Author: Attorney Hiroki Horita

1. Conventional Responses to Suspected Infringing Products

Until recently, when rights holders discovered suspected counterfeit or infringing products on e-commerce platforms, their effective options were limited. They could either (i) warn or initiate legal action against the seller offering the suspected infringing goods, or (ii) notify the e-commerce platform of the alleged intellectual property infringement and request the removal of the listings.

However, pursuing action directly against the business selling the suspected infringing products often proved ineffective. Even if sales could be halted, such sellers frequently lacked sufficient financial resources, making it difficult for rights holders to recover adequate damages.

On the other hand, notifying the platform presented additional difficulties. In many instances, platform operators responded slowly or did not carry out sufficiently thorough investigations. Furthermore, some sellers refrained from raising complaints with platform operators due to concerns that such actions could adversely affect their relationship with the platform and result in unfavorable treatment in future sales activities.

2. Liability of Platform Operators: The Amazon Japan Case

On April 25, 2025, the Tokyo District Court rendered a significant judgment in a lawsuit against Amazon Japan. The plaintiffs claimed that counterfeit versions of their products were listed on Amazon’s platform. Despite notifying Amazon Japan of the infringement, Amazon removed not only the infringing listings but also the plaintiffs’ legitimate product pages and subsequently failed to take appropriate corrective measures, causing substantial damage to the plaintiffs.

The court partially upheld the plaintiffs’ claims and ordered Amazon Japan to pay damages of JPY 35 million. (According to media reports, Amazon Japan has appealed the decision.)

In its reasoning, the court emphasized the structural characteristics of large online marketplace platforms. Because platform operators provide listing services, collect fees from sellers, and operate in an environment where fraudulent listings are easier to post than in physical retail stores, they bear contractual obligations to sellers to ensure fair sales opportunities. This includes monitoring and addressing fraudulent or improper listings that interfere with legitimate sales.

The court found that Amazon Japan breached this obligation by failing to conduct a proper investigation into the plaintiffs’ report and by removing all related product pages, including those for legitimate products, instead of selectively removing only the infringing listings. The court also took into account the fact that, due to platform rules, the plaintiffs themselves faced practical difficulties in addressing the issue directly.

Amazon Japan argued that it receives approximately 2.5 million complaints and inquiries annually and therefore could only recognize infringement reports submitted through its designated reporting system. However, the court rejected this argument, noting that the reporting system was not sufficiently publicized and that the plaintiffs’ notification should have been recognized and addressed.

At the time, Amazon Japan’s terms and conditions included broad exemption clauses disclaiming liability for losses, including investments, lost profits, business opportunities, data loss, and indirect or punitive damages, regardless of the legal basis for the claim.

While such clauses are often deemed invalid in consumer contracts, they have traditionally been upheld in business-to-business transactions, on the assumption that parties enter into the agreement with an understanding of the risks involved.

However, the court held that a blanket exemption from liability, even in cases involving intentional misconduct or gross negligence, exceeds the bounds of what is socially acceptable even in commercial transactions. Given that the contract was a standardized agreement applied uniformly to an unspecified and large number of sellers on a major online platform, the court concluded that the exemption clause should not apply where the platform operator acted with intent or gross negligence.

3. Overseas Developments

Similar trends can be observed internationally. In 2025, an Indian case involving Amazon Technologies Inc. addressed the sale of trademark-infringing products bearing the “Beverly Hills Polo Club” brand on Amazon’s platform. The Delhi High Court found that Amazon had failed to take adequate measures to prevent trademark infringement and ordered the company to pay damages of USD 38.78 million. The court also issued a permanent injunction prohibiting the use of the registered trademark and any actions facilitating such use.

4. Future Outlook

Large digital platform operators are already subject to stricter regulation, including laws aimed at improving transparency and fairness in digital platforms. Given that these platforms effectively establish their own rules and economic systems, it is reasonable to require them to actively maintain order and address misconduct within their ecosystems.

Looking ahead, both domestically and internationally, cases in which major platform operators are held liable for failures to address counterfeit and infringing products are expected to increase. Rights holders affected by counterfeit sales should therefore consider not only actions against individual sellers or requests for listing removal, but also the possibility of pursuing damages directly against platform operators as part of their enforcement strategy.