Amazon may be liable for trademark infringement after a European Court decision

The European Court has ruled in joined cases C‑148/21 et C‑184/21Christian Louboutin v Amazon

The main issue that focuses our attention, in this case, is whether Amazon can be liable for unauthorized use of trademarks shown in ads of third parties.

As it is well-known, Amazon is the biggest online retailer in the world offering a myriad of goods, directly or through third parties that use Amazon’s platform to sell their products.

The problem arises when these third parties offer fake goods bearing trademarks of other companies without permission and promote them through Amazon ads.

Several months ago, the Advocate General of the EU Court Maciej Szpunar gave its opinion that in such a situation Amazon is not liable for ads that infringe other trademarks, because the company does to use these marks itself.

The European Court, however, disagreed with the Advocate General, and conclude that Amazon may be liable for trademark infringement related to such ads.

The reason for this is the fact that Amazon itself uses ads to promote the same, but original, goods. These ads are very similar to those used by third parties but for fake goods. Thus it is difficult for consumers to make a distinction between the ads which in turn can lead to misleading about the fact that the fake goods can originate from Amazon. From that perspective, Amazon can be held liable for unauthorized trademark use.

In addition, the possible confusion between the ads is enhanced by the fact that Amazon is often involved in the storage, shipping, and management of returns for third-party products on its sites.

Source: Marks & Clerk – Megan Rannard for Lexology.

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Using a trademark as a decorative element is not the best option for its protection in the EU

The General Court of the European Union has ruled in the case T‑323/21 Castel Frères v Shanghai Panati Co., which reminds us how essential is one registered mark to be used correctly in order for its protection to be viable.

The case has the following background:

On 29 May 2018, Shanghai Panati Co filed an application with EUIPO for revocation of the EU trademark that had been registered further to an application filed on 17 March 2008 for the following figurative sign:

The goods covered by the contested mark, in respect of which a declaration of invalidity was sought, were inter alia in Class 33 of the Nice Agreement: ‘Still wines’.

The ground relied on in support of the application for revocation was the lack of genuine use of the contested mark within a continuous period of five years.

Evidence was submitted by Castel Frères that the mark was used for wine labels in the following way:

On 3 April 2020, the Cancellation Division rejected the application for revocation.

On 24 April 2020, Shanghai Panati Co. filed a notice of appeal with EUIPO against the decision of the Cancellation Division.

By the contested decision, the Board of Appeal upheld the appeal and revoked the contested mark. The Board of Appeal found, in essence, that the differences between the contested mark and the mark as used were such as to alter the distinctive character of the contested mark.

The Court upheld this decision.

According to the Court, it must be borne in mind that the contested mark in its registered form is a figurative mark consisting of three characters from the Chinese alphabet. As the Board of Appeal correctly notes the relevant public will not be able to verbalise or to memorise those Chinese characters, which will rather be perceived as meaningless, abstract signs or as decorative elements referring to China or to Asia. It is appropriate, therefore, to find that, with regard to the goods at issue, the Chinese characters forming the contested mark have a lower-than-average degree of distinctive character.

In that regard, it must be emphasised that on the product packaging or in the advertisements, the contested mark, which appears in a very small size, is almost systematically accompanied by the word elements ‘dragon de chine’ and by the representation of a dragon, which appear together and are very close to one another. Moreover, in so far as the contested mark is composed of three characters from the Chinese alphabet, in a very small size, the added elements are always clearly visible and dominate the overall impression.

The Board of Appeal was therefore right to find that the contested mark as used, that is to say, in an ancillary position and in a much smaller size than the distinctive and dominant word elements ‘dragon de chine’ and the representation of a dragon, would be perceived by the relevant public as a decorative element and not as an indication of origin of the goods.

That finding cannot be called into question by the argument that, in essence, it is common in the wine sector for two or more trademarks to be used jointly and autonomously on labels, with or without the name of the manufacturer’s company, as is the case here with the mark Dragon de Chine. It must be stated that the word elements ‘dragon de chine’ are always clearly visible in that they occupy a dominant position in the overall impression created by the mark as used. In any event, even if it were established that those elements are a trademark, the fact remains that that is not capable of weakening the alteration by those terms of the distinctive character of the contested mark, since the relevant public no longer perceives those three characters from the Chinese alphabet as an indication of the origin of the goods in question, in accordance with the case-law.

Having regard to the above examination of the distinctive and dominant character of the added elements, based on the intrinsic qualities of each of those elements and on the relative position of the various elements, it must be held that the variations in use demonstrated alter the distinctive character of the contested mark as registered, as the Board of Appeal rightly found.

This decision comes to remind us that one trademark should always be used as an indication of trade origin and not as a complimentary or decorative element. In a similar case, Apple lost a dispute regarding its trademark Think Differently because of the way the mark was used on the package of the product.

Is the re-use of branded carbonated gas bottles allowed – an EU Court ruling

The European Court has ruled in the case C‑197/21 Soda-Club (CO2) SA, SodaStream International BV v MySoda Oy. The main question, in this case, is whether refilled by someone else carbonated gas bottles infringes the trademark rights of the original producer of the bottles. The dispute has the following background:

SodaStream, a multinational corporation, manufactures and sells carbonation devices that enable consumers to make carbonated water and flavored carbonated beverages from tap water. In Finland, SodaStream markets these devices with a refillable carbon dioxide bottle, which it also sells separately. The companies that form SodaStream are the owners of the European Union trademarks and the national trademarks “SODASTREAM” and “SODA-CLUB”. The specified brands are found on the label and engraved on the aluminum body of these bottles.

MySoda, a company based in Finland, markets in that Member State carbonation devices under the brand name ‘MySoda’ in packaging that does not normally include a carbon dioxide bottle. Since June 2016, MySoda has been offering Finnish-filled carbon dioxide bottles for sale, which are compatible with both its own carbonators and those of SodaStream. Some of these bottles were originally marketed by SodaStream.

After receiving empty SodaStream bottles returned by consumers through distributors, MySoda refills them with carbon dioxide. It replaces the original labels with its own, leaving visible the SodaStream branding engraved on the bottles’ bodies.

For this purpose, MySoda uses two different labels. The first has the MySoda logo and the words “Finnish carbon dioxide for carbonation equipment” in large print in pink, and in small print MySoda’s name as the company that filled the bottle, as well as a link to its website for more detailed information. The second white label has the words “carbon dioxide” in capital letters in five different languages, and among the product information, in small print, MySoda’s name as the company that filled the bottle, as well as a statement that it has no relation to the original supplier of the bottle or his company or the claimed brand that appears on the bottle. In addition, this label contains a link to the MySoda website for more information.

SodaStream initiated a lawsuit for trademark infringement. The Supreme Court of Finland wasn’t sure whether such refilling and use of a trademark was a real infringement and asked the EU Court for clarification.

According to the EU Court:

Article 15, paragraph 2 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trademark and Article 15, paragraph 2 of Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 on the approximation of the laws of the Member States on trademarks

shall be interpreted to mean that:

the proprietor of a trademark who has placed on the market in a Member State good bearing that trademark which are intended for repeated use and refilling, shall not be entitled under these provisions to oppose the further marketing of those goods in that Member State by a reseller, who has refilled them and replaced the original brand label with another label, leaving the original brand visible on those goods, unless this new label gives consumers the false impression that there is an economic relationship between the reseller and the brand owner. This likelihood of confusion must be assessed in light of the information on the product and its new label, as well as distribution practices in the relevant sector and the extent to which consumers are aware of those practices.

(unofficial translation from the Court’s decision)

Belize joins the Madrid Protocol for the registration of international trademarks

WIPO reports about the accession of Belize to the Madrid Protocol for international registration of trademarks. The Protocol will come into force for the country on 24.02.2023, a date after which the country will be able to be designated in applications for such marks.

The country has made some declarations, two of which are that potential refusals for registration can be issued for up to 18 months as well as that there will be individual fees for the designation of Belize.

Can a trademark license be discontinued only by one of the mark’s co-owners?

The Advocate General of the European Court M. CAMPOS SÁNCHEZ-BORDONA has provided an opinion in the case C‑686/21 VW, Legea Srl срещу SW, CQ, ET, VW, Legea Srl.

This case focuses our attention on the question of whether one of the co-owners of a trademark can put an end to a license alone without consent from the other co-owners. The background of the case is as follows:

In 1990, VW, SW, CQ and ET formed a general partnership which, on 29 July 1992, filed an application for national registration of the trade mark Legea for sports goods. Registration was granted on 11 May 1995 under the number 650850.

In 1993, the joint proprietors of the trade mark ‘Legea’ unanimously granted Legea Srl (‘the company Legea’) a licence to use that mark for an indefinite period and free of charge. 

In December 2006, VW expressed his dissent to the continuation of the licence. 

In 2009, the company Legea instituted proceedings before the District Court, Naples, Italy)seeking to obtain, inter alia, a declaration of invalidity of certain marks registered by VW which contained the word ‘Legea’. For his part, VW lodged a counterclaim in the same proceedings.

In those proceedings, the dispute concerned:

–  whether the assignment of the use of the mark in 1993 required the unanimous consent of the joint proprietors or, on the other hand, majority agreement was sufficient;

–  whether that assignment could be revoked by the withdrawal of consent by one of the joint proprietors (VW).

On 11 June 2014, the District Court, Naples gave judgment, ruling that the use of the mark by the company Legea was: (a) lawful until 31 December 2006, since it occurred with the unanimous consent of all the joint proprietors; and (b) unlawful after 31 December 2006, in the light of the disagreement expressed by VW.

An appeal was lodged against that judgment before the Court of Appeal, Naples, Italy, which set the judgment aside in part in its judgment of 11 April 2016.

The appeal court held that use of the mark by the company Legea was also lawful in the period after 31 December 2006, because the joint proprietors had legitimately decided by a three quarters majority to allow that company to continue using the mark after that date. In the case of joint proprietorship, there would be no need for the unanimous agreement of the joint proprietors in order to assign the exclusive use of the trade mark to a third party.

VW appealed against the appellate judgment before the Supreme Court of Cassation. In summary, that court has put forward the following arguments as the basis for its request for a preliminary ruling:

– The provisions of the Civil Code governing joint ownership of property, which are applicable to joint proprietorship of trade marks, along with the provisions governing withdrawal from a contract, must be interpreted in the light of EU trade mark legislation.

–  EU trade mark law provides that trade marks may be the subject of a licence and acknowledges the possibility of joint proprietorship of a mark. However, it does not lay down any express rules governing whether the exercise of the rights relating to joint ownership of property requires unanimous or majority agreement in order to assign the right of exclusive use of a mark to a third party, for an indefinite period and free of charge.

– It is also necessary to clarify whether, where such an assignment occurs by unanimous agreement, one of the joint proprietors may subsequently dissent and terminate the assignment.

Against that background, the Supreme Court of Cassation has referred the following questions to the Court of Justice for a preliminary ruling:

‘(1)  Are the EU rules in question [Article 10 of Directive 2015/2436 and Article 9 of Regulation 2017/1001], in so far as they provide for the exclusive rights of the proprietor of an EU trade mark and, at the same time, for the possibility of such a mark being owned by several individuals in shares, to be interpreted as meaning that the assignment to a third party of the exclusive right to use a shared trade mark, free of charge and for an indefinite period, can be decided upon by a majority of the joint proprietors, or as meaning that it requires their unanimous consent instead?

(2) If it is the latter, in the case where an EU trade mark or a national trade mark is owned by several individuals, would it be consistent with the principles of EU law for it to be impossible for one of the joint proprietors of the mark, after the mark has been assigned to a third party by unanimous decision, free of charge and for an indefinite period, unilaterally to withdraw from that decision or, alternatively, would it, on the contrary, be consistent with the principles of EU law if the joint proprietor were not bound in perpetuity by the original intent, such that he or she could retract, with the resulting effect on the act of assignment?’

The Advocate’s opinion is that there is no harmonisation on the EU level and due to that the issue remains to be solved based on the national law and practice in every Member State:

Article 5 of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks and Article 9(1) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark, together with, where relevant, the corresponding provisions of Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks and of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark

are to be interpreted as meaning that in the case of joint proprietorship of a trade mark, the formation of common consent on the part of the joint proprietors to grant a third party a licence to use a national or a European Union trade mark, or to terminate that licence, is governed by the applicable provisions of the Member State.