Crime, Trade Marks and Soft Trade Policy in the Interwar Era: Market Realities and the Merchandise Marks Act 1926

ABSTRACT

This article explores a facet of the relationship between trade marks and the criminal law in the UK in the interwar era, a pivotal period of transition in UK economic policy from free trade to a more managed economy. Drawing together insights from legal, business and economic history, we show that, in the interwar years, the context of domestic politics and wider international trade policy, produced a greater focus on the relationship between trade marks and market-place understandings of the national origin of manufactured products. This context included the passage of the Merchandise Marks Act 1926, a criminal law statute that stipulated the circumstances in which imported goods were to be marked with an indication of national origin, and included a criminal offence regulating trade marks enforced by prosecutions brought by the Board of Trade. We argue that the criminal law regulating trade marks became entwined with ‘soft’ trade policy, i.e. a means of protecting the domestic/Empire market falling short of tariff protection. Drawing on substantial original archival research, we explore the problems that confronted the Board of Trade when it enforced the 1926 Act in view of market realities.

KEYWORDS:

• History of trade marks
• history of intellectual property
• history of criminal law
• soft trade policy
• international trade
• imperial preference
• substantial change

1. Introduction*

This article explores a facet of the relationship between trade marks and the criminal law in the UK during the early twentieth century at a time of consumer nationalism. Fusing insights from legal, business and economic history, we show how, in the interwar years, the context of domestic politics and wider international trade policy produced a greater focus on the relationship between trade marks and market-place understandings of the national origin of manufactured products. This context resulted, amongst other things, in the passage of the Merchandise Marks Act 1926 (hereafter, ‘the 1926 Act’): a criminal law measure that stipulated the circumstances in which imported goods were to be marked with an indication of the origin of manufacture/production (either a ‘definite indication of the country in which the goods were manufactured or produced’, or ‘Empire’ or ‘Foreign’) and included, in section 1, a criminal offence relating to trade marks.¹

This article is the first both to provide a legal history of the 1926 Act and its enforcement, and to show the relation between trade marks and ‘soft’ trade protection in the interwar period. The interwar era was a pivotal period of transition in UK economic policy, reflected in the shift from free trade to a more managed commercial economy, the latter slanted heavily towards protecting and developing the UK’s trading relationships within the British empire. While the introduction of general tariffs and quota restrictions – ‘hard’ trade policy – was politically unfeasible until the 1930s, ‘soft’ trade policy alternatives – means of protecting the domestic market falling short of tariffs and quotas – were a feature of UK economic policy throughout the interwar era. We argue that soft trade policy included not just exhortations to citizens and public bodies to buy domestic/empire products (e.g. the activities of the Empire Marketing Board) which have been well documented in the existing literature, but also national economic origin marking regulations including a criminal offence relating to trade marks (1926 Act s.1) which was enforced through prosecutions brought by a UK Government department. We argue that the criminal law relating to trade marks became a tool of UK soft trade policy and this was predicated on the need to prevent consumer deception as to the national manufacturing origin of products, at a time when consumers had a strong latent preference for domestic/empire products.

This article opens with a contextual section: in Part II we explore why regulating markings indicating national manufacturing origin of UK imports became a subject of considerable importance in the interwar years and relate this issue to debates over hard and soft trade policies. Scholarship by business and economic historians has considered a number of different facets of soft trade policy at this time. Yet there is a gap in this literature about the relationship between soft trade policy to marking regulation generally, and to criminal offences concerning trade marks more specifically.

In Part III we turn to the history of the 1926 Act. We first explore the legislative background to the passage of the 1926 Act: according to the Board of Trade, the UK Government department that sponsored the Bill in Parliament, the 1926 Act was intended to empower patriotic consumers to choose domestic/empire products over foreign products; consequently, the debate on the 1926 Act became bound up with polarized trade politics. However, legislative policy is not the whole story of the 1926 Act: enforcement of this Act is key to understanding its significance. Original archival work at The National Archives, London, reveals the Board of Trade prosecutions in summary cases before magistrates to be the central means through which the 1926 Act was enforced. Accordingly, the meaning of the 1926 Act was actualized both through decisions of magistrates and also day-to-day Board of Trade decisions as to both how the 1926 Act was to be interpreted (determined on the advice of the Law Officers’ Department – the Solicitor General and Attorney General) and also in what circumstances enforcement action would be taken.

In Part IV we consider a specific question raised by the 1926 Act. This Act only applied to ‘imported goods’: goods which had not since importation undergone any treatment or process in the UK resulting in a ‘substantial change’ to the goods. However, what did ‘substantial change’ mean in view of the market realities of the increasingly multinational nature of business? We begin this section with broader insights from business and economic history about the lack of consensus in defining national economic origin of products in a number of contexts – national, imperial and international – before turning to Board of Trade prosecution practice.

In Part V we draw conclusions about the significance of our analysis of the 1926 Act and its enforcement in the interwar era. We argue that crime, trade marks and international trade policy worked together at this particular time of consumer nationalism. This article is the first to show that the criminal law regulating trade marks was a facet of the UK’s transition away from free trade during this pivotal period in national economic policy, and this interwar history is significant because it reveals a relation between crime, trade marks and trade policy that is distinct from that in other junctures of history (both the nineteenth century and the latter half of the twentieth century to today). Further, for intellectual property lawyers, our analysis provides new insights into the significance of the criminal law in the field of trade marks, and for business and economic historians, we show that the criminal regulation of trade marks was yet another terrain where there was uncertainty in the determination of national origin of products, as business became increasingly multinational.

2. Trade Marks, Marking Regulations and Soft Trade Policy in the Interwar Era

The national origin of UK imports was a subject of considerable importance between 1919 and 1938 because of its relation to trade policy. Before the early 1930s, the UK essentially pursued a free-trade policy because it was politically impossible to introduce a general tariff. Therefore, prior to the 1930s, only selective tariffs were imposed: the McKenna duties (1915) applied to imported luxury products, and the Safeguarding of Industries Act (1921) levied an ad valorem duty of 33.3 per cent to protect ‘key’ industries such as optical products, scientific and precision instruments, and to counteract currency depreciation.² Free trade was not abandoned by Britain until the onset of the Depression in the 1930s, with the passage of the Abnormal Importations Act 1931, the Import Duties Act 1932 (imposing a 10 per cent ad valorem tariff on imports, subsequently raised to 20 per cent), and the introduction of quota restrictions on non-empire sources of food, following the Ottawa Conference of 1932.³

Consequently, in the 1920s, the UK government placed greater emphasis on ‘soft’ trade policy alternatives to tariffs and quotas, and these soft trade measures were also pursued alongside hard trade policies in the 1930s. These measures sought to protect the domestic market, but were also heavily slanted towards the British Empire given its importance to British trade: between 1910 and 1913, it accounted for 24.2 per cent and 35.8 per cent, respectively, of Britain’s imports and exports; by 1929 these had risen to 30.2 per cent and 44.4 per cent, respectively.⁴ Other factors which justified this strategy were the belief that Britain was not harnessing fully the benefits from promoting intra-empire trade, and that it was becoming politically difficult to justify the unreciprocated preferences that the Dominions afforded Britain. The Finance Act 1919 was the first UK legislation to incorporate imperial preference, i.e. favourable duties for goods imported from the British Empire.⁵ However, its provision was minimal: a reduction of one-sixth was permitted on the duties applicable to a limited range of primary products imported from the empire. Contemporary official reports claimed that the benefits derived by the Dominions from this preference were insignificant.⁶

Instead, much more emphasis was placed on soft trade policies of exhorting UK consumers to purchase domestic and/or empire products. In this respect, nationalism and trade policy became integrated. This relationship involved mobilization of the patriotic consumer to ‘buy British’ and to ‘buy empire’. These two terms became synonymous because of the importance of the empire to British trade. The underlying premise of these campaigns was that greater British consumption of empire foods and raw materials provided the empire with the funds to purchase British manufactured products. By such means it was anticipated that the British Empire would become self-supporting. Numerous ‘buy empire’ shopping weeks were launched by women’s organizations, and the UK-funded Empire Marketing Board (1926-33).⁷ Some of these campaigns, especially those enacted by the New Zealand Dairy Produce Board, emphasized the cultural affinity between New Zealand and the mother country.⁸ However, while the impact of such events was limited,⁹ the importance of accurate indications of manufacturing origin on imported products – to enable consumers to exercise a preference for British and empire products – was nonetheless recognized by contemporaries.¹⁰

Accordingly, concerns about whether a trade mark indicated British provenance was part of a much broader debate about all forms of indicia which misled consumers about the true geographic origin of products. One theme which featured prominently in these debates, from the late nineteenth century, was whether all imported products should indicate their country of origin. Concerns were raised that consumers might assume unmarked imports were British, or that ‘blanks’ were imported but subsequently marked to indicate English origin. Evidence to parliamentary Select Committees in the 1890s, revealed that such practices particularly aggrieved Sheffield’s edge-tool industries.¹¹ However, a general requirement that all imports be marked to indicate their origin was rejected, principally because of the adverse effects of such a policy on the UK’s enormous transhipment trade.¹² Because Britain possessed the biggest merchant shipping fleet¹³ and the biggest empire, it was naturally at the centre of global trade.

Following the First World War, the attitudes of the UK business community toward national origin marking changed substantially. One explanation for this shift in attitudes was that the First World War required that the UK introduce robust measures to protect its trade and navigation and this included the blacklisting of German companies operating in neutral countries and the blockading of supplies to enemy countries.¹⁴ The naval blockade had a bearing on post war policy: the Board of Trade was recommended to ban imports from enemy countries except under licence.¹⁵ Concomitantly, UK attitudes to origin marking hardened and this, too, influenced Board of Tade policy on merchandise marks after the war. Consequently, in 1916, representatives of the electrical apparatus, stationery and toy industries, communicated to the Board of Trade that it should be compulsory that products imported from former enemy countries indicate their origin; the view of the cutlery industry was that the Board of Trade should prosecute when the ‘get-up’ of foreign products indicated English origin.¹⁶ Some of the earlier concerns, such as marking blanks after import were reiterated.¹⁷ Both the Federation of British Industries, and the National Union of Manufacturers, were adamant that British consumers should be enabled to distinguish British from foreign products. This view was based on the belief that British consumers favoured domestic over foreign made goods, but were unable to exercise their preference for British products because imported products used English words and/or business addresses to disguise their origin.¹⁸ Anti-German feelings, and concerns about German competition after 1918, motivated representatives of the Birmingham chamber of commerce, and the perfumery manufacturers section of the London chamber of commerce, to insist that legislation be made more effective in preventing misleading indications of geographic origin, specifically, that all imported products bearing any indication, trade mark, name, or address in the English language, must bear a definite indication of country of origin.¹⁹ Similar views about the need to make legislation more robust were made by representatives of the Belfast, Nottingham and Southampton Chambers of Commerce, and by members of the gas mantle, printers and allied trades associations, and the Parliamentary Committee of the Trades Union Congress.²⁰ Representatives of the china and glassware trades were particularly aggrieved that foreign manufacturers embossed their products with British patterns and designs which, when sold without any indication of origin in the UK, induced consumers to believe they were British.²¹ The Board of Trade Committee on Merchandise Marks, which sat between 1919 and 1920 was unwilling to recommend that all imports bear a compulsory indication of geographical origin because of the need to protect the transhipment trade. However, this Committee was prepared to recommend that marks of origin could be imposed by the Board of Trade when such marks were in the public interest and when they were applied to a particular class of products.²² No legislation followed these recommendations, however, and the question of marking did not result in legislation until 1926.

3. The Merchandise Marks act 1926 and Its Enforcement

The immediate legislative background to the 1926 Act was the dramatic defeat of the Conservatives in the 1923 general election. Stanley Baldwin had called an early election in which tariff reform was a key element. Baldwin anticipated that a pro-tariff stance would be favourably received by working class voters at a time of high unemployment and help reunite the Conservative party. However, this gamble failed: the Conservatives lost 88 seats and a hung Parliament followed. According to the economic historian Frank Trentmann, ‘1923 was a powerful vote against tariff reform’.²³ Accordingly, when Baldwin returned as prime minister in 1924, alternative ‘soft’ trade policies were prioritized. In doing so, Baldwin and the Conservative party sought to ‘reposition themselves as friends of the consumer’: ‘consumer choice’ became central to government policy. Consumers were to be empowered to make the ‘right’ choices, to support domestic and Empire manufacturers. In this context, the ‘empowered consumer’ became ‘guardian of the public interest’.²⁴ The 1926 Act was part of this policy agenda.

The 1926 Act regulated trade marks through section 1: it was an offence to sell, expose for sale, advertise or distribute in the UK, ‘imported goods’ bearing inter alia a trade mark ‘being or purporting to be’ the trade mark of a UK trader, without also applying an indication of origin of the place of manufacture/production. Section 1 of the 1926 Act extended a similarly worded provision contained in section 16(1) of the Merchandise Marks Act 1887 (hereafter ‘the 1887 Act’) which, like 1926 Act s.1, required ‘imported goods’ bearing a trade mark ‘being or purporting to be’ the trade mark of a UK trader to be marked with an ‘indication of origin’, that is, a ‘definite indication of the country in which the goods were made or produced’ (though with no alternative of ‘Foreign’ or ‘Empire’ as allowed under 1926 Act s.10(1)).²⁵ However, 1887 Act s.16(1) was a prohibition on importation only: it concerned markings on goods at the point of importation and therefore allowed for goods to be imported blank and re-marked once in the UK. Further, section 16(1) was enforced by Customs and Excise procedures for detention and forfeiture and, unlike other provisions in the 1887 Act (particularly section 2, concerning ‘forgery of a trade mark’ and ‘false trade descriptions’) did not create offences enforced by criminal law procedures, summarily or on indictment.²⁶ By contrast, 1926 Act s.1 criminalized acts of sale, exposure to sale, advertisement or distribution, to be enforced through summary criminal procedures.

How was section 1 of the 1926 Act justified? The President of the Board of Trade, Sir Philip Cunliffe-Lister, on introducing the Bill into the House of Commons in 1926, stated that a trade mark which ‘purports to be’ that of a British manufacturer, dealer or trader, applied to ‘foreign goods’ ‘is in fact a misleading mark’. For Cunliffe-Lister, section 1, therefore, was a matter of ‘simple justice’:

If a British buyer in this country buys goods which have a British name upon them, that man or woman thinks that he or she is buying a British article. If in fact goods are sold with a British label, a British name, or a British trade mark are not British, they ought to be marked as of foreign origin.²⁷

Accordingly, the requirement in section 1, for ‘an indication of origin’ to be applied to goods that bore a mark being or purporting to be that of a UK trader, was ‘to prevent fraud’; to dispel the misrepresentation as to place of manufacture in ‘the use of British names and British trade marks’ on foreign manufactured goods.²⁸ As expressed in the House of Lords debates on the Bill in 1926, an indication of origin was necessary to correct a form of ‘latent misrepresentation’ where foreign goods bearing a ‘British trade mark’ were then sold to the public; the objective was to ensure that ‘foreign goods do not masquerade as British goods’.²⁹

Therefore, the Government’s rationale underpinning the 1926 Act was ‘to distinguish British and imperial products from foreign articles’ and, in so doing, to ‘benefit consumers and producers alike’: ‘[a] more secure home market would make it easier for national producers to join selling agencies and cut costs’ which in turn would ‘mean cheaper goods for consumers’.³⁰ However, when debating clause 1 of the 1926 Bill in the House of Commons Standing Committee, the Labour MP Albert Alexander argued that the Bill was a means of disguised protection: ‘the real cloven hoof’ of the Bill was that ‘the purpose … is not to prevent fraud, as far as the consumer is concerned, but to promote deliberate and stark-naked Protection’.³¹

Internationally, the UK justified the 1926 Act as a matter of ‘commercial probity’.³² The international agreements to which the UK was a party included the Madrid Agreement for the Repression of False and Deceptive Indications of Sources on Goods 1891. The UK Government could therefore argue that the regulation of ‘false or deceptive indications’ which ‘directly or indirectly indicated’ a ‘country or place of origin’, was a legitimate objective for legislation. Yet, the 1926 Act (as well as 1887 Act s.16(1)) sat uneasily with the international framework, in singling out false indications of UK origin for special treatment. The UK was a signatory to the Paris Convention on Industrial Property 1883, which obliged it to comply with the principle of national treatment under Art. 2, in conferring the same advantages as regards the protection of trade marks, on the nationals of other contracting states, as it did on its own nationals.³³

Further, in an international trade context, the League of Nations reviewed national origin marking requirements where these were coupled with a national campaign to further the sale of domestic goods (e.g. the Buy British campaign), and concluded they were illegitimate, and it characterized them as a form of ‘indirect protectionism’.³⁴ A Board of Trade internal memorandum in 1929 noted the conclusion of the Committee on Industry and Trade, that the principle underpinning the 1926 Act was ‘undeniably sound’: ‘that the purchaser is enabled to exercise a free choice’ and ‘to distinguish between home and imported goods’. Nevertheless, this committee also noted the argument that the 1926 Act was ‘a means of disguised protection’; ‘things being equal, a purchaser will prefer British or Empire goods to foreign goods’. Accordingly, the Committee also concluded that as the 1926 Act ‘has undoubtedly given rise to apprehensions in some foreign countries, we consider that its effects should be carefully watched’.³⁵

In addition, the Board of Trade was concerned about the impact on marking practice of the operation, in tandem, of 1887 Act s.16(1) and 1926 Act s.1. After 1926 Act s.1 entered into force, in June 1927,³⁶ traders could no longer import goods blank, and then apply a mark ‘being or purporting to be’ the mark of a UK trader once the goods were in the UK, as previously had been common practice. Accordingly, such goods were likely to be marked prior to importation. However, 1887 Act s.16(1), which regulated markings at importation, required goods bearing a mark ‘being or purporting to be’ that of a UK trader, to bear a definite indication of origin; 1887 Act s.16(1) did not allow for the alternative marking of ‘Empire’ or ‘Foreign’ as was possible under 1926 Act s.10(1) (to satisfy ‘indication of origin’ requirements in relation to subsequent acts of sale, exposure for sale, advertisement or distribution in the UK). Consequently, the Board of Trade considered that when the 1926 Act became operational, traders might tend towards applying a definite indication of origin (rather than ‘Empire’ or ‘Foreign’), and this would reveal trade secrets as to the source of certain products (thereby damaging the UK transhipment trade) and act as a gratuitous advertisement for foreign products (as had occurred regarding the marking ‘Made in Germany’ after the 1887 Act was enacted).³⁷ Following a meeting between the Board of Trade, and Customs & Excise, a joint memorandum on marking requirements for imported products was issued. While this document stated that marks on products at the time of importation were subject to s.16(1) of the 1887 Act, it stated that Customs & Excise should not detain imported products which bore the name or mark of a UK trader in conjunction with the word ‘Foreign’ or ‘Empire’. For example, ‘John Smith: Foreign ‘ or ‘John Smith: Empire’. The same provisions applied to imported products bearing British place names, thus, ‘Sheffield: Foreign’, or ‘Trent: Empire’.³⁸

How, then, was the 1926 Act enforced by the Board of Trade? The 1926 Act was expressly enacted as part of a series of Merchandise Marks Acts: together, the ‘Merchandise Marks Acts 1887-1926’. Specifically, a person contravening the 1926 Act would be treated as ‘guilty of an offence’ under the ‘Principal Act’: the 1887 Act.³⁹ The 1887 Act largely followed the approach of its predecessor – the Merchandise Marks Act 1862,⁴⁰ which was the first UK statute regulating trade marks generally (as opposed to specific trades) – and criminalized, under section 2(1), ‘forgery of a trade mark’ and ‘false trade descriptions’.⁴¹ Whereas offences under 1887 Act s.2(1) could be prosecuted either on indictment or by way of summary conviction, 1926 Act s.1 was only to be prosecuted summarily.⁴² Further, whereas section 2(1) of the 1887 Act provided that a defendant would not be guilty if the defendant proved ‘that he acted without intent to defraud’, 1926 Act s.1 was an offence of strict liability, as there was no mens rea either as part of the offence or as a defence.

Finally, the penalties for contravention of the offences contained in section 2(1) of the 1887 Act differed from those in 1926 Act s.1: on summary conviction, for a first offence, the penalty was a fine not exceeding £5 for an offence under the 1926 Act, and imprisonment for a term not exceeding four months or a fine not exceeding £20 under the 1887 Act; in the case of a second or subsequent offence, the penalty was a fine not exceeding £20 for an offence under the 1926 Act, and for imprisonment of up to six months or to a fine not exceeding £50 under the 1887 Act.⁴³ In addition, under the 1887 Act, where conviction was on indictment, section 2(3)(i) stated that for a first offence the defendant would be liable to imprisonment, with or without hard labour, for up to four months, or a fine not exceeding £20, and in the case of a second or subsequent conviction, to imprisonment with or without hard labour, for a term not exceeding six months, or to a fine not exceeding £50.

These differences between the offences contained in the 1887 Act and the 1926 Act can be explained by the changing functions of the criminal law. During the first half of the twentieth century the criminal law increasingly played a regulatory role, involving strict or no-fault liability: writing in 1933, the jurist F.B. Sayre noted an increasing number of ‘public welfare offences’, where the purpose of the criminal law was ‘regulating the social order’, rather than the ‘singling out of wrongdoers for the purposes of punishment’ and this explains the lower penalties contained in the 1926 Act (as compared to the offences under 1887 Act s.2), as well the absence of any mens rea, imprisonment or proceedings on indictment from the provisions in the 1926 Act.⁴⁴

The Merchandise Marks Acts also included two statutes empowering government departments to bring prosecutions. Particularly, the Merchandise Marks Act 1891 (hereafter ‘the 1891 Act’) empowered the Board of Trade to prosecute offences under the Merchandise Marks Acts, in cases where there was a ‘reasonable prospect’ of obtaining a conviction,⁴⁵ and ‘appearing to the Board to affect the general interests of the country, or a section of the community’.⁴⁶ How did the Board of Trade exercise its discretion to prosecute, and what enforcement action resulted?

None of the cases under section 1 of the 1926 Act are reported in law reports, and very few are reported in the general press,⁴⁷ though cases were often discussed in the relevant trade press.⁴⁸ However, a wealth of original records for the period 1928–1938 survive at The National Archives, particularly 26 boxes in BT 63, as well as additional files contained in BT 64, and where relevant, related files from the Law Officers’ Department (LO). In terms of number of prosecutions and outcomes, a contemporaneous Board of Trade ledger purporting to record all prosecutions under the Merchandise Marks Acts from 1928 to 1937, details 25 prosecutions – all successful – raising issues under section 1 1926 Act (six of which also concern ‘false trade description’ as to geographical origin – ‘Made in Britain’ – under s.2(2) 1887 Act).⁴⁹ The Board of Trade files themselves contain 35 files raising issues under section 1 1926 Act, but many of the 35 files comprise separate sub-folders detailing different allegations against multiple defendants in the same trade.⁵⁰

The relevant BT records held by The National Archives comprise a series of internal working notes by various personnel in the Board of Trade, which means that a clear outcome for each case is not always noted on the file. However, these records do enable us to unravel the decision-making process involved in Board of Trade prosecutions. While the Board had a solicitor – W.S. Bourne – it had no personnel for investigating contraventions and obtaining evidence. Files were opened, in the main, after the Board had been notified of an alleged contravention usually by a trade association, but sometimes by a trader or member of the public. There were also products, for example, imported musical instruments, where the Board liaised with trade associations in drafting general guidance on the 1926 Act for traders.⁵¹ Cases were handled by a small circle of civil servants from Board of Trade ‘General Department’ or ‘G-Dept’ in the 1930s, and from 1938 the same group of personnel were part of ‘I-M Dept’ (‘Industries and Manufactures Department’). Board of Trade records reveal the close collaboration of these civil servants with the Solicitor to the Board of Trade, in both reaching a decision of whether to formally prosecute, or to ask a defendant merely to provide undertakings as to future conduct, and the subsequent conduct of any prosecution.

Soft trade policy infiltrated internal Board of Trade discussions in a number of ways. The Board of Trade files reveal that the civil servants conducting the prosecutions were aware of pressure placed on the President of the Board of Trade in Parliament, for example, from the back-bench Conservative MP John Remer, to ‘take steps’ against foreign traders contravening the 1926 Act ‘by the sternest measures’,⁵² as well as the willingness of magistrates to protect the ‘patriotic consumer’; the importance of protecting the ‘patriotic consumer’, as we see later, was also central to the submissions in court made by the Board of Trade’s Solicitor.⁵³

Further, soft trade policy underpinned the way in which the Board of Trade approached prosecution practice, particularly civil servants’ interpretation of the requirement under 1891 Act that it would only prosecute cases ‘appearing to the Board to affect the general interests of the country, or a section of the community’. Cases raising issues under section 1 1926 Act (as well as, as we see below, ‘foreign vs British’ false trade descriptions under the 1887 Act⁵⁴) were automatically assumed by the Board of Trade to ‘affect the general interests of the country, or a section of the community’, and would then lead to further enquiries on the part of the Board. In other types of contraventions of the Merchandise Marks Acts (e.g. false trade descriptions as to quantity, quality or size), the Board tended to decline to take any steps and closed the file. Generally, the Board of Trade declined to take action for offences under section 5 of the 1926 Act for breach of Marking Orders made under section 2 of the 1926 Act. Marking Orders were Orders in Council imposing general marking requirements as to origin of manufacture, for goods in particular categories, and unrelated to the use of trade marks. In the period 1926–1938, 112 such Marking Orders entered into force. Accordingly, unlike offences under section 1, the Board of Trade considered that breaches of Marking Orders under the 1926 Act, as well as false trade descriptions other than ‘foreign vs British’, to be, in most instances, a matter for prosecution by traders and private trade associations, as such cases did not normally ‘affect the general interests of the country, or a section of the community’.⁵⁵

Once a case was found to affect the ‘general interests of the country, or a section of the community’, it was then for the Board’s Solicitor to advise on the strength of the case. The Board had no personnel for gathering evidence: evidence was obtained by civil servants from the complaining trader/related trade association, on the advice of the Solicitor, though in rare instances, where a complaint was notified by the public, trap purchases were carried out by the police.⁵⁶ While the Board could require the complaining ‘applicant’ (i.e. the member of the public, or trader, or trade association notifying the alleged contravention) to provide security for costs ‘on such terms and in such manner as it thinks proper’,⁵⁷ in most cases security was not provided (e.g. due to the applicant’s financial position) and therefore unsuccessful prosecution was considered a highly undesirable outcome.⁵⁸ In view of the costs risks, therefore, much of the internal discussions concerned whether the evidence was sufficient, such that the Board could be confident of success (which appears to be a higher threshold than that set out in the Board’s Regulations which, as mentioned above, empowered the Board to bring cases where there was a ‘reasonable prospect’ of success). In the absence of strong evidence to secure success in court, the Board would merely seek undertakings from a defendant as to their future conduct.⁵⁹ However, where the Board of Trade’s solicitor advised that the evidence was sufficient to secure a conviction, a prosecution would routinely be brought even in circumstances where the offending behaviour had been discontinued; as we see below, this was the case in Board of Trade v John Barker & Co (1938) where the defendant was merely addressing a temporary supply issue and the offending had ceased at time of prosecution. Accordingly, so long as there was sufficient evidence, there were very limited circumstances in which the Board of Trade would hold-off prosecution under section 1. One such example in 1929 concerned German-made cases for glasses, marked with the trade marks of UK optical firms, but bearing no indication of origin. The Board of Trade considered the absence of indication of origin on the cases to be a ‘breach of a technical character’ only, as the cases were not present at the point of sale, and therefore the Board chose not to prosecute.⁶⁰

With this general approach to prosecution in mind, how did the Board of Trade interpret section 1? The 1926 Act s.1 stated that it was unlawful, amongst other things:

to sell, expose for sale, or by way of advertising goods of some other kind, distribute in the United Kingdom, any imported goods to which there is applied any name or trade mark being, or purporting to be the name of a trade mark of any manufacturer, dealer or trader … in the United Kingdom, unless the name or trade mark is accompanied by an indication of origin.⁶¹

‘Indication of origin’, was to be ‘given … conspicuously’ and required either a ‘definite indication of the country in which the goods were manufactured or produced’ or, the word ‘Foreign’ or ‘Empire’ (for goods manufactured or produced, respectively, in any foreign country, or in part of the Dominions outside the United Kingdom).⁶²

One of the central questions to be determined in interpreting section 1 was the meaning of a name or trade mark ‘being or purporting to be’ the name or trade mark of a UK trader. This question was not new in 1926, as identical words were included in section 16(1) 1887 Act (in relation to trade marks present on importation). In a case from 1905, referred by UK Customs & Excise, concerning the trader A. von Hagen, the Law Officers’ Department advised that the ‘mere fact’ that foreign goods bear a UK registered trade mark, ‘does not constitute any representation that the goods are of British origin, inasmuch as that trade mark may according to the law be the property of a foreigner who resides and carries on business abroad only’.⁶³ Therefore, the Law Officers’ Department considered section 16(1) of the 1887 Act (and by implication, also 1926 Act s.1), to be compatible with foreign ownership of UK trade marks. However, the approach adopted by Customs & Excise under 1887 Act s.16(1) was to look at the context of use: what the trade mark was intended to convey and how the trade mark was in fact understood. Specifically, the Customs Code of 1905 stated that the phrase ‘name or trade mark being or purporting to be’ the mark of a UK trader, denoted:

any name or names reasonably suggesting a British manufacturer or dealer or trader whether the name is or is not known to the Officer; or as referring to a trade mark not being merely a matter of decoration or ornament which reasonably suggests itself as British by containing English wording or other representations especially designed to convey and in fact conveying an impression of British manufacture.⁶⁴

This was an approach consistent with the Board of Trade’s case in its prosecution in 1897 of the English incorporated Jaeger clothing company, for the use of its own trade mark – a device mark including the English words DR JAEGER’S SANITARY WOOLLEN SYSTEM CO LIM’D – on goods manufactured in Germany. The Board of Trade argued that it was a ‘false trade description’ under section 2(1) 1887 Act, to apply ‘a mark purporting to be an English trade mark … to goods of German manufacture’. While the prosecution failed, the Board of Trade’s claim that the Jaeger trade mark denoted English manufacture was rooted in the express representations by the Jaeger Company: a trade circular had been issued by the Jaeger Company representing that its goods were manufactured in England, and the Jaeger Company had subsequently switched its supply to Germany, without retracting its previous representation. The Board of Trade’s case had also been based on evidence of how the Jaeger Company’s device mark was in fact understood in the UK market.⁶⁵

After the passage of the 1926 Act, guidance on the interpretation of ‘purporting’ to be a trade mark of a UK trader, was given by the Law Officers’ Department in a case raised by Customs & Excise in 1928 concerning Yale & Towne, US manufacturers and traders in locks, and Philips, Dutch manufacturers and traders in electric lamps and electric fittings. In both cases, the foreign traders imported into the UK and then sold goods manufactured overseas bearing their marks – the mark YALE on locks made in the US and the marks PHILIPS and PHILIPS ARGENTA on electric lamps made in Holland – without any additional markings indicating country of manufacture. Both Yale and Philips considered that they did not trade in the UK, so the question was whether the marks YALE, PHIILPS, or PHILIPS ARGENTA, ‘purports to be’ the mark of a UK trader. Lawyers acting for Philips stated that: ‘the marks ‘Philips’ and ‘Philips Argenta’ are the registered marks of the Dutch Makers and are not, and do not purport to be, the name or trade mark of any manufacturer, dealer or trader in the United Kingdom’.⁶⁶ Yale also obtained their own Counsel’s opinion supporting their marking practice, that the phrase ‘purports to be’ the mark of a UK trader should be limited to the following two instances:

(1) the trade mark contains matter which inherently suggests that the proprietor is a trader in the United Kingdom and (2) there is a trader in the United Kingdom who is the proprietor of some trade mark, and the mark complained of so nearly resembles that trade mark as to be calculated to deceive.⁶⁷

Lawyers for Yale argued that YALE did not fall into these two categories, and they stated that this conclusion was also supported by an opinion from the eminent barrister and trade marks treatise writer, Sir Duncan Kerly.⁶⁸ However, the Law Officers rejected the interpretation advocated by Philips and Yale:

In our opinion the words ‘purporting to be the name or trade mark’ are intended to cover not merely a colourable imitation of an existing British name or mark, but also the case of a foreign trader seeking to give to goods the appearance of British origin by use of a name or mark having the fictitious appearance of being British, though it is not in fact the name or mark of any British manufacturer or trader.⁶⁹

In the case of both Yale and Philips, the view of the Law Officers’ Department was that the test was satisfied: while the goods were manufactured overseas, Yale and Philips also owned English subsidiary companies that were engaged in importation only. As the English subsidiaries were named on packaging, the Law Officers considered that the overall impression was given of UK manufacture. Accordingly, an indication of origin was required to correct that misrepresentation.

The question of ‘purporting to be’ the mark of a ‘UK trader’ was also considered by Customs & Excise. In 1927, this Department reported that foreign multinationals were treated the same as British companies, for the purpose of the exercise of seizure powers under section 16(1) 1887 Act, so long as they had a UK office and traded in the UK. The position was different in respect of UK distributors acting on behalf of foreign firms not based in the UK: Customs & Excise indicated that where a UK distributor bought the products outright and resold them, then the foreign firm did not trade in the UK. Notwithstanding this, the view of this Department was that if the distributor sold the foreign products on commission, then it might adopt the view that the foreign company did trade in the UK. Overall, Customs & Excise considered that ‘it is undesirable to be rigorous in these borderline cases’ and suggested ‘leniency’.⁷⁰

It is apparent from the above analysis that while the Law Officers’ Department had provided general guidance as to the meaning of ‘purporting to be’ the mark of a ‘UK trader’ in the cases of Yale and Philips, there was still considerable discretion in interpreting when a name or mark had the ‘fictitious appearance’ of being British. What does a detailed review of Board of Trade files reveal about the reality of enforcement? As already explained, the Board of Trade had no personnel to investigate offences; the cases that it considered were those referred by trade associations, traders or members of the public. A detailed review of Board of Trade files reveals that, despite the fact that section 1 was an offence of strict liability, the cases notified were, in the main, those in which there was contextual evidence of either an intention on the part of the defendant to represent that the imported goods were of British or UK origin and/or contextual evidence of a deliberate attempt to conceal foreign origin.

For example, one case in 1929, concerned the mark MEAD used on imported typewriters manufactured in Germany and bearing no indication of origin. Internal memoranda indicate that the Board of Trade considered this to be ‘a bad case of contravention’ as some (though not all) of the defendant’s advertising included pictures of a factory in Birmingham.⁷¹ Another instance of breach of section 1 1926 Act that the Board of Trade considered a ‘rather bad case’ was where the defendant had ‘deliberately concealed’ the marking ‘made in Belgium’ on matches sold under the mark ‘UNION’ and accompanied by the prominently featured words ‘THE UNION MATCH CO LTD’.⁷² This case was notified to the Board of Trade by a private citizen (a retired Colonel of the Royal Horse Artillery) with no interest in the match trade: he saw it as his ‘duty’ as a ‘loyal British subject’ to ‘report the case’ so as to prevent foreign goods ‘being passed off as British’, which may itself have pointed to deception of the public.⁷³

Similarly, in 1938, the Board of Trade decided to proceed with a prosecution concerning the importation and sale of foreign manufactured raincoats marked RAIN WARM and PONTINGS OF KENSINGTON without an indication of origin, despite the fact that the sales were few as the defendant was merely rectifying a temporary supply issue; the Board of Trade prosecuted because it considered that the defendant’s conduct was ‘aggravated’ by the fact that the labels, including the marking ‘foreign’, were ‘deliberately removed’ when the mark PONTINGS OF KENSINGTON was applied.⁷⁴ In finding the defendant guilty, the magistrate at West London Police Court commented that the facts of the case – particularly the cheapness of the foreign made raincoats – ‘just shows what competition we are up against’, and in imposing the penalty of £10, concluded that ‘it is vitally important that this legislation should be respected by both traders and the public’.⁷⁵

In prosecuting cases where there was contextual evidence that the defendant intended to mislead, the Board of Trade became particularly active in cases where the defendant, as well as including a trade mark purporting to be that of a UK trader, also included the express misrepresentation ‘Made in Britain’ or ‘Made in England’ or ‘Made in the United Kingdom’. Such cases were prosecuted under both section 1 1926 Act and also under section 2(1) 1887 Act as ‘false trade descriptions’. For example, in 1933 the Board of Trade successfully prosecuted the Remington Typewriter company, which sold foreign made typewriters with the mark REMINGTON and which were marked on the cover (though not on the goods themselves) ‘Made in England’. Before the Lord Mayor, Sir Charles Collett, sitting at Mansion House, the defendant pleaded guilty to charges of both false trade description under s.2(1) of the 1887 Act, and section 1 of the 1926 Act. A fine of £10 was imposed for breaches of 1887 Act s.2(1), and £5 for each summons under the 1926 Act.⁷⁶ The Board of Trade’s interest in cases raising issues under section 2(1) of the 1887 Act, as well as 1926 Act s.1, also reflected the general priority given to prosecuting cases of false trade descriptions as to British origin. An internal Board of Trade Memorandum from 1930, concerning section 2(1) of the 1887 Act, stated that the Board of Trade would ‘normally prosecute in cases of false indications of British origin on foreign goods, if called to do so’; such cases were automatically deemed to be a matter of public importance. By contrast, in the case of other false trade descriptions (e.g. as to quantity, or quality) the Board would only take action when it was shown that there was, in that particular case, a ‘gross fraud on the general public.⁷⁷ Perhaps indicative of the latter is a case concerning the ‘rife’ false marking as to quantities of South African oranges (selling boxes containing, for instance, only 176 oranges but marked as containing 200), which was notified to the Board by the South African High Commission, and successfully prosecuted at Bow Street by the Department of Public Prosecutions in 1929.⁷⁸

The relationship between false trade description under section 2(1) 1887 Act (for markings such as ‘Made in Britain’, ‘Made in England’ or ‘Made in the UK’) and section 1 1926 Act, was also significant in cases where the goods, though partly manufactured overseas, had undergone some process in the UK. This went to the heart of the interpretation of the meaning of British or UK origin, and how these were to be differentiated from ‘foreign’ origin. As we argue in the next section, how the 1926 Act applied to imported goods that had undergone a treatment or process in the UK became significant as business became more multinational in the twentieth century. In the view of the Board of Trade, the application of the 1926 Act in circumstances which involved the test of ‘substantial change in the goods’ became a weakness in the efficacy of the 1926 Act in cases involving goods which had undergone treatments/processes in several jurisdictions, and from 1933, the Board preferred to focus on prosecuting such cases under section 2(1) of the 1887 Act which, as interpreted by magistrates (in cases involving the trade description ‘Made in Britain’), became a more effective tool of soft trade policy.

4. The Meaning of British/UK Origin and ‘Substantial Change’

As we noted above, section 1 of the 1926 Act only applied to ‘imported goods’, which were defined in section 10(1)(a) as excluding: ‘goods which since the date of their importation have undergone in the United Kingdom any treatment or process resulting in a substantial change in the goods’. Further, under section 10(1)(b), ‘imported goods’ excluded goods produced or manufactured in the UK, which were exported and then brought back into the UK, including such goods that had undergone a ‘treatment or process’ abroad not resulting in ‘substantial change in the goods’. Section 10(1) also modified the ‘indication of origin’ requirement, where goods produced or manufactured in the UK had undergone ‘a treatment or process abroad resulting in a substantial change in the goods’: the goods could be marked ‘Foreign’ or ‘Empire’ in conjunction with ‘words descriptive of that treatment or process’, or with a marking specifying that the treatment or process was undergone in a ‘particular country’.

The phrase ‘substantial change in the goods’ was central to the meaning of ‘imported goods’ and therefore the application of section 1, yet substantial change was left undefined in the statute.⁷⁹ In parliamentary debates in 1926, the difficulty of determining ‘substantial change’ was articulated, for instance, by those representing Lancashire cotton-textile interests which were at the centre of global trade in this industry. During the Committee stages of the 1926 Bill, Samuel Hammersley, MP for Stockport and a prominent Lancashire textile manufacturer, was alert to the possibility that UK textile manufacturers might export their products abroad for ‘finishing’ (bleaching, dyeing, printing, embroidering or decorating) and then import these products in order to sell, or re-export them, as ‘British’. Hammersley proposed an amendment that ‘substantial change’ would ‘not include a change effected in any textile goods which have been sent abroad and which are returned to this country to be made for sale or re-export’. However, this amendment was rejected by ten votes.⁸⁰ This failure was lamented by the Manchester Chamber of Commerce because:

there will be hundreds of border line cases where the exact meaning of … substantial change will be a matter of dispute. Nothing could be worse for trade than to subject it to legislation which in practice will have to be interpreted by Courts of law. The failure of this Bill to solve [this problem] makes the whole scheme extremely dangerous to trade.⁸¹

Official debates about how to mark accurately composite products were not new in 1926; they appeared in evidence given before the Select Committees on Merchandise Marks Acts, in 1887 and 1897.⁸² These debates particularly affected the watchmaking industry because foreign movements were imported into the UK and then assembled and finished. Key questions which emerged were: what proportion of domestic components justified use of the legend ‘English’; how much English labour was required? And, did country of origin mean where the original process of manufacture occurred?⁸³ These issues resurfaced in evidence relating to bicycle components, gas mantles, and perfume, given before a Board of Trade Merchandise Marks Committee between 1919 and 1920.⁸⁴ In common with earlier Select Committees, this Committee also heard from witnesses representing trade unions, who considered marking to protect domestic producers to be in the interests of workers, as well as the consumer.⁸⁵

Debate over the meaning of ‘substantial change’ also reflected more general ambiguities relating to the term ‘Made in Britain’, which was a common marketing phrase in the interwar period. For instance, in 1931, the Federation of British Industries reported that it had been inundated with enquiries from its members about the meaning of ‘Made in Britain’ during debates preceding the 1926 Act.⁸⁶ Indeed, there was concern that foreign companies appeared to be free-riding on Buy British campaigns.⁸⁷ Thus, American firms owning UK plant were issuing posters with the legend ‘Support Home Industries’. Doubts were also raised that catalogues presented images which appeared to promote UK products.⁸⁸ The Association of British Chambers of Commerce (ABCC) opined that the term ‘British Made’ should be specifically regulated by statute.⁸⁹ The Coventry Chamber of Commerce requested that the ABCC consider whether existing Merchandise Marks legislation was sufficient to prevent the expression ‘British Made’ being applied to products which were not substantially made with UK labour and materials; the Portsmouth Chamber of Commerce endorsed the view that ‘British Made’ could only be applied to products made in Great Britain and Northern Ireland.⁹⁰ The Silk Association of the Manchester Chamber of Commerce reported that it had received ‘authoritative advice’ that to mark as ‘British’ imported tissues of silk or rayon which were finished in Britain, would constitute a false trade description under the Merchandise Marks Acts.⁹¹

The issue of ‘substantial change’ was also pertinent when the Board of Trade received applications for Orders in Council, under section 2(1) of the 1926 Act, which mandated compulsory marks of origin on specific products. Like section 1, these Orders only applied to ‘imported goods’ (defined in section 10(1)). For example, would finishing an imported felt hat in the UK fall outside the 1926 Act’s definition of ‘imported goods’? Related questions were raised by representatives of the tiled surrounds industry.⁹² The application for an Order in Council for brass taps and fittings generated the apparently bizarre outcome that the grounding and polishing of such items, which accounted for 60 per cent of final value, negated the need for an indication of foreign origin, even though such processing did not represent a ‘substantial change’.⁹³ The board game manufacturers Messrs Roberts Bros and Chad Valley Ltd Co assumed that when games and toys became subject to an Order in Council, some of the components such as counters and dice would also have to be marked ‘Foreign’ even though they were included as parts of games made in the UK. A related issue was whether imported cardboard used in the manufacture of board games would be classed as substantially changed. Correspondence with the Board of Trade on this particular point indicated tension between the Merchandise Marks Acts of 1887 and 1926: marking games ‘Made in England’ when their essential parts were of foreign manufacture, raised the possibility of false trade description under the 1887 Act. However, section 2 of the 1926 Act required marking of all products irrespective of whether imported articles only formed part of the finished product made by a British manufacturer.⁹⁴

All of the preceding issues became particularly important during the interwar period because of the market realities of the rapid growth of foreign direct investment (FDI) in the UK, with the consequence that business operations increasingly spanned a number of jurisdictions including the UK. There was official recognition of the benefits of such investment, which resulted in the introduction of new products, improved production methods, and fostered the adoption of modern machinery. In broad terms, the historiography demonstrates that before 1945, official policy on FDI was ‘minimal’, ‘passive’ and ‘ownership neutral’; the policy adopted by the Board of Trade was, ‘essentially ad hoc [and] pragmatic’, and this therefore facilitated the expansion of multinational operations.⁹⁵ In this permissive environment it did not matter from where FDI originated. Between 1920 and 1939, 315 foreign subsidiaries were established in the UK. The US was the biggest supplier of FDI, accounting for 228 of these subsidiaries (78.6 per cent), followed by Germany and the Netherlands, with 18, and 16 subsidiaries (7.9 per cent and 7.0 per cent), respectively.⁹⁶ In the 1930s, Germany accounted for one-third of foreign firms commencing manufacture in the UK.⁹⁷ Clearly, anti-German attitudes immediately after 1918 did not prevent this country becoming a major provider of FDI to the UK. The only time during our period when the origin of FDI was restricted was during and immediately after the First World War, when German subsidiaries in Britain were either sequestered or liquidated.⁹⁸

Domestic debates on the meaning of the marking ‘British’ or ‘Made in Britain’, and the test of ‘substantial change’ contained in section 10 (1) 1926 Act, co-existed alongside international discussions about how to determine the national origin of products in view of the increasingly multinational nature of business operations across the globe. The League of Nations, for example, recognized that problems in defining the nationality of a product were exacerbated by its different meanings. In some countries, product nationality denoted products in which the value of domestic labour and domestic raw materials represented a given proportion of its total value, which ranged between 25 per cent and 75 per cent. But the metric of value-added was criticized because, ‘of the great difficulty for the importers of furnishing … evidence of the increase in value, and the virtual impossibility for Customs & Excise obtaining positive information on the point’.⁹⁹ The League recognized that an alternative to the percentage criterion rule for determining the nationality of a product was to rely on substantial change or ‘important transformation’, and that implementation of such criteria might be feasible if post-import processing meant the product acquired a different tariff classification. However, international differences in tariff specifications meant it was impossible to devise a uniform formula for determining ‘tariff shift’ (i.e. the tariff classification for the finished product, rather than that applicable to the original materials). In view of these problems the League proposed that:

The country of origin of manufactured products shall be taken to be the country in which such products have been finished. No account shall be taken of the origin of the raw materials or of the raw, semi-manufactured or manufactured products which have entered into the composition of a product.¹⁰⁰

The problem of determining national origin became especially important to Britian’s intra-empire trade in the 1930s. The Finance Act 1919 stipulated that products would only qualify for imperial preference (i.e. favourable tariffs) if at least 25 per cent of their total value was the result of labour within the British Empire.¹⁰¹ But foreign companies were able to take advantage of this rule. US manufacturers located in Canada, or sent products to Canada for minimal processing, in order to meet the 25 per cent threshold.¹⁰² Concerns were also raised that US and German manufacturers were exploring the possibility of establishing ‘finishing’ plants in the Irish Free State and Gibraltar to secure imperial preference.¹⁰³ Other anomalies became apparent: products consigned direct to the UK from the Irish Free State were not entitled to imperial preference, but this exemption did not apply to products consigned via the empire.¹⁰⁴

The Imperial Economic Committee recognized the importance of achieving greater uniformity in definitions of empire content in order to promote imperial trade, and it recommended a uniform threshold to the Ottawa Conference 1932. However, this recommendation was not adopted; effectively, it was for each country belonging to the British Empire to determine this issue.¹⁰⁵ The UK government believed that these countries would follow its regulations on imperial preference, which were based on the Finance Act 1919. But it was imperative that any change in the threshold should not harm the UK’s trade with the empire. This, in turn, required an assessment of what threshold UK manufacturers could meet. Conversely, it was equally imperative that British Empire countries that exported to the UK should be able to satisfy UK thresholds. Another issue was how to deal with raw materials. Philip Cunliffe-Lister, President of the Board of Trade at the time of the passage of the 1926 Act, was opposed to any policy that facilitated overseas empire manufacturers using foreign raw materials when empire raw materials were available.¹⁰⁶ The geographical origin of raw materials was a source of concern for the Association of British Chemical Manufacturers, which noted that Australia and New Zealand, but not Canada, had set different empire content requirements for products made from raw materials not obtainable commercially within the empire. Consequently, UK manufacturers of chemical products containing citrus, iodine preparations and mercury, were impeded from exporting to Canada because the cost of the raw materials of non-empire origin exceeded the threshold set by Canadian regulations.¹⁰⁷ Finally, differences between the Finance Act, 1919, on the one side, and the Import Duties Act, 1932, and Ottawa Agreements Act, 1932, on the other side, affected aggregation (i.e. the total sum of work done in different parts of the empire to ensure that the final product qualified for preference).¹⁰⁸

Similar problems confronted the UK textile industry. Thus, Japanese and Russian ‘grey’ cloths were so cheap compared to British prices, that when imported into the UK only minimal processing was required to surpass the threshold for imperial preference.¹⁰⁹ In Hong Kong, labour and manufacturing costs were sufficiently low that firms could afford to use foreign materials to manufacture canvas shoes which qualified for preference when exported to the UK.¹¹⁰ One consequence of this practice was that manufacturers in the empire were benefitting from an ‘artificial’, or ‘unfair’ advantage over British manufacturers. However, raising the threshold for empire preference would have impeded this trade, but it adversely affected firms which were obliged to use some foreign inputs because there were not enough empire supplies.¹¹¹ In response to complaints that US firms were locating in Canada to secure imperial preference, the Board of Trade surveyed representatives of British industries to determine their views on empire content. This survey revealed considerable variation in opinion between industries on what the minimum empire requirements should be to qualify for imperial preference (see Table 1).

In response to its survey, the Board of Trade announced in 1933 a new Regulation which set a 50 per cent empire requirement for a diverse range of cutlery, electrical goods (including wireless apparatus), footwear, furniture, iron and steel products, motor cars and toilet preparations.¹¹² This Regulation failed to meet the demands of many industries, including those in Table 1. The Manchester Chamber of Commerce observed that reliance on a percentage metric failed to accommodate fluctuating prices of inputs. Low prices of foreign raw cotton necessarily increased the British content (value added) of products manufactured (spinning and weaving) and /or finished (bleaching, dyeing, printing), by Lancashire textile companies. Conversely, an increase in these prices reduced the British content of textiles. Consequently, cloths which were wholly of British manufacture were at risk of failing to qualify for imperial preference if there was a marked increase in the prices of inputs. To address this problem, the Manchester Chamber proposed that textiles manufactured in Lancashire should be subject to different criteria. However, the Board of Trade rejected this proposal on the grounds that any alternative to a percentage criterion had to be applicable to other industries.¹¹³

Table 1. Minimum empire content requirements to qualify for preference.

Industry association	Products	Minimum requirement (%)
Radio Manufacturers’ Association	Wireless apparatus	75
British Photographic Manufacturers’ Association	Photographic sensitized materials	50
India Rubber Manufacturers’ Association	All rubber products including tyres	65
Typewriter Manufacturers’ Association	Typewriters	75–90
Society of Motor Manufacturers and Traders	Motor cars and component parts	75 (65 for motor tyres)
Manchester Chamber of Commerce	100% artificial silks (man-made fibres such as rayon)	75

Source: BT 64/2 Empire content of goods entering the UK, ‘Empire Content’, document A, Appendix A, 7 October 1932; GMCRO, LD 1986/17; M8/5/15, Manchester Chamber of Commerce, ‘Minutes of Ordinary Meeting’, 18 December 1933. For industries in Table 1, empire content was defined in terms of the Finance Act 1919, and Section 6 of the Third Schedule to the Import Duties Act 1932: the proportion of labour costs to the total value of the product.

Determining the national origin of imports was therefore much debated in the interwar period, in a national, empire, and international context. These debates revealed the absence of consensus on this matter, even where the applicable tests (e.g. a percentage value of labour test for Imperial Preference) were settled.

How, then, did Board of Trade prosecution practice draw on and/or contribute to the understandings of the national origin of products? As explained above, the key concept under section 1 1926 Act was the definition of ‘imported goods’ (as defined in section 10(1)). In an internal Memorandum of 1927, the Board of Trade Solicitors’ Department considered that the central question was to ask whether an article was ‘substantially British’.¹¹⁴ No precise test was elaborated by the Board; it was understood to depend on the facts. However, the Board of Trade Solicitors’ Department rejected a proportion of value test, because the 1926 Act ‘contains no provision to that effect’.¹¹⁵ In doing so, the Board was consciously adopting a different approach to origin to that taken for Imperial Preference which was based on a proportion of value test. This, no doubt, was informed by wider debates, at a national and international level described above, which revealed tests based on threshold percentages to be fraught with difficulty. Consequently, in 1929 the Board of Trade acknowledged that it was unable to determine what constituted ‘substantial change’:

There have been no Court decisions on the question of what is meant by the expression substantial change and the matter is ultimately one in every case for determination by the Courts in the light of all the evidence including no doubt evidence as to trade custom.¹¹⁶

The definition of ‘imported goods’ was not the only legal provision under the Merchandise Marks Acts requiring an understanding of an imported product’s nationality; there was also the question of the meaning of false trade descriptions as to geographical origin under section 2(1) of the 1887 Act. When the 1926 Act was passed, a fact-based approach guided interpretation under 1887 Act s.2(1): a false trade description must be ‘false in a material respect’.¹¹⁷ Accordingly, that only one part of a watch was made abroad was not sufficient to make the description (‘English’) false.¹¹⁸ Guidance in Duncan Kerly’s treatise on The Law of Merchandise Marks was that trade descriptions as to geographical origin were to be determined by reference to the relevant custom of the trade, which would differ depending on the goods in question.¹¹⁹ Therefore, whereas the court of Queen’s Bench in Bishop v Toler (1895) held that the words ‘French factory’ constituted a false trade description, on the basis that the margarine ‘first became a finished product in England’, that test would not necessarily apply to other products, such as those involving ‘mechanical combinations’.¹²⁰ This approach, which required the Board first to obtain evidence of custom of the trade, made the prosecution of false trade descriptions under section 2(1) of the 1887 Act complex. For example, in one case from 1931, concerning ‘Made in England’ on shaving brushes, where the hair, imported already knotted, was merely affixed in the UK onto a foreign handle, the Board quoted the above noted guidance from Kerly – that ‘any Court in determining whether the indication of a particular country as the place of manufacture was false or not would be guided by the custom of the trade in the goods concerned’ – before writing to the defendant that the Board was ‘inclined to think that the Courts would hold’ the marking in question to be false.¹²¹ A prosecution did not follow, most likely because of the need for evidence on this point.

Therefore, in the years immediately following the passage of the 1926 Act, both the tests of ‘imported goods’ (the statutory test of ‘substantial change’ in the UK) under the 1926 Act, and of false trade description as to geographic origin under the 1887 Act, were understood by the Board to be grey areas requiring specific factual enquiry. This understanding changed, however, in 1933 with the decision of Marylebone Police Court in Board of Trade v Marks and Spencer. The magistrate – Ivan Snell, a Metropolitan Police Magistrate – held that pencil wallets that were 80 per cent British made in terms of labour and processes, could not be described as ‘Made in Britain’ and commented that even ‘if there had been only … one foreign made pencil out of a hundred, still if there was one article wholly foreign made I should still find it was against the Merchandise Marks Act’.¹²² Snell had heard submissions from the Board of Trade that if a product was ‘not entirely British’, the marking ‘British made’ was a false trade description, because of the need to protect the ‘conscientious person wanting to buy British made goods’:¹²³

It is obvious that there can be only one object in applying the term ‘British Made’ to goods and that is to persuade people to buy them in preference to other goods. Therefore, it is very material that when people sell goods as British made these goods should in fact be British made.¹²⁴

The ruling in Marks and Spencer was highly advantageous to the prosecution and ran against the more fact-based custom of the trade interpretation advocated in Kerly’s treatise. Viewed within a wider trade policy context (outlined above), the approach in Marks and Spencer also represented a test of national origin that was stricter, and more protective of the domestic market, than any percentage value measure adopted in relation to the hard trade policy of Imperial Preference. Indeed, in view of the seriousness that it attached to false trade descriptions as to national manufacturing origin, and its commitment to using Merchandise Marks legislation as a tool of soft trade policy, the Board considered the approach in the Marks and Spencer case to be ‘a very valuable expression of opinion’. Internal guidance indicates that the Board ‘did not want the present position upset’ by obtaining another decision that might run contrary to this; the ruling could be used, in other cases, to obtain undertakings from defendants as to future conduct (rather than having first to obtain evidence of trade custom, as advocated by Kerly's treatise).¹²⁵

Interestingly, while section 2(1) of the 1887 Act (unlike the strict liability nature of 1926 Act s.1) provided a defence where a defendant proved an absence of ‘intent to defraud’, this defence was never raised in any of these ‘Made in Britain’ cases, which may reflect the nature of the action taken by the Board after the Marks and Spencer ruling (undertakings as to future conduct, rather than formal prosecution). Consequently, from 1933, in matters concerning imported products that had undergone some process/treatment in the UK, the Board of Trade focussed on cases concerning section 2(1) of the 1887 Act (e.g. goods marked ‘Made in England’ or ‘Made in Britain’ or ‘Made in the United Kingdom’) rather than 1926 Act s.1 (which raised the question of the meaning of ‘substantial change’).¹²⁶ As the Board of Trade stated in an internal memorandum in 1933, discussing the 1926 Act, ‘there is no clear guide to what is a process or treatment producing a substantial change’.¹²⁷ With a case under section 1887 Act s.2(1) easier to establish, and the express representation ‘Made in Britain’ being in vogue as part of an effective marketing strategy, the result was that from 1933, the Board of Trade rarely utilized its power of prosecution under 1926 Act s.1 in cases involving goods which had undergone a process/treatment in a number of countries; in such cases section 2(1) of the 1887 Act, as interpreted in Marks & Spencer, was a more effective tool of soft trade policy.

5. Conclusion

This article has uncovered how trade marks, through their context of use, can acquire meanings relating to the geographical indication of products (here national manufacturing origin) and how those meanings were regulated, in the interwar period, through the criminal law. At a time of consumer nationalism, crime, trade marks and trade policy became closely allied, and central to Board of Trade approaches both to legislative policy and enforcement. Section 16(1) of the 1887 Act, which was enforced through Customs & Excise procedures of detention and seizure (and not the criminal law), only mandated an indication of origin at the point of importation (for imported goods bearing a trade mark ‘being or purporting to be’ that of a UK trader); it did not regulate such trade marks subsequently applied to goods that had been imported ‘blank’. Almost 40 years later, section 1 of the 1926 Act introduced a criminal offence for the failure to apply an indication of origin to such imported goods, applying to acts of sale, offer for sale, advertisement or distribution in the UK. The First World War had changed the economic and political environment to such an extent that, by 1926, it was feasible to regulate trade marks in this way, and this coincided with the development of a regulatory function for the criminal law (in regulating the social order, rather than imposing punishment for wrong-doing). Further, the introduction of the 1926 Act was not possible prior to 1914, largely because of opposition from the commercial sector that marking imports with their country of origin revealed trade secrets which would damage the substantial entrepôt trade centred on London.¹²⁸

Accordingly, in the interwar context, we argue that the criminal law regulating trade marks (1926 Act s.1) was recognized as a tool of soft trade policy: in legislative debates, section 1 of the 1926 Act was one element of Board of Trade policy that polarized political debate over the proper alternatives to hard trade policy (the latter rejected by the electorate in 1923). However, it was the Board of Trade’s powers of enforcement that actively shaped the meaning that section 1 of the 1926 Act took on in practice and its relative importance within the context of the Merchandise Marks Acts more generally (particularly its approach to enforcing section 2(1) of the 1887 Act). Board of Trade prosecutions actively contributed to twentieth century trade mark law, by promoting a specific understanding of both deceptive conduct on the part of a defendant in the use of a trade mark, as well as a particular meaning of national manufacturing origin. In this way, during the interwar period, the criminal law – section 1 of the 1926 Act – made a significant contribution to the regulation of how trade mark owners could use their own marks. This contrasts to the position today: the law of trade marks is understood to be a domain overwhelmingly for the civil, not criminal, law, and the primary role of the criminal law is in the enforcement of a trade mark owner’s rights against third party infringers in serious cases only.¹²⁹

However, the market realities of the increasingly multinational character of business in the twentieth century ultimately set the context for the decline of the 1926 Act as a basis for Board of Trade prosecutions in cases where goods had undergone a process/treatment in a number of countries. The statutory definition of ‘imported goods’ in section 10(1) of the 1926 Act, particularly the exclusion of goods that had undergone a ‘substantial change’ through a process/treatment in the UK, was complex to determine. Indeed, the wider context for the enforcement of the 1926 Act in the interwar era reveals the extent to which the meaning of ‘substantial change’ and the national origin of goods more generally, was contested. As regards Board of Trade enforcement, we have argued that as use of express trade descriptions as to national geographical origin (e.g. ‘Made in Britain/England/the UK’) became increasingly common in marketing practice, the Board favoured prosecutions utilizing earlier legislation (section 2(1) of the 1887 Act) and not the 1926 Act, thereby obviating the test of ‘substantial change’ altogether. In doing so, the Board utilized the test of national origin from Board of Trade v Marks & Spencer, that was stricter (i.e. more protective of the domestic market) than any percentage value test contemplated in hard trade policy such as Imperial Preference.

Finally, and more generally, this article, in drawing together interdisciplinary insights from business, economic, and legal history, reveals the importance of historical context both to how we understand law and its enforcement. The interwar context, for instance, contrasts to that in the late nineteenth century: due to very different historical conditions, consumers in the late nineteenth century could not be relied on to discriminate against foreign made goods.¹³⁰ That historical context was set to change in the latter part of the twentieth century, producing a marked shift in the relation between trade marks, crime and international trade. While the 1926 Act (in addition to the other Merchandise Marks Acts, including those of 1887 and 1891) was not repealed until 1968,¹³¹ already by the late 1940s, the discussions resulting in the General Agreement on Tariffs and Trade (1947) were characterized by non-discriminatory expectations, in an international trade context, about national policies on intellectual property.¹³² These developments eventually culminated in the TRIPS Agreement (the Trade-Related Aspects of Intellectual Property Agreement 1995), formally bringing intellectual property law into the framework of the World Trade Organisation that seeks to dismantle, not facilitate, barriers to international trade. By the late twentieth century, then, the role of crime in intellectual property was focussed only on the enforcement of trade mark infringement committed by third parties, and not empowering an organ of Government to police a trade mark owner’s uses of its own trade mark, in a bid to utilize trade marks as a tool of soft trade protection. The interwar history uncovered in this article, therefore, reminds us that the current approach to intellectual property policy, enshrined in the TRIPs Agreement, only dates from developments in the second half of the twentieth century.

Acknowledgements

The authors are grateful to Alison Firth for detailed comments on an earlier draft of this article. The authors also received valuable feedback from attendees at the authors’ presentation of this article in May 2023 as part of The CREATe Trade Mark Seminar Series, Summer 2023, particularly from Michael Birnhack, Jennifer Davis, Lindsay Farmer and Paul Heald. The authors also thank the anonymous reviewers for their comments, and Lindsay Farmer for subsequent discussion. The authors acknowledge the assistance of Richard Ward (Parliamentary Archives), the Bank of England Archives and the law librarians at Newcastle University. Elena Cooper’s research is funded by The Leverhulme Trust (ECF).

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Elena Cooper

Elena Cooper is Senior Research Fellow at CREATe, the Centre for Regulation of the Creative Economy, School of Law, University of Glasgow. She is the author of Art and Modern Copyright: The Contested Image (CUP, 2018), the first in-depth and longitudinal study of the history of copyright relating to the visual arts.

David M. Higgins

David M. Higgins is a professor in the accounting & finance division at Newcastle University Business School. He has published widely on the business-economic history of merchandise marks and trade marks.

Notes

* All references in this article to archival papers with reference numbers BT, DO and LO are to papers held at The National Archives, London.

1 16&17 Geo. 5 c.53; the marking requirements are specified in section 10(1).

2 Finance Act (No.2) 1915 (5&6 Geo. 5, c.89); 11&12 Geo. 5, c.47.

3 For recent analyses, see, especially, Alan de Bromhead, Alan Fernihough, Marcus Lampe, and Kevin Hjortshøj O’Rourke, ‘When Britain Turned Inward: The Impact of Interwar British Protection’, 109 American Economic Review (2019), 325; Alan de Bromhead, Alan Fernihough, Markus Lampe, and Kevin Hjortshøj O’Rourke, ‘The Anatomy of a Trade Collapse: The UK, 1929–1933’, 23 European Review of Economic History (2019), 123.

4 Tim Rooth, British Protectionism and the International Economy, Cambridge, 1993, 31; de Bromhead, Fernihough, Lampe, and O’Rourke, ‘When Britain’, 326.

5 Finance Act 1919, 9&10 Geo. 5, c.32, Second Schedule.

6 United States Tariff Commission. Introductory Survey of Colonial Tariff Policies, Wahington, 1921, 39.

7 Stephen Constantine, ‘Bringing the Empire Alive: The Empire Marketing Board and Imperial Propaganda, 1926–33’, in John M. MacKenzie, ed., Imperialism and Popular Culture, Manchester, 1986, 193; Thackeray, Forging a British; Frank Trentmann, Free Trade Nation, Oxford, 2008.

8 Felicity Barnes, ‘Bringing Another Empire Alive? The Empire Marketing Board and the Construction of Dominion Identity, 1926–1933’, 42 Journal of Imperial and Commonwealth History (2014), 61; Felicity Barnes and David M. Higgins, ‘Brand Image, Cultural Association and Marketing: “New Zealand” Butter and Lamb Exports to Britain, c.1920–1938’, 62 Business History (2020), 70.

9 Stephen Constantine, ‘Anglo-Canadian Relations, the Empire Marketing Board and Canadian National Autonomy between the Wars’, 21 Journal of Imperial and Commonwealth History (1993), 357; Ian M. Drummond, British Economic Policy and Empire, 1919-1939, London, 1972, 228–240; David Thackeray, ‘Buying for Britain, China, or India? Patriotic Trade, Ethnicity, and Market in the 1930s British Empire/Commonwealth’, 12 Journal of Global History (2017), 386; David M. Higgins, and Brian D. Varian, ‘Britain’s Empire Marketing Board and the Failure of Soft Trade Policy, 1926-1933’, 25 European Review of Economic History (2021), 780.

10 Imperial Economic Committee. Report of the Imperial Economic Committee on Marketing and Preparing for Market of Foodstuffs Produced in the Overseas Parts of the Empire. First Report, 1925, Parliamentary Papers (P.P.) XIII. 799, 7; Final Report of the Committee on Industry and Trade, London, 1929, 293-295; The Times, 19 Dec. 1925, 13 cols. c-d.

11 Report from the Select Committee on Merchandise Marks Act 1887, together with the Proceedings of the Committee and the Minutes of Evidence and Appendix, 1890, P.P. XV. 19 (hereafter ‘Select Committee Report 1890’) at QQ.190–191; QQ.766–768; QQ.771–774; Q.1030; Q.1034; Q.1710; Q.2369; Q.2373; Q.2376; Q.2720; Report from the Select Committee on Merchandise Marks together with the Proceedings of the Committee, Minutes of Evidence, Appendix and Index. 1897. P.P. XI.29 (hereafter Select Committee Report 1897) at QQ.43–47; Q.864; Q. 867; QQ.868–871.

12 See David M. Higgins, Brands, Geographical Origin, and the Global Economy, Cambridge, 2018, 133, discussing the late nineteenth century position. Transhipment means unloading cargo from one vessel and loading it onto another to reach the final destination, often because there is no direct route between the export location and the import destination. This trade was estimated to be worth £100m before 1914. Report to the Board of Trade of the Merchandise Marks Committee, 1920, P.P. XXI. 615 (hereafter Committee Report 1920), v.

13 Abraham Berglund, ‘The War and the World’s Mercantile Marine’, 10 American Economic Review (1920), 229.

14 Sydney Brooks, ‘The British Blacklist’, 204 The North American Review (1916), 825; Brian Bond, Britain’s Two World Wars Against Germany, Cambridge, 2014, 88–99.

15 Departmental Committee on the Electrical Trades. Report of the Departmental Committee Appointed by the Board of Trade to consider the position of the electrical trades after the war. London, 1918, P.P. XIII.355, 11. See also Departmental Committee on the Engineering Trades, Report of the Departmental Committee Appointed by the Board of Trade to consider the position of the Engineering trades after the war, London, 1918, P.P. XIII.369.

16 British Trade after the War. Summaries of the Evidence taken by a Sub Committee of the Advisory Committee to the Board of Trade on commercial intelligence with respect to measures for securing the position, after the war, of certain branches of industry, 1916, P.P. XV.611, 4; 8–9; 22; 24.

17 Merchandise Marks Committee, Minutes of Evidence, 1920 (hereafter, ‘Minutes of Evidence, 1920’) extract from the address of the chairman at QQ.588–591; see, also, the evidence of Arthur Kemp (National Federation of hosiery manufacturers), and that provided by representatives of the National Flint Glass Makers Society, in: Committee on Industry and Trade: Minutes of Evidence Taken before the Committee on Industry and Trade, 1924–1927, Volume 1: London HMSO, 1931, Q.7121, and Volume 3: London, HMSO, 1927, Q.20,138, respectively.

18 Minutes of Evidence, 1920, QQ.2295–2310; Q.3914; Federation of British Industries, Modern Records Centre, University of Warwick (hereafter, MRC), MSS.200/F1/1/1/155, Report of Deputation to President of the Board of Trade, 16 April 1926; MSS.200/F1/1/1/9, 18 June 1924; MSS.200/F1/1/1/10, 10 December 1924; United Manufacturers Journal, no.28, August 1921, 161; ibid., no.41, September 1922, 182. Few concerns were expressed about the quality of imported manufactured products, especially those originating from Scandinavia, the US, or Western Europe. As we show later in the article, contemporaries recognized that the technological base of UK manufacturing was enhanced by foreign direct investment – most of which originated from these regions: Frances Bostock and Geoffrey Jones, ‘Foreign Multinationals in British Manufacturing, 1850-1962’, 36 Business History 1994, 100, table 3.

19 Minutes of Evidence, 1920, Q.718; Q.791; QQ.927–29; QQ.945–46; Q.2117; QQ.2195–6; Q.2121;QQ.2123–26.

20 Ibid., Q.1778; Q.1786-1795; QQ.2532-36; Q.3046; Q.3048; Q.3386; Q.3394; Q.3483; Q.3552.

21 Ibid., Q. 4022; Q.4029.

22 Report to the Board of Trade of the Merchandise Marks Committee. P.P. X.73. London: HMSO, 1920 (hereafter, Committee Report, 1920), v.

23 Trentmann, Free Trade Nation, 223.

24 Trentmann, Free Trade Nation, 239; see also 222–223, 228–229.

25 50&51 Vict. c.28.

26 1887 Act, s.16(1)-(10).

27 Hansard, House of Commons Debates, series 5, vol. 195, col. 888-9, 12 May 1926 (HC), Sir Philip Cunliffe-Lister, President of the Board of Trade.

28 Hansard, House of Commons Debates, series 5, vol.200, col. 59, 22 November 1926 (HC), Percy Harris MP, on the debate of clause 1 in committee.

29 Hansard, House of Lords Debates, series 5, vol. 65 col. 1580, 13 December 1926 (HL), Viscount Peel.

30 Trentmann, Free Trade Nation, 239.

31 House of Commons, Standing Committee B, 15 June 1926, Albert Alexander, c.544.

32 BT 63/17/1 League of Nations, international Economic Conference, Geneva, May 1927, meeting of the Economic Sub-Commission on Indirect Protectionism.

33 Madrid Agreement 1891, signed by Great Britain, Spain, France, Switzerland and Tunis, which was a special agreement under Art 16 of the Paris Convention on Intellectual Property 1883. Art I(1) of the Madrid Agreement 1891 stated that: ‘All goods bearing a false or deceptive indication, by which one of the countries to which this Agreement applies, or a place situated therein is directly or indirectly indicated as being the country or place of origin shall be seized on importation into any of the said countries’. Alternatively, under Art I, States could provide for prohibition on importation, or failing that other remedies provided ‘in that case to natives by the law of such State’. Article III of the Madrid Agreement, as originally drafted, allowed the vendor of goods to indicate ‘his name or address upon goods coming from a country other than that where the sale takes place’ so long as that name or address was accompanied by ‘a clear indication in legible characters of the country or place of manufacture or production’. Following the Hague Conference, 1925, Article III was amended also to allow for ‘any other indication adequate to prevent any apprehension arising as to the true origin of the goods’. The latter criterion may have influenced the 1926 Act’s approach, which allowed for the marking ‘Empire’ or ‘Foreign’ as an alternative to a definite indication of origin.

34 BT 63/17/1 League of Nations, international Economic Conference, Geneva, May 1927, meeting of the Economic Sub-Commission on Indirect Protectionism.

35 Final Report of the Committee on Industry and Trade, appended to Board of Trade internal memorandum, 1929, BT 215/13.

36 The 1926 Act was passed on 15 December 1926, and section 1 entered into force 6 months thereafter: 1926 Act s.1(5).

37 BT 11/32 Fountain to Customs, 19 January 1927. On the consequences of the marking ‘Made in Germany’ in the late nineteenth century see Higgins, Brands, 133.

38 This memorandum dealt generally with the marking requirements applicable to imported products. BT 11/32, Merchandise Marks Acts: Memorandum of the Board of Trade and the Commissioners of Customs and Excise respecting the requirements as to marks on imported goods, May 1927.

39 1926 Act, s.5(1). The Merchandise Marks Act 1887 is referred to in the 1926 Act as the ‘Principal Act’: see 1926 Act s.10.

40 25&26 Vic. c.88 (hereafter ‘the 1862 Act’). Amongst the changes to the 1862 Act, introduced in 1887 were the introduction of summary jurisdiction, a change in the definition of ‘trade mark’ and placing the burden of proof, as regards absence of intent to defraud, on the defendant. On the pre-modern approach to regulating trade marks by way of subject specific statutes, see Brad Sherman and Lionel Bently The Making of Intellectual Property Law: The British Experience, Cambridge, 1999, 166.

41 See 1887 Act s.2(1), concerning ‘offences as to trade marks and trade descriptions’, including forgery of a trade mark and applying false trade descriptions to goods.

42 1926 Act s.5(1) and 1887 Act s.2(3).

43 Ibid.

44 F.B. Sayre, ‘Public Welfare Offences’, 33 Columbia Law Review (1933), 55. On the changing nature of the criminal law at this time, see L. Farmer, Making the Modern Criminal Law: Criminalization and Civil Order, Oxford, 2016, 92.

45 Regulations Made by the Board of Trade under Section 2 Merchandise Marks Act 1891, 21 May 1892, para. 3.

46 54. Vic. c.15, s.2. Similar powers were also conferred on the Board of Agriculture, under the Merchandise Marks Act 1894, 57 &58 Vict. c.34, but these were rarely used.

47 An example of a case that was widely reported in the general press is Board of Trade v John Barker & Co, discussed later, regarding ‘Pontings of Kensington’ on Japanese-made raincoats, see ‘Magistrate and 8/9 Raincoats: Japanese Competition’, The Times, 30 Dec. 1938, 7 col. e. For a newspaper report of a case concerning the trade misdescription ‘Made in Britain’ under the 1887 Act s.2(2), see Board of Trade v Doran Hart & Co, ‘Imported Christmas Cards: Fine for False Trade Description’, The Times, 25 April. 1933, 11. col. a, which concerned ‘Made in Britain’ on imported Christmas cards.

48 For example, see ‘French Christmas Cards Boxed as British’ The British Stationer, May 1933, p.89 (in BT63/14/4), ‘Ismay Electric Clocks’, Horological Journal, April 1937 (in BT64/25), ‘Fines for Selling a Foreign Oil Stove as British’, The Ironmonger, 4 March 1933 and, from the local press, ‘Merchandise Marks Act: Heavy Fines Imposed’, The Hornsey Journal 3 March 1933 (in BT63/13/1).

49 The ledger is held in BT64/39.

50 For example, there are multiple files about imported hoods in BT 63/13/7 and Christmas crackers in BT 63/9/6.

51 See Board of Trade comments on the Federation of Music Industries ‘Memorandum to the Music Industries’ about the 1926 Act, dated February 1927, BT11/32. The Memorandum is written in general terms, repeating the statutory language, and does not, for example, detail the meaning of section 1.

52 Hansard, House of Commons Debates, series 5, vol. 235, col.1126–7, 18 February 1930 (HC), for which manual notes, relating to the response to Remer’s question, are contained in an internal Board of Trade file: BT63/5/7. See also the question of John Remer MP to the Board of Trade in 1929, as to whether ‘the Board will insist that’ the provisions of the 1926 Act ‘are obeyed’: Hansard, House of Commons Debates, series 5, vol. 233, col.25, 24 December 1929 (HC).

53 For example, see the quotations below from the magistrate ruling in Board of Trade v John Barker & Co (1938), regarding ‘Pontings of Kensington’ on Japanese-made raincoats and the magistrate ruling and Board of Trade submissions in Board of Trade v Marks and Spencer (1933). A further example is the records of a case from 1931, contained in BT 63/9/12, which concerned a prosecution for a breach of marking order under section 2 1926 Act in relation to flexible sheet rules, where the Lord Mayor ruled that ‘the Board of Trade are doing everything they can to protect patriotically minded people’.

54 See text to n.77 below. This phrase comes from a Board of Trade notes from 1930, in BT63/6/5 concerning a case about boots and shoes sold by Gamage.

55 This point is explained in BT 258/1826, Memo, IM.5878/60, referring to a Board of Trade minute from May 1955: ‘hitherto a distinction has been maintained in the Board’s prosecution policy’, between breaches of 1926 Act ss.1 and 2. The Stationers’ Sundries Export Group, in 1960, sought to change this prosecution practice, so that the Board of Trade would be compelled to prosecute where there have been ‘flagrant infringements’ of marking orders and trade prosecutions had proven ineffective (which is the subject of a further file: BT 258/1826). The figure for the number of Marking Orders comes from BT 63/16/1, ‘General description of the United Kingdom Merchandise Marks legislation’.

56 See, for example, BT63/16/12, concerning the Union Match Company, which originated as a complaint notified by a member of the public; a Board of Trade file note from 5 December 1933, notes that a police officer made ‘four visits’ to relevant ‘shops’ where the products were sold, and made ‘enquiries’.

57 Regulations Made by the Board of Trade under Section 2 Merchandise Marks Act 1891, 21 May 1892, para 5.

58 The Board of Trade’s view on the undesirable nature of the costs consequences of losing in court, as well as the difficulty in practice of obtaining security for costs from the notifying applicant, is fully discussed in the internal Board of Trade notes in BT63/9/5, 1931. For an example of refusal by a notifying applicant to provide the Board with security, see BT63/3/14 JA Irvine & Co: Merchandise Marks Act, concerning the mark MEAD on typewriters (discussed further below, text to n.71), in which the notifying applicant – JA Irvine – wrote to the Board of Trade on 21 June 1929: ‘We wish to state emphatically that we are not prepared to bear the costs of such a prosecution nor give security thereof’ on the basis that the defendant was ‘flagrantly breaking the law’ and that it was ‘solely’ for the Board ‘to undertake the putting of this matter right in the interest of other traders without asking a single trader to be responsible for so doing’.

59 Such an approach is advocated, for instance, in a Board of Trade note 14 February 1930, BT63/5/7.

60 BT 63/5/1, Complaint regarding Messrs Nitche & Gunter Optical Company, 1929. See also BT 63/15/8, 1933: Imported coat hangers made in Germany, marked ‘C. Birnbaum Ltd’ but bearing no indication of origin. As only display items were in breach of section 1, the case was not taken further.

61 1926 Act s.1(1). Section 1 also applied to ‘the name of any place or district in the United Kingdom’, but the focus in this article is on trade marks.

62 1926 Act s.10(1).

63 ‘Merchandise Marks Act 1887, Re A von Hagen’, 4 August 1905, LO 3/130.

64 Para 800 Importation Code 1904, quoted in the Yale case, BT 63/1/3, Emphasis added.

65 E. Cooper, ‘The Nineteenth Century History of the Jaeger Trade Mark’, in L. Bently and R. Bone, eds., Research Handbook on the History of Trade Mark Law, Edward Elgar, forthcoming.

66 ‘Case for the Opinion of the Law Officers: In the Matter of N.V. Philips’, 3, BT 63/1/3.

67 Quoted in ‘Case for the Opinion of the Law Officers: In the Matter of Yale & Towne Manufacturing Co’, BT 63/1/3.

68 Ibid, 10.

69 ‘Opinion of the Law Officers of the Crown: In the matter of Yale & Towne Manufacturing Co’ para 2, and ‘Opinion of the Law Officers of the Crown: In the matter of NV Philips Lampenfabrikk’ para 1(b), BT 63/1/3. These documents are also contained in LO 3/906 and LO 3/907. Emphasis added.

70 BT 11/32, Minute by Mackie, March 1927.

71 BT 63/3/14, 1929, JA Irvine & Co. Merchandise Marks Act.

72 BT 63/16/12, 1933, Merchandise Marks – Matches.

73 Letter from P.H. Ewthoven, to Board of Trade, 19 November 1933 in BT 63/16/12, 1933. For another example of a patriotic member of the public see BT63/19/9, J&K Connor, Merchandise Marks: Hats: letter dated 20 June 1934 from the hat makers C Dillingham & Sons (seeking advice from the Board on the meaning of ‘Made in England’ where an article had undergone some processes in the UK and some abroad): ‘This particular lady of the British public is very incensed because it happens that this hat has reached her with the original label on the inside of the hat’ which stated ‘Made in Japan’, whereas the lining of the hat stated ‘Made in England’.

74 Board of Trade v John Barker & Co (1938): BT 64/42, Complaint regarding Messrs Pontings of Kensington, Merchandise Marks, 1938, Board of Trade Memo dated 23 November 1938.

75 Ibid.

76 BT 63/16/11, 1933, Merchandise Marks – Typewriters.

77 Board of Trade Memorandum on prosecution practice, 18 May 1930, BT 63/6/5. See also, BT 64/42: case about electric clocks advertised by Stedall & Co Ltd, marked as ‘British Made’ when in fact the electric movement was foreign-made. Board of Trade file note dated 20 November 1938: ‘We are usually willing to take the prosecution ourselves in cases where the description ‘British Made’ is misused’.

78 See BT63/17/1: South African Oranges: Prosecution at Bow Street: draft letter from Board of Trade to The High Commission for South Africa, marked G.631/29, referring to the ‘more or less rife’ nature of the false marking, and acknowledging the need to ‘prevent fraud of this character’. For another example of a Board of Trade prosecution in a case of ‘false trade description’ see: the false marking of Rangoon rice as ‘Empire’, which in fact also contained lower quality Saigon rice (BT 63/1/8); this case was referred to the Board of Trade by the Empire Marketing Board and therefore, while it did not involve the term ‘British made’, nevertheless related to the issue of protecting empire trade.

79 As we will see, in the UK there was an absence of case law on ‘substantial change’. This is in marked contrast to the United States, for which important cases existed. See, especially, Anheuser – Busch Brewing Association v United States, 207 U.S., 1908, 562; United States v Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.C.P.A 1940). In the US, the term ‘substantial transformation’ is used.

80 Merchandise Marks (Imported Goods) Bill, Standing Committee B, 29 July 1926, c.1426.

81 M8/3/10, Manchester Chamber of Commerce, Merchandise Marks (Imported Goods Bill), Views of the Manchester Chamber of Commerce, 4 March, 1926, Greater Manchester County Record Office, Manchester Central Library (hereafter ‘GMCRO’).

82 Report from the Select Committee on the Merchandise Marks Act 1862 Amendment Bill, Together with the Proceedings of the Committee and Minutes of Evidence and Appendix. 1887 P.P. X.357 (hereafter ‘Select Committee Report 1887’), Q.2527–2528; Select Committee Report 1897, Q.306.

83 Select Committee Report 1887, Q.928; Q.1025; Q.1090; QQ.1230–1231; QQ.1384–1387. A special clause was inserted in the Merchandise Marks Act, 1887, to cover the watch industry.

84 Minutes of Evidence 1920, QQ.1806-1807; Q.2140; Q.2144; Q.4239.

85 Ibid. Evidence of C.W. Bowerman, MP, and A.E. Holmes, representing the Trades Union Congress Parliamentary Committee, and the Printing Trades federation, respectively. Select Committee Evidence 1920, QQ. 3383-3479.

86 MRC, MSS 200/F/4/2/14. Federation of British Industries, Fifteenth Annual Report for the year ending 1931.

87 For debates on these campaigns, see, for example: Stephen Constantine, ‘The Buy British Campaign of 1931’, 10 Journal of Advertising History (1987), 44; Higgins, Brands, 126–132; Trentmann, Free Trade Nation.

88 MRC, MSS 200 F/3/D2/2/1. Luke & Spencer to Walker, 14 March, 1932; Thos. Forman & Sons to Walker, 14 May 1932; Memo, ‘Pushing the Sale of Foreign Goods Under Cover of ‘All British’ Slogans, 4 May 1933.

89 Guildhall Library, London (hereafter, Guildhall) MS 14482(2). Association of British Chambers of Commerce, Home Affairs and Transport Committee, 14 June 1933.

90 Both of these views were supported by the Manchester Chamber of Commerce. GMCRO, M8/5/15, Manchester Chamber of Commerce ‘Association of British Chambers of Commerce. Annual Meeting, 27–28 April 1933; M8/5/20, Manchester Chamber of Commerce, ‘General Purposes Committee’, 18 September 1934.

91 GMCRO, M8/5/10, Manchester Chamber of Commerce, ‘Trade and Merchandise Marks (Statutory) Committee, 25 November 1931. The legal interpretation of ‘false trade description’ is discussed later in this section, in the context of Board of Trade prosecution practice.

92 BT 11/33/20. Felt hats and hoods, Minute dated 1 September 1927; BT 63/3/12, ‘Tile surrounds made of imported tiles’, Marker to Dodd, 8 May, 1929.

93 BT 11/33/28. Furniture fittings, Minute dated 12 August 1927.

94 Guildhall, MS 16775, British Toy Manufacturers Association, 24 February 1931; 28 May 1931; 16 November 1931; Steven to Moreton Phillips & Son, 19 November 1931; 14 December 1931. Similar problems confronted Ford Motor Car Co, which imported components from the US for assembly at its factory in Trafford Park (Manchester): Higgins, Brands, pp. 150–151.

95 Geoffrey Jones, ‘The British Government and Foreign Multinationals Before 1970’, in Martin Chick, ed., Governments, Industries and Markets: Aspects of Government-Industry Relations in the UK, Japan, West Germany and the USA since 1945, London, 1990, 208; Peter Scott and Tim Rooth, ‘Public Policy and Foreign-Based Enterprises in Britain Prior to the Second World War’, 42 Historical Journal (1999), 496, at 501–503. The principal exception to this permissive policy occurred when foreign investors sought control of shipping firms such as Cunard, and Peninsula & Oriental, or major armaments producers, including Vickers Armstrong, which were of strategic importance to the UK economy. Similarly, the Bank, in conjunction with the Treasury, ensured that EMI – a UK based firm which was a world leader in music recording – was purchased by British investors instead of the rival Dutch firm, Philips. Bank of England Archives, G1/326, Meeting at Bank, 15 May 1929; ibid., de Stein to Norman, 17 October 1945; ibid., ‘EMI share deal rumours.

96 Bostock and Jones, ‘Foreign Multinationals’, 100, Table 3.

97 Christopher M. Law, British Regional Development Since World War 1, London, 1981, 176.

98 Daniela L. Caglioti, ‘Property Rights in Time of War: Sequestration and Liquidation of Enemy Aliens’ Assets in Western Europe During the First World War’, 12 Journal of Modern European History (2014), 523.

99 League of Nations. Economic Committee, Report to the Council on the work of the 35th Session, 24 June 1931, 12.

100 League of Nations. Economic Committee, Report to the Council on the work of the 35th Session, 24 June 1931, 12. Tariff shift requires a change in the Customs tariff code used to classify imports. A raw commodity, such as wheat, has a different tariff code to biscuits . Thus, if a Canadian bakery imported wheat from the US, and processed this wheat into biscuits, the biscuits would be eligible for tariff preference when imported into the UK. Another factor which hindered the League’s attempts to secure equitable treatment in commerce was the UK policy of imperial preference – a form of trade discrimination – which provoked a hostile response from France, Germany, and the US: Mona Pinchis, ‘The Ancestry of Equitable Treatment in Trade: Lessons from the League of Nations During the Inter-War Period’, 15 Journal of World Investment & Trade, 37.

101 9&10 Geo.5, Finance Act 1919, Imperial Preference: Regulations as to the Proportion of value resulting from labour within the British Empire, s.1. London 1919. This percentage was incorporated in Section 6 of the Third Schedule to the Import Duties Act 1932.

102 BT 64/2 Empire content of goods entering the UK, ‘Empire Content’, document A, 7 October 1932; BT 64/9, Empire content of goods entering the UK, ‘Applications for 50% or less’, 22 October 1934.

103 BT 64/2, Empire content of goods entering the UK, ‘Empire Content’, document A, 7 October 1932.

104 DO 35/233/7, Imperial preference: definition of Empire content, Minute, 19 April 1933.

105 Imperial Economic Conference at Ottawa 1932, P.P. X.797, 18; Imperial Economic Conference at Ottawa 1932, P.P. XI.701, 9; BT 64/2, Empire content of goods entering the UK ‘Empire Content’, 12 October, 1932; Runciman to Cunliffe-Lister, 1 November 1932; BT 64/2 Empire content of goods entering the UK, ‘Empire Content’, document A, 7 October 1932. However, no definition of ‘empire content’ was provided’. The Imperial Economic Committee was established in 1925. Its terms of reference focused on increasing the sale of Empire food products in the British market at the expense of foreign producers. Imperial Economic Committee, Report of the Imperial Economic Committee on Marketing and Preparing for Market of Foodstuffs Produced in the Overseas Parts of the Empire: First Report– General. London, 1925, 4.

106 BT 64/2, Empire content of goods entering the UK, letter to Kenny, 21 November 1932; Ibid., document A, 7 October 1932; Minute, 11 October 1932; Cunliffe-Lister to President of the Board of Trade, 8 November 1932.

107 DO 35/233/7, ‘Imperial Preference: Canadian requirement of 50% empire content’, Davidson to Board of Trade, 14 November 1932; Minute dated 28 March 1933.

108 Ibid., ‘Imperial preference: Empire content qualification’, 20 April 1933.

109 GMCRO, M8/5/15, Manchester Chamber of Commerce, ‘Definition of British Origin for Quota and Preference Purposes’, 10 September 1934; ‘Board of Directors’, 12 November 1934;

110 GMCRO, M8/5/20, Manchester Chamber of Commerce, ‘Special Sub-Committee Appointed by the Board of Directors to Examine the Question of Empire Content’, 6 March 1934.

111 GMCRO, M8/5/15, Manchester Chamber of Commerce, Rayon (Artificial Silk) Executive Committee, 30 November 1933.

112 Statutory Rules and Orders, 1933, No.760. The Import Duties (Imperial Preference) No.2 Regulations, 1933, Dated January 30 1933, London 1933.

113 GMCRO, M8/5/20, Manchester Chamber of Commerce, ‘Minutes of Meeting of Special Sub Committee Appointed by the Board of Directors to Examine the Question of Empire Content’, 5 February 1934; 6 March 1934. M8/5/21, Manchester Chamber of Commerce, ‘Rayon (Artificial Silk) Trade Executive Committee, 26 April 1934. Subsequently, the Board issued a new Regulation which set the qualifying threshold between 50 per cent and 75 per cent. Statutory Rules and Orders, 1933, No.26, The Import Duties (Imperial Preference) No.1 Regulations.

114 BT 103/275, Board of Trade, Solicitors’ Department, Memorandum dated 14 October 1927.

115 Ibid. Memorandum dated 3 November 1927. See Board of Trade Memorandum ‘Marking Foreign Goods processed in United Kingdom as of British Manufacture’ contained in BT 63/16/2, 1933, ‘“Made in Canada”, Memorandum on use of Description’: ‘Empire countries admit goods from other Empire countries on a preferential tariff provided (in the case of most goods) that not less than 25 per cent of the value of the goods is due to Empire labour or material’.

116 BT 63/3/12, ‘Tile surrounds made of imported tiles’, Carlill to Dodd, 4 June 1929.

117 Williamson v Tierney (1901) 17 TLR 174, High Court, discussed in D. Kerly and F.G. Underhay, The Law of Merchandise Marks, 3rd ed. London, 1909, 29 n.1.

118 Ibid.

119 Kerly and Underhay, The Law of Merchandise Marks, 29.

120 Ibid. The Law of Merchandise Marks, 28, referring to Bishop v Toler (1895) 65 LJ MC 1.

121 BT63/9/14, 1931, Merchandise Marks – Shaving Brushes, quoting Kerly and Underhay, The Law of Merchandise Marks, 29.

122 Board of Trade v Marks and Spencer, 28 April 1933, Transcript, 1 and 2, setting out submissions of the Board of Trade, BT 63/15/6.

123 For a real example of such a ‘conscientious’ consumer, see BT 63/16/12, discussed above (Union Match Co).

124 Board of Trade v Marks and Spencer, 8, BT 63/15/6.

125 BT 63/15/6, Internal note, 13 May 1933.

126 See also BT 63/14/4, 1933, the defendant’s Christmas cards were marked ‘Made in France, but contained in a box marked ‘British Manufacture’. The defendant argued that ‘British Manufacture’ is not a false trade description under section 2(1) 1887 Act as ‘the major portion of the cost of production of these cards was incurred in England’. However, this argument was rejected by the magistrate, Alderman Pollitzer, Justice Room, Guildhall, on 24 April 1933, who imposed fines of £20. The newspaper report of the prosecution states that the ‘Board of Trade took a very serious view of the matter’, The Times, 25 April. 1933, 11 col. a.

127 Board of Trade Memorandum ‘Marking Foreign Goods Processed in United Kingdom as of British Manufacture’ contained in BT 63/16/2, 1933, ‘Made in Canada’, Memorandum on use of Description’.

128 Higgins, Brands, 124–156.

129 Today, section 92 Trade Marks Act 1994 criminalizes various acts involving unauthorized use of trade marks ‘in the course of a business’ and carried out by a defendant ‘with a view to gain for himself or another, or with intent to cause loss to another’. Another aspect of the role of criminal law in trade marks is section 95 Trade Marks Act 1994, which states that it is an offence to falsely represent a trade mark as registered, when it is not (e.g. through the false use of the ® sign). The unauthorized use of trade marks by third parties is also the primary point of intersection today between trade marks and criminal offences protecting consumers under the Trade Descriptions Act 1968. For example, without a disclaimer, unauthorized uses of trade marks by third parties may constitute ‘false trade descriptions’ as false indications of ‘approval by any person’. See Trade Descriptions Act 1968 s.2, and the analysis in L. Bently and B. Sherman, Intellectual Property Law, 1st ed., Oxford, 2001, 1034-1035. On the Trade Descriptions Act, see also, R. Bragg, Trade Descriptions: A Study of the Trade Descriptions Act 1968 and Part III Consumer Protection Act 1987, Oxford, 1991.

130 See Higgins, Brands, 133: in the nineteenth century, the application of the marking ‘Made in Germany’ in many circumstances became a selling point and was applied by traders even where it was not mandated by 1887 Act s.16(1).

131 Trade Descriptions Act 1968, Schedule 2.

132 A. Taubman, ‘Discontent Industries? Creative Works and international Trade Law: Making Sense of Analogue IP Rules in a Digital Age’, CREATe Working Paper 2019/9, University of Glasgow, 3.