Despite registering the emblem as a Community Trade Mark, the English RFU couldn’t stop sales of ‘classic’ England rugby shirts with the red rose motif.
Who: The Rugby Football Union and Nike European Operations Netherlands BV v Cotton Traders Limited (2002)
Where: The Chancery Division of The High Court
When: March 2002
This case was all about the use of a picture of a red rose. The defendant Cotton Traders Limited started selling plain white rugby shirts carrying a picture of a red rose in 1998. This was the year after termination of its official licence from the Rugby Football Union to produce and sell the official strip of the England Rugby Union team. The team strip was different to the classic "English rugby jersey" sold by Cotton Traders from 1998 onwards, which carried the red rose on the left breast of the shirt. By 1998 the RFU had registered the red rose image as a Community Trade Mark. Its relationship with Nike was that Nike had taken over Cotton Traders licence to produce and sell the official England RFU team strip. It was therefore Nike and the RFU which sued Cotton Traders Limited over Cotton Traders’ production and use of the "Classic English Rugby Jersey" bearing the red rose symbol. For reasons which are unclear, there appears to have been no claim of copyright infringement. The legal causes of action which were cited were trade mark infringement and passing off. Cotton Traders challenged the red rose CTM's validity. They said that at the date of the filing of the papers for the CTM registration, April 1996, the red rose was regarded not as distinctive of goods associated with the Rugby Football Union but as a national emblem denoting England or the England rugby team. It deployed a similar argument in relation to the passing off claim. Even by 2000, when these proceedings were started, it argued that the red rose had not become distinctive of goods from or associated with the Rugby Football Union. This meant that the RFU did not have goodwill in the business carried on in respect of the rose device or any shirt bearing it. If this were right, then the RFU and Nike did not even get to first base in their passing off claim. The court agreed with all this, upheld Cotton Traders' claim that the RFU community trade mark was invalid and threw out the RFU's/Nike passing off and copyright infringement claims.
Why this matters:
The case may go to appeal, but as things presently stand, the verdict could have far-reaching implications for the use of sporting logos, not only on products but also in advertising. It underlines the fact that purely because a Community Trade Mark may have been registered, this is no guarantee that the registration will be invulnerable to an attack by way of a counterclaim in proceedings for infringement. Also emphasised by the decision is the fact that in both principal areas of English law that protect branding, (trade mark infringement and passing off) it is critical for the brand owner to be able to show that the branding in question is the minds of the public sending a clear message as to where the product or advertising carrying the branding originates. If this cannot be shown by way of evidence in proceedings, then unless a separate copyright infringement claim can be run on the basis that the logo contains artwork which has been copied, all attempts to protect the branding from third party use may fail.