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Archive for: e-auctions

Personal interest, case I ACa 841/2013

January 9th, 2014, Tomasz Rychlicki

The “Nigdy Więcej” (Never Again) Association and the “Zielone Światło” (Green Light) Foundation organized a social action entitled “Nazism never again on Allegro”. It was a protest against a Polish auction website Allegro.pl which allowed to buy and sell different Nazi gadgets and memorabilia. The Foundation together with a writer, artist and social activist Jerzy Masłowski prepared an illustration with Allegro.pl logotype in which in which two L letters were changed and shaped as the SS symbol. This illustration was used on postcards that were handed out to different people during the street-action that happened near Metro Świętokrzyska in Warsaw on 21 March 2010.

Stop Allegro

On 20 April 2010, the Foundation received a cease and desist letter from QXL Poland – the owner of Allegro. The Company requested the removal from all public places of all publications, photographs, posters and billboards, and other materials that included the altered trade mark. QXL demanded destruction of all the above mentioned materials and asked the Foundation to publish an apology on its website, as well as in the pages of Gazeta Wyborcza newspaper. The Foundation refused to comply.

Z-342240

QXL Poland sued the “Zielone Światło” foundation and Jerzy Masłowski for the infringement of personal rights. During the trial, the Foundation argued that it has conducted correspondence with Allego with regard to products with fascist symbols or products referring to fascist ideology, that were offered at different auctions. However, it has not brought the intended effect, because Allegro.pl did not remove these items from its website. For this reason, the Foundation organized the street action. The Foundation argued that from 8 June 2010, the provisions of Article 256 of the Criminal Code were amended.

Art. 256.
§ 1. Whoever publicly promotes a fascist or other totalitarian system of state or incites hatred based on national, ethnic, race or religious differences or for reason of lack of any religious denomination
shall be subject to a fine, the penalty of restriction of liberty or the penalty of deprivation of liberty for up to 2 years.

§ 22 The same punishment shall be imposed on anyone, who for the purpose of dissemination, produces, records or import, acquire, stores, possess, presents, transports or transfers a print, record or other item of the content specified in § 1 or being a carrier of the fascist, communist or other totalitarian symbolism..

§ 3 A crime is not committed by a perpetrator of a forbidden act specified in § 2, if he or she commits the said act in the course of artistic, educational, collectible or scientific activity.

The Foundation concluded that its action was a response to long-term omission of Allegro. The action was organized to draw the attention of relevant authorities and the public at auctions that poses a danger to others. It sought to protect an important public interest, and therefore was not unlawful. In addition, the Foundation argued that according to the legal doctrine the criticism aimed at improving the reality is not illegal, even if it is excessively expressive in description and in negative assessment, as well as it’s impolite way of expression and presentation of arguments, if it is justified by the importance of issues raised and the literary form that was used. Moreover, the scope of permissible criticism depends on the weight of social affairs, and in case of doubt, freedom of expression takes precedence, and in some cases even offensive criticism is acceptable. If the case requires so, the criticism might be very offensive, and it may even seek to destroy the enemy, for example, in the dispute against pedophilia or against the view that is glorifying Stalin. The Foundation argued also that a request for legal protection raised by Allegro cannot ban the Foundation and other individuals from expressing their critical opinions of the plaintiff’s conduct. Such behavior constitutes an abuse of the subjective right as decided by the Appeallate Court in Lódź in its judgment of 25 May 2006 case file I ACa 15/06, published in electronic database LEX, under the no. 512493.

On 9 November 20011, a lawyer representing the Foundation presented a legal opinion issued by Prof. Wojciech Sadurski. Prof. Sadurski wrote that there was no violation of personal interests. In the opinion of the author, the case brought by QXL Poland illustrates the conflict between two types of claims related to absolute rights protected by the law. The claims relating to freedom of expression, and intellectual property claims relating to the protection of trade marks owned by QXL Poland. Citing the case law of the Polish Constitutional Tribunal, prof. Sadurski argued that freedom of speech is superior to other constitutional rights and freedoms. He noted that limiting the right to freedom of expression by issuing a ban on speech, would violate the essence of the constitutional right to freedom of speech. Prof. Sadurski cited Smith v Wal-Mart Stores, 537 F.Supp.2d 1302 (ND GA 2008), however he pointed out that the Foundation does not conduct any commercial activity, and the risk of consumers’ confusions is clearly excluded. Please bear in mind that such opinions are treated by the Courts as private documents, not as the expert witness evidence/testimony. The case is pending and the next hearing is scheduled on 6 February 2012.

QXL Poland filed also a request for preliminary injunction. The District Court in Warsaw in its order of 20 January 2011 case file XXIV C 1035/10 dismissed it during a closed-door court session (in camera). However, the Appeallate Court in Warsaw in its decision of 5 May 2011 case file I ACz 671/11 decided to secure the claim of QXL. The Court prohibited the Foundation and Jerzy Masłowski from transmitting and disseminating on their websites of any publications or materials containing the questioned trade mark.

The District Court in Warsaw in its judgment of 13 March 2013 case file XXIV C 1035/10 ruled that the “Zielone Światło” (Green Light) Foundation infringed personal rights of Allegro, such as reputation and fame. The Court decided that the demonstrations against the sale of Nazi memorabilia and interference with the logo of the portal were too excessive and bore the risk of linking the portal with Nazi organizations.

The Appeallate Court in Warsaw in its judgment of 9 January 2014 case file I ACa 841/2013 dismissed Allegro’s claims. The Court noted that in this case there was a conflict of values, but also drew attention to the historical context of the sale of items referring to the Nazi ideology. The court held that undoubtedly there has been violation of the good name of the plaintiff – the name of the portal website, and in consequence, it could interfere with its business because some customers would not have positive opinions regarding the auction site. However, the rough means of expression that were undertaken by the Defendants, in order to remove the sale of a Nazi gadgets, excluded illegality. According to the Court this actions proved to be effective – have led to restrictions on the sale of Nazi’s memorabilia . What’s more important, the Court held that the Defendants acted to protect a legitimate public interest. The court ruled that artistic criticism of such business activities of an auction portal is not an unlawful action and deserves constitutional protection. The judgment is final.

Tax law, case I FSK1644/11

August 27th, 2012, Tomasz Rychlicki

A taxpayer who sold the old porcelain and books which were inherited from grandparents and parents, and bought on the antique fairs, was ordered by the Polish tax authorities to pay VAT for four years. Every year the taxpayer sold hundreds of these things, for more than three thousand PLN. Only 3089 PLN is the amount of income received during the year that is deemed as free of tax,. According to tax authorities this activity could not be regarded as a hobby, but as a professional activity, that should be taxed.

The Supreme Administrative Court in its judgment of 9 August 2012 case file I FSK 1644/11 dismissed the complaint of the taxpayer.

Tax law, case I SA/Łd 762/10

September 24th, 2011, Tomasz Rychlicki

The Voivodeship Administrative Court in Łódź in its judgment of 23 September 2010 case file I SA/Łd 762/10 held that a person whose account on an auction website was illegally hacked and used for sale of goods by someone else, is not obliged account to tax for such activity.

Personal data protection, case II SA/Wa 2037/10

May 12th, 2011, Tomasz Rychlicki

The Polish branch of McDonald’s Corp. has made a promotional campaign based on the issuance of the so-called “bonificards” i.e. discount cards entitling the holder to purchase certain McDonald’s products at a reduced price. Only employees and business partners were allowed to use such cards. The terms of the promotion explicitly stated that the cards cannot be resold. McDonald’s learned that cards were offered for sale or as a free bonus to other items sold on Allegro – Polish Internet auctions website.

McDonald’s requested Allegro to disclose personal data of persons engaged in the above mentioned auctions, on the grounds that these buyers and sellers violated the terms and rules of promotion, and thus McDonald’s intended to take steps to – on one hand – to deprive sellers of their wrongfully obtained benefits, on the other hand – to take away all bonificards from people who bought them. Allegro refused to provide requested data, indicating that there was no reason to assume that there was any kind of illegal action, arguing that disclosure may be classified as unlawful conduct of the controller that violates personal interests of the users and that may result in Allegro’s responsibility that is based on civil law regulations.

McDonald’s requested the Inspector General for Personal Data Protection to order Allegro the disclosure of information previously requested. The GIODO refused and pointed out that in this case the interests of McDonald’s cannot prevail over the interests of persons affected by the request. The disclosure of such data would be, in fact, too far-reaching interference with the privacy of the person concerned. McDonald’s filed a complaint against these decisions.

The Voivodeship Administrative Court in Warsaw in its judgment of 16 March 2011 case file II SA/Wa 2037/10 overruled GIODO’s decisions. The VAC held that McDonald’s has the right to know who offers promotion cards at online auctions provided by Allegro. The Court ruled that the provisions of the PPD cannot be interpreted as meaning that the disclosure of personal data of a person who offer to sell someone else’s property, violates that person’s interests. The protection of interests of one person cannot be done without prejudice to the rights of others. Especially, when such persons knew that they were trying to dispose of someone’s else things whose value was measured in money (the value of the Company’s products that were available in the promotional terms). The court ordered to reconsider the case, where the GIODO shall take into account all comments made by the VAC. The GIODO decided to file a cassation complaint.

The Supreme Administrative Court in its judgments case files I OSK 834/11 and I OSK 1137/11 agreed with the GIODO. The Court held that in the case of electronic services, personal data may be disclosed only for the purposes of criminal proceedings.

Civil law, case II Ca 26/11

May 9th, 2011, Tomasz Rychlicki

Andrzej J., a Polish farmer, ordered his 17-year-old son to put up for sale a tractor. He told him to use Allegro.pl, the most popular Polish auction website. It was one of the first auctions on the Internet for both of them. However, his son, who started the action, did not specify a minimum selling price. The auction was attended by six interested parties. The highest offer of 11.000 PLN bid by Adam S., let him to win the auction. Andrzej J. refused to hand over the vehicle, claiming that the winning price was too low. He argued that his son is minor and although he received his father’s command, he exceeded the scope of the mandate, because despite the clear indication, he did not select in the options, the minimum price that should be set to 38.000 PLN (it was set at the last day of the auction at the suggestion of the mother). Andrzej J. claimed that he was not aware that such transaction can be concluded below the minimum price, and he hadn’t the possibility of withdrawing the offer. He argued that he acted under the influence of the error in fact, therefore, he should be released from the conclusion of the agreement.

The District Court in Łuków held that the claim for a vehicle at the price of 11.000 is fully justified. The Court pointed to the wording of Article 70¹ of the Civil Code.

Article 70¹. § 1. A contract may be concluded by means of an auction or tendering.
§ 2. An announcement of an auction or tendering shall specify the time, place, object and terms of the auction or the tendering, or to indicate how such terms are available.
§ 3. The announcement and the terms of the auction or the tendering may be changed or revoked only when it has been stipulated in their contents.
§ 4. Since the moment of making the terms available and making the bid respectively by an organizer and the bidder according to the announcement of the auction or tendering, they shall proceed in accordance with the provisions of the announcement, likewise the provisions of the terms of auction or the tendering.

In this case, the terms for auctions and the procedures for the conclusion were established by Allegro in its Terms of Service, which were both accepted by the seller and the buyer. According to the terms of Allegro, the seller can make changes to the content of the auction only in three minutes after the auction begins. The Court ruled that the son of Andrzej J. did not act as his proxy, but as a messenger, whose role was purely technical, he had to enter some data on an auction website, therefore he could not be regarded as representative based on provisions of the Polish Civil Code.

Article 95. § 1. Barring the exceptions specified in statutory law or resulting from the character of a given act in law, an act in law may be performed through a representative.
§ 2. An act in law performed by a representative within the limits of the authorization shall have direct effects for the person represented.

Article 96. The authorization to act on behalf of another person may be based on statutory law (statutory representation) or on the declaration by the person represented (power of attorney).

The District Court in Lublin in its judgment case file II Ca 26/11 upheld a lower court’s judgment. See also “Civil law, case I ACa 295/10“.

Civil law, case I ACa 295/10

July 27th, 2010, Tomasz Rychlicki

Allego.pl is a very popular Polish auction website. Michał Z. is one of many of its users. He was acting on behalf of his father’s company when he placed an auction. When setting the option “buy now”, he allegedly by mistake underpriced the item he was trying to sell. The item was valued for 74.000 PLN but Michał Z. set the “buy now” price for 7.400 PLN. Alicja W. decided to buy this item and she choose “buy now” option. She received an e-mail confirming her purchase from Allegro.pl

Michał Z. tried to void the contract, arguing that he has made a mistake when setting a price for this auction. When Alicja Z. came for the auctioned item, its owners have refused to release it. They proposed purchase of another one – in a promotional price of 50.000 PLN. Alicja Z. did not agree to a subsequent proposals, including 20.000 PLN compensation and she sued.

The District Court in Radom dismissed her claim. The Court ruled that the parties came to the conclusion of the contract of sale, but Michał Z. has successfully evaded of legal consequences of his offer, because it was made by error of fact. It was clear for the Court that the value of the item was given incorrectly, and it did not correspond to real costs of such products. The Court ruled that Alicja W. was certainly aware of this price disparity. She could have acquired such knowledge even from the website of the seller because the address was included in the offer. Alicja Z. appealed.

The Appellate Court in Lublin in its judgment case file I ACa 295/10 held that if the declaration of will has been made to another person, the evasion of legal consequences it permissible only if the error was caused by that person, even if such person was not guilty, or if such person was aware of the error (for example such knowledge was acquired during the negotiations) or the error could easily be noted by such person. According to the Court, none of these conditions has occurred in this case. The Court ruled that it cannot be assumed that someone must be aware of the fact that the price is wrong, and that it was possible for such person to find out the actual price.

The Appellate Court ruled that the District Court overlooked the fact that the auction was placed on Allegro website, which has its own rules (TOS) of trading/auctioning. The item was only available at the auction with the “buy now” option, in which the seller puts the goods at a fixed, predetermined price. The contract between the seller and the buyer takes upon confirmation of the “buy now” option, as the buyer is automatically notified. The terms of such auction cannot be changed in relation to the buyer who has made an offer, before such change was made. The seller, who choose this type of auction, is bound by the rules and cannot change the conditions of the transaction after a bid by the buyer. The Appellate Court sent this case back for reconsideration.

Tax law, case I SA/Op 239/08

May 28th, 2009, Tomasz Rychlicki

The Voivodeship Administrative Court in Opole in its judgment of 4 March 2009, case file I SA/Op 239/08 ruled that when performing commercial transactions over the Internet in an organized and continuous manner, the taxpayer shall register such business and pay the taxes by virtue of performing such activity. Conducting a business with the use of internet networks is associated with the same tax obligations as operating business in the traditional manner, which includes, in particular the pursuit of tax revenue and expenditure accounts in such a way as to determine the income (loss), the tax base and amount of tax due for the fiscal/tax year.

Personal rights, case II CSK 539/07

March 27th, 2009, Tomasz Rychlicki

The company QXL Poland sp. z o.o. is the owner of the allegro.pl auction website which removed the user account of a natural person (Cezary O.) who was using the nicknames CezCez, 2cez, 2xcez and espia. The company presented different reasons for its decision to remove the account and tried to justify such action by putting various statements about CezCez on its forum website “Cafe Nowe Allegro”. CezCez did not agree with QXL’s statements and sued. The court of first instance agreed with Cezary O.’s arguments and ruled that QXL Poland make a statement of apology as follows

Allegro.pl wishes to apologize to CezCez for using comments by one of its employees which publicly appeared on the New Cafe Allegro on 17 January 2003,– wording that implied CezCez was dishonest, he lies, he is selfish and that he pursues his own self-interest. These actions and comments affected the good name of CezCez, which was not the intention of QXP Poland.

The above statement was to be published on the Allegro.pl website but both parties appealed. The Appellate Court in Lodz did not share the conclusions of the court of first instance that the username (a nickname) used in internet services is personal right/interests (i.e. intangible personal property) eligible for protection under Articles 23 and 24 of the Civil Code – CC – (in Polish: Kodeks Cywilny) of 23 April 1964, published in Journal of Laws (Dziennik Ustaw) No. 16, item 93, with subsequent amendments.

Article 23
The personal interests of a human being, in particular to health, dignity, freedom, freedom of conscience, surname or pseudonym, image, secrecy of correspondence, inviolability of home, and scientific, artistic, inventor’s and rationalizing achievements, shall be protected by civil law independent of protection envisaged in other provisions.

Article 24
§ 1 The person whose personal rights are threatened by someone else’s action, may require the desist of that action, unless it is not illegal. In the event of the infringement one may also require, the person who committed the violation, to fulfill the actions necessary to remove its effects, in particular, to make a statement of the relevant content and appropriate format. According to the conditions laid down in the Code one may also require monetary compensation or payment of an appropriate amount of money for a social purpose indicated.
§ 2 If as the result of a breach of personal rights one has suffered pecuniary prejudice, the aggrieved person may claim compensation based on general principles.
§ 3 The above shall not prejudice the entitlements provided by other regulations, in particular in copyright law and the patent (invention) law.

The Appellate Court did not agree with the arguments that the user name (a nickname) has parallels with a pseudonym. The case went to the highest court in a further appeal as a cassation complaint. The Supreme Court of Republic of Poland in its judgment of 11 March 2008 case file II CSK 539/07 dismissed the case for procedural reasons. However, the SC did not agree with conclusion of the Appellate Court with regard to protection of nicknames or usernames in the digital environment. The court noted that a username fulfils a variety of functions. First, the creation of a username is a prerequisite to registering on the allegro.pl website in order to obtain its own account and so participate in auctions. A person using such a nickname may be a buyer or a seller. Secondly, a username allows a person to log into Allegro.pl website. In the process of logging in, the user is given a pair of identifiers, such as a username and password. Thirdly, the username/nickname identifies the individual in question in the online environment, in this particular case, in the environment of people using Allegro.pl services. The individual is therefore recognised as a user using a specific nickname. The Supreme Court could not agree with the position of Court of Appeal that the nickname is purely a technical issue used to personalise the operation. On the contrary it argued, the username/nickname defines and characterises the person who uses such an auction site, bids on it, is the party to a contract of sale, issues comments or is involved in correspondence with other users. The Court found that in some cases, participations in the auction website by a user using a specific name can be a source of information for other participants who know that this user typically takes part in an auction of that type, bids only to a certain amount of money, only on certain days, in a certain way, does not compete with users using specific names, that the user is honest, efficient and immediately carries out transactions, etc. The Supreme Court also ruled that a username identifies a specific natural person. A username consists of a series of signs and letters, and there are no counter-indications that a person who created his or her own username could use his or her own name, surname, artistic pseudonym, pen name, or alias or it could even be a natural person who is the agent and uses the company name (the firm) under which it operates its business. It appeared to the court that in the assumption of a username by a person rather than his or her own name, the pseudonym (which has so far been used as an example in artistic activities) is meant as the assumption of a nickname in order to allow for individualisation of that particular person. The word “nickname” comes from the Greek language (“pseudonymos”–bearing a false name, falsely named) and it means a first name, last name or another name which someone uses to conceal his real name or surname. The court found irrelevant the motivation of a person who takes a nickname which is used as a pseudonym only in the “internet environment” or that the nickname may only be associated with the activities of that particular person carried out within the scope of services offered by Allegro.pl, since it may also have a broader meaning and go beyond the services of Allegro.pl. Consequently, the court noted that a username is subject to legal protection on the same basis on which protection is granted for any name, pseudonym or firm name, under which a person has established its business (whether it is a company name or that of a private person). At the same time, the court found no reason to treat a username/nickname as a separate personal right.

Civil law, case II C 903/06

August 2nd, 2007, Tomasz Rychlicki

The Regional Court in Warsaw in its judgment of 6 February 2007 case file II C 903/06 held that Internet auctions organized by the popular websites such as allegro.pl and ebay.com are auctions as defined in article 70 ¹ of the Civil Code. Auction’s closing within the meaning of the Civil Code is a statement generated by the system or by auction’s organizer and sent to the bidder which has submitted the best offer. This message should be treated just as a statement of will of the seller who accepted the offer. It means that the contract takes effect not due to the passage of time, but precisely upon a receipt by the bidder of seller’s statement of acceptance of his offer.