EcommerceBytes-NewsFlash, Number 2588 - July 18, 2011     1 of 5

EU Court Ruling Could Mean New Policing for Fakes on eBay

By Kenneth Corbin

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On the heels of last week's ruling from the top court in Europe, eBay and other online sellers doing business in the European Union may have to step up efforts to keep counterfeit goods off of their marketplaces, or they could find themselves liable for trademark infringement.

In a ruling that emerged from a longstanding complaint brought by luxury goods giant L'Oreal, the Court of Justice of the European Union held that Internet retailers can be on the hook for infringement if they take an "active role" in facilitating the sale of counterfeit goods.

The court ruling left the EU member states with considerable latitude to enforce counterfeit charges, but closed what L'Oreal had seen as loopholes in the infringement exemption for Internet retailers.

Some experts have said that the ruling signals a shift toward more stringent protection of the brand owners' rights.

"The EU court's ruling is a significant step in bringing the law in alignment with the reality of Internet auctions," said Geoffrey Potter, a partner at the law firm Patterson, Belknap, Webb and Tyler where he leads the anti-counterfeiting practice. "It gives brand owners a potentially potent tool for fighting the distribution of counterfeits through Internet auction sites."

eBay declined to comment on how the ruling will affect its marketplace policies. In an emailed statement, Stefan Krawczyk, eBay Europe's senior director and counsel government relations, said, "The judgment provides some clarity on certain issues, and ensures that all brands can be traded online in Europe."

"As a marketplace, eBay provides a level playing field for all online sellers and will continue building constructive partnerships to expand the range of brands being sold on eBay."

Over the years eBay has come under heavy pressure and faced numerous lawsuits from companies and industry groups ranging from luxury brands to software makers that have complained about the flow of knock-off goods on the marketplace.

And for Potter, who has built a career around fighting the traffic of counterfeit goods, the advent of the online marketplace has been nothing if not a game changer.

"In our global economy, it takes very little effort, capital or ingenuity for a counterfeiter to make fakes of virtually anything. The most difficult part of the counterfeiting scheme is distribution," Potter said. "In the old days, the counterfeiter's solution was a folding table at a flea market or street corner. Today, counterfeiters use Internet auctions to bring their illicit products to consumers. The auctions help counterfeiters achieve massive sales volume with little cost or risk."

About the Author
Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects for more than four years, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here .


About the author:

Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here.


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