The AG's Opinion is that eBay is not liable for the trade mark infringements of its customers but it could become so if it fails to take further action once notified and that injunctions are available against eBay in relation to repeated or continued infringements featuring the same user and same trade mark. The use by eBay of keywords in misleading sponsored links could trigger liability for eBay also.

Summary

In May 2009 we reported how Arnold J held that eBay was not liable as joint tortfeasor for the sale of infringing goods on its website despite, in the judge's opinion, there being more that could be done by eBay to prevent such sales from occurring. The judge however felt that he could not make a decision on the allegations that eBay's use of sponsored links to direct people to listings, in so far as those listings are for infringing products, amounted to trade mark infringement, without a reference to the (then) ECJ.

Yesterday the Opinion of the AG on the case L'Oreal v eBay C-324/09 was released, the AG suggesting that eBay was not liable for the trade mark infringements of the users of its website in the first instance but that if it had been notified of the infringing use and the use continues or is repeated then eBay would be liable. Further, under Article 11 of the Directive on enforcement of intellectual property rights (2004/48), injunctions may be available against marketplace operators in order to prevent continued or repeated infringements by the same user in relation to the same trade mark.

Business impact

Electronic marketplace operators and other ISPs will be relieved to see the AG following Arnold J's approach of no-initial liability for the infringing trade mark use of its users. However, the AG's Opinion sounds a warning in terms of preparedness to take down allegedly infringing sites and also in relation to eBay's own advertising activities to which Article 14 of the E-commerce Directive (the 'hosting' safe harbour) would not apply.

Background

There were several issues referred to the CJEU.

  • Use of key words (eBay had bought keywords to attract customers to its site)
  • Parallel import and un-boxing issues and exhaustion of rights
  • The existence of an E-commerce Directive defence for eBay and operators of similar websites
  • Whether the efforts made by eBay to deal with repeat offenders were adequate and whether this had any impact upon any defence eBay could raise

The trade objected to by L'Oreal included use of their trade marks as key words, trade in counterfeit goods, trade in unpackaged goods as well as parallel imports of products not intended for the EEA or EU and the sale of tester products (samples not intended for sale to consumers).

Opinion

The AG's Opinion was that:

  • Tester and other sample bottles marked "not for sale" or "not for individual sale" and not intended for sale to customers and supplied authorised dealers (without charge) are not "put on the market" within the EEA (within the meaning of Article 7(1) of the Trade Mark Directive 89/104/EEC) and so the trade mark proprietor's ability to assert his rights in relation to them is not exhausted.
  • Trade mark rights may also be asserted against goods offered for sale on eBay aimed at EEA consumers, which have not yet been "put on the market" with the consent of the proprietor in the EEA.
  • Un-boxing: In relation to luxury goods, the removal of outer packaging could constitute damage to the function of the trade mark of indicating origin and the quality of the goods and to the reputation of the trade mark and so could be actionable by the proprietor.
  • Keywords: By reserving L'Oreal's trade marks as keywords, eBay was using these trade marks in relation to the goods (since it provides an alternative purchasing source which co-exists with the official distribution network) but the use of such keywords does not necessarily result in misleading the consumers as to the origin of the goods offered. In cases where the advertisement in relation to which the keywords are used is not misleading the consumers as to the origins of the goods offered the function of the trade mark in indicating the origin of the product is not likely to be jeopardised.
  • The AG made clear that simple display of a trade mark on an electronic marketplace is different to a sponsored link and is not use of a trade mark by the marketplace operator, rather it is use by the users of the marketplace.
  • Assistance given by eBay to its clients in their preparation of their listings (which involve the use of trade marks) is not sufficient to adversely affect eBay's "neutrality" in such situations. In order for an ISP to benefit from the 'hosting' safe harbour provided for under Article 14 of the E-Commerce Directive 2000/31 and be exempted from liability for any information stored by its users, it is a requirement for it to be behave neutrally in relation to such information (see the Google cases).
  • Whilst, in the AG's opinion, eBay is exempt from liability in relation to such "hosting" activities, it still remains liable for the content of data it communicates as an advertiser to a search engine operator (i.e. its own advertising activities). There is "actual knowledge" of illegal activity or information or "awareness" of facts or circumstances (within the meaning of Article 14(1) of the E-Commerce Directive where the marketplace operator of the electronic marketplace has knowledge that goods have been advertised, offered for sale and sold on its website in infringement of a registered trade mark and such infringements by the same user are likely to continue in relation to the same or similar goods.
  • L'Oreal had argued that, even if eBay is not itself liable for trade mark infringement, an injunction should be issued against it to prevent further use of its marketplace for infringing purposes. One of the questions referred by Arnold J asked whether Article 11 of Directive 2004/48 on the enforcement of intellectual property rights required Member States to ensure trade mark proprietors could obtain such an injunction against an intermediary to prevent further infringements where the services of an intermediary such as an operator of a website have been used by a third party to infringe a registered trade mark, and if so what was the scope of the injunction that should be made available. The AG's Opinion was that a trade mark proprietor can obtain "an effective, dissuasive and proportionate injunction against the intermediary to prevent continuation or repetition of that infringement by that third party" but that the "conditions and procedures relating to such injunctions are defined in national law". The AG commented that the requirement of proportionality would exclude an injunction against the intermediary to prevent any further infringements of a trade mark but that an appropriate limit for the scope of injunctions may be that of a double requirement of identity - an injunction to prevent continuing or repetition of infringements by the same party in relation to the same trade mark.