This article deals with a recent UK trade mark judgment that speaks to the concept of 'targeting' – the meaning of which will become apparent later in the article. The case is Lifestyle Equities v Amazon.

Facts

A UK company, Lifestyle Equities, owns the trade mark Beverly Hills Polo Club, word and logo in, inter alia, the United Kingdom (UK) and European Union (EU). In the USA, however, the same trade mark is owned by a different (commercially unrelated) company which produces goods that are identical to those for which Lifestyles Equities' trade marks are registered in the UK and EU. Yet the goods sold in the USA are cheaper than those sold in the UK/EU. It is important to bear in mind that trade marks are territorial in nature and should be protected in all territories in which a party operates and conducts business.

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Lifestyle Equities has not consented to these US goods being sold in the UK or EU. But these goods are being sold in the UK on Amazon websites like www.amazon.com and www.amazon.co.uk. Lifestyle Equities therefore sued Amazon for trade mark infringement.

The legal issue

The legal issue was described as follows:

'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?'

The High Court – there needs to be 'targeting' / there was no ' targeting'

The High Court considered the issue and ruled against Lifestyle Equities. The basis for the court's finding was that the US goods were not 'targeted' at UK or EU consumers.

In coming to the finding that the goods were not targeted the judge considered a number of factors, such as the fact that:

  • The purchasers had deliberately bought US goods;
  • There were shipping costs to be paid;
  • The prices were in US dollars;
  • The purchasers supplied their addresses;
  • The actual sales took place in the USA;
  • The title to the goods passed in the USA, making the purchasers importers (into the UK/EU) of the goods;
  • The purchasers were responsible for paying import duties.

Lifestyle Equities took the High Court judgment on appeal.

The Court of Appeal – there was targeting

The Court of Appeal overruled the High Court judgment, with Lord Justice Arnold handing down the court's judgment. The judge made a number of points:

  • The High Court had erred in finding that the Amazon listings were not targeted at UK/EU customers – the judge said that, although the listings may well have been primarily directed at Americans, they were certainly not limited to them - UK/EU customers were targeted too!
  • The judge pointed out that options to 'Deliver to United Kingdom' and 'Ship to UK' were presented, and that there was provision for UK addresses for both shipping and billing, as well as currency in Sterling.
  • The judge said that the High Court had misinterpreted the earlier case of Blomqvist v Rolex SA, which is clear authority for the proposition that the sale of goods under a trade mark by a foreign website to a customer in the EU/UK is the use of the trade mark in that country or territory.

Amazon took this judgment on appeal.

Supreme Court – indeed there was targeting

The Supreme Court upheld the Court of Appeal's finding that there was targeting of UK and EU consumers. Lords Briggs and Kitchin went into some detail, finding as follows:

  • One must consider the website as a whole.
  • One must consider the 'customer journey', including consumer-inputted details.
  • One must consider stage-by-stage the specific elements of the successive pages as the consumer would see them.
  • A website that is primarily targeted at one area might also be targeted at others.
  • The issue here was this - is the site deliberately aimed at British people amongst others?
  • It is natural for a trader to take the trouble to configure their website in a user-friendly way by highlighting goods that can be shipped to a country like the UK, and by providing Sterling equivalent prices.
  • A targeted sale will be an infringing sale. The court did not need to decide whether a non-targeted sale is infringing.

Cross-border marketing and the sale of goods on the Internet have become customers' shopping preferences over the years. They appreciate the convenience of shopping online without having to visit physical stores. This includes the customers' choice of goods to purchase, competitive pricing and having goods delivered directly to their homes. The Supreme Court mentioned that "But the marketing and sale of goods on the internet knows no such territorial boundaries. The website marketing the goods may be viewed by consumers anywhere in the world where there is an internet signal". This emphasises the onus on traders to be extremely cautious when their websites are created and designed, offering goods for sale, enticing prospective customers and securing transactions. Traders operating on the internet and offering goods for sale cross-border should carefully consider the concept of "targeting" to avoid the risk of infringing the trade mark rights of third parties.

There has been much commentary on the case, as targeting is a tricky issue.

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.