A recent judgment passed by the Court of Justice of the European Union of 22nd December 2022 declared that the use of the trademark Louboutin on the Amazon online sales platform constitutes an infringement of the right of exclusive use which corresponds to the trademark holder.

The facts of the case, are in substance, the following:

  • Louboutin is a well-known shoe and bag manufacturer which uses a certain shade of red on the soles of its high-heel shoes. This colour is registered as a national trademark in Benelux and also as an EU trademark for the EU.
  • Amazon operates internet sites for the online sales of products, which sells on its own behalf, and also serves as a platform in the market of purchase and sale for third parties who make use of it for the sale of their articles (hereinafter we shall refer to these sites as “Site” or “Sites”). Amazon may also handle the storage and the shipment of the articles sold by the third-party users.
  • The Sites contain sales advertisements relative to shoes with red soles, which according to Louboutin, have been put on the market without their consent.

The Judgment which jointly puts an end to cases C-148/21 and C-184/21, which respond to diverse preliminary rulings of a court in Luxembourg and another in Belgium, respectively, in which Louboutin requested the cease of the use of its trademarks on the Sites, using arguments which are basically the same in both cases. The question arose as to whether article 9.2 of Regulation 2017/1001 on the Community trademark should be interpreted in the sense that the operator of an online internet sales site which integrates a sales platform is likely to be considered as making use of an identical sign to a trademark registered in the European Union when this is derived from third-party sales operations carried out within the Site and the use of the trademark is made without the consent of its owner.

The basis for the dilemma contained in the questions referred to the Court of Justice of the European Union lies in the circumstances of the case, that is, that Amazon carries out a uniform presentation of the products offered on its Site, placing advertisements which refer to both the products it sells on its own behalf as well as those sold by third parties, and makes its name as a renowned distributor appear above a group of advertisements, as well as offering certain complementary services such as product marketing support, warehousing and shipping to third-party vendors on the Site.

Article 9.2 of the Community Trademark Regulation grants the owner of a trademark with the right to prohibit any third party from using a sign identical to the registered trademark for products or services which are identical to those for which the trademark was registered.

The concept of “use” of the identical or similar sign to the registered trademark is not defined in the Regulation, but community case law has established that it implies an active conduct, and either direct or indirect control of the act that constitutes use (case C-567/18 “Coty”). In the same way, it has made it clear that the use of an identical or similar sign to the registered trademark by a third party in the sense of article 9.2 of the Regulation implies, at least, that the third party makes use of the trademark within the framework of its own marketing communication.

It has also declared that in relation with the operator of an online sales platform, the use of identical signs as those of registered trademarks, within its offers, is only carried out by clients who are vendors on such platforms and not by the platforms themselves, in so far as they do not use the sign within the framework of their own marketing communications (case C-324/09 “L’Oreal”). The mere fact of creating the technical conditions necessary for the use of a sign and being remunerated for such service does not mean that the operator of the platform makes use of the sign, even if it is done in its own commercial interest (case C-567/18).

However, the Court has also held that where the service provider of an online sales platform uses a sign identical or similar to that of a registered trademark of a third party to promote the products which are sold by another third party on the platform pursuant to the services provided by the platform, the service provider (operator of the platform) makes an actual use of this sign since it thereby creates a link between that sign and the services provided by the platform operator (see cases C-324/09 “L’Oreal” and C-119/10 “Frisdranken Industrie Winters”).

Such a link exists when the online sales platform operator carries out, with the help of an internet reference service and using as a basis a key word which is identical to the trademark of a third party, advertising of the products of said trademark which are put on sale by third parties on the platform. Thereby an evident association is created in the minds of the internauts between the products of this trademark and the possibility of buying them on this platform. And in order to determine whether such a link exists, that is to say, whether or not the utilisation of said identical denomination of a registered trademark forms a part of the marketing communication of the operator of the platform, this should be studied from the point of view of a “reasonably well-informed and reasonably observant user”.

In the judgment which we are commenting upon, the Court establishes a guide for determining whether certain acts of the Site constitute a use of the registered trademark:

  • Where the operator of the online platform associates different offers, either their own offers or offers made by third parties, without making a distinction as to their origin, a mention of the type “the top sales” or “best offers”, for the purposes of promoting offers, such presentation is likely to shape in the mind of a reasonably well-informed and reasonably observant user, the impression that the products thus promoted are marketed by that operator in its own name and on its own behalf.
  • On the other hand, consideration must be given to the nature and scope of the services provided by the operator of the online sales platform to third party vendors who offer products incorporating the sign or trade mark in question on that platform, such as the handling of questions from users concerning those products or their storage, the dispatch thereof and the handling of returns. Where such circumstances are present, they are likely to give the impression to a reasonably well-informed and reasonably observant user that those same products are marketed by said operator, in its own name and on its own behalf, and also that there is a link in the eyes of such users between the services and the signs appearing on the goods and in the advertisements of the third parties selling them.

In the case at hand, the Court determined the existence of both circumstances, since the operator of the Site (Amazon) uses a uniform method of presentation of the offers published on the Site, displaying at the same time advertisements relating to products which it sells directly and to other products offered by third parties on the Site, and displaying its own logo as a well-known distributor on all of said advertisements; on the other hand, the operator offers those third party sellers, in the context of the marketing of goods bearing the trademark sign in question, additional services, consisting of, in particular, the storage and dispatch of said products.

In view of this, the Court concludes that Amazon carried out an actual non-consented use of the registered trademark of Louboutin, within the meaning of article 9.2 a) of Regulation EU 2017/1001.

The Judgment serves as a base to undertake actions against digital sales platforms which, using a registered trademark without authorisation, formulate their advertisements and services without distinguishing between the products sold in its own name and on its own behalf and those which are sold by third parties on the platform  itself. This is a resolution of considerable significance, yet it is foreseeable that it will lose its value in a short period of time as the platforms will find ways of presenting the trademark differentiating between the two types of sale, thus solving the problem of liability for damages with regard to the trademark owner. Furthermore, it does not solve or make any progress regarding the underlying issue of sales on digital platforms, that is, how to provide a quick and effective solution to the problem of the sale of products benefitting from a registered trademark put on sale in the market without the authorisation of the holder of the trademark and the sale of fake products. It is not just a matter of establishing the liability of the platform operator for the damages caused (which probably does not represent a great worry), but of holding the platform operator responsible for a duty of due diligence consisting in the prior filtering and ultimate rejection or removal from the platform of such products, insofar as it is only the operators who, in practical terms, are able to effectively prevent and combat the illicit trade that takes place on their platforms by controlling what is sold on them.

 

 

Eduardo Vilá

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

13th January 2023