Europe’s top court has ruled that EU trade mark rules can apply to online offers relating to branded goods located in non-EU member states.

The judgment comes in response to a reference from the English High Court in L’Oréal v eBay, where L’Oréal accused eBay of being involved in trade mark infringement committed by its sellers. L’Oréal argued that by purchasing keywords corresponding to the names of L’Oréal trade marks from paid Internet referencing services (including Google’s AdWords), eBay purposely directed its users towards goods on its site that infringed L’Oréal trade marks. L’Oréal further alleged that eBay’s anti-counterfeit efforts were inadequate.

The Court of Justice of the European Union (CJEU) found that the duty on eBay and other online marketplaces is considerably more onerous than previously thought and that a failure to prevent trade mark infringement can result in liability. Furthermore, the court noted that member states can order companies to take measures (including the granting of injunctions) to put an end to trade mark infringements and prevent further intellectual property infringements.

The CJEU ruled that the operator of an online marketplace plays an active role with regard to data relating to the offers for sale by virtue of, optimising the presentation of the online offers for sale or, promoting those offers. According to the CJEU, EU trade mark rules apply to goods that are being sold from outside the EU through online marketplaces, provided it is clear that the offers to sell such goods are targeted at EU customers.

The decision will be welcomed by brand owners in Ireland and throughout the EU but will be cause for concern for online marketplaces, for whom the operational and cost implications could be significant.

Contributed by John Magee.