There have been some new developments in a high-profile IP rights dispute involving Coty Germany GmbH & Amazon. If by some chance you haven’t been following it, let us give you a quick rundown: Coty, a German subsidiary of a US cosmetics manufacturer, sued Amazon, a major online trading platform, for allegedly violating its IP rights. Its gripe with Amazon was that the latter was illegally storing its perfume in its warehouse facilities before shipping it to consumers. The lawsuit, filed with a court in Germany, was rejected twice - at a court of first instance & then on appeal. Coty decided to go all the way & filed an appeal with the CJEU. However, the Court found no evidence of wrongdoing on the part of Amazon & cleared the company of all charges.
Resolving disputes involving IP rights in the EU is hardly something new for the courts there. However, this one wasn’t an easy one. The dilemma the CJEU was facing was: Should the storage of goods for 3rd parties be considered as owning them for subsequent resale or should whoever storing them be regarded as someone who pursues no such goal? And seems to have differentiated clearly between storing & selling of goods – a move which, as it turned out later, made a big difference in this case.
According to the Advocate General, Amazon shouldn’t be shifting responsibility to any 3rd parties. They added that lack of proper control over the company’s warehouse facilities could result in them becoming a channel via which illegally produced products would be sold, thus infringing IP rights of 3rd parties.
To that, the CJEU retorted that it was perfectly legal for Amazon to be storing the goods, as long as they had no plans of making them commercially available. Nor does the simple storage of goods qualify as infringement of TM rights, either. That said, the mere storage of goods does involve a certain degree of control over the merchandise, both direct & indirect. Therefore, simply keeping the merchandise in storage shouldn’t be construed as the use of a TM.
According to the court, Amazon wasn’t involved in the sale of goods, which is why the whole responsibility lies squarely with the 3rd party merchandisers. Hence it follows that neither Amazon nor its subsidiaries infringed any trademark, including that of Coty.
Trademark Protection in the EU
The verdict didn’t come as much of a surprise, especially if we take into consideration its previous decisions. Earlier on, Amazon faced another lawsuit where the claimant, Louis Vuitton, accused the online platform of selling keywords containing the name Louis Vuitton to unscrupulous merchandisers who used the keywords to drive traffic to their e-stores. The trouble was that the stores dabbled in counterfeit Louis Vuitton products, thus infringing Louis Vuitton’s IP rights. Back then, the court ruled that there was no violation of IP rights was committed by Amazon, either.
Given all that, any further lawsuits in which the claimants accuse online platforms of violating trademark law by displaying goods on their web resources are likely to be dismissed. And the reasoning will be pretty much the same: it’s the sellers, and not the operators of online platforms who ought to be held ultimately responsible for any IP rights violation.
After winning the case, Amazon committed itself to upholding TM rights, promising that no counterfeit goods will ever sold on any of its web resources. It sure is some good news for all brand owners out there who are worried about their IP rights being infringed.
If you need to resolve an IP rights dispute in the EU or want to file a lawsuit for trademark infringement, your best bet would be to contact IQ Decision UK. Our team of professionals specializes in providing legal assistance with resolving trademark disputes in Europe & America.