Brief analysis of the Judgement of the Court of Justice of the European Union in Case C-567/18, Coty Germany v. Amazon Europe

*An article by Vladimir Griga, Associate

On April 2, 2020, the Court of Justice of the European Union (“the Court” or “CJEU”) ruled in Case C-567/18, concerning the reference for a preliminary ruling made by the German Federal Court of Justice (hereinafter “the referring court”) in the dispute between Coty Germany and Amazon Europe. This judgement may have significant implications for retailers, online marketplaces (which usually act as intermediaries of the latter), as well as trademark holders.

Facts

Coty Germany (hereinafter „Coty”), a German company and licensee of the European trademark “Davidoff”, made test purchases and found out that several perfumes from the “Davidoff How Water” line, which were offered for sale by third-party sellers on the Amazon-Marketplace platform (www.amazon.de), have been put on the EU market without its consent, hence infringing Coty’s trademark with respect to Davidoff. Amazon Europe (hereinafter “Amazon”) was not aware at the time the offers were published that those products violate Coty’s rights. Later on, Coty asked Amazon to disclose the details of those sellers, the latter refusing to do so. Finally, Coty sued Amazon for trademark infringement, requesting Amazon to cease the stock and dispatch of perfumes in Germany, if they are marketed without Coty’s consent.

Out of the Amazon companies that were sued, one runs the online platform, whilst the other one runs the warehouse under the “Fulfilment by Amazon” scheme. This scheme allows a third-party seller that uses the platform to delegate to Amazon the entire warehousing and delivery logistics of goods, albeit the former and not the latter remains the person that concludes the contract with the end customer (Amazon thus acting as an intermediary).

Reference for a preliminary ruling

In the dispute, the referring court requested the CJEU’s opinion with respect to the liability of an intermediary who, on behalf of a third-party, stores goods that infringe trademark rights, as long as the intermediary (the warehouse keeper) is not aware of this infringement.

The judgement of the Court

The CJEU decided to limit its judgement strictly within the scope of the question, concluding that the mere warehousing of goods, on behalf of a third-party, does not represent a trademark infringement, should that person be unaware of this infringement. In giving this solution, the Court has partially parted from the Advocate General’s opinion, the latter analysing in-depth the nuances of the issue at hand, from a double perspective.

The opinion of the Advocate General

The Advocate General considered that a distinction should be made between the intermediaries, depending on the nature of the services provided to the seller that had infringed the trademark.

» On the one hand, the Advocate General offered an answer similar to that given by the Court: if the intermediary carries out only ancillary tasks in the sales process, such as warehousing the seller’s products, then the intermediary cannot be sanctioned for trademark infringements if he/she was not aware of them, the responsibility belonging entirely to the seller. This is due to the fact that the intermediary does not have an active role nor any control in the sales process, as opposed to the seller.

» On the other hand, the Advocate General emphasised that the situation is different in the case of the so-called “integrated stores”, where the intermediary is actively involved in the sales process, offering not only simple warehousing services but a much wider range of services, such as online advertising and promotion, providing customer service, managing refunds of defective products, intermediation of payments between buyer and seller, preparation of products for delivery, including labelling, packaging and gift wrapping, and others alike. If the warehousing services, by themselves, could be regarded as accessories of the sales process, not the same can be said about the other services, which together put the online platform in a similar position to the seller, giving it more of a “co-seller” capacity, rather than it being just an intermediary of the seller.

We would like to point out that the Court did not consider the Advocate General’s analysis because the information regarding the active involvement of Amazon in the sales process emerged only in the procedures before the CJEU, the referring court failing to provide them in the context of the reference for a preliminary ruling. Nonetheless, from a procedural point of view, the Court has decided that it can only rule within the limits set by the referring court and, therefore, has omitted all that information and, consequently, the comparative analysis carried out by the Advocate General.

Conclusions and recommendations

Online marketplaces can breathe a sigh of relief for the time being, the decision, in this case, being favourable to them: the simple warehousing, on behalf of a third-party, of goods that infringe the trademark rights of another person will not lead to the liability of the online marketplaces unless they knew about that infringement. However, it is recommended that online marketplaces take into account the Advocate General’s reasons and consider the liability risk for trademark infringements, as the Court has not in any way ruled on the situation of “integrated stores”, which offer a broader range of services. At the same time, one needs to keep in mind that the intermediary’s liability in the present case concerned only trademark infringements: the Court itself warned that the intermediary’s liability may still exist on grounds of intellectual property enforcement and e-commerce, in cases where the intermediary enables another economic operator to use a trademark unlawfully, thus being liable for it.