26 June 2017

A Loss for Argos

In 1996, the Claimant, Argos UK registered the domain name www.argos.co.uk, which was used for its online shopping offering from 2004. The Defendant, Argos Systems Inc (Argos US), is a US-based company that offers computer-aided design systems for residential buildings. Argos US has operated solely in North America since 1991; in 1992, it registered the domain name www.argos.com.

At the heart of this case was the question of whether the display of Google-generated adverts for the Claimant’s goods or services that were displayed on the Defendant’s website – in conjunction with use of the Claimant’s trade mark in the domain name of that website – would amount to an actionable claim for trade mark infringement or passing off.

Google provides two forms of advertising service - Google AdWords and Google AdSense. Google AdWords is a pay-per-click advertising service that allows advertisers to bid on keywords or phrases. If those words or phrases are typed into the Google search engine, the advertiser’s adverts will appear above or near to the search results, and on the websites of its network of partner sites. In contrast, Google AdSense delivers contextually relevant Google AdWords adverts on Google’s partner sites. These adverts often allow viewers to click through to the advertiser’s home page, generating an income for the registrant of the partner website that hosts the adverts. For the purposes of these proceedings, Argos UK was a customer of the Google AdWords service and Argos US was a partner to the Google AdSense service.

When it signed up to Google AdWords, Argos UK was required by the terms and conditions to grant Google and its partners any such rights that were necessary for the operation of the AdWords programme. This included granting consent to the use of Argos UK’s trade marks, along with the right to publish, display, transmit and distribute its adverts, and the right to place those adverts on any website provided by Google and its partners for that purpose.

A lot of traffic was generated to Argos US’ website by UK and Ireland based customers who wrongly thought that Argos UK owned the www.argos.com domain. When these users reached Argos US’ website, the adverts generated and displayed by Google were usually “click-through” adverts for Argos UK, which generated an income for Argos US. When Argos US refused to sell their domain to Argos UK, the latter commenced proceedings in the High Court.

It was clear from the outset that Argos US’ use and registration of the domain www.argos.com would not amount to trade mark infringement or passing off. However, Argos UK sought to argue that by displaying adverts for Argos UK on a website whose domain name included the word “Argos”, Argos US had crossed the line into trade mark infringement and passing off.

Argos UK’s claims were all dismissed and they lost the case. Primarily on the basis that, having signed up to the terms of use of Google’s AdSense service, Argos UK were expressly consenting to the use by Argos US of the sign ARGOS in the domain name www.argos.com and to the display of Argos UK’s adverts on Argos US’ website. In addition as Argos US’ website was not targeted at the UK, Argos US did not use the sign ARGOS in the UK. Just because a website is accessible from a territory covered by the trade mark, does not mean that consumers are being targeted in that territory.

In conclusion, care should be taken by UK brand owners to check that the registrant of a domain name is actively targeting UK consumers before bringing any action to try and “recover” any domain that contains their trade mark.

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