What happens when a street trader takes on one of the country’ biggest football clubs? So far, it’s one-nil to the little guy, writes Eleanor Levenson
Matthew Reed has high hopes for the coming year: “Please God, Arsenal will win the Champions League and Tottenham will be relegated.” Reed has been an Arsenal fan since 1963. “I started supporting them because the boy next door did,” he says.
But there is one contest that Reed does not want Arsenal to win – their fight to stop him selling unofficial club merchandise outside the Arsenal football ground (Arsenal Football Club v Matthew Reed).
Reed has been selling the merchandise for more than 30 years. “I started selling outside the ground to pay my entrance fee into the ground” he says. “I sell scarves, hats, flags, badges and that kind of thing.”
Ten years ago, Reed was approached by officials from Arsenal Football Club who wanted him to stop selling the unofficial merchandise. “They were very heavy-handed and unpleasant,” claims Reed.
Others who sold outside the ground were also approached and when the club threatened them with legal action they gave in and purchased official merchandise to sell instead. Reed claims that he tried to purchase official merchandise but he had trouble buying official goods and was consequently blacklisted.
He says: “In 1994 I was raided by the Trading Standards Office. They started criminal proceedings so I had no option but to get a solicitor.” The solicitor was Bruce Walker of Stunt & Son in Chelmsford, Essex.
Reed won the criminal case, but Arsenal then issued a civil claim against him for passing off and infringement of their registered trademarks. In April of this year, Walker managed to persuade the judge in the High Court case, Mr Justice Laddie, to find in favour of Reed on several points.
To establish a claim for passing off, Arsenal’s lawyers had to show that members of the public may be misled into the belief that, because goods bear one or more Arsenal signs, they are official Arsenal products. Arsenal owns the trademark of the words ‘Arsenal’ and ‘Arsenal Gunners’ and of the Arsenal crest and cannon logo. They claimed that by using the words on his products and the crest and cannon logo, Reed was passing off his product as official merchandise.
Arsenal then had to prove that as a result of the passing off there had been actual damage to the business or the goodwill associated with a product. Arsenal were unable to show that people who wanted to buy official merchandise in order to support their club financially bought Reed’ goods by mistake as Arsenal Clearly mark their goods as official and have had several articles in club programmes about where to buy official merchandise.
Also, Reed’s stall has a large sign saying that his products are unofficial. The judge decided that there was no confusion for potential buyers as to what was and was not official merchandise and refused to accept that Reed was passing off. The Arsenal signs on Reed’s merchandise were badges of allegiance and no more, the judge ruled.
Arsenal also accused one of Reed’s employees of passing off by claiming an unofficial product was official but again the judge came down in favour of Reed.
The claim of infringing the registered trademark was more complicated. Arsenal claimed that Reed infringed their trademark through the sale of his Arsenal scarves, which use Arsenal’ registered trademarks.
The UK Trade Marks Act 1994, which implemented the EU Trade Marks Directive, says that a registered trademark is infringed if a sign identical to the trademark is used for goods and services that fall into the categories it is registered for and where there exists the likelihood of confusion by the public. Reed did not deny that his products used Arsenal logos, but again he argued that they were not used as trademarks but as badges of allegiance.
The judge accepted that Reed’ use was not as a trademark but as a badge of allegiance, so the question was whether the registration of a sign as a trademark in respect of a particular class of goods gives a right to restrain use by any other parties whether as a trademark or not.
In order to come to a decision, the judge has referred this question to the European Court of Justice for clarification of the Trade Mark Directive on which the UK’s 1994 Act is based, and so it is in the European Court of Justice’s (ECJ) hands that Reed’s fate now lies.
The judge has already decided that, in Reed’s, case the use of Arsenal words and signs is not a trademark use. What the ECJ has to decide is whether non-trademark use of a trademark can count as infringement. If it does, then Reed will lose.
So far Reed is happy with how things have gone. “I believe that what I’m doing is right or I wouldn’t have gone this far with it. I expect to win or I wouldn’t carry on. If I don’ win then I’ be bankrupt. But everybody who speaks to me regarding the case has been on my side. They all believe the club has been a little greedy and there’s no need to pick on someone like myself.”
And if Arsenal’s form on the pitch in Europe is anything to go by, Reed shouldn’t have too much trouble; Arsenal hasn’t won a European competition since 1994, the same year that Reed was raided by Trading Standards officers. As Walker says: “In footballing terms, the whole thing is only at half time.”
How to register a trademark
“Trademarks are an intangible asset, you can’t touch them but they can give enormous benefits to the owner,” says Olaf Rock, a patent and trademark attorney based in Oxford. If you have an idea for a product or business name then the best thing to do is register it as a trademark.
This means that only you can use that name for products and services in the category under which you register it.
The first thing to do once you’ had the idea, says Rock, is to make sure a search of the trademark register is done. This checks that no one else has registered the name and only takes a few hours.
Then you have to decide which categories to register it under. There are 42 classes covering all types of products. The search should cost less than £100.
The next step is to fill in an application form, available from the Trade Mark Registry, which is part of the Patent Office. This costs £200 if you are registering it in one class and an extra £50 for each additional class.
The registry may raise an objection if the mark is descriptive or a trademark that other traders might reasonably wish to use. For example, you couldn’t register ‘Oxford Shoes’ because that may describe any shoes being made in Oxford, nor can you register a place name or common surname.
If the registry approves, or any objections raised are overcome, then the application is advertised for three months in the Trade Marks Journal to give the public a chance to object. “People can object but not many do. About one case in 40,” says Rock.
After the three months are up, if no opposition is received or opposition is overcome, then you get your registered trademark. Your trademark can last forever, although you have to pay a fee and renew it every 10 years. If you want to use it overseas then you have to apply it separately in each country. You can also license other people to use your trademark or sell it to someone else, although the registry must be informed.
If you do not use your mark for five years, anyone can apply to have it removed from the register.
Rock says the whole process has speeded up recently. “You can get it through in four of five months, including the three months opposition period. You can do it yourself but it’s better to have a search done by an agent on the basis that they know what they’ looking for. As far as the application is concerned, there is no reason at all why you shouldn’t do it yourself.”
Money money money
It’s not all work, work, work, you know. Well, not if you’re a world class footballer. The star players can make more money off the pitch than on it by assigning image rights to the club in return for a share of profits.
The most expensive footballing deal ever was the transfer of Zinedine Zidane from Juventus to Real Madrid. A large proportion of the £50m deal came from Zidane giving Real Madrid the right to use his name and image.
Dan Harrington of Couchman Harrington Associates, a sport and media firm, says that these deals are often a tax avoidance measure. “If you set up an off shore image rights licensing company then any money the player is paid for image rights can be paid to this company to avoid paying tax,” he says.
In rugby this tends to be part of the standard contract and the players assign their image rights to the club without an extra fee.
Making a football product… and how to get away with it.
If you fancy making some money selling football merchandise outside a ground, here are a few tips:
Copyright doesn’t exist in the product itself, says Macfarlanes intellectual property lawyer Iain Mackie. The copyright exists on the drawings and designs. So, as long as you don’t copy the exact design, you should be okay.
Check what class the trademark is registered under. For example, a club may have registered its trademark for class 25, that is clothing, footwear and headgear. But if it’ not registered under class 30, which covers foodstuffs, then there’ nothing to stop you producing half-time sandwiches with your team’ colours on the label.
You can’ trademark the name of a place, so if it’s your own design then no one should have a problem with a red and white T-shirt saying ‘ARSENAL’. In order to be passing off, it would have to be proven that you were exclusively associating it with Arsenal Football Club and that members of the public will be confused into thinking it’s official Arsenal merchandise.
Just in case, put a large and very visible sign by your stall saying that all goods are unofficial. If anyone asks you whether they are official, say ‘no’ loudly and clearly.