In a case lodged by cosmetics giant L’Oreal, the European Court of Justice has ruled that online marketplaces like eBay could be sued for trademark abuse if they don’t take more responsibility to ensure trademarks aren’t abused on their services. The court also ruled that EU member governments are responsible for ensuring their own national courts can order market operators can act on trademark infringement claims.
The case has been percolating through European courts for a few years, and got started over counterfeit L’Oreal products and L’Oreal goods marked “not for sale” being offered on eBay. L’Oreal claimed eBay should do more to prevent counterfeit and pirated goods from being sold on its service.
The European Court of Justice ruling contradicts a 2009 victory eBay one over L’Oreal in the United Kingdom—that court agreed eBay could be doing more to combat infringement, ultimately it was not responsible for trademark and copyright violations committed by its users. The new ruling finds that if the site operator plays an “active role” in the sale or promotion of the goods—using the trademarks to promote its marketplace or services, for example—then it can’t count on being exempt from liability if its customers commit infringements.
The new ruling could have significant implications for eBay, which will now likely have to step up active policing of user listings.