In August 2009, we published a Law-Now article on the L'Oréal -v- eBay judgment. That case related to whether eBay should be liable for the sale of counterfeit products on its UK website, and the answer from the court was that it should not. However, as we noted in our Law-Now article, the court indicated that it would refer questions to the European Court of Justice (ECJ) relating to eBay's liability for sponsored links and whether it was possible to obtain an injunction against eBay to prevent trade mark infringement generally, rather than in respect of a specific act of infringement. Other questions were also referred to the ECJ relating to parallel trade, but these did not relate to eBay's liability.

The questions to the ECJ were subject to agreement by the parties and the court. However, the questions to the ECJ have now been finalised, and the ECJ has assigned a case number to the questions (C-324/09).

The questions relating to eBay's liability (questions 5 – 10) are set out below:

(5) Where a trader which operates an online marketplace purchases the use of a sign which is identical to a registered trade mark as a keyword from a search engine operator so that the sign is displayed to a user by the search engine in a sponsored link to the website of the operator of the online marketplace, does the display of the sign in the sponsored link constitute "use" of the sign within the meaning of Article 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation?

(6) Where clicking on the sponsored link referred to in question 5 above leads the user directly to advertisements or offers for sale of goods identical to those for which the trade mark is registered under the sign placed on the website by other parties, some of which infringe the trade mark and some which do not infringe the trade mark by virtue of the differing statuses of the respective goods, does that constitute use of the sign by the operator of the online marketplace "in relation to" the infringing goods within the meaning of 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation?

(7) Where the goods advertised and offered for sale on the website referred to in question 6 above include goods which have not been put on the market within the EEA by or with the consent of the trade mark proprietor, is it sufficient for such use to fall within the scope of Article 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation and outside Article 7(1) of the Trade Mark Directive and Article 13(1) of the CTM Regulation that the advertisement or offer for sale is targeted at consumers in the territory covered by the trade mark or must the trade mark proprietor show that the advertisement or offer for sale necessarily entails putting the goods in question on the market within the territory covered by the trade mark?

(8) Does it make any difference to the answers to questions 5-7 above if the use complained of by the trade mark proprietor consists of the display of the sign on the website of the operator of the online marketplace itself rather than in a sponsored link?

(9) If it is sufficient for such use to fall within the scope of Article 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation and outside Article 7(1) of the Trade Mark Directive and Article 13(1) of the CTM Regulation that the advertisement or offer for sale is targeted at consumers in the territory covered by the trade mark:

(a) does such use consist of or include "the storage of information provided by a recipient of the service" within the meaning of Article 14(1) of the E-Commerce Directive?

(b) if the use does not consist exclusively of activities falling within the scope of Article 14(1) of the E-Commerce Directive, but includes such activities, is the operator of the online marketplace exempted from liability to the extent that the use consists of such activities and if so may damages or other financial remedies be granted in respect of such use to the extent that it is not exempted from liability?

(c) in circumstances where the operator of the online marketplace has knowledge that goods have been advertised, offered for sale and sold on its website in infringement of registered trade marks, and that infringements of such registered trade marks are likely to continue to occur through the advertisement, offer for sale and sale of the same or similar goods by the same or different users of the website, does this constitute "actual knowledge" or "awareness" within the meaning of Article 14(1) of the E-Commerce Directive?

(10) Where the services of an intermediary such as an operator of a website have been used by a third party to infringe a registered trade mark, does Article 11 of European Parliament and Council Directive 2004/484 of 29 April 2004 on the enforcement of intellectual property rights ("the Enforcement Directive") require Member States to ensure that the trade mark proprietor can obtain an injunction against the intermediary to prevent further infringements of the said trade mark, as opposed to continuation of that specific act of infringement, and if so what is the scope of the injunction that shall be made available?

Comment

The ECJ is in the process of considering similar questions to (5) and (6) above in respect of the numerous questions that have been asked of it about search engine keywords. Our Law-Now article on the recent Advocate General's opinion relating to Google Adwords may be seen here.

The answers to all of the above questions will be interesting as they will impact heavily on the manner in which eBay and similar sites operate their business. In particular, they will affect eBay and potentially its affiliates' ability to advertise the sale of branded goods on the eBay website through the use of sponsored links.

The answer to question (10) will determine whether the courts are able to grant far-reaching injunctions over intermediaries (e.g. eBay) which require them to take greater steps to prevent infringement of a particular brand, rather than reacting to complaints received about particular hosted listings.

It can take the ECJ up to two years to answer questions submitted to it, so there will be some time until we receive answers to the questions asked.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 02/11/2009.