Top EU Court Clears Amazon on Storing Unauthorized Inventory

(CN) — Trademark law offers no recourse to hold Amazon liable for hosting inventory of a luxury perfume by unauthorized third parties, the European Court of Justice ruled Thursday.

The suit stems from a license held by Coty Germany, a subsidiary of the U.S. beauty company, to distribute Davidoff perfume.

(Pixabay image via CNS)

Back in 2014, one of Coty’s test purchasers found that an unauthorized third party was selling 2-oz. bottles of Davidoff Hot Water perfume on Amazon.

Coty’s crackdown led to the seller signing a cease-and-desist declaration with a penalty clause, but its work with Amazon revealed a deeper problem.

Though Amazon complied with Coty’s request that it return all the bottles of perfume that it had stocked on behalf of the seller, Amazon found that 11 of the 30 bottles it turned over had come from another seller’s stock.

Coty asked Amazon to divulge that other seller’s name and address, then it sued the e-retailer in a German regional court for spurning that demand.

After an appeals court affirmed dismissal of the case, Germany’s Federal Court of Justice asked Europe’s highest court to clarify what EU law requires.

Based in Luxembourg, the Fifth Chamber of the European Court of Justice determined Thursday that the mere storage of goods does not constitute trademark infringement.

“A person who, on behalf of a third party, stores goods which infringe trade mark rights, without being aware of that infringement, must be regarded as not stocking those goods in order to offer them or put them on the market for the purposes of those provisions, if that person does not itself pursue those aims,” the ruling states.

The court did side with Coty nearly three years ago in a related case where the retailer objected to its goods being hawked on Amazon by one of its authorized dealers. In that case, the court upheld Coty’s contract stipulations barring such sales.

A representative for Coty has not retuned an email seeking comment.

Though English was among the languages in which the Coty ruling was available, there was no such option Thursday in a case about music royalties.

The appeal stems from a lawsuit in Sweden where entities that manage music copyrights and performers’ rights sought royalties related to the radio receivers outfitted in vehicles for hire.

In a press release about its decision, the Court of Justice said that the renting of cars with radio receivers does not constitute a public offering subject to royalty payments.

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