Merchandising may not be a football club’s biggest revenue stream but it is certainly important – which is why the recent case of Arsenal Football Club PLC v Matthew Reed will be causing concern.
In this case, Arsenal Football Club (AFC) made allegations of trade mark infringement and passing off against Mr Reed, a self-employed proprietor of a wholesale and retail football merchandise company. Mr Reed is alleged to have sold scarves bearing the words “Arsenal” and “The Gunners” and designs which are said to be substantially similar to AFC’s crest and cannon devices which are registered trade marks
Central to the case are the arguments concerning infringement of trade marks. Mr Reed claims that he has not infringed AFC’s trade marks because he uses the signs on his products as “badges of allegiance” and not as trade marks indicating trade origin. The difficult question the court considered was whether such “non trade mark use” constitutes infringement.
Section 10 of the Act defines infringement in terms of the “use” of a sign. AFC is relying upon this wide construction of section 10 to argue that “non trade mark use” of the signs would still infringe its rights. However, the judge pointed out that if section 10 is interpreted in this manner then inconsistencies in the Act would arise, such as a requirement for trade mark distinctiveness for signs which could themselves be used in a non-distinctive way. The judge was concerned that such an interpretation would give a wide and unintended monopoly.
Courts in other member states have made references to the European Court of Justice (ECJ) regarding this issue. It was also considered by the Court of Appeal in the case of Philips Electronics NV v Remington Consumer Products Ltd. The Court of Appeal examined the issue of whether infringing use had to be use in a trade mark sense and decided that the use of a sign in a non trade mark way could infringe a registration. However, this was not a binding decision.
In the AFC case, Mr Justice Laddie decided that if a different view from that of the Court of Appeal in the Philips case is to be adopted, this must be done either by the ECJ or the House of Lords. The judge will consider whether to refer the case to the ECJ on May 1.
If the court finds in favour of AFC then registration of a sign as a trade mark will create the right to restrain any use of that sign in relation to particular class of goods. This will have far reaching consequences affecting the scope of rights owned not only by AFC but also by many other trade mark owners.