TRADE MARK
Merchandising

The Court of Appeal has published its decision in the case of Arsenal Football Club Plc -v- Reed substantially overturning the decision of Mr Justice Laddie in the High Court. The Court of Appeal applied the European Court of Justice’s decision that where a third party used in the course of a trade a sign that was identical to a validly registered trademark on goods which were identical to those for which the trademark was registered then the registered owner could prevent this third party use.
Mr Justice Laddie had held that the mark ‘Arsenal’ was a badge of allegience rather than indicating the origin of the goods and as Mr Reed had made it clear his goods were not official Arsenal FC goods then he was not infringing the club’s trademark. But the Court of Appeal held that whilst the mark may well be a badge of allegience – that though would not prevent its use by a third party and thus jeopardise the function of a trademark, namely the ability to guarantee origin. The Court therefore held that the High Court should have followed the ECJ’s decision and given judgement for Arsenal.
Whilst not strictly necessary, the Court of Appeal went on to consider the second issue of whether or not Mr Reed’s use was trademark use. Aldous LJ held that the use of the word ‘Arsenal’ on a scarf or other item of clothing could denote three things (a) that the owner was a supporter (b) that the scarf came from Arsenal and (c) a combination of both. Whilst his Lordship suspected that to certain persons the first meaning was the correct one he felt that the meanings in (b) and (c) would apply to a substantial number of people who would then think that the use of ‘Arsenal’ would denote that the goods came from Arsenal. This meant that in the absence of an explanation to the contrary, many people would consider that a scarf with the word ‘Arsenal’ came from Arsenal FC, and so denoted origin.
Mr Reed has indicated that he will now appeal to the House of Lords.
For the full Judgement see: The Times May 22nd 2003.