Following a recent decision of the English High Court the future of sports teams and organisations who license the use of their emblems and logos for lucrative contracts may have been seriously affected.
The case involved the Rugby Football Union ('RFU'), the governing and administrative body for rugby union in England, Nike, the US sportswear giant which supplies the RFU's official strip and Cotton Traders Limited ('CTL') a sporting goods company established by three former England rugby captains.
Since 1871 the members of the England Rugby team have worn a red rose on the left breast of their white rugby shirts. This was the official strip of the England rugby team, known as the classic English rugby jersey. Through the years the rose has been subject to several variations resulting in different designs but the motive of a red rose always remained.
For years CTL produced and sold a version of the classic rugby jersey with the word England underneath the rose. Then, in 1991 CTL became the official licensee of the RFU and the rose for the strip was redesigned. During its time as licensee CTL produced the official jersey for the English team but also other versions of the jersey for sale to the public.
In 1997 the RFU and CTL terminated their agreement and RFU entered into a new licence with Nike. CTL continued to produce and sell the classic English rugby jersey as it had done before becoming RFU's licensee.
The RFU and Nike (as exclusive licensee) sued CTL for infringement of RFU's Community trade mark ('CTM') and passing off in respect of the sale of the classic rugby shirt which depicts a rose which is similar to that which is registered in relation to the same goods giving rise to a likelihood of confusion on the part of the public.
CTL counterclaimed for a declaration of invalidity of the CTM on the grounds that the English rugby rose is not perceived by members of the public as a mark indicating origin, but as a national emblem or symbol, associated with the English rugby team and not with RFU.
In considering how the rose was perceived the Judge looked at the impact on the average consumer. To do that the Judge considered the evidence from a wide range of witnesses submitted by the parties. The conclusion that the Judge drew from the evidence was that the rose is primarily taken by the relevant members of the public as denoting either England as a country or, more specifically, the England rugby team, and that any association with the RFU was much less widespread, and even where it existed it was of secondary significance.
The Judge referred to another recent High Court case involving the Arsenal logo where a claim of trade mark infringement in relation to unofficial merchandise showing the club's cannon symbol failed. The Arsenal club sued for trade marks infringement and passing off based on Arsenal's registered trade marks including ARSENAL GUNNERS (the teams' nick name) and two device marks. In this case, the Judge found that although the defendant had been trading in official and unofficial Arsenal goods for over 30 years the club failed to prove that any members of the public had been confused as to the trade origin of the unofficial merchandising sold by the defendant. The Judge also found that the marks as used on the defendant's goods were solely badges of allegiance and they were not used as trade marks. However, the judge referred the question of whether such non-trade mark use could be sufficient to infringe Arsenal's registered marks to the European Court of Justice and a decision is not expected for months yet.
In the the RFU case the Judge also took into account that the RFU had not taken a very active role in trying to stop unauthorised undertakings from selling white rugby jerseys with an identical o very similar red rose. Due to this lack of 'action' against unauthorised use, the Judge concluded that it had become customary in the trade to use the rose by way of association with the England rugby team and it therefore lost its ability to distinguish as regards trade origin.
The claim of whether the Defendant's sales of the classic English rugby jersey amount to passing their goods off as being those of, or associated with, the RFU also failed as the Judge considered that the English rugby rose had not been shown to be perceived by a significant proportion of the relevant public as distinctive of goods of or associated with the RFU and therefore, the RFU did not have goodwill in the English rugby rose as a trade mark. Finally the Judge held that the Defendant's use of the rose did not involve a misrepresentation of RFU's goods.
Sports clubs and organisations know full well the amount of revenue lost every year because of the sale of unofficial merchandise. This decision has potentially serious implications as it could prevent organisations from having exclusive rights to logos and badges which may have become customary or generic because of the use made of the mark. A possible solution for any sport entity may be to own the copyright underlying the particular logo. During the term of protection (life of author plus 70 years) the copyright owner has an exclusive right to stop any unauthorised copying of its work or a work which is substantially similar. However, the ownership of the copyright in the logo/emblem etc should be carefully established as the author of the work is the first owner of the copyright work and the ownership of the work is not always assigned.
Finally, it is also advisable that these entities take an active role in the prosecution of counterfeiters using Customs and Excise services and work in collaboration with local Trading Standards.
First published in Brand Strategy in June 2002.
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.