Argos Limited v Argos Systems Inc

Argos Limited v Argos Systems Inc: Short summary

Defending a US company's ".com" domain against a UK retail giant, right up to the Supreme Court.

The Problem: Our US client owned the web domain "argos.com" legitimately since 1992. UK retailer Argos UK, wanting the domain, sued them in the UK High Court for trade mark infringement and passing off, arguing the site's use of Google AdSense targeted UK users.

Our Action & The Result: We defended the claim through the High Court, Court of Appeal, through to a denied appeal at the  Supreme Court. We successfully argued that, despite incidental UK traffic (mostly mistaken users) and AdSense use, there was no actionable infringement or passing off. The High Court dismissed all claims. While the Court of Appeal found "targeting," it upheld the dismissal, finding no infringement (use wasn't for identical services, no adverse effect on mark functions, no unfair advantage, use had "due cause," plus defences like "own name" applied). Argos UK failed, our client kept their domain, and Argos UK paid approximately £440k towards our client's costs. In addition to the above, the team secured favourable results for our client during interim proceedings on two occasions - avoiding significant impact on our client's business prior to the trial being decided.

Argos Limited v Argos Systems Inc: In detail

In the digital age, a premium domain name is prime real estate. Argos Systems Inc ("Argos US"), a US-based software company, had owned "argos.com" since 1992. However, UK retail giant Argos Limited ("Argos UK") coveted the domain, as many UK customers mistakenly typed .com instead of their .co.uk address.

Instead of straightforward negotiation, Argos UK launched High Court proceedings, alleging trade mark infringement and passing off. Their goal was clear: seemingly pressure Argos US into transferring the domain by wielding the threat of costly UK litigation (a "carrot and stick" approach). The core issue became whether Argos US, a company with no European business, was "targeting" UK consumers simply because UK users visited their site (often by mistake) and saw Google AdSense advertisements. Argos US engaged Virtuoso Legal to defend its valuable asset and its reputation.

Our action and the result

We mounted a robust defence, arguing that Argos US's use of its own name and its participation in the standard Google AdSense program did not constitute trade mark infringement or passing off aimed at the UK. We demonstrated that the minimal revenue generated from UK traffic was incidental and used partly to offset the bandwidth costs caused by misdirected visitors.

The High Court decisively rejected all of Argos UK's claims. While the Court of Appeal later found that "targeting" had occurred in a technical sense, it crucially upheld the High Court's overall dismissal, finding no infringement. Argos UK's further attempt to take the case to the Supreme Court was refused.

This multi-year battle resulted in a complete victory for our client. Argos UK failed in its objective to seize the domain name and was ordered to pay Argos US approximately £440,000 towards their legal costs, in addition to their own lawyers' fees, likely exceeding £1 million.

In addition to the above, the team secured favourable results for our client during interim proceedings on two occasions - avoiding significant impact on our client's business prior to the trial being decided.

Beyond achieving strong results at trial, our team twice obtained favourable interim rulings that protected our client’s business from serious disruption while the case was ongoing.

The takeaway for innovators

Your digital assets, especially domain names, are valuable. Larger companies may try to use aggressive tactics and jurisdictional claims to secure them. Standing firm with the right specialist legal team is crucial. We have a proven track record of defending clients against trade mark and domain name challenges, even against the largest opponents and across all levels of the court system.

Concerned about a domain name dispute or trade mark challenge? Book a confidential consultation with our IP team.

The legal deep dive: navigating targeting, AdSense, and multi-jurisdictional TM law

For legal professionals, Argos v Argos is a significant precedent on the application of EU trade mark law to foreign websites and the use of online advertising platforms like Google AdSense.

1. The complex issue of "targeting" A key battleground was whether Argos US's website "targeted" UK consumers, thereby bringing its activities within the scope of Argos UK's EU trade marks.

• • High Court: Found no targeting, focusing on the objective presentation of the website (US-centric content, pricing, contact details) and the fleeting nature of visits from mistaken UK users.
  • Court of Appeal: Overturned this specific finding, holding that the configuration to show ads to non-US visitors did constitute targeting. However, this did not ultimately assist Argos UK.

2. No infringement despite targeting Crucially, even after finding targeting, the Court of Appeal upheld the dismissal of the infringement claims:

• • Article 9(1)(a) / s.10(1): The claim failed because ASI wasn't using the sign in relation to identical "advertising services." Providing space for Google AdSense was deemed distinct from supplying advertising services itself. Furthermore, the court found no adverse effect on the functions of Argos UK's mark, given the clear distinction between the businesses and the lack of confusion for the average observant user.
  • Article 9(1)(c) / s.10(3): The claim for dilution/unfair advantage failed. The court found no "link" established by ASI's conduct (the link was pre-existing user assumption), no unfair advantage taken (AdSense use was legitimate), and no detriment. ASI's use was deemed to be with "due cause," considering its long-standing, legitimate use of its own name and domain.

3. Passing off claim dismissed The High Court rejected the passing off claim, finding no operative misrepresentation by Argos US. Mistaken visits by UK users were due to their own assumptions, not anything deceptive on ASI's site. The "instrument of fraud" argument (One in a Million) was distinguished, as argos.com had legitimate uses and wasn't registered with deceptive intent. This was upheld.
4. Successful defences Although not strictly necessary given the findings above, the High Court indicated (and the analysis supports) that defences would likely have succeeded:

• • Own Name Defence (Art 12(a)): Argos US had used its own legitimate name "Argos" since 1991, long before Argos UK's marks were even filed, and its use (including AdSense) was found to be in accordance with honest practices.
  • Consent: Argos UK's participation in Google AdWords, under terms granting Google and its "Partners" (like Argos US) rights to display ads, constituted consent to the ads appearing on argos.com.

A further appeal to the Supreme Court was denied.

Summary of key litigation points

This case underscores the territorial limits of trade mark rights and the high bar for proving infringement based on online activities directed from abroad. It affirms the legitimacy of standard online advertising practices like Google AdSense and provides robust authority for defendants facing aggressive domain name challenges based on incidental traffic from other jurisdictions. We provide specialist support to firms navigating complex cross-border IP disputes and novel questions of online infringement.

Facing a complex international trade mark or domain name issue? We invite you to contact our team for a confidential discussion.