Factual and Procedural Background
The Appellant, a substantial retailer of consumer products trading mainly in the UK and Ireland under the name ARGOS since 1973, owns EU trade marks for ARGOS relating to advertising and retail services. The Appellee is a US corporation incorporated in Delaware that trades in computer-aided design software under the same name, ARGOS, but only in the Americas. The Appellee registered the domain name www.argos.com in 1992, prior to the Appellant's registration of www.argos.co.uk.
The dispute arose because a significant number of UK and Irish internet users mistakenly visited the Appellee's website instead of the Appellant's, leading to the Appellee earning revenue through Google's AdSense advertising programme from ads shown to these users. The Appellant claimed that this constituted trade mark infringement under Article 9(1)(c) of the Community Trade Mark Regulation, alleging unfair advantage was taken of its trade mark reputation.
The Deputy Judge dismissed the Appellant's claims on 22 March 2017, and the Appellant appealed with permission granted on 13 September 2017. The appeal concerns whether the Appellee's use of the sign ARGOS in relation to the provision of advertising space on its website targeted UK consumers and took unfair advantage of the Appellant's trade mark.
Legal Issues Presented
- Whether the Appellee's use of the sign ARGOS in relation to the provision of advertising space on its website constitutes use in the course of trade targeted at consumers in the UK under Article 9(1)(c) of the Community Trade Mark Regulation.
- Whether the use of the sign gives rise to a link between the sign and the Appellant's trade mark with a relevant reputation.
- Whether the Appellee's use of the sign takes unfair advantage of the distinctive character or repute of the Appellant's trade mark.
- Whether the Appellee's use of the sign was "without due cause".
- The applicability of the defence of bona fide use of own name and consent to the use.
Arguments of the Parties
Appellant's Arguments
- The Appellee knowingly targeted UK consumers by using Google AdSense ads on its website, intending to profit from misdirected internet traffic seeking the Appellant's website.
- Internal emails demonstrated clear subjective intention by the Appellee to monetise UK visitors arriving mistakenly at its website.
- The use of the domain name and display of advertisements caused a mechanical link between the sign and the Appellant's trade mark, sufficient to establish the required link under Article 9(1)(c).
- The Google AdSense algorithm ensured that ads shown were relevant to UK users, reinforcing targeting and unfair advantage.
- The presence of ads on the UK-facing version of the website was a deliberate choice to maximise revenue, not a mere consequence of algorithmic selection.
- The Appellee could have used a simple redirect to the Appellant’s website but chose to display ads instead, which was unfair.
- The Appellant contended that it was not necessary to show actual economic detriment, only that the Appellee gained an unfair advantage without compensation.
Appellee's Arguments
- The Appellee's business is restricted to the Americas and it does not perform relevant acts in the UK; therefore, its website use is not targeted at UK consumers.
- Subjective intention evidence, particularly emails from a non-employee director, is not representative of the Appellee's corporate mind or controlling decision-making.
- The display of Google AdSense ads was a normal, commercially unobjectionable activity intended partly to mitigate unwanted UK traffic, not to target UK consumers.
- The majority of UK visitors arrived by mistake, quickly realized the site was not for them, and left, negating targeting or change in economic behaviour.
- The Appellee merely provided a channel for Google's ads; Google and its advertisers, not the Appellee, targeted UK consumers.
- The Appellee’s use of the sign ARGOS relates to its own bona fide business and domain name registered prior to the Appellant's domain.
- The judge’s multifactorial assessment correctly found no unfair advantage or relevant link, and no change in economic behaviour by consumers.
- The Appellee’s participation in AdSense was not unfair, and the existence of alternative methods (such as redirects) does not imply unfairness.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Case C-173/11 Football Dataco Ltd v Sportradar GmbH [2013] FSR 4 |
Approach to localisation of acts on the basis of targeting, considering factors beyond the average consumer's perception. |
Referenced to illustrate that the average consumer test is not universally applicable and objective factors beyond consumer perception are relevant. |
| Joined Cases C-585/08 and C-144/09 Pammer v Reederei Karl Schluter GmbH & Co. KG and Hotel Alpenhof GmbH v Heller |
Factors relevant to determining targeting of internet activity at consumers in a particular territory. |
Used to support the principle that targeting is assessed objectively considering website content and other relevant circumstances. |
| [2017] EWCA Civ 1834 Merck v Merck Sharpe & Dohme |
Clarification on the role of subjective intention and objective targeting in assessing use in a territory. |
Affirmed that subjective intention is relevant but not determinative; objective targeting from the average consumer perspective is primary. |
| Joined Cases C-236/08 to C-238/08 Google France SARL v Louis Vuitton Malletier SA [2010] ECR I-2417 |
Distinction between providing a channel for ads and using trade marks in own commercial communications. |
Distinguished from the present case as Google did not use the trade mark in its own communications; relevant to assessing who targets consumers. |
| Case C-324/09 L'Oreal v eBay [2011] RPC 27 |
Use of trade marks in advertisements placed by third parties facilitated by a platform provider. |
Distinguished as eBay did not use the offending signs in its own communications; relevant to the issue of use and targeting. |
| Case C-252/07 Intel Corporation Inc v CPM United Kingdom Ltd [2009] RPC 15 |
Requirement of a link in the mind of the average consumer between the sign and the trade mark for Article 9(1)(c) infringement. |
Applied to analyse whether a mechanical link (domain name use) suffices to establish the necessary link. |
| Case C-487/07 L'Oreal v Bellure [2010] Bus LR 303 |
Definition of unfair advantage as parasitism or free-riding on the coat-tails of a trade mark with a reputation. |
Used to frame the concept of unfair advantage and to assess whether the Appellee's conduct constituted such advantage. |
| [2009] EWCA Civ 753 Whirlpool Corp v Kenwood Ltd [2010] RPC 2 |
Commercial advantage alone is insufficient; an added factor is required for unfairness. |
Applied to reject the argument that mere profit from the use of a sign constitutes unfair advantage. |
| [2012] EWCA Civ 24 Specsavers International Healthcare v Asda Stores Limited [2012] FSR 19 |
Limits to the broad principle of unfair advantage; fair competition exceptions. |
Referenced to contextualize the limits on unfair advantage claims and the relevance of due cause. |
| Case C-383/12 Environmental Manufacturing LLP v OHIM (2013) |
Requirement of change in economic behaviour to establish detriment to trade mark's distinctive character. |
Considered in relation to whether change in economic behaviour by consumers is necessary to prove unfair advantage. |
| [2014] EWHC 110 Jack Wills Ltd v House of Fraser (Stores) Ltd [2014] FSR 39 |
Economic behaviour change as relevant to unfair advantage assessment. |
Used to support that change in economic behaviour of customers for the defendant's goods or services may suffice. |
Court's Reasoning and Analysis
The Court analysed the issue of targeting, concluding that the relevant question is whether the Appellee's use of the sign ARGOS in relation to the provision of advertising space was objectively targeted at UK consumers. The Court found that the judge erred by relying exclusively on whether the website or whole page was "for" the average UK consumer and by discounting the significance of ads of clear interest to UK consumers.
The Court held that the Appellee's billboard service, when populated with ads relevant to UK consumers, was objectively targeted at the UK. Both Google and the Appellee targeted UK consumers by displaying such ads, and the Appellee used the sign ARGOS in relation to this service.
Regarding the requirement for a link between the sign and the Appellant's trade mark, the Court rejected the judge's conclusion that no link was formed. It found that the mechanical link created by the domain name use and the arrival of traffic based on the Appellant's reputation sufficed to establish the necessary link under Article 9(1)(c).
On unfair advantage, the Court upheld the judge's assessment that the advantage gained by the Appellee was not unfair. Although the Appellee earned revenue from the ads, this was a modest sum, the traffic was unsolicited and not sought out by the Appellee, and the ads arguably benefited the Appellant by redirecting misdirected customers. The Court emphasized that mere commercial advantage is insufficient for unfairness; an added factor is required, which was absent here.
The Court further noted that the Appellee's use was bona fide and that the defences of due cause, own name, and consent did not require determination in light of the findings on unfair advantage.
Holding and Implications
The Court dismissed the appeal, upholding the Deputy Judge's conclusion that the Appellant did not establish that the Appellee's use of the sign ARGOS took unfair advantage of the distinctive character or repute of the trade mark.
The direct effect of this decision is that the Appellant's claim under Article 9(1)(c) of the Community Trade Mark Regulation fails, and the Appellee's use of the sign in relation to provision of advertising space on its website is not an infringement targeted at the UK. No new precedent altering the law on trade mark infringement or targeting was established by this ruling.