Can Coty hold Amazon to account on infringements?

A legal opinion[i] issued by the Court of Justice (CJEU) in a dispute between Amazon and luxury goods house Coty is giving renewed hope to brand owners in their battle to police infringements on Amazon and other online marketplaces. The proposals made in the opinion - from Advocate General Campos Sánchez-Bordona (the AG) - could oblige Amazon to implement potentially costly measures to detect infringements on its “Fulfilled by Amazon" service or face legal liability to brand owners. If confirmed by the Court of Justice itself, this is likely to make it much easier for brand owners to control the flow of infringements through Amazon.

Background

Amazon offers independent sellers the ability to reach millions of consumers in exchange for a fee. For an additional fee, sellers can register with the “Fulfilled by Amazon” service, promoted through the line “Send us your goods and we’ll take care of the rest”. Doing exactly what it says on the tin, those that are registered can enjoy having all their storage, picking, packing, shipping and other customer service functions provided by Amazon.

The dispute

The case arises out of a referral made to the CJEU from Germany, where Coty has brought a trade mark infringement action against various European Amazon group companies. Coty, a licensee of the DAVIDOFF trade mark, brought a claim against Amazon after becoming aware of a seller who had joined the “Fulfilled by Amazon” service and was selling bottles of their “Davidoff – Hot Water” perfume obtained from an unauthorised source.

Amazon argued that, as it was simply an intermediary, it could not be held liable merely for stocking trade mark infringing goods for third party sellers without knowledge of the infringements. This was accepted both at first instance and on appeal. However, Coty pointed to the fact that, through its “Fulfilled by Amazon” programme in particular, Amazon was actively involved in the distribution of the products and this went well beyond merely stocking the goods.

The opinion

The AG accepts that Amazon cannot be held responsible where it is simply performing a warehouse role and is unaware that it is stocking infringing products. That said, the AG differentiates between merely stocking the goods on behalf of the third party seller and playing an active role in the selling and commercialisation process as Amazon does through its Fulfilled by Amazon programme. Where Amazon are providing the “Fulfilled by Amazon” service, liability could arise if products are infringing. Further, the AG indicates that Amazon cannot avoid liability on the basis that it did not know the products were infringing if it could reasonably have implemented measures to detect them.

Implications

Although this opinion is not binding, AGs’ opinions are usually very influential in the CJEU’s decision. The CJEU decision is expected to be delivered in the next few months and is eagerly awaited by brand owners.

If the AG’s opinion is followed by the CJEU, online marketplaces offering services such as Amazon will be unable to absolve themselves of responsibility simply because they do not source the products so are unaware that they are infringements. To continue providing services such as “Fulfilled by Amazon”, measures will need to be implemented to check for trade mark infringements, which is likely to involve checking the source of the products.  This, in turn, will likely result in price implications for consumers.