Retail

Amazon wins EU court backing in trademark dispute with Coty

Key Points
  • Amazon is not liable for unwittingly stocking trademark infringing goods for third-party sellers, Europe's top court said.
  • The court handed the U.S. online retail giant a victory in its battle against cosmetics company Coty.
  • The case, brought by Coty's German unit, underlines the tension between luxury goods companies seeking to preserve their exclusivity and branding and online platforms.
This illustration picture taken on July 24, 2019 in Paris shows the logo of the US online store application Amazon on the screen of a tablet.
MARTIN BUREAU | AFP | Getty Images

Amazon is not liable for unwittingly stocking trademark infringing goods for third-party sellers, Europe's top court said on Thursday, handing the U.S. online retail giant victory in its battle against cosmetics company Coty.

The case, brought by Coty's German unit, underlines the tension between luxury goods companies seeking to preserve their exclusivity and branding and online platforms such as Amazon and eBay fighting against online sales curbs.

Brand names have also questioned the scope of online platforms' responsibility for products sold, or content transmitted, on their sites.

Amazon found itself in a German court after Coty said it violated its trademark rights by stocking its Davidoff perfume for third-party sellers and should be held responsible for such practices. The German court sought guidance from Europe's top tribunal.

The Luxembourg-based Court of Justice of the European Union (CJEU) backed the U.S. company.

"The mere storage by Amazon, in the context of its online marketplace (Amazon-Marketplace), of goods which infringe trade mark rights does not constitute an infringement by Amazon of those trade mark rights," judges said.

Amazon's scheme called "Fulfilled by Amazon" allows it to store and deliver goods for third-party sellers, one of the key features of its business model.

The company welcomed the ECJ's decision, saying in a statement "Amazon continues to invest heavily in fighting bad actors on our store and is committed to driving counterfeits to zero."

The case is C-567/18 Coty Germany.