European court rules eBay could be liable for counterfeits

eBay: online marketplaces could be held accountable for counterfeit goods sold on their sites
eBay: online marketplaces could be held accountable for counterfeit goods sold on their sites

The European Court of Justice today gave L'Oréal a partial victory by ruling that eBay and other online marketplaces could be held liable for counterfeit branded goods sold on their sites, if they have knowledge of the activity.

The case was first launched by L'Oréal in 2007 when it filed related lawsuits against eBay in the UK, Belgium and France.

It argued that restricting the distribution of its products and preventing them from being distributed would protect consumers from buying counterfeit goods.

L'Oréal complained that eBay "directs its users to goods that infringe trademark law, which are offered for sale on its website". It claimed this includes the practice of purchasing keywords relating to L'Oréal trademarks from paid search services, such as Google’s Adwords.

The High Court of Justice for England and Wales referred questions to the European Court of Justice in August 2009, after it ruled that eBay could not be held responsible for the sale of counterfeit goods.

Today's ruling means that brand owners will be able to initiate legal proceedings against online marketplaces if they play an "active role" in promoting counterfeit goods.

The EU judges ruled that: "National courts now must be able to order those companies to take measures intended not only to bring to an end infringements of intellectual property rights but also to prevent further infringements of that kind."

It said when the operator has played an active role to give it knowledge of, or control over, the data relating to the offers for sale of that kind, "it cannot rely on the exemption from liability which EU law confers, under certain conditions, on online service providers such as operators of internet marketplaces."

It said that national courts are able to order the operator to take measures to end the infringements, and the injunctions made must be "effective, proportionate, and dissuasive and must not create barriers to legitimate trade".

Emily Devlin, IP specialist at law firm Osborne Clark said: "Although there are no outright winners in this case, luxury brand owners will see the ruling as a useful step towards preventing the sale of counterfeit goods via online marketplaces."

They may be disappointed that the CJEU didn't go further and make platforms like eBay responsible for actively policing the way in which their sites are used, but the judgment recognises that would be an impossible task given the scale of these sites."

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."

A L'Oréal spokesman said: "L’Oréal is satisfied with the ruling of the Court of Justice of the European Union rendered today which is a step towards effectively combating the sale of counterfeiting brands and products via the internet.

"The Court of Justice ruled that, as stipulated by trademark laws, national courts must be able to order companies operating internet marketplaces to take measures to prevent the sales of counterfeit products, the sale of unboxed products and not-for-sale products, and the sales of goods imported within the European Union without the consent of the trademark owners.

"This decision is in line with the position L’Oréal has taken for several years and is applicable in courts throughout the European Union."


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now


John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer