UK: Advocate General´s Opinion in Arsenal v Reed: Golden Goal for Trade Mark Owners?

Last Updated: 17 June 2002
Article by William James
On 12th June 2002 in the late stages of a long-running contest, the Advocate General allowed trade mark owners to score. Delivering his opinion on what constitutes "trade mark use" he concluded that it had a wider meaning than that given by the English courts. We will have to wait to see if the European Court upholds the match result.

The case of Arsenal Football Club plc -v- Reed was referred to the ECJ by Mr Justice Laddie to consider what constitutes "use" of a trade mark. The Defendant, Mr Reed, sold merchandise bearing signs identical to the registered trade marks of Arsenal Football Club plc from a stall outside Arsenal’s Highbury ground. Mr Reed clearly identified the goods as unofficial merchandise and there was no evidence of confusion on the part of customers. Laddie J. ruled that the use of the Arsenal marks was not perceived by consumers as indicating the origin of the goods, therefore there was no use "as a trade mark". Instead, the use was held to be as "a badge of support, loyalty or affiliation" which did not infringe s.10 of the Trade Marks Act 1994 or Article 5 of the Council Directive 89/104/EEC.

In essence the questions referred to the ECJ were:

  • Q1. Is the trade mark proprietor entitled to prevent any use, in the course of trade, of identical signs with identical goods or services?
  • Q2. Or, on the contrary, is the "use" protected by law only use which discloses the connection between the trade mark proprietor and the goods or services i.e. use which discloses trade origin? If the answer to this question is ‘yes’, does the use as a badge of support, loyalty or affiliation indicate such a connection?

The Advocate General's Opinion

  1. The rights granted to the trade mark proprietor do not allow him to prevent any use of the mark. Instead, a trade mark owner is entitled to prevent third parties from using, in relation to the same goods or services, identical signs which are capable of "giving a misleading indication as to their origin, provenance, quality or reputation".
  2. Whether "use" of a sign by a third party is use "as a trade mark" is a question for the national court to decide on the facts of the case. As a starting point however, in circumstances where the sign and registered mark are identical, and the goods or services for which it is used are identical, it is assumed there is both a likelihood of confusion and that use is "as a trade mark". The presumption of trade mark use by the third party can be rebutted with evidence, but the Advocate General indicated that was a remote possibility in practice.
  3. The "use" of the mark that the trade mark owner is entitled to control is use in the course of trade, and includes preventing third parties from commercially exploiting the sign. This includes the use of distinctive signs (or badges of support or affiliation) registered by football clubs for merchandising.
  4. The reasons on which the consumer bases his choice of the goods or services are irrelevant. The consumer’s intention is only relevant to the extent he acquires or uses the goods because they incorporate the distinctive sign. The national court must look at why the person who is not the proprietor has put the same distinctive sign on the goods or chooses to market services under that sign. Any commercial exploitation of the goods under the distinctive sign will be "use as a trade mark" to which the trade mark owner will be entitled to object.
The Advocate General rejected the "maximalist" arguments that any use of a trade mark is sufficient for infringement under Article 5. Trade mark use "as such" was necessary.

Many would have thought that such a conclusion would have brought victory for Mr Reed and other "unofficial merchandisers". However, for a number of reasons it did not. Firstly, the Advocate General sought to adopt a wider view of what constitutes "use of a trade mark as such" than the concept of "trade mark use" traditionally adopted by the English courts. Secondly, he concluded that in a case where there is an identical mark and identical goods and services, there is a presumption that any use of the mark will fall within the scope of Article 5(1)(a). Finally for good measure, he concluded that the merchandising use of the type undertaken by Mr Reed was sufficient use for these purposes.

The opinion is not without difficulty. The fact that the presumption of "use of a trade mark as such" is rebuttable immediately raises the question, what does a Defendant need to demonstrate in order to rebut the presumption? Also, the Advocate General’s comments regarding confusion are unsatisfactory. Is there a rebuttable presumption of confusion and does this provide another potential defence for a defendant? If so, how does this operate given that "confusion" for these purposes is something wider than confusion as to origin (which according to the English Court did not exist in this case).

Nevertheless, the practical effect of this opinion, if followed by the ECJ, will be to strengthen significantly the position of trade mark owners.

© Herbert Smith 2002

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

For more information on this or other Herbert Smith publications, please email us.

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