HomeInsightsHigh Court finds that branded goods listed on amazon.com were not targeted at the UK market

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Facts

Lifestyle Equities CV, incorporated in the Netherlands and owned and controlled by Mr Eli Haddad, issued proceedings against Amazon UK Services Ltd, as well as Amazon in the US and in the EU (Amazon), alleging infringement of its registered trade marks in the UK and the EU for the words BEVERLY HILLS POLO CLUB and the following logo registered in respect of a wide range of goods including clothing, luggage, watches and perfumery (the BHPC brand):

Lifestyle claimed that Amazon had infringed its rights by allowing BHPC branded goods to be listed either on amazon.com or through its global store service on amazon.co.uk, and so to be visible to consumers in the UK and EU. Lifestyle said that this was a form of “counterfeiting” that was destroying its business.

The issue arose because of a split in the ownership of the trade mark rights between the US and the UK/EU when, in 2008, Mr Haddad split from his two brothers who, through their company BHPC Associates LLC, now own the BHPC brand and corresponding trade mark rights in the US.

Amazon accepted that the goods in question had the BHPC brand and were identical to Lifestyle’s registered trade marks. It admitted that the listing of BHPC branded products on amazon.co.uk were infringements under Article 9(2)(a) of the Trade Mark Regulation (2017/1001/ EU). However, it said that the restrictions it had put in place in January 2019 to protect Lifestyle’s rights once Amazon had become aware of the problems created by split ownership of the BHPC brands, had stopped any sales of BHPC goods in the UK/EU from both the amazon.co.uk and amazon.com websites. Further, it said that historical sales of BHPC goods from amazon.com to consumers in the UK/EU had been tiny and that therefore Lifestyle’s action was wholly disproportionate. It argued that what this was really about was preventing any visibility at all of BHPC goods to consumers in the UK/EU.

In fact, the evidence showed that Mr Haddad had a different strategy for the BHPC brand in the UK and the EU than that of his brothers in the US and that Mr Haddad wanted nothing to do with his brothers’ approach. Essentially, he wanted to stop his market (i.e. the UK/EU market) from seeing BHPC branded goods as sold in the US, in particular, their price.

The evidence also showed that the restrictions that Amazon had instigated in January 2019 were indeed effective in stopping sales in the UK/EU, but BHPC products were still listed on amazon.com if they were sold by third parties. UK/EU consumers were only informed at the checkout page that the item was not available for shipping to their destination.

The issues were therefore whether there had been infringement of Lifestyle’s trade mark rights pre-2019 and whether the visibility to UK/EU consumers of BHPC branded goods on amazon.com post-2019 was also an infringement even if such goods could not actually be purchased by such consumers.

Decision

Green J said that the case was not about “counterfeiting” as alleged by Lifestyle, as the goods in question were not “fakes”: the goods had been lawfully manufactured, marketed and sold in the US with the consent of the US rights holders (i.e. Mr Haddad’s two brothers). Therefore, they were not counterfeits. Rather, this case was about the global nature of the internet and the protection of non-global trade mark rights and had arisen due to the split in ownership of the rights. To deal with such cases, the courts have developed the concept of “targeting” of the website and will only accept jurisdiction if the website is targeted at the relevant territory where the rights are owned. The real issue was therefore whether Amazon’s US website, amazon.com, and/or the listings of BHPC products on it, was targeted not only at US consumers, but also at UK/EU consumers.

Lifestyle submitted that the CJEU decision in Case C-98/13 Blomqvist v Rolex SA [2014] ETMR 25 was authority for the proposition that sales of goods to EU consumers before their importation into the EU are acts of trade mark infringement, regardless of targeting. It argued that if BHPC products had been sold via amazon.com to consumers in the UK/EU, that was an infringement even if amazon.com did not target UK/EU consumers and even if the sale legally took place outside the EU.

Green J disagreed, finding that if Lifestyle was correct it would mean that the EU was exercising a very long-arm jurisdiction over an online seller from outside the EU that seemed unjustified and contrary to the territorial nature of trade mark rights. In Green J’s view Blomquist was wrong. Sales of goods that take place outside the UK/EU but to consumers in the UK/EU, which were not preceded by targeted offers for sale or advertisements, and whether or not they were from an online seller, were not in themselves “use in the course of trade” within the UK/EU and did not constitute infringements of UK/EU trade marks.

Targeting

Amazon admitted that, historically, the listing of BHPC branded products on amazon.co.uk before it was stopped by the 2019 restrictions were infringements of Lifestyle’s trade mark rights because they were targeted at the UK. However, it made no similar admission in relation to listings on amazon.com, either historical or current.

Green J said that it was plain that both amazon.com and the BHPC listings on it were not targeted at the UK/EU consumer. As Amazon submitted, each EU country has its own targeted Amazon website. A consumer shopping on amazon.com therefore knows full well that they are viewing the Amazon website that is primarily directed at US consumers. They will have appreciated all the disadvantages of shopping on amazon.com for delivery in the UK, but decided to do so anyway.

In any event, it was not appropriate to look at the issue in terms of whether amazon.com as a whole targeted UK/EU consumers. The issue was whether the sign had been used by Amazon in the UK/EU. In this context, the use had to be by way of an “offer for sale” or an “advertisement”. Therefore, the only question was whether such use of the sign in the listings of BHPC products had been in the UK/EU.

In Green J’s view, “targeting” imported the notion of taking deliberate aim at the consumers in another country; the offers for sale and advertisements had to be designed to attract sales from the territory in which the relevant trade mark was registered. If there was not that direct connection with the territory, then there had not been use in that territory. Whether the question was considered from the perspective of the average consumer or from the data as to sales and viewings, it was clear that the BHPC products listed on amazon.com were not targeted at the UK/EU. The average consumer in the UK who had found their way to those listings of BHPC products would have deliberately sought to do so and would not have been put off by the prohibitively high shipping and import costs and knew that they were buying such products from the US and from the US website of Amazon. The trivial number that had actually gone on to purchase BHPC goods from amazon.com must have had a specific reason for wanting to do so, e.g. because the item they wanted was not available any other way, but it could not sensibly be said that those listings were targeting the UK/EU.

It was clear that Mr Haddad and Lifestyle basically wanted to remove all visibility of US BHPC branded products from the UK/EU market. In particular, Mr Haddad wanted to prevent potential licensees of Lifestyle from being able to see the prices at which BHPC products were sold for in the US.

Green J said that even if consumers had no intention of buying from amazon.com, it could not be right that they should be prevented from knowing the prices at which products could be bought or sold in another country. Similarly, there was no reason why Mr Haddad’s licensees should not be able to research the products that they might want to license or buy from Lifestyle. It would amount to censoring the internet if they were prevented from doing so.

Accordingly, there was no such targeting in this case and Green J rejected Lifestyle’s alleged infringements based on listings on amazon.com of BHPC products, both historical and current. (Lifestyle Equities CV v Amazon UK Services Ltd [2021] EWHC 118 (Ch) (27 January 2021) — to read the judgment in full, click here).

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