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Home | L'Oreal 'loses' to eBay in the UK
L'Oreal 'loses' to eBay in the UK
22 May 2009
The High Court has ruled that eBay cannot be held legally accountable for the sale of counterfeit goods on its website.
But it has also referred a number of questions to the European Court of Justice (ECJ) for clarification.
Facts
L'Oreal has brought proceedings against eBay in several European countries - including the UK, France, Germany, Belgium and Spain - over the sale of counterfeit L'Oreal products on its auction site.
L'Oreal argued that eBay does not do enough to prevent or police the sale of counterfeit goods.
Ruling
Although the ruling states that eBay is not jointly liable for the sale of counterfeit products, interestingly - and in contrast to the French ruling requiring the parties to go to mediation - the High Court has referred a number of questions to the ECJ on the interpretation of the Trade Marks Directive for clarification, such questions yet to be agreed.
However, Mr Justice Arnold has specifically stated that the German version of this case may be wrong; hence the reference to the ECJ.
What eBay could be forced to do
Despite the ruling in eBay's favour, the judgment also states that eBay could police its site better by implementing measures such as:
- filtering listings before they are posted on the site
- using additional filters, including filters to detect listings of samples and other not-for-sale products and unboxed products
- filtering descriptions as well as titles
- requiring sellers to disclose their names and addresses when listing items, at least when listing items in a manner which suggests that they are selling in the course of trade
- imposing additional restrictions on the volumes of high risk products, such as fragrances and cosmetics, that can be listed at any one time
- being more consistent in their policies, for example regarding sales of unboxed products
- adopting policies to combat types of infringement which are not presently addressed, and in particular the sale of non-EEA goods without the consent of the trade mark owners
- taking greater account of negative feedback, particularly feedback concerning counterfeits
- applying sanctions more rigorously
- being more rigorous in suspending accounts linked to those of users whose accounts have been suspended
The judge noted, however, that the fact it was possible for eBay to do more did not necessarily mean it was legally obliged to do it.
It will be interesting to see if any of these suggestions are implemented over the coming months.
What this means?
The ruling effectively means that for the time being brand owners will have to continue the costly and time-consuming practice of policing sites such as eBay for counterfeit goods.
On the positive side, the referral to the ECJ on the interpretation of the Trade Marks Directive should mean that there will soon be a Euro-wide precedent clarifying the position in relation to the sale of counterfeit items via third party hosts.
Increased policing by eBay could therefore be on its way.
What should you do?
Being proactive about trade mark infringement is always better than being reactive, so it is important to consider the following:
- implementation of a registration policy that works for you
- devising an appropriate enforcement strategy
- using the eBay VeRO process where necessary
- involving Trading Standards if appropriate, who are very supportive regarding counterfeit goods
- notifying Customs of your trade marks, and the authenticity indicators on your products
© Shoosmiths. This page is for general information: it is not legal advice. Please read our full terms and conditions for details of the disclaimers and exclusions which apply.
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Rachael Parman
Associate
T: 03700 86 8494
I: +44 (0)1908 48 8494
E: rachael.parman@shoosmiths.co.uk