Arsenal Football Club has suffered a very surprising defeat at the hands of Mr Justice Laddie in the High Court, following what appeared to be a conclusively successful outcome in the European Court of Justice in its case against Matthew Reed, a vendor of unauthorised merchandise bearing Arsenal's trade marks.
The ECJ decision
In a clearcut judgment the ECJ had decided that trade mark registrations are enforceable against unlicensed use in the course of trade on goods for which registrations are held, whether or not consumers regard the mark as a "badge of support" rather than a trade origin. However such protection would be limited to cases where use of a sign by a third party affected the function of a trade mark, in particular in guaranteeing origin.
The ECJ went on to make clear its view that on the facts of this case the guarantee of origin was adversely affected and infringement had occurred. Although there was no proven confusion on the part of the public and Mr Reed had used a disclaimer on his stall, the risk of confusion could not be ruled out, particularly as the goods may have been taken to be official merchandise once removed from his stall. This meant that the guarantee of origin was adversely affected.
In the High Court
It had been assumed that the hearing in the High Court would be a foregone conclusion in the light of the ECJ's firm judgment. However, Mr Justice Laddie decided that in examining the facts the ECJ had exceeded its jurisdiction, it being the task of the national courts only to apply principles of law to the facts of the case. On this basis he found that he was not bound by the ECJ's conclusion, stating "I must apply its guidance on the law to the facts as found at the trial".
He therefore disregarded the ECJ's findings of fact and substituted his original (different) findings, ie. that Mr Reed's goods carried no message of trade origin. This led to the conclusion that the guarantee of origin attached to Arsenal's trade marks was unaffected by Mr Reed's activities and that an infringement had not occurred.
Mr Justice Laddie was clearly uncomfortable with this result, saying that it was in no-one's interests for "there to be such a difference between the views expressed by the High Court and the ECJ". He refused another reference to the ECJ and confirmed that the correct course would be an appeal to the Court of Appeal. Such an appeal seems highly likely and the outcome will be of wide interest regarding the proper functions of Member State national courts and the ECJ.
In the meantime, brand owners will be extremely disappointed and a large degree of uncertainty in this fundamental area of trade mark law remains.
Related articles
Arsenal Football Club - European Court of Justice Judgment, 12 November 2002
Trademark infringement: success for Arsenal
Arsenal Football Club plc - v- Matthew Reed, 12 December 2002
If you would like a copy of the judgment please contact:
Stephen Whybrow by telephone on +44 (0)20 7367 2175 or by e-mail at [email protected] or Lucy Kilshaw by telephone on +44 (0)20 7367 2044 or by e-mail at [email protected]
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