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December 2008
The Latest BUDWEISER Development
The latest
development in the BUDWEISER trade mark dispute between Anheuser-Busch Inc (AB)
and Budejovicky Budvar Narodni Podnik (BB) was an appeal to the High Court by
BB following an application by AB for a declaration of invalidity of BB's UK
trade mark Registration for BUDWEISER. See
[2008] EWHC 263 (Ch) Mr Justice Norris Anheuser-Busch Inc (AB) v Budejovicky
Budvar Narodni Podnik (BB) re BUDWEISER.
History
AB is a Missouri
brewer selling BUDWEISER beer since 1875. BB is a Czech brewer from Ceske
Budovice (formerly "Budweis"), selling BUDWEISER beer since 1895. The
parties have been in trade mark disputes since 1911.
BB's first UK
use of BUDWEISER was in 1973. AB's first UK use of BUDWEISER was between the
years 1974-1979.
Previous proceedings 1976 - 2000
1. Both
parties applied to register BUD as a UK trade mark, and during the resolution
of those proceedings each launched passing off actions over the other's use of
BUDWEISER. As a result of these proceedings, both parties obtained a UK trade
mark registration of BUD, and it was judicially established that neither party
had exclusive goodwill in BUDWEISER, sufficient to prevent the other's use of
the mark.
2. AB
applied for a UK trade mark registration of BUDWEISER in December 1979. BB applied to register BUDWEISER in June
1989, and AB opposed. These
proceedings began under the 1938 Act - during the proceedings the 1994 Act came
in but due to Transitional Provisions the matters were dealt with throughout
under the 1938 Act. The result of
these proceedings was the dismissal of AB's opposition, and both parties'
applications being granted registration on the same date in 2000.
At the time of
the present proceedings:
- both parties have a registration of BUD
- neither party has exclusive goodwill in
BUDWEISER
- both parties havea registration of BUDWEISER (AB having the
earlier application date).
The present matter deals with an application by AB for a declaration of invalidity of BB's registration of BUDWEISER, under Sections 47(2), 5(1) and 5(2). AB relied upon their prior right in the mark BUDWEISER, as AB's registration has the earlier filing date.
In order to avoid a defence of acquiescence under Section 48, AB applied four years and 364 days after the registration date ofBUDWEISER - so it was filed within the five year period precluding acquiescence but issued on BB too late for them to counterclaim for invalidity of AB's registration (on the basis of their BUD registration).
BB put forward four defences at the Registry Hearing (all were rejected), and again at this High Court Appeal:
1. Statutory Acquiescence: BB argued that there had been acquiescence by AB for five years, if the period of acquiescence can start prior to registration of BB's mark. Moreover, BB pointed out various Sections of the Act and Articles of the Directive which indicate that it is the date of application for registration of a trade mark that is paramount in many situations. Accordingly, BB concluded that the period of acquiescence need not start from the date of registration, and that these Sections and Articles indicate emphasis being on use of a mark which at some point later becomes registered.
The Hearing Officer had rejected these arguments on prior case law, particularly the SUNRIDER invalidity hearing which raised similar issues. The date from which the period of acquiescence begins is clearly defined as beginning at the date of registration of the complained-of mark. Mr Justice Norris upheld the Hearing Officer's rejection of the appeal on the same reasons.
2. Estoppel: BB claimed that AB's behaviour in not applying for invalidity earlier amounted to implied assent. Furthermore, BB claimed that by failing to act earlier AB encouraged BB to continue to act to its own detriment in continuing use.
The Hearing Officer had concluded that the mere existence of statutory acquiescence provisions precludes application of estoppel by (implied) acquiescence. Mr Justice Norris disagreed on that point, but found on the facts that there was no evidence that AB's failure to act previously implied acquiescence, or that BB interpreted it as such. He took the view that it just never occurred to BB that this situation could arise.
3. Abuse of Process: BB suggested that raising the invalidity action after a failed opposition amounted to abuse of process by AB.
As noted by Mr Justice Norris, the recent Special Effects Court of Appeal judgement significantly reduced the prospects of the appeal on the grounds of abuse of process. That case decided that filing an invalidity action after having filed an opposition (when both take place under the provisions of the 1994 Act) is not necessarily abuse of process. So the Hearing Officer had concluded that in this case, where the opposition took place under the provisions of the 1938 Act, there can be even less reason to find abuse of process. Norris J agreed, and made the point that you cannot find abuse of process just by virtue of the fact the matter could have been raised earlier.
4. TRIPS: The TRIPS agreement states that exclusive rights granted by a trade mark registration "shall not prejudice any existing prior rights". BB claimed that its right to use the mark BUDWEISER as established by passing off actions in the past constitutes such a prior right.
Norris J held that the trade mark registration in question, stemming from an application filed after the trade mark registration relied upon in the invalidity action, cannot constitute a prior right for these purposes. He pointed out that this question may be better considered in the light of any future injunction that AB may bring against the use of BUDWEISER by BB.
Scope of Conflict - Goods
Having dismissed the appeal on all four grounds, Mr Justice Norris did offer BB one small consolation: while the specifications of these two BUDWEISER registrations are for the most part identical, "malt beverages" covered in the BB registration is not identical to any of the AB goods. He further found that no similarity or confusion had been established on the evidence in respect of "malt beverages", accordingly the invalidity action cannot be successful in that respect.
The appeal was therefore allowed in respect of "malt beverages".
Mr Justice Norris indicated throughout the judgement, and stated clearly in his conclusion, that he was uneasy with having to reach this conclusion, as was the Hearing Officer. Mr Justice Norris has suggested that further appeal is advisable, and no doubt we will see more of the ongoing disputes between these companies.
Boult Wade Tennant
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