Amazon told to clean up its act as High Court imposes order in Lush trade mark dispute

The High Court has ruled on the form of order to be imposed on Amazon following its decision earlier this year that the online marketplace had infringed the LUSH Community trade mark in a number of ways.¹ John Baldwin QC rejected Amazon's argument that the injunction should be limited to future infringements in the UK as the High Court was only concerned with the operation of the UK website. He also rejected the contention that it was "technically difficult" for Amazon to prevent breaching Lush's trade mark rights. The Judge went on to rule that a general injunction should apply across the EU irrespective of the website Amazon chose as a vehicle for its trade.

Article 5(1)(a) of the TMD

This article grants certain exclusive rights to a proprietor of a registered trade mark, in particular the right to prevent third parties that do not have their consent from using in the course of trade any sign that is identical with the trade mark in relation to goods or services that are identical with those for which the trade mark is registered.

Summary of underlying case

The main dispute follows a number of decisions on Google AdWords (we considered some of the key decisions in our August 2013 IP/IT newsletter and our July 2012 IP/IT newsletter.

Following a complaint of trade mark infringement, Lush was successful in proving that:²

Amazon's use of the word "Lush" as a keyword on the Google AdWords service constituted trade mark infringement under Article 5(1)(a) of the TMD

Lush took issue with the fact that when a consumer typed "Lush" into the Google search box, it would trigger a sponsored link advertisement directing the consumer to a link on the Amazon website, despite the fact that Amazon did not sell any Lush products in the UK. Lush had made a commercial decision in line with its ethical trading policy not to sell any of its products on Amazon's UK website. The Court rejected Amazon's view that the "average consumer would, without difficulty, ascertain that the goods referred to by the ad were not the goods of or connected with Lush". However, it dismissed Lush's argument that even sponsored links without the sign LUSH were infringing, finding that the average consumer was aware such ads were offered by competing suppliers. The judge was able to distinguish the case from Interflora -v- M&S, where Interflora's distinctive membership model gave rise to a higher risk of confusion.³

Amazon's use of the LUSH mark on its own search engine was infringing under Article 5(1)(a) of the TMD

The Court also held that Amazon had infringed the LUSH trade mark in various search results which appeared on the Amazon website when consumers searched for "Lush". This included results for "Related Searches" which were compiled from software Amazon had developed based upon consumers' use of its UK website and their prior purchases. These results would direct a consumer to similar/equivalent products, without an overt message that Lush's products were not available for purchase on www.amazon.co.uk.

The Court found that this use of Lush's trade mark involved a "commercial communication" by Amazon with the effect of boosting Amazon's sales of the non-Lush products. The Court was of the view that Amazon's use of LUSH damaged the mark's origin, advertisement and investment functions.

The Court order

Lush had sought an order requiring Amazon to publish a notice stating at some length that it did not sell Lush products and linking the judgment (a) in the national press; and (b) on the homepages of the UK, Dutch, French, Italian and Spanish Amazon homepages (and any other Amazon webpages displayed as a result of a consumer inputting the word "Lush" (whether alone or in combination with any other word)). The Judge stated that further advertisement in the national press was not required as the case had already received significant publicity. He limited the scope of the publicity order both in terms of its content, scope and the time during which Amazon would be required to publish the statement. He granted a stay of this publicity order pending appeal should the Court of Appeal grant Amazon permission to appeal the Judgment. The Judge ordered Amazon to pay 90 per cent of Lush's costs to be assessed on the standard basis.

Future impact

This ruling may cause Amazon to reconsider what it argues is its "core business model", since consumers who search for a particular item on www.amazon.co.uk are taken to products purchased by previous consumers who searched for the same item. The decision does however provide guidance to online retailers as to when they should avoid using third party trade marks on their own websites and as ads displaying sponsored links for the purpose of directing consumers to alternative products that do not originate from the trade mark owner.

Please click on the links below for the other articles in the June 2014 technology and IP newsletter:

• Google Spain and the right to be forgotten.
• EU General Court highlights the importance of strong distinctive character in trade mark dispute.
• Decision of Company Names Tribunal highlights importance of pre-action measures.
• EPO refuses to exclude commercially sensitive documents from public inspection.
• Kiddee Case rides high as Court of Appeal overturns decision on Trunki design right.
• The Intellectual Property Act, copyright exceptions and beyond: a round-up of new legislation.

_Notes:

_{¹ Cosmetic Warriors Limited & Anor v Amazon.co.uk Ltd & Anor [2014] EWHC 1316 (Ch).
² Cosmetic Warriors Ltd and another v Amazon.co.uk Ltd and another [2014] EWHC 181 (Ch).
³ Interflora v Marks & Spencer [2013] FSR 33}