BB and AB have both sold beer in the UK under the trademark “Budweiser” since the 1970s. The use of the identical mark for identical goods has continued for over 30 years, and consumers have, in general, been able to distinguish between the two companies’ products by taste, price and get-up. However, there has been ongoing litigation between the parties.
In 2000, both parties had outstanding applications to register “Budweiser” as a trade mark and each had opposed the other’s application. AB’s application had been made on 11 December 1979 and BB had made an application on 28 June 1989. In February 2000 the Court of Appeal gave judgment on the applications and their oppositions, allowing both applications to proceed on the basis of “honest concurrent use”. The Court acknowledged that there are cases where two parties with identical marks can and should be allowed to co-exist. As a result, neither party can restrict the other from using the mark, but as against any third party who infringed it, either owner of the mark could obtain an injunction. Following this judgment, on 19 May 2000 both companies registered the trademark “Budweiser” for their products.
AB’s Application for Invalidity
The current proceedings were commenced on 18 May 2005 (the day before the 5 year anniversary of the registrations) when AB applied for a declaration that BB’s trademark was invalid. The grounds of invalidity stated that BB’s mark was identical and applied to identical goods, and that AB’s mark was the earlier mark since it was applied for first. AB relied on s6(1) of the Trade Marks Act 1994, which implements Article 4(1)(a) of the European Trade Marks Directive (89/104): an “earlier trademark” is “a registered trademark…which has a date of application for registration earlier than that of the trademark in question, taking account (where appropriate) of the priorities claimed in respect of the trademarks.”
The Law of Acquiescence
BB argued before the Hearing Officer that AB should be precluded from bringing the action by the law of acquiescence. This statutory limitation period is imposed by section 48 of the Trade Marks Act, which states that: “where the proprietor of an earlier trade mark…has acquiesced for a continuous period of five years in the use of a registered trademark in the United Kingdom, being aware of that use, there shall cease to be any right entitled on the basis of that earlier trade mark…to apply for a declaration that the registration of the later trademark is invalid…unless the registration of the later mark was applied for in bad faith.” This comes from Article 9 of the Trade Marks Directive.
Although AB’s application was issued within the five year period, it was not served on BB until the five year period had expired. This therefore precluded BB from making a counter-application for invalidity of AB’s trademark based on its earlier mark as it would be deemed to have acquiesced for the requisite 5 year period. BB had grounds for a counter-attack as it had an even earlier application for the trade mark “Bud” which is a recognised abbreviation of the “Budweiser” mark and may be taken as an equivalent.
The Hearing Officer stated with unease that, on the basis of the facts, he had to find in AB’s favour, as the earlier mark and the marks were indeed identical and applied to identical goods, causing risk of confusion in the minds of the public. The unease came from having to find in favour of one party, when the Court of Appeal in the 2000 proceedings had been keen to preserve the status quo and allow both marks to be registered side-by-side.
BB appealed the Hearing Officer’s decision to the High Court, arguing that it had substantive and procedural defences. BB put forward the argument that the requirements for “continuous use” and “acquiescence in that use” intend the time period to cover use of the mark, not only when it was registered, but when the product was on the market. Therefore BB stated that the acquiescence by AB to its use of the mark had continued for more than 5 years, even though it was less than 5 years since the use of the registered trade mark.
Acquiescence has been considered in UK case law to mean that the opposing party must have been aware that the trademark existed and have done nothing, in terms of making an application for a declaration of invalidity or opposing the use. The leading case on the date from which the 5 year period of acquiescence is deemed to begin is Sunrider v Vitasoy (2007) . In this case the application for invalidity was brought within five years of the registration, but 13 years after the application for the mark. Warren J rejected the argument by Sunrider that the five year period of acquiescence of “use of a registered trade mark” starts to run from the date of the application. He stated that the Act is to be given its natural meaning. In addition, the time limit for raising an invalidity claim should run from the same date as that for making an opposition, which can only be the date on which the trademark is registered.
In his High Court judgment in the present case, Norris J found that the arguments brought by BB did not add any further substance and he agreed with the findings of the Hearing Officer, following the case law in Sunrider. The application made by AB was not prohibited by acquiescence, and there was no argument that, where the application was allowed, the finding of invalidity of BB’s trademark was correct.
As well as the argument for “statutory acquiescence” BB also brought a claim for “common law acquiescence”. They argued that AB had demonstrated the “type of conduct which is sufficient to give rise to an estoppel”. AB had, he said, given an implied representation that it would not enforce its rights, as it had knowledge of and allowed the BB to continue to use and expend money on its own mark. It would therefore be unreasonable for AB to enforce its rights at this point. This is the position under English common law. However, Norris J found that acquiescence for the purpose of the Trade Marks Act is a statutory provision derived from an EU Directive, and therefore was not intended to be interpreted in the light of the common law of one Member State. In any event, Norris J found that the actions by AB (not bringing an invalidity action until the last possible day) did not amount to a representation that they would not enforce their rights, and there was no evidence that the significant people within BB would have seen the inactivity as such a representation.
Norris J shared the unease of the Hearing Officer at the outcome of his judgment, and stated: “I am of the opinion that the issues raised before me merit consideration by the Court of Appeal”.
References to the ECJ
BB did appeal Norris J’s decision to uphold the judgment of the Hearing Officer. The Court of Appeal (Jacob LJ giving the leading judgment) has now dismissed BB’s claim for common law acquiescence, on the same basis as Norris J. However, it referred three questions to the European Court of Justice (ECJ) to clarify the position on statutory acquiescence:
- What is the meaning of acquiescence in Article 9(1), in particular whether the Directive permits honest concurrent use of identical marks?
- When does the 5 year period begin? In particular is it necessary that the trade mark should be registered for the acquiescence to begin?
- Whether Article 4(1)(a) of the Directive applied even in situations where there had been long-standing, honest concurrent use of two identical trade marks for identical goods, such that consumers were aware that such marks and goods originated from one or other proprietor?
The Court of Appeal has therefore chosen not to uphold the strict meaning of the law, in favour of allowing the ECJ to decide whether or not to create a doctrine of honest concurrent use. A decision is unlikely for at least two years, given the backlog of cases pending before the court.