VIRTUOSO LEGAL SCORES COURT OF APPEAL SUCCESS IN ARGOS VS ARGOS CASE

VIRTUOSO LEGAL SCORES COURT OF APPEAL SUCCESS IN ARGOS VS ARGOS

Virtuoso Legal’s IP Protect litigation team, led by Philip Partington, have secured a further landmark ruling in the Court of Appeal in the case of Argos Limited (“Argos UK”) vs Argos Systems Inc (“Argos US”), successfully defeating Argos UK’s appeal.

A copy of the judgment can be viewed here.

You may recall that in 2017 the team at Virtuoso Legal defeated Argos UK’s claim against Argos US for infringement of its trade marks and passing off in relation to Argos US’s use of the ARGOS name on its website at www.argos.com.  Please see our earlier blog here.

The case was all about Argos US’s use of a Google Ad Sense programme on its website at argos.com.  As commented upon by the trial judge the proceedings raised “issues which are both novel and of potential wider importance, not least relating to the operation of Google advertising”.

In 2017, Argos UK appealed against the trial judge’s decision arguing that he had erred when considering the unfair advantage arguments and that Argos US should be found liable for trade mark infringement.

In particular, Argos UK pleaded that Argos US gained an advantage by using of Argos UK’s reputation without paying compensation. Based on CJEU’s decision in L’Oreal v Bellure, Argos UK stated that this was proven due to the fact that Argos US was making money out of Argos UK’s reputation. Argos UK also argued that there was diversion of trade from Argos UK due to the American company’s use of ads. A link was argued that would have re-directed the lost traffic back onto Argos UK’s website.

Argos US, represented by Virtuoso Legal, argued that the First Instance’s judge findings were correct. The visitors who would accidentally end up on Argos US’s website would have no difficulty in appreciating it as a software business and identify no connection with Argos UK’s retail business. Therefore, the use of the sign will not cause the customers to do anything further and it will not change their economic behaviour. While the ads were a benefit for Argos US, they also brought a benefit to Argos UK as they would direct the visitors who ended up accidentally on the website back to Argos UK’s website.

After a careful analysis of both parties’ submissions, the Court of Appeal decided to uphold the trial judge’s decision and dismissed the appeal. In particular, it was decided that:

  • Argos US did not seek out the unwanted internet traffic which arrived at its website, and it had no power to prevent it; 
  • Argos UK also benefited from Argos US’ as it restored misdirected customers to Argos UK who might otherwise have lost interest;
  • participation in AdSense is a normal and commercially unobjectionable activity;
  • when considering the both parties’ businesses, the income stream derived from it by Argos US was small.
  • on arriving at the website even moderately observant customers would see it had nothing to do with Argos UK.

In conclusion, the result is a thumping success for Argos US, who were represented by our expert IP team. The decision is of “wide importance” as it approves the precedent for online advertising set out in the High Court and will certainly be seen with a sigh of relief from Google, as it further clarifies, legitimates and solidifies its Google AdSense programme.

Philip Partington, Head of IP Protect and the London office of Virtuoso Legal said:

When I joined Virtuoso Legal in 2015, Argos vs Argos was one of the cases I took charge and I immediately viewed it as a case where we could steer our client to victory.

During the course of the proceedings, we successfully defeated Argos UK at two interim applications in relation to their disclosure, obtaining substantial costs awards in our client’s favour.  We then went on to defeat Argos UK at trial, with a further substantial costs award in our client’s favour.  In total, Argos UK had paid well in excess of £330,000 in costs to our client.

Despite this, Argos UK sought to challenge the (in my view) the very reasoned decision of the trial judge and, thankfully, the Court of Appeal has now dismissed that appeal and we expect that Argos UK will be ordered to pay our client’s costs of the appeal.

Overall, it is most unfortunate that Argos UK has pursued our client in this way in relation to adverts which were removed by our client many years ago. However, our client, who is a US company, must be given a great deal of credit for placing their faith in the justice of the UK courts.”

Jonathan Fox, President of Argos Systems Inc said:

I am grateful for everything Philip Partington and the rest of the group at Virtuoso Legal has done for us throughout this case.  Everyone at the firm, along with Mr. Jaani Riordan and Mr. Martin Howe QC, worked tirelessly to get to where we are, and they certainly deserve all the credit.

The Royal Courts of Justice is quite an impressive institution, and I have the utmost respect for the judges and their decisions. There is obviously a lot of thought and care taken by the judges to ensure fair and correct decisions.  It goes without saying, I am very thankful that, in this case, they were in our favour.”


A number of posts looking into the legal detail of the judgment will follow this post in the coming hours and days.

For more information about this judgment, or to speak to our team of solicitors, contact: enquiries@virtuosolegal.com.

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