In a challenging competitive marketplace, the importance of brands and how they make consumers feel and respond is becoming ever more important. But in a world of intensive advertising both off- and on-line, and increasingly fragmented channels of communication, how might a company reduce risk and engage its target consumers?

One way is through brand revival. This can mean bringing back an old advertising slogan, refreshing a dormant brand, reviving visual means of differentiation, or even aligning your brand to events, people and characters from yesteryear. Transposed into a retail environment, history, nostalgia and heritage become branding watchwords for legitimacy, trust and experience. If you are a company with a portfolio of brands stretching back many years, there may well be some you can revive, without their being stigmatised as "old" or "moribund" brand propositions. But if you are not blessed with a corporate brandscape that has its own heritage, is it possible to re-awaken old brands even when they were not yours to begin with? If the brand-owner appears to have abandoned a brand, under what circumstances can you bring it back? Finally, if you are a company that has older brands that you do not wish to use as part of your current proposition to the marketplace, but would like to protect from third party exploitation, how might you do so?

Is it a brand at all?

Sometimes, references to the past are arguably not to particular brands at all, but simply to an "identity". A recent example is the case of Score Draw Ltd v Finch ([2007] EWHC 462 (Ch)), which concerned the use of the former emblem of Brazil's national football team (used between 1914 and 1971), where two companies were in dispute over whether the emblem should be registered as a trade mark by one of them. Neither party had any link to the Brazilian football team. The emblem was essentially a badge, being the official emblem of the Brasileira de Desportos (CBD), the former governing body for sport in Brazil. The Respondent, Alan Finch, had applied to register the emblem as a trade mark, and the Hearing Officer allowed the registration. On appeal to the High Court the appellant, Score Draw, said that the registration should not have been granted, on the basis that the emblem lacked distinctiveness, was descriptive, and had become customary in the trade.

In the Arsenal case ([2003] EWCA Civ 696), the Court of Appeal found that the insignia or name of a football club can denote both trade origin and allegiance to the club. As Mann J said in the Score Draw case, it is of the essence of a trade mark that it fulfils the former function. In addition, Mann J observed that "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". The issue was, therefore, whether the use of the badge had become so associated with (in this case) the Brazilian football team that the mark was not capable of being rendered distinctive of the person putting on the market an item of merchandise bearing it. Mann J found that the use of the badge, both in the past and now, had caused it to acquire a familiarity which meant that it would inevitably be associated, by the relevant public, with the historic Brazilian football teams, and as a result could not be distinctive of trade origin. How is this different from Arsenal, in which Laddie J held that the badge was capable of denoting trade origin? In the Brazilian emblem's case, it had been used as a badge for a period before anyone seemed to contemplate using it in a trade mark manner and, according to Mann J, the purpose of that use was so strong in the mind of the relevant public that it now prevented the emblem being used as a mark of trade origin.

This is similar to "famous name" cases. Some names are so famous, for reasons other than their association with particular goods or services, that it would be almost impossible to make them connote a particular trade origin. The Executrices of the Estate of Diana, Princess of Wales' Application ([2001] ETMR 254) is a good example of the point (and was endorsed by Mann J in the Score Draw case). It held that it was unlikely that "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".

So, if the name or device that you wish to adopt is so well known for non-trade reasons that it cannot serve the function of being distinctive of trade origin, it is possible that any company could use it. Of course, if you decide to use it on this basis, there would be nothing to stop others from using it either, as Score Draw found.

What rights may subsist in an old brand?

There are various rights that may subsist in a dormant brand. A good example is the WORLD CUP WILLIE word mark and device that were the subject of the recent case of Jules Rimet Cup Ltd v The Football Association Ltd ([2007] EWHC 2376 (Ch)). In that case, Jules Rimet (JR) sought a declaration that its trade mark application for two trade marks, a word mark for WORLD CUP WILLIE and a device mark for a cartoon lion in football kit, could not be opposed successfully by the Football Association (FA). The FA counterclaimed that:

• the device mark that JR sought to register infringed the FA's copyright in a drawing of the original World Cup Willie mascot and JR had infringed the copyright by using the device mark;
• the FA owned goodwill in the drawing and in the World Cup Willie name, and in seeking to register the marks, JR had passed itself off as the FA or as a business connected with the FA;
• the applications were made in bad faith (see below).

Copyright: when looking back at copyright works which may subsist in old brands (typically artistic works), it is important to remember that it may not be the current Act, the Copyright Designs and Patents Act 1988 (the "1988 Act"), that applies. Indeed, in the World Cup Willie case, it was the Copyright Act 1956 that was relevant. In addition, under the 1988 Act, section 52 limits the period of copyright protection to 25 years for artistic works which have been commercially exploited by making articles which are copies of the work (with some exceptions). However, the Court held in the World Cup Willie case that reproduction on paper or canvas did not constitute the making of an "article", so applying for a trade mark even outside the 25 year period could constitute infringement of copyright. In this case, however, it was not, as JR was not found to have taken a substantial part of the original work.

Trade marks: there may well be a registered trade mark for the old brand. However, this does not mean that it is valid or that you cannot use it! The most common way to appropriate an old brand is to file a revocation action on the basis that the trade mark is no longer used, and has not been used for a continuous period of five years. The key points relating to non-use of trade marks are set out in a separate box. However, if the proprietor starts using the mark at least three months before any application for revocation for non-use is filed, or even within this time provided he has had no notice of the pending application, the fact that it was not used for over five years becomes irrelevant. Therefore, if you are seeking to remove a trade mark registration on these grounds, it is best to give the proprietor notice as quickly as possible, and to ensure that the application is filed within three months of giving the notice (to be safe).

Passing off: as famously set out in the Jif Lemon case (Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341), for there to be passing off there must be:

• goodwill or reputation attached to the relevant goods or services;
• a misrepresentation by the defendant to the public (whether or not it is intentional) leading or likely to lead the public to believe that the goods or services offered by him are those of the claimant; and
• damage to the claimant caused by the misrepresentation.

Identifying goodwill in old brands can be difficult as, like any legal property, it can be assigned freely, and it can also be unclear which business is responsible for a series of events leading up to the sale of the goodwill. Christopher Wadlow helpfully suggests ways to establish the ownership of goodwill in his book, the Law of Passing-Off.

Residual goodwill is likely to be one of the ways that a company with an old, unused brand is most likely to be able to prevent it being appropriated by a third party. In the World Cup Willie judgment, the High Court held that the questions posed by Mr Wadlow in his book (see the box) may be appropriate in some cases, but they are not relevant to merchandising cases. In this case, on the facts, the High Court held that the FA was obviously the "apex" of the licensing operation, and so owned any goodwill, so the question turned to whether this goodwill had been abandoned. Reference was made to the case of Star Industrial v Yap Kwee Kor ([1976] FSR 256), and Wadlow's interpretation of it, namely that goodwill is not abandoned if the claimant intends to resume active trading: "It is not necessary for the prospect to be imminent, but the mere possibility of resumption if circumstances ever change in the claimant's favour is not enough", Wadlow says. Each case will, of course, turn on its facts, and whether there has been an abandonment of the residual goodwill will be a matter of evidence. In the case of World Cup Willie, it was held that, as it was a mascot for the World Cup, it was not appropriate to use it at other times, so it was reasonable to put the mascot and surrounding goodwill on the shelf until the next time England hosts the World Cup. The Court said that this was not abandonment, especially given the comments of JR in disclosure which stated that World Cup Willie is "one of the most valuable sports rights in the UK" and that it was "the mascot who inspired England's 1966 triumph".

How can a company protect itself from an accusation of bad faith where it is trying to register as a trade mark a dormant brand that once belonged to another?

The ground of revocation of a trade mark for bad faith arises from section 3(6) Trade Marks Act 1994, and the test was laid down in the CHINA WHITE case. Please see the separate box that sets out the provision and the test.

The issue of bad faith was considered recently in the World Cup Willie case. The FA's counterclaim included a claim that JR had made its trade mark applications in bad faith. The deputy judge found that JR had made its trade mark applications knowing that there was valuable residual goodwill in World Cup Willie. The question that remained was whether this was "dishonest" as judged by the ordinary standards of honest people. The deputy judge examined what steps JR took to see if it could make its applications; it called the FA to find out if it claimed any rights, but received no response; it carried out internet searches to see if anyone was using World Cup Willie and found that no-one was; and finally it engaged the services of a firm of trade mark attorneys, which advised JR that it could go ahead with the application.

In spite of all these steps, the deputy judge found that knowing that World Cup Willie had a residual goodwill in the UK amounted to bad faith. Interestingly, he noted that, if a defence is going to be run on the basis that legal advice has been sought and followed, all relevant facts including both the instructions given and the full advice received must be disclosed. Otherwise, it cannot be conclusive.

So, to protect yourself from an accusation of bad faith, you must be fairly sure that there is no residual goodwill in the subject matter of your trade mark application. It's a tough hurdle to overcome. Interestingly, the Court did not wholly dismiss the idea of relying on legal advice as a defence to a bad faith accusation. Perhaps a solution would be to seek an Opinion on this issue in isolation, disclosing the full facts available to you, and, if the legal advisers give you the all-clear, this may be conclusive (provided you are willing to disclose that legal advice with the court, and thereby waive any privilege that may be protecting it).

How can a company protect its old brands from being acquired by third parties?

As can be seen from this article, and the recent cases, it is very difficult to appropriate the rights of a brand owner in a brand, even if that brand has not been used for some time.

The clearest way for a company to protect its old brands is to conduct a regular audit of them all, and to decide which ones are important from both a current and long term perspective. Once this has been done, the company should seriously consider applying for registered trade mark protection (assuming the trade mark has no registered protection already), or recommencing use of the mark if it has already been registered. The use does not have to be on a large scale – but it must be genuine use. As for the other brands that you would like to keep, but not use at the moment, you could consider licensing them so that others can satisfy the "use" requirements. Such licensing arrangements could include restrictions and an expiry date, or a break clause, so that if your company changed its focus and wished to re-launch the old brand itself, it could do so.

Bad faith in trade mark law: the key points

Section 3(6) Trade Marks Act 1994 states that "a trade mark shall not be registered if or to the extent that the application is made in bad faith". Anyone (including the registrar himself) who believes that a trade mark has been registered in breach of section 3 can apply for a declaration that it is invalid pursuant to section 47 Trade Marks Act 1994.

One of the key cases on bad faith was the CHINA WHITE case (Harrison v Teton Valley Trading Co Ltd [2004] EWCA Civ 1028). It set out the test for bad faith as:

• Whether, in all the circumstances, the knowledge of the applicant was such that his decision to apply for registration would be regarded as bad faith by persons adopting proper standards.
• The applicable objective standard was acceptable commercial behaviour observed by reasonable and experienced persons in the particular commercial area being examined.
• Bad faith does not necessarily have to involve dishonesty, but failing to make the relevant enquiries that a reasonable and experienced person would have done could amount to bad faith.

Non-use of a registered trade mark: the key points

Sections 46(1)(a) and (b) state that a registration of a trade mark can be revoked on the following grounds:

1. that within the period of five years following the date of completion of the registration procedure it has not been put to genuine use in the United Kingdom, by the proprietor or with his consent, in relation to the goods or services for which it is registered, and there are no proper reasons for non-use;
2. that such use has been suspended for an uninterrupted period of five years, and there are no proper reasons for non-use.

Trade mark proprietors should ensure that, once the mark is registered, they ensure that they put their newly registered mark into use within five years. It is not enough for the use to be notional (just to get round the provisions of the Trade Marks Act) – it must be genuine use. This does not mean that it needs to be use on a large scale. There are, as envisaged by the Act itself, times in which there may be a proper reason for the non-use. However, the ECJ has recently provided guidance which indicates that this should be construed fairly narrowly: obstacles having a direct relationship with the trade mark which made its use impossible or unreasonable and which were independent of the will of the trade mark owner could constitute a proper reason for the non-use of the mark. The case in which the ECJ provided this guidance (Armin Häupl v Lidl Stiftung & Co. KG, Case C-236/05) concerned the inability of a supermarket (Lidl) to start its operations in Austria as a result of bureaucratic obstacles beyond its control. However, the ECJ did say that each case should be decided on its own facts.

Who owns goodwill?

Christopher Wadlow, in his book The Law of Passing-Off (3rd Ed), suggests a checklist for establishing ownership of goodwill:

• Are the goods bought on the strength of the reputation of an identifiable trader?
• Who does the public perceive as responsible for the character or quality of the goods? Who would be blamed if they were unsatisfactory?
• Who is most responsible in fact for the character or quality of the goods?
• What circumstances support or contradict the claim of any particular trader to be the owner of the goodwill?

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For further information about this published aticle, contact Kathryn Hobbs on +44 (0)121 213 2397, Alexa Highfield on +44 (0)121 213 2396 or Amie Ryalls on +44 (0)121 213 2360

This published article may contain information of general interest about current legal issues, but does not give legal advice.