On 6 March 2024, the Supreme Court unanimously dismissed Amazon’s appeal in a dispute against Lifestyle Equities (Lifestyle) relating to the advertisement and offers for sale of Lifestyle’s “BEVERLY HILLS POLO CLUB” trade marks from amazon.com (Amazon’s US website). For similar but not identical reasons, the Supreme Court upheld the Court of Appeal’s decision and found that Lifestyle’s registrations were infringed because Amazon’s US website targeted UK consumers.
We previously reported the Court of Appeal’s 2022 decision here and our comments on the key issues arising from this dispute are repeated below:
“The internet isn’t bound by physical borders. Consumers can endlessly journey across a multiplicity of sites, browsing goods and services in any language. Intellectual property rights, on the other hand, are territorial in nature, subject to the laws of individual countries, sitting within the constraints of jurisdictional boundaries. Given this tension, at what point does selling goods online to another foreign jurisdiction constitute trade mark infringement?”
In what is now the leading authority on the issue of targeting in the UK, the Supreme Court has provided a clear indication as to the circumstances upon which an ecommerce platform would be liable for infringement of products sold on its site to another jurisdiction within the context of advertisements and offers for sale.
The full judgement can be found here: Lifestyle Equities CV and Anor v Amazon UK Services Ltd and Ors [2024] UKSC 8.
Background
Our previous article discusses the factual background and relevant law in more depth but in essence:
- Lifestyle owns UK and EU word and logo trade marks comprising of “BEVERLY HILLS POLO CLUB” (the BHPC trade marks).
- By coincidence, there exist corresponding trade marks registered in the US, owned by a commercially unrelated party (the US branded goods) and it is perfectly legitimate for the US branded goods to be marketed and sold in the US.
- However, Lifestyle never consented to the marketing or offers for sale of the US branded goods in the UK or the EU and so it alleged that Amazon’s advertisement and offers for sale and sale of the US branded goods from Amazon’s US website constituted trade mark infringement.
The High Court first rejected Lifestyle’s claims on the basis that Amazon’s US website did not target UK consumers but the Court of Appeal overturned that decision which has now been subsequently upheld by the Supreme Court.
The fundamental question to this dispute was whether Amazon has used the signs of which complaint is made in the course of trade in the relevant territory (here, the UK) in relation to the relevant goods[1].
In other words, did the sale of the US branded goods via Amazon’s US website, through its marketing and sales practices, target UK consumers within the context of a commercial activity conducted online?
Supreme Court decision
Having reviewed the purchasing process on Amazon’s US website, the Supreme Court agreed with the Court of Appeal’s findings that the average consumer in the UK would perceive Amazon’s US website as directed at them[2].
The Supreme Court conducted a careful contextual examination of the entire customer journey to assess targeting. It emphasised the multifactorial nature of the assessment and acknowledged the complexity of balancing various components.
Crucial factors included:
- Offerings on the amazon.com website to deliver products to the UK, particularly on the landing page and repeated on almost all subsequent pages, including those which first display the US branded goods.
- Amazon’s software which inserts a “Deliver to United Kingdom” message into those pages wherever the website is visited by a consumer with a UK IP address, unless the consumer actively changes their delivery address.
- The pop up box itself which says “We’re showing you items that ship to United Kingdom”.
- The “Review your order” page which contained UK-specific indicators such as UK delivery times, the ability to pay in GBP coupled with an exchange rate which was deliberately calculated by Amazon to populate the details of an offer to supply and deliver the goods to the UK.
There were some pointers which might be said to look the other way such as:
- A message on the landing page about using Amazon’s UK website instead, however, this was expressed only as an option.
- Default prices on Amazon’s US website were in dollars, however, this was deemed a weak indicator because of the prominently displayed choice to change the currency on the landing page, with sterling expressly included as an option.
- Amazon’s UK sales of the US branded goods were a small fraction of its USA sales of the same goods. Very little weight was placed on this statistical fact because the question is whether the average consumer would think that Amazon was seeking to sell the US branded goods to consumers in the UK, not how successful that seeking had been.
Overall, the Supreme Court, conducting its appraisal of targeting afresh from the Court of Appeal’s decision, said:
“we would conclude that Amazon did target the UK as a destination for the US branded goods by its display of them on its USA website, provided of course that each product thus displayed was marked as available for shipment to the UK. That is, in our judgment, the view which an average consumer would clearly form as the result of their experience of the USA website, right through from the landing page to the moment of contract by clicking the “Place your order in GBP” button on the “Review your order” page. Nothing in the possible contra-indicators comes near to displacing that conclusion.” (paragraph 80)
Therefore, Amazon’s appeal was dismissed and the Court of Appeal’s decision to issue an injunction and order for an inquiry into damages will remain in place.
What does this mean going forward?
The implications of the Supreme Court’s decision are important for both trade mark owners and online platforms that operate globally.
Brand owners can view the ruling as reinforcing their ability to protect against online infringement. For ecommerce platforms, like Amazon, careful consideration of how goods are presented to customers, particularly during cross-border sales, becomes imperative to avoid unintentionally infringing the rights of others in a foreign jurisdiction. As we previously advised, those who sell abroad via websites should, inter alia, consider:
- ensuring they have carried out clearance searches and put in place relevant IP protection in both their home territory and to those territories which they target;
- presenting information to customers in a manner consistent with where those IP rights are protected and cleared for use;
- where third party rights have been identified, adopting measures to ensure activities are made only within the jurisdiction, such as requiring payment in local currency and using geo-blocking software.
Interestingly, after deciding on the issue of targeting, the Supreme Court declined to comment on whether the US branded products would infringe the BHPC trade marks if they were sold and delivered to the UK, had there been no targeting or offers for sale. Despite the Court of Appeal previously finding the products in this scenario would infringe, the Supreme Court said there was an “air of unreality about addressing the doctrine about non-targeted sales” because the underling facts of the authoritative case law[3] (the “Blomqvist Issue”) were not aligned. It is possible that we may see the Blomqvist Issue decided upon in the future.
[1] Pursuant to section 10 of the UK Trade Marks Act 1994 and Article 9 of the EU Trade Mark Regulation ((EU) 2017/1001)
[2] The Supreme Court’s decision confirms that the Court of Appeal’s approach to targeting as explained by Arnold LJ citing Merck v Merck [2017] EWCA Civ and Argos v Argos Systems [2018] EWCA Civ 2211 is correct.
[3] See the Court of Justice of the European Union’s decision in Martin Blomqvist v Rolex SA and Manufacture des Montre Rolex SA (Case C-98-13).
