Arsenal Football Club v Reed [2003] EWCA Civ 696

KEY POINTS

• The European Court of Justice (ECJ) is the top judicial body in the EU, responsible for interpreting and ensuring consistent application of EU law across member states. It resolves disputes involving EU law and offers guidance to national courts through a preliminary reference process.

• Non-trademark use refers to instances where a trademark is used in a way that doesn't infringe on its function, like generic or descriptive use. This use is generally allowed as long as it doesn't cause confusion or dilute the trademark.

• Section 10 of the Trade Marks Act 1994 defines trademark infringement in the UK. It covers unauthorized use of identical or similar marks that could cause confusion or take unfair advantage of a registered trademark.

• Article 5(1) of the First Council Directive (EEC) 89/104 establishes the exclusive rights of trademark owners in the EU. It grants trademark owners the authority to prevent unauthorized use of their trademarks and forms the basis for identifying and addressing trademark infringement in the EU.

FACTS

• Arsenal Football Club plc ("The Claimant"), a famous football club, sued Mathew Reed("Defendant") for trademark infringement under Section 10 of the Trade Marks Act 1994.

  • The Defendant was selling souvenirs and memorabilia featuring the club's registered trademarks, including the words "Arsenal," "Arsenal Gunners," and certain logos.

  • Section 10(1) prohibits using identical trademarks in the course of trade for goods or services that match those for which the trademark is registered.

• The Defendant argued that his use was not "trademark use," claiming that the products were perceived as badges of support for the club rather than indicators of trade origin.

• The initial judge found this raised a question requiring guidance from the European Court of Justice (ECJ).

  • The ECJ clarified that the issue is whether the use jeopardizes the trademark's guarantee of origin, not whether it's seen as a trademark.

  • The ECJ concluded that if a third party uses a sign identical to a registered trademark in the course of trade for identical goods, the trademark owner can prevent this use under Article 5(1)(a) of the First Council Directive (EEC) 89/104, even if it is perceived as a badge of support or loyalty.

• When the case returned to the judge, he disagreed with the ECJ's interpretation, believing the ECJ had exceeded its jurisdiction by disagreeing with his earlier findings.

• He applied the ECJ's legal guidance to his original findings and ruled that there was no infringement, which contradicted the ECJ's conclusion.

• The Claimant appealed.

JUDGEMENT

• When the European Court of Justice (ECJ) issues a preliminary ruling on a point of law, national courts must follow its interpretation. However, national courts determine the facts.

• In this case, the judge could disregard the ECJ's conclusions only if they contradicted his findings.

  • The ECJ examined whether Defendant's use of the football club's trademark affected its core function of guaranteeing origin.

  • The court found that the defendant's use of the trademark on souvenirs could jeopardize its ability to indicate origin, even if those items were viewed as symbols of support.

  • The judge had not fully considered this in his original ruling.

  • The ECJ's interpretation showed that extensive use of a trademark by third parties can confuse consumers and undermine the trademark's primary function.

• Therefore, the appeal was allowed, and the judge's initial decision was reversed.

COMMENTARY

• The case between Arsenal Football Club and Mathew Reed revolves around trademark infringement.

  • Arsenal sued Reed for using their registered trademarks on souvenirs and memorabilia, arguing it was an unauthorized use under Section 10 of the Trade Marks Act 1994.

  • Reed defended by saying his use was not "trademark use" but intended as badges of support for the club.

• The initial judge disagreed with the ECJ, thinking it had overstepped its bounds by contradicting his findings.

  • He applied the ECJ's guidance but ruled there was no infringement, leading Arsenal to appeal.

• On appeal, the court clarified that while national courts find the facts, they must follow the ECJ's legal interpretation.

  • Since the ECJ highlighted that extensive use by third parties can harm a trademark's ability to guarantee origin, the court overturned the initial judgment.

• The appeal was allowed, reinforcing the ECJ's authority in guiding how trademark law should be applied across the EU.

ORIGINAL ANALYSIS

• Defendant sold merchandise from a stall near Arsenal’s football ground; these goods contained a number of Arsenal’s trade marks which were registered for same goods.

• Was a notice on Defendant’s stall, stating that his goods were not ‘official’ Arsenal merchandise.

• Claimant sued for infringement under Section 10(1) (identical goods and identical marks).

ECJ

• Use of mark is in course of sale of goods to consumers

  • Thus is not for descriptive purposes

  • Rather it creates impression of ‘link’ between Claimant and Defendant.

• Exclusion notice is irrelevant

Court of Appeal

• Is possible for use of a trade mark which is not understood by public to denote origin to be infringement.

• This case where origin function of trade mark is liable to be harmed by Defendant’s use.

• Thus on facts, is infringement

  • Is irrelevant that sign is perceived as badge of loyalty and not origin

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