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05 May 2020
BY Dr Delene Bertasso

Amazon: not in (Davidoff) hot water

The Coty v Amazon case, which we’ve previously written about, reached its conclusion recently. The judgment went in Amazon’s favour, as so much seems to be at the moment.

To recap, Coty, who owns the trade mark Davidoff, discovered that infringing Davidoff Hot Water perfumes were available on Amazon. Coty sued Amazon (there were, in fact, two separate Amazon companies involved) for trade mark infringement in Germany, but was unsuccessful. The German court referred the matter to Europe’s highest court, the Court of Justice of the European Union (“CJEU”).

Image credit.

The awkward question for consideration by the the CJEU was: is a person who stores goods infringing trade mark rights on behalf of a third party without having knowledge of the infringement of the trade mark rights, to be regarded as possessing those goods for the purpose of offering them for sale or putting them on the market within the meaning of those provisions if he himself does not pursue those purposes?

What the question does make clear is that the German court drew a sharp distinction between the storage and sale of infringing goods – a distinction that plays an important role in this case.

In proceedings before the CJEU, the Advocate General (“AG”) hands down an opinion before the CJEU hands down its judgment. The AG, in this case, said that Amazon can be expected to show particular care in terms of control of the lawfulness of the goods they trade. What this means is that Amazon cannot simply discharge their responsibility by attributing it exclusively to the seller, precisely because they are aware that, without this control, they can easily serve as a channel for the sale of illegal, counterfeit goods, pirated, stolen, or unlawful or unethical in any other way, infringing the property rights of third parties.”

The CJEU, however, absolved Amazon of any liability. It also drew a clear distinction between storage and sale. It said that it was very relevant that Amazon merely stores goods without taking any action to offer them for sale. It held that the mere storage of infringing goods in an online marketplace does not infringe trade mark rights. It said that using a trade mark involves both active behaviour and control, whether direct or indirect. The mere storage of goods is not use of a trade mark.

The CJEU concluded that the two Amazon companies involved “have not themselves offered the goods for sale or put them on the market and that the third party seller alone pursued that aim.” It follows “that the Amazon companies have not themselves used the Davidoff mark”.

The CJEU’S decision was perhaps not totally unexpected given some of its earlier decisions. There was the pivotal AdWords case in 2010, where the issue was whether the sale by Amazon of Louis Vuitton keywords that directed people to sites that sold counterfeit Louis Vuitton goods infringed the Louis Vuitton trade mark. The court there held that it did not constitute use of this trade mark.  

In the case of ecommerce platforms, the trend in Europe seems to be that infringing use of trade marks that are displayed on those platforms will be regarded as an action of the seller, who is a customer of the platform operator, rather than the operator of the platform itself.

So, Amazon is in the clear. The company has, however, reaffirmed its commitment to uphold trade mark rights and has stated that it will “drive counterfeits to zero” on its platforms. Brand owners will certainly welcome that.

Reviewed by Gaelyn Scott, Head of ENSafrica’s IP department.

Delene Bertasso
Senior Associate | IP
+27 83 399 6172