UK: R v Johnstone - Clarification and Uncertainty

Last Updated: 5 May 2004
Article by Claire Mortimer

Originally published May 2003

Issues

This case gave the House of Lords the opportunity to sort out some of the inconsistencies in case law surrounding the criminal provisions of the Trade Marks Act. But in doing so, another inconsistency appears to have been created. Their Lordships’ interpretation of the European Court of Justice’s decision in Arsenal seems to be at odds with the Court of Appeal’s interpretation in its Arsenal judgment, handed down just one day earlier.

Background

Mr Johnstone was found to have in his possession a number of "bootlegged" CDs (i.e. unauthorised copies of recordings of artists’ live performances). These CDs bore performer’s names, such as U2, The Rolling Stones and Bon Jovi, which are registered as trade marks. Mr Johnstone was charged with possessing these "bootlegged" CDs with a view to committing an offence under s92(1)(c) of the Trade Marks Act 1994.

At trial, Mr Johnstone attempted to rely upon the honest and reasonable defence belief under s92(5). He also submitted that before the Crown could establish an offence under s92, the Crown must prove civil infringement of the registered trade mark in accordance with sections 9 to 11 of the Act. He wished to rely upon section 11(2)(b) to contend that the use of the performer’s name merely indicated who was the performer. The trial judge rejected his submissions on the basis that section 92 was a ‘stand alone’ provision which was a complete code so far as criminal offences were concerned.

Mr Johnstone’s appeal was upheld by the Court of Appeal who considered that, unless the defences available in a claim for civil infringement were available in a claim for criminal infringement, section 92 would criminalise conduct which did not amount to a civil infringement. The Crown appealed to the House of Lords.

Outcome

The House of Lords determined three questions which have dogged the courts in determining cases under section 92.

First, it is clear from the judgment that in order to amount to a criminal offence, the relevant conduct must amount to a civil infringement. This means that all defences open to a Defendant in a civil infringement action will be open to a Defendant in a criminal infringement action. This does not mean that the Crown will need to prove civil infringement in every case; it seems that the prosecution need only attempt to disprove a civil defence if it is raised by the Defendant.

Secondly, the House of Lords considered the provisions of section 92(5). This provides that "it is a defence for a person charged with an offence under this section to show that he believed on reasonable grounds that the use of the sign in the manner in which it was used, or was to be used, was not an infringement of the registered trade mark". A previous case had decided that this defence was not available to a Defendant who claimed to be unaware of the relevant trade mark registration, because the section presupposed such awareness. The House of Lords overruled, confirming that the defence is open to all Defendants who believe that they are not infringing, whether that is because they believe that the goods are genuine or because they believe that there is no trade mark to infringe. The key is whether that belief is ‘reasonable’.

Finally, the House of Lords considered, obiter, that the defence in section 92(5) imposes a legal, rather than an evidential burden on the Defendant. This means that the Defendant must prove the existence of a defence under this section on the balance of probablities. This is more onerous on the Defendant that an evidential burden, which simply requires the Defendant to raise an issue sufficient to require the prosecution to disprove the existence of the defence beyond reasonable doubt. The House of Lords considered that this was compatible with the presumption of innocence contained in the European Convention on Human Rights since there were compelling reasons for imposing a legal burden on the Defendant, including the importance and difficulty of combating counterfeiting.

Comment

The decision is a welcome clarification of section 92. However, in deciding what constitutes a civil infringement following the European Court of Justices’ decision in Arsenal, their Lordships appear to conflict with the Court of Appeal’s decision in Arsenal, further muddying the waters.

The House of Lords declared that, in order to constitute a civil infringement, use of an infringing sign must be "in a trade mark sense" (i.e. purporting to identify and guarantee the trade origin of the goods to which it is applied). The House of Lords considered case law which raised questions as to whether non-trade mark use could amount to infringing use but stated that these doubts "must now be regarded as laid to rest" by the European Court of Justice’s decision in Arsenal.

That’s not what the Court of Appeal thought in Arsenal. This judgment was handed down the previous day but had not been available to the House of Lords prior to its judgment. The Court of Appeal stated that the European Court of Justice’s decision in Arsenal is not concerned with whether the use complained about is ‘trade mark use’. The consideration is whether the third party’s use affects or is likely to affect or jeopardise the guarantee of origin which was the essential function of Arsenal’s trade mark rights. Although this clearly covers infringing use ‘in a trade mark sense’, it goes wider than that, embracing the concept of dilution.

What is clear from both decisions is that the concept of infringing use is now wider, however that use may be defined. Given the Court of Appeal’s (obiter) determination in Arsenal that Reed’s use of the trade marks in issue was trade mark use, further clarification of the law is unlikely to affect the outcome of the Arsenal decision. Nonetheless, this uncertainty is unsatisfactory. The House of Lords may well seize the opportunity to clarify the law should Mr Reed appeal……

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