TRIPs RULES OK, SAYS ECJ IN LATEST BUD SPAT

The European Court of Justice has just ruled this very morning on Case C-245/02 Anheuser-Busch v Budĕjovický Budvar, národní podnik. This ruling follows a reference in proceedings between the US and Czech Budweisers concerning the labelling used by Budvar to market its beer in Finland which, according to Anheuser-Busch, infringed its Finnish BUDWEISER, BUD, BUD LIGHT and BUDWEISER KING OF BEERS trade marks.

The dispute

Anheuser-Busch owned the Finnish trade marks (mentioned above) which were registered with priority from not earlier than 24 October 1980. Budvar registered its trade name in the Czechoslovakian commercial register in February 1967, in Czech (‘Budĕjovický Budvar, národní podnik’), English (‘Budweiser Budvar, National Corporation’) and French (‘Budweiser Budvar, Entreprise nationale’). Budvar also owned the Finnish trade marks BUDWAR and BUDWEISER BUDVAR, registered in May 1962 and November 1972 respectively, but which the Finnish courts later declared forfeit for failure to use them. In this action, which was commenced in 1996, Anheuser-Busch sought to prohibit Budvar from continuing or recommencing the use in Finland of the trade marks BUDĔJOVICKÝ BUDVAR, BUDWEISER BUDVAR, BUDWEISER, BUDWEIS, BUDVAR, BUD and BUDWEISER BUDBRAÜ for beer, plus an order that all labels contrary to that prohibition be removed and that Budvar pay compensation for any infringement of its trade-mark rights. Anheuser-Busch argued that the signs used by Budvar could be confused with its own marks since both sets of signs and trade marks designated identical or similar types of goods.

In the same action, Anheuser-Busch sought a further order prohibiting Budvar from using in Finland, on pain of a fine, the trade names ‘Budĕjovický Budvar, národní podnik’, ‘Budweiser Budvar’, ‘Budweiser Budvar, national enterprise’, ‘Budweiser Budvar, Entreprise nationale’ and ‘Budweiser Budvar, National Corporation’, on the ground that those names were liable to be confused with its trade marks.

Budvar denied trade mark infringement and contended that the signs it used in Finland could not be confused with Anheuser-Busch’s trade marks. It also submitted that, with respect to the sign ‘Budweiser Budvar’, the registration of its trade name in Czech, English and French conferred on it, pursuant to Article 8 of the Paris Convention, a right in Finland earlier than that conferred by Anheuser-Busch’s trade marks and that their earlier right was therefore protected under that article.

The trial court held that the beer-bottle labels used by Budvar in Finland and, in particular, the dominant sign appearing on that label, ‘Budĕjovický Budvar’, especially when taken as a whole, were so different from Anheuser-Busch’s trade marks and labels that the goods in question could not be confused. It further held that the sign ‘BREWED AND BOTTLED BY THE BREWERY BUDWEISER BUDVAR national enterprise’, appearing on the labels below the dominant sign and in considerably smaller letters, was not used as a mark but merely indicated the trade name of the brewery. It found that Budvar was entitled to used that sign since it was the registered English version of its trade name, had been registered as such and was, at least to a certain extent, well known in the relevant trade circles when Anheuser-Busch’s trade marks were registered, with the result that it was likewise protected in Finland under Article 8 of the Paris Convention. On appeal, the Helsinki Court of Appeal ruled that there was insufficient evidence to prove that the English version of Budvar’s trade name was, at least to some extent, well known in the relevant trade circles in Finland before registration of Anheuser-Busch’s trade marks. Accordingly, it set aside the judgment in so far as that court held that the English version of Budvar’s trade name enjoyed protection in Finland under Article 8 of the Paris Convention. Both parties appealed to the Supreme Court, relying on the arguments which they had already put forward at first instance and on appeal. The Supreme Court observed that the ECJ has jurisdiction to interpret a provision of the TRIPs Agreement if it may be applied both to situations falling within the scope of national law and to situations falling within the scope of Community law, as is the case in the field of trade marks. According to the Supreme Court, the trade mark provisions of TRIPs relate to a field in which the Community has already adopted legislation and which therefore falls within the scope of Community law. By contrast, the Community has not, as yet, adopted legislation relating to trade names. As regards the temporal applicability of TRIPs to this case, the Supreme Court observed that, in accordance with TRIPs Article 70(1), that agreement is applicable in so far as the infringement of intellectual property rights continues beyond the date on which TRIPs became applicable with regard to the Community and the Member States. It also noted that TRIPs Article 70(2) provides that, save where otherwise provided, that agreement gives rise to obligations in respect of all subject-matter existing at the date of application of the TRIPs Agreement to the Member in question, which is protected in that Member on that date or which meets or comes subsequently to meet the criteria for protection laid down in that agreement. Accordingly the Supreme Court referred a number of questions relating to the applicability of TRIPs to this sort of dispute for a preliminary ruling.

The ruling

The ECJ ruled as follows:

1. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) applies, in the event of a conflict between a trade mark and a sign alleged to infringe that trade mark, where that conflict arose before the date of application of the TRIPs Agreement but continued beyond that date.

2. A trade name may constitute a "sign" within the meaning of the first sentence of Article 16(1) of TRIPs. That provision is intended to confer on the proprietor of a trade mark the exclusive right to prevent a third party from using such a sign if the use in question prejudices or is liable to prejudice the functions of the trade mark, in particular its essential function of guaranteeing to consumers the origin of the goods.

The exceptions provided for in TRIPs Article 17 are intended, inter alia, to enable a third party to use a sign which is identical or similar to a trade mark to indicate his trade name, provided that such use is in accordance with honest practices in industrial or commercial matters.

3. A trade name which is not registered or established by use in the Member State in which the trade mark is registered and in which protection against the trade name in question is sought may be regarded as an existing prior right within the meaning of the third sentence of TRIPs Article 16(1) if the proprietor of the trade name has a right falling within the substantive and temporal scope of that agreement which arose prior to the trade mark with which it is alleged to conflict and which entitles him to use a sign identical or similar to that trade mark.

The IPKat thinks this decision is right and that TRIPs -- to which both the EU's Member States and the EU in its own right subscribe -- is entitled to receive a broad and inclusivist construction. He is now curious to see how the referring Court will now decide the dispute, but he is also a little anxious. Finnish court judgments are notoriously short on verbal reasoning when compared with the courts of many other European countries and we may not see much of the reasoning that lies behind the actual decision.

Battle of the Buds here , here and here
Non-combatant Buds here and here
Bosom Buddies here, here and here (nothing rude!)
Make your own Bud here