Lifestyle Equities – the Evolution of “Targeting” in the United Kingdom

This article was first published in IPSANZ journal [September 2024].

Lifestyle Equities CV and Anor v Amazon UK Services Ltd and Ors
[2024] UKSC 8

Over the years, European and United Kingdom courts developed principles through case law to deal with the issue of applying UK/EU trade mark law to cross-border sales and marketing of goods over the internet. One of those principles is that of “targeting”. Targeting is where the marketing, and offering for sale, of branded goods which is directed at UK/EU consumers, can be regarded as use of the trade mark in the UK/EU for the purposes of trade mark infringement. Therefore even if a sale contractually occurred in a foreign country, the trader’s offering for sale and advertising to UK/EU consumers of branded goods would be regarded as use of the relevant brand in the course of trade in the UK/EU. This could in turn amount to trade mark infringement.

UK courts have traditionally considered, amongst other things, the intention of the website operator to assess targeting. In essence, is the website operator deliberately targeting UK consumers? If so, their use of a trade mark over the internet would be regarded as trade mark use in the UK/EU for the purposes of assessing trade mark infringement. However, following recent decisions from the UK courts, the focus is now on what the average consumer’s experience of the purchase is (i.e. did they feel that the offer was aimed at them?).

In this update I review the UK Supreme Court decision in Lifestyle Equities CV and Anor v Amazon UK Services Ltd and Ors [2024] UKSC 8 (“Lifestyle Equities”) which sheds light on what will be considered targeting, and the circumstances in which there will be trade mark infringement.

Background

This case concerned the infringement of a number of UK/EU registered trade marks owned by Lifestyle Equities (“Lifestyle”). The dispute arose because Amazon had, through its US website, marketed and sold the goods of a US company branded under identical marks to those of Lifestyle to UK consumers. While the US company and Lifestyle had been coexisting in the US, this was not the case for the UK/EU. Lifestyle therefore contended that Amazon’s marketing or sales of goods from the unrelated US company to UK consumers through its US website amounted to infringement of its UK/EU trade marks.

There were two key issues in this case:

1. whether the marketing and offering of the products through Amazon’s US website was “targeted” at UK consumers. If Amazon’s behaviour constituted “targeting” of UK consumers, then there would be a finding of trade mark infringement; and
2.  whether actual sales to UK consumers, where there had been no targeting or marketing to UK consumers, could amount to infringement. Lifestyle essentially contended in the alternative that even if there had been no targeting of UK consumers, there had been actual sales of the relevant products in the UK which would be enough to constitute infringement per se. The basis for this argument was a decision from the Court of Justice of the European Union in C-98/13 Blomqvist v Rolex SA [2014] ETMR 25 (“Blomqvist”), which, in the context of a customs action, treated the sale of a branded product to an EU consumer as use of the relevant trade mark in the EU market even if the sale occurred outside the EU and there was no marketing of the product to the EU consumer.

The Issue of Targeting

Targeting in the EU/UK has traditionally been assessed by having regard to the intention of the website operator. “The trader ought to have manifested an intention to establish commercial relations with consumers”¹ in the EU/UK. This intention did not have to be clearly expressed but could be implied from the trader’s activities. Mere accessibility was not enough, there had to be indications that UK/EU consumers were targeted. In Pammer,² the Court of Justice of the European Union gave guidance on what could constitute evidence to conclude that the trader was directing its activities to UK/EU consumers. An example would be the use of the language and currency of the UK/EU consumer where the trader is located elsewhere, and the indication that the seller was willing to dispatch the product to the UK/EU consumer’s location.

Through the years the UK courts emphasised that the fact that a website that is accessible from anywhere in the world, even if it attracts occasional interest from consumers unintendedly, should not give rise to liability.³ The courts also started to put the focus on the perception of the average consumer to determine whether the trader targeted them. Evidence of a subjective intention from the trader continues to be relevant to determine whether the trader’s activities targeted the UK but, crucially, this has to be considered from the perspective of an average consumer in the UK.⁴ The ultimate question is whether the average consumer in the UK would consider the website directed to them. It is not actually necessary to show that the trader had a subjective intention to target UK consumers, as the key issue is whether consumers themselves felt targeted.

Turning back to this case, in the first instance decision, the UK High Court did not find that Amazon’s US website targeted UK consumers. Consumers would, in the High Court’s view, conclude that Amazon’s US website was targeted at consumers in the US rather than the UK. UK consumers would conclude this because (i) the US website advised incoming consumers from the UK about the availability of the UK website and (ii) the UK website had lower delivery times and prices than the US website. The High Court also held that (iii) there were statistically very few sales of the US branded goods to the UK and (iv) that Lifestyle’s purpose in bringing the claim was not so much to prevent sales to the UK but to prevent UK consumers who strayed onto the US website learning of the low prices of the US branded goods, thereby downgrading the value of the marks.

Lifestyle appealed to the UK Court of Appeal where it claimed that the High Court’s assessment on the targeting issue had been vitiated by numerous errors in the assessment. The Court of Appeal agreed with Lifestyle and found that Amazon had plainly targeted UK consumers. In deciding the issue, the Court of Appeal highlighted, amongst other things, that:

(i) the High Court had attached too much weight to the perception of the US website as a whole instead of analysing each of the acts of targeting complained of;

(ii) it was wrong to conclude that because the US website was primarily directed at US consumers then it could not target UK consumers;

(iii) it focused too much on Amazon’s subjective intention instead of the perception of UK consumers and whether they would consider the US website to target them; 

(iv) the High Court wrongly concluded that the UK aspects of the website were simply designed to make the US website more user friendly for a non-targeted UK consumer; 

(v) it was wrong to consider the lower shipping costs on the UK website because consumers would probably not to be aware of them; and 

(vi) it was wrong to treat Lifestyle’s motives in bringing the claims as relevant evidence to the question of targeting.

Amazon appealed to the Supreme Court who upheld the Court of Appeal’s decision on targeting but for different reasons and adopting a different approach. In deciding the matter the Supreme Court considered the following and sought to provide guidance in the assessment of targeting:

(i) The Court of Appeal seemed to conduct a rather self-contained review of the specific parts of the website where it should have considered Amazon’s website as a whole. Otherwise, as put by the Supreme Court, “the approach may miss the wood for the trees”.

(ii) The Court of Appeal was not wrong to disregard the evidence regarding the different delivery times and charges. This was insufficient to point away from targeting UK consumers.

(iii) It is appropriate to conduct a review of the consumer’s journey through the website forwards rather than backwards (the Court of Appeals did the latter) as it better reveals what the average consumer is likely to see and conclude.

(iv) While the Court of Appeal reached the correct conclusion on targeting, its approach was too simplistic and applied a low threshold. Indeed the Supreme Court agreed that there was targeting but not just because of specific parts of Amazon’s US website (in particular the “Review your Order” page) but due to the combined effect to the US website as a whole which was designed specifically to offer goods to consumers with UK IP addresses.

Overall, the Supreme Court emphasised that the assessment of targeting should take into account all relevant facts and circumstances viewed from the perspective of the average consumer in the UK. At the heart of the assessment is the experience of UK consumers of the website and their journey throughout it. In this particular case, the Supreme Court considered relevant that upon landing on Amazon’s US website, consumers would see the message “Deliver to United Kingdom” and be told for each product whether it would be available in the UK by noting “ships to United Kingdom”. Consumers would eventually reach the “Review your order” page to purchase the relevant product. This final “Review your Order” page was, in the Supreme Court’s view, an offer from Amazon for sale to a consumer at a UK address, with UK specific delivery times and prices and the ability to pay in sterling (with an exchange rate from US dollars).

On balance, the Supreme Court thought that Amazon’s US website did show with reasonable clarity that it was targeting UK consumers accessing its US website. UK consumers would be told from start to finish that they would be shown goods available for delivery to them in the UK and that those goods could be delivered to them. Amazon’s software deliberately sent the message “Deliver to the United Kingdom” unless the consumer changed their delivery address by using the “Change Address” option in the pop-up box. This s was, in the Supreme Court’s view, an indication that Amazon thought about whether it was seeking sales to UK consumers for delivery to the UK and decided that it was. So while consumers were given the mere option to change to the UK website, they were nonetheless offered products from the US website for those who wished to continue to shop from the US website. A strong indicator of this was Amazon telling consumers specifically which products would be available for shipping to the UK.

The Supreme Court also pointed out that the fact that US dollars was the default currency and that the products on Amazon’s US website had longer delivery times and more expensive delivery costs than Amazon’s UK website was not enough to point away from targeting. This was because there were options prominently displayed to change the currency on the landing page, with sterling included as one of those options.

Delivery times being quicker and prices being lower on the UK website was not a strong point against targeting either. Consumers would not conduct a detailed comparison and, in any event, if the product was available to purchase from Amazon US then it was open to the UK consumers to buy that product even if more expensive or if it took longer for the delivery.

As a result of the above, the Supreme Court found that the UK average consumer would, as a result of their experience of the Amazon US website, conclude that Amazon did target the UK and therefore infringed Lifestyle UK/EU trade marks in the UK.

The Issue of Actual Sales to Consumers

The Supreme Court also considered whether actual sales to UK consumers could amount to use in the UK and therefore trade mark infringement.

As discussed in the “Background” section above, this claim made by Lifestyle relied on the Court of Justice of the European Union’s decision in Blomqvist. Lifestyle argued that, in accordance with that EU precedent, actual sales of goods to a consumer in the UK or EU amount to use of the sign in the UK/EU regardless of whether there had been targeting or not. So it would not matter if the sale was preceded by offers for sale and/or advertisements targeted at the UK or EU consumer. Therefore even if Amazon US did not target UK consumers, there would be trade mark infringement nonetheless.

In the first instance the High Court had found that Blomqvist would not apply to this case. The Court felt that this could only be applied to cases where the sale of the relevant product through a website takes place within the EU or if the product is intended to be put on sale within the EU. However, the Court of Appeal disagreed and held that actual sales of goods to UK consumers amounts to use in the UK even if not preceded by targeting or advertisements to the UK consumer.

Amazon appealed to the Supreme Court claiming that the Court of Appeal had gone too far and that the effect of the decision of the Court of Appeal, if upheld, would be that the English Courts’ jurisdiction would catch acts from foreign traders where there is no targeting, but where consumers choose to visit their website and import goods for their own personal use.

Unfortunately, the Supreme Court found it unnecessary to consider the appeal on the issue of “actual sales” as there had been a finding gon targeting so there was infringement anyway. Although the Supreme Court also made it clear that there were a number of uncertainties relating to the facts in Blomqvist which made it difficult to have clarity on the extent of the ambit of the Court of Justice of the European Union’s decision. As a result, the Supreme Court felt that the EU decision would hardly do much for the jurisprudence.

Comments

The Supreme Court’s ruling provides clarity on what amounts to “targeting” and how the Court should approach the assessment of targeting. The focus of the assessment now rests heavily on the consumer’s experience of the website. The website operator’s intention is still relevant but not necessarily fundamental if consumers have felt that they have been targeted.

Trade mark owners in the UK will certainly welcome the decision as it should allow them to complain about online infringement in situations where the website operator’s intention may not be that obvious but consumers would have been targeted nonetheless.

Conversely, the decision means risk for online operators who may inadvertently be infringing UK trade marks by, for example, allowing UK consumers to purchase their products and smoothing the UK consumers’ purchase. Businesses ought to now think carefully about the perception of UK consumers of their website. To this end, the decision from the Supreme Court will be helpful as it will allow online traders to consider their website in an attempt to reduce risk. The facts of each case will be key but, as the Supreme Court noted, the overall context when it comes to the website, and the consumer’s experience of their journey through it, will be very important to the assessment.

Finally, whether “actual sales” to UK consumers without prior targeting or marketing infringe as per the decision in Blomqvist remains unclear. The Court of Appeal decision suggests that actual sales would amount to infringing use, although the Supreme Court’s comments on the reliability of the Blomqvist jurisprudence casts doubt on whether it would be applicable. This issue remains “unclear”, which also means that risk remains as to how “actual sales” to UK consumers without prior targeting or marketing will be considered by the courts in the future.

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[1] Pammer v Reederei Karl Schlüter GmbH & Co KG; Hotel Alpenhof GesmbH v Heller (Joined Cases C-585/08 and C-144/09) [2010] ECR I-12527; [2012] Bus LR 972, CJEU.
[2] Pammer v Reederei Karl Schlüter GmbH & Co KG; Hotel Alpenhof GesmbH v Heller (Joined Cases C-585/08 and C-144/09) [2010] ECR I-12527; [2012] Bus LR 972, CJEU.
[3] Argos Ltd v Argos Systems Inc [2018] EWCA Civ 2211; [2019] Bus LR 1728.
[4] See Argos Ltd v Argos Systems Inc [2018] EWCA Civ 2211; [2019] Bus LR 1728 and Merck KGaA v Merck Sharp & Dohme Corpn [2017] EWCA Civ 1834; [2018] ETMR 10.