Peter Brownlow of Bird and Bird, our correspondent at the House of Lords. writes to tell us of a decision handed down this morning which appears to contradict the Court of Appeal decision in the Arsenal case, which Peter analyzed here yesterday.

The House of Lords handed down a decision in the criminal counterfeiting case:  Regina -v- Johnstone. The judgment appears to have been written without sight of the judgment of the Court of Appeal in Arsenal and also deals with the issue of whether “trade mark use” is necessary for trade mark infringement.

In yesterday’s Court of Appeal judgment in Arsenal, Aldous LJ stated:

It is important to note that the ECJ is not concerned with whether the use complained about is trade mark use.  The consideration is whether the third party’s use affects or is likely to affect the functions of the trade mark.

However the Law Lords who gave judgments in today’s decision appear to have interpreted the decision of the ECJ in the Arsenal case as requiring “trade mark use”. 

The background to the case is that Mr Johnstone was charged with having committed criminal offences under section 92 Trade Marks Act 1994 by including on counterfeit CD labels  the name of the group or artist whose performance was recorded on the CD in question eg “Bon Jovi”, “U2”, “Rolling Stones”, etc.  Mr Johnstone argued that his use merely described the contents of the products bearing the words i.e. music by “Bob Jovi”, etc and the House of Lords was asked to consider whether “trade mark use” was necessary for civil infringement under s.10(1) Trade Marks Act 1994 (identical goods/identical marks).

Both Law Lords  held that the ECJ in the Arsenal decision had decided that trade mark use was necessary for infringement under section 10(1) to (3) and that section 92 was therefore to be interpreted as applying only when the offending sign is used as an indication of trade origin.

However the House of Lords stated that in the Arsenal case trade mark use had been found by the ECJ.
Use of the Arsenal logo was not intended for purely descriptive purposes. The use was such as to create the impression ‘that there is a material link in the course of trade between the goods concerned and the trade mark proprietor’: see para 56. Whether it was open to the European Court to reach this factual conclusion has proved controversial: see [2002] All E R (D) 180. The rights and wrongs of this particular controversy are not material to the outcome of the present case.

The factual situations in the two cases are different but the two Courts appear to have reached opposite conclusions as to whether the ECJ held that “trade mark use” is necessary for infringement. This can only increase the likelihood of Mr Reed being given leave to appeal to the House of Lords.”

Thanks again to Peter.