Flagging the risk of a new type of trade mark infringement

The Intellectual Property Enterprise Court has recently ruled that linking an own brand product listing on Amazon to a competitor's branded listing for the same product amounts to trade mark infringement (and passing off) in a dispute over flagpoles.

The trade mark

Jadebay Limited (Jadebay) owns the following trade mark for a stylised device in class 20 for 'flagpoles plastic storage box garden furniture' (the trade mark):

Jadebay has also previously used the words DESIGN ELEMENTS as an unregistered trade mark (the sign).

The issue

Jadebay had a couple of licensees who were authorised to sell Jadebay's flagpoles on Amazon.co.uk (Amazon).  When listing items for sale on Amazon, each new listing is given a unique Amazon Identification Number (ASIN).  However, on Amazon it is possible for multiple sellers to sell the same product without creating a new listing: they simply locate the item they wish to sell within the Amazon website and confirm that the item they intend to sell is the same.  Amazon, in turn, selects a default seller from all those selling the item, and this seller is promoted within the listing so that they receive the majority of sales.  This seller is often the one which sells the product at the lowest price (including postage and packaging).

The Defendant in this case used Jadebay's licensees' Amazon listing – which included the words 'by Design Elements' – in order to sell its own-brand flagpoles.  However, their listing undercut Jadebay's licensees' price, and so the Defendant ended up becoming the default Amazon seller.  It is important to note that the Defendant's products themselves did not use the Jadebay trade mark or sign; only their listing did.

Jadebay's case was that their licensees' listing should only have been used to sell identical products (i.e. the Jadebay branded products), and that the Defendant's products should have been sold with a unique ASIN in a new listing.  Jadebay sued the Defendant for trade mark infringement and passing off, seeking damages as well as an injunction.

The decision

The Judge held that the Defendant's activity amounted to trade mark infringement under section 10(2) Trade Marks Act 1994:

• The Defendant's had used the sign in order to offer its products for sale;
• The sign was aurally and conceptually similar to the trade mark for the device; and
• There was a likelihood of confusion on the part of the average consumer (the average consumer for flagpoles being likely to be 'a considered one, rather than a whimsical or impulsive one') – this was in spite of there being no evidence of actual confusion.

The Judge also held that there had been passing off:

• Goodwill and reputation were easily identified through the significant number of positive customer reviews on Jadebay's licensees' Amazon listing prior to the Defendant's use of the listing; and
• Misrepresentation was established through the fact that the listing included the words 'by Design Elements', as well as because of the use of the photographs in the listing (which showed Jadebay's product rather than the Defendant's).

Damages were easily decided through a reconciliation of the sales which had gone to the Defendant which would otherwise have gone to Jadebay's licensees during the time the Defendant's used the listing.  This was in spite of the fact that, given the Defendant was undercutting Jadebay's licensees in price, it was impossible to tell whether or not all the sales would have proceeded at Jadebay's licensees' higher price.  In addition, Jadebay was awarded an injunction to prevent further infringement and passing off.

Comment

The Defendant in this case is certainly not the only one sailing too close to the wind (or the flagpole) where the issue of digital sales listings are concerned.  eBay also has a feature called 'Sell One Like This' which can be used to copy the information from one listing over to another, and with eBay enjoying over £1.1bn listings in the last quarter of 2016, it is easy to see the commercial driver behind it.

Trade mark infringement is not the only risk either. Stock images and professional website photos are only one Google image search away from being included in an online listing, and can be used to add credibility and interest to anyone's bi-annual wardrobe clear-out, thereby infringing copyright in the process.

We live in an age where the man on the Clapham omnibus is only a tweet away from being a journalist; only a blog post away from being a publisher; and only an online listing away from being a retail outlet.  Digital channels may need to sit up and develop some more sophisticated ways of monitoring their content, or else risk seeing their traffic considerably slow down while listings are taken down following a cease and desist letter from rights owners that references 'the recent decision in Jadebay Ltd and others v Clarke-Coles Ltd (t/a Feel Good UK) [2017] EWHC 1400'.