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9 December 2010

Attorney General's Opinion in L’Oreal SA et al v eBay International et al Concerning the Sale of Counterfeit Perfume Bottles

Attorney General's Opinion in L’Oreal SA et al v eBay International et al Concerning the Sale of Counterfeit Perfume Bottles

Today, the Attorney General delivered his eagerly awaited opinion in the ongoing dispute between L’Oreal SA and eBay concerning the sale of counterfeit perfume bottles on eBay’s auction website. The main points are as follows:

Where perfume and cosmetic bottles which are not intended for sale to consumers are supplied free of charge to the trade mark owner’s distributor, such goods are not “put on the market” and the proprietor is entitled to oppose the further commercialisation of these products where the outer packaging has been removed without the proprietor’s consent, and where one of the following applies:

a) the products do not bear the information required by the law

b) the removal of the outer packaging changes or impairs the condition of the goods

c) further commercialisation of the product damages or is liable to damage the image or reputation of the trade mark

Further, where a trader operating an electronic marketplace purchases a keyword identical to a registered trade mark and uses this as a sponsored link to his website, or where clicking on the sponsored link leads the user directly to advertisements identical to the registered trade mark, there is use of the sign within the meaning of Article 9 of the CTM Regulation (Section 10 UK Trade Marks Act 1994) relating to infringement.  However, in relation to the latter point, the sponsored link does not have an adverse effect on the function of the trade mark, provided the average consumer understands that the operator of the electronic marketplace is offering third party products or services for sale.

If the goods have not yet been put on the market in the EEA with the consent of the proprietor, it is sufficient to show that the advertisement is targeted at consumers within the territory covered by the trade mark.

Displaying the sign on a website but not using it as a sponsored link does not constitute use in relation to the infringing goods referred to under Article 9 of the CTM Regulation (Section 10 Trade Marks Act 1994).

Actual knowledge of illegal activity or information or awareness of facts or circumstances exists where the operator of the electronic marketplace has knowledge that goods have been advertised or offered for sale on its website in infringement of a registered trade mark, and that infringements are likely to continue.

It remains to be seen whether the Court will apply the Attorney General’s opinion, but the Court’s decision is eagerly awaited.

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