Ready, set, buy – Supreme Court holds that Amazon did target UK consumers

The Supreme Court has handed down its judgment in Lifestyle Equities CV v Amazon UK Services Ltd  ([2024] UKSC 8).

It upheld the Court of Appeal's decision that Amazon's marketing and offer for sale of US branded goods to UK consumers from its US website did target the UK as a territory and therefore infringed Lifestyle Equities' trade marks. 

Background and facts

This appeal was brought by members of the Amazon group (together "Amazon") who operate various online vending platforms including Amazon.com (the "US website") and Amazon.co.uk (the "UK website").

Lifestyle Equities ("Lifestyle") owns and licenses several UK and EU trade marks (the "Lifestyle marks") for or containing the words "BEVERLY HILLS POLO CLUB". The Lifestyle marks are registered for a variety of goods, including clothing. A commercially unrelated entity owns corresponding US trade marks which are used in connection with genuine, identical goods (the "US branded goods") and are legally sold and marketed in the US at a lower price point, including on the US website.

The proceedings arose from the fact that EU and UK consumers could access and purchase those US branded goods directly from the US website and have those goods delivered to the EU and UK. Lifestyle, which never consented to the US branded goods being sold in the UK or EU, claimed that this amounted to trade mark infringement by Amazon on the basis that:

(i) the marketing and offering for sale of the US branded goods were targeted at UK and EU consumers; and

(ii) even if there was no targeting of UK and EU consumers, the sales constituted trade mark infringement under the Blomqvist doctrine (see below).

For clarity, the US branded goods were also sold in the UK and EU directly from the UK website and it became undisputed that this infringed the Lifestyle marks. The dispute persisted in relation to Amazon's activities from its US website, which Amazon denied amounted to trade mark infringement.

Overview of the applicable law

The Supreme Court clearly set out the applicable law as follows: 

• In deciding jurisdiction in EU consumer contracts cases, a key consideration was whether the trader had pursued commercial or professional activities in, or directed such activities to, the relevant Member State (see the decision of the Court of Justice of the European Union ("CJEU") in the joined cases Pammer & Hotel Alpenhof);
• That concept of targeting was adopted into EU trade mark law by the CJEU in L’Oréal SA v eBay International AG, which considers the advertisement and offering for sale of trade marked goods targeted at consumers within protected territories as amounting to use of that mark in the course of trade in that territory;
• The issue of targeting must be considered from the perspective of the average consumer (who is reasonably well informed and reasonably observant): would the average consumer consider the website to be directed at them?;
• Mere accessibility of a non-UK website by a UK consumer is not enough on its own to establish targeting;
• A court should carry out a multifactorial assessment of all the relevant circumstances, which may include:
  • clear expressions of an intention to solicit custom in the UK (e.g. including the UK as a geographic area to which the trader is willing to dispatch its products);
  • the overall appearance of the website;
  • how the website responds to the presence of the consumer;
  • whether it is possible actually to buy goods and have them delivered via the website, and how that is done.

           Other factors may also be taken into consideration;

• Under the Blomqvist doctrine (developed by the CJEU in Blomqvist v Rolex), where sales of goods are made in a territory from a website outside the territory, the sale can infringe trade mark rights upon entry of the goods into the territory. It is not necessary for an advertisement or offer for sale to be targeted at the consumer within that territory prior to the sale; infringement can happen by selling and supplying branded goods from a foreign website without prior targeting.

It is important to note that in the present proceedings, Amazon denied infringement on the basis that its US website did not target EU/UK consumers. However, it conceded that a) it had sold goods into the UK from its US website, and b) infringement followed if targeting was found.

Could the Supreme Court re-evaluate the facts?

Before rendering its substantive decision, the Supreme Court considered whether it could re-evaluate the facts.  It reiterated the general position set out in numerous cases that "on a challenge to an evaluative decision of a first instance judge, the appeal court does not carry out the balancing exercise afresh but must ask whether the decision of the judge was wrong by reason of an identifiable flaw … which undermines the cogency of the conclusion … for the decision to be "wrong" … it is not enough to show, without more, that the appellate court might have arrived at a different evaluation". 

The Supreme Court considered that the High Court judge had "made material errors" such that the Court of Appeal had been right to re-evaluate the facts, whilst the Court of Appeal had not carried out its evaluation in the right way, so the Supreme Court should also re-evaluate the facts.

Decision of the Supreme Court

Targeted sales

The Supreme Court dismissed Amazon's appeal and agreed that the Court of Appeal had made the right decision on targeting, although the Court of Appeal had made errors in reaching its conclusion (see below).

In coming to this conclusion, the Supreme Court conducted its fresh evaluation of targeting by working its way through the buying process/customer journey on the Amazon US website from a UK IP address from start to finish. The Supreme Court noted that during that process, Amazon told UK consumers that they would be shown goods that were available for delivery to the UK (including the US branded goods) and that those goods would be delivered to the UK should the UK consumers finalise the purchase from the US website.

The conclusion that Amazon targeted UK consumers is based on the combined effect and balancing of many factors. The factors indicating that Amazon targeted consumers in the UK are as follows:

• The main landing page of the US website deliberately displayed the message "Deliver to the United Kingdom" when accessed by consumers with a UK IP address. The same message repeated on almost all of the subsequent pages unless the consumer deliberately chose to change the address when that option was shown in a pop-up box. This indicates that Amazon decided that it was seeking sales to UK consumers;
• The US website displayed a pop-up box with the wording "We're showing you items that ship to the United Kingdom" and this message was subsequently displayed against all goods available for shipment to the UK (including the US branded goods). This creates an assumption that Amazon intended for the US branded goods to be shipped to the United Kingdom;
• The fact that the messages "Deliver to the United Kingdom" and "We're showing you items that ship to the United Kingdom" were displayed automatically by the website was deemed irrelevant (indeed this feature had been designed into the system by Amazon); and
• The "Review your order" page contained numerous indications of targeting UK consumers, namely, the supply of the US branded goods to a UK address with UK specific delivery times, prices shown in GBP and the display of the USD exchange rate.

The Supreme Court noted that there were "[p]ointers which might be said to look the other way":

• The message on the US website's landing page about using the UK website; and
• The fact that the initial currency displayed on the US website was US dollars.

These were both weak points and did not outweigh the pointers towards targeting; plainly the average consumer would think that Amazon wished to achieve UK sales of those products from the US website.

Non-targeted sales (Blomqvist doctrine)

The Supreme Court declined to comment on this point having already concluded that there was trade mark infringement by targeting. It also expressed "some relief" at not having to decide this point because it felt the facts in Blomqvist (such as where the contract for sale had been concluded) were unclear, and therefore it was impossible to tell if the doctrine could properly be applied in the current proceedings.

Decisions of the lower courts

High Court: there were no targeted or non-targeted sales

Lifestyle was unsuccessful at first instance, with the trial judge concluding that the average consumer would consider that the US website was targeted at US consumers, not UK consumers. Both the Supreme Court and the Court of Appeal ultimately held that the trial judge had reached the wrong conclusion on targeting.

The trial judge relied on a range of factors in reaching this conclusion, including that the US website advised UK consumers about the availability of the UK website which had shorter delivery times and lower prices than the US website, and that there were very few sales of US branded goods in the UK. The Supreme Court did not criticise the trial judge for taking these factors into account and indicated that these factors might be said to be contra-indicators to a finding of targeting. However, in its analysis, the Supreme Court concluded that these contra-indicators were outweighed by other factors favouring a finding of targeting (see above).

The trial judge also perceived that Lifestyle's purpose in asserting its trade mark rights was to prevent UK consumers who accessed the US website from learning about the lower prices, a finding which the Supreme Court criticised as not even being a relevant factor in the analysis of targeting.

The trial judge also rejected Lifestyle's claim that the sales constituted trade mark infringement under the Blomqvist doctrine on the basis that the title to the US branded goods passed to the EU / UK consumers at the point of sale in the US and the goods were subsequently imported by the EU / UK consumers, not Amazon. For the reasons explained above, the Supreme Court declined to comment on this point.

Court of Appeal: there were targeted and non-targeted sales

Lifestyle successfully appealed the High Court's decision, with the Court of Appeal concluding that the trial judge made a number of errors in analysing the targeting issue and that Amazon plainly targeted UK and EU consumers. Whilst the Supreme Court reached the same conclusion, its reasons for doing so were slightly different.

The Supreme Court said that the Court of Appeal had focused too narrowly on particular elements of the US website, when the website should have been considered as a whole. The Court of Appeal had probably done that because it thought that the final "Review your Order" page so plainly demonstrated targeting that it didn't really need to undertake a structured review of the whole US website.  There would be instances however where this approach would be erroneous; instead the Court of Appeal should have reviewed the US website as a whole and worked forwards through the US website rather than backwards in order to see what the average consumer is likely to see and conclude.

Amazon had argued that the Court of Appeal had "applied such a low threshold to the requirement for targeting that it would be satisfied whenever a UK consumer purchased goods online from a non-UK website for delivery in the UK" – i.e. that a page equivalent to the "Review your Order" page would, on its own, be enough to infringe.  The Supreme Court thought that argument carried some weight, but stressed that it had come to its conclusion that there was targeting by looking at the combined effect of the various aspects presented by the US website to a UK consumer, and not just by looking at the one "Review your Order" page.

The Court of Appeal also held that, even if there was no specific targeting of UK and EU consumers and the sales took place in the US, Amazon did infringe Lifestyle's trade marks under the Blomqvist doctrine as the sales constituted use of a sign in the course of trade, which, as we have seen, was overturned by the Supreme Court.

Comment

This clear and practical decision will be of particular interest to non-UK online vendors with customer orders originating from the UK. The judgment provides guidelines as to the factors and circumstances that will likely lead to a finding of targeting of UK consumers in the context of trade mark infringement. Retailers will need to carefully review their policies and ensure that they place adequate restrictions to prevent the sale of goods to territories where doing so could amount to trade mark infringement. Particular attention needs to be paid to any activities which could amount to advertising and offering for sale of branded goods, even if there is ultimately no sale of those goods.

The decision is also reassuring to brand owners that they can enforce their trade mark rights in the context of online sales where territorial boundaries are often blurred.

Finally, as the Supreme Court refrained from commenting on the Blomqvist issue in this decision, it will be interesting to see whether the position will be clarified in future cases.

With huge thanks to Francesca Iacob, Solicitor Apprentice, for co-authoring this article.