Fighting against counterfeit items – can online marketplaces be held directly responsible for their sellers’ IP infringement?

Under UK and EU, the act of selling, advertise, stock, offer goods carrying a sign identical or similar to a registered sign amount to infringement. Even when the law is straightforward, marketplaces like Amazon and eBay frolic with counterfeit/knock off products sold at a quarter of the price of their original counterparts. This is damaging to businesses that invest significant resources to develop their brand identity and products.  Additionally, selling counterfeiting items is illegal and does not promote fair competition.

Unfortunately, even when the law is on your side, not many businesses have the resources to police each online platform and initiate proceedings against every third party that sells counterfeit items. Protecting your business’s intellectual property becomes a restless task as you are constantly fighting with companies and individuals who are trying to unfairly capitalize on your products’ better quality, goodwill, and reputation.

It can be said that platforms like Amazon and eBay “indirectly encourage” such behaviour as currently they do not bear any responsibility if any of their account holders sell counterfeited items. The reasoning behind this lack of legal accountability is that these platforms cannot have knowledge or awareness of the infringing nature of the goods as they are merely bystander. However, this month a referral to the Court of Justice of the European Union (CJEU) by the famous luxury brand, Louboutin, has once again sparked the debate as to whether this platform should be directly liable for trade mark infringement. According to the Attorney General, these platforms provide a direct contribution to the distribution, sale and marketing of knockoff products and this should evidence the active role that these marketplaces have in the diffusion of counterfeit items. CJEU decision will be paramount to establish the level of responsibility that marketplaces may have in relation to policing and preventing the spread of counterfeit items by their sellers.

Briffa are experts in all aspects of intellectual property law and practice, including running counterfeit programs for our clients and advising clients in relation to ever aspects of IP protections for their brands and products. If you would like to arrange a free consultation with one of our specialist intellectual property lawyers, please contact us on 020 7096 2779.