A sports fan at Bird and Bird writes:

“Judgment was handed down yesterday by the Court of Appeal in Arsenal Football Club PLC -v- Matthew Reed

In summary they overturned Mr Justice Laddie on his finding that:

1.      the ECJ decision was not binding on him in all respects; and

2.      that on the facts Reed’s use of the trade mark did not designate origin (ie the “trade mark use” point”).

They also cast doubt on his reasoning on passing off decision even though this was not appealed by pointing out he had referred to the wrong case.

The judgment is very brand owner friendly and seems to make the question of whether or not something is “use as a trade mark” is irrelevant to the question of TM infringement.

Is the ruling of the ECJ Binding ?

AldousLJ explained that the ECJ decision was not based on whether the use complained of was “trade mark use”.  Instead the relevant consideration was whether the use complained of was likely to jeopardise the guarantee of origin which constitutes the essential function of the mark. That did not depend on whether the use complained of was trade mark use.

The ECJ gave two examples of how Reed’s use affected the functions of the trade mark:

1.      Consumers who obtain or are given the product away from the environs of Mr Reed’s stall may believe there is a link between the goods and Arsenal;

The Court of Appeal said this was not inconsistant with the Judges findings of fact. He was concerned with the effects of the signs upon Mr Reed’s customers, not upon consumers who might not know anything about Mr Reed.

2.      The goods are supplied outside the control of AFC. This undermines the guarante that all goods designated by the trade mark have been manufactured or supplied under the control of a single entity.

The Court of Appeal rejected the claim by Reed that this also contained findings of fact contrary to those of the Judge.  The Judge’s findings related to whether use by Mr Reed was “trade mark use” – the ECJ was looking at the function of the trade mark. Clearly unchecked use of the mark by a 3rd party (which is not descriptive use) is likely to damage the function of the trade mark because the registration will no longer be able to guarantee origin.

The Court of Appeal held that the Judge had misinterpreted the ECJ’s decision – finding that it decided that Arsenal should win because Mr Reed’s use was such as would be perceived by some customers as a designation of origin. This was not the basis of the ECJ decision. The ECJ had held that the important consideration is whether the right given by the resgistration is likely to be affected by a third party’s use.

“Trade Mark Use”

Although not necessary because of the finding above – the Court of Appeal found on the evidence that the use by Mr Reed of “Arsenal” did designate origin of the goods to a substantial number of consumers.

Passing Off

Even though it was not the subject of an appeal by Arsenal the Court of Appeal cast doubt on Laddie’s reasoning on passing off. 

Unsurprisingly the Court of Appeal refused Reed leave to appeal to the House of Lords but he has indicated he will be applying to them to seek leave.”

Thank you to Peter for this (including the title).

More coverage here and here.

Previous blog coverage here.