Amazon must check for trade mark violations says EU court adviser

U.S. online retail giant Amazon is not liable for unwittingly stocking trade mark infringing goods for third-party sellers, but should be diligent in checking whether products are legal, an adviser to Europe's top court said.

The adviser was giving his opinion on a case that pits Amazon against U.S. cosmetics company Coty.

The dispute is one of the many battles between luxury goods companies seeking to preserve their exclusivity and branding and online platforms such as Amazon and eBay fighting against online sales curbs. It also raises the question of the scope of online platforms' responsibility for products sold, or content transmitted, on their sites.

The opinion from Manuel Campos Sanchez-Bordona, advocate general at the Court of Justice of the European Union (CJEU), came in a case involving Coty's German subsidiary, which took Amazon to a German court for stocking Coty's Davidoff perfume for third party sellers.

Coty said such practices violate its trade mark rights and that Amazon should be liable for stocking trade mark infringing goods. The German court subsequently sought guidance from the CJEU.

Companies which are not aware of trade mark infringements cannot be held responsible for storing such products for third party sellers, Campos Sanchez-Bordona said.

However, if they are actively involved in distributing the goods and if they operate a scheme like Amazon's, then they should show diligence in checking the legality of goods sold on their platforms, he said. Under a scheme called "Fulfilled by Amazon", the U.S. online retail giant stores and delivers goods for thirdparty sellers, one of the key features of its business model.

Companies cannot simply absolve themselves of responsibility and should be aware that without this control, they can serve as a channel for the sale of illegal, counterfeit, stolen or unethical products, Campos Sanchez-Bordona said.