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No. 26
September 2012
International Association for the Protection of Intellectual Property
AIPPI General Secretariat |Toedistrasse 16 | P.O.Box |CH-8027 Zurich
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Liability of an online marketplace
Micheline Don and Emma de Groot, NautaDutilh, Amsterdam, Netherlands

An appellate court in the Netherlands recently applied the L'Oréal/eBay judgment of the European Court of Justice of July 12, 2011.

The judgment is the result of an ongoing battle between Stokke, the manufacturer of the well-known TRIPP TRAPP children's chairs, and the online platform Marktplaats, the Dutch version of eBay. Lower courts have already held that various chairs offered on Marktplaats infringed Stokke's copyrights and/or were falsely advertised as “Stokke” or “Tripp Trapp” chairs, thereby infringing Stokke's trademarks.

Stokke requested the Court of Appeal to order Marktplaats to refrain from placing any such advertisements and from re-issuing advertisements which previously had to be removed due to their infringing nature. The order would not apply if it was not apparent from the advertisement that the chairs offered had previously been held to infringe Stokke's rights. Stokke further requested that Marktplaats be ordered to register and provide to Stokke all contact details of each advertiser of infringing chairs.

Given the fairly anonymous modus operandi of Marktplaats and its advertisers, it is often difficult - if not impossible - for right holders such as Stokke to contact the infringers and put an end to infringements. In the absence of such vital contact details, can the operator of an online marketplace be held liable for the infringements, particularly if the operator knows or should know that its platform is being used for unlawful activities?

In L'Oréal/eBay the European Court held that a hosting operator is in principle exempted from liability if it has taken a neutral position between the customer-sellers and the potential buyers, unless the hosting operator was aware of facts or circumstances on the basis of which a diligent economic operator should have realised that the offers for sale were unlawful and failed to act expeditiously. The operator's position is not neutral if it plays an active role, such as providing assistance, that entails, in particular, optimising the presentation of the offers for sale or promoting those offers.

In Stokke/Marktplaats, the Court of Appeal applied these principles and held that Marktplaats was exempted from liability because:
  • As hosting operator, Marktplaats played a neutral (not active) role between its customer-sellers and the potential buyers because:

    • it gained knowledge - on its own initiative or after notification - of the content of the advertisements only after they were launched on its website;

    • the mere offering of a possibility for customer-sellers to have their ads stand out cannot be regarded as optimising the presentation of the ads because it is up to the customer-sellers to make use of these possibilities and all customer-sellers profit equally from the efforts of Marktplaats;

  • Marktplaats acted expeditiously after becoming aware of the unlawful advertisements. Marktplaats was not obligated to investigate all the ads (relating to the Stokke chairs or similar ones) because about 90% of the trade in these items on Marktplaats appears to be legitimate;

  • Although the exemption from liability relates only to liability for damages and the operator of an online marketplace may still be ordered to take measures to terminate or prevent an unlawful situation, those measures must be reasonable and proportionate.

    • Ordering Marktplaats to take measures preventing the placement of infringing ads would be disproportionate and highly disadvantageous to Marktplaats - i.e. increasing costs and making it a commercially less attractive platform - compared to the relatively minor benefits that Stokke would enjoy from those measures - i.e. the removal of some infringing ads from Marktplaats.

    • Ordering Marktplaats to provide or even register the contact details of its advertisers would also be unreasonable and disproportionate as the vast majority of them are private persons not acting in the course of business. Given that Marktplaats successfully argued that some 90% of is trade is legitimate, disclosing the contact details of all those “innocent” people would not be justified.

Comments:

Even though right holders have been fighting online sales platforms for years, the gap between their opposing interests seems difficult to close. For right holders confronted with infringing products being offered under aliases on online platforms, it is nearly impossible to find the responsible trader. The right holder can request the platform operator to remove a particular advertisement, but the advertisement will resurface the next day, posted by a different trader or under a different alias. The platform, on the other hand, does not have the resources or ability to check all advertisements in advance. Furthermore, to act proactively against its advertising customers (in favour of right holders) would harm its business model.

Although the ECJ has set certain standards, from a right holder's perspective the road to protection of its rights is still long and bumpy.
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