It may be a glib remark, but online marketplaces have revolutionised commerce. What you can buy, where you can buy it from and how you buy it has changed irrevocably over the last decade.

However, as a company, if you only have the rights to sell branded products in the UK and not the US, can you stop a third-party online marketplace like Amazon offering US versions of the products for sale to potential customers in the UK?

The Court of Appeal has ruled this can be prevented in a recent judgment, the implications of which we explain below.

Background

Lifestyle Equities CV owns (and Lifestyle Licensing BV has an exclusive licence in relation to) UK and EU trade marks comprising the words ‘BEVERLY HILLS POLO CLUB’ for clothing goods.

Another party owns the US ‘BEVERLY HILLS POLO CLUB’ trade marks for clothing goods. These goods were available to purchase through Amazon.com (which Amazon referred to as the US version of its website).

In the initial case at the High Court, Lifestyle argued that Amazon was infringing its trade marks by “advertising, offering for sale and selling US branded goods to consumers in the UK and the EU” as the ‘BEVERLY HILLS POLO CLUB’ marks were identical, and the clothing goods were identical – known as double identity infringement. Amazon argued it was not targeting the UK/EU market.

The key determining factor was whether there was “use” in the course of trade of the ‘BEVERLY HILLS POLO CLUB’ marks by Amazon in the UK/EU. If there was such use in the UK/EU, then it was not contested that there was double identity infringement. The High Court had found there was not such use and Lifestyle appealed.

The Court of Appeal’s judgement

The Court of Appeal overturned the High Court’s ruling and held that there was use of the ‘BEVERLY HILLS POLO CLUB’ marks by Amazon in the UK/EU including for the following reasons:

  • Being able to access amazon.com in the UK/EU was not on its own enough. There must be targeting in the UK/EU. This is considered objectively as to whether the average consumer in the UK would consider they are being targeted. The website owner’s subjective intention of where it was targeting could be relevant, as could other circumstances such as languages, currencies, and top-level domains used.
  • Amazon.com can be used by consumers who are not in the US. However, UK users may not necessarily see the statement that they can use amazon.co.uk instead (this is not shown once consumers searches for something) and, if they saw it, it was only an alternative option. The homepage informs users they can use eight languages and over 60 different currencies and that delivery is possible to the UK.
  • Consumers may not know that buying the US goods from amazon.com (rather than amazon.co.uk or amazon.de) would mean shipping costs would be higher and there would be import duties.
  • The “product details” page on amazon.com was considered “use” in the UK as it includes “Deliver to United Kingdom” twice and “This item ships to United Kingdom” and provides the delivery date and shipping cost. The price and shipping cost being in dollars does not detract from the page informing consumers in the UK that they can purchase the product and Amazon will organise shipping to the UK. Further, there were sales to UK consumers.
  • The “search results” page on amazon.com was “more marginal” as to whether it was “use”. However, it stated “Deliver to United Kingdom” and this with the addition of “Ships to United Kingdom” for some products (showing some products could not be shipped to the UK) was enough. UK consumers were being informed that they can purchase the product and Amazon will organise shipping to the UK.
  • For the “Review your order” page on amazon.com, there was “use” in the UK as “The purchaser is located in the UK, the shipping address is in the UK, the billing address is in the UK, the currency of payment is GBP and Amazon will make all the necessary arrangements for the goods to be shipped to and imported into the UK and delivered to the consumers in the UK”.

The judge considered in the alternative if the sales by a foreign website (amazon.com) would not have been considered to be “use” in the UK and EU (as explained above). The judge concluded that sales to UK and EU consumers would still be “use” in the UK and EU and infringement.

Take home points

  • If you do want to sell goods internationally, check your agreements/licenses that you have the rights to do so in all intended territories.
  • Just because a consumer can purchase something internationally, doesn’t mean a company has the right to sell it. Companies should ensure that they have the intellectual property rights needed for the relevant countries in which they do business or intend to. For example, that their trade mark or registered design protection extends to all such territories.
  • Double check your agreements that it is clear following Brexit whether the EU includes the UK.
  • Intellectual property rights are territorial rights so if you are considering licensing or transferring such rights to other companies for certain territories then a carefully drafted licensing or assignment agreement is essential.