NEWS Lush and Amazon trademark dispute reaches court


A trademark case between UK cosmetics company Lush and online retailer Amazon surrounding search engine results and the use of Google AdWords has been heard in the UK High Court.


In the case, instigated by Lush suing under the name Cosmetic Warriors Ltd, the company alleges that when typing the term ‘Lush’ into Amazon’s search bar, results are generated which show similar products to Lush’s but not its official line.


In August, sister publication WIPR exclusively reported on the case and revealed it was due to go trial before the end of the year.


Originally set up in 1994, Lush now operates more than 800 stores in 51 countries. It produces and sells handmade cosmetic products, including soaps, shower gels and shampoos but does not let Amazon sell its products.


Lush also says Amazon had bid on the Google


AdWord for ‘Lush Bath Products’, despite its not selling any Lush products.


In a statement, Lush told WIPR that Amazon had been buying Google “and other search engine AdWords” for Lush and other “Lush-related terms”.


“Tis is done to drive traffic to Amazon’s website, which does not sell Lush products,” it said.


“When people get to Amazon’s site and search for Lush, they are shown a competitor’s product. Tis, on a website designed for speedy transactions, can lead to customers mistaking other company’s products as being from Lush.


“Tis is not a theoretical risk as actual real customers have said they have been misled,” Lush added.


In a pre-trial hearing in August, Lush filed for permission to introduce the results of two surveys it had carried out in order to identify any customer confusion.


Newegg pays $2.3 million as TQP marches on


Online retailer Newegg must pay a non-practising entity (NPE) $2.3 million for infringing a patent that has helped secure millions of dollars in licensing fees.


A jury in Texas found Newegg guilty of infringing the patent—directed to web encryption and owned by TQP Development—and rejected claims that it was invalid.


Te patent, filed in 1989, protects a way of combining SSL, a protocol for encrypting information over the Internet, and RC4, an algorithm for performing encryption. Its owner, Michael Jones, later sold it to TQP.


With the patent, TQP has sued more than 100 companies for infringement, extracting more than $45 million in licensing fees. Microsoſt paid $1 million, while Amazon settled for half that amount.


In the latest case, Whitfield Diffie, a pioneer in the field of cryptography, appeared on behalf of Newegg as an expert witness to argue that TQP’s patent should be invalidated.


But on November 26, this evidence, along with other claims that various prior art trumped TQP’s patent, was dismissed by an eight-person jury at the US District Court for the Eastern District of Texas, a popular destination for NPEs.


Te $2.3 million damages award was much less than the $5.1 million fine TQP wanted, however.


8


Marc Fenster, head of IP at law firm Russ August & Kabat, who represented TQP in the trial, told TB&I that the company was “very grateful to the jury for its attention, consideration and ultimately, its verdict”.


“Tis was a hard fought win,” he said, “and we are tremendously gratified that the jury upheld the validity of Michael Jones's patent.”


Newegg did not respond to a request for comment, but the company’s chief legal officer Lee Cheng told online technology publication Ars Technica, which reported live from the trial, that he was “very disappointed” by the ruling.


“We respectfully disagree with the verdict that the jury reached tonight. We fully intend ... to take this case up on appeal and vindicate our rights,” Cheng told the news website.


What is interesting about this case, according to Michael Oblon, partner at law firm Perkins Coie, is that each side probably spent much more on fees and costs than the verdict amount, and yet both sides still ‘won’.


“Te ‘troll’ undoubtedly will continue asserting the patent against new targets, using this verdict to demonstrate to those targets that the patent is valid and infringed. So, this verdict is worth much more to it than $2.9 million,” he said.


“And although Newegg may have to pay $2.9 million on top of the fees and costs that it spent


Trademarks Brands and the Internet Volume 2, Issue 4 www.worldipreview.com


on this case (and the costs for pursuing an appeal), it demonstrated to all other ‘trolls’ that Newegg does not back down and will never become an easy target.


“So, for $2.9 million (plus the costs of trial and appeal), Newegg may have deterred countless other patent assertions against it,” Oblon noted.


Tere is pending litigation between TQP and several other companies, including Google, with trials set to start early next year. 


However, the surveys were rejected due to having “no real value” to a trial judge putting himself in the position of a consumer.


Lush added: “We have trademarks that we have built a reputation in over many years around the world. Lush is our house mark and our business is dependent upon it. We will always protect our name.”


Amazon did not respond to requests to comment.


Te case has similarities with the Interflora v Marks & Spencer High Court ruling in May this year.


Tere, Mr Justice Arnold found that retailer Marks & Spencer’s use of Interflora Google AdWords that produced search results for its flower delivery services did infringe trademarks belonging to an existing flower delivery company of the same name.


A judgment in the case is expected by January 2014. 


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44