Amazon in the firing line as UK Supreme Court tackles targeting

The UK Supreme Court has confirmed that Amazon infringed Lifestyle Equities’ UK and EU trade marks by offering for sale certain third party goods to UK consumers through its US website, Amazon.com. This is the first time that the Supreme Court has considered targeting in a trade mark infringement context and so this decision will be of material interest to those selling online – particularly where goods are marketed across borders.

Background

Lifestyle are the owner and exclusive licensee of various UK and EU trade marks for the words BEVERLY HILLS POLO CLUB and a related device mark, registered in respect of various goods including clothing. A commercially unrelated third party owns corresponding US trade marks and markets identical goods under them in the US.

Lifestyle claimed (amongst other things) that Amazon had infringed their trade marks by advertising, offering for sale and selling certain US branded goods to consumers in the UK and EU via its US website.

As trade mark rights are territorial rights, in order to establish infringement of a UK/EU trade mark it is necessary to prove that the allegedly infringing sign was used within the UK/EU, respectively. Whilst it is usually straightforward to determine this in the context of advertising and selling goods through physical stores, that question is much more difficult to answer in the online world, where cross-border marketing and sales of goods are prevalent. 

The courts have adopted two key approaches to help deal with this conundrum: (i) by treating the advertising and offering for sale of branded goods that are “targeted” at a protected territory as use of the relevant trade marks in that territory; and (ii) by treating sales of branded goods themselves as use of the mark within the protected territory if the sale is made “to” a consumer in that territory (irrespective of whether there has been targeting). Both of those approaches were in issue in these proceedings.

First instance and Court of Appeal decisions

At first instance, the High Court found that, taking all relevant factors into account, the average consumer would conclude that Amazon.com was not targeted at UK or EU consumers (see our blog). It also found that the sales of US branded goods were not sales “to” consumers in the UK or the EU as the sales were completed in the US.

This was overturned on appeal to the Court of Appeal on both counts, with the Court of Appeal finding that the relevant pages on Amazon.com were targeted at consumers in the UK and that the sales of US branded goods in and of themselves also infringed Lifestyle Equities’ trade marks (see our blog).

Decision of the UK Supreme Court

The Supreme Court broadly agreed with the Court of Appeal’s conclusions (but did critique some aspects of its approach).

It reminded us that the question of whether a particular advert or offer for sale is targeted at consumers in the UK must be assessed from the perspective of the average consumer – would the average consumer consider the website in question to be directed at him/her? 

Answering that question requires the court to carry out a multifactorial assessment of all the relevant circumstances. That includes the appearance of the website, how it responds to the presence of the consumer, whether it is possible to buy goods and have them delivered, and how that is done. It may also include other factors such as any clear intentions to solicit custom in the UK, the language or currency used, the nature of the top level domain, or the number of visits made to the website by consumers in the UK.

Balancing the facts and evidence before it, and following a review of the successive pages of the US website that would have been visible to the average consumer, the court concluded that Amazon’s marketing and offers for sale were targeted at the UK. Factors supporting this conclusion included the following:

• the presence of the words “Deliver to the United Kingdom” on the landing page and almost all subsequent pages of Amazon’s US website – this being a message which Amazon’s software automatically inserts by design whenever the website is accessed by a consumer with a UK IP address (unless the consumer actively changes their delivery address);
• the presence of a pop-up box telling consumers that they will be shown precisely which goods are available for delivery in the UK, with subsequent product pages doing just that; and
• the “Review your order” page offering the goods for sale to a consumer with a UK address for delivery, with UK specific delivery times and prices, and the ability to pay in Sterling.

Whilst there were some factors pointing against targeting (e.g. a notice referring to Amazon’s UK website and the fact that the default currency was US dollars) these were not sufficient to sway the court away from its conclusion.

Given the court’s finding that there was targeting, and that Amazon had conceded that if targeting was found then any subsequent sales would themselves be an infringement, the court found it unnecessary to consider whether the sales, absent targeting, would have infringed.

Comment

The Supreme Court’s decision provides further helpful guidance on the issue of targeting and how it will be assessed by the English courts.

The decision will, naturally, be welcomed by trade mark owners. For those operating cross-border online sales platforms, however, it serves as another stark reminder to take extra care in setting up their websites and designing their customer journey, in order to reduce the risk of inadvertently infringing UK trade mark rights.