Lifestyle Equities C.v v. Amazon UK Services Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Michael Green |
| Judgment Date | 27 January 2021 |
| Neutral Citation | [2021] EWHC 118 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: IL-2019-000003 |
| Date | 27 January 2021 |
[2021] EWHC 118 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
INTELLECTUAL PROPERTY
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
THE HONOURABLE Mr Justice Michael Green
Case No: IL-2019-000003
Michael Edenborough QC and Thomas St Quintin (instructed by Brandsmiths) for the Claimants
James Mellor QC and Maxwell Keay (instructed by Hogan Lovells International LLP) for the Defendants
Hearing dates: 8,9,10,11 and 15 December 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
| CONTENTS | Paragraphs | |
| A | INTRODUCTION | A1–7 |
| B | THE PARTIES, THE REGISTERED TRADE MARKS AND THE BUSINESS MODELS | 8 – 13 |
| C | THE EXAMPLE TRANSACTIONS | 14 – 36 |
| D | THE ISSUES | 37 – 40 |
| E | THE WITNESSES | 41 |
| F | FURTHER FACTUAL MATTERS | |
| (1) Implementation of Restrictions | 55 – 71 | |
| (2) Effectiveness of Restrictions | 72 – 74 | |
| (3) Volume of allegedly infringing sales and other data | 75 – 82 | |
| (4) Amazon's Reporting Tools and use made of them by the Claimants | 83 – 89 | |
| G | LEGAL ISSUES: | 90 |
| (1) Core principles of trade mark infringement | 91 – 98 | |
| (2) Use of a sign | 99 – 112 | |
| (3) Use in the course of trade | 113 – 116 | |
| (4) Use in the relevant territory — Targeting | 117 – 127 | |
| (5) The case of Blomqvist | 128 – 147 | |
| (6) “ Counterfeit” goods | 148 – 152 | |
| (7) Passing Off | 153 – 154 | |
| (8) Joint Liability | 155 – 158 | |
| H | APPLICATION OF THE LEGAL PRINCIPLES TO THE FACTS | 159 |
| (1) Targeting | 160 – 179 | |
| (2) Sales | 180 – 189 | |
| (3) Importation | 190 – 193 | |
| (4) Use of the sign | 194 – 198 | |
| I | JOINT LIABILITY | 199 – 207 |
| J | CONCLUSION | 208 – 213 |
A. INTRODUCTION
This is the trial of a trade mark dispute between the owners of the Beverly Hills Polo Club ( BHPC) brand in the UK and EU (and certain other countries) and companies within the Amazon Group. The Claimant companies say that the Defendant companies have infringed their trade mark rights by allowing BHPC branded goods to be listed on their websites, in particular amazon.com, and so to be visible to consumers in the UK and EU (hereafter collectively referred to as “ UK/EU”).
This is not a normal case of trade mark infringement as there are no issues of likelihood of confusion or similarity; it is accepted that the goods in question have the BHPC sign and are identical to the Claimants' valid registered trade marks (the Claimants describe it as a “ double identity” case). The issue in this case arises because of a split in the ownership of the trade mark rights between the US and the UK/EU, apparently a fairly unusual situation. BHPC goods that have been lawfully manufactured, marketed and sold in the US with the consent of the US rights holder are being marketed and sold, so the Claimants say, by Amazon in the UK/EU by being listed either on amazon.com or through its global store service on amazon.co.uk, thereby infringing the Claimants' trade mark rights. The Claimants say that this is a form of “ counterfeiting” and it is destroying their business.
The Defendant companies recognise the problems that arise from such a split in the ownership of trade mark rights but say that the Claimants' case has been exaggerated and that certain restrictions that Amazon have put in place in order to protect the Claimants' rights have been effective in stopping there being any sales of BHPC goods from the amazon.com website to the UK/EU. Furthermore, they point to the fact that historical sales of BHPC goods from amazon.com to consumers in the UK/EU have been tiny and that therefore the Claimants' action is wholly disproportionate. They say that what this is really about is preventing any visibility of BHPC goods to consumers in the UK/EU and Mr Eli Haddad, the Managing Director of the Claimants, admitted that that is what he wants to achieve. He repeatedly said in his evidence that sales are not the issue and that Amazon has never really understood this; it is the mere visibility of BHPC products to UK/EU consumers that is damaging the value of their brand in the UK/EU, he says.
The insistence of the Claimants to describe this case as being about “ counterfeiting” is unhelpful and in my view obscures the real issues. These are not “ fake” or “ counterfeit” goods in any normal sense of the word as they have been manufactured and put on sale in the US with the consent of the US rights holder. Describing such goods as “ counterfeit” seems to me to be purely for effect and pejorative, and does not assist in analysing whether the listing of lawfully branded BHPC goods on amazon.com infringes the Claimants' trade mark rights in the UK/EU, even if such consumers are unable to purchase those goods from the amazon.com website.
Rather than being about counterfeiting, this case seems to me to be much more about the impact of e-commerce and the global nature of the Internet, the “ world-wide web”, on the protection of non-global trade mark rights. This is brought into sharp focus by the split ownership in this case where it is necessary to understand the extent of this court's jurisdiction and the inherent territoriality of trade mark rights. The UK and EU case law in this field has attempted to strike a balance between those tensions and has developed the concept of “ targeting” of a website or similar means of advertising or selling and the court will only accept jurisdiction if the website is targeted at the relevant territory where the rights are owned. That is really what is at the heart of this case: is Amazon's US website, amazon.com, and/or the listings of BHPC products thereon, targeted not only at US consumers but also at UK/EU consumers?
Amazon operates four relevant business models through which purchases could be made of BHPC branded goods by consumers in the UK/EU. The parties have agreed that for the purposes of testing the Defendants' liability, the allegations of infringement and passing off are to be assessed by reference to four sample transactions, each one representing a transaction that took place through the four business models (which are described in more detail below).
This trial is only concerned with liability. As is usual in such cases, quantum of damages, if any, will be left to a second trial if I find the Defendants liable and I consider that such an inquiry should take place.
B. THE PARTIES, THE REGISTERED TRADE MARKS AND THE BUSINESS MODELS
The First Claimant, Lifestyle Equities C.V., is the proprietor and the Second Claimant, Lifestyle Equities B.V., the exclusive licensee of a portfolio of registered trade marks that protect the BHPC brand in the UK and the EU (they are hereafter referred to collectively as the “ Claimants” and there is no need to distinguish between them). The Claimants were incorporated in the Netherlands and are owned and controlled by their Managing Director, Mr Eli Haddad. Their business is selling clothing and similar goods under the BHPC brand or licensing others to do so within their territories.
In 2008, there was a split between Mr Haddad and his two brothers: the latter have, since then, through their company called BHPC Associates LLC, owned the BHPC brand and corresponding trade mark rights in the US. It was clear to me from Mr Haddad's evidence that he and his brothers have gone their own separate ways in respect of the BHPC brand and are pursuing very different methods of promoting and selling BHPC branded goods. That situation has given rise to the current dispute with goods lawfully listed on amazon.com with the authorisation or licence of Mr Haddad's brothers, while Mr Haddad wants nothing to do with that approach and wants to stop his market from seeing, in particular, the price at which BHPC branded goods are being sold in the US.
The Claimants' registered trade marks in the UK and the EU protect either the words
“BEVERLY HILLS POLO CLUB” or this logo:
The trade marks protect a wide variety of goods, but of particular relevance they cover clothing, luggage, watches and perfumery. The precise details of the UK and EU trade marks are set out in an annexe to the Particulars of Claim. These are not disputed and do not need to be set out in this judgment.
The Defendants are all part of the Amazon group of companies that generally operate e-commerce websites. For convenience, I will continue to refer to “ Amazon” throughout this judgment, unless it is necessary to identify the particular company concerned. As already indicated above, the relevant Amazon websites are: (1) the US website at www.amazon.com ( amazon.com); (2) the UK website at www.amazon.co.uk ( amazon.co.uk); and (3) the German website at www.amazon.de ( amazon.de).
The four relevant business models in issue in this case can be shortly defined as follows:
(1) ...
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