Not on target: Why US products on Amazon.com do not infringe UK and EU trade marks

Amazon

is a global e-commerce phenomenon with millions of customers across 19 country marketplaces. The global nature of Amazon invites the inevitable trade mark law questions: How does the territorial nature of trade mark protection work with global e-commerce platforms? Does it matter from a trade mark law perspective if from my desk in London I buy something from the US site Amazon.com?

The High Court grappled with these kinds of issues in the recent case of Lifestyle Equities CV v Amazon UK Services Ltd. The issue arose in this case because of a brand split between the US and the UK/EU for the trade mark BEVERLY HILLS POLO CLUB. Lifestyle Equities CV owned various BEVERLY HILLS POLO CLUB trade marks in the UK and EU and argued that sales of BEVERLY HILLS POLO CLUB products in the UK and EU from US based Amazon.com was destroying its business. As a well-known principle of trade mark law, a trade mark owner has the right to prevent parallel importation and sales of goods labelled with the trade mark in another country. This is on the basis that a trade mark owner is able to decide the distribution chain and price point for each jurisdiction in which it has a registered trade mark.

Michael Green J stated that Lifestyle Equities CV’s trade mark registrations for BEVERLY HILLS POLO CLUB in the UK and EU were not infringed by sales into the UK and EU of products bearing these trade marks from US-based Amazon platform Amazon.com. He came to this conclusion by considering a number of questions concerning the sale of products on the Amazon.com website.

Was the listing of the product ‘targeted’ at the UK and EU? 

The key issue was whether Amazon’s use of third party trade marks on its US marketplace Amazon.com constituted use of that trade mark in the UK and EU when customers from the UK and EU could purchase these products. Put in layman’s terms, did Amazon ‘target’ the EU and UK markets with BEVERLY HILLS POLO CLUB products from its US-based marketplace and in so doing infringe Lifestyle Equities CV’s trade mark rights?

Amazon had put in place technical restrictions to prevent sales in the UK and EU of BEVERLY HILLS POLO CLUB products (and damages would have been ‘de minimis’ as a result of minimal sales). That meant that the question of targeting was only relevant to the visibility of the Amazon.com listings, which Lifestyle Equities CV’s attempted to argue ‘targeted the world’.

Michael Green J held that visibility on a website alone cannot constitute ‘targeting’. Despite Amazon’s technical restrictions, the average UK or EU consumer who accesses the product listings on Amazon.com would be doing so deliberately. They would know that they were buying from the US marketplace as they would have to also consent to high shipping and import costs if they proceeded to purchase a product. The BEVERLY HILLS POLO CLUB products listed on Amazon.com were therefore not ‘targeted’ at customers in the UK or EU. Further, Amazon had not taken deliberate aim at those countries’ consumers, and had not used offers and advertisements specifically designed to attract UK or EU sales.

Where did the sale take place?

In the US, according to Amazon’s standard T&Cs. Lifestyle Equities CV’s argument that there was infringing use of the BEVERLY HILLS POLO CLUB trade marks ‘in the course of trade’ in the UK/EU relied heavily upon the CJEU decision in Blomqvist v Rolex SA. Michael Green J dismissed this ‘troublesome’ judgment on the basis that there was a lack of certainty surrounding the place of Blomqvist’s transfer of title.

Could Amazon be held responsible for importing the product into the UK and EU?

No. The consumers were the importers of record and primarily responsible for the payment of import duties. Amazon did not intend to put the BEVERLY HILLS POLO CLUB goods into free circulation in the jurisdictions where they allegedly infringed existing trade mark rights; their only intention was to fulfil private consumers’ individual orders.

Key messages

The case was unusual from the outset because of the global brand split between the UK/EU and then the US. Nonetheless, there are some important messages for e-commerce platforms:

• The case demonstrates the importance of clarity in standard T&Cs regarding (a) cross-border transfer of title, and (b) import duties. Express provisions on these points could be helpful if faced with allegations of trade mark infringement in the future.
  
  
• This decision also confirms the court’s broad and circumstantial understanding of ‘targeting’ in a trade mark context (which looks beyond the ‘average consumer’ and is not fulfilled by visibility on a website alone). In doing so, it reaffirms that trade mark protections cannot overstep their territorial limits.

Many thanks to Alex Buchanan for his research assistance in preparing this post.