When a group of Estée Lauder-owned brands filed a trademark infringement suit against Walmart early this year, it marked the latest reminder that the contours of platform liability remain unsettled. In the case, Estée Lauder, Le Labo, Tom Ford, Le Mer, Aveda, and Clinique allege that counterfeit cosmetics and fragrance products bearing their trademarks were sold through Walmart’s online marketplace by third-party sellers. The complaint contends that Walmart’s role in facilitating those sales – including its involvement in checkout, payment processing, fulfillment services, and returns – places the retail giant closer to the transaction than a traditional marketplace intermediary.
While the allegations in the February 2026 complaint center on counterfeit beauty products, the dispute reflects a broader legal question that courts have grappled with for more than a decade: when can an online platform be held responsible for trademark infringement committed by third-party sellers?
As online marketplaces have evolved from listing platforms into complex retail ecosystems, courts have increasingly been asked to determine where responsibility lies when infringing goods appear on those platforms, and that question now sits at the crux of the Estée Lauder-owned companies’ case against Walmart.
The Traditional Marketplace Liability Framework
The legal framework governing platform liability for trademark infringement largely stems from a 1982 Supreme Court decision, in which the court held that contributory trademark infringement arises when a party either intentionally induces another to infringe a trademark or continues to supply a product or service while knowing – or having reason to know – that infringement is occurring. When courts began applying the doctrine established in the Inwood Laboratories case to online marketplaces, they generally treated platforms as intermediaries that facilitate transactions between independent buyers and sellers.
Under this view, the platform does not sell the goods itself and therefore, is not automatically liable when infringing products appear on the site.
In the case that Tiffany & Co. waged against eBay, for instance, the U.S. Court of Appeals for the Second Circuit held in 2010 that eBay could not be held liable for trademark infringement based solely on its generalized knowledge that counterfeit Tiffany jewelry were present on its platform. Instead, the appeals court held that contributory liability requires evidence that the platform had knowledge of specific infringing listings or sellers and failed to take appropriate action.
The Second Circuit’s widely-cited decision reinforced a central principle in marketplace liability cases: general awareness that infringement may occur on a platform is not enough to establish liability.
Subsequent decisions have continued to emphasize the importance of specific knowledge in determining contributory trademark liability. Courts have generally held that platforms must be aware of particular infringing listings or sellers before they can be held responsible for continuing to provide services that facilitate infringement. The Ninth Circuit reaffirmed this approach in 2023 in a case that retailer Brandy Melville filedagainst print on demand platform Redbubble, with the court explaining that platforms are not required to proactively search their listings for trademark violations. However, once a platform becomes aware of specific instances of infringement, it must take bona fide steps to address the problem, such as removing listings or disabling sellers.
Because knowledge and response efforts are highly fact-specific, disputes over contributory liability often turn on how platforms respond to infringement notices and whether their enforcement mechanisms are effective in practice.
A Spectrum of Platform Involvement
Although early cases largely treated platforms as passive intermediaries, more recent decisions have examined situations in which platforms play a greater role in the creation, fulfillment, or distribution of goods. In the case that Ohio State University filed against Redbubble, the Sixth Circuit addressed whether a platform that coordinated the manufacturing and shipment of products bearing user-uploaded designs could be liable for direct trademark infringement. When a consumer placed an order, third-party manufacturers produced the item and shipped it to the customer, with the platform’s branding appearing on packaging and return materials.
Under those circumstances, the court concluded that Redbubble could fall outside the passive intermediary model. Because the platform was involved in procuring and distributing the goods, the court held that a jury could find it liable for direct trademark infringement.
The decision is significant, as it illustrates a broader point that has emerged in recent litigation: platform liability often depends on the degree of involvement a platform has in the transaction. At one end of the spectrum are platforms that merely host product listings. At the other are platforms that participate in fulfillment, manufacturing, marketing, or distribution.
THE BIGGER PICTURE: As online marketplaces expand their operational roles – integrating payment processing, logistics, advertising, and customer service – the line between marketplace facilitator and retailer has become increasingly hazy. With that in mind, courts are being tasked with applying traditional trademark doctrines to modern online marketplaces, evaluating platform liability on a case-by-case basis based on the platform’s knowledge of infringement and its level of involvement in the sale of the goods.
The dispute between brands owned by The Estée Lauder Companies and Walmart reflects the broader tensions surrounding platform liability in modern e-commerce. As courts continue to assess how traditional trademark doctrines apply to increasingly integrated online marketplaces, cases like Estée Lauder Companies v. Walmart are a reminder that the scope of platform liability for trademark infringement remains a developing and highly fact-specific area of law.
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