UK: Amazon Loses UK Supreme Court Appeal In Cross-Border "Targeting Consumers" Case

In a judgment handed down yesterday, 6 March 2024, the UK Supreme Court has unanimously dismissed Amazon's appeal in their fight with Lifestyle Equities regarding the sale of products from Amazon's US site to consumers in the UK/EU.

My previous article discusses the facts of the case to date, and the High Court and Court of Appeal decisions. In brief, Amazon appealed to the Supreme Court following a Court of Appeal decision that found them liable for the infringement of Lifestyle Equities' UK/EU trade mark registrations for the BEVERLY HILLS POLO CLUB brand via marketing and sales to the UK on the US site, amazon.com. The corresponding US trade mark registrations for this brand are held in the name of a commercially unrelated entity, and the Court of Appeal found that Amazon's marketing and sale of these US branded goods on Amazon's US site (amazon.com) were also targeted at UK/EU consumers, which constitutes infringement.

The main question for the Supreme Court to consider was: "Where goods marketed and sold on a foreign website are identical to goods for which trade marks are registered in the EU or UK, in what circumstances would the marketing and selling of such goods infringe the EU/UK trade marks?"

Supreme Court decision

Having reviewed the purchasing process as a UK consumer on Amazon's US website from start to finish, the Supreme Court concluded that Amazon's marketing and offer for sale of the US branded goods directly targeted UK (and EU) consumers. In particular, the following features and messages on the customer journey on amazon.com from a UK IP address were determinative in reaching this conclusion:

• We ship internationally
• Deliver to United Kingdom
• Ships to United Kingdom
• We're showing you items that ship to United Kingdom
• Click here to shop in your local currency
• Place your order in GBP

Furthermore, the Supreme Court noted that "unless they use the 'Change Address' button, the average UK consumer only sees the 'Deliver to United Kingdom' message" on Amazon's US website and a pop-up box on the website also informs UK consumers that they will be specifically shown goods that can be delivered to the UK.

Amazon had argued that the Court of Appeal's decision inappropriately lowered the threshold for "targeting" consumers, such that any purchase of goods online from a non-UK website for delivery to the UK would constitute infringement. However, the Supreme Court considered that the finding of "targeting" by Amazon in this case is based on the "combined effect" of the various aspects of amazon.com (such as those listed above) that are specifically designed to directly market and offer goods for sale to UK consumers once the website identified that the consumer's IP address was located in the UK.

Therefore, Amazon's appeal was dismissed, and the injunction and order for an inquiry into damages issued by the Court of Appeal will remain in force

Comment

Whilst the facts of this particular case are somewhat unusual (in that the registrations for the BEVERLY HILLS POLO CLUB brand are owned by separate and commercially unrelated entities in the UK and the US respectively), the overriding message is clear and the Supreme Court's decision places the onus on overseas online marketplaces to ensure that they are not infringing any UK trade mark rights when marketing and offering goods for sale. As with the Court of Appeal decision, the Supreme Court ruling is certainly in favour of brand owners and will seemingly open the door for brands to clamp down on the direct targeting of UK consumers by overseas online retailers and marketplaces in relation to infringing goods.

As I mentioned in my previous article, marketplaces operating in a similar manner to Amazon should also be vigilant and prompt in addressing infringement and targeting issues raised by brand owners. In this case, Amazon did implement some restrictions in 2018 and 2019 in response to complaints from Lifestyle, although the 2018 restrictions were not wholly effective in preventing the sale of the US goods into the UK/EU. Going forward, taking steps to address specific cases of infringement of UK IP rights will be paramount for overseas online marketplaces to avoid potential liability.

Although this case does not specifically deal with counterfeit goods (the US goods in question were entirely legitimate), the general principle will also surely be applicable to cases in which counterfeit goods are available on overseas online marketplaces that directly target UK consumers, and retailers could therefore find themselves liable for infringement.

Coupled with the CJEU decision in 2022 that allows EU Member State National Courts to potentially find online marketplaces liable for trade mark infringement in relation to the advertisement of fake products by third parties on their sites, the legal landscape in relation to online marketplace infringement in the UK and EU is seemingly continuing to shift in favour of brand owners' rights.

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