In its December 2022 preliminary ruling, the Court of Justice of the EU found that Amazon’s practice of displaying ads for counterfeit Christian Louboutin shoes makes the e-tailer liable for online trademark infringement. Savvy Kaushal provides a summary of the case.
The tricky question of who is responsible for enforcing trademark rights on online marketplaces, such as Amazon.com, came before the Court of Justice of the EU (CJEU) in December last year. Iconic shoe brand Christian Louboutin had sued the global e-tailer for trademark infringement in Belgium and Luxembourg after discovering that Amazon.com frequently displayed adverts for counterfeit copies of its red-soled shoes.
In its claim, Louboutin alleged that Amazon's advertising services could lead consumers to believe that the adverts came from Amazon, rather than third-party sellers. The case was referred to the CJEU for a preliminary ruling to determine whether and when Amazon is directly liable for trademark infringement resulting from third-party advertising.
Online trademark infringement: Factors to consider
In its ruling, the CJEU provided a list of factors to consider when determining whether the operator of an online marketplace is liable for trademark infringement. These factors include:
- how the adverts are presented;
- whether the average consumer might be led to believe that the operator is marketing the infringing goods in its own name and on its own account; and
- whether that operator makes a clear distinction between the marketplace’s services and the use of the trademark for commercial purposes.
The CJEU found that Amazon consistently presented adverts for the shoes on Amazon.com using its own logo, which could lead consumers to believe that the products were marketed for and by Amazon. Moreover, the fact that Amazon provides additional services to third-party sellers, such as responding to user enquiries and handling returns, contributed to the appearance of a link between Amazon and the products being sold on Amazon.com.
Although the CJEU did not conclude that Amazon is guilty of trademark infringement (since such a definitive conclusion is never given in a preliminary ruling), the ruling does make online marketplace operators like Amazon more susceptible to direct liability for third-party sales of counterfeit products on their platforms. It will now be for the national courts in Belgium and Luxembourg to decide whether Amazon is guilty of online trademark infringement.
Online trademark infringement: How and when to act
Crucially, the CJEU ruling should also make it simpler for brand owners to pursue online trademark infringement claims against large operators such as Amazon, as opposed to having to pursue individual counterfeiters as is the case currently.
Online marketplaces that use hybrid models, such as Amazon.com, may need to reconsider their website layouts to ensure that their own products are clearly distinguished from those sold by third-party sellers. This will enable customers to recognise the source of advertisements and the actual seller of the products.
In the meantime, brand owners are advised to update their online brand protection strategies to make best use of this opportunity to enforce their trademark rights on e-marketplace platforms. For advice and assistance, please speak to your Novagraaf attorney or contact our specialist brand protection team below.
Savvy Kaushal works in the Knowledge Management department at Novagraaf Amsterdam.