Can Amazon be directly liable for counterfeit goods sold by third party sellers on its platform? In particular, will it be liable for trade mark infringement where ads for the infringing goods have been displayed on Amazon’s site and/or where Amazon ships the goods? These are the issues covered by questions referred to the Court of Justice of the European Union (CJEU) in a Luxembourg case brought by the well-known high-end shoe brand, Louboutin.
Louboutin holds EU and Benelux trade mark registrations for the famous red sole found on Louboutin shoes. Various goods infringing those marks have been sold via Amazon, not by Amazon itself but by third party sellers. It is well-established that, if an online marketplace merely creates the technical conditions necessary for the use of an infringing sign, that in itself does not make the marketplace liable for infringement. However, Louboutin argues that Amazon’s role goes far beyond this, since Amazon was involved in many aspects of the sales, from assisting in the preparation of ads for the goods and displaying those ads on its site, to stocking and shipping the goods. This, Louboutin argues, makes Amazon directly liable for trade mark infringement when infringing goods are sold via its platform.
The Luxembourg court found that, despite the abundant case law from the CJEU on online marketplaces, there were no rulings covering this exact issue. It therefore referred various questions to the CJEU (the full text of which can be seen here). This new referral follows the CJEU ruling in the Coty Germany case last year in which the German court had referred a question relating to a very similar factual scenario to the Louboutin case. However, there was a lot of criticism around the wording of the question referred in the Coty case, with many saying that it was too narrow and did not accurately describe the active role played by Amazon. The Opinion in the Coty case was given by Advocate General Campos, who concluded that there could be liability on the part of Amazon. However, the CJEU declined to follow his Opinion and confined itself to answering the very narrow question before it, with the result that Amazon was not directly liable for infringement.
The questions now being referred in the Louboutin case contain a much broader description of Amazon’s activities, including aspects relating to ads for the goods and shipping, so it will be very interesting to see whether this leads to a different outcome to the Coty case. There are certainly hopes that the ruling will bring some clarity as to exactly how far an online marketplace can go in assisting sales of infringing goods before becoming liable for infringement. One to watch!