These shoes are made for walking: CJEU clarifies platform operators’ trade mark infringement liability
Introduction to the concept of platform liability
The question of how platform operators can be held liable for their users’ IP right infringements remains a hot topic in the world of IP. There is no uniform answer for all IP rights besides the general distinction between direct/primary liability for own infringements and indirect/secondary liability for some sort of contribution to a third-party infringement.
With regards to trade mark law, only the first is harmonised within the European Union. The EUTMR includes a non-exhaustive list of acts which amount to trade mark use in Article 9. They all require active behavior from the trade mark user, like advertising under the sign in question. The necessity of an active conduct would, at a first glance, exclude primary liability of platform operators for their user’s infringing trade mark use. This is in line with the CJEU’s findings a couple of years ago in Google France and L’Oréal/e-Bay. However, the technological innovations since then and the accompanying development of the activities of online platforms could justify another stance on this question today.
Recent case law in copyright has shown that conducts traditionally falling within the application of indirect liability can fall under the scope of primary liability rules. It must be considered that the platform on which the advertisements of third-party infringing goods are displayed also takes care of stocking and delivering the infringing products to the consumers and presents all offers – whether those of third parties or its own – uniformly on the website showing its own logo. The question therefore is if the initial gut feeling with regards to trade marks and platform liability stands up to closer scrutiny given the particular business model of a platform which does not allow its users to easily distinguish between its own advertisements and those of third-party sellers?
The Tribunal d’arrondissement (Luxembourg) and the Tribunal de l’entreprise francophone de Bruxelles referred essentially this question to the CJEU. The CJEU thus has the opportunity to clarify the content of trade mark use and platforms’ liability in light of their current business models.
Background – potential trade mark infringement by platform offerings
Christian Louboutin is a French designer known for the red soles of his shoes which are registered as a trade mark. Click here to read our article on the CJEU finding that the red sole mark was not invalid under shape exclusion. In this case, he sued platform operator Amazon – known to offer for sale various goods and services, both directly on its own behalf and indirectly as a sales platform for third-party sellers – for trade mark infringement due to the display of advertisements on the platform for red-soled shoes that were allegedly infringing his trade mark.
Mr. Louboutin argued that the advertisements in question – even if placed by third parties – were part of Amazon’s own commercial communication. By displaying advertisements of shoes bearing a red sole on its online stores as well as by stocking, shipping and delivering the infringing goods to the end consumers, the platform had thus used his trade mark without his consent. He therefore sought corresponding declarations that Amazon is liable for the trade mark infringements.
Both courts in question however deemed it necessary to first have the CJEU clarify the notion of “use of a sign” in an intermediary’s own commercial communication, notably whether the particular way in which Amazon operates its platform and integrates third-party sellers’ advertisements could result in these advertisements being part of the commercial communication of the platform itself.
Advocate General Szpunar’s opinion on the notion of use and trade mark infringement
With regard to intermediaries, the CJEU already held that a platform rendering a service in connection with the marketing of goods, including by providing the technical conditions necessary for the use of the sign, but that neither offers the goods nor puts them on the market itself does not use the relevant signs for its own commercial communication. Still, AG Szpunar, referring to the cases Google France, L’Oréal/eBay and Coty Germany, considered that there are remaining uncertainties regarding the situations that fall within the notion of “use of a sign” by a platform operator as Amazon’s broader business model has yet not been addressed by the CJEU.
AG Szpunar acknowledges that the notion of use requires an active behaviour and some degree of control over the act constituting use. Only then can the intermediary effectively stop the use and comply with Article 9 EUTMR.
In his opinion, the use of a sign within an intermediary’s own commercial communication must also be appreciated from the perspective of the platform’s reasonably well-informed and reasonably observant users as the addressees of said communication. The perception of the users is, in the opinion of the AG, not only relevant to determine whether the particular use amounts to an infringement, but also whether there is “use” of the sign at all.
With regard to Amazon, the AG concludes that despite the particularities of its business model described above, the reasonably well-informed and reasonably observant internet user is not likely to perceive signs in third-party advertisements as an integral part of Amazon’s own commercial communication. Amazon is a renowned distributer and Internet users are familiar with its posting of both its own offerings as well as those of third parties. Furthermore, the platform also specifies the nature of the offer (“by Amazon” or a third party) in the advertisements. The further services offered by Amazon which help third-party sellers promote their advertisements, take over the stocking of the goods as well as their shipping to the end consumer, might result in a greater control of the platform over the sale of allegedly infringing products. The AG however emphasises that the platform herewith facilitates the handling of sales to the benefit of the consumer and it is not sufficient to establish the use of a sign in its own commercial communication. Therefore, the platform operators do not use a trade mark which appears in third-party advertisements within the meaning of Article 9 EUTMR. This excludes any direct liability for the alleged trade mark infringements.
Implications on trade mark infringement liability of platform providers
The AG’s opinion is in line with previous case law and implements the requirements for trade mark infringement as previously set out by the CJEU. Should the CJEU follow the AG’s opinion, it would clarify the notion of “use” and refine its preconditions with regard to online sales platforms, allowing more active business models without falling under the scope of primary trade mark liability.
That being said, the lack of an own use of a trade mark by the platform operator does not imply that the intermediary cannot be held liable for the infringement. The AG’s opinion leaves room for a potential secondary liability according to national law. This would thus raise the importance of national secondary liability rules such as liability based on breach of duty of care. Other than in copyright law, these notions would then grant Member States and national courts further scope of action. This could boost the relevance of duties of care as a separate liability regime. We thus have to stay tuned – a date of delivery has not yet been announced.