There is no doubt that the internet can pose tricky questions for trade mark lawyers; as our reliance on the world wide web grows, arguably the world becomes smaller.
Can the proprietor of a registered EU trade mark complain about the supply goods or services in the US under that mark? It isn’t too difficult to conclude that the answer is ‘no.’
But is (or, should) the answer be different if the US company supplies goods or services through its website, using that mark? That will likely depend on the whether that website ‘targets’ those within the EU.
What if, as a consequence of the Google AdSense and AdWord’s programmes, the US website generates income because UK consumers are, in error, visiting that US website?
This is a question that has been considered in both the High Court and more recently in the Court of Appeal.
The Facts
Argos UK (the well-known UK based retailer) owns two EU trade marks for ‘ARGOS’, registered for (amongst other services) advertising and retailed related services. It has a number of physical stores, as well as a website – www.argos.co.uk
Argos US is a software company, trading in CAD systems for use within the construction industry. Its website appears at www.argos.com
As a partner in Google’s AdSense programme (and so allowing third party adverts to appear in its website) Argos US’ website displayed third party adverts, including those for Argos UK (who was a member of AdSense and AdWords programmes, not as a partner, but as an advertiser). Due to the high rate of internet users clicking on the .com website (which the evidence demonstrated, was often visited in the erroneous belief that it was the website for Argos UK) and the interplay between the AdSense and AdWords programmes, Argos US began to earn money from those clicks.
Argos UK argued that this took unfair advantage of, and thereby infringed, its EU trade mark.
Argos Ltd v Argos Systems Inc [2018] EWCA Civ 2211
Court of Appeal Decision
In finding that adverts displayed on the .com website were targeted at UK consumers and further, that Argos US’ use of ‘ARGOS’ to provide advertising services gave risk to a link with Argos UK’s trade mark, the question was then whether Argos US, in using ARGOS in providing advertising space, had taken unfair advantage of the registered trade mark.
Put another way, had Argos US ridden on the coat tails of a registered trade mark’s reputation, so as to benefit from that reputation?
Upholding the decision of the Judge at first instance, the Court of Appeal held that it did not; Argos US had not sought out the unwanted internet traffic from the UK and the display of Argos UK’s adverts was beneficial to Argos UK because it redirected consumers, before they lost interest.
Further, participation in AdWords was a commercially unobjectionable activity, with the income derived being relatively modest, when considered in the context of both parties businesses. Finally, even moderately observant consumers would realise that Argos US’ website had nothing to do with Argos UK.
In addition, the Court of Appeal found that whilst Argos US could have ceased to have participated in the AdSense programme or provided a link to the Argos UK website, there was no reason why, when considering the issue of fairness, Argos US should adopt a more burdensome way of dealing with unwanted traffic.
Perhaps more interestingly, the Court of Appeal was also of the view that there was no reason why Argos US could not optimise the advantage that it received from the AdSense programme, provided that all other factors behind the first instance decision on unfair advantage (listed above) remained the same.
Comments
It is unlikely that this particular set of facts will arise that often in future. Consequently, perhaps what is most though noteworthy point from this case is view that, even though Argos US’ use of ARGOS within the advertising space did alter the economic behaviour of consumers (by their clicking on the adverts) this was still not taking unfair advantage of the EU trade mark’s reputation. This was said to remain the case, notwithstanding that Argos US had profited from that change in behaviour.
Whether the Court of Appeal decision will be upheld remains to be seen (as at the time of writing, it is not known whether Argos UK will appeal to the Supreme Court and certainly, the Court of Appeal relied on precedent in reaching its view). In the interim, the Court of Appeal has made it clear that the creation of an economic advantage, is not necessarily an unfair one for the purposes of trade mark infringement.
How Can Nelsons Help?
Emma Ward is a Partner in our Dispute Resolution team, specialising in intellectual property disputes.
For more information, please contact Emma or another member of the team on 0800 024 1976 or via our online form, and they will be happy to assist.