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Tuesday, 20 October 2009

Hundred Years War, or merely Thirty? Goalless Draws and Penalty Shoot-Outs

No strangers to litigation, whether in the UK or elsewhere, that lovable duo of Bud and Bud have been back in the Court of Appeal (England and Wales), which has just given its latest pronouncement between the warring parties in Budejovicky Budvar Narodni Podnik v Anheuser-Busch Inc [2009] EWCA Civ 1022. In this judgment the parties are referred to as BB and AB respectively.

Right: The 100 Years War -- note how difficult it is to tell the two sides apart!

The Court (for whom Lord Justice Jacob gave the leading judgment, with Warren and Ward LJJ adding brief extras) summarised, at no little length, the background to this particular branch of the dispute, leading both up to and beyond the happy position which pertained after both brewers were held concurrently entitled to the registration of the word BUDWEISER in respect of beer, a great result so long as each took pains to ensure that its beer was not confused with that of the other. Jacob LJ takes up the story from here:

"18. In any rational world that ought to have put an end to things provided each side sensibly kept its get-up and form of usage distinct from the other’s. But the world of trade marks is not always rational. In 1994 the UK implemented the Trade Marks Directive 89/104 and a wholly new regime for registered trade marks came in. (The Directive has been replaced by Directive 2008/95/EC but not in any material respect, including, sensibly, the numbering.) It is said that this new regime has provided the rules which enables AB to steal a march on ΒB.

19. Although the Judge below used the provisions of the UK Trade Marks Act 1994, it is common ground that those provisions not only are intended to implement the Directive but have the same meaning. Unfortunately the draftsman of the Act got the idea that it would be helpful in implementing the Directive to use different language. It is not. Quite the opposite. At best it wastes everyone’s time trying to relate the section to the provision of the Directive which it is implementing. At worse it positively misleads. ...

21. On 18th May 2005, that is four years and 364 days after the parties’ respective Budweiser marks were put on the register, AB applied to the Trade Marks Registry for a declaration that ΒB’s Budweiser registration was invalid. The case runs thus:

(1) Although both side’s marks were put on the Register on the same day, AB’s was an “earlier trade mark” by virtue of Art 4(2) – its date of application was earlier and that is what matters.
(2) The marks and goods are identical and so by virtue of Art 4(1)(a) BB’s mark is liable to be declared invalid.

[nb. Art 4(1)(a): A trade mark shall not be registered or, if registered, shall be liable to be declared invalid: ... (a) if it is identical with an earlier trade mark, and the goods or services for which the trade mark is applied for or is registered are identical with the goods or services for which the earlier trade mark is protected.]

(3) There was no question of acquiescence because the five year period provided by Art 9 was not over.

[Art. 9 Limitation in consequence of Acquiescence 1. Where, in a Member State, the proprietor of an earlier trade mark as referred to in Article 4 (2) has acquiesced, for a period of five successive years, in the use of a later trade mark registered in that Member State while being aware of such use, he shall no longer be entitled on the basis of the earlier trade mark either to apply for a declaration that the later trade mark is invalid or to oppose the use of the later trade mark in respect of the goods or services for which the later trade mark has been used, unless registration of the later trade mark was applied for in bad faith. 2. Any Member State may provide that paragraph 1 shall apply mutatis mutandis to the proprietor of an earlier trade mark referred to in Article 4 (4) (a) or another earlier right referred to in Article 4 (4) (b) or (c). 3. In the cases referred to in paragraphs 1 and 2, the proprietor of a later registered trade mark shall not be entitled to oppose the use of the earlier right, even though that right may no longer be invoked against the later trade mark.]

22. The timing was such that by the time BΒ learned of it, it could not launch a counter-attack on AB’s “Budweiser” registration. It would have been able to do so earlier. For it had the registered mark Bud with an even earlier date of application than AB’s 1979 date and “Budweiser” was confusingly similar to Bud. In principle a case of invalidity could thus be made out under Art. 4(1)(b). But by the time BB learned of AB’s attack such a case would be met by a plea of acquiescence by virtue of Art. 9.

23. This is the march which AB claims to have successfully stolen. If correct the position is that AB will have a registration of “Budweiser” which cannot be attacked. Prima facie it will be in a position to assert it against ΒB’s use of Budweiser, even though that started as long ago as 1973 and has built up a very substantial goodwill in this country since then. Annual sales run at just under 100,000 hectolitres. ...

25. We of course do not have to decide whether if AB did indeed sue, it would win. Prima facie it would have a case under Art.5(1)(a) (same mark, same goods) but conceivably it might be met by a defence of no confusion in fact by reason of the manner and history of use (itself perhaps involving yet another expedition to Luxembourg). There is also a serious question of whether the law would allow the destruction or deprivation of the valuable property ΒB clearly owns in the goodwill in the name “Budweiser”. The case could also find its way to Strasbourg [presumably, to the European Court of Human Rights]. And there may be other defences to this notional trade mark infringement action.

26. What is clear, however, is that potentially BB will be worse off if it loses its registration of “Budweiser”. This is so for three reasons:

i) Firstly, as matter of UK law, it is a defence to a trade mark infringement suit that the defendant is using his own registered mark, ...

ii) Secondly. BB would not be a position to assert its registration of Budweiser against AB. If each side were in that position there would be the commercial equivalent of a nuclear standoff.

iii) Even if AB do not sue now, there is no guarantee it will not do so in the future – and any change, however apparently harmless in the get-up, packaging or even manner of advertising or extent of sale, might be used by AB as a justification for the suit".

After reviewing issues involving defences under English law, estoppel, acquiescence and the deep meaning of the travaux to the original Directive, there was nothing for it but for the Court to do what Jacob LJ has done so well in recent years and to lob some well-aimed questions at the Court of Justice of the European Communities (another home-from-home for BB and AB) and consume a further couple of years in getting the right answer. The questions which Jacob LJ considered appropriate for a preliminary ruling are as follows:

"In Council Directive 89/104/EEC:

1. What is meant by “acquiesced” in Article 9(1) and in particular:

(a) can the proprietor of a trade mark be held to have acquiesced in a long and well-established honest use of an identical mark by another when he has long known of that use but has been unable to prevent it?
(b) is it necessary that the proprietor of a trade mark should have his trade mark registered before he can begin to “acquiesce” in the use by another of (i) an identical or (ii) a confusingly similar mark?

2. When does the period of “five successive years” commence and in particular, can it commence (and if so can it expire) before the proprietor of the earlier trade mark obtains actual registration of his mark; and if so what conditions are necessary to set time running?

3. Does Art 4(1)(a) apply so as to enable the proprietor of an earlier mark to prevail even where there has been a long period of honest concurrent use of two identical trade marks for identical goods so that the guarantee of origin of the earlier mark does not mean the mark signifies the goods of the proprietor of the earlier and none other but instead signifies his goods or the goods of the other user?"

The IPKat welcomes this reference, not because it will resolve the issues in this dispute but because the answers of the European Court of Justice will clarify issues which, surprisingly have not caused more problems than they should have done. Merpel says, what I like is a judgment which is full of quotable passages, vibrant metaphors and cultural allusions as this one. What a shame the ECJ's rulings are as dull and insipid as a glass of the B******** produced by one of the parties. Tufty says, did anyone else notice that two of the three Court of Appeal judges' surnames begin with the word "war"?

How to make beer here
How to make war here
How to make peace here

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