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Trade Mark And Intellectual Property Essay

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The principles of trade mark and intellectual property protection is to guarantee that the owner of the property or service in question has the right to use his protected property or service to the exclusion of all others. However, in the spirit of the open market agenda of the European Community and the commercial trade it is desirable that those rights do not stifle free trade and competition. Therefore the ideology of propriety protection and free and open trade requires a fair balancing of priorities.

As a result of these seemingly conflicting goals, the law regulating intellectual property can be confusing. No where is this more evident than in trade mark laws. The law in the UK has always maintained the position that trade names and trade marks will only warrant protection if the marks and names are such that they distinguish the identity of the goods or services from others. However, the judiciary has struggled with the concept of use of a trade mark always maintaining that in order to infringe a trade mark it must first be established that the trade mark was used.

In determining this question the courts generally turn to the actual purpose of trade mark protection which is to distinguish the trade mark owners goods from another’s.

This approach has presented some difficulties because it requires the application of a subjective test in each case. The court looks at a variety of elements such as the conduct of the alleged infringer, the commercial consequences for both parties, the goods or services in question, the goodwill and reputation of the trade mark owner as well as the consumers who will ultimately come into contact with the goods.

By taking this approach it is difficult to formulate a uniform code for the definition of use of trade mark. The discussion that follows examines the courts approach to trademark infringement with particular emphasis on what amounts to trade mark use. The discussion will demonstrate how there can be no infringement unless there is use of the actual trade mark.


Protection of intellectual property rights are mechanisms designed to protect the right of the owner while at the same time ensuring that those rights do not impede upon the rights of another. As a result there are certain limitations and restrictions regulating the grant of intellectual property rights. Similarly, there are certain requirements that have to be met in order to substantiate a claim of infringement of intellectual property rights.

Trademark law was not entirely clear on the question of whether or not an infringement claim could be substantiated in a case where the alleged infringer had not used the trademark in question. The question was thought to have been resolved by the European Courts in Arsenal Football Club plc v Reed (C206/01[2002] ECR I-10273. However, subsequent rulings by the British courts have remained largely inconsistent to the extent that the question has yet to be resolved.

The discussion that follows examines the ruling of the ECJ in Arsenal Football Club plc v Reed (C206/01[2002] ECR I-10273 and key rulings that followed in the UK with a view to demonstrating the continuing vagueness of this area of trademark law. In order to understand the significance of the ruling by the ECJ in the Arsenal case and subsequent rulings by the UK courts it is necessary to look at the basic relevant law in respect of Trademark protection.

Overview of Trademark Law

A trademark is any feature used by a business entity for the purpose of distinguishing from another business entity or competitor. In a typical case distinguishing features are names, logos, slogans, designs, colours and numbers. These features can be used either in isolation or together by a combination of any two or more. Once a business entity identifies its business by the use of a unique identifying feature he or she can obtain protection by way of registration or by virtue of the common law concept of goodwill and reputation. The protection is designed to prevent competitors passing off or misrepresenting that the goods offered are the goods of another.

In Reckitt & Colman Ltd v Borden Inc [1990] 1 All E.R. 873 the House of Lord explained the threshold that a plaintiff must cross in order to establish a claim of infringement. Lord Oliver said that: “First, he must establish a goodwill or reputation attached to the goods or services…Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether intentional) leading or likely to lead the public to believe that the goods or services offered by him are goods or services or services of the plaintiff….Thirdly, he must demonstrate that he suffers loss or damage as a consequence of the erroneous belief that the goods or services of the defendant are the goods or services of the plaintiff.”

In order to obtain trademark protection under the tort of passing off it is necessary that the words, brand names or marks used is not merely descriptive of the property to which it is attached. If the features use only go so far as to describe the product it will be regarded as bearing a special meaning to the user of that feature. For instance the use of the word cola is not unique to Pepsi since it describes a specific type of beverage. It must be discernible that the feature used has a “secondary signification” to the product to warrant trademark protection.

Once a trademark has been registered the plaintiff’s claim for infringement becomes a far easier task. Clayton Utz and Peter Knight explain the difference as follows:

“The primary distinction between the common law protection of trade marks and the law under the Trade Marks Act is that, if a trade mark, a name or logo, has been registered, then the registered proprietor is relieved of what is often the heaviest burden in any passing off action, that is, proving the existence of goodwill and reputation associated with the mark. All that need be proved is that the defendant is using that trade mark, or a mark deceptively similar, in relation to the same goods or services in respect of which the mark is registered.”

Registered trade marks are afforded far broader protection under the Trade Marks Act 1994 than the protection allowed under the common law tort of passing off. Section 10(1) of the 1994 Act provides: “…a person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered…”

By virtue of Section 10(1) of the Trade Marks Act 1994, the owner of a registered Trade Mark is entitled to claim Trade Mark infringement if a competitor markets a product which is similar in colour, name and design. Even if a competitor offers for sale a product which is not altogether similar to the product subject to Trade Mark registration and protection a claim of infringement.

The Trade Marks Act 1995 came into effect in response to Council Directive No. 89/104/EEC which has as its goal the unification of trade marks law throughout the Community. It contains the minimum requirements for the registration and enforcement of trade marks. Section 3(1)(b) of the Trade Marks Act 1995 requires that the feature, the subject matter for registration have distinct characteristics and/or identifiers. In was held in Associated Newspapers Ltd v Express Newspapers [2003] EWHC 1322 that the word “distinct” must not be confused with “unique”. The court went on to rule that it was only necessary to examine the closeness of the genuine article and the infringing article and the impressions that would likely arise from that closeness and whether the products would be likely to reach like consumers.

Arsenal Football Club plc v Reed (C206/01[2002] ECR I-10273

In Arsenal Football Club plc v Reed, the defendant had been engaged in selling Arsenal memorabilia from a stand where he displayed a sign indicating that the articles were not in fact Arsenal’s. The memorabilia bore marks and designs similar to those registered by the football club. The court of first instance ruled against the plaintiffs claim of passing off and referred the question of Trade Mark infringement to the ECJ.

The passing off claim had failed since the plaintiff football club was unable to prove that the sale of the memorabilia had caused confusion. Further the defendant produced evidence proving that many members of the public were aware that the articles in question were not in fact indorsed by Arsenal. The judge at first instance ruled that since the defendant was marketing the products as a some sort of “badge of allegiance” to the football club, he was not using the trademark in a traditional sense since consumers were by and large aware of the distinction. However, the judge went on to say that since the law in this area was unclear he would refer the matter to the ECJ for clarification. The judge at first instance referred the following two questions to the ECJ:

“1. Is it a defence to infringement that the use complained of does not indicate trade origin (ie a connection in the course of trade between the goods and the trade mark owner)?
2. And, if so, is it a defence that the use in question would be perceived as a badge of support, loyalty or affiliation to the trade mark proprietor?”

In responding to the first question Advocate General Ruiz-Jarabo ruled that the purpose of a trade mark was to identify a “badge of origin.” The Advocate General went on to say that although most consumers are not aware of the origins of a product they regard the trade mark as attaching a certain quality to the product and is one of the reasons why it is necessary to protect trade marks.

As a result the owner of a trade mark is at liberty to prevent the passing off of identical features to similar goods covered by the trade mark registered if they have the capacity to create confusion as to origins and quality. It would therefore be presumed that if there was use of identical marks and features of a trade mark there would likely be confusion and therefore a use of a trade mark. These presumptions however can be rebutted. However whether or not the presumption is rebutted would be a question of fact in each case and would be up to the national courts to determine.

In response to the second question as to whether or not the use of a trade mark as a bade of affiliation or allegiance constituted the use of a trade mark by infringement the Advocate General determined that it could amount to use of a trade mark and infringement would follow if objected to.

The Advocate General ruled that any use of a trade mark, even as a badge of loyalty or allegiance gives the impression that there is a connection between the owner of the trade mark and the goods. It was immaterial what the consumer or the third party felt about the goods. The fact remained that the trade mark owner lost control of his trade name or mark when others put them on the market without their consent. If it can be shown that the person who is not the trade mark owner is exploiting the trade mark for a commercial purpose, then he is using the trade mark and the owner is at liberty to object to that use.

The underlying principle was stated in the following terms:
“the essential function of a trade mark is to guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin. For the trade mark to be able to fulfil its essential role in the system of undistorted competition which the Treaty seeks to establish and maintain, it must offer a guarantee that all the goods or services bearing it have been manufactured or supplied under the control of a single undertaking which is responsible for their quality”.

The referring UK Court determined that on the facts of the case, the defendant’s use of the football club’s trademark was not for commercial exploitation and was therefore not in breach of the trade mark laws. However, on appeal the Court of Appeal ruled that it was not necessary to prove trade mark use in order to substantiate a trade mark infringement claim.

The Current Position in the UK

One year following the Court of Appeal’s ruling in Arsenal Football Club plc v Reed the House of Lords reached an entirely different conclusion in R v Johnstone [2003] EWCA Crim 194 finding that since there was no trade mark use there could be no trade mark infringement. In R v Johnstone, the defendant was charged and tried for offences of piracy under Section 92 of the Trade Mark Acts 1994 for copies of CDs depicting performances by various artists. At his trial the defendant argued that his use of the trade mark was to give credit to the individual artists and not to in anyway indicate the trade origins and as a result he was not using a trade mark or trade marks.

Lord Nichols ruled that one of the most essential components of trade marks was that it indicated a badge of origin. It therefore followed that when one speaks of use of a trade mark one must necessarily contemplate that the use must leave the impression that it represented the trade origin. In other words use of the trade mark was pivotal for establishing infringement. Lord Walker defined trade mark use as follows:

“’Trade mark use’ is a convenient shorthand expression for use of a registered trade mark for its proper purpose (that is, identifying and guaranteeing the trade origin of the goods to which it is applied) rather than for some other purpose. It is easy to recognise those cases which fall squarely on one side or other of the line. If a counterfeiter sells a cheap imitation watch under the trade mark OMEGA, he is fraudulently engaging in trade mark use.”

In other words a trade mark is used if and only if the user holds the product out as an original article and exploits it for commercial gain to himself or loss to the owner of the registered trade mark. If the uses does not represent the product as an original article and does not exploit it in a commercial sense he is not using the trademark and there can be no infringement.

Reed Employment v Reed Elsevier Publishing [2004] EWCA Civ 887 appears to represent yet another departure from the spirit and intent of Arsenal Football Club plc v Reed which by and large broadened trademark protection. In this case, Reed Employment had enjoyed a registered trade mark for several years in which it registered the name Reed for its trade as an employment agency. In 1995 almost ten years after registering its trade name, Reed Employment commenced advertisements via the internet. At some point the defendant, Reed Elsevier commenced advertising via the internet as well and its ads consisted of its logo and the term Reed Elsevier.

Reed Employment commenced an action against Reed Elsevier claiming that the latter’s use of the term Reed on its website amounted to passing off and as such was an infringement of Reed Employment’s registered trade name. The court at first instance agreed. However, on Appeal the Court of Appeal did not agree. The appellate court essentially held that in order to constitute a use of another’s trade mark, the trade mark or name allegedly copied had to be identical. In this case there was no evidence that Reed Elsevier had used the word Reed in isolation. In fact it used the words Reed Business Information. Moreover the defendant used a logo that distinguished it from Reed Employment.

Citing a previous ECJ decision Jacobs J said that:

“… the perception of identity between the sign and the trade mark must be assessed globally with respect to an average consumer who is deemed to be reasonably well informed, reasonably observant and circumspect. The sign produces an overall impression on such a consumer. That consumer only rarely has the chance to make a direct comparison between signs and trade marks and must place his trust in the imperfect picture of them that he has kept in his mind. Moreover, his level of attention is likely to vary according to the category of goods or services in question.”

Jacobs J went on to rule that it was also important to note that in order to constitute trade mark use the alleged user must be offering similar services or products as the registered owner of the trade name. On the facts of this case, the defendant is offering a different service and the use the words Reeds Business Information did not constitute use of the plaintiff’s registered trade mark. Since there was no use of the trade mark there could be no infringement.

In Electrocoin Automatics Ltd v Coinworld Ltd [2004] EWHC 1498 the plaintiffs brought an action in respect of infringement of their registered trade mark BAR X, an amusement with prizes game machine. The defendant marketed a similar machine called a BEAR X. Mr. Geoffrey Hobbs QC, sitting in the High Court of Justice, Chancery Division ruled that in order for a trade mark to be infringed it must be shown that the trade name or trade mark allegedly infringed has a distinguishing feature. In this case, the BAR X was merely descriptive and therefore the use of the term BEAR X was not a use of the name or trade mark BAR X. As such it could not constitute a trade mark infringement.

Referring to the Arsenal case Geoffrey Hobbs Q.C. noted that:

“The relevant consideration was whether the use complained of was likely to damage that property right or, as the ECJ put it, is likely to affect or 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.”

Hobbs went on to distinguish the facts of the Arsenal case from Electrocoin Automatics Ltd v Coinworld Ltd. In the former case the defendant had used the registered trade name Arsenal and while he posted a disclaimer at his sale’s stand, the likelihood that the goods would fall into the hands of consumers by way of gift or otherwise was great. In other words consumers who received the goods away from the stand would likely be left with the impression that hey were in fact receiving original Arsenal articles. This possibility constituted use of a registered trade mark.

Geoffrey Hobbs explained the use of a trade mark as follows:

“…the essence of a trade mark has always been that it is a badge of origin. It indicates trade source: a connection in the course of trade between the goods and the proprietor of the mark. That is its function. Hence the exclusive rights granted to the proprietor of a registered trade mark are limited to use of a mark likely to be taken as an indication of trade origin. Use of this character is an essential prerequisite to infringement. Use of a mark in a manner not indicative of trade origin of goods or services does not encroach upon the proprietor’s monopoly rights.”

This analysis brings to the mind the requirement that unless the use of a sign or trade name seeks to leave the impression that the alleged infringement is in fact the trade mark owner’s work there is no use of the trade mark. If there is no use of the trade mark there can be no infringement.


The cumulative impact of the decisions discussed above is that the law of trade mark infringement is not limited to a strict interpretation of the word “use.” It places a creative interpretation of Article 5(1) of the Trade Mark Directive. Article 5(1)(a) that the owner of a registered trade mark is entitled to prevent the use of his registered trade mark without his or her consent provided however that three elements are satisfied. The three elements require that the use of the trade mark must be in the “course of business” and that the features used are identical to the features contained in the registered trade mark. Moreover, the goods and services impacted must also be identical to the goods and services subject to trade mark protection.

The three requirements necessary to establish infringement place a broad interpretation of the term “use.” Obviously, there must be use of a registered trade mark in a very broad sense in order for there to be trademark infringement. Requiring that the trade mark be used in the course of business, the features used are identical and that the services and goods are also identical imply that the third party use of the trade mark is relevant to construction of the term “use.” As a result there can be no strict application of principles and law. Each case is decided on its own special facts leaving open the possibility of confusion and inconsistencies.

Moreover, Article 6(1)(b) of the Trade Marks Directive provides that trade mark registration does not confer upon the owner of the trade mark the right to prevent third parties using similar characteristics and features of the goods or services for commercial purposes if the user is conducting himself honestly and in accordance with fair commercial practices.

The Arsenal decision by the ECJ essentially rules that a defendant is at liberty to invoke the descriptive use defence to defeat a claim that he or she used a registered trade mark without the requisite consent of the registered trade mark owner. The difficulty with this decision for the UK courts is that it leaves open the possibility that dishonest conduct in the use of a registered trade mark may not amount to use of a trade mark if that use is merely descriptive. This confusion created by the Arsenal decision accounts for the approach taken by the courts. As seen in the Coinworld case, determining descriptive use of goods and services can override commercial concerns.

In the final analysis the traditional three tier test of goodwill, misrepresentation and damages will determine if there is actual use of the trademark under UK law. A claim for trademark infringement will likely only succeed if identical features are used and the defendant cannot prove that such identical use did not create the impression that the goods in question originated from the registered trade mark owner. If the defence is successful there will be no use of the trademark in the traditional sense. It therefore follows that use of a registered trademark, subject to a judicial interpretation of use is required in order to substantiate a claim of trademark infringement.

Anderson, R. and Gallini, N. T., (1998) Competition Policy and Intellectual Property Rights in the Knowledge-based Economy, Calgary: University of Calgary Press.
Arsenal Football Club plc v Reed (C206/01[2002] ECR I-10273
Associated Newspapers Ltd v Express Newspapers [2003] EWHC 1322
Bainbridge, David . (2007) Intellectual Property. Pearson Longman
Council Directive No. 89/104/EEC
Electrocoin Automatics Ltd v Coinworld Ltd [2004] EWHC 1498
Frank Reddaway Ltd. v. George Banham, [1896] A.C. 199
Llewelyn, Margaret Dr. Proposals for the Introduction of a Community Utility Model System: A UK Perspective. [1995] 2 Web JCLI http://webjcli.ncl.ac.uk/articles2/llewel2.html Retrieved February 2 2008
Reckitt & Colman Ltd v Borden Inc [1990] 1 All E.R. 873
Reed Employment v Reed Elsevier Publishing [2004] EWCA Civ 887
R v Johnstone [2003] EWCA Crim 194
Trade Marks Act 1994
Utz, Clayton and Knight, Peter. (n.d.) Protecting the Brand: The Law of Passing Off and Registered Trade Marks. Available at:,+The+Law+of+Passing+off+and+Registered+Trademarks&hl=en&ct=clnk&cd=1&gl=us Retrieved February 3 2008

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