Two companies have been using the "Budweiser" brand in
the UK for decades. Liane Bylett in our Commercial Disputes Team
looks at the latest battle over the "Budweiser" trademark
concerning the issue of honest concurrent use.
This case is a good example of how delay in taking action
in respect of an identical trademark can impact upon your ability
to challenge the registration, particularly in circumstances where
there is little evident likelihood of confusion. If two
identical brands co-exist for a long period of time, with little or
no impact on each other's business, then honest concurrent use
may arise with both parties obtaining equal rights to use the mark.
It is therefore very important to police your trademarks and IP to
ensure that swift action can be taken.
Background
American company, Anheuser-Busch Inc (AB), and Czech company,
Budejovicky Budvar Narodni (BB), have both sold beer in the UK
under the name "Budweiser" since the 1970s. Perhaps
unsurprisingly there has been a long-standing legal wrangle between
the parties over the trademark. Eventually, in 2000, the Court of
Appeal held that both AB and BB were permitted to register
"Budweiser" as a trademark in the UK because there was
"honest concurrent use" of the mark by both companies
i.e. both had been simultaneously using the name for a long period
of time without any adverse effects.
However in 2005 AB applied for an order under Article 4(1)(a) of EU
Directive 89/104 that BB's registration be declared invalid.
The application was made on the basis that the marks / products are
identical and AB's was an "earlier trademark"
– AB's trademark application having been made in
1979, whilst BB's application was made in 1989. The
Intellectual Property Office, and subsequently the High Court,
declared that BB's trademark was invalid. BB appealed to the
Court of Appeal.
The Court of Appeal referred a number of questions to the Court of
Justice of the European Union, including:
"Does Article 4(1)(a) apply so as to enable the proprietor
of an earlier mark to prevail even where there has been a long
period of honest concurrent use of two identical trade marks for
identical goods ... ?"
The Court of Justice of the European Union recently provided their
response to the Court of Appeal's questions and the Court of
Appeal applied their reasoning to the Budweiser case.
Key Elements of the Decision
The Court of Justice of the European Union said that the
proper interpretation of the relevant law means that the owner of
an earlier trade mark cannot obtain a declaration that an identical
later trade mark designating identical goods is invalid in
circumstances where there has been a "long period of
honest concurrent use of those two trade marks" and that
situation has not had (nor is liable to have) an adverse effect on
the essential function of the trade mark, which is to guarantee the
origin of the goods.
BB argued that the above guidance means that, due to the honest
concurrent use of the mark, both AB and BB can prevent third
parties from using the mark but cannot prevent one another from
using it. However AB argued that it was able to show an
"adverse effect" based on evidence of confusion used in
earlier litigation between AB and BB, which would prevent a finding
of honest concurrent use.
The Court of Appeal held that the evidence of confusion produced in
previous cases was not sufficient. The Court of Appeal said that
"these two brands have lived side by side for many years
in different get-ups, prices and taste..." and the public
have got used to the two brands co-existing. So, whilst some
consumers will inevitably be confused, there are many consumers who
will not be confused.
The Court of Justice of the European Union found that the
circumstances of this dispute were exceptional and identified five
factors to support this assertion. AB therefore tried to argue that
the Court of Justice of the European Union's ruling was so
limited that it was restricted to cases of "de
minimis" (very minor) levels of confusion. The Court of
Appeal rejected this interpretation, confirming that the decision
did not mean that only "de minimis" levels of
confusion are acceptable where there is honest concurrent
use.
The Court of Appeal allowed BB's appeal and the declaration of
invalidity of BB's trademark was overturned.
Comment
This case should serve as a timely reminder to all brand
owners of the importance of policing your trademarks and IP rights.
Action should be taken at the earliest possible opportunity,
usually as soon as the application for registration of the
identical mark is made, as honest concurrent use may otherwise
prevent you doing so at a later stage. If you would like any advice
on policing your trademark, please do not hesitate to contact
us.
This document is provided for information purposes only and
does not constitute legal advice. Professional legal advice should
be obtained before taking or refraining from taking any action as a
result of the contents of this document.
ARTICLE
3 August 2012
Seeing Double? Honest Concurrent Use Of The Budweiser Trademark
This case is a good example of how delay in taking action in respect of an identical trademark can impact upon your ability to challenge the registration, particularly in circumstances where there is little evident likelihood of confusion.