When is an online marketplace “targeting” consumers in a territory?
This was the question that Mr Justice Michael Green wrestled with in his judgment in Lifestyle Equities CV & Anor v Amazon UK Services Ld & Ors  EWHC 118 (Ch).
The case involved trade mark infringement and passing off claims brought against Amazon regarding the sale of goods bearing the Beverly Hills Polo Club trade marks on amazon.com.
The claimants are familiar faces in the English High Court. They own trade marks for Beverly Hills Polo Club in the UK but not in the US. As the judge made clear, the goods offered on amazon.com were not “fake” or “counterfeit” as such, and had been put on sale with the consent of the US rights holder. He concluded that the offers for sale or advertisements in listings on amazon.com were not targeted at UK or EU consumers, and consequently there was no trade mark infringement.
Assessing liability and where an infringing act takes place on the internet was initially a challenge for the courts. It is now clear that, for the UK at least, the key question is whether or not UK consumers were "targeted". This is established by various factors such as the language of the web listing, currency offered and the shipping and delivery options. For example, a French language website which only offers goods in Euros and will not deliver to the UK, is not targeting.
The facts of this case are somewhat odd because the transaction process on Amazon.com makes it clear to UK consumers that they are making the purchase in the US and then importing the goods into the UK (i.e. the consumer is the importer and the targeting essentially takes place in the US as that is where the sale is concluded).
Because the judge concluded that the customers buying Beverly Hills Polo Club products through Amazon.com “are acting in a private capacity and not engaging in commercial activity” he found that there was no “targeting” of UK/EU consumers. As he put it in the judgment, “Such a consumer knows full well that they are viewing or shopping on the Amazon website that is primarily directed at US consumers … in my view it is highly relevant if the average UK consumer believes that amazon.com is targeted at US consumers and not them.” (emphasis added).
Consequently, the judge held that there was no infringement (apart from advertisement listings on Amazon Global Store which was available on Amazon’s national websites before 2019). These admitted infringements were trivial.
The case highlights some of the difficult issues that arise with global online marketplaces, given the territoriality of trade mark rights and the difficult that marketplaces face in identifying and tackling infringements. These are particularly challenging when the ownership of trade marks is split between different entities around the world. This can also create issues relating to parallel imports as Schweppes and Coca Cola have discovered in the past.
One key issue in this case, and the reason for the dispute, was a divergent marketing strategy between the owners of the EU/UK marks and the US marks. The UK/EU owner was unhappy that consumers in this jurisdiction could see that the goods were sold at a much lower price point in the US compared to the UK. This is something which would ideally have been resolved in the underlying contract following the sale of the trade marks (or in a family meeting - the owners of the respective companies are brothers!)
It will be interesting to see how the concept of targeting continues to develop in the case law including in the somewhat inevitable appeal of this case.