Amazon not liable for mere storage of grey market perfumes

In Coty v Amazon the CJEU has ruled on warehouse provider and e-commerce platform liability for trade mark infringement in the EU

21 May 2020

Coty Germany GmbH v (1) Amazon Services Europe Sarl (2) Amazon Europe Core Sarl (3) Amazon FC Graben GmbH (4) Amazon EU Sarl // Case C-567/18

Consistent with existing case law, the CJEU has held that the mere storage by one party of another party’s infringing goods, where the storing party is unaware of the goods’ infringing nature, does not constitute ‘use’ for the purpose of infringement, unless the storing party has the intention of offering the goods for sale or putting them on the market.

Background

Coty is a distributor of perfumes and licensee of the EU trade mark DAVIDOFF. In 2014 Coty discovered an unauthorised third party listing of a ‘Davidoff Hot Water’ perfume (the trade mark rights of which had not been exhausted) on <amazon.de>. Orders under the listing were fulfilled by Amazon, meaning that although any contract of sale would be between a buyer and the third party seller (and not Amazon), the goods were stored in a warehouse operated by Amazon FC Graben and dispatched by external service providers.

After resolving its dispute with the seller Coty asked Amazon Services Europe (which operates the Amazon Marketplace) to send to Coty all the branded perfume bottles stocked by the seller. Amazon obliged and sent 30 bottles to Coty, noting that 11 originated from another seller’s stock. When Amazon refused to disclose the details of that other seller Coty sued Amazon for trade mark infringement, claiming that Amazon Services Europe and Amazon FC Graben had infringed its trade mark rights by stocking and dispatching the Davidoff perfumes in Germany and/or storing the perfumes either on behalf of a third party seller or on no seller’s behalf (in the case of residual stock).

Coty was unsuccessful in the lower courts, which found that Amazon Services Europe had neither stocked nor dispatched the perfumes and that Amazon FC Graben had only stored them on behalf of third party sellers. Coty appealed to the German Federal Court on a point of law and the Federal Court referred the following question to the CJEU:

"Does a person who, on behalf of a third party, stores goods which infringe trade mark rights, without having knowledge of that infringement, stock those goods for the purpose of offering them or putting them on the market, if it is not that person himself but rather the third party alone which intends to offer the goods or put them on the market?”

Offering goods for sale, putting them on the market, or stocking them for those purposes under an infringing sign are listed as illustrative examples of prohibited acts by Article 9(2)(b) of Regulation No 207/2009 and Article 9(3)(b) of Regulation 2017/1001 (the “Articles”). The facts of Coty’s claim required the CJEU to consider both Regulations.

CJEU Preliminary Ruling

The CJEU answered the referred question in the negative: for the CJEU, it follows directly from the text of the Articles that a party only stocks third party goods for the purpose of offering them for sale or putting them on the market if the stocking party itself intends to pursue those aims.

The judgment is consistent with, and directly refers to, the CJEU’s previous judgments concerning intermediary actors, including that use of a sign by a party implies that the party uses the sign in its own commercial communication (and that a person may thus allow its clients to use signs without itself using them, Google France and Google, C-236/08 to C-238/08), that the use of signs by sellers on e-commerce platforms is by the sellers and not by the platform operator (L’Oréal and Others, C-324/09), and that the mere storing of a third party’s goods by a warehouse-keeper, where the goods bear another person’s trade mark, may not constitute ‘use’ (TOP Logistics and Others, C-379/14), among others. 

Commentary

Given the previous decisions cited in the CJEU’s judgment, the judgment itself is not unexpected and does not break new ground. This is in large part attributable to the narrow factual background provided to the CJEU by the referring court, which limited Amazon’s role to that of warehouse-operator, and effectively rendered irrelevant the fact that Amazon had been both the warehouse operator and the e-commerce platform operator for the goods in question.

Of more interest, particularly to e-commerce platforms playing an active part in the supply chain, may be what Advocate General Sanchez-Bordona said, and what the CJEU did not. Whereas the Advocate General engaged in a wider analysis, based on hypothetical scenarios involving differing levels of engagement by an e-commerce platform, the CJEU focussed only on the factual matrix provided by the referring court, and declined Coty’s request that it also rule on Amazon’s potential liability as a result of its activity as an online marketplace, rather than as a mere stockist of goods.

Coty v Amazon is the latest reference for a preliminary ruling concerning the potential liability of e-commerce platforms, but it will not be the last. For now, whether the CJEU’s reticence has a greater significance, and, if so, whether it lies in favour of brand owners or e-commerce platforms, remains to be seen.

This article was written by Harry Jewson and first appeared on WTR Daily, part of World Trademark Review, in April 2020.

For more information or if you have any questions, please contact Jeremy Dickerson, Emily Roberts, or your usual intellectual property team contact.

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