Does L’Oreal EUJ ruling re-open French LVMH ban case?

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A week ago there was a ruling by the European Court of Justice on the liability of companies operating internet marketplaces for trade mark infringements committed by users. The ruling says online market providers could be liable if they play an active part in the use of trademarks if they play an active part in the presentation and promotion of specific listings on their site, which allows the platform to have knowledge or control over the data stored by individual users. The ruling came as a decision in the case L’Oreal bought against eBay in the UK

At first reading it looks like any promotion of trademarks leading to sales of counterfeit or unauthorised products could leave eBay liable, but that’s not the whole story. The court case decision is unnecessarily vague and leaves interpretation to national courts in each of the 27 EU countries.

This is a massive backward step – with the Distance Selling Regulations/Consumer protection legislation the EU have endeavoured to set minimum standards which each of the 27 EU countries must abide by. With this ruling they have left vast majority of decisions to the inevitable nationally and culturally influenced interpretation of local courts, which which is a step back for EU ecommerce – we need the ability to trade across the whole of the EU without 27 separate pieces of legislation to comply with.

So what does the decision actually mean? It doesn’t stop eBay or other marketplaces from buying brand keywords on search engines. It doesn’t stop them providing tools to enable sellers to list product on their marketplaces and it doesn’t make marketplaces liable if a seller lists a fake if they have no knowledge of the content of the listing.

The ruling suggests that marketplaces are liable if it’s something a generally diligent operate should have known, but gives no guidance as to what they should know and how they should be aware of it.

The ruling also gives some protection to marketplaces, for instance you can’t force a platform to do general monitoring or to block a brand entirely. You can’t put in place obstacles to legitimate trade and you can’t enforce disproportionate measures just to catch a couple of instances out of thousands of product listings.

This questions the legitimacy of the French ban of sales of LVMH brand – Christian Dior, Kenzo, Givenchy and Guerlain – on eBay France. The ruling specifically says that a brand shouldn’t be blocked carte blanche and puts this French ruling at odds with the European Court of Justice.

What will happen now is that the decision of the European Court of Justice will be considered in the UK courts where the original L’Oreal case was filed. This should hopefully be a short case leading to a definitive decision for the UK. Sadly though due to the vagueness of the European Court of Justice ruling each of the other EU countries will have to apply their own interpretations leaving uncertainty for merchants and cross border trade.

In essence rather than simplify the issue of brands and counterfeits the EUJ have complicated the matter into 27 different sets of rules. That’s regrettable and a backwards step, but as far as I can see it’s business as usual for eBay and the ruling makes little if any impact to their EU operations.

2 Responses

  1. Indian Railways to sell perfumed tickets
    The Railway Ministry is in talks with few consumer goods companies which are now ready to advertise their products like soap, shampoo and perfume on train tickets. Ads will be printed on the backside of the perfumed tickets sources said.



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