Targeting and infringement by selling goods on the Internet

Law360 Canada (March 19, 2024, 10:38 AM EDT) --

John McKeown

An essential feature of trademark law is that it provides only territorial protection to the proprietor of a mark in the territory or territories where the mark is registered. But the marketing and sale of goods on the Internet has no territorial boundaries. The website marketing the goods may be viewed by consumers anywhere in the world where there is an Internet signal.

The Court of Justice of the European Union (CJEU) has tried to resolve issues relating to this conflict by treating the advertisement and offering for sale of branded goods in a way which is targeted at a territory as a use of the mark in the targeted territory. The U.K. Supreme Court, formerly the House of Lords and the highest U.K. court, has now accepted this approach as well.

 Facts

The present proceedings concern alleged infringement of a group of trademarks registered in the United Kingdom and owned and licensed respectively by two companies in the Lifestyle Equities group (Lifestyle Equities CV v. Amazon UK Services Ltd. [2024] UKSC 8).

In broad terms the marks include either the words BEVERLY HILLS POLO CLUB or a logo including those words coupled with a device of a horse and rider. They are registered with various types of consumer goods including clothing. Corresponding trademarks have been registered in the United States, owned by a commercially unrelated party and used in the United States in connection with identical goods.

The dispute arose because Amazon has marketed and sold the U.S. branded goods on its U.S. website, and Lifestyle contends (but Amazon denies) that those goods were both targeted at, and sold to, consumers in the United Kingdom. The matter eventually made its way to U.K. Supreme Court.

To determine if a specific territory has been targeted the CJEU said these matters, the list of which is not exhaustive, should be considered to determine if the trader’s activity is directed to the member state of the consumer’s domicile: the international nature of the activity; mention of itineraries from other member states for going to the place where the trader is established; use of a language or a currency other than the language or currency generally used in the member state in which the trader is established with the possibility of making and confirming the reservation in that other language; mention of telephone numbers with an international code; establishing an Internet referencing service to facilitate access to the trader’s site or that of its intermediary by consumers domiciled in other member states; use of a top-level domain name other than that of the member state in which the trader is established; and mention of an international clientele composed of customers domiciled in various member states. However, the mere accessibility of the trader’s or the intermediary’s website in the member state in which the consumer is domiciled is not enough. The same is true of mention of an email address and of other contact details, or of use of a language or a currency which are the language and/or currency generally used in the member state in which the trader is established.

The U.K. Supreme Court agreed with this approach but considered four additional matters. First, whether an advertisement or offer sale is targeted at consumers in the United Kingdom should be considered from the perspective of the average consumer. Second, the question is, in substance, whether the average consumer would consider the website to be directed at him or her. To answer it, the judge must evaluate or carry out a multifactorial assessment of all the relevant circumstances. These circumstances will include the appearance of the website, how it responds to the consumer, whether it is possible to buy goods and have them delivered, and how that is done. Third, the above matters are considered from an objective viewpoint. Finally, it is enough for the trademark owner to show that a significant proportion of the relevant consumers would consider the website to be directed and targeted at them.

Leaving aside the details of the appeals and the standard of review the court concluded that Amazon’s marketing and offer for sale of the U.S. branded goods on its U.S. website showed with reasonable clarity it was targeting the United Kingdom as a territory. Viewed from the perspective of the average U.K. consumer, they are from start to finish in their encounter with the U.S. website being told that they will be shown goods (including the U.S. branded goods) available for delivery to them in the United Kingdom, and that those goods will be delivered there if they choose to make an online purchase of them from the U.S. website.

Comment

Because of this decision the law in the European Union and the United Kingdom look to targeting to determine whether infringement has occurred. There is no Canadian decision directly on point, but the U.K./E.U. position will be persuasive.

John McKeown, counsel at Goldman Sloan Nash & Haber LLP, is certified by the Law Society of Ontario as a specialist in intellectual property law (trademarks/copyright). He is the author of Canadian Intellectual Property Law and Strategy: Trademarks, Copyright and Industrial Designs. He can be reached at mckeown@gsnh.com.

The opinions expressed are those of the author and do not reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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