The Arsenal Case

In April 2001 in Arsenal Football Club Plc v Reed, the English High Court (Laddie J) delivered a decision of some importance in the trade mark field. The case involved the manufacture and sale of lucrative football souvenirs and memorabilia.

The outcome of this case could have significant ramifications for the product merchandising industry.

Arsenal Football Club is a leading English premier division soccer club that owns and has registered a number of its trade marks, including Arsenal, Arsenal Gunners and a series of logo trade marks. The trade marks are registered in relation to a range of goods including clothing and footwear.

Mr Reed, the defendant, ran a football merchandise company and had done so for 30 years. An important part of his business was the sale of so called “unofficial” Arsenal products including scarves and hats. Unlike the products made and sold with the Club’s approval, Mr Reed’s made it clear that his goods were “unofficial” and had not been manufactured on behalf of the Arsenal Football Club.

On the trade mark infringement claim the defendant argued that the words and logos he was using were not being used by him as trade marks in the strict legal sense. That is, they were not being used to indicate the origin of the goods and as such did not function as trade marks. Justice Laddie agreed with this argument and accepted that the words and logos on the merchandise carried “no message of trade origin”.

Having so found, the Judge said that Arsenal had to show that “non-trade mark use” of its registered trade marks would still constitute an infringement. The Judge was of the view that in terms of the English authorities, use of the mark did not necessarily have to be strict trade mark use and any use would suffice, subject to any statutory defences which might be available. However, the Judge felt it necessary to refer the matter to the European Court of Justice for a clear ruling. That is, firstly on whether a defendant has a defence to infringement on the ground that the use complained of does not indicate a trade origin. Secondly, if the answer to the first question was yes, whether the fact that the use in question would be perceived as a badge of support, loyalty or affiliation to the trade mark proprietor is a sufficient connection.

On the passing off question the Judge was of the view that the mere use of the words and logos was not sufficient for people to think that Mr Reed’s goods were produced by or under licence from the Club. Part of the reason for this was that Arsenal used swing tags and other forms of statements that made it clear that their merchandise was “official” while Mr Reed’s was not.

Accordingly, it was found on the evidence, that the use by the defendant of a large sign that stated that the sale of the goods should not imply or indicate any affiliation or relationship with the official merchandise was important. As a result the Judge concluded that an important distinction had to be drawn between official merchandise and “badges of allegiance and support” to the Club itself.

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