• The court did not change the law on ‘targeting’, affirming the summaries given by the Court of Appeal in the earlier Merck and Argos cases
• In assessing the correctness of the decisions by the courts below, the court did give guidance about the right approach to take when applying the law in certain scenarios
• Brexit issues were not in play, but the court did state that “UK trademark law remains rooted in EU legal principles” post-Brexit

In Lifestyle Equities CV v Amazon UK Services Ltd ([2024] UKSC 8), the Supreme Court has for the first time addressed the issue of when the use of a trademark on a foreign website infringes UK trademarks.

Background

This appeal concerned the application of UK trademark law to the cross-border marketing and sale of goods on the Internet. The question for the Supreme Court was: where goods marketed and sold on a foreign website are identical to goods for which trademarks are registered in the United Kingdom, in what circumstances would the marketing and selling of such goods infringe the trademarks?

In May 2022 the Court of Appeal overturned the High Court’s ruling that several BEVERLY HILLS POLO CLUB UK and EU registered word and logo marks were not infringed by sales through the ‘amazon.com’ platform (US website). The US website listed goods bearing such marks which had been lawfully manufactured, marketed and sold in the United States with a US rights holder’s consent (US branded goods) and enabled consumers to buy those goods. The Court of Appeal considered that the manner in which those offers were presented on the US website constituted “use” in the United Kingdom and so infringed the claimant’s UK trademarks. The same was true of sales of the US branded goods to UK consumers.

The Supreme Court noted that the relevant EU jurisprudence deals with the question of when marketing and sales of branded goods from a foreign website infringed trademarks in a particular territory by reference to two separate concepts:

1. The first is by treating the advertisement and offering for sale of branded goods in a way which is ‘targeted’ at a protected territory as a use of the mark in the targeted territory.
2. The second is by treating a sale of branded goods as a use of the mark within the territory if the sale is made “to” a consumer in that territory pursuant to a contract of sale made outside it.

Targeting

Earlier case law

Regarding the concept of ‘targeting’, the court reviewed the case law and concluded that the summaries given by the Court of Appeal in the Merck and Argos cases were correct (see Merck KGaA v Merck Sharp & Dohme Corp ([2017] EWCA Civ 1834) and Argos Ltd v Argos Systems Inc ([2018] EWCA Civ 2211)). It went on to elaborate that evaluating ‘targeting’ was a multi-factorial assessment of all the circumstances, viewed objectively from the perspective of the average consumer. Subjective intention to target may be taken into account to the extent relevant to that objective assessment, and it is enough that a significant proportion of average consumers would consider the website to be directed at them.

Decisions of the courts below

The court analysed the decisions below and considered that both the trial judge and the Court of Appeal had made errors (even if the Court of Appeal had reached the correct conclusion). The Court of Appeal had been entitled to reject the judge’s conclusion and consider the matter afresh, but because it too had made errors, the Supreme Court was free to do so again.

Supreme Court’s evaluation

In the Supreme Court’s evaluation, the factors favouring a conclusion that the marketing and offer for sale of the US branded goods on the US website did target UK consumers “greatly outweighed” those pointing in the opposite direction. This was because UK consumers were being told that they would be shown goods (including the US branded goods) available for delivery to them in the United Kingdom, and that those goods would be delivered there. Specifically:

• For visitors with a UK IP address, the landing page displayed a message “Deliver to the United Kingdom” in the top-left, which was repeated on almost all subsequent pages.
• Clicking or hovering on that message revealed a pop-up box saying “We ship internationally. We’re showing you items that ship to United Kingdom”.
• Product pages labelled which of the goods displayed were so available.
• The ‘Review your order’ page generated UK specific delivery times and prices, and the ability to pay in sterling coupled with an exchange rate.

Factors pointing the other way, but which held less weight, were as follows:

• A message giving the consumer an option to switch to the ‘amazon.co.uk’ UK website – this was a weak factor because it contemplated that the consumer might not do so, and did not make clear whether the same goods would be available there;
• The default display of prices in US dollars – this was very weak because of the prominent option to change currency to sterling;
• The fact that delivery times and charges for UK customers were likely lower on the UK website – there were a number of reasons why this was weak, but the critical one was that the US branded goods were not in fact available as an alternative on the UK website;
• The statistical fact that Amazon’s UK sales of the US branded goods were a very small fraction of its US sales of those goods was also of very little weight – the question was whether the average consumer would think that Amazon was seeking to sell the US branded goods to consumers in the United Kingdom, not how successful that seeking had been; and
• Lifestyle’s motive in bringing the proceedings, which the trial judge had taken into account, was irrelevant.

Consequently, the Supreme Court concluded that Amazon did target the United Kingdom as a destination for the US branded goods by its display of them on its US website.

Supreme Court guidance

Considering the court’s criticisms of the earlier judgments, the following guidance can be gleaned:

• The targeting assessment should consider the combined effects of a marketing website on the average consumer in the aggregate and focus in sufficient detail on the specific elements of the particular pages relied on.
• For websites selling goods, reviewing the consumer’s journey on the site from landing to a decision to buy will be relevant and, in most cases, this should be done forwards rather than backwards.
• For websites whose content varies according to the visitor’s IP address, it will be relevant to assess how it is designed to respond to the presence of visitors from the location said to be targeted.

Non-targeted sales

Under the conditions of sale, the relevant sales by Amazon took place, and title and risk passed to the purchaser, in the United Sates. Further, the carrier imported the goods into the United Kingdom as agent of the buyer, who acted in a purely personal capacity (not in the course of trade). Nonetheless, Amazon conceded that, if and insofar as any sales were preceded by an offer or ad targeted at consumers in the United Kingdom, then the sales did amount to an infringement. The Supreme Court’s decision that such offers/ads were so targeted left it unnecessary to consider whether the Court of Appeal had been correct in considering that sales of the US branded goods to UK consumers also infringed, even in a situation where the offers/ads were not targeted at the United Kingdom.

Arnold LJ in the Court of Appeal had been in no doubt that such sales did infringe, following the CJEU’s decision in Blomqvist v Rolex SA (Case C-98/13), which found that a sale from Hong Kong of a counterfeit watch to a private individual in Denmark amounted to actionable use in the European Union. He had stated as follows:

In the case of a sale to a person in the European Union it is not necessary to consider whether there has been prior targeting of EU consumers. This makes perfectly good sense: the sale itself is targeted at the EU consumer.

The Supreme Court considered the situation more nuanced, and was concerned about uncertainties in the underlying facts of Blomqvist making it “difficult to be sure about the extent of the ambit of the doctrine”. Specifically, it does not emerge from that case when or where title or risk passed in relation to the goods, or who (as between seller, carrier and buyer) was to be regarded as importer (interestingly, in Arnold LJ’s view, such considerations were irrelevant because the issue was one of interpretation of the Customs Regulation (1383/2003), rather than English sale of goods law).

The Supreme Court therefore declined to decide this point. Consequently, while there is Court of Appeal authority (in the form of the earlier decision in this case) that foreign sales into the United Kingdom not preceded by a UK-targeted offer/ad can infringe a UK trademark, it is not clear whether the Supreme Court would uphold that position if asked to address it in future.

Brexit

There was in interesting side note on Brexit. While none of the issues in this case were affected by Brexit, the court did observe that “UK trademark law remains rooted in EU legal principles” post-Brexit. This suggests it might be an unusual trademark case which results in the higher courts exercising their power to depart in future from EU law (although see Industrial Cleaning Equipment (Southampton) Ltd v Intelligent Cleaning Equipment Holdings Co Ltd for a recent example of just such a case. The Court of Appeal departed from Budějovický Budvar np v Anheuser-Busch Inc (Case C-482/09) on the basis it was a “bald conclusion” which contradicted the EUIPO Guidelines and the General Court case law).

This article first appeared in WTR Daily, part of World Trademark Review, in March 2024. For further information, please go to www.worldtrademarkreview.com.