To what extent can consumers using a trade mark to search for products be directed to competitors’ products?

In Cosmetic Warriors Ltd and Lush Ltd v Ltd [2014] EWHC 181 (Ch), the High Court has revisited the perennial issue of third parties using registered trade marks to trigger sponsored ads in search engine results. The case also considers the issue of trade marks entered into retailers’ search engines throwing up competing goods.

In summary, the Court found that sponsored ads which did not themselves include the trade mark searched were not an infringement. Ads which did reproduce the mark, and the uses made of the mark by Amazon on its own website did, in the main, infringe.

Alleged infringing acts

Lush manufactures cosmetics under the LUSH brand and owns a Community trade mark registration for LUSH. The company does not allow its products to be sold on the Amazon website, believing that Lush's ethical policies and philosophies are not consistent with those of Amazon. In this case, Lush complains of three distinct uses of its trade mark:

  1. Typing "lush" into (eg) Google results in the consumer being presented with a sponsored ad including the words "Lush Soap at Amazon" and a link
  2. Typing (eg) "lush cosmetics bath bomb" into Google brings up a sponsored ad that includes words such as "Bomb bath at Amazon" and a link. The word LUSH does not appear in the ad.
  3. Typing "lush" into the search box at will either autocomplete to (eg) "lush cosmetics" as a link, or you can type the word lush. Both instances resolve to a set of competing products, none of which are Lush cosmetics.

When the links at 1 and 2 are clicked on, or the search results in 3 are shown, there is no overt statement that Lush cosmetics are not available to buy at Amazon, just a set of competing products.

First class of infringement

These advertisements appear because Amazon has purchased LUSH as an AdWord. European case law (Google France) has established that purchase of a key word constitutes use in the course of trade in relation to goods/services. All that is in question is whether one of the functions of the trade mark is adversely affected by that use.

Here, the ad includes the word LUSH and clicking on the link in the ad leads the consumer to the Amazon website and a set of competitors' cosmetics.

The judge found that the average consumer cannot tell without difficulty that the goods to which it is directed are not those of Lush. Consequently, there is an infringement of Lush’s trade mark.

Second class of infringement

In this case, LUSH does not appear in the sponsored ad. Consumers are used to seeing sponsored ads from competing suppliers and in this scenario, Amazon is "just another supplier offering similar products". There is no infringement.

Third class of infringement

The thrust of Amazon’s argument in this case was that the consumer is in charge of the search and what is typed in. Lush is seeking to stifle competition by taking that control away and IP rights should not "unduly interfere with the basic right of the public to access technological development".

The judge countered that that right "does not go so far as to ride roughshod over intellectual property rights, to treat trade marks such as Lush as no more than a generic indication of a class of goods in which the consumer might have an interest".

The judge agreed that the mere act of the consumer typing in the word LUSH into Amazon’s search box could not be an infringement, as Amazon has no control whatsoever over that activity. All the other instances complained of do, however, constitute trade mark infringement:

  1. Amazon will autocomplete "lu…" with, for example "lush bath bomb" presented as a link for the consumer to click through to a set of results.
  2. If LUSH is typed in, the word "Lush" appears again below the search box and above the results presented by Amazon.
  3. Amazon offers related search results below the search box (ie "other people searched for…"), such as "lush bath bombs", again presented as a link.

In all of these cases, the average consumer could not, without difficulty, ascertain that the goods to which it was directed did not originate with Lush. The judge held that Amazon was using Lush as a generic indicator of a class of goods, damaging the mark’s ability to indicate the origin of products.

Likewise, the attraction ability of the mark is affected if Amazon uses it to direct to third party goods (the advertising function). In addition, Lush has invested in a reputation for ethics which could be damaged by (for example) Amazon’s tax policy (the investment function).

This case provides helpful guidance as to the extent to which retailers and competing businesses can use registered trade marks as a shortcut to steer consumers towards alternative buying options and the extent to which right holders can legitimately object to such use.