In a shock report without a footballing pun in site, we look at the recent Court of Appeal decision in Arsenal FC’s long running attempts to nail a Highbury stallholder.
Who: Arsenal Football Club -v- Matthew Reed
Where: Court of Appeal, High Court of Justice, London
When: May 2003
After a detour to the European Court of Justice, the long-running saga of Arsenal's attempts to stop stall holder Matthew Reed selling Arsenal merchandise reached its latest stage before the Court of Appeal.
Previously, Mr Justice Laddie of Chancery had ignored the clear indication from the ECJ that he should find in favour of Arsenal. This was on the basis of a technical point cleverly raised by Reed's lawyers. This was that the ECJ had gone beyond its legitimate remit in its judgement, thus enabling the UK Courts to disregard its decision. Arsenal predictably appealed that decision to the Court of Appeal and their appeal has been allowed.
This means that unless Matthew Reed takes the matter to the House of Lords, his sales of merchandise carrying registered Arsenal Football Club "Gunners" trademarks must cease, and this applies whether or not he uses a notice on his stall stating that the goods are not official. The Court of Appeal held that this was of no effect and in fact made things worse for Mr Reed. This was because the notice effectively confirmed that the word "Arsenal" did indeed carry an indication of origin (something Reed had denied). If it were otherwise there would be no need for such a notice.
The Court of Appeal interpreted the ECJ finding as one to the effect that Reed's use of the Arsenal branding was "liable to affect the functions" of Arsenal's registered marks. This was because it was likely to jeopardise the "guarantee of origin" which was the essential function of the trademark right. This finding was enough, regardless of whether Reed's use of the Arsenal brand was trademark use, to make Reed liable for trademark infringement.
Although it was then no longer directly necessary, the Court of Appeal also expressed some doubt as to Laddie J's rejection of the Arsenal "passing-off" claim.
Why this matters:
This case may yet go to the House of Lords, but so far, it has not been a model of efficient judicial handling. It is clearly an unsatisfactory state of affairs for a Chancery Judge to effectively rubbish an ECJ decision which the Chancery Judge had requested in the first place, and to do that on a narrow technicality.
It has now taken a considerable time and even more considerable expense to take the matter to where we are today, which is something of a victory for brand owners.
There will now be many traders in a position similar to that of Mr Reed who will be urgently reviewing their stock. From a brand owner's point of view, although the myth of having to show "trademark use" in order to establish trademark infringement appears to be almost dead, we will have to wait for a further judgment, perhaps by the House of Lords in this very case, for absolute clarity on the point.