This trade mark case concerning the sale by Mr Reed of Arsenal–branded football souvenirs and memorabilia has been the subject of four court hearings since March 2001. Yesterday the Court of Appeal allowed Arsenal’s appeal against Laddie J’s judgment of 12th December 2002, in which he had refused to follow the judgment of the ECJ on the basis that the ECJ had ruled outside its area of competence.
Background
The goods sold by Mr Reed bear the marks "Arsenal", "Gunners" and the cannon and crest logos – all of which are registered trade marks belonging to Arsenal F.C. Arsenal sued Mr Reed for trade mark infringement under section 10(1) of the Trade Marks Act 1994 – that is, use by Mr Reed of signs identical to its registered trade marks for goods identical to those for which the trade marks are registered.
In March 2001, it fell to Laddie J in the High Court to determine whether any use in the course of trade of an identical trade mark for identical goods infringes the registered mark, or whether only "use as a trade mark" could be prevented by the trade mark owner. By "use as a trade mark", the Court meant use of the mark to indicate the trade origin of the goods. Laddie J found that the use of Arsenal’s marks made by Mr Reed falls outside the parameters of "trade mark use"; rather than indicating that the merchandise originated from Arsenal, the marks were perceived "as a badge of support, loyalty or affiliation" to the football team.
However, a number of courts in this country had expressed different views when considering whether or not there was a requirement of trade mark use under section 10(1). In these circumstances, Laddie J decided to make an Article 234 reference to the ECJ.
The ECJ decision
The ECJ found that a trade mark owner can only prevent use of a sign under Article 5(1)(a) of the Trade Marks Directive (corresponding to section 10(1) of the Trade Mark Act) where that use may be liable to affect the guarantee of origin function of the trade mark. However, the ECJ went on the find that the particular use made of the Arsenal marks by Mr Reed is "liable to jeopardise the guarantee of origin" such that "it is immaterial in the context of that use the sign is perceived as a badge of support for or loyalty or affiliation to the proprietor of the mark".
Laddie J – back in the High Court
Laddie J found that the ECJ’s conclusion that Mr Reed’s use of the marks was liable to jeopardise the guarantee of origin of the goods, was a finding of fact at odds with his own earlier finding that the particular use made by Mr Reed was not perceived as indicating trade origin. Laddie J gave judgment for Mr Reed and granted leave to appeal.
The Court of Appeal
Aldous LJ giving judgment for the Court of Appeal, explained that the ECJ had concluded that the English courts had been grappling with the wrong question. The relevant consideration was not whether the use complained of was "trade mark use", but whether the use complained of was likely to damage the trade mark (or – per the ECJ – it was likely to affect or jeopardise the guarantee of origin which constitutes the essential function of the mark.) The ECJ’s conclusion that the use by Mr Reed of the Arsenal trade marks was likely to jeopardise the guarantee function was inevitable in the circumstances. As a further blow to Mr Reed, Aldous LJ went on to re-consider the evidence which led Laddie J to find that his use of the marks did not constitute trade mark use, and found that the use was trade mark use. Infringement was found. Mr Reed has indicated that he may appeal to the House of Lords.
Comment
The Court of Appeal decision is not altogether surprising. As Laddie J himself remarked, an English High Court refusing to follow an ECJ judgment is a "most unattractive outcome". We now appear to be back to the position that we thought we were in following the ECJ judgment – the question is not whether use is or is not trade mark use, but whether the use made of the mark is likely to affect or jeopardise the trade mark’s guarantee of origin. This test, which will be new to English courts, will broaden the protection afforded to trade mark owners. It will be of particular interest to sports clubs and their licensed manufacturers in their attempts to curb sales of unofficial merchandise.
Article by Joel Smith and Naomi Gross