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United Kingdom: High Court Rules on Google AdWords/AdSense and Trademark Infringement

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This article looks at the High Court decision in Argos Ltd v Argos Systems Inc, [2017] EWHC 231 (Ch) concerning the domain name argos.com.

This article first appeared here on 1 May 2017 in the INTA Bulletin and was reprinted with permission from the International Trademark Association (INTA).

UK retailer Argos Ltd has lost its claim for trademark infringement and passing off (in the High Court of England and Wales) against Argos Systems Inc, a U.S. software company, with respect to the domain name argos.com. Argos Ltd v. Argos Systems Inc, [2017] EWHC 231 (Ch), Feb. 15, 2017 (High Court of England and Wales).

Argos Ltd had claimed that Argos Systems was infringing its EU trademarks for ARGOS by allowing its argos.com domain to feature Google AdSense advertising. Argos Systems had registered its domain name in 1992 and Argos UK had registered the domain name argos.co.uk in 1996.

Argos UK did not argue against Argos Systems’ use of argos.com as a website and for email to promote its software. Instead, it argued that the use of the domain name in conjunction with the advertisements amounted to trademark infringement and passing off. Argos Systems participated in Google’s AdSense advertising program and Argos UK’s ads were among those that appeared on Argos Systems’ website. This meant that indirectly the money Argos UK paid to Google (as part of the Google AdWords program) was being received by Argos Systems, as the clicks on the ads were from Argos Systems’ website.

In rejecting Argos UK’s claims against Argos Systems, the High Court made two key rulings, which were that:

  • Argos UK had expressly and unequivocally consented to Argos Systems’ use of the sign ARGOS in the domain name by agreeing to the Google AdWords terms of use. Argos UK did not need direct knowledge of where its advertisements were appearing; this knowledge was available via its advertising agency.
  • In any event, Argos Systems had not targeted UK consumers, so the sign ARGOS was not used within the UK. The court took into account the fact that most of the UK visitors to argos.com had visited the website by mistake and had left the website almost instantly when they realized it was not Argos UK’s website.

Although these two rulings were enough to dispose of the action, the court also ruled on a number of other issues between the parties. Among other things, it concluded that Argos Systems was not using the sign ARGOS in relation to goods and services which were identical to those for which Argos UK’s trademarks were registered, and that its use of the sign did not adversely affect any of the functions of those marks. With respect to passing off, the court considered that there had been no material misrepresentation to the public, no damage (or the likelihood of damage), and no fraudulent use of the domain name.

This decision is interesting as it covers new ground concerning the extent to which the use of Google AdWords or AdSense can result in trademark infringement or passing off. However, the facts of this case were very unusual, so its significance to future decisions of the UK courts remains to be seen.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.