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Judges rule on L'Oreal trade mark
Online shopping sites may be liable for trademark infringements if they play an "active role" in promoting counterfeit products, European judges have ruled.
The verdict came in the latest of a series of cases brought by cosmetics giant L'Oreal in courts across the EU to defend its brand name.
The company is challenging eBay in the UK High Court, which asked the European Court of Justice in Luxembourg to clarify the obligations of internet marketplaces under EU law.
L'Oreal claims eBay is liable for the sales on its website of counterfeit goods and of "parallel imports" - L'Oreal-branded products not intended for the EU market.
Last December, the EU court's advocate-general said in a legal opinion that eBay should not be liable unless it had been notified by a trademark holder such as L'Oreal of an infringement, and the online offence continued.
In the final verdict, the full panel of EU judges said it was the right of national courts to order companies such as eBay "to take measures intended not only to bring to an end infringements of intellectual property rights but also to prevent further infringements of that kind".
The ruling acknowledged that operators of online sales sites did not "use" trade marks within the meaning of the EU law, if they provided a service "consisting merely in enabling its customers to display on its website, in the course of their commercial activities, signs corresponding to trade marks".
But the judgment added when the operator has played an active role "it cannot rely on the exemption from liability which EU law confers, under certain conditions, on online service providers such as operators of internet marketplaces". And even in cases where the operator had not played an active role, it could still be liable for trademark infringement under certain circumstances.
The judgment said L'Oreal's complaint against eBay included claims that, by buying keywords from paid internet referencing services (such as Google's AdWords) corresponding to the names of L'Oreal trade marks, eBay "directs its users towards goods that infringe trademark law, which are offered for sale on its website".
Then the UK High Court ruled that eBay was not "jointly liable" for trademark infringements committed by its users, but decided to ask the EU court for legal guidance about EU trademark rules. Now the case returns to the High Court for a final hearing and ruling.