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Using eBay's VeRo System Could Land You In Court

Many brand owners will be aware that eBay operate a "Verified Rights Owner" system (referred to as "VeRO"), whereby an IP rights owner can notify eBay if they believe that a third party is offering for sale eBay products that infringe its IP rights (e.g. a registered trade mark).

As a result of receiving a notification, eBay will often delist the allegedly infringing products and will not relist them until the dispute has been resolved between the IP rights owner and the third party. This can often result in significant financial loss to the third party, as it cannot sell its (allegedly infringing) products via eBay, which could well be a major marketplace for its products.

For many years, (as a consequence of Mr Justice Pumfrey's comments in Quads 4 Kids v Campbell [2006]) it has been thought that the service by an IP rights owner of a notification on eBay could be construed as a 'threat'. Thus, unless the IP rights owner can prove that the third party's products do indeed infringe their trade mark, design and/or patent (as relevant), they have made a 'threat,' which is actionable and the third party can sue them for the loss they suffer as a result of their product being delisted on eBay.

This issue was recently considered further in Cassie Creations Limited v Simon Blackmore and Mirrorkool Limited [2014], where the deputy judge hearing the case felt that it was certainly arguable that the service of such a notification on eBay was potentially an actionable 'threat'. However, he did not feel he had all the necessary material before him to make a final assessment and thus has decided that this issue will need to be decided at a full trial.

So, in summary, don't go filing VeRO notifications with eBay unless you are certain that you can prove that the person in question is infringing your IP rights (and that you IP rights are valid). Otherwise, you run the risk of being sued and could be held liable to pay damages for any loss the other person suffers as a result of your actions.