU trade mark rules apply to offers for sale and advertisements relating to trade-marked products located in grey markets, which apply as soon as it is clear it is targeted at EU consumers.

However, in terms of assessment, it is left to the national courts to decide, case-by-case, whether a particular offer for sale or advertisement displayed on an online marketplace is targeted at EU consumers.

Additionally, the court has also ruled that the operator of an internet marketplace does not itself use trademarks as meant under EU legislation if it is merely providing a service enabling its customers to display on its site, signs corresponding to trade marks, as part of commercial activities.

On the other hand, the liability of operators of an online marketplace has been specifically mentioned as, despite stating that national courts carry out the assessments, the court still considers that the operator play an active role in the knowledge of, or control over sales.

Lastly, the court stated that in the case of operators of an online marketplace failing to decide on its own initiative, to end infringements of intellectual property rights, and prevent further such infringements, injunctions may be granted against the operator.

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