Regina v. Johnstone (Respondent)(On appeal from the Court of Appeal (Criminal Division)).

An offence under section 92 of the Trade Marks Act 1994 requires use of the offending sign as an indication of trade origin. The prosecution must prove that ingredient. Whether the sign was so used depends on how the average consumer of the relevant goods would perceive it.

Purely descriptive use falls outside section 92. A performer's name on a recording may identify only its contents, although the presentation may also suggest a commercial connection or authorisation.

The reasonable-belief defence in section 92(5) extends to a reasonable belief that no relevant trade mark was registered. The provision places the persuasive burden on the accused, to be discharged on the balance of probabilities. That reverse burden is compatible with article 6(2) because compelling enforcement considerations justify it and the relevant facts are chiefly within the accused's knowledge.

The respondent possessed compact discs containing unauthorised recordings of performances by well-known musicians. The discs and packaging displayed performers' names which had been registered as trade marks. He was charged under section 92(1)(c) of the Trade Marks Act 1994.

The Crown Court ruled that section 92 was a self-contained criminal code and that the prosecution did not need to establish civil trade mark infringement. The respondent then pleaded guilty. The Court of Appeal (Criminal Division), in [2002] EWCA Crim 194, allowed his appeal because the ruling had prevented the jury from considering whether the names were used descriptively under section 11(2)(b). It ordered no retrial.

The Crown appealed. The certified question was whether it is a defence to a charge under section 92 that the defendant's acts do not amount to civil infringement. Subsidiary issues concerned reasonable belief under section 92(5), the burden of proving that defence and compatibility with article 6(2) of the European Convention on Human Rights.

1. Appeal dismissed unanimously. Lord Nicholls delivered the leading speech. Lord Walker gave concurring reasons, and Lord Hope, Lord Hutton and Lord Rodger agreed with both speeches. The respondent's conviction remained quashed.

2. Per Lord Nicholls, section 92 of the Trade Marks Act 1994 applies only where the offending sign is used as an indication of trade origin. That requirement is implicit because the offences concern acts done without the proprietor's consent, while Parliament cannot have intended to criminalise innocuous conduct outside the proprietor's rights. Section 92(5), which refers to a reasonable belief in non-infringement, confirms that construction. Construing the Act consistently with the trade mark directive leads to the same result.

3. Trade mark use is an ingredient which the prosecution must prove. Whether the use indicates trade origin is a question of fact, assessed through the perception of the average consumer of the relevant goods. Purely descriptive use is excluded. A performer's name on a compact disc may merely identify the recorded performance, but it may also indicate a commercial connection between the performer and the disc.

4. Lord Walker agreed that no circuitous route through section 11(2)(b) was required. In disputed cases relevant matters may include the prominence and apparent purpose of the name, other branding, the terms and prominence of any disclaimer, and matters bearing on good faith and honesty. A disclaimer is not conclusive. The trial ruling had wrongly prevented the respondent from advancing his proposed defences, so the guilty pleas produced unsafe convictions.

5. Per Lord Nicholls, section 92(5) protects a defendant who reasonably believes that no relevant trade mark is registered, as well as one who knows of the registration but reasonably believes that his use is non-infringing. The contrary distinction adopted in earlier authority was unsupported by the statutory language and inconsistent with the defence's purpose.

6. Although unnecessary to dispose of the appeal, Lord Nicholls held, with the agreement of the other Law Lords, that section 92(5) places a persuasive burden on the accused. The accused must prove the reasonable belief on the balance of probabilities. That derogation from the presumption of innocence in article 6(2) was justified. Counterfeiting is serious, the relevant belief and sources of supply are within the accused's knowledge, and requiring the prosecution to prove dishonesty would materially impede enforcement.

1. House of Lords: The prosecution's appeal in [2003] UKHL 28 was dismissed unanimously. The House held that trade mark use is an ingredient of an offence under section 92 of the Trade Marks Act 1994.
2. Court of Appeal (Criminal Division): In [2002] EWCA Crim 194, the court allowed the respondent's appeal because the trial ruling had prevented consideration of his proposed defence. It ordered no retrial because he had served the custodial sentence and the alleged offences were several years old.
3. Crown Court at Kingston: Judge Mitchell ruled that section 92 was a self-contained criminal provision and that civil infringement need not be proved. The respondent then pleaded guilty, received concurrent six-month sentences, and became subject to confiscation and forfeiture orders.