Trade Marks and Customer Confusion in the Internet Era – Court of Appeal Ruling

With the Internet accessible from anywhere in the world, the potential for confusion between businesses with similar or identical names has increased exponentially. The Court of Appeal tackled the issue in resolving a transatlantic trade mark dispute.

The case concerned well-known retailer Argos Limited (AL), which trades largely in the UK and Ireland. It has registered EU trade marks protecting the Argos name and operates online via the domain It launched proceedings against Argos Systems Inc. (ASI), a software company which trades exclusively in the United States and whose online presence is at

AL presented evidence derived from Google Analytics that the vast majority of those visiting ASI’s website were UK residents. Most of them did not make it beyond the home page and departed within 10 seconds. That was said to indicate that the website was routinely being clicked on in error by those looking for AL. ASI was alleged to have profited handsomely from advertising placed on its website via Google’s AdSense system that was targeted at UK consumers. AL’s trade mark infringement claim was, however, dismissed by a judge.

In ruling on AL’s challenge to that decision, the Court noted that there was abundant evidence that ASI was aware of misdirected traffic arriving at its website seeking AL. It also knew that the vast majority of that traffic emanated from the UK and Ireland, where it had no trading presence, and that Google’s algorithms were likely to result in visitors being shown adverts of interest to UK and Irish consumers. Although Google had ultimate control over which adverts appeared, ASI was itself targeting UK and Irish consumers through its website.

In dismissing AL’s appeal, however, the Court noted that trade marks are territorial in their effect and those who are doing business exclusively outside the UK should not generally have their dealings subjected to the trade mark law of the UK. ASI’s use of the Argos name in relation to the provision of advertising space on its website did not take unfair advantage of AL’s trade marks.

Such unfairness was not established by the fact of economic advantage alone. ASI’s use of the Argos name did not cause AL’s customers to click on competitors’ adverts or cause any diversion of AL’s business. ASI was entitled to optimise its benefits from the AdSense system and was not required to adopt the least advantageous or most burdensome way of dealing with the unwanted traffic.