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Friday, 22 May 2009

High Court: L'Oréal v eBay - ebay wins again?

Eagerly awaited and just out today is the UK High Court's decision in L'Oréal v eBay [2009] EWHC 1094 (Ch). Update: Please click here to retrieve the decision.

While the Kat has not yet seen the actual decision, early media reports inform the Kat that eBay has again emerged successful from a trade mark infringement action brought against it by cosmetics giant L'Oréal. In similar fashion to the Tribunal de Grande Instance de Paris in the recent French proceedings (see the IPKat's report here), the High Court appears to have considered that eBay has met its legal obligation to combat fake products.

Paris-based L'Oréal, which had brought similar proceedings in several European countries, had argued that online auction site eBay did not do enough to prevent the sale of counterfeit goods such as perfumes and cosmetics. Broadly speaking L'Oréal's position was that eBay should be liable for counterfeit and parallel imported goods sold via its website, and that eBay should do more to prevent the sale of such trade mark infringing goods. After today's decision, there are now three decisions in favour of eBay (UK, France and Belgium), one decision in favour of L'Oréal (Germany) and one decision (from Spain) still outstanding.

According to a report by Kathy Sandler of Dow Jones Newswires, the court appears to have taken the view that the relevant European trade mark law provisions and the eCommerce Directive "were unclear, referring such issues to the European Court of Justice for further guidance".

*****

Update: the decision, which comprises of 482 paragraphs and certainly deserves an in depth analysis, can now be retrieved by clicking here. Based on what the Kat has been reading so far though, it appears at least open whether eBay has "won" (as initially reported in the media and above) pending a referral to the ECJ. In the meantime, Mr Justice Arnold's conclusions (paragraphs 481, 482) are set out below:

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 [of the Enforcement Directive] 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]."

7 comments:

Anonymous said...

Thanks for your update Kat! I was just about to email you.

Mr Justice Arnold said...

For those who have not read the judgment, conclusion (vi) refers to Article 11 of the Enforcement Directive.

Birgit said...

For our German readers: you will be most interested in paragraphs 320 pp. re Bundesgerichtshof decision in I ZR 63/04 "Parfümtester" (Perfume Tester Bottles).

In particular paragraph 326, which reads "The judgment of the Bundesgerichtshof is entitled to the greatest of respect. It may be correct. I am unable to agree, however, that the matter is acte clair. In my judgment, it is arguable that the Bundesgerichtshof's decision is wrong for the reasons given by counsel for L'Oréal. Accordingly, I consider that guidance is required from the ECJ on this issue."

Robert Hurst said...

Is it really necessary to refer the matter to the ECJ?

Is not the only relevant question whether E-Bay was a joint tortfeasor with the infringers?

In A & M Records v Audio Magnetics [1979] FSR 1 (in which I represented Audio Magnetics) and CBS v Amstrad [1988] AC 1013, it was held that, since any copyright infringement would have taken place subsequent to the sale of the blank tapes by the alleged joint tortfeasor (i.e. the manufacturer of the blank tapes), no tort can have been committed at the point of sale. The allegation of joint tortfeasorship was therefore unsustainable.

By way of contrast, the TM infringement in relation to goods sold on e-Bay does take place at the point of sale. Because of e-Bay's system (which Arnold J conceded leaves room for improvement), the identity of the vendor remains anonymous until the point at which the contract is concluded and the infringement has been committed.

Ashley Roughton said...

The e-commerce directive is inpenetrable - even the trade marks directive is clear in comparison! However if clear guidance can be given (either by Arnold J - which is likely, or the ECJ - about which there might have to be some not breath holding) on the interpreatation of how liability works under the e-commerce rules and what "coordinated field" means then I for one will have less work to do. Are we likely to get a clear answer from the ECJ? Are we ever.

Robert Hurst said...

A further issue has occurred to me.Because of the anonymity of eBay vendors until the point of sale, is not eBay liable for the acts of an undisclosed principal? These are matters of domestic law. It should not be necessary to trouble the ECJ.

Anonymous said...

Has anyone been able to unravell the German mystery?? The translation of the decision that I have read clearly has eBay winning on the basis that the tester bottles were put onto the market with L'O's consent, whereas there are reports in various places saying that eBay lost.

Does anyone know if the Englsih translation is selective of all the issues at trial, or an appeal on a limited set of issues?

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