L'Oreal SA & Ors v EBay International AG & Ors

A person who facilitates trade mark infringements is not thereby liable as a joint tortfeasor. Liability requires procurement of an identifiable infringement or participation in a common design which makes the infringing act the defendant’s own. Mere knowledge, facilitation and commercial benefit are insufficient.

Article 5(1)(a) of the Trade Marks Directive may apply where a sign is used in relation to goods originating from the trade mark proprietor, including goods placed on the market outside the EEA. The court also held that several important questions concerning exhaustion, online advertising, hosting immunity and intermediary injunctions required guidance from the ECJ.

L’Oréal alleged that individual sellers had infringed its registered trade marks by selling counterfeit, non-EEA, tester, dramming and unboxed cosmetic products through eBay’s websites. It also alleged that eBay Europe was jointly liable for those infringements, had itself infringed by using L’Oréal marks in sponsored links and site searches, and was not protected by Article 14 of the E-Commerce Directive.

The claim was tried before Arnold J. The individual sellers did not appear. The central questions included the scope of accessory liability, exhaustion under Article 7 of the Trade Marks Directive, the territorial significance of online listings, hosting immunity, and the availability of injunctions against intermediaries.

1. Individual sellers. The Fourth to Tenth Defendants infringed the relevant trade marks. Items sold by the Fourth to Eighth Defendants had been placed on the market outside the EEA without L’Oréal’s consent. Items sold by the Ninth and Tenth Defendants were counterfeits.
2. Joint tortfeasorship. Under domestic common law, eBay Europe were not jointly liable. Procurement requires inducement, incitement or persuasion directed to an individual infringer and identifiably procuring a particular infringement. Participation in a common design requires concerted action which makes the infringing act the secondary party’s own. eBay’s assistance, knowledge that infringements occurred or were likely, and profit from transactions did not satisfy that test. The fact that eBay encouraged non-EEA trade and could have adopted stronger controls did not alter the result.
3. Trade mark use. The court considered it arguable that eBay’s sponsored links and site search facilities constituted use of signs in relation to infringing goods and were targeted at UK consumers. The court rejected the submission that Article 5(1) was confined to use in relation to a third party’s goods, but held that several aspects of the ECJ’s jurisprudence were unclear.
4. Other issues. The status of testers and dramming bottles, the effect of selling unboxed products, the Article 14 hosting defence and the scope of injunctions required by Article 11 of the Enforcement Directive could not safely be resolved without ECJ guidance. The court had domestic power to grant an injunction against an intermediary, but the required scope of relief remained uncertain.
5. The parties were directed to submit proposed questions for reference to the ECJ.