Virtuoso Legal Secures Landmark Legal Ruling – Argos Limited v Argos Systems Inc
The intellectual property litigation team at Virtuoso Legal have secured a landmark ruling in the High Court.
Argos Limited, the large UK-based high street retailer and e-tailer, has had their entire claim dismissed against a little-known US-based software company, Argos Systems Inc, who own the www.argos.com domain name. Virtuoso Legal represented Argos Systems. The team from Virtuoso comprised of principal solicitor Elizabeth Ward, senior associate Philip Partington and trainee solicitor Matthew Lingard.
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In November 2016, Argos Limited (“Argos UK”), the well-known UK retailing giant, brought a High Court claim against Argos Systems (“Argos US”), a CAD Software design company based in the USA, 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. In particular, Argos UK complained of Argos US’s use of a Google Ad Sense programme on its website. As commented upon by Deputy Judge Spearman, sitting in the High Court in London, the proceedings raised “issues which are both novel and of potential wider importance, not least relating to the operation of Google advertising”.
It became clear during the course of the proceedings that both Argos UK and Argos US had independently come up with the name ARGOS, as had many other companies around the world. Argos US are a modestly sized software provider based in Massachusetts. However, it had invested early in its cyber property by purchasing the argos.com domain name back in 1992; a time when most had not even heard of the internet or even thought of the value of certain domain names.
All of Argos UK’s claims were based on Argos US’s use of ARGOS on its website’s landing page. In particular, Argos US’s inclusion of the Google AdSense programme meant that its website had “banner” advertising at the top and side of its website.
During the cross examination, it became clear that one of Argos UK’s main concerns was that consumers, who were looking for Argos UK’s website by mistakenly believing that it would be at argos.com, would then see adverts for Argos UK’s competitors, such as John Lewis. Argos US argued that the adverts seen by customers were directed by Google’s algorithm and were presented according to the consumer’s previous browsing history – and therefore Argos US were not targeting anyone in particular by having such links on their landing page.
The key issue for Argos UK was that it was using its European trade marks (for the brand ARGOS) to bring an action against Argos US, who only operated in the United States and had no customers in Europe. As such, Argos UK had to overcome the hurdle of proving that Argos US’s actions amounted to “targeting” customers in the UK. Please read more about this issue here. In short, the High Court rejected Argos UK’s arguments and found that Argos US had not targeted European customers.
Argos UK claimed Argos US had infringed its trade marks on the following basis:
- Use of an identical sign for identical services. See our blog here for more detail; and
- Use of an identical sign for dissimilar services, but where Argos UK has a reputation, Argos US’s use of the identical sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of Argos UK’s trade mark. See our blog on linking here for more detail.
Argos US was successful in defending Argos UK’s claims on both counts.
In addition, Argos US’s legal team successfully argued that Argos US benefited from defences including the “Own Name” defence (see here for more details) and a defence by way of Argos UK’s consent (see here for more details) by its agents signing up to the Google AdSense programme on its behalf.
Argos UK also argued that Argos US had, through its actions, committed the tort of “passing off”, relying upon the famous “One in a Million” case, i.e that the registration of the argos.com domain name and subsequent inclusion of the Google AdSense programme amounted to a misrepresentation that would result in customers being confused as to who was behind the argos.com domain name. Ultimately, the judge rejected Argos UK’s claims in this respect because there was not at any material time any misrepresentation by Argos US. Please see here for more details.
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 sets a new precedent for online advertising and will certainly be seen with a sigh of relief from Google, as it further clarifies, legitimates and solidifies its Google AdSense programme.
Elizabeth Ward, Principal of Virtuoso Legal, who represented Argos US in the UK High Court said “This case goes to show the real value of intangible assets in a company’s portfolio. The days when businesses fought over prime real estate are over. Today’s economic value is based on clicks not bricks.”
In addition, the President of Argos US said: