Details of the case
Trademark infringement is an unauthorised use of a registered trademark by any third party on any goods or services identical with the goods or services specified on the register. According to general trademark laws, a registered trademark is infringed when the infringer, without obtaining consent from the registered trademark holder, uses an identical logo or a name, for its goods or services despite the possibility of confusion by the average consumer. Trademark infringement cases can be rather complicated and expensive because the owner of the trademark must prove that the alleged infringers confuse consumers.
The question of trademark infringement has played a major role in the long-running dispute between Amazon and French luxury shoe brand Louboutin, whose high heels typically sell for at least $695. Louboutin brought two trademark infringement cases against the company, in courts in Belgium and Luxembourg in 2019, alleging that Amazon is liable for trademark infringement for regularly advertising replicas of the company's shoes on its marketplace without Louboutin's consent. In response, Amazon stated that the use of the trademark in an advertisement for the sale of infringing goods placed by a third-party seller is not attributable to the operator of the online marketplace. In its decision on the case C-148/21, in relation to the advertisement of fake Christian Louboutin shoes by third-party vendors on Amazon, the CJEU held that Amazon may indeed be held accountable for trademark infringement based on their "use" of trademarks in advertisements promoting fake third-party goods.
Online marketplaces and trademark infringement
With the rise of eCommerce, brands have been exposed to a growing number of counterfeiters trying to replicate their goods and services. Counterfeiting is the practice of producing and distributing unauthorized goods and services that closely resemble goods and services of another brand. Trademark law aims to prevent consumer confusion so that consumers can reasonably depend upon the item they purchase to retain the brand's characteristics. Therefore, a person who places a counterfeit item within the stream of commerce may be liable for committing trademark infringement. Resolving counterfeit issues can be especially difficult when trademark infringement occurs through online marketplaces. Trademark owners often face the problem of not being able to locate the person responsible. Instead, an obvious alternative is to take action against the operator of the platform on which the illegal content was posted in order to effectively stop the infringement. Despite the persistent online counterfeit issue, current legislation does not clearly indicate at what point the platform operator is liable for third-party infringements.
Tiffany vs Ebay
One of the most prominent cases against platforms that allow for counterfeit selling is the dispute between Tiffany (NJ) Inc. and eBay Inc. Tiffany, a seller of luxury jewellery items, sued eBay, an online marketplace that connected various buyers and sellers, for facilitating counterfeit selling of Tiffany jewellery under the guise of them being authentic Tiffany pieces. The court upheld that eBay’s efforts to combat the sale of counterfeit goods were not sufficient to prevent consumer confusion. Therefore, eBay is liable for false advertising insofar as eBay advertised the sale of Tiffany jewellery on its website, knowing that some of the “Tiffany” products on its website were not authentic. In 2008, the U.S. District Court for the Southern District of New York ruled in favour of eBay after a weeklong bench trial, holding that eBay was not liable for contributory trademark infringement despite its general knowledge that counterfeit Tiffany products were being sold on its site.
Amazon vs Coty
Coty is a German company supplier of luxury goods (particularly perfumes and cosmetics) and a licensee of the DAVIDOFF trademark. The company discovered that a third-party seller using Amazon was selling parallel import products that infringed Coty’s trademarks. Coty alleged that Amazon had infringed its rights in the DAVIDOFF trademark by storing and dispatching infringing goods, namely bottles of “Davidoff Hot Water” perfume, on behalf of a third-party seller on Amazon. The case bears an evident resemblance to the Louboutin dispute. The difference, however, lies in Amazon’s role in shipping products. In Coty’s case, the goods were shipped by a third party, while in the Louboutin case, they were shipped by Amazon. Following the Coty II decision, the court ruled that Amazon cannot engage its liability when it takes care of the storage but not the shipping.
The recent Amazon decision, however, affirms that online retailers can be held liable for third-party advertisements that infringe registered trademarks if there is confusion as to the source of the advert. This case is expected to encourage Amazon and similar online marketplaces to play a more direct role in the fight against counterfeiting on their platforms. It is however the responsibility of the brand owner to monitor potential infringements and challenge similar trademarks. Trademark monitoring represents a highly recommended service, ensuring the uniqueness of the brand. If you require any help with trademark monitoring or would simply like to receive professional advice on trademark protection, don’t hesitate to schedule a free consultation.