As shopping trends continue to evolve from the high street to the internet, more sellers are listing their products on online marketplaces such as Amazon and eBay.
The IPEC has handed down a decision that identifies a new variety of trade mark infringement, relating to the unique identifier codes that are automatically generated by online marketplaces such as Amazon and that are often used by multiple businesses. This case affects every business that sells products online, and is a useful reminder of why sellers must exercise caution when selling products on these platforms.
Read the case report here
The case relates to a trade mark infringement and passing off claim arising from the sale of aluminium flagpoles on Amazon. Jadebay Limited is the registered owner of the trade mark "Design Elements", which it licensed to Clarke-Coles Limited to sell goods online including the flagpoles in question.
Clarke-Coles was trading as 'The Discount Outlet' on Amazon where it was listing three variations of flagpoles under three different Amazon listings. Each listing generates a unique Amazon Identification Number (ASIN) and a unique European barcode for the product listed.
An Amazon listing created by one party can be used by multiple sellers selling the same product. In fact, Amazon encourages sellers to use pre-existing generic ASINs where possible. Feel Good UK was also selling flagpoles on Amazon and used the Clarke-Coles ASIN listing to sell its products, undercutting the total price charged by Clarke-Coles. This resulted in Feel Good becoming the default seller on the listing, replacing Clarke-Coles, and thus winning sales from Clarke-Coles through the listing.
Clarke-Coles claimed its listing should only be used to sell identical products, such as its branded flagpoles and that Feel Good should create its own ASIN listing to sell its branded flagpoles. Feel Good argued that the listings were "generic" because of the title and it was therefore entitled to list its flagpoles under the Clarke-Coles ASIN listing.
Clarke-Coles agreed that Feel Good had not intentionally attached the trade mark to its listing but had chosen to "ride on the coat tails" of Clarke-Coles' existing reputation for high quality flagpoles to capture sales to the detriment of Clarke-Coles.
HHJ Melissa Clarke was satisfied that the use of the Clarke-Coles listing by Feel Good to sell its flagpoles was an infringement of the trade mark under section 10(2) of the Trade Marks Act 1994.
Regarding the passing off claim, the judge found that Clarke-Coles' business had goodwill and reputation associated with the trade mark. Feel Good had used the trade mark in a way that constituted a misrepresentation and the average consumer was likely to think they were buying Clarke-Coles products. This ultimately caused Clarke-Coles damage through loss of sales.
The IPEC judge ordered Feel Good to pay Clarke-Coles the sum of £25,359.75 in damages for the infringement and passing off, as well as serving an injunction restraining Feel Good from engaging in further infringement and passing off.
Following this decision, businesses and individuals should exercise caution when listing products for sale on online marketplaces such as Amazon, which allow the same product listing to be used by multiple sellers. To avoid the risk of trade mark infringement and passing off, if the product being sold is similar but has a different brand name or source, it is advisable to create a separate listing and not to utilise and link to an existing listing for the product.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2017. For more information see ourterms & conditions.