UK Supreme Court finds sales of trade marked goods from US website targeted UK consumers for infringement purposes

The Supreme Court has upheld the decision of the Court of Appeal, ruling that Amazon was targeting UK consumers through advertisements and offers for sale of trade marked goods on amazon.com, which constituted infringing trade mark use in the UK.

Implications for brand owners and online platforms

This decision is particularly important for both brand owners and online platforms, highlighting a number of key points.

Platforms need to be aware that online 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 decision confirms that platform operators can be held liable for infringing goods advertised and sold on their platforms by third parties. This could potentially lead to an increase in infringement claims being brought against platforms that allow third-party sales.

The position of trade mark owners looking to prevent the sale of infringing products from overseas platforms and websites to UK consumers has been strengthened.

Whether there is targeting requires close contextual examination of how the overseas website is presented to UK consumers. The targeting analysis will look at the website as a whole and everything done before the sale contract is formed.

Reviewing website design is going to be critical and platforms need to consider whether website restrictions should be put in place for UK consumers.

Whether non-targeted overseas sales to UK consumers amount to infringement was not determined by the Supreme Court, leaving the door open to future debate and potential litigation.

Background

Lifestyle is the owner of UK and EU trade marks relating to the Beverly Hills Polo Club clothing brand. An unrelated company owns the brand in the US. Certain US goods were being advertised and sold on Amazon.com, some of which were purchased by UK consumers without Lifestyle's consent. Some of these goods were sold by Amazon directly and some by third-party sellers.

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 consumers in the US rather than the UK. The Court of Appeal held that the first instance judge's analysis contained errors, and on re-analysis held that there was targeting of UK consumers, and that sales of the US-branded goods from Amazon's US website to UK consumers constituted infringement under EU case law, even if there was no targeting.

Targeting

The first type of deemed use Lifestyle relied on at the Supreme Court was targeting. When considering whether UK consumers have been targeted, the Supreme Court confirmed that this must be assessed from the perspective of the average consumer, and that it should be determined whether a significant proportion of the relevant consumers would consider a website to be directed and targeted at them.

The court considered the US website as a whole and conducted a forward review of the consumer's journey through the webpages and buying process prior to purchase. What happens after a sale is not considered. The court unanimously agreed that the average consumer in the UK (or EU) would consider Amazon's US website to be directed at them.

Particularly significant factors leading to the Supreme Court's conclusion included:

• a "deliver to the UK" message on the website's landing page and almost all subsequent pages – which, by design, automatically appeared on those pages whenever the website is visited by a consumer with a UK IP address;
• com specified and labelled which goods could be shipped to the UK; and
• the "review your order" page offered delivery to consumers at UK addresses, with UK-specific delivery times and the option to pay in GBP.

The Supreme Court did identify indications that pointed away from targeting, such as the price being displayed in US dollars to UK consumers by default, but these were greatly outweighed by the factors pointing towards targeting.

The fact that the delivery times and costs were likely to be more from the US website than the UK website had "more force", but the factor did not stand up to scrutiny. These differences would only be apparent to consumers who made multiple comparisons of the same goods on both websites, which may not even be possible, and "the average consumer is not a statistician or a litigator".

"Little weight" was also placed on a low number of UK sales compared to the US as the relevant consumer would not be aware of this, nor was the degree of relative sales success said to be a reliable pointer for targeting.

Non-targeted sales

The second type of deemed use relied on by Lifestyle was overseas sales to UK consumers. The Supreme Court was clear that this doctrine operates separately from targeting and only arises where there are non-targeted sales.

Given that the court had found that there was targeting, it declined to decide this point. It also highlighted factual uncertainties in the EU case law underpinning this doctrine, which made it unsuitable to be decided here, leaving scope for debate – and litigation – in future.

Osborne Clarke comment

The Supreme Court's decision provides further clarity on the issue of targeting and how that analysis should be carried out, strengthening the position of brand owners seeking to prevent infringing products being sold to UK consumers from non-UK platforms and websites.

The decision emphasises that even if an online platform is principally marketed at a specific country, that does not necessarily preclude a finding that it is targeting consumers in the UK. This provides a strong impetus for overseas platform providers to carefully review the consumer's advertising and sales journey through their websites.

The judgment sets out a number of factors that indicate that the website is being targeted at UK consumers that should be avoided and platforms may wish to consider adopting territorial restrictions to reduce the risk of UK trade mark infringement.

It is also clear that platform providers can be held liable for the advertising and sale of infringing third-party goods, therefore the website review process should encompass the consumer advertising and sales journey for third-party goods as well.

The Supreme Court has left open the possibility that any non-targeted sales of trade marked goods made to UK consumers could still constitute trade mark infringement, which may result in further litigation seeking to test the limits of this doctrine.