May 2003
Arsenal's Victory over Street Trader
Arsenal has won a long running court battle against a street trader selling fake Arsenal merchandise.
The case commenced two years ago when Arsenal brought an action against Reed for trade mark infringement and passing off. Arsenal had registered ARSENAL and GUNNERS as trade marks. One of trade marks' function is to indicate origin of goods promoted under the mark.
The High Court where the case was first heard held that Arsenal had failed to produce evidence to support likelihood of confusion, which is required for any trade mark infringement claim to succeed. The court held that the signs used by Reed in his fake merchandise were perceived as badges of support, loyalty and affiliation not indications of origin. No evidence to support Arsenal's claim in passing off was found either.
However, a reference to the European Court of Justice was required in order to determine the full meaning of European directive on trade marks. The High Court raised its enquiry on the view that the issue of infringement would depend upon whether the use complained about was trade mark use, in the sense of indicating origin of goods. The ECJ held that this view was irrelevant and stated that "where a third party uses in the course of trade a sign which is identical to a validly registered trade mark on goods which are identical to those for which it is registered, the trade mark proprietor of the mark is entitled, in circumstances such as those in the present case, to prevent that use." In short the ECJ held that it is irrelevant that use of the sign is perceived as a badge of support for or loyalty or affiliation to the trade mark proprietor.
Regardless of ECJ's clear view on the matter the High Court gave its ruling in defiance of EJC's opinion and held that Reed was should be allowed to sell his merchandise and by doing so did not infringe Arsenal's trade marks.
Arsenal appealed. The Court of Appeal allowed the appeal and held that the High Court was wrong finding the case for Reed and it should have followed ECJ's ruling.
The decision means that unless Reed can force a replay in the House of Lords he must stop trading and pay Arsenal's legal costs estimate to be in hundreds of thousands of pounds.
The ruling has been welcomed by other leading football clubs whose profits are also hit by traders selling fake merchandise.
Briffa comment:
The decision clarified what kind of use it is necessary to show in order to succeed in a trade mark infringement claim. Merely registering a mark gives the proprietor property right and the relevant consideration is whether the use complained of was likely to damage that property right or likely to affect the guarantee of origin.