The Internet, increasingly present in our daily lives, is certainly a great factor of progress and innovation, but it also represents a threat for some operators, in particular for intellectual property rights holders. Indeed, the development of online marketplaces such as Amazon, eBay or Leboncoin has considerably increased the risk counterfeit goods. The recent case Louboutin v. Amazon is a striking illustration: Amazon has been cited for displaying advertisements on its website for red-soled heel shoes, which Louboutin claims to be counterfeiting of its best-known high-heeled women’s shoes. From a legal point of view, this phenomenon raises the question of liability of online intermediaries, including operators of online marketplaces such as the giant Amazon. Indeed, several obstacles often challenge the attribution of the infringement of an EU trademark to the real seller, who may be difficult to identify, whose location may prevent him from being held liable and whose solvency is questionable. On the contrary, the operator of the online marketplace through which the third-party seller went is easier to identify, may be held liable, and is usually more solvent. It is therefore preferable for the victim of the infringement to seek the establishment of that operator’s liability. However, positive law tends to protect online intermediaries, and it is actually difficult to establish their liability, whether direct or indirect.
In terms of direct liability of online platform operators for trademark infringements (which is at issue in the case under discussion), the challenge lies in the concept of “use”. In this sense, Article 9 of EU Regulation 2017/1001 confers on the proprietor of an EU trademark a right to prohibit all third party from using in the course of trade, without his consent, any sign identical with his trademark in relation to goods or services which are identical with those for which the trademark was registered. Section 3 of the same Article lists the types of use that may be prohibited by the trademark proprietor, including “offering the goods, putting them on the market, or stocking them for those purposes”. Lacking textual definition, the question arises as to when the operator of the online marketplace must be considered to have “used” a sign identical to the mark at issue. The Court of Justice recalls in this judgment that the term “using” involves active behavior and direct or indirect control of the act constituting the use (definition previously established in 2016 in the Daimler judgment, Case C-179/15). Indeed, the whole point of Article 9 is to provide the trademark proprietor with a legal instrument allowing him to prevent any use of his trademark made by a third party without his consent. Yet, only a person who has control of the act constituting the use is in a position to effectively stop it.
Moreover, since the Google judgment (cases C-236/08 to C-238/08, 2010) the Court has consistently considered that an act of use by an online intermediary implies that the latter uses the sign identical to the trademark in its own commercial communication. This condition relating to the commercial communication, which is “at the heart of the concept of use” (expression used by Advocate General Maciej Szpunar in his opinion for the present case), has always led to rule out the direct liability of the online intermediary, at least until now. For instance, in the Coty Germany case (C-567/18, judgment delivered in 2020), the European judges considered that the mere storage by Amazon of goods bearing a sign identical to an EU trademark did not in itself constitute a use of that sign in its own commercial communication, and therefore ruled out the direct liability of Amazon.
However, the notion of “commercial communication” remained rather vague and imprecise. This Louboutin judgment, in light of the Advocate General’s opinion, provides a clearer definition of such a concept: commercial communication means “any form of communication for third parties, designed to promote its activity, goods or services” (point 39 of the judgment). This definition allows a new dimension to come into the picture: the perception of the public. Since the purpose of a commercial communication is purely external (bringing the company’s activity to the attention of third parties), it can only be conceived from the users’ point of view. Consequently, the use of a sign identical to a registered trademark by an online intermediary in its own commercial communication requires that the sign in question appears, in the eyes of internet users, as an integral part of the intermediary.
For this reason, the Court explains in its judgment that the operator of an online marketplace such as Amazon, must be considered to be using a sign identical to an EU trademark when the “reasonably well-informed and reasonably observant user” has the impression that the operator is the one who actually puts on the market the goods bearing such an identical sign, and not the third-party seller. In this respect, both the mode of presentation of the advertisements on the website and the nature and extent of the services offered by the operator to the third-party seller are relevant. On the one hand, a uniform presentation lacking of distinction between advertisements relating to third-party sellers’ goods from those relating to Amazon’s products can lead to confusion, especially when Amazon’s logo appears on all offers for sale. Moreover, this confusion in the mind of the user is reinforced by the additional services offered by the operator to the third-party seller, in particular services of stocking and shipping of goods bearing the sign at issue. All these elements lead the reasonably well-informed and reasonably observant user to believe that the marketplace operator is the one putting on the market the good bearing the sign at issue and who, therefore, makes use of it for the purposes of Article 9 of Regulation 2017/1001, even though the product actually originates from a third-party seller.
Comment:
By bringing the notion of the user’s perception to the forefront, the European Court of Justice seems to be marking a turning point in terms of online intermediaries’ direct liability for trademark infringement; and finally rules against them, contrary to the direction taken by positive law until now. However, this ruling is open to some criticism.
First of all, the fact that the shipment and storage of the goods by Amazon is relevant to the user may seem inconsistent with the Court’s previous position in the Coty judgment. Indeed, in the Coty case, European judges clearly explained that “a person who, on behalf of a third party, stores goods which infringe trademark rights, without being aware of that infringement, must be regarded as not stocking those goods in order to offer them or put them on the market” for the purposes of the provisions of Regulation 2017/1001. In this Coty judgment, Amazon’s stocking of goods was not a key element to qualify the use of a sign identical to an EU trademark, as long as Amazon was not aware of the infringement. Why would the solution be different when the operator of the online marketplace, in addition to storing the goods, ships them on behalf of the third party? In fact, this is one of the reasons why Advocate General Maciej Szpunar reaches a different conclusion than the Court, despite similar reasoning regarding the importance of the user’s perception.
Secondly, what exactly does a “reasonably well-informed and reasonably observant user” refer to? The judgment, which lacks precision as to the definition of the standard it uses, might be read in the light of the Advocate General’s opinion. According to him, some users of online sales platforms pay little attention to the identity of the seller and focus solely on the product and its price. He therefore decides not to take such a user as a standard, and prefers a “reasonably well-informed and reasonably observant user”. In his opinion, and considering that Amazon is a highly renowned distributor, a reasonably well-informed user is aware that both advertisements for goods sold directly by Amazon and advertisements published by third-party sellers are posted on the platform. Therefore, the website’s uniform presentation cannot mislead him into thinking that the signs displayed in third-party sellers’ advertisements are part of Amazon’s own commercial communication, even if the Amazon logo appears on all offers. However, requiring such a degree of information from the user seems to us a bit excessive and could lead to an overprotection of online intermediaries. In real life, most online consumers are, on the contrary, poorly informed, and it seems fair to us to take as a standard a user who is certainly less observant, but closer to reality. Conversely, by not defining the reasonably well-informed and reasonably observant user, the Court seems to expect from the internet user a lower degree of knowledge than the Advocate General, hence its dissenting solution. Indeed, the Court concluded that the internet user had the impression that the identical sign of an EU trademark was an integral part of Amazon’s commercial communication.
In conclusion, this decision is a new contribution to the definition of the concept of “use” of a sign identical to an EU trademark via the Internet. We consider the inclusion of the user’s perception in such a definition to be an appropriate compromise, finally allowing the proprietor of a trademark to effectively sue the operator of an online marketplace for the use of a sign identical to its trademark. This solution is satisfactory in that it takes into account the major role of online intermediaries in the proliferation of the counterfeiting phenomenon: even if they are not directly at the origin of the infringement, it is nevertheless thanks to online sales platforms that such products gain visibility. This judgment, together with the recent Regulation 2022/1925 on contestable and fair markets in the digital sector (entered into force in November 2022), marks an evolution in the EU’s position towards online intermediaries, and shows a increasing willingness to make them accountable. In this respect, the new Regulation aims to put an end to the unfair practices by online platforms acting as digital gatekeepers, under penalty of fines imposed by the European Commission.
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Marco Amorese
Jeanne Deniau