eBay victorious in French battle over counterfeit L’Oreal products

Cosmetics giant L’Oreal launched a trade mark infringement action in France against the online auction house in September 2007, alleging that eBay was not doing enough to combat transactions involving fake L’Oreal perfumes.  Judge Elisabeth Belfort last week ruled in eBay’s favour, finding that eBay had fulfilled its obligation towards other market operators (including L’Oreal) in good faith, by developing eBay’s current anti-counterfeiting measures.  Despite this, Judge Belfort ordered both companies to mediation in order to jointly develop a plan for improving eBay’s counterfeit filters, stating that “preventing counterfeits will only be effective through a close collaboration between rights holders and eBay.”

The ruling represents eBay’s first victory in the French courts, after eBay unsuccessfully defended a number of cases brought by luxury goods group LVMH (Louis Vuitton Moet Hennessy) and Hermes in the last two years.  Last week’s decision appears to be part of an international trend in eBay’s favour, with US, German and Belgian Courts all recently finding that eBay’s current anti-counterfeiting measures were sufficient to support a ruling that eBay should not be held responsible for sale of infringing products on its site.  More broadly, this indicates increasing recognition that online hosts should generally bear limited responsibility for policing the use of trade marks on their sites.  Instead, the Courts consider that the onus substantially lies with trade mark owners themselves.

However, with judgments in similar cases brought by L’Oreal against eBay in Britain and Spain due this year, it appears that the battle between brand owners and online hosts still has some way to go.  Although eBay may be breathing a sigh of relief at the moment, it is still unclear how these the Courts in Britain and Spain will apportion responsibility as between rights owners and third party “intermediaries”.


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