Argos Ltd v Argos Systems Inc

This is the trial of a claim for infringement of two trade marks and passing off brought by the Claimant (“AUL”) in respect of the use by the Defendant (“ASI”) of the sign ARGOS in the form of the domain name www.argos.com (“the ASI domain name”) and on ASI’s website, and of a counterclaim which seeks declarations of non-infringement in respect of both current and historic versions of ASI’s website. These claims and cross-claims raise a number of issues which are both novel and of potential wider importance, not least relating to the operation of Google advertising.

In Greek mythology, Argos was the short name of Argus Panoptes, an all-seeing giant, and a servant of Hera. When he was killed, as a constant reminder of his foul murder, or as some say of his loyalty to her, Hera placed Argos’ eyes in the tail of the peacock. A version of the scene leading up to his death was depicted by Diego Velázquez in 1659 in his painting “Hermes and Argus”. The full story also involves Zeus and his passion for the nymph-heifer Io, but those who are interested in the full details and who do not know them already must look for them elsewhere.

In modern times, “Argos” has become a popular name for companies all over the world. The papers in this case include a list of over 100 registered “Argos” domain names, and a list of about 100 registered trade marks comprising or including the word “Argos”, which (a) relate to a wide range of designated territories, (b) are not associated with either of the parties to this litigation, and (c) appear to belong to a substantial number of different companies, many of which have names which comprise or include the word “Argos”.

The present claim is concerned with two companies who use the name Argos.

AUL is a very substantial UK based retailer of non-food consumer products, which began trading in 1973 through both catalogues and retail stores. AUL operates primarily in the UK and the Republic of Ireland, although from about 2011 to 2014 it had a small internet-based presence in Spain. AUL trades under the mark ARGOS, and on 8 January 1996 it registered the domain name www.argos.co.uk (“the AUL domain name”), which it launched as an e-commerce website in around 2004. AUL had a turnover in 2015 in excess of £4bn. It is not in dispute that ARGOS is extremely well known to a substantial proportion of consumers in the UK and the Republic of Ireland in relation to the provision of catalogue and store and internet based retail services.

ASI is a company incorporated under the laws of Delaware, USA, on 23 May 1991, which trades from its headquarters in Bedford, Massachusetts, providing Computer Aided Design (“CAD”) systems for the design and construction of residential and commercial buildings. ASI has traded under the name ARGOS since 1991, and earned total customer income of about US $25m between January 1995 and July 2014. ASI registered the ASI domain name on 8 January 1992, and uses it as a commercial website and for email. ASI trades only in North and South America: it has no clients in the EU, and has made no attempt to enter the European market. ASI is one of a number of companies that are associated with a Finnish company called Vertex Systems Oy (“Vertex Systems”), which helped to develop the Vertex BD building design software the licensing of which comprises the principal part of ASI’s business. If ASI receives an enquiry from a potential customer located outside North and South America, ASI refers it to another, more local, company that is a member of the association.

AUL is the proprietor of two EU trade marks, numbered 450,858 (the “858 Mark”) and 2,057,263 (the “263 Mark”). Both relate to the word mark ARGOS. The 858 Mark is registered for inter alia “advertising services” in Class 35, and was applied for on 28 January 1997 and registered on 3 March 1999. The 263 Mark is registered for retail and related services in Class 35, and was applied for on 26 January 2001 and registered on 19 April 2006. There is no dispute that the 263

All of AUL’s claims are based on ASI’s use of the sign ARGOS in the form of ASI’s domain name in conjunction with some versions of ASI’s home (or landing) page. AUL’s case is that this page has been directed at UK internet users by reason of the display of advertisements placed there through the medium of Google’s advertising programmes with the consent of ASI that are, or at least in keeping with the algorithms used by Google appear to be, of interest to UK consumers, including actual or potential customers of both AUL and AUL’s competitors.

These claims are denied in their entirety by ASI, which counterclaims for declarations of non-infringement in respect of both current and historic versions of ASI’s website. ASI also claims an indemnity under a contract made between AUL and Google, on the basis that this contract conferred third party rights on ASI.

Jonathan Hill and Maxwell Keay appeared before me for AUL, and Jaani Riordan appeared for ASI. I am grateful to them for their clear and helpful written and oral submissions, which were skilfully presented.

Because the placing of advertisements on ASI’s website is at the heart of the case, some understanding of how Google advertising works is necessary in order to make sense of the battle lines which have been drawn up between the parties.

Google operates two internet advertising programmes. First, Google AdWords, which offers services to advertisers. Second, Google AdSense, which offers website operators the opportunity to contract with Google for the provision of space for advertising on their websites. Google refers to advertisers who sign up to Google AdWords as “Customers”, to advertisements as “ads”, and to such website operators as “Partners”. Google explains how these programmes work as follows:

“The Google AdWords program enables you to create advertisements which will appear on relevant Google search results pages and our network of partner sites. … The Google AdSense program differs in that it delivers Google AdWords ads to individuals’ websites. Google then pays web publishers for the ads displayed on their site based on user clicks on ads or on ad impressions, depending on the type of ad.”

In brief, therefore, Google AdWords and Google AdSense are two halves of Google’s overall advertising operation. Google acquires advertisements through the AdWords programme and, through the AdSense programme, Google delivers them to internet locations at which they can be viewed and accessed by consumers.

Google’s charges for providing that service to advertisers depend on the extent of consumer interest that is generated by the advertisements, as well as the type of advertisement. That revenue is either received by Google alone (in cases where the ads are displayed on Google search result pages alone) or (in cases where the ads are displayed on websites operated by others) it is divided between Google and individual “partner” website operators as agreed between those two parties.

The Google AdWords service is offered to customers in the United Kingdom by Google Ireland Limited. ASI placed before the Court three versions of the standard form wording of the contract offered by Google Ireland Limited (referred to therein as “Google”) dated 12 July 2006, 6 October 2009, and 10 September 2013. These terms became increasingly complex and detailed over time. They provide (among other things) as follows:

AUL is a “Customer” and ASI is a “Partner” for purposes of these terms. Although I have quoted the wording more fully in order to set the important aspects in context, I consider that, for purposes of the issues that arise in the present case:

I also consider that, in relation to those issues, there is no material difference so far as concerns the meaning and effect of these provisions.

ASI’s evidence included a number of screenshots of ASI’s website at various times. These showed that the following versions of the website existed at different times.

Version 1: December 2008 to January 2012. This is the first version to include AdSense ads. It was shown to all visitors to argos.com during this period, subject to periodic changes (e.g. the use of “lite” home or landing pages during periods of peak visitor traffic). This version consisted of a landing page and sub-pages which were accessed from the landing page. The landing page looked like this:

Version 2: January 2012 to December 2014. At this time ASI introduced a configuration of the website which featured two different versions of the home or landing page, using geo-targeting source code to secure the result that the version which included AdSense ads was not displayed to visitors detected as coming from the Americas but was displayed to all other visitors regardless of their location. The content of the website was otherwise the same. The version of the home page which was displayed to visitors from outside the Americas looked like this:

Version 3: January 2015 to 8 September 2015. The design of the website was modernised, but the landing page and the ad configuration remained the same.

Version 4: 9 September 2015 to the present time. This is the current version, which does not contain any ads. The home or landing page looks like this:

ASI’s case is that these screenshots show what would have been seen by the average consumer who accessed ASI’s website at different times from the UK or another EU member state.

ASI’s evidence also included website statistics for argos.com which had been automatically recorded using a Google platform called Google Analytics for the period since January 2012. These statistics revealed the following:

Mr Patmore accepted that these statistics were likely to be more reliable than information relating to the same subject matter available to AUL. In any event, the evidence adduced by AUL did not present a radically different picture. For example, AUL’s disclosure included two emails dated 16 September 2013 and 14 November 2013 from Dave Thomas of Netnames to various individuals at AUL, which contained the following information regarding traffic to argos.com:

ASI contended that these statistics supported the conclusion that the average consumer (as represented by this very large sample of millions of UK internet users from 2012 to 2015) would not regard the contents of ASI’s website as being meant for them, and that if s/he mistakenly accessed argos.com s/he would very quickly realise that the website has nothing to do with AUL and would rapidly leave it.

For its part, AUL placed emphasis on a number of matters concerning the way in which the ASI website had been configured at different times.

AUL’s contentions included that: (a) the documents disclosed by ASI suggested that one driver for introducing AdSense advertising was to “make money simply by putting ads [on the home page]”; (b) ASI realised that ads for AUL would be displayed on the website, as indeed they were; (c) it is reasonable to infer that ads for AUL’s competitors would also have been displayed on the website to UK internet users; (d) the re-configuration of ASI’s website to display different versions of the home page to visitors from the Americas and to visitors from the rest of the world was carried out with a view to maximising revenue (which ASI

AUL’s overarching submissions included that (i) ASI is not an internet business, and while ASI’s website might be useful for conveying information about its products and services it was not critical to ASI’s business and (ii) the true nature of ASI’s activities summarised above is that ASI was conducting a secondary adbased business in the UK which was independent of ASI’s American activities.

AUL’s claims for trade mark infringement are brought under Articles 9(1)(a) and 9(1)(c) of the applicable Community Trade Mark Regulation (Council Regulation (EC) No 207/2009 on the Community trade mark) (“the Regulation”), which provide:

“Rights conferred by a Community trade mark

1.

A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

(a)

any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered

…

(c)

any sign which is identical with, or similar to, the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.”

AUL did not object, and accepts that it could not have objected, to ASI’s use of the ASI domain name for email and as a simple website promoting its CAD software and related services. AUL’s analysis throughout has focussed on the use of ASI’s domain name in conjunction with ads: for example, AUL’s closing submissions state that “… the use of [ASI’s] domain name in relation to a webpage bearing ads, as complained of, does indeed amount to use of a sign identical to [AUL’s] trade

By no later than 2004, however, a substantial number of people based in the UK and Ireland who wanted to visit AUL’s website were visiting ASI’s website by mistake. It seems probable that this was largely due to UK consumers guessing that argos.com is AUL’s website address, and typing that address into their web browsers or internet searches accordingly. By participating in the Google AdSense programme between about December 2008 and September 2015, ASI was able to generate advertising revenue from visitors to ASI’s website, many of whom were visiting that website in the mistaken belief that argos.com was the website address of AUL. A number of the advertisements which were placed on ASI’s website in this way were for AUL, and such advertisements were placed on ASI’s website by Google as a result of AUL’s participation in the Google AdWords programme.

One of AUL’s central claims is that ASI’s use of the ASI domain name in these circumstances was abusive, because it amounted to unfair free-riding on, and was liable to damage, the distinctive character and reputation of AUL’s trade marks. AUL also claims that this use confused a significant number of internet users. The fact that a number of the material advertisements related to AUL added insult to injury, because it meant that part of the payments made by AUL to Google for clicks on these advertisements were received by ASI, such that, on AUL’s case, AUL was paying ASI for carrying out activities which infringed AUL’s rights.

It was common ground that the conditions which need to be satisfied for a claim under Article 9(1)(a) to succeed were correctly stated by Arnold J in Supreme Pet Foods Ltd v Henry Bell & Co Ltd [2015] EWHC 256 at [83] as follows:

“(i)

there must be use of a sign by a third party within the relevant

territory;

(ii)

the use must be in the course of trade;

(iii)

it must be without the consent of the proprietor of the trade mark;

(iv)

it must be of a sign which is identical to the trade mark;

(v)

it must be in relation to goods or services which are identical to those for which the trade mark is registered; and

(vi)

it must affect, or be liable to affect, one of the functions of the trade mark.”

There was no dispute about conditions (ii) and (iv), and AUL contends that the other conditions are also satisfied.

It was also common ground that the conditions which need to be satisfied for a claim under Article 9(1)(c) to succeed were correctly stated by Arnold J in

There was no dispute about conditions (i), (iii), (v) and (vi), and AUL contends that the other conditions are also satisfied.

With regard to passing-off, the elements of the claim were set out in Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341, by Lord Oliver at 406:

“The law of passing off can be summarised in one short general proposition – no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action that he is likely to suffer, damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.”

AUL submitted that this authority leaves room for something like “initial interest confusion” in passing off, provided that the misrepresentation, even if dispelled by subsequent conduct, has already been the effective cause of damages, and that this was acknowledged by David Richards J in Knight v Beyond Properties [2007] EWHC 1251 (Ch) [2007] FSR 34 at [80].

AUL submitted that a defendant also commits the tort of passing off where he equips himself with an instrument of fraud, relying on British Telecom Plc v One In A Million Ltd [1999] FSR 1 (“One in a Million”), Aldous LJ at p18:

“Whether any name is an instrument of fraud will depend upon all the circumstances. A name which will, by reason of its similarity to the name of another, inherently lead to passing off is such an instrument. If it would not inherently lead to passing off, it does not follow that it is not an instrument of fraud. The court should consider the similarity of the names, the intention of the defendant, the type of trade and all the surrounding circumstances. If it be the intention of the defendant to appropriate the goodwill of another or enable others to do so, I can see no reason why the court should not infer that it will happen, even if there is a possibility that such an appropriation would not take place. If, taking all the circumstances into account the court should conclude that the name was produced to enable passing off, is adapted to be used for passing off and, if used, is likely to be fraudulently used, an injunction will be appropriate.”

AUL submitted that in that case the defendants’ mere registration of a domain name comprising the name Marks and Spencer was held to constitute passing off, on two bases: first, that the registration made a false representation to persons consulting the domain name register that the defendants were associated or connected with Marks and Spencer; and, second, that the domain name comprising the name Marks and Spencer was an instrument of fraud in that any realistic use of it would result in passing off. The defendants’ arguments to the effect that their registration of other domain names comprising other well-known trade names (e.g. Sainsbury, Virgin) were not inherently deceptive as there are people with such names and other companies whose names incorporate such words was rejected both at first instance and on appeal because, although those domain names could have been used innocently, that was not the use that the defendants had intended (see [1998] FSR 265, 273 at first instance and [1999] FSR 1, 24 on appeal).

AUL submitted that the present case falls within the conventional domain name analysis given in One in a Million and followed in many cases since then, including Tesco Stores Ltd v Elogicom Ltd [2007] FSR 4 (a decision of Mr Philip Sales, sitting as a Deputy High Court Judge, upon which Mr Hill placed considerable reliance). First, the registration of ASI’s domain name misrepresents to the UK public that ASI is connected with AUL and ASI’s domain name itself constitutes an instrument of fraud, because any use of it within the UK would be liable to misrepresent, given AUL’s enormous goodwill and reputation. Second, the use of ASI’s domain name in the UK amounts to a damaging misrepresentation. Initially, internet users believe that a website denoted by ASI’s domain name is one for which AUL is responsible. Although some of them will realise when they get to ASI’s website that it is not connected to AUL, by then damage is a fait accompli because they are highly likely to click on an ad for AUL or its competitors. With other customers the confusion will never be dispelled, because they will click on an ad very rapidly without realising that ASI’s website is unconnected to AUL.

Before setting out its substantive defences, ASI made some preliminary points.

While ASI accepted that the traffic from visitors to ASI’s website who get there by mistake dwarfs the number of visits from ASI’s customers, ASI also contended that (a) this has caused serious bandwidth and other problems and real expense for ASI and (b) moreover, this traffic is fleeting and trivial, because (as the above statistics show) such visitors immediately realise their mistake and leave ASI’s website.

In nearly 7 years, the ads generated about US $100,000 in revenue for ASI, and ASI contended (a) that this sum was tiny relative to either party’s business, and (b) that it used this sum in part to offset the costs of the bandwidth and infrastructure needed to host ASI’s website, as a result of the many visitors who, through no fault of ASI’s, speculatively guessed the address “www.argos.com”.

As against this, where AUL’s own ads were clicked on by internet users, this generated significant profits for AUL when those users thereafter proceeded to purchase goods from AUL.

In July 2013, AUL decided to blacklist its ads from appearing on ASI’s website. As soon as it received AUL’s complaint in May 2014, ASI also took steps intended to stop AUL’s ads from appearing (as they had continued to do to some extent even after AUL had tried to block them). In September 2015, ASI disabled ads entirely.

ASI argued that the ads themselves are a red herring. AUL’s claim relates to the use of the sign ARGOS in ASI’s domain name and references to the word ARGOS on ASI’s website. AUL does not complain about the contents of ads themselves.

ASI submitted that the claim failed for the following principal reasons:

AUL called the following witnesses:

While I do not question their honesty, in my judgment both Mr Cohen and Mr Barrett had a tendency to attempt to further AUL’s corporate position both generally and in this litigation, and to argue AUL’s case. Accordingly, I found their evidence less helpful than it might otherwise have been. It suffices to give one example, namely Mr Barrett’s evidence concerning the four email chains which are said by AUL to support the conclusion that ASI’s website caused confusion to consumers and led them to believe that it was connected with AUL. Mr Barrett is right in saying that these emails are from customers who were confused, and who contacted ASI in error when they truly wanted to contact AUL. However, if the emails are considered objectively, I consider that it is clear that this confusion was the product of the carelessness of the consumers and not due to anything said or done by ASI which was confusing. In my judgment, his evidence about these emails is little more than argument, and his failure to look at what they show more thoroughly and less partially led him to take a bad point on behalf of AUL.

ASI called the following witnesses:

In my view, although, as I have made clear, I found them honest, and, ultimately, this did not undermine their direct evidence, the witness statements of both these men contain a quantity of material which is in the nature of argument, or, at least, a pulling together of more or less forensic points concerning documents and events about which they are not in a position to give personal, first hand evidence. This led them to put forward as their own evidence many statements which were, on proper analysis, not for them to make, and which, in a number of instances, they were unable to sustain when questioned; and it is in these respects that their evidence became vulnerable to criticisms of the kind which Mr Hill advanced against it.

The main criticisms which were made of Mr Moilanen related to the following matters: (1) there was an issue about disclosure of the four email chains relating to customers, which Mr Moilanen explained arose out of an honest mistake on his part in not attaching them to email that he sent to AUL’s solicitors, but which was put right when a search was conducted again, and the emails were re-discovered and disclosed; (2) there was an issue about whether ASI incurred website expenses such as hosting costs, which Mr Moilanen claims to have answered by pointing to documents which show more than US $1m in overall marketing expenditure; (3) there was an issue about evidence contained in Mr Moilanen’s first witness statement which related to events in 2004, which Mr Moilanen explained was part of a narrative prepared by ASI’s lawyers based on the documentary materials and instructions he provided for purposes of an interim application; and (4) Mr Moilanen was criticised for not speaking with Panu Outinen (who, although not a director of ASI, was a senior officer of ASI) about Mr Outinen’s intentions and motivations, which Mr Riordan submitted was not a valid criticism because ASI did not regard Mr Outinen’s stance as being of any great relevance, as Mr Outinen had no formal decision-making role at ASI, and put forward ideas in an idiosyncratic style, very few of which were taken up by ASI’s board.

Among the points which were put to Mr Fox were the following: (1) it was suggested that his witness statement had been drafted by his lawyers, which he sought to answer by saying that it was a collaborative effort in which he had participated; and (2) it was suggested that the non-American version of ASI’s landing page had been configured to maximise the effectiveness of the ads, and that the source code relating to that page had been adopted with a view to improving advertising revenue, which he answered by explaining that the purpose of the changes was to minimise bandwidth consumption and server load, and by stating that while Mr Outinen’s concern may have been to maximise advertising revenue, the main concern of himself and other (unidentified) employees of ASI was “to provide the quick and easy access for the unwanted visitors to leave the page”.

As I have already indicated, I consider that there is validity in the criticism that the statements of these witnesses contained a quantity of material that, on proper analysis, was not evidence for them to give. Mr Moilanen was also partly to blame for ASI’s failure to provide initial disclosure of the “confusion” emails. However, I acquit both Mr Moilanen and Mr Fox entirely of any intention or attempt to mislead the court. I also decline to draw adverse inferences from ASI’s failure to call Mr Outinen as a witness (see Wisniewski v Central Manchester Health Authority [1998] PIQR 324, Brooke LJ at 340), for two principal reasons. First, I am satisfied that Mr Outinen’s stance concerning ads is evident from the contemporary documents. Second, I am satisfied that Mr Outinen’s views were not shared by others at ASI, and especially Mr Fox, whose prime concern was that the configuration of ASI’s website should serve the needs of ASI’s “real clients” and should make clear that ASI was a CAD software company. Accordingly, I consider that there is no need or warrant to resort to inferences. Looked at more generally, points of the kind discussed above were not of great relevance to the central issues.

In fact, I consider that those aspects of the oral evidence which remained substantially in dispute and which depended on an assessment of the credibility of the witnesses were of relatively limited significance overall. In some instances, the resolution of the issues which I was called upon to decide depended, either wholly or substantially, on facts which were not materially in dispute. Further, even where there were conflicts of oral evidence which might be said to be of importance, I consider the contemporary documents provide a tolerably clear guide to the truth.

I turn to consider some of the matters to which those documents relate.

AUL’s disclosure included emails and other documents relating to the period between July 2013 and April 2014. Some of these emails passed between AUL’s advertising agents Summit Media Limited (“Summit”) and Mr Patmore and others at AUL; others were internal emails passing between various individuals at AUL (including Bertrand Bodson, who joined AUL in 2013 as its first ever digital officer, later becoming Chief Digital Officer); still others passed between AUL and David Thomas of AUL’s domain name agents, who were called Netnames.

An email from Summit to Mr Patmore and others dated 4 July 2013 states: “We now have a view of the performance for the past 3 months for the argos.com site. As a placement it had been performing well and has therefore not been excluded during our optimisation”. The email contains a table which includes the following statistics: “Impressions 265,521; Clicks 19,763; CTR [i.e. Click Through Rate] 7.44%; Sales 1,631; Revenue £106,214”. The email continues: “Spend circa £300 per month. Rev circa £34,000 a month … You would probably argue that it should be there – at least it stops people having to re-search and find an Argos click through. Conversely turning it off would not have a massive impact”.

Later the same day, Mr Patmore replied: “Thanks for this data. Please can we exclude this website from all future activity”. He also sent an internal email stating “We have only generated £100k in the last 3 months, so there is no major risk to our campaigns. I have asked Summit to exclude argos.com from now on”.

On 5 July 2013, Summit provided a list of steps taken in response to ad hoc requests from AUL which included: “Argos.com removed as a placement from all GDN [i.e. Google Display Network] campaigns – Done”.

On 20 July 2013, Mr Bodson sent an email saying that “There is another one that I absolutely want to get: Argos.com”. Later the same day, Mr Bodson sent another email asking Mr Barrett for his views on “the best approach to get” argos.com.

On 5 August 2013, Mr Cohen recorded that the argos.com domain “is of increased importance to us”.

On 28 August 2013, AUL’s head of brand marketing, Carl Nield, recorded that argos.com “is likely to be a considerable investment”.

On 9 September 2013, Mr Bodson sent an email to Mr Patmore and others stating: “Do you know how much traffic/revenue we are getting for ‘Argos.com’ (web but also mobile/tablets as there is a big ‘.com’ on those that prospective customers might take [as] a shortcut? … Basically, we are in discussion with the owner of the domain … [We need] to see what value we could put on it. I’m hoping that we can get it”.

Mr Patmore’s answer, sent the following day, included the following: “Having a quick look on site catalyst for 2012, argos.com as a referring domain generated 2,653 visits and a £6,180 revenue … Looking in hitwise approximately 75% after leaving argos.com are to our web/mcomm sites”.

On 10 September 2013, Mr Bodson recorded “We’ll make a first ‘low’ bid and play hardball”.

On 16 September 2013, Mr Thomas sent an email to various individuals at AUL, which contained the information regarding traffic to argos.com that I have already summarised above.

On 20 September 2013, Mr Patmore sent an email raising a possible “disconnect” between Mr Patmore’s figures and those provided by Mr Thomas, adding: “To give some comparison, this is performing a lot better than our total activity in this space – click thru rate of 0.23%, conversion 5.5% and gives an indication of how many people are actually looking for us when on the domain”. This email was forwarded to Mr Thomas, who replied: “It’s impossible for me to say unless I had access to the analytics data from the owners – which they are unwilling to divulge until we have placed an offer that they would consider serious”.

On 4 October 2013, there was an exchange of emails between Mr Thomas and Mr Patmore. Mr Thomas produced some calculations which suggested that the revenue generated for ASI by argos.com was in the region of £11,400-£27,672; Mr Patmore replied that yearly earnings of “£54-£242k” might be more representative.

On 6 October 2013, Mr Bodson sent an internal email discussing “the right entry bid” for argos.com. He explained that what made the ASI domain name “particularly attractive” to him was: “(1) improved SEO which by itself probably has bigger impact that (sic) all considerations above; (2) will become increasingly important for us on tablet/phones there is a ‘.com’ key; (3) they increasingly send to our competitors – eager to stop this”.

On 8 October 2013, Mr Bodson sent an email to Google, stating “In confidence, we are looking at making a buying (sic) the ‘Argos.co,’ domain. Really silly for us not to have this in my opinion”, and asking Google if it could provide data that “Will help [us] get a sense of what offer we should consider doing to the domain owner”.

On 9 October 2013, Google replied with information said to be obtained from “public data sources” which “there’s no harm in sharing”. The data provided suggested that argos.com had: “100-200k page views per month; 70-100k unique visitors per month”.

On 4 November 2013, Mr Cohen informed Mr Patmore that he had been looking at Google’s AdSense terms, and asking whether Mr Patmore considered that “the number and placement of ads on [ASI’s] website puts them in breach of this policy”. Mr Patmore sent email in response which, in sum, replied in the negative.

On 14 November 2013, Mr Cohen reported to Mr Bodson that ASI had refused AUL’s offer, that the latest information “indicates that, in a year, Argos.com receives 2.5m unique visits, 90% of which come from the UK, that “the owners casually indicated that they would be expecting a 7 figure offer”, and that “it is now down to us to go back with a revised offer”.

On 30 December 2013 and 2 January 2014, Mr Patmore sent emails saying that the latest data provided by ASI had caused him to revise his view of the value of argos.com, because “we previously underestimated the traffic argos.com was receiving in the UK”, and that “it feels like the next step is to decide on a new bid that we are comfortable with”.

On 6 January 2014, following a lot of internal discussion about prices and tactics, Mr Cohen sent an update to Mr Bodson stating that Netnames would put forward a revised offer from AUL “with the justifications we have provided”.

On 24 January 2014, Mr Thomas reported back to Mr Cohen as follows: “Finally caught up with the owner and had a lengthy discussion regarding the sale – realistically they have no interest in entering negotiations with our revised budget – no counter offer was given”.

On 27 January 2014, Mr Thomas sent an email recording that AUL’s offer had been “flatly refused” and that ASI’s response “suggests they genuinely aren’t interested”, and suggesting that AUL should “raise the offer to the max budget”, although “My gut feeling is that the offer will be rejected again”.

Also on 27 January 2014, Mr Cohen reported to Mr Bodson that ASI had rejected AUL’s offer, that in order to keep ASI’s attention AUL needed to consider a “dramatic increase”, and that: “On a side point I have been exploring potential legal remedies against the owners (to be used as ‘sticks’ in negotiation). Initially these are somewhat limited given our lack of trade mark rights in the US and the existence of their ‘legitimate’ US business”.

On 25 February 2014, Mr Cohen sent an email to Mr Bodson and others, stating: “We are presently following up on our legal options for Argos.com with a view to putting across the (potential) … carrot/stick offer we discussed”. Mr Cohen referred to information which had been gathered by Netnames which showed that argos.com displayed no ads in the USA, and commented “this will certainly aid any legal argument we choose to make over the targeting of their ads”. Later the same day, Mr Barrett sent a reply stating simply “Interesting!”

Also on 25 February 2014, Mr Bodson sent internal emails recording that a meeting had been held with legal and financial personnel at AUL to change AUL’s approach to argos.com because “the owner is clearly not playing ball at the levels we are currently at”. The new approach involved making an increased offer, but it was also the case that: “Legal has found a way to put some legal pressure too”. The emails concluded: “Will offer a next bid in between but apply pressure at the same time”.

On 20 March 2014, Mr Cohen sent an email to Mr Patmore with regard to argos.com, stating that Mr Bodson “is getting keener that we explore all possible avenues (which at this stage touches on the legal approaches we can make)”.

On 1 April 2014, Mr Patmore recorded that he had checked the ASI source codes which had been supplied to him by Netnames and that “they aren’t serving up the AdSense code in the US, so it is intentional not to show it in the US”.

It is clear from these documents that, throughout this period, AUL had no real concerns that ASI’s activities were giving rise either to infringement of AUL’s trade marks or to passing off. AUL’s interest in the nature and extent of the traffic which was attracted to ASI’s website was primarily as a means of assessing the value to ASI of ASI’s domain name, so that AUL could make an offer to buy argos.com at a price which AUL could put forward to ASI as having commercial justification. The potential grounds for legal complaint which were identified by AUL were sought to be deployed not as a basis for legal proceedings but rather as a negotiating tool. By the time the letter before claim was sent on 30 May 2014, AUL had known for many months of most the matters of significance which AUL relies on in this claim, and for three months that ASI had created two different versions of its website.

In support of its case that by no later than June 2006 ASI knew about AUL and that a substantial number of AUL’s customers were accessing ASI’s website when seeking to access AUL’s website, AUL relied on the following principal documents:

In support of its case that issues relating to the bandwidth of ASI’s website by this substantial traffic were resolved or virtually resolved by, at latest, November 2008, AUL relied on an email dated 1 June 2006 from Mr Outinen to Mr Fox and Hannu Heinio and on emails passing between “Jessi” and Mr Outinen between 10 July 2008 and 17 November 2008 which included the following: (a) “So, I guess most of the Internet related things work after this switch to Conversent :-)” and (b) “…we’ve been having several problems with our website and have finally fixed all of them except for one”.

In support of its case that at this time or shortly after, ASI first introduced Google AdSense ads on its home or landing page, AUL relied on emails passing between “Jessi”, Mr Outinen and John Vigilante between 17 November 2008 and 17 December 2008, which included the following: (a) “The reason I’m asking is that there might be opportunities to show (and thus sell) ads on e.g. front page a la google ads…”, (b) “If you go to our homepage you will see the beginnings of the AdSense advertisements…”, and (c) “Looks exactly as I though [sic] it would! I can see 4 text based advertisements…”.

At that point (indeed up until early 2012) the same home page was displayed to all visitors to ASI’s website, irrespective of the country or territory from which they were accessing the website.

In support of its case that the ads were introduced by ASI with the specific intention of making money, by means of the ads, from customers of AUL in the UK who were in fact seeking to access AUL’s website, and that recouping bandwidth costs was at best a minor concern and deferring “unwanted” visitors from accessing the sub-pages of ASI’s website was not a concern at all, AUL relied on the following contents of the emails referred to above: (a) “… I briefly [sic] discussed with other Argos Board Members after you left the phone meeting last time that there might be opportunities to make money simply by putting ads to www.argos.com web site (front page!)”; (b) “Ok, since people don’t remember the correct web site for Argos (the retailer) they simply type argos.com OR [sic] www.argos.com to their browsers and voila they come to Argos Systems’ web site… So there’s definitely [sic] market value in www.argos.com !”; (c) “I still think you may not have understood the idea of putting these Google Ads. 99% of visitors of argos.com are people NOT [sic] interested into getting CAD software or potential customers in any way in the future. They are simply there because they typed something to their browsers. 10000 different visitors a day! And simply providing ads for them to VIEW [sic] is enough to make money (they don’t even need to click on the ads!) Is this money worth the hassle who knows but without trying how can you know???”; and (d) “…I don’t care what the ads actually are as long as the web surfers would either click on them (per-click) OR [sic] what’s more

AUL further contended that in 2009 and 2010, and possibly at other times, ASI adjusted its website with the aim of maximising the revenues received from the ads by increasing the likelihood of click throughs from internet users intending to access AUL’s website; and, specifically, that ASI took steps to access and obtain a view of its website from the UK (to check whether AUL’s ads were showing to UK traffic to ASI’s website). AUL relied on the following documents in particular:

Finally, in reliance on the documents contained in ASI’s disclosure, AUL contended that ASI also changed the size, number and positioning of the ads displayed over the Christmas 2010 period (and in subsequent years) to take advantage of a time when AUL’s customers were even more likely to be seeking to access its website. In this regard, AUL relied on the following:

These documents speak for themselves, and, in general terms, they provide contemporary support for the points which AUL sought to extract from them. Nevertheless, it is right to record that these documents do not tell the whole story.

For example, they reveal that part of ASI’s motivation in displaying Google ads was to earn revenue, and indeed Mr Fox did not dispute this. However, ASI’s actions were also driven by other considerations, which included how best to address unwanted traffic to ASI’s website, as Mr Fox asserted and as I accept.

Further, whether or not it is right to say that ASI was not concerned about deterring “unwanted” visitors from accessing the sub-pages of ASI’s website, providing a means for misguided visitors to navigate back to AUL was, as I find, one of the concerns and objectives of Mr Fox at least. The fact that ASI realised that this was likely to be achieved if AUL’s ads were displayed on ASI’s website assists AUL’s case in that it supports the conclusion that ASI could foresee and did in fact intend that such displays would occur (although ASI did not have any control over AUL’s ads being placed there, and in practice had to leave the presence of AUL’s ads to be determined by Google’s algorithms). At the same time, it assists ASI’s case in that it shows that ASI’s motives were far from purely mercenary. On the contrary, ASI had problems it wanted to solve, and it saw a way of doing so that was not inimical to AUL. In fact, ASI’s display of ads not only took misguided visitors back to AUL but also generated revenue for AUL, and it seems likely that at least some of this was money that AUL would otherwise not have earned. In this regard, although some users who were trying to navigate to AUL’s website and who reached ASI’s website by mistake might have found their way back to AUL’s website and made purchases from AUL regardless of whether they found AUL’s ads displayed on

On a careful reading of the contemporary documents, it is apparent that the documents themselves reflect these different considerations. For example, one email records the view that the content of the ads is immaterial as long as visitors to ASI’s website either click on them or “what’s more likely in this case (Argos the Retailer) they simply see ads and figure out that they are in the wrong place”. The writer of that email believed that, either way, ASI was likely to generate revenue from the ads because “their browsers have already downloaded the ads and showed on the screen”. However, even with that element of focus on the revenue prospects, it was also the writer’s perception that the ads would be an effective way of telling visitors who were looking for AUL’s website that they were in the wrong place. As a matter of logic, although the emails do not descend to such details, this means of notifying visitors that they were lost would apply most clearly to ads which were not for AUL, as visitors would not expect AUL’s website to display ads for others.

In his first witness statement, Mr Barrett referred to AUL’s concern that some of its customers who mistakenly accessed ASI’s website might think that website had “something to do with” AUL. In his second witness statement, Mr Barrett asserted that “Emails only very recently disclosed by [ASI] demonstrate that these were in fact valid concerns. The emails are from [AUL’s] confused customers who contacted [ASI] in error through the contact form on [ASI’s website] concerning products purchased and communication received from [AUL]”.

The emails in question are few in number, and comprise the following exchanges, in all of which the consumers sent their emails to bdhelp@argos.com.

First, an email sent by Audrey Banks on 14 June 2012 on the subject “Vertex BD Software Feedback” saying that she had purchased a Bush television “last year” which she was not able to use because the “the sound is really unbearable”, that “I bought this paying by Mastercard on 4^th September, from the Nottingham branch, Victoria Park”, and ending “I wondered if you could help”. Mr Fox replied to this email stating: “It looks like you are trying to reach the Argos (www.argos.co.uk) department store, but we are not it. We are a software company in the US. I wish you luck with the TV”. Ms Banks replied: “Thank you for taking the time to answer my misdirected email. I shall try again”.

Second, an email sent by Kevin Ryan from his iPhone dated 15 May 2013 on the subject “Vertex BD Software Feedback” saying that he had received a text thanking him for “your reservation 162385 at Gloucester Eastgate Street” and informing him that “This will be held for you until the store closes on 16-05-2013”, but that “… someone will be disappointed as I haven’t ordered anything recently from Argos .. Hope you can sort this out please and many thanks”. Mr Fox replied to this email stating: “I believe you are trying to reach the Argos department store, www.argos.co.uk. We are a software company in the US, so I don’t think I’ll be much help with this”. Mr Ryan replied to that email, stating: “I realised after I’d sent it that it looked like a “different Argos” – so I’ve already done that part. Thank you for taking the time to be bothered replying”.

Third, an email sent by Susan Fisher dated 28 January 2014 with no subject saying that she was having problems with a Samsung mobile telephone which she had purchased on 16 September 2013 from “your Romford store” and asking “what should I do”. Mr Fox replied to this email stating: “I’m sorry to hear about your phone, however, I think you are trying to reach the Argos department store in the UK, and not Argos Systems, a software provider in the US. You may find their contact info on their website: www.argos.co.uk.”. Ms Fisher does not appear to have sent any reply.

Fourth, an email sent by Brenda Hughes on 8 April 2014 on the subject “E book Arvonia” saying that: she had bought an Arvonia eBook from Amazon at Christmas which was faulty; she had sent it back on 15 February 2014; she had been advised in March that it had been sent back to France and she would receive a new one by the end of March, but she was still waiting; and “When I rang the phone number I had I was told by a recorded message that I could trace the progress of returns on your website – argos.com – however, there does not seem to be any way of doing this – please could you help”. Mr Fox replied to this email stating: “It sounds like you are looking for the Argos store based in the UK, not Argos Systems in the USA. You should try their website: www.argos.co.uk.”. Ms Hughes replied “Thanks Jonathan”.

Quite apart from their numerical paucity in terms of evidence of confusion, in my judgment these emails lend no support to the suggestion that consumers who are reasonably observant will think that ASI’s website is in any way connected to AUL. On the contrary, each of them bears all the hallmarks of having been directed at ASI due to a careless mistake on the part of the consumer in question.

Ms Banks appears to have acknowledged that the mistake was hers, and Mr Ryan discovered his mistake, it seems by taking a second (and more careful) look at ASI’s website, even before he had received a reply from Mr Fox. To my mind, the mis-match between the true subject of their emails and the subject they attributed to

Ms Fisher does not suggest that she was misled by anything said or done by ASI, and it is not clear that Ms Hughes’ complaint (about an eBook purchased from Amazon) was properly directed to AUL, let alone ASI. It seems most unlikely that the number that Ms Hughes called can have been a number for ASI (because surely she would have noticed that it was a number in the USA), or that by calling a number for Amazon she could have been given the domain name of ASI’s website. It may be that the number Ms Hughes called was a number for AUL, but in that case she cannot have been told that she could trace the progress of returns on ASI’s website. Whichever way one looks at the matter, it seems clear to me that Ms Hughes’ confusion, also, is not attributable to anything said or done by ASI.

In my view, all that can safely be taken away from these emails is that the mistakes of a small number of UK consumers, which were not attributable to any confusion created by the contents of ASI’s website, put ASI to some trouble and inconvenience, but were nevertheless dealt with promptly, courteously and helpfully by Mr Fox for ASI, as most of those consumers readily acknowledged.

Mr Hill suggested that it would be right to infer that ASI has not given full disclosure of relevant documents in this regard (and perhaps in other respects). However, I do not consider that there is any basis for drawing any such inference.

As the above summary of AUL’s and ASI’s rival cases makes clear, they give rise to numerous issues. The written and oral arguments addressed these issues largely by examining in sequential order the case for and against each element which is in dispute concerning: (i) the claim based on Article 9(1)(a); (ii) the claim based on Article 9(1)(c); and (iii) the claim for passing off. It seems to me, however, that it is convenient to address at the outset certain issues which are potentially dispositive of wider aspects of the case than others, and, moreover, appear to depend on facts which are not materially in dispute. The issue of consent is one such issue: that the use of the sign that is complained of is without consent is a condition of the claims under both Article 9(1)(a) (condition (iii)) and Article 9(1)(c) (condition (iv)).

ASI’s case on consent

ASI contends that the grant of rights given by AUL in the AdWords terms constitutes consent, for Article 9 purposes, to the display of AUL’s advertisements

The meaning of “consent” for these purposes was discussed by Males J in Marussia

That case concerned an application for summary judgment. The central question, to which Males J gave a negative answer, was whether consent could be established by an implied term in an oral agreement. Mr Riordan suggested that the decision of Males J should be treated with care, partly because of these differences between that case and the present case, and partly because Males J appears to have based his decision on two cases concerning exhaustion of rights, in circumstances where the argument that “consent” had a different meaning in other contexts did not arise.

With regard to this last point, Mr Riordan submitted that (a) “consent” is relevant to a number of aspects of EU trade mark law; (b) these aspects are distinct; (c) it is not obvious that “consent” has the same meaning in each of these contexts; (d) in particular, although a defence of exhaustion based on consent must be proved by the person relying on that defence, in the context of infringement absence of consent is a positive element of the claim which the claimant has to prove under Article 9 of the Regulation; and (drawing these threads together) (e) in the present case (i) AUL bears the burden of proving that ASI did not have AUL’s consent and (ii) the concept of “consent” ought not to be narrowly construed in this context.

Mr Riordan developed these submissions along the following lines (omitting his references to the equivalent provisions of the Trade Mark Directive - 89/104):

Without giving up this line of argument, Mr Riordan suggested that it probably does not matter in the present case. In summary: (a) ASI’s case on consent is based on AUL’s assent to and active participation in the Google AdWords programme, which resulted in AUL’s own ads appearing on the ASI website throughout the time that is material to the present claim; (b) even if ASI bears the onus of proof, and must prove “unequivocal” renunciation, the AdWords Terms meet this standard; (c) the correct construction of those Terms is that AUL has granted to Google, and Partners, authority to place ads on any Target; and (d) that is not only an express statement, but is also one which is inconsistent with AUL maintaining its trade mark rights against Google, and therefore against ASI.

AUL’s case on consent

Mr Hill submitted that the principles relevant to the meaning of “consent” under the Regulation were to be derived from Zino Davidoff, that “consent” must be interpreted in the same way in both the exhaustion and the infringement provisions, and that the burden is always on the party alleging consent to prove it. He placed reliance on case C-661/11 Martin Y Paz Diffusion v Depuydt [2014] Bus LR 329 at [57], Zino Davidoff at [40]-[41], the fact that in the Marussia case Males J applied

With regard to ASI’s reliance on the AdWords Terms, Mr Hill pointed out that ASI had put forward three versions of these terms (the 2006 terms, the 2009 terms, and the 2013 terms), and he submitted that (a) the 2013 terms can have no application to the issue of consent since AUL blacklisted its ads from appearing on ASI’s website in early July 2013, and the very limited appearances of AUL’s ads on ASI’s website after this date was probably due to a glitch and (b) ASI had failed to establish the periods to which the 2006 terms and the 2009 terms applied.

Mr Hill’s fundamental submission, however, was that none of the AdWords terms could assist ASI in establishing consent because those terms say nothing about use of the sign ARGOS in ASI’s domain name. (This formulation of AUL’s case does not make reference to the use of the sign ARGOS on the home (or any) page of ASI’s website. Accordingly, in the discussion which follows below, I have concentrated on the complaint that the sign ARGOS is used in ASI’s domain name. For the avoidance of doubt, however, I consider that the same reasoning and analysis applies to any claim made by AUL which is based further or alternatively on ASI’s use of the sign ARGOS on ASI’s website). Mr Hill contended as follows:

Mr Hill invited me to consider a case where a third party signs up to AdSense and then uses AUL’s trade mark in the content of its website to market its goods. He submitted that: if ASI’s argument is right, AUL will have consented to this use of its trade mark when its ads appear on the third party website; this is plainly wrong.

Mr Hill further submitted that: (a) in any event, AUL’s case is that ASI infringes even where AUL’s ads are not shown on ASI’s website (for example where AUL’s competitors’ ads are shown instead); (b) plainly, the fact that AUL had signed up to AdWords can be of no relevance in this situation; (c) therefore, assuming that AUL prevails on the other issues, ASI’s use of the sign ARGOS in the ASI domain name in this situation will be infringing; and (d) it would be bizarre if the appearance of one of AUL’s ads could make ASI’s otherwise infringing use of the ASI domain name non-infringing.

Finally, Mr Hill submitted that any suggestion that either AUL or Summit deliberately placed AUL’s ads on ASI’s website was not made out on the evidence. Mr Hill relied on Mr Patmore’s evidence that, to the best of his knowledge, AUL had no campaigns that were targeted at particular domains, and instead the placements of AUL’s campaigns were driven by the content of the campaign and user interest. Mr Hill further contended that ASI’s reliance on the contents of a placement specific report relating to ASI’s website which was generated for the purposes of this litigation was misplaced. Again, Mr Hill relied on Mr Patmore’s evidence that there was nothing in that report which, when properly understood, stated that the placements listed were “managed placements” (i.e. placements specifically chosen by the advertiser) as opposed to normal placements.

Discussion of the issue of consent

Mr Hill does not appear to take issue with ASI’s contention that the grant of rights given by AUL in the AdWords terms constitutes consent to the display of AUL’s ads by ASI on ASI’s website, where ASI’s website is selected for that purpose by Google as part of Google’s AdSense programme. In any event, in my judgment that contention is plainly correct. I consider that this is so in accordance with each of the three versions of the AdWords terms which have been placed in evidence before me. Further, AUL has not suggested that any display of AUL’s ads on ASI’s website was not governed by one or other of those versions of the AdWords terms.

Although AUL, and not ASI, was the contracting party with Google in accordance with the AdWords programme, AUL has left it to ASI to make the running in adducing evidence of the AdWords terms which were offered by Google at different times. This is unsatisfactory, and has deprived the Court of direct evidence as to which set of terms was applicable to AUL at different times.

Because AUL began participating in the AdWords programme before the 2009 terms were created, and because no suggestion has been made that AUL contracted with Google on any earlier terms than the 2006 terms, I conclude that the 2006 terms were operative at all material times until Google began to offer to contract with advertisers on the basis of the 2009 terms. When Google began to offer the 2009 terms to advertisers, it is unclear whether Google required existing counterparties to contract with Google on those terms, or whether Google only required new counter-parties to contract with Google on those terms. Further, the precise date when the newer terms came into effect, either generally, or with regard to AUL in particular, is also unclear. The like points apply to the 2013 terms.

Accordingly, it is possible that the terms which are material to the present dispute comprise (a) the 2006 terms, or (b) the 2006 terms and the 2009 terms, or (c) all three sets of terms. I do not consider that any of this matters so far as concerns the issue of consent, because I take the view that there is no material difference between any of these sets of terms in this regard. If that is wrong, however, I would be inclined to the view that it is more probable than not that Google required all counter-parties to contract with Google on the same standard terms at any one time, and that Google would have imposed this requirement on AUL with regard to the 2009 terms and the 2013 terms on or about the dates that those terms were created.

It is important to keep well in mind that AUL does not object, and could not have objected, to ASI’s use of the sign ARGOS in the ASI domain name, without more. As stated in AUL’s opening submissions: “All [AUL’s] claims complain of [ASI’s] use of the sign ARGOS in the form of the domain name argos.com … in relation to versions of [ASI’s] home page deliberately directed to UK internet users – in particular [AUL’s] customers – and featuring advertisements aimed at profiting from those users”. Accordingly, the use of the sign ARGOS which is complained of is not its use in ASI’s domain name by itself, but rather its use in ASI’s domain name in conjunction with a home page which is said to be directed at UK internet users, specifically by including advertising so that it can be accessed by such users.

Similarly, AUL’s claims that ASI’s use of ASI’s domain name was abusive, and amounted to free-riding on AUL’s trade marks, do not rely upon ASI’s use of the sign ARGOS in ASI’s domain name alone, but upon the configuration of ASI’s website and its contents to target UK internet users and/or to generate revenue from visitors to ASI’s website. AUL’s contention that ASI has set up an independent business in advertising services even more clearly depends upon the display of ads.

In light of these matters, I consider that it misses the point to ask baldly whether AUL consented to the use of the sign ARGOS in ASI’s domain name. The correct questions are: (i) whether, by the AdWords terms, AUL consented to the display by ASI of AUL’s ads on ASI’s website, in circumstances where that website had an existing lawful domain name (and home page) which used the sign ARGOS, such that – in the absence of some change in ASI’s existing lawful use of the sign, which there was no reason for anyone to expect and which AUL did not suggest - the display of AUL’s ads would be accompanied by that use by ASI of the sign, and (ii) whether AUL thereby consented to ASI’s use of the sign ARGOS in that new or altered context. I would give an affirmative answer to both of those questions.

In my judgment, it follows that if and to the extent that AUL’s claims depend upon ASI’s display of AUL’s ads on any version of ASI’s website (including and in particular in conjunction with ASI’s use of the sign ARGOS in the form of the domain name argos.com), then those claims must fail, because AUL consented to ASI acting in that way. In other words, in circumstances where AUL was unable to complain of ASI’s use of the sign ARGOS in ASI’s domain name (and home page) by itself, and where AUL consented to the display by ASI of AUL’s ads on ASI’s website (which was already lawfully using the sign in that way), AUL cannot complain of any breach of its rights which might otherwise have arisen from the combination of the continuation of that existing use and the display of those ads.

I consider that AUL’s consent was unequivocally demonstrated, and can be gathered from the express provisions of the AdWords terms. Further, even if it is assumed that ASI bears the burden of proving that consent, I consider that ASI has discharged that burden. In these circumstances, it is unnecessary to decide the interesting arguments raised by Mr Riordan to the effect that, in the present context, (i) AUL bears the burden of proving that ASI did not have AUL’s consent, and (ii) the concept of consent ought to be liberally construed. It is preferable that those issues should be determined in a case in which they are necessary for the decision.

I should say, however, that I am doubtful that Mr Riordan is right to submit that the burden of proof of lack of consent rests on AUL. This seems to me to be contrary to the decision of the Court of Justice in Case C-405/03 Class International BV v Colgate-Palmolive Company [2005] ECR I-8735. That case concerned a claim for infringement of a registered trade mark arising from the introduction into the EU, under the external transit or customs warehousing procedures, of original goods bearing the mark. The Court was asked a series of questions concerning the proper interpretation of Article 5 of the Directive (and Article 9 of the Regulation), including a question concerning the burden of proof and, in particular, which party had the burden, in a situation such as that in issue, of proving the facts which would give rise to a claim for exercising the prohibition provided for in Article 5(3)(b) and (c) (Article 9(2)(b) and (c)). The Court stated at [74]:

“It must then be stated that, in a situation such as the one in the main proceedings, the onus of proving interference must lie with the trade mark proprietor who alleges it. If that is proven, it is then for the trader sued to prove the existence of the consent of the proprietor to the marketing of the goods in the Community (see, on the subject of the Directive, Zino Davidoff and LeviStrauss, cited above, paragraph 54).”

I have based these conclusions on the AdWords terms alone, rather than evidence that AUL knew that its ads were being displayed on ASI’s website while ASI also used the sign ARGOS in ASI’s domain name. However, there is such evidence.

First, AUL owns well over 300 domain names, and well over 100 of those domain names include the word ARGOS. These include, for example, the domain names argos.info, argoes.com, and argosmoney.com, which were registered on 1 August 2001, 18 April 2003, and 28 October 2003 respectively. It is inconceivable that AUL would not have registered the domain name argos.com if that name had been available, and I consider that it is more likely than not that, when exploring why this name was not available, AUL learned it had already been registered by ASI. It is difficult to know when AUL acquired that knowledge, but I consider it is likely to have been no later than when AUL registered the domain name argoes.com. (It is not unlikely that AUL acquired this knowledge when it registered the domain name argos.co.uk, and Mr Barrett accepted that he knew of argos.com before 2006). AUL’s evidence suggested that when it registered argoes.com this was to capture traffic emanating from persons who mis-typed “argos” as “argoes”. It seems highly likely that AUL would have investigated the ownership of argos.com by that time.

Second, at all material times AUL’s AdSense advertising campaigns were run and managed by Summit. AUL did not call any witness from Summit, and Mr Patmore’s evidence was that “Nobody at Argos or Summit would have been monitoring campaign data at the level of performance of ad placements appearing specifically on [ASI’s website]”. The reason for this is that the traffic to and from ASI’s website was very small in AUL’s scale of things. It is clear, however, that information concerning the performance of the ASI website as a placement for AUL’s ads was available, and, moreover, that Summit paid regard to website performances when making decisions concerning AUL’s campaigns.

As set out above, an email from Summit to Mr Patmore and others dated 4 July 2013 states: “We now have a view of the performance for the past 3 months for the argos.com site. As a placement it had been performing well and has therefore not been excluded during our optimisation … Spend circa £300 per month. Rev circa £34,000 a month … You would probably argue that it should be there – at least it stops people having to re-search and find an Argos click through. Conversely turning it off would not have a massive impact”. This email was generated as a result of a specific enquiry made of Summit (in connection with a discussion within AUL as to whether the ASI website should be excluded from future GDN campaigns). Further, this email provides only a limited example of Summit monitoring the performance of AUL’s ads on the ASI website. However, the reference to the ASI website “not [being] excluded during our optimisation” seems to me to relate to matters which are free-standing from AUL’s request relating to GDN de-listing. In addition, the email does not suggest that “optimisation” was only carried out by Summit on this one occasion, and expresses no surprise at the information that is being given by Summit to AUL concerning the ASI website.

In the absence of any evidence from Summit, and in spite of Mr Patmore’s evidence that it is much more likely than not that any campaign optimisation activity involving ASI’s domain name formed part of general optimisation taking place across all GDN placements and would not have descended to the level of considering specific websites like ASI’s website, I consider that it is more likely than not that Summit did know that AUL’s ads were being displayed on ASI’s website for much, if not all, of the time during which that was taking place. To say that ASI’s website would probably not have been selected to display AUL’s ads is not to say that Summit did not realise that AUL’s ads were in fact displayed there. Further, I consider that this knowledge should be attributed to AUL on ordinary agency principles: see Bowstead & Reynolds on Agency, 20^th Edn, para 8-207.

Mr Riordan argued that AUL had not only decided to include the GDN option in its advertising campaigns (such that its ads were placed on any and all Partner websites selected by Google) but had also deliberately decided on a series of “managed placements” on ASI’s website. He contended that such decisions had been made by Summit, within the scope of Summit’s authority as advertising agents, as their role included creating advertising campaigns for AUL and operating and optimising those campaigns under the direction of AUL. The two main strands of ASI’s evidence on this topic were (i) Google materials which include the statement “If you know of a website that your customers visit, consider adding it as a managed placement” and (ii) a spreadsheet produced by AUL for the purposes of these proceedings in response to a request from ASI, which had a start date of April 2013, and which described placements relating to ASI’s domain name as “managed” and “targeted”. However, Mr Patmore’s evidence was to the effect that a website which was producing impressions at a level which was as modest in comparison to the level of impressions generated by AUL’s advertising campaigns

I have based my finding that AUL expressly and unequivocally consented to ASI’s use of the sign ARGOS in ASI’s domain name, together with and in the context of also displaying AUL’s advertisements on ASI’s website, on the AdWords terms. In my view, in order for AUL to give ASI consent for purposes of Article 9 of the Regulation, AUL did not have to know that ASI was using the sign in that way. I consider that, even if AUL did not know that argos.com had been registered by a third party, or knew that but did not know that the third party was ASI or that the sign ARGOS was being used by the third party in the third party’s domain name, it is sufficient for those purposes that AUL did not exercise the right that it plainly had (whether or not after enquiring in to those matters) to exclude any website having the argos.com domain name from the “Properties” provided by “Partners” which were otherwise included in AUL’s grant of rights to Google and “Partners”.

If I am wrong about that, however, I consider that the evidence discussed above provides a further or alternative basis for the same conclusion as to AUL’s consent. 140. In my view, these conclusions do not lead to the dire results suggested by Mr Hill.

It does not follow from my findings above that wherever an advertiser agrees the AdWords terms with Google the advertiser will be taken to have consented to any use of the advertiser’s trade mark that may be made by a third party in connection with a website which is selected by Google to display the advertiser’s ads. I have held that an advertiser is unable to complain about the continuation of use by a website operator of a sign which is otherwise lawful by relying on an allegation that its use in conjunction with a display of the advertiser’s ads to which the advertiser has given express consent infringes the advertiser’s rights. That does not mean that the advertiser is precluded from pursuing a claim based upon a use by the operator of a sign when such use was neither pre-existing nor lawful by itself.

Nor does it follow that the agreement of an advertiser (in the present case, AUL) to the AdWords terms is effective to produce the result that the appearance of the advertiser’s ads on the website of a third party (in the present case, ASI) through the medium of Google affords the third party a defence in respect of all activities which would otherwise amount to an infringement of the advertiser’s rights. By agreeing the AdWords terms, the advertiser does not consent to the display of other people’s ads on any third party website, or lose its entitlement to complain of all and any infringement of its rights to which such matters may give rise.

In my view, however, what the advertiser cannot do is to rely upon the activities of a third party for which the advertiser has given express consent (in this case, the display of AUL’s ads on ASI’s website) as the foundation for a legal claim based upon the third party’s use of a sign in a domain name which is otherwise lawful.

The rival contentions concerning the correct legal approach

Trade marks and goodwill are rights that have territorial scope. In accordance with Article 98(a) of the Regulation, the jurisdiction of this Court is limited to acts of infringement in the territory of Member States. AUL has no right to prevent activity occurring outside the EU so far as concerns its EU trade marks. Accordingly, one of the conditions which needs to be satisfied for claims under both Article 9(1)(a) (see condition (i) above) and Article 9(1)(c) (see condition (ii) above) of the Regulation is that there is use of the sign within the relevant territory.

It is common ground that this issue falls to be determined having regard to the concept of targeting. However, the parties disagree as to the correct legal approach to that concept.

AUL contends that whether a website (or part of it) is targeted at the UK is a broad question which depends on all the circumstances. Determination of that question is not limited to a consideration of the contents of the website that are visible to UK visitors to the website, but includes, for example, evidence relating to the numbers and locations of visitors to the website, whether the operator knows that the prevailing traffic emanates from the UK, whether the operator has taken steps to bring traffic to the website from the UK (including promotion or advertising outside the website), and the operator’s subjective intentions.

ASI contends that targeting is an objective question which is to be approached from the perspective of the average consumer of the material goods or services, and answered by reference to whether such a consumer would perceive that the materials visible to them on the website, considered as a whole, are being directed to them. Mr Riordan submitted as follows with regard to the average consumer:

Mr Riordan referred me to a substantial body of case law concerning the role of the average consumer in various trade mark contexts, the characteristics of the average consumer for purposes of the present case, and the approach of the Court to evaluating the effect of the impugned materials and activities on the average consumer where, as in the present case, neither side relies upon expert evidence or survey evidence.

In my view, however, it is sufficient to refer to the following passages from the judgment of Kitchin LJ in Interflora Inc & Anor v Marks and Spencer Plc (No 5) [2014] EWCA Civ 1403, [2015] FSR 10 at [112]-[130] (citations omitted):

“112.

First, in the context of internet advertising, the average consumer (who is reasonably well-informed and reasonably observant and circumspect) and the reasonably well-informed and reasonably circumspect internet user are one and the same.

113.

Second, the average consumer in any context is a hypothetical person or “legal construct” … he is a person who has been created to strike the right balance between various competing interests including, on the one hand, the need to protect consumers and, on the other hand, the promotion of free trade in an openly competitive market, and also to provide a standard, defined in EU law, which national courts may then apply.

114.

Third, the average consumer test is not a statistical test. The national court must exercise its own judgment, in accordance with the principle of proportionality and the principles explained by the Court of Justice, to determine the perceptions of the average consumer in any given case in light of all the relevant circumstances.

115.

Fourth, … in a case concerning ordinary goods or services, the court may be able to put itself in the position of the average consumer without requiring evidence from consumers, still less expert evidence or a consumer survey. In such a case, the judge can make up his or her own mind about the particular issue he or she has to decide in the absence of evidence and using his or her own common sense and experience of the world.

…

118.

… First, the average consumer test provides the court with a perspective from which to assess the particular question it has to decide, for example whether a statement is liable to mislead purchasers. Second, a national court may be able to assess this question without the benefit of a survey or expert evidence. Third, a national court may nevertheless decide, in accordance with its own national law, that it is necessary to have recourse to an expert’s opinion or a survey for the purpose of assisting it to decide whether the statement is misleading or not. Fourth, absent any provision of EU law dealing with the issue, it is then for the national court to determine, in accordance with its own national law, the percentage of consumers misled by the statement that, in its view, is sufficiently significant in order to justify banning its use.

…

125.

… in giving its guidance in this case … the Court has explained that if the M & S advertisements in issue caused at least some internet users to believe, incorrectly, that M & S was a member of the Interflora commercial network then this might be a relevant consideration but would not, of itself, be a sufficient basis for a finding of liability. At the end of the day, the crucial question was whether the advertisements enabled the average consumer to tell that the flower delivery service so offered did not originate from Interflora. The judge suggested … that confusion on the part of internet users who are ill-informed or unobservant must be discounted. Of course it must. But this formulation runs the risk of setting the bar too low and we prefer to put it differently. It is only the effect of the advertisements on internet users who are reasonably well-informed and reasonably observant that must be taken into account.

126.

Considered in this way, we think it makes no difference whether the question is asked and answered from the perspective of the single hypothetical well-informed and reasonably observant internet user or whether that hypothetical person provides the benchmark or threshold for the purposes of identifying the population of internet users whose views are material. The Court has itself used the two interchangeably, as shown by the passages of its decisions in the keyword advertising cases to which we have referred … in considering the application of Article 6 of the Directive, it explained the limited scope for the application of this defence in circumstances sufficient to satisfy Article 5(1), namely that the advertisement is likely to cause at least a significant section of the target public to establish a link between the goods or services to which it refers and the trade mark owner, and does not enable average internet users to ascertain whether the goods or services originate from the trade mark proprietor or an unconnected third party.

129.

As we have seen, the average consumer does not stand alone for it is from the perspective of this person that the court must consider the particular issue it is called upon to determine. In deciding a question of infringement of a trade mark, and determining whether a sign has affected or is liable to affect one of the functions of the mark in a claim under Article 5(1)(a) of the Directive (or Article 9(1)(a) of the Regulation), whether there is a likelihood of confusion or association under Article5(1)(b) (or Article 9(1)(b)), or whether there is a link between the mark and the sign under Article 5(2) (or Article 9(1)(c)), the national court is required to make a qualitative assessment. It follows that it must make that assessment from the perspective of the average consumer and in accordance with the guidance given by the Court of Justice. Of course the court must ultimately give a binary answer to the question before it, that is to say, in the case of Article 5(1)(b) of the Directive, whether or not, as a result of the accused use, there exists a likelihood of confusion on the part of the public. But in light of the foregoing discussion we do not accept that a finding of infringement is precluded by a finding that many consumers, of whom the average consumer is representative, would not be confused. To the contrary, if, having regard to the perceptions and expectations of the average consumer,

the court concludes that a significant proportion of the relevant public is likely to be confused such as to warrant the intervention of the court then we believe it may properly find infringement.

130.

In the circumstances of this case we are, of course, concerned with a claim under Article 5(1)(a) (and Article 9(1)(a)) in the context of internet advertising and the question to be answered was whether the advertisements in issue did not enable reasonably well-informed and observant internet users, or enabled them only with difficulty, to ascertain whether the goods and services so advertised originated from Interflora or an undertaking economically linked to Interflora or, on the contrary, originated from M & S, a third party. In answering this question we consider the judge was entitled to have regard to the effect of the advertisements upon a significant section of the relevant class of consumers, and he was not barred from finding infringement by a determination that the majority of consumers were not confused.”

The like considerations as to the requirement for material to be targeted at users in the relevant territory apply to AUL’s claim for passing off. In a judgment on an interim hearing in the present case, Mr Robert Englehart QC sitting as a Deputy High Court Judge recorded that: “It is common ground that, in order to succeed in its claims for trade mark infringement and passing off, [AUL] would have to establish that [ASI’s] website was “targeted” at those in the United Kingdom and elsewhere in the ED who were desirous of accessing an Argos website” (Argos Ltd v Argos Systems Inc [2015] EWHC 3164 (Ch), [2016] FSR 21, at [13]).

The authorities concerning the correct approach to the question of whether there has been use of the sign within the EU were gathered together and analysed by Arnold J in Stichting BDO & Ors v BDO Unibank, Inc & Ors [2013] EWHC 418 (Ch), [2013] FSR 35 at [101]-[107] (in a manner which Birss J has said he could not improve on: see Thomas Pink Limited v Victoria’s Secret UK Ltd [2014] EWHC 2631 (Ch), [2014] WLR(D) 368 at [133]).

At [101], Arnold J said:

“… [This] was considered by the CJEU in the context of offers for sale on an online marketplace in Case C-324/09 L’Oréal SA v eBay International AG [2011] ECR I-0000, [2012] EMLR 6. In that case the Court held as follows:

“61.

Whilst recognising those principles, eBay submits that the proprietor of a trade mark registered in a Member State or of a Community trade mark cannot properly rely on the exclusive right conferred by that trade mark as long as the goods bearing it and offered for sale on an online marketplace are located in a third State and will not necessarily be forwarded to the territory covered by the trade mark in question. L’Oréal, the United Kingdom Government, the Italian, Polish and Portuguese Governments, and the European Commission contend, however, that the rules of Directive 89/104 and Regulation No 40/94 apply as soon as it is clear that the offer for sale of a trademarked product located in a third State is targeted at consumers in the territory covered by the trade mark.

62.

The latter contention must be accepted. If it were otherwise, operators which use electronic commerce by offering for sale, on an online market place targeted at consumers within the EU, trademarked goods located in a third State, which it is possible to view on the screen and to order via that marketplace, would, so far as offers for sale of that type are concerned, have no obligation to comply with the EU intellectual property rules. Such a situation would have an impact on the effectiveness (effet utile) of those rules.

63.

It is sufficient to state in that regard that, under Article 5(3)(b) and (d) of Directive 89/104 and Article 9(2)(b) and (d) of Regulation No 40/94, the use by third parties of signs identical with or similar to trade marks which proprietors of those marks may prevent includes the use of such signs in offers for sale and advertising. As the Advocate General observed at point 127 of his Opinion and as the Commission pointed out in its written observations, the effectiveness of those rules would be undermined if they were not to apply to the use, in an internet offer for sale or advertisement targeted at consumers within the EU, of a sign identical with or similar to a trade mark registered in the EU merely because the third party behind that offer or advertisement is established in a third State, because the server of the internet site used by the third party is located in such a State or because the product that is the subject of the offer or the advertisement is located in a third State.

64.

It must, however, be made clear that the mere fact that a website is accessible from the territory covered by the trade mark is not a sufficient basis for concluding that the offers for sale displayed there are targeted at consumers in that territory (see, by analogy, Joined

Cases C-585/08 and C-144/09 Pammer and Hotel Alpenhof [2010] ECR I-0000, paragraph 69). Indeed, if the fact that an online marketplace is accessible from that territory were sufficient for the advertisements displayed there to be within the scope of Directive 89/104 and Regulation No 40/94, websites and advertisements which, although obviously targeted solely at consumers in third States, are nevertheless technically accessible from EU territory would wrongly be subject to EU law.

65.

It therefore falls to the national courts to assess on a case-by-case basis whether there are any relevant factors on the basis of which it may be concluded that an offer for sale, displayed on an online marketplace accessible from the territory covered by the trade mark,

is targeted at consumers in that territory. When the offer for sale is accompanied by details of the geographic areas to which the seller is willing to dispatch the product, that type of detail is of particular importance in the said assessment.”

At [102]-[106], Arnold J said:

“102.

Joined Cases C-585/08 and C-144/09 Pammer v Reederei Karl Schlüter GmbH & Co. KG and Hotel Alpenhof GesmbH v Heller [2010] ECR I-12527, to which reference is made at [64], concerned the interpretation of Article 15(1)(c) of Council Regulation 44/2001/EC of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“the Brussels I Regulation”), and in particular the requirement that “the contract has been concluded with a person who pursues commercial or professional activities in the member state of the consumer's domicile or, by any means, directs such activities to that member state”. The CJEU interpreted the national court as asking, in essence, “on the basis of what criteria a trader whose activity is presented on its website or on that of an intermediary can be considered to be ‘directing’ its activity to the Member State of the consumer’s domicile …, and second, whether the fact that those sites can be consulted on the internet is sufficient for that activity to be regarded as such”.

103.

The Court held at [69]-[75] that it was not sufficient for this purpose that a website was accessible in Member States other than that in which the trader concerned was established: “the trader must have manifested its intention to establish commercial relations with consumers from one or more other Member States, including that of the consumer’s domicile”. It went on at [80]-[81] to say that relevant evidence on the point would be “all clear expressions of the intention to solicit the custom of that state’s customers”. Such a clear expression could include actual mention of the fact that it is offering its services or goods “in one or more Member States designated by name” or payments to “the operator of a search engine in order to facilitate access to the trader's site by consumers domiciled in various member states”.

104.

The CJEU concluded at [93]:

“The following matters, the list of which is not exhaustive, are capable of constituting evidence from which it may be concluded that the trader’s activity is directed to the Member State of the consumer’s domicile, namely the international nature of the activity, mention of itineraries from other Member States for going to the place where the trader is established, use of a language or a currency other than the language or currency generally used in the Member State in which the trader is established with the possibility of making and confirming the reservation in that other language, mention of telephone numbers with an international code, outlay of expenditure on an internet referencing service in order to facilitate access to the trader’s site or that of its intermediary by consumers domiciled in other Member States, use of a toplevel domain name other than that of the Member State in which the trader is established, and mention of an international clientele composed of customers domiciled in various Member States. It is for the national courts to ascertain whether such evidence exists.”

105.

In my judgment these matters are also capable of constituting evidence which bears upon the question of whether an offer for sale or an advertisement on a website is targeted at consumers within the European Union for the purposes of the first condition under Article 9(1)(a). It is perhaps worth emphasising that, at least in this context, the question is not one of the subjective intention of the advertiser, but rather one of the objective effect of its conduct viewed from the perspective of the average consumer.

106.

Both L’Oréal v eBay and Pammer and Hotel Alpenhof were cases concerned with websites. It is common ground that the test of targeting the consumer in the relevant territory adopted by the CJEU in L’Oréal v eBay is essentially the same approach as had previously been adopted with regard to websites by the courts of this country: see Euromarket Designs Inc v Peters [2001] FSR 20 at [21]-[25], 1800 Flowers v Phonenames [2001] EWCA Civ 721, [2002] FSR 12 at [136]-[139] and Dearlove v Combs [2007] EWHC 375 (Ch),

[2008] EMLR 2 at [21]-[25].”

At [107]-[108], Arnold J said:

“107.

Euromarket v Peters also concerned an advertisement in a magazine. The claimant, which ran a chain of shops selling household goods and furniture in the USA, applied for summary judgment on a claim for infringement of its UK registered trade mark for the words CRATE & BARREL. The defendants ran a shop in Dublin selling household goods and furniture under the same sign. One of the alleged infringements consisted of an advertisement placed by the defendants in the magazine Homes & Gardens. Jacob J set out the relevant facts as follows:

“10.

Homes & Gardens is a United Kingdom published magazine. The defendants had a single full page colour advertisement. At the top in large letters are words ‘Crate & Barrel’, beneath are two colour photographs, beneath them is the word “Dublin”, in the same large size and lettering. One reads the words naturally as ‘Crate & Barrel, Dublin’. In much smaller letters

the advertisement goes on to say ‘soft furnishings: Orior by Design, furniture: Chalo’. In even smaller print at the bottom, the advertisement says ‘sofas, tableware, beds, lighting accessories’. Underneath that a website address is given, ‘www.crateandbarrel-ie.com.’ ‘ie’ is webspeak for Ireland. A telephone/fax number is given with the full international code for Ireland.

In Omnibill v Egpsxxx [2014] EWHC 3762 (IPEC); [2015] ECDR 1, Birss J provided the following summary at [12]:

“It is clear that the question of whether a website is targeted to a particular country is a multi-factorial one which depends on all the circumstances. Those circumstances include things which can be inferred from looking at the content on the website itself and elements arising from the inherent nature of the services offered by the website. These are the kinds of factors listed by the CJEU in Pammer in the passage cited by Arnold J. However as can be seen from paragraph 51 of Arnold J’s judgment he took other factors into account too, such as the number of visitors accessing the website from the UK. I agree with Arnold J that these further factors are relevant. Their relevance shows that the question of targeting is not necessarily simply decided by looking at the website itself. Evidence that a substantial proportion of visitors to a website are UK based may not be determinative but it will support a conclusion that the acts of communication to the public undertaken by that website are targeted at the public in the UK.”

Omnibill was a case about the communication of copyright works to the public through a website. It concerned a directory of escort services which had a particular sub-domain which was accessed by a substantial number of UK users.

Mr Hill submitted that (a) Birss J’s approach is equally applicable to cases of trade mark infringement, and (b) websites are often directed at multiple audiences and often include parts aimed at different audiences, as Birss J accepted on the facts in Omnibill at [13]-[14].

Mr Riordan submitted that (a) Omnibill illustrates that evidence of substantial intentional UK access to a website may be relevant to whether visitors regard the contents as directed at them (because it may be said to demonstrate their reaction to the contents of the website), (b) in contrast, however, access which is mistaken or accidental is irrelevant and should be disregarded (because it is incapable of shedding any light on such matters), (c) in any event, there is an important difference between copyright cases (in which communication to the public arises from the mere making available of material) and trade mark cases (where it is necessary for the use of the relevant mark in the course of trade to take place within the territory of the mark, and it is not enough that a sign is accessed from the relevant territory by third parties).

I was also referred (among many other cases) to two pre-Pammer first instance decisions of Jacob J and Kitchin J (as they then were) respectively.

In 1-800-FLOWERS Trade Mark [2000] FSR 697 Jacob J had to consider whether Internet use of the mark 1-800 FLOWERS constituted use of that mark in the UK. Jacob J said at p705:

“Reliance is also placed on Internet use of 1-800 FLOWERS. This name (with the addition of Inc.) is used for a website. Mr Hobbs submitted that any use of a trade mark on any website, wherever the owner of the site was, was potentially a trade mark infringement anywhere in the world because website use is in an omnipresent cyberspace; that placing a trade mark on a website was “putting a tentacle” into the computer user’s premises. I questioned this with an example: a fishmonger in Bootle who put his wares and prices on his own website, for instance, for local delivery can hardly be said to be trying to sell the fish to the whole world or even the whole country. And if any web surfer in some other country happens upon that website he will simply say “this is not for me” and move on. For trade mark laws to intrude where a website owner is not intending to address the world but only a local clientele and where anyone seeing the site would so understand him would be absurd. So I think that the mere fact that websites can be accessed anywhere in the world does not mean, for trade mark purposes, that the law should regard them as being used everywhere in the world. It all depends upon the circumstances, particularly the intention of the website owner and what the reader will understand if he accesses the site. In other fields of law, publication on a website may well amount to a universal publication, but I am not concerned with that.”

In Dearlove v Combs [2007] EWHC 375 (Ch), having considered that case and the decision of Jacob J in Euromarket Designs Inc v Peters and Crate & Barrel Ltd [2001] FSR 20, Kitchin J said at [25]:

“I believe it is clear from these authorities that placing a mark on the Internet from a location outside the UK can constitute use of that mark in the UK. The Internet is now a powerful means of advertising and promoting goods and services within the UK even though the provider himself is based abroad. The fundamental question is whether or not the average consumer of the goods or services in issue within the UK would regard the advertisement and site as being aimed and directed at him. All material circumstances must be considered and these will include the nature of the goods or services, the appearance of the website, whether it is possible to buy goods or services from the website, whether or not the advertiser has in fact sold goods or services in the UK through the website or otherwise, and any other evidence of the advertiser’s intention.”

Mr Hill submitted that these cases make clear that the Court’s consideration is not properly confined to the website alone, and, in particular, that the intentions of the advertiser/website owner can and should be taken into account. Indeed, he submitted that the references in Pammer at [92] to the overall activity of the trader and what the trader envisages and has in mind make it clear that the focus should be on the trader rather than on the consumer:

“In order to determine whether a trader whose activity is presented on its website or on that of an intermediary can be considered to be “directing” its activity to the member state of the consumer’s domicile, within the meaning of article 15(1)(c) of Regulation No 44/2001, it should be ascertained whether, before the conclusion of any contract with the consumer, it is apparent from those websites and the trader’s overall activity that the trader was envisaging doing business with consumers domiciled in one or more member states, including the member state of that consumer’s domicile, in the sense that it was minded to conclude a contract with them.”

Mr Hill pointed out that this aspect of the decision in Pammer had been applied by analogy in intellectual property cases concerning infringement of copyright and database rights. In case C-173/11 Football Dataco and Others [2013] FSR 4, for example, the CJEU stated at [39] and [41]:

“39 The localisation of an act of re-utilisation in the territory of the Member State to which the data in question is sent depends on there being evidence from which it may be concluded that the act discloses an intention on the part of its performer to target persons in that territory (see, by analogy, Pammer and Hotel Alpenhof, paragraphs 75, 76, 80 and 92; L’Oréal and Others, paragraph 65; and Donner, paragraphs 27 to 29) …

41 The fact that Sportradar granted, by contract, the right of access to its server to companies offering betting services to that public may also be evidence of its intention to target them, if – which will be for

the referring court to ascertain – Sportradar was aware, or must have been aware, of that specific destination (see, by analogy, Pammer and Hotel Alpenhof, paragraph 89, and Donner, paragraphs 27 and 28).”

Mr Hill submitted that the explanation for Arnold J’s statement in Stichting BDO v BDO Unibank that “the question is not one of the subjective intention of the advertiser, but rather one of the objective effect of its conduct viewed from the perspective of the average consumer” is that Arnold J was there considering an argument by the user of the sign that the user had no subjective intention to target the UK. In that context, the remark was apposite: a trader cannot rely upon evidence of his subjective intention to defeat an allegation that a website is targeted at the UK when, objectively assessed on the overall evidence, its contents are aimed at the UK based average consumer.

Mr Hill submitted that where someone has a positive intention to target, it is right to take the same approach as applies in like circumstances in the context of passing off: the burden on the claimant is lightened, because “where an intention to deceive is found, it is not difficult for the court to infer that the intention has been, or in all probability will be, effective” (see Slazenger v Feltham (1889) 6 RPC 531 and 536 per Lindley LJ).

Finally, Mr Hill placed reliance on CJEU and national authorities which show that evidence of subjective intention is taken into account under EU trade mark law in related areas. He submitted that: (1) in Specsavers v Asda [2012] EWCA Civ 24 [115]-[116] the Court of Appeal accepted that intention to confuse was relevant to the question as to whether there was a likelihood of confusion for the purposes of

Mr Riordan submitted that Arnold J’s statement in Stichting BDO v BDO Unibank could not be explained away, or given a narrow interpretation, on the basis suggested by Mr Hill. The statement is clear. It would be illogical to take a different approach to the foreign trader’s positive intention than to the foreign trader’s negative intention.

This submission fed into another argument advanced by Mr Riordan, namely that in the converse situation where the Court is considering an allegation of non-use, what is required to defeat the allegation is some “active step”, and an intention to use the mark in the UK will not suffice. He referred to 1-800 Flowers v Phonenames Ltd [2001] EWCA Civ 721, [2002] FSR 12, Buxton LJ at [137]-[138] in this context.

Mr Riordan focussed on the statement of Kitchin J in Dearlove v Combs that: “The fundamental question is whether or not the average consumer of the goods or services in issue within the United Kingdom would regard the advertisement and site as being aimed and directed at him”. He added that in Yell Ltd v Giboin [2011] EWPCC 009, at [56], [164], HHJ Birss QC (as he then was) reached the same conclusion and stated: “What matters is how the site looks and functions when someone in this jurisdiction interacts with it”. He submitted that this is the approach that was applied by Birss J in Thomas Pink Limited v Victoria’s Secret UK Ltd [2014] EWHC 2631 (Ch), [2014] FSR 10 at [135]:

“No doubt users in the UK and elsewhere in the EU could and did access the site but all indications on it show that from the time when it started until sometime approximately in 2012 the Facebook postings were not targeted to the EU or UK. The language was US English, the currency was US dollars, no telephone numbers appear directly but the Facebook page links to the L Brands’ US website with US telephone numbers. The vast majority of the content refers to US college type events at US universities. In addition to the events at US universities, the content referred to US store openings, sales for US specific holidays and posts in support of the US Olympics team.”

Mr Riordan submitted that these authorities were clear and persuasive, and that I should follow them by assessing the issue of targeting from the perspective of the average consumer who views ASI’s website from within the UK.

Among other things, he submitted that this involves leaving out of consideration matters which are not apparent to the average internet user. In the present case, for example, visitors from the UK would not know that ASI’s website had been configured so that one version was displayed to visitors detected by the source code as coming from the Americas and another version was displayed to other visitors. Accordingly, that matter should be disregarded when assessing the issue of targeting. Mr Riordan relied on the observation by Jacob LJ in Reed Executive Plc & Ors v Reed Business Information Ltd & Ors [2004] EWCA Civ 159, [2004] RPC 40 at [149(a)] that the following were among the “difficult questions” upon which Jacob LJ said that he would wish to reserve his opinion:

“First, does metatag use count as use of a trade mark at all? In this context it must be remembered that use is important not only for infringement but also for saving a mark from non-use. In the latter context it would at least be odd that a wholly invisible use could defeat a non-use attack. Mr Hobbs suggested that metatag use should be treated in the same way as uses of a trade mark which ultimately are read by people, such as uses on a DVD.

But in those cases the ultimate function of a trade mark is achieved – an indication to someone of trade origin. Uses read only by computers may not count – they never convey a message to anyone.”

Mr Riordan submitted that the following propositions could be extracted from Pammer, or were apparent from or were supported by other decided cases:

Mr Riordan also pointed out that website operators have no control over who visits a public website and are powerless to stop foreign visitors, even if unwanted, from typing in the URL (as the present case demonstrates). That decision by a consumer to access a website precedes any intervention by the website operator, and takes place before any use of the sign by them, and irrespective of their intention.

The correct legal approach to the issue of targeting

The issue raised by these submissions is an important one. Among other things, the correct answer will determine what evidence is relevant and admissible and how the Court should approach the assessment of that evidence. In addition, the correct approach to the issue will have a profound influence on the extent of the jurisdiction of the Court with regard to the activities of foreign traders, and, specifically, as to the circumstances in which a foreign trader which operates a website which attracts substantial traffic from the UK may find itself in jeopardy as a result of displaying ads on that website. The potential clash between the rights conferred by EU trade mark law and the operation of a foreign trader’s website which is not suggested to be unlawful under the laws of the trader’s country of domicile, arising because the foreign trader’s domain name and website contents are accessible in the EU, requires handling with care, and possibly circumspection.

In the present case, as Mr Riordan submitted, and as I did not understand Mr Hill to dispute, targeting is a threshold question for each of AUL’s claims: if the issue is answered adversely to AUL, that will be dispositive of all of those claims.

Moreover, the issue is not entirely straightforward, as I believe is apparent from the rehearsal of the arguments and the above citation from the decided cases.

It is clear that if, viewed objectively, the foreign trader’s activity is directed at consumers in the UK, the fact that, subjectively, the trader did not intend this result will not prevent the use that is sought to be impugned from occurring in the UK.

It is equally clear that if, viewed objectively, the foreign trader’s activity is not directed at consumers in the UK, the fact that, subjectively, the foreign trader did intend to direct it at them will not result in use of the impugned sign in the UK. An example of this might be where, whatever the trader’s hopes and aspirations, either separately or cumulatively matters such as (i) the nature of the goods or services, (ii) the appearance of the website, (iii) difficulties about buying goods or services from the website, and (iv) the circumstance that over a long period the trader has not in fact sold any goods or services in the UK through the website or otherwise, clearly point to the conclusion that there has been no use in the UK.

Accordingly, it is clear that the trader’s subjective intentions are neither a necessary nor a sufficient factor to establish use in the UK. Something more is required, namely, in my judgment, that the objective effect of the trader’s conduct should be that (in the context of the present case) an offer of goods or services or an advertisement displayed on a website is targeted at consumers within the UK.

Furthermore, whether that is or is not so is to be assessed from the perspective of the average consumer (who is reasonably well-informed and reasonably observant and circumspect in his use of the internet as in all other respects). As Kitchin LJ explained in Interflora (No 5), that hypothetical person or legal construct (who is of a type invoked in many other areas of the law, which has led to the judicial observation that he is “hard-pressed”) has been created to strike the right balance between various competing interests in the area of trade mark law, and also to provide a standard, defined in EU law, which national courts may then apply.

It does not follow from that, however, that it is necessarily irrelevant or impermissible to consider the trader’s subjective intentions. As a matter of common sense, speaking in general terms, the more clearly and coherently something is intended, or is sought to be avoided, the more likely it is to be achieved, or avoided, as the case may be. More specifically, evidence as to the trader’s intentions may shed light on whether some particular feature of his conduct should or should not be assessed, objectively, as producing the result of targeting the average consumer.

Further, matters external to the website – such as advertising which is directed at and read by UK consumers – may be relevant to a determination of the objective effect on such consumers of the trader’s conduct in placing content on the website. If advertising materials (for example) are not read by UK consumers then, in my view, they will not be relevant. An example might be where flyers intended for insertion in a magazine are not distributed at all for some reason, such as administrative error by the distributors. The same would apply if the evidence showed that inserts were not looked at (e.g. if they were found discarded in large quantities besides stands where newspapers are distributed free at railway stations).

In addition, evidence as to the nature and extent of visits to the website from UK consumers may be relevant to that question. These matters are capable of confirming how such consumers react to that content. Logically, the mere fact of visits which are unintended will provide no such confirmation. Similarly, if their visits are of very short duration, their reaction is likely to support the conclusion that the website and its contents are not targeted at consumers within the UK.

I believe that this analysis accords not only with: (i) the analysis (endorsed by Birss J) of Arnold J in Stichting BDO v BDO Unibank, leading to the conclusion that “the question is not one of the subjective intention of the advertiser, but rather one of the objective effect of its conduct viewed from the perspective of the average consumer” and (ii) the exposition of the Court of Appeal in Interflora (No 5), but also with (iii) Jacob J’s statements in Euromarket v Peters that in order to determine whether there is use in a territory “there must be an inquiry as to what the purpose and effect of the advertisement in question is” and in 1-800-FLOWERS Trade Mark that “It all depends upon the circumstances, particularly the intention of the website owner and what the reader will understand if he accesses the site”, (iv) Kitchin J’s reference in Dearlove v Combs to “any other evidence of the advertiser’s intention” (which I would interpret, in context, as being a reference to evidence of intentions which are manifested in such a way that “the average consumer of the goods or services in issue within the UK would regard the advertisement and site as being aimed and directed at him”), (v) the statements of Birss J in Omnibill v Egpsxxx that “the question of whether a website is targeted to a particular country is a multi-factorial one which depends on all the circumstances” and in Yell Ltd v Giboin that “What matters is how the site looks and functions when someone in this jurisdiction interacts with it”, and (vi) the jurisprudence of the CJEU to which I have been referred (bearing in mind, as I think is right, that when statements made in other areas of the law are applied by analogy to the question of use of a sign it is necessary to have careful regard to the context in which those statements were made – for example, even if it were right to say (which I do not need to decide) that the focus should be on the activity of the trader for purposes of determining whether a trader whose activity is presented on its website can be considered to be “directing” its activity to the member state of the consumer’s domicile, within the meaning of article 15(1)(c) of Regulation No 44/2001, it does not follow, and indeed I consider that it would be wrong to suggest, that the focus should be anywhere other than on the effect of the trader’s activity on the average consumer for purposes of Article 9 of the Regulation).

I therefore agree with Mr Hill that, in a case like the present, the Court’s consideration is not necessarily confined to the website alone. I also agree with him that there is no hard and fast rule that, when exploring the question of targeting, it is necessary to have regard to the entirety of the website, as opposed to, 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 to attract a substantial number of UK users, it may be appropriate to have regard to that part of the website alone, even if, viewed globally, the website is clearly not directed to UK users.

At the same time, however, I agree with Mr Riordan that, ultimately, one always comes back to the same question, which is a threshold requirement for all of AUL’s claims in the present case, namely whether or not the objective effect of ASI’s conduct is that UK internet users who are reasonably well-informed and reasonably observant and circumspect will regard ASI’s website (or part of it) as being “for them” (in the words of Jacob J) or “aimed and directed at them” (in the words of Kitchin J) in sufficient numbers to justify banning ASI’s use of the sign ARGOS.

For this reason, I also agree with Mr Riordan that little, if any weight, should properly be attached to features or aspects which are not apparent to UK users. For example, in this case, UK consumers would not have known that there was in existence for some of the time a different USA-facing version of ASI’s home page.

AUL’s contentions on the facts

The way in which Mr Hill put AUL’s case in opening is that ASI has targeted its domain name at the UK. He relied on the following matters:

ASI’s contentions on the facts

The thrust of Mr Riordan’s submissions was that ASI only traded in the Americas, undertook no trade in the EU or the UK, and had no intention of trading in the EU or the UK; that the contents of ASI’s website accorded fully with these matters; and that all this would be apparent to the average UK visitor to the website. Many of his submissions relied on a consideration of the website as a whole. He submitted that, if it is relevant for the Court to take into account the making of contracts with consumers from the UK when determining whether a website operator is targeting the UK, then it must also be relevant for the Court to take account of the absence of such contracts; and, likewise, that if an intention to trade with the UK is relevant, an intention not to trade with the UK must also be relevant.

Mr Riordan made the following specific points, which he submitted were fully supported by the evidence of ASI’s witnesses, and especially Mr Moilanen:

Mr Riordan submitted that it was clear that, whatever intention ASI (or individual officers or consultants of ASI) may have had, targeting of the UK was not achieved:

Mr Riordan submitted that the Court should conclude, on the evidence, that the average consumer does not regard ASI’s website as being meant for him. For this purpose, ASI’s intentions are neither relevant nor, on any view, determinative. As such, there is no targeting. ASI’s use of the sign ARGOS takes place in the USA.

Conclusions on targeting in this case

The effect of a foreign trader’s use of Google advertising for purposes of the assessment of targeting has not arisen for determination in any of the cases to which I have been referred, and it raises issues which are important and potentially far-reaching. In the final analysis, however, there is no real doubt as to the essential principles, or as to the guidance as to the general approach and the nature of the legal standard and the tools for implementation provided by the CJEU, and it falls to the national court to apply that guidance to the facts of each particular case.

The facts of the present case are highly unusual. As far as I am aware, in none of the authorities to which I have been referred has it been the case that most of the UK visitors to the website in question visit it by mistake, and, in keeping with that fact, that a great many of those visitors leave the website almost instantaneously.

Those who visit a website entirely by mistake do not arrive there due to any antecedent act of the trader which is directed at them. Further, many such visitors probably do not ask themselves whether the website is or is not “for them” in the sense of considering whether it offers anything of interest to them: they simply realise that it is not the website that they were trying to reach (and so is not “for them” in another sense), and leave it straightaway to get back to where they were trying to go. If they get as far as seeing that the contents of the website present a ready means of taking them back to their intended destination (as, on the evidence before me, was presented by AUL’s ads on ASI’s website in this case), I consider

Another unusual feature of the present case is that the display of Google ads is, in effect, the determinative factor when assessing the issue of targeting. In simple terms, AUL accepts that without any display of ads it has no real case on targeting; whereas it contends that the display of ads makes good its case on targeting, especially having regard to factors (on AUL’s case) such as that ASI knew that its website was being visited by UK internet users and why, and that in choosing to display ads ASI acted deliberately, created a non-American version of its website, planned to profit from that UK based traffic, and did in fact profit from the same.

This raises a question as to how ads are perceived by the average internet user. At least where Google ads are concerned, what is displayed to any individual visitor on any particular website from time to time will be affected by the conduct or characteristics of that individual (or, more accurately, of the user(s) of the computer which is being used to access that website). If a website is accessed from a computer with no browsing history, the ads which will be selected for display to the visitor by the Google algorithms will necessarily be determined without regard to what the algorithm calculates as pertinent to the particular visitor. If the same website is accessed at the same time by two visitors with two different browsing histories, due to the operation of the Google algorithms they may well be shown different ads. I consider that the average internet user would know or suspect that this is the case. Assuming that an ad is directed at the user at all, the more difficult question, in my view, is whether the average internet user would regard ads displayed on a trader’s website for products or services provided by a third party (a) as being directed at the user by the trader, or (b) as being directed at the user by the third party with the assistance of an algorithm operated by someone other the trader, with the agreement of the trader to that ad being displayed as it is.

I consider that this is likely to depend on context and expectation. For example, if a user who has previously been researching English fishmongers online visits the website of the Times newspaper and sees displayed there an ad for an English fishmonger, the user may well not trouble to think about whether the ad has been directed at them by the Times, by the fishmonger, or by both of them. The user will have visited the website deliberately, and in the expectation that everything that the

In my view, the position may well be different if, while trying to visit the Times website from his laptop, the user goes instead and by mistake to the home page of the Times of India newspaper, where s/he finds displayed headline stories relating to Indian news together with an ad for an English fishmonger. In those circumstances, the average user would know or suspect that the only reason why this ad is being displayed to them is because their previous browsing history has been taken into account by the computer programme they have used to access that website, and I consider that at least some average users would regard the ad as being directed at them by the advertiser and not by the Times of India proprietor.

For convenience, I will call these two classes of average UK internet user “unenquiring” and “enquiring” respectively. Although I believe that this distinction is correct, however, I do not consider that I have any material which enables me to form an assessment of the proportions in which users are likely to be divided between those two classes, either generally or in the circumstances of this case. For that reason, while I have taken account of this distinction in the analysis which follows, all I believe that I can safely say about it is that it further dilutes the extent to which the evidence before me supports AUL’s case, possibly to a large extent.

I turn from those (illustrative) points of distinction between the present case and the decided cases to which I have been referred to consider the evidence in this case.

It is clear that ASI’s website was visited by many internet users based in the UK not only when ads were displayed on it but also before any ads were displayed on it, and that this has continued after ads were removed from it. This is overwhelmingly a product of mistake, and, to a significant extent, is due to UK users guessing or assuming that the argos.com domain name is owned by AUL. This traffic arises because ASI, entirely lawfully and properly, registered the argos.com domain name (in 1992) either before AUL thought of registering a domain name at all (which it first did in 1996) or at least before AUL thought of registering argos.com as AUL’s domain name or one of AUL’s domain names. It does not arise because ASI has done anything to attract internet users based in the UK to ASI’s website.

According to ASI’s evidence concerning the period after ads began to be displayed on ASI’s website in January 2012, 90% of users accessed argos.com by navigating directly to the site, and only 2% of traffic to the site was search or referral. According to AUL’s disclosure (i.e. the email from Mr Thomas dated 16 September 2013, which may be a snapshot of traffic for some period in 2013),

I am in no doubt that those UK users who went past the home or landing page of ASI’s website, whether before or after or during the time that ads were displayed on that page, would not regard the site as being aimed or directed at them. This follows from the features of ASI’s website which were identified by Mr Riordan, whether viewed separately or cumulatively. I did not understand the contrary to be seriously suggested by Mr Hill. Indeed, I consider that it is because he recognised, without conceding, that this is pretty clearly the case that Mr Hill devoted time to the argument that the content of the home or landing page of the website, including and in particular the ads that were displayed on that page between 2012 and 2015, can and should be considered by itself when assessing ASI’s targeting of UK users.

In addition, I have no doubt that UK users who viewed the contents of the home or landing page of ASI’s website would not regard even that page in isolation as aimed or directed at them either (a) when no ads were displayed on it or (b) if they viewed those contents separately from the ads. I consider that this follows for the like reasons as are stated above in respect of the website viewed as a whole. The first sample landing page that is reproduced above uses American spelling (i.e. “Program”), and all three samples identify the website operator as Argos Systems Inc. and show styles of building which are American, or at all events not of a kind that is typical to the UK. Further, this accords with the fact that AUL did not object, and AUL’s concession that it could not have objected, to ASI’s use of argos.com for email and as a simple website promoting its CAD software and related services.

It follows, in my judgment, that AUL’s case on targeting can only be sustained by considering the content of the home page (a) alone and (b) including the ads.

There is evidence that a significant number of the ads which were displayed on ASI’s website were AUL’s ads. Among other things, this is apparent from the statistics contained in Summit’s email dated 4 July 2013 (e.g. for revenue generated from visitors to the website clicking through and buying products from AUL).

In accordance with my ruling on the issue of consent, I consider that these ads ought properly to be disregarded for purposes of assessing the issue of targeting. If, as I have found, AUL expressly consented to the display of AUL’s ads on ASI’s website, then if and to the extent that this caused or contributed to the result that the website was targeted at UK users, in my judgment AUL cannot rely upon that targeting as a basis or element of its current claims against ASI. For purposes of the discussion which follows, however, I will assume that the contrary is correct.

The trial materials contain scant evidence as to precisely what ads were displayed on ASI’s website from time to time. I summarise that evidence as follows.

First, there are the sample screenshots produced by ASI:

Second, a number of screenshots of the home page of ASI’s website are contained in exhibits “TFDK3”-“TDFK8” to Mr Keane’s witness statement dated 9 September 2016. All his “initial” screenshots were obtained after Mr Keane had first entirely cleared his Internet Explorer browser history, and all his “follow up” screenshots were obtained after he had visited only a few websites. As set out above, this did not replicate the behaviour of the average consumer or generate the ad display results which such a person would obtain when visiting ASI’s website. On the contrary, the average user will have a browsing history, and, although the details of Google’s algorithms are not known and those algorithms are no doubt complex, it is clear that this history will typically play a part in determining which ads are displayed when that user’s computer is used to visit any website on which ads are displayed through Google advertising. (This will not always be the case, because the operators of the websites which the user has previously visited may have blocked their ads from being displayed on the website which s/he is currently visiting; and the operator of the website which s/he is currently visiting may have blocked the display of ads relating to those other operators’ products.)

As to Mr Keane’s screenshots:

In addition, AUL’s disclosure contains an internal email from Mr Patmore dated 2 May 2014 on the subject “Argos.com adverts” which has attached to it a version of the home page of ASI’s website. One of the two ads at the top of the page is for AUL, the second ad at the top of the page is for a software company with a .com domain name, and the ad at the left hand side of the page is for a Morphy Richards steam carpet cleaner and gives an amazon.co.uk domain name. In my view, the points made above in respect of Mr Keane’s second screenshot also apply to this.

Pulling all this together, and focussing on ads alone, the advertising content of the sample screenshots which are in evidence varies between (a) that which is entirely and unequivocally not directed at UK consumers, (b) that which is in part not directed at UK consumers and is in part directed at a territory which is unclear but, in the context of the part that is not directed at UK consumers, appears also likely not to be directed at UK consumers, (c) that which is in part not directed at UK consumers and in part directed at UK consumers, and (d) that which is entirely directed at UK consumers (of which the only example which has been produced is Mr Keane’s twelfth screenshot, which was displayed to a UK user whose entire history consisted of browsing the websites of AUL, John Lewis, Tesco and Very).

In light of the statistics as to bounce rates and the duration of the visits made to ASI’s website by UK users, it seems likely that the vast majority of UK visitors did not look at the ads at all. Accordingly, as the ads were the only part of the website that was aimed or directed at UK visitors (and even then only in some instances), that vast majority would not have regarded ASI’s website or any part of it as being aimed or directed at them at all. In all likelihood, this vast majority comprised individuals who were seeking to get to AUL’s website, and who would have realised, in my judgment, virtually instantaneously that they had reached a website that was not AUL’s website, and had nothing to do with AUL. This vast majority probably would not have got as far as seeing whether the website was operated by a trader which offered anything that was either available to them or of interest to them, but, to the extent that they had time to do so, they would have seen that the trader was not selling retail goods but specialist CAD software, and from the USA.

There may be a partial exception to the above in the case of AUL’s ads, because AUL’s revenue figures alone suggest that significant numbers of visitors to ASI’s website “clicked through” to AUL’s website using AUL’s ads on ASI’s website. However, such a visitor’s perception of those ads was unusual: it was not that of a consumer looking to see whether what was offered by the ad was of interest to the consumer, but, rather, was that of a lost or misdirected internet user viewing the ad as a convenient way of rectifying the mistake that had taken him to ASI’s website.

Due to the operation of Google’s algorithms, it seems to me that would be the case, in particular, of those lost or misdirected users who made repeat visits to ASI’s website. There is no breakdown of how many visitors were repeat visitors, but the evidence (e.g. in Mr Thomas’ email dated 14 November 2013) suggests that the numbers may have been considerable. Visitors to ASI’s website who were existing customers of AUL might well, because of their previous browsing or purchasing history, be presented with an AUL ad on their first visit to ASI’s website. Further, the prospect that they would be presented with such an ad on a subsequent visit would rise if, having visited ASI’s website, they then visited AUL’s website, especially if they did so having clicked through an AUL ad on ASI’s website. On the face of it, having visited ASI’s website by mistake on one occasion, it would be reasonable to expect them to avoid that mistake in the future, and instead to go directly to the domain name of AUL’s website. However, many people make the same mistake more than once, especially if they need to clear their history to avoid being directed to argos.com instead of argos.co.uk by default on future occasions.

Of those who did look at the ads, it seems unlikely that many of them would have confined their visit to viewing the ads alone. It seems to me that this is probably true of anyone who visited the site for as long as 21 seconds (one of the figures contained in ASI’s statistics) or those who visited for 22 seconds and viewed on average 1.16 pages (some of the figures contained in AUL’s disclosure). In the case of many of ads, the average UK visitor would not regard the ad as being aimed or directed at him even if the ad or ads were viewed in isolation. If the average UK consumer looked beyond the ads, even in a case where an ad or ads was or were aimed or directed at him, he would not regard anything else on ASI’s website over and above such ad(s) as aimed or directed at him, and the longer the user remained on the site and/or went beyond the home page the more that this would be the case.

Moreover, for the reasons explained above, I consider that only some average UK internet users would regard any ads on ASI’s website which are directed at them as being directed at them by ASI as opposed to being directed at them by advertisers.

Although it is not safe to extrapolate from Mr Keane’s visits to ASI’s website, even the fruits of those visits provide very limited support for AUL’s case for all the above reasons. However, AUL’s case also included arguments about extrapolation.

For example, it was a recurring theme that it could be inferred that ads for AUL’s competitors would have been displayed on ASI’s website, with the prospect that visitors then “went on to click on an advertisement for a competitor’s website, e.g. John Lewis, diverting sales and revenue from Argos to its competitors” (see Mr Barrett’s witness statement dated 5 October 2016 at paragraph 10). This loomed particularly large in the evidence of Mr Barrett, who went on to state “There is simply no way the business can measure this loss of business and revenue”.

Although, stated at a high level of generality, the inference that ads for AUL’s competitors would have been displayed on ASI’s website is not unreasonable, I consider that AUL’s difficulties start at an antecedent stage: paraphrasing Mr Barrett’s words, on the evidence before me there is no way of measuring the extent to which that occurred. In most of the cases to which I was referred, the material contents of the websites in question were less variable than applies in the case of ads, where the content varies or may vary according to different visitors and even in respect of the same visitor at different times. This gives rise to uncertainties about website content over time of a kind which, as far as I can see, played no part in those cases. In the present case, I consider that AUL needed to produce better evidence than it has to make good this point, and that inference does not suffice.

For all these reasons, and having regard to the perceptions and expectations of the average consumer, I am unable to hold that the proportion of UK visitors to ASI’s website who would have regarded the site or any part of it as aimed or directed at them was such as to warrant the conclusion that it was targeted at them. This result is reached more readily if am wrong in assuming certain matters in favour of AUL (for example, that it is not essential to consider the website as a whole; and that AUL’s own ads should be taken into account when assessing the issue of targeting).

That finding is sufficient to determine the claim in favour of ASI. However, as the remaining issues were argued fully before me, and in case this litigation should go further, I shall also consider many of those issues, although not in so much detail.

AUL’s case on use in relation to identical services

Mr Hill made three submissions on the law:

Applying those propositions to the facts of the present case, Mr Hill submitted as follows:

ASI’s case on use in relation to identical services

Mr Riordan submitted that AUL had to show: (i) that ASI has used the sign ARGOS (in which regard AUL’s only complaints related to “ARGOS.COM” in the URL of ASI’s domain name itself, and the word “ARGOS” in the text of ASI’s website); (ii) that use is “in relation to” goods or services; and (iii) that those goods or services are identical to those covered by the 858 Mark (in which regard the only service relied upon by AUL is “advertising services”).

As to element (ii), Mr Riordan submitted that what is required is “use” in a trade mark sense, in which regard:

As to element (iii), Mr Riordan submitted that (a) ASI has never supplied “advertising services”, (b) ASI’s only use of the sign ARGOS is in relation to building software and related services, and (c) this is obviously not identical to the 858 Mark. He submitted that, when construing the meaning of “advertising services” in the specification of the 858 Mark, the following principles apply.

First, that meaning falls to be construed from the perspective of the average consumer of the services for which protection is sought (see Maier v ASOS plc [2015] FSR 20, [62]–[63]). As Jacob J explained in British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281 at 289, in the context of goods:

“When it comes to construing a word used in a trade mark specification, one is concerned with how the product is, as a practical matter, regarded for the purposes of trade. After all a trade mark specification is concerned with use in trade.”

Second, where general descriptions of services are claimed, they must be confined to the core of their possible meanings. As Jacob J explained in Avnet Inc v Isoact Ltd [1998] FSR 16 (where internet access services were held not to fall within “advertising and promotional services”) at 19:

“definitions of services … are inherently less precise than specifications of goods. The latter can be, and generally are, rather precise, such as ‘boots and shoes’. … In my view, specifications for services should be scrutinised carefully and they should not be given a wide construction covering a vast range of activities. They should be confined to the substance, as it were, the core of the possible meanings attributable to the rather general phrase.”

Third, the Regulation requires the services for which registration is sought to be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators (such as ASI), on that basis alone, to determine the extent of the protection sought (see Chartered Institute of Patent Attorneys (CIPA) v Registrar of Trade Marks (Case C-307/10) [2013] Bus LR 740, [49] (“IP TRANSLATOR”)).

Fourth, while the Regulation does not preclude the use of general class headings in accordance with the Nice Classification, the identification of services must always be sufficiently clear and precise to allow the extent of protection to be determined: IP TRANSLATOR, [56]. Where a class heading is used, the applicant must state whether it intends to cover all or only some of the goods in the class: IP TRANSLATOR, [61]. Class headings should be construed compatibly with the Paris Convention and the Nice Agreement adopted pursuant to that Convention (see Netto Marken-Discount AG & Co KG v Deutsches Patent- und Markenamt [2014] Bus LR 981, [37]; IP TRANSLATOR, [52]).

Fifth, in Netto Marken at [52], the CJEU expressed the preliminary view that an application which simply referred to inter alia “advertising” was one which “does not ostensibly specify” the particular services claimed with sufficient clarity and precision.

Sixth, it follows from IP TRANSLATOR that, for an EU trade mark granted before that decision, the national authority or court must, when called upon to interpret the scope of the services covered, do so in a way which ensures clarity and precision.

Further, the Nice Classification Guidance for the User of the Nice Classification (10^th ed, 2016) provides the following guidance in relation to “advertising services” in the Explanatory Note to Class 35 (emphasis added):

“Class 35 includes mainly services rendered by persons or organizations principally with the object of: 1. help in the working or management of a commercial undertaking, or 2. help in the management of the business affairs or commercial functions of an industrial or commercial enterprise, as well as services rendered by advertising establishments primarily undertaking communications to the public, declarations or announcements by all means of diffusion and concerning all kinds of goods or services.

This Class includes, in particular: …

— services of advertising agencies and services such as the distribution of prospectuses, directly or through the post, or the distribution of samples. This Class may refer to advertising in connection with other services, such as those concerning bank loans or advertising by radio. …”

The EUIPO, Guidelines for Examination of European Union Trade Marks (23 March 2016) part C (Opposition), section 2 (Double identity), chapter 2 (Comparison of goods and services) at p 52 provides the following guidance on “advertising services” in Class 35 (emphasis added):

“All services listed in the class heading of Class 35 are aimed at supporting or helping other businesses to do or improve their business. They are therefore in principle directed at the professional public. …

Advertising services consist of providing others with assistance in the sale of their goods and services by promoting their launch and/or sale, or of reinforcing the client’s position in the market and acquiring competitive advantage through publicity. In order to fulfil this target, many different means and products might be used. These services are provided by advertising companies, which study their client’s needs, provide all the necessary information and advice for the marketing of their products and services, and create a personalised strategy regarding the advertising of their goods and services through newspapers, websites, videos, the internet, etc.

Examples of advertising services are rental of advertising time on communication media, telemarketing services, marketing, public relations and demonstration of goods, since they are all intended to promote other companies’ goods/services albeit via different means. …

The nature and purpose of advertising services are fundamentally different from the manufacture of goods or from the provision of many other services. Therefore, advertising is generally dissimilar to the goods or services being advertised. The same applies to the comparison of advertising services versus goods that can be used as a medium for disseminating advertising, such as DVDs, software, printed matter, flyers and catalogues.”

In sum, ASI’s case on identity of services is that it stands in the position of an entity which supplies a medium for disseminating advertising. As such, that is (in accordance with the Guidelines) dissimilar to “advertising services”. ASI is not an advertising company, plays no role in the composition of ads placed with Google, and has no direct relationship with Google AdWords advertisers. It is Google, not ASI, which supplies advertising services in the context of the present case.

Mr Riordan also placed reliance on the observations of HHJ Birss QC (as he then was) in Yell Ltd v Giboin [2011] EWPCC 009 in support of the contention that merely offering a diffusion medium in which a third party can place advertising composed and paid for by another third party will not be identical to an advertising service. In that case, one issue was whether offering for sale enhanced placements in a website directory, along with templates with which to construct the content of ads, was to be classified either as “advertising and publicity services” or as “marketing, promotional and advertising services”. HHJ Birss QC said at [116]:

“The core of each definition seems to me to focus on a service whereby the client is helped in order to produce advertising or promotional material. I doubt, but do not have to decide, whether merely offering advertising space for sale amounts to the core of either definition but when that offer is combined with templates in order for the particular advertisement to be created as a result of a collaboration between the Zagg system and the advertiser, then it seems to me that those services are on offer.”

Discussion of the issue of use in relation to identical services

Having set out the arguments as I have, I can state my conclusions quite shortly. I prefer Mr Riordan’s submissions. ASI is not an advertising company, and it is does not offer or provide any of the services which are typically provided by such a company. In line with the provisional views expressed by HHJ Birss QC, I do not consider that merely offering to display on a website ads which are both created by third parties and selected for placement on the website by third parties amounts to the substance or core of “advertising services” within the meaning of Class 35. I also agree with Mr Riordan that ASI is not using the sign ARGOS for the purpose of distinguishing any advertising services that it may supply, or in such a way that consumers are liable to interpret the sign as designating the origin of such services, and, accordingly, that ASI is not using the sign “in relation to” such services.

AUL’s case on effect on the functions of the trade mark

The issue here is whether ASI’s use of a sign identical to AUL’s trade marks affects or is liable to affect the functions of those marks, i.e. the functions of guaranteeing to consumers the origin of the goods or services, of guaranteeing the quality of the goods or services, and of communication, investment and advertising (see case C-487/07 L’Oreal v Bellure [2010] RPC 1, [58]).

Whether the origin function of AUL’s trade marks is adversely affected involves considering, in particular, whether ASI’s use of that sign is such as to create the impression that there is a material link in trade between ASI’s goods (and services) and AUL, and whether the consumers targeted are likely to interpret the sign, as it is used by ASI, as designating or tending to designate the undertaking from which

The defence of honest concurrent use is a corollary of the principle that to establish infringement under Article 9(1)(a) it must be shown that the third party’s use of the sign affects or is liable to affect the functions of the mark. In case C-482/09 Budejovicky Budvar v Anheuser Busch [2012] RPC 11, the CJEU held that due to the long period of honest concurrent use of the two trade marks in issue, neither had nor was liable to have an adverse effect on the essential function of the mark.

Guidance on the nature of the advertising function and the circumstances in which it is adversely affected was provided by the CJEU in joined cases C-236/08, C237/08 and C-238/08 Google France Sarl v Louis Vuitton Malletier SA [2010] RPC 19 (“Google France”) at [91]-[92]:

“91.

Since the course of trade provides a varied offer of goods and services, the proprietor of a trade mark may have not only the objective of indicating, by means of that mark, the origin of its goods or services, but also that of using its mark for advertising purposes designed to inform and persuade consumers.

92.

Accordingly, the proprietor of a trade mark is entitled to prohibit a third party from using, without the proprietor’s consent, a sign identical with its trade mark in relation to goods or services which are identical with those for which that trade mark is registered, in the case where that use adversely affects the proprietor’s use of its mark as a factor in sales promotion or as an instrument of commercial strategy.”

Guidance on the nature of the investment function and the circumstances in which it is adversely affected was provided by the CJEU in Case C-323/09 Interflora v Marks and Spencer Plc [2012] FSR 3 at [60]-[64]:

“60.

In addition to its function of indicating origin and, as the case may be, its advertising function, a trade mark may also be used by its proprietor to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.

61.

Although that function of a trade mark—called the “investment function”—may overlap with the advertising function, it is nonetheless distinct from the latter. Indeed, when the trade mark is used to acquire or preserve a reputation, not only advertising is employed, but also various commercial techniques.

62.

When the use by a third party, such as a competitor of the trade mark proprietor, of a sign identical with the trade mark in relation to goods or services identical with those for which the mark is registered substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty, the third party’s use must be regarded as adversely affecting the trade mark’s investment function…

63.

In a situation in which the trade mark already enjoys such a reputation, the investment function is adversely affected where use by a third party of a sign identical with that mark in relation to identical goods or services affects that reputation and thereby jeopardises its maintenance…

64.

However, it cannot be accepted that the proprietor of a trade mark may—in conditions of fair competition that respect the trade mark’s function as an indication of origin—prevent a competitor from using a sign identical with that trade mark in relation to goods or services identical with those for which the mark is registered, if the only consequence of that use is to oblige the proprietor of that trade mark to adapt its efforts to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. Likewise, the fact that that use may prompt some consumers to switch from goods or services bearing that trade mark cannot be successfully relied on by the proprietor of the mark.”

Further explanation as to the functions of a trade mark was given by the General Court in case T-215/03 SIGLA SA v OHIM [2007] ECR-II711, [2007] ETMR 79 at [35]:

“…the primary function of a mark is unquestionably that of an “indication of origin” (see the seventh recital in the preamble to Regulation 40/94). The fact remains that a mark also acts as a means of conveying other messages concerning, inter alia, the qualities or particular characteristics of the goods or services which it covers or the images and feelings which it conveys, such as, for example, luxury, lifestyle, exclusivity, adventure, youth. To that effect the mark has an inherent economic value which is independent of and separate from that of the goods and services for which it is registered. The messages in question which are conveyed inter alia by a mark with a reputation or which are associated with it confer on that mark a significant value which deserves protection, particularly because, in most cases, the reputation of a mark is the result of considerable effort and investment on the part of its proprietor.”

The authors of Kerly’s Law of Trade Marks and Trade Names (15th ed, 2011), state at paragraph 2-018 that the communication function of a trade encompasses the function described by the General Court in SIGLA. It would follow that use of a sign in a way that damages the mark’s ability to convey such messages would adversely affect the communication function.

Applying the tests set out in these cases, AUL submitted that:

ASI’s case on effect on the functions of the trade mark

The CJEU has “consistently held that [infringement under Article 9(1)(a)] is limited to those cases in which the use of the sign by a third party adversely affects or is liable adversely to affect one of the functions of the trade mark” (see the judgment of the Court of Appeal in Interflora (No 5) at [148]).

Further, whether the use of a sign infringes a trade mark pursuant to Article 9(1) must be assessed as at the date that the use of the sign complained of was commenced (see Case C-145/05, Levi Strauss & Co v Casucci SpA [2006] ECR I3703; BDO at [95]-[96]). For purposes of the present case, and according to AUL, that would appear to be when ads were introduced by ASI in December 2008.

As explained by the Court of Appeal in Interflora (No 5) at [132], [136] and [137]: (a) the CJEU “has, in its decision in Google France, enunciated a new test to be applied by the national court in assessing whether the accused use has adversely affected, or is liable adversely to affect, the origin function of a trade mark at least in the context of keyword advertising cases”, (b) the burden of proving this lies on the party making the allegation, and (c) this is the “general position under EU law” as well as English law. The Court of Appeal concluded at [151]:

“In our judgment the onus lies on the trade mark proprietor to establish that the advertisement complained of does not enable normally informed and reasonably attentive Internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisement originate from the trade mark proprietor or an undertaking economically connected to it or, on the contrary, originate from a third party.”

Although the present case does not concern an advertiser and a rival proprietor, but rather the provider of a diffusion medium for advertising and a proprietor, the principle is the same: the onus is on AUL to demonstrate inter alia adverse effect.

The Court of Appeal in Interflora (No 5) provided the following further guidance at [155]-[156]:

“155.

In either case [i.e. in both Article 9(1)(a) and Article 9(1)(b)] it must be shown that the advertisement does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the trade mark proprietor or an undertaking economically connected to it or, on the contrary, originate from a third party. Of course, Article 5(1)(a) and Article 9(1)(a) also afford protection against use in this way of a sign identical to the trade mark if that use is liable adversely to affect one of the other functions of a trade mark, as the Court elaborated in its decision in Interflora (CJEU) [2012] Bus LR 1440.

156.

These tests have been formulated by the Court with great care and reflect the importance of trade marks in developing a system of undistorted competition whilst recognising that their purpose is not to protect their proprietors against fair competition. Moreover, the Court has acknowledged that internet advertising on the basis of keywords corresponding to trade marks is not inherently objectionable because its purpose is, in general, to offer to internet users alternatives to the goods or services of the trade mark proprietors. The tests enunciated by the Court therefore incorporate appropriate checks and balances. In particular, the national court is required to consider the matter from the perspective of the average consumer, a concept we have discussed, and to decide whether the advertiser has enabled that average consumer to ascertain the origin of the advertised goods or services and so make an informed decision. We would emphasise it is not the duty of such advertisers to avoid confusion.”

The doctrine of initial interest confusion is “an unnecessary and potentially misleading gloss on the tests the [CJEU] has articulated” and “it should perform no part of the analysis” (Interflora (No 5) at [158]).

ASI’s case is that the evidence fails to establish any adverse effect upon the functions of the 858 Mark (or, insofar as relevant, the 263 Mark). At its highest, consumers fleetingly and speculatively visit argos.com, then realise very quickly upon arriving that ASI’s website is not what they are looking for and leave. The reaction of the average consumer when visiting ASI’s website is borne out by the statistics and confirmed by the evidence of the witnesses. In particular:

Discussion of the issue of effect on the functions of the trade mark

I agree with Mr Riordan that AUL has not established that ASI’s use of the sign ARGOS affects or is liable to affect any of the functions of the 858 Mark (or, insofar as relevant, the 263 Mark).

In order to make sense of AUL’s case under this heading, it is necessary to assume that, contrary to my earlier holding, ASI is using the sign in relation to the supply of advertising services. Even if that is assumed to be so, I am wholly unpersuaded that ASI’s use of the sign is such as to create the impression that there is a material link in trade between ASI’s services and AUL.

Mr Hill contends, however, that it is sufficient to establish an adverse effect on the origin function of the mark that consumers targeted are likely to interpret the sign, as it is used by ASI, as designating or tending to designate the undertaking from which ASI’s (ex hypothesi advertising) services originate. I find great difficulty in applying that proposition, in those unqualified terms, to a case like the present. If it were right, it would seem to follow that any person in the EU which has registered a mark in relation to advertising services could bring a claim for trade mark infringement against any website operator, wherever that operator is located, which uses a sign that is identical to the mark and which displays ads on its website. In other words, it would have the effect that, in such circumstances, the EU trade mark regime points to or requires a complete ban on website advertising by any foreign trader, including, as far as I can see, for that trader’s own goods or services.

The application of the approach rehearsed in Interflora (No 5) in respect of keyword advertising, which Mr Hill submits to be inappropriate in the present case, avoids such extreme consequences and produces what seems to me to be an entirely rational and commercially acceptable outcome. I therefore prefer Mr Riordan’s submissions on this point. Indeed, in broad terms, I accept his arguments overall.

I regard some aspects of AUL’s case under this heading as somewhat far-fetched, if not positively incredible, and consider other aspects are difficult to follow and/or difficult to reconcile with other parts of its case. I discuss some examples below.

Reliance on the fact that many people who are trying to access AUL’s website in fact access ASI’s website in error because they deliberately but misguidedly type in argos.com as giving rise to a form of confusion that is very damaging to AUL, even if such persons realise on viewing ASI’s website that it is not operated by AUL, seems to me to sit uneasily with what I understand to be AUL’s acceptance elsewhere in its case that, in the absence of the display of ads on ASI’s website, AUL would have no grounds for legal complaint about ASI’s use of argos.com.

I also consider that AUL’s reliance on the four customer email chains is misplaced, for reasons which I have already explained in some detail above.

The suggestion that the fact that many visitors to ASI’s website visit AUL’s website shortly afterwards in some way creates or enhances a basis of claim for AUL which AUL would or might otherwise not have seems perplexing to me, as does the reliance placed by AUL on the fact that, while AUL’s ads were displayed on ASI’s website, customers seeking AUL were able to use those ads to navigate back to AUL’s products and website. To the extent that visitors go rapidly from argos.com to argos.co.uk, this reflects their mistake in supposing that argos.com is the domain name of AUL’s website and in not realising that it is the domain name of ASI’s website. It is not due to any impression created by ASI, or any interference by ASI with AUL’s use of its trade marks. Similarly, whether or not the ability to navigate back to AUL through ads displayed by AUL on ASI’s website is fairly described as “cumbersome”, I see no reason to suppose that it is more detrimental to AUL than the alternative, namely that having reached ASI’s website by mistake those visitors cannot click on any AUL ads, and therefore have to leave ASI’s website and then try and find AUL’s website from scratch, ex hypothesi without knowing what is the correct domain name of AUL’s website.

AUL’s problems, such as they are or are perceived by AUL to be, do not, in my judgment, stem from any actual or prospective adverse effect on the functions of AUL’s trade marks arising from ASI’s use of the sign ARGOS, but rather from a combination of (a) the fact that ASI registered the domain name argos.com for the purpose of promoting its entirely genuine and lawful (and non-competing) business of supplying CAD software before AUL thought of applying to register that domain name and (b) the errors or assumptions of a number of AUL’s actual or potential customers. On the evidence before me, I consider that even those visitors would have no difficulty whatsoever in rapidly appreciating that ASI’s operation and ASI’s website, including any ads displayed on it from time to time, have no connection in any shape or form with AUL’s retail or advertising businesses; and this applies even more clearly to those visitors to ASI’s website who do not visit it in the mistaken belief that argos.com is the domain name of AUL’s website.

It was common ground that, in deciding whether AUL has demonstrated that ASI’s use of the sign ARGOS creates a link in the mind of the average consumer between that sign and the 263 Mark, the effect of Adidas-Salomon AG v Fitnessworld Trading Ltd, C-408/01, EU:C:2003:582 [2004] Ch 120 (“Adidas-Salomon”) at

ASI further submitted that:

Turning to the facts of the present case, AUL submitted that a link will be formed between ASI’s domain name and AUL’s trade mark. That trade mark is so well known that this is inevitable where ASI’s domain name is used in the UK. Any UK internet user going to ASI’s website, having typed in argos.com, and seeing ASI’s use of the sign will call to mind AUL’s trade mark, and, even in the absence of confusion, that is sufficient to establish the existence of a link. Moreover, as many UK visitors to ASI’s website are returning visitors, and there is no suggestion that any of them are customers of ASI’s software business, they must be typing in argos.com even after they are aware of ASI’s use of the sign, and this further demonstrates that ASI’s use of the sign calls to mind AUL’s mark.

ASI submitted that:

I prefer Mr Riordan’s submissions on this issue as well.

On the evidence, it seems to me that it is not any use by ASI of the sign ARGOS which creates a link in the mind of the average consumer between that sign and the 263 Mark, but, rather, that the connection undoubtedly made in the minds of many UK consumers between ASI’s domain name and AUL arises from pure supposition. Logically, in light of the contents of ASI’s website, and having regard to the fleeting if not vestigial duration of the overwhelming majority of UK visits to that website, any such supposition will be dispelled by a single visit to the website. In this regard, I do not consider that there is any basis for saying that the volume of repeat UK visitors to ASI’s website bears out that ASI’s use of the sign calls to mind AUL’s mark. In many cases, it is likely that repeat visits are due to priority being given to argos.com for repeat searches by features like those described by Mr Thomas in his email of 14 November 2013. In other cases, in my view, the occurrence of repeat visits is more likely to be a consequence of laziness or forgetfulness than as a result of ASI’s use of the sign calling to mind AUL’s mark.

The parties’ submissions on the law

The effect of the judgment of the CJEU in Intel (at [27]-[32]) is that (i) the existence of a link between the sign and the mark in the mind of the public constitutes a necessary but not a sufficient condition for the establishment of the existence of one of the types of injury against which Article 9(1)(c) ensures protection for the benefit of trade marks with a reputation, and (ii) what needs to be established in addition is (a) detriment to the distinctive character of the mark, or (b) detriment to the repute of the mark, or (c) unfair advantage being taken of the distinctive character or the repute of the mark.

The effect of the judgment of the CJEU in L’Oreal is that the taking of unfair advantage of the distinctive character or the repute of a mark, within the meaning of Article 9(1)(c), does not require that there be a likelihood of confusion or a likelihood of detriment to the distinctive character or the repute of the mark or, more generally, to its proprietor, and (see [50]):

“The advantage arising from the use by a third party of a sign similar to a mark with a reputation is an advantage taken unfairly by that third party of the distinctive character or the repute of the mark where that party seeks by that use to ride on the coat-tails of the mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image.”

The CJEU provided further guidance with regard to these concepts in the following passages in L’Oreal, upon which both AUL and ASI placed reliance (citations omitted):

“39 As regards detriment to the distinctive character of the mark, also referred to as ‘dilution’, ‘whittling away’ or ‘blurring’, such detriment is caused when that mark’s ability to identify the goods or services for which it is registered is weakened, since use of an identical or similar sign by a third party leads to dispersion of the identity and hold upon the public mind of the earlier mark. That is particularly the case when the mark, which at one time aroused immediate association with the goods or services for which it is registered, is no longer capable of doing so.

Mr Hill further submitted as follows:

Mr Riordan further submitted as follows:

AUL’s submissions on the facts

Mr Hill submitted that all three types of injury were made out in the present case:

ASI’s submissions on the facts

Mr Riordan submitted that:

Mr Riordan made the following further submissions in light of the evidence:

Discussion of the issue of injury

In my view, none of the types of injury identified by Mr Hill are made out in the present case. I am unable to accept almost any part of his analysis of the facts.

Mr Hill’s formulation that “once projected into the UK by ASI’s targeting of UK internet traffic”, argos.com took unfair advantage of the distinctive character and repute of AUL’s trade mark glosses over the fact that traffic was taken to ASI’s website simply by the international availability of ASI’s domain name and regardless of any alleged targeting (which I have in any event rejected on the facts).

It was the mistakes or carelessness of UK internet users which brought traffic to ASI’s website, rather than AUL’s trade mark, and which presented ASI with the opportunity – which it did nothing to seek out, had no means of preventing, and, in the case of AUL’s ads, was only able to enjoy due to AUL’s own AdWords advertising decisions – to earn very modest sums through AdSense advertising.

ASI only got “money for nothing” in the sense that it had to do nothing to seek out that traffic. It did not get “money for nothing” in the sense that it provided nothing in exchange for the ad revenue it was paid – including and in particular to AUL, in which regard (see above) I consider it more likely than not that at least some of the revenue earned from AUL’s ads would or might otherwise have been lost to AUL.

I agree with Mr Hill that, even if it is assumed that AUL earned revenue in this way that AUL might otherwise not have earned, that does not mean that ASI paid financial compensation to AUL with the meaning of [50] of L’Oreal. To my mind, however, when assessing unfair advantage, it is relevant to bear in mind that ASI gained nothing from the alleged riding on the coat-tails of AUL’s mark other than a small financial income stream, which was paid to ASI as a result of participation in an entirely normal and commercially unobjectionable Google advertising programme, and, moreover, a programme in which AUL also chose to take part; and the traffic which enabled ASI to earn that income stream was not sought out by ASI and was by no means entirely of benefit or advantage to ASI, in that, for at least at some of the time, it caused ASI a measure of expense and inconvenience.

I do not accept that ASI’s use of ARGOS in the UK was liable to dilute the distinctive character of AUL’s mark so as to weaken its ability to serve as a badge of origin for AUL’s goods. This seems to me to fly in the face of all the evidence which I have considered above in respect of other elements of AUL’s claims.

I also do not accept that ASI’s use of ARGOS was liable to change the economic behaviour of consumers in the manner suggested by Mr Hill. Although it is correct that the display of AUL’s ads on ASI’s website would cause some of AUL’s customers who had mistakenly accessed that website to click on one of AUL’s ads, and that this would generate revenue for ASI, I am unable to accept that this constitutes any material change in the economic behaviour of those customers. It may also be correct that the display of ads on ASI’s website would cause some of AUL’s customers who had mistakenly accessed that website to click on ads for one of AUL’s competitors. However, AUL has not persuaded me by evidence or as a matter of inference that this occurred to any material extent, and still less that, as suggested by Mr Hill in this context, this resulted in diversion of sales from AUL.

I agree that a large number of AUL’s customers appear to have accessed AUL’s website through ASI’s website, and that at ASI’s website they will have been presented with a home or landing page that was inconsistent with AUL’s branding and the impression that AUL was trying to present to its customers. However, I do not accept that this would inevitably have had a negative impact on the image of AUL’s mark and reduce its power of attraction. Nor do I accept that there is a serious risk that this would cause customers not to buy products from AUL when they would otherwise have done so. These claims seem to me to be quite unreal, and to pay little regard to the reasons why AUL’s customers will have accessed ASI’s website and their likely affiliation for AUL and desire to buy its products.

On reaching ASI’s website, as much now that ads are no longer displayed on it as when ads were displayed on it, all such customers who are even moderately observant will immediately see that it is a website that has nothing to do with AUL.

I see no reason to suppose that any aspect of the presentation or contents of that website would affect their perception of the image and power of attraction of AUL’s mark, and still less to cause them not to buy products from AUL when they would otherwise have done so. A number of them may think that it is surprising, and perhaps unfortunate, that AUL has not registered the argos.com domain name,

In my view, there is no fair comparison between Tesco Stores Ltd v Elogicom Ltd [2007] FSR 4 and the present case. In that case the moving light of the defendant company (“Elogicom”), Mr Ray, caused it to register a raft of domain names using the word “tesco”, which were then added to the list of domain names in a system run by TradeDoubler AB (“TradeDoubler”) in accordance with which operators of websites could become affiliates of clients of TradeDoubler such as Tesco. Elogicom did not use those domain names to sell any goods or services of its own. Instead, Mr Ray arranged matters so that if an individual browsing the internet entered any of these various Tesco related domain names into the address bar on his computer, the individual was taken not to any website operated by the Elogicom but instead directly to one of the websites operated by Tesco (see [16]). If any individual consumer entered one of these domain names in his computer, was taken directly to a Tesco website and then made purchases on that website, TradeDoubler would charge Tesco commission on those sales under the agreement between Tesco and TradeDoubler, and would pay Elogicom that commission under as separate agreement between TradeDoubler and Elogicom (see [17]).

Mr Philip Sales held at [34] that, subject to its defences, Elogicom infringed Tesco’s trade marks, and at [52] that Tesco’s claim for passing off succeeded, because:

“34.

… its use of “tesco” related domain names infringed Tesco’s three trade marks, contrary to section 10(2) of [the Trade Marks Act 1994]; and I also consider that Elogicom’s use of those domain names infringed Tesco’s three trade marks, contrary to section 10(3) of the Act, in that Elogicom used the domain names in the course of its trade in relation to services, they were similar to Tesco’s trade marks, Tesco’s trade marks had a reputation in the United Kingdom and … its use of those domain names was “without due cause” and took “unfair advantage of” the distinctive character and the repute of Tesco’s trade marks. In my view, Elogicom took unfair advantage of the Tesco brand, reflected in its trade marks, by using the word “tesco” in its domain names specifically with the object of trading on and benefiting from Tesco’s reputation with the general public, by capturing part of the traffic of persons browsing the internet and entering Tesco related names in the address bars on their computers in the hope of being taken to Tesco websites, and then obtaining payment of commission from Tesco via TradeDoubler in relation to that traffic. Moreover, on the authority of the Court of Appeal’s decision in British Telecommunications Plc v One in a Million Ltd [1999] FSR 1, it seems to me that the situation which Elogicom brought about would also fall to be regarded as detrimental to the distinctive character or the repute of Tesco’s trade marks, within the meaning of section 10(3), since the following observation of Aldous LJ at p25 would apply: “The domain names were registered to take advantage of the distinctive character and reputation of the marks. That is unfair and detrimental.”

…

52.

In my judgment, there is no doubt that Elogicom by its registration and use of the “tesco” related domain names, has sought to associate itself with and trade upon the considerable goodwill which attaches to the name “Tesco” for the benefit of Tesco. There is also no doubt that Elogicom continues to threaten to make use the Tesco name, so damaging Tesco’s goodwill, both by retaining those domain names with the option of starting to use them again at some point in the future and by virtue of maintaining their registration against Elogicom’s name in the register. Therefore, for the same reasons as I have given above in relation to Tesco’s trade marks claim and by application of the principles in One in a Million, Tesco is entitled by way of summary judgment to the quia timet injunctive relief which it seeks on this basis also.”

In the present case, ASI registered the ASI domain name for entirely legitimate reasons, and used it to sell its own products. ASI did not use the word “ARGOS” in that domain name specifically (or indeed at all) with the object of trading on and benefiting from AUL’s reputation with the general public. Nor has ASI brought about a situation which falls to be regarded as unfair or detrimental to the distinctive character or the repute of AUL’s trade marks on the basis that ASI’s domain name was registered to take advantage of the distinctive character and reputation of the marks. Internet traffic looking for AUL’s website does not arrive at ASI’s website because ASI set out to capture that traffic, and ASI was able (while ASI displayed ads) to monetise that traffic simply because it was arriving there through no fault of ASI’s, and not because ASI chose or registered ASI’s domain name with the object of trading on and benefiting from AUL’s reputation.

Further, for the like reasons, it cannot fairly be said that, by its registration and use of ASI’s domain name, ASI has sought to associate itself with and trade upon the considerable goodwill which attaches to AUL’s name for the benefit of ASI.

Although expressed in my own words, and by reference to Mr Hill’s submissions, these conclusions reflect my acceptance of the thrust of Mr Riordan’s submissions.

In sum, I agree with him that the advantage that ASI gained from the ads was not significant in the context of the business of either ASI or AUL, was not without an element of benefit to AUL, ought to be seen in the context that the traffic which enabled it to be gained was not sought out by ASI and was not without some unwanted adverse effects for ASI, was not accompanied by any transfer of reputation or brand characteristics to ASI’s goods or services (although I accept this is not a determinative consideration), and, overall, was not, in my view, unfair.

The parties’ submissions on the law

Where the trade mark proprietor demonstrates the existence of one of the three forms of injury in Article 9(1)(c) discussed above, it was common ground that the onus is then on the third party to establish that it has “due cause” for using the sign

The intention of the third party in using the sign is also a relevant factor in assessing whether there is due cause (Leidseplein at [55]). Further, at [56] the CJEU gave the following guidance concerning good faith:

“In this regard, in order to determine whether the use of the sign similar to the mark with a reputation was in good faith, it is necessary to take account of the degree of proximity between the goods and services for which that sign has been used and the product for which that mark was registered, as well as to have regard for when that sign was first used for a product identical to that for which that mark was registered, and when that mark acquired its reputation.”

Mr Riordan relied on Interflora at [74], [91] in support of the submission that the concept of “due cause” has been given a particular meaning in the context of internet keyword advertising (emphasis added):

“[74] For its part, the concept of ‘taking unfair advantage of the distinctive character or the repute of the trade mark’, also referred to as, inter alia, ‘free-riding’, relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation (L’Oréal at [41]). …

[91] By contrast, where the advertisement displayed on the internet on the basis of a keyword corresponding to a trade mark with a reputation puts forward—without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark concerned—an alternative to the goods or services of the proprietor of the trade mark with a reputation, it must be concluded that such use falls, as a rule, within the ambit of fair competition in the sector for the goods or services concerned and is thus not without ‘due cause’ for the purposes of Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation 40/94.”

Mr Riordan submitted that the Interflora conditions are to be applied in preference to the more general formulations developed in Leidseplein, which concerned prior user of a mark for identical goods in good faith. In particular, he argued that:

Mr Riordan also placed reliance on the decision of the CJEU in Google France, and in particular the observations at [102]–[105]. He suggested that the upshot of that decision is that Google is entitled to derive a commercial advantage from the display of infringing ads on its website, and, if that is so, he asked rhetorically, why is ASI not entitled to derive a commercial advantage from the display of entirely legitimate ads of third parties which are placed by Google on ASI’s website?

Finally, on the law, Mr Riordan argued that in Specsavers International Healthcare

AUL’s submissions on the facts

Mr Hill submitted that:

ASI’s submissions on the facts

Mr Riordan submitted that:

Discussion of the issue of use of the sign with due cause

I do not consider that it is necessary for me to decide whether all the arguments that Mr Riordan advanced concerning the law are correct. In particular, there is no need to decide whether the points that he sought to extract from Google France are well founded, and I prefer to express no view on that unless I am required to do so.

In my judgment, however, the headline points that he made on the facts are correct.

I understand Mr Hill’s focus on the difference between ASI’s initial and longstanding use of the sign (which he accepts to be legitimate) and ASI’s use following the decision to display ads and a fortiori the decision to establish two different geo-targeted versions of ASI’s home or landing page (which he labels illegitimate). However, I have difficulty in viewing ASI’s conduct as not according with honest practices, or as involving ASI in use of its domain name for illegitimate purposes.

If ASI had displayed ads on its website from the outset, I am unable to see that AUL could lawfully have complained, albeit that the website would have been accessible in the UK, and regardless of whether (a) ASI had any need to display ads for the benefit of its business, (b) ASI decided to display ads solely in order to make money, and (c) ASI in fact made more money from the ads than it otherwise would have done because many people visited ASI’s website due to mistakes made by them which were not caused or contributed to by ASI and over which it had no control. For AUL to enjoy a basis of legal complaint in those circumstances would seem to me to produce altogether too extravagant and anti-competitive a result.

I am unable to accept that it makes any difference that (a) rather than displaying ads on its website from the outset, ASI only decided to display ads after some years had passed date, and (b) ASI did this in the knowledge that it was likely to benefit in the form of an increased income stream generated by such displays due to the large volume of misdirected traffic which it did nothing to generate or encourage, and did not want. Unlike the squatter in Mr Hill’s example, ASI did not set out to take advantage of AUL’s marks. When an opportunity to make money by a commercial activity (displaying ads) which is in all other respects lawful and not misleading in any way dropped into ASI’s lap due to the volume of visits from UK consumers which ASI had not induced them to make, and ASI saw a means of taking up that opportunity while at the same time minimising the problems for ASI to which unwanted UK visitors might otherwise give rise by splitting the website into two versions, I am unable to accept that the breadth of AUL’s rights as trade mark proprietor is such as to require ASI to give up that opportunity on pain of being held to have infringed those rights.

For these reasons, I determine the issue of due cause in favour of ASI in this case.

ASI raises three free standing defences to AUL’s trade mark infringement claims, namely: (a) an own name defence under Article 12(a) of the Regulation, (b) an equitable acquiescence defence under English law, and (c) a defence and counterclaim based on a right of indemnity pursuant to the Google AdWords terms.

Because I have already decided that AUL’s claims for infringement of trade marks fail on a number of grounds, the first and second of these defences do not arise. However, having regard to the breadth of ASI’s arguments concerning the third defence, which includes a claim to be indemnified in respect of the costs of these proceedings, it is still necessary to consider that defence. In addition, I consider that it may be helpful for me to consider the first defence as well. But I do not propose to consider the second defence, not least to avoid further lengthening this judgment.

The parties’ submissions on the law

So far as relevant, Article 12(a) provides:

“A Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade:

(a)

his own name or address

provided he uses them in accordance with honest practices in industrial or commercial matters.”

In accordance with Council Regulation (EU) 2015/2424, which entered into force on 23 March 2016, this defence is now limited to “natural persons”. However, as all of the alleged acts of trade mark infringement took place before September 2015, the instrument in force at all material times was the old Regulation, under which the defence applies to corporations as much as to natural persons (see

Both sides relied on the following statement of the law Hotel Cipriani v Cipriani (Grosvenor Street) Ltd [2010] RPC 16 (“Hotel Cipriani”), Lloyd LJ at [59]–[72]:

“[I]n principle an individual ought to be able to use the defence in relation to an adopted name by which he or she is known … That being so, I find it difficult to understand why a corporate entity should not be able to do so, if it can show that it uses a distinct name for trading purposes. … In my judgment the Article 12(a) defence may be available in respect of a trading name, as well as the corporate name of a company, but it will depend on (a) what the trading name is that has been adopted; (b) in what circumstances it has been adopted; (c) depending on the relevant circumstances, whether the use is in accordance with honest practices.”

The requirement that the defendant’s conduct should be in accordance with honest practices in industrial and commercial matters reflects a general duty to act fairly in relation to the legitimate interests of the trade mark proprietor (see Anheuser-Busch C-245/02, EU:C:2004:717 [2004] ECR I-10989 at [82]; ASOS at [147]). This requires an overall assessment, in light of all the relevant circumstances, of whether the defendant “can be regarded as unfairly competing with the proprietor of the trade mark” (Anheuser-Busch at [84]).

Mr Riordan contended, however, that this does not require defendants “to submit to an open-ended assessment of their commercial morality” (see Samuel Smith Old Brewery (Tadcaster) v Lee (t/a Cropton Brewery) [2011] EWHC 1879 (Ch); [2012] FSR 7 (“Samuel Smith”), Arnold J at [120]).

It is relevant to consider why the defendant adopted the name and whether, when adopting it, the defendant was aware of the claimant’s registered mark (see Céline

Both sides also relied on the decision of the Court of Appeal in ASOS and in particular the judgment of Kitchin LJ at [147]–[148], in which (among other things) he explained that in determining whether a defendant is acting fairly in relation to the legitimate interests of the trade mark proprietor:

“it will be relevant to consider, among other things, whether there exists a likelihood of confusion; whether the trade mark has a reputation; whether use of the sign complained of takes advantage of or is detrimental to the distinctive character or repute of the trade mark; and whether the possibility of conflict was something of which the defendant was or ought to have been aware. The national court must carry out an overall assessment of all the circumstances and determine whether the defendant is competing unfairly.”

Mr Riordan further submitted that, on the facts of that case, the Court of Appeal identified a number of considerations which were said to be “particularly material”:

Both sides also referred me to Samuel Smith Old Brewery (Tadcaster) v Lee [2011] EWHC 1979 (Ch) [2012] FSR 7, in which Arnold J provided a non-exclusive list of factors potentially relevant to the issue of honest practices (see [112]-[120]). Among other things, Arnold J observed at [116]:

“… an important factor is whether the use of the sign complained of either gives rise to consumer deception or takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark. If it does, it is unlikely to qualify as being in accordance with honest practices: see Gillette at [49], Anheuser-Busch at [83] and Céline at [34].”

Mr Riordan further submitted that in cases of honest concurrent use some give and take is needed: “Provided the parties behave fairly and reasonably it works” (see

AUL’s submissions on the facts

Mr Hill submitted that:

ASI’s submissions on the facts

With regard to use of ASI’s own name Mr Riordan submitted that Mr Moilanen’s evidence was clear that he believed “ARGOS” to be a trading name of ASI, that the evidence showed that this trading name has been adopted ever since ASI’s incorporation in 1991, and that this evidence was not undermined in crossexamination:

With regard to honest practices in industrial and commercial matters, and in reliance on the evidence of Mr Moilanen (which was necessarily largely second hand), Mr Riordan starting by addressing the factors identified as relevant in ASOS:

Next, Mr Riordan submitted that application of the Samuel Smith factors to the evidence led to the following conclusions:

Mr Riordan also submitted that the Samuel Smith factors are not exhaustive. He suggested that the following additional factors also supported ASI’s own name defence:

Discussion of ASI’s own name defence

In my judgment, this defence is made out.

In large part, Mr Hill’s submissions repeated points which he had advanced in support of other aspects of AUL’s case, and which I have already rejected under those headings. For the reasons set out above, I do not accept that ASI’s use of argos.com is not in accordance with honest practices or can properly be said to amount to unfair competition with AUL. The reason why ASI adopted the name ARGOS is that its moving light chose a name from the lexicon of Greek mythology (it would seem in common with many other traders all over the world). When adopting that name in 1991, ASI was unaware of AUL’s marks, which indeed had not even been registered at that time. Looking briefly at the other considerations which were identified by Kitchin LJ in ASOS as being of relevance to a determination of whether ASI is acting fairly in relation to the legitimate interests of AUL, in my judgment: (a) there exists no likelihood of confusion; (b) although AUL’s mark plainly has a very substantial reputation, use of the sign complained of does not take advantage of and nor is it detrimental to the distinctive character or repute of that mark; (c) the possibility of conflict was not something of which ASI was or ought to have been aware; and (d) on an overall assessment of all the circumstances, ASI is not competing unfairly, beyond doubt whenever ads have not been displayed on ASI’s website, and in my view even when they have been.

The one element which Mr Hill added in his submissions in respect of the own name defence is his contention that the Cipriani and Premier Luggage cases make clear that the defence will not apply to an abbreviation or an adaption of a company’s corporate name or trading name. However, what I take away from those cases is the recognition of Lloyd LJ in the Cipriani case that the Article 12(a) defence may be available in respect of a trading name, as well as the corporate name of a company, depending on the circumstances. Those circumstances include: what trading name has been adopted (in the present case, the name adopted is ARGOS, the name of a character from Greek mythology); in what circumstances that name has been adopted (in summary, in the present case, in 1991, for the purposes of a legitimate business which is directed solely at trade in the Americas, which does not compete with AUL, and without any - let alone any sinister - knowledge of any likely adverse impact on AUL’s business, or any possibility of confusion or of benefitting from a suggested association with AUL or its marks); and whether ASI’s use is in accordance with honest practices (as I consider it is).

To give individual consideration to the great many points which were made by Mr Riordan would lengthen this judgment considerably, and is, in my view, unnecessary in light of these conclusions. Moreover, I would not want to be taken to accept all those points, at least without qualification. For example, I did not hear extensive argument on Mr Riordan’s “reverse hijacking” point, and I would prefer to express no firm view on his contentions about UDRP proceedings generally.

In general, however, and to a significant extent in accordance with the findings that I have already made, I consider that Mr Riordan’s points concerning the factors identified in ASOS and Samuel Smith are well founded, and that there is also some force in his four additional points. Overall, I am satisfied that the balance comes down firmly in favour of the two essential elements of ASI’s own name defence, namely (i) that use of the sign ARGOS is of ASI’s own name, and (ii) that ASI’s use of that sign is in accordance with honest practices in commercial matters.

The relevant contractual provisions

The Google Adwords terms contain the following indemnity clauses:

ASI contended that these indemnities are directly enforceable by it under the Contracts (Rights of Third Parties) Act 1999 (“the 1999 Act”).

Section 1 of the 1999 Act provides, insofar as relevant:

“(1)

Subject to the provisions of this Act, a person who is not a party to a contract (a ‘third party’) may in his own right enforce a term of the contract if —

(a)

the contract expressly provides that he may, or

(b)

subject to subsection (2), the term purports to confer a benefit on him.

(2)

Subsection (1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.

(3)

The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into. …

(5)

For the purpose of exercising his right to enforce a term of the contract, there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract

…”

When placing reliance on the 1999 Act, Mr Riordan concentrated on the 2013 terms, submitting that “It is apparent on the face of Clause 10 [of the 2013 terms] that s1(1)(a) is satisfied by stating that Partners “are intended third party beneficiaries of this Clause””. I am uncertain whether this focus was deliberate, but I consider that he was right to take this course at least with regard to the 2006 terms, because they are not governed by English law. So far as concerns the 2009 terms, Clause 17 provides “Rights of third parties. Except as expressly stated otherwise, nothing in this Agreement shall create or confer any rights or other benefits in favour of any person other than the parties to this Agreement”. However, this exception is probably satisfied by the wording of Clause 11 of the 2009 terms. Be that as it may, I consider that Mr Riordan is right in his contention as to the meaning and effect of Clause 10 of the 2013 terms. This interpretation is confirmed by Clause 12(h) of the 2013 terms, entitled “Miscellaneous”, which provides “Except as expressly listed in Clause 10, there are no third-party beneficiaries to these Terms”.

I should mention for completeness, however, that Mr Riordan submitted in the alternative that s1(1)(b) of the 1999 Act is satisfied in that Clause 10 of the 2013 terms purports to confer a benefit on Partners, and there is nothing in the AdWords Terms which suggests that the parties did not intend clause 10 to be enforceable by ASI. He submitted that (a) once s1(1)(b) is satisfied, AUL bears the onus of proving that s1(2) is satisfied (see Chitty on Contracts (32^nd ed) [18-095] and the cases there cited) (b) it is well-established that third party beneficiaries of an indemnity can rely on the benefit directly conferred upon them directly against the promisor unless the promisor can show that the parties did not so intend (see

AUL’s case on interpretation

Mr Hill submitted that the defences based on these terms must fail because:

ASI’s case on interpretation

Mr Riordan submitted that the wording of Clause 10 of the 2013 terms (i.e. to “defend, indemnify and hold harmless”) must be given its ordinary and natural meaning, in the widest sense of “recompense for any loss or liability which one person has incurred” (see Chitty on Contracts (32^nd ed), [45-006]). This must include any financial remedy which ASI is otherwise liable to pay to AUL in relation to the ads, and any costs of defending the present claim.

In this regard, he submitted that number of definitions and other terms are relevant:

Mr Riordan submitted that, in light of these provisions:

Discussion of the argument about indemnity

In my view, the words “any third party claim or liability” in Clause 10 of the 2013 terms should be read together, and relate to (a) “any claim by a third party” and “any liability to a third party”, as opposed to (b) “any claim by a third party” and “any liability [to anyone]”. Accordingly, in my judgment, and as submitted by Mr Hill, the Clause only applies in respect of liabilities to third parties, i.e. liabilities to persons those who are not parties to the contract. Examples would include the liability of a Partner to a third party for defamation or (in keeping with Clause 5(b)) for infringement of copyright arising from the display on the Partner’s website of an ad which the Customer has contracted with Google to have displayed there.

On this basis, Clause 10 is not apt, in my opinion, to provide ASI with an indemnity in respect of any liability that it may have incurred to AUL as a result of displaying AUL’s ads on ASI’s website, whether for damages for infringement of trade mark or passing off or for the costs of the present proceedings.

Further, Mr Riordan’s arguments additional arguments do not, in my view, take ASI’s case any further. If AUL acts in breach of the 2013 terms vis-à-vis a Partner, the Partner has no need for an express contractual indemnity because the Partner will be able to rely on its ordinary legal rights to protect itself against the adverse consequences of that breach in any event (e.g. by defending the claim on its merits, or, in an appropriate case, by obtaining an injunction to restrain the breach).

In my view, Mr Riordan is seeking to stretch ASI’s case for an indemnity beyond its original bounds by asserting that, in the event that AUL brings a claim in breach

Clause 8 of the 2006 terms is similarly limited to “third party claim or liability”.

Although Clause 11 of the 2009 terms is worded differently, I consider that the like points apply to that Clause. Thus, although the first sentence of that Clause refers to “any claims [etc]” as opposed to “any third party claims”, it seems to me that it is not apt to cover claims by Customer, because the first sentence is qualified by the second sentence, pursuant to which (among other things) Google is required to give Customer “full control and sole authority over the defence and settlement of such claim”, and this would make no sense in respect of a claim by Customer itself.

AUL’s submissions on passing off

I have set out the main way in which AUL presents its case, both as to the law and on the facts, when providing an outline of the claims above.

In his written closing submissions at the end of the trial, Mr Hill re-iterated the argument that, although ASI initially used ASI’s domain name legitimately, from the time when ASI introduced ads and (on AUL’s case) began targeting the UK, there is no material difference between ASI’s conduct and the conduct of the defendants in One in a Million, the Elogicom case, and, more recently, Vertical Leisure v Poleplus [2014] EWHC 2077 (IPEC). He submitted that:

ASI’s submissions on passing off

ASI accepts that AUL possesses goodwill, but disputes the other elements of the claim, in essence for the same reasons as it submits the trade mark claims must fail.

With regard to the misrepresentation element of the claim, Mr Riordan submitted that although the focus in a passing off case is the “relevant public” (i.e. AUL’s customers) the standard of perspicacity to be expected of that public is at least as high as that to be expected of the average consumer. He relied on the observations of Arnold J in Europcar at [158]:

“It has long been the law that the correct approach is to consider whether, as Lord Cranworth LC put it in Seixo v Provezende (1865-66) LR 1 Ch App 192 at p 196, ‘ordinary purchasers, purchasing with ordinary caution, are likely to be misled’. No claim for passing off lies if, as Foster J famously observed in Morning Star Co-Operative Society Ltd v Express Newspapers Ltd [1979] FSR 113 at 117, ‘only a moron in a hurry would be misled’. … Thus English passing off law requires the court to consider whether ordinary consumers who purchase with ordinary caution and who know what is fairly common to the trade are likely to be misled.”

Mr Riordan further submitted:

Turning from misrepresentation to damage, Mr Riordan began by referring to the observation of Jacob LJ in Phones 4U Ltd v Phone4U.co.uk Internet Ltd [2007] RPC 5 at [19]:

“A more complete test would be whether what is said to be deception rather than mere confusion is really likely to be damaging to the claimant’s goodwill or divert trade from him. I emphasise the word ‘really’.”

Mr Riordan further pointed out that no particulars of damage are pleaded by AUL. He submitted that there is no evidence to suggest actual or likely damage, and, indeed, that the evidence suggests that AUL benefited materially from the ads it placed on argos.com.

Mr Riordan disputed AUL’s claim that ASI’s domain name is an instrument of fraud, on the following principal grounds.

With regard to One in a Million, Mr Riordan submitted as follows:

Discussion of the issue of passing off

In my view, there is not and was not at any material time any misrepresentation by ASI to the public leading or likely to lead the public to believe that goods or services offered by ASI are the goods or services of AUL. Nor has AUL demonstrated that it has suffered, or is likely to suffer, damage by reason of any erroneous belief engendered by any misrepresentation by ASI that the source of the ASI’s goods or services is the same as the source of those offered by AUL, or at all.

In particular, I agree with Mr Riordan that (a) there is no evidence of actual deception in the present case or of any likelihood of future deception, and the 4 emails from customers provide no support for the proposition that ordinary consumers, acting with ordinary caution, are likely to be misled, (b) there is no evidence that any one has ever purchased any goods or services from ASI (including, for the avoidance of doubt, any services constituting or connected with advertising services) thinking that ASI was AUL or that there is any risk that anyone may do so in the future, (c) if and to the extent that visitors are drawn to ASI’s website because they are deceived into thinking that it is AUL’s website or is in some way connected to AUL, there is no evidence that they are misled for long enough to take any material step or so as to cause any damage to AUL’s goodwill, and (d) there is no evidence that ASI’s website itself, with or without ads, has led or is in future likely to lead the relevant public or any substantial proportion of it to believe that it is AUL’s website or that it is in some way connected to AUL.

For these reasons and in all the other circumstances detailed above, I do not accept that argos.com is inherently deceptive or that its use by ASI (without or without ads) will inevitably lead to passing off, whether in light of the enormity of AUL’s goodwill and reputation in the UK or because of the confusion of UK consumers in guessing or supposing that argos.com is the domain name of AUL’s website.

I also do not accept that argos.com is an instrument of fraud. In my view, there are significant points of difference between the facts of the present case and cases such as One in a Million and the Elogicom case, as discussed above with regard to Elogicom in particular and as submitted by Mr Riordan with regard to One in a Million in particular. It is true that the mistakes of UK consumers, which ASI did nothing culpable to create or foster, have led them to visit ASI’s website in error, as much when ads were displayed there as when they were not, and that ASI took advantage of those mistakes in the sense that in light of those mistakes it was able to generate more revenue by displaying lawful ads on its website than it would otherwise have done. That advantage was not a product of anything wrongful done by ASI, and thus, in my judgment, was not unfair, let alone the product of fraud.

In these circumstances, AUL’s claim for passing off must be rejected.

In light of the rulings above, the issue of remedies on the claim does not arise. So far as concerns the counterclaim, ASI seeks declarations of non-infringement, and Mr Riordan made detailed written submissions in support of ASI’s case in that regard. However, Mr Hill submitted in opening that discussion of appropriate remedies should await the Court’s conclusions on liability. I agree with him that such issues are best addressed after this judgment has been handed down.

In summary, I hold that:

I ask Counsel to agree an order which reflects these rulings, and, if and to the extent that they are able to agree this, the remedies that the Court should be invited to order pursuant to ASI’s counterclaim. I will hear submissions on any points which remain in dispute, and on any other issues such as costs and permission to appeal, either when judgment is handed down, or at some other convenient date.