Trade Marks
Posted on 29/5/2020

Online marketplaces and the storage of goods

Did the sale of infringing Davidoff perfume (by a third party) on Amazon’s marketplace constitute infringement by Amazon itself?

In a recent decision of the CJEU, the court was asked to decide whether the sale of infringing Davidoff perfume (by a third party) on Amazon’s marketplace would constitute infringement by Amazon itself.

Background

Coty Germany GmbH, (the claimant) is a perfume distributor and a licensee of the EU trade mark for DAVIDOFF. Amazon is an online marketplace which allows third parties to sell their products directly to customers via the marketplace. In this case, the contract of sale is between the seller and the buyer, and it does not include Amazon.  Amazon also offers a service whereby it can store the third parties’ goods in its warehouse and dispatch them when orders are received (‘Fulfilment by Amazon – FBA’). Coty’s claim related to the latter service and it alleged that by storing and dispatching infringing bottles of “Davidoff Hot Water” perfume on behalf of a third party seller, Amazon infringed its rights in the trade mark.

Having gone through the German courts, the case was eventually referred to the CJEU for interpretation of the relevant law, namely Article 9 of the EU Trade Mark Regulation. The German Federal Court referred the below question to the CJEU:

Does a person who, on behalf of a third party, stores goods which infringe trade mark rights, without having knowledge of that infringement, stock those goods for the purpose of offering them or putting them on the market, if it is not that person himself but rather the third party alone which intends to offer the goods or put them on the market?’

The decision

Infringement under Article 9 occurs when a trade mark is put to use in the course of trade. The court had to decide whether merely storing the goods could be construed as ‘use’. The relevant law, namely Article 9(3) of the Regulations provides examples of uses which could constitute infringement namely “offering the goods, putting them on the market or stocking them for these purposes under that sign, or offering or supplying services thereunder”

In previous decisions the courts have stated that online marketplaces could be held liable for infringement if they play an ‘active role’ in the promotion of the goods or have access to information which indicates that the listing was of unauthorised products and failed to remove it within a reasonable period (L’oreal v eBay C‑324/09).

Although Amazon’s FBA service entails the company handling all labelling, packaging, delivery and returns, the CJEU took a narrow view of these activities, essentially reducing them to ‘mere storage’. The CJEU stated that storage would not constitute trade mark infringement as long as the storage provider does not intend to offer the goods for sale itself.

Conclusion

This decision will undoubtedly be welcomed by online marketplaces as it reduces their policing burden. However, it does leave some uncertainty about how involved an online marketplace needs to be to be considered ‘active’; this line could quite easily be crossed.

If you are concerned about infringement of your trade mark online, please get in touch for further advice.