Amazon does not infringe Davidoff trade mark by merely storing goods on behalf of a third party seller

IN-DEPTH ANALYSIS

In Coty v Amazon (Case C‑567/18), the EU Court of Justice has held that "a person 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".

This is an important decision not only for companies offering warehousing services, but also for online marketplaces.

Facts

Coty owns the EU trade mark for the perfume brand Davidoff.

Amazon's German online marketplace is operated by Amazon Services Europe Sàrl. Amazon offers a service called "Fulfilment by Amazon" where third party sellers can have the goods they sell stored by an Amazon entity (in this case Amazon FC Graben GmbH) which operates a warehouse.

Following a test purchase of some Davidoff perfume offered by a third party seller, Coty obtained contractual undertakings from the seller. The perfume in question had been not been put on the market in the EU by Coty or with its consent.

Coty then sued various Amazon entities for infringement. The lower German courts dismissed the claim on the basis that, for example, Amazon FC Graben had only stored the goods on behalf of third-party sellers.

Coty appealed certain points of law in its claim against Amazon Services Europe and Amazon FC Graben, to the Bundesgerichtshof (German Supreme Court). That court decided to stay the proceedings and refer a question to the CJEU (see below). In doing so, the Bundesgerichtshof said that the lower courts' finding that Amazon FC Graben did not infringe Coty's trade mark depends on the interpretation to be given to Article 9(2)(b) of Regulation No 207/2009 and Article 9(3)(b) of Regulation 2017/1001.

These Articles state that the following examples of use may be prohibited for the purpose of the infringement provisions of the EU Trade Mark Regulations:

"…offering the goods, putting them on the market, or stocking them for those purposes under the sign, or offering or supplying services thereunder."

The Bundesgerichtshof stated in its question that:

the relevant Amazon entities merely stored the goods concerned, without themselves offering them for sale or putting them on the market, and
that (in contrast to the sellers) they did not intend to offer those goods for sale or put them on the market either.

The question referred

The CJEU explained the question referred as:

"Whether Article 9(2)(b) of Regulation No 207/2009 and Article 9(3)(b) of Regulation 2017/1001 must be interpreted as meaning that a person who, on behalf of a third party, stores goods which infringe trade mark rights, without being aware of that infringement, must be regarded as 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."

Judgment

The CJEU's reasoning included the following principles on what are the types of potentially infringing use:

"Using", for the purposes of infringement, involves active behaviour and direct or indirect control of the act constituting the use.
Such use implies, at the very least, that that third party uses the sign in its own commercial communication: Google France (C-236/08).
With regards to the operation of an e-commerce platform, the use of signs identical or similar to trade marks in offers for sale displayed in an online marketplace is made by the sellers who are customers of the operator of that marketplace and not by that operator itself: L'Oréal v eBay (C-324/09).
Although an economic operator who imports or sends to a warehouse-keeper goods bearing a trade mark of which it is not the proprietor for the purposes of their being put on the market may be regarded as "using" a sign identical to that trade mark, that is not necessarily true of the warehouse-keeper who provides a storage service in relation to goods bearing another person's trade mark: TOP Logistics (C‑379/14)
The fact of creating the technical conditions necessary for the use of a sign and being paid for that service does not mean that the party offering the service itself uses the sign: Google France (C-236/08).
Given that the Bundesgerichtshof had held that it was the third party sellers alone which intend to offer the goods or put them on the market, it followed that the relevant Amazon entities did not themselves use the sign in their own commercial communication.

In conclusion, the CJEU held that Article 9(2)(b) of Council Regulation (EC) No 207/2009 and Article 9(3)(b) of Regulation (EU) 2017/1001 must be interpreted as meaning that:

"…a person 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."

Comment

The decision can be interpreted as answering a specific question about a particular provision of EU trade mark law on a particular set of facts. However, stepping back, the judgment clarifies that businesses, including online marketplaces, do not infringe a trade mark merely by providing services, such as warehousing, to third party sellers, provided that such businesses were not aware of the infringement and were not stocking the goods on their own account.

The case clearly distinguishes between the activities of third parties sellers on online marketplaces and the online marketplaces themselves. Whereas it may be obvious that a seller has infringed a trade mark, establishing the liability of the marketplace requires them to have used the trade mark, not merely to have provided services to and on behalf of the third party seller. If the online marketplace is not using the trade mark, it will not infringe. Therefore, there would be no need to consider the hosting exemption under Article 14 of the E-Commerce Directive 2000/31.

While this case interprets a provision of EU trade mark law, it could lead to analogous findings on the role of online services in the context of other rights asserted such as copyright and defamation – for example, where a company had stocked on behalf of a third party seller a publication which infringes copyright or is defamatory and was not aware of the infringement and not stocking it for its own selling purposes.

Different laws apply there (which are beyond the scope of this article), but the overall result – the extent of liability of online services provided to third parties – could be the same.