Argos Loses Passing Off Claim
The Retail a retail giant lost a passing-off claim over a domain name.
The case between UK retailer Argos and a small US-based software company, Argos Systems, concerned the domain name www.argos.com, which was registered by the tech company in 1992.
Argos UK brought the claim for trade mark infringement and passing off action after discovering that a significant number of customers were accidentally visiting the .com domain rather than the .co.uk domain.
Argos US’s legal team successfully argued that Argos US’s use of the term ARGOS was in accordance with honest practices for the following reasons:
- Argos US adopted its name independently of Argos UK and without knowledge of it, in 1991, after its founder (who liked Greek mythology) read a history book. It did not take legal advice at the time of choosing the ARGOS name, but, even if it had, Argos UK’s trade marks were not in existence;
- By the time Argos US found out about Argos UK’s business in late 2004, ASI had been trading for nearly 14 years and already possessed a substantial goodwill and reputation in America.
- Argos US did not believe that Argos UK’s business would be impacted since the two companies operate on opposite sides of the globe and sell to different customers.
- The only problem that Argos US anticipated was its own to deal with, namely the problem of “rogue” visitor traffic to argos.com.
- There was no evidence of relevant actual confusion or any likelihood of it in future, so far as Argos US was aware. The 4 emails relied upon by Argos UK were not evidence of confusion at all.
- As soon as Argos US was made aware of Argos UK’s objection, Argos US took steps to “blacklist” Argos UK’s domain names from appearing in ads, and Argos US then removed the ads entirely and reverted to its original pre-2008 trade on argos.com.
- Argos US had been using the ARGOS name continuously since 1991 and the complaint was only made by Argos UK in May 2014, having been aware of the domain name for “many years”. Indeed, Argos UK did not initially see Argos US’s activity as a problem, but really wanted to purchase the valuable argos.com domain name, which Argos US refused. Argos UK only pursued the legal complaint when these were rejected.
The High Court found Argos Systems was not infringing the trade mark or passing off rights of Argos UK. The decision is expected to have wide implications for the future of the operation of Google advertising.
Liz Ward, the principal at Virtuoso Legal who represented Argos Systems, explained that the case underlines the value of domain names and importance of the internet marketplace.
Peter Duff, a partner at Morisons Solicitors and member of the UK200Group executive committee, said this ‘David and Goliath’ case would set a precedent for digital marketers for years to come.
‘It also represents an important win for businesses at the smaller end of the scale,’ he added, ‘and helps to preserve the web as a place where small firms can compete with bigger firms on a more even basis.’