European Union: Court Of Appeal Finds That Advertisements On Amazon.com Targeted UK And EU Consumers

The Court of Appeal in Lifestyle Equities CV and another v Amazon UK Services Limited and others [2022] EWCA Civ 552 has ruled that various Amazon entities “Amazon” or the “Defendants”) infringed the registered U.K. and EU trademarks of Lifestyle Equities CV and Lifestyle Equities BV (“Lifestyle” or “the Claimants”) by advertising, offering for sale and selling goods on its U.S. website to U.K. and EU customers. The decision is potentially significant for any company operating an online business and shipping internationally.

Facts

The Claimants are the owners of U.K. and EU trade marks consisting of the words “Beverly Hills Polo Club” or a logo comprising those words together with a device of a horse and rider (the “Trade Marks”). 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 the Defendants had infringed its Trade Marks by advertising, offering for sale and selling goods bearing the Trade Marks to consumers in the U.K. and the EU via various different sales models, including on its U.S. site www.amazon.com (“Amazon.com”). The key question was whether the Defendants' advertisements on that website had targeted U.K. and EU customers.

Amazon argued that its U.S. website was only targeted at U.S. consumers. 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 (e.g. 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 also provided in its terms and conditions that risk of loss and title for such purchases passed to the customer upon delivery to the carrier (in an attempt to avoid being the importer of the goods), and it cited the fact that not all items for sale on Amazon.com were available to ship to the U.K. It claimed this demonstrated the U.S. Amazon site was not targeting the U.K., and that paying the import fees was simply an example of Amazon trying to provide an “easy customer experience.”

Amazon was successful at first instance in the High Court. That decision raised some eyebrows in view of the presence of features normally thought to be classic evidence of targeting the U.K., such as displaying prices in pounds and making all necessary arrangements for the goods to be shipped and imported into the U.K. The Claimants appealed.

Decision

The Court of Appeal (“CoA”) overturned the High Court's decision, and found that Amazon had infringed.

Arnold LJ considered that use of the sign in the relevant territory is to be assessed objectively and it is incorrect to say that the website as whole must target a territory; rather, what matters is whether the particular offers for sale (and the uses of the relevant mark) do.

In examining example listings, Arnold LJ highlighted the fact that the Amazon.com website prominently made available shipping to the U.K. and EU and purchasing options to that effect. He remarked he did not understand how it could be seriously considered that the relevant listings were not targeted at the U.K.: the purchaser was in the U.K., the billing and shipping addresses were U.K. addresses, the currency was British pounds and Amazon made all necessary arrangements for the shipping, importation and delivery to the U.K. customer. Further, Arnold LJ noted that even if the U.S. Amazon website was targeting the U.S. predominantly, it was not restricted to the U.S. It advertised that products could be bought in eight different languages and in 60+ currencies. He stated that the High Court judge had erred in determining that targeting “imports a notion of taking deliberate aim at a country.” There is no requirement for subjective intent (though it may provide useful evidence). The relevant question is whether there is use of the sign in issue, and in this case, in Arnold LJ's view, there clearly was.

Further, Arnold LJ held that even if the listings in question had not targeted the U.K. or EU, the sale of the goods to the U.K. or the EU infringed. He quoted the Court of Justice of the European Union's judgment in Blomqvist v Rolex C-98/13 [EU: C: 2014:55] and stated that this ruling is clear authority for the proposition that “the sale of goods under a sign by a foreign website to a consumer in the United Kingdom or the European Union constitutes use of the sign in the relevant territory, and that this is so even if there is no antecedent listing, offer for sale or adverts targeting consumers in that territory.”

The position was less clear in terms of liability for the acts of importation. Lifestyle argued that Amazon was jointly liable for the acts of importation with the carriers they engaged to import the products to the U.K. Amazon sought to rely on its contracts with the individual purchasers, which provided that the purchaser was the importer of record. In view of Arnold LJ's findings on the other issues, it was not necessary for him to decide this point, and he determined that it was better left to a case “where it matters.”

Comment

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 (or indeed selling the products to). The mere fact that a website is accessible from the U.K. is not likely to be enough for it to be deemed to target the U.K., but the court will evaluate all of the relevant circumstances including any clear expressions of intention to solicit custom in the U.K. The appearance and content of the website is likely to be significant, and relevant factors may include (but are not limited to):

• The use of the English language (where this is not the language of the country the trader is established in) and prices presented in GBP.
• Including the U.K. in a list of countries to which the trader is willing to dispatch its products.
• The use of a British telephone number, and having a .co.uk domain.
• Steps that have otherwise been taken to facilitate access to the website from the U.K. (e.g. expenditure on an internet referencing service for that purpose) or shipping to the U.K. (such as arranging and paying import fees, as Amazon did in this case).

The subjective intention of the website owner is not a requirement to infringe but it may be relevant, and even determinative, particularly in cases where the objective position is unclear or finely balanced.

Amazon may appeal the judgment and any further developments will be monitored.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.