Amazon and counterfeit product advertising: Did they get away with it?

Since the COVID-19 pandemic has pushed the trend towards online sales, e-commerce platforms are a crucial area of expansion for luxury and fashion brands. However, counterfeiting on the internet is a great barrier to this expansion, since the sale of counterfeit goods currently accounts for 3.3% of all global commerce.

Amazon vs Christian Louboutin is the latest infringement case among luxury brands. However, this is not the first case for Amazon.

Coty sued Amazon for providing a platform for infringing items. However, Amazon escaped liability since the court determined that what this e-commerce was doing did not meet the elements of infringement.

Nonetheless, this latest case provides new insights into brand protection and paves the way for e-commerce platforms to be held liable for trademark infringement.

Actively promoting fake products

Louboutin launched two lawsuits against Amazon in 2019—one in Belgium and one in Luxembourg—claiming that the online retailer regularly featured ads of knock-off red soles, Louboutin’s signature, without the brand’s consent. Both courts subsequently turned to the European Court of Justice (ECJ) for advice.

Amazon claimed that it could not be held accountable since the trademark was used by a third-party seller rather than its own platform.

The ECJ, on the other hand, saw things differently. In summary, there are a few reasons that lead consumers to believe that Amazon is responsible for the advertisement, rather than being a third-party vendor. The first is the fact that Amazon is a hybrid platform, since it incorporates third-party sellers and sells its own items. The second is that it offers additional services, such as addressing user inquiries, storing and shipping third-party products, and handling returns of such products.

Display advertising, combined with additional services, is what qualifies Amazon to be considered actively promoting infringing items. This is what distinguishes it from the Coty case. On those grounds, in December 2022, the ECJ decided that Amazon may be held accountable for advertising Christian Louboutin replicas. Notwithstanding, the court left the final decision to the Belgium and Luxembourg courts.

The importance of brand monitoring

As a result, aside from third-party sellers, sales platform providers also have the potential to misuse brands and can be held liable—even if they have implemented an anti-counterfeit policy. Amazon’s Project Zero is one example of this.

For brand owners, this infringement case confirms that law enforcement can aid them in protecting their trademarks. In addition, these cases increasingly emphasize the importance of monitoring brands on online platforms to ensure that negative exposure to brands does not influence consumer perception.

Comprehensive monitoring and swift law enforcement are critical to reducing the number of victimized consumers and brand owners. However, comprehensive monitoring is not a simple task. It takes complex strategies, consistency, and professional human resources in this field.

Integrity Asia is ready to help brand owners protect their brand identities and reputations by combating infringement of their products and brands. In addition to investigating counterfeit products marketed through online channels, Integrity Asia is also experienced in conducting continuous monitoring to detect and identify whether infringing products are being offered again using a different account or channel.

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Photo by Bryan Angelo on Unsplash