Following a recent defeat in the High Court relating to a finding of infringement in respect of Cosmetic Warrior Limited's LUSH Community trademark for cosmetics and toiletries, Amazon.co.uk Limited and Amazon EU Sarl have suffered a further blow in their attempt to limit the scope of the court's order.(1)
On February 10 2014 Cosmetic Warrior and its exclusive licensee, Lush Limited (together, Lush) – the manufacturer and supplier of LUSH cosmetic products, famous for its colourful soaps and 'bath bombs' – issued proceedings in the High Court for trademark infringement in respect of Amazon's use of the sign LUSH in its sponsored adverts within the Google search engine results and in the search facility on the Amazon.co.uk website.
In his February 10 2012 judgment John Baldwin QC, sitting as a deputy judge, referred to the leading cases in this area – Google France(2) and, more recently, Interflora Inc v Marks and Spencer plc(3) – to make the following findings:
- Amazon's use of the LUSH trademark as a keyword within the Google AdWords service to trigger sponsored advertisements for the Amazon.co.uk website, which included references to 'Lush' and 'Lush soap' products despite the fact that such products were not available (and the site instead offered similar or equivalent products), infringed Lush's Community trademark pursuant to Article 5(1)(a) of the EU Trademarks Directive. The deputy judge held that the average consumer would not expect Amazon to be advertising Lush soap for purchase if it were not in fact available for purchase.
- There was no finding of infringement in respect of those Amazon sponsored ads which included no reference to 'Lush' or 'Lush Soap', but only references to similar or equivalent products as, according to the deputy judge, consumers are familiar with sponsored ads and are used to seeing such ads from competing suppliers.
- Amazon's use of the LUSH trademark within its internal search results, so that when consumers searched for 'lush' they were directed towards a dropdown menu which ultimately led them to competitor products, infringed Lush's Community trademark pursuant to Article 5(1)(a) of the Trademarks Directive. The deputy judge held that the average consumer would be unable to ascertain without difficulty that the goods available on the Amazon site were not Lush products.
As the parties were unable to agree the form of order, it was left to the deputy judge to finalise the terms of the order, following submissions from the parties. The most pertinent aspects of the order are set out below.
Form of injunction
Not surprisingly, Lush argued that the court should impose a general form of injunction against infringement. Amazon, on the other hand, argued that the injunction should be in a specific form, relating only to certain uses of the LUSH mark, as set out in the judgment. Amazon's concern was that because of the way it designed its software, it was technically difficult to avoid infringement. For example, Amazon contended that it did not quite know how to prevent its webpage from reproducing the word 'lush' above the offering of a range of products competitive to Lush products. The judge was not convinced by this argument and was satisfied that Amazon had the expertise to do what was required if it wished; only commercial reasons prevented it from doing so. Amazon provided no adequate justification as to why it could not use more conventional methods to inform customers that the goods that were being offered were not Lush's products. On this basis, the deputy judge granted a general form of injunction.
The deputy judge rejected Amazon's argument that the injunction should apply only to the United Kingdom (since the trial had concerned only Amazon's UK site) and held that there were no special circumstances to warrant a departure from the usual order that, as the infringement related to a Community trademark, the injunction should be effective throughout the European Union.
As to the question of whether the court should grant a publicity order, the deputy judge sought guidance from Samsung Electronics (UK) Ltd v Apple Inc.(4) He concluded that Amazon should publish a notice on its website, by way of a link to the judgment, for one month. This was in relation to all pages which returned in response to the search term 'lush'. However, the deputy judge did take into account the fact that the decision had already attracted significant publicity; for this reason, no further advertisement in the national press was warranted. Thus, the deputy judge agreed to grant a stay regarding the publicity order, pending any appeal to the Court of Appeal.
Permission to appeal
The deputy judge refused to grant permission to appeal on the basis that he had simply applied established legal principles to a set of facts. Amazon now has the opportunity to apply to the Court of Appeal in order to obtain permission to appeal.
Registration of licence
The deputy judge rejected Amazon's argument that Lush should be entitled to only 50% of its costs owing to the fact that the exclusive licence between Cosmetic Warrior and Lush had not been recorded at the UK Intellectual Property Office within the prescribed time period pursuant to Section 25(4) of the Trademarks Act 1994. In sum, Section 25(4) states that where a person becomes the licensee of a registered trademark and the mark is infringed before the licence has been recorded, in proceedings for infringement the court shall not award the licensee costs unless the licence has been recorded within six months (unless it was not practicable for the licence to be recorded). The deputy judge contended that this was a case about injunctive relief which depended almost entirely on what had happened subsequent to registration of the licence, and that it was incidental that Amazon's infringements dated back to a period prior to registration. The deputy judge conceded that the position may well be different when it comes to the costs of any damages inquiry or account of profits of pre-registration activity.
Increasingly, form of order hearings are becoming fiercely contested as parties seek to gain any possible advantage over each other. This decision serves as helpful guidance as to the types of issue that are considered following judgment in IP cases. In particular, it demonstrates that commercial considerations of the defendant are irrelevant when deciding the form of any injunction. This decision also serves as a useful reminder to rights holders that any exclusive licence should be recorded at the UK Intellectual Property Office as soon as possible, and in any event within six months, as it could have an effect on cost recovery –at least in respect of a damages inquiry.
For further information on this topic please contact Paul Joseph or Ben Mark at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email (email@example.com or firstname.lastname@example.org). The RPC website can be accessed at www.rpc.co.uk.