Arecent U.K. case dealt with a claim fortrademark infringement relating to the use of domain name and the impact of theGoogle AdWords and AdSense programs on the claim as well jurisdictional issues.
The Facts
In Greek mythology, Argos was the short name of ArgusPanoptes, an all-seeing giant, and a servant of Hera. When he was killed, as aconstant reminder of his foul murder, or as some say of his loyalty to her,Hera placed Argos' eyes in the tail of the peacock.
In modern times, "Argos" has become a popularname for companies all over the world. The evidence in this case included alist of over 100 registered "Argos" domain names, and a list of about100 registered trademarks comprising or including the word "Argos",which (a) related to a wide range of designated territories, (b) were notassociated with either of the parties, and (c) appeared to belong to asubstantial number of different companies, many of which have names whichcomprise or include the word "Argos".
ArgosLimited, (the Plaintiff) is a very substantial UK based retailerof non-food consumer products, which began trading in 1973 through bothcatalogues and retail stores. The Plaintiff operates primarily in the UK andthe Republic of Ireland under the mark ARGOS for which it has EU registrations.On January 8 1996 it registered the domain name <argos.co.uk> and launchedan e-commerce website in 2004. The Plaintiff’s sales in 2015 were in excess of£4bn. It was not in dispute that the ARGOS trademark is extremely well known toa substantial proportion of consumers in the UK and Ireland in relation to theprovision of catalogue and store and internet based retail services.
ArgosSystems Inc. (the Defendant) is a company incorporated under thelaws of the state of Delaware, USA, in 1991. The Defendant carries on business from itsheadquarters in Bedford, Massachusetts, providing computer aided design systemsfor the design and construction of residential and commercial buildings. The Defendant’ssales were about US $25M between January 1995 and July 2014. The Defendant registeredthe domain name <argos.com> on January 8, 1992, and uses it inconjunction with a commercial website and for email. The Defendant carries onbusiness only in North and South America: It has no clients in the EU, and hasmade no attempt to enter the European market.
Google
Google operates two internet advertising programmes. Under the Google AdWords program Google offersservices to advertisers. Under the GoogleAdSense program, Google offers website operators the opportunity to contractwith it for the provision of space for advertising on their websites. Googlerefers to advertisers who sign up to Google AdWords as "Customers",to advertisements as "ads", and to the website operators as"Partners". Google explains how these programmes work as follows:
"The Google AdWords programenables you to create advertisements which will appear on relevant Googlesearch results pages and our network of partner sites. … The Google AdSenseprogram differs in that it delivers Google AdWords ads to individuals'websites. Google then pays web publishers for the ads displayed on their sitebased on user clicks on ads or on ad impressions, depending on the type ofad."
The Plaintiff was a "Customer" and the Defendant was a"Partner" for purposes of these programs. At all material times under tothe terms of the programs the Plaintiff granted not only to Google but also to theDefendant such rights as were necessary for Google and the Defendant to operateGoogle's programmes.
TheDefendant’s Website
Atall material times the Defendant’s website received substantial traffic fromvisitors from the U.K. In fact close to90 % of all visitors were from the U.K. but the vast majority of them leave thewebsite very promptly.
In January 2012 the Defendant introduced a version of itswebsite which featured two different versions of the landing page. The Defendant used geo-targeting source codeto ensure that the version of the site which included the AdSense ads was notdisplayed to visitors from the Americas but the ads were displayed to all othervisitors regardless of their location.
By participating in the Google AdSense programme betweenabout December 2008 and September 2015, the Defendant was able to generateadvertising revenue from visitors to its website, many of whom were visitingthat website in the mistaken belief that <argos.com> was the websiteaddress of the Plaintiff. A number ofthe advertisements which were placed on the Defendant’s website in this waywere for the Plaintiff’s business, and such advertisements were placed on the Defendant'swebsite by Google as a result of the Plaintiff's participation in the GoogleAdWords programme.The Defendant contended that these mistaken visitors causedserious bandwidth and other problems and real expense for the Defendant. The ads generated about US $100,000 in revenue for the Defendantwho contended that it used this sum, in part, to offset the costs of thebandwidth and infrastructure modifications needed to host its website.
The Claim
ThePlaintiff alleged infringement of its EU trademark registrationsin respect of the use by the Defendant of the sign ARGOS in the form of thedomain name <argos.com> and on Defendant’s website. The Defendant filed acounterclaim which sought declarations of non-infringement in respect of bothcurrent and historic versions of Defendant’s website.
Asis the case in Canada if the plaintiff has consented to the defendant’s use ofits mark this will be a defence to a claim for infringement. TheDefendant contended that the grant of rights given by the Plaintiff in theAdWords terms constituted consent to the display of the Plaintiff’s advertisementsby Partners, including the Defendant, on websites which are selected by Googleto form part of the AdSense programme. This was subject to the Plaintiffexercising the right under the AdWords programme to opt out of having itsadvertisements placed on Partners' websites in general or on Defendant'swebsite(s) in particular.
Thejudge found that the Plaintiff expressly and unequivocallyconsented to Defendant's use of the trademark ARGOS in the Defendant’s domainname, together with the display of the Plaintiff’s advertisements on Defendant'swebsite or on the AdWords terms.
TheDefendant also asserted that it had not performed any act within the territoryof the Plaintiff’s rights, because Defendant's website did not target consumersin the UK or the EU. Presumably by defending the action the Defendant waivedthe right to assert that the court had no jurisdiction but leaving that asideit is clear the rights associated with trademark are territorial and limited tothe E.U.
Thejudge reviewed in great detail the cases in the U.K. and the E.U. dealing withtargeting. He found that that there is no hard and fast rulethat it was necessary to have regard to the entirety of the website, as opposedto, say, the landing or home page alone. It all depends on the circumstances.If the evidence shows that some part of the website is so configured as toattract a substantial number of UK users, it may be appropriate to have regard to that part ofthe website alone, even if, viewed globally the website is clearly not directedto UK users.
Thejudge disregarded the display of the Google ads because of his finding ofconsent. He concluded that it was clear that Defendant'swebsite was visited by many internet users based in the UK not only when adswere displayed on it but also before any ads were displayed on it, and thatthis had continued after ads were removed from it. This was overwhelmingly aproduct of mistake, and, to a significant extent, was due to UK users guessingor assuming that the <argos.com> domain name was owned by the Plaintiff.This traffic arises because the Defendant, entirely lawfully and properly,registered the <argos.com> domain name in 1992 either before the Plaintiffthought of registering a domain name at all, which it first did in 1996 or atleast before the Plaintiff thought of registering <argos.com> as itsdomain name or one of its domain names. It did not arise because the Defendanthad done anything to attract internet users based in the UK to its website.
Asa result the action was dismissed and the counterclaim allowed.
Comment
The effect of a foreign trader's use of Google advertising inthe context of determining whether the trader has targeted a specific countrydoes not appear to have been previously considered by a court. Because of thewide spread use of the Google programs this is an important and potentiallyfar-reaching issue.
John McKeown
Goldman Sloan Nash& Haber LLP
480 UniversityAvenue, Suite 1600
Toronto, OntarioM5G 1V2
Direct Line: (416)597-3371
Fax: (416) 597-3370
Email: mckeown@gsnh.com
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