Arsenal Football Club v Reed

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Arsenal Football Club vs. Matthew Reed is a trademark infringement case concerning the sale of unlicensed Arsenal Football Club merchandise.

Contents

Summary

Arsenal FC is a football club, which owns registered trademarks. Matthew Reed had sold souvenirs bearing the registered trademarks of the Arsenal FC. In January 1999 Arsenal Football Club Plc started proceedings against Matthew Reed. They elected that Reed had infringed certain of the registered trademarks and had carried out acts of passing off. The European Court of Justice had considered whether the third party use affected, or was likely to affect, the essential function of the mark, and had found the third party use of the registered trademarks was liable to have an effect on the functions of the registered trademark.

Arsenal FC is a well known football club which was founded in 1886. [1] The club generated revenues of £381.7 million in the business year which ended 31 May 2010, [2] inter alia by selling merchandising products. Arsenal FC owns UK trademark registrations for the word "Arsenal", registered trademark number 1383343, for the Arsenal Cannon device, registered trademark number 1387461, for the Arsenal FC crest device, registered trademark number 1387589 and the words "Arsenal Gunners", registered trademark number 1393203, which were registered in 1989. [3] Matthew Reed had been selling football merchandise articles with the Arsenal FC marks from stalls near the Highbury Stadium for around 30 years. At the stalls were notices and disclaimers, stating that the products were not official. [4] The few official products he had offered were specially labeled.

High Court of Justice

Arsenal FC started proceedings in first instance against Reed in January 1999 at the High Court of Justice. They alleged that Reed infringed certain of their registered trademarks and had carried out committed acts of passing off. [5] The High Court rejected the claim in the terms of passing off. It was mentioned by the High Court that the products sold by Reed were not noticed as an indication of origin by the customers, because of the disclaimer notices at the stalls. Arsenal FC could not prove that the customers were not able to differentiate between the original product and the ones sold by Reed. So there was no use of the marks as badges of origin which were causative for the claim of passing off. Additionally, it was held that the marks were only used as badges of allegiance and loyalty. In terms of the claim of trademark infringement it is relevant to make clear if any respective use of the sign is a trademark infringement or just the use as a mark. It was difficult to interpret whether this legal issue covered by the national law which is influenced by the First Council Directive 89/104 of December 21, 1988, to approximate the laws of the Member States relating to trade marks. To sort out that matter, the High Court referred the following questions to the European Court of Justice. [6]

Referred Questions

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)?

2. 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? [7]

Reason of decision

At first, the ECJ pointed out that Reed was using a sign in the course of trade which was identical with the trade mark registered by Arsenal FC. In this particular case, there is a trademark infringement. Beyond that the question had to be answered whether any use of the sign of a third party would entitle Arsenal FC to forbid this use. Or if there must be a specific interest by the owner of the registered trade mark. In this point, the ECJ made clear that Article 5 (1) (a) of the trade mark directive requires for its applicability a specific interest. Ensuing, the ECJ pointed out, that a specific interest is constituted by violation of an essential function. The owner of a registered trade mark could only prohibit the use of an identical sign if his interests regarding the essential function of the trade mark violated. The essential function of a registered trade mark is to identify the origin of the goods. So there is no danger of confusion by the customers. A use of an identical sign in a merely describing way would not violate the interest of the owner of the trade mark. The ECJ is convinced that the style of the products sold by Reed could lead to the impression in the course of trade, that there is a relationship between these products and Arsenal FC. Even the disclaimers at the stalls that the products sold by Reed are not official products of Arsenal FC, do not lead to another estimate. Following the opinion of the ECJ, most of all by the time the products left the stalls they can be regarded as official Products of the Arsenal FC by other customers. The interesting point here is that the arguments are identical with those, which lead to the rejection in the claim of passing off. Under this the decision about the claim of passing off maybe has to be reconsidered. But the ECJ did not say anything about this former ruling of the High Court and its arguments. Going back to the case, the ECJ assume to be convinced that the use of a sign which is identical with a registered trade mark is suitable to harm the guarantee of origin and therefore consequently the essential function of a registered trade mark. Consequently, in this particular case, there is a violation of the specific interests of the Arsenal FC by Reed. He used the sign in the meaning of Article 5 (1) of the trade mark directive. Therefore, there is a trade mark infringement by Reed selling products, not official wear by Arsenal FC, but carrying the sign of the Arsenal FC. [8] [9] [10]

Ruling of the court

For that reason, the European Court of Justice, in answer to the questions referred to it by the High Court of Justice of England and Wales, Chancery Division, by order of 4 May 2001, ruled: In a situation which is not covered by Article 6(1) of the First Council Directive 89/104/EEC of 21 December 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 Article 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. [11]

This decision has a special relevance for the trade mark law in view of the trade mark directive. It pointed out that the important requirements are the specific interests and as a consequence of that the essential function. For the applicability of the law, there has to be at first a specific interest by the owner of the registered trade mark. And therefore this special interest has to concern an essential function of the trade mark. In this case the ECJ pointed out that the essential function is the guarantee of origin. The consideration that there could be other essential functions is not far to seek obvious. If such interests exist and what they will be was left unanswered by European Court of Justice. [12]

Rejection of ECJ Ruling

When the case was remitted from the ECJ back to Laddie J, [13] it was found that the ECJ had exceeded its jurisdiction and had made findings of fact, and contrary to the English Court's findings in the first judgment. Laddie J applied the ECJ's guidance on the principles of law and disregarding any conclusions reached on the facts. The case was decided in favour of Reed. Arsenal appealed. [14]

Appeal

The Court of Appeal allowed the appeal, and held that in so far as the ECJ had made findings of fact, the conclusions were not inconsistent with the findings of fact reached by the judge, and were inevitable in the circumstances. The ECJ had considered whether the third party's use affected or was likely to affect the essential function of the mark, and had found that Reed's use of the registered trade marks was liable to affect one of the functions of the registered mark.

At no stage had the ECJ suggested that use which was not understood by the public to be a designation of the origin, could not infringe. The judge had found that Reed's use of the marks did not indicate the origin of the goods but had failed to consider whether such use was liable to affect or jeopardise the guarantee of origin which was the essential feature of Arsenal's marks. Reed's use meant that the goods which did not originate from Arsenal were in free circulation. This affected the ability of Arsenal's marks to guarantee the origin of the goods.

It was also held that the use of the word 'Arsenal' on a scarf or other item of clothing could have three meanings:

a) the owner was a supporter of Arsenal

b) the goods came from Arsenal

c) a combination of the above two.

It was clear that the evidence showed that there were instances of confusion, albeit few, and that consumers seeing identical signs to Arsenal's registered marks, complained to Arsenal. If there was no such likelihood of confusion there would be no need for Reed to inform his customers expressly that the goods were not official. It was clear that the trademarks did designate origin.

Further, the judge's decision on passing off was doubted. Although, Aldous LJ's comments were obiter, the traditional form of passing off was said to be no longer definitive of the ambit of the cause of action which now was approximating to a law of 'unfair trading' or 'unfair competition'. To date (April 2007), there is little sign that Aldous LJ's comments have led to a wider tort of unfair competition within the UK. [15]

Related Research Articles

Trade dress is the characteristics of the visual appearance of a product or its packaging that signify the source of the product to consumers. Trade dress is an aspect of trademark law, which is a form of intellectual property protection law.

In common law countries such as the United Kingdom, the Philippines and New Zealand, passing off is a common law tort which can be used to enforce unregistered trade mark rights. The tort of passing off protects the goodwill of a trader from misrepresentation.

Trademark dilution is a trademark law concept giving the owner of a famous trademark standing to forbid others from using that mark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of another's trademark on products that do not compete with, and have little connection with, those of the trademark owner. For example, a famous trademark used by one company to refer to hair care products might be diluted if another company began using a similar mark to refer to breakfast cereals or spark plugs.

United Kingdom trade mark law provides protection for the use of trade marks in the UK. A trade mark is a way for one party to distinguish themselves from another. In the business world, a trade mark provides a product or organisation with an identity which cannot be imitated by its competitors.

A non-conventional trademark, also known as a nontraditional trademark, is any new type of trademark which does not belong to a pre-existing, conventional category of trade mark, and which is often difficult to register, but which may nevertheless fulfill the essential trademark function of uniquely identifying the commercial origin of products or services.

In trademark law, confusing similarity is a test used during the examination process to determine whether a trademark conflicts with another, earlier mark, and also in trademark infringement proceedings to determine whether the use of a mark infringes a registered trademark.

A colour trade mark is a non-conventional trade mark where at least one colour is used to perform the trade mark function of uniquely identifying the commercial origin of products or services.

Canadian trademark law

Canadian trademark law provides protection to marks by statute under the Trademarks Act and also at common law. Trademark law provides protection for distinctive marks, certification marks, distinguishing guises, and proposed marks against those who appropriate the goodwill of the mark or create confusion between different vendors' goods or services. A mark can be protected either as a registered trademark under the Act or can alternately be protected by a common law action in passing off.

Comparative advertising, or combative advertising, is an advertisement in which a particular product, or service, specifically mentions a competitor by name for the express purpose of showing why the competitor is inferior to the product naming it. Also referred to as "knocking copy", it is loosely defined as advertising where "the advertised brand is explicitly compared with one or more competing brands and the comparison is obvious to the audience". An advertising war is said to be occurring when competing products or services exchange comparative or combative advertisements mentioning each other.

Trademark distinctiveness is an important concept in the law governing trademarks and service marks. A trademark may be eligible for registration, or registrable, if it performs the essential trademark function, and has distinctive character. Registrability can be understood as a continuum, with "inherently distinctive" marks at one end, "generic" and "descriptive" marks with no distinctive character at the other end, and "suggestive" and "arbitrary" marks lying between these two points. "Descriptive" marks must acquire distinctiveness through secondary meaning—consumers have come to recognize the mark as a source indicator—to be protectable. "Generic" terms are used to refer to the product or service itself and cannot be used as trademarks.

Trademark Trade identifier of products or services

A trademark is a type of intellectual property consisting of a recognizable sign, design, or expression that identifies products or services from a particular source and distinguishes them from others. The trademark owner can be an individual, business organization, or any legal entity. A trademark may be located on a package, a label, a voucher, or on the product itself. Trademarks used to identify services are sometimes called service marks.

Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees. Infringement may occur when one party, the "infringer", uses a trademark which is identical or confusingly similar to a trademark owned by another party, in relation to products or services which are identical or similar to the products or services which the registration covers. An owner of a trademark may commence civil legal proceedings against a party which infringes its registered trademark. In the United States, the Trademark Counterfeiting Act of 1984 criminalized the intentional trade in counterfeit goods and services.

Shield Mark B.V. vs. Joost Kist is a decision by the 6th Senate of the European Court of Justice, case C-283/01, which dealt with the question whether sound signs may be registered as trademarks, and what requirements those sound signs and their trademark entry have to fulfill to be consistent with Article 2 of the First Council Directive of 21 December 1988 to approximate the laws of the Member States relating to trade marks (89/104/EEC).

In Canada, passing off is both a common law tort and a statutory cause of action under the Canadian Trade-marks Act referring to the deceptive representation or marketing of goods or services by competitors in a manner that confuses consumers. The law of passing off protects the goodwill of businesses by preventing competitors from passing off their goods as those of another.

Indian trademark law statutorily protects trademarks as per the Trademark Act, 1999 and also under the common law remedy of passing off. Statutory protection of trademark is administered by the Controller General of Patents, Designs and Trade Marks, a government agency that reports to the Department of Industrial Policy and Promotion (DIPP), under the Ministry of Commerce and Industry.

Procter & Gamble v. Office for Harmonization in the Internal Market is a case before the European Court of Justice about the registration of 'BABY-DRY' as a trademark for baby diapers. OHIM refused the registration of the brand as a community mark saying that 'BABY-DRY' wasn't distinctive, but instead that it was descriptive without a secondary meaning.

Intel Corporation v. CPM United Kingdom Ltd., Case 252/2007 was a case of the European Court of Justice in which the ECJ interpreted the meaning of Article 4 (4)(a) of the EU Trade Marks Directive. The ECJ considered what elements are required to show that a later mark was causing dilution to an earlier mark. The case laid out a clear basis on which grounds a court can find that trademark dilution has occurred.

Société des Produits Nestlé S.A. v. Cadbury UK Limited is a trademark law case decision by the High Court of Justice, Court of Chancery, in the United Kingdom. The Court held that a specific shade of the colour purple was registrable as a trademark for the following goods: milk chocolate in bar and tablet form; milk chocolate for eating; drinking chocolate; preparations for making drinking chocolate.

Trademarks Act, 2004

The Trademarks Act, 2004 is legislation enacted by the Third Parliament of the Fourth Republic of Ghana and signed into law by President John Agyekum Kufuor. The Act regulates the process through which trademarks and collective marks are registered, the issuance of registered trademarks and how trademarks and collective marks are protected through the enforcement of the Act. The rationale for enacting the Act is for the protection of the goodwill and reputation of the business of a proprietor. The Act establishes the Trademark Registry(Registar) to which is mandated to register trademarks and issue registered trademarks. The Act has been amended by the Trademarks (Amendment) Act, 2014 which came into force on 25 July 2014. The Amendment incorporated the Madrid Protocol into The Act.

Google France SARL and Google Inc. v Louis Vuitton Malletier SA (C-236/08), also known as Google v. Louis Vuitton was a landmark decision in which the European Court of Justice (ECJ) held that search engines operators such as Google do not themselves infringe trademark rights if they allow advertisers to use a competitor's trademark as a keyword.

References

  1. ↑ "Home". arsenal.com.
  2. ↑ http://www.arsenal/the-club/corporate-info/arsenal-holdings-financial-results.com%5B%5D
  3. ↑ "Archived copy". Archived from the original on 22 March 2011. Retrieved 20 June 2011.{{cite web}}: CS1 maint: archived copy as title (link)
  4. ↑ "Archived copy". Archived from the original on 8 April 2008. Retrieved 11 August 2008.{{cite web}}: CS1 maint: archived copy as title (link)
  5. ↑ "EU law - EUR-Lex".
  6. ↑ "Archived copy". Archived from the original on 8 April 2008. Retrieved 11 August 2008.{{cite web}}: CS1 maint: archived copy as title (link)
  7. ↑ "Archived copy". Archived from the original on 22 March 2011. Retrieved 20 June 2011.{{cite web}}: CS1 maint: archived copy as title (link)
  8. ↑ "EU law - EUR-Lex".
  9. ↑ "Archived copy". Archived from the original on 14 November 2011. Retrieved 20 June 2011.{{cite web}}: CS1 maint: archived copy as title (link)
  10. ↑ "Archived copy". Archived from the original on 22 March 2011. Retrieved 20 June 2011.{{cite web}}: CS1 maint: archived copy as title (link)
  11. ↑ "EU law - EUR-Lex".
  12. ↑ "Archived copy". Archived from the original on 8 April 2008. Retrieved 11 August 2008.{{cite web}}: CS1 maint: archived copy as title (link)
  13. ↑ see [2003] 1 All ER 137
  14. ↑ "Archived copy". Archived from the original on 14 November 2011. Retrieved 20 June 2011.{{cite web}}: CS1 maint: archived copy as title (link)
  15. ↑ "Archived copy". Archived from the original on 14 November 2011. Retrieved 20 June 2011.{{cite web}}: CS1 maint: archived copy as title (link)
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