18
Jul/11

Guest Post by the IPKat – L'Oreal v eBay: Apocalypse Not Quite Now


My friend IPKat, also known as Jeremy, writes:

Some two years after the world’s largest cosmetics group clashed with the world’s biggest online auction and sales host, the Court of Justice of the European Union has delivered judgment.  Amid a fanfare of apocalyptic forecasts that this might mean the end of online sales as we know them, Case C‑324/09 L’Oréal SA, Lancôme parfums et beauté & Cie, Laboratoire Garnier & Cie, L’Oréal (UK) Limited v eBay International AG, eBay Europe SARL and eBay (UK) Limited has been posted on the Court’s website.  A few short days later, last week’s hottest news scarcely raises a ripple of interest. The world has not ended.  eBay continues to function.   Sellers continue to sell and the dust is falling pretty much back into place.

So has anything actually happened? In one sense, yes. The Court has affirmed its existing case law in another not-quite-apocalyptic ruling in the last year’s three Google France rulings that, in principle, online service providers aren’t liable for the trade mark sins of those who use their services unless (i) they either actually know about those sins and don’t do anything about them or (ii) they play an active part in the sinning process.  In another sense, no. To the average European, American football consists of lengthy periods of discussion and the appearance of inactivity, punctuated by the occasional short spell of brief, violent activity. This is the model on which European trade mark litigation is based. You get a flurry of serious litigation in a national court which doesn’t know for sure what the law is. Then time out is called for a couple of years while the contesting parties wait to discover what the Court of Justice—ruling in principle and without the power to decide the case—says the law is. Once it gives its ruling, there’s another flurry of litigation as the national court applies the law to the facts, and the parties, before it.

No serious business can sit on its backside for two years awaiting the sometimes Delphic pronouncements of a panel of judges drawn from anywhere and everywhere from the European Union’s 27 countries, so they get on with their lives, modify their business models to minimise the risk of serious loss in the event of an adverse ruling. Hence Stefan Krawczyk (eBay’s European government-relations director): “We’ve moved on — we fulfill most of these conditions now anyways”.  And it’s not just business plans that change; attitudes change too. While it’s clearly wrong to say that all big brand owners have suddenly fallen in love with eBay, the “let’s talk” policy of companies like Richemont has won an increasing amount of respect and the “let’s sue” policy preferred by some other companies has produced few positive results.

There’s another reason why the Court of Justice ruling is not going to make much difference to daily trade on e-sites. Infringement litigation remains an expensive option. Cases have to be brought; evidence has to be marshalled; the law of diminishing returns has to be respected, if not obeyed. The only cases likely to come to court following this ruling are, I predict, the same ones that would have come to court beforehand: those in which the value of the infringement is large enough to make it worthwhile and those in which the trade mark owner needs to establish a principle.  If I am wrong, Europe will be a great recruitment ground for trade mark litigation lawyers in the coming months.

A tip of the Trademark Blog to the IPKat.