The European Court of Justice has given a preliminary ruling that a company which stores goods for a third-party without being aware they are infringing trade marks, does not itself infringing those marks, but only if that company does not attempt to offer the goods for sale or put them on the market like the seller.
Coty Germany GmbH is a company that distributes perfume products throughout Germany (its parent company, Coty, is a beauty company that, among others, owns the Davidoff brand).
As it holds a licence for one of the ‘Davidoff’ EU trade marks, it brought a claim against two Amazon companies, Amazon Europe Core S.a.r.l. and Amazon FC Graben GmbH, for trade mark infringement as they were storing and dispatching ‘Davidoff Hot Water’ perfume bottles in Germany on behalf of third-parties.
The dispute started in 2014, when Coty wrote to Amazon to desist from stocking or distributing the ‘Davidoff Hot Water’ perfumes in Germany as it was infringing their licenced trade mark. The perfume was being sold by third-parties online on the Amazon Marketplace (www.amazon.de).
The German Federal Court of Justice, The Bundesgerichtshof, had ruled that the two Amazon companies had not infringed the Davidoff trade mark as they had not themselves put the goods on the market or offered them for sale it was only third-parties who had done so.
Whilst the German courts had sided with Amazon, the Bundesgerichtshof nevertheless referred the matter (by allowing an appeal on a point of law by Coty) to the CJEU to interpret Council Regulation (EC) No 207/2009 and in particular Article 9 (2) (b) of the Regulation which concerns rights conferred on EU trade marks.
They, in turn, have ruled that, in order for there to be an infringement, the company which stores the infringing goods must pursue the aim of putting the goods on the market or the aim of offering the goods.
Whilst this ruling may act as a precedent for issues surrounding third-party online sellers, the CJEU mentioned, as a caveat to its ruling, that other avenues are available for bringing claims against an intermediary who has allowed someone to use a trade mark unlawfully, particularly Directive 2000/31/EC concerning e-commerce and Directive 2004/48/EC which concerns the enforcement of IP rights;
Directive 2000/31/EC gives an applicant the right to pursue an interlocutory injunction against an intermediary whose services are being used by a third party to infringe IP rights, whilst Article 14 of Directive 2000/31/EC deals with the unlawful hosting of information in e-commerce which is when the host, i.e. Amazon in this case, is aware that they are hosting illegal information (in this case trade mark infringement) and does not take steps to remove access to / disable the information.
There is also the fact that the Advocate General Campos Sanchez-Bordona gave an opinion on this case last year. AG opinions are not binding on the CJEU but they are persuasive, much like obiter dicta in English court proceedings.
He stated that, whilst there can be no trade mark infringement where the storage/distribution company are unaware that there is an infringement, there can be an infringement where the stockist had an ‘active role’ in selling the product.
He went on to say that the Fulfilled by Amazon service would be an “active role” and indicated that they could not avoid liability by saying that it was unaware of any infringement(s) because Amazon should reasonably know given the level of service that they provide.
The question referred to the CJEU by the Bundesgerichtshof was answered narrowly meaning that the AG’s opinion is still of relevance and may be the basis for future litigation in this area.
The case will now be transferred back to the Bundesgerichtshof. For now, the decision is undoubtedly good news for e-commerce platforms who sell third-party goods.