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CJEU Finds That Amazon May Be Liable For Infringing Third Party Ads – Trademark

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In a highly anticipated decision dated 22 December in relation
to the advertisement of fake Christian Louboutin shoes by third
party vendors on Amazon, the Court of Justice of the European Union
(CJEU) has held that Amazon may indeed be held accountable for
trade mark infringement based on their “use” of trade
marks in advertisements promoting fake third-party goods.

The main question to be answered by the Court was whether, and
under what conditions, online marketplaces such as Amazon could be
held liable for trade mark infringement in relation to the
advertisement of infringing goods offered for sale by third parties
on their platforms.

The short answer is “yes” – online marketplaces can be
held liable for third party advertisements that infringe registered
trade marks if there is confusion as to the source of the
advert.

The CJEU’s guidance for a finding of marketplace liability
in essence turns on whether an informed and reasonably attentive
user would be under the impression that advertisements for fake
products bearing another’s registered trade mark originate from
the operator of the marketplace themselves and whether consumers
would form a link between the marketplace’s services and the
trade marks appearing on infringing products in the advertisements.
The Court noted that the method of displaying product adverts on
marketplaces such as Amazon (whereby Amazon’s own products and
those of third party sellers are advertised alongside each other
under the Amazon logo) makes it difficult for consumers to clearly
distinguish the origins of each advert.

Therefore, it will also be difficult for consumers to
distinguish the source of infringing goods and this may give the
impression that Amazon is marketing infringing products themselves,
and thereby “using” another party’s registered trade
mark. The risk of confusion is increased by the fact that Amazon is
often involved in the storage, shipping and management of returns
for third party products on its sites.

On this basis, the CJEU has opened the door for national Courts
to hold marketplaces such as Amazon liable for trade mark
infringement in relation to the advertisement of fake products by
third parties on their sites. The Louboutin cases will now be
passed back to their respective national courts in Belgium and
Luxembourg, whose role will be to interpret the CJEU’s decision
and determine whether the advertisement of the infringing Louboutin
shoes in question will cause consumer confusion. Following the
decision, Thierry Van Innis (Louboutin’s lawyer) told Reuters
that “Amazon can be held accountable for the breaches as if
the platform was itself the seller”, meaning that “Amazon
will be forced to change their model and stop misleading the public
by mixing up their own and third-party offers”. A spokesman
for Louboutin also said that they “brought this case to
encourage Amazon to play a more direct role in the fight against
counterfeiting on its platforms”.

The decision contradicts the Advocate General’s non-binding
opinion issued in June 2022, in which Maciej Szpunar stated that he
is “of the opinion that, in [such] circumstances, the operator
of an online platform, such as Amazon, does not use a
[trademark]” and therefore “cannot be held directly
liable for infringements of the rights of trademark holders taking
place on its platform as a result of commercial offerings by third
parties”. Those who agreed with the Advocate General’s
opinion will no doubt consider the CJEU’s decision to be going
too far in attributing liability to online marketplaces for the
actions of third party sellers, over whom the marketplaces
ultimately have very little control.

It seems that hybrid marketplaces such as Amazon (offering both
their own and third party products) will need to review their
platforms and the manner in which products are advertised to try to
ensure that consumers can more easily identify the origins of the
various adverts in order to avoid falling victim to the new
parameters set out by the CJEU. Whether or not the requirements for
marketplace liability set out in the CJEU’s decision are clear
enough in practice remains to be seen and we will await the
decisions of the national Courts in relation to the Louboutin cases
with interest.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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