Can Lush judgement have an affect on your online traffic?

Amazon

The cosmetics company Lush was recently successful in pursuing a claim for trade mark infringement against the online retailer, Amazon.

The case primarily looked at the issue of when the use of brand names in search terms constitutes a trade mark infringement. We asked James O’Flinn, a partner at Mundays LLP, to explain the judgement might impact other businesses

This case considered the consequences of a consumer (1) typing the word ‘lush’, or (2) an expression containing ‘lush’, into a search engine like Google, and (3) the consequence of a consumer typing the word ‘lush’ into the search facility on the amazon.co.uk website.

Points one and two focus on internet advertising, with Amazon having bid on certain keywords, including ‘lush’, within the Google AdWords service, in order to activate a sponsored link advertisement appearing on the Google results page whenever a consumer types ‘lush’ into the search box.

The third point relates to the operation of Amazon’s own website. For example, if a consumer searches for the word ‘lush’ in the relevant department of Amazon’s UK site, a drop down menu appears immediately after the letters ‘lu’ are typed, providing the consumer with the opportunity to click on one of the options and a new page appears. This new page offers similar products to those available from Lush without any unambiguous expression of unavailability of the Lush item.

In giving his landmark decision Deputy Judge John Baldwin QC considered the six criteria to be satisfied to establish trade mark infringement: (a) there must be use of a sign by a third party within the relevant territory, (b) the use must be in the course of trade, (c) the use must be without the consent of the proprietor of the trade mark, (d) the use must be of a sign which is identical to the trade mark, (e) the use must be in relation to goods or services which are identical to those for which the trade mark is registered, and (f) the use must be such as to affect or be liable to affect the functions of the trade mark.

Point One – It was held that Lush established infringement as the average consumer seeing the advertisement would expect to find Lush soap on the Amazon site at a competitive price. A consumer would think that Amazon, being a reliable supplier of goods, would not be advertising Lush soap for purchase if it were not in fact available for purchase.

Point Two – The court ruled that in so far as results from the search word ‘lush’ procured advertisements for cosmetic products not containing the word ‘lush’ were concerned, “…the average consumer could not reasonably fail to appreciate that the Amazon ad was just another ad from a supplier offering similar products to those requested by the internet searcher.”

Point Three – Amazon argued that this point was the most important because it went to the core of its business model. If third party sellers were using the Lush trade mark on their goods and were using the Amazon site merely as an online market place, then Amazon would not be using the mark. But that was not this case.

When the consumer typed in the letters ‘lu’, a drop down menu appeared which included ‘lush bath bombs’. The judge concluded the average consumer is unlikely to know how the drop down menu has the content which it displays, but is likely to believe that it is intended to be helpful to him/her. The menu informs the average consumer that if they were looking for Lush Bath Bombs on Amazon, they would find them by clicking on that menu item. Further, it was decided that Amazon had used the Lush sign in the course of trade in relation to the relevant goods and had used the sign as part of a commercial communication that it was selling such goods on its website. Infringement was therefore established here too.

Practical consequences of the judgment
The finding on the third point is of most significance and online retailers should pay careful heed to it when considering marketing and promotion of alternative products. In future, clarity needs to be in evidence as to whether a particular branded product is stocked by the online retailer in the search results produced in consequence of a brands search request.

In order to avoid a risk of trade mark infringement action when bidding on a third party brand, online retailers should refrain from placing that same brand in the advert itself if they are not actually selling the branded goods.

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