Judgment issued by the Court of Justice on July 12th, 2011 has provided an important doctrine in the matter of the sale of branded goods on the Internet through the electronic market and deals likewise about the liability of the operator of the electronic marketplace.  

The issue under discussion arose by a preliminary ruling from the High Court of Justice (England and Wales) as a result of a lawsuit filed by L’Oreal and its subsidiaries companies, Lancome and Garnier against eBay in regards to the marketing of L’Oreal products through eBay without the consent of L’Oreal.  

The lawsuit faces the way of marketing L’Oreal products, through a closed distribution network, and by the eBay model, through which L’Oreal products are sold on the eBay website by individuals who offer such products to other individuals who can access through searching engines.  

L’Oreal sued eBay to prevent such sales in territories for which they were not authorized by L’Oreal, in this case, the European Economic Area (EEA). Furthermore, L’Oreal opposed to the marketing of samples or products without the authorized L’Oreal packaging.  

The High Court of Justice referred to the Court a number of questions which hereinbelow summarized:  

  • Whether if it is possible to sell product samples without authorization from the manufacturer.
  • Whether if it is possible to sell unpackaged products without the consent of the trademark holder.
  • Whether if it is lawful to use the representative symbol of a trademark by an unauthorized third party when the use occurs by the appearance of the representative symbol in a searching engine like Google.
  • Whether if shall be considered lawful that products are marketed by eBay in a different market from the intended market to which the products were addressed to initially.  

The Court stated:

  • The holder of a trademark may be opposed to the sale of products supported by its brand in different territories for which they were authorized.
  • That the supply of products samples shall not be considered as marketing of the product itself.
  • That the resale of goods without the official packaging authorized by the trademark holder is not lawful if this involves that essential information as the name of the manufacturer is not included or that by removing the packaging damages the brand image.
  • That the holder of a trademark may prohibit the use of its brand appearing in a searching engine installed on the website of an operator of an electronic market where the consumer might believe that such use constitutes an authorization from the trademark owner.
  • That the electronic operator may be liable for an unauthorised use of the trademark made by the people that can use its web site.