Chapter 15 Answer guidance to end of chapter questions

1. A client, Jada, who is based in London, comes to see you for advice on the following scenario. Advise her of any potential claims she may have in trade mark law.
   
   Her company ‘Streetbags’ specialises in handbags and travel bags with designs supplied by   famous urban artists including Blek Le Rat, SPQR and D'Face. Since their launch in 2009 they have quickly become a highly desirable fashion accessory featured in Vogue, Elle and Glamour. Limited edition Streetbags can sell for up to £10,000. Collection bags range in price from £500 to £2,500.
   
   Recently your client has noted that a search on Google using the term ‘Streetbags’ returns   not only her company page but also ‘Sponsored Listings’ for a number of unrelated sites. One listing links to the webpage of a UK-based dealer ‘Cheap Designer Bags UK’. Their site offers Streetbags for sale for between £80–£150. An investigation by Streetbags reveals these are cheap fake bags produced in the Far East, not the genuine Streetbags product only ever produced in the EU.
   
   A second link takes the user to the home page of Streetbags competitor ‘Urban Style’, a start-up company which has recently began to commission its own bags designed by less-  well known artists such as KIWIE and Stereoflow. Yet to launch, Urban Style have indicated their bags will be priced in the £100 to £250 price range.
   
   It has also come to the attention of Streetbags that auction site eBay hosts a number of   Streetbags sales. Some appear to be genuine resales of real Streetbags by customers, but a number of listings seem to be suspect, offering new Streetbags for suspiciously low prices. Streetbags believe these sales are being fulfilled by fake bags imported from the Far East.

To answer this question I would expect the student to discuss in order:

1. Firstly the question for Jada is does she have a trade mark in the term “streetbags”? If she does then we can proceed with a trade mark claim if not she would need to pursue an action for passing off. We will assume Jada has a trade mark registration in the remainder of the answer.
2. The first issue is the sponsored listing for Cheap Designer Bags based on her trade mark. this is similar to the scenario in Google France, Google Inc. v Louis Vuitton Malletier. An analysis of this decision suggests that infringement is being committed by Cheap Designer Bags UK and thus Jada’s first choice is to pursue them for trade mark infringement. Of course identifying who is operating this site may be difficult and they may not be in the UK. She would therefore prefer to pursue Google directly. Unfortunately in Louis Vuitton Malletier the CJEU said Google did not infringe, but they also said it was not clear Google could make use of the Art.14 safe harbour defence. Thus if Google knowingly carry infringing adverts they may be held liable for the communication of these adverts. Based on Google’s behaviour following the Louis Vuitton Malletier decision (the removal of sponsored listings relating to any well known trade mark) it seems Google agree. She should write to Google informing them of the potential infringement. Google will pull the ads.
3. The second issue is slightly different – it is in essence a form of a comparative listing and is closer to the situations in Portakabin v Primakabin and Interflora Inc. v Marks & Spencer plc. An analysis of these two cases suggests that the actions or Urban Style go beyond what is permitted. They seem to be using Jada’s trade mark to create an association with their product which is a competitor product. As was stated by the CJEU in Interflora “a trade mark’s function of indicating origin is adversely affected when internet users are shown, on the basis of a keyword identical with the mark, a third party’s advertisement, such as that of a competitor of the trade mark proprietor, depends in particular on the manner in which that advertisement is presented. That function is adversely affected if the advertisement does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.” Again Jada should write to Google informing them of the potential infringement. Google will pull the ads.
4. The final scenario is based upon  L’Oréal v eBay. An analysis of that decision reveals that in their actions eBay could infringe the rights of trade mark holders in two ways. First by advertising online using services such as Google sponsored links to advertise the claimants’ products, and secondly by actively promoting sales on the eBay site via adverts and other promotional services such as mailings and re-offers, eBay could be liable for the infringements committed by their customers. Further the court found that eBay are unlikely to be able to take refuge in the Art.14 safe harbour. Jada should write to eBay they will remove the listings (she may use their VeRo programme to do so).

2. To be an infringement of a trademark someone must mistakenly believe that good, service, or product is associated with the trademark holder in some way (confusion) unless the mark is an identical mark used for identical goods or services. Where goods are sold as being ‘inspired by’ or ‘related to’ or similar on eBay or Amazon Marketplace is this trademark infringement?

To answer this question I would expect the student to discuss in order:

1. I would expect students to begin by discussing the requirements for trade mark infringement under the Trade Marks Act 1994 an in particular s.10(2).
2. Although the question refers to eBay and Amazon and therefore to the cases of L’Oréal v eBay and Cosmetic Warriors Ltd, Lush Ltd v Amazon.co.uk Ltd it would be natural to next discuss the impact of Interflora Inc. v Marks & Spencer plc. Interflora remains the leading UK/EU case on confusion and the online environment. As was stated by the CJEU in Interflora “a trade mark’s function of indicating origin is adversely affected when internet users are shown, on the basis of a keyword identical with the mark, a third party’s advertisement, such as that of a competitor of the trade mark proprietor, depends in particular on the manner in which that advertisement is presented. That function is adversely affected if the advertisement does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.”
3. Next, as the question indicates the student should look at L’Oréal v eBay. The student should discuss the liability of eBay for specific wording and the role of the presentation of information on a site. They may note the words of the CJEU “The operator plays such a role when it provides assistance which entails, in particular, optimising the presentation of the offers for sale in question or promoting them.”
4. The bulk of the answer should focus on Cosmetic Warriors. There is a lot of relevant material in this case, including Baldwin QC’s, statement that “the average consumer seeing [the advert] would expect to find Lush soap available on the Amazon site and would expect to find it at a competitive price. Moreover, I consider that it is likely that if he were looking for Lush soap and did not find it immediately on the Amazon site, then he would persevere somewhat before giving up. My reason is that the consumer is likely to think that Amazon is a reliable supplier of a very wide range of goods and he would not expect Amazon to be advertising Lush soap for purchase if it were not in fact available for purchase.”
5. The student may also discuss the effect of autocomplete systems in creating an association. As Baldwin QC noted: “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 and is some consequence of other searches that have been carried out. In my judgment it would inform the average consumer that if he were looking for Lush Bath Bombs on Amazon, he would find them by clicking on that menu item. I reject the contention that the average consumer who was typing Lush into the search box would think that the drop-down menu reference to Lush Bath Bombs was a reference merely to products which were similar to or competitive with the Lush product . . .On the facts of this case, I do not think Amazon can escape from the conclusion that it has used the Lush sign in the course of trade in relation to the relevant goods based on the principles to be found in Google France and L’Oréal v eBay. It has used the sign as part of a commercial communication that it is selling the goods on its website.”

3. How would you have decided the Interflora v Marks and Spencer and L’Oréal v eBay cases?

This is a relatively straightforward question. Students should:

1. Beginning with Marks & Spencer identify the issues in dispute – (1) could a proprietor of a trade mark prevent a competitor from displaying, on the basis of a keyword which is identical to that trade mark and which has been selected in an internet referencing service by the competitor without the proprietor’s consent, an advertisement for goods or services identical to those for which that mark is registered; and (2) is the advertisement liable to lead some members of the relevant public to believe, incorrectly, that the advertiser is a member of the trade mark proprietor’s commercial network?
2. A strong answer will identify the influence or Portakabin on the first question and will identify that the court found that the trade mark function “is adversely affected if the advertisement does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.
3. With regard to the second question the was whether the “trade mark did not enable the reasonably well-informed and reasonably observant internet user to tell that the service promoted by M&S is independent from that of Interflora. This can be examined theough later cases Cosmetic Warriors Limited, Lush Limited v Amazon.co.uk Limited and Victoria Plum v Victorian Plumbing.
4. Turning to L’Oreal there is a different issue in dispute there – whether third party dites are liable for trade mark infringement they host on behalf of others.
5. The question was addressed initially in Louis Vuitton Malletier v eBay and revisited in L’Oreal.
6. The court found that eBay could be infringing the rights of trademark holders in two ways. First by advertising online using services such as Google sponsored links to advertise the claimants’ products, and second, by actively promoting sales on the eBay site via adverts and other promotional services such as mailings and re-offers, eBay could be liable for the infringements committed by their customers. The court also found that eBay could not necessarily rely on the Art.14 safe harbour.
7. Students should then address the question “How would they have decided the cases?”