The European Court of Justice has ruled that online auction site eBay should be held liable for trademark infringement where it is aware that users are selling counterfeit items via the site.
The decision will have far-reaching implications for all online sites which allow vendors to sell branded goods.
The case was referred to the European Court in May 2009 by Mr Justice Arnold after four claimants, L’Oreal, Lancome Parfums Et Beaute & Cie, Laboratoire Garnier & Cie and L’Oreal (UK), asked the domestic court to find eBay liable for trademark infringement committed by its users (see judgment).
Specifically the European Court was called upon to decipher at what point eBay could be found to be responsible for trademark infringement.
This included assessing whether infringement is committed where the host website promotes the product in dispute through using tactics such as buying keywords from search engines.
Today’s ruling will mean that brand owners will now be able to bring cases against eBay where it claims copyright has been infringed.
Ashurst partner Dominic Batchelor said: “”eBay will be concerned by this decision, which means it could be forced to prevent intellectual property infringements by its users. The practical and cost implications could be extensive, and any additional costs will presumably be passed on to eBay’s users.”
Marks & Clerk Solicitors Kirsten Gilbert added: “Brand owners like L’Oréal will be jubilant at today’s ruling. Trademark owners are no longer alone in their fight for online brand protection. Instead, as is the case on the High Street, companies which facilitate sales can be held accountable for the goods which pass through their hands.”
Bristows partner Paul Walsh instructed 11 South Square’s Henry Carr QC and Brick Court’s David Anderson QC to lead 3 New Square’s Tom Mitcheson for L’Oreal.