Unauthorised Louboutins sold by third parties on Amazon: the CJEU rules on platform liability
The European Court of Justice, in its ruling of 22 December 2022 in joined cases C- 148/21 and C-184/21, has clarified whether and under what circumstances there can be liability, on the part of the operator of an online sales platform, for trademark infringement perpetrated by third-party sellers within the platform. The order was issued following two preliminary rulings, filed by the Courts of Luxembourg and Brussels, on the interpretation of Article 9(2)(a) of European Regulation No. 2017/1001.
The parties involved in the two disputes were the fashion designer Christian Louboutin, whose most successful product is the well-known red-soled high-heeled shoes, and Amazon, an online sales giant through whose platform both its own and third-party products are offered on the market. Louboutin complained that shoes were regularly sold by third parties, on the Amazon platform, without its consent, in violation of its own trademarks on the red sole and, for that reason, requested that Amazon be held liable for the infringement and ordered to pay damages. Specifically, Louboutin invoked Article 9(2)(a) of the aforementioned Regulation, according to which the owner of a registered trademark has the right to oppose the use in the course of trade, by unauthorised third parties, of identical signs for identical goods. The CJEU focuses precisely on what constitutes such commercial 'use'.
According to Louboutin, Amazon was directly liable for the trademark infringement because, although it did not sell the shoes in question, it played an active role in the commercial use of the infringing sign, given that: a) within its own platform, Amazon publishes sales advertisements for products not only belonging to third parties but also its own products, always applying its own logo, such that it is difficult to differentiate a product sold by Amazon from one sold by a third party; b) Amazon offers third-party sellers additional services, such as directly taking care of the shipping of their product to buyers, thus playing an active role in the sales process.
Amazon defended itself by denying that it could be held liable for the infringement of a trademark carried out by third-party sellers: according to Amazon's defence, the fact that a service provider creates the technical conditions necessary for the use of a sign infringing a registered trade mark, and receives remuneration for that activity, does not imply a “use” within the meaning of Article 9 of Reg. 2017/1001. In support of this argument, it attached several case law precedents, including the Judgments of the same CJEU in the Coty Germany case (C-567/18), in which it was denied that the storage service rendered by Amazon constituted use of the trade mark within the meaning of European law, and in the L'Oréal and Others case (C-324/09), in which the liability of the eBay platform operator for ads published by third-party sellers was denied and it was clarified that the presence of the eBay logo in the ads did not imply liability for their content.
The two national Courts handling those merits proceedings therefore suspended them and referred the matter to the CJEU.
The CJEU clarified that there is a "use in the course of trade" of another person's trademark in the presence of active conduct and control, direct or indirect, over the act constituting the use, such as to enable the person in question to put an end to the infringing conduct. It is true that, as indicated in the L'Oréal and Others ruling (C-324/09), the mere creation of the technical conditions necessary for the use of a sign and receiving in exchange a financial consideration does not constitute use of the sign under Article 9 Reg. 2017/1001; however, the cases differ in that Amazon, unlike eBay, offers on its platform not only products referable to third parties but also its own products, making all the ads part of its commercial communication and also offering complementary services useful for the marketing of the products. As instead regards the Coty Germany ruling, the CJEU emphasised how, in that case, Amazon was not aware that the goods infringed other people's trademark rights and did not take care of the shipping of the goods, which was handled by external third-party service providers.
The CJEU therefore indicated the principles to be followed by the two referring courts: in order to determine the liability of the platform operator, it is necessary to verify whether the published advertisement may lead the informed and reasonably observant consumer to believe that there is a link between the services offered by the operator and the sign in question. In other words, the operator will be liable whenever the consumer may be led to believe that it is the operator itself that markets in its own name and on its own behalf the goods in which the sign infringing the trademark rights of a third party is present. The fact that the operator of the platform sells, within it, both its own and third party products by presenting the advertisements in a uniform manner, showing at the same time all the advertisements with its own logo inside, and also offering additional services, such as, for example, the service of shipping the goods on behalf of the sellers, can clearly make it difficult to distinguish the origin of the goods and therefore mislead the consumer.
Following this interesting ruling by the European Court of Justice, we can only wait to see what the two national courts will decide regarding Amazon's liability in those specific cases.
