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Take care when consenting: AdWords and Argos.

Written by Mustapha Shaldoum on 06 April 2017

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In 1992, Argos Systems Inc (ASI), an American company specialising in computer aided design (CAD), registered the domain argos.com. In 1996, Argos Limited, a well-known UK retailer registered argos.co.uk. 

Argos owned various EU and UK trade marks for ARGOS, but was too late in securing the ‘.com’ domain. 

Between 2008 and 2012, ASI's website included Google AdSense advertisements to all visitors.  From January 2012 to late 2014, the website was reconfigured as to only allow visitors from outside the Americas to see Google’s advertisements.

The majority of argos.com’s visitors originate from the UK and Ireland with 83% of these visitors leaving the site almost immediately after arriving. Argos was understandably suspicious that the Google ads were left on for visitors outside the Americas with the intention of generating advertising revenue from Argos' name. They were particularly aggravated to discover that some of the adverts appearing on argos.com were for Argos Limited and its competitors.

Argos alleged free riding and damage to the distinctive character and reputation of its trade marks.

ASI relied on an indemnity in the contract between Google and Argos which bestowed third party rights on ASI.

Can a domain name in addition to Google advertisements constitute a trade mark infringement?
Argos contended that the combination of the domain name ‘argos.com’, in addition to Google adverts - some of which included adverts for Argos or Argos' competitors, constituted a trade mark infringement. This argument failed on two grounds:

(i) Argos had consented to the use when it signed Google's terms; and,
(ii) there was no targeting of UK consumers.

Did Argos consent?
It was common ground that the use of the domain alone was insufficient to establish a trade mark infringement, or indeed passing off. In order for the claim to be successful, Argos needed the domain name in addition to something else. 

Richard Spearman Q.C. (sitting as a Deputy Judge of the Chancery Division) found:

  1. when Argos signed up to Google's advertising service, they expressly and unequivocally consented to ASI's use of ARGOS in its domain, in addition to adverts for Argos' goods and services. Therefore, any claim founded on adverts for Argos appearing on argos.com was 'doomed to fail' because the Claimant had consented to this use.  
  2. Spearman noted that it had been open to Argos to block its ads (AdWords) from appearing on argos.com, but had declined to use this feature. AdWords’ terms are unequivocal!
  3. Even if Argos did not have direct knowledge of where its advertisements were appearing, this knowledge was available to its advertising agency and was attributed to Argos under ordinary agency principles.

Judge Spearman was careful to point out that this decision did not mean that by agreeing to the AdWords terms, advertisers were consenting to the display of other people's adverts on any third party website.  

If it were possible for Argos to establish that the Google adverts concerned Argos' competitors, it may have rendered a different result. However, the only evidence of a competitor’s advertisements appearing from Argos.com occurred following deliberate manipulation of the cookies (i.e. deleting browser history and searching for competitor websites). 

'ASI was not targeting the UK'. Why?
Argos accepted that without the display of Google adverts it had no case on targeting.

The question of targeting was objective rather than subjective, assessed from the perspective of the ‘average consumer’. The judge considered there to be two types of average UK Internet user:

(i)            enquiring; and,
(ii)           unenquiring.  

The ‘enquiring consumer’ would assume some connection with their browsing history if they saw a third party advert on a website.

The ‘unenquiring consumer’ would not worry about the reason for the ad being there.

Spearman noted that the majority of the visitors to ASI's website did so erroneously - UK consumers would honestly assume that argos.com would be owned by Argos.   

ASI obtained traffic to its site due to the domain name which they had lawfully registered.  

The advertisements appearing on Argos.com could be separated into three categories:

  1. those for Argos which Argos had consented to when it signed up for Google AdWords;
  2. those clearly not aimed at UK consumers (e.g. pricing was in dollars);
  3. those which may be aimed at UK consumers;
  4. those which were definitely aimed at UK consumers but were obtained as a result of cookie manipulation.
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