What Amounts to ‘Targeting’ by a Retail Website? UK Supreme Court Provides Clarity in Lifestyle Equities v Amazon

In March, the Supreme Court ruled that Amazon was liable for trade mark infringement because of the manner in which it advertised and offered for sale goods to UK and EU consumers through its US website. The case of Lifestyle Equities v Amazon [2024] UKSC 8 is the first time the highest court in the UK has explored targeting in the sphere of trade mark infringement.

The decision provides useful guidance on what amounts to ‘targeting’ within the context of cross-border ecommerce and when this will amount to trade mark infringement in the UK and EU.

Background

The case involved two parties selling identical goods bearing identical trade marks for “BEVERLY HILLS POLO CLUB” (amongst other similar device marks) which are registered for various consumer goods including clothing. The UK party (Lifestyle Equities, the Claimant) was authorised to use the trade marks in the UK and EU. The US party (a commercially unrelated party called BHPC Associates LLC) was authorised to use the trade marks in the US.

The US party’s goods were marketed and sold by Amazon via its US website, Amazon.com, from which UK and EU consumers could access and purchase the US branded goods. Lifestyle Equities saw this as an encroachment on its trade mark rights and brought infringement proceedings against Amazon. The key issue in the case was whether Amazon had targeted and sold to UK and EU consumers through the advertising and offering for sale of the US branded goods on Amazon.com.

Previously, the High Court had ruled ([2021] EWHC 118 (Ch)) there was no such targeting as it concluded that the US branded goods were meant for the US market and UK consumers would need to specifically look for those products on Amazon.com to buy them.

The Court of Appeal overturned ([2022] EWCA Civ 552) the High Court decision, finding that Amazon’s advertisements and offers for sale did in fact target UK and EU consumers. The Court of Appeal also found that, where an actual sale had taken place and goods had been sold to UK consumers under the relevant sign, it meant that the relevant trade mark had been ‘used’ in the territory where the consumer was situated.

Supreme Court decision

The Supreme Court agreed with the Court of Appeal’s finding, albeit for slightly different reasons. Based on the following factors, it determined that the promotional content and offers for sale complained of on Amazon’s “.com” website amounted to targeting consumers in the UK:

1. A message on the landing page and almost all subsequent pages offered to “Deliver to the United Kingdom”;
2. The pages specified which of the goods displayed could be shipped to the UK and which could not; and
3. A “Review your order” page offered to sell the relevant goods to a consumer at a UK address, with UK specific delivery times and the option to pay in sterling.

The Supreme Court also considered a number of factors which might point away from a finding of targeting. For example, a message which appeared on the landing page which suggested using the UK website instead of the US website, that the default prices displayed on the US website were in US dollars, and that delivery times for UK consumers were likely to be faster and charges lower on the UK website. Ultimately, however, the Supreme Court found that the factors favouring a finding of targeting outweighed those which might point in the opposite direction. The Supreme Court held:

“That is, in our judgment, the view which an average consumer would clearly form as the result of their experience of the USA website, right through from the landing page to the moment of contract by clicking the “Place your order in GBP” button on the “Review your order” page. Nothing in the possible contra-indicators comes near to displacing that conclusion.”

It is worth noting that, in its analysis, the Supreme Court stated that delivery of goods to a particular country does not automatically mean there is targeting of that country. It held that: “Whether or not there has been targeting in the relevant sense depends upon what is done up to the moment of the conclusion of the contract of sale, not thereafter.“

Non-targeted sales

Separately, Lifestyle Equities argued that, even if it was found that Amazon did not target consumers in the UK/EU through its promotional content and offers for sale, it nonetheless infringed Lifestyle Equities’ marks by actually selling and delivering the goods through its US website to consumers in those territories.

Whilst the Court of Appeal found that the sale and delivery of products in this scenario would infringe, the Supreme Court refused to opine on this issue. First, because it did not arise in the circumstances of this case, given it had found that there was targeting. Secondly, the Supreme Court considered the case law on this point (the decision of the Court of Justice of the European Union in Blomqvist v Rolex (Case C-98-13)) and was concerned about uncertainties in the underlying facts of that case which made it difficult to form a reliable view, despite the Court of Appeal’s finding that the sale and delivery of products in this scenario would infringe.

Analysis and insights

The Supreme Court’s decision provides useful guidance on what amounts to ‘targeting’ within the context of cross-border ecommerce and when this is likely to amount to trade mark infringement in the UK/EU. This is particularly helpful for brand owners and licensees who operate/trade on a licensing basis. It underscores the importance of understanding how online retail practices operate and will help brand owners and others enforce their rights against any online encroachment of their operational territories. Ecommerce websites whose websites are primarily directed to consumers in other countries will also need to consider and review how their platforms function and offer goods for sale to ensure they are not inadvertently targeting the UK and leaving themselves open to a potential trade mark infringement claim.

While the Supreme Court’s decision provides clarity on what amounts to targeting, the issue of whether non-targeted sales amount to use of a sign however may still need to be resolved in the future.