EBay 3: Luxury Trade Mark Holders 2

Exciting breaking news from the IPKat that eBay have won their court case in the UK High Court , asserting that they are not liable for the trademark infringements of sellers on their site selling counterfeit goods. There are now three decisions in favour of eBay (UK, France and Belgium), one decision in favour of L'Oreal (Germany) and one decision (from Spain) still outstanding. The case is important to an understanding of how the immunities in Art 14 of the EC E-Commerce Directive operate in relation to "web 2.0" or user generated content sites. The case indicates that on both trade mark law and article 14, the issues will be referred to the ECJ for a clearer ruling.

The judgment is available here. It comes only weeks after a French court reversed a previous French ruling finding for eBay and against L'Oreal. Does this show a turning against the theory that UGC sites are "complicit" with the infringing activities of their users and not deserving of immunity under Art 14, since their revenue is derived in part from such activity and they may have constructive knowledge thereof? Pangloss has not had time to read the ruling properly yet but the relevant conclusions appear to be:

"i) The Fourth to Tenth Defendants have infringed the Trade Marks. In the case of the Fourth to Eighth Defendants the goods they sold were put on the market outside the EEA and L'Oréal did not consent to those goods being put on the market within the EEA. In the case of the Ninth and Tenth Defendants the goods they sold were counterfeits.

ii) Whether the sale by sellers on the Site of testers and dramming products and of unboxed products amounts to an infringement of the Trade Marks depends upon questions of interpretation of the Trade Marks Directive as to which the law is unclear (see paragraphs 319-326 and 331-342 above). Although these questions are academic so far as the acts committed by the Fourth to Tenth Defendants are concerned, they are potentially relevant to the question of what relief, if any, L'Oréal are entitled to. Accordingly, guidance from the ECJ is required on these points.

iii) eBay Europe are not jointly liable for the infringements committed by the Fourth to Tenth Defendants.

iv) Whether eBay Europe have infringed the Link Marks by use in sponsored links and on the Site in relation to infringing goods again depends upon a number of questions of interpretation of the Trade Marks Directive upon which guidance from the ECJ is required (see paragraphs 388-392, 393-398 and 413-418 above).

v) Whether eBay Europe have a defence under Article 14 of the E-Commerce Directive is another matter upon which guidance from the ECJ is needed (see paragraphs 436-443 above).

vi) As a matter of domestic law the court has power to grant an injunction against eBay Europe by virtue of the infringements committed by the Fourth to Tenth Defendants, but the scope of the relief which Article 11 requires national courts to grant in such circumstances is another matter upon which guidance from the ECJ is required (see paragraphs 455-465 above).

I shall hear further argument on the precise formulation of the questions to be referred to the ECJ. The parties should exchange proposed drafts of the questions in advance of that hearing. The parties should also consider the guidance given by Arden LJ in Horvath v Secretary of State for Environment [2007] EWCA Civ 620 at [80]."

Pangloss Sez: Looking to the mentioned paras 436-443 we find little but the conclusion that the Art 14 defense is not acte claire and that this is born out by the range of decisions in cases across Europe and existing references to the ECJ. There is some interesting discussion of the German Internet Auctions cases however. It looks as if we may have to wait for the ECJ to finally speak for more guidance though .