ARTICLE
15 April 2024

Lifestyle v Amazon: A Milestone For Online Cross-Border Trademark Infringement

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Novagraaf Group

Contributor

Novagraaf has been helping iconic brands and innovative organisations drive competitive advantage through intellectual property (IP) for more than 130 years. One of Europe’s leading IP consulting groups, Novagraaf specialises in the protection and global management of IP rights, including trademarks, patents, designs, domain names and copyright. Part of the Questel group, Novagraaf has 18 offices worldwide and a network of more than 330 IP attorneys and support specialists.
In a recent trademark decision in the UK, the Supreme Court considered what constitutes targeting in relation to cross-border e-commerce and infringing use of UK and EU...
European Union Intellectual Property
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In a recent trademark decision in the UK, the Supreme Court considered what constitutes targeting in relation to cross-border e-commerce and infringing use of UK and EU trademark rights on global online marketplaces. Laura Morrish outlines what it means for brand owners and global businesses.

The popularity of online selling platforms such as Amazon, Ebay and Alibaba, particularly during and after the COVID-19 pandemic has meant that even though e-commerce portals have existed for much longer, they have really gained mainstream attention over the previous few years.

The convenience and range of options provided by e-commerce indicate that this is a trend that is here to stay. According to the Office for National Statistics, in December 2023 the value of internet retail sales in the UK reached a value of £2.9 billion.

Evolution of e-commerce

In recent years, Amazon has years obtained a formidable international reputation and has become the "go to" online platform for the marketing and sale of consumer goods. It was reported that Amazon accounted for 39.5% of all US retail e-commerce sales in 2022, or nearly $2 in $5 spent online.

For many retailers, the growth of e-commerce has allowed them to expand their brands' reach and positively impact their bottom lines. 

However, success in the online marketplace relies on much more than offering a good product. Having a great product or service to sell is a strong foundation, but the rapid evolution of e-commerce adds many more factors into the equation. Two of the main issues here are a saturation of options and the reliance on consumer trust.

The online marketplace is not limited by geography or a time schedule. This mean that consumers don't need to buy based on convenience or proximity, they can find the exact product they're looking for, sold by multiple providers, and choose the one that most appeals to them.

Brand trust

Given the saturation of supply, purchasing decisions become more influenced by brands.

This leads to the second factor: consumer trust. The internet offers consumers many options but among those there will be lower quality products and numerous scams. Having a consistent brand identity enables the building of trust among consumers. Consumers will know and recognise the brand's name, logo, and slogan and see other people using the product; this almost becomes an endorsement.

In this context trademark registration, and the ability to enforce those registered rights, becomes crucial to e-commerce market success in the long term.

However, what is not clear is how far-reaching protection would need to be for those rights. The global nature of the internet, and platforms such as Amazon, means that consumers online in the UK can view and purchase products from stores and e-commerce platforms from around the world.

This has led to issues when establishing who is liable for trademark infringements that occur through these sales platforms and what the relevant jurisdiction might be if action is required.

Infringing trademark use on online marketplaces

In a recent UK decision involving Amazon, the Supreme Court had to consider what acts amount to 'targeting' in relation to cross-border e-commerce and the extent to which holders of UK and EU trademark rights can object to others using their rights, in respect of products listed for sale on online globally accessible marketplaces.

Lifestyle Equities CV is the owner and exclusive licensee of various UK and EU trademarks for the Beverley Hills Polo Club (BHPC) brand. The corresponding US trademark rights for the same marks are owned by an unrelated entity, BHPC Associates LLC.

Lifestyle alleged that Amazon had infringed its trademarks by advertising and offering for sale US branded goods to UK consumers through its .com platform. It also claimed that Amazon was jointly liable with the seller for importing these goods into the UK. These acts had all occurred without the consent of Lifestyle.

Amazon argued that due to the existence of its .co.uk and .eu websites, it was clear that Amazon.com is only targeted at US consumers.

Initially Amazon had some success, and the High Court ruled that in respect of US branded goods that were advertised and offered for sale on its country-designated Amazon site, for example amazon.co.uk, Amazon had infringed Lifestyle's UK and EU trademarks.

In contrast, it did not consider that the goods advertised and offered for sale in the same way on Amazon.com were targeted at consumers in the UK. On this basis, Amazon had not 'used' Lifestyle's trademarks in the UK and no trademark infringement had occurred.

In a decision that overturned that of the High Court, The Court of Appeal found that all adverts and offers for sale in the evidence constituted infringing use of the trademarks in the UK and EU.

In reaching its conclusion, the Court of Appeal considered that various factors were relevant, such as:

  • The homepage of the US website notified consumers that they could buy in eight different languages, in over 60 different countries and that goods could be delivered to the UK.
  • The search result webpages and product detail webpages indicated that goods could be delivered and shipped to the UK.
  • The order review webpage showed that where a potential buyer was located in the UK, with the shipping address in the UK, the billing address in the UK and the currency of payment as pounds sterling, Amazon would make all of the necessary arrangements for the goods to be shipped to and imported into the UK (including a pre-estimate of import duties) and delivered to the consumer in the UK.

Ultimately Amazon's sales of US branded goods to UK and EU consumers constituted use of the trademarks in the relevant territory, and amounted to infringing use, even if the adverts and offers for sale did not.

In its recent decision, the Supreme Court, the final court of Appeal in the UK, upheld the decision of the Court of Appeal.

Significance for global businesses

The decision will have a significant impact on businesses operating on global sales platforms and their potential to be liable for IP infringements in countries beyond that where they are based.

Now more than ever, companies will need to take steps to ensure that they are not inadvertently targeting consumers in other jurisdictions. Changes to websites may be necessary to remove all statements that indicate that goods are available to consumers in the UK, including that the goods can be shipped to the UK and delivered to UK addresses. Businesses will also need to remove the option to pay for goods in pounds sterling. More decisive action could be to implement geo-blocking on websites, to ensure that they are only accessible to the target market.

Considerations for brand owners

Although this decision was issued against an e-commerce platform, brand owners selling through their own websites would be wise to be similarly cautious. Conducting trademark searches prior to launching, to establish if there are any third-party risks in the countries to which sales will be directed, would reduce the risk of a cross-jurisdictional conflict arising. Ideally seeking protection in target markets would also be a priority.

For brand owners, this decision potentially provides greater scope to take action against e-commerce platforms that are targeting the UK, even if there is no protection for their trademark in the home country of that platform. It is likely that this decision will provide brand owners with an increased confidence to request the take down of infringing listings, and perhaps a greater inclination on the part of e-commerce platforms to action these to reduce their own liability in such matters.

In this environment, online brand protection will become even more important. Being able to monitor e-commerce platforms efficiently and take steps to remove infringing listings in a timely and cost-effective way, will enable brand owners to step up in the fight against online infringement.

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.

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