BAILII [Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

England and Wales Court of Appeal (Criminal Division) Decisions


You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Johnstone & Ors, Re [2002] EWCA Crim 194 (31st January, 2002)
URL: http://www.bailii.org/ew/cases/EWCA/Crim/2002/194.html
Cite as: [2002] EWCA Crim 194

[New search] [View without highlighting] [Printable RTF version] [Help]


Johnstone & Ors, Re [2002] EWCA Crim 194 (31st January, 2002)

Neutral Citation Number: [2002] EWCA Crim 194
20004168Y4

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)

20004169Y4
20004312Y4
2000969Y2
Royal Courts of Justice
Strand,
London, WC2A 2LL
31st January 2002

B e f o r e :

LORD JUSTICE TUCKEY
MR JUSTICE PUMFREY
and
MR JUSTICE BURTON

____________________

Robert Alexander JOHNSTONE
Matthew Louis CROXSON
Toon Chin HO
Charles Thomas ELEY
MAYRON MULTIMEDIA LTD.
Richard James HARRISON
Appellants

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Mr David Lane QC appeared on behalf of the Appellant Johnstone
Mr A Roughton appeared on behalf of the Appellants Croxon & Eley

____________________

HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
____________________

Crown Copyright ©

    Lord Justice Tuckey:

  1. These cases raise two broad questions of importance : whether section 92 of the Trade Marks Act 1994 (the Act) is compatible with Council Directive 89/104 EEC to approximate the laws of Member States relating to trade marks (the Directive) and; whether it is a defence to a criminal charge under section 92 that the defendant’s acts do not amount to a civil infringement of the trade mark.
  2. The Appellants or Applicants were convicted of, or, after unsuccessful legal submissions, pleaded guilty to offences under section 92. In Johnstone the Judge certified the following questions under section 1 (2)(b) of the Criminal Appeal Act 1968 :
  3. 1) Whether in a prosecution brought under section 92(1) of the Act
    a) it is necessary for the Crown to prove “an infringement of the registered trade mark” ?
    b) a defendant relying on the statutory defence provided by section 92(5) may further rely upon sections 9,10 and 11 ?
    2) a) What do the words “infringement of a trade mark” in section 92 (5) mean?
    b) Do they mean “an unauthorised use of a registered trade mark” ?
    3) Whether section 92 of the Trade Marks Act 1994 is compatible with the Directive ?
    4) Whether the penalties provided for in section 92(6) of the Act are effective, proportionate and dissuasive for the purpose of Article 5 of the Treaty of Rome ?
  4. We have also been asked to give guidance about the effect of the decision in R –v- Lambert (2001) 3WLR 706 on section 92(5) of the Act although this has no bearing on the instant cases which were decided before the HRA came into force.
  5. The Act

  6. To understand the issues to which we have referred it is necessary to set out the most relevant provisions of the Act at the outset. Section 92 appears in Part III headed Administrative and Other Supplementary Provisions under the sub-heading Offences. It says :
  7. 92. Unauthorised use of trade mark, &c in relation to goods.

    1) A person commits an offence who with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor –
    (a) applies to goods or their packaging a sign identical to, or likely to be mistaken for, a registered trade mark, or
    (b) sells or lets for hire, offers or exposes for sale or hire or distributes goods which bear, or the packaging of which bears, such a sign, or
    (c) has in his possession, custody or control in the course of a business any such goods with a view to the doing of anything, by himself or another, which would be an offence under paragraph (b).
    (3) A person commits an offence who with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor –
    (a) makes an article specifically designed or adapted for making copies of a sign identical to, or likely to be mistaken for, a registered trade mark, or
    (b) has such an article in his possession, custody or control in the course of a business,
    knowing or having reason to believe that it has been, or is to be, used to produce goods, or material for labelling or packaging goods, as a business paper in relation to goods, or for advertising goods.
    (4) A person does not commit an offence under this section unless _
    (a) the goods are goods in respect of which the trade mark is registered, or
    (b) the trade mark has a reputation in the United Kingdom and the use of the sign takes or would take unfair advantage of, or is or would be detrimental to, the distinctive character or the repute of the trade mark.
    (5) It is a defence for a person charged with an offence under this section to show that he believed on reasonable grounds that the use of the sign in the manner in which it was used, or was to be used, was not an infringement of the registered trade mark.
    (6) A person guilty of an offence under this section is liable –
    (a) on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both,
    (b) on conviction on indictment to a fine or imprisonment for a term not exceeding ten years, or both.
  8. Section 104 of the Act says :
  9. In this Act the expressions listed below are defined by or otherwise fall to be construed in accordance with the provisions indicated.

    The provisions indicated for the words “infringement (of registered trade mark)” are sections 9(1) (2) and 10. Section 9 is in Part 1 headed Registered Trade Marks. The first eight sections define what trade marks are and set out the grounds for refusal of registration. Under the sub-heading Effects of registered trade mark. Sections 9 to 12 say :

    9. Rights conferred by registered trade mark

    (1) The proprietor of a registered trade mark has exclusive rights in the trade mark which are infringed by use of the trade mark in the United Kingdom without his consent.
    The acts amounting to infringement, if done without the consent of the proprietor, are specified in section 10.
    (2) References in this Act to the infringement of a registered trade mark are to any such infringement of the rights of the proprietor...

    10. Infringement of registered trade mark

    (1) A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered.
    (2) A person infringes a registered trade mark if he uses in the course of trade a sign where because -
    (a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or
    (b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,
    there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.
    (3) A person infringes a registered trade mark if he uses in the course of trade a sign which -
    (a) is identical with or similar to the trade mark, and
    (b) is used in relation to goods or services which are not similar to those for which the trade mark is registered,
    where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.
    (4) For the purposes of this section a person uses a sign if, in particular, he –
    (a) affixes it to goods or the packaging thereof;
    (b) offers or exposes goods for sale, puts them on the market or stocks them for those purposes under the sign, or offers or supplies services under the sign;
    (c) imports or exports goods under the sign; or
    (d) uses the sign on business papers or in advertising.
    (5) A person who applies a registered trade mark to material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, shall be treated as a party to any use of the material which infringes the registered trade mark if when he applied the mark he knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee.
    (6) Nothing in the preceding provisions of this section shall be construed as preventing the use of a registered trade mark by any person for the purpose of identifying goods or services as those of the proprietor or a licensee.
    But any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing the registered trade mark if the use without due cause takes an unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.
    11 Limits on effect of registered trade mark

    (1) A registered trade mark is not infringed by the use of another registered trade mark in relation to goods or services for which the latter is registered (but see section 47(6) (effect of declaration of invalidity of registration)).
    (2) A registered trade mark is not infringed by –
    (a) the use by a person of his own name or address,
    (b) the use of indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services, or
    (c) the use of the trade mark where it is necessary to indicate the intended purpose of a product or service (in particular, as accessories or spare parts)
    provided the use is in accordance with honest practices in industrial or commercial matters.
    (3) A registered trade mark is not infringed by the use in the course of trade in a particular locality of an earlier right which applies only in that locality ........

    12. Exhaustion of rights conferred by registered trade mark

    (1) A registered trade mark is not infringed by the use of the trade mark in relation to goods which have been put on the market in the European Economic Area under that trade mark by the proprietor or with his consent ........
  10. Sections 32 to 44 contain provisions relating to the procedure for registration of trade marks. Surrender, revocation and invalidity of registration are dealt with in sections 45 to 48.
  11. The Facts

    Johnstone

  12. On 27 October 1999 at the Kingston Crown Court the Appellant pleaded guilty to twelve offences under section 92(1)(c) of the Act following unsuccessful legal submissions made to the Judge. This was his second conviction for offences of this kind and he was subsequently sentenced to six months imprisonment concurrent on each count. A confiscation order in the sum of £132,181.24 and an order for forfeiture were also made.
  13. The offences with which the Appellant was charged were sample counts following a police raid on the Appellant’s house in New Malden on 24 October 1997. In an outhouse in the garden the officers found a large quantity of compact discs in boxes both sealed and opened, together with unmarked discs and empty containers. The majority of the CDs found were illicit recordings which bore the registered trade marks consisting of the names of the performers concerned.
  14. The prosecution’s case was that the Appellant was a bootlegger. Bootlegging involves making unauthorised recordings of an artist or group at live concerts or from the radio or television, transferring the recording onto a CD and selling it without the authority of the proprietor of the mark. The Prosecution’s evidence showed that most bootleg CDs sold in the United Kingdom are manufactured abroad and imported into this country without inlays. The importer pays about 80p for each disc and then packages the disc, together with the locally created inlays, into locally obtained cases. The packaged discs are then sold to a middle-man for about £7 to £8 each or exchanged for others bootleg CDs, or sold directly to the public for between £12 to£15 each. Bootleg CDs often involve infringement of the trade marks of the major record companies to whom the performers are contracted as well as those of the performers themselves.
  15. At trial Mr. Lane, QC, for Johnstone then as now, submitted that before the Crown could prove an offence under section 92 of the Act they had to prove a civil infringement of the trade marks concerned, having regard to sections 9, 10 and 11 of the Act. In particular the Defence wished to rely on section 11 (2)(b) to contend that the use of the artist’s name on the offending CD was not to indicate the origin of the goods but merely to indicate who the performers were. In other words it was merely “the use of indications concerning the kind ........ or other characteristics of goods ........ in accordance with honest practices in industrial or commercial matters”. Alternatively, Mr. Lane said that this argument provided a defence under section 92(5) of the Act. Following other decisions at Crown Court level the Judge rejected these submissions holding that section 92 contained a complete code so far as criminal offences were concerned and it was not necessary to establish a civil infringement. “Infringement” in section 92(5) meant unauthorised use as defined by the earlier provisions of section 92. Following this ruling the Appellant pleaded guilty to the offences with which he was charged. The Judge however granted leave to appeal against conviction and certified the four questions to which we have referred.
  16. Croxson
  17. On 16 August 2000 in the Bournemouth Crown Court before His Honour Judge Richard Hawkins QC and a jury the Applicant was convicted of six offences under section 92 (1)(c) and one offence under section 92 (1)(b) of the Act. He was fined a total of £3,500 and ordered to pay £4,000 prosecution costs. His application for leave to appeal against conviction has been referred to the full court by the Registrar because it raises similar points to the other cases before us.
  18. The Applicant trades in retail clothing including designer labels from temporary shops. The first three counts in the indictment related to the sale of cheap branded goods in a shop in Bournemouth in early April 1999. Shirts bearing the Yves St. Laurent logo, socks bearing the Nike logo and a tee-shirt bearing the Timberland logo were seized from the shop by trading standards officers. Similar clothing was seized from a temporary shop in Worcester later that month as well as two shirts bearing the Kickers logo. Witnesses on behalf of the proprietors of the marks concerned gave evidence that the clothing to which they were affixed was counterfeit.
  19. The issues at trial were whether in fact the clothing was counterfeit and if so whether the Applicant had shown that he believed the goods to be genuine on reasonable grounds (section 92(5)). His case was that he had bought the goods from reputable suppliers.
  20. No relevant submissions of law were made to the trial Judge but it is common ground that the Defence reserved the right to argue on appeal that section 92 as a whole was incompatible with the Directive and so the Applicant should not have been prosecuted.
  21. Ho, Eley and Mayron Multimedia Ltd.

  22. On 22 June 2000 in the Oxford Crown Court following a three week trial before His Honour Judge Morton Jack and a jury, Ho and Eley were convicted of conspiracy to commit offences under section 92 (1)(b) of the Act. Ho and his company Mayron were also convicted of three offences under section 92 (1)(a) and one offence under the Trade Descriptions Act 1968 and Eley was convicted of three offences under section 92 (2)(b) and one offence under the Trade Descriptions Act. Each of the Applicants’ appeals against conviction has been referred to the full court by the Registrar.
  23. The case against the Applicants was that Ho, through Mayron, had produced and Eley had packaged counterfeit CDs of four titles by well-known artists which were current hit singles. A third man, Tringham, who was not before the court was also involved. In October 1996 Tringham’s company had placed orders for 50,000 pressings of each of the titles with Mayron as “specials”. Eley’s company packed the discs after they had been made by Mayron and then Eley arranged for them to be stored in a warehouse where 120,000 of them were found in a raid by trading standards officers in February 1997. The CDs would have sold on the retail market for £2m to £3m. The counterfeiters’ profit would have been very large. Both Ho and Tringham were arrested in May 1997 and initially both falsely claimed that the “specials” were recordings by Bruce Springsteen. Tringham jumped bail and went to the United States before trial.
  24. One of the titles involved bore the Capitol trade mark. The Judge ruled that this mark was not registered for CDs. The Prosecution had therefore to prove that the mark had a reputation in the UK under section 92 (4)(b) of the Act. They called a Vice-President of EMI who said that Capitol sold 1.8m. CDs in the UK in 1997 which represented (86% of the total market. The Defence called evidence which sought to show that people buying CDs were not interested in the trade mark of the record company concerned.
  25. At trial Ho and Eley’s main defence was that they had no knowledge of the “specials” order. Ho maintained that he had been tricked by Tringham and that he was not knowingly involved in counterfeiting. Eley denied any involvement in packaging the CDs because at the time he was preoccupied with caring for his dying wife.
  26. Eley has been represented by Mr. Roughton on this appeal. He takes the same points about the effect of the Council Directive on behalf of Eley as he does on behalf of Croxson. He also complains that the Judge omitted to remind the jury of the evidence to which we have referred to the effect that those who purchase CDs are not interested in the recording company’s trade mark.
  27. When these cases were called on last week Mr. Ho asked the court to adjourn his and Mayron’s application so that they could be represented by counsel. We refused this application for reasons which appear in the short judgment given at that time, but said that we would deal with his application as a non-counsel application in the course of this judgment. In their preliminary grounds of appeal against conviction settled by counsel, they adopt, where relevant, the grounds advanced on behalf of Eley and we have considered the application on this basis. On Monday we were informed that Ho had instructed counsel over the weekend. We gave her the opportunity to put in any further submissions on behalf of the Applicants by 10.30am on Tuesday (29 January 2002) but no further submissions have been received. In the preliminary grounds of appeal, the Applicants’ other complaint is that the Judge wrongly admitted evidence of Tringham’s assertions that he thought the “specials” were Bruce Springsteen CDs so as to show that both conspirators had initially put forward the same false story.
  28. Harrison

  29. On 25 January 2000 in the Sheffield Crown Court the Applicant pleaded guilty to eleven offences under section 92 (1)(a) of the Act. He was fined £500 and ordered to pay £2,000 prosecution costs. Leave to appeal against conviction and sentence was refused by the single judge, but the Applicant renewed those applications. On 7 September 2000 the court received a Notice of Abandonment from his solicitors. However, on 30 September 2000 the Applicant wrote to the court saying that he wished to retract this abandonment because he had always maintained that in order to be guilty of an offence under section 92 (1)(a) a person had to be acting in the course of trade. In subsequent correspondence with the court his solicitors have confirmed that this is the case and that his oral instructions to abandon the appeal were only given reluctantly for financial reasons.
  30. This court will only exceptionally allow an applicant to treat his abandonment as a nullity (see R. –v- Medway [1976] QB 779) but in this case we will allow the Applicant to do so. One of the points which we have to decide is whether in a prosecution under section 92 the Crown do have to prove that the defendant was acting in the course of a trade and, in the light of our conclusion about this, we think it would be manifestly unfair to the Applicant to refuse to allow him to pursue his appeal.
  31. The facts giving rise to the Applicant’s prosecution are that on 31 March 1998 trading standards officers searched his house and found approximately 220 Sony playstation game CDs, the majority of which were unlawful copies . The Applicant had been buying or renting genuine CDs from stores and copying them using equipment installed on his personal computer. In order to identify which games were on which CD the Applicant had downloaded images from the Sony internet site and printed these out to create what in effect were copy inlays for each game. These copy inlays bore the Sony trade mark.
  32. The Applicant maintained that he was an inveterate games player and that all of the copied discs were for his own personal use. He pointed to the fact that he did not have more than one copy of any individual game and that there was no evidence that he had ever sold any copied CDs.
  33. The Applicant had also been prosecuted for Trade Description Act offences for which the prosecution accepted they had to show that the Applicant was acting in the course of trade. They did not accept however that they had to prove this for the trade mark offences and the Judge was asked to rule on that point. After he had ruled in favour of the prosecution, counsel advised the Applicant to plead guilty to the trade mark offences and the prosecution offered no evidence on the Trade Description Act offences, accepting that all the CDs were for the Applicant’s own personal use.
  34. As we have already said, the Applicant’s renewed application to appeal against conviction is on the basis that the Judge’s ruling was wrong and that the prosecution did have to prove that he had used the trade marks in the course of trade.

    The Law

    The Act – Civil and Criminal Liability

  35. The Act is, as its long title indicates, a measure which is intended among other things to implement the Directive. Because of the importance of trade marks in enabling consumers to distinguish between goods originating with different manufacturers, and the associated capacity to convey a message of quality, attractiveness and fashionableness, trade marks are central to modern trading, and have of course attracted those who wish to place counterfeit goods bearing valuable marks on the market. The so-called TRIPs Agreement, or Agreement on the Trade-Related aspects of Intellectual Property Rights including trade in counterfeit goods, which is an annexe to the World Trade Organisation agreement signed in 1994 provides by Article 61 that

    Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies available shall include imprisonment and/or monetary fines sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of a corresponding gravity. In appropriate cases, remedies available shall also include the seizure , forfeiture and destruction of the infringing goods and of any materials and implements the predominant use of which has been in the commission of the offence….
    There is no doubt that a Member state is both entitled and obliged to create appropriate offences relating to trade mark infringement.
  36. At the heart of the argument that section 92 of the Act is incompatible with the Directive is the contention that section 92 embraces behaviour which does not amount to civil infringement of a trade mark. Thus, if Johnstone’s conduct fell within section 11(2)(b) of the Act it would not infringe; nor would Harrison’s if it was not in the course of trade. To see whether this contention is well founded it is necessary to consider and compare the circumstances in which the Act imposes civil liability with the provisions of section 92 creating criminal offences.

  37. In the discussion which follows, we refer only to goods. Sections 9, 10, 11 and 12 are concerned with use of marks in respect of services as well, but section 92 imposes no criminal liability in respect of use of a mark in respect of services and for simplicity we have omitted references to services. Equally, sections 9–12 are concerned with ‘non-graphic’ use of the infringing sign (see section 103(2)) but section 92 plainly is not, so we make no reference to spoken and other non-graphic uses of signs.

  38. A trade mark is registered in respect only of certain goods. The list of goods set out in the registration is called the ‘specification of goods’, and these are referred to in the Act as the ‘goods for which the mark is registered’. The Act is comparatively straightforward. Section 9 has been described by Jacob J in British Sugar v James Robertson & Sons [1996] RPC 281 as a ‘chatty introduction’ to section 10, adding nothing to section 10 other than that the acts concerned must be done without the consent of the proprietor, a requirement of Article 5 of the Directive. Sections 11 and 12 specify acts which do not amount to infringement. Section 10 itself refers to the ‘sign’ used by the infringer, and is concerned with a number of factual considerations, which may be summarised as follows:

    (a) Does the infringer use the mark in the course of trade? If he does not, there is no infringement. ‘Trade’ is defined by section 103 as meaning ‘any business or profession’. This is not a narrow definition, and to use a mark even on a single article to be sold or hired out for reward will normally amount to use of the mark ‘in the course of trade’, as will its use on orders, invoices, advertisements, brochures and the like (section 10(4)).
    (b) The infringer’s sign is the same as the proprietor’s mark, and the use is on goods identical to those in respect of which the mark is registered (section 10(1)). This is the normal counterfeiting case.
    (c) The infringer’s sign is the same as that of the proprietor, but it is used in respect of goods similar to those for which the mark is registered (section 10(2)(a)).

    (d) The infringer’s sign is similar to the proprietor’s mark, and it is used either on goods identical to those in respect of which the proprietor’s mark is registered or on goods similar to those goods (section 10(2)(b))

    (e) If the case falls under (c) or (d) above, then is the public likely to be confused?
  39. Section 10(3) prescribes one further head of infringement. A defendant may infringe a registration when he uses a sign identical or similar to the proprietor’s mark on goods which are not similar to the goods in respect of which the mark is registered, provided that (a) the sign is used without due cause (b) the mark enjoys a reputation in the United Kingdom and (c) the defendant’s use either takes unfair advantage of or is detrimental to the distinctive character or repute of the mark.
  40. Whether they are properly described as defences to an action for infringement or as a set of acts not falling within section 10, sections 10(6), 11 and 12 list certain acts which are not infringements of a registered mark. Section 10(6), a so-called ‘home grown’ provision, is probably intended to relate to comparative advertising. We do not think we need to consider it further. There is also a controversial question whether section 10 relates only to ‘trade mark use’, that is, use as a badge of origin, or whether it is intended to embrace mere use of the mark for other purposes.
  41. Section 11(1) is concerned with the specific defence that the defendant’s sign is itself a registered trade mark. Section 11(2) provides savings relating to the matters there set out. These savings can be important, although they are necessarily of limited scope. The defendant’s knowledge or intention is relevant under the subsection because he will still infringe if what he is doing is ‘not in accordance with honest practices in industrial or commercial matters.’ Section 11(3) provides a protection likely to be very limited relating to a prior right of the defendant.
  42. We have already referred to trade mark use. An example of the kind of use under discussion may be helpful. The proprietor, a publisher of magazines, registers a mark consisting simply of a question mark, ‘?’, as a trade mark for magazines. There is no reason to suppose that such a registration cannot properly be obtained, and it is a plausible mark. Can he prevent the grammatical use of question marks on the covers of other magazines? Of course not, is the rational response. The difficulty is in seeing why. On the face of it, the requirements of section 10(1) are satisfied. The answer is to say that the defendant is not using the mark as a trade mark, that is, as a badge of origin. This question is said to have direct relevance to bootlegging cases, since the mark sued on is commonly the name of the performer or group, which is registered for goods including records and compact discs. The bootlegger uses the name of the performers, he says, not to indicate the origin of the goods but merely to indicate who the performers were. So in this case the defence is similar if not identical to the defence under section 11(2)(b).
  43. In Johnstone reliance was placed on the decision of the Full Court of the Federal Court of Australia (Gummow and Heerey JJ, Davies J dissenting) in Musidor BV v Tansing (t/a Apple Music House) (1994) 123 ALR 593. In this case the registered trade mark was ‘Rolling Stones’. The defendant sold compact discs carrying bootleg recordings of live performances by the Rolling Stones. The label contained the statement that the recordings “had not been authorised by the Rolling Stones Group or by their record company”. The question whether a mark is being used as a badge of origin is a question which transcends particular statutory provisions. The difference between the majority and Davies J was on the question of fact. Davies J considered that the mark as used by the defendant accompanied by the disclaimer nonetheless was used as a badge of origin for the recordings, but the majority considered that as a matter of fact it was not. In our view Davies J produced a telling example:
  44. To exemplify the infringement, assume that “Pierre Cardin” and “Gucci” are registered marks and that the Pierre Cardin organisation or the Gucci organisation manufactured goods but declined to put them on sale being not satisfied with their quality. It would, in my opinion, be an infringement for some other person without authority to put the goods on the market with the description that they were manufactured by Pierre Cardin or by Gucci but that the sale had not been authorised. Yet that is what the respondent seeks to do in the present case. It seeks to avail itself of the goodwill in the name “Rolling Stones” by using that name to identify the goods and it seeks to defend the infringement by stating that the release was not authorised by the Rolling Stones.

    We prefer this view to that of the majority but emphasise that whether the mark is ‘used as a trade mark’ is a question of fact in every case.

  45. The question whether ‘trade mark use’ is an essential aspect of the exclusive right of the proprietor under sections 9 and 10 has been referred to the Court of Justice on a number of occasions. No definitive answer has been received. However, the most recent view on the subject, expressed by Jacobs AG in Case C-2/00 Hölterhoff v Freiesleben (Opinion 20 September 2001) is that ‘trade mark use’ is an essential element of infringement under section 10. There is indirect support for this view in the judgment of the Court in Case C–63/97 BMW v Deenik [1999] ECR I–905.
  46. Section 12 is of some importance. It is the provision which provides for the free movement of trade marked goods in the internal market. It is the non-availability of this defence in the case of imports of the trade mark proprietor’s goods from outside the EEA which enables trade mark proprietors to accuse sellers of such goods of infringement: see the recent judgment of the ECJ of 20 November 2001 in Case C–414/99 Zino Davidoff (unreported). The concept of exhaustion of rights is based upon the doctrine that a trade mark owner placing his goods upon the market in the EEA is deemed to consent to their subsequent export and import into other countries of the EEA. Thus an export restriction in the EEA is not effective, and the trade mark owner cannot accuse an importer into another EEA country of infringement. However, the ECJ has held that a consent to importation into the EEA from outside must be clearly expressed, and cannot usually be implied. It follows that the source of ‘genuine’ goods sold in this country is central to the problem. If they are the proprietor’s goods placed on the EEA market by the proprietor or with the proprietor’s consent there is no infringement. If the goods are imported from outside the EEA, then unless the proprietor has consented to their sale in the EEA there is no defence.
  47. Finally it is a defence to civil proceedings that the registration is invalid. However, section 72 of the Act provides that in all legal proceedings relating to a registered Trade Mark (including proceedings for the rectification of the register) the registration of a person as proprietor of a trade mark shall be prima facie evidence of the validity of the original registration and of any subsequent assignment or other transmission of it. The grounds for challenging the validity of the registration are contained in section 47. Once a trade mark is invalidated, wholly or partially, the registration is deemed never to have been made to the extent that it is declared to be invalid (see section 47(6) of the Act). Jurisdiction to invalidate a mark is at present conferred only on the High Court and on the Registrar.
  48. 39. Sections 92(1) to (3) are qualified by sub-section (4) which requires either that the mark be used in respect of goods for which it is registered or that the mark enjoys a reputation and the use complained of satisfies the requirements of unfair advantage or detriment also set out in section 10(3).

    40. Each of sub-sections 92(1) to (3) is prefaced by words requiring the prosecution to prove that the acts of the defendant are done ‘with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor’. The requirement for consent mirrors the provisions of section 9. The preceding words are found nowhere else in the 1994 Act and appear to have their origin in the Theft Act 1968, where they are used in sections 17 and 21. The terms ‘gain’ and ‘loss’ are defined in paragraph 34(2)(a) of the Theft Act 1968, but since there is no definition in the Act they must be given their ordinary meaning

  49. Section 92(1) is directed to three types of ‘primary infringement’. To the extent to which the section relates to identical sign and mark, and goods in respect of which the mark is registered, this head of liability is co-extensive with section 10(1). Section 10(1)(c) echoes Article 61 of TRIPs which we have quoted above. Sections 92(2) and (3) prescribe offences which are ancillary to the offences of Section 92(1). Section 92(2) corresponds to section 10(5) and is concerned with preliminary acts of marking material such as packaging, ‘business paper’ and advertisements. Section 92(3) is concerned with printer’s plates and screens used for marking, and no doubt also with electronic versions of such things.
  50. From this analysis one can see that on a straight comparison between sections 9 and 10 and section 92 of the Act the basis of criminal liability under section 92 is generally narrower than the basis of civil liability under sections 9 and 10. But this does not answer the real question as to whether defences of “not in the course of trade”, under sections 11 and 12, of “not trade mark use” or of “invalidity” are available in criminal proceedings.
  51. It was submitted by counsel for the Crown that they were not. Mr. O’Neill in Johnstone, supported in his oral submissions by Mr. Rush in Croxson and Eley, submitted that section 92 only applied to counterfeit goods. Thus, section 92(1)(a) obviously refers to an act of counterfeiting. The words “such a sign” in section 1(b), they submitted, refer only to goods where a counterfeit sign has been applied by the defendant or some third party under section (1)(a). The words “such goods” in section 1(c) should be read in the same way. If section 92 was confined to counterfeiting, sections 11 and 12 could not possibly provide a defence. Nor could any question of non-trade mark use arise. Use in the course of trade, they submitted, could be equated with a requirement to prove gain or loss in section 92. They sought to derive support for their construction of section 92 by references to what the Minister said during debates whilst the bill was passing through the House of Lords.
  52. We do not accept these submissions. We do not think section 92 (1) can be construed in the way that the Crown contend. The words “such a sign” in sub-section (1)(b) obviously refer and refer only to the words “a sign identical to, or likely to be mistaken for a registered trade mark” in sub-section (1)(a). In other words “such a sign”, refers to the nature of the sign and not the person who applied it and the circumstances in which it was applied. “Such goods” in sub-section (1)(c) refers to goods or their packing which bear such a sign. We do not think that the words “with a view to gain or an intent to cause loss” necessarily equate with “in the course of trade”. We should add for completeness that Mr. O’Neill argued that the reference in section 92(1)(c) in the “course of business” indicates that the acts proscribed by section 92(1)(a) and (b) do not have to be committed “in due course of trade”. This does not follow. The “business referred to in section 92(1)(c) is the business of the possessor of goods who has not committed any of the acts within (b) : thus he may merely store the goods. It would only be necessary to refer to Hansard if there was any ambiguity in the statute. We do not think there is. Even if we are wrong about this, the various statements of the Minister to which we have been referred do not state clearly what the intention of the legislature was and are arguably inconsistent.
  53. It follows that unless the defences available to a claim for civil infringement of a trade mark are available in criminal proceedings section 92 does embrace behaviour which could not be the subject of a successful civil claim. If this is what Parliament intended then, as we shall explain, there are obvious difficulties with the Directive. But is this what Parliament intended ?
  54. We think the answer to this question is “no”. We have so far not considered section 92(5) and its reference to “infringement of the registered trade mark”. These words are specifically defined by section 104 of the Act by reference to the civil infringement sections - section 9(1) and (2) and section 10. Section 92(5) therefore pre-supposes that the illegal unauthorised use amounts to a civil infringement. We do not think the words can be read in any other way. It follows we think that unless there is a civil infringement, there can be no offence under section 92. Otherwise section 92 would cast the onus on the defendant to show that he had reasonable grounds for believing that what he did was not a civil infringement when the prosecution had only to prove unauthorised use within the four corners of section 92. Put another way, it would provide a defence when a defendant has a reasonable belief that there is no civil infringement, when in fact the absence of civil infringement would be no defence. This is a nonsense. Mr. O’Neill and Mr. Rush submitted that the words in question may have been inserted into section 92(5) in error, or intended to have the meaning which Judge Mitchell gave them in Johnstone. We do not agree. The words have the meaning that the statute gives them.
  55. Both counsel emphasised the need for an interpretation which made possible a clear direction to the jury. This need for clarity has, it seems to us, encouraged judges to construe section 92 so as to avoid requiring the jury to consider any question of civil liability. In arriving at this point, we consider that in certain respects the construction which has hitherto been placed on the section has the capacity to permit a criminal liability to be imposed where there would be no civil liability.
  56. It follows from what we have said that we think that the Act does give a defendant the defences to which we have referred. However, we do not think that the prosecution are required in every case to establish a civil infringement. It will be for the defendant to raise and set out clearly in his defence statement in accordance with the provisions of sections 5 or 6 of the Criminal Procedure and Investigations Act 1996 the defence or defences he relies on. The onus will then be on the Crown to disprove them. Lest this should encourage every defendant to raise every defence, we should emphasise some of the points which we have already made in considering these defences. These are :
  57. (a) The wide meaning of “in the course of trade” (para. 30(a)).
    (b) Our view that the minority judgment in Tansing was right (para. 35). We can see strong reasons for supposing that in every bootlegging case use of a registered trade mark consisting of the name of the performer would be a trade mark use, since it indicates the origin of the performance, a recording of which the consumer has to acquire and is hence a badge of origin.
    (c) It should also be noted that the important defences set out in section 11(2) are negatived if the prosecution establish to the normal criminal standard that the defendant’s use of the mark is not in accordance with honest practices in industrial or commercial matters. Thus the jury need only consider the specific defences if they are not satisfied that the defendant acted dishonestly.
    (d) We cannot envisage many, if any cases in which the issue as to whether the trade mark was being used as a badge of origin (trade mark use) will be distinct from the defence under section 11(2) but in such event the issue is one which should be left to the jury

    (e) The validity of the registration of the trade mark cannot be tried in criminal proceedings. The presumption in section 72 applies to such proceedings. If a defendant says in his defence statement that he is challenging the validity of the registration the criminal court may have to consider on the application of the defendant whether or not to grant an adjournment to allow the challenge to be determined. Mr Roughton suggested that such an application was not practicable in the context of a prosecution. We disagree. We would expect a challenge to validity to be launched very early in the life of the prosecution. No doubt the trade mark owner will be astute to protect his own interests. There is no reason why the challenge should not be expedited. There would be a discretion in the criminal court to refuse an adjournment where the challenge was proceeding slowly or had been started late or on obviously frivolous grounds.
  58. We have so far only considered section 92 (5) of the Act as an aid to construction but not as a defence. It is clear, as we have already said, that the sub-section pre-supposes that there has been a civil infringement of the mark and that the defendant’s use of it is unauthorised in one of the ways set out in section 92.
  59. Sub-section 92(5) has been considered by the higher courts in two cases. In R v Torbay Council ex parte Singh [1999] 2 Cr App R 451 justices stated the following question for the opinion of the Divisional Court:
  60. Whether a defendant who exposes for sale goods which bear a registered trade mark makes out that statutory defence if his evidence shows that he did not know of the existence of the registered trade mark and could not, therefore, have applied his mind to its detail.

    The defendant had taken steps to ascertain whether there was a registered trade mark by asking his supplier and checking the Draper’s Record.

    Auld LJ said this:

    The logical starting point is to identify the mens rea of the offence, subject to the statutory defence. …
    In my view, the offence is made out if the prosecution prove: (1) the fact of registration of a trade mark to which a sign on goods which the defendant exposes for sale is identical or for which it is likely to be mistaken; (2) that he does so with a view to gain for himself or another or with intent to cause loss to another; and (3) without the consent of the proprietor. It is not necessary to prove knowledge or intent to infringe a registered trade mark….

    After holding that ignorance of the registration could not afford any defence, Auld LJ continued:

    That leaves the question whether a trader is entitled to take advantage of the statutory defence in section 92(5) on the basis that he believed on reasonable grounds that there was or might have been no registered trade mark to infringe. A trader who does not know of, or who is in doubt as to, the existence of the registered trade mark which he is in danger of infringing, can check the register. It will provide him with a definitive answer...
    It follows, in my judgment, that the statutory defence in section 92(5) can have no application to a defendant’s state of mind as to whether at the material time there was or might have been a registered trade mark capable of infringement. Its wording makes plain that that is not its function. It does not speak of a reasonable belief in the absence of a registration. It speaks of a reasonable belief that the “manner” of use of the sign did not infringe “the registered trade mark”. In my view, it presupposes an awareness by a defendant of the existence of the registration against which he can match his manner of use of the allegedly infringing sign. The use of the definite article in the words “the registered trade mark” coupled with the reference to the “manner” of use of the sign makes plain that the draftsman intended that a defendant’s reasonable belief of no infringement in the manner of use of the sign falls to be judged against his knowledge or deemed knowledge of the registered trade mark in question.
    It also follows that the justices conducted the wrong enquiry as to Mr Singh’s belief and the reasonableness of it when considering his reliance on the defence provided by section 92(5). Accordingly I would answer “No” to the question posed by the justices…’

  61. In referring to the ‘use of the sign in the manner in which it was used’ it seems to us to be plain that sub-section 92(5) is concerned only with a defendant who has turned his mind to the question of the infringing nature of the particular use. In R v Keane (CA 18 February 2000 unreported) the appellant had been convicted after selling certain counterfeit items of clothing and footwear at a car boot sale. The defence was that he believed that the goods were genuine, nothing having excited the appellant’s suspicion. The contention on appeal was that mens rea was required for section 92(1). Mance LJ quoted with approval the judgment of Auld LJ in R v Torbay Council ex parte Singh and continued
  62. 25. What section 92(5) does do, however, in cases such as the present is, in our judgment, provide a broad general defence wich is capable of applying to all activities covered in section 92(1)(a), (b) and (c), but, of course, the defence involves the appellant showing that he believed on reasonable grounds that the use of the sign on goods in whichever of the ways mentioned in (a), (b) or (c) it was used or was to be used was not an infringement of the registered trade mark. The only matter which he must be taken to know is the existence of the registered trade mark.
  63. In our view, it follows from Singh and Keane that if the defendant has not paid any attention to the existence of the mark, or if he has been reckless as to its existence, or if he thought (mistakenly) that it was an infringing manner of use, he cannot bring himself within section 92(5).
  64. Compatibility

  65. The Directive has been stated by the Court of Justice to provide, in Articles 6 to 7, which correspond to sections 9 to 12 of the Act, a complete harmonisation of the rules relating to the rights conferred by registration of a trade mark under the national laws of the Member States:
  66. 23. In that respect, although the third recital in the preamble to the Directive states that 'it does not appear to be necessary at present to undertake full-scale approximation of the trade mark laws of the Member States', the Directive none the less provides for harmonisation in relation to substantive rules of central importance in this sphere, that is to say, according to that same recital, the rules concerning those provisions of national law which most directly affect the functioning of the internal market, and that that recital does not preclude the harmonisation relating to those rules from being complete.
    24. The first recital in the preamble to the Directive notes that the trade mark laws applicable in the Member States contain disparities which may impede the free movement of goods and freedom to provide services and may distort competition within the common market, so that it is necessary, in view of the establishment and functioning of the internal market, to approximate the laws of Member States. The ninth recital emphasises that it is fundamental, in order to facilitate the free movement of goods and services, to ensure that registered trade marks enjoy the same protection under the legal systems of all the Member States, but that this should not prevent Member States from granting at their option extensive protection to those trade marks which have a reputation.
    25. In the light of those recitals, Articles 5 to 7 of the Directive must be construed as embodying a complete harmonisation of the rules relating to the rights conferred by a trade mark. That interpretation, it may be added, is borne out by the fact that Article 5 expressly leaves it open to the Member States to maintain or introduce certain rules specifically defined by the Community legislature. Thus, in accordance with Article 5(2), to which the ninth recital refers, the Member States have the option to grant more extensive protection to trade marks with a reputation.
    (Case C–355/96 Silhouette International Schmied GmbH & Co KG v Hartlauer Handelsgesellschaft mbH [1998] ECR I–4799.)
  67. Thus the option to provide wider protection for marks having a reputation permits the Member State exercising the option to adopt only the provision specified for that purpose in Article 5. Had the defences under sections 11 and 12 not been available to a defendant charged with an offence under section 92, there would have been a possibility that acts caught by the latter section were not infringements within sections 9–12. Had that been the case there would have been an inconsistency with the Directive. We do not think that it is possible to rely, as Mr O’Neill sought to suggest, upon the sixth recital:
  68. Whereas this Directive does not exclude the application to trade marks of provisions of law of the Member States other than trade mark law, such as the provisions relating to unfair competition, civil liability or consumer protection.

    Mr O’Neill submitted that whether or not section 92 went wider than civil infringement, it could be justified as a measure of consumer protection and thus could benefit from this recital. We would observe that the decision in Silhouette suggests that any suggestion that the Directive is not exhaustive in respect of the substantive scope of protection to be given to trade marks must be approached with caution. But it is clear that while consumer protection may be the effect of section 92 (as it is in respect of all trade mark provisions) consumer protection is not material to the elements of the offence. We do not consider that this submission is well-founded. The Directive is concerned with the internal market, is made pursuant to Article 95 (ex Article 100a) of the Treaty, and empowers the Council to “adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.” It is settled that the Internal Market provisions of the Treaty, and in particular Articles 28 (ex Article 30) and 30 (ex 36) which relate to measures having effect equivalent to quantitative restrictions on imports and the justification of such restrictions on the grounds of protection of industrial property (trade marks, patents, copyrights &c) apply to criminal proceedings: see Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837 (a case concerning certificates of origin required for imports into Belgium). An approximation of laws for preventing the impeding of the free movement of goods would be partial if it related only to civil liability.

  69. However, in view of our conclusions about the offences created by section 92 of the Act and the defences to them, we do not think there is any general incompatibility between the Act and the Directive. In the event that we reached such a conclusion Mr. Roughton did not seriously argue to the contrary. It follows that insofar as the applications of Croxson, Ho, Mayron Multimedia and Eley are based on such a general assertion, they fail. Mr. Roughton maintained however that the inability to challenge validity in criminal proceedings and Mr. Lane maintained that the penalties prescribed for offences under section 92 were discreet grounds of incompatibility.
  70. We have already dealt with invalidity. In our judgment a defendant’s right to challenge validity in other proceedings and obtain an adjournment of the criminal proceedings in deserving cases affords adequate protection. There is no incompatibility with the Directive in this respect.
  71. Case 326/88 Anklagemyndigheden v Handsen [1990] ECR I–2911 establishes that where Community legislation does not specifically provide for any penalty for an infringement or refers for that purpose to national laws, regulations and administrative provisions, Article 5 of the Treaty (now Article 10 EC) requires the Member States to take all measures necessary to guarantee the application and effectiveness of Community law. For that purpose, whilst the choice of penalties remains within their discretion, they must ensure in particular that infringements of Community law are penalised under conditions, both procedural and substantive, which are analogous to those applicable to infringements of national law of a similar nature and importance and which, in any event, make the penalty effective, proportionate and dissuasive.
  72. The seriousness of trade mark infringement occupies a spectrum running from the comparatively trivial to the very serious (see also Article 61 of TRIPs). Counterfeiting is certainly a potentially serious offence, there being large sums of money to be dishonestly made by the deliberate counterfeiter. Special provision is made in respect of the treatment by Customs of counterfeit goods. Counterfeiting is a growing problem of sufficient importance to be the subject matter of a Commission Green Paper which appears to consider that enhanced penalties can be viewed as effective to combat counterfeiting. We observe that imprisonment for a term not exceeding 10 years can be imposed on conviction on indictment of a person guilty of obtaining property by deception (section 15 of the Theft Act 1968), 10 years under section 6 of the Forgery and Counterfeiting Act 1981 for the offence of forgery, and 10 years for the common law offence of conspiracy to defraud.
  73. We have no doubt that at least at the top end of seriousness counterfeiting is a serious offence of dishonesty and we cannot see that the maximum penalty is in any way out of step with other comparable offences involving dishonesty. We reject the suggestion that it is disproportionate to the seriousness of the offence.
  74. The Questions

  75. Having dealt with the general points which arise in these cases, we turn now to the Judge’s four questions in Johnstone.
  76. 61. 1. Whether in a prosecution brought under section 92(1) of the Act

    (a) it is necessary for the Crown to prove ‘an infringement of the registered trade mark’?
    (b) A defendant relying on the statutory defence provided by section 92(5) may further rely upon sections 9,10 and 11.
    Answer :- (a) No, but see para 48 and paras 62-64 below.
    (b) Yes, but see para. 64 below.
  77. To establish the offence under section 92(1)(a) the prosecution must prove : (1) registration of the trade mark (2) application of a sign to goods within the registration or packaging therefor by the defendant, the sign being the same as, or likely to be mistaken for, the mark and (3) lack of consent by the proprietor. So far as section 92(1)(b) and (c) are concerned, the defendant’s acts are as specified in those paragraphs, but the other elements are the same. If the judge is not satisfied that the goods are within the registration, then he must direct the jury in accordance with section 92(4)(b), which we accept is not straightforward. We believe that in the more normal case this will not arise, but if it does then it is probable that the direction can be restricted to ‘taking unfair advantage…of the repute of the trade mark by unfairly representing to the public who see the mark and are familiar with it that the goods originate with the same people as make other goods which bear the mark’.
  78. If however, the defendant raises a defence under sections 10 or 11 (and, we would add, section 12 where not embraced by the requirement for lack of consent) it will be for the prosecution to disprove such a defence. Section 10 “use in course of a trade” and section 11(1) are straightforward. So far as section 11(2) is concerned we repeat that these defences are only established if the defendant is acting honestly. We consider that the direction to the jury should take the form “if the prosecution have satisfied you that the defendant was not acting honestly in doing what he did, you do not have to consider whether the defendant [is just using his own [name or address]], [is using the mark to indicate that his goods [are of a particular kind/quality/intended purpose/value/other characteristics as appropriate]] or [needs to use the mark to show the intended use of his goods] but if you are not so satisfied then you must consider whether the prosecution has established that he is not [as above] and if you are not so satisfied you must acquit”.
  79. The defences under sections 10,11 and 12 are independent of the defence under section 92 (5) which may arise in the circumstances we have considered in paragraphs 49-52. But the defence under section 92(5) will only arise if the former defences fail or are not sought to be established. The section 92(5) defence has also to be considered in the light of the Lambert point with which we deal in the last section of this judgment.
  80. 2. (a) What do the words ‘infringement of a registered trade mark’ in section 92(5) mean?

    (b) Do they mean ‘an unauthorised use of a registered trade mark’?

    Answer:- (a) The word ‘infringement’ means infringement according to sections 9 to 12 of the Act.

    (b) No.

  81. 3 Whether section 92 of the Act is compatible with the Directive.

    Answer : Yes.
  82. 4 Whether the penalties provided for in sub-section 92(6) of the Act are effective, proportionate and dissuasive for the purpose of Article 5 of the Treaty of Rome.

    Answer : Yes – Article 5 has now become Article 10 EC.

    Disposal

    Johnstone

  83. In the light of what we have said Johnstone was entitled to raise a defence based on section 11(2)(b) of the Act. The Judge’s ruling denied him the right to have this defence considered by the jury. Unless we are satisfied that the jury would have convicted him even if he had been able to run this defence, his conviction must be regarded as unsafe and his appeal must be allowed. We are not so satisfied although in the light of what we have said about this defence (see paras. 35 and 48(b)) we would not expect many bootleggers to be acquitted. The Appellant has served the sentence of imprisonment imposed following his conviction and the Crown did not ask for a re-trial. For this reason and because the offences alleged occurred 4 ½ years ago we do not order a re-trial.
  84. Croxson

  85. This was a counterfeiting case in which the jury rejected the applicant’s defence that he believed the goods to be genuine on reasonable grounds. No other relevant defence was raised. We have already rejected the general contention made on his behalf that section 92 is incompatible with the Directive. His application for leave to appeal against conviction must be refused.
  86. Ho, Mayron and Eley

  87. This was also a counterfeiting case where the jury rejected the defence of lack of knowledge. The argument about lack of compatibility also fails in each of these cases.
  88. Ho’s complaint about the Judge admitting evidence of Tringham’s initial statement to the police is unfounded. He and Tringham were alleged to be co-conspirators. Evidence that they both put forward the same false story when arrested was admissible to show common purpose.
  89. The discrete point taken on behalf of Eley is that the Judge did not remind the jury of the evidence called to show that those who purchase CDs are not interested in the recording company’s trade mark. This evidence related to the Capitol trade mark where the prosecution had to prove the matters set out in sub-section 92 4(b). Mr. Roughton submits that the evidence was not called on the issue of reputation but went to the question of whether the applicant was taking unfair advantage of or acting in a way which was detrimental to the mark.
  90. In his summing up the Judge reminded the jury that the prosecution had to prove “that the Capitol trade mark has a reputation in the UK and its use was taking unfair advantage of the distinctive character or repute of the mark”. Later when dealing with the evidence he said “whether the Capitol mark has a reputation and whether its use in this case on pirated goods was taking unfair advantage of it are matters for you”. These directions cannot be faulted. The Judge was not obliged to remind the jury of all the evidence. He had made it clear at the beginning of his summing up that the facts were for them and that they were free to accept or reject what he said about them. For these reasons there is nothing in this complaint in our judgment.
  91. It follows that each of these applications for leave to appeal against conviction must be dismissed.
  92. Harrison

  93. In the light of what we have said Harrison was entitled to raise a defence based on section 10 of the Act to the effect that his use of the marks was not in the course of trade. The Judge’s ruling denied him the right to have this defence considered by the jury. Somewhat surprisingly, we must say, the Crown accepted that his use was not in the course of trade. Based on such a concession, the Appellant would have been entitled to be acquitted. It follows that we must regard his conviction as unsafe and quash it.
  94. The Appellant has not appeared to argue what the consequences of allowing his appeal against conviction should be. Clearly it would not be appropriate to order a re-trial given the Crown’s concession and that the alleged offences occurred nearly 4 years ago. Quashing the conviction also quashes the sentence and the order for payment of prosecution costs. We know nothing as to how the defence costs were met other than that from the court record it appears that the Appellant was legally aided from 2 September 1999 onwards. Our provisional view is that any application by the Appellant to recover what he paid towards the cost of his defence could be successfully met by the argument that he brought this case upon himself and was extremely fortunate that the prosecution made the concession which they did.
  95. The Lambert Point

  96. For a defendant to take advantage of s92(5) he must ‘show that he believes on reasonable grounds that the use of the sign in the manner in which it was used ... was not an infringement of the registered trademark’. The issue is whether, on a proper construction of the subsection and without contravention of Article 6 of the European Convention on Human Rights, this imposes a legal onus on the defendant, whereby he must prove the defence upon the balance of probabilities, or an evidential onus upon him, namely that he (or the evidence) must disclose a sufficient case for the prosecution to have to disprove it beyond reasonable doubt as part of its legal onus to establish guilt. Mr O’Neill accepted and asserted that ‘the burden imposed upon the defendant in the case of the statutory defence under s92(5) can be read as being evidential only and thus not an infringement of Convention rights’. Mr Rush, in a skeleton argument which was prepared (because of the time which this matter has taken to come on for hearing) without taking into account the decision of the House of Lords in R v Lambert [2001] 3 WLR 206 but only by reference to the decision in the Court of Appeal [2001] 2 WLR 211, did not make that concession: and in paragraph 7(g) of his skeleton he submitted that ‘there can be no complaint by a defendant in consequence of the onus being placed upon him to satisfy the s92(5) defence, his state of mind [being] a matter particularly within his own knowledge’.
  97. Mr O’Neill has referred us to the decision of the Divisional Court in Lynch v DPP [2001] EWHC Admin 882 (unreported), subsequent to the decision of the House of Lords in Lambert. He submitted that Lynch supported the concession that he had made and reinforced it. In the light of that, we gave Mr Rush the opportunity to put in a further written submission subsequent to the hearing, of which he took advantage: in that submission he confirmed that he too had reconsidered his position and no longer pursued his submission that there was a legal onus upon the defendant, so associating himself with the position of Mr O’Neill.
  98. Pill LJ, giving the leading judgment in Lynch with whom Poole J agreed, fully and clearly summarised the recent authorities discussing the inter-relationship between criminal proceedings in which a statute apparently placed a legal onus of proof on the defendant in relation to a particular issue, or particular issues, and Article 6. We do not believe it is necessary to repeat in this judgment the valuable and concise survey of the authorities there set out. He reviewed the leading case in the European Court of Human Rights, Salabiaku v France [1988] 13 EHRR 379, the decision of the Judicial Committee of the Privy Council in Attorney General for Hong Kong v Lee Kwong-Kut [1993] AC 951 and the speeches of Lord Bingham of Cornhill and Lord Hope of Craighead in Brown v Scott [2001] 2 WLR 817 and of Lord Hope in R v Director of Public Prosecutions ex parte Kebilene [2000] 2 AC 326. He then considered the judgment of Lord Woolf CJ in the Court of Appeal in Lambert at paragraph 16 and the speeches of Lord Steyn (at paragraphs 38 and 41), Lord Clyde (at paragraph 154) and Lord Hutton (at paragraph 198) in Lambert in the House of Lords. Lambert related to the question of the reverse onus apparently present in sections 28(2) and (3) of the Misuse of Drugs Act 1971. The most relevant passages cited by Pill LJ are from the speech of Lord Steyn at paragraph 41:
  99. In these circumstances I am satisfied that the transfer of the legal burden in section 28 does not satisfy the criterion of proportionality. Viewed in its place in the current legal system, s28 of the 1971 Act is a disproportionate reaction to perceived difficulties facing the prosecution in drugs cases. It would be sufficient to impose an evidential burden on the accused. It follows that s28 is incompatible with the Convention rights.
  100. The passage he cited from Lord Clyde’s speech at paragraph 154 reads as follows:
  101. A strict responsibility may be acceptable in the case of statutory offences which are concerned to regulate the conduct of some particular activity in the public interest. The requirement to have a licence in order to carry on certain kinds of activities is an obvious example. The preservation of health and safety and the avoidance of pollution are among the purposes to be served by such controls. These kinds of cases may properly be seen as not truly criminal. Many may be relatively trivial and only involve a monetary penalty. Many may carry no real social disgrace or infamy.
  102. Nevertheless the Divisional Court in Lynch concluded that in the case of the specific section being considered, namely a defence under s139 of the Criminal Justice Act 1988 (as amended by the Offensive Weapons Act 1996), providing that the defendant had the burden of proving lawful possession of an otherwise offensive weapon, on a proper construction of the statute this placed the legal burden upon the defendant and such reversing of the burden was not in contravention of Article 6. The Divisional Court distinguished s28 of the Misuse of Drugs Act on a number of bases, including the conclusions that a section 139 offence though undoubtedly ‘truly criminal’ carried a much more restrictive power of sentence (a maximum of two years) than the potential life sentence referred to by Lord Steyn in Lambert and in particular (at paragraph 27(2)) that:
  103. There is a strong public interest in bladed articles not being carried in public without good reason. I do not find it obviously offensive to the rights of the individual that it is for him to prove a good reason on a balance of probabilities … Parliament is entitled, without infringing the European Convention on Human Rights, to deter the carrying of bladed or sharply pointed articles in public to the extent of placing the burden of proving a good reason on the carrier.
  104. As we have stated, neither Mr O’Neill nor, in the event, Mr Rush have sought on behalf of the Crown to persuade the Court that this is a case falling on the Lynch side of the line, and we agree:
  105. i) Though in the event it was not decisive to his deliberations, Pill LJ was plainly concerned (at paragraph 23 of his judgment) as to whether the so-called placing of the evidential burden on the defendant, being in fact a description of the situation in which, as discussed above, what is in fact required is the raising of a sufficient case on the evidence, can properly be described as a burden of proof at all. He therefore had a reluctance (which it seems was not shared by their Lordships in Lambert) to construe the word ‘prove’ as anything other than satisfying a legal burden of proof, as opposed to raising an issue. If this be a concern in relation to some statutes, we are satisfied it does not apply here where the words used simply require the defendant to ‘show’ his belief, which would certainly be consistent, given the obligation of the courts to construe a statute so far as possible to comply with the Convention, with imposing what is conventionally called only an evidential burden.

    ii) We are satisfied that the offence in this case, carrying with it as it does a sentence of up to ten years imprisonment, is one which renders it important to give adequate protection to a defendant, and in any event we can see no similar public policy reasons to those which were identified by Pill LJ in Lynch.

    *************************

    LORD JUSTICE TUCKEY: Are there any applications arising out of that with which we can deal now?PRIVATE 

    MR BOUMPHREY: There is an application for costs in relation to Johnstone.

    LORD JUSTICE TUCKEY: The costs of what?

    MR BOUMPHREY: My Lord, this hearing and the hearing below.

    LORD JUSTICE TUCKEY: We hear what you say, yes.

    MR BOUMPHREY: The basis of that application is that Mr Johnstone was deprived of his defence.

    LORD JUSTICE TUCKEY: I follow that.

    MR BOUMPHREY: My Lord, I would respectfully suggest that while his behaviour is behaviour that may have brought some form of attention to him, it is not behaviour that has fallen to such a low standard that he should have been deprived of a defence necessarily. In those circumstances he was entitled both to see whether his defence was effective in the Crown Court and in the circumstances of what happened in the Crown Court he was entitled to bring the matters from there to here.

    MR JUSTICE BURTON: Was he legally aided?

    MR BOUMPHREY: He was legally aided initially in the Crown Court, yes. He has subsequently instructed counsel privately.

    LORD JUSTICE TUCKEY: When? We ought to perhaps know, when did legal aid come to an end?

    MR BOUMPHREY: My Lord, my understanding is that he was privately funding the case from the moment it started its process in the Crown Court to the Court of Appeal.

    LORD JUSTICE TUCKEY: Right.

    MR JUSTICE BURTON: So throughout the Crown Court he was legally aided.

    MR BOUMPHREY: He was legally aided from the end of Crown Court proceedings and from the conviction in the Crown Court he started to fund his solicitors privately.

    MR JUSTICE PUMPHREY: Can you tell me what the sale price of the compact discs which he had by way of stock were?

    MR JUSTICE BURTON: And the defence he wanted to put forward was that the identification of the performers on the CDs was not a badge of origin, is that it?

    MR BOUMPHREY: It would have been both the combination of it not being a badge of origin and an element of reasonable belief in relation to it not being a badge of origin as a result of his belief about the property.

    MR JUSTICE BURTON: It was not a badge of origin, and if he was wrong about that then he reasonably believed that the names of the performers was not a badge of origin.

    MR BOUMPHREY: My Lord, yes.

    LORD JUSTICE TUCKEY: We understand, Mr Boumphrey, what the application is. That is your only application, is it, in the case of Johnstone? Are there any applications by anyone else? Mr Roughton?

    MR ROUGHTON: My Lord, their Lordships in the House of Lords. Your Lordship is refusing me leave to appeal; I cannot appeal an application for leave to appeal unless your Lordships so order.

    LORD JUSTICE TUCKEY: No, you cannot.

    MR ROUGHTON: My Lord, can I just take you to the relevant part?

    LORD JUSTICE TUCKEY: Let us deal with this question of costs first, shall we? There is nothing else arising out of Johnstone.

    MR RUSH: There is an application for costs so far as I am concerned. I will deal with mine later. Shall I make the application now?

    LORD JUSTICE TUCKEY: Let us deal with costs together. You are applying, Mr Rush, in the cases of Croxson, Ho and Eley.

    MR RUSH: Eley and Mayron. The costs simply for this hearing. The total figure of costs for three local authorities legal departments and the council is £15,315.

    LORD JUSTICE TUCKEY: Do we assess them in this Court? I do not think we do. When you say there are three local authorities involved, because there are two involved in the Croxson prosecution.

    MR RUSH: My Lord, yes.

    LORD JUSTICE TUCKEY: Then there is a separate authority in the Ho cases. You apply for the Crown's costs of the appeal.

    MR RUSH: I do, effectively, to be split four ways between the four appellants.

    (Associate indicates that in the case of a costs order in favour of the Crown the Court should specify the amount of such order.)

    LORD JUSTICE TUCKEY: Very well. Give me the figure again.

    MR RUSH: The total figure is £15,315. Split four ways that would amount to £3,828.

    MR JUSTICE PUMFREY: Do we not make a joint and several order; or can we not do that?

    MR RUSH: Yes. I give you that figure and I seek a joint and several order.

    MR JUSTICE BURTON: Croxson's appeal should be regarded as joint and several?

    LORD JUSTICE TUCKEY: No, I think not.

    MR JUSTICE BUXTON: Can you give a separate figure for Croxson?

    MR JUSTICE PUMFREY: Would you have to allocate that on the basis of a quarter?

    LORD JUSTICE TUCKEY: 3,828 let us say for Croxson, and the balance in the other case; would that be fair?

    MR RUSH: I think that would be fair.

    MR JUSTICE BURTON: I do not know whether you feel that Croxson was rather more than the one quarter of the consideration, given that he had his own separate facts.

    MR RUSH: The reality, my Lord, is that, although there are separate facts in the case of Croxson, factually Ho/ Mayron was a much more complicated case. As far as the legal arguments advanced by Croxson, they are the same.

    MR JUSTICE BURTON: I suppose there is the separate point under 4(b).

    MR RUSH: There is a separate point on 4(b) as far as Eley was concerned, which frankly did not take up very much time. I did not mean it quite like that.

    LORD JUSTICE TUCKEY: Okay, I think we have a picture. Thank you, Mr Rush.

    Miss Bevan, you appear for the Crown in Johnstone, is that right?

    MISS BEVAN: Indeed.

    LORD JUSTICE TUCKEY: What do you say about the costs in that case?

    MISS BEVAN: The Crown do not oppose an application for costs out of central funds in relation to Mr Johnstone.

    MR JUSTICE BURTON: In relation to the appeal.

    MISS BEVAN: In relation to the appeal.

    MR JUSTICE BURTON: What do you say about the costs below?

    LORD JUSTICE TUCKEY: I do not think there are any.

    Mr Boumphrey, I am not sure I understood you; at one stage I thought that you were telling us that he was not legally aided below and then I understood that he was legally aided until after the trial.

    MR BOUMPHREY: My Lord, yes, I was under the misapprehension that there was a contribution that he was required to pay in relation to his legal aid payments in the Crown Court.

    LORD JUSTICE TUCKEY: I would be amazed if there was not, but one is always being amazed at these things. And he had thousands of pounds worth of....

    MR JUSTICE PUMFREY: Can you tell me - this has probably gone past in the wash now - he was legally aided with a nil contribution in the Crown Court?

    MR BOUMPHREY: I understand that he was legally aided with a nil contribution in the Crown Court.

    LORD JUSTICE TUCKEY: Very well.

    (The Bench conferred.)

    LORD JUSTICE TUCKEY: Mr Boumphrey, as Mr Johnstone was legally aided no question of costs arises, but we are surprised to hear that he had no contribution in the circumstances, and had he paid any part of his costs below he certainly would not have been given them by this Court. But we think it is right, having succeeded on the appeal, that he should have his costs of the appeal out of central funds to be assessed.

    Mr Roughton, you have dealt with the application against your clients.

    MR ROUGHTON: I say very little, except to say that Mr Eley has been legally aided throughout. Mr Croxson was not legally aided until he was granted representation by the Registrar. That is all I have to say.

    (The Bench conferred.)

    LORD JUSTICE TUCKEY: Miss Wilson, do you want to say anything about the question of costs?

    MISS WILSON: My Lord, I do not, thank you. I leave the matter rest there.

    LORD JUSTICE TUCKEY: It seems to us - just so that you should know what we are thinking - that although Mr Ho tried unsuccessfully to obtain an adjournment, he had availed himself of the argument which was advanced by Mr Roughton on behalf of the other two and we agreed that we would consider it on that basis.

    MISS WILSON: My Lord, yes. I cannot add anything to that. So, my Lord, I have no applications to make.

    LORD JUSTICE TUCKEY: We think it is right that the unsuccessful applicants should pay prosecution costs in this case. In the case of Croxson we will make an order that Mr Croxson pays £5,000 towards the costs of the relevant prosecuting authorities in that case, and in the case of Ho, Mayron and Eley, we make an order that those applicants should be jointly and severally liable to an order for costs in the sum of £10,000 in favour of the one prosecuting -- there were two in each?

    MR RUSH: Two for Croxson, Oxford County Council.

    LORD JUSTICE TUCKEY: And the prosecuting authority in the Ho/Eley case.

    Mr Roughton, that leaves your application. What is it you want us to do?

    MR ROUGHTON: I am sorry about this; can we just go back to costs?

    LORD JUSTICE TUCKEY: Go back to costs, right.

    MR ROUGHTON: What your Lordship has ordered is that Mr Croxson has to pay two people because he had been prosecuted by two authorities. If he is sued on costs, which is a civil debt, then there might be a problem.

    LORD JUSTICE TUCKEY: £2,500 each.

    MR ROUGHTON: I am obliged. Sorry to raise that.

    LORD JUSTICE TUCKEY: No, let us avoid complications of that type.

    MR JUSTICE PUMFREY: It is comfortably above the limit of £750 for the statutory demand anyway.

    LORD JUSTICE TUCKEY: What were you going to show us in the good red book?

    MR ROUGHTON: Page 993. I am looking, my Lord, at paragraph 7-255, the paragraph that starts "section 51".

    MR JUSTICE BURTON: You are asking to recall our judgment, is that right, prior to it being drawn up and grant you leave to appeal but then dismiss the appeal rather than refusing your application?

    MR ROUGHTON: My Lord, it is not clear what is said in Archbold because it appears that your Lordships have the power to say 'Although this is an application for leave to appeal we order it to be treated as if it were an appeal'. My Lord, if one looks at section 51 I think that is consistent with what your Lordship says. What I would like to do is try to convince your Lordships of that and to make that order.

    MR JUSTICE BURTON: What does Mealey and Sheridan say?

    MR ROUGHTON: That I do not know.

    LORD JUSTICE TUCKEY: Let us go to other end of this and you tell us shortly what it is you say the House of Lords should be considering in your cases.

    MR ROUGHTON: The problem is that I need to have some time to consider your Lordships' judgment. What I was going to ask for is a week.

    LORD JUSTICE TUCKEY: What, you mean anything will do? What do you have in mind?

    MR ROUGHTON: My Lord, the Directive point, we say, is of fundamental importance in this case.

    LORD JUSTICE TUCKEY: On the basis of the construction which we put on the Act, the main planks of your argument fell to the ground, as we have indicated. The only discrete points remaining were about the invalidity point and the penalty point. Is that what you are saying you want to take to the House of Lords?

    MR ROUGHTON: The penalty point I did not make. I know your Lordship said I did - it does not matter because it is there as a point anyway.

    LORD JUSTICE TUCKEY: I thought you had made it.

    MR ROUGHTON: It does not matter. We say the Directive has to be more seriously advanced - I say 'seriously', more fastidiously followed.

    MR JUSTICE BURTON: In what way? The only point in that case, apart from the point on 4B, which you abandoned in the course of argument, the only point then is the adjournment/validity point, if you are going to associate yourself on penalty. We are not trying to say that you have wrongly construed the Act.

    MR JUSTICE PUMFREY: It is going to be a bit surprising for (inaudible), is it not, to be told if you cannot try the two issues separately, you cannot do it any other way.

    MR ROUGHTON: My Lord, it would be, yes. I would like the opportunity to make submissions, even if I can do it on paper.

    MR JUSTICE BURTON: Even for the purposes of coming to us, never mind to the House of Lords, would you get leave to appeal against sentence if your only point was the validity point?

    MR ROUGHTON: I would like to consider it. I was asked just to give my off-the-cuff point, but I would like to consider the judgment.

    LORD JUSTICE TUCKEY: I suppose in fairness to you, you have to have the opportunity to consider it, but we will give a snap view on the point.

    (The Bench conferred.)

    LORD JUSTICE TUCKEY: Mr Roughton, I am sorry, I do not think we are going to need to embark on whether procedurally you are in order. If the point that you want to raise is the adjournment point, you can be guaranteed that we will not certify as a point which should go to the House of Lords. So I should not waste your time on it if I were you.

    MR ROUGHTON: My Lord, can I have at least the opportunity to think about whether I want to waste my time. I do not want to use up any more of your Lordships' time --

    LORD JUSTICE TUCKEY: Remember you are also wasting our time.

    MR ROUGHTON: Everybody's time.

    LORD JUSTICE TUCKEY: Right.

    MR ROUGHTON: My Lord, I just want to have an opportunity to consider the judgment. I can do that today. My Lord, I then may choose to make an application to your Lordships and it would have to be a very good application, I entirely concede that.

    LORD JUSTICE TUCKEY: It would also have to be on paper because we shall be dispersing to the four corners, perhaps only in this building.

    MR ROUGHTON: What I do not want to do is - and I have some notes of what was said. I just want to consider them in some detail. I am happy to do that in a relatively short time in the course of this afternoon and indicate to everybody, 'Yes, I will go', 'No, I will not'. But my concern is that there are some things that your Lordship said that I would like to have a chance to look at, and that is the essence of my application. I do not ask for an extension of any time from the fourteen days or anything like that.

    MR JUSTICE BURTON: The trouble is you are doing three things, are you not? One is you are seeking to persuade us that there is a point of law of public importance; secondly, if there is, you have to persuade us that we should turn your application into an appeal; and, thirdly, even if we did that - and suppose anticipatorily we might - you would then have to persuade us to grant you leave, or at least refuse you leave so that you can then go to the House of Lords.

    MR JUSTICE PUMFREY: It comes to this, does it not? You want us to hold back drawing the order for two days.

    MR ROUGHTON: 24 hours.

    MR JUSTICE PUMFREY: Right, 24 hours. And if the order is not drawn for 24 hours, if before the order is drawn you make an application that you wish to press to have your application for leave to appeal allowed and your appeal dismissed and if you formulate a suitable question for their Lordships then you want us to deal with it on paper and hold up the drawing of the order at least sufficiently long for that to happen; is that right?

    MR ROUGHTON: My Lord, that is right.

    MR JUSTICE BURTON: You will need to address us on Mealey and Sheridan as well in your paper application, quite apart from the formulation --

    MR ROUGHTON: I appreciate there is an uphill struggle and I think it is probably vertical, my Lord, but I am a little concerned - and I stress a little - that I am being asked to make an application on the basis of a fairly lengthy judgment. So 24 hours is all I am asking. I am quite happy to indicate either way what my position is.

    LORD JUSTICE TUCKEY: And you are happy for us to deal with it on paper?

    MR ROUGHTON: Absolutely, my Lord.

    LORD JUSTICE TUCKEY: If we think it requires a response we will put it; if we do not, we will deal with it.

    MR RUSH: Can I mention a further potential complication? I know, having spoken to Mr O'Neill last week - and your Lordships can see he is not here, and of course Crown is represented by my learned friend Miss Bevan today - that if the decision was adverse to the Crown in that case I know he would be grateful for some time to consider the position. It has a slightly different effect, I appreciate, from my learned friend's application. I know, having spoken to him, he would be grateful for a little bit of time as well.

    Can I say from my point of view I think it is extremely unlikely that I would seek to take the matter any further, but I know, having spoken to Mr O'Neill, it is something he would be grateful for some time to consider.

    LORD JUSTICE TUCKEY: There is a logistical problem as I have explained. How long are you asking for on his behalf? I am assuming that we will be able to get the final form of this judgment to you today. We have had problems in that respect, so whether we can deliver on that promise I am not certain, but certainly by tomorrow.

    MR RUSH: For my part not very long. I do not know, perhaps if Miss Bevan ...

    MISS BEVAN: My Lord, I understand that Mr O'Neill in the first instance will be seeking perhaps up to a week to consider the judgment that you have delivered today, either to make a paper application or respectfully so that the Court can reconvene to hear submissions if any are forthcoming.

    LORD JUSTICE TUCKEY: I think a week is too long.

    (The Bench conferred.)

    LORD JUSTICE TUCKEY: What we have decided to do is this. We think that this should be dealt with speedily. We will give you, Mr Roughton, and also Mr O'Neill until close of business on Wednesday to put in writing any application for - in your case, Mr Roughton, as you know you have a number of difficulties, but so far as the prosecution are concerned, any application to certify and for leave should be put in writing by close of business on Wednesday. When we have received that written application, we will either deal with it on paper or give further directions as to how it should be dealt with, which may involve calling for a reply from the other side, or possibly reconvening the Court to consider it. But that is the way we see forward.

    We have refused the application in the case of Croxson and Eley and Co. We had better defer drawing up the order until that time as well.

    MR ROUGHTON: My Lord, yes.

    LORD JUSTICE TUCKEY: But there is no reason why the orders in relation to those who are not affected by this, which it is only Johnstone, is it not, and Harrison, should not be drawn up. But in the other cases the order will not be drawn up until close of business on Wednesday and then subject to any further directions.

    MR ROUGHTON: So be it, my Lord. Would a nil return be appreciated for the Court? If I was to write as soon as I possibly knew and say: 'I do not wish to make any application', would that assist?

    MR JUSTICE BURTON: The order can be drawn up as soon as we get your nil return, assuming your nil return is to that effect.

    LORD JUSTICE TUCKEY: Certainly, Mr Roughton, thank you very much. Is there anything else that we need to deal with? Thank you all again for your help.


© 2002 Crown Copyright


BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII
URL: http://www.bailii.org/ew/cases/EWCA/Crim/2002/194.html