Website Reseller eBay has secondary liability for infringement of L'Oreal's trademarks

Website Reseller Lawyers

Website reseller lawyers review eBay L’Oreal’s trademarks case

The eBay L’Oreal’s trademarks case is of interest to Website reseller lawyers because it is related to the legality of the resell of third party goods on an intermediary website.

Website Reseller Lawyers

Website Reseller Lawyers

In the case of:

L`Oreal SA, Lancome parfums et beaute & Cie, Laboratoire Garnier & Cie, LOreal (UK) Limited v. eBay International AG, eBay Europe SARL, eBay (UK) Limited

A reference to the European Court of Justice in Luxembourg (ECJ) for a preliminary ruling, from the High Court of Justice of England and Wales, Chancery Division was set out broadly in 9 carefully structured questions.

On the 09 December 2010 advocate general Jaaskinen (AG) presented his legal opinion on the questions referred by the High Court of Justice of England and Wales. At the time of writing, the ECJ`s ruling is still pending however the advocate general`s opinion is a strong indication of how the ECJ is likely to reply.

The referred questions of law relate to pertinent issues of Internet law including but not limited to:

(i) keyword advertising corresponding to trademarks;

(ii) liability of an electronic marketplace provider; and

(iii) the interpretation of Article 14 of Directive 2000/31/EC on electronic commerce in respect of an operator of an electronic marketplace for the information it hosts; and Directive 2004/48/EC (Directive on the enforcement of intellectual property rights).

In brief the facts of the main proceedings, before the High Court of Justice, are inter alia that L`Oreal (a well known manufacturer and supplier of perfumes, cosmetics and hair products) is in a suit against eBay (a well known operator of an online marketplace) that:

(1) Certain individuals have infringed one or more of its trademarks as users of the eBay marketplace by using signs that are the same as the registered trademarks of L`Oreal and in relation to goods that are the same as the goods for which the trademarks are registered;

(2) That eBay is jointly liable (with these individuals); and

(3) That eBay is primarily liable for the use, in relation to the infringing goods, of the branded links that are registered trademarks of L`Oreal and for sponsored links on third party search engines like Google ad Word. The issues of concern in this post are limited to the AG`s opinion relating to the so called `hosting immunity` from liability of an electronic marketplace provider and trade mark infringement liability relating to the use of branded links, keywords and sponsored ads.


The AG suggests that the operator of an electronic marketplace can be a provider of information society services as can a paid Internet referencing service.

In particular he says trying to apply the exemptions in Articles 12, 13, 14 namely “mere conduit”, “caching”, “hosting” too narrowly is not necessarily the only approach. This is because, an online business might benefit from one exemption if narrowly interpreted but not from another, and it may well be doing all three.

Another approach would be to apply the exemptions depending on the type of activity not the service provider type.

The AG states:

“I do not think it is possible to sketch out parameters of a business model that would fit perfectly to the hosting exemption. And even if it were, a definition made today would probably not last for long. Instead we should focus on a type of activity and clearly state that while certain activities by a service provider are exempt from liability, as deemed necessary to attain the objectives of the directive, all others are not and remain in the`normal` liability regimes of the member States, such as damages liability and criminal law liability.”

Therefore unless the activity is exempted then the activities that are not exempted may lead to liability under national law.

Therefore a search engine might benefit from the`hosting` exemption.

But the operator of the online marketplace, using a mark that is the same as that registered as a trade mark, in a sponsored link, for an Ad Word campaign, where the information is “hosted” by the search engine, would not benefit.

In other words EBay would not benefit.

Website Reseller Lawyers take note it will be for the High Court to apply the resulting judgment of the ECJ to the case.

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