10 October 2018Trademarks

English Court of Appeal rules against Argos in TM dispute

The English Court of Appeal yesterday delivered a blow to UK retailer Argos in its trademark and domain name dispute with US software company Argos Systems.

In July 2015, the retailer accused Argos Systems of trademark infringement by allowing the domain name, which had been registered by Argos Systems, to feature Google AdSense advertising. The UK store didn’t object to Argos Systems’ use of the domain as a website promoting its software, but rather the use of the domain in conjunction with adverts.

Argos owns a number of word and figurative trademarks for ‘Argos’, including EU numbers 450,858 in class 35 for advertising services and 2,057,263 in class 35 for retail services.

In addition, the retailer registered the domain name in 1996 and launched its e-commerce website in 2004.

However, Argos Systems registered the domain name before this, in 1992. The software company only trades in North and South America, rather than in the UK, where Argos operates.

Argos claimed that, because UK-based consumers could see the Google adverts for Argos Systems’ software products and services, Argos Systems was targeting them with online marketing and therefore abusing and profiting from violations of the ‘Argos’ trademarks.

The retailer said that, by 2004, a large number of UK consumers were visiting as a result of the adverts.

Argos said that such use of the adverts was “abusive” and amounted to “unfair free-riding”, as well as damaging the distinctive character and reputation of Argos’s trademarks.

In response, Argos Systems noted that the adverts did not target any particular geographical region, and that the average consumer would quickly realise if they had accidently ended up on the wrong Argos platform.

In February 2017, the English High Court sided with Argos Systems.

The court held that Argos Systems had not infringed the ‘Argos’ marks, as its use of ‘Argos’ was in relation to its own name and in accordance with honest practices. Argos failed to establish that the software company was making a material misrepresentation to the public, or that damage had been caused by Argos Systems’ actions, the court held.

Yesterday, the English Court of Appeal sided with the software company and rejected Argos’s appeal.

The Court of Appeal said that using Google adverts is a “normal and commercially unobjectionable activity”, and that Argos Systems had not sought the UK internet traffic through the adverts—nor was it able to prevent it.

Although the software company may benefit from misdirected consumers, Argos also benefitted as a result of customer confusion, the court noted.

The court agreed with Argos Systems that, upon arriving at, “even moderately observant customers” would see that the platform is not affiliated with the UK retailer.

Argos Systems’ use of the ‘Argos’ marks did not take unfair advantage of the distinctive character or reputation of the marks, the court concluded.

Virtuoso Legal, which represented Argos Systems in the dispute, called the verdict a “thumping success”. The decision is greatly important as it clarifies, legitimises, and solidifies Google’s online advertising programme, according to the firm.

The law firm also noted that the adverts at the centre of the dispute were removed “many years ago”.

Virtuoso added that, after the initial trial, Argos paid more than £330,000 ($434,162) to Argos Systems in costs, and the retailer is also expected to have to pay the software company’s appeal costs.

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20 February 2017   UK retailer Argos suffered a knockout blow in a domain name dispute with US software company Argos Systems over the domain name