The windy flag

With the growth of digital economy, the most important guard of it – the intellectual property law is also developing. The trademark law which protects the brand of the products sold online from unfair use, tends to be at the cutting edge of such developments as sales move from the high street and onto the internet.

The specialist Intellectual Property Enterprise Court (IPEC) has recently handed down an interesting judgment in the case Jadebay Limited & (2) Noa and Nani Limited T/A The Discount Outlet –v– Clarke-Coles Limited T/A Feel Good UK concerning the use and infringement of trade marks by independent sellers via Amazon’s marketplace. [1]

The case at a glance:

The case involved a trade mark infringement and passing off claim arising out of the sale of aluminium flagpoles on Amazon.co.uk under the same listing number by two different sellers.

two sellers using the same ASIN (Amazon Standard Identification Numbers) numbers where Jadebray, the trademark owner of the of the “Design Elements” gave the license to  Noa and Nan,THE DISCOUNT OUTLET  is the license holder and were selling aluminium flagpoles. After few days another seller, the defendant, FEEL GOOD UK decided to use the same listing of plaintiff and started selling flagpoles which is almost same with the plaintiff having some difference in design, in cheaper cost than plaintiff and it became the default seller replacing The Discount Outlet in the Listings and the ‘Buy Box’, appearing as ‘Feel Good UK – UK SELLER’. As a result, it captured the majority of sales from the Listings during the period it sold from them.

When there are multiple sellers on a listing, one is selected by Amazon as the default seller and is promoted in the listing and in the ‘Buy Box’. The ‘Buy Box’ seller usually charges the lowest total price for the product plus delivery charges

The main confusion which led to the dispute is that an existing listing on Amazon can be used by multiple sellers to sell the same product without having to create a new and separate listing. Another seller can do this by locating the specific item he wishes to sell in the Amazon catalogue through its ASIN number and then confirming that the item it wishes to list is the same as that in the listing and that it wishes to join the existing listing.

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As Feel Good UK have not made any other listing but instead sold its products being ‘by DesignElements’ the plaintiff argued that Feel Good UK was infringing its trade mark and passing off its products as those of the Claimants. The Claimants sought damages for infringement and passing off and an injunction to prevent future infringement and passing off.

The other party argued that this activity of the defendant is likely to create confusion between the two seller among the customers in the following ways.

• Due to the high degree of similarity of the sign complained of to the Trade Mark,
• the identity of the goods,
• the distinctiveness of the Trade Mark to repeat customers,
• the careful consideration that the average consumer will have given to the information on the Listings before making his purchase,
• the real possibility of there being unreported actual confusion, and
• the likelihood that the average consumer will consider that the Product emanates from the stated manufacturer, Design Elements, or is economically linked to that source.

The court held that by adding its products to the Listings Feel Good UK had used the sign complained of, namely ‘DesignElements’, to offer or expose its products for sale in the UK and also that the sign and the Trade Mark were conceptually identical and visually similar. There was no dispute that it was use in the course of trade and was in respect of the identical class of products to that which the Trade Mark is registered, namely flagpoles.

By considering all the above stated fact the court ordered Feel Good UK to pay the Claimants the sum of £25,359.75 in damages for their infringement and passing off as well as an injunction restraining Feel Good UK from engaging in further infringement and passing off.

Conclusion:

This case is a warning to the businesses and the individual to be aware when listing their products for sale online, and particularly through online market places like Amazon which enable multiple sellers to utilise the same product listing.

If a particular product being sold is similar to the other one being sold through an existing listing but has a different origin, source or brand to the listing then this case confirms that utilising the original listing and linking sales with it risks both infringing any registered trademarks held or licensed by the original seller who created the listing as well as amounting to passing off.