L'Oreal SA v Ebay International AG
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE ARNOLD,MR JUSTICE ARNOLD |
| Judgment Date | 22 May 2009 |
| Neutral Citation | [2008] EWHC B13 Ch,[2009] EWHC 1094 (Ch) |
| Docket Number | Case No: HC07C01978 |
| Court | Chancery Division |
| Date | 22 May 2009 |
[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
Hearing dates: 9–12, 18–19 March 2009
Further written submissions: 27, 31 March, 7, 23, 27 April 2009
Approved Judgment
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.
MR JUSTICE ARNOLD:
Contents
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 | |
| 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 |
Introduction
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.
The parties
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”.
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”.
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.
The Trade Marks
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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