Do you need to be making “trade mark use” of somebody else’s brand before you can be liable for trade mark infringement? Maybe this European Court of Justice verdict finally answers the question.
Who: Arsenal FC and Matthew Reed
Where: Luxembourg – the European Court of Justice
When: November 2002
The European Court of Justice has finally handed down its judgement on questions that had been referred to it by an English Chancery Judge in a trademark infringement case over football logos. The case had been brought by Arsenal Football Club against Matthew Reed. Mr Reed had been selling scarves, shirts and flags carrying the "Arsenal" name, its nickname "the Gunners" and its shield and cannon badge from a stall outside the Highbury Stadium for over 32 years. The name, nickname and badge logo had been registered by Arsenal as trademarks since 1989. In Arsenal's trademark infringement action, the English Court had sided with Reed. It had taken the view that Reed was not using the Arsenal brands as a "badge of origin" and that far from being confused as to whether Mr Reed was selling merchandise which was officially approved by Arsenal, his customers could not give a monkey's as to whether the items were officially connected with Arsenal or not. Indeed, Mr Reed had in any event pre-empted this argument by putting up a big sign on his stall stating that everything sold there was "unofficial replica clothing".
The European Court of Justice disagreed. It said that whether or not customers thought the use of the trademark in question indicated a link between the product being sold and the owner of the brand, the proprietor of the trademark must be able to prevent its commercial use by a third party if that use is liable to affect the guarantee of origin of the goods which the trademark provides. As the owners of those trademarks, Arsenal must have the right to decide exactly how and in what circumstances the three registered trademarks in question were exploited commercially. Arsenal appeal upheld.
Why this matters:
After the judgment, Mr Reed announced he would be looking at ways of taking the matter further in the Courts, but it is difficult to see where there is left for him to go. Some say that so long as nobody is deceived into believing that the items being sold are official Arsenal merchandise, there can surely be no real harm done. However, the definition of trademark infringement in the Trade Marks Act 1994 does not, where marks identical to registered brands are used, include a requirement that the defendant must be shown to be deceiving his customers into believing his products are linked with the trademark owner.
To suggest that this a prerequisite for establishing a case in trademark infringement is to confuse this particular tort with that of "passing off". Here, an essential element of their civil wrong is a "misrepresentation". This is what makes establishing "passing off" so difficult. It is also the reason why brand owners opt for trademark registration in preference so that the task of stopping unauthorised use of their brands is that much easier.
The verdict in this case serves to underline the immense value and importance of registering all of a business's brands. It may also have brought to a final end the debate which had been raging before and after the introduction of the 1994 Trade Marks Act as to whether an infringer had to be shown to be making "trademark use" of the claimant's brands before being found liable for infringement. What the ECJ are saying is that "trademark use" does not have to be established to press home a case of trademark infringement. All that has to be shown is that the defendant is making commercial use of the brands in question.