Recently, the Court of Appeal of Leeuwarden, the Netherlands, rendered a judgment in the Stokke/Marktplaats case. The judgment (of 22 May 2012) is the result of an ongoing legal battle between Stokke, the manufacturer of the well-known TRIPP TRAPP children’s chairs, and the online platform Marktplaats, the Dutch version of eBay. Various chairs offered on Marktplaats have already been held by lower courts to infringe Stokke's copyrights in the chair, and/or to be falsely advertised as 'Stokke' or 'Tripp Trapp' chairs, thereby infringing Stokke's trademarks. Stokke asked the Court of Appeal to order Marktplaats (in short) to refrain from placing any such advertisements and from re-issuing advertisements which previously had to be removed due to their infringing nature. The order would not apply if it was not apparent from the advertisement that the chairs offered had previously been held to infringe Stokke’s rights. Furthermore, Stokke demanded that Marktplaats be ordered to register and provide to Stokke all contact details of each advertiser of infringing chairs.
Given the fairly anonymous modus operandi of Marktplaats and its advertisers, it is often difficult – if not impossible – for right holders such as Stokke to contact the infringers and put an end to infringements. In the absence of such vital contact details, can the operator of the online marketplace be held liable for the infringement, particularly if the operator knows or should know that its platform is being used for illegal activities?
Liability of online marketplace
The Court of Appeal interpreted the L'Oréal/eBay judgment of the European Court of Justice ("ECJ") of 12 July 2011 (C-324/09). The ECJ ruled in L'Oréal/eBay1]:
- a hosting operator is in principle exempted from liability - as provided for by the E-commerce Directive - if it has taken a neutral position between the customer-seller and the potential buyers;
- the operator’s position is not neutral if it plays an active role of such a kind as to give knowledge of, or control over, the data relating to the offers for sale, such as providing assistance which entails, in particular, optimising the presentation of the offers for sale or promoting those offers;
- if the operator plays a neutral role, it can nonetheless not rely on the exemption from liability if it was aware of facts or circumstances on the basis of which a diligent economic operator should have realised that the offers for sale were unlawful, and, in the event of it being so aware, failed to act expeditiously;
- the liability exemption relates only to damages. The operator may, regardless of any liability of its own, be ordered to take, in addition to measures aimed at bringing to an end infringements of intellectual property rights brought about by users of its services, measures aimed at preventing further infringements of that kind. (Those measures cannot consist of the active monitoring of all data of all customers in order to prevent future infringements, but the operator may be ordered to take measures to make it easier to identify its customers/sellers).
In Stokke/Marktplaats, the Court of Appeal held - based upon the principles laid down by the ECJ - that Marktplaats was exempted from liability for the following reasons:
As hosting operator, Marktplaats played a neutral (i.e. not active) role between its customer-sellers and the potential buyers because:
- it gained knowledge - on its own initiative or after notification - of the content of the advertisements only after they were launched on its website;
- the mere offering of a possibility for customer-sellers to have their advertisements stand out cannot be regarded as optimising the presentation of the advertisements because it is up to the customer-sellers to make use of the possibility and all customer-sellers profit equally from the efforts of Marktplaats.
- Marktplaats acted expeditiously after becoming aware of the unlawful advertisements. Marktplaats was not obliged to investigate all the advertisements (relating to the Stokke chairs or similar ones) because about 95% of the trade in these items on Marktplaats appears to be legitimate;
Although the exemption from liability relates only to liability for damages and the operator of an online marketplace can still be ordered to take measure to terminate or prevent an unlawful situation (pursuant to the Enforcement Directive), those measures must be reasonable and proportionate.
- It would be disproportionate to order Marktplaats to take the requested measures to prevent the placement of infringing advertisements. Such measures would of course be highly disadvantageous to Marktplaats – i.e., increasing its costs and making it a commercially less attractive platform – compared to the relatively minor benefits that Stokke would enjoy from those measures - i.e. the removal of some infringing advertisements from Marktplaats. Furthermore, Stokke already makes use of SNB REACT, a company monitoring the advertisements relating to Stokke chairs or similar ones.
- It would also be unreasonable and disproportionate to order Marktplaats to provide or even register the contact details of its advertisers, as the vast majority of them are private persons not acting in the course of business. Given that Marktplaats successfully argued that some 90% of its trade is legitimate, disclosing the contact details of all those "innocent" people would not be justified.
Even though right holders have been fighting online sales platforms for years, the gap between their opposing interests seems difficult to close. The right holder is confronted with infringing products being offered under aliases on online platforms, where it is nearly impossible for the right holder to find the responsible trader. The right holder can request the platform operator to remove a particular advertisement, but the advertisement will resurface the next day, posted by a different trader or under a different alias. The platform, on the other hand, does not have the resources or ability to check all advertisements in advance, and to act proactively against its advertising customers (in favour of the right holders) would kill its business model. A solution to the resulting impasse is still far away. Although the ECJ has set certain standards with which the platforms must comply, and these will now be applied by the Dutch courts, from a right holder’s perspective the road to protection of its rights is still long and bumpy.