Online businesses should take note of a recent Court of Appeal decision, in which Amazon was found to have infringed BEVERLY HILLS POLO CLUB (BHPC) trade marks by targeting and making sales of US branded goods to consumers in the UK and EU (Lifestyle Equities CV v Amazon UK Services Ltd  EWCA Civ 552).
The Claimant, Lifestyle Equities CV, is the owner and exclusive licensee of various UK and EU trade marks relating to the BHPC brand, consisting of the words “Beverly Hills Polo Club” or a logo comprising those words together with a device of a horse and rider. A commercially unrelated entity owns corresponding Trade Marks in the U.S. Lifestyle had not consented to U.S. goods bearing the Trade Marks being placed on the market in the U.K. or EU. It asserted therefore that its trade marks had been infringed by Amazon advertising, offering for sale and selling US branded goods to consumers in the UK and the EU. Lifestyle also claimed that Amazon was jointly liable with the end seller of the products, for the importation of US branded goods into the UK and EU. Therefore, the key question was whether the Defendants’ advertisements on that website had targeted U.K. and EU customers.
Amazon argued that its US website, www.amazon.com (the US website), was only targeted at US consumers, and that the UK and each EU country had their own targeted website. It said, amongst other things, that there was an extremely low volume of website traffic from the U.K. and EU (as compared with the U.S. traffic), and, whilst it did advertise shipping in the U.K., arrange for payment of import fees and offer the ability to shop in British pounds, it actively encouraged users to shop on their local Amazon website instead (www.amazon.co.uk if a user is based in the U.K.). If a U.K. or EU user therefore chose to stay on Amazon.com, and purchase goods from that site notwithstanding the higher shipping costs and import duties that would apply, they would make a conscious decision to do so. Such users knew they were buying U.S. products from a U.S. site, and that the products were not targeted at them.
Amazon was successful at first instance in the High Court. The Court of Appeal overturned the High Court’s decision, and found that Amazon had infringed.
The Court of Appeal stated that the first instance judge had made a mistake when saying that there was no targeting of the UK. The purchaser was located in the UK, the shipping address was in the UK, the billing address was in the UK, the currency of payment was GBP and Amazon said that it would make all the necessary arrangements for the goods to be shipped to and imported into the UK and delivered to the consumer in the UK. Further, it was noted that even if the U.S. Amazon website was targeting the U.S. predominantly, it was not restricted to the U.S. The relevant question is whether there is use of the sign in issue, and in this case, there clearly was. Following the CJEU decision in Blomqvist v Rolex SA (Case C-98/13) the sale of goods under a sign by a foreign website to a consumer in the UK or the EU constitutes use of the sign in the course of trade in the relevant territory, and this is so even if there is no antecedent offer for sale or advertisement targeting consumers in that territory. The judge had made an error in interpreting Blomqvist differently, it is stated.
The judgment is significant for those operating online businesses globally, and the potential liability for intellectual property rights infringement such activity may present. Websites may be accessible by anyone anywhere in the world, but intellectual property rights are territorial. This means it is vitally important to make sure that the sale of a product is lawful not only in the country the business is established in, but also in any countries the business may be deemed to be targeting.
You can read the entire decision of the Court of Appeal at the link.
Amazon may appeal the judgment and any further developments will be monitored.
If you need advice on how this judgment might affect your business, please contact us.