Score Draw Ltd v Finch [2007] EWHC 462 (Ch)

[2007] EWHC 462 (Ch)Case No CH/2006/APP/0644
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 09/03/2007
IN THE MATTER OF THE TRADE MARKS ACT 1994
AND
IN THE MATTER OF UK REGISTRATION NO. 2313965
AND
IN THE MATTER OF APPLICATION NO 82076 FOR A DECLARATION OF INVALIDITY THERETO
Before
MR JUSTICE MANN
Between
SCORE DRAW LIMITEDAppellantALAN JAMES PATRICK FINCHRespondent
MR. J. REED (instructed by Messrs. Serjeants, Leicester) for Appellant.MS. J. REID (instructed by Pannone LLP, Manchester) for Respondent.Hearing Hearing dates: 14 th& 15 th February 2007
Judgment

Introduction

[1]This is an appeal from the decision of a Hearing Officer (Ms Ann Corbett) dated 3 August 2006 in which she determined that the claims of the present appellant, Score Draw Ltd (“Score Draw”) that registration of the mark in suit was invalid should be dismissed. The mark in suit is essentially a badge, the badge being the official emblem of the CBD, which was formerly the governing body for sport in Brazil. Its historical importance is that the badge was used by the Brazilian football team between 1914 and 1971. As such it appeared on the shirts of that team in various important football matches, and was borne on the shirts of important historical football figures such as Pele and Jairzinho. The registered proprietor of the mark is Alan Finch, an English individual, though he has informally licensed its use to TOFFS Ltd (“TOFFS”) – The Old Fashioned Football Shirt Company. The effective date is 23rd October 2002. The specification provides for its application to such things as articles of sports and leisure-wear. The mark is the following:[2]In paragraph 2 of her written decision, the Hearing Officer records that the attack at the time was based on an allegation that the mark in suit was said to be confusingly similar to the current official emblem of the CBF, which is the successor body to the CBD. That point is not pursued before me. She also records that the claim was that the mark was said to be wholly without distinctive character and was descriptive in that it conveys a message displaying an allegiance to the Brazil football team. The distinctiveness point was very much in issue at the hearing before the Hearing Officer. There was also a bad faith point in issue in the proceedings.[3]At the outset of this appeal I resolved a dispute as to whether this appeal should take the form of a rehearing (the appellant’s case) or a review (the respondent’s case). I determined it as being the latter.

The statute and the principal bases for this appeal

[4]Section 3 of the Trade Marks Act 1994 provides:
“3(1) The following shall not be registered – … (b) trade marks which are devoid of any distinctive character, (c) trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services, (d) trade marks which consist exclusively of signs or indications which have become customary in the current language or in the bona fide and the established practices of the trade…”
[5]Score Draw relies on all three of those bars. The same point underlies all three of them for the purposes of its argument. The point is that the evidence shows that the mark does not and never did (at least at any material time) denote trade origin. The mark was originally that of the CBD itself, and used on football kit to denote the Brazilian team. Both Score Draw and Mr Finch wish to use it, and have used it, on replica football clothing (that is to say, football clothing that seeks to reproduce the historic strip worn by Brazil in memorable past tournaments). Score Draw says that the mark has never been used, and at the effective date could not be used, to denote trade origin because it has come to denote something else.[6]Score Draw also relied on section 3 (6):
“(6) A trade mark shall not be registered if or to the extent that the application is made in bad faith.”
[7]The essence of the bad faith argument before me was that the registration was not used as a brand but was used in order to stop others using the mark, and that he did not intend to use the mark in a trade mark manner. It was pointed out that Mr Finch has registered a number of other historic badges as marks. What he was doing in relation to the mark in suit was part of a plan to hoover up various historic badges. The purpose of this activity was said to be to obtain a monopoly on goods bearing the relevant badges (and, for the purposes of the present appeal, the CBD badge), and that that amounted to bad faith for the purposes of section 3(6).

The decision below on these points

[8]The Hearing Officer decided the points before her against Score Draw. She summarised the evidence of the respective parties (I will have to return to the accuracy or fairness of her summary below) and dealt first with section 3(1)(d). At paragraph 30 she observed that she had no reliable evidence of the market in replica sportswear, and concluded that the average consumer of this sort of clothing was “the general public who buy or wear football related clothing primarily as leisure wear.” Score Draw sought to rely on its prior use of an identical or similar mark, and a similar use by third parties, as establishing customary use of the sign. Then in paragraph 33 she considers the evidence of Mr Phillips (managing director of Score Draw) and Mr Finch on prior usage. She concludes that that evidence did not establish that at the material date the mark in suit was used customarily in relation to trade in the clothing.[9]She then considered section 3(1)(b) and (c) together. She summarised the evidence of Mr Finch and found as follows: “36. Numerous examples of advertising and marketing are provided. It’s not clear how much, if any, relates solely to the mark in suit. Much of the advertising takes the form of pictures of the many shirts available through TOFFS. The trademark in suit appears as a badge on the chest of some of the football shirts; that there is no evidence to show the goods to have been offered for sale under the trademark in suit -- and indeed the evidence shows the goods to have been offered and sold under the TOFFS name. I can find no evidence that the mark in suit was used as a trade mark, merely that it was used as a decoration on shirts. However this decision is in relation to an application for invalidity, not for revocation on the grounds of non-use (and in any event the trademark has not yet been registered for five years). On the basis of the evidence as filed, I am unable to find that the trademark had acquired a distinctive character as a result of the use made of it and the proviso cannot apply in this case. I therefore go on to consider whether the mark is distinctive per se."[10]Having recorded an assertion by Mr Phillips that the mark could not be distinctive per se as it was identical to the official emblem used by the CBD and Brazil football team from 1914 to 1971, she sets out passages from Arsenal Football Club Plc v Reed [ 2001] RPC 46 and Tottenham Hotspur plc v O’Connell (BL/0/024/03) which she said made it clear that emblems of football clubs can function both as a badge of origin as well as a focus of allegiance. She then concludes:
“41. In this case, whilst it is not disputed that the mark in suit was the emblem used by the CBD and the Brazil football team, that use ceased more than 30 years ago, in 1971. There is nothing in the evidence which persuades me that the mark in suit is a sign which may serve in trade to designate a characteristic of the goods for which the mark is registered. Neither is there anything which persuades me that this is a sign which should be kept free for others to use. … In my view, the mark is made up of a number of elements as described above, which together form a distinctive whole and is capable of being an indication of origin. The objections under sections 3(1)(b) and (c) of the Act fail.”
[11]Having dealt with those provisions, the Hearing Officer then turned to deal with the bad faith point. Having considered briefly a couple of authorities, she simply concluded that there was no evidence that in applying to register the mark, Mr Finch acted in bad faith. I will set out her actual finding later in this judgment.

This appeal

[12]As I have indicated, the same basic factual point underlies the appeal in relation to exclusions (b) to (d) of section 3(1). It is that the historic use of the badge means that it does not have, and cannot have, a function as in indication of trade origin. Mr Jeremy Reed, for Score Draw, says that the Hearing Officer either ignored, wrongly rejected or misunderstood the evidence about this, and that she went on to draw wrong conclusions as to whether the mark complies with one or more of those three heads. He says that once one understands the evidence correctly, and applies the law properly, one comes to the conclusion that it complies with all three.[13]In order to consider this point it is necessary to consider the evidence in a little more detail. It took the form of written evidence from Mr Phillips and from Mr Finch, with a significant number of documents annexed. (There was also a short witness statement from Snr Guilherme de Mattos Abrantes, who gave some limited confirmatory evidence about the historic use of the badge.) Neither party sought an oral hearing so the evidence was unchallenged and there was no oral development of the written cases submitted by each party.[14]I have indicated the original source of the mark. For those who wish to sell and wear replica clothing, the mark is of some significance because of its history. Mr Finch has licensed the use of the mark to TOFFS. They claim between them to have a large part of the market in replica football shirts. The shirts generally are said to be faithful replicas of football shirts worn by teams from the 1950’s to the 1990’s.[15]So far as the CBD badge is concerned, Mr Phillips (through various partnerships and companies) said that he has been using it on “my replica shirts” since 1994 and it was well-known in the UK before he used it. In his witness statement he explained that he has supplied 6 different replica Brazil shirts, including the one worn by the 1970 World Cup-winning side. He exhibits photographs of the replica shirts as worn by Pele and Jairzinho. The overall effect of this evidence, therefore, is that the mark has been used by a number of people on retro or replica shirts since the mid-90’s. He provided figures for mail order sales for the years 1996 to 2000 – 7,157 Pele and Jairzinho shirts. Wholesale sales of Brazil shirts for the years 1997 to 2002 were in the region of 11,000. He exhibited images of historic team members wearing the shirts sporting the badges and suggests that the badge would have been easily recognisable by members of the public in October 2002 when the application for the mark in suit was made. Score Draw advertises its products in various nationally distributed publications.[16]The Hearing Officer considered there were a number of difficulties with Mr Phillips’ evidence. She set them out in paragraph 33 of the decision. “ There are a number of difficulties with Mr Phillips's evidence. It shows that sales on retro football shirts have been made by him or his companies, and those sales include retro Brazil shirts. … The examples provided by Mr Phillips at MP1-3 show the emblem used on some of the shirts supplied by him or his companies. These examples show the emblem to differ from the mark in suit, the differences including the placing of full stops between the letters appearing in the mark and a marginally different shape to the cross device. But I do not go on to consider whether the emblem is identical under the principles in the SADAS case, [2003] FSR 34, as Mr Phillips says he or his companies have supplied six different shirts yet does not say whether they all bore an emblem and if so whether it was the same emblem. The evidence does not show what shirts bearing what emblem were supplied and by whom at the material date. And despite Mr Phillips's claim that third parties produce a wide range of goods bearing the emblem, he has provided no evidence in support of that claim.”[17]In this appeal nothing seemed to turn on differences in the device, and I can put that on one side. However, the criticism of Mr Phillips’ evidence is misplaced. A proper and fair reading of his evidence demonstrates that he said that all his shirts bore the CBD emblem. In paragraph 5 of his unchallenged witness statement he says:
“I have been using [the mark] since 1994 on my retro Brazil shirts.”
In paragraph 7 he refers to a photograph of “the retro 1970 Brazil ‘home’ shirt as made and supplied by Score Draw without substantial variation since 1994. The official emblem of the CBD is clearly visible on the front left hand side of the shirt.” The emblem is indeed visible. When properly read, this evidence taken in its overall context shows that Mr Phillips did put the badge on all his Brazilian replica shirts since 1994. Furthermore, I do not think that it is right or fair to dismiss his reference to third party sales in the manner in which the Hearing Officer did either. It is true his evidence in this respect was not particularised, but there was no challenge to it, and it is plainly part of the jigsaw picture of usage of the badge. This criticism of his evidence occurred in the context of her determination of the custom point under head (d), but it is also clear that this downplaying of the effect of his evidence underlay the rest of her determination as well.[18]It also seems that the Hearing Officer was critical of Mr Phillips’ evidence of sales insofar as they were based on estimates. Mr Phillips had explained that in some areas precise sales figures were not available so he had provided estimates. In paragraph 11 of her decision the Hearing Officer said:
“In respect of the number of shirts supplied by him or his companies, Mr Phillips explains that he is unable to provide precise figures but instead provides what he calls a good and reliable estimate. He does not explain which version of the shirts the sales relate to, nor, more importantly, does he explain how he arrived at these figures and therefore I do not intend to reproduce them here.”
It seems from what she says that she was not only declining to reproduce the figures, she was also giving them little weight. Looking at the quality of Mr Phillips’ evidence in this respect, that, too, seems to me to be an unfair approach to the evidence.[19]These are significant errors. I think that they demonstrated that the Hearing Officer did not give proper weight to the evidence of usage, and therefore as to its effect. It is necessary and right for me to correct the error, and its effect, in this appeal. It entitles me to consider the evidence fully and reconsider the relevant points myself.[20]For his part Mr Finch gave evidence of his sales (approximately 16,000 Brazil shirts from 1998 to 2002) and pointed out how his products were sold – mail order, retail outlets and (more recently) the internet. He gave evidence of his advertising, and claims to have controlled the mail order shirt market in 1998. He considers that TOFFS’ reputation is closely connected with historic Brazilian football shirts. He gives figures for the turnover of Brazil replica shirts from 1998 to 2005. Leaving aside 2002 (a World Cup year) when over 10,000 were sold, the figures average at around the 2,000 mark per annum. He says these high sales demonstrate the substantial reputation and goodwill which it has established in such shirts, and says that his sales figures show that since the majority of the shirts are sold via TOFFS itself (as opposed to via other outlets) that indicates that customers associate the Brazil shirts with TOFFS.[21]The picture derived from all this evidence is one in which both TOFFS and Score Draw (and some third parties) have used the mark extensively on replica football kit since 1994/1995, and probably before. Both present the kit as being a replica of what the Brazilian team has worn over a number of preceding years. I have seen advertising material prepared by each of the parties. The advertising emphasises the accurate replica nature of the product (not confined to Brazil kit), and (not surprisingly) each set of advertising emphasises the name of the advertiser (Score Draw and TOFFS). TOFFS in particular emphasises its name (which itself is apparently a registered trademark). The Hearing Officer found as much in paragraph 36 of the decision -- and see above. It is obvious that the purpose of the badge on the kit, as that kit was sold in the relevant period, was to designate its being associated with the Brazilian football team. It also seems clear enough on the evidence that members of the relevant public (as defined by the Hearing Officer) would recognise it as having that purpose. They (and in particular those likely to be looking to associate themselves with Brazil) are likely to be well-enough educated in the ways of football and its insignia to realise that.

Distinctiveness

[22]I turn, therefore, to consider the effect of that evidence, and the other findings of the Hearing Officer, on the relevant alleged heads of invalidity. I shall start with head (b) – distinctiveness. In doing so I bear in mind what was said by Laddie J in the Arsenal case at para 68 (and cited by the Hearing Officer): “I do not see any reason why the use of these signs [including the word "Arsenal", itself a football club] in a trademark sense should not be capable of being distinctive. When used, for example, on swing tickets and neck labels, they do what trade marks are supposed to do, namely act as an indication of trade origin and would be recognized as such. There is no evidence before me which demonstrates that when so used that they are not distinctive of goods made for or under licence of AFC. The fact that the signs can be used in other, non-trademark, ways does not automatically render them non-distinctive."[23]Two points emerge from this which are relevant to me. First, the insignia or name of a football club can denote both trade origin and allegiance to the club. Second, it is of the essence of a trademark that it fulfils the former function.[24]I start with exclusion (b). As was said in Linde AG v Deutches Patent und Markenamt [2003] RPC 45 at paragraphs 40-41 and 47: “40. For a mark to possess a distinctive character within the meaning of that provision it must serve to identify the product in respect of which registration is applied for as originating from a particular undertaking, and thus to distinguish that product from products of other undertakings … “41. In addition, a trademark's distinctiveness must be assessed by reference to, first, the goods or services in respect of which registration is sought and, second, the perception of the relevant persons, namely the consumers of the goods or services. According to the Court's case-law, that means the presumed expectations of an average consumer of the category of goods or services in question, who is reasonably well-informed and reasonably observant and circumspect… “47. As para [40] of this judgment makes clear, distinctive character means, for all trade marks, that the mark must be capable of identifying the product as originating from a particular undertaking, and thus distinguishing it from those of other undertakings."[25]The Hearing Officer determined that the mark in suit was capable of being an indication of origin. Mr Reed submitted that the facts were such that it can no longer do so. He accepted that for a time after its first use the mark was capable of denoting trade origin, and therefore of being distinctive, as the mark in the Arsenal case did. However, there came a time, once the badge was no longer used by the Brazilian team, when it acquired such significance as a badge connoting the former Brazilian football team that it could no longer be taken to denote the trade origin of anyone, and particularly of one like Mr Finch who sought to use it on replica football kit. This was particularly so when it had been used by many traders in such items.[26]I agree that the principle underlying Mr Reed’s argument is right. A mark which might once have been capable of denoting trade origin can lose its capacity to denote it as a result of use by third parties, and indeed from other factors. As the CFI observed in Alcon Ltd v OHIM [2004] ETMR 6 at para 48: “48. A sign which was at one time capable of acting as a trademark may, by reason of the use thereof by third parties as a customary designation of a product, lose the capacity to perform the essential function of a trademark, and in particular that of identifying the origin of the goods or services, thus enabling the consumer who acquired them to repeat the experience, if it proves to be positive, or to avoid it, if it proves to be negative, on the occasion of a subsequent acquisition."[27]There is a helpful analogy with “famous name” cases. Some names are so inherently famous for reasons other than those associated with particular goods and services that it would be difficult or impossible to make them connote a particular trade origin. The name of the late Princess Diana is an example – see Executrices of the Estate of Diana, Princess of Wales’ Application [2001] ETMR 254. That is a decision of a Hearing Officer, but it illustrates the point. At paragraph 55 he said: “55. In the light of the use made of the Princess' name whilst she was alive -- which could not have been further from a trade mark for products -- I do not believe that, at the date of the application, the average consumer who was reasonably well-informed and circumspect, would have expected all commemorative articles bearing the Princess' name to be commercialised under the control of a single undertaking."[28]It is therefore necessary to consider whether that sort of factor has operated in the manner suggested by Mr Reed for Score Draw, so that the use of the badge has become so associated with the Brazilian football team (or former teams) that the mark is not capable of being rendered distinctive of the person putting on the market a shirt (or cap, or other item of sports or leisure wear) bearing it.[29]Miss Jacqueline Reid, who appeared for Mr Finch, submitted that there was no finding that that had occurred, no indication that the Hearing Officer got the law or the test wrong, and no evidence which supports the case. The Hearing Officer was right to say that the badge was capable of being distinctive of trade origin. She says that the alleged fact that the relevant public would recognise the badge as being that of the (old) Brazilian team is assertion by Score Draw, not evidence. This emblem did not have the same notoriety or fame as Princess Diana. She also relied on the statement in Kerly’s Law of Trade Marks and Trade Names, 14th Edition at paragraph 8-155 that: “the mark is assessed absent use”, so only a “swamping” (her word) use would be relevant to the point. There was no evidence of such use.[30]The Hearing Officer did not quite approach the matter in this way, which is probably in part attributable to the fact that the submissions before her did not really articulate the matter in the way in which Mr Reed argued it before me. However, I have seen the written submissions placed before her, and it is clear enough from those submissions that the distinctiveness point was placed squarely before her on the basis that a badge so closely associated with the Brazilian football club could not be capable of distinguishing trade origin. She expressed herself shortly on the point – I have set out the relevant parts of paragraph 41 above.[31]In my view the Hearing Officer did not consider this point fully, and in particular did not give proper consideration or effect to the totality of the evidence. This may be in part attributable to the way in the matter was put below, and in part attributable to her apparent playing down of some of the evidence of Mr Phillips. Nevertheless, having considered the evidence (and since there was no cross-examination I am in as good a position as the Hearing Officer was in this respect) it seems to me that Mr Reed’s point is a good one. The evidence shows that the CBD badge has been used to indicate team loyalty or affiliation. Until 1971 its purpose was to function as the emblem of the CBD, and the Brazilian football team. Since then, or at least since the mid-1990’s, it has plainly been used to denote the historical football teams. Its use on replica football kit, by Score Draw, by TOFFS and by others (including the Brazilian sporting authorities in a commemorative match in Paris in 2004) clearly demonstrates that. TOFFS’ own advertising shows that even TOFFS uses it for that purpose, as the Hearing Officer found in paragraph 36 of her decision. Its 1995/96 catalogue shows a wide range of shirts (of which Brazil’s historic shirts are only a small proportion), all sporting national club or federation badges. The only purpose of the badges is to give authenticity to the shirts. The advertising copy emphasises this. Under the banner “TOFFS” (with a stylised O made up of the company’s own emblem in a circle of the words for which TOFFS is an acronym) there are the words “100% nostalgia guaranteed”. That can best be achieved by reproducing the past as authentically as possible, including its badges. That is the purpose of the badges appearing on the range of shirts appearing thereafter. Below that the following words appear:
“The philosophy between the formation of TOFFS … was, quite simply, to re-create classic cotton football shirts of a high quality…”
. Again, therefore, the purpose of badging is to re-create the past. The only thing on the brochure that is, or smacks of being, a mark of origin is TOFFS’ own mark. The same is true of later advertising.[32]I accept, of course, that the mere fact that the badge has not been used as a trade mark hitherto does not mean that it cannot acquire that use. However, the position in the case of the CBD badge is different. Its use has plainly not been that, and its actual use has caused it to acquire a familiarity which means it will inevitably be associated, by the relevant public, with the historic Brazilian football teams. That, after all, is how TOFFS (and Score Draw) manage to sell shirts with it on. I find that on the evidence that use has robbed the badge of its power to be distinctive of trade origin. The analogy with famous names case is helpful, though not determinative. The attempts by Mr Finch in his witness statement to elevate the badge to one which has come to denominate TOFFS do not work. He may well have demonstrated the strength of the reputation of the company, and the TOFFS mark, but he has not demonstrated that the CBD badge is capable of designating anything other than the Brazilian team, in the light of its history. I find the latter association clearly demonstrated to an extent that the badge can no longer be used as a mark of trade origin. The Hearing Officer erred in failing so to find on the evidence before her. Her error is of such a quality that it is open to me to correct it on this appeal by way of review.[33]The Arsenal and Tottenham cases are distinguishable on their facts. They demonstrate that the use of a mark to indicate club affiliation does not mean that the mark cannot have a trade mark use. On the facts of those cases it fulfilled both functions. By the same token the mere fact that the badge in the present case is used to denote an affiliation or allegiance to the Brazilian team does not mean that the mark cannot have trade mark use. What sets the present case apart is that there has been use of the badge for a period before anyone apparently contemplated using it in a trade mark manner, and the purpose of that use is so strong in the mind of the relevant public that it now prevents it being used as a mark of trade origin.[34]That means that the mark lacks distinctiveness for the purposes of section 3(1)(b), and is invalid accordingly.[35]That means that strictly I do not have to deal with exclusions (c) and (d), or the bad faith point, but I heard argument on them and will deal with them.

Characteristics

[36]Mr Reed’s argument was that the badge is descriptive of a relevant characteristic of the goods to which it was applied, that characteristic being the designation of the team to which it refers (historic Brazilian teams). The Hearing Officer determined that:
“There is nothing in the evidence which persuades me that the mark in suit is a sign which may serve in trade to designate a characteristic of the goods for which the mark is registered.”
Beyond that there is no reasoning. Paragraph 35 of her decision recites that Mr Finch’s evidence of sales has its flaws, as did Mr Phillips’, because it did not explain how he reached a given figure for sales in 1998. It seems likely to me that the Hearing Officer was unjustifiably reluctant to accept estimated sales figures and that to some extent that affected her judgment on the question of the effect and extent of prior use on this question as much as head (b), as I have indicated above. On this basis I consider that she erred and it is open to me to reconsider her decision.[37]As the CFI observed in Linde at paragraph 74: “The public interest underlying Article 3(1)(c) of the Directive implies that, subject to Article 3(3), any trade mark which consists exclusively of a sign or indication which may serve to designate the characteristics of goods or a service within the meaning of that provision must be freely available to all and not be registrable."[38]To a large extent that does not advance a consideration of the matter, because it is repeating the provisions of legislative provision. Article 3 of the Directive contains comparable wording to that contained in section 3 of the English Act. However, it does emphasise the public interest in the matter, which is helpful.[39]The words “other characteristics of goods or services” are obviously more general than the more specific words which precede it. They demonstrate that the preceding words are not the only way in which the provisions of the subsection can be fulfilled. It is therefore open to Score Draw to seek to demonstrate that the badge operates so as to be descriptive of some characteristic of goods other than those enumerated in the section. It seeks to do so by saying that the badge identifies the Brazilian football team nature of the goods to which it is applied. Mr Reed found it hard to articulate the precise characteristic involved, but it was of that general nature. By way of a parallel, Mr Reed relied on Linkin Park LLC’s Application, Case O-035-05 [2006] ETMR 74.[40]In that case the appointed person (Mr Richard Arnold QC) had to consider whether the name of a pop group (Linkin Park) was descriptive under head (c) when applied to posters and books. He held that the term “other characteristics” did not have to be construed ejusdem generis with the other characteristics referred to, and in paragraph 44 said:
“I see no reason why subject matter should not qualify [as a characteristic].”
He said that in order to deal with a submission that subject matter should indeed not qualify. He was implicitly accepting the suggestion that the expression “Linkin Park” in its context did indeed amount to a description of subject matter. He observed in paragraph 42:
“By the application date the Mark was no longer meaningless, but on the contrary had acquired a well-established meaning of denoting the Group.”
[41]I find this analysis, and the parallel with the present case, helpful. The mark in this case is not a mark which, in its actual terms, describes subject matter in the same way as the words “Linkin Park” would have described subject matter in the Linkin Park case by making those very words descriptive of the characteristics of the goods. However, the effect of the badge, in the eyes of the relevant public is very similar. The CBD badge would, on the evidence, be recognised by them as denoting the clothing as Brazilian team clothing because the badge had been part of that clothing for many years, had in particular been part of the clothing of more modern successful teams, and since the mid-90’s had been sold as a necessary and integral part of replica kit. It does not say “Brazilian National Club” in terms, but it would mean that to the relevant public even if (as seems likely) they do not know the Portuguese words for which the initials stand. I consider that in the circumstances the badge is descriptive of a characteristic of the clothing which bears it in the sense that it connotes that the clothing is, or has an association with, the historic Brazilian national team.[42]The Hearing Officer did not so find. In paragraph 36 she found it had been used as “decoration”. That seems to me to be a finding that is contrary to the evidence. It was not mere decoration – it had a greater significance than that, and I consider that she misread the evidence in so determining. Her conclusion on exclusion (c) is part of the conclusions that she reached in paragraph 41 (set out above). It is not reasoned, but is based on an assessment of the evidence. So far as that involves an assessment that the badge is “merely … decoration”, that assessment is flawed. So far as it is an assessment of the rest of the evidence then it is entitled to the usual respect afforded to decisions of the hearing officers, but it seems to me to be contrary to the thrust of the evidence, and may well be based in part on not giving sufficient weight to the sales figures of Mr Phillips (and indeed Mr Finch) – see above. Her decision is therefore one which I consider it is right and proper to substitute with my own, and I do so. I find that the provisions of this exclusion are fulfilled.

Custom

[43]Next, there is the case of Score Draw that the use of mark had become a sign or indication that has become customary in the bona fide and established practices of the trade, within the meaning of section 3(1)(d).[44]The Hearing Officer’s determination in relation to this is in paragraph 33 of her decision. Having referred to Mr Phillips’ evidence of his shirt sales (see above), and having also summarised (shortly) other evidence, she concludes:
“Taking all matters into account, the applicant has not established that at the material date, the trade mark in suit was used customarily in relation to the trade in clothing. The objection under section 3(1)(d) fails.”
[45]Her finding in this respect is technically flawed for the reasons given above. She misunderstands Mr Phillips’ evidence and therefore does not give full weight to his sales of shirts with the badge on, and she does not give proper weight to the evidence of sales by third parties. Accordingly, she does not consider properly the evidence said to support this ground of invalidity. Again, therefore, on this review it is open to me to consider the point.[46]On this point I do not consider that the Hearing Officer came to the wrong conclusion. The use made by Score Draw, TOFFS and others on replica kit does not seem to me to amount to a customary use in the trade. One first has to define the trade. That seems to me, in the present case, to be the trade in sportswear, or perhaps the trade in replica football kit. Then one has to ask why the badge is used in that trade. If it is customary, then the requirements of head (d) may be fulfilled. But the use of the CBD badge in this trade is not there through custom. It is there through necessity – it has to be used to achieve the fullest degree of authenticity. It would be a misuse of the word “customary” to describe its use in that way. It is no more customary than it is customary to use yellow and green (Brazil’s primary shirt colours) on a replica shirt. Those colours are not used because of a trade usage; they are used because if you don’t use them you will not sell any replica shirts of that kind, because the shirt will not have the right quality as a replica. By the same token, the badge is not used because it is, or has become, the custom to use it. It is used because it is necessary in order to complete the perceived link between the clothing and the national team. The fact that it is always done does not make it customary (or habitual, to use a possible synonym). Its use is not attributable to custom; it is attributable to commercial necessity.

Bad faith

[47]The last attack on this mark is based on the bad faith exclusion in section 3(6). Put shortly, Mr Reed’s point is that Mr Finch did not intend, and does not intend, to use the mark in a bona fide trade mark sense or manner. He seeks to use it, and other historic marks that he has registered as trade marks, to denote the teams represented by the marks, and not as a mark of origin at all. He has registered the badge in order to stop others using it. It is said that this is not bona fide use, and that section 3(6) therefore applies. I was shown a number of cases as to what is meant by bad faith, including some well-known ones in the dishonesty area of constructive trusts.[48]The Hearing Officer introduces this point in paragraph 42 of her decision. She says “42. The applicant contends that Mr Finch applied to register the mark when he was highly likely to have known the origin of it and did this in the full and certain knowledge that he was not legally entitled to do so. He claims it is part of a deliberate policy to register historic badges and emblems of other football clubs."[49]Her conclusions appear shortly in paragraph 46 of her decision. Having set out extracts from certain authorities she concludes, shortly, that: “There is no evidence that in applying to register the mark, the registered proprietor acted in bad faith. Although it is not disputed that the mark in suit is identical to that formerly used by the CBD and the Brazil football team, that use ceased more than 30 years ago. There is no evidence it was only used in the UK. The mark was there for the taking. Mr Finch took it. The objection under section 3(6) fails."[50]Miss Reid takes the point that the case run on this appeal was not that run at hearing below. The nature of the case run below is set out in paragraph 2.7 of the submissions made on behalf of Score Draw: “ 2.7 We submit that Mr Finch applied to register the Trade Mark in bad faith contrary to sections 47(1) and 3(6) of the Trade Marks Act 1994. The position of the Applicant is clearly set out in paragraph 2.7 of the Statement of Case and further evidence relating to other British Trade Mark Applications filed by Mr Finch can be found from paragraphs 31 and 32 and Exhibit MP 15 of the Witness Statement of Mr Phillips. We do not intend to put forward further arguments here."[51]The two paragraphs of Mr Phillips' witness statement give particulars of applications or registrations filed by Mr Finch or TOFFS in relation to various historic badges. They do not amplify the reasons for which it is said that the application is made in bad faith. Paragraph 2.7 of Score Draw's Statement of Case alleged that: "Mr Finch is highly likely to have known the origin of the sign … and that he applied to register the sign in the full and certain knowledge that he was not legally entitled to do so. This is not an isolated incident but simply part of a deliberate strategy on the part of Mr Finch to register the historic badges and official emblems of other football clubs … as his own exclusive property.” Thus the point apparently being made in the Statement of Case is that Mr Finch knew that he was not entitled to do what he was doing. That presupposes that he was not entitled to do it. If he is not entitled to do it then the allegation of knowledge and bad faith does nothing to further the application other than a raising of the temperature. If his knowledge is important, and bearing in mind that he did not accept this allegation, I do not see how that point could have been successfully resolved without cross-examination and a testing of Mr Finch's evidence. Since there was no application to cross-examine him, the Hearing Officer was entitled not to make findings against Mr Finch in that respect.[52]However, the real answer to the appeal on this point is that the case now advanced is different from, and was not investigated on, the hearing below. Since this is allegation of bad faith, I do not think that Mr Reed should be allowed to change his case in that way. There may be much to be said for the assertion that there was no intention on the part of Mr Finch to use the badge or badges he has registered in a trade mark way. It may be said that if the badge was ever successfully used to connote him as the trade origin, and not the Brazilian team, it would have lost its real purpose, so that he could not really have intended that, but that requires some investigation of the facts which it is not appropriate to conduct on this appeal. Whether such a state of affairs would amount to bad faith within section 3(6) is a point which can be argued as and when it arises. It does not arise in this case because it was not part of the case advanced below and, as I have said, it is not appropriate for Mr Reed to advance it on this appeal. In any event, in the light of the conclusions that I have reached above on other grounds, it is not necessary for me to rule further on this one.

Conclusion

[53]Accordingly, I shall allow this appeal and declare that the trade mark in suit is invalid.