Introduction
In the recent case of
Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2024] UKSC 8, the United Kingdom Supreme Court, on an appeal against the decision of the United Kingdom Court of Appeal, held that Amazon, the online retail giant is liable for infringing Lifestyle Equities CV’s UK and EU trademarks by allowing goods branded under those trademarks to be advertised and offered for sale on their US website in a manner that amounts to targeting of consumers in the UK and EU.
Brief facts
The Appellants, Amazon UK Services Ltd and others (collectively “
Amazon”) are members of the Amazon group of companies, originally headquartered in the United States of America (“
US”) that has become a global powerhouse in recent years as an e-commerce company for the marketing and sale of consumer goods.
The Respondents (collectively “
Lifestyle”) are part of the Lifestyle Equities group that own and license a group of trademarks comprising the words “BEVERLY HILLS POLO CLUB” or a logo consisting of those words coupled with a device of a horse and rider in the United Kingdom (“
UK”) and European Union (“
EU”)
1, These trademarks are registered for various types of consumer goods, including clothing.
The instant dispute arose as a result of Amazon listing the US branded goods on its US website, amazon.com, which Lifestyle contended amounted to an infringement of their rights in the UK and EU trademarks as the US branded goods were both targeted at, and sold to, consumers in the UK and the EU without Lifestyle’s consent. Lifestyle therefore brought an action against Amazon in the UK High Court for, among others, trademark infringement under section 10(1) of the UK Trade Marks Act 1994 (“
UK TMA”) and Article 9 of the Council Regulation 2017/1001 of 14 June 2017 on the European Union trade mark (“
EUTM Regulation”). Section 10(1) of the UK TMA is materially the same as Article 9 of the EUTM Regulation.
Decision of the High Court
On 27 January 2021, the High Court found that Lifestyle’s UK and EU trademarks were not infringed as the relevant listings on amazon.com did not target consumers in the UK or the EU by Amazon incorporating them into listings on their US website. However, Amazon did admit that while the listings displayed on amazon.co.uk and amazon.de were
advertisements that constituted infringement of Lifestyle’s UK and EU trademarks, they denied that
sales from such websites amounted to infringement.
Decision of the Court of Appeal
On 4 May 2022, the Court of Appeal overturned the High Court’s decision upon considering various facts and circumstances to determine whether Amazon had targeted UK consumers. It was held that Amazon had infringed Lifestyle’s UK and EU trademarks by advertising and offering for sale US branded goods on Amazon’s US website as it amounted to use of the relevant marks in the UK and the EU. The Court of Appeal also granted Lifestyle an injunction against Amazon to restrain the infringement of their trademarks.
Decision of the Supreme Court
Dissatisfied with the Court of Appeal decision, Amazon appealed to the Supreme Court and on 6 March 2024, the Supreme Court unanimously upheld the decision of the Court of Appeal that Amazon had infringed Lifestyle’s UK and EU trademarks as it targeted consumers in the UK and EU by advertising and offering for sale the US branded goods on its US website.
The two main issues present throughout the entirety of this case, from the High Court to the Supreme Court, were (i) whether Amazon’s acts of advertising and offering for sale US branded goods on the US website amounted to targeting UK and EU consumers; and (ii) whether actual sales to consumers in the UK and EU amounted to infringement independent of targeting, under the
Blomqvist doctrine.
2
In considering the first issue, the Supreme Court stated that there is a need for a close, contextual examination of the manner in which the Amazon’s US website is presented when it is accessed by a UK consumer. This began from the landing page of the website to the placement of orders. Upon conducting this multifactorial assessment, the Supreme Court concluded that an average consumer would clearly form the impression that Amazon was targeting UK consumers by displaying the US branded goods on the US website due to the following factors:
While there were factors that may have pointed away from this direction, such as the option to choose the UK website as well as the display of prices of the goods in US Dollars, these were weaker in comparison and could not outweigh the factors above that clearly showed Amazon was targeting UK consumers. This was coupled with the fact that Amazon had conceded that listing the US branded goods on the UK website would amount to an infringement of Lifestyle’s trademarks, despite denying that such display on the US website was infringement.
The Supreme Court held it was unnecessary to consider the second issue relating to the Blomqvist doctrine as the Court had already concluded that Amazon was targeting UK consumers on the US website.
Commentary
The UK Supreme Court decision above, while largely focused on clarifying what constitutes targeting of foreign consumers by online retailers, is still based on a claim for trademark infringement and thus, would be relevant to Malaysian jurisprudence.
Lifestyle’s claim of trademark infringement is premised on section 10(1) of the UK TMA which is in pari materia with section 54(1) of the Malaysian Trademarks Act 2019 (“Malaysian TMA”) on trademark infringement. As the Malaysian courts have yet to be called upon to decide on this issue of foreign online retailers targeting Malaysian-based consumers and whether such acts amount to infringement, this UKSC decision would most certainly be relevant and be of persuasive authority if the issue arises for decision by the Malaysian courts.
This is particularly as online shopping on platforms operated by e-commerce companies such as Amazon, Alibaba and even Lazada or Shopee in Malaysia has risen in popularity in recent years due to the Covid-19 pandemic and its convenience. Even now, online shopping remains a go-to for many Malaysians everyday especially on foreign platforms such as Amazon and Alibaba that offer a wide range of products. Hence, every online retailer should take heed of the UKSC’s decision and be mindful of their targeting practices to ensure they do not run afoul of it.
Fortunately, the UK Supreme Court has provided guidance on certain factors that may amount to targeting, as detailed above. It is apparent from the decision that in considering whether a particular act constitutes targeting, the courts would conduct an objective assessment of the relevant facts and circumstances from the perspective of the average consumer. The Supreme Court also made clear that a consumer merely accessing a website within the UK would not be enough to establish targeting as there must be evidence of some intent to establish commercial relations with consumers in the territory.
Conclusion
The UK Supreme Court has not only clarified the limits of using trademarks in the course of cross-border online sales in the UK but also provided guidance on the factors that may constitute targeting of foreign consumers by online retailers, which is increasingly important in this digital age.
This decision will be welcomed by brand owners seeking to protect their trademarks from being used without their consent particularly by online retailers that target consumers within the territory where their trademarks are registered. Hence, online retailers should be aware of the factors that may amount to targeting and consequently, trademark infringement as highlighted in this decision and take the necessary steps to cease or refrain from such practices in order to reduce their risk of potentially being liable for trademark infringement.
Case commentary by Laura Anastasia Kurian (Associate) of the Intellectual Property Practice of Skrine.