It is caution time now for the online selling portals. They should take a cue from what happened with eBay. eBay is one of the very popular online shopping website offering myriad products for sale. The advantages are that it is easily accessible, you can choose sitting in your home and ofcourse, if you get lucky, products are also available at much lower prices. However, this cannot continue to promote (actively or passively) counterfeit goods at the cost of original goods. And here, L’Oréal leads the struggle of the ‘reals’!

Source: http://theglamourcollection.multiply.com/journal/item/34

Only yesterday (12^th July, 2011) the Court of Justice of the European Union (ECJ) in its judgment held that an online marketplace is not exempt from liability when it has played an ‘active role’ in the sale, which includes “optimizing the presentation of the offers for sale in question or promoting them”.

Where the operator of the online marketplace has not played an active role the operator nonetheless cannot be exempt from liability if it was aware of facts or circumstances on the basis of which a diligent economic operator should have realized that the offers for sale in question were unlawful.

The ECJ ruled that “the proprietor of a trade mark is entitled to prevent an online marketplace operator from advertising – on the basis of a keyword which is identical to his trade mark and which has been selected in an internet referencing service by that operator – goods bearing that trade mark which are offered for sale on the marketplace, where the advertising does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods concerned originate from the proprietor of the trade mark or from an undertaking economically linked to that proprietor or, on the contrary, originate from a third party.”

L’Oréal as the brand owner will be euphoric at today’s ruling. This ruling will usher an era where brand owners are no longer fighting alone for online brand protection. Such orders, although, are common in the physical world, where companies/ retail stores which facilitate sales are held accountable for the goods which pass through their hands.

Eric Gummers, partner at Howard Kennedy, strongly opines: “No more turning a blind eye to sellers ripping off brands such as L'Oréal by permitting international sellers to peddle branded products without correct permissions where often there is a risk of counterfeiting and knock-offs where ordinary consumer gets much less than bargained for.”

The national courts must take similar steps in relation to the protection of intellectual property rights and preventing further infringements of that kind. However, those injunctions must be effective, proportionate, dissuasive and must not create barriers to legitimate trade.

So, instead of chasing the ones directly engaged in manufacturing and distributing counterfeits, its rather intelligent to close the gates for them. We say aye!