For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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Tuesday, 29 March 2011

Global dispute with only local significance

"Where there's life ... there's Bud" --
but who, or what, is Bud in Europe?
Every few weeks there seems to be another giant-sized decision in the Battle of the Buds -- and here's the next installment: Case C 96/09 P Anheuser-Busch, Inc. v Budějovický Budvar, a ruling of the Court of Justice of the European Union (ECJ), delivered dew-fresh and delicious all the way from Luxembourg.

In this particular version of the battle of the two breweries for the heart and soul of Budweiser beer, Anheuser-Busch applied to register four Community trade marks (CTMs). The first was a figurative mark featuring the word Bud for goods in Classes 16, 21, 25 and 32. The other three applications were in respect of the word mark Bud, in Classes 32 (beers), 33 (alcoholic beverages), 35 (setting up databases, gathering data and information in databases), 38 (telecommunications, ie making available and supplying data and information, supplying and communicating information stored in databases), 41 (education, entertainment) and 42 (restaurant, bar and pub services; operating a database).

Budvar opposed, citing the following alleged prior rights: (i) a figurative Bud mark effective for ‘all types of light and dark beer’, in Austria, Benelux and Italy; (ii) the appellation of origin ‘Bud’, registered under the Lisbon Agreement in respect of beer, and effective in France, Italy and Portugal; (iii) an Austrian appellation of origin ‘Bud’ protected in Austria under a bilateral convention with the former state of Czechoslovakia.
The Opposition Division partially upheld Budvar’s opposition, in respect of ‘restaurant, bar and pub services’ covered by Anheuser-Busch’s fourth application. All other grounds of opposition were dismissed. The Opposition Division considered that Budvar had proved that it had a right to the appellation of origin ‘Bud’ in France, Italy and Portugal, though in relation to Italy and Portugal the arguments put forward by Budvar were not sufficiently specific to determine the scope of its protection under national law. It found that the ‘restaurant, bar and pub services’ covered by one of the applications were similar to the ‘beer’ covered by the appellation of origin ‘Bud’, there being a likelihood of confusion given that the signs concerned were identical. However, in respect of the other goods, and in the context of the applicable French law, Budvar had failed to demonstrate how the use of the mark applied for was likely to weaken or undermine the reputation of the appellation of origin concerned, when the goods covered were different.

Both parties appealed. The Board of Appeal dismissed all Budvar’s appeals but allowed that of Anheuser-Busch. It considered that Budvar no longer appeared to refer to its international figurative mark as the basis of its opposition, but solely to the appellation of origin ‘Bud’. It was however difficult to see how ‘Bud’ could be considered to be an appellation (or designation) of origin, or even an indirect indication of geographical origin. The Board also held that the evidence provided by Budvar to show use of the appellation of origin ‘Bud’ in Austria, France, Italy and Portugal was insufficient. Thirdly, it held that Budvar had not demonstrated that the appellation of origin gave it the right to prohibit use of the word ‘Bud’ as a trade mark in Austria or France.
Budvar appealed to the Court of First Instance (now the General Court), contending that (i) the sign BUD could be considered to be an appellation of origin, and (ii) the conditions of Article 8(4) of Regulation 40/94, in relation to an opposition based on the existence of an earlier non-registered mark of more than purely local significance, were satisfied. The Court of First Instance allowed the appeal.

In reaching its decision the Court of First Instance found that ‘Bud’ could be considered to be an appellation of origin and that it was protected under the Lisbon Agreement, and that the validity of a national mark may not be called into question in proceedings for registration of a CTM: when the contested decisions were adopted, the effects of the appellation of origin ‘Bud’ had not been declared invalid in France by a decision against which there was no appeal. Accordingly the Board of Appeal did not have the power to call into question the fact that the claimed earlier right was an appellation of origin. At most it could have suspended the opposition proceedings until a final judgment on the matter was delivered. The Court also found that the appellation ‘Bud’ remained protected under the bilateral convention, was still effective following the break-up of the Czechoslovak Socialist Republic.

The Court then upheld Budvar’s appeal in relation to the use in the course of trade of a sign of more than mere local significance. The Board of Appeal was wrong in law to apply, by analogy, the provisions of Community law relating to the ‘genuine’ use of an earlier trade mark. In the present context, an opposing party need only show that a sign had been used in the context of a commercial activity with a view to economic advantage. Subject to this, an appellation of origin registered under the Lisbon Agreement could not be deemed to have become generic. In any event, such appellations might enjoy protection in a particular territory even though they are only used in another territory.

On the facts, the Court held, Budvar had provided proof that the signs concerned were used in the course of trade and it was unnecessary to show that the signs were used prior to the contested CTM applications. At most, Budvar only had to show that the signs were used before publication of the trade mark applications in the Community Trade Marks Bulletin. The documents Budvar relied on were sufficient proof of use of the word ‘Bud’ even though they referred to a product on which the word ‘Bud’ was always accompanied by ‘strong’ or ‘super strong’.

In the context of an opposition based on the use in the course of trade of a sign of more than mere local significance, the Court held that it was sufficient for the sign to be used in the course of trade: the fact that it was identical to a trade mark did not mean that it was not used in the course of trade. Moreover, OHIM and Anheuser-Busch did not clearly specify how the sign ‘Bud’ had been used ‘as a trade mark’. There was no evidence that the expression ‘Bud’, displayed on the goods in question, referred to the commercial origin of the products more than to its geographical origin.

The word ‘significance’ in the formula “more than mere local significance” referred to the geographical extent of a sign’s protection: the Board of Appeal therefore erred in law when, as regards France, it linked proof of use of the sign concerned to the requirement that the right concerned must have a significance which is not merely local.

The Court then reviewed the effect and significance of litigation between the same parties and concerning the same sign in various national jurisdictions. The Court considered that those decisions were not binding upon it and that It was not conclusive that Budvar had not been able to prevent Anheuser-Busch’s distributor from selling beer in France under the Bud trade mark since, under Article 8(4), the opposing party does not need to establish that he has in fact already been able to prohibit use of a subsequent mark, but only that he has such a right available to him.

Anheuser-Busch then appealed to the ECJ.  Advocate General Cruz Villalón advised the ECJ to allow the appeal and remit the case to the General Court. Why? In particular he considered that (i) the requirement of ‘use in the course of trade’ in Article 8(4) is, like the other requirements in that provision, an independent concept which warrants its own interpretation; (ii) it is relevant to argue that an opponent relying on Article 8(4) has used the invoked sign as a trade mark rather than for the purpose of indicating the geographical origin of a product; (iii) for the purposes of Article 8(4) the use of the opponent’s sign must, where appropriate, be proved before the date of filing, rather than at any time up to the date of publication, of the opposed application for registration (iv) the judgment under appeal supplied an interpretation which was excessively literal and which adhered too closely to the wording of Article 8(4).

This morning the Court of Justice accepted the advice of the Advocate General, set aside the judgment of the (now) General Court which, it said, made three errors of law, and remitted the case for further consideration by that Court. The judgment has only just been posted on the Curia website and, at 221 paragraphs, will take some time to read, but the non-binding press release says:
" ... the General Court was incorrect in holding that it was sufficient, for the purpose of establishing that the sign ‘bud’ was of more than mere local significance, that the sign was protected in a number of States. The Court of Justice notes, in that regard, that, even if the geographical extent of the protection of the sign concerned is more than local, registration of a Community trade mark may be prevented only when the sign is actually used in a sufficiently significant manner in the course of trade in a substantial part of the territory in which it is protected. Use in the course of trade must also be assessed separately for each of the territories in which the sign is protected. 
Next, ... the General Court also made an error in holding that the Regulation did not require the sign ‘bud’ to have been used in the territory in which it is protected and that use in a territory other than the territory of protection may be sufficient to prevent registration of a new trade mark, even where there is no use at all in the territory of protection. In that connection, ...it is only in the territory in which the sign protected, in its entirety or in a part of it, that the exclusive rights attached to the sign may enter into conflict with a Community trade mark.
Finally, ... in holding that it had to be shown only that the sign concerned was used in the course of trade before publication of the trade mark application and not, at the latest, as at the date of the application, the General Court made a further error of law. In view, in particular, of the considerable period of time which may elapse between the filing of an application and its publication, applying the test relating to the date of the application provides a better guarantee that the use claimed for the sign concerned is real and not an exercise whose sole aim has been to prevent registration of a new trade mark. Furthermore, as a general rule, where the sign concerned is used exclusively or to a large extent during the period between filing of the application for a Community trade mark and publication of the application, that will not be sufficient to establish that the use of the sign in the course of trade has been such as to prove that the sign is of sufficient significance. 
The Court of Justice, while rejecting the other grounds of appeal raised by Anheuser-Busch, sets aside in part the judgment of the General Court in so far as the judgment makes the three errors of law thus found. Since the state of the proceedings does not permit final judgment to be given by the Court of Justice, the latter refers the case back to the General Court to give judgment afresh".
The IPKat was rather expecting this.  Though he has a tendency to prefer the sort of literalism that the General Court employed, he believes that the ECJ's ruling is more in line with the legislative intent than was that of the inferior court.  Merpel adds, the first of Anheuser-Busch's four applications was filed on 1 April 1996.  It's almost 15 years to the day later, and we still have the prospect of a rehearing by the General Court which itself is subject to a possible -- and in the case of these two parties highly likely -- further appeal to the ECJ.  Is there truly no better path to Community trade mark registration?

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