Keeping on target – online sales and trade mark infringement

It's unusual to have a trade mark case which doesn’t involve any discussion of confusion or similarity. Instead, this case of Lifestyle Equities CV and another v Amazon UK Services Ltd and others revolves around the question of online sales and the interaction with brand portfolios that have different owners in different territories.

Ultimately, this case is specific to Amazon's methods of sales, but this blog focuses on the points that can apply to e-commerce platforms generally.

The fact that a website is accessible from anywhere in the world holds inherent issues in that customers from lots of different territories may find the goods for sale. However, this in itself should not give rise to any form of liability. The question instead is which customers the website is targeting.

Background

The claimants are the owners or exclusive licensee for the Beverly Hills Polo Club ("BHPC") brand portfolio in the EU and UK, which includes various registrations for word marks and logos for clothing and similar goods. Interestingly, since 2008 the BHPC US portfolio was owned by the brothers of the UK/EU owners.

The claimants found that BHPC goods that had been lawfully manufactured, marketed and sold in the US with the US rights-holder's consent were being marketed and sold by Amazon in the UK or EU by being listed on amazon.com or Amazon's global store service on amazon.co.uk. They claimed that this amounted to infringement of their UK and EU rights, pursuant to section 10 of the Trade Marks Act 1994 and Article 9 of the EU Trade Mark Regulation ((EU) 2017/1001).

In response to the allegations, Amazon put some restrictions on the website to prevent sales and advertising to UK and EU-based customers that appeared to be effective from 2019 onwards. Before this, Amazon's records showed the number of UK/EU customers purchasing the US origin goods was very low. Amazon acknowledged that problems arose where rights in different territories were owned by different entities, however it considered the claim exaggerated and that any court action was disproportionate.

IPEC's decision

Sitting in the IPEC, Mr Justice Green dismissed the claimants' argument that Amazon's activities fell within the definition of "counterfeiting". The goods were, in fact, genuine and the use of the "counterfeiting" term blurred the issues of the case. (See [2021] EWHC 118 (Ch) for the judgment.)

The court, and Amazon, recognised that problems do arise where websites can be accessed globally and the ownership of brands is split between different territories. However, Mr Justice Green found that Amazon had acted responsibly in attempting to put restrictions in place, first in relation to Amazon Global Store in 2018 and then in relation to amazon.com in 2019.

The true question was which customers the websites were targeting. Amazon could only be liable if it was targeting UK/EU customers and intending to import goods into those jurisdictions. Simply fulfilling the orders of private customers from the UK/EU was not enough to amount to infringement.

What is targeting?

According to the judge, there are many things to consider when deciding who and where a website is targeting its sales. Mere accessibility of a website cannot constitute targeting.

Instead, it is necessary not just to look at the average consumer's perception of targeting, but also all surrounding evidence such as viewing figures, traffic data, website content (i.e. currency, terms and conditions) and the website's subjective intent. The website's responsibility for and involvement in any importation process of goods into certain territories is also an important consideration.

Final thoughts

It's possible that by alleging counterfeiting and joint liability by multiple Amazon entities, shippers and private consumers, the claimants muddied the issues at hand.

It seems however, that the judge has taken a pragmatic and commercially workable approach, bringing the focus back to the question of who (and where) a website is targeting. This is in line with previous case-law, which has developed criteria of how to assess this question (see for example our previous blog: UK retailer Argos loses its battle against US company in Court of Appeal | Fieldfisher. Also, It’s a jungle out there – trade mark infringement and passing off on Amazon.co.uk | Fieldfisher on a related issue).  

As consumers turn more and more to e-commerce, this decision will bring welcome clarity and reassurance to the industry.