Amazon Trade Mark Case Highlights Dangers of Online Selling

You may recall that we recently provided an alert with some advice on the potential pitfalls associated with moving towards online sales, which many businesses are doing during this period of uncertainty, particularly in respect of policing counterfeit products and protecting your brand reputation. A recent decision of the European Court of Justice (CJEU) on the liability of Amazon for trade mark infringement perfectly illustrates these pitfalls.

Amazon was sued in Germany by Coty, the multinational beauty company, in respect of the selling of counterfeit perfumes on the Amazon platform bearing Coty trade marks. Coty subsequently sought to sue Amazon on the basis that Amazon offer a service where they take care of storage of the product, delivery to customers, customer service and returns handling. Coty alleged that this made Amazon liable for infringement of their trade marks and the German courts sought a ruling from the CJEU clarifying whether a third party who stores goods which infringe trade marks, without having knowledge of that infringement, could subsequently be liable for it.

Unsurprisingly, given the wording of the referral from the German courts the CJEU has ruled in Amazon’s favour that they were not liable for the infringement of Coty’s marks. The CJEU said that to be liable Amazon would need to pursue the aim of offering the goods or putting them on the market. It was held that Amazon’s activities did not meet this threshold.

The most important consideration here, and the reason Amazon were found not to be liable, was the inclusion in the question of the German court of Amazon not having knowledge of the infringement. Had Amazon been deemed to have knowledge that they goods they were storing infringed Coty’s marks then the outcome would almost certainly have been different.

On the face of it this seems to be a big victory for Amazon, however it should not be an issue for online sellers if they are proactive in monitoring and protecting their rights. If you come across such issues and you make Amazon, or any other online platform aware of your rights by way of a takedown notice, they should take action as they can be liable for the infringement from the date you notified them of your rights. Takedown notices are a quick and inexpensive way of enforcing your rights when selling online.

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