Author: Iona Barron

Is Amazon liable for infringing third party rights?

Amazon could be held liable for trademark infringement in relation to advertisement of fake Louboutin shoes that were placed on its website the Court of Justice of the European Union (CJEU) has ruled. 

The French fashion designer, Christian Louboutin, brought proceedings against the American multinational company Amazon concerning the ‘red-sole’ mark (which has been trade marked by Christian Louboutin) and whether the marketplace, Amazon, has liability for allegedly infringing Christian Louboutin’s IP rights. The main question posed is whether the operator of a hybrid marketplace can be held responsible for infringement when it advertises and delivers infringing products from third parties. The proceedings involve the interpretation of Article 9(2)(a) of Regulation 2017/1001. Article 9(2)(a) states that:
‘’Without prejudice to the rights of proprietors acquired before the filing date or the priority date of the EU trademark, the proprietor of that EU trademark shall be entitled to prevent all third parties not having his consent from using in the course of trade, in relation to goods or services, any sign where:

The sign is identical with the EU trademark and is used in relation to goods or services which are identical with those for which the EU trademark is registered’’

The Background
Before taking the matter to the CJEU, Belgium and Luxembourg national courts referred the matter to the Attorney General of the CJEU. They held that "an online intermediary cannot be held directly liable for infringements of the rights of trademark owners taking place on its platform as a result of commercial offerings by third parties". The Attorney Generals opinion agreed with that of previous case law. He held this on the basis that an average consumer would not perceive the signs displayed on the advertisements of third party sellers as an integral part of amazons commercial communication – particularly as the advertisements always stated whether or not the goods in question were sold by a third party or directly by amazon.

The Decision
The CJEU on 22nd December 2022 concluded that an operator of an online marketplace which integrates both its own sales platform, and the sale of third-party goods can be held liable for third party advertisements that infringe a third-party trademark if the average consumer would be confused as to the origin of the advert. Broken down, the CJEU ruled that if a reasonably informed and observant user formed a link between the services provided by the marketplace operator (Amazon) and the trademark (Louboutin’s red sole trademark Pantone code 18-1663TP or “Chinese red”) it may be seen as an infringement.

• Provisions of an additional service to a third-party seller, such as storage, delivery and advertising.
• The marketplaces own logo on the distribution materials, even if the distribution is of third-party products (e.g. amazon packaging).
• Displaying advertisements for the third-party products at the same time as the operators own products
•  Using the same uniform method of displaying products available on the platform making it indistinguishable as to whether it is a third party product or a own product.

The CJEU ruling is not to be mixed up with a finding of infringement by Amazon. The case will ultimately be for the referring courts to decide and be passed back to Belgium and Luxembourg national courts for the final judgement, based upon the ECJ’s guidance given.
Post Brexit, this decision is not binding in the UK. However, it does open doors making it easier for brand owners to bring claims against large companies such as Amazon rather than individual counterfeiters (who can be harder to bring claims against as they are harder to track down and pockets aren’t as deep). It leaves operators of hybrid business models (such as Amazon and E-bay) more vulnerable to direct liability of those selling counterfeit products on their sites.