Court of Appeal reverses High Court ruling on sales of trade marked goods on Amazon’s US website to consumers in the UK and EU

The Court of Appeal has reversed the High Court's ruling that certain trade marks were not infringed by sales through various Amazon platforms which allowed UK and EU consumers to buy branded goods which had been lawfully manufactured, marketed and sold in the US with US rights-holder's consent.

In Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2022] EWCA Civ 552, the Court of Appeal has overturned the High Court's ruling.

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.

The High Court decision

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 certain 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.

Lifestyle appealed the High Court decision.

The Court of Appeal decision

The Court of Appeal upheld Lifestyle's appeal. It held that:

  • The advertisements and offers for sale at issue amounted to use of the relevant signs in the UK and the EU, and therefore infringing uses. The first instance judge had made a mistake when saying that there was no targeting of the UK. The purchaser was located in the UK, the shipping address was in the UK, the billing address was in the UK, the currency of payment was GBP and Amazon said that it would make all the necessary arrangements for the goods to be shipped to and imported into the UK and delivered to the consumer in the UK.
  • Following the CJEU decision in Blomqvist v Rolex SA (Case C-98/13) the sale of goods under a sign by a foreign website to a consumer in the UK or the EU constitutes use of the sign in the course of trade in the relevant territory, and this is so even if there is no antecedent offer for sale or advertisement targeting consumers in that territory. The judge had made an error in interpreting Blomqvist differently.
  • The judge had been wrong to refuse to order an inquiry as to damages or an account of profits due to considering that it would be wholly disproportionate given the "trivial" level of the admitted infringements. The Court of Appeal said that even if the quantum of any damages or profits would probably have been below the County Court small claims limit, such a result would have been unjust. The correct approach on that hypothesis would have been either to make an immediate summary assessment or to direct a subsequent summary assessment.

Further hearing on consequential matters

There has since been another hearing on consequential matters as a result of this decision. Lifestyle sought an injunction against Amazon, which was granted by the court.  Lifestyle also sought an inquiry as to damages. In all the circumstances the court was not persuaded that an inquiry was so clearly disproportionate that a summary assessment should be imposed on two unwilling parties.

In addition, Amazon had sought permission to appeal to the Supreme Court. The Court of Appeal did not consider that there is an arguable point of law of general public importance involved in this case, and so has refused permission to appeal. 

Published: 2022-05-16T16:00:00

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