Partner Article

Trade Marks and Online Trading

With Watson Burton LLP Law Firm

The most famous of the online auction sites, eBay, has recently faced two cases brought by high profile luxury goods brands regarding the sale of fake goods through their website. One was heard in Europe and one in America with markedly different results for the American commercial giant.

In the first case, in June 2008, the luxury goods maker LVMH, owner of such brands as Louis Vuitton and Christian Dior, brought an action for trade mark infringement in the French courts. They alleged that eBay had failed in their responsibility to police their site for fake goods which infringed LVMH’s prestigious trade marks. Further LVMH claimed that 90% of the goods sold through eBay’s website were fakes.

The court found in favour of LVMH and ordered that eBay pay €38.9 million. eBay are planning to appeal.

Many believed that this would indicate a significant change in judicial opinion towards online traders. Previously, the courts had been very reluctant to find against them, believing that the current law did not hold sites such as eBay liable. The problem was that eBay did not actually sell the goods to the end customer but merely provided an online space whereby independent traders sold the goods. The fact that they operated online (as opposed to in a physical market place) had previously offered protection.

Others believed that this was a political decision; a French court protecting a high profile French brand against infringement by an American company. All eyes turned to New York where eBay was fighting a very similar case against Tiffany & Co.

In July, the decision was handed down and eBay were found not to infringe Tiffany’s trade marks. The court held that to be liable eBay would have to have specific knowledge in relation to the individual items for sale on their site. It could not be said under the current law that there was a general duty on eBay to police their site. If, however, they were informed that a particular item for sale did infringe a trade mark they would have to remove it, and, as this is current practice on eBay, they were not liable.

Although this was an American case applying American law, much of trade mark law comes from the same international treaties and is therefore, broadly speaking, quite similar. The judge specifically stated that he had sympathy with Tiffany’s but at present, the law did not hold sites such as eBay liable. It remains to be seen whether any jurisdiction decides to bring in new laws to protect traders and their trade marks.

If you have any queries about this article, please do not hesitate to contact Laura Keegan on laura.keegan@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .