In the latest round of the long running dispute between Budĕjovický Budvar (‘Budvar’) and Anheuser-Busch over the BUDWEISER trade mark, the CJEU has handed down judgment on the reference made by the Court of Appeal requesting an interpretation of the Trade Marks Directive 89/104. The reference asked for the CJEU’s assistance with three questions concerning the interpretation of the concept of acquiescence in Article 9(1), when the five year period in Article 9(1) starts to run, and also interpretation of Article 4(1)(a) and the compatibility of the English law doctrine of ‘honest concurrent use' with EU law.
The facts behind the case are highly unusual; Budvar and Anheuser-Busch both distribute beer in the UK under a trade mark consisting of, or including, the word BUDWEISER and have done so since 1973 and 1974, respectively. Both parties applied to register the word mark BUDWEISER in class 32 (for ‘beer, ale and porter’): Anheuser-Busch in 1979 (which Budvar opposed) and Budvar in 1989 (which Anheuser-Busch opposed). In February 2000, the Court of Appeal applied the Trade Marks Act 1938, which allowed simultaneous registration of identical or confusingly similar marks in cases of honest concurrent use, and dismissed both oppositions and allowed both sides to register the trade mark BUDWEISER. Both marks were registered on 19 May 2000.
On 18 May 2005, four years and 364 days after registration of the BUDWEISER marks, Anheuser-Busch applied to the Trade Marks Registry for a declaration of invalidity of Budvar’s mark. This was on the basis that Anheuser-Busch’s mark was the earlier mark and the marks and the goods were identical, meaning Budvar’s later mark was liable to be declared invalid by virtue of Article 4(1)(a). Anheuser-Busch argued there was no acquiescence because the five year period provided for in Article 9 had not expired. The Trade Marks Registry agreed and allowed the application and this decision was upheld on appeal by Budvar to the High Court. Budvar appealed to the Court of Appeal which referred the three questions to the CJEU for a preliminary ruling and stayed the proceedings pending answers.
In February 2011, Advocate General Trstenjak gave her opinion. She believed that acquiescence was an EU law concept which must have a uniform interpretation and that, for a person to acquiesce, they had to be aware of the situation but decline to take countermeasures. The AG also concluded that the five year period commenced when three conditions were satisfied: (i) the later mark must be registered; (ii) the later mark must be used in the Member State in which it was registered; and (iii) the proprietor of the earlier mark must be aware of the registration and use of the later mark. Also, the AG believed the doctrine of ‘honest concurrent use’ was incompatible with EU law as the view was it would be an exception to Article 4(1)(a). The AG concluded that she did not believe that it was necessary for the CJEU to answer the individual questions and that the answer should be that Article 4(1)(a) was temporally not applicable as it came into force in 1994 and could not be applied retroactively. Therefore, the AG’s view was that the case must be decided in accordance with national law.
However, the CJEU did consider all of the questions in turn and, although the judgment agrees with the AG’s opinion on some points, it diverged on others. The CJEU first considered the meaning of acquiescence and followed a similar line of thinking to the AG. They held that acquiescence was an EU law concept but went further by ruling that a “proprietor of an earlier trade mark cannot be held to have acquiesced in the long and well-established honest use, of which he has long been aware, by a third party of a later trade mark which is identical with that of the proprietor if that proprietor was not in any position to oppose that use”. In making this judgment, the CJEU referred several times to the 11th recital of the Trade Mark Directive, which considers the importance of balancing the interests of proprietors of earlier and subsequent trade marks. This ruling on acquiescence appears to be an attempt by the CJEU to add to the restriction found in Article 9(1).
The CJEU also agreed with the AG on how to calculate when the 5 year period began and held that it was up to the national courts to determine whether these tests had been satisfied. However, the CJEU also added a fourth test, that the application for registration of the later mark must be made in good faith. One interesting observation made in the judgment is that there is no requirement for the earlier mark to be registered for the 5 year period to begin running.
The major departure in the judgment from the AG’s opinion was on the doctrine of ‘honest concurrent use’, which the CJEU recognised. The judgment held firmly that, due to the “long period of honest concurrent use” of the trade marks involved, Anheuser-Busch cannot obtain cancellation of Budvar’s trade mark. In making the ruling, the CJEU considered, first and foremost, the effect of its ruling on the essential function of a trade mark: to guarantee the origin of good and services to consumers. The CJEU held that, although the trade marks were the same, the British consumers were well aware of the difference between the two Budweiser brands and that they clearly originated from different companies, meaning the essential function of the trade mark was not compromised by the identical marks. However, the CJEU were clear that, if there was an issue with misrepresentation, or passing off, in the future, the situation could be looked at again.
Rather interestingly, the overall impression of the judgment seems to be one of equity. It appears to send a message that the CJEU believes a trade mark should only be declared invalid if it is ‘equitable’ to do so. However, we will be eagerly awaiting the Court of Appeal’s decision to see how they interpret this judgment.