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What was in store when Coty alleged Amazon stocked infringing Davidoff perfume bottles?

You discover a third party is selling your genuine goods on Amazon in an unauthorised territory. As well as providing the platform for the third party seller, Amazon is stocking and arranging the dispatching of these goods. Can you prevent Amazon from doing so in future?

This was the question at the heart of a recent judgment of the Court of Justice of the European Union (CJEU) in relation to Davidoff perfumes being sold on Amazon.de.

First, some quick background:

  • Coty was a licensee of a DAVIDOFF EU trade mark for perfumes.
  • Test purchasers for Coty purchased Davidoff perfume bottles from https://www.amazon.de/ and discovered a third party was selling Davidoff perfume bottles that should not have been sold in the EU via the Amazon Germany website. Coty sent a cease and desist letter to the third party seller. Following this, Coty reached an agreement with that third party.
  • Coty then requested Amazon to send to it the perfume bottles it stocked for that third party seller and Coty was sent 30 perfume bottles. Another Amazon company subsequently informed Coty that 11 of the bottles were stocked for another seller. However, Coty was unable to obtain further details of this other third party seller from Amazon.
  • Coty filed a trade mark infringement claim in Germany, including requiring that the two Amazon companies stop stocking and dispatching (or causing to be stocked or dispatched) certain Davidoff perfumes in Germany that were not to be sold in the EU.
  • Coty lost twice in the German courts and so made a further appeal. The appeal court sought guidance from the CJEU.

Next, some brief law:

  • Trade mark infringement includes using an identical mark (DAVIDOFF) for identical goods (on the perfume bottle) without the trade mark owner’s consent (Coty did not consent to the goods being sold in the EU).
  • ‘Using’ a trade mark includes stocking goods for the purpose of offering them for sale or putting them on the market.

Accordingly the CJEU had to consider if a party such as Amazon could be using a trade mark (the identical DAVIDOFF mark) by stocking (on behalf of a third party) goods which infringe trade mark rights when:

  • it (Amazon) had not been aware of the infringement; and
  • it was the third party (rather than stocker, Amazon) intending to offer the goods for sale or put them on to the market.

CJEU ruling

The CJEU considered the case law. This provided that ‘use’ was “active behaviour” and only a party with “direct or indirect control” of the use could stop the use. Furthermore, it gave examples from other cases which had decided that:

  • It had been the seller, not the e-commerce platform, that ‘used’ trade marks for goods offered for sale on the online marketplace;
  • A party that only filled the final version of cans with drink, following a third party’s instructions and had no input on the can’s presentation had not been ‘using’ the trade mark; 
  • A party could be using a trade mark if goods were imported and stored in a third party warehouse for the purpose of the goods being put on sale. However, this was not necessarily the case where the warehouse owner simply provided storage services for goods which displayed another party’s trade mark;
  • Creating the necessary conditions for a trade mark to be ‘used’ and receiving payment for that service did not necessarily mean the storage provider had been ‘using’ the sign itself.

As a result, the CJEU decided that a party such as Amazon that was stocking goods (on behalf of a third party seller) which infringe trade mark rights when:

  • it (Amazon) was unaware of the infringement; and
  • it was the third party (not the stocker, Amazon) intending to offer the goods for sale or put them on the market,

was not using the trade mark and, as a result, was not liable for the infringement.

Take home points

  • Third party platforms are not necessarily off the hook. Such platforms will still be liable if they do not act quickly enough to remove infringing products where they have knowledge of the infringement (for example, it is a regular occurrence for take down notices prepared for clients to be sent to platforms in order to give the platforms knowledge of the infringement).
  • The CJEU’s decision likely would have been different if Amazon was stocking its own goods for the purpose of offering them for sale or putting them on the market (for example, goods Amazon had purchased for re-sale on its own platform).