Luxury brands take significant steps forward in anti-counterfeiting

The signature red sole of the luxury footwear label Louboutin has featured prominently in IP case law for several years now.

The latest instalment in the long-running Louboutin sole saga has now arrived in the form of the Court of Justice of the European Union’s (CJEU) recent judgment in the C-148/21 and C-184-21 cases. It has been hailed by the famous fashion house as providing protection to both manufacturers and consumers against the menace of counterfeiting – an unsurprising reaction given that the likely consequence of this decision will be the implementation by online marketplaces of stronger anti-counterfeiting measures against unauthorised sellers.

The decisions in question have together found that operators of online marketplaces can be held directly liable for trade mark infringement under Article 9(2)(a) EUTMR for the advertisement and sale of goods listed on their platforms by third parties. In order to be found liable in such circumstances, it must also be found that a reasonably informed and observant user of the platform is given the impression that the platform is selling the goods in its own name, thereby creating consumer confusion. Such a false impression may be created by: the absence of clear differentiation between the platform and the seller (perhaps through the incorporation of the online platform’s logo into advertisements for the infringing goods); the platform offering its own similar goods alongside the infringing goods; or its involvement in the storage and shipping of the relevant goods.

Beyond these instances, the CJEU elaborated further factors which would be taken as being conducive to a finding of platform liability for infringement:

• the provision of customer care services on behalf of third-party sellers;
• the provision of additional services to third-party sellers such as assistance with advertising; and
• associating third-party listings with labels such as “bestseller” or “most wanted” without identifying them as third-party goods.

Whether or not an operator will be found to be liable for infringement will, therefore, depend on the facts of the matter at hand.

The CJEU’s decision in these two cases to hold online marketplaces liable for the sale of infringing third-party goods can be said to represent a major development in this area of trade mark law, especially with consideration to the fact that this judgment is a rare instance of the CJEU departing from the opinion of the Advocate General.

The case will now make its way back to the referring national court which will deploy the factors outlined in the CJEU decision in determining whether the actions of the online marketplace in question do indeed lead to consumer confusion. At the same time, commentators will continue to rigorously debate the judgment and what it means for the future of online platforms and their interactions with third party content.