The Potential Rise of Cross-Border Trade Mark Infringement via On-line Retailers

Case update

Earlier this year, the Supreme Court found Amazon’s US website liable for infringing a UK trade mark owned by Beverly Hills Polo Club (“BHPC UK”) by marketing and selling US-branded goods to UK consumers (Lifestyle Equities CV and another v Amazon UK Services Ltd and others).

Lifestyle Equities CV owns the trade mark for Beverly Hills Polo Club in the UK and EU.  An unrelated company in the United States, BHP Associates LLC owns the trade marks for Beverly Hills Polo Club in the United States and authorised Amazon US to sell the goods it manufactured there.  Amazon US ended up selling some of the LLC’s products to consumers in the UK and EU without BHPC UK’s consent, amounting to a trade mark infringement under s.10 of the Trade Marks Act 1994 and Article 9 of the EU Trade Mark Regulation.  

The arguments centred around the way in which Amazon marketed the goods to UK consumers via its US website.  There was no argument that marketing and selling the US-branded goods in the UK or EU would be an infringement of BHPC UK’s trade marks.  Amazon’s position was that it was not doing that. 

Infringement was found because Amazon US actively targeted customers in the UK by displaying certain goods on its website and marketing those goods as available for shipment to the UK. 

What is the law on targeting?

The concept of targeting ensures that trade mark protection is upheld within the relevant territorial boundaries in which a mark has been registered.  Problems frequently arise in the context of platforms that are deliberately directing sales promotions to consumers in other countries for goods with identical or similar trade marks to trade marks which have been registered in that country,  thereby infringing those trade marks.  

Aside from possible counterfeiting and piracy issues, targeting overseas customers can disrupt licensing arrangements which grant rights to use trade marks to different traders in different territories for genuine goods, usually with an obligation not to make active sales outside the licensed territory. 

When considering whether targeting has taken place, the courts will apply the “average consumer test” which asks the question whether an average consumer would conclude that the relevant trader or retailer is directing its activity towards consumers in the territory where the alleged infringement has taken place (in this case the UK).

How can proprietors of UK trade marks identify targeting?

In the Lifestyle Equities case, the Supreme Court identified evidence of Amazon US’ targeting of UK consumers by:

• providing a “deliver to the United Kingdom” message on pages selling the relevant goods to any consumers with a UK IP address, a pop-up box directed towards UK consumers relating to goods which were available for delivery to the UK and “ship to the UK” option on the final review page before customers submitted orders;
• labelling the goods on offer which were available for delivery to the UK;
• providing space to input UK addresses; 
• providing the option to translate the purchase price from Dollars to Pounds Sterling;
• order details at check-out which were calculated specifically for an offer to supply and deliver the goods to the UK; and
• having the relevant arrangements in place to transport the goods to the UK.

Even if the goods had not be marketed in such a way as to target UK customers, the resulting sale of the goods (using the same/similar trade marks as those registered in the UK) to and acquisition of those goods by consumers in the UK would have amounted to trade mark infringement.

This sends a strong message to global retailers to consider how they can modify their websites to avoid the risk of infringing trade marks that have been registered in the UK.  Proprietors of UK trade marks also now have clearer guidelines on what to watch out for as evidence of non-UK websites targeting consumers in the UK, strengthening the position of trade mark holders in the UK.  That being said, each case will need to be decided by consideration of the individual facts and evidence presented and whether the relevant signs of targeting are present. 

Written for ACID magazine - https://www.acid.uk.com/acid-magazine/