Introduction

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.

Challenges for trademark owners

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 international nature of the activity;
  • the mention of itineraries from other countries for going to the territory covered by the trademark;
  • the use of language or a currency which is different to the language or currency used in the country in which the website is located;
  • the reference to telephone numbers with an international code;
  • the outlay of expenditure to an internet referencing service (or social media) in order to facilitate access to the trader's site or that of its intermediary by consumers domiciled in the country targeted;
  • the use of a top-level domain name other than that of the country in which the trader is established; and
  • the reference to international clientele comprising customers domiciled in different countries.

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.

Decision

A UK court recently analysed the issue of targeting in Lifestyle Equities CV v Amazon UK Services Limited ([2021] 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:

  • The judge considered that the average UK consumer would understand that the website 'amazon.com' was targeted at a US audience. This shows a recognition that the average consumer is reasonably observant and recognises the global nature of '.com' websites.
  • The data on UK and EU visits to that website and the alleged infringing listings was low. Circulation figures, viewing figures and volume of traffic have previously been considered relevant,(1) but this reinforces that this information will continue to be scrutinised going forward.
  • The sales made to consumers in the United Kingdom were low. This is notable as the level of sales has not previously been relevant when assessing targeting in the context of trademark infringement.
  • The terms and conditions made it clear that the sale took place in the United States and that risk passed to the customer while the products were still in the United States. Therefore, the customer was responsible for the product's import. Case law has been clear that an individual will not be held liable for trademark infringement in these circumstances unless that individual is acting in a commercial capacity.

Comment

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:

  • location;
  • age;
  • gender;
  • language;
  • interests; and
  • type of device.

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.

Endnotes

(1) See Stichting BDO v BDO Unibank, Inc ([2013] EWHC 418 (Ch)).