New ruling will protect brands from online counterfeits, say IP lawyers


The European Court of Justice today struck a blow to eBay in its fight against L’Oréal and other brand owners over liability for counterfeit goods sold on its website, claims intellectual property specialists, Marks & Clerk.

The Court ruled eBay and other online marketplaces cannot claim exemption from liability for these infringements, if they are aware of the illegal nature of the sales their sites facilitate.

The ruling means brand owners will be able to initiate legal proceedings against online marketplaces if they allow counterfeit goods to be sold through their site, said Marks & Clerk.

According to the lawyers, the ruling answers questions referred to the European Court of Justice in August 2009 by the High Court of Justice for England and Wales. Mr Justice Arnold of the High Court referred the questions after finding in favour of eBay in May 2009 in a landmark ruling in the struggle between the cosmetics giant and the online marketplace. Later in the same year, a French court ordered eBay to pay LVMH, the owner of the Louis Vuitton brand, €1.7m for failing to prevent the sale of LVMH products on its website. Today’s ruling from the European Court of Justice hands the advantage to L’Oréal and other big brands, said Marks & Clerk.

Kirsten Gilbert, partner at Marks & Clerk Solicitors, said: “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.

“Brands have been concerned for years now 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 online marketplaces like eBay now sit up and pay attention to the sales of counterfeit items which go through their sites.

“European trade mark law has been straining under the pressure of dealing with the internet age. The information revolution and the rise of online commerce have created a host of scenarios never envisaged when our laws were drafted. Today’s ruling will give national courts guidance on how to approach just one of these scenarios.

“We have seen over the past years different national courts finding in favour of opposing parties in similar cases. Inconsistency in the area of the online counterfeiting trade will be reduced following this ruling. Brand owners will now be working with a legal system which protects one of their key assets – their brand identity.”