Trade mark infringement: targeting consumers on website

Background

The European Court of Justice (ECJ) developed the concept of targeting to ensure that trade mark protection did not extend beyond territorial boundaries. The High Court and Court of Appeal use the average consumer test to establish whether a product is being targeted at a particular location. The ECJ has not adopted the average consumer test for this purpose. 

The ECJ ruled that, under the Customs Regulation, goods sold to a person in the EU through an online sales website in a non-member country might be infringing merely through the sale of the goods, even though they were not offered to, or targeted at, EU consumers, before the sale. (Blomqvist v Rolex SA C-98/13). 

Facts 

L owned a portfolio of "BEVERLY HILLS POLO CLUB" (BH) UK and EU-registered word and logo marks and sold clothing and similar goods under the BH brand within its territories. B owned the BH trade mark rights in the US. 

A operated e-commerce websites, including global, UK and German websites, through which consumers in the UK and EU can buy BH-branded goods. In 2019, at L’s request, A put in place technical restrictions in relation to the sale and advertising of BH goods to UK and EU consumers, in order to prevent sales of BH goods from its global website to the UK and EU. Historically, sales of BH goods from the global website to consumers in the UK and EU were very small.

L claimed that BH goods, which had been lawfully manufactured, marketed and sold in the US with B's consent, were being marketed and sold by A in the UK or EU by being listed on A's UK and global .com websites, and that this infringed L's trade mark rights. L argued that, following Blomqvist, sales of goods to EU consumers before their importation into the EU were acts of trade mark infringement, so that, if BH products had been sold through A to consumers in the UK or EU this was an infringement even if the global .com website did not target UK and EU consumers and even if the sale legally took place outside the EU.

Decision

The court held that L's claims should be dismissed, except in relation to the pre-2019 listings on A’s global store as these were targeted at the UK and constituted infringements of L's trade mark rights. No inquiry into damages was justified as the admitted infringements were trivial compared to the alleged infringements that had been dismissed. 

The goods in question had the BH sign and were identical to L's registered trade marks. The issue arose because of a split in the ownership of the trade mark rights between the US and the UK and EU. 

While it was necessary to look at the average consumer's perception of targeting, the test was broader, and account had to be taken of all relevant circumstances including the data on issues such as viewing figures and volume of traffic and A's subjective intent. The main legal issue was whether the use of a sign on the internet constituted the use of a sign in the relevant territory.

The court rejected L’s argument that, while the UK and EU were not specifically targeted by the global .com website, this website effectively targeted the world, not just the US. Mere accessibility of a website cannot constitute targeting. If the global .com website targeted the world it would render meaningless the concept of targeting and the territorial nature of trade mark rights.

The issue was whether the listing of the product was targeted at the UK and EU. It was necessary to look at the sign in question. "Targeting" means taking deliberate aim at the consumers in another country: whether the offers for sale and advertisements were designed to attract sales from the territory in which the relevant trade mark was registered. Both from the perspective of the average consumer, and from the data as to sales and viewings, it was clear that the BH products listed on the global .com website were not targeted at the UK and EU. The average consumer in the UK who found those listings of BH products would have deliberately intended to do so, would not have been put off by the high shipping and import costs and knew that they were buying those products from the US. Those listings were not targeting the UK and EU.

The court considered whether the sale of the product, or the putting of the product on the market, took place in the UK and EU. As historic sales were very small, any damages suffered by L directly as a result of such sales would be very small. Sales of BH products through A’s global store did not constitute infringements of L’s trade mark rights because, according to A's contractual terms and conditions, the customer took title to the goods in the US and was the importer of record. Other business models did not involve A as the seller of BH products, and so A could not be liable for any trade mark infringement in respect of sales of those products. 

A's terms and conditions made clear that the consumer was the importer of record and was primarily responsible for the payment of import duties. This importation was by a private individual who was not infringing the trade mark owner's rights. A could only be liable for importing the goods if they intended to put the goods into free circulation in the EU. 

The court refused to make a last-minute reference to the ECJ about Blomqvist. Although the case was still binding on the High Court following Brexit, the court concluded that it was not changing trade mark law so as to extend jurisdiction beyond the EU. The relevance of the case was also marginal because the 2019 restrictions now prevented there being any sales of BH products from the US to the UK and EU.

Comment

This decision provides an interesting analysis of what amounts to "targeting" in relation to a large global .com retail website.

The decision also illustrates the importance, in relation to sales out of the country where the website is based, of website terms and conditions dealing with where the sale is deemed to take place and the extent to which the consumer is deemed to be the importer of the goods. The court’s comments regarding its refusal to refer the case to the ECJ are also of interest.

Case:  Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2021] EWHC 118 (Ch).