NEED TO KNOW: Increasing Threats for Auction Sites like eBay

The legal starting point for any host of a website is that the host will not become responsible for content posted by others on the site until put 'on notice' about the nature of the content.
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However, it's becoming less straightforward to determine what amounts to 'notice', as the spectrum for what qualifies becomes broader.

Auction sites provide a good illustration of this. A concern for an auction site host is to know whether following an objection to a listing, it should be removed or left as it is. If the host removes the listing prematurely, it risks a claim by the seller. Whereas if it leaves the listing up, the complainant may sure not only the seller, but also the host.

An auction site host will typically try to use its site terms and conditions to control this situation by doing a number of things. Firstly, by warning all site users that only the person posting the listing is responsibile for the content of that listing; secondly by reserving the right to remove listings without liability to the seller; and thirdly by attempting to prevent complainants from putting the host 'on notice' without first going through a preset verification process to demonstrate that the complainant has the proper rights or evidence to jusitfy the complaint.

Ebay's policy is to reject all attempts by brand owners to put it 'on notice' that a listing infringes a brand owner's intellectual property rights and therefore should be removed, unless the brand owner uses a pre-determined certification process which eBay calls the 'Verified Rights Owners' scheme.

By this process, the brand owner has to register with eBay and submit a written declaration of ownership of the relevant copyright or trademark each time it wishes to have a listing removed for infringement. Only once the declaration is received by eBay will they treat themselves as being 'on notice' and therefore under a duty to remove the listing.

However, the French authorities recently took the view that eBay should have been more pro-active in preventing listings of counterfeit product, and held in favour of a claim brought against eBay by the owners of Louis Vuitton.

The decision may well be appealed of course, but it's still fair to say that there must be some nervousness that the same result could arise if eBay's policy were to be put to the test in the UK.


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