Argos v Argos: Confused?

This blog is part of our series following our successful landmark ruling in the matter of Argos Ltd v Argos Systems Inc. For our full review of the case and to see our full range of blog posts click here.

If your business does not yet have your key brand registered, then it will need to rely upon the tort of “Passing Off”.

To give passing off its 1842 definition, it provides that “A man is not to sell his own goods under the pretence that they are the goods of another man“.  Obviously, the English courts have come a long way since 1842, but the principle is the same.  Indeed, classic “Passing Off” has the following three-part test:

  • The Claimant must prove it has goodwill attached to the goods or services;
  • A misrepresentation by the Defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods or services offered by him are the goods or services of the Claimant; and
  • The Claimant has suffered damage as a result of the erroneous belief engendered by the Defendant’s misrepresentation that the source of the Defendant’s goods or services is the same as offered by the Claimant.

In the case of Argos Limited (“Argos UK”), the well-known UK giant retailer, brought a High Court claim against Argos Systems (“Argos US”) in relation to passing off.

In particular, Argos UK argued that Argos US had committed the tort of passing off as Argos US had equipped itself with an instrument of fraud, i.e. the argos.com domain name, relying on British Telecom Plc v One In A Million Ltd [1999] FSR 1 (“One in a Million”).  Argos US’s subsequent use of Google AdSense upon its website at argos.com amounted to a damaging misrepresentation to the UK consumer.  Argos UK relied heavily upon the fact that Argos US used Google Ads on the non-American facing home page of their website.

While Argos US accepted that Argos UK had goodwill in relation to its name in the UK, it disputed that a misrepresentation, or that any damage had occurred as a result of Argos US’s actions.

In most passing off cases, evidence of confused customers is gold dust for any claimant. In this case, Argos US had disclosed 4 emails whereby customers of Argos UK had contacted Argos US, thinking there was some connection between Argos US’s website and Argos UK.  However, upon review of those emails, Deputy Judge Spearman stated that those customers were “misguided” and not “representative of the relevant public”.  In particular, he stated “1 instance they relate to goods that were offered to the customer by mistake, and in the other 3 instances they relate to goods already purchased from [Argos UK] (or, perhaps, in one case, Amazon)” and there can be no passing off arising from a statement which only came to the purchaser’s attention after the time of purchase.

In the Deputy Judge’s view, there was not any misrepresentation by Argos US to the public leading, or likely to lead, the public to believe that goods or services offered by Argos US are the goods or services of Argos UK.

Turning to the third element of passing off, namely damage, Argos US pointed out that there was no evidence to suggest actual or likely damage, and, indeed, that the evidence suggests that Argos UK benefited materially from the ads it placed on argos.com by Argos US as many of those ads were Argos UK ads and therefore browsers were directed to Argos UK’s website and made purchases.  As such, such, the Deputy Judge found that Argos UK had not suffered any damage.

Given Argos US’s legal team successfully argued that no misrepresentation had taken place by Argos US and that Argos UK had not suffered any damage, Argos UK’s claim for passing off was rejected.

Virtuoso Legal acted for the successful party, Argos Systems Inc in this matter.

For more information on this blog contact, Philip Partington on philip@virtuosolegal.com or 0207 412 8372 or 07983 124030.

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