Amstrad helps eBay win counterfeit suit

 

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By Stuart Turton

Posted on 27 May 2009 at 11:31

The High Court has ruled that eBay is not liable for the sale of counterfeit goods on its site, based on a precedent set by Amstrad back in 1986.

The landmark ruling came against L'Oreal which took eBay to court alleging the auction site had not done enough to prevent users from selling fake merchandise including handbags and perfume, damaging its reputation and sales.

In response, eBay argued the site was merely a tool, incapable of recognising between genuine and counterfeit goods. To that end, it argued, it could not be asked to protect the trademarks of other companies.

The court agreed, claiming L'Oreal had failed to prove eBay had "participated in a common design" with the sellers to infringe its trademarks. The ruling was based on a 1986 case lodged by the the British Phonographic Institute against Amstrad, which alleged Amstrad was liable for illegal recordings of cassettes copied using its tape recorder. A case the BPI lost.

"I am satisfied that mere knowledge on the part of the supplier of equipment that it would probably be used to infringe someone's copyright does not make the supply unlawful; nor does an intention to supply the market for such user," the court papers read.

"Mere supplying with knowledge and intent will not be enough to make the supplier himself an infringer or a joint tortfeasor with someone who is."

The court's final ruling states that as with Amstrad, eBay has "no legal duty" to protect trademarks or stop them being infringed by the people using its site.

L'Oreal SA took eBay to court across Europe, suing in Britain, Germany, France, Belgium and Spain. It's had success in France, which ordered eBay to pay a 40 million euros fine.

The auction site has had greater success elsewhere though, winning cases against Rolex and Tiffany & Co, which described the site as a "rat's nest of counterfeit goods".