CJEU judgment: Trademark infringement in ecommerce platforms (Coty vs. Amazon)

In its judgment of April 2 (Coty Germany, case C-567/18), the Court of Justice of the European Union (“CJEU”) ruled on whether, by offering and storing products on behalf of a third party, Amazon or a subsidiary are using the trademark requiring the owner’s authorization. The preliminary ruling request was submitted by the German Supreme Court.

One of Amazon’s most popular services is its marketplace, through which third parties can offer and sell their products. Sellers can also contract the storage and delivery of their products to buyers with Amazon. In that case, Amazon group companies store products on the third party’s behalf and use external contractors to deliver them.

The facts of the case are presented below. A third-party seller offered Davidoff products in the Amazon marketplace. An Amazon subsidiary, Amazon FC Graben, stored the products. According to Coty (the claimant), the products had not yet been marketed in the European Union under their owner’s authorization, and so the Davidoff trademark, of which Coty is the licensee, was being infringed.

Coty started court proceedings against Amazon Services Europe and Amazon FC Graben, holding them directly liable for the trademark infringement. The Supreme Court referred a preliminary matter to the CJEU. It essentially asked whether “a person who, on behalf of a third party, stores goods that infringe trademark rights, without being aware of that infringement, must be regarded as stocking those goods to offer them or put them on the market” in the sense of the EU’s trademark regulation “if that person does not itself pursue those aims” (section 30).

Among other arguments, the CJEU highlights that, under its own case law, for a third party’s “use” of the trademark to be relevant in terms of infringement, the third party must use the trademark “in its own commercial communication” (section 39). The CJEU has already stated that, in an ecommerce platform, it is the sellers using the platform that use the trademarks and not the operator of that electronic market (section 40). Likewise, the CJEU has already ruled that a warehouse-keeper does not necessarily use the trademark of the stored goods (section 42).

To rule on this preliminary matter, the CJEU argues that, for there to be a “use” by the warehouse-keeper, it must intend to offer or market the products. In this case, neither Amazon nor its subsidiary offered the sale of the products or marketed them. These activities were performed by the third-party seller. Therefore, they are not “using” the trademark and have committed no infringement.

However, the judgment includes an important caveat: “the possibility of considering that [Amazon and its subsidiary] themselves use the sign in connection with bottles of perfume that they stock, not on behalf of third-party sellers, but on their own behalf or which, if they were unable to identify the third-party seller, would be offered or put on the market by those parties themselves” (section 48).

The CJEU indicates that this conclusion does not preclude the possibility of the warehouse-keeper being held indirectly liable and, therefore, the liability exemption system regulated in the e-Commerce Directive (article 14) must be taken into account. Under that system, an online intermediary service provider can only be liable for unlawful conduct if, once it becomes aware of the unlawfulness, it does not take prompt action to remove or prevent access to the content in question. The CJEU does not examine whether a platform such as Amazon is included in the scope of article 14 of the e-Commerce Directive, as the German Supreme Court did not raise that issue.

Authors: Ane Alonso and Miquel Peguera