L’Oreal – eBay: 1-0; Court of Justice clarifies liability of operators of online markets

In L’Oreal and Others v eBay the Court of Justice tightened the liability of operators in the field of controlling commerce on the online market.

Prelude of the case is that L’Oreal, owner of a wide range of trademarks with a reputation, had about enough of the practice that eBay uses keywords identical to the names of L’Oréal trade marks to direct its users towards goods that infringe trade mark law. Furthermore, L’Oréal is of the view that eBay’s efforts to prevent the sale of counterfeit goods on its website are inadequate.

The High Court (United Kingdom) that hears this case, has asked the European Court of Justice to interpret some articles, and the Court was stricter than usual. The Court pointed out that the operator of an online marketplace itself does not ‘use’ trademarks in case it is only providing a service under which it is enabling its customers to display trademarks on its website. But if it provides assistance which entails, in particular, optimizing the presentation of the online offers for sale or promoting those offers, it plays an ‘active role’, and therefore it cannot rely on the exemption from liability.

Furthermore, after these statements, the Court stated that in some cases there is not even need for this ‘active role’. Because if the operator was aware of facts or circumstances on the basis of which a diligent economic actor should have realized that the online offers for sale were of an unlawful nature and, in the event of it being so aware, failed to act promptly to remove the data concerned from its website or to disable access to them. Therefore, the operator’s liability is established and it may be ordered to take measures making it easier to identify the sellers who are its customers.

Thus, the Court noted the national courts’ task to assess, with attention of effective, proportionate, and dissuasive injunctions and, of course, they must not create barriers to legitimate trade.