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EBay win against L’Oréal in the High Court

01 June 2009Written by ATG Reporter

EBAY have now added a London High Court victory against a claim from luxury brand L’Oréal to the one they gained in France last month.

This is expected to all but end court action against the online giant over trademark infringements that take place on their site.

With the High Court ruling that eBay had no legal duty to protect other firms’ trademark rights coming on top of a similar finding by a French judge, it is now thought likely that luxury goods firms concerned about counterfeiting and other breaches will try to work with eBay to improve matters rather than resorting to the law.

The High Court case was the latest in a long list of actions by L’Oréal, Louis Vuitton, Tiffany, Christian Dior and others, who felt that their businesses were being damaged by the often high level of counterfeit goods carrying their brands that appeared for sale on eBay.

They had argued that eBay had a duty to ensure sellers did not attempt to promote such goods on the site – and they accused eBay of being jointly liable with those breaking the law because they were aware that such breaches were taking place and profited from them.

EBay had countered that they spent upwards of $20m a year on tackling the problem of fake goods, as well as removing offending material when it was drawn to their attention.

In the end, the High Court looked at a precedent set by case law to resolve the matter. Mr Justice Arnold quoted from an action against computer firm Amstrad in 1986, when the record industry tried to hold them responsible for selling tape recorders to people they knew would use them to record music from vinyl discs, thereby infringing copyright. Now, as then, the judge ruled that such knowledge, in itself, was not enough to make the supplier (eBay/Amstrad) jointly culpable with the infringer under the law.

It was a difficult case to decide, he concluded, agreeing that the situation with eBay was not exactly the same as with Amstrad. He also expressed sympathy for L’Oréal’s position, noting that eBay’s business model increased the risk of infringement and that there was something to be said for the view that, having increased that risk, eBay should accept more responsibility for the consequences.

By Ivan Macquisten

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