What could stop the on-line sales of illegal goods in times of COVID-19? Certainly not the ECJ decision in Amazon / Coty
In its decision of 2 April 2020 in the case C-567/18, the European Court of Justice (ECJ) held that Amazon is not legally liable in case of storage of counterfeit goods.
Background and issue
The plaintiff, Coty Germany, distributes perfumes and holds a licence for the EU trademark Davidoff. Coty Germany claimed that two Amazon companies infringed its trademark rights by storing infringing bottles of “Davidoff Hot Water” perfume. The bottles of perfume were not sold by Amazon but by third-party sellers.
The dispute was brought before the Bundesgerichtshof (BGH – Federal Court of Justice, Germany) on points of law.
The BGH asked the ECJ to interpret the EU trademark regulation and to ascertain whether a company which, on behalf of a third-party seller, stores goods which infringe trademark rights while unaware of the infringement, itself uses that trademark.
While there is no definition of the word “use” in EU trademark legislation, the ECJ quoted previous case law and held that the term “use” in EU trademark law involves “active behaviour and direct or indirect control of the act constituting the use”. In order for the use to be considered as an infringement of the trademark by the company providing the storage, that company must therefore pursue, like the seller, the aim of offering the goods for sale or putting them on the market.
The ECJ held that the two Amazon companies concerned did not themselves offer the goods for sale or put them on the market and that the third-party seller alone pursued that aim. The two Amazon companies have thus not made “use” of the trademark and should therefore not be held liable.
Implications - Is it a real blow to the fight against fakes and in particular against the intermediaries?
In this case, the ECJ held that an online platform storing goods on behalf of a third-party seller without knowing that said goods infringe third-party trademark rights does not itself use (and thus infringe) the trademarks, as long as the company storing the goods does not pursue the aim of offering the goods for sale or putting them on the market.
This judgement appears to be a victory for e-commerce platforms stocking goods on behalf of sellers and bad news for actors invested in the fight against fakes.
However, it must be pointed out that the ECJ only answered a very narrow question relating solely to the scope of responsibility for online marketplaces when it comes to the storage (without knowledge) of counterfeit goods.
Yet, online platforms often provide additional services that go beyond the usual services provided by a storage company. In its opinion, the Advocate General (AG) distinguished between merely stocking the goods on behalf of a third-party seller (in which case Amazon could not be held responsible) and playing an active role in the selling and commercialization process. For the AG, where Amazon provides such complete service, liability could arise if the products were infringing trademark rights. For example, sellers can opt for the “Fulfilment by Amazon” programme in which Amazon companies undertake significant tasks which are typical of a seller (eg: preparation of the goods for delivery, delivery, advertising and promotional activities, information to customers and refund of faulty goods).
The ECJ did not assess the liability of online platforms providing such a complete service.
As the limitation of liability set out by the ECJ in the present case is restricted to a specific type of service, it remains to be seen what would be the answer of the ECJ on the liability of online platforms undertaking much broader tasks than warehousing.
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