eBay held to be jointly responsible for sale of Hermès fakes

The Troyes High Court has held that eBay was jointly responsible for the sale of counterfeit Hermès bags on its auction platform (June 4 2008). It is the first time that a French court has found that an auction platform was liable for the sale of counterfeit goods.
Fashion company Hermès brought an action against eBay France, eBay International and the seller of counterfeit products bearing the HERMES trademarks.
The Troyes High Court held as follows:
 “In offering for sale Hermès-branded bags and accessories on the ebay.fr website and by failing to act within their powers to prevent reprehensible use of the site, Mrs X, the company eBay France and Swiss company eBay International AG have committed acts of trademark infringement.
The court considered that eBay France and eBay International, in their capacity as “providers of online communication services” for a brokerage activity, had the obligation to discourage use of their website in an unlawful manner by providing appropriate means to sellers, purchasers and IP rights owners.
As well as clarifying the responsibility of eBay in principle, the court specified the conditions under which auctions platforms may be exonerated from such responsibility. In this regard, the court indicated that the information and tools provided by eBay at the time the counterfeit goods were sold - notably, the Verified Rights Owner policy - were insufficient. The court gave precise examples of what eBay could have done to fulfil its obligations, namely:
  • ensure that sellers provide appropriate means to identify the products sold (eg, reference number, serial number and authenticity certificate); and
  • warn sellers and purchasers about: 
    • the civil and criminal consequences of the infringement of IP rights;
    • the ability of IP rights owners to query the authenticity of the products offered for sale; and
    • the fact that personal data can be transferred to IP rights owners. 
The decision represents a significant departure from previous decisions by other French courts.
In similar cases, the courts decided that eBay and other auctions platforms were not liable on the grounds that they were merely “technical intermediaries” and/or “hosting services providers”.  
In previous cases involving eBay, the courts found that under French law, eBay (as a hosting services provider) had neither the obligation nor the possibility to control the content of its websites. Therefore, the courts concluded that eBay had no responsibility in this respect, except where:
  • it was aware of the unlawful character of the content; 
  • it was aware of facts and circumstances that made such unlawful character apparent; or 
  • it failed to remove the content promptly after becoming aware of the unlawful character of the content. 
In the present case, the court awarded €20,000 in damages to Hermès for the sale of four counterfeit bags. The court also ordered the publication of the decision in four magazines, on the home page of the ebay.fr website and on the Hermès’s websites.
It will be interesting to see whether the Paris Court follows this trend in two similar actions brought by Louis Vuitton and Dior Couture against eBay, particularly due to the significant amount of damages requested (€20 million and €17 million, respectively). In addition, decisions in similar cases are pending before several courts in different jurisdictions (notably in the United States and other European countries). Special attention should be paid to the position of other European courts, since internet and trademark laws are harmonized in the European Union.
Jean-François Bretonniere and Virginie Ulmann, Baker & McKenzie SCP, Paris

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