TRADEMARK LAW – The operator of an online marketplace can be held liable for counterfeits sold on its marketplace

CJEU, Grand Chamber, 22 Dec. 2022, C-148/21 and C-184/21. In response to two preliminary questions from the Luxembourg and Belgian courts, the Court of Justice of the European Union (CJEU) considers that the operator of an online marketplace such as Amazon can be held directly liable for the infringement of a trademark owner’s rights resulting from an advertisement by a third-party seller on its marketplace.

In this case, Mr. Christian Louboutin, a designer of pumps famous for their red outsole, noticed that Amazon, a distributor, and operator of an online marketplace, was overflowed with third-party seller ads for red-soled shoes.

He also noticed that Amazon not only published ads on its platform but also handled the storage, shipment, and delivery of these products. However, Mr. Christian Louboutin never gave his consent to the release of such products.

Considering that Amazon had illegally used a sign identical to his trademark, Mr. Louboutin brought an infringement action against Amazon based on Article 9§2.a), of Regulation 2017/1001, before the Luxembourg and Belgian courts.

These two courts then asked the CJEU about the interpretation of this article, in particular, whether the operator of an online marketplace could be held liable for infringement of a trademark owner’s rights resulting from an advertisement by a third-party seller on its online marketplace.

In a judgment of December 22, 2022, the CJEU, sitting as a Grand Chamber, answered positively on the condition that “a reasonably well-informed and reasonably attentive user [….] establishes a link between the services of [the platform] and the sign in question“, i.e. when he has the impression that it is the operator of the said platform who “markets, in his own name and on his own behalf, the goods“.

The CJEU then provides details on how this link can be established by the user between the platform and the trademark at issue. The mere fact of “creating the technical conditions necessary for the use of a sign and being remunerated for that service” is not sufficient to demonstrate the use of the trademark by the operator.

It must be shown that the operator uses the mark in the context of its own commercial communication, which must be understood as “all forms of communication intended for third parties, with the objective of promoting its activity, its goods and services or indicating the exercise of such an activity“.

In this respect, it can be taken into account according to the CJEU:

• How the offers published on the platform are presented: a display showing at the same time the platform operator’s ads and those of third-party sellers, with its logo both on its website and on all of these ads, is “likely to create a link, in the eyes of these users, between this sign and the services provided by this same operator.”

• the nature and extent of the services provided by the platform operator: the processing of users’ questions, the storage, the shipping of the products, or the management of returns are “such as to make the user believe that these products are marketed by the site operator in its name and on its behalf“.

It will then be up to the national courts to analyze in detail and practice the commercial communication of the platform to see if it leads the user to establish a link between it and the product in question.