In April 2020, the controversial American internet giant Amazon was “acquitted” of infringing a German licensee’s trademark rights.
Read the article from Jyllands-Posten, Saturday, August 22, 2020 here.
As global trade increases, so does sales via the internet. Part of the trade on the internet takes place via online marketplaces, where the marketplace only mediates contact between buyer and seller. This means that it can often be difficult to distinguish between who is the buyer and seller, and who the consumer actually buys the product from.
The question in the present case concerned whether the company, through its subsidiary Amazon Services Europe (hereinafter “Amazon”), had infringed Coty Germany’s (hereinafter “Coty”) exclusive right as licensee. The license consisted of commercially using the EU trademark “Davidoff”. Coty claimed that when Amazon offered a Davidoff perfume on its German platform “www.amazon.de” on behalf of an external seller, they infringed the trademark.
Circumstances of the case
In 2014, a test purchaser from the German company Coty ordered a perfume from the website amazon.de. The perfume was of the type Davidoff Hot Water, which Coty has the exclusive right to sell in the EU. Coty was not the seller of the product and had not given its consent to the sale thereof. Therefore, Coty demanded that Amazon hand over the perfumes in question and stop using the trademark owned by Coty. After Amazon had sent 30 perfumes to Coty, it turned out that the perfumes came from not just one, but two different sellers. Coty then requested to be informed of the name and address of the unknown seller. Amazon would not comply with this request.
Coty was of the opinion that Amazon thereby infringed the trademark right in question, which is why the company brought an action before the Landgericht (the regional court of first instance in Germany), but did not succeed in its claim. The case ends up for judgment at the Bundesgerichtshof (Federal Court of Justice in Germany), which chooses to postpone the case in order to ask the EU Court of Justice a preliminary question. The question, which was intended to establish the interpretation of EU law, was as follows:
“Is a person who stores goods that infringe a trademark right for a third party without knowledge of the infringement in possession of the goods in question for the purpose of offering them for sale or marketing them, when it is not the person himself, but only the third party, who intends to offer the goods for sale or market them?”
According to EU rules, valid registration of a trademark gives the holder the exclusive right to use the trademark. This will in particular mean that the holder can prohibit others from offering the trademark-protected goods for sale, marketing them or storing them for these purposes.
Amazon’s role
Amazon is especially known for being behind an e-commerce platform on the internet. The website displays a wide range of products, some of which are sold by Amazon itself, while others are sold on behalf of independent retailers. In the present case, the company was asked to specify the range of services that Amazon offers under the service the company calls “Fulfilment by Amazon”. If the service is selected, the independent retailer only has to send the stock in question, after which Amazon is responsible for storing the goods, preparing them by labelling, packaging or wrapping and shipping them to the buyer. In addition, Amazon offers to market the goods on its website through favourable search results. It is also Amazon that receives the buyer’s payment for the goods and is responsible for customer service regarding inquiries and returns. If the item is defective, it is also Amazon that is responsible for the refund.
Amazon therefore plays a quite active role in mediating contact between buyer and seller. The EU Court of Justice was therefore asked, among other things, to consider how big a role in the sale the trading platform can take before it can legally be equated with a seller.
EU Court of Justice’s handling
The Court initially notes that there is an infringement of an EU trademark right when the infringer uses the mark commercially with the risk that confusion may arise in the public’s mind. The Court then examined whether Amazon’s actions could form the basis for an infringement of Coty’s trademark. The relevant point in this case is whether the storage of the goods can be equated with commercial use, and whether this is done with the purpose of offering them for sale.
The EU Court of Justice referred to a similar question that has previously been decided in relation to another digital trading platform, namely Ebay. In this case, the EU Court of Justice found that even if an online marketplace displays sales offers of protected trademarks on behalf of a seller, it will not be the marketplace itself that infringes the trademark right, but rather the seller who, through the marketplace’s service, offers the products for sale.
However, the Ebay case differs on essential points from the present case, as Amazon’s role does not stop at the mere display of the goods on Amazon’s platform. Amazon offers a range of services that are normally characteristic of a seller.
The EU Court of Justice has previously established that there is not necessarily an infringement of the trademark right by the storage of goods if the warehouse keeper provides a service in connection therewith. The fact that a service enables the sale of infringing products does not in itself constitute a use of the trademark and therefore not an infringement.
Service for seller
Amazon provides a range of services to the sellers who wish to use the trading platform, including display, shipping, storage and payment administration. When Amazon displays an item on the trading platform and then sends it to the buyer, this is done in the form of services for the seller, not for the buyer. The EU Court of Justice therefore emphasised that Amazon itself does not offer the goods for sale, but instead provides a service through which the seller offers the goods. Should Amazon’s storage of the perfume bottles constitute a “use” of the trademark, Amazon itself should have the purpose of marketing and selling these.
The EU Court of Justice thus found that even though the purpose of the storage was that the goods should be marketed, it was not Amazon who intended to do this, but only the independent retailers. Amazon therefore did not infringe Coty’s trademark right, as the company did not use the mark as part of its own commercial communication.
The judgment handed down may have significant implications for today’s and future virtual marketplaces, as our analogue behaviour is increasingly being moved to digital platforms in ways that legislators have not been able to foresee, and therefore the framework for what is permissible in the new digital world must be tested in the courts.