The Court of Appeal has held that there was no infringement of a trade mark by unfair advantage through use of a search engine advertising programme, despite its finding of targeting and the required link.
A Community trade mark (CTM) entitles the proprietor to prevent third parties not having its consent from using in the course of trade any sign which was identical with, or similar to, the CTM in relation to goods or services which were not similar to those for which the CTM was registered, where the latter had a reputation in the Community and where use of that sign without due cause took unfair advantage of, or was detrimental to, the distinctive character or the repute of the CTM (Article 9(1)(c), CTM Regulation (207/2009/EC)) (Article 9(1)(c)).
Google AdWords enables advertisers to create advertisements which will appear on relevant Google search results pages and partner sites.
Google AdSense enables website operators to contract with Google for advertising space on their websites. It delivers Google AdWords ads to individuals' websites. Google then pays web publishers for the ads displayed on their site based on user clicks or ad impressions.
In Merck KGaA v Merck Sharp & Dohme Corp and others, the Court of Appeal held that targeting should be assessed objectively, although evidence of subjective intention was relevant and possibly determinative where the objective intention was unclear or finely balanced, when deciding if the trader's activities were targeted at the UK ( EWCA Civ 1834).
AUK sued AUS for trade mark infringement in respect of the ARGOS mark.
The High Court dismissed the claim (www.practicallaw.com/1-640-0652)
AUK appealed, arguing that AUS had taken unfair advantage of the distinctive character or repute of AUK's mark.
The court dismissed the appeal. It held that there was no unfair advantage, and so no trade mark infringement.
If the ARGOS name and domain name had been deliberately selected, the advantage that AUS obtained might have been unfair, but here the internet traffic was initially unwanted. Also, using Google AdSense is a common business practice. There was no attempt by AUS to draw a link with AUK on their website so it was immediately clear to visitors that they had come to the wrong place. The revenue raised was minimal in the context of AUS's overall business. AUS was not merely riding on the coat tails of AUK.
Although the High Court had made errors in its approach as to whether AUS's activities were targeted at the UK or whether there was a link between AUS's sign and AUK's mark, its overall finding was correct: that there was no unfair advantage.
The court also made several obiter comments re targeting and the need for a link to show dilution.
Targeting is a jurisdictional principle, being the threshold for the question of infringement to be considered. The question was whether the average consumer would regard the service of the provision of advertising space on AUS's website as targeted at UK consumers. Despite evidence to show that AUS signed up to the AdSense programme with the intention of making money from the mistaken visitors, subjective intention could not make a website or page that was plainly not intended for the UK into a page that was so intended.
The question here was different from that raised in conventional online retailing cases of whether a website operator was offering goods or services under a sign in the course of trade that were intended for consumers in the UK; rather it was whether the website operator was providing an electronic billboard service under the sign in the course of trade that was intended for consumers in the UK. Without advertisements with content relevant to UK consumers, the answer to the question was no. This conclusion was not altered because AUS knew that a large number of UK-based consumers would mistakenly arrive at the website or by the fact that AUS would earn the per-impression or click-through income from the visits. The webpage did not objectively target the UK and no amount of knowledge or subjective intention on the part of AUS could change that objective effect. However, once the billboard was populated with ads of relevance to UK consumers, the billboard part of the webpage would be understood by UK consumers as directed to them to the extent that it carried ads of obvious interest to them.
As to who was carrying out the targeting, this would require a full evaluation of the relevant circumstances and not just from the perspective of the average consumer. Here, AUS was using the sign in a commercial communication, not least because the domain name argos.com was used to direct users to its website where they could see its billboard. Overall, AUS provided a billboard service that included ads of interest to UK consumers. To the extent that it contained such ads it was targeted at the UK, but not otherwise.
It was sufficient to prove a link between the sign and a mark with reputation that the sign would call the mark to the mind of the average consumer. However, it was not necessary to show this in all cases. In the context of keyword advertising, the consumer already had the trade mark in mind at the moment the search was commenced. Here, by presenting the billboard service to internet traffic that had arrived at the website on the strength of AUK's reputation, AUS gained at least the impression fee earned by the downloading of the ads. Therefore, advantage was taken of an opportunity that arose only because the traffic had arrived at the site on the strength of AUK's reputation. This sufficiently established the necessary link.
The comments on targeting are perhaps the most interesting aspect of this decision. There is useful analysis following Merck of the approach to be taken in relation to online trade mark infringement in the context of geo-targeting and misdirection of users. However, the circumstances here are unusual and the case turned on its own particular facts.
Case: Argos Ltd v Argos Systems Inc  EWCA Civ 2211.