The High Court has ruled that eBay was not liable for the sale of counterfeit L'Oréal products on its UK website.
L'Oréal believed that eBay was not doing enough to prevent the sale of counterfeit goods displaying its trade marks. L'Oréal had instructed an agency to carry out test purchases which had found that, of 287 products purchased, only 84 were legitimate products intended for sale in the EEA.
However, eBay had refused to perform an active policing role by pre-checking every item, although it would respond to take down notices submitted through its VeRO (Verified Rights Owner) programme. L'Oréal refused to participate in the VeRO programme and instead commenced legal action against eBay.
L’Oréal commenced legal action in the High Court against three European subsidiaries of eBay Inc, the First to Third Defendants, and seven eBay sellers, the Fourth to Tenth Defendants. The eBay sellers were included in the proceedings as it was alleged by L'Oréal that they had sold infringing products through eBay. L’Oréal claimed that eBay should be jointly liable for the sale of those infringing products.
L'Oréal, which has brought similar proceedings in a number of other European countries, argued that eBay did not do enough to prevent the sale of counterfeit goods, in particular perfumes and cosmetics. However, the court decided that, although eBay sellers could liable for the sale of infringing products, eBay itself should not be liable for such sales. eBay was under “no legal duty or obligation to prevent infringement of third parties’ registered trade marks” and the “fact that it would be possible for [eBay] to do more does not necessarily mean that they are legally obliged to do more”.
In addition to its claims that eBay should be jointly liable for trade mark infringement, L’Oréal also claimed that: (a) eBay should be liable in respect of its use of sponsored links featuring L’Oréal’s trade marks; and (b) an injunction should be awarded against eBay in respect of the infringing sales made by the eBay sellers (Fourth to Tenth Defendants). In respect of these claims, which required two EC Directives to be interpreted, the court did not make a decision and referred questions to the European Court of Justice.
For further commentary on the court’s decision, please click here.
A copy of the full judgment may be seen here.
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