The Court of Justice of the European Union (CJEU) has recently ruled that online retailer, Amazon, may be liable for trade mark infringement as a result of advertising counterfeit Christian Louboutin shoes on its platform. It is now up to national courts to decide.
Both parties are well established in the retail sector. Mr Christian Louboutin (Louboutin) is a renowned French designer who is best known for high-heeled shoes with an iconic red sole. Amazon is an online marketplace which sells various types of goods globally through its website.
Goods are sold by Amazon both directly (in its own name) and indirectly (i.e. by providing a sales platform for third party sellers), known as a ‘hybrid model’. Orders may be fulfilled by Amazon distribution centres or by the third-party sellers directly.
Louboutin has held Benelux and EU trade marks since 2005 and 2016 respectively. In 2019, Louboutin brought claims against Amazon in Belgium and Luxembourg, arguing that Amazon was breaching trade mark rights by enabling third-party sellers to offer “identical” products without their consent.
The cases were combined and referred to the CJEU to consider, with Louboutin seeking a declaration that:
Amazon maintained that its operating method is not significantly different from that of other marketplaces, such as eBay, and that the fact that Amazon’s logo is included in the advertisements of third-party sellers does not mean that it adopts those advertisements.
Earlier cases had established that online marketplaces could not be directly liable for advertisements and/or products of third parties. Here the CJEU has done a U-turn and said “yes”, online marketplaces like Amazon can be held liable for the advertisement of counterfeits by third parties that infringe registered trade marks. This liability can arise where there is a confusion as to the source of the advert. i.e., where users have the impression that it is the marketplace (Amazon) which is selling the goods when making a purchase.
Some factors which may establish a link between a marketplace and a trade mark are:
Marketplaces which only sell third party products (for example eBay) are untouched by the decision but this judgment may well cause more brands to challenge Amazon in cases with similar facts as the parameters of what is likely to attract liability have been made clearer.
It is also likely to act as a warning to marketplaces which mix their own offerings with that of third parties. Other online marketplaces which have similar operating systems may now be rethinking their website design so that customers can more clearly distinguish between third party and own brand products and therefore easily identify the origin of the goods they are purchasing.
Whilst persuasive, the decision is not binding on the UK. It is, however, binding in the EU for future cases, and it certainly clears the way for Amazon to be held liable for advertisements. It will be interesting to see how the national courts in Luxembourg and Belgium decide their cases. We will keep you updated.