Argos Ltd v Argos Systems Inc

For EU trade mark infringement based on website activity, accessibility from the territory is insufficient. The court must assess objectively whether the website or relevant part is targeted at reasonably well-informed, observant and circumspect consumers in that territory.

Consent to displaying a proprietor’s advertisements may extend to their display alongside an existing lawful domain-name use. The claims failed because there was no targeting, no relevant adverse effect on trade mark functions, no link or injury under Article 9(1)(c), and no passing off.

Argos Limited, a UK retailer, sued Argos Systems Inc, a US CAD-software company, over ASI’s use of argos.com and Google AdSense advertising on its website. AUL alleged infringement of two EU trade marks and passing off. ASI counterclaimed for declarations of non-infringement and sought an indemnity under Google AdWords terms.

The principal issues were consent, territorial targeting, use in relation to identical services, effects on trade mark functions, link and injury under Article 9(1)(c), due cause, the own-name defence, passing off and the contractual indemnity.

1. Consent. The AdWords terms authorised Google and its Partners to display AUL’s advertisements. Since ASI’s existing use of argos.com was lawful and AUL could not complain of that use alone, AUL consented to the combination of that use with the display of its advertisements.
2. Targeting. Targeting was a threshold territorial issue. It required an objective assessment from the perspective of the average internet consumer. Relevant matters included the website’s appearance and function, external material, visitor numbers and behaviour, and the trader’s intentions insofar as they illuminated objective effect. The overwhelming UK traffic resulted from mistaken direct navigation, most visitors left almost immediately, and the website and its substantive content were plainly American and directed to ASI’s CAD business. The site was not targeted at the UK.
3. Other trade mark issues. ASI was not providing “advertising services” in the core sense of that expression, and did not use ARGOS to distinguish such services. Its use did not affect the functions of AUL’s marks. The pre-existing supposition of mistaken visitors did not constitute a link caused by ASI’s use. No dilution, tarnishment or unfair advantage was established, and the use was with due cause.
4. Defences and passing off. ASI used ARGOS as its own name and acted in accordance with honest commercial practices. The indemnity clauses concerned third-party claims or liabilities and did not indemnify ASI against liability to AUL or the costs of defending AUL’s claim. AUL established goodwill but no material misrepresentation or damage. The claim and indemnity counterclaim failed.