E.U. Court Says Online Marketplaces Can Be Held Responsible Over Counterfeit Goods

Europe’s top court has ruled online shopping sites including eBay may be liable for trademark infringements should they play an “active role” in the promotion of counterfeit goods.

The European court of justice, Luxembourg said national courts could order online retailers to stop such infringements.

The verdict comes after a series of cases were brought forward by the world’s largest cosmetics and beauty company, L’Oreal, to defend its brand name.

The company is challenging eBay to clarify the obligations of internet marketplaces under the EU law.  L’Oreal is claiming that eBay is liable for the sales of counterfeit goods on its website, and of “parallel imports” – L-Oreal-branded products unintended for the European market.

L’Oreal’s complaint included claims that, by buying advertising from paid internet services (such as Google AdWords), eBay “directs its users towards goods that infringe trademark law, which are offered for sale on its website.”

However, last December, the EU court said eBay should not be made liable unless it had been notified by a trademark holder.

Now the judges are saying that even in cases where the operator had not played an “active role” it could still be liable for trademark infringement.

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