Belgium: Advocate General Opinion in L’Oreal v. eBay Case

Last Updated: 21 January 2011

INTELLECTUAL PROPERTY

Advocate general Jääskinen (the "AG") of the Court of Justice of the European Union (the "ECJ") gave on 9 December 2010 an elaborate opinion (the "Opinion") in Case C-324/09 on a series of trade mark issues that arose in litigation in the UK between three subsidiaries of eBay Inc., which operate an electronic marketplace ("eBay"), and L'Oréal SA and its subsidiaries, a major manufacturer and supplier of perfumes, cosmetics and hair care products which are sold under various well-known trademarks ("L'Oreal").

The case was brought before the ECJ by the UK High Court. The UK High Court sought the guidance from the ECJ on the interpretation of a range of European legal instruments governing trade mark law, electronic commerce and the enforcement of intellectual property rights.

The dispute between the companies revolves around the allegedly widespread sale of L'Oréal branded goods on eBay's European websites that supposedly infringe the trademarks of L'Oréal. The forms of trade mark infringement identified by L'Oréal include the sale of counterfeit goods; the sale of unpackaged goods; the sale of non-EEA source products in EEA countries without the consent of L'Oréal; and the sale of product samples not intended for sale to consumers.

In his Opinion, the AG first finds that products samples which are not intended for sale to consumers (often marked with the words 'not for sale' or 'not for individual sale') and are provided without charge to authorised distributors of the products concerned, cannot be considered as being put on the market. Consequently, the trademark proprietor can still prohibit the sale of such product samples.

Second, the AG analyses the effects of unboxing trade marked cosmetic products. According to the AG, the trade mark proprietor has the right to oppose the further commercialisation of perfumes and cosmetics which have been unpackaged without its consent; if (i) due to the unboxing, the products do no longer bear the information required by Council Directive 76/768/EEC on the approximation of the laws of the Member States relating to cosmetic products; (ii) the unpackaging can as such be considered as amending or impairing the condition of the good; or (iii)  the reputation of the goods is affected or is likely to be affected by the further commercialisation of the unboxed products.

With regard to goods offered for sale on an electronic marketplace for which the trademark has not yet been exhausted by the trade mark proprietor in the EEA, the AG finds that trade mark protection can also be invoked, insofar as the advertisement of these products aims at selling the products to consumers within the territory covered by trade mark protection.

Subsequently, the AG addresses eBay's role in the alleged trade mark infringements. eBay registered L'Oréal's trade marks as keywords with a search engines to bring customers searching for L'Oréal's products to the eBay websites. The AG holds that this use of L'Oréal's trade marks denotes goods marketed by L'Oréal under the trade marks. Still, such a use does not necessarily mislead consumers as to the origin of the goods on offer. The AG is of the opinion that if the advertisement itself is not misleading as to the nature of the advertising party, the function of the trademark of indicating the origin of the product is not likely to be put in danger. Since the use does not affect the functions of the trade mark, the AG maintains that such use does not infringe L'Oréal's trademark.

The AG also maintains that if the use complained of by the trade mark owner consists of the display of the sign on the website of an electronic marketplace operator such as eBay rather than in a sponsored link of a search engine, it cannot be regarded as use by the marketplace operator, but instead should be regarded as use by the marketplace users. In other words, in that case eBay's users, rather than eBay itself are responsible.

In keeping with the ECJ's ruling in Google (joined cases C-236/08, C-237/08 and C-238/08 – See, this Newsletter, Volume 2010, No. 3, p. 6), the AG is of the opinion that eBay is not generally liable for the information uploaded by users and stored at the request of these users, even though eBay has an involvement in the preparation of the clients' listings.

Despite the broad scope of the above principle, the AG nonetheless recognises that at least two exceptions may come into play that give rise to eBay's liability: (i) eBay remains liable for the content of data which it communicates as an advertiser to a search engine operator; and (ii) if eBay is notified of the infringing use of a trademark and the same user continues or repeats the infringement, eBay will be responsible and may even be slapped with an injunction.

Finally, the AG is of the opinion that Member States should ensure the availability of an appropriate injunction for trademark proprietors against website operators when websites are used by third parties to infringe trademarks, in order to avoid the continuation of the trademark infringement concerned.

It would not seem that the AG succeeded in performing the balancing act which he had promised he would engage in his Opinion. It remains to be seen to what extent the Opinion will serve as a basis for the ECJ's judgment which is due next year.

Commission Submits Proposal for Enhanced Cooperation regarding EU Patent

On 14 December 2010, the European Commission submitted a proposal for a decision from the Council of Ministers of the European Union (the "Council") authorising an enhanced cooperation mechanism for the creation of the EU patent.

For years, the EU has tried to create a unitary EU patent. The present system of the European Patent Organisation ("EPO"), which includes 38 member countries, already provides a framework for handling patent applications covering all EU Member States. However, the patents granted under the EPO are essentially converted into national patents of the chosen member countries. Under this system, the costs are very high due to translation requirements and enforcement in each of the chosen jurisdictions separately.

In December 2009 (See this Newsletter, Volume 2009, No. 12, p. 11), the EU Member States reached a political agreement on an enhanced European patent system and the proposal for a Regulation on the EU Patent. However, the use of languages, which had already been reallocated to a separate draft Regulation, still remained a critical deal breaker.

Since the Council failed to reach an unanimous agreement on the EU patent's language requirements under the Belgian presidency, it was decided to move forward on the basis of the "enhanced cooperation mechanism" under Article 20 of the Treaty on European Union and Articles 326 to 334 of the Treaty on the Functioning of the European Union. The enhanced cooperation procedure allows a group of at least nine EU Member States to move forward in a specific area on their own, but still relying on the EU framework, if no EU-wide consensus can be found within a reasonable period.

The European Commission, following a request from 12 EU Member States, now applied to the Council to proceed on this matter using the enhanced cooperation procedure. The requesting EU Member States include Denmark, Estonia, Finland, France, Germany, Lithuania, Luxembourg, The Netherlands, Poland, Slovenia, Sweden and the United Kingdom. During the Presidency, Belgium adopts a neutral position. However, it is likely that Belgium will support this procedure.

If the Council accepts to proceed using enhanced cooperation – this needs to be approved by qualified majority and after consent from the European Parliament – the European Commission will present a detailed proposal for a unitary patent for the participating EU Member States in the course of 2011.

This detailed proposal will build on the existing language regime of the EPO to reduce translation costs. The existing official languages of the EPO (English, French and German) will remain the official languages for the purposes of examination and grant of an EU patent. However, applicants in the EU whose language is not English, French or German will have the option to file applications in any other official language of the EU, in which case the costs for translation into one of the official languages of the EPO will be eligible for compensation.

When an application is granted, applicants' inventions will enjoy patent protection in all EU Member States participating under the enhanced cooperation. The EU patent will be made available to all applicants in the EU.

WCO Launched Anti-Counterfeiting Interface for Public Members

During its recent Council Meeting in June 2010, the World Customs Organization ("WCO") introduced an anti-counterfeiting interface for public members ("IPM").

According to the WCO, the IPM is a secure communication tool for the exchange of information between intellectual property right holders and customs administrations as well as an in-service training tool for identifying counterfeit products, designed to be made available to field-based customs officers. The tool provides real-time information necessary for distinguishing counterfeit products, and will be provided to WCO Members and field-based customs officers free of charge.

The IPM provides right holders with the possibility to exchange valuable information with field-based customs officers. In particular, the IPM database comprises (i) a "genuine/fake" database, which is filled with product information, provided by right holders; (ii) "genuine/fake" information provided to national customs authorities; (iii) a compendium of national legislation on intellectual property rights; (iv) counterfeiting reports by sector; and (v) any other tools and publications based on the requirements of the different players. By highlighting key aspects of elements such as brand name and product appearance, packaging and routes, right holders give customs officers valuable information to help them distinguish between genuine and fake products, allowing them to enforce more adequately right holders' intellectual property rights.

General Court Rejects EU Trade mark on Chocolate Rabbits

In a judgment delivered on 17 December 2010, the General Court of the European Union confirmed a decision from the EU trade mark's office that Lindt's chocolate rabbits figures are not a protected species, at least when the protection sought is a Community trade mark.

In an earlier edition of this Newsletter, we reported on the attempted registration by Chocoladefabriken Lindt & Sprüngli AG ("Lindt") to register the shape of it's chocolate rabbit figures as a trade mark in Austria (See this Newsletter, Volume 2009, No. 6, p.9). In addition, the chocolate manufacturer also sought to protect the shape of the chocolate rabbits wrapped in golden foil with red ribbon around their necks and a bell as a Community trade mark with the Office for Harmonization in the Internal Market (the "OHIM"). The OHIM dismissed the application on 14 October 2005, holding that the chocolate rabbit figures did not stand out enough.

Lindt challenged this decision before the General Court on two grounds. First, Lindt argued that the shape for which protection is sought presents distinctive characteristics. Second, to the extent that the sign for which protection is sought is not inherently distinctive, distinctiveness can be acquired through use. Lindt maintained that chocolate rabbits are largely unknown outside Germany. Hence, and according to Lindt, these figures are inherently distinctive outside this region. As regards Germany, Lindt claims that the figures acquired distinctiveness through use.

The General Court ruled that the design of chocolate rabbits could not belong to Lindt alone. Each of the three elements, i.e. the chocolate figure of a sitting rabbit, the golden wrap and the red ribbon, are frequently used in the chocolate industry. According to the Court, a rabbit is a classic shape for chocolate and the golden wrapping paper and the color red of the ribbon are typical for the way chocolate goods are presented, particularly at Easter and Christmas.

The General Court also dismissed the territorial argument stating that chocolate rabbits are not only know in Germany since they are sold in most EU Member States around Easter time.  As a result, the shape of the chocolate product was devoid of any distinctive character throughout the EU and Lindt failed to demonstrate that the shape had acquired distinctiveness through use in a significant part of the EU territory. The General Court thus refused to grant trade mark protection to Lindt's rabbit-shaped chocolates.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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