Trade marks

The purpose and function of trade marks

A trade mark serves to distinguish one trader’s goods or services from those supplied by others. It is a badge of origin, a sign that indicates who made the goods or provided the services1, and also serves to provide the consumer with a guarantee of quality. It is a potent means of communicating information to customers, and therefore reduces consumer search costs. Because it is the embodiment of a business’s reputation, it is a valuable business asset in its own right.

Trade mark law prevents one trader appropriating the reputation of another: it is therefore concerned with three matters:

  • Preventing unfair competition:

  • Protecting consumers: and

  • Preserving business assets.

Historical development

Trade marks have existed for centuries, ever since merchants first marked their goods with a graphic device which could identify the goods as theirs even to someone who could not read, if not before. Archaeological evidence for the use of signs in this way dates back to the ancient Chinese, Greek and Roman empires, where blacksmiths who made swords used an early form of trade mark to identify the origin of their products. More recently the German brewer Löwenbräu claims to have used its lion mark since 1383.

The first trademark legislation was passed by the Parliament of England under the reign of King Henry III in 1266, which required all bakers to use a distinctive mark for the bread they sold. In medieval Europe proprietary signs could be observed, and by at least the 18th century the courts were beginning to deal with legal disputes involving them: the first modern trade mark case was Southern v Howe2 according to many authors and Aldous LJ in the One in a Million case3: but the trade mark aspects of that old case were obiter, as it was an agency dispute. See also Hamilton v Davis4.

By identifying the source of goods, these marks came to stand for the reputation of that merchant and in England received protection in both the common law courts and the courts of equity, where a trader would be able to obtain redress against another trader who was appropriating his trade reputation or goodwill. This is what we know now as the action for passing off, which is dealt with in the next chapter.

There were also another type of sign, related to these proprietary marks: production marks, which provided an element of consumer protection and were enforced by the guild system. By enabling the maker of goods to be identified, they ensured that he could be held to account for any shortcomings. The sanctions for breach of these regulations were criminal, and the goodwill that underlay the mark belonged not to the individual trader but to the guild.

The Industrial Revolution introduced mass production and transport, making a wider range of goods more generally available at more affordable prices and leading eventually to the consumer society we know today. People bought goods not merely because they trusted the retailer, but because they trusted the manufacturer or producer who was now identified on the goods. By the 1870s, the demands of the industrial society led to the establishment of a register of the rights that had hitherto been protected by common law. Owners could now sue for infringement of a property right instead of having to go to all the trouble and expense of a passing off action, in which they would have to satisfy the judge that they had a reputation to protect before demonstrating that the defendant had taken advantage of it.

Development of the law

There are streams of trade mark cases in the common law courts and in the courts of equity. The earliest common law cases date from the nineteenth century. The action for infringement at common law5 developed from the tort of deceit: it was based on the defendant’s fraudulent intent, whether or not consumers were actually deceived, and whether or not the defendant’s goods were inferior.6

In the Court of Chancery, to which plaintiffs had recourse if they sought an injunction to stop an infringement rather than a purely financial remedy to compensate him for an unlawful use, trade marks did not receive particularly generous protection. Relief was refused in some cases to avoid creating an unfair monopoly.7

Later, the court came to recognise that it was not wrong to protect the ‘get-up’ of a business: these days, it would never cross our minds that this could be unacceptable. In Knott v Morgan8 the defendant was restrained from copying the colour scheme and lettering that the plaintiff used on his omnibuses. Within a mere two years, the court had gone so far as to declare that trademarks were a type of property9 so that neither intent nor confusion was essential to show that there had been an infringement.

Later Chancery cases are (as remains the case with passing off cases, as we shall see) contradictory. Some followed the common law approach, requiring proof of a likelihood of deception before an injunction would be granted10; others treated trade marks as a property right, so deception was not relevant11.

Legislative reform

The Merchandise Marks Act 1862 made it a criminal offence to imitate another’s trade mark ‘with intent to defraud or to enable another to defraud.’ The Trade Marks Registration Act 1875 introduced registration for trade marks, something that already existed in other countries: registration was prima facie evidence of ownership. France legislated for trade marks in 1852, and the newly-united Germany introduced trade mark registration in 1874.

In the same year as the first UK Act, the last of the Judicature Acts 1873-1875 merged the common law courts with the Court of Chancery, creating the Supreme Court of Judicature (now called the Senior Courts of England and Wales as a result of the Constitutional Reform Act 2005, which created the Supreme Court that we know today), with intellectual property matters being assiged to the Chancery Division. Although in principle equity was supposed to prevail over the common law, .in the field of what we now know as passing off the courts maintained the common law requirement for deception.

Since the Trade Marks Registration Act there have been several Acts of Parliament, notably the Trade Marks Acts 1905 and 1938. The 1938 Act, which was not replaced until 1994, introduced registration on the basis of an intention to use a trade mark. In 1975 the Mathys Committee12 made recommendations for the modernisation of trade mark law, only one significant one of which was enacted: the Trade Marks (Amendment) Act 1984 allowed trade marks to be registered for the first time for services.13

In September 1990 the government published a White Paper entitled Reform of Trade Marks Law.14 Reform was, by then, necessary for a number of reasons, described below at .

The modern role of trade marks

Trade mark law still stresses that marks are indications of origin, though for decades the actual source of goods has mattered less and less to consumers: for example, people continue to buy Smarties confectionery irrespective of Nestlé’s takeover of Rowntree MacIntosh. Indeed, it is the strength of brands like that which gives some companies their value, and the identity of the brand owner is often irrelevant.

A trade mark embodies the goodwill or reputation of the business which makes the goods: in an increasingly impersonal market place it gives the customer a sign to which to return for goods of the same quality and characteristics. A consumer may buy a bar of chocolate from any confectioner’s shop they may be passing: but they rely not on the confectioner’s reputation, of which they know nothing, nor on the identity of the manufacturer of the chocolate, which they may well not know either. They go for the brand name and the distinctive packaging. A particularly succinct explanation the function and purpose of a trade mark is found in a Note by Frank Schechter, an extremely important figure in the development of trade mark law, in the Yale Law Journal for 1925:

... a trade-mark is merely the visible manifestation of the more important business goodwill, which is ‘property’ to be protected against invasion.

Goodwill’ has been defined as consisting of a number of elements, one of which is ‘the attractive force which brings in custom’15.

Registered and unregistered trade marks

Trade marks may be even now protected whether they are registered or not: the law of passing off has not been superseded. Indeed, it is in many ways more valuable than ever. Be careful, though, how you use the expression ‘trade mark’:16 in the Trade Marks Act 1994 it has the very specific meaning of a sign that meets the requirements for registration. What the defendant in an infringement action is using is a sign, but not a trade mark.

The owner of an unregistered trade mark cannot sue for infringement but it is protected by the action for passing off, which gives a remedy when a trader’s goods or services are misrepresented as being another’s. Registration brings significant benefits: a registered trade mark is protected under the Trade Marks Act 1994 which came into operation on 31 October that year (making far-reaching changes from its predecessor, the 1938 Act) and the proprietor can sue someone who infringes the proprietary rights given by registration for infringement.

Trade mark owners can also register under the Community Trade Mark (CTM) system17, established by Regulation 40/94/EC (codified in Council Regulation (EC) No 207/2009) which came into operation on 1 April 1996. Registration at the obscurely-named Office for Harmonisation in the Internal Market (Trade Marks and Designs), or OHIM, based in Alicante, gives protection throughout the European Union and offers considerable cost savings.

A passing off action must begin with the claimant showing a reputation in the mark, which can be very costly in terms of court time. It is much easier if an action can be brought to protect a property right recorded on a public register.

Similar badges can be used by service industries to distinguish what they provide from what other people in the same business provide. Marks applied to services in this way were known as service marks, a distinction which disappeared in the 1994 Act. An important limitation was placed on service marks by the courts’ refusal to recognise retailing as a service, so a trade mark could not be registered for retail services. The correct course was to register the mark for the goods retailed, if they carried the mark. See Re Dee Corporation plc 18. More recently, however, following a decision of the Board of Appeal of OHIM, allowing registration of a mark for retail services, the UK Trade Marks Registry started to accept applications to register trade marks for retail services. In Case C-418/02, Praktiker Bau- Und Heimwerkermärkte AG19, a reference for a preliminary ruling under Article 234 EC from the Bundespatentgericht (German Federal Patent Court) the Community Court ruled that in an application to register a trade mark for retail services it was not necessary to be specific about the services for which protection was required, but it was necessary to be specific about the goods involved. The Trade Marks Registry then published a Practice Amendment Note (6/05) suggesting wording that would be acceptable to it for specifications for such applications.

Aims of the 1994 Act

The Trade Marks Act 1994 had several purposes. Most important are:

  • It implemented the First Council Directive approximating the laws of the Member States relating to trade marks (Directive 89/106), ensuring that the trade mark laws of all the Member States of the European Community are similar. It adopted most of the optional provisions of the directive. Two points should be noted about the directive: it is entitled the ‘First directive’, but is still the only one, and it approximates rather than harmonises.

  • It enabled the UK to sign the Madrid Protocol, permitting UK trade mark owners to obtain international trade marks.

  • It paved the way for the advent of the Community trade mark system (under Council Regulation 40/94/EC).

  • It updated a very old and outmoded piece of legislation, the 1938 Act, which in turn modified the 1919 Act to only a limited extent, and deregulates an area of legislation of great importance to industry. The 1938 Act, despite the recommendations of the Mathys Committee in 1974 (British Trade Mark Law and Practice, Cmnd 5601) had remained unamended save in one respect, the introduction of registration for service marks in 1986.

To avoid some problems of interpretation the 1994 Act adopts the wording of the directive in many provisions. However, this also results in the importation into UK law of many strange continental concepts: the directive owes a great deal to Benelux law, a fact that the English courts are unprepared to recognise. Doubts have been expressed by some commentators about whether the Act correctly implements the Directive, and a number of judgements under the 1994 Act illustrate the confusion that the wording of the legislation may cause (on which, see British Sugar plc v James Robertson20 and Phillips Electronics NV v Remington Consumer Products21 (the Phillishave case) where Jacob J accepted that there was no intentional conflict between the directive and the Act, and heard argument based directly on the provisions of the EC legislation.

Nature of trade marks

Personal property

Section 2 states that trade marks are personal property. They can be bought and sold, licensed, and used as security. A value can be placed on them, which may be shown on a company’s balance sheet (though depreciating an asset which is likely to be growing in value is a tricky business). Often a company’s trade marks can be a major asset: sometimes they are the biggest asset a company has.

Remember that, like other registered intellectual property rights but unlike other forms of property, a trade mark can disappear. It may be declared invalid because of some defect in the registration process, or revoked if it is mis-managed by its owner (principally by allowing it to fall into disuse for five years or more). The possibility of being lost because of the actions, or inactions, of the owner is unique to trade marks.

Exclusive rights

Except in a ‘double identity’ case (identical trade mark and sign, identical goods or services) trade mark rights are not absolute, unlike the monopoly rights, patents and registered designs. Where similarity is relied on, or where dilution is alleged, a further element is also needed: a similarity must give rise to a likelihood of confusion, and there must be damage to the reputation of the mark in the case of dilution. Moreover, for all sorts of infringement, the use must be in relation to relevant goods or services, and must affect the interests of the trade mark owner.22

Trade marks and other areas of Intellectual Property Law

Intellectual property rights are not co-ordinated in the sense that the subsistence of one right generally precludes or interferes with the existence of other rights. So the content of a trade mark may be protected by copyright or a registered design, if it includes or consists of (for example) a logo. Musical jingles may be registered as trade marks, and also attract copyright protection. Surface decoration is excluded from unregistered design right protection under Part III of the Copyright, Designs and Patents Act 1988, but a shape that can now be registered as a trade mark may be the subject of unregistered design right.

The possible subsistence of copyright in a trade mark makes it necessary to obtain an assignment of copyright from a commissioned designer of a logo, as in R Griggs Group Ltd v Evans23, or a piece of music, as in Case C-283/01, Shield Mark v Joost Kist24. Note that copyright is unlikely to subsist in a word mark even where it is an invented word: Exxon Corp v Exxon Insurance Consultants International Ltd25. In those cases where there is copyright in the subject-matter of the trade mark, care must be taken to resolve any possible problems about ownership of the various rights.

Functions of trade marks

Once upon a time trade marks simply indicated who had made the goods to which they were applied. This meant that they attracted customers who had previously enjoyed that manufacturer’s goods. In the modern world they do rather more: Floyd J told a seminar in 2011 that trade marks have come to resemble one of those multi-function tools you see in the Sunday supplements which enable you to do whatever you need to do to your bicycle.

The functions performed by a trade mark are not only of academic interest. They provide a justification, or multiple justifications, for the existence of trade mark law: they also determine whether a sign can be registered as a trade mark, whether a registered trade mark is suffering from non-use and may be vulnerable to revocation, and the scope of what may constitute an infringement. All these matter require that the sign be used as a trade mark.

Indication of origin

The traditional view of a trade mark is that it signifies the commercial origin of the goods or services in respect of which it is used. The fact that the consumer does not know (or indeed care) the exact trade origin of the goods as long as they recognise the consistency of the anonymous source of supply.26

Before 1994, this function of a trade mark was enshrined in statute.27 It meant that Elvis Presley’s estate could not register trade marks comprising the deceased singer’s name, image or signature, because the sign would not indicate trade origin, merely that the goods commemorated him.28 Although the definition of trade mark in the 1994 Act is different, the Registry continued its practice under the new law.29

The Court of Justice might have different ideas. In Arsenal Football Club v Reed 30 Laddie J held that the defendant was not infringing because people understood when they bought his wares that they were not made by or even approved by Arsenal. They bought them as ‘badges of allegiance’. The Court of Justice, however, thought otherwise, and in Case C-206/0131 it took a much broader approach to the role of the trade mark, saying that:

… the essential function of a trade mark was to guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin.

So, the Court thought that the trade mark had to guarantee that all the goods (or, mutatis mutandis, services) sold under it had been manufactured or supplied under the control of a single undertaking which was responsible for their quality. The proprietor therefore had to be protected against competitors who wanted to take unfair advantage of the status and repute of the trade mark, which seems to import into the general test for infringement some of the concepts specifically applicable to dilution problems. The court thinks that the rights conferred by a trade mark are there to enable the proprietor to protect his specific interest as proprietor. The scope of protection therefore reflects the functions of the trade mark and those functions reflect the interests of the owner: the scope of protection is determined, in part, by what the owner wants to do with the trade mark.

Note that the origin function has traditionally been protected by the action for passing off. One notable feature of passing off is that the judgments are often inconsistent, sometimes even contradictory. So it is no surprise that in some cases a broad approach to the origin function is taken, and in others (such as Harrods v Harrodian School32 the approach is more restrictive – that case being decided on the basis that if there was no customer confusion there was no passing off.

Product differentiation

The definition of a trade mark tells us that it is concerned with distinguishing the goods or services of one undertaking from those of others. Arsenal suggests that trade marks may go beyond indicating origin and actually assist customer choice, particularly as far as quality goes. The Court of Justice applies the test of whether a trade mark facilitates consumer choice in considering absolute grounds for refusal – see below, X. It seems perfectly reasonable to analyse a trade mark’s function in this way – but it could be regarded as nothing more than a restatement, in different words, of the origin function.


A trade mark may reassure consumers about the quality of the goods or services – not in an absolute sense, but in the sense of consistency. You enjoyed a certain brand of beer last time you tasted it, so you can confidently buy the same brand again. Spalding v Gamage33 and United Biscuits v Asda34 - the Penguin case – both show how passing off cases can support this functions (and the former shows that it has been happening for nearly a century). In the Penguin case, Robert Walker J held that shoppers would think that the claimants had made the accused biscuits for the defendants, and would expect the same quality.

The guarantee function also comes into play where common origin or parallel imports are involved. The key common origin case (where the trade mark ended up in the hands of different, unrelated, companies as a result of expropriation by the Belgian government of enemy property in the Second World War) is Case C-10/89, SA CNL Sucal NV v Hag GF AG35 where the Court of Justice accepted that customers would be misled by the different taste of the Belgian trade mark owner’s decaffeinated coffee compared with that made by the German company which originally owned the trade mark, so the German company could sue for infringement of its German trade mark. And in Case C-143/00, Boehringer Ingelheim v Swingward Ltd and Dowelhurst Ltd36 it considered that consumers of parallel-imported pharmaceuticals would take the trade mark as an indication legitimate goods had not been interfered with by the importer. In Case C-228/03, Gillette v LA Laboratories Oy37 it added that an undertaking must be able to keep its customers by virtue of the quality of its products, which is only possible if customers can identify the goods from their distinctive marks.

Finally, back to Arsenal: the Court of Justice recognised that the guarantee of consistent quality enables consumers to choose between competing brands. Trade marks, it seems, still have an important role to play in consumer protection.

Investment and advertising functions

Schechter’s analysis tells us that the advertising function of trade marks is important, and the mark’s selling power should be protected against free-riders. The Arsenal case supports this view, and so does the introduction (through optional provisions of the Directive) of the concept of dilution into English law. (See Error: Reference source not found and Error: Reference source not found.) The investment function is closely related: by protecting the trade mark against non-competing use (which is what the anti-dilution provisions do), the law recognises it as a business asset which merits protection in its own right, the attractive power of which is attributable to the investment the owner has made in it.

International considerations

Although international aspects of intellectual property are covered earlier in this work, it is worth mentioning here the main international instruments which have an impact on our trade mark laws.


The First directive to approximate the laws of the Member States relating to trade marks was one of the main reasons for the 1994 Act. It means that the substantive laws of all the Member States are in theory at least the same: the same trade marks are registrable, for the same period of time, giving the same protection and subject to the same non-use rules. The Directive is, though, a mixture of elements inserted at the insistence of different Member States from their own laws – see Wagamama v City Centre Restaurants38 for an illustration of how this happened, and the repercussions – along with a number of special provisions which accommodate established UK and Irish practice to continental norms (protection for vested rights39, for example, and common law trade marks as the basis for opposition40).


In parallel with the Directive, the Regulation on the Community trade mark established a unitary European Community-wide trade mark (CTM), a big step forward in the integration and development of intellectual property law in the European Community. The substantive rules are the same as in the Directive, so a trade mark owner can choose whether to go for a CTM or national rights depending on where it is doing business (or planning to do business in the next five years). See chapter Error: Reference source not found

Because the substantive rules are the same, and the Court of Justice of the European Union (the institution comprising the General Court and, confusingly, the Court of Justice) hears appeals from decisions of the Office which go in the first place to the General Court, there is an abundance of case law which directly bears on UK trade marks.

The Regulation also deals with more prosaic matters, including how the Office deals with applications. The Directive is silent on this matter, so Member States’ trade mark offices remain free to operate how they like – which is usually how they have always acted: but, facing competition for trade mark owners’ business from the Community system, the UK registry changed its practice to match that of the Community system. See Error: Reference source not found


The Madrid Protocol provides a mechanism for trade mark owners to obtain protection in other countries by means of an extension, for which a single application is made to the International Bureau. The original Madrid Agreement was not appropriate for the UK because of the fee structure and time limits, but the Protocol was championed by the UK and enabled the country to join the international trade marks system. Now it provides a quick, easy and cheaper way to obtain protection in most of the important countries of the world, and the EU. See chapter Error: Reference source not found


The classification of goods and services into 45 different classes is governed by the Nice Agreement, which is reviewed periodically. In theory, all goods and services known to humankind are in one of the classes in the Nice classification, and only one class.

Trademark Law Treaty

An international treaty designed to approximate and streamline national and regional trade mark registration procedures through simplifying and harmonising certain features of those procedures. Trade mark applications, and the administration of trade mark registrations, in multiple jurisdictions should therefore be less complex and more predictable. Concluded 1994: 45 contracting parties.

1Aristoc Ltd v Rysta Ltd [1945] AC 68 in which the House of Lords emphasised the origin role of trade marks over their quality guarantee function.

2(1618) Popham 143.

3Marks & Spencer and others v One in Million and others, [1998] 4 All ER 476.

4(1771) 3 Burr 2732 (Lord Mansfield).

5In modern trade mark law, only a registered trade mark can be infringed. The Trade Marks Act 1938 specifically stated that there was no action for infringement of a common law mark. The action for passing off is however an adequate substitute. In the United States, an action for infringement of a common law mark can still be brought, which reflects the fact that in US trade mark law use is what creates rights, whereas in the system prescribed by the Directive the important thing is registration.

6See for example Sykes vSykes (1824) 3 B&C 543, Blofield v Payne (1833) 4 B&AD 409, and Crawshay v Thompson (1842) 4 Man & G 358.

7Blanchard v Hill (1742) 2 Atk 484 and Cruttwell v Lye (1810) 17 Ves 335.

8(1836) 2 Keen 213.

9Millington v Fox (1838) 3 My & Cr 338.

10Perry v Trufitt (1842) 6 Beav 66, Croft v Day (1843) 7 Beav 84, and Burgess v Burgess (1853) De G, M & G 896.

11Hall v Barrows (1863) 4 De G, J & S 150; Edelsten v Edelsten (1863) 1 De G, J & S 185; and American Leather Cloth Co (1863) 4 De G, J & S 137.

12Cmnd 5601.

13Originally, these new trade marks were called service marks, but the 1994 Act removed the distinction. In the US and other jurisdictions the term ‘service mark’ is still in use. Before the amendment, service businesses had usually secured what protection they could by registering their trade marks in class 16 (printed matter), on the basis that every business produces some printed matter.

14Cm 1203. No doubt now it would have thought of a more exciting and less descriptive title.

15Inland Revenue v Muller’s Margarine [1901] AC 217.

16In the United States the words have merged, while in some other countries (Canada, for one) they have acquired a joining hyphen, but in the United Kingdom they remain separate though not independent.

17Although the Community has become the Union, the trade mark system (like the Community registered designs system) has not been renamed.

18[1990] RPC 159.

19[2005] ECR I-05873.

20[1996] RPC 281.

21[1998] RPC 283, 290-293.

22Case C-206/01, Arsenal Football Club v Reed [2002] ECR I-10273.

23[2005] FSR 706.

24[2003] ECR-I 14313.

25[1982] Ch 119.

26See Powell v Birmingham Vinegar Brewery Co Ltd (1896) 13 RPC 235 and McDowell’s Application (1926) 43 RPC 313.

27Trade Marks Act 1938, section 68.

28ELVIS PRESLEY trade marks [1999] RPC 567 (CA).

29DIANA, PRINCESS OF WALES trade mark [2001] ETMR 254, JANE AUSTEN trade mark [2000] RPC 879.

30[2001] RPC 922.

31[2002] ECR I-10273.

32[1996] RPC 697.



35[1990] ECR I-3711.

36[2002] ECR I-3759.

37[2005] ECR 2337.


39See Error: Reference source not found.

40See Error: Reference source not found.