Takeaway: An online marketplace like Amazon is protected under the safe harbour provisions outlined in the Digital Millennium Copyright Act if third-party sellers on its site are infringing copyrights of others.
The Federal Circuit upheld the U.S. District Court of Western District of Washington’s summary judgment for Amazon in Milo & Gabby LLC v. Amazon.com Inc., (Fed. Cir. 2017) stating that Amazon is not liable for copyright or trademark infringement based on third parties selling allegedly infringing products on its site and Milo & Gabby failed to preserves its patent infringement arguments.
Milo & Gabby tried to argue that Amazon being the “World’s Largest Internet Retailer,” it should be held liable because they effective sells the goods. Amazon also has a fulfillment service allowing merchants to ship their products to an Amazon warehouse and then Amazon would ship the product upon purchase. However, the court sided with Amazon and stated that because Amazon is not responsible for completing the sales and cannot sell products on their own accord, Amazon is not considered the seller.
Courts have decided similar claims against Amazon for patent infringement and also against other online marketplaces like Amazon. The court explained that while “Amazon’s services made it easier for third parties to consummate a sale, the third parties remained the sellers.”
The court rejected Milo & Gabby’s patent claims on procedural grounds as it tried to raise a new issue on appeal. Further in terms of trademark and copyright infringement, the Federal Circuit agreed with the District Court that there was no valid enforceable trademark and Amazon was protected under safe harbour provisions outlined in the Digital Millennium Copyright Act.
“Because the third-party sellers retain title to the pillowcases at all times and Amazon merely provides an online marketplace … Amazon is not a seller in this case for the purposes of copyright infringement,” the judgment said.
Further, the court dismissed Milo & Gabby’s claim regarding palming or passing off because it was not brought up in the initial complaint, which only specified a false designation of origin claim, which is a much broader claim, and therefore did not provide proper notice to Amazon.