High Court rules on sales of trade-marked goods on Amazon websites

The High Court has issued a ruling regarding sales of trade marked goods on Amazon’s US website to consumers in the UK and EU

The High Court has issued a ruling regarding sales of trade marked goods on Amazon’s US website to consumers in the UK and EU in Lifestyle Equities CV & Anor v Amazon UK Services Ld & Ors [2021] EWHC 118 (Ch).

The dispute was between the claimant owners of the Beverly Hills Polo Club (BHPC) brand in the UK and EU (and certain other countries) and companies within the Amazon Group. BHPC said that Amazon had infringed their trade mark rights by allowing BHPC branded goods to be listed on Amazon websites, in particular amazon.com, and to be visible to consumers in the UK and EU. The issue in this case arose because of a split in the ownership of the trade mark rights between the US and the UK/EU, apparently a fairly unusual situation. This was “counterfeiting” and destroying their business.

Rather than being about counterfeiting, the judge said that it was much more about the impact of e-commerce and the global nature of the Internet on the protection of non-global trade mark rights. This was brought into sharp focus by the split ownership in this case. In reality the key issues in the case was whether Amazon’s US website, amazon.com, and/or the listings of BHPC products thereon, targeted not only at US consumers but also UK/EU consumers.

Amazon denied most of the claims. However, it admitted some historic infringements and said that it had put certain restrictions in place to protect the claimants’ rights which had been effective in stopping sales of BHPC goods from the amazon.com website to the UK/EU. Furthermore, Amazon said that historical sales of BHPC goods from amazon.com to consumers in the UK/EU had been tiny and that the action was wholly disproportionate.

Targeting

The key issue in the case was whether the use of a sign on the internet constituted the use of a sign in the relevant territory. The EU Court of Justice had developed the concept of "targeting" because of the inherently territorial limits of trade mark protection and to ensure that such protection did not extend beyond those territorial boundaries; and the English courts had introduced the average consumer test as the means by which targeting was to be established. Although a court needed to consider the average consumer's perception of targeting, it also needed to take account of all relevant circumstances including information about issues such as viewing figures and volume of traffic as well as Amazon's subjective intent. 

With this in mind, the judge considered whether:

  • the listing of the product was targeted at the UK and EU and was an offer for sale or advertisement in the UK and EU (the judge said not); 
  • whether the sale of the product took place in the UK and EU or the product was put on the market in the UK and EU (there were two routes to market – with one route Amazon was not involved in the fulfilment, so the judge said they could not be liable for trade mark infringements – and with the other, under Amazon's terms, the customer took title to the goods in the US and was the importer of record);
  • whether Amazon companies were responsible for importation of the product into the UK and EU – they were only selling to private individuals, so the judge did not consider that they were “importers”.

Therefore, the judge dismissed most of the claims. 

In relation to the claims Amazon had admitted, the judge also rejected the claim for an inquiry as to damages. The admitted infringements were trivial and it would be disproportionate.

The judge considered that Amazon had responded reasonably and responsibly after the unusual and difficult issue of the split trade mark rights in relation to BHPC goods was brought to its attention. It cannot have been expected to have realised that there might be a problem before being notified of it. The restrictions that Amazon put in place have removed any possibility of infringements occurring.

The judge further said that the situation had come about not through Amazon’s activities but through the complications of dealing with the split in trade mark ownership.

Published: 2021-02-04T17:00:00

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