The European Court of Justice has today ruled that internet auction giant eBay and other online "marketplaces" can be held liable for trademark breaches that occur on its website. The outcome could have ramifications for the Motion Picture Association (MPA), which is attempting to force BT and potentially every other broadband ISP into blocking access to any website that is deemed to facilitate internet piracy.


The MPA is seeking to establish an injunction against BT which, using Section 97A of the UK Copyright, Designs and Patents Act, would require the ISP to block access to a controversial Newsgroup (Usenet) indexing website called Newzbin2 (full case summary).

The presiding Judge Arnold warned at the end of last month that he intended to wait until the outcome of the case between eBay and L'Oreal had been decided before passing his own ruling on BT and the MPA. That eBay judgement came today.

EU Court of Justice - Short ISPreview.co.uk Summary of CASE C-324/09

1. The Court found that its rules could be applied to websites that existed outside of the UK/EU just as soon as it is clear that those offers for sale and advertisements are targeted at consumers in the EU.

2. Next, the Court holds that the operator of an internet marketplace does not itself ‘use’ trademarks within the meaning of the EU legislation if it provides a service consisting merely in enabling its customers to display on its website, in the course of their commercial activities, signs corresponding to trade marks.

3. The Court also specifically mentions certain matters concerning the liability of the operator of an online marketplace, which found that eBay could not escape liability if was deemed to have played an "active role" by showing knowledge or control over any infringing content.

Moreover, even in cases in which the operator has not played an active role, it cannot rely on that exemption from liability if it was aware of facts or circumstances on the basis of which a diligent economic operator should have realised that the online offers for sale were unlawful and, in the event of it being so aware, failed to act promptly to remove or disable the related data.

4. Finally, the Court rules on the question of injunctions which may be granted against the operator of an online marketplace when it fails to act against infringements.

The operator may, for example, be ordered to take measures that would make it easier to identify any infringers who are its (e.g. eBay's) customers. It also said that such injunctions must be "effective, proportionate, and dissuasive and must not create barriers to legitimate trade."

It's difficult to speculate upon precisely how this could impact the MPA's case against BT, especially with national courts still holding all of the power to asses and rule on each case. The eBay and BT cases are also very different, but they do share some common ground.

Crucially the EU's ruling makes it extremely difficult for Newzbin2 or similar sites to claim that they are not infringing copyright. Moving servers to another country will also no longer be an effective way of avoiding such issues.

In theory the MPA could also now argue that, as BT has knowledge of the site and its activities, then the onus should be upon the ISP to act. However the court ruling covers "internet marketplaces" and not ISPs, which are protected by other EU laws that identify them as mere conduits of information (i.e. cannot be held liable for third party content online).

As we say, it's difficult to know how the MPA case will be interpreted. ISPs (access) and websites (content) are two very different sides of the same coin. An outcome to BT's case is expected within the next week or two.