ABSTRACT
Retailers operating on marketplaces may infringe trademarks. While these retailers are liable as infringers under European Union law, the operator of the marketplace is not. The marketplaces’ obligations are limited to certain duties, such as taking down infringing offers on notice and possibly preventing new infringements. Should this change because the marketplace (itself or through an affiliate) acts as seller on the same website (ie, it operates a ‘hybrid’ marketplace)? Should operators of hybrid marketplaces, on account of their business model, be liable for the infringements committed by third party sellers? I find that, taking into account short term and long-term effects, hybrid marketplace operators have no incentive to tolerate trademark infringers. While infringing sales may, in the short term, increase the platform’s sales, the negative long-term consequences of hosting infringers dwarf any short-term gains, in particular the loss of reputation in the eyes of consumers and third-party sellers, on any marketplace. The costs of hosting infringers are even higher for hybrid online marketplaces, since, in addition to the long-term harm inflicted by infringers, the infringing sales will also reduce the sales of the hybrid marketplaces’ own retail arms in the short-term. I conclude that there is no justification as a matter of economics to impose a stricter liability on hybrid marketplaces.
Padilla, Jorge, Trademark Liability in Hybrid Marketplaces (April 3, 2022).
First posted 2022-05-05 17:30:50
Leave a Reply