Argos Ltd v Argos Systems Inc

For unfair advantage under Article 9(1)(c) of the Community Trade Mark Regulation, a commercial benefit obtained through use of a reputed mark is not, without more, unfair. The court must evaluate the circumstances, including how the benefit arose, whether the activity is commercially ordinary, its scale, any benefit to the mark proprietor, and whether there is diversion or transfer of image.

Internet targeting depends on the particular use alleged. A website operator providing advertising space must be assessed by asking whether advertisements relevant to United Kingdom consumers target them. Subjective intention may assist the objective assessment, but cannot convert objectively untargeted activity into United Kingdom use.

Argos Ltd, a United Kingdom retailer with a reputed ARGOS EU trade mark, complained that Argos Systems Inc, a United States construction-software business, earned Google AdSense revenue from advertisements displayed on its argos.com website. Many United Kingdom users reached that website by mistyping its address while seeking the retailer.

The High Court dismissed claims for trade mark infringement and passing off: [2017] EWHC 231 (Ch). On appeal, the surviving claim was under Article 9(1)(c) of the Community Trade Mark Regulation, based solely on alleged unfair advantage of the repute of the mark.

The central issues were whether the advertising-space service targeted United Kingdom consumers, whether a relevant link existed between the sign and the mark, and whether any advantage obtained was unfair.

1. Appeal dismissed. The court upheld the dismissal because the appellant had not established that the respondent took unfair advantage of the distinctive character or repute of the mark.
2. The judge had erred on targeting. Targeting gives effect to the territorial nature of trade mark rights and is assessed objectively, from the perspective of the average United Kingdom consumer, in light of all relevant circumstances. Subjective intention may illuminate that assessment but is neither necessary nor sufficient. Here, the relevant service was the provision of online advertising space, so the inquiry had to focus on whether the advertisements were directed at United Kingdom consumers, rather than whether the whole website was for them. Where the advertising space contained advertisements of obvious relevance to such consumers, it was targeted at them. On the evidence, both Google and the respondent had a role in that targeting.
3. The judge had also erred in finding no relevant link. A link need not always arise because the impugned sign itself brings the reputed mark to mind. The misdirected internet traffic had arrived because of the reputation of ARGOS and was immediately exposed to the respondent's advertising service. That was sufficient to connect the service and the mark for Article 9(1)(c).
4. Those conclusions did not establish unfair advantage. Article 9(1)(c) does not require confusion, detriment, or damage to the proprietor. Nor, however, is every economic advantage unfair. The judge was entitled to find that the traffic was unsolicited, the AdSense activity was commercially ordinary, some advertisements assisted users to return to the appellant, the revenue was modest, and there was no material diversion of trade or transfer of the mark's image. The availability of alternative ways to handle the unwanted traffic did not make the selected solution unfair.
5. As unfair advantage was not made out, the court did not decide due cause, the own-name defence, or consent.

• Court of Appeal (Civil Division): In Argos Ltd v Argos Systems Inc, [2018] EWCA Civ 2211 , the appeal was dismissed. The court disagreed with the lower court on targeting and the link requirement, but upheld the dismissal because unfair advantage was not proved.
• High Court, Chancery Division, Intellectual Property: Richard Spearman QC dismissed the action in [2017] EWHC 231 (Ch) .