Beverly Hills Polo Club Litigation

Author Roger Schultz Licence CC BY-SA2.0 Deed Source Wikimedia Commons

  

Jane Lambert

Sometimes the same brand is owned by different businesses in different countries.  That did not matter much in the days before the Internet because the only consumers who were likely to come across the same brand in different hands would have been travellers,  Nobody minded if a tourist purchased goods marketed under a familiar label that were cheaper, better or simply not available at home while on holiday and brought them home. The only time there might have been a problem would have been if a trader imported large quantities of branded goods from overseas and attempted to resell them here. He or she would have risked an action for trade mark infringement from the owner of the brand in the United Kingdom. 

All that changed with the Internet because it created a worldwide marketplace for goods and services.  Trade marks protect brands within the country or territory for which they are registered.  They cannot prevent the use of the registered mark beyond that country or territory's shores.  There is in theory nothing to stop a consumer in the United Kingdom from selecting branded goods from a foreign website, paying and taking delivery of them abroad and arranging for a carrier to transport them home.  The consumer is not infringing any trade marks because he is not using the marks in the course of trade,  Nor is the retailer because the sale takes place abroad.  Yet such transactions would render trade marks useless in electronic commerce if they were allowed to continue.

The Court of Justice of the European Union has developed two doctrines to regulate such transactions:

• One is to treat targeting of consumers in a particular market as an infringement of the trademarks that have been registered in that market; and 
• The other is to the rule in Blomqvist's case (Case C-98/13 Martin Blomqvist v Rolex SA [2014] EUECJ C-98/13, [2014] Bus LR 356, [2014] WLR(D) 47, ECLI:EU: C:2014:55, [2014] ECDR 10, [2014] ETMR 25, EU: C:2014:55) in which the Court held that the mere entry of a counterfeit watch into Danish territory entitled customs officers and the IP owner to impound it,

The concept of targeting is better developed than the rule in Blomqvist's case but the UK Supreme Court has referred to only a handful of European and English cases in support of that doctrine.

The issue arose in Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2021] FSR 19, [2021] EWHC 118 (Ch).   The word mark BEVERLY HILLS POLO CLUB and the equestrian logo shown below are held by different entities in Europe and the United States:

Clothing and luxury goods intended for the American market are marketed on Amazon's US website.  From time to time consumers in the UK have purchased trade marked items from that site and arranged for them to be transported to their homes.  

Lifestyle Equities CV and Lifestyle Licensing BV ("Lifestyle") sued Amazon.com Inc. for trade mark infringement alleging that Amazon's US site had targeted British consumers.  The action was tried by Mr Justice Michael Green who dismissed the claim for the following reasons:

"(i) the USA website advised incoming consumers from the UK about the availability of the UK website, (ii) that this would for UK consumers produce lower delivery times and prices than the USA website, (iii) that 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 USA website learning of the low prices of the US branded goods, thereby downgrading the value of the marks."

He also distinguished Blomqvist on the basis that the sale had been made in Denmark or the watch was intended for onward sale.

Lifestyle appealed to the Court of Appeal which found that  Mr Justice Michael Green had erred in several respects.  It carried out its own assessment of the facts and found that Amazon had targeted British consumers and had therefore infringed art 9 of the EU Trade Mark Regulation and s,.10 (1) of the Trade Marks Act 1994,  It granted an injunction and an inquiry as to damages to Lifestyle (see Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2023] 1 All ER 905, [2022] EWCA Civ 552, [2023] Bus LR 1010, [2022] WLR(D) 199, [2023] 1 All ER (Comm) 189, [2022] FSR 20).

Amazon appealed to the Supreme Court which handed down judgment on 6 March 2024 (Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2024] UKSC 8).  The Supreme Court carried out its own multifactorial assessment which led it to conclude that there had been targeting of British consumers and consequential trade mark infringement.  The Court of Appeal had erred as had Mr Justice Michael Green but as the Court of Appeal had reached the right decision the Supreme Court did not disturb its injunction or order for an inquiry as to damages.  Having found that Amazon had infringed Lifestyle's trade marks by targeting consumers it was unnecessary for the Supreme Court to make a finding on the rule in Blonqvist's case and the justices declined to do so.

Because of the numbers who use Amazon this judgment could have important and far-reaching consequences.  For those who want to learn more about this case, I have written a more detailed article in NIPC Law entitled Trade Marks: Lifestyle Equities v Amazon.  That article links to the judgments of the Supreme Court, Court of Appeal and Mr Justice Michael Green and other materials on the Supreme Court's website.  I am also willing to discuss this case with anyone who calls me on +44 (0)20 7404 5252 during normal business hours or sends me a message through my contact page,