Supreme Court Decision 2010Ma817

(1) This is an important decision regarding trade of counterfeit goods on online shopping malls, so called open-markets, where the service providers do not sell goods but intermediate between sellers and customers and receive commissions. The plaintiff was Adidas and the defendant was eBay Korea. Adidas filed an injunction against eBay for the sale of counterfeit goods on Gmarket and Auction, the largest and top grossing open-market in Korea. Adidas alleged that eBay has a duty under Article 44(2) of ICNA (note: This provision declaratively states the service provider’s duty to make efforts to reduce rights-violating material on its services, and is not to be confused with Article 44-2 that imposes on-demand takedown obligations.) to prevent circulation of counterfeits and demanded eBay to take several measures including authenticity check of goods and counterfeit monitoring and filtering system. Adidas also argued that the notice and take down system and other measures eBay already put in practice were not sufficient. The Supreme Court found in favor of the defendant and dismissed the claim..

(2) The Supreme Court held that “any information that infringes upon other’s rights through invasion of privacy, defamation, etc.” does not include information infringing upon other’s trademarks and therefore the provision cannot be construed to impose alleged duty on service providers.

(3) This decision is significant in that Article 44-2, the on-demand takedown provision, also applies only to “any information that infringes upon other’s rights through invasion of privacy, defamation, etc.”, and therefore this Supreme Court decision can be said to have narrowed the scope of Article 44-2 to defamation and invasion of privacy only.