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What We’re Watching in Europe…

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Sterne, Kessler, Goldstein & Fox

Continuing with news involving the color red, on December 23, 2022, the Court of Justice of the European Union (CJEU) issued a preliminary ruling finding that Amazon may be subject to liability for trademark infringement stemming from certain advertisements for counterfeit Christian Louboutin red-soled shoes sold by third parties on its platform.

Christian Louboutin owns numerous trademark registrations for its famous red-colored sole for shoes, including registrations in Luxembourg, Belgium, and the European Community. In considering the question of Amazon’s potential liability in actions brought by Christian Louboutin in Luxembourg and Belgium, both national courts asked the CJEU for guidance on whether online marketplaces can be held liable for third party advertisements for goods that infringe registered trademarks. The CJEU answered the question in the affirmative, so long as there is confusion as to who is the source of the advertisement.     

In rendering its guidance, the CJEU explained that an online marketplace would be liable for trademark infringement if an informed and reasonably attentive user would believe that an advertisement for counterfeit products emanated from the operator of the online marketplace, such that the user would make an association between the online marketplace’s services and the trademark for the counterfeit products appearing in the advertisement. In the case here, the CJEU ruled that Amazon may be liable for trademark infringement since Amazon’s own products are grouped and advertised together with advertisements for counterfeit products by third-party sellers. The CJEU reasoned that the user’s ability to distinguish between products emanating from Amazon and from those of third parties may also be frustrated by the fact that Amazon offers storage and shipping services for the third-party counterfeit products, of which Christian Louboutin also complains.

With this guidance from the CJEU, proceedings at the national courts in Luxembourg and Belgium will resume to determine whether there is any confusion or misimpression as to the source of the advertisements at issue on Amazon’s platform.

We will be watching to see how both of these national cases are decided, and how they might help brand owners address advertisements for counterfeit goods sold on online marketplaces servicing Europe. The decision may also provide further insight on how online marketplaces servicing the European market should display advertisements for their own goods, on their own platforms, to avoid trademark infringement claims.