CJEU case L’Oréal and Others v eBay:on the liability of companies operating internet marketplaces for trade mark infringements committed by users

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National courts must be able to order those companies to take measures intended not only to bring to an end infringements of intellectual property rights but also to prevent further infringements of that kind.

eBay operates a global electronic marketplace on the internet, where individuals and businesses can buy and sell a broad variety of goods and services. L’Oréal is the owner of a wide range of well-known trade marks. Its products (especially cosmetics and perfumes) are distributed through a closed distribution network, in which authorised distributors are restrained from supplying products to other distributors. L’Oréal complains that eBay is involved in trade mark infringements committed by users of its website. Moreover, it claims that, by purchasing from paid internet referencing services (such as Google’s AdWords) keywords corresponding to the names of L’Oréal trade marks, eBay directs its users towards goods that infringe trade mark law, which are offered for sale on its website. Furthermore, L’Oréal is of the view that eBay’s efforts to prevent the sale of counterfeit goods on its website are inadequate. L’Oréal has identified various forms of infringement, including, inter alia, the sale and offer for sale, to consumers in the EU, of goods bearing L’Oréal’s trade marks intended, by L’Oréal, for sale in third States (parallel importation).

The High Court (United Kingdom), before which the dispute is pending, has asked the Court of Justice a number of questions concerning the obligations to which a company operating an internet marketplace may be subject in order to prevent trade mark infringements by its users.The Court states, as a preliminary point, that the proprietor of the trade mark may rely on his exclusive right as against an individual who sells trade-marked goods online only when those sales take place in the context of a commercial activity. That is the case, in particular, if the sales, owing to their volume and frequency, go beyond the realms of a private activity.

The Court rules first of all on commercial activities directed towards the EU by means of online marketplaces such as eBay. It states that the EU trade mark rules apply to offers for sale and advertisements relating to trade-marked goods located in third States as soon as it is clear that those offers for sale and advertisements are targeted at consumers in the EU. Here to read more.

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