Can Amazon be liable for third parties’ advertising infringing products on Amazon’s online marketplace? Specifically, can Amazon be liable for third parties advertising for sale fake Louboutin red soled shoes on Amazon, considering Louboutin has an EU trade mark (see here) protecting its iconic red colour applied to the sole of a shoe?
This was the question raised when Louboutin brought trade mark infringement actions against Amazon in both the Luxembourg and Brussels courts. In turn these courts asked the EU Court for guidance as to Amazon’s potential liability for trade mark infringement.
Background to the case
Part of Amazon’s business model is the sale of its own products alongside the products of third parties (which could unintentionally include counterfeiters), without obvious delineation between the two.
Amazon also offers assistance to third party sellers in terms of advertising, storage, shipping, and returns. Certainly the convenience of ordering from home and receiving products rapidly (sometimes the next day) means that Amazon is an enormously popular supplier and a big rival to the traditional brick and mortar shops.
In recent years the EU Court appears to have taken a practical approach in its assessment of trade mark infringement. The argument being that it would be very difficult for an online marketplace to monitor what is being offered for sale by every third party selling on its online marketplace. For example, in April 2020 the EU Court decided that Amazon was not “using” an identical mark “DAVIDOFF” for identical goods (perfume) on its platform. This was because Amazon had been unaware of the trade mark infringement and it was the third party (rather than Amazon as stocker) offering the goods for sale (see our summary here).
Was Amazon using the Louboutin trade mark?
In this most recent case, however, Louboutin claimed that its trade mark was infringed by Amazon using an identical sign (red soled shoes which were identical to Louboutin’s EU trade mark) for identical goods (high-heeled shoes) without the consent of Louboutin, the trade mark owner.
The key point was whether Amazon was “using” the mark by allowing the advertisements of the counterfeit red soled shoes by third parties?
EU trade mark law provides that “use” includes active behaviour, direct or indirect control of the use, and use as an integral part of the relevant party’s own commercial communications.
In the case before the EU Court the “commercial communications” depended on whether a reasonably informed and observant user would make a link between Amazon’s services and the identical sign (the counterfeit red soled shoes). For this purpose, importance was placed on the following:
Amazon presented advertisements for products being sold by Amazon in the same way as – and alongside – products being sold by third parties. The Amazon logo was used in relation to both types of advertisements. Therefore it could be difficult for consumers to easily tell which advertisements concern the sale of goods by Amazon and which were by third party sellers
Amazon promoted products of third parties by including them as “best sellers” and other such terms
Amazon dealt with questions from consumers, as well as dealing with storage, shipping, and returns – this could imply that such products were products being offered for sale by Amazon itself.
Given the above points, the EU Court decided that Amazon could be “using” the identical signs (the counterfeit red soled shoes) by advertising on its platform such third party products and could be liable for trade mark infringement. However, whether Amazon was liable for trade mark infringement was a matter to be determined by the referring Brussels and Luxembourg courts.
What this means for online marketplaces
As a result of the Louboutin judgment, online marketplaces will have to clearly differentiate their own offers for sale from those of third parties. This is likely to entail more work for online marketplaces and, as a result, may see online marketplaces increasing their charges to third party sellers.
However, the judgment should mean fake products should no longer appear in the same way as products which platforms like Amazon are themsevles selling, which is also good news for brand owners.
So far as the UK courts are concerned, the judgment of the EU Court will only be of persuasive authority in the UK following Brexit. However, in May 2022 the English Court of Appeal did decide that there was use by Amazon of the “BEVERLY HILLS POLO CLUB” marks in the UK/EU (see our article here).
As such given the Beverly Hills Polo Club judgment and this judgment involving Louboutin, there is a clear trend towards making online marketplaces more accountable for what they are selling.
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