The internet isn’t bound by physical borders. Consumers can endlessly journey across a multiplicity of sites, browsing goods and services in any language. Intellectual property rights, on the other hand, are territorial in nature, subject to the laws of individual countries, sitting within the constraints of jurisdictional boundaries. Given this tension, at what point does selling goods online to another foreign jurisdiction constitute trade mark infringement?

Following an appeal from the High Court by Lifestyle Equities CV and Lifestyle Licensing BV (“Lifestyle”), the Court of Appeal^[1] ruled that Amazon and its group companies (“Amazon”) had infringed Lifestyle’s registered UK and EU trade marks for “Beverly Hills Polo Club” (word + logo). Lord Justice Arnold judged that Amazon’s advertising, offers for sale and sale of goods from its US Website infringed the Beverly Hills Polo Club trade marks[2].

Factual background

Lifestyle are the owners and exclusive licensee of UK and EU trade marks for the signs BEVERLY HILLS POLO CLUB which consist of the word mark or a logo comprising those words together with a device of a horse and rider (the “BHPC trade marks”), registered in relation to a range of goods including clothing.

By coincidence, a third party which is commercially unrelated to Lifestyle owns corresponding trade marks in the US. That party therefore uses, in a perfectly legitimate manner, an identical mark to Lifestyle’s to sell identical goods (the “US branded goods”).

Amazon sold the US branded goods to UK and EU customers without Lifestyle’s consent. Lifestyle therefore asserted that Amazon infringed its BHPC trade marks by facilitating the advertisement, offers for sale and sales of US-branded goods to consumers in the UK and EU.

The High Court had previously decided that Amazon did not infringe the BHPC trade marks because:

i). www.amazon.com was primarily a US site;

ii). UK and EU consumers were actively encouraged to use a specific website aimed for consumers in that territory (such as through amazon.co.uk);

iii). there was a very low volume of website traffic from the UK and EU (in comparison to traffic from the US); and

iv). the consumer would consciously recognise during the purchasing stage that they were shopping on a website primarily directed at US consumers because of high import fees and shipping costs.

The key question in the appeal was whether the listings of US-branded goods from Amazon’s website “targeted”[3] UK and EU customers (mere accessibility of the sites would not be enough).

Applicable law

To constitute trade mark infringement, a proprietor of a trade mark is entitled to succeed in a ‘double identity’ (identical mark used on identical goods or services) claim if six conditions are satisfied^[4]:

i). There must be use of a sign by a third party within the relevant territory.

ii). The use must be in the course of trade.

iii). It must be without the consent of the proprietor of the trade mark.

iv). It must be of a sign which is identical to the trade mark.

v). It must be in relation to goods or services which are identical to those for which the trade mark is registered.

vi). It must affect or be liable to affect one of the functions of the trade mark.

Lifestyle appealed the High Court decision, arguing there was use of a sign identical to the BHPC trade marks within the relevant territory (the UK and EU) and that this use was in the course of trade. The parties unanimously agreed if conditions i) and ii) were satisfied, then conditions iii)-vi) were not disputed, for the trade mark infringement claim to succeed.

Decision

The Court of Appeal allowed the appeal and overturned the High Court decision because it had erred in law. Lord Justice Arnold ruled that Amazon had in fact infringed Lifestyle’s BHPC trade marks. His findings applied to both the UK and EU trade marks.

Important factors leading to this outcome were as below.

i). The analysis should include each stage of the purchasing process from amazon.com (which includes reviewing the website as a whole). The stages are set out below, from the perspective of a consumer accessing the site from the UK.

1. 1. The search results page offered a “delivery” option to the United Kingdom and also included wording that it “ships” to the United Kingdom, positioned next to the product.
   2. After clicking through the search result page, the product detail page equally noted delivery and shipping to the United Kingdom.
   3. Thirdly, the ‘Review your order’ page showed a potential UK buyer that the shipping and billing address were in the UK and the currency was in pounds sterling.

The court summarised this as below:

“The purchaser is located in the UK, the shipping address is in the UK, the billing address is in the UK, the currency of payment is GBP and Amazon will 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.” (paragraph 67).

ii). That the assessment should be objective as to whether there is use of a sign in the relevant territory.

Essentially, the court recognised the subjective intention of Amazon seeking to predominantly target the US market via amazon.com. However, it was not restricted to the US (the products could be bought in eight different languages and 60+ countries). The weight of this subjective intention is not, therefore, as conclusive (contrary to the High Court ruling).

iii). A specific assessment should be made in relation to each type of use complained of.

The Court of Appeal clarified that even if the advertisements or offers for sale did not constitute trade mark infringement, then the actual sales themselves did.

Conclusion

Businesses that operate globally should be cognizant of the risks associated with cross-border sales and the potential liability for trade mark infringement in foreign jurisdictions. Those who sell abroad via websites should, inter alia, consider:

• ensuring they have carried out clearance searches and put in place relevant IP protection in both their home territory and to those territories which they target;
• presenting information to customers in a manner consistent with where those IP rights are protected and cleared for use;
• where third party rights have been identified, adopting measures to ensure activities are made only within the jurisdiction, such as requiring payment in local currency and using geo-blocking software.

[1] Lifestyle Equities CV and another v Amazon UK Services Limited and others [2022] EWCA Civ 552 https://www.bailii.org/ew/cases/EWCA/Civ/2022/552.html

[2] Under section 10 of the UK Trade Marks Act 1994 and Article 9 of the EU Trade Mark Regulation ((EU) 2017/1001). This note focusses on the UK rights only, though, Arnold clarified in his judgement that the courts’ decision applies to both the UK and EU.

[3] Arnold LJ cited previous case law in Merck v Merck [2017] EWCA Civ and Argos v Argos Systems [2018] EWCA Civ 2211 to clarify the legal assessment on the use of a sign, whether activity on a foreign website would infringe a UK trade mark and the concept of targeting

[4] Section 10 of the UK Trade Marks Act 1994 and Article 9 of the EU Trade Mark Regulation ((EU) 2017/1001)