Cosmetic Warriors Ltd & Anor v amazon.co.uk Ltd & Anor

Factual and Procedural Background

The Plaintiff, referred to as Lush, is a manufacturer and supplier of cosmetics known for its colorful soaps and bath bombs, holding the registered Community trade mark number 1388313 for the sign "Lush" in respect of cosmetics and toiletries. The Defendants, collectively referred to as Amazon, operate the amazon.co.uk website and associated UK fulfilment centres. The Plaintiff alleges trade mark infringement by the Defendants concerning the use of the "Lush" trade mark in online advertising and on the Amazon website, particularly relating to keyword bidding on search engines and the presentation of search results on the Amazon site.

The action originally included claims under Articles 5(1)(a) and 5(2) of the Directive and passing off, but only the first claim was maintained. A counterclaim for invalidity of the trade mark registration was dropped prior to the hearing. The Defendants deny infringement and raise defences under Articles 12(1) and/or 14(1) of the E-Commerce Directive.

The claims focus on three categories: (1) Amazon bidding on keywords including "Lush" in Google AdWords triggering sponsored ads, (2) similar ads without the "Lush" mark but triggered by keywords containing "Lush," and (3) the use of the word "Lush" in the search facility on the amazon.co.uk website. The Plaintiff contends that the Defendants are joint tortfeasors acting pursuant to a common design to infringe the trade mark, which the Defendants deny.

Legal Issues Presented

1. Whether the Defendants' use of the "Lush" trade mark in keyword advertising on third party search engines constitutes trade mark infringement under Article 5(1)(a) of the Directive.
2. Whether the Defendants' use of the "Lush" trade mark in the amazon.co.uk website's internal search facility and presentation of search results infringes the Plaintiff's trade mark rights.
3. Whether the Defendants can rely on the provisions of the E-Commerce Directive, particularly Articles 12(1) and 14(1), to avoid liability for alleged infringements.
4. Whether the Defendants are jointly liable as joint tortfeasors for the alleged infringement.

Arguments of the Parties

Plaintiff's Arguments

• The use of the "Lush" trade mark by the Defendants, particularly in sponsored ads and on the amazon.co.uk website, damages the origin, advertising, and investment functions of the trade mark.
• The average consumer would likely believe that the goods advertised or presented under the "Lush" mark on Amazon's platform are genuine Lush products, especially given the absence of any overt indication that such products are not available.
• The Defendants' use of the mark in the drop down menus and related search results misleads consumers into thinking the products are connected with Lush, damaging the trade mark's functions.
• The Defendants are joint tortfeasors acting pursuant to a common design, as evidenced by the close operational and commercial integration between the two Defendant entities.
• The E-Commerce Directive defence does not apply to the claims made, which concern products and listings with which Amazon is intimately involved in sales, fulfillment, and presentation.

Defendants' Arguments

• Sponsored ads are a familiar internet feature; consumers would not be confused because they can easily click through and see that the goods are not genuine Lush products.
• The absence of the "Lush" mark in some ads and the presence of competing products would inform consumers that the products are not from Lush.
• The internal search facility on amazon.co.uk is a tool for consumer navigation and does not constitute use of the trade mark in relation to goods; it is part of Amazon’s business model and technological development.
• The Defendants argue that the E-Commerce Directive shields them from liability for listings by third parties where Amazon acts as a host and lacks actual knowledge of infringement.
• The Defendants deny joint tortfeasance, asserting that the two entities have distinct roles and that the first Defendant merely facilitates the second Defendant's operations.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analyzed the three classes of alleged infringement separately but within the overall context of Amazon's commercial operations. It applied the six conditions for infringement under Article 5(1)(a) of the Directive, focusing particularly on whether the use affected the functions of the trade mark, using the guidance from Google France and subsequent cases.

Regarding the first class (keyword bidding leading to sponsored ads displaying the "Lush" mark), the court found that the average consumer would likely believe the goods advertised were genuine Lush products available on Amazon, especially given the absence of any disclaimers. This led to a finding of infringement since the consumer would not ascertain without difficulty the true origin of the goods.

For the second class (ads triggered by keywords containing "Lush" but not displaying the mark), the court found that consumers are familiar with sponsored ads from competing suppliers and would not be confused. The absence of the "Lush" mark in these ads and the presence of other third party ads supported this conclusion.

In relation to the third class (use of "Lush" in Amazon's internal search and website), the court considered Amazon's role as both search engine operator and retailer. It rejected the Defendants' argument that Amazon does not use the trade mark, distinguishing the case from L'Oreal v eBay where the operator was a pure marketplace. The court found Amazon’s presentation of "Lush" in drop down menus, related searches, and product listings constituted use in the course of trade and adversely affected the origin, advertising, and investment functions of the trade mark.

The court also rejected the Defendants' reliance on the E-Commerce Directive defence, concluding that the claim did not concern third party use unknown to Amazon or hidden metadata. Instead, it concerned Amazon's own commercial activities.

On joint tortfeasance, the court found that the two Defendants acted pursuant to a common design, with extensive operational and commercial integration, making them jointly liable for the infringements.

Holding and Implications

The court held that the Defendants infringed the Plaintiff's trade mark rights in relation to the first and third classes of alleged infringements. The second class of alleged infringements did not constitute infringement.

The court found that the Defendants are jointly liable as joint tortfeasors for the infringement.

In terms of implications, the decision confirms that keyword bidding on third party search engines which leads to consumer confusion and the use of trade marks within a retailer’s own website search facilities can constitute trade mark infringement. The ruling underscores the importance of protecting the origin and investment functions of trade marks in online commercial contexts. No new precedent was established beyond the application of existing principles to the facts of this case. The decision directly affects the parties by imposing liability on the Defendants and supports the Plaintiff’s control over the use of its trade mark in online retail environments.