Karlsruhe/Berlin, 25 July 2019 – The German Federal Supreme Court decided that AdWords adverts of online giant Amazon linking to products of other manufacturers under the Ortlieb trademark are misleading. The complaint was initiated by sports equipment manufacturer Ortlieb, which was represented by the law firm Lubberger Lehment. This case could have far-reaching consequences for all industry sectors.

The highest German court for civil cases dismissed an appeal on the points of law by online trader Amazon with a decision that could have effects on the entire area of search engine advertising. The market leader in German eCommerce had run AdWords adverts on the search engine Google using the Ortlieb trademark in order to attract potential customers towards products of various manufacturers on its own platform. Ortlieb – which is a medium-sized sports equipment manufacturer from the Nuremburg area and well-known for its waterproof bicycle bags – successfully proceeded against this abuse of its trademark.

In the specific case, which was now heard at the German Federal Supreme Court (docket no. I ZR 29/18), Amazon had run adverts on Google using and showing keywords like “Ortlieb Fahrradtasche“ [Ortlieb bicycle bag] or “Ortlieb Outlet“. However, the advertising was linked to mixed lists of offers on Amazon.de, which did not only show Ortlieb products, but also products of other manufacturers, without pointing this out specifically. According to the German Federal Supreme Court, this is misleading: If an advert contains the keyword Ortlieb the customer would expect to find Ortlieb products and not an overview of offers from different manufacturers.

Our colleagues Dr. Rani Mallick and Dr. Bernd Weichhaus achieved an important victory against Amazon for our client Clarins before the Appeal Court in Berlin (case no. 5 U 1/18). According to the court’s decision, it is solely the online seller who bears the burden of prove to show that the distributed goods have been put on the market within the EEA with the trademark owner’s consent. Thus, the decision contributes to the strengthening of rights of brand owners. The article of the online magazine JUVE is available under the following link.

On 10.10.2018, Ortlieb Sportartikel GmbH and Amazon tried a case before the Copyright Senate of the Court of Appeal in Berlin about the use of Ortlieb’s product images on amazon.de. After successful first instance proceedings before the District Court in Berlin, the proceedings were terminated by a withdrawal of the appeal by Amazon.

On amazon.de each product is featured with a uniform presentation containing a product description and a product image. The product images are fed into amazon.de by the retailers who use Amazon Marketplace. An algorithm then selects the images suitable for presentation. These are often the original images of the manufacturer. That also applied to the present case. Ortlieb sued Amazon Eu Sarl which trades on amazon.de in its own name, and Amazon Services Europe Sarl which is responsible for the Amazon Marketplace. Ortlieb considers the use of its product images on amazon.de to be an improper appropriation of its advertising material and an intervention in its distribution. Ortlieb operates a selective distribution system and does not supply to Amazon.

The District Court in Berlin decided in favour of Ortlieb and ordered Amazon to injunctive relief, surrender of information and payment of damages for copyright infringement. Amazon appealed that decision.

In today’s oral hearing in the Appeal proceedings, the Court of Appeal made it clear that it considered the decision by the District Court to be correct and that the appeal had no prospect of success. With regard to the product images, Amazon is not a neutral platform operator, but plays an active role and is therefore directly responsible for the use of the images. In addition, the Senate rejected Amazon’s argument, pursuant to which Ortlieb was enforcing its distribution system in an abusive manner, as unfounded. The 24th Senate had already pointed out in writing on 4.10.2018 the lack of prospects of success of Amazon’s appeal.

Under the impression of these statements by the Senate, Amazon withdrew its appeal at the end of the oral hearing.

The case goes far beyond the specific facts of the case at hand. The question of copyright infringement by Amazon arises every time a retailer uploads a product image to amazon.de without the permission of the rights owner.

Amazon EU Sarl and Amazon Services Europe Sarl were represented by Dr. Jens Heidenreich of Harmsen Utescher. The Presiding Judge of the 24th Senate of the Court of Appeal is Mr. Harte.

Ortlieb Sportartikel GmbH was represented on the part of Lubberger Lehment by Dr. Kai Schmidt-Hern and Eva Maierski.

Coty distributes high quality fine fragrances through a selective distribution system. The admissibility of the selective distribution system was recently confirmed by the noteworthy “Akzente” ruling of the European Court of Justice (judgement of 6 December 2017, C-230/16). The findings of this judgement are already bearing fruit:Lubberger Lehment has assisted Coty to successfully defend themselves against the distribution of their luxury perfumes in the branches of the discounter Aldi. The Appeal Court in Berlin (decision of 11 May 2018, Ref.: 5 W 97/18) ruled that Coty was right that the product presentation in a typical discounter sales environment affected the prestige value of the brand concerned. The prominent offer of the branded perfumes in the context of special sales campaigns does not change this assessment. Coty can oppose this form of resale. “If the defendant (…) also wants to gain an image boost as a discounter by offering inexpensive special sales of luxury products, it is obliged (…) to take special consideration. In this respect, they can be reasonably expected to maintain the special prestige of luxury products, even in the event of selling off remaining stock, without offering the goods in the style of a careless, rummage table. The court expressly refers to the “Akzente” ruling in continuation of the CJEU rulings “Copard/Dior” (C-59/08) and “Dior/Evora” (C-337/95). This is where selective distribution and brand protection come together – even discounters must take account of this.Representatives of Coty:
Lubberger Lehment (Berlin): Dr. Rani Mallick and Eva Maierski

On 12 July, the Higher Regional Court of Frankfurt issued the final judgment (11 U 96/14 (Kart)) in the dispute between the perfume manufacturer Coty and its authorized retailer Akzente: In a selective distribution system, a manufacturer of luxury products may prevent its retailers from marketing its products through third party online sales platforms.

The decision implements the principles of the European Court of Justice’s landmark decision of December 2017, according to which the intangible brand image justifies restricting the sale of luxury goods in a selective distribution system by retailers in order to ensure a high-quality sales environment. According to the Higher Regional Court of Frankfurt, this does not depend on individual products and their pricing, but rather on the entire product range. The decisive factor is how the manufacturer puts its products on the market.

Yet, the manufacturer itself must adhere to the rules it has established. If, however, the manufacturer excludes platforms such as Amazon and Ebay or discounters from the intended distribution channels, its customers – such as Akzente in the present case – have to accept such restrictions. This is irrespective of offers of grey market products that may be available on these distribution channels. As the taking of evidence carried out with regard to Coty’s internal practices in this respect undoubtedly showed that Coty adheres to the self-imposed rules, the contractual sales restrictions in Coty’s distribution system are unobjectionable under antitrust law and, thus, enforceable.

The same applies to sales via travel retail stores at airports or direct airline sales, which do not call into question the luxury character of the products. Nor could Coty be accused of tolerating the sale of its products via retail stores in large shopping centers (shopping malls), because these are not comparable to platforms since every such retailer is perceived as independent by the consumer.

The Higher Regional Court of Frankfurt showed that these aspects do not necessarily exclude all sales on online platforms since the manufacturer’s quality specifications can also be met by specific platform clauses. This may be particularly important in Germany, where platforms have a much larger market share of internet trade than in other EU countries. However, the Court felt obliged to adhere to the principles established by the European Court of Justice, which – at least in the field of luxury products – had expressly considered an exclusion of third-party platforms per se to be permissible.

In this case, Coty relied on the proven cooperation with the law firm Lubberger Lehment, which has already won many landmark decisions for Coty before the highest courts.

In a landmark judgment The ECJ has confirmed the rights of trademark owners in defending selective distribution systems. It ruled that a manufacturer of luxury perfumes such as the plaintiff Coty could impose far-reaching requirements on its authorised dealers for their internet sales and could also largely restrict sales via online platforms. The lawsuit was filed by an authorized dealer who was prevented from selling Coty perfumes on major online platforms by Coty’s terms and conditions.

»This brings the Court back to its early decisions, reconciling the free movement of goods with the protection of intellectual property.« Dr. Andreas Lubberger

He claimed that the relevant contractual clauses were contrary to antitrust law. The Higher Regional Court of Frankfurt had submitted fundamental questions to the European Court of Justice. This happened against the background of a very controversial discussion of these issues, especially in Germany. The ECJ has now ruled all these questions to Coty’s advantage.