ELZABURU Blog - Industrial and Intellectual Property

Tag Archives: Infringement

Amazon not liable for trademark infringement in storing goods offered and sold by third parties

Amazon no infringe marcas ajenas al almacenar productos ofrecidos y vendidos por terceros, según el TJUE

In December 2017, the Court of Justice of the European Union ruled that from the standpoint of the rules on competition, the bar imposed by the company Coty Germany on the members of its selective distribution network, prohibiting them from offering its luxury perfumes on the Amazon e-commerce platform, was lawful.

Amazon not liable for trademark infringement in storing goods offered and sold by third parties  

On 2 April of this year, the CJEU ruled on a new matter referred for a preliminary ruling (case C-567/18) concerning the sale of Coty’s perfumes through the aforementioned platform. However, on this occasion, Coty had brought its complaint directly against Amazon, and the decision went against its interests.

Coty Germany had brought an action against Amazon before the German courts, arguing that Amazon was infringing its trademark rights by storing Davidoff brand perfumes in which its trademark rights were not exhausted. The storage in question formed part of the service provided by Amazon to third-party sellers that were offering goods for sale in the “Amazon Marketplace” section of Amazon’s website in Germany.

The complaint was dismissed and, with Coty having lodged an appeal against the decision on a point of law, the German Federal Court of Justice (Bundesgerichtshof) referred a question to the CJEU for a preliminary ruling, seeking clarification as to whether said storage constituted use of the trademark within the meaning of Article 9 of the Regulation on the European Union Trade Mark. Specifically, it questioned whether it came under the example of use mentioned in Article 9(3)(b) of Regulation No. 2017/1001, which provides for prohibiting third parties from “offering the goods, putting them on the market, or stocking them for those purposes”.

In its ruling on the matter, the Court of Justice first of all pointed to its case law holding that on e-commerce platforms third-party trademarks are used by the sellers of the goods and not by the operators of those platforms (judgment of 12 July 2011, L’Oreal, C-324/09).

With respect to the storage service Amazon provides to third parties who sell goods on its platform, the Court stated that according to the information provided by the referring court, those goods were not offered or put on the market by Amazon itself but by the third-party sellers. It further stated that it follows from this circumstance that Amazon does not use the trademarks in its own commercial communication. Therefore, Article 9 of the Regulation is not applicable to Amazon.

Lastly, the CJEU stated that the above does not preclude the examination of the platform operator’s conduct with respect to the trademarks of third parties from the standpoint of other rules of law, specifically Article 14(1) of Directive 2000/31 on certain legal aspects of information society services or Article 11 of Directive 2004/48 on the enforcement of intellectual property rights. However, since this matter had not been raised by the referring court in this case, the Court of Justice refrained from conducting such an examination, notwithstanding Coty’s petition in this regard.

In summary, the Court of Justice rejects that Amazon may be held directly liable for trademark infringements committed by sellers that use its online sales platform, not even when it stores the infringing goods. Nevertheless, it does not rule out the possibility that the owners of infringed trademarks could request measures against Amazon through application of the rules in the aforementioned directives. In this regard, we must consider the precedent of the aforementioned judgment of 12 July 2011, in which this issue was examined in relation to the eBay platform.

 

Author: Carlos Morán

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Passions Fly in Shopping Trolley Case

In a passionate dispute over shopping trolleys locks, Valencia Commercial Court No. 2 has found against a supplier who had been displaced at one of Spain’s largest retail chains (Judgment 134/19 of May 6th, 2019 in PO764/2017).

When this happens, emotions tend to run high and the row often ends up in court. The shunned supplier frequently alleges infringement of a utility model together with slavish imitation giving rise to unfair competition. A driving force for such litigiousness is the fact that utility models are not subject to any substantive examination in most European countries, for instance, in Spain and Germany. There is no bar to obtaining an exclusive right based on something which may be lacking in merit. This effectively shifts the State’s functions onto the shoulders of competitors, who are saddled with the burden of proving that the title is invalid. It might be fairer if that burden were shifted to the title-holder who, after all, has obtained an exclusive right based on nothing more than his or her own say-so.

The justification for this system is that it provides SME’s with a route to obtaining fast-track protection for inventions at a reasonable cost, thereby giving them access to the patent system and encouraging innovation. However, SME’s competitors are usually other SME’s who may be unjustifiably precluded from carrying out further developments simply because they cannot bear the cost of litigation. It is only fair to point out however that the system does have some checks and balances. The patent office can carry out a prior art search upon request and in fact this has now become mandatory in Spain before enforcement proceedings can be brought. Unlike the case of patents, a German infringement court can consider validity as a defence – an exception to bifurcation. Post-grant opposition is also available in both countries, which can be undertaken for a fraction of the cost of court proceedings.

In the Valencia case the Court found that the new shopping trolley locks did not infringe the utility model which was described by the Court as a simple alternative lacking in any inventive merit. Whether the lock was a slavish imitation or not was irrelevant from the point of view of unfair competition, as imitation per se is expressly permitted by the Spanish Unfair Competition Act. The Court had not been shown any evidence that the imitation had interfered with the normal workings of the marketplace such as causing a risk of association with the original coin-lock in the mind of the average buyer.

This decision applies settled case law which upholds the principle of free imitation. This comes as a surprise to many people who somehow imagine that their “intellectual property” is automatically protected. The whole point of the free market economy is that the public be offered a range of similar products. The granting of patents and other exclusive rights is in fact an exception to this general rule which is only justified because it encourages innovation.

Author: Colm Ahern
Visit our website: http://www.elzaburu.es/

S.O.S. Security incident

Since 25 May, we receive news and notifications every day of security breaches at top-level companies resulting in the mass exposure of customer data.

The reality, as unlikely as it may seem, is that the number of security breaches has not increased since the application date of the Data Protection Regulation (GDPR) of 27 April 2016. It is in fact the case that, up to now, there has been no obligation under our legislation to report security violations except in the case of providers of publicly available electronic communications services, while the GDPR now extends this obligation to any company processing data.

A security incident is the destruction, loss or alteration of personal data due to internal or external causes, which may be accidental or intentional. With regard to such an eventuality, the most important things for any company to bear in mind should be to (i) define a procedure for management of security breaches; (ii) have the tools available to assess the risk of such an incident occurring; and (iii) know whether it should be reported to the supervisory authorities and to data subjects depending on the characteristics of the incident and the risk for data subjects.

Notification to the supervisory authority, as established under the GDPR, is required whenever the incident may result in a risk to data subjects and the notification must be made within 72 hours of becoming aware (having actual evidence) of the incident. It is also required to notify the data subjects affected whenever such an incident could result in a high risk for them and provided that said notification does not compromise the outcome of a pending investigation, in which case the communication may be made at a later stage, all under the control of the supervisory authority.

Additionally, it is crucial to respond quickly in an effort to mitigate the consequences of the incident, by adopting security measures that prevent access to data or amendment or reading of the same.

The only effective formula for avoiding this deluge of legal obligations is prevention. All possible measures must be taken to avoid security breaches, prevent unauthorised reading and amendment of data, and establish a procedure for responding to incidents of this kind.

The European Data Protection Board, formerly the Article 29 Working Party, prepared a guide on notification of security breaches which deals with many of the issues that had given rise to doubts. Moreover, on 19 June 2018 the Spanish Data Protection Agency published a guide for management and notification of security breaches with directives for detection and management of security breaches and evaluating notification of the same.

Author: Martín Bello y Cristina Espín

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