EU Court Disagrees With Pretty Much Every Other Court; Says Ebay May Be Liable For Third Party Trademark Infringement

from the not-this-again dept

Wed, Jul 13th 2011 1:06am — Mike Masnick

The luxury goods folks have been on the legal warpath against Ebay for a while, because they don't like the fact that anyone else can make a market for their product, other than "authorized" distributors. They hide some of that by claiming that their real concern is in "counterfeit" products being sold, but the truth is they want to control the full distribution chain. For years, though, they've been bringing a variety of lawsuits against eBay, trying to establish that the company has some sort of weird requirement to magically know if a good someone is selling is counterfeit (the real goal is to get Ebay to block all sales of their products, and if they can get liability for any infringing works, then Ebay has incentives to block all such products).

In the US, the war has been waged by Tiffany, which resulted in a big fat loss at the appeal court level and no interest from the Supreme Court in hearing an appeal. The courts correctly and smartly pointed out that general knowledge that people infringe via the site is not enough to say that the site should have to police the products -- especially since it had no clue how to tell what was really infringing and what was legit. Furthermore, Ebay bends over backwards to take down counterfeit products when it becomes aware of them, and also has a whole program to make it easier for trademark holders to alert the company of counterfeit goods.

In Europe, the battle has been waged by L'Oreal. And, even though European governments and courts seem to have a more welcoming view towards third party liability than US courts, for the most part, L'Oreal has lost many, many times in Europe (it's filed similar lawsuits in a whole bunch of countries). However, it appears to have finally found a slightly sympathetic court.... and tragically, it's the European Court of Justice (the top European Court), which has ruled that Ebay can be liable in certain cases, if it's determined (a) that the goods for sale target the EU market, if the company is considered to have played "an active role" and if it "has enough information" to determine that the use is infringing. Now this isn't quite as bad as some of the press have made it out to be, as the Court still says there are protections... but it does outline key exceptions to those protections, and the key question is on which side of the line Ebay falls.

Ebay claims that it's in compliance and thus not guilty of such infringement, but I'm sure L'Oreal will be pushing the case back in the specific court (this is the UK case). Still, just opening the door like this to a rather subjective standard of "active role" and having "enough information" to know that something is infringing, seems wide open to abuse... and could lead to Ebay making its service a lot less useful, just because some luxury brand giants hate competing.

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Filed Under: europe, liability, trademark
Companies: ebay, l'oreal

30 Comments

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anonymous, 13 Jul 2011 @ 1:45am

taking this comment:'The courts correctly and smartly pointed out that general knowledge that people infringe via the site is not enough to say that the site should have to police the products'

why is it that isps now have to police the internet? everyone knows that people can infringe via the internet. why is it enough to say that isps should police the entertainment industries products? what is the difference? i suppose there are deeper pockets at work!
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Anonymous Coward, 13 Jul 2011 @ 1:47am

Bullying
What is it about Trademarks that makes companies feel that it is OK to engage in a spot of bullying? This is actually an attempt by these companies to bully their own customers into being afraid to sell goods second hand. They think that by killing the second hand market, they will somehow improve the new market. This wrong on two counts, (1) morally wrong, and (2) economically stupid.

It is morally wrong to subject consumers to unfair accusations that they are selling counterfeit goods, when the vast majority of them are doing no such thing.

Economists can tell you that people like to defray the cost of buying expensive new things, by selling old things. Also aspirational buyers, who cannot afford new, will often buy second hand at a lower cost. It is a well-established economic truth that the presence of a thriving second hand market helps the new market.

The boneheads running these companies have no morals and no knowledge of economics.
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mike allen (profile), 13 Jul 2011 @ 3:31am

It could be the court want a full hearing. L'Oreal are a perfume manufacturer who control their supply chain with vigour. and consider that any woman would want to sell any of their product on. however some do escape to the wider market. their are many shops that sell "copies" of most well known perfumes in Europe, at a much reduced price.
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Anonymous Coward, 13 Jul 2011 @ 3:57am

Lol Mike. You never bought from ebay I gather? Fake goods are everywhere. I bought a pair of Razer headphones for 10$, free shipping, from Japan. I knew they were fake. I ordered anyway. There's tons of stuff that's counterfeit and most is easy to spot. Ebay are just lazy and wait for people to complain, they don't proactively look for counterfeit products. And that's a problem. It's not because companies can't stand competition, like you claim... a claim you really have no way to back up. I lol'ed.
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tom, 13 Jul 2011 @ 4:17am

Re: I knew they were fake
how did you know - or did you guess?
Guessing is not good enough. Maybe they were second hand. What country it came from and the price means nothing. Even if the item said it was new not second hand - it could still have been real - a shop closing down. Lol as much as you like but you can't just take down stuff on a guess. I could guess many sites were telling lies or inciting evil (religious sites for instance) but you can't just take them down on a guess.
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Anonymous Coward, 13 Jul 2011 @ 4:27am

Re:
So, you buy counterfeit goods, but you think that they are a big problem and want ebay to be more proactive in detecting and removing them?

Are you completely retarded? Or are you just trolling for trouble?
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Anonymous Coward, 13 Jul 2011 @ 4:28am

Re: Re: I knew they were fake
Simple. They don't make the "model" I bought. A simple search on their site revealed it immediately. So yeah, it's not about guessing as much as you would like. Do other searches. Look for other "cheap official products" then look at the official merchandise. More often then not, you can find discrepancies with a 5 second glance at the picture. They're lazy and are not proactive, simple as that.
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Anonymous Coward, 13 Jul 2011 @ 4:31am

Re: Re:
This is why techdirt is such a great place to comment. Retards like you, trolling, not understanding points, and calling others troll. Mike, please add a troll button... please.

To idiot A/C: Did I complain it was a problem? Never. I'm merely pointing out that it is a problem, and ebay do not care. You're putting your own stupid words in my mouth. You had no point to make, merely came in to bitch. So go back to slashdot to troll. Thanks.
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Anonymous Coward, 13 Jul 2011 @ 4:34am

Re: Re: Re:
"Did I complain it was a problem? Never. I'm merely pointing out that it is a problem..."

Dude. Please. Just stop now...

Funny +1.
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Anonymous Coward, 13 Jul 2011 @ 4:40am

Re: Re: Re: Re:
Complaining != pointing out. Dude, just please stop now. Go back to school and learn english. +1 stupid.
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Tom, 13 Jul 2011 @ 4:41am

Re: Re: Re: I knew they were fake
if its so easy to spot then why cant the companies involved chase up the sellers themselves. it sounds like ebay is doing the manufacturers a favour by showing who is doing the copying?
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Anonymous Coward, 13 Jul 2011 @ 4:44am

Re: Re: Re:
"You had no point to make, merely came in to bitch. So go back to slashdot to troll. Thanks."

No U
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Anonymous Coward, 13 Jul 2011 @ 4:47am

Re: Re:
"Are you completely retarded? Or are you just trolling for trouble?"

both
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Chronno S. Trigger (profile), 13 Jul 2011 @ 4:54am

Re: Re: Re: Re: Re:
"There's tons of stuff that's counterfeit and most is easy to spot. Ebay are just lazy and wait for people to complain, they don't proactively look for counterfeit products."

That sure as hell suggests that you think counterfeit products are a problem. Why else would you insist that eBay spend millions of man hours looking at each product, searching the real manufacturers website, and removing anything that's even slightly off (even typos?). "They don't make the 1457 model, they only make a 1475. Counterfeit! Ban the ID."

Light green AC has a point. You're ether a moron or a troll.
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NullOp, 13 Jul 2011 @ 4:59am

Luxury
If an item is considered luxury it commands a higher price and therefore is a must have item by those who think they are A-list. So, if you can get one of these products on eBay it automatically draws down the perceived value of the product since you didn't have to shop in posh store. Availability on eBay lessens the must have factor. A company can't legally argue that eBay availability hurts them but they make up a story about copyright infringement. Remember the governing rule of business, "Thou shalt strive for monopoly."
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Anonymous Coward, 13 Jul 2011 @ 5:02am

Re: Re: Re: Re: Re: Re:
Yes, it is a problem. Did he complain about that problem? No. If you can't read, don't try to. Did he insist they spend millions? No, you're like other A/C and putting your own stupid words in his mouth.

But I agree with you. Anyone who disagrees with your almighty ruler Mike must be either a retard *cough* look in a mirror *cough* or a troll... plenty of trolls here are members, right Chronno?

If you can't interpret english, then don't read it. He even said he buys them, so yes it's a you're right. Absolutely. Right about being completely clueless.

Ah well... to be expected here...
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Anonymous Coward, 13 Jul 2011 @ 5:07am

Re: Re: I knew they were fake
Oh noes, someone siding for the corporations and against Ebay?! QUICK CALL THE TROLLS!!!111one
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Anonymous Coward, 13 Jul 2011 @ 5:09am

Re: Re: Re: Re: Re: Re: Re:
Please note that you are agreeing with someone that openly said that he/she buys goods that he/she thinks/knows are counterfeit. Last I checked, selling counterfeit goods is illegal (trademark infringement). I'm not sure about buying them, tough, but your "friend" is AT LEAST supporting counterfeit goods.

I might be stupid or a troll and I might even have poor reading comprehension, but at least I don't support criminal activities.
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Chronno S. Trigger (profile), 13 Jul 2011 @ 5:31am

Re: Re: Re: Re: Re: Re: Re: Re:
"I might be stupid or a troll and I might even have poor reading comprehension,"

No, don't give them an inch. You're right. Light blue AC is supporting purple AC while purple AC is supporting counterfeit goods and simultaneously bitching that eBay isn't doing anything to get rid of said counterfeit goods (thus saying that counterfeiting is such a big problem that eBay needs to spend millions of man hours stopping).
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E. Zachary Knight (profile), 13 Jul 2011 @ 5:57am

Re:
Now. Imagine if these head phones were listed as a model that Razer actually produced and the listing photo was a photo from Razer's own website, how would you have determined that they were counterfeit before purchase?

Answer, you wouldn't be able to until you bought it.

ebay, much like YouTube, does not have the man power, knowledge or ability to spot and remove all possible counterfeit objects. It is just no humanly possible. They are not experts in the products of every company in the world. But that is what idiots like you expect them to be.

Idiots like you don't actually care about stopping counterfeits. Idiots like you only care about forcing 3rd parties to do your work for you, because you know full well that attempting to stop all counterfeits and piracy would bankrupt any organization that attempts it.
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Q�r Tharkasd�ttir (profile), 13 Jul 2011 @ 6:16am

L'Or�al (who are they?)
�
Very, very unfortunate, because in more aspects than one (use of disreputable chemicals in their cosmetics, for example), L'Or�al is one of the corporations with the worse record in Europe, going back to their collaboration with the Nazis and other distasteful characters:

http://www.voltairenet.org/Histoire-secrete-de-L-Oreal
(in French)

For those of you who know Spanish: http://www.voltairenet.org/%E2%80%A8La-historia-secreta-de-L-Oreal

Liliane Bettencourt, who recently has made the headlines in the affair bearing her name, is the heiress of L'Or�al, as well as the richest woman in France. Maybe the European Court, as other European institutions that are fast turning themselves into tools of the Atlantist agenda, will soon be as independent as the Criminal Court in The Hague (i.e.��zilch).
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ASTROBOI, 13 Jul 2011 @ 6:35am

Pot and the kettle?
While its probably true that a lot of "name brands" don't want their product on ebay for one reason or another it should be mentioned that ebay itself has some of the most user un-friendly policies of any major internet company. Loyal sellers who have done respectable business for years find themselves kicked off the service with no hope of appeal. Selling items, as far as a private individual is concerned, is now a nightmare compared the the glory days of year 2000. I'd have a lot more sympathy for ebay if they themselves were not involved in so much wretched behavior. A quick look at their seller forums will reveal a lot of anger.
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Chris Rhodes (profile), 13 Jul 2011 @ 7:29am

Re:
You highlight exactly why our trademark system is backwards. The true fraud of counterfeit goods is perpetrated on customers when they don't know the goods they bought are counterfeit. If they know what they're buying is a knockoff (like you did), no fraud takes place.

Really, it's the consumers that should be bringing trademark lawsuits, not the company with the trademark.
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Wedge, 13 Jul 2011 @ 7:36am

If I were ebay I would give a big fuck you to the EU and just not run my site in Europe anymore.
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Anonymous Coward, 13 Jul 2011 @ 7:59am

Re: Re: Re: Re: Re: Re: Re: Re: Re:
And you're openly supporting it by claiming it is not a problem, and it should remain there, because Ebay would have to spend its millions in pure profit to manage it. But you bitch at someone buying those goods.

Hypocritical are we? *sigh* Figures.
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WysiWyg (profile), 13 Jul 2011 @ 8:03am

Re:
Quick quiz:

http://cgi.ebay.com/250-Pieces-NEW-LOreal-Cosmetics-Wholesale-Makeup-/200449569448?pt=LH_Default Domain_0&hash=item2eabb9b2a8

Infringing? If you're not 100% sure by the time you have read this sentenced, you have just proved yourself wrong.

And if you are 100% sure (either way), you have just proven that you don't understand what "100% sure" means.
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Anonymous Coward, 13 Jul 2011 @ 8:50am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
http://www.fallacyfiles.org/strawman.html
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Anonymous Coward, 13 Jul 2011 @ 9:39am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
That's not helping your case.
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mike allen (profile), 13 Jul 2011 @ 9:42am

I see nothing with copied goods why should I Pay �20 or �30 more for a slightly and I mean slightly better quality and a name. stuff em.
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Mike Masnick (profile), 13 Jul 2011 @ 10:55am

Re:
Lol Mike. You never bought from ebay I gather

I have. Many times.

Fake goods are everywhere.

That may be true. It doesn't change the analysis.

There's tons of stuff that's counterfeit and most is easy to spot. Ebay are just lazy and wait for people to complain, they don't proactively look for counterfeit products.

You think eBay should staff up to review every listing on the site? Do you not realize how that would kill eBay and make the product unusable?
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