Case Report: Argos in a Small World

A recent High Court judgment in a case concerning infringement of trade marks and alleged passing off raises novel issues of wider importance

The High Court judgment in Argos Ltd v Argos Systems Inc [2017] EWHC 231 (Ch) features a judgment of 362 paragraphs (plus pictures) which could be very crudely summarised in one phrase: if you have the luck to share an online name with a more well-known entity, and money can fall into your lap as a result, you have done nothing wrong. But it also carries lessons about the way in which the Internet has made trading boundaries leaky and emphasises the importance of getting full control of important domain names.

The trial concerned two companies using the name Argos. One is the UK-based, former catalogue company which sells almost everything in stores and online and which supplied half the nation’s Christmas presents. The other is a US-based company providing Computer Aided Design (CAD) systems for the design and construction of residential and commercial buildings. The Argos we all know had the domain name; the CAD company in the USA had While no conflict occurred in normal trade, there was strong evidence that many of those visiting were from the UK or Republic of Ireland and actually wanted to buy a new toaster or toys etc. Argos UK complained that Argos Systems Inc had taken advantage of that by using a version of its home page to display adverts (placed there through the medium of Google's AdWords but with the consent of Argos Systems Inc) that appeal to UK consumers, including actual or potential customers of both Argos UK and its competitors. These complaints were rejected by Argos Systems Inc, which counterclaimed for declarations of non-infringement in respect of both current and historic versions of its website. There was also a complex claim for an indemnity under a contract made between Argos UK and Google, on the basis that this contract conferred third party rights on Argos Systems Inc.

As one might expect in a judgment of 362 paragraphs, Richard Spearman QC (sitting as a Deputy Judge of the Chancery Division) takes a tour through many aspects of the law on domain names, trade marks, passing off and the links between them, citing numerous cases including Interflora, OneinaMillion, Google France and Reed v Reed, but the Argos evidence never really impressed him and he summarised his judgment as follows (at [361]):

(1) AUL [Argos UK] consented to ASI's [Argos Systems Inc’s] use of the sign ARGOS in the domain name, together with and in the context of ASI also displaying AUL's advertisements on ASI's website, and AUL is unable to rely upon that use as the basis of any claims that AUL might otherwise have against ASI.

(2) Neither the whole nor any sufficient part of ASI's website was targeted at the UK, and accordingly ASI did not use the sign ARGOS within the UK.

(3) ASI did not use the sign ARGOS in relation to goods or services which are identical to those for which AUL's marks are registered.

(4) ASI's use of the sign ARGOS does not affect and is not liable to affect any of the functions of AUL's marks.

(5) ASI's use of the sign ARGOS does not give rise to a link between the sign and AUL's marks in the mind of the average consumer.

(6) ASI's use of the sign ARGOS does not give rise to (a) detriment to the distinctive character of AUL's marks, or (b) detriment to the repute of AUL's marks, or (c) unfair advantage being taken of the distinctive character or the repute of AUL's marks.

(7) ASI's use of the sign ARGOS was not without due cause.

(8) ASI's use of the sign ARGOS was (a) of ASI's own name and (b) in accordance with honest practices in commercial matters.

(9) Accordingly, ASI's claims for infringement of trade mark fail.

(10) ASI's claims for indemnity pursuant to the Google AdWords terms fail.

(11) Although AUL has goodwill, AUL has not established a material misrepresentation to the public, or damage or the likelihood of damage, or that ASI's domain name is an instrument of fraud.

(12) Accordingly, AUL's claim for passing off also fails.

One small point may be worthy of note by legal advisers in relation to online disputes. The judge comments on the tendency of some witnesses to stray from evidence into argument – it didn’t seem to go down well.

Published: 2017-02-17T11:10:00

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