UK ruling: Parallel Trademarks in Amazon Sales

The UK ruling on the BHPC trademark is about parallel trademarks in online sales via Amazon – and a possible claim to geotargeting. Can Amazon display the U.S. goods of a parallel trademark in the EU on amazon.com, even though it is not sold in the EU?

BHPC: Parallel Trademarks in EU/UK and in USA

The UK judgment concerning the BHPC dispute mark, an apparel brand for Polo Sport, is about parallel marks in sales on Amazon, fragmented into a UK/EU mark and a US mark. The background to the case ([2021] EWHC 118 (Ch)) is a trademark split between brothers whereby the BHPC (Beverly Hills Polo Club) dispute mark is protected as a parallel mark both in Europe / UK and as a US mark. The owner of the EU and UK trademark BHPC is Lifestyle Equities C.V. and its managing director Mr. Eli Haddad (Netherlands), the owner of the US trademark BHPC is Mr. Haddad’s brothers through the company BHPC Associates LLC.

Coexistence of trademarks, community of heirs or voluntary fragmentation of parallel trademarks? That was not the issue in this case, it was not about a likelihood of confusion, but about parallel trademarks in online sales – and geotargeting that is reasonable for Amazon.

This is because BHPC goods are listed on amazon.com from the USA, while Mr Haddad from Europe objects to the Amazon listing of BHPC goods and, above all, also wants to prevent the price at which BHPC-branded goods are sold in the USA from being seen in the European market.

The European plaintiffs argued that this was a form of counterfeiting and would destroy their business.

Amazon reacted

Amazon had – after the possible trademark infringement was raised by the claimant via Amazon’s reporting tool – introduced technical restrictions on the sale and promotion of BHPC goods to consumers in the UK/EU, essentially since 2018 on the Amazon Global Store and since 2019 on amazon.com shop models. This was done by restricting cross-listing from amazon.com to amazon.co.uk.

In practice, this prevents BHPC goods from being shown on European sites such as amazon.co.uk (then still with UK), but on amazon.com BHPC goods can be seen as a U.S. offering first – including prices, also displayable as British pounds – only the final sales step is blocked by Amazon for Europeans.

Therefore, these measures were not sufficient for the European plaintiffs, who demanded that Amazon block the visibility of all BHPC branded goods on amazon.com for consumers from the UK and the EU. Amazon refused, saying that this was technically very complex. But even in principle, Amazon was not prepared to “censor the internet”.

Rightly so? Or was it a justified claim of geotargeting?

Right to geotargeting?

There are several important judgments on geotargeting, most notably the Floyd judgment in the UK in 2018 (Floyd LJ in Argos Ltd v Argos Systems Inc [2018] EWCA): targeting is not a separate doctrine of trade mark law, the UK court (England and Wales Court of Appeal) held. As trade marks have a territorial effect, geotargeting is not intended to subject those who do business exclusively outside the UK to UK trade mark law, but this could not give rise to any form of liability.

European claimants claimed prohibition rights against third parties

In fact, the European claimants – besides the trademark owner from the Netherlands also an exclusive licensee – invoked both the UK law under Section 10 of the Trade Marks Act 1994 and Article 9 of Regulation (EU) 2017/1001 on the European Union Trade Mark (EUTMR) as well as EU Directive 2006/114/EC. The aforementioned laws give a trade mark owner possibilities for prohibitions – for example, against offering, selling and advertising of one’s own trade mark by third parties. However, this only applies if there is a likelihood of confusion or if the reputation of the EU trade mark is unfairly exploited without due cause.

Case law: Trademark infringement in online sales

On the other hand, trade mark rights can also be infringed if goods originating from third countries are the subject of a commercial act directed at consumers in the European Union, such as a sale, an offer for sale or an advertisement, even before their arrival in the EU, the ECJ had ruled in 2011 (L’Oréal and others v. Ebay, C-324/09). However, the operator of an online marketplace – such as Ebay or Amazon – is only (co-)responsible for such a trade mark infringement if it is aware of the possible trade mark infringement and optimises the presentation of the sales offers in question or advertises them.

In fact, however, the European Claimants had provided only one piece of evidence of trademark infringement on Amazon (Lifestyle Equities C.V. and anor v Santa Monica Polo Club Ltd and ors [2017] EWHC 3313), whereupon Amazon removed around 80 potentially infringing ASINs within a few hours. Moreover, when a product is purchased and imported via the Amazon Global Store, it is purely private activity if it is stated as a private use or private gift. And in the case of private use, there is no trademark infringement.

The ECJ also ruled as recently as April 2020 (Coty Davidoff) that there is no trademark infringement in mere storage (even in the “Shipping by Amazon” programme) – as long as these goods are not sold. The ECJ has not yet examined whether Amazon should nevertheless be held jointly responsible for any trademark infringement in this programme.

Case dismissed – website does not target EU/UK

Therefore, the UK court dismissed the case and ruled in favour of Amazon. Accordingly, the display of an identical branded product – e.g. by parallel brands – on a website outside the plaintiff’s trademark rights does not constitute an infringement – unless this website specifically targets the territory of the plaintiff’s rights. This was not the case in the present case, the UK court ruled.

Moreover, since according to the 2018 Schweppes judgment of the ECJ ( in case of fragmentation of parallel trademarks), the owner of a national trademark cannot defend itself against the importation of identical goods bearing the same trademark – if it has continued to actively and deliberately promote the appearance or image of a single and global trademark – it appears that the claim against Amazon was quite rightly dismissed by the UK court – at least from an EU perspective.

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