Trademark infringement: success for Arsenal

United Kingdom
The European Court of Justice has issued the Opinion of the Advocate General in the case of Arsenal Football Club -v- Reed concerning the use of registered trade marks by a vendor of unofficial “Arsenal” merchandise. Contrary to the view of the English High Court, whose judgment cast serious doubt over the value of merchandising rights, the Opinion is strongly in favour of Arsenal Football Club.

Facts

Arsenal Football Club ("the Club") brought a seemingly straightforward trade mark infringement case against a vendor of unauthorised football merchandise on which appeared various of the Club's registered trade marks including ARSENAL, GUNNERS and Club logos. The defendant, Mr Reed, had sold football memorabilia from outside the grounds of the Club for over 30 years on which the Club's trade marks were used. He made clear to consumers that his goods were “unofficial”. Mr Reed argued that he was not using trade marks within Section 10 of the Trade Marks Act 1994 (concerning infringement), and alternatively, that the marks were incapable of distinguishing the Club's goods in a "trade mark sense". He claimed that he used the marks as "badges of allegiance" rather than as a trade source.

The Club had also brought a case in passing off which failed on the grounds of lack of confusion and a failure to point to deception and damage.

The High Court decided that it was unclear under the Trade Marks Act 1994 as to whether a defendant infringed only if he used the trade mark "as a mark" (which was the position under the previous legislation.) Here the Club's registration would be perceived as a badge of support and not as a mark to indicate trade source or origin. Given that the Trade Marks Act derived from a European Directive the case was referred to the European Court.

Opinion

The Advocate General emphasised the value of trade marks not simply as indications of origin. He said that a trade mark acquires “a life of its own, making a statement… about quality, reputation and even, in certain cases, a way of seeing life.…” and that all of these aspects should be protected.

In particular, given the highly commercial nature of the football “industry”, which he examined in some detail, and the importance of merchandised goods within the industry, the marks should be capable of protection in these circumstances. Mr Reed was exploiting the mark to supply goods in a commercial market and his use was the requisite use for infringement purposes under the Trade Marks Act. It did not matter that the marks were perceived as badges of support for the proprietor rather than a trade origin. The important factors were that the mark was used in the course of trade and that purchasers bought the goods because they identified with the mark and its proprietor. While it was for the national court to decide the question of “use” in each case, in the case of the identical mark being used on the identical goods or services registered, the requisite “use” should be presumed.

The Advocate General did cite some circumstances in which a trade mark would not be “used” for the purposes of infringement, for example, the use of the Campbell soup can in Andy Warhol’s well known picture, notwithstanding the fact that the artist consequently derived a commercial benefit. It appears that this example is being distinguished from use of a mark on commercially available goods or services.

The Opinion is most welcome for brand owners, particularly in the merchandising field. It is likely to be followed by the European Court in its judgment in due course, but this is not certain.

[Case reference: Arsenal Football Club plc -v- Reed, European Court of Justice, 13 June 2002. Please let us know if you would like a copy of the full Opinion.]

For further information, please contact Stephen Whybrow at stephen.whybrow@cms-cmck.com or on +44(0)20 7367 2175, or contact Lucy Kilshaw at lucy.kilshaw@cms-cmck.com or +44 (0)20 7367 2044.