Jadebay Ltd and Another v Clarke-Coles Ltd Trading as Feel Good UK

JurisdictionEngland & Wales
CourtIntellectual Property Enterprise Court
JudgeHer Honour Judge Melissa Clarke
Judgment Date13 Jun 2017
Neutral Citation[2017] EWHC 1400 (IPEC)
Docket NumberClaim No: IP-2015-000152

[2017] EWHC 1400 (IPEC)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

INTELLECTUAL PROPERTY ENTERPRISE COURT

Rolls Building

New Fetter Lane

London

Before:

Her Honour Judge Melissa Clarke

Sitting as a deputy Judge of the High Court

Claim No: IP-2015-000152

Between:
(1) Jadebay Limited
(2) Noa and Nani Limited Trading as the Discount Outlet
Claimants
and
(1) Clarke-Coles Limited Trading as Feel Good UK
Defendant

Mr Jamie Muir Wood (instructed by Singletons Solicitors) for the Claimants

Mr John Small (instructed by Josiah Hincks Solicitors) for the Defendant

Hearing date: 2 May 2017

Her Honour Judge Melissa Clarke

INTRODUCTION

1

This is a trade mark infringement and passing off claim arising out of the sale of aluminium flagpoles on Amazon.co.uk.

2

The Claimants are related companies with common shareholders. The First Claimant is the registered proprietor of United Kingdom trade mark number 2653159 for the device mark:

which was filed on 18 February 2013 and registered with effect from 30 August 2013 in class 20 for 'flagpoles plastic storage box garden furniture' (the " Trade Mark"). Before the device mark was registered, the First Claimant used the words DESIGN ELEMENTS as an unregistered trade mark (the " Sign").

3

The First Claimant has licensed the Second Claimant, and only the Second Claimant, to sell goods including flagpoles under the Sign and the Trade Mark pursuant to an oral licence agreement. It has granted no other licences of the Sign or Trade Mark.

4

Since March 2011 the Claimants have purchased flagpoles made by a manufacturer in China, packaged them in their own packaging branded with the Sign and/or Trade Mark, imported them into the UK and sold them through two internet-based sales channels. The First Claimant sells the flagpoles on ebay.co.uk, and the Second Claimant, trading as 'The discount outlet', sells them on Amazon.co.uk. The Second Claimant sells the flagpoles in three different packages with varying numbers and types of flags (for example flagpole with Union Jack, flagpole with Union Jack and St George's Cross, etc.) and each variant is sold via a different Amazon listing, which are otherwise identical save as to total price ("Listings"). The Second Claimant created each of those Listings itself.

5

Each of those Listings upon creation generated a unique Amazon Identification Number (or ASIN) and a unique European barcode (EAN) for the product so listed.

6

Below is an image of the top-presented listings following a search on Amazon.co.uk for '20 ft aluminium flagpole' on 4 June 2017:

Figure 1.

7

The first-presented product is not connected with the Claimants. However the second and third are. It can be seen that the title for these Listings is 'Aluminium Flagpole 20ft with 2 Flags Union Jack and England Flag' and 'Aluminium Flagpole 20ft with Union Jack Flag' respectively, and both are then described underneath the listing title as being 'by DesignElements'.

8

If an interested Amazon customer wished to learn more, or to buy, the flagpole with a single Union Jack, for example, he would click the third listing which then presents itself as follows:

Figure 2.

9

It can be seen that more information is now available, including that the item is in stock and it is 'Dispatched from and sold by The discount outlet'. That is the trading name of the Second Claimant. To purchase, the customer would click the ' Add to basket' button in the box on the right, which also says that the item is 'In stock—Sold by The discount outlet'. He would then check out his purchase. That box on the right is known as the Buy Box. If 1-click ordering was enabled by the customer, it would also contain a second button saying "Buy now with 1-Click".

10

If the customer was unsure about whether he was ready to purchase, he might notice that there were currently 161 customer reviews of the product. He could click through and read those (or scroll down the screen where they are also displayed) to help inform his decision. He could also learn more about 'The discount outlet' by clicking on that hypertext name, where he would learn that it was a trading name of Noa and Nani Limited (the Second Claimant) of Tenderden, Kent, and that it had been left 95% positive reviews by Amazon customers in the previous 12 months. From that page he could click through and see what other products they sold.

11

It is also not disputed that an Amazon listing, although set up by one seller, can be used by multiple sellers to sell the same product. Another seller can do so by locating the specific item he wishes to sell in the Amazon catalogue through its EAN or ASIN number; reviewing the description of the item which includes a description of its brand and manufacturer; confirming that the item it wishes to list is the same as that in the listing it wishes to join; pricing the item including delivery charges; and submitting the listing.

12

When there are multiple sellers on a listing, one is selected by Amazon as the default seller and is promoted in the listing and in the Buy Box in the same manner that 'The discount outlet' now appears in Figure 2. If the buyer simply clicks on the ' Add to basket' or '1-Click' buttons, it will purchase from that Buy Box seller. If it wants to consider the prices, delivery charges and delivery times of any of the other sellers using that listing, it will have to click a separate link to inspect them. The Buy Box seller is usually, but not always, the one that charges the lowest total price for the product plus delivery charges.

13

The dispute arises because at some point after July 2012 and before 18 February 2013 the Defendant decided to use the Listings to sell its own flagpole product, which it sourced and purchased from a different manufacturer in China to that used by the Claimants. It did so after it had purchased one of the Claimants' flagpoles from Amazon. The Defendant's flagpoles are different in design (most notably they split into a different number of sections to the Claimants' flagpole), but it is not now disputed that they are also 20ft tall aluminium flagpoles of a comparable quality to those of the Claimants ("Product").

14

When the Defendant listed its Product on the Listings, the total price it charged for the Product plus delivery undercut the total charged by the Second Claimant. It 'won the Buy Box' and became the default seller replacing 'The discount outlet' in the listing and the Buy Box, appearing as 'Feel Good UK – UK SELLER'. Accordingly, it captured the majority of sales from the Listings during the period it sold from them.

15

The Claimants contend that by listing its Product for sale against the Listings, which all refer to the flagpoles for sale on those listings as being 'by DesignElements', the Defendant has: (i) infringed the Trade Mark pursuant to sections 10(2) and 10(3) of the Trade Marks Act 1994 (" TMA") for sales on or after 18 February 2013; and (ii) passed off its Product as goods of the Claimants in relation to sales before 18 February 2013.

16

The Claimants' case is that: their Listings should only have been used to sell identical product, in other words the Claimants' flagpoles branded with the Sign or the Trade Mark; this is the product which the relevant ASIN and EAN numbers uniquely identify; if the Defendant wished to sell its own flagpoles, it should have created a new listing for Feel Good UK branded flagpoles with its own unique ASIN and EAN numbers; it has not done so, choosing instead to sell its Product as being 'by DesignElements' in order to ride on the coat-tails of the Claimants' existing reputation for high-quality flagpoles and capture sales to the detriment of the Second Claimant. It claims damages for such infringement and passing off and an injunction to prevent future infringement and passing off.

17

The Defendant's case is that: the Listings are 'generic' because the title of the listing (such as "Aluminium Flagpole 20ft with 2 Flags Union Jack and England Flag") does not refer to any brand, let alone the Sign or the Trade Mark; accordingly it is entitled to use the Listings to sell any flagpole that meets that generic description; further it is required by Amazon's listing policy not to create additional listings when there is an existing listing which matches the product it wishes to sell; it has not used the Claimants' Sign or Trade Mark at all, because the Trade Mark does not appear anywhere on the Listings, and the phrase 'by DesignElements' is not a use of the Sign (which in any event is two words not one), or any sign, but the use by Amazon of the name of the seller who created the Listing. It asks for the claim to be dismissed.

18

For the avoidance of doubt, it is accepted by the Claimants that the Defendant has not attached the Sign or the Trade Mark or any sign complained of to the Product itself, or any part of the packaging of the Product. The only use complained of is in the Defendant's use of the Listings to sell the Product, as I have described.

CHRONOLOGY

19

The following chronology is of assistance:

i) The Second Claimant created the Listings and started selling flagpoles on Amazon on 7 March 2011.

ii) The Defendant incorporated on 24 April 2012.

iii) The Defendant purchased a flagpole from Claimants, via one of the Listings, on 6 March 2012.

iv) The Defendant sourced 1176 units of the Product from a Chinese manufacturer and began selling them in the UK from its Feelgooduk. com website in July 2012.

v) The Second Claimant sold 1504 units of its flagpoles from the Listings in 2012.

vi) The First Claimant filed the Trade Mark application on 18 February 2013 and it was registered from 30 August 2013.

vii) The Defendant began using the Listings or any of them to sell Product on a date unknown, which it says was before 18 February 2013.

viii) The Claimants became aware of such sales by the...

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