The High Court has considered trade mark infringement/passing off in the context of Google AdSense for the first time.
Google AdSense offers website operators the opportunity to contract with Google for it to place adverts on their website and pay a fee per user's click on the adverts.
In this case, UK retailer Argos claimed that Argos Inc.'s use of Google AdSense on its website www.argos.com (which was registered prior to www.argos.co.uk) amounted to trade mark infringement. Argos argued that Argos Inc. was 'free riding' on its reputation.
A key (and highly unusual point) was that most UK visitors visited Argos Inc.'s website by mistake and bounced off the page almost immediately. However, as www.argos.com was (1) registered in 1992 and pre-existed Argos' 2004 domain name and (2) targeted customers in the USA only, Argos accepted it could not complain about the use of the domain name alone.
Argos complained that its paid-for adverts appeared on Argos Inc.'s website and Argos Inc. therefore received revenue from Google for user clicks. Argos argued that it was indirectly paying Argos Inc. to infringe Argos' rights (via Google AdWords).
Argos Inc. raised the defence that it was a US focused site and produced evidence to show that 85% of UK visitors to the website left after a median time of 10 seconds. Argos Inc. also argued that Argos had signed Google's AdWords terms and conditions and consented to the use of its adverts on Argos Inc.'s and third party websites. Crucially Argos had not excluded any particular website from showing its advert.
The High Court agreed with Argos Inc. To infringe a trade mark, its use must have been made without consent but here Argos consented to the use of the domain name argos.com and the use of Argos' adverts on the Argos Inc. website. The sign was also not used in the UK so did not amount to trade mark infringement in the UK.
The Judge made it clear that it was not the case that wherever an adviser entered into an AdWords contract with Google, it would consent to the use of the trade mark by any third party in any context.
The real issue for Argos in this case is that the domain had been registered by Argos Inc.. in 1992, prior to Argos' 2004 registration and it accepted it could not complain about it.
This is a useful reminder for new businesses to register domain names early to avoid being in a position where a third party legitimately owns a domain name which consumers are likely to mistake with their brand.
Another key point when signing up for AdWords is to carefully consider excluding some third parties from using your adverts, to avoid being deemed to have consented to a potential infringement.