The Court of Justice of the European Union provides some clarification on third party liability of marketplaces in trade mark infringement disputes

On 2 April 2020, the Court of Justice of the European Union (the "CJEU") delivered its judgment in Coty Germany v Amazon (Case  C‑567/18), in which the CJEU considered whether Amazon was liable for trade mark infringement for storing goods that infringed EU trade marks.

The CJEU clarified that Amazon was not using a trade mark within the meaning of Article 9 of Regulation (EU) 2017/1001¹ (the "EU Trade Mark Regulation") by storing, on behalf of a third-party seller, goods which infringe an EU trade mark when it was not aware of that infringement, as long as it did not itself offer the infringing goods for sale or put them on the market.

Background

Amazon operates the Amazon Marketplace which sellers can use to sell their products to customers. Entities in the Amazon group help sellers sell their products, for example by storing the products of the sellers and / or shipping them to the buyers.

Coty Germany ("Coty") is a distributor of perfumes and a licensee of the DAVIDOFF EU trade mark. In May 2014, Coty's test purchasers ordered a bottle of 'Davidoff Hot Water EdT 60 ml' perfume on www.amazon.de. The product was offered for sale by a third-party seller and dispatched by Amazon under the "Fulfilment by Amazon" service. The perfume bottle infringed the EU trade mark for DAVIDOFF (which Amazon was not aware of at the time) because it was not put on the market in the EU with Coty's consent. Subsequently, Coty sent a cease-and-desist letter with a penalty clause to the third-party seller.

In June 2014, Coty asked Amazon to return all the bottles of perfumes with the infringing EU trade mark which it stocked on behalf of the third-party seller. Amazon sent Coty 30 bottles of the perfume and later informed Coty that 11 out of the 30 bottles originated from a different seller. Coty asked Amazon to disclose the name and address of the second seller but Amazon refused.

Coty started court proceedings in Germany against several entities in the Amazon group, including Amazon FC Graben GmbH, which stored trade mark infringing perfume bottles on behalf of the sellers. Coty argued that by stocking goods that infringed Coty's trade mark and promoting the goods concerned on its website (www.amazon.de) Amazon violated previous EU trade mark legislation at Article 9(2)(b) of Regulation No 207/2009. Article 9(2)(b) of Regulation No 207/2009, substance of which is reproduced in Article 9(3)(b) of the EU Trade Mark Regulation, provided that:

"2.      The following, inter alia, may be prohibited under paragraph 1:…

(b)      offering the goods, putting them on the market or stocking them for these purposes under that sign, or offering or supplying services thereunder;"

Coty lost in first instance and on appeal. On further appeal, the German Federal Court of Justice made a request to the CJEU for a preliminary ruling on whether Article 9(2)(b) of Regulation No 207/2009 and Article 9(3)(b) of the EU Trade Mark Regulation must be interpreted as meaning that a person who, on behalf of a third party, stores goods which infringe trade mark rights, without being aware of that infringement, must be regarded as stocking those goods in order to offer them or put them on the market for the purposes of those provisions, if that person does not itself pursue those aims.

CJEU judgment

The CJEU focused very narrowly on the question referred to it from the German Federal Court of Justice. The CJEU confirmed that a person who only warehouses and advertises goods which infringe EU trade mark rights on behalf of a third party, but does not know about the infringement itself, does not use the trade mark within the meaning of Article 9 of the EU Trade Mark Regulation.

At the oral hearing it was argued whether the fact that the perfume bottles were a part of the "Fulfilment by Amazon" service (a service in which Amazon, without obtaining legal ownership of the goods, takes care of storage, delivery to customers, customer service and returns handling on behalf of the third party seller) changed the position on Amazon's liability for trade mark infringement. In his opinion², which is persuasive but not binding on the CJEU, the Advocate-General Campos Sánchez-Bordona argued that Amazon's role in "Fulfilment by Amazon" went beyond the "neutral" warehousing of stock to Amazon's active participating in distribution of the infringing goods. The Advocate-General concluded that such participation amounted to putting the goods on the market for the purpose of offering them within the meaning of Article 9(3)(b) of the EU Trade Mark Regulation.

The Court did not follow the Advocate-General's opinion on this point and strictly kept to the narrow focus of the preliminary reference from the German Federal Court of Justice. The Court did not consider the facts of "Fulfilment by Amazon" in its judgment and declined the opportunity to clarify what level of involvement is needed from a marketplace operator to amount to a primary infringement under Article 9 of the EU Trade Mark Regulation. However, the CJEU highlighted (without considering these points in further detail) that EU trade mark holders still may have other avenues of recourse under EU law, such as under Article 14(1) of the E-commerce Directive 2000/31/EC or Article 11 of the IP Enforcement Directive 2004/48/EC where economic operators have enabled another operator to make use of trade mark contrary to Article 9 of the EU Trade Mark Regulation.

Conclusion

The CJEU judgment brings relief to marketplaces selling third-party products where those marketplaces merely store and advertise the third-party sellers' products. Marketplaces will not be liable for EU trade mark infringement under Article 9(3)(b) of the EU Trade Mark Regulation without (i) the knowledge that such products are infringing trade mark rights or (ii) pursuing the aim of offering the infringing goods for sale or putting them on the market.

Businesses who own EU trade mark rights and whose rights are being infringed by products sold on e-commerce platforms need to bring the infringement to the attention of the seller and, failing that, the e-commerce platform. Online marketplace platforms that have actual knowledge of the trade mark infringement (which was not the case in Coty Germany v Amazon) are unable to rely on the safe harbour for third-party intermediaries under Article 14 of the E-commerce Directive 2000/31/EC and therefore could be held liable if they do not expeditiously remove or disable access to the infringing materials.