Amazon victorious in EU trademark lawsuit with Coty

Amazon is not liable for unknowingly stocking trademark-infringing goods on behalf of third-party sellers, according to a landmark EU legal judgment.

The decision in the legal dispute with the German unit of cosmetics company Coty is that Amazon’s storage of fake or unlicensed products doesn’t amount to trademark infringement, according to the Luxembourg-based Court Justice of the European Union (CJEU).

The ruling has implications for Amazon in the context of counterfeits, as it faces criticism from brandowners that its third-party Marketplace is riddled with fake goods.

It sets a precedent that would seem to absolve Amazon of responsibility for stored counterfeits, but it’s worth noting the case still has to be handed back to Germany’s federal courts.

The long-running lawsuit dates back to 2014, and was prompted by Amazon selling an unlicensed Davidoff Hot Water perfume product, sold by a third-party via its “fulfilled by Amazon” service. Coty also filed a cease-and-desist notice with the seller, which was complied with.

Shortly after Coty asked Amazon to surrender all infringing bottles of the perfume, and it received 30 bottles – 11 of which originated from another sellers stock. The cosmetics firm asked for the identify of that seller, and Amazon responded it wasn’t able to comply.

A lawsuit alleging trademark infringement was filed by Coty in Germany and sought to stop Amazon selling any Davidoff Hot Water products – but was dismissed – and was referred to the CJEU on appeal.

“The mere storage by Amazon, in the context of its online marketplace, of goods which infringe trademark rights does not constitute an infringement by Amazon of those trademark rights,” said the CJEU in a statement after the ruling.

“A company which, on behalf of a third-party seller, stores goods without being aware that they infringe trademark rights does not itself use that trademark, so long as it does not pursue, like the seller, the aim of offering the goods for sale or putting them on the market.”

Amazon insists that it strictly prohibits counterfeit on its platform, saying that in 2018 alone it invested more than $400m to fight fraud, counterfeit, and other forms of abuse as it tries to drove the number of fakes sold to “zero”.

“In 2019, we launched new programmes including Project Zero and IP Accelerator, expanded existing programmes like Brand Registry and Transparency, and piloted new innovations including the Utility Patent Neutral Evaluation process,” said a spokesperson ahead of the latest ruling.

Earlier this year, the company also committed to reporting all confirmed counterfeiters to law enforcement to help them build stronger criminal cases that can hold counterfeiters accountable, she added.

“We are actively fighting bad actors and protecting our store and we will continue to work with brands, government officials, and law enforcement.”