New appeal court rulings add confusion to sports issues

Introduction
In Arsenal v Reed the European Court of Justice (ECJ) was asked whether a football club could prevent a third party from selling merchandised goods bearing its trademarks at the entrance of the club's stadium. A similar type of dispute has recently been brought before the French courts regarding the use of names of football clubs and sporting events by online bookmakers to present their services. In two decisions issued in late 2009 the Paris Court of Appeal was asked whether the owners of trademarks ROLAND GARROS and JUVENTUS could prevent online betting sites from using these signs to identify and/or promote their services. The judges decided differently in the cases and considered that use of the trademark ROLAND GARROS was infringing, while the word “Juventus” was not used as a trademark and was therefore lawful.

In the decisions the Paris Court of Appeal, although differently composed, took different stances regarding the use by online bookmakers of the name of a sporting event and of a football team which were both registered as trademarks. In both cases, the signs used by the bookmakers were identical to those registered and were used for identical or similar services as those designated by the registration. The main issue in both cases was whether the use of the names of these teams or events by an online bookmaker to identify bets and promote its activities constituted trademark infringement.

Decisions
In Unibet International Ltd v Federation Française de Tennis (14th October 2009) the French Tennis Federation brought a claim against online bookmaking company Unibet for trademark infringement of its French trademark RG ROLAND GARROS and its Community trademark ROLAND GARROS FRENCH OPEN. Unibet argued that the words “Roland Garros” were not used as trademarks, but rather were used in their common meaning to describe the main properties of its activities.

Unibet also invoked the exception in Article L713-6 of the IP Code, which contains similar provisions to Article 6 of Directive 89/104/EEC, limiting the rights of trademark owners where use by a third party is necessary to indicate the intended purpose of a product or service.

The Paris Tribunal de Grande Instance approved this argument and considered that the use of the ROLAND GARROS trademarks by Unibet was not infringing.

However, the Paris Court of Appeal considered as follows:

• The use of the sign ROLAND GARROS by Unibet was intended to distinguish bets on this particular competition from other bets.
• The use of the sign ROLAND GARROS constituted trademark use. The use of the words "Roland Garros" in their common meaning referred to an iconic World War ! pilot and could not be understood as a way to identify or give information about betting.
• The ROLAND GARROS trademarks were used by Unibet to designate identical or similar services to those for which they were protected.
• The use of the trademarks gave the impression that the French Tennis Federation endorsed the use of the trademarks by Unibet.

In addition, the appeal court rejected the exception of Article L713-6 of the IP Code since the reference made to the product was a reference not to the sporting event, but to the betting services themselves. Therefore, the use of the trademarks was infringing and the court awarded the French Tennis Federation damages of €300,000.

In Juventus FC SpA v Unibet and William Hill Credit (11th December 2009) the famous Italian football club brought a claim against seven online bookmakers, but the court found that it had jurisdiction for only two of them. Juventus Football Club owns the trademark JUVENTUS in Class 41 for gaming and gambling services, and considered that the use of this trademark by these bookmakers was infringing. Once again, the bookmakers relied on the exception of necessary use of Article L713-6 of the IP Code.

In its decision of 30th January 2008 the Paris Tribunal de Grande Instance rejected the bookmakers' defence. The judges considered that, in principle, bookmakers are allowed to use trademarks to identify the football teams on which bets may be placed. However, this use should be kept to what is strictly necessary to designate the bets and the use made by the two bookmakers went beyond this necessity, since the trademarks were also used to promote their activities. Therefore, the use of the trademark JUVENTUS by Unibet and William Hill was considered to be an infringement.

The appeal court disagreed and considered that the use of the word "Juventus" by the bookmakers was intended not to identify products or services, but merely to identify the football team in order to enable the users to bet on this team, since no other term could have done so. The court considered that the sign was not used as a trademark and that no infringement had occurred.

Analysis
The judges in these two decisions seemed to agree implicitly that the necessary reference exemption of Article L713-6 cannot be relied on by online bookmakers to justify their use of events or teams which are registered as trademarks.

In so ruling, the appeal court departed from rulings which had repeatedly found in favour of online bookmakers since 2007 (eg, Comité National Olympique v Expekt.com, Paris Tribunal de Grande Instance, 28th November 2007; Paris Saint Germain v Bwin, Paris Tribunal de Grande Instance, 17th June 2008). However, the appeal court's reasoning in Unibet v Federation Française de Tennis brings a clear analysis of what may fall under this exemption. Article L713-6 b allows the use of registered trademarks only to “state the intended purpose of the product or service” and “provided no confusion exists as to their origins”. Since this necessary reference is an exemption, it must be interpreted strictly, which implies that the reference must be absolutely necessary and that the user must take all precautions to avoid any risk of confusion between the signs. The disclaimer in English informing users that Unibet was not affiliated with any sports teams or event organisers was considered insufficient for the French public and did not remove the impression that this use was endorsed by the French Tennis Federation. Therefore, the appeal court's reasoning is unquestionable on this point: online bookmakers cannot rely on the necessary reference exemption of Article L713-6 b.

This is likely why, in Juventus v Unibet, the appeal court considered that there was no use as a trademark, since this was the only way to find the use not to be infringing and to avoid granting trademark owners extensive rights over the name. However, the consequence of this decision is that the court's reasoning regarding the use of the names of sporting events and sport teams as trademark use seems contradictory. Indeed, it is difficult to understand why the use of the sign ROLAND GARROS by bookmakers to designate bets is trademark use, while the use of JUVENTUS with the same intention is merely use to identify a football team. On this issue the appeal court's reasoning in Unibet v Federation Française de Tennis is somewhat confusing, since to most French people the words “Roland Garros” refer not to an iconic World War I aviator, but more commonly to the French Tennis Open named after him. At first instance the judges even considered that these words were the only way to refer to the tournament without any risk of misleading the consumers. 

The appeal court's reasoning seems to drift away from that of the ECJ in Arsenal v Reed. Trademark use requires the use of a sign in the course of trade and a use which guarantees the identity of origin of the marked goods or services to the consumer. There is no doubt that the use of these signs by bookmakers is a use in the course of trade. However, it is much more difficult to consider that the names of competitions or football clubs are used as the indication of origin of the betting services. In Belgium, the Tribunal de Première Instance of Liège in Federation Française de Tennis v Ladbrokes (28th April 2008) considered that the mere mention of the name “Roland Garros” was a necessary indication of the activity of online betting and thereby rejected a claim of free riding on the French Tennis Federation’s goodwill.

The appeal court seems to have insisted that the ROLAND GARROS trademark enjoys a strong reputation, which may explain why the judges were more protective of the owner’s rights. This argument was not raised in Juventus v Unibet, even though Juventus Football Club probably enjoys a similar level of reputation.

The decisions can also be compared to the preliminary ruling of the Paris Tribunal de Grande Instance of 8th July 2005 in Real Madrid Football Club v Hilton Group PLC. In that case the judges considered that the football team could not object to the use of the names and image of its famous players on betting websites, since this use was not a use to promote bets, but merely a use for the presentation of the game on which bets were organised.

The context of the upcoming liberalisation of the gambling market in France, which should take place just before the Football World Cup later this year, means that these decisions have a particularly strong impact. There is a strong probability that the conflict between sports teams, event organisers and online bookmakers will be brought before the Cour de Cassation or even the ECJ.