Pinning Your Colours to the Mark

03 July 2002

Jacqueline Irvine













Background


There is no doubt that football is big business for brands. It has been speculated that the Football Association has lost £2 million in revenue from merchandise that would have sold had England made it into the semi-finals alone[1]. Football players such as David Beckham are branding icons and, more generally the large fan base of national clubs and international football teams creates a ready pool of consumers ready to buy flags and strips to display their support for their chosen team. It is fitting, then, that the courts should recently have had to consider whether football teams can use registered trade mark rights in their name and logos to prevent other persons producing and selling such merchandise.

The question arose in a case bought by Arsenal Football Club plc (“Arsenal”). Arsenal own the trade mark rights in ARSENAL, the nickname THE GUNNERS and a Crest and Cannon logo for sporting goods and merchandise. The Defendant, Mr Reed sold football souvenirs and memorabilia bearing the trade marks without Arsenal’s permission from stalls outside the stadia where the team played their matches.

By way of background, when someone applies to register a mark they need to indicate the type of goods they would like it to cover. When it comes to deciding infringement if the offending sign is slightly different or on goods that are different, then the crucial issue is whether consumers are likely to be come confused between the two. However, in respect of the use of an identical trade mark on identical goods to those registered - as in the Arsenal case - it has long been unclear in whether only use as a trade mark will infringe the trade mark owner’s rights or whether the trade mark owner can prevent any use of the mark.

The distinction between using a trade mark as a trade mark and using it for other purposes is a quite subtle and difficult one to grasp. Essentially, the trade mark is used as a trade mark where it is used to call the trade mark to the consumer’s mind in some way, so as to attract trade. For example, use of the trade mark MOTHERCARE in a book title “Mothercare/Othercare” about working mothers is not using the trade mark MOTHERCARE to attract sales but simply describing the book and using “Treat size” to describe miniature chocolate bars is not a reference to the trade mark “TREETS”, but simply a description.

The Defendant claimed that the use he made of the Arsenal trade marks was not infringing because the marks were simply badges of allegiance or loyalty, which did not suggest that the goods had originated from Arsenal. Football fans did not regard the trade marks as indicating that Arsenal produced the goods. They merely wanted a scarf or cap which had Arsenal’s logos on it so that they could wear them to matches.

The Opinion of the Advocate General

Because the UK legislation implemented a European Directive which harmonised trade mark protection in Europe, the Judge sought guidance from the European Court of Justice on the point. The European Court of Justice’s judgment is preceded by that of the Advocate-General who provides his view to assist it and it is that Opinion which this article is exploring. The court does not have to follow his Opinion, but, in practice, it tends to find it persuasive. The Judgment of the court is not likely to be given for some months.

The Advocate-General found that use of a registered trade mark on identical goods would only infringe the trade mark owner’s right where it caused consumers to buy the goods or services because they were misled as to their origin, provenance, quality or reputation. However, if the offending sign and the registered trade mark are identical and used on the same goods and services, the Advocate General indicated that it should be presumed that consumers were so confused. On this basis, he concluded that the use of the Arsenal sign on football memorabilia was use as a trade mark because it would lead the consumer to connect the goods with Arsenal. So long as fans bought the goods because they incorporated the distinctive sign there would be infringement.

The Advocate-General also stressed that trade mark owners could only object to someone else using the trade mark for commercial purposes – in trade or business. Connected with this, he also placed emphasis on whether the owner of the registered trade mark could be said to have registered it exclusively for commercial purposes. Hence, he considered objectively the social and economic position of sports clubs such as football clubs. He concluded, unsurprisingly, that the major football clubs are also multi-million pound businesses for whom merchandising is a commercial enterprise. They registered trade marks to enhance their profits not to secure greater support or sporting success and should be able to protect their trade marks to prevent others selling such merchandise.

Comments


This analysis of what constitutes trade mark use is wider than the conventional view in the UK, which tends to see the function of a trade mark as being exclusively to indicate to consumers the source of the goods. The Advocate General acknowledged what brand owners had known for a long time – that the consumer may be unaware of who produces the goods and acquire them because they see the mark as a guarantee of quality or prestige or because of the mark itself.

Although the point cannot be said to be settled as yet, if the European Court of Justice does follow this Opinion, as it usually the case, the decision can be seen as a victory for sports clubs who have trade marks which they exploit commercially. The decision will bring some comfort to sports clubs and organisations who may have feared that they would be unable to enforce trade mark rights in respect of merchandise in the light of recent case in which the Rugby Football Union’s rose emblem was found to be a badge of allegiance which did not distinguish as to trade origin. If the Opinion is followed it would appear to have the following consequences:

  • Trade mark owners will not always be able to prevent third parties using their mark on identical goods to those they have registered, although the courts will presume that such use has confused consumers and is infringing. The infringer may be able to adduce evidence to prove them wrong, although the scope for this is fairly limited;
  • Even if a person is using a trade mark in a trade mark sense, it will still not be infringing if the use if for purposes outside those of business and commerce – such as Andy Warhol’s paintings of Campbell soup tins, or for educational purposes or private use;

In order to be able to enforce the trade marks it has registered, an entity which is not exclusively commercial will be tested by reference to its social and economic position to ascertain whether it registered the marks for purely commercial purposes or to enhance other objectives such as sporting success or popularity. If it is for reasons other than commercial purposes, it may be unable to enforce the marks because trade marks are about commerce and trade. This makes it all the more important that such entities take positive steps to actively exploit their marks.

First published in the July 2002 edition of Brand Strategy.




[1] based on an estimate by sports academic Professor Ellis Cashmore