eBay may be liable for trademark infringements in relation to counterfeit products sold on its site following a ruling by the European Court of Justice (ECJ) in a case brought by French cosmetics giant L’Oreal.

The ECJ has indicated that ISPs that take an active role in relation to offers of trademark-infringing goods, such as assisting in matters of presentation or promotion, which allows them to have knowledge or control of the data they are storing, will lose the benefit of the exemption from liability conferred by EU law.

Even in cases where the operator had not played an “active role”, the judges said it could still be liable for trademark infringement “if it was aware of facts or circumstances on the basis of which a diligent economic operator should have realised that the online offers for sale were unlawful and, in the event of it being so aware, failed to act promptly to remove the data concerned from its website or to disable access to them”.

ISPs are increasingly facing liability for the content on their sites, regardless of who posted it, as the Twitter-injunctions debacle demonstrates. It is vital that ISPs understand their responsibilities under UK and EU law and have well drafted terms and conditions in place in order to protect themselves.

The case will now return to the High Court for a final hearing and ruling.