Arsenal Football Club Plc v Reed, Court of Appeal - Chancery Division, April 06, 2001, [2001] EWHC 440 (Ch)

Resolution Date:April 06, 2001
Issuing Organization:Chancery Division
Actores:Arsenal Football Club Plc v Reed
 
FREE EXCERPT

This judgment will be made available on the Court Service web site:

http://www.courtservice.gov.uk under the heading ``judgments''

[2001] EWHC 440 (Ch)

Case No: HC 1999-0038

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 6 April, 2001

B e f o r e :

THE HONOURABLE MR JUSTICE LADDIE

- - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - -

Mr S Thorley QC and Mr T Mitcheson (instructed by Lawrence Jones for the Claimant)

Mr A Roughton and Mr Malynicz (instructed by Stunt & Son for the Defendant)

- - - - - - - - - - - - - - - - - - - - -

Hearing dates: 20 -22 March 2001

Mr Justice Laddie:

Introduction

The claimant, Arsenal Football Club (``AFC''), hardly needs any introduction. As Mr John Hazell, its commercial manager and a witness in this action has explained, it was founded in 1886 and has consistently been one of the leading football clubs in the UK over the past century and, since the 1960s, in Europe. It has never been relegated from Division 1 of the Football League since being promoted to it in 1919, or from the Premier League, of which it is a founder member, since that League was established in 1992/93. It has won the FA Cup on seven occasions, most recently in 1997/1998, and has been League Champion of the Football League and the Premier League on six occasions most recently in the season 1997/1998. AFC has also experienced success in Europe, winning the European Cup Winners Cup in 1994 and being runners-up in the same competition the following year. It has also qualified for the UEFA Champions League for the past three seasons and reached the final of the UEFA Cup in the season 1999/2000. It has a dedicated following of supporters.

AFC is known not only as ``Arsenal'' but also by its nickname, ``the Gunners''. For a long time it has also been associated with two graphics or logos. The first consists of a shield, referred to as the ``Crest Device'', the other, referred to as the ``Cannon Device'', depicts an artillery piece. They are as follows:

The Crest Device:

The Cannon Device:

I shall refer to these two words and two devices together as the ``Arsenal Signs''.

The defendant, Mr Matthew Reed, is, and since the early 1960s has been, an Arsenal fan. He describes himself as a self-employed proprietor of a wholesale and retail football merchandise company. Over thirty years ago he began a business of selling football souvenirs and memorabilia. He has been in that business ever since. Amongst the articles he sells are souvenirs and memorabilia which are likely to appeal to Arsenal supporters. By these proceedings, AFC is attempting to stop or curtail sale of some of these articles.

The sale of souvenirs and memorabilia has become very lucrative. AFC now derives considerable income from it. Over the last ten years or so AFC has taken steps to try to ensure that as many as possible of the products which refer to Arsenal and are bought by or for its fans are sold by it or are acquired, directly or indirectly, from its licensees. In support of this endeavour, it has acquired various intellectual property rights and has sought to use them against those who sell souvenirs and memorabilia which are not made for or under licence from it. Hence this action. In its original pleadings, AFC made allegations of registered trade mark infringement, passing off and copyright infringement against Mr Reed. The last allegation was abandoned some little while ago with the result that this case now is limited to trade mark infringement and passing off only.

Many of AFC's major competitors in the Football League have taken similar steps to use intellectual property rights to control the market in, and derive income from, the sale of souvenirs and memorabilia relating to their own teams. In this action, evidence of those endeavours was given on behalf of Manchester United FC and Tottenham Hotspur FC. This case raises important points of principle which could affect the scope of the rights owned not only by AFC but by many other trade mark owners and not just in the field of sport.

The History of selling Arsenal memorabilia and souvenirs

It is difficult to know when Arsenal memorabilia and souvenirs were first placed on the market. It is likely that for very many decades supporters have signified their allegiance to the club either by wearing its shield or by holding signs bearing its name. In any event, it is clear from Mr Reed's evidence that souvenirs have been sold for at least three decades. Mr Reed does not claim to have been the originator of this trade and it may well have existed for many years before he started in 1970.

Details of AFC's own trade in souvenirs and memorabilia is sketchy, at least in respect of the early years. Mr Hazell has been with the club since 1989. He has given evidence that the commercial and marketing side of Arsenal's business has expanded dramatically since about 1992. He says that before 1990 there was a small single shop run by or on behalf of AFC located just inside its stadium at Highbury on the Avenall Road frontage. It was called the Gunners Shop. Apparently, at that time, there was also a small mail-order business. Since 1990, AFC has dramatically expanded its retail premises. It now has a large shop called ``Arsenal World of Sport'' adjacent Finsbury Park station, the new Gunners Shop within the stadium and a smaller North Bank Shop within the new North Bank Stand. AFC not only makes sales through its own retail outlets but it also operates a substantial mail-order business, which includes very substantial sales made over the Internet. Its current sales of souvenirs and memorabilia has achieved a total turnover of nearly £5 million per annum. Mr Hazell explains that AFC has a database of about 240,000 customers to whom it mails its merchandise catalogues and other related material. I have been supplied with copies of two recent AFC catalogues. The range of products available is very large and includes articles of clothing for adults, children and even newborn babies, pennants, cups, desk sets, combs, sticky labels, watches and a host of other items each of which prominently bears one or more of the Arsenal Signs.

Mr Hazell explains that AFC either sources and supplies its own merchandise or arranges for the production and supply of the products through its licensees. He says that prior to 1990 AFC occasionally granted licences for the use of the Arsenal Signs. However it appears that the majority of the licensing activity has taken place in the last few years. Needless to say, each of the licensees is required to mark its products in a way which complies with AFC's current labelling requirements, a matter I will consider further below.

AFC's attempts to curtail unofficial sales

(a) Direct legal action

AFC has employed a variety of civil and criminal procedures in an attempt to stop or restrict the activities of unlicensed vendors of Arsenal souvenirs and memorabilia. These have included supporting actions brought by local Trading Standards Officers under the provisions of the Trade Marks Act 1994 and the Trade Descriptions Act 1968. It is apparent from the exhibits to Mr Hazell's first witness statement, that these activities have been extensive and spread geographically. I have been told that AFC has been unable to use this avenue against unlicensed vendors operating in and around its grounds at Highbury because the local authority, the London Borough of Islington, has not been willing to use its Trading Standards Officers for this purpose. Where this type of prosecution has been pursued, those who have pleaded or been found guilty have been punished in a variety of ways including by being subject to fines, community service orders, being placed on probation and having their stocks forfeited and destroyed.

As far as civil proceedings are concerned, AFC appears to have relied upon registered trade marks, passing off and copyright. Amongst other things it has used the provisions of section 100 of the Copyright, Designs and Patents Act 1988 Act to seize in advance of any court order products which it considers consist of or include unlicensed copies of its own copyright material. It could not use any rights acquired by registration of trade marks until such registration of the Arsenal Signs had been achieved at the beginning of the 1990s. It does not appear that AFC has used passing off proceedings before it had secured trade mark registrations.

(b) Competition/licensing

Although AFC may not have put a great deal of effort into merchandising before the early 1990s, it has done so in the recent past. One of the ways it has attempted to secure a larger part of the souvenir and memorabilia market is to try to sell its own products to the vendors located outside its Highbury grounds. To this end it has very recently employed a company, KT Sports, which has a licence to sell ``official'' merchandise to such vendors. It does not appear that all vendors are given the opportunity to purchase. Mr Reed's evidence was that he had tried to purchase licensed products but that he appears to have been ``blacklisted''. The result is that he has only been able to obtain comparatively small quantities of licensed goods on an intermittent basis. I did not understand this evidence to be challenged. Apparently KT Sports has no licence to sell to vendors outside any other grounds. This means that for that half of all AFC's matches which are played away from home, there is no attempt to ensure that the local vendors are supplied with licensed products.

(c) Warnings to the public / warnings on stalls.

In paragraph 35 of his first witness statement, Mr Hazell states as follows:

``Over the years, the Club has taken various steps to educate the public in its buying habits. Aside from making sure Arsenal's merchandise is retailed in a...

To continue reading

REQUEST YOUR TRIAL