Argos Limited v Argos Systems Inc [2017] EWHC 231 (Ch)

Argos

Argos Limited (‘Argos UK’) brought court proceedings against Argos Systems Inc (‘Argos US’) an American company specialising in CAD systems for the design and construction of residential and commercial properties, for trade mark infringement and passing off based on Argos US’s use of the trade mark ARGOS in the domain name in conjunction with some advertisements placed on their website via the Google Ad Sense program.

Argos US secured the domain name argos.com in 1992, years before Argos UK became known. Between December 2008 and January 2012 Argos US’s website included Google Ad Sense adverts to all visitors, however, between January 2012 and December 2014, Argos US reconfigured their website which meant that the Google Ad Sense adverts were only visible to internet users from outside America. 89% of the internet traffic on argos.com was from the UK, however, 85% of the UK visitors left argos.com almost immediately after realising that it is not the UK retailer for which they were most likely looking.

Jurisdiction – targeting UK customers

Argos UK argued Argos US were clearly targeting U.K. / EU customers as Argos US were fully aware that majority of the visitors to their website were U.K. internet browsers. The Deputy Judge held that the question of targeting is an objective question rather than a subjective question (as proposed by Argos UK) and there was no reason on the facts why UK consumers visiting argos.com, mostly by mistake, would perceive the website to be directed at them. As such, the sign ARGOS was not used by Argos US within the UK.

Although this finding was sufficient to deny the claim the Court went on to consider the claims made by Argos UK.

Claims made by Argos UK
Trade mark infringement – s.9(1)(a) of the Council Regulation (EC) No. 207/2009 (‘CTMR’)

Argos UK claimed Argos US’s use of the ARGOS sign on their website (via the Google Ad Sense adverts) and in their domain name in relation to services, namely advertising services, which are identical to those for which Argos UK’s marks are registered constituted trade mark infringement under s.9(1)(a) of the CTMR.

It was held that Argos US were merely using the term ARGOS in relation to CAD systems and unrelated services and were not offering or providing services which are typically provided by advertising companies. Placing adverts on their website given to them by Google did not amount to advertising services, therefore Argos US did not use the sign ARGOS in relation to identical goods or services which are identical to those for which Argos UK’s marks are registered.

In any event none of the functions of the trade mark were affected as customers did not think the parties’ businesses were connected due to the use of Argos by the defendant.

Trade mark infringement – s.9(1)(c) of the CTMR

Argos UK also claimed that Argos US’s use of ARGOS (which has a reputation in the U.K.) caused a link in customers mind without due cause and caused detriment to ARGOS UK’s brand which constitutes trade mark infringement under s.9(1)(c) of the CTMR.

It was held Argos US’s use of the sign ARGOS did not give rise to a link between the sign and Argos UK’s mark in the mind of the average consumer as on the facts the Court held that if there were any repeat visitors they probably kept revisiting argos.com by mistake on the assumption that Argos UK owned argos.com not knowing or forgetting it did not.

Furthermore, it was held that there would be no change in the economic behaviour of consumers and Argos US’s use of the sign ARGOS did not cause detriment to the distinctive character of Argos UK’s mark, nor did it cause detriment to the reputation of Argos UK’s mark and finally it did not take unfair advantage of the distinctive character or reputation of Argos UK’s mark on the basis that the advantage gained by Argos US from the use of the domain name in conjunction with the adverts was not significant to the level required to say that it was “unfair” to satisfy the criteria for s.9(1)(c) of the CTMR. Argos US merely took advantage of another income stream on their website which is legitimate and did not set out to make use of Argos UK’s reputation. Argos US registered the domain in 1992 without any intention to associate itself with Argos UK and it was the Deputy Judge’s opinion that Argos US’s use also benefited Argos UK as some adverts on Argos US were those of Argos UK so customers would click the adverts and go to Argos UK’s page as intended originally. It did not matter that the use in relation to adverts began some years after first use of ARGOS and as Argos US could have done this legitimately it was not without due cause.

Argos US’s defences

Argos US successfully argued that they benefited from the ‘own name’ defence as it had adopted the name independently since 1991, had been trading for 14 years when they found out about Argos UK and the complaint to Argos US was only made in May 2014 despite Argos UK being aware of argos.com for many years and attempting to purchase the domain name, such attempt not being successful and therefore a legal complaint of this nature was made against them.

Furthermore, Argos US also successfully argued that Argos UK gave consent to Argos US using the term ARGOS via the Google Ad Sense terms and conditions.

Passing off

Argos UK claimed passing off on the basis that the mark ARGOS has goodwill and use of the mark by Argos US would cause misrepresentation on part of the public which is likely to cause Argos UK damage.

Argos US disclosed 4 emails they received from UK customers who believed Argos US was linked to Argos UK. However, the Deputy Judge held that there was no operative misrepresentation or evidence of actual deception of customers acting with ordinary caution those customers were “misguided” and not “representative of the relevant public”. As such, there was no material misrepresentation by Argos US leading the public to believe they are associated with and/or connected with Argos UK and subsequently no damage was caused.

Overall, the Deputy Judge held that Argos UK’s claim for trade mark infringement and passing off failed and Argos US’s use of ARGOS in its domain name and on its website in conjunction with Google Ad Sense adverts did not constitute infringement.

Update

Argos UK requested for permission to appeal the decision on various grounds, however, upon hearing submissions, the Deputy Judge refused their appeal as in his opinion it had “no reasonable prospect of success”. It is still to be seen whether Argos UK will appeal to the Court of Appeal.

Link to Judgment:

Judgment Date: 15 FEBRUARY 2017

High Court rules argos.com in conjunction with use of Google ads does not amount to trade mark infringement or passing off

 

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