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the team's stadium. Those items bear the 8. As for the second action, the High Court signs which the club registered as trade rejected Arsenal's argument that the use by marks. Mr Reed of the indications and symbols registered as trade marks was perceived by consumers as a use indicating the origin of the goods (badge of origin), that is, the use was a 'trade mark use'.

6. In particular, he offers for sale scarves prominently marked with the word 'Ar- senal'. They are products which Mr Reed advertises as unofficial in the stalls from which he carries on business, with a large 9. According to the High Court, the signs notice with the following text: and logos affixed to the goods offered for sale by the defendant are perceived by that public as badges of support, loyalty or affiliation.

'The word or logo(s) on the goods offered for sale, are used solely to adorn the product and does not imply or indicate any affiliation or relationship with the 10. With that preamble, the High Court manufacturers or distributors of any other refers to the Court of Justice the following product, only goods with official Arsenal merchandise tags are official Arsenal mer- questions: chandise.'

'1. Where a trade mark is validly regis- 7. Arsenal brought two actions against Mr tered and Reed. One was for 'passing off' and the other for infringement of trade mark; both actions were heard and determined in a single procedure. The first was dismissed on the ground that, according to the High Court, the claimant club had not been able to show actual confusion on the part of (a) a third party uses in the course of consumers and, in particular, had not been trade a sign identical with that able to show that the unofficial products trade mark in relation to goods sold by the defendant were regarded by the which are identical with those for public as coming from Arsenal or marketed whom the trademark is registered; with its authorisation. and

11. Written observations were submitted, 'A trade mark may consist of any sign within the period prescribed for the pur- capable of being represented graphically, pose by Article 20 of the EC Statute of the Court of Justice, by Arsenal, Mr Reed, the Commission and by the Surveillance Auth- 3 — Paragraph 3 of the Opinion which I delivered on 6 No- vember 2001 in Case C-273/00 Sieckmaim, in which the ority of the European Free Trade Associ- judgment has not yet been delivered. See the first, third, fourth and fifth recitals in the preamble to the First ation. Directive.

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particularly words, including personal or services (Article 5(1)(a)). It covers imi- names, designs, letters, numerals, the shape tation and passing-off. Subparagraph (a) of goods or of their packaging, provided offers protection against copying, as the that such signs are capable of distinguishing Surveillance Authority of the European the goods or services of one undertaking Free Trade Association has observed in its from those of other undertakings.' written observations. The protection is absolute and unconditional,5 with no limi- tations other than those resulting from Article 6 of the Directive.

15. Article 5, entitled 'Rights conferred by a trade mark', lays down the various degrees of legal protection which the Direc- tive requires to be afforded to proprietors of that kind of intellectual property.4

18. For its part, Article 5(l)(b) envisages three situations: identical signs and similar goods and services; conversely, similar indications and identical goods or services; and, finally, similar signs for similar goods A. Article 5(1) and services. In those cases, protection depends on whether there exists a likeli- hood of confusion, which includes the likelihood of association.6

21. The Directive is aimed at partial har- monisation. It restricts its operation to trade marks acquired by registration.13 It is, to a certain extent, a de minimis provision14 which does not prevent, in certain situations, the Member States from 20. The decisive factor is that the propri- granting more extensive protection than etor is entitled to prevent a third party from that afforded by the Community provision. using the trade mark in relation to the same or different goods and services, or from using signs and indications which, looked at as a whole, 12 might lead to confusion on

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sign, even in respect of unrelated goods or preserve goodwill,18 by protecting the sign services. Such protection is specific, supple- against unfair competition.19 mentary and optional national protec- tion. 16

C. Articles 6 and 7

23. On the other hand, the Directive does not affect provisions in any Member State which, on the basis of other fields of 25. These two provisions are the other side national law, afford protection against the of the coin to Article 5, and their purpose is use of a sign registered as a trade mark to reconcile the rights of the registered other than for the purpose of distinguishing proprietor with the general interest, which the goods and services it covers. That requires free movement of goods and free- provision, announced in the sixth recital, 17 dom to provide services in the common is contained in Article 5(5). market. 20

26. Both articles lay down the limits of the powers of the registered proprietor and set out the circumstances in which he may not prohibit third parties from using the trade 24. In both cases, protection is subject to mark, either because they are individual the condition that the infringer is seeking to signs or for specific uses (Article 6), or gain unfair advantage of the reputation of because for reasons of commercial policy it the trade mark or that the distinctive is advisable to avoid compartmentalising character or repute of the mark may be the intra-Community market by erecting damaged. The aim is to safeguard the right barriers to the freedoms which I have of the proprietor of the distinctive sign to mentioned in the foregoing paragraph (Article 7).

IV — Analysis of the questions referred

'A person infringes a registered trade mark 29. The High Court has made this refer- if he uses in the course of trade a sign which ence to the Court of Justice in the course of is identical with the trade mark in relation proceedings between the proprietor of a to goods or services which are identical to trade mark and a third party who markets those for which it is registered. the same class of products as that in respect of which the mark was registered and which bear that sign, although the third party makes it clear that the sign is not intended to express any affiliation to or relationship with the proprietor.

A person infringes a registered trade mark if he uses in the course of trade a sign where because — 30. The questions referred by the High Court therefore concern the interpretation of Article 5(1)(a) of the Directive. How- ever, the answers which this Court provides must be framed on the basis of a full analysis of that provision together with those to which it is related.

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1. Question 1 even where there is no likelihood of con- fusion, if that type of mark is not to be granted less protection where the goods are similar than where they bear no similarity at all. 21 A. Systematic interpretation of Articles 5, 6 and 7 of the Directive

21—However, Advocate General Jacobs, in his Opinion in Davidoff, cited above, argues that well-known marks enjoy greater protection than the rest under Community 32. From the analysis which I have carried law. In his view, that type of distinctive sign may only enjoy the additional and optional protection authorised by out above I find, as a first corollary, that, Article 5(2) of the Directive where the goods or services in on the positive side, the Directive aims question are not similar. If, on the other hand, they are similar, the national court must examine, in the light of the (Article 5(1)) to achieve harmonisation of Court's case-law concerning the protection enjoyedby marks with a highly distinctive character, whether there the rights of trade mark proprietors con- exists a likelihood of confusion in accordance with sisting in preventing the use of identical or Articles 4(1) or 5(1) of the Directive (paragraph 68). Despite his most thoroughly reasoned arguments, my similar signs to distinguish identical or learned colleague nevertheless acknowledges that 'there may be an area in which a trade mark having a reputation similar goods, by requiring, in cases of is not protected against the use of identical or similar marks or signs' (paragraph 51), although he then immedi- similarity, that there be a likelihood of ately states that it is possible that '(that area) is likely to be confusion. As the Surveillance Authority of insignificant in practice' and that the Court's case-law on trade marks having a highly distinctive character may limit the European Free Trade Association has its extent still further. An interpretation which leads to an avowedly unreasonable result cannot be maintained, under pointed out, protection against copying and the pretext that it is of no practical relevance or that it may confusion is a matter for Community law. be tempered by the case-law, when there is an alternative interpretative criterion to hand. Moreover, I believe that Mr Jacob's arguments are based on a mistaken premiss. The stronger the distinctive char- acter of a sign, the less will be the likelihood of confusion. Registration of the name 'Coco-Colo' for refreshments, and subsequent commercialisation of the goods, does not give rise to any confusion with the drinks distributed by Coca-Cola', given the distinctiveness, penetration and reputation of that trade mark. By following the route of 'likelihood of confusion', well-known trade marks may be left without protection against those using similar indi- 33. Also falling within the field of Com- cations in order to distinguish identical or similar goods. munity law is the non-discretionary pro- 22 — That interpretation is implicit in the case-law of the Court which, in paragraph 20 of the judgment in Sabel, cited tection of trade marks of repute above, states that Article 5(5) permits 'the proprietor of a trade mark which has a reputation to prohibit the use (Article 5(2)) against the use by third without due cause of signs identical with or similar to his parties to distinguish identical or similar mark and does not require proof of likelihood of confusion, even where there is no similarity between the goods. Such protection must be accorded goods in question'.

24 — Below I shall analyse the scope of the term 'distinguish' which appears in Article 5(5) of the Directive. 37. The factual situation in question in the 25 — Article 5(3) sets out, purely for illustrative purposes, various ways of using a trade mark which a proprietor may main proceedings is that of the use of the prohibit third parties from doing: The following, inter alia, may be prohibited under iaragraphs 1 and 2: f a) affixing the sign to the goods or to the packaging thereof; 23 — 'The trade mark shall not entitle the proprietor to prohibit (b) offering the goods, or putting them on the market or a third party from using, in the course of trade, an earlier stocking them for these purposes under that sign, or right which only applies in a particular locality if that right offering or supplying services thereunder; is recognised by the laws of the Member State in question (c) importing or exporting the goods under the sign; and within the limits of the territory in which it is (d) using the sign on business papers and in advertising. recognised'.

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States to extend protection to those situ- B. Interpretation of the imprecise legal ations in which the goods or services are concepts of 'use of the trade mark to different. Finally, Article 5(5) excludes distinguish' and 'use as a trade mark' from the scope of the Directive protection against use of the trade mark for purposes other than distinguishing goods and ser- vices. In short, conduct consisting in the use of a sign for purposes other than distin- guishing a product or a service from other products or services is not covered by Article 5(1). 41. To state that a registered proprietor may prevent a third party from using 'the trade mark as a trade mark' is as good as saying nothing at all. It is therefore necess- ary to give substance to that indeterminate legal concept and, in doing so, to keep the functions of a trade mark very much in mind. 28

28 — In Holterhoff cited above, the Court refrained from 26 — Advocate General Jacobs expressed himself to similar providing a definition of the concept of use of a trade effect in the Opinion he delivered on 20 September 2001 in mark within the meaning of Article 5(1)(a) and (b) of the Case C-2/00 Höherhoff [2002] ECR 4187, {see in par- Directive (see, in particular, paragraph 17). ticular paragraph 37 of the Opinion). 29 — See paragraphs 35 et seq. of the Opinion which I delivered 27 — That is, moreover, the view taken by the Court which, in in Case C-517/99 Merz Sc Krell [2001] ECR I-6959; and paragraph 38 of the judgment in BMW, cited above, stated paragraphs 16 et seq. of my Opinion in Siechnann, cited that the scope of application of Article 5(1) and (2) of the above. directive, on the one hand, and Article 5(5), on the other, 30 — In the Opinion in Siechnann I pointed out that, para- depends on whether the trade mark is used for the purpose doxically, in order to ensure free competition in the market of distinguishing the goods or services in question as this is a right which constitutes an exception to the general originating from a particular undertakings that is to say, as rule of competition, by according to its proprietor the right a trade mark as such, or whether it is used for other to appropriate exclusively certain signs and indications purposes'. (see footnote 12 to that Opinion).

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43. In order to reach that goal and with an promoting competition in the internal mar- obligatory stop at that intermediate stage, ket. 34 All of them are uses of the 'trade the journey may be made using various mark as a trade mark', which may be vehicles singly or together. With that prevented by the proprietor, provided unfailing purpose of distinguishing between always that none of the circumstances exist the goods and services of various under- in which, pursuant to Articles 6 and 7 of takings, distinctive signs may indicate prov- the Directive, the proprietor's right lapses. enance as well as quality, 31 the repu- tation 32 or the renown of the producer or the provider, while trade marks may also be used for advertising purposes in order to inform and persuade the consumer. 33

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regard to the origin as well as to the quality guard only the function of indicating the of the goods or services it represents. trade origin of the goods and services. 37

Austrian academic legal writing follows the same he consumes. The trade mark acquires a life line and, in particular, points out that there is infringement of a trade mark where it is used, for example, in of its own, making a statement, as I have merchandising (Schanda, Markenschittzgesetz - Praxis- suggested, about quality, reputation and kommentar, 1999, 9 61, and Character- und Personalitv- Merchandising, OBI 1998, p. 323; Ciresa, Die 'Spanisene even, in certain cases, a way of seeing life. Reitschule' - höchsgerichtlicher Todessto für das Merchan- dising?, RdW 1996, p. 193 et seq.) That requirement or 'distinctive' use or use 'as a trade mark' is also to be found in legal systems such as those of Finland, Ireland, Sweden and Spain, as well as in the case-law of the Court of Justice of the Benelux, so that, on the basis of those legal systems, the answer to the question which is the subject-matter of the present order for reference will depend on the interpretation given to those concepts and, accordingly, on the conception one has of the functions proper to trade marks. Legal systems such as those of France and Greece allow the proprietor of a trade mark to object to its use, whatever it may be, by third parties and without his consent, so that any exploitation of it for identical goods and services amounts to infringement of his industrial property.

parties. That broad conception is also to be found in of who manufactures the goods or provides academic legal opinion (A. Côrte-Real Cruz, Ό contudo e the services which bear the trade mark, 36 extensão do direito à marca: a marca de grande prestígio', en Direito Industriai, Vol. I, ADPI - Associação Portuguesa from acquiring them because he perceives de Direito Industrial, Almedina, Coimbra, 2001, p. 79 to 117, in particular, p. 88 and 94 et seq.). the mark as an emblem of prestige or a In the United Kingdom, the courts, albeit not all of them, guarantee of quality. When I regard the are liberal in their interpretation on this point.

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48. Furthermore, as the Surveillance Auth- another's trade mark may claim in defence ority of the European Free Trade Associ- to the proprietor's objection that his use of ation observes, in certain cases consumers it does not indicate the origin of the goods are more interested in the trade mark itself or of the services or give rise to confusion than in the goods to which it applies. over their quality and reputation.

My position is thus capable of giving a misleading indication as based on the considerations I have set out to their origin, provenance, quality or in the preceding paragraphs and, fur- reputation. 38 thermore, on the reasoning which the European Free Trade Association Surveil- lance Authority sets out at paragraph 19 of its observations; namely that when the Directive says that protection is absolute in the case of identity39 it must be under- stood as meaning that, in light of the aim

According to the reputation of the distinctive sign, an approach which, Article 16(1) of the Agreement on Trade-Related Aspects evidently, goes beyond the narrower notion of likelihood of Intellectual Property Rights, annexed to the Agreement of confusion (see the judgment in Case 102/77 Hoff- establishing the world Trade Organisation, made in mami-La Roche (1979) ECR 1139 and Hag CV and Marrakcsh on 15 April 1994 (OJ 1994 L 336, p. 214), Parfums Christian Dior, cited above). In all those cases, where a third party uses a sign identical to that registered trade marks perform similar functions and the legal status as a trade mark by the proprietor, for identical goods or of the proprietor should therefore also be the same. services, a likelihood of confusion is to be presumed.

(2) Where such identity exists, there is a 53. When use of a trade mark by a third presumption iuris tantum that the use party is use of it as such is a question of fact by a third party of the trade mark is use which falls to the national court to deter- of the mark as such. mine in the light of the information avail- able to it for the purpose of deciding the case. There are situations, such as that in point in the dispute between Arsenal and Mr Reed, in which, because there is identity (3) The determination of when a third both of signs and of goods or services, there party uses a distinctive sign 'as a trade will be a presumption of 'use of the trade mark' is a question of fact which falls mark as a trade mark', but in many other to the national court to determine in cases the situation will not be so clear-cut the light of the information available to and account will have to be taken of the it for the purpose of deciding the case.

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59. As regards signs which may legit- imately be a trade mark, the proprietor is

57. To begin with, there is a first external 41 — Sec Articles 2, 3 and 4. boundary to the concept of 'use as a trade 42 — The Court is due to deliver its judgment on 18 June.

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not entitled, on the basis of the Directive, to ceived with the eyes, 44 but also those object to their use by third parties outside which may be perceived through the other the 'course of trade', 43 that is, outside any senses, such as smell or hearing. 45 This commercial activity involving the produc- possible extension of the catalogue of signs tion and supply of goods and services on capable of constituting a trade mark must the market. be accompanied by a precise delimitation of the rights which their ownership confers on their proprietor. It would be absurd, even grotesque, to claim that, just because someone has registered the colour tur- quoise as a trade mark, plastic artists should henceforth refrain from using that pigment in their works.

44 — Even colours per se, in the absence of a shape, have already been registered in certain national industrial property registers and at the Office for the Harmonisation of the Internal Market. The Office has registered the colour lilac to distinguish chocolate, chocolates, chocolate products and chocolate confectionery (Community trade mark No 31336). In France, the Conseil d'État accepted the 61. The law on trade marks has latterly colour rouge congo for oil products (judgment of 8 Feb- ruary 1974, JCP 1974. III. 17.720). The Patents Office of been under strong pressure to include, as the United Kingdom, with effect from 1 January 1994, part of the concept of signs capable of agreed to register the colour pink to denote fibreglass insulating material (trade mark number 2004215). That constituting that kind of industrial prop- trade mark was subsequently registered in the offices for the Benelux (trade mark number 575855) and of Portugal erty, not only those which may be per- (trade mark number 310894). At present before the Court of Justice is Case C-104/01, in which the Hoge Raad of the Netherlands has asked the Court to what extent the Directive allows registration of a 43 — An expression used in Article 5(1). The German version of single colour, as such, as a trade mark. the Directive uses the expression geschäftlichen Verkehr, in 45 — In this respect, see the Opinion I delivered in Siechnann, French it is vie des affaires, the English version gives course cited above. Currently pending before the Court is Case of trade, the Italian version reads nel commercio and, C-283/01 Shield Mark, in which the Court is asked to rule finally, the Portuguese text speaks of vida comercial. on whether noises or sounds can constitute a trade mark.

B. Uses expressing support, loyalty or affiliation to the proprietor of the trade 63. It would appear that equally legitimate mark constitutes, in principle, use 'as a is the private use that someone might make trade mark' of the mark BMW on a key ring, from which he gains no material advantage other than the convenience of having the keys that he habitually uses on one holder, 47 as is the use which, in the 1960s, Andy Warhol made of the Campbell brand of soup in several of his paintings, 48 from 65. I thus arrive at the grey area, the which, obviously, he obtained an economic 'aureole of uncertainty' within which the benefit. 49 A radical conception of the scope answer to the doubt harboured by the High of the rights of the proprietor of the trade Court is to be found. mark could have deprived contemporary art of some eminently expressive pictures, an important manifestation of 'pop art'. Other non-trade uses, such as those for educational purposes, also fall outside the scope of the protection afforded to the proprietor. 66. I consider that the uses to which the High Court refers in its second question are methods of using the trade mark which, as that court itself acknowledges, express a 46— In the report presented to the ALAI 2001 Congress, organised by the Columbia Law School, Topic II. Rela- connection between the goods, the sign and tionship between copyright, trade marks and unfair competition. Section lì. Further legal analysis and debate its proprietor, between the scarves bearing concerning the relationship of copyright and trademark the trade marks at issue and Arsenal. 50 The exceptions: Does/should trademark law prohibit conduct to which copyright exceptions apply?, it is argued that, for broad interpretation which I have proposed use of a sign to be an infringement of trade mark law, it must be intended to indicate commercial origin of the for the reply to the first question permits goods or services (A. Kur). me to make that statement. 47 — According to the abovementioned report, drawn up by A. Kur, unlike copyright, private copying is not of any concern for trade mark law. 48 — For example, '200 Campbell's soup cans', 1962, oil on 50 — However much Mr Reed may announce that the goods canvas, 6 ft. x 8 ft 4 ins (188 x 254 cms.). New York, which he sells neither come from Arsenal nor are auth- private collection. orised by it, he is able to market them — and his 49 — I would even go so far as to suggest that the use by Warhol customers buy them — precisely because they bear the of its distinctive sign was profitable for the famous soup. signs which, under registered protection, identity the club.

68. It does not matter whether the reason for the decision to purchase is that the 70. It goes without saying that the propri- purchaser sees the trade mark as a sign of etor of a trade mark is entitled to object to distinction or as a guarantee of quality or a third party using it, provided always that whether, on the contrary, he engages in an he has registered it in order to use it as act of rebellion as an adherent to the cult of such. If he does not exploit it commercially, bad taste. In short, for the purposes of he will not be making 'effective use' 51 of resolving the dispute, it is irrelevant the distinctive sign and over his rights will whether a football fan buys the shirt of a hang the 'sword of Damocles' of lapse and particular team, bearing the relevant trade of their atrophy when it comes to opposing mark, because it is his cherished club and the registration of new indications. 52 he wants to wear the shirt or because, since he is a fan of the rival team, his intention is to burn it. The key to the problem is that he has decided to purchase it on account of the fact that the article is identified with the trade mark and, through it, with its propri- 71. In light of the foregoing considerations etor, that is to say with the team. and of the factual hypothesis underlying the questions referred by the High Court, what has to be decided is whether, when a football club — or, more generally, an incorporated sports club — registers a

69. The debate must be moved on to a 51 — I shall have the opportunity of addressing the concept of 'effective use' in the near future in the Opinion I will different ground. Given that, where there is deliver in Case C-40/01 Ansul BV. identity, the consumer purchases the goods 52 — See Articles 10 and 11 of the Directive.

53 — Bill Shankly, sometime legendary Liverpool manager in the 1960s and 1970s, put it in the following words: 'football 73. Football plays an important role in the isn't a matter of fife and death. It's far more important contemporary world. From its origins in than that'. 54 — As G. Bueno, philosopher and professor emeritus of the English universities in the middle of the University of Oviedo, observes, football is a sport which nineteenth century to the present day, that through the medium of television mobilises cities which identify themselves with their teams. In his view, a match sport has managed to adapt with uncom- between, for example, two workers' unions would never attain the same importance (see the interview published in mon good fortune to the signs of the times the daily newspaper La Nueva España of 13 February and to become, through being broadcast by 2002). 55 — American football, baseball and basketball. the media, a mass phenomenon which 56 — See the article in the Spanish daily newspaper El Pais of transcends geographical, cultural, religious 16 July 2000 by S. Seguróla entitled 'Al borde de la hipertrofia'. and social frontiers. The key to football's 57 — The order for reference makes much of this point in success — and also its mystery, to those relation to Arsenal Football Club.

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With some exceptions, they have shed their purely sporting character in order to become commercial companies, with ever more of them being quoted on the stock exchanges. 63 It is little wonder that in a few years the budgets of those clubs have generally exploded, so much so that in the case of some of the most famous clubs in Europe their budgets far exceed EUR 100 million, which is comparable to the budget for an average Spanish city. 64 76. In a relatively short time, the profes- sional practice of football has taken on the features of an industry which moves a volume of money which would have been unimaginable a few years ago and which also generates thousands of jobs and activ- 78. The most admired management model ities in very varied sectors. 60 It is difficult today is that of Manchester United, to provide accurate figures, but it is calcu- possibly the richest club in the world. 65 lated that in Italy, one of the countries in Control of several of the best teams in which the practice of football is most professionalised, the sport moves approxi- mately EUR 4.5 million per annum and is 62 — Article on football entitled 'Un Negocio de Primera the 14th industry in the country. 61 In the División', published in the Spanish daily newspaper El Mundo, of 21 March 1999. case of Spain, it is estimated that that 63 — England and Italy are the two countries where there are the activity generates, both directly and indi- most teams quoted on the stock market. Amongst them

Next came Bayern television. Additionally, the new technologies extended Munich and Real Madrid, each with revenue of nearly the range of methods of payment allowing each viewer, for (GBP) 80 million. Arsenal was in 10th place, with some a fee, to select the matches he wishes to watch. GBP 50 million (see The Economist of 8 February 2001 in an article entitled 'It's a funny old game'). 59 — The article by S. Segurola, 'El fútbol rompe con su pasado', may be found at www.elpais.es/especiales/ 65 — According to the Spanish daily El Mundo of 8 February 2001/liga-00-01/liga01.htm. The author explains that 2002, the English team is valued at nearly EUR 1 600 there has been the birth of a new era in football, million. During the last three years, Manchester United has dominated by the primacy of business. had an average income of GBP 120 million per season, making a profit of nearly GBP 20 million before tax (data 60 — In particular in the hotel and catering trade, commerce, obtained on 11 Match 2002 from www.soccerbusiness- transport and in the media. online.com). At the sporting level. Real Madrid is the most 61 — Information available on 8 January 2001 at www.hot.it/ successful team and was awarded the title of 'best football canali/finanza/strumenti/borsacalcio. club of the 20th Century' by FIFA.

Europe is in the hands of successful busi- ments, the total amount of debt of the clubs nessmen, whose conception of football is today in excess of EUR 1 000 million. 70 reflects a genuine change of epoch. Thus, for example, Sergio Cragnotti, President of Rome's Lazio, considers that 'football is the most important business in an ever more globalised economy'; in his view, therefore, 'it should not be regarded as a sport, in the strict sense, but as part of the entertainment industry'. 66 That vision of 80. It is true that the clubs' sources of things is shared by Florentino Pérez, Presi- finance have increased in recent years. dent of Real Madrid, who, in referring to Traditional income from sales of tickets at the economic prospects of the entity under the turnstiles or from shares have become his direction, has spoken of an 'unexploited less significant by comparison with other, Walt Disney'. 67 more considerable, sources of income, such as television rights, the sale of products related to the team, the exploitation of rights to images of the players and the internet. 71 European clubs also earn money in other ways; these include the benefits they obtain through participating in the championships organised by the European Union of Football Associations (UEFA), holding friendly matches or the operation of facilities (shops, bars, conference 79. That image hides a reality which is not centres). so gratifying for most professional clubs, many of which are burdened with heavy debts. In fact, according to a report in The Economist, 68 at the present time, which is characterised by a sharp rise in players' salaries and in transfer fees, 69 clubs find themselves caught up in a dynamic which forces them to spend a large part of what 81. One of the sources of income to have they earn, without it being possible to say increased in importance in recent years is, that they are badly managed. This explains in fact, the sale of goods related to the why, for example, in Italy, whose football team, an activity commonly known as league attracts large numbers of invest- 'merchandising'. 72 That business, the object of which is the sale, either directly 66 — From www.socccragc.com, quoting an interview which appeared in the Italian daily newspaper La Repubblica of 17 July 2000. 70 — According to www.futvol.com on 20 March 2002. 67 — See the article by V. Verdu entitled 'El fútbol de ficción', 71 — The most popular European clubs receive several million which appeared in the daily newspaper El Puis of 15 July visitors to their web pages each clay. They receive 2001. substantial amounts through those pages by means of 68 — 'Football and prune juice', published on 8 February 2001. advertising or on-line sales. 69 — According to a study by Deloitte&Touche, which The 72 — As a result of the success of that activity, teams tend to Economist quotes in the report referred to in the foregoing promote official shops in shopping centres to the detriment footnote, while income for clubs increased by 177% of stalls outside football grounds, many of which, as in the between the 1993/94 and the 1998/99 seasons, players' case of Mr Reed, are run by individuals with no connection salaries went up by 266%. with the entities that own the teams.

or through intermediary undertakings, of decided to open shops in cities in Asia in scarves, banners, articles of clothing or any order to offer their goods directly for other article which identifies the club, has sale. 77 proved to be one of the most profitable, 73 hence its transformation into a priority for those managing the business side of the clubs. 74 According to Real Madrid's mar- keting director, one of the reasons for the success of merchandising is simple: 'loyalty to football teams is very strong.

player in question. In recent years there has been a considerable number of transfers of football players which lends support to that statement, such as the acquisition of the Japanese player Nakata by Parma 78 and, in 82. It is well known that the growth fore- particular, of the Frenchman Zinedine casts for merchandising show a rising Zidane by Real Madrid, the most expensive curve. Transmission of football games by transfer in history, at around EUR 70 television and the internet allows European million, much of which the club hopes to teams to open their markets to other recover from the sale of shirts. 79 regions of the world, particularly in Asia, where the following for this sport has grown considerably in recent years, in part as a result of the fact that the 2002 World Cup is being held in Japan and South Korea. 76 Some European clubs have

78 — His transfer value no doubt reflects the fact that he is the 75 — J.A_ Sánchez Periéñez, marketing director at Real Madrid, most successful Japanese player in Europe. writing in the weekly El País Semanal of 3 March 2002. 79 — In the current season, it is forecast that 500 000 shirts will 76 — That is why a number of European clubs' websites also be sold worldwide. Total income will probably be EUR 36 have Japanese versions. million, of which nearly half will go to the club.

85. In the result, and in response to the 87. The reasoning set out above, and the second of the doubts harboured by the answers which I propose to the first ques- High Court, I consider that the use by third tion referred for a preliminary ruling, do parties which the proprietor is entitled to not follow to the letter the way in which the two questions from the High Court are framed but, in interpreting the Directive, 80 — In the sports section of the Madrid edition of the El Pais newspaper of 25 April 2002 there is an item giving an may provide a helpful and appropriate account of the arrest by members of the Guardia Civil in answer for the purpose of enabling it to Valencia of four persons for the illegal distribution of 14 000 articles bearing the Real Madrid logo with a decide the case before it. 81 market value in excess of EUR 336 000. During the 1998 World Cup Football competition the French authorities initiated 41 proceedings for improper use of trade marks. In the report on action undertaken by the customs 81—In the Opinion I delivered on 5 April 2001 in Case authorities with regard to trade mark infringements, C-55/00 Elide Gottardo [20021 ECR 413 I bad occasion to drawn up by the French Directorate-General for customs say that 'the interpretative role assigned to the Court of and indirect taxes of the French Ministry of Finance for the Justice by Article 234 EC, with the aim of ensuring that years 1994 to 1998, attention is drawn to the increase in Community law is applied uniformly in the Member trade mark infringements concerning articles which the States, cannot be limited to giving an automatic response public relates to a sport. In taking stock of the situation in to the questions strictly in accordance with the terms in 2001, that authority reports that 810 000 souvenirs of the which they have been formulated; the Court, as the 2002 World Cup football competition had been seized (the legitimate interpreter of Community law, must analyse two latter documents may be consulted via internet at the problem from a broader point of view and with greater www.financcs.gouv.fr/douancs/actu/rapport). flexibility so as to give a reply which will be of assistance There is a report in www.sport.fr, dated 25 April 2002, to the national court which raises the questions and to the which contains a warning that the market is about to be other courts in the European Union, in the light of the flooded with counterfeit shirts in the colours of the applicable Community provisions. Otherwise, the dialogue national teams participating in the World Cup being held between courts under Article 234 EC might be excessively in Korea and Japan, and mentions that there are goods determined by the court which raises the question, so that, already on the market infringing the trade marks of teams depending on the way it worded the question referred for a such as Manchester United, Real Madrid and Juventus of preliminary ruling, it could prejudge the preliminary Turin. ruling' (second paragraph of point 36).

(3) The use which the proprietor is entitled to prevent third parties from making is use for the purposes of commercial exploitation, which includes use of the distinctive signs which the undertakings which own football clubs have registered as trade marks for the purpose of marketing articles of clothing and other articles connected with the team.

(4) In that regard, the reasons on which the consumer bases his choice of the goods and services are irrelevant. The decisive factor is that the persons for whom they are intended acquires or uses them because they incorporate the distinctive sign.

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