The badges pictured here are in the collection of the Victoria & Albert Museum in London. They were donated by Michael Costiff who ran the Kinky Gerlinky nightclub.
The V&A website says:
The smiley face icon has a history within subcultures since the 1970s, when it was associated with the anti-Vietnam hippie culture. Its peak in the British popular consciousness came later, when Rave culture developed in the late 1980s. This was a subculture that adopted the image as symbolic of the euphoria associated with the dance music, clubs and parties and their associated drug Ecstasy. It was recognised as emblematic of this scene in wider society through the symbol’s use in tabloid newspaper headlines, warning of the dangers of raves and drug taking.
According to Wikipedia the first printed version of a smiley face was a sticker applied to receipts by the Buffalo Steam Roller Company in Buffalo New York in 1919. However no pictures of this could be located online.
In 1962 the New York radio station WMCA produce a promotional "WMCA good guys" sweatshirt featuring a smiley face on a bright yellow background. Thousands of these sweatshirts were given away to listeners.
A year later in 1963 The State Mutual Life Assurance Company of Worcester, Massachusetts merged with the Guarantee Mutual Company of Ohio. Morale was low among employees and the company hired designer Harvey Ross Ball to design something to boost morale. Ball's solution was a yellow smiley face which was printed on badges.
In 1972 the smiley was first trademarked by Franklin Loufrani who used it to highlight the good news parts of the newspaper France Soir. He invented the word "Smiley" and founded the Smiley Company.