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UK High Court Finds No Infringement in Sponsored Links if Third Party Trade Marks Not Referred to Explicitly

In Cosmetic Warriors Ltd v Amazon.co.uk Ltd [2014] EWHC 181 (Ch), the UK High Court has considered the extent to which retailers may use third party trade marks to generate sponsored advertisements within search engine results or websites to direct consumers to products that do not originate from the trade mark owner.

BACKGROUND

The claimant (Lush) is the registered proprietor and exclusive licensee of the Community Trade Mark “LUSH” registered for cosmetics and toiletries, including soap. Lush brought trade mark infringement claims against Amazon in respect of Amazon’s use of “lush” as a keyword within Google AdWords to trigger sponsored link advertisements appearing on the Google results page whenever consumers typed “lush” into the search box.

Lush, which does not allow its goods to be sold on www.amazon.co.uk, complained about two classes of advertisements resulting from such use. In the first class, the LUSH mark appeared in several places. Clicking on the relevant link took consumers to www.amazon.co.uk and presented them with the opportunity to browse or purchase products equivalent to Lush soap. There was no overt message either within the advertisement or on the Amazon website that Lush soap was not available for purchase from Amazon. The second class of advertisements did not show the LUSH mark, but displayed references to products equivalent or similar to those sold by Lush.

Lush also claimed infringement in relation to uses of LUSH appearing in search results on www.amazon.co.uk when consumers searched for “lush” and were directed to products similar to those available from Lush without any overt reference to Lush items not being available from Amazon.

DECISION

The Sponsored Links

Applying established case law, John Baldwin QC noted that use of a third party trade mark in keyword advertising amounted to use of that mark in the course of trade, and that such use would amount to trade mark infringement where the advertisement did not enable normally informed and reasonably attentive internet users, or enabled them only with difficulty, to ascertain whether or not the goods or services referred to in the advertisement originated from, or were connected with, the proprietor of the mark or from a third party.

The judge upheld Lush’s claim in relation to the first class of alleged infringements. Average consumers seeing the advertisement referring to “Lush” would expect to find Lush soap available on www.amazon.co.uk at competitive prices. They would not expect Amazon to advertise Lush soap for purchase if it was not available for purchase. The judge rejected Amazon’s argument that average consumers would, without difficulty, ascertain that the goods referred to by the advertisements were not goods of or connected with Lush.

The judge found no infringement, however, in respect of the second class of advertisements. Consumers were familiar with sponsored advertisements and used to seeing them from competing suppliers. In the judge’s view, average consumers would expect an advertisement for Lush products to include some reference to the LUSH mark, some indicia that would distinguish that advertisement from the advertisements of others they might expect to see on the Google results page. Average consumers could not reasonably fail to appreciate that the Amazon advertisement was just another advertisement from a supplier offering products similar to those searched for by the user.

The Website

The judge accepted that consumers typing “lush” into www.amazon.co.uk could not be considered use by Amazon, When, however, consumers typed in “lu”, however, a drop down menu appeared that included, for example, “lush bath bombs”. This was the result of Amazon’s sophisticated software and its analysis of prior consumers’ behaviour on www.amazon.co.uk. In the judge’s view, average consumers were unlikely to know how the drop down menu sourced the content it displayed, but were likely to believe that it was intended to be helpful to them. The judge rejected the contention that average consumers typing “lush” into the search box would think that the drop down menu reference to Lush Bath Bombs was a reference merely to products that were similar to, or competitive with, the Lush product. Amazon had used the sign as part of a commercial communication that it was selling the goods on its website. That was use in the course of trade in relation to the relevant goods.

Given that there was no overt indication that Lush products were not available for purchase on www.amazon.co.uk, the judge considered that average consumers would only ascertain with difficulty that the goods to which they were directed did not originate from Lush. The absence of any reference to Lush on the display of the goods themselves was not relevant, since the situation was different to the sponsored advertisement claim, where consumers seeing an advertisement for Lush products would expect to see a reference to Lush. Here, the consumers’ initial expectation was that the products were Lush products.

Amazon’s use of the LUSH mark as a generic indicator of a class of goods denied the mark the ability to act as a guarantee of origin of the claimants’ goods. The use of the LUSH mark on www.amazon.co.uk consequently constituted trade mark infringement.

COMMENT

The decision clarifies the extent to which retailers may use third party trade marks to generate sponsored advertisements within search engine results or websites to direct consumers to products that do not originate from the trade mark owner.

Interestingly, the judge found no infringement where sponsored link advertisements appearing on a search engine results page do not overtly refer to a third party trade mark, but refer to products equivalent or similar to those sold by the trade mark owner. Retailers are therefore able to avoid a finding of trade mark infringement when using third party trade marks in such advertisements, as long as they do not explicitly refer to the trade mark within the text of the advertisement.

© 2022 McDermott Will & EmeryNational Law Review, Volume IV, Number 77
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About this Author

Boris Uphoff, McDermott Will Emery Rechtsanwälte Steuerberater, Munich Law Firm, Intellectual Property
Partner

Dr. Boris Uphoff is a partner in the law firm of McDermott Will & Emery Rechtsanwälte Steuerberater LLP based in its Munich office.   He is a member of the Intellectual Property Litigation Practice Group, where his practice focuses on trade marks, unfair competition, copyright, design rights and patents.  His work in these areas, mostly contentious, has included representing plaintiffs and defendants in infringement suits before all major commercial courts in Germany. 

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