Liability of online auction providers confirmed by Supreme Court

The claimant notified eBay that an unknown third party had registered under the pseudonym 'Universum3333' with the auction site using the claimant's name, address and date of birth without the claimant's authorization. Subsequently, individuals who had purchased allegedly counterfeit items of clothing from the third party contacted the claimant. Although eBay blocked the account, the third party continued to use the claimant’s personal data on eBay under a new account and pseudonym. The claimant sought a cease and desist order.

 

The first and second instance courts granted the claimant's cease and desist claim on the grounds that eBay was liable as 'disturber' (Störerhaftung in German) for the violation of the claimant's rights in his name (Paragraph 12 of the German Civil Code). Liability as 'disturber' arises where the party does not commit the infringement directly, but contributes to the infringement deliberately and causally. eBay appealed.

 

The Supreme Court set aside the decision of the appellate court, but confirmed the court’s ruling on liability.

 

First, in analogy with the infringement of trademark rights (see “Online auction site is found liable for sale of fake ROLEX watches” and “Supreme Court confirms liability of online auction sites”), the Supreme Court agreed that eBay was liable as 'disturber' for infringement of the claimant’s rights in his name, as it had been notified of the infringement. Hosting providers have no general obligation to check all the information stored on their platforms. However, once a hosting provider has been notified of a clear infringement, it must not only stop the infringement of the specific right, but also prevent similar infringements as far as is reasonably possible.

 

However, the Supreme Court referred the case back to the appellate court with directions to assess whether it was technically possible for eBay to prevent users of its auction platform from further violating the claimant’s rights after it had been notified of the infringement. Importantly, the Supreme Court highlighted that the secondary burden of proof rested with eBay. In such cases a plaintiff may shift the burden of proof to the hosting provider if it denies that reasonable protective measures have been taken. As the claimant in the present case had no knowledge of the technical measures used by eBay to prevent further infringements, the latter had to demonstrate:

The court pointed out that eBay's secrecy interest (with regard to the reasonableness of the protective measures) could be satisfied by excluding the public at the court hearing or issuing a secrecy order.

 

The decision increases the pressure placed on auction platform operators on two fronts: liability and burden of proof. Although the decision concerns only the infringement of an individual's right in his name, it must be considered within a wider framework - that is, the general tendency of the Supreme Court to make things more difficult for auction sites operators.