L’Oréal SA and Others v eBay International AG and Others.

• Jurisdiction: European Union
• Celex Number: 62009CC0324
• ECLI: ECLI:EU:C:2010:757
• Date: 09 December 2010
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-324/09

OPINION OF ADVOCATE GENERAL

JÄÄSKINEN

delivered on 9 December 2010 (1)

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

eBay (UK) Limited

(Reference for a preliminary ruling from the High Court of Justice of England and Wales, Chancery Division (United Kingdom))

(Information society – Search engine – Keyword advertising – Operator of electronic marketplace – Keywords corresponding to trade marks – Directive 89/104/EEC (‘Trade Mark directive’) – Articles 5 and 7 – Regulation (EC) No 40/94 (‘Community Trade mark regulation’) – Articles 9 and 13 – Liability of an operator of electronic marketplace for the information it hosts – Directive 2000/31/EC (‘Directive on electronic commerce’) – Article 14 – Member States’ duty to ensure that rightholders are in a position to apply for injunctions against intermediary providers of services used by third parties to infringe those rights – Directive 2004/48/EC (‘Directive on the enforcement of intellectual property rights’) – Article 11 – Freedom of expression – Freedom of Commerce – Directive 76/768 (‘Cosmetics directive’))

I – Introduction

1. The dispute in the main proceedings is between L’Oréal SA and its subsidiaries (‘L’Oréal’), on the one hand, and three subsidiaries of eBay Inc. (‘eBay’), together with certain natural persons, on the other. It relates to offers for sale of goods by these persons on eBay’s electronic marketplace. The offers for sale allegedly infringe L’Oréal’s intellectual property rights.

2. eBay, the defendant in the national proceedings, operates a popular and sophisticated electronic marketplace in the internet. It has built up a system which greatly facilitates the selling and buying over the internet by individuals, with a powerful search engine, a secure payment system and extensive geographical coverage. It has also designed compliance mechanisms to fight sales of counterfeit goods. To attract new customers to its web site, eBay has also bought keywords, such as well-known trade marks, from paid internet referencing services (such as Google’s AdWords). The use of a selected keyword in the search engine triggers the display of an advertisement and a sponsored link, which leads directly to eBay's electronic marketplace.

3. L’Oréal, the applicant in the national proceedings, is a global company with a very wide product range enjoying trade mark protection, including well-known marks with worldwide reputation. Its primary concern in this case is the trade of various counterfeit L’Oréal products on eBay’s electronic marketplace. For L’Oréal, the situation is aggravated by the fact that some of the products are not meant for sale in the European Economic Area (‘EEA’), but end up here through eBay sales. Some of the cosmetic products are sold without the original packaging. In L’Oréal’s view, by buying the keywords eBay attracts customers to its electronic marketplace to buy L’Oréal branded goods in infringement of its trade mark rights. To stop the individual sellers in an effective way, L’Oréal would like to obtain court orders against eBay so that its trade marks would be better protected.

4. For the Court, this preliminary reference touches on the topical legal question relating to the application of trade mark protection in the new environment of electronic commerce and information society services in the internet. The Court is called upon to draw the right balance between the protection of the legitimate interests of the trade mark proprietor, on the one hand, and those of businesses and private individuals using the new trading opportunities offered by internet and electronic commerce, on the other hand. Some of the questions can be answered on the basis of existing case-law whereas others require further interpretation of several European Union (EU) legislative acts.

5. The main challenge for the Court lies in the double-balancing act the Court is called to undertake. Not only is the Court requested by the national court to give an interpretation of the EU law provisions in this challenging setting, but it should at the same time ensure that the interpretation given of the instruments in question would remain applicable in settings with different parameters. The trade marks in question are well known and the products are luxury products but the applicable EU law provisions do apply to all trade marks and all kinds of goods. Electronic marketplace is global and it has many specific features. While the replies given should take into account the specificities of the case before the national court, they should, at the same time, be based on a global view on how this system should function in general. In my view, this case is more complicated than Google France and Google (2) in many aspects.

6. In this case, the Court is called to give an interpretation among others concerning (i) the legal position under EU trade mark law pursuant to Directive 89/104 (‘Trade Mark Directive’) (3) of an electronic marketplace operator who (a) purchases keywords identical to trade marks from a paid internet referencing service so that the search engine results will display a link that leads to marketplace operator's website, and (b) stores on its website on behalf of its clients offers for sale of counterfeit, unpackaged or non-EEA source branded products; (ii) the definition of the scope of the exemption of the information service providers’ liability, as contained in Article 14 of Directive 2000/31 (‘Directive on electronic commerce’); (4) (iii) the definition of the scope of the right to obtain an injunction against an intermediary whose services are used by a third party referred to in Article 11 of Directive 2004/48 (‘Directive on the enforcement of intellectual property rights’) (5) and (iv) concerning certain provisions of Directive 76/768 (‘the cosmetics directive’). (6)

II – Legal context

A – European Union law (7)

Directive 76/768

7. Article 6(1) of Directive 76/768 on cosmetic products requires the Member States to take all measures necessary to ensure that cosmetic products may be marketed only if the container and packaging bear the information specified in that provision in indelible, easily legible and visible lettering. That information includes, inter alia, (a) the name and the address or registered office of the manufacturer or the person responsible for marketing the cosmetic product who is established within the Community; (b) the nominal content at the time of packaging; (c) the date of minimum durability; (d) particular precautions to be observed in use; (e) the batch number of manufacture or the reference for identifying the goods; (f) the function of the product, unless it is clear from the presentation of the product; and (g) a list of ingredients.

Directive 89/104 (8)

8. Article 5 of Directive 89/104 on trade marks, entitled ‘Rights conferred by a trade mark’ is worded as follows:

‘1. The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

(a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered;

…

3. The following, inter alia, may be prohibited under paragraphs l and 2:

…

(b) offering the goods, or putting them on the market or stocking them for these purposes under that sign, or offering or supplying services thereunder;

(c) importing or exporting the goods under the sign;

(d) using the sign on business papers and in advertising.

…’

9. Article 6(1) of Directive 89/104, entitled ‘Limitation of the effects of a trade mark’, read as follows:

‘1. The trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade,

…

(b) indications concerning the kind, quality, intended purpose, value, geographical origin, the time of production of goods or of rendering of the service, or other characteristics of goods or services;

(c) the trade mark where it is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts;

provided he uses them in accordance with honest practices in individual or commercial matters.’

10. Article 7 of Directive 89/104, entitled ‘Exhaustion of the rights conferred by a trade mark’ states:

‘1. The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the [European Economic Area (EEA)] under that trade mark by the proprietor or with his consent.

2. Paragraph 1 shall not apply where there exist legitimate reasons for the proprietor to oppose further commercialisation of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market.’

Directive 2000/31

11. Recital 9 in the preamble to Directive 2000/31 on electronic commerce is worded as follows:

‘The free movement of information society services can in many cases be a specific reflection in Community law of a more general principle, namely freedom of expression as enshrined in Article 10(1) of the Convention for the Protection of Human Rights and Fundamental Freedoms, which has been ratified by all the Member States; for this reason, directives covering the supply of information society services must ensure that this activity may be engaged in freely in the light of that article, subject only to the restrictions laid down in paragraph 2 of that article and in Article 46(1) of the Treaty; this directive is not intended to affect national fundamental rules and principles relating to freedom of expression.’

12. Recitals 42, 43 and 45 to 48 in the preamble to Directive 2000/31 state:

‘(42) The exemptions from liability established in this...