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Insight

CJEU's narrow ruling favours Amazon in trade mark battle over DAVIDOFF perfume

Heidi Hurdle
16/04/2020

Summary

In a highly anticipated ruling in a dispute between Amazon and Coty, the CJEU, sticking quite strictly to the question referred to it by the German courts (in contrast to the Advocate General), has come down in Amazon's favour. It ruled in essence that by warehousing certain perfumes on behalf of a third-party, Amazon was not itself liable for trade mark infringement. 
 

The facts – in brief

Coty, a distributor of perfumes, holds a licence for the EU trade mark (EUTM) DAVIDOFF for perfumes.

In 2014, a Coty ‘mystery shopper’ purchased a particular DAVIDOFF perfume, in relation to which the trade mark rights had not been exhausted, from a third-party seller on Amazon-Marketplace. Coty asked Amazon to provide all perfumes stocked on behalf of the seller. 11 of the 30 perfumes delivered by Amazon to Coty were stocked on behalf of another seller, whose identity Amazon would not confirm.

Coty sued Amazon for trade mark infringement in Germany requesting the German courts to order that the Amazon companies concerned desisted from such storage and dispatch of the perfumes. (This included Amazon Services Europe Sàrl, which ran the marketplace and Amazon FC Graben GmbH, which operated a warehouse under the “Fulfilment by Amazon” scheme.)

The Regional Court in Germany dismissed Coty's action and the case went up to the Bundesgerichtshof (German Federal Court of Justice), which stayed the proceedings referring the following question to the CJEU for a preliminary ruling. 
 

Question for the CJEU

The question referred went to the interpretation of Article 9(2)(b) of the EUTM Regulation (207/2009 - now Article 9(3)(b) of Regulation 2017/1001) and was as follows: 

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?


CJEU ruling

The CJEU's answer to the question in a nutshell was "no" – a person who, on behalf of a third party, stored goods which infringed trade mark rights, without being aware of that infringement, could not be regarded as stocking those goods in order to offer them or put them on the market for the purposes of Article 9(2)(b) of the Regulation.

In reaching this conclusion in what is a relatively short judgment the court made the following key points:
 
  • The concept of "using" in Article 9 of the (original and latest) EUTM Regulation is not defined. However earlier case law had considered its ordinary meaning, namely that it involved active behaviour and direct or indirect control of the act constituting the use.
  • The fact of creating the technical conditions necessary for the use of a trade mark and being paid for that service does not mean that the party offering the service itself uses the mark (see for example, Google France, C‑236-8/08).
  • The wording of the provision in Article 9 specifically refers to the offering of goods, their being put on the market, their being stocked ‘for those purposes’. This meant that the economic operator providing the storage itself (ie Amazon) had to pursue the aim referred to by the provision, which was offering the goods or putting them on the market.
  • The German court had stated unequivocally that the Amazon companies had not themselves offered the perfumes for sale or put them on the market and this was emphasised again in the wording of its question, that it was the third party alone who intended to offer the goods or put them on the market. Consequently, the CJEU found that the Amazon companies did not themselves use the trade mark in their own commercial communication.
At the end of its judgment, the CJEU adds a further and important word pointing out that its decision does not rule out the possibility that the activity of online marketplaces like Amazon could be liable on an alternative basis such as under the E-Commerce Directive (2000/31). In this case it would be as an intermediary, as oppose to a primary infringer, with the requisite need to show awareness of the infringement.
 

Comment

After the Advocate General's opinion in November 2019 (which sadly was not in English) some commentators thought that we were about to a significant development in the scope and application of direct liability to online platforms in the trade mark arena, similar to that which we've seen in the copyright field in recent years.

However, the CJEU by keeping to the strict parameters of the question before it and the facts supplied by the German courts has now squashed this possibility. It is clear (for the time being at least) that online marketplaces like Amazon's will not fall foul of the current EU trade mark laws. What is not so clear is the level of involvement that is required for a marketplace to "use" a trade mark and therefore be liable; each case is likely to be determined on its own facts. 

This case illustrates the ongoing tension between brand owners and online marketplaces like Amazon and eBay, something that is set to continue as all businesses fight for survival in these unprecedented times. Meanwhile, this particular case will now return to the German courts for a decision.
 
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