Claiming he was in an "invidious position", Justice Laddie affirmed his earlier ruling in the case of Arsenal Football Club v Matthew Reed, finding in favour of Reed after deciding that the ECJ had overreached its jurisdiction.

In a November decision the ECJ had ruled in favour of Arsenal, finding that in selling unofficial club merchandise Reed had infringed Arsenal's trade mark.

But rehearing the case after the ECJ's ruling, Laddie agreed with defendant Reed's argument that in finding in favour of Arsenal the ECJ had decided on an issue of fact – a role for which it had not been granted authority.

"The ECJ should not be, and in this case was not, invited to resolve issues of fact," wrote Laddie in his opinion. "The national court is referring a question of interpretation to the ECJ for determination so that it, the national court, can then apply the law to the facts of the case."

In its judgment the ECJ had stated: "The trade mark proprietor of the mark is entitled, in circumstances such as those in the present case, to rely on Article 5(1)(a) of the Trade Mark Directive to prevent that use." The ECJ's decision – that the owner of a trade mark must be able to prevent its use by a third party if that use could affect the guarantee of origin of the goods – was therefore based on the facts of the case, rather than a general interpretation of the Directive, which was the ECJ's remit.

"This is a most unattractive outcome," wrote Laddie, who ruled that his April 2001 decision in favour of Reed was upheld – a reversal of the ECJ's ruling. In his original ruling Laddie had found that because Reed was not claiming to be selling official Arsenal merchandise, he was not guilty of passing off the club's trade mark.

"We can now expect to see this case go to the UK Court of Appeal, which does have the power to overturn the High Court's finding on the facts of the case and may well result in the apparent inconsistencies between the High Court and the ECJ's decision being eliminated," said Isabel Davies, head of intellectual property at UK firm Eversheds.

"Not only did the ECJ have no jurisdiction to consider issues of fact, but it did not have the means to do so since the only documents put before the ECJ were a copy of the High Court judgment, copies of the English pleadings and the parties' submissions," added Davies.

Arsenal Football Club was represented by Simon Thorley QC and Tom Mitcheson, instructed by Lawrence Jones. Barristers Ashley Roughton and Simon Malynicz, instructed by Stunt & Son, acted for Reed.

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