• Argos Systems Inc (Argos US) had been receiving increased internet traffic from UK users meaning to access the Argos Ltd (Argos UK) website.
• Argos US was profiting from users arriving at its website on the reputation of Argos UK, automatically downloading and in certain circumstances clicking on the ads.
• Was Argos US taking unfair advantage of the Argos UK trade marks?

What's it about?

Argos UK is a well-known retailer of consumer goods, owning the argos.co.uk domain name, as well as two EU trade marks for the word ARGOS.  Argos US is a US company which sells construction software solely in North and South America, trading through its domain name argos.com. 

Argos.com was receiving substantial internet traffic from users intending to reach the Argos UK website. After signing up to Google AdSense, Argos US started profiting financially from this traffic, which Argos UK argued took unfair advantage of its reputation and trade marks.

At first instance Argos UK brought trade mark infringement claims under Article 9(1)(a) and 9(1)(c) of the Council Regulation (EC) No 207/2009 and for passing off. All claims were dismissed by the High Court, with Argos UK appealing the decision on Article 9(1)(c) (the unfair advantage claim).

Why does it matter? 

This decision highlights how the Court of Appeal deals with competing international trade marks. It additionally provides useful guidance on whether foreign websites are targeted at UK customers and what constitutes unfair advantage. Whilst the appeal was dismissed, in contrast to the High Court, the Court of Appeal found that:

• by allowing Google AdSense to use geo-targeting, Argos US had targeted customers in the UK as Google algorithms would select ads generating most responses. For UK customers these would feature UK businesses who would therefore consider these relevant; and
• the use of the 'ARGOS' keyword established a sufficient link as UK users arrived at the argos.com website on the strength of Argos UK's reputation.

Nevertheless, the claim ultimately failed on unfair advantage. Whilst Argos US had benefitted financially, this was nominal compared to the income derived from its services.  Most importantly, Argos UK could not show that the ads resulted in a change in its customers' economic behaviour, i.e. that as a result of the ads they chose to purchase goods from a competitor instead. 

Now what? 

To avoid targeting allegations, businesses using Google Adsense should make use of the geo-blocking feature, disallowing or excluding domains which they do not wish to provide ads for on their website.

Argos Ltd v Argos Systems Inc [2018] EWCA Civ 2211

For further information on this or any other IP related matter please contact Sophie Moore on 020 7160 3185.