Monday, November 7, 2011

Hidden Gems of L'Oreal v. eBay

Some of you might be wondering why Huťko did not report on two most interesting CJEU cases of this beautiful summer - L´Oréal v. eBay C-324/09 and Interflora C-323/09. The main reason is the complexity of said cases. Summing them up in two separate articles would be just not enough to cover everything. And after all, they both have been so widely reported and analyzed. Therefore, Huťko decided to focus on less discussed parts. This article will then cover such issues of L'Oreal v. eBay.
  • Application of the european trade mark law on the Internet
60      In the situation under consideration in the context of this question, in which the goods have at no time been put on the market within the EEA by the trade mark proprietor or with his consent, the exception set out in Article 7 of Directive 89/104 and Article 13 of Regulation No 40/94 cannot apply. In that regard, the Court has repeatedly held that it is essential that the proprietor of a trade mark registered in a Member State can control the first placing of goods bearing that trade mark on the market in the EEA (see, inter alia, Joined Cases C-414/99 to C‑416/99 Zino Davidoff and Levi Strauss [2001] ECR I-8691, paragraph 33; Peak Holding, paragraphs 36 and 37, and Makro Zelfbedieningsgroothandel and Others, paragraph 32).
61      Whilst recognising those principles, eBay submits that the proprietor of a trade mark registered in a Member State or of a Community trade mark cannot properly rely on the exclusive right conferred by that trade mark as long as the goods bearing it and offered for sale on an online marketplace are located in a third State and will not necessarily be forwarded to the territory covered by the trade mark in question. L’Oréal, the United Kingdom Government, the Italian, Polish and Portuguese Governments, and the European Commission contend, however, that the rules of Directive 89/104 and Regulation No 40/94 apply as soon as it is clear that the offer for sale of a trade-marked product located in a third State is targeted at consumers in the territory covered by the trade mark.
62      The latter contention must be accepted. If it were otherwise, operators which use electronic commerce by offering for sale, on an online market place targeted at consumers within the EU, trade-marked goods located in a third State, which it is possible to view on the screen and to order via that marketplace, would, so far as offers for sale of that type are concerned, have no obligation to comply with the EU intellectual property rules. Such a situation would have an impact on the effectiveness (effet utile) of those rules.
66      In the case before the referring court, the website with the address ‘www.ebay.co.uk’ appears, in the absence of any evidence to the contrary, to be targeted at consumers in the territory covered by the national and Community trade marks relied on; the offers for sale on that website which form the subject-matter of the main proceedings therefore fall within the scope of the EU rules on intellectual property.
In other words, when the use of a sign targets the territory where it is being protected, it should qualify for use of the trade mark in that territory within the meaning of Art. 5 TMD. Such targeting may be proved also by the presence of the cc.TLD in the domain name, if there is no conflicting evidence.
  • 'Non-use' of the trade mark by an intermediary
98      By its eighth question, the referring court asks, in substance, how the display, on the website of the operator of an online marketplace, of signs identical with or similar to trade marks is to be regarded in the light of Directive 89/104 and Regulation No 40/94.
99      In that regard, it is first necessary to point out that, where sales are made through online marketplaces, the service provided by the operator of the marketplace includes the display, for its customer-sellers, of offers for sale originating from the latter.
102    If a sign identical with, or similar to, the proprietor’s trade mark is to be ‘used’, within the meaning of Article 5 of Directive 89/104 and Article 9 of Regulation No 40/94, by a third party, that implies, at the very least, that that third party uses the sign in its own commercial communication. In so far as that third party provides a service consisting in enabling its customers to display on its website, in the course of their commercial activities such as their offers for sale, signs corresponding to trade marks, it does not itself use those signs within the meaning of that EU legislation (see, to that effect, Google France and Google, paragraphs 56 and 57).
The Court of Justice confirmed 'non-use theory' for intermediaries that it used previously in Google France C-236/08. In this case court held that the fact of creating the technical conditions necessary for the use of a sign and being paid for that service (Google) does not mean that the party offering the service itself uses the sign. This 'non-use theory' is of particular importance (e.g consider OEM infringements) and seems to be developing further. For instance Advocate General in Frisdranken Industrie Winters C-119/10 suggests that 'intermediary company' that only technically produce bottles and affix trademarks to them for another company that placed the order, does actually not use this trademark – if there is no use of the trade mark there is no corresponding infringement of course. Nonetheless intermediary may be subject to injunctions on the basis of art.11 of Enforcement Directive; damages can be awarded only on the basis of 'secondary liability' constructed on the national law;  

  • Requirements of 'notice' triggering 'actual knowledge'
121    Moreover, if the rules set out in Article 14(1)(a) of Directive 2000/31 are not to be rendered redundant, they must be interpreted as covering every situation in which the provider concerned becomes aware, in one way or another, of such facts or circumstances.
122    The situations thus covered include, in particular, that in which the operator of an online marketplace uncovers, as the result of an investigation undertaken on its own initiative, an illegal activity or illegal information, as well as a situation in which the operator is notified of the existence of such an activity or such information. In the second case, although such a notification admittedly cannot automatically preclude the exemption from liability provided for in Article 14 of Directive 2000/31, given that notifications of allegedly illegal activities or information may turn out to be insufficiently precise or inadequately substantiated, the fact remains that such notification represents, as a general rule, a factor of which the national court must take account when determining, in the light of the information so transmitted to the operator, whether the latter was actually aware of facts or circumstances on the basis of which a diligent economic operator should have identified the illegality.
Based on the above lines, Huťko believes that Court of Justice indirectly identified two requirements for notice to trigger the 'actual knowledge'. The notice thus have to be
a) sufficiently precise, and
b) adequately substantiated;
Therefore, Court of Justice not only narrowed down the application of hosting safe harbour by limiting its application to 'neutral intermediares' and interpreted 'aware of facts or circumstances from which the illegal activity or information is apparent', but also defined the notice required to trigger 'actual knowledge'.
  • Disclosing the identity of infringers
142    Furthermore, in order to ensure that there is a right to an effective remedy against persons who have used an online service to infringe intellectual property rights, the operator of an online marketplace may be ordered to take measures to make it easier to identify its customer-sellers. In that regard, as L’Oréal has rightly submitted in its written observations and as follows from Article 6 of Directive 2000/31, although it is certainly necessary to respect the protection of personal data, the fact remains that when the infringer is operating in the course of trade and not in a private matter, that person must be clearly identifiable.143    The measures that are described (non-exhaustively) in the preceding paragraphs, as well as any other measure which may be imposed in the form of an injunction under the third sentence of Article 11 of Directive 2004/48, must strike a fair balance between the various rights and interests mentioned above (see, by analogy, Promusicae, paragraphs 65 to 68).

Above obiter dictum seems to suggest that disclosing the identity of business user who infringes upon somebodies rights is always alright. Disclosing the identity of non-business infringers (or ordering measures making it easier) was left unanswered. The Court of Justice only pointed out the need for the fair balance. Huťko believes that Bonnier Audio C-461/10 may shed some more light on this, so important issue. See e.g. current opinion of the Polish Supreme Court in its new case IV CSK 665/10 (the case was reported by Tomasz Rychlicki here).

PS: Huťko's favorite part are injunctions [128-141]. Next time hopefuly finally on Interflora.

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