Louboutin versus Amazon: the position of online marketplaces in trademark law

Louboutin is a French designer who is mainly known for its women's high-heeled shoes. Since the 1990s, Louboutin has been using the well-known red soles on their high heels. This signature red sole is registered as a trademark within the Benelux and EU.

Amazon operates an online marketplace for third-party sellers. These external sellers offer products on the online marketplace. Shipping can be fulfilled by Amazon, which then stores the products in its distribution centres.

Amazon regularly displays advertisements for red-soled shoes put on the market without Louboutin's consent. Obviously, Louboutin is trying to oppose this practice. Louboutin holds Amazon, as operator of the online marketplace, liable for the trademark infringement.

Louboutin goes to court

This article concerns the case between Louboutin and Amazon at the highest court in the EU, the Court of Justice of the European Union (CJEU). Before the case reached this court, Louboutin launched legal proceedings against Amazon in both Belgium and Luxembourg. The task of the CJEU is, at the request of national courts, to explain certain European articles of law if there is any uncertainty. In this case, the national courts wondered whether Amazon, as operator of an online marketplace, could be described as legally 'using' the infringing sign.

Liability online marketplaces

Trademark proprietors are eager to be able to hold intermediaries like online marketplaces liable for trademark infringement on such platforms. For trademark proprietors, it is much easier to place responsibility with Amazon. However, Amazon claims that it is 'only' the operator of an online marketplace and must be considered a neutral party regarding the (infringing) products which are sold on its online marketplace. The key question is obviously whether Louboutin can hold Amazon liable in this specific case.

The classic idea of trademark law is that the trademark proprietor is entitled to "prevent all third parties not having his consent from using in the course of trade, in relation to goods or services, any sign where the sign is identical with the trademark of the trademark proprietor, and is used in relation to goods or services which are identical with, or similar to, the goods or services for which the trademark is registered, if there exists a likelihood of confusion on the part of the relevant public".

In other words: a trademark proprietor can only object to a third party if that third party also actually uses the infringing sign, in the sense that it is used to market the trademarked shoes.

'Use' as trademark law concept

The case between Louboutin and Amazon mainly focused on the definition of the term 'use'. Because, in terms of trademark law, does Amazon 'use' a distinguishing sign which is similar to a registered trademark of the trademark proprietor if it 'facilitates' the use by a third party on its online marketplace? In this case, Amazon claims that it has 'only' a facilitating function in terms of displaying distinguishing signs by third-party sellers.

Trademark law requires active behaviour to constitute "use”. . The term 'use' implies at least that the sign is used in the framework of its own commercial communication. In principle, distinguishing signs that are displayed on online marketplaces are only used by the third-party sellers of the operator of this marketplace, because the operator of the online marketplace - in this case Amazon - does not use this sign in the framework of its own commercial communication. Amazon invokes previous case law on this question.. An important detail is that in those judgements, it was not actually established that the operator of the online marketplace also sold products in its own name. In other words: in those specific cases, was it clear to the consumer that another party - not the operator of the online marketplace - was in fact selling the products.

Consumer perception

In the case of Louboutin versus Amazon, the facts are slightly different than in the cases invoked by Amazon. In addition to the online marketplace offered by Amazon on its website, Amazon - on that same website - is simultaneously presenting its own sales offers. The Amazon logo is used with both the goods offered by third parties and with its own. Furthermore, Amazon does not merely play a facilitating role in the sense that it only offers its platform as a marketplace. Consumers can ask Amazon questions about third-party products. Amazon also offers the option of fulfilling shipping and handling any third-party product returns. The result of the above-mentioned presentation and involvement in shipping means that consumers may get the impression that Amazon is offering the third-party products itself. The consumer will subsequently assume that there is a relationship between Amazon and the infringing distinguishing sign.

Application in legal practice

It seems to be more difficult for operators of online marketplaces - and perhaps other parties acting as 'intermediary' - to escape any liability in all cases. In this specific business model at least - in which the company's own sale offers and offers by third parties are uniformly presented - Amazon does not seem able to escape any liability. Additional services, like answering questions about products and fulfilling shipping, enhances the assumption of the consumer that Amazon is the actual user of the infringing distinguishing sign. The CJEU considers that this practice goes beyond that of a neutral online marketplace that merely facilitates.. It remains to be seen how national courts will apply this judgement in national cases. 

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