Amazon defends accusation of trade mark infringement at the UK Intellectual Property Enterprise Court (IPEC)

EBay and Amazon are amongst the online marketplaces that are no strangers to defending themselves against accusations of trade mark infringement.

An online marketplace is an e-commerce platform, which is accessible worldwide and facilitates the purchase of products from various sources. Using Amazon as an example, sellers of products can list their products for purchase on the Amazon platform. Once a product is purchased, depending on the nature of the sellers contract with Amazon, Amazon fulfils the order by, amongst other things, arranging for delivery of the product.

Disputes between trade mark owners and the providers of online marketplaces inevitably occur because e-commerce platforms are accessible worldwide and trade marks are territorial in nature. The territorial nature of a trade mark means that trade mark rights are limited to the country where they have been granted, used or are well known. A trade mark registration does not give the owner worldwide trade mark protection, but rather protection in individual/specific territories where the trade mark is used in the course of trade. As such, it is possible for a trade mark to have different owners in different countries.

Consequently, a trade mark owner in one country has the right to control the use of the trade mark on products in that specific country and the original offer of those products for sale in that specific country. However, if those products are offered for sale originally in a country in which the owner does not have the trade mark rights, like through an online marketplace accessed worldwide, it may be infringing the rights of the trade mark owner in a different country.

Parallel importation and private individuals who purchase a product incorporating the trade mark for personal use is distinct from the above situation and does not generally amount to trade mark infringement.

In the case of parallel imports, parallel imports are genuine products originally purchased in a country where the trade mark owner in that specific country has consented to the product being put on the market in that country. The purchased product is then transported to another country and further offered for sale in that other country. Parallel imports therefore do use a trade mark on products in the course of trade (i.e. commercially) but with consent of the trade mark owner in the specific country where the product is originally purchased.

However, due to the global nature of the internet, products sold anywhere in the world can be viewed by a party interested in those products. Where there are multiple owners of the same trade mark in different territories, a question arises over when use of the trade mark by an owner of the trade mark in a different territory will amount to trade mark infringement.

A recent matter heard at IPEC reiterated the principles to be applied in such a case.

Beverly Hills Polo Club

In the matter, the trade mark rights for the brand "Beverly Hills Polo Club" are owned by different entities in the US and UK/EU. Products bearing the trade mark were placed onto for sale with the consent of the US trade mark owner but not the UK/EU trade mark rights owner. Restrictions on the website prevented the sale of the products bearing the trade mark into the UK/EU.

The trade mark rights owner in the UK/EU brought proceedings against Amazon on the basis that his consent should have been obtained because the website is accessible in the EU/UK, and Amazon is thereby infringing his trade mark rights. The UK/EU brand owner's primary concern was the visibility of the goods bearing the trade mark to consumers in the UK/EU and not the possibility of consumers based in the UK/EU actually buying the goods. 

The court in deciding the matter reiterated the principle to be applied when dealing with the territoriality of trade marks and the global nature of the internet. The principle being that these matters must be assessed on a case by case basis taking into account whether the listing of the product is targeted at consumers in the territory of the rights owner. As such, for Amazon to be found to have infringed the UK/EU brand owner's trade mark, the branded products that were put on the market in the US with consent of the US trade mark owner would need to be offered for sale or advertised specifically to UK/EU customers.

The Decision

Amazon produced evidence to show that its website, where the goods were offered for sale, was only targeted to US consumers. Its other websites, which did not offer the branded goods, such as, were specifically marketed to the UK. As such, Amazon was not found guilty of trade mark infringement. The court stressed that Amazon would only have been found guilty of trade mark infringement if they intended to put the goods bearing the trade mark into free circulation in the UK/EU.

In the decision, the court made some analogies between this situation and an individual purchasing a product bearing a trade mark in the US and bringing it back to the UK in a suitcase, or a UK individual ringing a physical store in the US from home and buying some goods which were then shipped to them in the UK. Neither of these situations would amount to trade mark infringement because the goods in the US were not being actively targeted at UK consumers.

In summary, if trade mark rights are owned by multiple owners in different territories, use of the trade mark on an online marketplace, even if accessible throughout the world, is allowed provided it is with the consent of the owner of the trade mark in the country where the products are being specifically marketed to and/or offered for sale.

There are various reasons why the same trade mark may be owned by different entities or individuals in different markets. Brand owners who are in this situation may not welcome the present decision, but the court's view is clear: trade mark rights do not grant the owners the right to censor the internet, and businesses and brands need to live with the realities of the global nature of an online retail platform.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.