Luxury brands vs. eBay the battle continues - Richard Dickinson, Partner AIJA Seminar (Dusseldorf), Trade Marks and their Enforcement 12 March 2010
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Luxury brands vs. eBay
– the battle continues
Richard Dickinson, Partner
AIJA Seminar (Dusseldorf), Trade Marks and their Enforcement
12 March 2010Luxury brands vs. eBay
What is eBay?
– On line marketplace
On-line
– 21 websites in eight languages
– Founded in 1995, listed in 1998
– 2008 revenue $8.54 billion; income $1.78 billion
– 300 million registered users (84 million active)
– 125 million
illi active
ti listings
li ti att any given
i time
ti
– 7.3 million new listings posted each day
– Auction-style
Auction style and fixed price listingsLuxury brands vs. eBay
Unusual sale items
– Cooked Brussels sprout sold for £99.50 on Christmas Day 2005
– British radio DJ
J Tim S Shaw‘s wife sold his Lotus Esprit
p for 50p
after she heard him flirting on air
– Four men from Australia auctioned themselves to spend the
weekend with the promise of “beers
beers, snacks,
snacks good conversation
and a hell of a lot of laughs” for AU$1,300Luxury brands vs. eBay
Brand owners’ concerns
– Explosion in sales of fake goods
– Insufficient
I ffi i t action
ti byb eBay
B to t combat
b t infringing
i f i i sales
l
– Luxury products (and obvious fake products) advertised using
sponsored links and adwords
eBay’s view
– No liability on the basis of generalised knowledge that trade mark
infringement might be occurring on its website (Arts 14 and 15 of
eCommerce Directive 200/31)
– Checking every listing for authenticity would make cost of listing
prohibitively expensive
– Verified Rights Owner (“VERO”) program introduced in 2006: rights
owners report listings that infringe their rights
– eBayy takes down listings
g if notified of infringing
g g salesLuxury brands vs. eBay
Global litigation by brand owners
Mixed results
– Europe
• Germany:y 2-0* to eBayy
• France: 6-1* to (French?) brand owners
• Belgium: 2-0* to eBay
• UK: 1-0
1 0 to eBay
– US
• 1-0 to eBay*
(*appeals pending)Luxury brands vs. eBay
France
– Hermès v eBay (4 June 2008)
• eBay
B ordered
d d tto pay €20K over sale
l off 3 H
Hermes b
bags, ttwo off which
hi h
were fake
– LMVH v eBay (30 June 08)
• Court accepted jurisdiction as damage would occur in France (LV’s(LV s
head office) despite advertisements being hosted on US servers
• Other courts may also have jurisdiction
• eBay breached its duty of care by participating in marketing of
counterfeit
t f it goods,
d and d by
b failing
f ili tto ensure that
th t its
it activities
ti iti did nott
generate illegal activity
• eBay ordered to pay €39m in damages for unauthorised sales and
“culpable negligence”
• eBay fined €1.7m in November 2009 for breaching injunction banning
users’ sales of LMVH products
• Appeal being heard in May 2010Luxury brands vs. eBay
France (cont.)
– L'Oréal v eBay (13 May 2009)
• Judge found that eBay had “acted in good faith” and ordered a mediation
– LMVH v eBay (21 September 2009)
• eBay committed various acts of counterfeiting by using keywords from LMVH
brands
• LMVH awarded €80k damages, and €1k for each subsequent breach
– Louis Vuitton v eBay (11 February 2010)
• eBay had purchased Adwords for misspelt versions of LV marks (e.g. Viton,
Wuiton, etc.)
• Paris District Court found eBay liable for damaging reputation of LV trade marks,
the company name and the domain name, and awarded €200k in damages
• eBay ordered to stop paying search engines to direct keywords to its site
• Conflict with Belgian Adwords case?
• eBay understood to be appealingLuxury brands vs. eBay
Germany
– Rolex v eBay (24 February 2009)
• July 07 decision overturned. Rolex unable to demonstrate that
counterfeits offered for sale after eBay became aware of infringing sales
– Sternjakob v eBay (2 July 2009)
• German manufacturer of popular satchels and backpacks
• Stopped supplying distributor who sold via eBay on basis of quality
requirements
• Munich court held that prohibition on online auction sales does not
constitute a customer restriction under German competition law
(although new law comes into force in 2010)
• Left open whether this would be a restriction of competition under Art
101 TFEU (anti-competitive agreements)
• Decision subject to appealLuxury brands vs. eBay
UK
– L
L'Oréal
Oréal v eBay (22 May 2009)
• High Court held that eBay is not jointly liable with individual sellers for
sales of infringing or counterfeit products
• Facilitating infringement and knowledge that infringements were likely to
occur did not amount to a ‘common design’ to procure infringement
• No duty or obligation under UK law to prevent infringement of 3rd
parties’ marks (but compare with Art 11 Enforcement Directive, which
parties
provides power to injunct 3rd parties who have participated in infringing
acts as intermediaries or accessories)
• Judge
g commented that eBay y could and should do more to p prevent sales
of infringing goods
• Use of sponsored links targeting UK customers held to be trade mark
“use”, but guidance required on whether this amounted to infringementLuxury brands vs. eBay
UK (cont)
– Guidance sought from ECJ on:
• “Use”: Did eBay’s Adword use of L'Oréal’s marks constitute an
advertisement amounting to use under Art 5(3)(d) of the TM
Directive?
• “In relation to”: Was eBay’s Adword use of the marks ‘in relation to’
specific identifiable goods? L'Oréal says use is made in relation to
all goods on site
site, which includes infringing goods
• “Infringing use”: Do sponsored links infringe if they relate to non-
EEA goods?
• Scope of hosting defence under Art 14 eCommerce DirectiveLuxury brands vs. eBay
Belgium
– Lancôme v eBay (30 July 2008)
• eBay
B exemptt from f liability
li bilit as a provider
id off h hostt services
i under
d BBelgian
l i
implementation of Art 14 eCommerce Directive
• eBay has no general obligation to monitor the information hosted and
has no ggeneral obligation
g to look for illegal
g activity y ((Art 15 eCommerce
Directive )
• Sufficient to take down infringing advertisements upon notification
• Appeal lodged
– eBay v Ralph Lauren (11 February 2009)
• Overturned 2008 ruling against eBay to cease all use of “Ralph Lauren”
and “Polo Sport” adwords
• Adwords used solelyy “for the purposes
p p of distinguishing
g gggoods or
services”
• Adwords not used concerning the kind, quality, quantity etc of the
goods, so no need to consider “honest practices in commercial matters”Luxury brands vs. eBay
US
– Tiffany v eBay (14 July 2008)
• Court concerned about implications for free speech, and unwilling to
expand meaning of contributory infringement
• If no confusion
f i or suggestionti off endorsement,
d t eBay
B is i free
f to
t use
Tiffany trade marks to describe brand owners’ products
• Burden placed on brand owners to police their marks
• eBay not liable for infringement solely on the basis of generalised
knowledge that infringement might be occurring on its website
• Appeal decision due soonLuxury brands vs. eBay
Watch this space
– eBay continues to operate VERO programme
– A
Appeals
l pending
di iin USUS, G
Germany, F
France and
dBBelgium
l i
– Patchwork of different decisions
– Questions referred to ECJ by UK courts on Adwords issue in
L'Oréal (and Interflora/Google Adwords case)
– Some questions may be addressed by ECJ’s decision in Google
F
France v Louis
L i V Vuitton,
itt expected
t d 23 M
March
h 2010Richard Dickinson, Partner
Direct Line: +44 (0) 20 7786 6213
E-mail: Richard.Dickinson@aporter.comYou can also read
