August 15, 2022
Lifestyle Equities CV, incorporated in the Netherlands and owned and controlled by Mr Eli Haddad, issued proceedings against Amazon UK Services Ltd, as well as Amazon in the US and in the EU (Amazon), alleging infringement of its registered trade marks in the UK and the EU for the words BEVERLY HILLS POLO CLUB and the following logo registered in respect of a wide range of goods including clothing, luggage, watches and perfumery (the Trade Marks):
The issue arose because of a split in the ownership of the trade mark rights between the US and the UK/EU when, in 2008, Mr Haddad split from his two business partner brothers who, through their company BHPC Associates LLC, now own the corresponding trade mark rights in the US. BHPC Associates LLC market goods identical to those for which the Trade Marks are registered under signs identical to the Trade Marks (US Branded Goods).
Lifestyle claimed that Amazon had infringed its rights by allowing US Branded Goods to be advertised and sold on amazon.com to consumers in the UK and the EU.
Without admitting liability, Amazon put in place successive restrictions in 2018, January 2019 and November 2019 designed to address Lifestyle’s complaint, but Lifestyle said that they did not go far enough. Shortly before trial, Amazon made a limited admission of past infringement on a small scale in respect of one of its business models, but otherwise it denied any infringement.
Lifestyle’s claims were dismissed at first instance, save to the limited extent that they had been admitted. Lifestyle appealed.
The principal issue on appeal was whether condition (i) of the six-stage test for infringement under Article 9(2)(a) of the Trade Mark Regulation (2017/1001/ EU) established by EU case law was satisfied. Condition (i) is that there must be use of a sign by a third party within the relevant territory, i.e., the UK and the EU.
There was no dispute that advertisements, offers for sale, sales and importations were “uses” falling under Article 9(3). There were, however, two sub-issues: (i) whether the advertisements and offers for sale constituted use in the relevant territory, i.e., whether they were they “targeted” at the UK and the EU; and (ii) whether, even if the advertisements and offers for sale were not “targeted” at the UK and the EU, sales made to UK and EU consumers nevertheless constituted use of the sign in the UK and the EU.
Giving the lead judgment, with which the other Justices agreed, Lord Justice Arnold disagreed with the judge that UK visitors to amazon.com who reached the “Review your order” page on the website, i.e., once they had added an item to their basket and signed in to their account, had not been “targeted”. In Arnold LJ’s view, this was clearly an offer for sale under Article 9(3)(b) because the purchaser was located in the UK, the shipping address was stated to be in the UK, the billing address was in the UK, the currency of payment was GBP and Amazon had stated that it would make all necessary arrangements for the goods to be shipped and delivered to the consumer in the UK. There was no argument against this being an offer for sale targeted at the UK, Arnold LJ said.
Arnold LJ also said that the judge had been wrong to accept Amazon’s argument that, because amazon.com was primarily targeted at US consumers, the relevant web pages were not also targeted at UK/EU consumers. He reasoned that:
- com is not restricted to US customers; although the UK user is informed on the amazon.com home page that shopping at amazon.co.uk instead means fast local delivery, it is easy for the user to miss this statement; even if they see it, it simply offers an alternative to amazon.com; the home page also tells the user that they can shop in eight languages and more than 60 currencies, and that they can get delivery to the UK; further, once the user has conducted a search, the message about amazon.co.uk no longer appears; and
- in any event, the question was not whether amazon.com as a whole was targeted at the UK/EU, but whether the relevant uses of the sign were so targeted; the fact that the generality of a website is not targeted at the UK/EU does not exclude specific uses of the sign on that website being so targeted.
The judge had also been wrong to find that targeting “imports the notion of taking deliberate aim at consumers in another country”. The correct question was whether there was use of the sign in the relevant territory. There was no requirement for subjective intent on the part of the website operator.
In addition, the judge had been wrong to dismiss the factors relied on by Lifestyle in support of its case on targeting (such as the statements about shipping and delivery to the UK, and pricing in GBP) as “largely irrelevant” because they could be explained as Amazon “mak[ing] the process as painless and easy as possible” once the consumer had decided to buy from amazon.com. There was no evidential basis for this, and these “largely irrelevant” factors showed that, at the “Review your order” stage, Amazon was offering US branded goods for sale to consumers in the UK and the EU.
Arnold LJ also disagreed with the judge that it was significant that UK and EU consumers who bought US Branded Goods from amazon.com would have to pay higher shipping costs and import duties. In Arnold LJ’s view, consumers would not necessarily be aware of these differences unless they made the comparison; and even if they were aware, the differences might have been offset by the assumed price differentials (although there was no evidence as to what the price differentials were). In any event, the evidence showed that some consumers were not put off by the higher costs.
Given the errors in the judge’s approach, it was necessary to reconsider the issue. Having found that the offer for sale made in the “Review your order” page was targeted at UK consumers, Arnold LJ considered whether the same applied to earlier pages in the process, such as on the search results page and the “full product details” page.
Arnold LJ found that both these pages were also targeted at the UK, as both essentially stated, albeit with differing degrees of emphasis, that the items in question could be shipped and delivered to the UK.
Accordingly, Arnold LJ found that all the advertisements and offers for sale in question amounted to use of the relevant signs in the UK and the EU, and hence infringing uses.
Following Case C-98/13 Blomqvist v Rolex SA EU:C:2014:55, Arnold LJ also found that, if he were wrong that the advertisements and offers for sale constituted use of the signs in the UK/EU, the resulting sales of US Branded Goods amounted to infringement in any event. As Blomqvist stated, in the case of a sale to a person in the EU it is not necessary to consider whether there has been prior targeting of EU consumers: the sale itself constitutes targeting at the EU consumer. Accordingly, the judge had been wrong to accept Amazon’s arguments on the issue. Amazon’s sales of US Banded Goods to UK and EU consumers constituted use of the signs in the relevant territory, and thus infringing uses, even if the antecedent advertisements and offers for sale did not.
The appeal was allowed. (Lifestyle Equities CV v Amazon UK Services Ltd  EWCA Civ 552 (4 May 2022)) — to read the judgment in full, click here).
In a separate, subsequent judgment, Arnold LJ declined to grant Lifestyle declarations of infringement by Amazon. Lifestyle said that declarations would serve a useful purpose because they would allow Lifestyle to communicate the effect of the Court of Appeal’s decision to third parties in a form approved by the court. Arnold LJ disagreed that this amounted to a useful purpose. He was also concerned that the declarations might be interpreted by third parties as meaning that any listing of US Branded Goods on amazon.com which can be viewed by a UK or EU consumer would infringe the Trade Marks, which was not necessarily the case.
Arnold LJ did, however, grant an injunction restraining infringement of the Trade Marks by Amazon and an inquiry as to damages (not an account of profits), as sought by Lifestyle. Arnold LJ was not persuaded that an inquiry was so clearly disproportionate that a summary assessment should be imposed. (Lifestyle Equities CV v Amazon UK Services Ltd  EWCA Civ 634 (12 May 2022) — to read the judgment in full, click here).