For several years now, L'Oréal has been combating
the sale of counterfeit and other infringing products on the online
marketplace eBay. In various countries (Belgium, France,
Spain, Germany and the UK) L'Oréal has started
litigation against eBay, basically claiming that eBay facilitates
trademark infringement and profits from it, reason why eBay should
be held responsible and be ordered to take (additional) measures to
stop the infringements. In the UK, the case raised several
questions of law, inter alia as to the infringing nature
of testers, eBay's use of search engine keywords for
advertisements on its website, and eBay's responsibility for
infringing advertisements on it website. These questions have been
submitted to the European Court of Justice (ECJ) by the High Court
of Justice (England and Wales), Chancery Division, on 12 August
2009 (Case C-324/09).
Now, on 12 July 2010, the ECJ has issued its keenly awaited
preliminary ruling on the questions referred following in most
aspects Advocate General Jääskinen's opinion
rendered on 9 December 2010. A summary of the ECJ's answers is
given below.
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The ECJ's answers
The modalities of the offers on eBayThe first set of questions refers to different types of sales.
In line with its Coty Prestige Lancaster v
Simex-decision, the Court held that the trademark
proprietor's rights are not exhausted where it concerns
advertisements on eBay for testers and drammers. With respect to
products removed from their packagings the Court found that the
trademark owner can oppose the sale thereof where the consequence
of that removal is that essential information, such as information
relating to the identity of the manufacturer or the person
responsible for marketing the cosmetic product, is missing. Where
the removal of the packaging has not resulted in the absence of
that information, the trade mark proprietor may nevertheless oppose
the resale of an unboxed perfume or cosmetic product bearing his
trade mark, if he establishes that the removal of the packaging has
damaged the image of the product and, hence, the reputation of the
trade mark.
In the L'Oréal/eBay case another issue concerned the
market targeted for by the offers on eBay of products that are
coming from outside the EU. The Court held that as long as the
offers for sale of products that have not yet been marketed in the
EU are targeted at consumers located in the EU the trade mark owner
can oppose such sales. The Court confirmed that the trade mark
owner should keep control on putting the products on the EU-market
first. The national courts should asses whether it concerns sales
targeted at EU-consumers. If it appears from eBay's website
that the seller is willing to dispatch the products to an address
in the EU, or, like in the case at hand it concerns a website
operated in the EU (www.ebay.co.uk) the products are
targeted at consumers in the territory covered by the national or
Community trade marks.
The use of L'Oreal's trade marks as keywords by
eBay
The Court found that when eBay purchases keywords consisting
of trade marks for products sold via eBay, and advertisements are
being triggered by such keywords, such advertisements not only
promote eBay's services but also the products under the trade
marks. In so far as through the purchase of the keywords the add
promotes eBay's services, the use of the trade marks as a
keyword is not use for identical or similar products and can
therefore only be opposed under the dilution provision of art. 5
(2) TM Directive or art. 9(1)(c) CTM Regulation. In so far as the
use of the keywords result in adds to promote the sale of the
trademarked products, such use can be opposed under art. 5(1)(a) TM
Directive or 9(1)(a) CTM Regulation if the advertisement does not
enable reasonably well-informed and reasonably observant internet
users, or enables them only with difficulty, to ascertain whether
the goods concerned originate from the proprietor of the trade mark
or from an undertaking economically linked to that proprietor or,
on the contrary, originate from a third party (see also the
Court's Google France-decision). It will not be easy
to assess when a sponsored add placed by eBay will cause such an
effect, in particular where the Court also concludes that eBay acts
in a transparent way in case the add discloses both the identity of
the online-marketplace operator and the fact that the trade-marked
goods advertised are being sold through the marketplace that it
operates.
The use of trade marks on eBay's site.
The UK Court also wanted to know how the use of trade marks on
eBay's website itself for products sold via eBay should be
regarded. The Court decided that eBay does not use such trade marks
for the goods for which they are registered. The sellers of such
goods use the trade marks for goods offered for sale via
eBay.
The liability of the operator of an online marketplace.
One of the most important aspects of the case concerns the
decision on the liability of companies such as eBay for what it is
offering for sale through their websites. This concerns
interpretation of the so-called e-Commerce Directive (nr. 2000/31).
The Court decided that online marketplaces enjoy the exemption from
liability under art. 14 of this Directive so long as the
marketplace does not play an active role allowing it to have
knowledge of, or control over the data relating to the offers for
sale on its website. The Court said that the role becomes active
when the operator has provided assistance which entails, in
particular, optimising the presentation of the offers for sale in
question or promoting those offers. It is up to the national court
to decide whether eBay's role was active rather than neutral.
If the operator's role remains neutral (which is the case if he
merely stores the information transmitted by the customers-sellers
on its server, sets the terms for its service, is remunerated for
that service and provides general information to its customers) the
condition for relying on the exemption from liability is that the
operator does not have actual knowledge of the illegal activities
or information, and if it does, acts expeditiously to remove or
disable access to the information. Such knowledge can be the result
of investigation on its own initiative, or of information notified
to him. Although such notification can be insufficiently precise or
inadequately substantiated, the fact remains that such notification
represents, as a general rule, a factor of which the national court
must take account when determining, in the light of the information
so transmitted to the operator, whether the latter was actually
aware of facts or circumstances on the basis of which a diligent
economic operator should have identified the illegality.
Possible measures against online marketplaces.
Finally the Court gave rules on what a trade mark owner can ask a
court to do in case infringing products are being discovered on the
site of a company like eBay. The Court first outlines that the
measures required of the online service provider concerned cannot
consist in an active monitoring of all the data of each of its
customers in order to prevent any future infringement of
intellectual property rights via that provider's website.
Furthermore, a general monitoring obligation would be incompatible
with Article 15 of the e-Commerce Directive and Article 3 of the
Enforcement Directive (nr. 2004/48), which states that the measures
referred to by the Directive must be fair and proportionate and
must not be excessively costly. The system of the Enforcement
Directive entails that, in a case such as that before the referring
court, which concerns possible infringements of trade marks in the
context of a service provided by the operator of an online
marketplace, the injunction obtained against that operator cannot
have as its goal or effect a general and permanent prohibition on
the selling, on that marketplace, of goods bearing those trade
marks. According to the Court however, if the operator of the
online marketplace does not decide, on its own initiative, to
suspend the perpetrator of the infringement of intellectual
property rights in order to prevent further infringements of that
kind by the same seller in respect of the same
trade marks, it may be ordered, by means of an injunction, to do
so. Furthermore, in order to ensure that there is a right to an
effective remedy against persons who have used an online service to
infringe intellectual property rights, the operator of an online
marketplace may be ordered to take measures to make it easier to
identify its customer-sellers. The Court said that the measures
mentioned here are not exhaustive and can entail both the ending of
infringements and the preventing of new infringements of such
nature, as long as they are effective, proportionate, dissuasive
and do not create barriers to legitimate trade.
Conclusion
With its answers to the questions referred in
L'Oréal/eBay, the ECJ has provided some
additional guidelines on what an operator of an internet
marketplace can be expected to do to prevent trade mark
infringements by its users.
NautaDutilh is representing the trade mark proprietor
L'Oréal in the case before the Belgian courts.
Please click the link below for the English version of the
preliminary ruling.
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009J0324:EN:HTML
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.