The Supreme Court has upheld the judgment of the Court of Appeal (which we reported on here) in Lifestyle Equities v Amazon, ruling that Amazon was liable for trade mark infringement because of the manner in which it advertised and offered for sale goods to UK and EU consumers through its .com website.
The decision provides useful guidance on what amounts to 'targeting' within the context of cross-border ecommerce and when this will amount to trade mark infringement in the UK and EU. Retailers whose websites are primarily directed to consumers in other countries will need to review their sites to ensure they are not inadvertently targeting the UK and leaving themselves open to a potential trade mark infringement claim.
Background
The case involves two parties selling identical goods bearing identical trade marks. The UK party (Lifestyle Equities) is authorised to use the trade marks in the UK and EU. The US party (a commercially unrelated party) is authorised to use the trade marks in the US.
The US party sold its goods via Amazon.com (and other Amazon-affiliated services), which UK and EU consumers could access and purchase the US branded goods from. The UK party saw this as an encroachment on its trade mark rights and brought infringement proceedings against Amazon.
The key issue in the case was whether Amazon had targeted UK and EU consumers through the advertising and offering for sale of the US branded goods on Amazon.com. The High Court ruled there was no such targeting as the US branded goods were meant for the US market and UK consumers would need to specifically look for those products on Amazon.com to buy them. The Court of Appeal overturned the High Court decision, finding that Amazon's advertisements and offers for sale did target UK and EU consumers.
Supreme Court decision
The Supreme Court agreed with the Court of Appeal's finding, albeit for slightly different reasons. Based on the following factors, it found that Amazon was targeting consumers in the UK:
- A message on the landing page and almost all subsequent pages offered to "Deliver to the United Kingdom"
- The pages specified which of the goods displayed could be shipped to the UK and which could not.
- A “review your order” page offered to sell the relevant goods to a consumer at a UK address, with UK specific delivery times and the option to pay in sterling.
The Court also considered a number of factors against targeting of the UK, including a message on the landing page about using the UK website instead of the US website and that the default prices displayed on the US website were in US dollars (albeit there was an option to change currency on the landing page, with sterling expressly included as an option). Ultimately, the Supreme Court found that the factors favouring the conclusion that Amazon targeted UK consumers greatly outweighed the factors which might point in the opposite direction.
It is worth noting that, in its analysis, the Supreme Court stated that delivery of goods to a particular country does not automatically mean there is targeting of that country. It held that "Whether or not there has been targeting in the relevant sense depends upon what is done up to the moment of the conclusion of the contract of sale, not thereafter."
Non-targeted sales
Lifestyle Equities also argued that, even if it was found that Amazon did not target consumers in the UK/EU, it nonetheless infringed Lifestyle Equities' marks by selling and delivering the goods through its US website to consumers in those territories.
However, the Supreme Court refused to opine on this issue as it did not arise in the circumstances of this case, given it had found that there was targeting. It also considered that the case law on this point (the decision of the Court of Justice of the European Union in Blomqvist v Rolex) did not provide a sufficiently detailed description of the underlying facts for the Supreme Court to form a reliable view, despite the Court of Appeal having found that the sale and delivery of products in this scenario would infringe.
Comment
The Supreme Court's decision on targeting is welcome news for brand owners and licensees who trade on a licensing basis. It underscores the importance of understanding how online retail practices operate and will help brand owners and others enforce their rights against any online encroachment of their operational territories.