Liability for trade mark infringement of online marketplaces in Europe

From The Journal of Intellectual Property Law and Practice:

Online marketplaces reach potential customers all over the world, but can also be used for goods infringing intellectual property rights. Even when online marketplace operators do not themselves participate in such transactions, they do draw economic benefit therefrom, e.g. by charging a fee per transaction. So, to what extent can they be held liable for the sale of infringing goods through their platforms? 
Whereas such operators qualify as providers of information society services in the sense of the E-Commerce Directive, they are also intermediaries in the sense of Article 11 of the IP Enforcement Directive. And like any economic operator, they must abide by the trade mark laws and other legislation. 
The interpretation of these distinct sets of rules has given rise to a number of decisions of the Court of Justice of the European Union (CJEU). Certain aspects seem to have been settled by now, but many issues remain open. Absent contributory infringement in EU trade mark law, one of the most pressing questions is if, and to what extent online marketplaces can be held liable for direct trade mark infringement.

. . . .

The Coty/Amazon case (C-567/18), currently pending before the CJEU, might shed some light over the first question, namely the liability for direct trade mark infringement of online marketplace operators, especially when they engage in additional services like they often do nowadays. Such additional services can include supplying the goods to buyers, assisting sellers in promoting the sale of their goods. 
The teaching to be expected from the Coty/Amazon judgment will largely depend on how the CJEU will interpret the preliminary referral. If it sticks to the facts as presented to it by the German Supreme Court, then it will probably not go as far in its analysis as did the Advocate General, who opened the door to direct liability for trade mark infringement of online marketplace operators, and by extension, online intermediaries in general. Hence, further guidance might be on its way … or not just yet. 

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Liability for direct trademark infringement should not be accepted too soon, at least if online marketplace operators clearly communicate their role to the consumer. After all, establishing a direct trade mark infringement requires an adverse effect on one of the functions of the trade mark. At least as far as the essential origin function is concerned, no impairment thereof can be presumed if the advertising is not misleading as to the nature of the operator. As stated by the Advocate General in L’Oréal/eBay, in 2011, and even more so today, consumers are used to the existence of various intermediary economic activities. 
Of course trade mark owners should not be left without ammunition. An equitable balance between the interests of online marketplace operators and the interests of trade mark owners could be found by imposing higher monitoring duties on online marketplace operators assuming an ‘active’ role. Where such ‘active’ intermediaries cannot benefit from the hosting exemption, they can be liable for tort if they have not been sufficiently diligent and a causal link exists between their lack of diligence and the damage suffered. Requiring them to display a higher degree of diligence could therefore solve a lot. It would make sense to have a proactive monitoring duty the extent this is proportionate to the degree of their involvement. 

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In this area – the prevention of infringements – an important challenge for online marketplace operators lies in setting up more performant technologies to reveal potential trade mark infringement by their customers/vendors. Automated identification and/or enforcement and voluntary, non-judicial takedown mechanisms established between online intermediaries and IP rights owners are bound to become increasingly important.

Link to the rest at The Journal of Intellectual Property Law and Practice

It’s not easy (at least for PG) to discover how many trademarks there are in the world. According to the latest information (2016) he could find from the World Intellectual Property Organization (WIPO), there were an estimated Seven Million trademark applications worldwide just during that single year.

PG downloaded a spreadsheet from WIPO summarizing trademark filings on a country-by-country basis from 1980 to 2018. The spreadsheet was 42 columns wide and 203 lines long. For those who may be arithmetically-impaired (as PG is) that is more than 8,500 separate data points.

These numbers show a total of more than 22 million trademark applications filed during that time.

Some trademarks disappear and others go on and on and one. In the US, trademark rights can last indefinitely as long as the owner continues to use the mark to identify its goods or services. The term of a federal trademark is 10 years, with 10-year renewal terms.

Per Wikipedia, the oldest U.S. registered trademark still in use is trademark reg. no 11210, . . . a depiction of the Biblical figure Samson wrestling a lion, registered in the United States on May 27, 1884 by the J.P. Tolman Company, now Samson Rope Technologies, Inc., a rope-making company.

Additionally, although trademarks are typically issued on a country-by-country basis but international treaties provide that trademarks registered in one nation will be recognized and enforceable in other treaty nations. Under The Madrid System (named after the city where the two underlying treaties were negotiated) is a system for the international registration of marks. It provides a means to seek protection for a trademark simultaneously in a large number of jurisdictions.

One additional complication – trademarks are issued for a particular class of goods/services so different individuals or companies may own identical trademarks that are enforceable for different categories of goods or services. For example, in the US, Ace is a trademark for hair brushes and Ace is also a trademark for stapling machines and The American Council on Education.

So, how does an online marketplace like Amazon build a system that can allow it to determine whether the name of a product sold on its marketplaces around the world infringes the trademark belonging to another individual or company without hiring the largest collection of trademark attorneys in the world?

Multiple countries, lots and lots of different product categories and a legal regimen for enforcing trademarks that may be applied differently in one nation than it is in another.

Here’s a link to a New York Times story about how a trademark can lose its protection if it becomes generic.