The CJEU interprets there is no liability for mere storage of infringing products

Return to News — Monday 27 April — 2020 by Morgan Schaaf
avatar

On 2 April 2020, the CJEU issued its much-awaited ruling in case C-567/18, which deals with another chapter in the Coty vs. Amazon Saga.

On this occasion, the Court of Justice had to determine whether a company which stocks goods in infringement of a trademark (in this case, Amazon Logistics) on behalf of a third party (a company selling in Amazon marketplace), without being aware of the infringement, is making use of the trade mark for the purpose of selling or putting the infringing goods on the market within the meaning of Article 9(3)(b) of the EUTMR.

This judgment was highly expected, not only because of the relevance for the e-commerce sector of the legal issues discussed in the proceedings before the German court involved in the preliminary ruling, but also because of the controversy raised by Advocate General M. Campos Sánchez-Bordona in his Opinion delivered on 28 November 2018.

In this respect, it should be recalled that the Advocate General proposed to the CJEU to interpret the applicability of Article 9(3)(b) EUTMR (and in particular, the wording “offering the goods, putting them on the market, or stocking them for those purposes under the sign, or offering or supplying services thereunder”) in such a way that if a company (Amazon) actively contributes to the distribution of the infringing goods it stocks (as for example by storing the goods sold by a third party and delivering them to the buyers), it may be deemed to store the goods for the purpose of offering them or putting them on the market within the meaning of the Regulation. In that case, whether or not that company (Amazon) knew of the existence of an infringement should not be relevant, as according to the Advocate General, the lack of knowledge that the third party is offering or selling its goods in breach of the trademark owner's right does not exonerate the company from liability when it could reasonably be required to provide the means for detecting such infringement.

In short, the approach taken by the Advocate General would have jeopardized the mechanisms currently in place to protect marketplaces from infringements on their websites, and in particular, the applicability of the safe harbors provided for in Article 14 of Directive 2000/31/EC, i.e. the exemption from liability to which marketplaces are entitled.

Notwithstanding the above, and fortunately for e-commerce platforms, the CJEU has not taken the same approach as the Advocate General, but merely pointed out that the simple stocking by Amazon, in the context of its online marketplace, of products bearing a trademark does not constitute a violation by Amazon of that trademark right. According to the CJEU, a company who, on behalf of a third party, stores goods which infringe trade mark rights, without being aware of that infringement, must be regarded as not stocking those goods in order to offer them or put them on the market for the purposes of those provisions, if that person does not itself pursue those aims.

Therefore, and as it was done until this Judgment, the liability of e-commerce platforms as a consequence of the infringements carried out by third parties in their platforms should not be assessed on the basis of trademark law, but on the basis of other provisions of EU law. By way of example, this responsibility shall be assessed on the ground of the Directive on electronic commerce which provide in Article 14 for the possibility of acting against those intermediaries who consciously allow third parties to commit infringements on their platforms. The rules relating to intellectual property rights may also be applicable to impose the adoption of injunctions against those intermediaries who allow an infringement to take place on their websites, on the basis of Article 11 of Directive 2004/48/CE.

However, this would be the case only when marketplaces do not directly pursue the objective of offering the products for sale or putting them on the market, irrespective of knowledge of the infringement, since otherwise, the provisions of Article 9(3)(b) EUTMR would apply. In short, this may be deemed to constitute direct trademark infringement by the marketplace, regardless of the potential applicability or not of the liability exemption mechanisms.

In spite of the above, changes can be expected in the area of liability of e-commerce platforms. Indeed, one of the European Commission's priorities for this year is the Digital Services Act, which provides, among other measures, incentives for electronic platforms to be more proactive in removing infringing content. To be continued...

Share: