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Amazon Gets a Leg Up in Louboutin Lawsuit

Amazon cannot be held “directly liable” for third parties’ infringing “commercial offerings,” an official with the Court of Justice of the European Union (CJEU) concluded.

Published Thursday, the non-binding opinion arose from actions brought by the French footwear designer Christian Louboutin in Luxembourg and Belgium. The lawsuits regarded third parties using Amazon to sell shoes he said infringed on E.U. and Benelux trademarks for his signature red outsoles.

In March 2021, the court in Luxembourg turned to the CJEU for guidance. The case was later merged with a similar complaint from Belgium.

The joined cases asked the CJEU to interpret a provision passed by the European Parliament in 2017 and decide whether an online marketplace is directly liable for displaying advertisements for infringing goods and for delivering infringing goods that are offered by an independent seller on that marketplace.

CJEU advocate general Maciej Szpunar concluded that although an online intermediary’s commercial services may include the publication of offers for sale and shipping of goods, it “cannot be held directly liable” when third parties’ commercial offerings infringe on a trademark, a media release said.

In his opinion, Szpunar argued the settled case law of the court holds that the act of use by an internet intermediary requires that it use the trademark in its own commercial communication. This condition is met when the addressee of that communication—a “reasonably well-informed and reasonably observant” user of the platform— specifically links the intermediary and the trademark, he wrote. Szpunar noted that the advertisements on Amazon’s site always specify whether the goods are sold directly by Amazon or by a third-party seller.

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Christian Louboutin originally sued Amazon in 2019 for infringement
Christian Louboutin Nasser Berzane/Abaca/Sipa USA via AP Images

That Amazon’s advertisements and those of third-party sellers appear next to each other does not mean a well-informed internet user would perceive the trademarks displayed on the third-party ads as an integral part of Amazon’s commercial communication, Szpunar decided. Likewise, the same logic applies to the additional services of assistance, stocking and shipping of goods, he added. In these circumstances, he concluded the operator of an online platform like Amazon is not directly liable for third parties’ infringement.

Szpunar’ opinion is not binding on the CJEU. The role of the advocates generals is to independently propose to the court a legal solution to the cases they are responsible for. The court’s judges “are now beginning” deliberations on this case with a judgement to be given on a “later date,” the media release said.

Louboutin originally brought proceedings on behalf of his Benelux trademark before the president of the Brussels Companies Court in Belgium in March 2019. By August, the president of the court had ruled in the designer’s favor subjecting Amazon to financial penalty should it continue to advertise red-soled shoes. In September 2019, Louboutin brought proceedings before the District Court of Luxembourg on behalf of his E.U. trademark, asking for similar protections across Amazon’s European marketplaces.

By June of 2020, however, the Brussels Court of Appeals set aside its earlier judgment, deciding instead that only ads relating to shoes sold by Amazon itself could be subjected to penalties. Louboutin filed to appeal the judgement. The courts eventually referred both the Belgium and Luxembourg cases to the CJEU.

Amazon has worked in recent years to crack down on counterfeiters, including founding a so-called Counterfeit Crimes Unit (CCU) in mid-2020. In October last year, it reported that it had invested more than $700 million to stopping fraud, counterfeit and abuse. It said the CCU had provided in-depth referrals and evidence of more than 250 counterfeiters for criminal investigation in the U.S., U.K., EU and China. Its work has also included teaming with brands like Valentino and Salvatore Ferragamo to sue counterfeiters.