Amazon keeps hitting the target... but not quite in a trade mark context

Despite challenging economic conditions Amazon continues to thrive and the Internet giant has received plenty of news coverage of late with reports of record revenues and growth driven by an e-commerce boom during the Coronavirus pandemic. However, this post is not directly about the continued rise of Amazon or recent global spike in e-commerce during the pandemic, rather it is about a recent High Court case involving Amazon which brings e-commerce, the global nature of the Internet and the protection of non-global trade mark rights into sharp focus.

At its core, the decision in Lifestyle Equities C.V. and anor v Amazon UK Services Ltd and Ors. concerns the concept of targeting in trade mark law, specifically, whether certain Beverly Hills Polo Club products listed and sold on amazon.com were "targeted" at UK/EU consumers.  The concept of targeting reflects the intrinsic territorial nature of trade marks and is, in essence, a jurisdictional requirement in cases of online trade mark infringement.  The problem is that the Internet and e-commerce has no respect for territorial boundaries, so how can trade mark law strike the appropriate balance between respecting those territorial boundaries whilst still offering adequate trade mark protection in an online environment?

The decision of Mr Justice Michael Green effectively confirms that sales of goods that take place outside the UK/EU but to consumers in the UK/EU, which are not preceded by targeted offers for sale or advertisements, do not amount to "use in the course of trade” within the UK/EU and therefore cannot constitute infringements of UK/EU trade marks. The outcome illustrates the territorial limitations of trade marks, the challenges of online enforcement and the potential infringement risks in e-commerce due to the global nature of the Internet.  The finding of Mr Justice Green effectively distinguishes between active and passive selling, with the latter deemed not to qualify as use in the course of trade in the UK without prior targeting of UK consumers.

The result in Lifestyle Equities will be welcomed by online platforms, marketplaces and retailers as a shield against potential liability for online trade mark infringement, but will disappoint businesses looking to enforce their marks against online actors.  The decision is largely in step with previous authority, but it is questionable whether the reasoning and outcome properly reflects the global nature and realities of online business and e-commerce.  Certain questions remain unanswered: for example, does this decision mean passive sales can never amount to an online infringement or is it a question of degree? Further, does the same reasoning apply to services that are delivered to UK consumers online without any prior advertisement or marketing directed at UK consumers? It will be intriguing to see how the decision is received and how it affects trade mark enforcement in an online context moving forward.