The High Court of Justice of England and Wales has ruled that Amazon’s UK subsidiary infringed the trademarks of cosmetic maker Lush Retail Ltd. by directing website customers to other products when they searched for the Lush brand.
Lush cosmetic products are not sold on Amazon. UK-based Lush says this is for “ethical” reasons.
Lush makes cruelty-free and mostly vegan beauty and bath products and reportedly donates about 2% of its profits to charity.
The founders of Lush have criticized Amazon for how it pays taxes in the UK. Amazon’s UK subsidiary paid £3.2 million in taxes in 2013, based on UK sales of £4.2 billion.
The High Court said that Amazon consumers who were directed to other companies’ products after searching for “lush” would be confused and think that these competing brands were associated with Lush.
The product descriptions shown in the Amazon search results used the word “lush” in various contexts.
Amazon contended that it was merely providing its customers with similar options when it could not match their exact requests, but the High Court rejected this defense.
The High Court said:
This right of the public to access technological development does not go so far as to allow a trader such as Amazon to ride roughshod over intellectual property rights, to treat trade marks such as Lush as no more than a generic indication of a class of goods in which the consumer might have an interest.
The High Court also said that Amazon had infringed Lush’s trademark by buying Google adwords including the term “lush,” such as “Lush bath products.” This could cause sidebar ads to pop up for things like “Lush bath products at Amazon.co.uk.” But consumers who clicked on the ads would be taken to non-Lush products on Amazon.
The Court noted:
The average consumer seeing the ad … would expect to find Lush soap available on the Amazon site. 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.
According to Lush’s trademark attorney, the ruling will make retailers reconsider their use of third party trademarks in generating ads or search results.