[Patent Talk] IP Infringement: How Far Does an Online Marketplace's Liability Extend?

European Court of Justice: "Amazon Also Liable for Trademark Infringement for Counterfeits Sold"... Korean E-commerce Industry Abuzz

On December 22 last year, the European Court of Justice (ECJ) ruled that Amazon, as an online marketplace, can also be liable for trademark infringement in connection with the sale of counterfeit products distributed through its platform, causing a stir in the Korean e-commerce market as well. The ruling stems from trademark infringement lawsuits filed in 2019 by the French luxury shoemaker Christian Louboutin in Belgian and Luxembourg courts.

The ECJ based its ruling on the facts that consumers buy goods because they trust the e-commerce platform Amazon rather than the individual sellers, and that Amazon provided services for storing and shipping some of the counterfeit products. Following this ECJ ruling, the Belgian and Luxembourg courts are expected to reach the same judgments on the merits, and the impact is expected to extend to countries outside Europe as well.

In general, distributors, including sellers who sell goods, can be infringers of intellectual property rights. In Korea, however, the prevailing practice has been to regard online marketplaces as not directly liable, on the grounds that they merely broker direct online transactions between sellers and buyers and are not themselves parties to the transactions.

Nevertheless, there has been a decision to a similar effect in Korea as well. On the 21st of last month, the Korea Fair Trade Commission issued corrective orders on the terms and conditions of three online luxury platforms, Balaan, Trenbe and Mustit, requiring them to revise their terms so that they bear brokerage-related liability for counterfeit goods where they act intentionally or negligently.

As a result of this ruling, e-commerce platforms such as Naver and Coupang are not expected to be entirely free from liability for intellectual property infringement either. The ECJ's consideration of Amazon's role in storing and shipping products...