Liverpool Football Club Dispute

Charlotte Duly, Boult Wade Tennant

This article first appeared in the May 2009 issue of Trademark World. Click here to read this article in PDF format.

The Liverpool FC Dispute
The Liver Bird is a mythical creature which according to legend could be seen flying along the River Mersey and was adopted as the City of Liverpool's symbol since at least the 1350s.

Liverpool FC (LFC) filed a UK trade mark application for the Liver Bird covering a range of goods in Classes 6, 14, 16, 18, 21 and 25. The Liver Bird forms part of the LFC crest which is the subject of separate trade mark registrations.

The LFC application became the subject of a dispute with Liverpool Council who wanted the symbol to remain available for all. The Council had no objection to LFC registering the Liver Bird as part of the LFC crest; it was the application for the Liver Bird on its own that they took issue with due to their use, and use by other third parties, which may have infringed the trade mark should it have achieved registration. Following the threat of opposition the application was withdrawn.

LFC claimed they were only trying to protect their specific version of the Liver Bird in order to stop counterfeit merchandise and stem the substantial amount of money lost each year to counterfeiters rather than to stop use by third parties such as the Council who may have a genuine claim to the historic symbol. The registration would have been useful to prevent the production and sale of imitation clothing or other goods that replicate part of the LFC emblem, rather than copying the whole logo. Such goods, for example a red t-shirt carrying the Liver Bird but not reproducing the entire emblem, could still suggest an association with LFC and cause damage.

The Counterfeiting Problem
A counterfeit item is an imitation or replica of a genuine product that is usually made with the intention of deceiving the purchaser into thinking the item is genuine. However, the low price of such products usually means that the purchaser has some idea that the goods are not genuine although this is not always the case. There is still damage done to the value of the original through the existence of the cheaper version. Counterfeit items by their very nature infringe third party rights such as trade mark registrations or copyright.

Counterfeiting is a serious problem. Although the figures available are not accurate, it is known that millions of pounds each year are spent buying replica sports kits. Estimates of the number of counterfeit football shirts on sale in the UK range from 1 in 30 to 9 in 10. The International Chamber of Commerce (ICC) released a paper in 2004, prepared by The Commission on Intellectual Property, that gave an estimate of the annual value of pirated and counterfeit goods as EUR 500 billion. It is thought that this figure continues to rise. This makes for worrying reading for rights holders and there is evidence to suggest that proceeds from counterfeiting fund other forms of crime.

The recent case of L'Oreal SA v Bellure NV (& others) ([2008] RPC 9) highlighted the practice of creating smell-a-like perfumes. Although not counterfeiting in the traditional sense, this case shows how third parties may seek to hijack a registered trade mark in order to promote their own goods. According to The UK based Anti-Counterfeiting Group even roses can be faked. Last year EU Customs were set the task of checking boxes of commercially grown cut roses from countries such as South America for goods that either infringed trade mark registrations or plant variety rights. The main source of counterfeit goods is China and although cigarettes made up the majority of seized goods in 2006, clothing remains a popular item for criminals to imitate.

The Value of a Trade Mark Registration
When it comes to protecting against the import and sale of counterfeits the value of a Registerd Trade Mark is huge.. Council Regulation (EC) No 1383/2003 allows the holder of a trade mark, design registration or copyright (as well as certain other rights) to lodge an application with HM Revenue and Customs (HMRC) to prevent both the entry into the EC or the export/re-export into the EC of counterfeit and infringing goods. If an application has not been made the same Regulation allows HMRC to contact a rights holder if they come across suspected infringing goods during the course of their checks. In such a case the goods can be detained by HMRC and the rights holder will be required to lodge an application within three working days, a deadline which cannot be extended.In the UK, Trading Standards are also active in the policing and enforcement of trade marks and copyright by taking action against the sale of infringing items and prosecuting offenders resulting in criminal sanctions. It is therefore important for businesses such as LFC to have adequate protection in place to allow action to be taken against the sale and importation of counterfeit merchandise.

Copyright
Copyright is an alternative consideration as a form of intellectual property that can be used to protect logos. Club emblems are likely to attract copyright protection as long as they meet the minimum criteria, namely that they are a work within the meaning of the Copyright, Designs and Patents Act 1988, are recorded or fixed in some way and are not a copy of a previous work. If these criteria are met then the emblem will automatically be protected on creation by copyright, without the need to apply for protection, for a duration of 70 years following the death of the author/creator. Unlike a trade mark registration, copyright applies to any goods or services and is not subject to use requirements. However, copyright does have it's drawbacks as it only protects against copying which, although useful when an emblem is copied, may not assist in situations where goods are being sold that contain only an element of the logo yet suggest a connection with a Club. There must be substantial taking of the original copyright work.

Copyright can also be more costly and difficult to enforce than a trade mark registration and only lasts for a finite amount of time whereas a trade mark can be renewed indefinitely subject to the payment of renewal fees. In order to create a new copyright in their logos some clubs have been known to amend their design. An example of this is Arsenal who reversed the cannon on their emblem and updated the design in order to create a new copyright protected work which is also the subject of trade mark registrations in order to maximise the protection for their very important symbol.

The Use Issue
A trade mark registration is a valuable tool but use of the mark the subject of the registration must also be a consideration. In the case of the UK, EU and other territories, there are use requirements. For example, in the UK and EU the mark the subject of a trade mark registration must be put to genuine use for the goods and services covered by it otherwise the registration will become vulnerable to revocation for non-use (for the goods/services not used on) once the mark has been on the Register for over five years. This raises an interesting point in the case of businesses who, due to local objections, may not be able to protect the actual emblem they use because a central part of it is non-distinctive. What if LFC only intended to use their version of the Liver Bird that was the subject of the dispute but could not protect it by way of registration? They may well decide to register a composite mark that contains the Liver Bird with other elements in order to have some ammunition against counterfeiters as the infringement provisions extend to similar as well as identical marks. However, there is the possibility that their use of the Liver Bird on its own would not be sufficient to support the composite registration. If registrations are helpful to defend against counterfeiters then such combination marks may be required but vulnerability to revocation may become an issue and needs consideration when determining the requirements of a trade mark portfolio.

The way forward
It is clear that rights holders must take action in order to defend their businesses from counterfeiting activities. The importance of getting protection, including trade mark registrations, cannot be under estimated. However, businesses such as sports clubs need to think carefully before applying for marks that include emblems from their home city. These may be protectable as part of a composite trade mark but the protection of individual elements can be an issue if they are not distinctive due to existing third party use or otherwise. Although LFC have registrations that contain the Liver Bird the problem was that they tried to protect the Liver Bird on its own. Clubs need to carefully chose the logos they use and protect in order to ensure that they are adequately protected to fight counterfeiters without treading on the toes of those who have not done any wrong and who have legitimate reasons to use certain symbols.