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Amazon's business model under fire for infringing trade marks

Following a recent High Court decision Amazon's business model is in trouble, says Carl Steele, Head of Trade Marks at Ashfords,

"My kids love Lush bath bombs. But the damage that Lush has done to Amazon in the High Court is somewhat greater than the explosions of colour I often find in my children's bath after they have used a Lush product!"

In summary, Lush products are not sold on Amazon's website. Lush complained to the Court that Amazon was infringing it's "Lush" trade mark in a variety of different ways. In particular, they complained that if a consumer searches against the word "Lush" on Amazon's UK website, the consumer would be offered the opportunity to purchase similar products to those available from Lush, but without any overt reference to the fact that genuine Lush items are not available to purchase via Amazon's website. In effect, Amazon was using the Lush trade mark to promote third party rival products, which Amazon hoped would be of interest to a consumer searching for genuine Lush products.

It was explained to the Court that Amazon has built, and uses, a behaviour based search engine tool on its website, to identify an association between a particular search word that a consumer enters and specific products that Amazon sells via its website. Amazon uses this tool to present products to consumers which it hopes will be of interest to them. In the case in question, this tool had used the word "Lush" to identify third party products which Amazon believed a consumer searching for genuine Lush products might wish to buy, instead of Lush branded products. What the tool did not do was send a response to the consumer, explaining that "no results were found" when a consumer searched for "Lush" products on the Amazon website. Self evidently, the reason Amazon's search engine did not return a "no results found" response is because it is not in its commercial interests. It might lead to a decrease in sales.

Whilst Amazon submitted a credible defence on the merits of the claim, the Court held for Lush. By displaying rival third party products whenever a consumer typed the word "Lush" into the Amazon search engine, Amazon was using the Lush trade mark as a generic indicator of a class of goods. Such conduct attacks head on the ability of a trade mark to act as a guarantee of origin of one trader's goods and nobody else's goods. Whilst the Court did not expressly state this, it appeared to be saying that when a consumer typed the word "Lush" into the Amazon search engine there needed to be an overt indication that "Lush" products were not available for purchase on the Amazon site. The Court was not saying that Amazon could not display rival third party products to Lush products when a consumer typed the word "Lush" into the Amazon search engine. However, it could only do so if, before displaying the products, it made it abundantly clear to the consumer that genuine Lush products were not available to purchase via the Amazon website, but only unrelated third party products.

The judgment will have major implications for Amazon. It will have to redesign its search engine tool, so that when consumers type a trade mark into its search engine they are not shown independent third party rival products, unless the manner in which they are displayed to the consumer makes its abundantly clear to them that they are not the trade mark owner's products, but those of an unrelated and unconnected independent rival third party.