INTERNET auction site eBay Inc is generally not liable for trademark infringements committed by users on its site, the European Court of Justice said yesterday.

ECJ Advocate General Niilo Jaaskinen also said in a non-binding opinion that if eBay was notified of infringement of a trademark by a user who continued to repeat the offense, it could be held liable. He also found a trademark holder has the right to prevent the sale on electronic marketplaces of samples or testers marked "not for sale," or products which have had their packaging removed, if this harms its reputation.

The issue relates to previous unsuccessful legal attempts by L'Oreal, the world's largest cosmetics maker, to claim trademark infringement through sales of goods on eBay. The ECJ, Europe's highest court, upholds opinions by advocates' general in the vast majority of cases. The court's judges are to rule in a few months.

"The use of the disputed trademarks as keywords by eBay does not necessarily result in misleading the consumers as to the origin of the goods offered," the advocate general found in his written opinion.

"In cases where the ad itself is not misleading as to the nature of the advertising Internet marketplace operator, the function of the trademark of indicating the origin of the product is not likely to be jeopardized."

Jaaskinen found that if a seller uses a trademark on an Internet market website, such as eBay, it cannot be considered to be used by the marketplace operator, but by the seller. So the marketplace operator could not be blamed for any resulting problems caused to the trademark holder.

One of L'Oreal's complaints was over the selling of samples or testers marked "not for sale." In such cases, Jaaskinen said, the company retained the right to prohibit their sale.