Trademark infringement: Louboutin v. Amazon

 

Background

Mr. Louboutin is a French designer of luxury shoes and handbags, renowned for the red soled stiletto heel. This colour found at the bottom of the high-heel shoe was registered as a Benelux trademark and later as a European Union trademark. Amazon operates an e-commerce website whereby it sells products both directly as a first-party vendor and indirectly as a third-party vendor. The online advertisement of counterfeit Christian Louboutin shoes bearing Louboutin's red sole registered EU trademark as well as the possession, shipping and delivery of these counterfeit products by Amazon formed the basis of the trademark infringement cases brought before the national courts of Belgium and Luxembourg.

 

Consequently, Mr. Louboutin argued that Amazon played an active role in the use of an objectively identical mark to those of his products for a commercial benefit, meaning that Amazon could not be regarded as a mere website host or a neutral intermediary given that it provides assistance to third-party sellers in particular to optimize the presentation of their offers. The proceedings in both national courts were stayed and preliminary questions were subsequently brought before the CJEU in relation to the alleged breach of Mr. Louboutin’s intellectual property rights in terms of article 9 (2) (a) of Regulation 2017/1001 of 14 June 2017 on the European Union trademark (the “Regulation”).

 

CJEU Preliminary Ruling

The CJEU examined the facts and stated that when the operator of an e-commerce website simultaneously displays and advertises products of its own along with the products of third- party sellers, this makes distinguishing the origin of these products difficult. Furthermore, when those goods bear a sign identical to the trademark of another, such uniform presentation is likely to create a link between that sign and the services provided by the operator in the eyes of those users of the website. Consequently, this gives the reasonable, well-informed and observant consumer the impression that it is Amazon which is marketing in its own name, while also offering the products for sale by these third-party sellers.

 

Additionally, an operator like Amazon who assists in the handling of consumer queries relating to products, storage and shipping of these products along with management of returns also enforces the same connection in the minds of these reasonable, well-informed and observant consumers between its services and the signs appearing on these products. In its ruling on 22 December 2022, the CJEU therefore concluded that where a marketplace operator uses a uniform method to present both products that it is selling and those that third parties are selling, all under the operator's logo, this may make it difficult for consumers to clearly distinguish the origin of each advert and source of the infringing goods. In these circumstances, it may give the impression that Amazon is marketing infringing products itself, and therefore ‘making use of’ the sign identical to Mr. Louboutin’s EU registered trademark for the purposes of the Regulation, thereby potentially exposing Amazon to liability in front of national courts.

 

The significance of this ruling is that operators of online marketplaces, such as Amazon, are now more vulnerable to being held directly liable for third parties selling counterfeit products on their websites, while it also makes it easier for brand owners to bring claims against operators such as Amazon for an infringement rather than bringing a claim against individual counterfeiters. Such platforms may therefore wish to rethink their website designs to ensure that products they are selling themselves are clearly distinguishable from third party products so that consumers can identify the origin of adverts and the party actually selling the goods.

 

Article written by Dr. Andrea Abela, Junior Associate, BDO Malta legal team.

 

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