L’Oréal v eBay Part III: what the world says ...

Here in Part III, in alphabetical order, are some early responses to this morning's Court of Justice ruling in Case C‑324/09 L’Oréal SA, Lancôme parfums et beauté & Cie, Laboratoire Garnier & Cie, L’Oréal (UK) Limited v eBay International AG, eBay Europe SARL and eBay (UK) Limited (see Part I for background, Part II for the ruling and an easy summary).

Ashursts IP partner Dominic Batchelor: "eBay will be concerned by this decision, which means it could be forced to prevent intellectual property infringements by its users. The practical and cost implications could be extensive, and any additional costs will presumably be passed on to eBay's users".

“Brand owners like L’Oréal will be jubilant at today’s ruling. Trade mark owners are no longer alone in their fight for online brand protection. Instead, as is the case on the High Street, companies which facilitate sales can be held accountable for the goods which pass through their hands", says Kirsten Gilbert (Marks & Clerk), adding "Brands have been concerned for years now that the internet has facilitated the trade of counterfeit goods. Items which would otherwise be available only from back-street traders have become instantly available to consumers in the privacy of their own homes. L’Oréal and other brand owners will be hoping that online marketplaces like eBay now sit up and pay attention to the sales of counterfeit items which go through their sites. ... Brand owners will now be working with a legal system which protects one of their key assets – their brand identity.”

Stefan Krawczyk, eBay’s European government-relations director: “The judgment provides some clarity on certain issues, and ensures that all brands can be traded online in Europe. A lot of cases will still have to be assessed by the national courts. We’ve moved on -- we fulfill most of these conditions now anyways”.

At the time this item was posted, L’Oréal had yet to issue a public statement, confirming only that the company was studying the ruling. Given the fact that L’Oréal must not only decide what it thinks about the judgment but must also determine what it should say about its own corporate policy in the wake of the ruling, any delay in issuing a statement is probably prudent.

Managing Internet IP's James Nurton said this morning's press release from the court "makes grim reading for the online marketplace".

Adam Smith (World Trademark Review blog): "the court clarified that an online marketplace is not exempted from liability when it has played an “active role” in the sale, which includes “optimising the presentation of the offers for sale in question or promoting them”. This would appear to challenge eBay’s current business practices, and its arguments that it is not responsible for third parties selling counterfeit goods, especially because it takes active steps to stop them with its Verifed Rights Owner programme".

While these responses, which the perhaps inevitable exception of that of eBay, reflect the opinion that this ruling is bad news for online market operators, this Kat is not expecting an avalanche of litigation against eBay. The fact that the company cannot automatically escape liability under the E-Commerce Directive does not mean that it is automatically liable. Apart from the fact that the success of each prospective trade mark infringement action will still turn on its facts, the cost of litigation is itself a deterrent where the infringement is small and injunctive relief -- which is pretty well automatic in the case of Community trade mark infringement even when infringement has ceased -- is not a per se remedy in the case of infringement of national marks.  Merpel adds, while the injured trade mark owner can derive some justifiable satisfaction from having brought a successful action, the biggest benefit to the consumer, and therefore to the protection of the goodwill in each brand, is for eBay and the brand owners to cooperate more fully and effectively in producing the best-possible system for notice and take-down.