ECJ on eBay sales – Judgment of 4.10.2018

When is the “private” seller treated as a business?

If you want to sell goods on eBay, you can quickly violate third-party trademark rights. Then it’s important to clarify whether you are considered a business.

A typical case: Relatives or friends bring branded goods from the USA that are not sold in Germany. The souvenir is not liked, so it is offered on eBay. Since you repeatedly clear out goods and sell them on eBay, you are present on eBay in bursts, sometimes with more, sometimes with fewer offers. However, you don’t feel like a business, but as a consumer who is just selling their old or new, disliked goods.

To your complete surprise, you then receive a warning letter from the trademark owner of the product from the USA. Argumentation: The product is not distributed in the EU, the trademark rights in the EU would be violated.

Legally speaking, a difficult situation. Because: From a trademark law perspective, the trademark owner’s defensive rights continue to exist for the EU despite legal purchase in the USA. There is a lack of so-called “exhaustion” because the goods were not put into circulation within the EU by the trademark owner.

A defense strategy can then be: You are not a business.

In case of success with this opinion, prosecution would not be possible or at least much more difficult. The seller must also fulfill significantly less comprehensive information obligations regarding the person of the seller.

Until now, however, the courts have judged the question of whether someone is to be considered a business quite generously in favor of the suing trademark owners: The outward appearance is sufficient if one has several auctions running in parallel and these are designed quite professionally.

Now the ECJ has decided with judgment of October 4, Case 2018 C-105/17:
Whether one is classified as a business in online sales should not be determined solely by the number of items offered. Rather, it is decisive whether the sales are part of a “commercial, craft or professional activity”.

The ECJ had to assess the question of whether someone could be classified as a business within the meaning of the Unfair Commercial Practices Directive because they post “a comparatively high number” of sales advertisements.
In its judgment, the ECJ emphasizes that courts must decide on a case-by-case basis whether a person is acting as a commercial seller. Indicators include whether the sale is planned, has a certain regularity or is pursued for commercial purposes, as well as whether the offer is concentrated on a limited number of goods. In addition, the legal form of the seller and their technical skills must be taken into account.

A seller with a series of simultaneously running offers could only be classified as a business if she acts within the framework of her commercial, craft or professional activity.

Assessment:

This decision judges the question of when a seller is to be considered as acting commercially much more narrowly than was previously customary in German courts. This is certainly positive for occasional sellers.

However, it remains to be seen how German courts will implement this recent decision in their decision-making practice. So far, no profound change is discernible.