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Amazon.com Inc. can’t be held liable for allegedly infringing animal-shaped pillowcases that third parties sold on its platform, even though Amazon provided a service to ship products to the buyer, a federal appeals court held May 23 ( Milo & Gabby LLC v. Amazon.com Inc. , Fed. Cir., No. 16:1290, 5/23/17 ).
The U.S. Court of Appeals for the Federal Circuit, affirming a lower court decision, ruled that Amazon couldn’t be liable for copyright infringement because it didn’t sell the products at issue.
The court looked to the ordinary meaning of “sale” under the Copyright Act, 17 U.S.C. § 106, deferring to its precedent of considering the ordinary meaning of the term under 35 U.S.C. § 271 for patent infringement claims. Courts deciding similar patent claims against Amazon or other online marketplaces may rely on the same interpretation.
While “Amazon’s services made it easier for third parties to consummate a sale, the third parties remained the sellers,” the court said.
Plaintiff Milo & Gabby LLC alleged that merchants sold knock-off versions of its “Cozy Companion” pillowcases through Amazon’s online marketplace. Milo & Gabby brought patent, copyright and trademark infringement claims against Amazon.
“The ‘World’s Largest Internet Retailer’ doesn’t actually sell anything? Come on,” Philip P. Mann, owner of Mann Law Group in Seattle and counsel for Milo & Gabby, told Bloomberg BNA May 23 in an email.
The lower court granted Amazon’s bid for summary judgment on the copyright and trademark claims. It held after trial that Amazon wasn’t liable for the patent infringement claim because it didn’t offer to sell the products at issue. Milo & Gabby argued on appeal that Amazon should be held liable because they effectively sold the goods.
Amazon offered services that made it easier for third parties to complete their transactions, such as boxing and shipping the products to the destination, but Amazon never held title to the products, the court said of the copyright claim.
Amazon’s fulfillment service allows merchants to ship their products to an Amazon warehouse, where Amazon will ship the products upon purchase. Amazon isn’t responsible for completing the sales and can’t sell products on its own under this service, the court said.
On the patent claim, the court rejected Milo & Gabby’s seller liability argument on procedural grounds. Milo & Gabby had alleged in its complaint that Amazon sold products that infringed its design patents, but the company abandoned that argument when responding to Amazon’s motion for summary judgment.
“Milo & Gabby cannot raise the issue anew on appeal now that it has lost at trial on the ‘offer to sell’ theory,” the court said.
Mann Law Group represented Milo & Gabby. Bartlit Beck Herman Palenchar & Scott LLP represented Amazon.
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