Adwords Infringe Lush Trademark

Posted: 4 years ago in: Case Study, News, Trademark InfringementPosted By admin

Adwords infringe Lush trademark

 

 

Adwords infringe Lush trademark

1.1                Lush, the cosmetics brand, sued Amazon, the largest online retailer in the world, in the British High Court over infringement of its registered European trademark.

(a)                 Lush did not license the use of its trademark to Amazon directly.

(b)                 Lush did not sell its goods on Amazon, and consumers generally could not purchase Lush goods on Amazon.  Customers could buy certain Lush branded products, for example Lush Hair Extensions, provided by a third party supplier, on Amazon.

 

Keyword advertising

2.1                The claim for trademark infringement related to the use of “lush” in keyword advertising campaigns.  Aspects of the claim related to the use of adwords, by Amazon in Google Adwords, and by Amazon on its own site-search facility.

(a)                 In Google Adwords, Amazon bid for the word “lush” for ads in order to direct consumers who searched for “lush” to sponsored links relating to cosmetics and soaps equivalent to the Lush products to Amazon’s web site.

(b)                 In the Amazon site, when a consumer typed the letters “lu” into the search facility, options to select items from a drop-down list included “lush cosmetics”, “lush bath bombs” among others.  When selected, a new page offered goods similar to those available from Lush, but without reference to the Lush goods not being available for purchase.

(c)                 Lush was able to show the court various examples of its trademark on pages of the Amazon UK website.  Lush argued that Amazon’s use: –

(i)                  Damaged the origin function of its registered trademark,

(ii)                Damaged the advertisement function of its trademark, and

(iii)              Damaged the investment function of its trademark.

 

Adwords – bidding

3.1                Amazon used technology and software to achieve commercial advantage to bid for certain words in Google Adwords.  Amazon also determined the content of the ad, and used the word “lush”.  It also used a search tool to show goods to consumers who typed in “lush” into its search facility.

(a)                 Amazon stopped bidding for Google Adwords containing “lush”, shortly after the complaint was made.

(b)                 However, it denied it was an act of infringement, and did not undertake to desist from such use.

(c)                 Nonetheless, the court held it was trademark infringement.

 

Attack on core business model

4.1                In defending the use of its internal search facility, Amazon regarded the case as an attack on its core business model.

4.2                This argument did not persuade the court to favour Amazon.

 

Rights in trademark registrations

5.1                The owner of a registered trademark must be entitled to prohibit the display of third-party ads which internet users may erroneously perceive as emanating from that proprietor.

5.2                Moreover, EU legislation on E-commerce (directive 2000/31) contains an article (Article 6) which rules that a person who makes a commercial communication should be clearly identified.

5.3                Use of a trademark in the course of trade, including adwords, without the consent of the registered owner can constitute infringement.  The High Court judge held that “It is clear, following Google France, that if the ad appeared as a result of Amazon having bid on Lush as a keyword, Amazon has used the mark in the course of trade in relation to the relevant goods”.

Outcome – Adwords held to infringe trademark

6.1                The judge held that the Adword advertisement used by Amazon did infringe the Lush registered trademark.  This was upheld both in the case of Amazon’s use of adwords in Google Adwords, and in Amazon’s own website search facility.

(a)                 The court found that the Amazon use damaged the origin function, the advertising function and the investment function of the Lush trademark registration.

(b)                 In a commercial communication, use of a trademark to assist the sales of similar non-trademarked goods can be held to be use in trade, and the court took such a position.

Infringement by service providers too

7.1                There was another aspect to the case, whereby a Luxembourg company operated the website at amazon.co.uk, and another company operated order fulfilment services.

(a)                 The decision held that both parties were joint tortfeasers in the case, and the allegation of joint tortfeasance was successful.

Registered trademark succeeded

8.1                The Lush registered trademark succeeded in the High Court case against Amazon. February 2014.

 

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