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David and Goliath – Argos v Argos

MICRO COMPANY FIGHTS GIANT ARGOS UK AND WINS IN LANDMARK RULING!

ACID Legal Affiliate, Virtuoso Legal, has won a modern-day David vs Goliath intellectual property case in the High Court, acting for the defendant, Argos Systems Inc (“Argos US”) in a case brought by Argos Limited (“Argos UK”), the well-known UK retailer. This case sets a new precedent in online advertising, particularly those businesses who advertise using Google AdWords or AdSense, as many ACID members will. 

ACID Legal Case Study – trade mark infringement

Argos UK brought a claim against Argos US, a CAD Software design company based in the USA, for infringement of trade mark and passing off in relation to Argos US’s use of the ARGOS name on its website at www.argos.com. In particular, Argos US’s use of Google’s AdSense programme on its website.

During the proceedings it was clear that both Argos UK and Argos US had independently come up with the name ‘ARGOS’ and Argos US had invested early in its cyber property by purchasing the argos.com domain name back in 1992. Argos UK claimed that Argos US’s use of ARGOS on its website’s landing page in conjunction with the Google AdSense programme was illegal, as this meant that Argos US’s website had “banner” advertising at the top and side of its website.

Argos UK’s main concern was that visitors who were looking for Argos UK’s website would be mis-led that it would be at argos.com and see adverts for Argos UK’s competitors, such as John Lewis. Given the intelligence of Google’s algorithms, it means that those ads would be targeted at the particular customer and this could lead to confusion in that visitors feel like they are being stalked from website to website as a result!

Argos UK were using its EU trade marks (for the brand ARGOS) to legally challenge Argos US, who only operated in the United States and had no customers in Europe. As such, Argos UK had to overcome the hurdle of proving that Argos US’s actions amounted to “targeting” customers in the USA. In short, the High Court rejected Argos UK’s arguments and found that Argos US had not targeted European customers. As such, Argos UK’s case failed.

Although Argos US had won in relation to the above points, the Deputy Judge also agreed that Argos US had two valid defences. First, that they had honestly used their “own name” and second, that Argos UK had “consented” to Argos US’s use by signing up to Google’s AdSense programme themselves. That means, even if Argos US had been “infringing” they would have had two complete defences to those infringements.

In conclusion, this was a significant ruling for Argos US, represented by the expert IP team at ACID legal affiliates Virtuoso Legal. The decision is of “wide importance” as it sets a new precedent for online advertising and will certainly be seen with a sigh of relief from Google, as it further legitimises and solidifies its Google AdSense programme (example below).

SO WHAT CAN BE LEARNED FROM THIS CASE?

  • If you are starting out in business register your brand’s domain name as soon as possible and the shorter the domain name, the better!
  • Register your trade mark using the correct specification. All too often, design creators who have registered their own trade marks find they are not covered for what they think they are, so always seek professional advice to secure your brand safety.
  • Even famous brand such as Argos UK, can still find it difficult to enforce their trade marks in relation to dissimilar products as, in the above case study, they were required to show that Argos US had placed the Google AdSense on its website “without due cause” and had taken “unfair advantage”. This was sufficient for the Deputy Judge to reject Argos UK’s arguments in those respects.
  • Never bow down to big brands who are sending you threatening letters; pick up the ACID Hotline and speak to a Legal Affiliate who can assist!

 

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