Amazon escapes liability on its FBA Service
What’s Amazon’ liability for trade mark infringement if they fulfil a product order that happens to be of a product that infringes a brand owner’s rights? This was the question considered in an action brought by Coty over their Davidoff Hot Water perfume. The products in this case were put on sale by a seller who used Amazon’s Fulfilment by Amazon service option to store and ship goods. Amazon describes this service option on their site as ‘With Fulfilment by Amazon, you store your products in Amazon fulfilment centres, and we pick, pack, ship and provide customer service for these products’. Amazon had no knowledge of the infringing nature of the goods and no intention of placing the goods on the market themselves. On those facts the court found that Amazon’s actions could not give rise to liability. While Coty argued that the commercial interest that Amazon had in the reseller’s activities should be enough to treat Amazon as if it was stocking and selling the perfume itself, the court did not agree. The contract here is made between the seller and the customer. Holding Amazon liable for where they had knowledge of the infringing nature of the goods would stretch the limits of liability. In this case nobody except Coty itself was able to tell whether the products were authorised Coty products for sale in the EU and on that basis the court’s reasoning is hard to criticize. The case will now go before the European Court of Justice.
The sale of counterfeit and grey markets goods on Amazon and other marketplace sites is a major issue for many brand owners. Using a fulfilment service on a site like Amazon allows a vendor to hide their contact details and makes finding the source of infringing goods difficult to discover. While the decision of the court here appears sensible in that Amazon cannot be liable for sale of infringing goods where it is not aware of the infringement, what about where Amazon is aware and put on notice of the infringement. In that the Community Trade Mark Regulation should assist a brand owner who can show that Amazon has used the trade mark ‘in the course of trade’ even if Amazon is not technically selling the products.