Arsenal - The European Final

24 December 2002

Jacqueline Irvine

Are a football club's name and the logos associated with it really capable of being enforced as trade marks as they are used on scarves or kit, or are they merely badges of allegiance and support for the teams’ supporters, which consumers do not understand as having a deeper trade mark meaning? Quite a lot could ride on this question as sports merchandising is big business.


Background


The European Court of Justice (“ECJ”) has now considered this question. The reference to the Court arose from a case brought by Arsenal Football Club plc ("Arsenal") in the English High Court. Arsenal have registered ARSENAL, their nickname THE GUNNERS and a Crest and Cannon logo with which they are associated as trade marks for sporting goods and merchandise. Arsenal brought a case against a Mr Reed who had for many years sold souvenirs and memorabilia bearing the trade marks without Arsenal's permission from market stalls outside football grounds when the team played their matches.


Mr Reed argued that there was no infringement because, on a proper construction of the English trade mark legislation, a person must use a trade mark "as a trade mark" for the relevant goods in order to infringe it. He submitted that there was no such use where the signs were regarded by members of the public as badges of allegiance to Arsenal.


The questions for a court when deciding if a trade mark has been infringed differ where the allegedly infringing mark :


(a) is similar to that registered and is used on identical goods, or is identical but used on similar goods; and


(b) is identical to that registered and is used on goods identical to those for which the mark is registered;


In case (a), the Court would have to conclude that a consumer would be confused between the registered and allegedly infringing mark in order for there to be trade mark infringement.


However, in case (b) it has long been unclear what is required for trade mark infringement. Prima facie, one could argue that this case falls squarely into the rightful monopoly of the trade mark owner. He should be able to prevent persons using the very mark he has registered in respect of identical goods. However, in practice, the issues are not so clear cut.


It has long been unclear whether infringement will occur where a person uses a mark identical to a registered trade mark on identical goods where the mark is not used "as a trade mark" – indicate origin in simple terms, where it is used for "descriptive" purposes instead of to attract trade. The question goes to the heart of what a trade mark is for. Hence, among trade mark lawyers, the decision of the European Court which will finally resolve the question has been much anticipated.


The Decision of the European Court


The Court held that a trade mark owner could only prevent other persons from using a mark identical to his trade mark in respect of identical goods to those for which it was registered if the use affected or was liable to affect the functions of the trade mark. The Court identified the essential function of a trade mark as being to guarantee that a single undertaking had produced the goods. The trade mark would also be an indication of quality.


Dealing with the issue of whether use of a trade mark which could also be said to be a badge of loyalty or support for Arsenal fans would infringe, the Court concluded that such commercial use of the trade marks did constitute “trade mark use”. The use was such as to create the impression that there was a material link in the course of trade between the scarves and memorabilia and Arsenal. So long as the trade mark functions were affected, it was immaterial that the registered trade marks were perceived as a badge of support, loyalty or affiliation.


The ECJ decision concluded that in the case of Mr Reed there had been infringement of Arsenal’s registered trade marks.


Comments


The decision has gone someway to resolving the question of whether a trade mark owner can exert an absolute monopoly against those using his registered mark in respect of identical goods. While it answered the question in the negative, the Court appeared to construe the boundaries of what would constitute use of the mark as a trade mark fairly widely so that the rights of trade mark owners remain significant.


In essence, one could say that in cases of use of an identical mark on identical goods to those for which the mark is registered, it boils down to applying a type of “confusion” test, since the Court will have to decide whether a consumer would be potentially misled as to the origin or quality of the goods by the use of the mark (ie so that the mark's function is affected).


It remains to be seen precisely what scope there will be for third parties to use a mark identical to a registered trade mark in respect of identical goods, given that the Court will focus on whether the trade mark functions will be affected. The cases in which the English Court have found there to be non-trade mark use in the past - for example, use of the trade mark MOTHERCARE in a book title "Mothercare/Othercare" is a case where the trade mark was used with other words. It is not clear whether use of a trade mark on its own, instead of in conjunction with other words, would be purely descriptive.


The Home Game


After the ECJ had given its judgment, the case was referred back to the English Court to apply the legal analysis to the facts. There was an argument over whether the ECJ was in fact entitled as a matter of law to come some of its conclusions, in particular whether the ECJ had exceeded its jurisdiction by deciding questions of fact (i.e. that Mr Reed’s use indicated origin to consumers) rather than limiting itself to guidance on the law.


In a surprise result English Judge decided that the ECJ had exceeded its authority and ignored its finding of facts. He did use its legal guidance and decided that on the facts before him there had been no confusion about the source of the goods that Mr Reed was selling.


Arsenal would not succeed in its infringement action.


Summary Points


  • The function of a registered trade mark, in law, is to act as a guarantee of origin.


  • At present it appears that the registered trade mark owner may not be able to prohibit the use of an identical mark where the use of the identical mark does not affect the function of a trade mark.


  • This may not be the last word on the matter as the parties may well appeal


Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.