The Coty vs Amazon case and the use of trademarks

The Court of Justice of the European Union gives a preliminary ruling pursuant to article 267 TFEU and re-examines the notion of use of trademark

The Court of Justice of the European Union resolved the case known as “Coty Germany GmbH vs Amazon“[1] with the sentence of 2 April 2020 (C-567/18) and gave a preliminary ruling in favor of the e-Commerce giant regarding the interpretation of a provision of the EU Trademark Regulation. The ruling was returned to the German Federal Court of Justice (Bundesgerichtshof) and it states that mere storage or stocking activity cannot be deemed as “use” of those trademarks which are put on the stocked or stored goods. Therefore such an activity alone does not infringe the exclusive right to trademark: a more specific purpose is needed, the purpose of offering or placing such goods on the market.

As for the case background, Coty Germany GmbH, a German company supplier of luxury goods (particularly perfumes and cosmetics) and owner of the related brands, having through a “mystery shopper” purchased their own goods on Amazon, found out that unauthorized vendors were unlawfully trading such goods by availing of the stocking service “Fulfilment by Amazon”. Such trading activity was allegedly unlawful as the related trademark rights had not yet been exhausted (hereinafter the “infringed trademark”). Coty requested that the vendors to refrain from trading the goods marked with the infringed trademark (hereinafter the “Goods”) and asked Amazon to hand all Goods in stock over to them (Coty). Both the vendors and Amazon conformed to the requests but Amazon informed Coty Germany that part of the products in the warehouse were stored on behalf of “fourth” parties to which it was not possible to trace. Facing the impossibility to trace the unknown vendor, Coty sued Amazon itself, whose stocking service, according to Coty, had to be considered as illicit, pursuant to the EU Trademark Regulation and that Amazon completely replaces the seller in the advertisement phase and then also in the phase of implementation of the contract.

Therefore, under the interpretation of the EU Law examined by the ECJ, the question was raised as to whether the service called “Fulfilment by Amazon” could be considered as “use” of the infringed trademark and particularly if the notion of “stocking” of Goods could be interpreted as covering the commercial scheme above,  pursuant to article 9 of Regulation No 207/2009 and article 9 of Regulation No 1001/2017 (the latter replacing the former without substantial change).

The ECJ by looking through its relevant case law, notes, among others, the following points:

• Creating the technical conditions necessary for a third party to use trademarks and being paid for that service does not mean that the party offering the service itself uses the sign (see ECJ judgement of 15 december 2011, Frisdranken Industrie Winters, C‑119/10).
• “Using” involves active behaviour and direct or indirect control of the act constituting the use and consequently the ability to effectively stop that use and therefore the ability to comply with a prohibition pursuant to article 9 Reg. No 1001/2017 or article 9 Reg. No 207/2009 (see ECJ judgement of 3 march 2016, Daimler, C‑179/15).
• An economic operator who imports or sends to a warehouse-keeper, for the purpose of their being put on the market, goods bearing a trade mark of which it is not the proprietor may be regarded as “using” a sign identical to that trade mark but that is not necessarily true of the warehouse-keeper who provides a storage service in relation to goods bearing another person’s trademark (see ECJ judgement of 16 july 2015, TOP Logistics e a., C‑379/14).

Considered all such precedents, the judgement ends by stating the following legal principle:

«On those grounds, the Court […] hereby rules:

[…] a person who, on behalf of a third party, stores goods which infringe trade mark 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 [Trademarks EU Regulation] provisions, if that person does not itself pursue those aims.»

It should be noted that the Court has declined to rule on Amazon’s liability as an “information society” pursuant to article 14 of Directive 2000/31/EC on Electronic Commerce, on the basis that the query had not been submitted by the referring court. However, this particular aspect of liability has been dealt with by the Advocate General in his opinion delivered on November 28th 2019.

All points made in this judgement are theoretically applicable to every e-commerce platform that offers or is willing to offer a service similar to Amazon’s stocking service (such as eBay, Alibaba, Zalando, Yoox and the Japanese platform Buyma), regardless of the category of goods offered (luxury or not).

 

 

[1] The ruling is not to be confused with ECJ decision of December the 6th 2017 (C-230/16) “Coty Germany GmbH vs Parfümerie Akzente GmbH”