Coty v Amazon continues: latest decision highlights the right to inspection under German Trademark Law
The case between German perfume distributor Coty and e-commerce giant Amazon has gone into another round before the German Federal Supreme Court.
In 2020 the Court of Justice of the European Union (CJEU) decided that a person who stores trademark-infringing goods for a third party without knowledge of the infringement does not possess the goods for the purpose of offering or putting them on the market if they do not pursue such purposes themselves. In this case, Amazon was storing parallel import Davidoff Hot Water perfume for a third-party seller using Amazon Marketplace (C-567/18, Coty Germany/Amazon).
The case went back to the Supreme Court (21 January 2021, I ZR 20/17), which found that although Amazon was not an infringer, it could be liable due to breach of duty of care by contributing intentionally and causally to the trademark infringement. The court found that the company could be liable for information on the manufacturing numbers of the infringing perfumes that it stored, deciding that the right to inspection under German Trademark Law, short of actual inspection, includes the duty to communicate certain characteristics of infringing products.
Amazon Marketplace enables third-party sellers to place offers for sale in respect of their goods. Any contract to purchase the item is then concluded between the seller and the consumer. However, under the ‘dispatch by Amazon’ programme, Amazon offers to store third-party goods in its warehouses and arranges their dispatch upon sale.
Coty is a German perfume distributor and licensee of the DAVIDOFF trademark. It discovered that a third-party seller using Amazon Marketplace was selling parallel import products that infringed Coty’s marks.
Coty resolved the dispute with the seller and requested Amazon to return the infringing products being stored. Amazon obliged, but it was soon discovered that part of the infringing inventory sent to Coty came from a second, unknown third-party seller, whose products were also stored by Amazon. These items turned out to be infringing parallel imports of Davidoff Hot Water perfumes. Amazon could not disclose the identity of the second seller. As a result, Coty brought action against Amazon before the Regional Court of Munich, arguing that it had infringed Coty’s rights in DAVIDOFF by storing and despatching infringing perfumes on behalf of a third-party seller. In addition, it claimed information on the manufacturing numbers of all the perfumes stored at the same location as those that had been sent to Coty.
The action was dismissed at first instance and on appeal. The court then referred the following question to the CJEU:
Does a person who, on behalf of a third party, stores goods which infringe trade mark rights, without having knowledge of that infringement, stock those goods for the purpose of offering them or putting them on the market, if it is not that person himself but rather the third party alone which intends to offer the goods or put them on the market
The CJEU answered with no.
The case went back to the Supreme Court, which applied the above CJEU decision and confirmed that Amazon was neither an infringer nor a participant in the infringement. However, the court held that Amazon was potentially liable due to its breach of duty of care. It noted that Amazon could have reasonably inquired about the origin of the infringing goods. However, the Munich Court of Appeal had failed to make the necessary findings as to if and how Amazon fulfilled the above obligation following Coty’s notice.
The Supreme Court then confirmed that – depending on the finding of breach of duty of care – Coty may have a claim for information on the manufacturing numbers of all Davidoff Hot Water EdT 60ml perfumes, which were stored in the same place as the perfumes sent to Coty by Amazon. Coty may demand that the alleged infringer/interferer produce a document or inspect an object that is in its power of disposal, if this is necessary to substantiate its infringement claims. The claim for inspection includes the duty to communicate certain characteristics of the infringing products (eg, the manufacturing numbers of the perfumes stored by Amazon).
The case has been referred back to the Munich Court of Appeal, which must assess whether Amazon in fact breached its duty of care. This will depend on the measures undertaken by Amazon after being informed by Coty about the infringement.
It is highly likely that the case will be back before the Supreme Court in no time.
This article was first published on World Trademark Review on 25 March 2021 – see here.