Tuesday May 26th 2009, by Piers Strickland
The English High Court has just handed down its decision in the case of L’Oréal v eBay & Others. In it, the English Court recognised but felt unable to clarify the law surrounding key usages of trade marks on eBay.
The case was complex and centred on another new method of doing business over the Internet, which has resulted in an explosion of infringements: the online auction-house. The Court was asked to decide: who should incur the legal and practical responsibility for monitoring and taking action against such infringements. L’Oréal considered that eBay’s current anti-counterfeiting procedures (such as its Vero procedures) were not sufficient. However, L’Oréal’s claim went further; it claimed that eBay had a “common design” with those selling the infringing goods to infringe the rights of L’Oréal.
The Judge seemed to have a lot of sympathy for L’Oréal’s position, stating in his judgment that he thought that perhaps eBay should go further to protect against infringements. An intriguing quote from the late and great Lord Denning was used by the Judge to float the idea that the auctioneer in today’s Internet age (i.e. eBay) should have the responsibility for ensuing good and proper title and that its fee might be considered as inclusive of insurance against any such defective title problems.
L’Oréal also complained about eBay’s use of its trade marks as key words on popular search engines such as Google. EBay countered claiming certain defences under the E-Commerce Directive.
In one respect, the Judge came down on the side of eBay in that he held that eBay were not jointly liable for the infringements committed by the individual sellers (who were also defendants in this action). This was perhaps not a particularly surprising result, as often quite compelling evidence is needed to prove such “common design”.
However, in most respects, the Judge stating his intention to refer the key questions to the European Court of Justice (ECJ), i.e.:
1. As to whether eBay infringed L’Oréal’s trade marks by use in sponsored links and on the eBay site.
2. Whether eBay Europe has a defence under Article 14 of the E-Commerce Directive.
3. The scope of the injunctive relief which Article 11 requires national courts to grant in such circumstances.
As a result, the law in these areas is still extremely unclear for companies in the online marketplace. L’Oréal has corresponding actions across the EU, which have been reported as favourable for eBay in France and Belgium, and in favour of L’Oreal in Germany. The Court’s decision in Spain is still outstanding.
Until as such time as the ECJ provides additional guidance, or, more probably, until the European trade mark laws are revised, the level of uncertainty for online traders will remain high in this area.
