L'Oreal SA v Ebay International AG

JurisdictionEngland & Wales
JudgeTHE HON MR JUSTICE ARNOLD,MR JUSTICE ARNOLD
Judgment Date22 May 2009
Neutral Citation[2008] EWHC B13 Ch,[2009] EWHC 1094 (Ch)
Docket NumberCase No: HC07C01978
CourtChancery Division
Date22 May 2009
Between
(1) L'OrÉAl S.A
(2) Lancome Parfums ET Beaute & Cie
(3) Laboratoire Garnier & Cie
(4) L'OrÉAl (U.K.) Limited
Claimants
and
(1) Ebay International AG
(2) Ebay Europe S.A.R.L.
(3) Ebay (UK) Limited
(4) Stephen Potts
(5) Tracy Ratchford
(6) Marie Ormsby
(7) James Clarke
(8) Joanna Clarke
(9) Glen Fox
(10) Rukhsana BI
Defendants

[2009] EWHC 1094 (Ch)

Before: The Hon Mr Justice Arnold

Case No: HC07C01978

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Henry Carr QC and Tom Mitcheson (instructed by Bristows) for the Claimants

Geoffrey Hobbs QC and Philip Roberts (instructed by Olswang) for the First-Third Defendants

The Fourth-Tenth Defendants did not appear and were not represented

1

Hearing dates: 9–12, 18–19 March 2009

2

Further written submissions: 27, 31 March, 7, 23, 27 April 2009

3

Approved Judgment

4

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HON MR JUSTICE ARNOLD MR JUSTICE ARNOLD
5

MR JUSTICE ARNOLD:

6

Contents

7

Topic Paragraphs

Introduction

1

The parties

2–4

The Trade Marks

5–8

L'Oréal

9–11

eBay

12–16

L'Oréal's claims against the Fourth to Tenth Defendants

17–23

The Fourth Defendant

18

The Fifth Defendant

19

The Sixth Defendant

20

The Seventh and Eighth Defendants

21

The Ninth Defendant

22

The Tenth Defendant

23

L'Oréal's claims against eBay Europe

24–31

The issues

32–33

The facts

34–275

eBay Europe's activities

35

Registration

37–40

User Agreement

41–43

Help pages and tutorials

44

Sales formats

45–48

Classified ads

49

Listings

50–54

Cross-promotion

55

eBay Shops

56

eBay Express

57

PowerSellers

58–60

International sellers

61–65

Searching listings

66

Completing a transaction

67

PayPal

68–70

Feedback

71–72

Sellers’ profiles

73

Dispute resolution

74–75

Fees earned by eBay Europe

76

Filtering

77–78

VeRO programme

79–86

Community Watch

87

Sanctions

88–90

High Risk Brands

91

The Fourth Defendant's activities

92–114

The Fifth Defendant's activities

115–148

The Sixth Defendant's activities

149–172

The Seventh Defendant's activities

173–192

The Eighth Defendant's activities

193–214

The Ninth Defendant's activities

215–225

The Tenth Defendant's activities

226–245

The Fourth to Eighth Defendants’ suppliers

246

L'Oréal's evidence as to the scale of the problem

247–256

IIS

248–250

Envisional

251

Lexsi

252–253

French proceedings

254

Complaints in Germany

255

Commentaries

256

The difficulty of identifying counterfeit products

257–258

L'Oréal's objections to the VeRO programme

259–265

L'Oréal's letter

266

PriceMinister

267–276

Could eBay Europe do more?

277

The key provisions of the Trade Marks Directive

278–282

Use within Article 5(1)(a) of the Trade Marks Directive

283–293

The six conditions

283–288

Use in relation to the trade mark proprietor's goods

289–299

Other questions

300–306

Were the goods sold by the Fourth to Tenth Defendants

infringing goods?

307–342

Counterfeits

312

Non-EEA goods

313–317

Testers and dramming bottles

318–326

Unboxed products

327–342

Are eBay Europe jointly liable for infringements committed

by the Fourth to Tenth Defendants?

343–382

Community law

344–345

Domestic law

346–352

Was there any release?

353–358

Procurement

359

Participation in a common design

360–369

L'Oréal's contentions

360–364

eBay Europe's contentions

365–368

Discussion

369–382

Are eBay Europe liable as primary infringers for the use of

the Link Marks in relation to infringing goods?

383–431

Use in sponsored links

384–425

The complaint

384–387

Use?

388–392

In relation to?

393–399

In the course of trade?

400–401

In the United Kingdom?

402–412

Infringing use?

413–425

Use on the Site

426–431

Use?

427

In relation to?

428

In the course of trade?

429

In the United Kindom?

430

Infringing use?

431

Do eBay Europe have a defence under Article 14 of the

E-Commerce Directive?

432–465

Key provisions of the E-Commerce Directive

433–435

Discussion

436–443

Do L'Oréal have a remedy under Article 11 of the

Enforcement Directive?

444–452

Relevant provisions of the Enforcement Directive

445–446

Domestic law

447–454

What does Article 11 require?

455–465

Are the Distance Selling Regulations relevant to any of the

foregoing issues, and if so how?

466–475

Selected provisions of the Distance Selling Regulations

469–470

Application of the Distance Selling Regulations to

eBay Europe

471–474

Relevance?

475

A reference to the ECJ?

476–480

Conclusions

481

8

Introduction

9

1. Are eBay Europe liable for trade mark infringements committed by their users? Do eBay Europe themselves commit infringements by using trade marks in relation to infringing goods? In a nutshell, those are the main questions raised by this claim. This is a test case brought by L'Oréal, one of a number they have brought in courts around Europe (including Case RG 07/11365 L'Oréal SA v eBay France SA, in which the Tribunal de Grande Instance in Paris gave judgment on 13 May 2009). The issues are not peculiar to products of the kind sold by L'Oréal, and other brand owners have also brought claims against both eBay Europe and other providers of similar services. Given that the key aspects of European trade mark law have been harmonised by a European Directive, and that there is also a European Directive harmonising the liability of internet service providers, European courts ought to be in a position to give the same answers to the questions raised. As matters stand, however, they are not able to do so. This is for two main reasons. The less important one is that one aspect of European trade mark law has not been harmonised, and that is the question of accessory liability. The more important reason is that the legislation is unclear and the Court of Justice of the European Communities has either not pronounced on the issues of interpretation or has not yet provided a clear answer.

10

The parties

11

2. The Second, Third and Fourth Claimants are subsidiaries of the First Claimant. It is common ground that there is no need to differentiate between the Claimants, and I shall refer to them collectively as “L'Oréal”.

12

3. The First, Second and Third Defendants are subsidiaries of eBay Inc, which is not a party to these proceedings. It is common ground that there is no need to differentiate between the First, Second and Third Defendants, and I shall refer to them collectively as “eBay Europe”. I shall refer to eBay Inc's group of companies generally as “eBay”.

13

4. The Fourth to Tenth Defendants are individuals who are alleged by L'Oréal to have sold infringing products through eBay Europe. L'Oréal has settled with the Fourth to Eighth Defendants and obtained judgment in default of defence against the Ninth and Tenth Defendants. The Fourth to Eighth Defendants have not admitted infringement, but have given contractual undertakings contained in confidential schedules to consent orders in Tomlin form. eBay Europe have brought contribution claims against the Fourth to Tenth Defendants for breach of their respective user agreements with eBay Europe. Those claims have been stayed pending the determination of L'Oréal's claims against eBay Europe. The Ninth and Tenth Defendants were joined to the claim in August 2008, a year after the proceedings were commenced.

14

The Trade Marks

15

5. One or other of the Claimants is the registered proprietor of the following registered trade marks (“the Trade Marks”):

i) UK Registration No. 476691 for L'OREAL in class 3, in respect of hair dyes and other preparations for the hair;

ii) UK Registration No. 655072 for LANCOME in class 3 in respect of non-medicated toilet preparations, cosmetic preparations, perfumes and perfumed soap;

iii) UK Registration No. 692680 for MAYBELLINE in class 3, in respect of cosmetics and non-medicated toilet preparations;

iv) UK Registration No. 1034105 for KERASTASE in class 3, in respect of perfumes, non-medicated toilet preparations, cosmetics, dentifrices, depilatory preparations, toilet articles, preparations for the hair, and soaps;

v) UK Registration No. 1099431 for MAGIE NOIRE in class 3, in respect of non-medicated toilet preparations, perfumes, soaps and cosmetics;

vi) UK Registration No. 1228643 for MATRIX in class 3, in respect of non-medicated toilet preparations; cosmetics; perfumes; preparations for the hair; soaps; cleansing preparations for toilet purposes; bath additives, hand creams, body massage creams, body lotions and face creams, all being non-medicated preparations for the care of the skin;

vii) UK Registration No. 1270710 for SHU UEMURA in class 3, in respect of soaps; perfumes; essential oils; cosmetics; hair lotions;

viii) UK Registration No. 1288684 for SOFT SHEEN in class 3, in respect of preparations and substances, all for the hair;

ix) UK Registration No. 1382742 for TRESOR in class 3, in respect of perfumes; toilet waters; non-medicated toilet lotions; soaps; cosmetics; make-up; oils, creams and liquids, all being perfumed lathering and softening products for use in the bath; non-medicated foaming preparations for use in the bath; toothpastes;

x) UK Registration No. 1444126 for KIEHL'S in class 3, in respect of cosmetics; soaps; preparations for the hair and...

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