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ISP-Liability & Media Law

Jun.16.2009

Other sections of this issue:
ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT


In a decision of May 22, 2009, the English High Court of Justice ruled in a litigation between L’Oréal and eBay regarding eBay’s liability for sales of counterfeit and parallel imported L’Oréal products via its online platform. Although confined to the UK situation, the decision may have a European-wide impact since a number of references for a preliminary ruling will be made to the European Court of Justice (“ECJ”).

Introduction
In previous newsletters, we have already commented extensively on a number of high-profile decisions in France, Germany and Belgium regarding the liability regime for internet service providers that store or transmit third-party content. This ISP liability regime is harmonized on a European level in the E-Commerce Directive 2000/31. This Directive provides for a “safe haven” regime under which providers of hosting, caching and mere conduit services are exempt from liability under certain conditions. Furthermore, the E-Commerce Directive states that the providers of these services cannot be subject to any general monitoring obligation. Courts can only impose temporary monitoring obligations in specific cases.

National courts have however experienced difficulty in the past in correctly applying the provisions of the E-Commerce Directive.

The latest court to deal with this issue is the High Court of Justice, which was asked to decide in a trademark infringement case brought against eBay by L’Oréal.

The decision and the questions for the ECJ
The High Court found that trademark infringements were committed by sellers and eBay members by offering L’Oréal-branded goods for sale that were put on the market outside the EEA and/or by offering counterfeit L’Oréal goods.

The High Court announced that it will refer to the ECJ as regards the question whether the online sale of testers, dramming products or unboxed products constitutes a trademark infringement under the EC Trademark Directive.

The High Court found that eBay was not itself liable for trademark infringement by sellers and eBay members. However, the High Court did announce a reference to the ECJ over the question whether eBay’s use of sponsored links to infringing goods constituted an infringement under the EC Trademark Directive.

Finally, the High Court announced that it will refer to the ECJ concerning two questions on ISP-liability that may potentially affect the entire European ISP liability, ranging from internet access providers, electronic billboard operators and newsgroup servers to companies such as eBay that are hosting third-party content:

  • one question concerns Article 14 of the E-Commerce Directive 2000/31 and when an information society services provider qualifies as a ‘host’ exempt from liability within the meaning of that Article.
  • Another question concerns the balance between Article 11 of the IP Enforcement Directive 2004/48 and Article 15 of the E-Commerce Directive: which kinds of injunctions can be imposed to an online intermediary in order to prevent trademark infringement, when Article 15 of the E-Commerce Directive explicitly prohibits any general obligation of surveillance or monitoring?

Analysis and conclusion
The merit of the High Court’s decision to refer to the ECJ, is that finally judges around Europe may receive some guidance on how to apply the E-Commerce Directive 2000/31 and the IP Enforcement Directive 2004/48. This will help in creating a uniform, harmonized legal framework for rights holders and online intermediaries across Europe.

However, the debate before the High Court is far from over, since the precise wording of the High Court’s questions to the ECJ must still be decided. This wording may be of paramount importance for the final outcome of the case.

References : High Court of Justice, [2009] EWHC 1094 (Ch), http://www.bailii.org/ew/cases/EWHC/Ch/2009/1094.html

For more information, contact: Christoph De Preter.

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For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Thomas De Meese
Partner – Brussels
Phone: +32.2.282.1842
Email: tdemeese@crowell.com
Flip Petillion
Partner – Brussels
Phone: +32.2.214.2886
Email: fpetillion@crowell.com