16 April 2020

Amazon’s fulfilment services do not constitute infringement

Large online marketplaces like the Amazon platform not only sell their own products, but also serve as a sales platform for third parties. In such cases the platform usually handles the fulfilment of the order, in other words storing the product and shipping the order to the buyer. The case presented here concerns the question whether the storage and shipping of the infringing products of a third party should be considered infringement.

The parties in these proceedings are Coty and Amazon. Coty holds a licence for the perfume trade mark DAVIDOFF HOT WATER. The Amazon marketplace offered perfume bottles under the trade mark DAVIDOFF HOT WATER. These were originals, not counterfeits, but the goods were originally from outside the EU and were being offered on the EU market without Coty’s consent – a situation known as parallel import. Parallel import to the EU from outside the EU will generally constitute trade mark infringement.

The infringing products were not being sold by Amazon, but by a third party operating on Amazon’s marketplace (the platform). Amazon provided storage for the third party and handled ordering and shipping. Consequently the actual question was whether the operator of a platform can be held responsible for the storage and shipping of infringing products offered for sale by a third party on that platform, without the platform operator being aware of the infringement.

On the 2nd of April 2020 the Court of Justice of the European Union (CJEU) issued a ruling that clarified the extent of responsibility of operators of online platforms like Amazon’s in case of infringement. The question put to the Court was whether Amazon’s storage and shipping of perfume under the trade mark DAVIDOFF HOT WATER constituted infringement by Amazon of Coty’s trade mark rights. An important aspect of that central question was the fact that the infringing perfume bottles were being sold by a third party, and not by Amazon itself, and that Amazon was not aware of the infringement.

The CJEU has now issued a ruling on the question whether storage – or more particularly the ‘storage of goods in order to offer the goods for sale or place them on the market’, in the words of the EU Trade Mark Regulation – can be considered “use” of a trade mark. The Court has ruled that in this case there is no infringement, going on to explain that storage can be qualified as use, but here the storage does not occur with the aim of offering the goods for sale or putting them on the market. The Court therefore concluded that the use did not occur within the context of Amazon’s own commercial communications.

This means that although there is use of the trade mark, this use occurs within the context of storage rather than the platform’s own commercial communications, and for that reason there is no infringement. Having goods in storage is only infringement if the party that stores the goods also puts them on the market. As this ruling does seem a bit contrived, the Court goes on to add that there might well be other circumstances that could indicate infringement.

For now, the conclusion is that having infringing goods in storage for a third party who offers the goods for sale on a platform, and where the platform operator cannot reasonably be expected to know there is infringement, will not lead to claims against the platform’s operator.