Arsenal Football Club Plc v Reed

In January 1999 Arsenal Football Club Plc (Arsenal) started proceedings against Mr Matthew Reed in which they alleged that Mr Reed had infringed certain of their registered trade marks and had carried out acts of passing off. Those proceedings came before Laddie J in March 2001.

The judge in his first judgment, handed down on 6th April 2001, held that the allegations of passing off had not been established. The judge went on to conclude that the defence raised an issue of construction of the Trade Mark Directive (89/104/EEC) which could not be decided without a reference to the European Court of Justice (ECJ). He therefore referred the following questions to the ECJ.

"1. Where a trade mark is validly registered and

(a) a third party uses in the course of trade a sign identical with that trade mark in relation to goods which are identical with those for which the trade mark is registered; and

(b) the third party has no defence to infringement by virtue of Article 6(1) of the Directive;

does the third party have a defence to infringement on the ground that the use complained of does not indicate trade origin (i.e. a connection in the course of trade between the goods and the trade mark proprietor)?

If so, 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?"

The ECJ (Case C-206/01) did not answer those questions in the form posed. They concluded:

"62. In the light of the foregoing, the answer to the national court's questions must be that, in a situation which is not covered by Art.6(1) of the Directive, where a third party uses in the course of trade a sign which is identical to a validly registered trade mark on goods which are identical to those for which it is registered, the trade mark proprietor is entitled, in circumstances such as those in the present case, to rely on Art.5(1)(a) of the Directive to prevent that use. It is immaterial that, in the context of that use, the sign is perceived as a badge of support for or loyalty or affiliation to the trade mark proprietor."

They therefore ruled:

"In a situation which is not covered by Art.6(1) of the First Council Directive 89/104 of December 21, 1988 to approximate the laws of the Member States relating to trade marks, where a third party uses in the course of trade a sign which is identical to a validly registered trade mark on goods which are identical to those for which it is registered, the trade mark proprietor of the mark is entitled, in circumstances such as those in the present case, to rely on Art.5(1)(a) of that Directive to prevent that use. It is immaterial that, in the context of that use, the sign is perceived as a badge of support for or loyalty or affiliation to the trade mark proprietor."

The case came back before the judge in December 2002. In his judgment of 12th December 2002 ([2002] EWHC 2695 (CH)) (the second judgment) the judge concluded that the ECJ had disagreed with findings of fact made by him in his first judgment. That being so, the ECJ had "exceeded its jurisdiction" with the result that he was not bound by its final conclusion. He then applied the ECJ's guidance on the law, as he understood it, to the findings of fact made in his first judgment and concluded that infringement of the trade marks had not taken place. That resulted in the judge coming to a different conclusion from that reached by the ECJ.

Arsenal have not appealed against the findings of the judge that passing off had not been established. Mr Reed also contended that Arsenal's trade mark was invalid. That contention was rejected by the judge and there is no appeal against that conclusion. Thus this appeal is only concerned with the issue of trade mark infringement.

The Background– The factual background was fully set out by the judge and is not in dispute. I can therefore take from the judgment the salient facts to enable my judgment to be understood.

Arsenal is the internationally known football club. It is known as "Arsenal" or "the Gunners". Part of the business carried on by Arsenal involves the sale of products bearing the words "Arsenal", "Arsenal Gunners" and the device marks reproduced below:

The Crest Device:

The Cannon Device:

Arsenal alleged infringement of the following trade marks:

"(a) Registered trade mark number 1383343 for "ARSENAL" in class 25 (registered 9th May 1989);

(b) Registered trade mark number 1387461 for the Arsenal Cannon device in class 25 (registered 8th June 1989);

(c) Registered trade mark number 1387589 for the Arsenal Crest Device in class 25 (registered 13th June 1989)

(d) Registered trade mark number 1393203 for "ARSENAL GUNNERS" in class 25 (registered 27th July 1989)."

Mr Reed is the self-employed proprietor of a wholesale and retail football merchandise business. Amongst the articles that he sells are souvenirs and memorabilia likely to appeal to Arsenal fans. Such include articles bearing the trade marks Arsenal, Arsenal Gunners and the device marks illustrated above. He accepted that he had, without Arsenal's consent, used in the course of trade signs identical to the registered trade marks relied on by Arsenal in relation to the goods for which they were registered. He denied infringement. No positive case was pleaded in the defence, but in voluntary particulars it was made clear that he was asserting that there could be no infringement if the use complained about was not trade mark use, and his use was not trade mark use. It was that point which caused the reference to the ECJ.

The Statutory Background – The Trade Marks Act 1994 swept away the old law and implemented the Directive. It follows that the provisions of the Act must be construed so as to reflect the terms of the Directive.

Section 1(b) defines a "trade mark" as meaning "any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings." There is no doubt that Arsenal's registered trade marks are signs which have the character required.

A registered trade mark is a property right (section 2) which is personal property (section 22). It can be assigned either in connection with the goodwill of a business or independently (section 24). Once obtained a registration is prima facie valid (section 72). It need not be used for the initial 5 years after registration, but thereafter it is liable to be revoked in whole or in part for non-use under section 46.

Section 2(1) states that the proprietor of a registered trade mark "has the rights and remedies provided by this Act". For the purpose of this case the relevant rights are those contained in section 10 (Article 5 of the Directive). The applicable parts of that section are as follows:

"s.10 Infringement of registered trade mark.

(1) A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered.

(2) A person infringes a registered trade mark if he uses in the course of trade a sign where because—

(a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or

(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.

(3) A person infringes a registered trade mark if he uses in the course of trade a sign which—

(a) is identical with or similar to the trade mark, and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered,

where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.

(4) For the purposes of this section a person uses a sign if, in particular, he—

(a) affixes it to goods or the packaging thereof;

(b) offers or exposes goods for sale, puts them on the market or stocks them for those purposes under the sign, or offers or supplies services under the sign;

(c) imports or exports goods under the sign; or

(d) uses the sign on business papers or in advertising.

…

(6) Nothing in the preceding provisions of this section shall be construed as preventing the use of a registered trade mark by any person for the purpose of identifying goods or services as those of the proprietor or a licensee. But any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing the registered trade mark if the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark."

It is important to note the difference between subsections...