French Court considers liability of e-commerce platform

Alibaba's host status: to be continued…

On 25 January 2019, the Paris Court of Appeal held that the interim measures requested by the owner of a trade mark against an e-commerce platform do not fall within the scope of a pretrial judge's powers. The issue of the active or passive role of a platform must be heard by a court hearing the case on the merits.

Lafuma Mobilier manufactures and markets home furniture including a chair named "RELAX" under the trade mark LAFUMA. Lafuma S.A. granted a license to Lafuma Mobilier of two French trade marks and two EU Union trade marks, which included the word LAFUMA.

In June 2017, Lafuma Mobilier became aware that Alibaba was selling unauthorized copies of the "RELAX" chairs on its French website. It sent a cease and desist letter to Alibaba France on 17 July 2017, requesting the withdrawal of reference to these. On 26 September 2017, Alibaba France indicated to Lafuma Mobilier that its requests "ha[d] been processed".

Considering that this response did not constitute a satisfactory reply, Lafuma Mobilier filed summary proceedings against several companies in the Alibaba group, including Alibaba France and Alibaba Holding.

Lafuma Mobilier requested the President of the Paris Court of First Instance to impose:

• interim measures preventing Alibaba from using the LAFUMA sign on Alibaba's website as a trade mark or infringing the claimant's company or trade name or used as a keyword for internal searches on the alibaba.com website
• all the appropriate blocking measures on the Alibaba website regarding the procedure infringing the claimant's rights.

Lafuma Mobilier requested said measures to be ordered until the issuance of a decision on the merits. It also requested damages for the damage resulting from trade mark infringement acts as well as unfair competition and parasitic acts.

The Paris Court of Appeal first stated that the trade mark owner may file summary proceedings against e-commerce platforms to obtain any measure intended to prevent an imminent infringement of his/her rights, or to prevent the continuation of the alleged acts of infringement.

The appellate judges specified that measures can be ordered only if the evidence reasonably available to the claimant is sufficient to show that his/her rights have been infringed, or that such an infringement is imminent and where the existence of prejudice to him/her cannot be seriously challenged.

Regarding acts of unfair competition or parasitic acts, the Paris Court of Appeal reiterated that the general rules of French tort law should apply, so it must be demonstrated that the interim measures are justified by the prevention of an imminent damage or the cessation of a "manifestly unlawful disorder". The existence of an obligation that is not seriously challenged must be demonstrated.

Here, unlike the first instance judge (who considered that Alibaba plays an "active role"in respect of the content of its website), the Paris Court of Appeal indicated that it could not rule on this issue, and that it should be heard by a court hearing the case on its own merits.

In spite of this, the Paris Court of Appeal then reiterated the limited liability of hosting companies and indicated that, in the case at hand, it did not appear that the liability of the Alibaba companies is "necessarily" not even "likely enough".

Finally, the Paris Court indicated that it is not "without interest" to note that Alibaba executed the interim measures ordered by the first instance judge, and concluded that in view of all the above-mentioned elements, all the requests made by Lafuma Mobilier should not be assessed in the context of summary proceedings.

Thus, both the issue of the active or passive role of hosting companies, and the issue of the existence (or not) of a prompt response, should be examined by a court hearing the case on the merits.

The liability of hosting companies should take into account factual elements, such as the existence (or not) of options or tools on e-commerce platforms that exceed mere automated technical services, and which allow these platforms to retain control over advertisers' content.

Summary proceedings must be limited to issues which are "obvious", which is often not the case when assessing the issue of the liability of e-commerce platforms.

Case Ref. Paris Court of Appeal – 25 January 2019 – case No. 2017/22056 – "Lafuma vs. Alibaba"