On 12 July 2011, the European Court of Justice ("ECJ") handed down its much anticipated decision in L'Oréal v. eBay. The case concerns the advertisement and sale of goods on the online market place eBay. L'Oréal has claimed that eBay is liable for infringements of L'Oréal's trademarks committed by sellers on the eBay website.

The decision clarifies the scope of the liability exemptions for intermediary service providers, as contained in the E-Commerce Directive, and the available measures against those intermediaries, as referred to in the IP Enforcement Directive.

In response to a number of questions of the High Court (United Kingdom), the ECJ ruled that an operator of an online marketplace cannot rely on the liability exemption if it played an 'active role' that would give 'it knowledge of, or control over, the data relating to the offers for sale'. The operator already plays such a role 'when it provides assistance which entails, in particular, optimising the presentation of the online offers for sale or promoting those.' The ECJ also confirmed that even if the operator did not provide such assistance, it may nonetheless be held liable if it is aware of facts or circumstances from which the illegal information is apparent and fails to remove this information from its website.

Furthermore, the ECJ pointed out that national courts should be able to order the operator to take measures, not only to end infringements but also to prevent further infringements. To ensure that there is a right to an effective remedy against the individual sellers who used the online service for intellectual property right infringements, the ECJ added that the operator may be ordered to take measures to make it easier to identify those persons.

The decision will have major practical implications for online marketplace operators and other online intermediaries whose services are being used to infringe intellectual property rights. From the trademark holder's perspective it is good news as it puts them in a stronger position to take action against those intermediaries.