eBay has lost a legal battle in European courts relating to liability for infringement of trademarks.
The online auction website originally argued that it should not be held liable when its users illegally use a trademark for a big brand like cosmetics company L'Oréal. In May 2009 it won its case in the UK's High Court.
However, there were some concerns over the ruling that were forwarded to the European Court of Justice, which ruled today that eBay and other online marketplaces which have an active role in sales cannot claim exemption from trademark infringement liability.
The ruling applies for the European Union (EU) market and extends to sellers outside the EU if they are directing their sales to citizens of member states.
“Brand owners like L’Oréal will be jubilant at today’s ruling,” said Kirsten Gilbert of Marks & Clerk Solicitors. “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.”
Gilbert said that the move will help protect brands, which are the victim of significant counterfeit goods sales on the internet.
Ebay and similar vendors can no longer shirk the blame onto the individual sellers who use its service. This means it will need to monitor sales a lot more closely, in a similar way to which the music industry is pressuring the likes of YouTube to remove pirated or leaked content.
Gilbert added that today's ruling will give national courts guidance on how to treat similar cases within their jurisdiction. We are likely to see many companies launch lawsuits against eBay and similar websites in efforts to protect their brand name.