In the recent case of Argos Ltd v Argos Systems Inc [2017] EWHC 231 (Ch), the High Court has rejected claims of passing off and trade mark infringement arising out of Argos Limited’s objections to the use by an unrelated US corporation (Argos Systems Inc) of the domain name www.argos.com, in conjunction with the Google AdSense program.
Background
Established in 1973, Argos Limited (“Argos”) is the well-known UK based retailer. Trading in-store and online through www.argos.co.uk, Argos is the registered owner of two word only EU trade marks for ‘ARGOS’.
It was common ground during the proceedings that one of those trade marks had a reputation in the EU and further, that Argos had the benefit of goodwill in the mark ‘ARGOS,’ within the UK.
Argos Systems Inc (“Argos Inc”) began trading in 1991, and provides computer aided design systems for the design and construction of residential and commercial buildings. It uses the domain at the heart of this dispute – www.argos.com – for its commercial website and for email. Incorporated in Delaware US, Argos Inc had no clients in the EU and had made no attempt to enter the EU market.
The only difference between the two domain names used by the parties is the suffix – .co.uk or .com. Argos accepted that it could not complain in respect of the www.argos.com domain name, but it did however complain of the use of the .com domain name in relation to webpage bearing adverts.
AdWords & AdSense
Argos’ complaint related to the placement of adverts for its business on the Argos Inc website, through a combination of Google’s AdWords and AdSense programs. Through those programs, adverts placed by Argos via AdWords appeared on Argos Inc’s website, Argos Inc having signed up to Google’s AdSense service.
As a partner in the AdSense program, Argos Inc received revenue for the placement of third party adverts, including Argos’ adverts, on its website.
Argos complained that the use of Argos Inc’s domain name in the AdSense service constituted an infringement of Argos’ EU trade mark, as it took unfair advantage of the reputation of the trade mark to increase advertising revenue through its participation in AdSense, and despite not trading within the UK, the evidence showed that 89% of visitors to Argos Inc’s website were from the UK.
Further, Argos complained that the registration of the .com domain name and its use within the UK was actionable as passing off.
Decision
As was common ground between the parties, the use of www.argos.com domain name was not, without more, an infringement of Argos’ rights. The question was whether Argos Inc’s participation in the Google AdSense scheme and, as such, the display of adverts on its website was the ‘more’ required for infringement or passing off to be established.
The Court held that it was not Argos’ Inc’s use of the domain name was lawful and, through Argos’ agreement to the AdWord’s terms of service (which allowed the display by Argos Inc of Argos’ adverts on its website – Argos had not opted out of placement of its adverts on Argos Inc’s website, as it could have done under Google’s terms) the display of Argos’ adverts on the website hosted on that domain remained lawful.
For a trade mark to be infringed, use has to be without consent and so, by necessity, the claim had to fail.
In relation to the passing off, whilst it was accepted that Argos owned goodwill in the mark ‘ARGOS’, the Court held that Argos had failed to establish that Argos Inc’s use of www.argos.com, with or without the ads, constituted the necessary misrepresentation leading or likely to lead the public to believe that the goods or services offered by Argos Inc were the goods or services of Argos. There was no evidence of actual deception or of likely future deception. Accordingly, that claim failed as well.
Comments
This case is an extremely unusual one. Whilst the Google AdWords service and its interplay with intellectual property has come under judicial scrutiny before (see for example the Interflora/Marks and Spencer litigation), the Court in this case was faced with a highly novel situation.
It is difficult not to have some sympathy with Argos, after all, the evidence showed that Argos Inc was able to generate advertising revenue from visitors to its website, the majority of which came from the UK (89% of traffic to Argos Inc’s website was from the UK).
However, any unfairness in the decision is mitigated in part by the fact that Argos could have opted out of the placement of its adverts on Argos’ Inc’s website, had it chosen to do so.
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