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12 April 2021
Unsurprisingly, the combination of the COVID-19 pandemic and global lockdowns has resulted in increased consumer shopping online. To capture that increased demand, retailers have invested in both their website infrastructure and marketing budgets. Consumers now have no geographical limits on where they view and purchase goods. An unintended consequence of this is that it has shone a spotlight on the tension between trademarks which are territorial and online marketplaces which are not.
The challenge for trademark owners is that a global website could offer goods for sale under a mark which infringes a national trademark. The website owner may not be based in the same country as the national trademark, but consumers that are based in that country can access the website and purchase the goods. To succeed with a trademark claim, there are several conditions that must be satisfied depending on whether the mark and goods or services are identical, similar or dissimilar. However, all types of infringement require the use of the infringing mark to be within the relevant territory covered by the trademark.
To address the inevitable tension between a global marketplace and territorial trademark rights, the EU and UK courts have attempted to strike a balance by accepting jurisdiction only if it can be shown that the website targeted consumers in the relevant country. The word 'targeting' does not appear in legislation and is derived from the European Court of Justice's consideration of the word 'directed' in a case unrelated to trademark infringement (Pammer v Reederei Karl Schluter GmbH & Co (C-585/08)). The word 'targeting' conjures up the image of taking deliberate aim and it is clear from case law that mere accessibility of a merchant's website in a EU member state (or the United Kingdom) by a consumer domiciled there is not enough to establish targeting.
A list of factors that are relevant when considering this issue has emerged from the various cases which started with Pammer setting out the following factors:
The test is objective; it is always assessed from the perspective of the average consumer. Subjective intention may be relevant if the trader did intend to target a particular territory but will not be determinative if the trader did not intend to do so. Inevitably, the method of analysing whether targeting has taken place has evolved and other factors have now emerged.
A UK court recently analysed the issue of targeting in Lifestyle Equities CV v Amazon UK Services Limited ( EWHC 118 (Ch)) in the context of the various business models and websites operated by Amazon. While the facts of the case do not help to clarify what is meant by 'targeting', the following points are of interest:
Lifestyle demonstrates that new factors will emerge when considering the issue of targeting as online marketplaces continue to develop and diversify. A key focus in future cases could be marketplaces on social media. These platforms allow advertisers to set certain parameters for advertising, such as:
Some platforms even enable advertisers to target a specific audience by reference to user IDs. The use of influencers to sell products is also more prevalent on social media platforms and such influencers could attract a global audience but equally could be popular in a particular territory. Inevitably, these factors together with other new issues are likely to become relevant when considering targeting in the future.
Lifestyle indicates that the UK courts will pay more attention to the data analysis of both user location and sales in future cases. It is becoming more commonplace to have websites with language options and international dialling codes as retail business becomes more global. Therefore, those traditional factors are likely to be less determinative of targeting. There is one noteworthy exception to targeting which is that customs regulations can still be used to prevent counterfeit goods entering the European Union and the United Kingdom. This is irrespective of whether the trader has targeted consumers in the United Kingdom or the European Union and it does not matter whether the counterfeit goods comprise a single item or multiple items. Therefore, a multi-layered enforcement strategy should always be considered, involving both online monitoring and enforcement together with offline enforcement options.
For further information on this topic please contact Tom Nener or Katy Bourne at Pinsent Masons by telephone (+44 121 200 1050) or email (firstname.lastname@example.org or email@example.com). The Pinsent Masons website can be accessed at www.pinsentmasons.com.
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