Supreme Court dismisses Amazon's appeal in landmark decision on consumer targeting

Intro 

In a unanimous decision¹, the Supreme Court has dismissed Amazon's appeal against a Court of Appeal (CoA) decision, which found that the sale of branded goods on Amazon's US site, amazon.com, infringed UK and EU trade marks by virtue of the fact that UK consumers had been targeted. 

In reaching its decision, the Supreme Court noted that it is not the role of an appellate court to interfere with the evaluation of a lower Court, unless the judge has made an error of law or principle, or there is a flaw in their evaluation. The Supreme Court further noted that the mere fact that the appellate court would have reached a different decision was not sufficient to prompt an overturn. 

The dispute

As those that have been monitoring the case, as it made its way through the courts will know, Lifestyle Equities (Lifestyle) is the owner and exclusive licensee of various UK and EU trade marks relating to the 'Beverley Hills Polo Club' brand (BHPC). Those marks are registered in the UK and EU for various goods, including clothing. The appellants are five members of the Amazon group.

The dispute began when Lifestyle brought a claim against Amazon, alleging that its trade marks had been infringed by Amazon advertising and selling US branded goods to consumers in the UK and EU. Amazon argued that amazon.com was only targeted at US consumers and that the UK and each EU country had its own targeted website (amazon.co.uk etc.). 

Previous decisions

The High Court rejected Lifestyle's claims. Specifically, it agreed with Amazon’s argument that amazon.com had not targeted UK and EU consumers and therefore, that Amazon’s use of signs identical to the BHPC marks did not amount to 'use' of the trade marks, in the course of trade, in the UK or EU. The rationale for this conclusion was (amongst other things) that: 

• amazon.com advised UK consumers about the availability of amazon.co.uk; 
• amazon.co.uk would, for UK consumers, undercut delivery times and prices on amazon.com; and
• there were (statistically) very few sales of the US branded goods to the UK (albeit, the Supreme Court placed very little weight on this evidence, on the basis that this information would not be available to the average consumer, whose eyes targeting must be assessed through).

Lifestyle successfully appealed, with the CoA reversing the first instance decision and finding that UK and EU consumers had indeed been targeted via amazon.com. The reasons for this finding included that: 

• The homepage of amazon.com notified consumers that they could buy in eight different languages, in over 60 different countries and that goods could be delivered to the UK;
• The search result webpages and product detail webpages indicated that goods could be delivered and shipped to the UK; and 
• The "review your order" webpage showed that the potential buyer was located in the UK, with a UK shipping address, a UK billing address, the currency of payment was pounds sterling, and Amazon would make all of the necessary arrangements for the goods to be shipped to and imported into the UK (including a pre-estimate of import duties) and delivered to the consumer in the UK.

Amazon duly appealed the CoA's decision to the Supreme Court and that appeal was heard in March 2024. 

The concept of targeting 

Trade marks are territorial, meaning that they can only be enforced in the jurisdiction(s) where they are registered. In the digital age, this creates a mismatch, as while trade marks have geographical limits, websites typically do not. To address this, the concept of targeting has emerged through case law, and the right to bring a UK or EU infringement claim depends on whether consumers in those territories have been 'targeted' in the context of ads, or other offers of sale, for trade marked goods. It is now well-established that the mere availability of a website to consumers in a particular jurisdiction is not enough to create a cause of action – some form of active targeting is required.  

To determine whether the advertising of goods on a website operated from outside the jurisdiction (here, US operated amazon.com) is targeted at consumers within the 'relevant territory', the key question for the court is whether the average consumer, being someone who is reasonably well informed and reasonably observant, would consider that the website is directed at them. The court must carry out a multifaceted assessment of all relevant circumstances to determine this and to assess the reaction of the average consumer. 

The Supreme Court's decision

In the present case, the test essentially required the court to conduct a close review of how amazon.com presented itself to UK consumers. The lower courts had done so when reaching their decisions and the Supreme Court did likewise. As a result of this exercise, the Supreme Court concluded that an average UK and/or EU consumer would consider that amazon.com was directed at them. Decisive factors included: (i) messages on the amazon.com landing page offering to deliver goods to the UK, with similar messages shown on a high percentage of subsequent pages – all such messages were generated automatically where there was an enquiry from a UK IP address and this, the Supreme Court found, indicated that Amazon has thought about whether it was seeking sales to UK consumers and had decided that it was; (ii) specifying which goods could be 'shipped to the UK'; and (iii) a “Review your order” page offering to sell the relevant goods to consumers with UK addresses, with UK specific delivery times and the option to pay in £GBP. Following the Supreme Court's decision, these are all features that website operators should be mindful of, if they are to stay on the right side of trade mark infringement allegations. 

The Supreme Court did find that there were some 'contrary indicators' (for example, the option to use amazon.co.uk and the default display of prices in $USD) that pointed against targeting but considered that these were 'greatly outweighed' by the factors which pointed in the other direction. Interestingly and perhaps surprisingly, although the Supreme Court found that it could not be 'ruled out as a relevant factor', it was not inclined to treat the delivery of goods to the UK alone as weighty evidence of targeting: instead, it found that whether or not targeting had occurred depended more on what had happened up to the point that consumers placed orders (i.e. at the point of sale).

Key takeaways

The upholding of the CoA's decision (which provides a final decision on this matter), will have a significant impact on the liability of businesses operating websites across borders and their potential liability for IP infringements. Such businesses will now need to consider:

• Implementing geo-blocking measures, to ensure that websites are only accessible in target markets where IP rights have been cleared or do not exist;
• Making changes to their website content (including ads and sales information) to avoid being caught out for inadvertently targeting consumers in different territories;
• Carrying out enhanced due diligence before working with third party suppliers; and 
• Including warranties and indemnities in contracts, requiring confirmations that goods can be sold in all markets in which the business operates, and addressing liability where issues arise.

¹ Lifestyle Equities CV v Amazon UK Services Ltd [2024] UKSC 8