World Cup Willie Wins in Extra Time

People of a certain generation may still remember when England won the football World Cup in 1966. Enough people evidently do that the Football Association (“FA”) recently succeeded in striking down a U.K. trade mark registration for a cartoon lion resembling World Cup Willie, the 1966 English World Cup mascot, on grounds including passing off and bad faith (Jules Rimet Cup Ltd. v The Football Association Ltd., [2007] EWHC 2376 (Ch)).

The decision is newsworthy because of the strong association many still make between World Cup Willie and the historic English victory. However, the decision also contains interesting observations on bad faith and the nature and ownership of residual goodwill in a merchandising business, and merits a read even by those less athletically inclined.

The Lion Sleeps Tonight…

The original World Cup Willie was introduced by the FA as the official mascot of the 1966 World Cup, which England hosted. The cartoon lion wore a Union Jack t-shirt and appeared in a variety of poses, including kicking a football. For a time he was actively licensed by a third company acting as agent for the FA for use in connection with a variety of merchandise.

After the World Cup, Willie gradually disappeared from the scene and the last of the FA’s U.K. trade mark registrations for the word WILLIE (the words WORLD CUP having been omitted as the property of FIFA, the World Cup governing body) expired in 1986.

In or around 2005, Jules Rimet Cup Ltd. became aware that no one owned a registered trade mark for World Cup Willie or his image. They determined to modernise the lion and license him for use on merchandise. On Rimet’s instructions, a graphic designer drew a lion based on the original World Cup Willie designs with some modifications, including a cross of St George t-shirt instead of a Union Jack. The new modernised lion was shown kicking a football. Jules Rimet applied to register the figurative device and the words WORLD CUP WILLIE as trade marks.

When the FA learned of the applications, it threatened to oppose them and wrote to one of Jules Rimet’s licensees, threatening legal proceedings. As a result, the licensee ended its agreement with Jules Rimet, who then sued the FA for unlawful interference with its business and for a declaration that the FA could not successfully oppose its applications. The FA counterclaimed for refusal of the applications, arguing that they were filed in bad faith and that it could, as of the filing dates in 2005, have brought a successful passing off action against use of the marks by Jules Rimet or its licensees.

…or Does He?

Jules Rimet attacked the FA’s claim under passing off on the basis that the FA had never owned the goodwill in World Cup Willie and that, if it did, no goodwill survived by 2005 when Jules Rimet filed its applications.

Jules Rimet pointed out, in particular, that the FA had never itself had any business in connection with World Cup Willie, but rather had only licensed the mark to third parties. Moreover, the actual licensing was undertaken by a third company, Walter Tuckwell Associates Ltd. (“Tuckwell”), and there was no evidence that the FA and Tuckwell had agreed that goodwill should accrue to the FA rather then Tuckwell. Jules Rimet further argued that if indeed goodwill had vested in the FA, the FA had abandoned that goodwill by ceasing to use World Cup Willie without any intention to resume use.

The FA resisted all these points, asserting that it had always intended to resume use of World Cup Willie and had in fact received several expressions of interest in licenses to use the lion in recent years, which it had declined to grant for business reasons. It could not, however, prove the existence of an agreement governing ownership of goodwill as between it and Tuckwell as a fire at the FA’s offices in 1998 had destroyed a large number of records.

On the existence and ownership of original goodwill, the Court nonetheless found for the FA. It held that, at the outset, the wide range of different merchandise in connection with which the lion had been licensed would have led people to conclude that its use had been authorised by the World Cup organisers, and that the individual manufacturers of the merchandise had been licensed accordingly. The goods were likely to have been bought on the strength of the presence of World Cup Willie, which further increased the probability that goodwill had accrued to the FA as the ultimate licensor. The Court also found that the FA had not abandoned its goodwill. The fact that it had dropped the words WORLD CUP from the mascot’s name signalled an intention to continue to use the lion thereafter, and the Court accepted the FA’s evidence that it intended to use the lion again when it eventually hosted a future World Cup.

Did Goodwill Survive in 2005?

Despite the passage of nearly 40 years since Willie’s launch, the Court was persuaded that the FA’s goodwill had survived, at least in part.

It noted sales literature from Jules Rimet referring to World Cup Willie as “some of the most valuable sports rights in the U.K.,” and an internal email observing that, “World Cup Willie is what people associate with.” The Court also noted a newspaper article quoting Jules Rimet employees as saying, “Back in 1966, football wasn’t big business like it is today and it seems no one thought to register World Cup Willie. We have put him in a St George’s cross and think England fans will love him,” and “Everyone remembers World Cup Willie and he is closely linked to the 1966 success. No one, not even the Football Association, had registered his image so we just added him to our collection.” Other sales literature read, “We are going to make World Cup Willie famous again. He is already known and loved by older generations, and now younger generations will come to know and love him too.”

The Court was persuaded that this evidence, and other occasional references to the lion in the press over the years, together with the occasional approach to the FA by prospective licensees, proved that goodwill had survived as of 2005.

The Court further found that this goodwill would have enabled the FA to succeed in a passing off action against Jules Rimet. It noted that Jules Rimet’s applications covered merchandise of the type that would ordinarily be licensed for use in connection with a football mascot. As the lion device was associated with the FA, the use was therefore likely to constitute an actionable misrepresentation.

Bad Faith

Although the finding on passing off was sufficient to spell the end for Jules Rimet’s applications, the Court went on to consider the FA’s allegation that the applications had been filed in bad faith.

It noted that the test to be applied was whether a reasonable person with the knowledge held by Jules Rimet at the time the applications were filed would regard the filings as proper in accordance with acceptable commercial behaviour observed by reasonable and experienced persons in the trade.

The Court found that Jules Rimet had knowledge of a continuing valuable goodwill in World Cup Willie, even if it did not know to whom it belonged. The judge was persuaded, however, that Jules Rimet had genuinely concluded that the FA had no continuing interest in World Cup Willie, in part because a telephone call to the FA to enquire whether it had rights in the lion was not returned. Moreover, Jules Rimet had sought legal advice from a trade mark attorney prior to filing its applications.

Nonetheless, by the standards of honest people in the trade, the judge considered that Jules Rimet had acted in bad faith. The legal advice obtained prior to the filings was not disclosed, and the court could not assess the extent to which the advisor was aware of the relevant facts. Although Jules Rimet did not appear to believe it was doing anything wrong, nonetheless appropriating a mark that was clearly the subject of someone else’s goodwill, whoever it might have been, was not in accordance with acceptable commercial behaviour.

Comment

The judge’s finding on bad faith in this case could have gone either way.

The factors in play were almost evenly balanced: on the one hand, Jules Rimet thought it was doing nothing wrong, made an attempt (albeit halfhearted) to establish whether the FA claimed rights in World Cup Willie, and sought legal advice before filing the applications. On the other, it knew that there was valuable goodwill in the property it was seeking to appropriate, did not disclose what its trade mark attorney knew or was told about that, and did not make any serious attempt to identify any possible right-holder prior to filing. In the event, it did too little to show that what it had done was honest in accordance with prevailing standards.

The judge’s confirmation that goodwill in a merchandising brand accrues to the ultimate licensor in the absence of any agreement to the contrary is helpful for businesses who make money through licensing arrangements. Smart licensors will still specify who is to own any goodwill arising from the use in a licensing agreement, however, to avoid potential traps later if the goodwill ever needs to be relied upon in a passing off claim.

For World Cup Willie, the match is over for now. Time will tell whether he makes a reappearance in line with the assurances given by the FA. Given the costs invested in the case, the FA no doubt believe they have a winner on their hands. England fans may yet see him back on the field soon.