The Supreme Court determines the exposure of overseas websites to UK trade mark infringement claims

In a decision handed down by the UK Supreme Court in March 2024, Amazon’s US based website has been held liable for trade mark infringement in the UK for marketing products for sale to customers based in the UK.

The case impacts any overseas website selling into the UK market. It sets out the factors the UK courts will consider in determining whether customers are being targeted here and is therefore important for sellers to understand what exposes them to UK infringement claims. 

Background

The claimants, Lifestyle Equities, own UK and EU trade marks for “Beverley Hills Polo Club” and its associated device mark which consists of a polo player on horseback. 

Amazon’s US based website was selling products using identical trade marks for identical products (mainly clothing). Those products could be sold lawfully in the United States where another party unconnected with Lifestyle held registered trade mark rights.

Lifestyle brought a claim in the English courts for infringement of its UK and EU registered trade marks (the case was commenced before Brexit impacted the position on the EU trade marks so they remained in issue). Lifestyle argued that Amazon was targeting customers in the UK and that this constituted unauthorised use in the UK by Amazon of Lifestyle’s trade marks. 

Lifestyle was unsuccessful before the trial judge, but that decision was overturned by the Court of Appeal. Amazon appealed that decision to the UK Supreme Court.

Supreme Court Ruling

The Supreme Court agreed with the Court of Appeal but, importantly, it differed in the test it applied to determine whether Amazon was using Lifestyle’s trade marks in the course of trade in the UK. The Supreme Court’s approach will therefore set the benchmark for determining the approach the English court will take and the factors it will consider in future.

The Supreme Court emphasised earlier case law in the UK and EU that the mere accessibility to an overseas website by customers in the UK is not enough. The critical issue is whether the overseas website is targeting customers in the UK. The Supreme Court said this evaluation should be made from the viewpoint of the reasonably well informed and observant average UK customer, with an understanding that foreign websites might occasionally capture the attention of customers unintentionally. The question to ask is: would this hypothetical average customer understand that the website and its marketing is directed at them?  

The Supreme Court said that normally what the court should do is analyse the online journey of the customer through the overseas website from start to finish to determine whether they were being targeted. 

In deciding that Amazon’s US website was targeting UK customers the Supreme Court paid particular attention to the following: 

• The consistent display of "deliver to United Kingdom" on landing pages on its website and on nearly all of the subsequent pages,
• The specific display of products stated to be available for shipping to the UK, particularly US-branded items,
• On the closing "review your order" page, the offers for sale of relevant products destined for UK addresses, with specific delivery times and prices tailored for the UK, and with the further option to pay in British Pounds with an associated exchange rate.
  
  

The Supreme Court rejected Amazon’s counter-arguments that proportionally few sales to UK customers was a factor in indicating that they were not being targeted. Nor did the fact that UK customers were given the option to switch to Amazon’s UK based website during their visit to the US website persuade the court. It was only optional with the UK based customer able to continue on the US website. That prices were expressed in US dollars was also not persuasive, as it was easy to swich to British Pounds. And the fact that the UK based website offered more favourable terms to UK based customers, such as speedier delivery times, did not matter: the typical customer could not be expected to carry out a detailed comparison of the benefits of using the UK website as opposed to the US one.    

Accordingly, the Supreme Court determined that the average UK customer would perceive that Amazon was targeting them based on their experience of navigating the US website, from the initial landing page to the point of entering into a contract when placing an order in British Pounds.

The Supreme Court declined to rule on whether Amazon was also infringing based on the CJEU decision in the case of Blomqvist -v- Rolex SA. That case appears to determine that the mere sale of branded goods online to an EU based customer under a contract of sale made outside the EU can constitute trade mark infringement even where that customer has not been targeted in the EU. As the court had found Amazon liable on the basis of targeting, it did not need to consider this additional basis of liability. The Supreme Court also expressed some doubts about the basis of the decision in Blomqvist. So, the validity of that line of attack by right-holders may need to be determined in a future case, but there is some doubt that the UK courts will follow it.    

Conclusion

This case now sets the benchmark for UK courts to follow in determining the potential liability for trade mark infringement of foreign websites selling to UK customers. It should be closely studied by such sellers if they are concerned about exposure to trade mark liability in the UK and it is of course important to rights holders based here who are seeking to police online infringements.   

A copy of the full judgment can be found here.

Many thanks to Laura Biro, a current paralegal in the team, for their help in preparing this briefing.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, March 2024