Court of Appeal says overseas online sales of trade marked goods to UK consumers is infringement

The Court of Appeal recently ruled that Amazon's advertisements, offers for sale and resulting sales on amazon.com were targeted at UK consumers and therefore constituted trade mark use in the UK. Since the trade mark owner did not consent to that use, Amazon's activity amounted to trade mark infringement in the UK.

This decision is important for brand owners and online platforms because:

• Platforms need to be aware that advertisements and offers for sale of goods that can be shipped to the UK might be held to target UK consumers and could amount to trade mark infringement in the UK.
• The court was keen to make it clear that the sales per se constituted trade mark use in the UK, and thus infringing use, even if the preceding advertisements and offers for sale did not and even if the overall website does not target UK consumers.
• Those findings strengthen the position of trade mark owners seeking to prevent infringing products being sold to UK consumers from non-UK platforms and other websites
• The decision indicates that platform operators will be held liable for infringing goods placed on their platforms and sold by third parties and potentially increase the number of infringement claims made against platforms that allow third party selling.
• Platform operators must now consider putting in place restrictions to ensure unauthorised sales to the UK don’t risk infringing trade mark rights.

Background to the dispute

Lifestyle is the owner of UK and EU trade marks relating to the Beverly Hills Polo Club clothing brand. The brand is owned by an unrelated company in the US and certain goods, which were produced by the US brand owner, were being placed on Amazon.com and purchased by UK consumers.

Lifestyle did not consent to US branded goods being placed on the market in the UK or the EU (via amazon.com or otherwise). Some of these products were being sold by Amazon directly and some by third-party sellers on the Amazon platform.

At first instance, the High Court had held that there was largely no infringement of the trade marks because the product listings were targeted at US consumers and not the UK.

In this appeal, the principal issue was whether Amazon's conduct amounted to infringing use of Lifestyle's trade marks within the UK and EU. This gave rise to two sub-issues and questions: Were Amazon's advertisements and offers for sale targeted at the UK and EU such that they amounted to infringing use of Lifestyle's trade marks? And, even if the advertisements and offers for sale were not targeted at the UK and EU, did sales made to UK and EU consumers nevertheless amount to infringing use?

The Court of Appeal found that Amazon's search results page (just), full product-details page and the "review you order" page were all advertisements and offers for sale that targeted the UK and made use of Lifestyle's trade marks in the UK, thereby constituting infringing uses of the UK marks. In part, this decision was reached because the relevant listings were accompanied by specific statements such as "Ships to the UK", which, in the court's view, conveyed a clear message to UK consumers that they could buy the item.

In considering the final "Review your order" page (the page that users are taken to after adding an item to their cart and after providing their shipping and billing address), this was held to be a clear offer for sale that targeted UK consumers given that:

• The purchaser was located in the UK.
• The shipping and billing addresses were in the UK.
• The currency of payment was pound sterling.
• Amazon made all the necessary arrangements for the goods to be imported into the UK and delivered to the consumer in the UK.

In coming to this conclusion, it was noted that the targeting analysis should not be conducted on the basis of the website as a whole, but whether the relevant uses of the sign are targeted at the UK and this means assessing the individual webpages. Just because the whole website is not targeted at the UK, it does not exclude the possibility that specific uses of signs are not targeted at UK consumers.

Liability for third-party listings

The court made a brief but important finding that advertisements and offers for sale by third parties using Amazon's platform still amounted to use of the trade marks by Amazon and therefore were infringing uses by Amazon.

The court stated that the applicability of the findings to all of Amazon's business models within the case was not disputed by the parties. However, this brief finding is of broader significance as it seems to indicate that platforms will be held liable for advertisements and offers for sale placed on their platforms by third parties. This might potentially increase the number of trade mark infringement claims made against e-commerce platforms that allow third party selling.

Sales to UK consumers are also infringing

Significantly, the court held that even if the advertisements and offers for sale of the goods on amazon.com were not targeted at the UK and therefore did not amount to infringing use, the resulting sales made to UK consumers did constitute infringing use. Thus, even if overseas websites do not target UK consumers, any sales made to UK consumers may still amount to infringement in the UK.

With respect to this finding on sales, the court does not appear to have made a distinction between sales from Amazon directly and those from third party sellers using Amazon's platform. All sales were found to have been infringing uses for which Amazon was liable.

Osborne Clarke comment

This decision is favourable for brand owners seeking to prevent infringing products being sold to UK consumers from non-UK platforms and websites.

The decision can be seen as a reminder to global platforms to carefully review business models and, without geo-restricting measures in place, certain behaviours may amount to trade mark infringement in the UK.

The Court of Appeal's decision helpfully sets out a number of factors that platforms should keep in mind when assessing whether trade marked goods could be inadvertently targeting consumers in the UK:

• Each advertisement or product listing should be analysed separately. Consequently, even if an online platform is principally marketed at a specific country, it will not necessarily be viewed as being restricted to that country.
• The customer's journey must be carefully assessed at each step. If an online platform is either facilitating the shipment of goods to the UK or providing quotes for shipping fees and prices for goods in pound sterling, then this could be seen as targeting UK consumers.

However, more significantly, even if there is no targeting, any unauthorised sales of trade marked goods made to the UK will be held to be trade mark infringement. Providing the opportunity for such sales to be made could expose platforms to the risk of trade mark infringement if a UK consumer makes a purchase. Platforms engaged in e-commerce may, therefore, wish to consider adopting a territorially restricted approach to prevent the possibility of unauthorised sales to the UK.

It is possible that this decision will be appealed by Amazon to the Supreme Court, however, the Court of Appeal recently refused permission stating that there is not an "arguable point of law of general public importance in this case". Amazon can seek permission from the Supreme Court directly but it remains to be seen whether any such application will be accepted.

Separately, two referrals – cases C-148/21 and C-184/21 – been made to the Court of Justice of the EU concerning disputes between Louboutin and Amazon covering similar issues (the cases have been joined together). Any judgment given by the CJEU would not be binding on UK courts post-Brexit, it may still be considered persuasive given the similarity of the issues being decided.

Trainee Solicitor Andy Holt helped produce this Insight.