The United States and the European Union have strikingly similar laws regarding liability of online marketplaces for third-party content posted on their websites. Nonetheless, the approaches American courts and European courts take to address the issue, are drastically different. This extreme divergence is best illustrated by the American case, Tiffany v. eBay, and the French case, LVMH v. eBay.
In Tiffany v. eBay, the court considered whether eBay should be held liable for trademark infringement—among other similar claims—after Tiffany discovered that thousands of pieces of counterfeit jewelry were being sold on eBay. The court dismissed all of Tiffany’s claims, holding that eBay was neither directly, nor indirectly, liable.
The court explained that eBay needed to use Tiffany’s trademark in its advertising in order to market Tiffany’s products. Therefore, eBay’s use of Tiffany’s trademark constituted a “protected, nominative fair use” of Tiffany’s trademark. Moreover, eBay was not indirectly liable because Tiffany could not show that eBay knew, or had reason to know, of specific items infringing its rights.
Unlike American courts, French courts have taken a vastly different approach, holding online marketplaces to a higher standard. In LVMH v. eBay, the supreme court found eBay liable for abstention and negligence, by failing to set up preventative filters to curtail infringement. Unlike the American courts, the court held that eBay should have known that items were infringing the holders’ rights, because it was apparent that the items were imitation, they were being sold for low prices, and a high number of identical goods were being offered at the same time, by the same user. Though this case is not illustrative of all decisions coming out of the European Union, it represents the general approach the European courts are taking to protect the rights of third-parties that sell products and services on online platforms.
As this issue continues to arise, one thing is for sure: alternative preventative measures need to be investigated. For example, the use of more effective filtering mechanisms could be used to curtail copyright infringement. Taking an active approach will benefit both online platforms and third-party rights holders.
As always, if you have a concern, e-mail or call one of the Intellectual Property Team members at 920-437-0476 to discuss the best way to protect your intellectual property in the ever-changing world of the Internet.