AG Szpunar advises CJEU not to extend direct liability for trade mark infringement to operators of online marketplaces

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Is the operator of an online marketplace (more specifically: a hybrid marketplace, which also provides logistics assistance to third-party sellers through a fulfilment programme) using third-party trade marks itself, in accordance with Article 9(2) EUTMR, when it displays, on its marketplace, advertisements of independent sellers’ goods that infringe such trade mark rights, which it also delivers to end customers? Is the perception of a reasonably well informed and reasonably observant internet user relevant when undertaking such an assessment?

These are the key issues on which the Court of Justice of the European Union (CJEU) has been requested to provide guidance. Joined cases Louboutin/Amazon, C-148/21 and C-184/21 are referrals for a preliminary ruling made in the context of highly similar proceedings pending before, respectively, Luxembourg’s Tribunal d’arrondissement (C-148/21) and Belgium’s Tribunal de l’entreprise francophone de Bruxelles (C-184/21).

Yesterday, Advocate General (AG) Szpunar issued his Opinion [not yet available in English] in which he advised the CJEU to rule that, at the conditions described by the referring courts, a marketplace operator would not be directly liable for trade mark infringement.

Let’s see how the AG reasoned.

Preliminary remarks

The AG began his Opinion noting how the topic of intermediary liability has always raised novel questions over time. This, he noted, is unsurprising considering the relevance of the internet to our societies and also the circumstance that the internet has been creating new intermediation models.

From an IP perspective, it is “easily understandable” (“agevolmente comprensibile”) that rightholders seek to establish the liability of operators when counterfeits are being sold through their platforms, also because of the difficulties connected with the identification and localization of individual sellers.

This said, the interests of rightholders cannot be considered in isolation and cannot, on their own, justify a finding of liability of platform operators due to third-party infringements. Account should be taken of the circumstance that this could entail imposing a general monitoring obligation (contrary to Article 15 of the Ecommerce Directive) and make it generally more difficult to innovate online.

Notion of “use”

Turning to the substance of the referrals, the AG noted that the notion of use is not defined in the EUTMR. It has been the CJEU, through its case law, that has provided guidance on how it is to be intended. 

The notion of “use” thus requires an active behaviour/conduct and a direct or indirect control over the act constituting use. The rationale of all this is to allow the trade mark proprietor to prohibit any unauthorized use of their trade mark by a third party that is effectively able to stop such use and therefore comply with that prohibition. This is connected to the well-established principle according to which no one can be legally obliged to do the impossible.

With specific regard to intermediaries, the CJEU has held that an intermediary that renders 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.

Referring to the judgments in Google France, L’Oréal, and Coty, the AG considered (my own translation from Italian) that “as of today […] the requirement that use of the sign by an online intermediary needs to be within its own commercial communication has always led to exclude the existence of use by the intermediary itself”. He nonetheless conceded that it is not entirely clear which situations fall within the notion of use of a sign by an intermediary in the context of its own commercial communication.

All the above said, the AG noted that it is possible to identify the borders of such a notion by undertaking a closer inspection. 

The relevance of the platform user

The commercial communication of an undertaking encompasses all forms of communication aimed at promoting its own activity, products, or services. As such, it targets third parties in order to make them aware of its activities and establish a link between that subject and the sign at issue.

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In line with the AG Opinion in Coty, AG Szpunar considered that whether there is use of a sign within an intermediary’s own commercial communication cannot but be appreciated from the perspective of the addressee of such a communication, that is the platform user.

Having established that, the next step would be to determine the attributes of such a user. According to the referring court, it should be a “reasonably well informed and reasonably observant internet user”. The AG substantially agreed, considering that the perception of such a user would be a “pertinent element” (“elemento pertinente”) to determine use of a sign in the own commercial communication of a platform operator.

Application of the principles to the present circumstances

Applying the principles above to the present circumstances, the AG concluded that a platform operator like Amazon does not use Louboutin’s trade mark within the meaning of Article 9 EUTMR. As such, no direct/primary liability for trade mark infringement could be established.

Among other things, the AG considered that none of the peculiarities of the Amazon model as described by the referring courts would allow to ‘depart’ from the conclusions reached in a case like L’Oréal.

All the above said, the AG did not rule out that liability could be established – on a secondary/indirect basis – in accordance with national law.

Conclusion

As I write in this article, which was supported by one of the parties to these proceedings, the conclusion that there is no use in a trade mark sense of the Louboutin trade mark is correct and the CJEU should endorse it.

This said, I am not entirely persuaded about the relevance of the platform user’s perception to the determination of whether there is “use”. My view would be that such an assessment is to be conducted exclusively on an objective basis. The perception of the ‘average consumer’ would come into consideration at a subsequent stage, that is when deciding whether the use at issue is actually infringing.

Let’s now wait for the CJEU ruling: stay tuned!