CJEU rules auction sites still liable for trademark infringement
European ‘hosting defences’ will not protect online auction sites from being liable for the trademark infringement committed by their users if they actively help users to sell counterfeit goods, the Court of Justice for the European Union (CJEU) has ruled.
The CJEU released its decision on July 12. The court answered 10 questions referred to it in 2009 by the Honourable Justice Arnold, sitting in the High Court of Justice for England & Wales, Chancery Division, in L’Oréal SA et al v eBay International AG et al.
France-based cosmetics and perfume manufacturer L’Oréal complained that online auction site eBay Europe was jointly liable for the trademark infringement committed by six of its users, who were also named as defendants in the case, in 2006.
Justice Arnold’s 10 questions concerned the harmonisation of “accessory liability” in European trademark law and the clarity of the language in the legislation. Justice Arnold asked how Article 14(1) of the E-Commerce Directive should be interpreted and whether eBay had met the directive’s conditions that would exempt it from liability for the trademark infringement committed by its users.
In response, the CJEU ruled that online auction sites must not play an “active role” in the trademark infringement. “The [online auction site] plays such a role when it provides assistance which entails, in particular, optimising the presentation of the offers for sale in question or promoting them.”
Roland Mallinson, partner and head of trademarks and copyright at UK law firm Taylor Wessing LLP, said: “If these operators play an active role, they may well be implicated in any resulting infringement of intellectual property rights by those sellers. The ruling is likely to lead to businesses, such as eBay, playing a more passive role. In the meantime, national courts will be kept busy ruling on what constitutes an ‘active role’.”
In response to the CJEU’s ruling, Stefan Krawczyk, senior director and counsel, government relations, at eBay Europe, said: “The judgment provides some clarity on certain issues, and ensures that all brands can be traded online in Europe. As a marketplace, eBay provides a level playing field for all online sellers and will continue building constructive partnerships to expand the range of brands being sold on eBay.”
The case has been referred back to the UK court for final proceedings.
