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EU court clarifies online retail laws

Associated Press / July 13, 2011

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BRUSSELS - Online retailers like eBay Inc. can be held responsible for the infringement of trademarks by goods they sell, Europe’s top court said yesterday.

National courts can order online retailers to stop trademark infringement and prevent similar incidents in the future, the Luxembourg-based European Court of Justice said.

The court’s clarification of EU laws came in response to questions referred to the court by the High Court in London in 2009. The UK court was seeking the top court’s opinion in a case brought by French cosmetics maker L’Oreal SA against eBay.

L’Oreal complained that some of its products that were not deemed for sale in Europe were being offered on eBay and that the retailer was not making enough of an effort to prevent such sales.

While the court said it was up to national courts to decide whether there was an infringement and order it to be stopped, it said that companies promoting the sale of goods online can be held responsible for what goes on on their websites.

However, the court sided with eBay on one count, saying that online shopping sites are not using trademarks if they allow customers to display brand signs on their websites.

The court’s clarification could act as a reference in similar cases brought against eBay by other companies complaining about counterfeits and trademark infringement.