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By Virtuoso Legal

03/03/21

IP Insight: Trade marks are territorial – and so is Amazon

IP Insight is a series from IP specialists Virtuoso Legal covering key decisions and changes in IP law. In this unique case of split ownership of a brand between the UK and the US, Michael Green J discussed the key aspects of targeting sales in different jurisdictions. Lifestyle Equities CV v Amazon UK Services Ltd [2021] EWHC 118 (Ch).

By Catherine Wynn

 

BACKGROUND

The Beverly Hills Polo Club (“BPHC”) is a global brand. The Claimant is the proprietor of the registered trade marks for the BPHC brand in the UK. The managing director of the Claimant was in business with his brothers.

In 2008, the brothers split from the Claimant company and set up a company called BPHC Associates LLC who, it was agreed, owned the BPHC trade mark rights in the US.

Both companies on each side of the Atlantic Ocean soon began selling through Amazon. The Claimant argued that the goods which were marketed in the US with the consent of the US rightsholder were being marketed and sold by Amazon in the UK by being listed on both amazon.com and amazon.co.uk.

Amazon has a range of ways of selling its goods. The ‘Fulfilled by Amazon’ export allows third parties to sell their products on amazon.com and international customers can buy from those third-party sellers. Amazon handles all aspects of the transaction. Alternatively, there is the ‘Merchant Fulfilled Network’ which works in the same way except that Amazon does not handle the transaction – only payment processing.

There is also ‘Amazon Exports-Retail’ where customers shopping on amazon.com can purchase products from Amazon and have them shipped to another country, including the UK, and the ‘Amazon Global Store’ where consumers on amazon.co.uk (and other national sites) can access listings on amazon.com.

After the Claimant complained of US goods being marketed and sold in the UK, Amazon introduced restrictions – in 2018 and 2019 – to prevent the BHPC goods from the US being visible in the UK and prevented branded items from being shipped outside of the US by third parties. These restrictions did not affect the Merchant Fulfilled Network due to the lack of input by Amazon in the sales and the transactions.

Despite these restrictions, the Claimant maintained the position that sale on amazon.com was a way of targeting sales to the world, and not just the US.

 

 

 

JUDGMENT

Michael Green J discussed a number of legal issues which arose in this case but had to focus on whether using a trade mark on the internet generally constitutes the use of a trade mark in the relevant territory (being the UK). This is a difficult subject as the internet does not respect individual territories in the same way that a trade mark registration is a territorial protection.

The judge analysed the issue of ‘targeting’, as the claimants claimed that amazon.com targeted the whole world and not just the US. Therefore, any goods being sold on amazon.com under a trade mark would be targeted at all territories and not just to the US.

If this were the case, then: ‘any court across the world, assuming they had similar jurisdictional rules, could purport to exercise jurisdiction over the whole of amazon.com in respect of potential national trade mark infringement.’

That cannot be right’.

Therefore, it was found that any listings on the amazon.com website are only targeted at the US. Consumers from other jurisdictions are aware that when they access amazon.com they are viewing a website directed at US consumers. So, the trade mark used by BPHC Associates LLC through amazon.com, after the restrictions had been put in place, were not infringing the claimant’s UK trade mark rights.

 

 

 

OUR INSIGHT

With the vast development of online retail and the common use of Amazon as a marketplace by many retailers, this case is important for any business with an international reach.

When two businesses are operating under similar brand names in different jurisdictions, a territorial-based settlement can be put in place. It is therefore vital to understand how selling on Amazon or other international retail operators work in respect of targeting consumers in other jurisdictions.

Further, a knowledge of the different ways of selling through Amazon, such as the Merchant Fulfilled Network, could mean targeting in another jurisdiction is taking place which could infringe on other trade mark owners’ rights.

IP specialists, such as Virtuoso Legal, who are particularly equipped with brand protection capability can help businesses understand which retail service would be the ideal to engage with in order to navigate the risk landscape of others' rights across jurisdictions.

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