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A step in the right direction for Louboutin as CJEU rules on the liability of online marketplaces

25/01/2023

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United Kingdom

In summer 2022, we blogged on the Advocate General's opinion in the Louboutin v Amazon joined cases (C-148/20 and C-184/21) - Backward step for Louboutin in complaint against Amazon, who advised that online intermediaries (such as the world's largest online retailer, Amazon), should not be held directly liable for third party trade mark infringement on their platforms (subject to certain conditions).

However, on 22 December 2022, the CJEU ruled that Amazon could be held directly liable for counterfeit goods sold by a third party on its platform, if a user was confused by the origin of the goods advertised. The decision is a win for IP owners in the fight against counterfeit goods and could cause Amazon and similar online marketplaces to re-think how they display products on their websites.

Background

Louboutin is famous for its red-soled women's shoes. The red sole is a registered trade mark in the EU and elsewhere. Louboutin brought trade mark infringement proceedings against Amazon in Brussels and Luxembourg in 2019, for the advertisement and sale of counterfeit goods (red-soled women's shoes) by third parties on its website. The cases were referred to the CJEU to determine whether (and if so, in what circumstances) Amazon, as an online marketplace, could be held liable under Article 9(2) of the EU Trade Mark Regulation 2017/1001 (which sets out the rights conferred by an EU trade mark) for the display of adverts for infringing goods sold by third parties.

Amazon argued that, as a mere operator, it could not be held directly liable for the 'use' of an identical sign by a third party on its website. Louboutin's argument was that since Amazon sold goods directly as well as allowing sales from third parties, it could not be regarded as a straightforward marketplace provider. Instead, it must be characterised as a distributor of those infringing goods.

Decision

The CJEU agreed with Louboutin (and departed from the opinion given by the Advocate General). It found that an operator of a 'hybrid' website (incorporating its own sales offerings as well as a third party marketplace) can be held liable where a well-informed and reasonably observant user would have the impression that that retailer was advertising and selling the goods in its own name. The court listed certain factors relevant to the assessment of whether there was such an impression:

  • The fact that that operator uses a uniform method of presenting the offers published on its website, displaying both the advertisements relating to the goods which it sells in its own name and on its own behalf and those relating to goods offered by third-party sellers on that marketplace;
  • The fact that it places its own logo as a renowned distributor on all those advertisements; and
  • The fact that it offers third-party sellers, in connection with the marketing of goods bearing the sign at issue, additional services consisting inter alia in the storing and shipping of those goods.

What's next?

The claims in Luxembourg and Brussels brought by Louboutin against Amazon will now resume, with those national courts determining whether the required impression or link has been made  and therefore whether there is actual infringement by Amazon. Regardless of the outcomes, Amazon will no doubt be considering its position and potentially its liability for trade mark infringement in relation to third party goods sold on its websites.

As a general comment, the ruling could have major implications for online marketplaces like Amazon, in relation to how third party goods are presented on their websites.

With special thanks to Professional Support Lawyer, Jennifer Bryant and Trainee Solicitor, Tash Brown, authors of this article.

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Areas of Expertise

Intellectual Property