Selling counterfeits on your Marketplace: What you should be aware of

Selling counterfeits on your Marketplace: What you should be aware of

Article 274 of the Criminal Code establishes that anyone who, for industrial or commercial purposes, without the consent of the owner of an industrial property right registered under trademark law and with knowledge of the registration, shall be punished with one to four years’ imprisonment and a fine of twelve to twenty-four months: (i) manufactures, produces or imports goods incorporating a distinctive sign identical or confusingly similar to it, (ii) offers, distributes, or markets wholesale goods incorporating a distinctive sign identical or confusingly similar to it, or stores them for that purpose, when it concerns the same or similar goods, services or activities for which the industrial property right is registered.

What are the consequences of selling counterfeits on a Marketplace?

Taking into account art. 274 of the Penal Code, it would seem easy to answer this question.

However, in a recent CJEU ruling, it exempts Amazon, one of the world’s largest marketplaces, from liability for counterfeits sold in its online shop.

“Although it integrates in its offer a set of services, from the publication of sales offers to the delivery of the goods, this internet intermediary [referring to Amazon] cannot be held directly liable for the infringements of trademark owners’ rights committed on its platform through third-party offers,” said Advocate General Maciej Szpunar.

He also pointed out that “Amazon is merely a technical facilitator that allows transactions to be carried out through its platform and its activity is subsumable”, the judgment clarified, which directly explained that the legal link was formed between sellers and consumers, in which Amazon did not intervene”.

Although the sale of counterfeit goods is prohibited and punishable under article 274 of the Criminal Code, if you are the owner of a Maketplace and only act as an intermediary or mere facilitator between the seller and the consumer, according to the latest ruling of the CJEU, it would seem that there is no civil or criminal liability for the owner of the Maketplace.

However, the ruling clarifies that Bezos’ company is not liable for trademark infringements that may occur through its online marketing services or storage of products, unless it was aware of the unlawfulness of the products it hosts and did not act promptly to remove them.

Therefore, the Marketplace owner is not exempt from liability in all cases, and it will be necessary to consider the specific case, and above all, whether the owner of the Marketplace is aware of these fraudulent sales.

Counterfeits vs Replicas

Counterfeit products are designed to look like genuine products, and may even look almost identical to the original genuine products, usually the only difference between the two being the low-quality materials used to make the counterfeit.

In this sense, counterfeit goods involve the unauthorised use of a brand owner’s intellectual property, using the brand owner’s trademarks to deceive consumers into believing that they have purchased a genuine product.

Imitation, on the other hand, is intended to resemble a genuine branded product, but is usually not identical. The main difference between a counterfeit and a replica is that imitations do not contain marks or logos that are identical to those of the original product.

In accordance with the above, and in order to determine the seriousness and/or dimension of the counterfeit or replica, it is necessary to analyse the intellectual or industrial property rights infringed and the confusion that this product generates in the average consumer.

If your products have been the object of an infringement of intellectual or industrial property rights, or if you are the owner of a Marketplace and you do not know how to act in the face of this type of offence, do not hesitate to contact Letslaw by RSM.