When the case of Arsenal Football Club plc -v- Matthew Reed came before Mr Justice Laddie in April 2001 he found that, whilst Mr Reed was not passing-off his replica Arsenal kit as that of the Gunners, he needed help from the European Court to establish whether or not Mr Reed was infringing Arsenal’s registered trade marks. However, once the Judge heard what the European Court had to say, he decided that he had no option but to ignore it!
Background
Mr Reed is an Arsenal fan who has been selling unofficial Arsenal memorabilia and souvenirs for over 30 years. He convinced the Judge that, where used on replica kit and other merchandise, the ARSENAL name and badge did not function as trade marks in the traditional sense because the Arsenal marks did not tell people where the goods originated from. Rather, the Arsenal marks served merely as "badges of support, loyalty or affiliation". Since the law affords protection to the owners of registered trade marks in order to prevent people from misrepresenting the origin of their goods, Mr Reed argued that his use of the Arsenal marks, which did not misrepresent where the goods came from, was lawful.
The referral
The Judge had some sympathy for this argument and found that the UK legislation was too vague for him to be able to interpret it without help from the European Court. He therefore asked the European Court the following questions:
"Does a defendant in a registered trade mark infringement case have a defence on the ground that the use complained of does not indicate trade origin?"
The Judge went on to ask that if a defendant does have such a defence:
"Is the fact that the use in question would be perceived as a badge of support, loyalty or affiliation to the trade mark proprietor a sufficient connection to be considered an indication of origin?"
Well over a year later, and after the European Commission and the European Free Trade Association had both shared their views with it, the European Court gave its judgment.
The first half of the European leg
Arsenal got off to a poor start. Throughout the first half of the judgment the European Court appeared to be agreeing with Mr Reed’s construction of the legislation. The European Court agreed that the enforcement of a trade mark registration must be reserved to cases where the use of the mark is liable to affect the consumer’s ability to guarantee the origin of the goods in question. The answer to Mr Justice Laddie’s first question was therefore: Yes!
Mr Reed’s defence seemed to be fending off the Arsenal’s Premier League barristers with ease and would have been roundly praised at half time. However, there was a long way to go before the final whistle was blown.
The second half
Mr Reed’s defence began to show signs of weakness right from the start of the second half with the European Court holding that Mr Reed’s use of the Arsenal marks was such as to create the impression that there was a material link between the goods and Arsenal.
Mr Reed responded with a counter attack of his own on the basis that there could be no such link because the sign above his stall told buyers that the merchandise was unofficial. However, this shot was easily deflected wide of the post by the Arsenal defence who successfully argued that when those goods were seen by others away from Mr Reed’s stall, those others would not know that the goods were unofficial and would assume the contrary.
The Reed defence then came under intense pressure when the European Court found that people expect goods bearing the Arsenal marks to conform to a type and quality controlled by Arsenal and since Mr Reed’s use of the Arsenal marks was depriving Arsenal of its legitimate right to control the type and quality of Arsenal goods, Arsenal had the right to stop him.
The whistle blew as the European Court confirmed that use of a sign as an indication of support or loyalty in the manner used by Mr Reed is use as an indication of origin. However, the European Court would not say if, on the facts, Arsenal had sufficiently proved that there was an infringement. That decision was for Mr Justice Laddie to make, bearing in mind what the European Court had said.
With the scores even, both teams began preparing for the High Court replay. Arsenal was confident that victory was within reach but trade mark infringement is a funny old game and Mr Reed had some surprises in store for when these two sides next met on The Strand.
The home leg
On 12 December the two sides met again in the High Court before Mr Justice Laddie. Rather surprisingly, Mr Reed used an entirely new argument against Arsenal and again the Judge found Mr Reed’s arguments very persuasive.
Mr Reed’s attack focused on the fact that the European Court had not categorically answered the Judge’s questions. It had qualified its answers by saying that they only applied "in circumstances such as those in the present case".
It must be appreciated that the European Court was asked to interpret the relevant law. The European Court was not provided with any of the evidence submitted to the High Court and therefore was not capable of reaching any decisions on the facts of the case. However, its decision was laced with references to the facts of the case and even went as far as to disagree with Mr Justice Laddie’s analysis of those facts. Mr Reed argued that the European Court did not have the jurisdiction to do this and Mr Justice Laddie agreed saying:
"Looked at from the perspective of the High Court in England, it is the Court of Appeal and the Court of Appeal alone which has jurisdiction to overturn or to make alternative or supplementary findings of fact."
This left the Judge in the unusual position of having a European Court decision before him that he felt he had no option but to effectively ignore. He found that if you disregard the European Court’s analysis of the facts (which he was compelled to do), its guidance on the law does not change his original decision that there was no infringement of the Arsenal registered trade marks by Mr Reed.
The only option left open to Arsenal now is to appeal this High Court decision in the Court of Appeal. Mr Justice Laddie accepts that there is a distinct possibility that the Court of Appeal will agree with the European Court’s analysis of the facts and decide that there has indeed been an infringement of the Arsenal trade mark registrations. However, that is for the Court of Appeal and not the European Court to decide.
Commentary
Initially this was an important registered trade mark case for the sports industry, all trade mark owners, the media and the public at large. It has now snowballed into a case concerning the role of the European Court within the English judicature. As mentioned above, Mr Justice Laddie has hinted that the Court of Appeal may well find in favour of Arsenal next time around and most commentators agree that all Mr Reed has gained is another reprieve before he is finally ordered to close down his stall forever. Having said that, this case has given us more twists and turns than a Robert Pires run down the wing so we should not write off Mr Reed just yet.
The replica sports kit industry is a hugely lucrative one and any decision in favour of Arsenal will not please those involved in it as it will signal a serious blow to its previously perceived immunity from trade mark infringement claims. The major kit sponsors (the likes of Nike, Adidas and Reebok) will be very happy with such a decision because it safeguards their monopoly on the sale of official kit to loyal fans. This will make kit sponsorship a more valuable commercial asset so is bound to please the teams themselves.
Once this question has finally been resolved, trade mark owners will generally have a little more certainty (although not really that much) about exactly what does, and what does not, constitute an infringement of a trade mark registration.
Consumer implications
What about the consumer – will he be better or worse off as a result of the anticipated eventual decision? The European Court made the point that one of the purposes of trade mark law is to ensure that the consumer’s ability to rely on a trade mark as an indication of origin is not compromised. However, this ‘absence of confusion’ is primarily of benefit to the trade mark proprietor rather than to the man on the street. The average parent of an under-16-year-old football fan will probably lament the demise of Mr Reed and his ilk who provide a cheaper alternative to the high prices charged by official kit retailers.
Coming after the high-profile dispute between Tesco and Levi which was generally seen as a poke in the eye to the consumer, any decision in favour of Arsenal could be seen as another excuse for premium brands to use the ® symbol as an excuse to add 50% to the cost of their goods.
Implications for the media
There is the possibility that a decision in favour of Arsenal could have an impact on the media’s use of registered trade marks.
Where a word (as opposed to a logo) is a registered trade mark it is very rarely an infringement of the registration to use the word (in print or otherwise) to describe the goods or services of the trade mark proprietor. For example, HARRY POTTER as a word, and in the stylised form used in the films, has been registered as a trade mark by Time Warner Entertainment in respect of newspapers and printed matter. It would be very difficult for Time Warner to use that registration to stop the word from being used in newspaper articles or reviews to describe the Harry Potter books and films.
However, in the past there was some doubt as to whether or not such a registration could stop the name being used to describe unofficial promotions in, for example, newspapers. The thinking has been that where you refer to something like a Harry Potter Competition or Supplement in a newspaper you are not using the mark in a trade mark sense because you are not representing that the paper, the competition or the supplement is produced or run by Time Warner. The European Court’s decision in Arsenal -v- Reed could be used to argue that when a trade mark is used in this way in a publication it is being used in order to capitalise on the popularity of the films and books, Time Warner has the right to control that sort of exploitation and therefore this is use in a trade mark sense.
In hypothesising like this we are, or course, assuming that the Court of Appeal will find in favour of Arsenal. Mr Reed has proved that giant-killing is a phenomenon faced by Premiership teams both on and off the pitch and perhaps we should not be so quick to predict that he will eventually lose this case – stranger things have already happened in the history of this particular dispute.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.