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News blog31 January 2023European Innovation Council and SMEs Executive Agency5 min read

Louboutin – Amazon case (C-148/21 and C-184/21)

Last December, the Court of Justice of the European Union (CJEU) ruled on a referral for a preliminary ruling from two national courts concerning the liability of online marketplace operators such as Amazon, for possible intellectual property infringements performed by their sellers. Although we have already addressed this issue in a previous blog post, we wanted to make a compilation of all the stages of this interesting case.

Christian Louboutin is a French luxury shoemaker whose high heels have become very popular worldwide thanks to their red soles. Beyond the popularity, those red-soled heels were registered as trade marks, among others, in Benelux and at a European level as European Union Trade Marks (EUTM). 

From its side, Amazon works as an online marketplace operator that sells products, both directly – i.e., in its own name and on its own behalf-, and indirectly, for third-party sellers, by hosting and advertising their products. Moreover, through the Fulfilment by Amazon (FBA) programme, Amazon provides logistics assistance to sellers, by stocking and delivering their products to consumers.  

 

1.     NATIONAL COURTS 

In 2019, in two separate proceedings, Louboutin sued Amazon before the Luxembourg District Court (Tribunal d'arrondissement de Luxembourg) and before the Brussels Companies Court (Tribunal de l’entreprise francophone de Bruxelles), for trade mark infringement. 

The luxury shoemaker alleged that Amazon was using its trade mark to advertise the red-soled shoes on its website without Louboutin’s consent. In essence, Amazon was displaying advertisements from third-party sellers that included Louboutin’s trade mark. 

Furthermore, Amazon stored the allegedly infringing shoes for later shipment.  

As Louboutin is a registered trade mark, article 9.2 of the European Union Trade Mark Regulation (EUTMR) states that any use of the trade mark performed by a third party should be authorised by the trade mark holder. An unauthorised use may cause a likelihood of confusion among the public and could therefore be considered as trade mark infringement. 

 

2.     CJEU REFERRAL 

In the light of these proceedings, both the Luxembourg Court and the Brussels Court referred questions to the Court of Justice for a preliminary ruling. In these joined cases (C-148/21 and C-184/21), the CJEU was asked for guidance on whether online marketplaces could be held directly liable for trade mark infringement, pursuant to article 9.2 EUTMR:

-       for displaying advertisements of sellers that were using third-party (Louboutin) trade marks without authorisation, and

-       for stocking and delivering the seller’s infringing goods to customers.  

 

3.     ADVOCATE GENERAL

In June 2022, Advocate General Szpunar issued his opinion on this case. The Opinion of the Advocate General of the CJEU waived the online operator Amazon from liability as regards sales of counterfeit Louboutin shoes. 

Advocate General Szpunar confirmed that although Amazon advertised and commercialised the products, it acted as an intermediary. Hence, it could not be held directly liable for trade mark infringement committed by third-party sellers on its platform. 

Furthermore, the Advocate General stated that Amazon could only be held directly liable for using "a sign identical to a trade mark", whereas in this case, the advertisements always specified whether the goods were marketed by the sellers or directly by the marketplace itself.

Although not binding, the Advocate General’s opinions are usually in line with the rulings of the CJEU. But this time it was not the case!

 

4.     CJEU PRELIMINARY RULING

The CJEU was asked to issue some guidance to define what is considered as trade mark use in the case of marketplaces like Amazon, if the sellers make unauthorised use of a third-party trade mark like Louboutin, within the meaning of article 9.2 EUTMR. The question also concerned the role of public perception in assessing the more or less active role of these site operators, as well as the consequences of taking responsibility for shipping potentially infringing goods.

On previous occasions, the CJEU had ruled on the liability of online marketplaces, and considered that they could not be held directly liable for trade mark infringement performed by third parties using their marketplaces. In this regard, one of the most well-known decisions was Amazon vs Coty. The German luxury cosmetics supplier Coty was a licensee of the Davidoff trade mark. Coty found out that Davidoff perfumes were being sold on Amazon, albeit through a seller and not directly by the marketplace operator, without the corresponding authorisation from the trade mark holder. Therefore, Coty sued Amazon for trade mark infringement alleging that the online marketplace was directly liable for trade mark infringement. Even though, unlike in the Louboutin case, the infringing products were shipped directly by the seller and not by Amazon. As a result, the CJEU ruled that Amazon could not be held liable for trade mark infringement as the operator did not carry out the shipping but only the storage of the infringing products, and considered that there was no active conduct from Amazon. However, in the Louboutin case, Amazon was also in charge of shipping the goods. 

Last December, the CJEU issued a decision and concluded that Amazon could be held liable for trade mark infringement if, when seeing the advertisement, an informed and reasonably observant consumer could establish a link between the trade mark in question and the services of the online marketplace. 

In other words, an online marketplace operator is likely to be considered to use a third-party trade mark by virtue of advertisements, if this is likely to give an informed user the impression that the operator itself markets, in its own name and on its own account, the goods bearing that sign, rather than third-party.

The Court recalled that, pursuant to article 9.2 EUTMR, the use of a EUTM involves an active conduct, and therefore that “the use of a sign by a third party is liable to be sanctioned under trade mark law, provided, however, that it is made in the context of the commercial communication of that third party”. 

As mentioned, now is the time for the national courts to decide if a seller's advertisement on an online marketplace is infringing a third-party trade mark, if the source of the advertisement could cause confusion in the minds of consumers.  

For the time being, this decision has been highly appreciated by trade mark holders that see in this ruling an opportunity for online marketplaces to take a more active role in the fight against counterfeiting. 

 

 

Picture by Birgith Roosipuu on Unsplash

Details

Publication date
31 January 2023
Author
European Innovation Council and SMEs Executive Agency