eBay's use of LVMH's marks as keywords is infringing, says court

In LVMH Group v eBay Inc (September 18 2009), the Paris Court of First Instance has held that eBay Inc and eBay International AG (collectively eBay) were liable for trademark infringement in connection with the use of trademarks owned by the LVMH Group as keywords to trigger sponsored links.

 

Several companies belonging to the LVMH Group, including Parfums Christian Dior, Kenzo, Parfums Givenchy and Guerlain, sued eBay for trademark infringement, alleging that the latter was using keywords reproducing or imitating their trademarks (eg, ANGE OU DEMON, HOT COUTURE, L’HEURE BLEUE, HABIT ROUGE and KENZO) on several search engines (eg, Google, MSN and AOL) to trigger sponsored links directing internet users to eBay's auction sites.  

 

In its defence, eBay argued that there had been no direct use of the marks. It also pointed out that the marks were used with the sole purpose of providing clear and complete information as to the availability of the goods offered for sale on its auction sites. Finally, eBay alleged that the position of the sponsored links on the results pages, together with eBay's reputation, excluded any possible confusion in the mind of the public.  

 

The Paris Court of First Instance disagreed, ruling that use of the marks by eBay constituted trademark infringement, regardless of whether the sponsored links led to authentic goods or not. The court also held that use of LVMH's trademarks as keywords served only promotional - rather than informative - purposes. The court thus ordered that eBay pay €60,000 in damages and €20,000 in costs to LVMH.  

 

The court's interpretation of French trademark legislation seems to be correct. eBay directly and actively sought to buy keywords which were identical or very similar to registered trademarks. Therefore, eBay's behaviour could not be regarded as neutral, as the marks were not used merely for the purpose of indicating which brands were available for sale on eBay's auction platforms. 

 

Arguably, the recent opinion of the advocate general of the European Court of Justice (ECJ) in Google France v Louis Vuitton Malletier SA(Case C-236/08), Google France v Viaticum SA & Luteciel SARL (Case C-237/08) and Google France v CNRRH (Case C-238/08), in which the latter held that Google's use of registered trademarks as keywords in its AdWords system did not constitute trademark infringement, does not affect the outcome of this case (for further details please see "Advocate general favours Google in AdWords cases"). The matter pending before the ECJ involves Google and its AdWords system, rather than advertisers using the system (eBay was acting as an advertiser in the present case). Therefore, whatever the decision of the ECJ in the Google Cases, trademark owners are still advised to file infringement actions against the advertisers themselves, rather than Google.