A Win for Arsenal in Europe

Profession:Herbert Smith

The ECJ delivers its judgment in Arsenal v Reed

The conclusions of the ECJ in its Arsenal v Reed judgment delivered earlier today are of crucial importance for brand owners engaged in merchandising. The effect of the judgment will be to make it easier for them to prevent the sale of "unofficial" merchandise bearing their trade marks.

Background and issues

The case concerned the sale by Mr Reed of football souvenirs and memorabilia bearing the words "Arsenal", "Gunners" and the cannon and crest logos. These are all registered trade marks belonging to the well known English football club, Arsenal F.C. Mr Reed has been selling these goods from stands in or near the Arsenal football ground in Highbury, London for over 30 years. He has always made clear, most recently by the use of a sign at his stalls, that the goods are "unofficial". Arsenal made various attempts to stop Mr Reed from trading, and in 1999 sued him for trade mark infringement and passing off.

Arsenal alleged trade mark infringement under section 10(1) of the Trade Marks Act 1994 (corresponding to Article 5(1)(a) of the Trade Marks Directive) - that is, use by Mr Reed of signs identical to its registered trade marks for goods identical to those in respect of which it registered the marks.

The case came before Laddie J in the High Court. As far as the trade mark infringement allegations were concerned, the legal question that Court had to consider was whether any use of a registered trade mark is unlawful, or whether only "use as a trade mark" could be prevented by a trade mark owner. By "use as a trade mark" the High Court meant use of the mark to indicate that the merchandise came from the trade mark owner, in this case Arsenal. Mr Reed argued that the trade marks on his merchandise are used as "badges of allegiance" to the football team, rather than to indicate that the goods originate with Arsenal.

Laddie J found that the use of the marks by Mr Reed was as "badges of support, loyalty or affiliation", and that this use did not fall within the parameters of "trade mark use" as outlined above. However, given the uncertain state of the law, the High Court made a reference to the ECJ.

The ECJ judgment

The ECJ was firmly of the view that under Article 5(1)(a) of the Trade Marks Directive (and section 10(1) of the Trade Marks Act), a trade mark owner is entitled to prevent only use of a sign which affects the trade mark's function of guaranteeing to consumers the origin of the...

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