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Who should take responsibility?

Hello everyone,

I hope that you’re having a good week.

One of the thorny issues we’ve come across in the last few years has been the sales of lookalike or even counterfeit products online on some big platforms such as Amazon, Etsy and eBay. Big brand owners have been pushing for platforms such as Amazon to take more responsibility for what they sell and whether or not it infringes on someone else’s rights.

To try and help with this the platforms have all developed brand registries and we’ve certainly helped many clients with the required trade mark registrations, take-down notices and reinstatement of goods for sale where unjustified challenges over trade mark, design rights and patent claims have been made.

Today I would like to talk to you a bit about a recent European Court of Justice ruling, and what it means for platforms that so far have been largely insulated from the responsibility of (and who many believe have even benefitted from) brand misuse.


The Ruling

In this particular case, the ECJ found that Amazon may be held responsible for third-party trade mark misuses in its jurisdiction. The ruling was a result of Christian Louboutin’s complaint to the Court, accusing Amazon of breaching its trade mark by hosting listings from 3rd parties which they say infringed its marks.

Crucially, Amazon as a platform hosts listings for its own products and third-party sellers who use Amazon to advertise (and indeed, sometimes logistically fulfil the sale) of their products.

The European Court (which since Brexit has significantly reduced influence over UK Courts) ruled that in offering its own products alongside third-party sellers, there was sufficient confusion, stating: “Amazon itself makes use of the sign registered by Louboutin where the user of its site has the impression that it is Amazon which is marketing, in its name and on its behalf, shoes of the trademark”.

Whilst the case itself will be decided by the lower courts, this opinion is binding on national courts within the ECJ's jurisdiction and this decision is of interest to those who trade in the EU.

So, the legal point here is that it is confusing enough for Amazon to inadvertently list infringing products on their platform that the buying public might believe that these counterfeit shoes are being sold by Amazon themselves – and as such, they can be considered a party to the infringement.

But what’s the bigger picture here?


The bigger picture

Well for me, this misses the bigger picture entirely and it’s one that attracts a bit of controversy.

It seems all too easy when visiting online marketplaces like Amazon, AliExpress, and Shopify to be able to access and purchase goods which infringe on established trade marks. The same goes for social selling platforms like Facebook, Instagram, TikTok, Etsy and so on.

For the most part, Joe Public are usually aware that these platforms offer, to some degree, look alike, copycat and “not quite the real deal” versions of branded goods.

However, in the past, these platforms have largely been given a bit of a free reign in relation to this – under the broad excuse that they only provide the means for a seller to sell, and that they themselves should not be liable for bad actors who utilize the platform with ill intent.

And yes, in their infancy, these platforms and marketplaces exploded in popularity and use which would have made it difficult to police them effectively. As such, lawmakers have largely capitulated in the past – censuring infringers on these marketplaces whilst assigning little responsibility to the platforms themselves. (Admittedly, in recent years programmes like Amazon’s Brand Accelerator and AliExpress’ similar crackdown have shown determination from marketplaces to police their platforms to a degree.)

But for many, including myself, there is a sense that given the scale of brand infringement occurring (and when we engage with online brand protection activities, we see it first-hand) it feels very much like shutting the stable door after the horse has bolted!

As such, decisions such as the one from the ECJ are welcome. Such cases are helpful in differentiating between 3rd party products that may be infringing and first-party Amazon products – as it imposes some responsibility on platforms that have become a hotbed for infringement activity.

(In another example, Corsearch, who is a platform we use as part of our brand protection activity have very recently published a white paper “calling for Cloudflare to do more” as the online hosting service after Corsearch found that 71% of all websites “notified by Corsearch and demoted by Google use Cloudflare”. In this instance, Cloudflare, whilst maintaining it is not responsible for the behaviour of its users, can clearly be seen to be receiving revenue from the infringing activity. Examples such as this continue to highlight the need for intermediaries of all kinds to shoulder some level of legal liability for misuse – especially when such a clear line can be drawn between misuse and revenue).


Striking the right balance

I concede that it is important, however, to strike a balance.

As platforms host an increasingly large number of different users – it becomes very difficult and perhaps even unrealistic for them to be able to police each and every instance of brand misuse that occurs on their platforms.
Furthermore, for the platforms to be liable in each infringement case would be an onerous and unrealistic burden to place upon them.

But what is clear is that we have reached a point where facilitators of infringement at scale should take more accountability for misuse occurring on their platforms and that those brand owners whose rights are infringed at scale should be respected and given redress.

What this might look like, I am not sure, but it is clear that whilst commerce has shifted to the online world, it stands to reason that the same liabilities should apply within reason, and I am not sure that we're there yet.

Regardless, the ECJ decision, in my eyes, represents a step in the right direction in incentivising platforms to move forward with brand owners' IP rights firmly in the forefront of their minds. Whilst we find ourselves as a law firm increasingly able to undertake takedowns on these platforms - the hope for our clients is that the means will be put in place soon, such that these infringements would not happen in the first place.

But what do you think?

Should online platforms take more responsibility for what they host? Should they be more liable from a legal standpoint?

I would be interested in your point of view.

As always, if you need me, drop me an email by clicking the button below. 

Hope you have a great weekend.



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