Anheuser-Busch Inc. v Budejovicky Budvar N.P., B & S Foods Aktiebolag and Birra Mex Aktiebolag
| Jurisdiction | England & Wales |
| Judge | Mr Justice Warren,Lord Justice Ward |
| Judgment Date | 20 October 2009 |
| Neutral Citation | [2009] EWCA Civ 1022 |
| Docket Number | Case No: A3/2008/2211 and 2196 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 October 2009 |
[2009] EWCA Civ 1022
Lord Justice Ward
Lord Justice Jacob and
Mr Justice Warren
Case No: A3/2008/2211 and 2196
CH/2007/APP/0562
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
The Hon Mr Justice Norris
Royal Courts of Justice
Strand, London, WC2A 2LL
Michael Bloch QC and Michael Edenborough (instructed by Macfarlanes LLP) for the Appellant
James Mellor QC and Simon Malynicz (instructed by Marks & Clerk LLP Solicitors) for the Respondent
Hearing date: 21 July 2009
Lord Justice Jacob (Giving the first judgment at the invitation of Ward LJ):
The Oxford English Dictionary provides the following definition for to steal a march: “in military sense, to succeed in moving troops without the knowledge of the enemy; hence gen. to get a secret advantage over a rival or opponent.” That is what the American Budweiser beer company (I call it “A?”) claims to have done to their long-standing foe, the Czech Budweiser beer company (“?B”).
B? says not so for two reasons:
i) That AB's tactic is so sneaky, so unfair, that English law should step in and estop (as English lawyers, using old Norman French, say) AB from asserting the position it has apparently gained.
ii) As a matter of EU trade mark law, the tactic, clever though it was, simply has not worked.
Background
AB is a brewer based in Missouri and has sold beer under the trade mark “Budweiser” since about 1875. ?B is a brewer in the town of Ceske Budovice (formerly “Budweis”) in the Czech Republic. Since 1895 it also has sold beer under a trade mark consisting of or including “Budweiser”. It is not suggested that either side adopted the name otherwise than purely innocently.
From time to time each side has also used or attempted to register “Bud” as a trade mark. It is common ground that this word would be taken as an abbreviation of “Budweiser” and as far as trade marks are concerned may be taken as an equivalent to that word.
But although the names are the same, the beers are not. Their tastes, prices and get-ups have always been different. In markets where they have co-existed, consumers have by and large become aware of the difference, though of course there will always be some small level of confusion.
As world trade expanded it was inevitable that the markets of the two companies would also expands, so that sooner or later they would find places where they overlapped. This has led to a quite astonishing series of legal battles around the world. Apparently the first of these was as long ago as 1911. So we are nearing a 100 year war. It would be an interesting but very substantial exercise to collect all the decisions of all the courts and all the trade mark registries of all the countries where the battles have taken place. Many lawyers and their families in many places must be grateful that these two parties apparently cannot produce a once and for all world-wide settlement.
In the UK, to which I now turn, the war is more recent – being only about 30 years old. It was ?B who first actively entered the UK market, doing so in 1973. AB gradually entered the UK home market a little later, starting in 1974.
In November 1976 ?B applied to register “Bud” as a trade mark. Naturally AB opposed. The opposition, as was unfortunately too common in those days, meandered on slowly until, in 1979 AB upped the ante.
It did so by going on the offensive. It sued ?B for passing off, seeking an injunction to prevent ?B from using “Budweiser”. Of course ?B responded by not only defending but counterclaiming for an injunction to restrain AB from passing off by using “Budweiser”. Whilst this major battle was raging, the trade mark opposition was stayed.
The result of the case was a goalless draw. Both at first instance (Whitford J ) and on appeal, the claim and counterclaim failed, [1984] FSR 413. The courts decided that neither side was making a false representation; that there was a dual reputation in the mark and name “Budweiser.”
The case was actually an example of what both English common law and statute law had long recognised: that there are cases where two parties with similar or even identical trade marks can and should be allowed to co-exist. This was known as the doctrine of “honest concurrent use.” Its history was described by Lord Diplock in a case concerned with a battle between the American General Electric company and the then mighty English General Electric Company, “GE” TM [1972] 1 WLR 729. He said, at p.742:
The common law of trade marks before 1875
The use by manufacturers of distinctive marks upon goods which they had made is of very ancient origin, but legal recognition of trade marks as a species of incorporeal property was first accorded by the Court of Chancery in the first half of the 19th century. It may be said to have been established by Lord Cottenham L.C. in Millington v. Fox (1838) 3 My. & Cr. 338. He decided that it was not necessary to establish any intention to deceive on the part of an infringer against whom an injunction to restrain his use of a trade mark was sought.
The right of property in a trade mark had special characteristics. One, which it shared with patents and with copyright, was that it was a monopoly, that is to say, it was a right to restrain other persons from using the mark. But it was an adjunct of the goodwill of a business and incapable of separate existence dissociated from that goodwill. To be capable of being the subject matter of property a trade mark had to be distinctive, that is to say, it had to be recognisable by a purchaser of goods to which it was affixed as indicating that they were of the same origin as other goods which bore the same mark and whose quality had engendered goodwill. Property in a trade mark could therefore only be acquired by public use of it as such by the proprietor and was lost by disuse. The property was assignable, transmissible and divisible, but only along with the goodwill of the business in which it was used.
….
A right of property of this character calls for an accommodation between the conflicting interests of the owner of the monopoly, of the general public as purchasers of goods to which the trade mark is affixed, and of other traders. This accommodation had been substantially worked out by the Court of Chancery by 1875.
The interest of the general public requires that they should not be deceived by the trade mark. It ought not to tell a lie about the goods. Two main kinds of deception had been the subject of consideration. These were misrepresentation (a) of the character of the goods to which the trade mark was attached, and (b) as to their origin, i.e. that they were the product of some other manufacturer.
But the interest of the public in not being deceived about the origin of goods had and has to be accommodated with the vested right of property of traders in trade marks which they have honestly adopted and which by public use have attracted a valuable goodwill. In the early 19th century trade was still largely local; marks which were identical or which closely resembled one another might have been innocently adopted by traders in different localities. In these their respective products were not sold in competition with one another and accordingly no question of deception of the public could then arise. With the rapid improvement in communications, however, in the first half of the 19th century markets expanded; products of two traders who used similar marks upon their goods could thus come to be on sale to the same potential purchasers with the consequent risk of their being misled as to the origin of the goods. Furthermore, it was accepted that as an adjunct of the goodwill of the business the right to use a trade mark might be acquired by more than one successor if the goodwill of the business were divided, as it might be, for instance, where the business had formerly been carried on in partnership or from more than one manufactory or shop. To meet this kind of situation the doctrine of honest concurrent user was evolved. Under this doctrine a trade mark remained entitled to protection in cases where the use of it had not originally been deceptive but a risk of deception had subsequently arisen as a result of events which did not involve any dishonesty or other wrongful conduct upon the part of the proprietor of the mark. If, however, his own wrongful conduct had played a part in making the use of the mark deceptive, the Court of Chancery would not grant him an injunction against infringement. This was but a particular application of the general equitable doctrine that he who seeks equity must come with clean hands.
In cases of honest concurrent user, neither of the owners of the mark could restrict the other from using it, but as against a usurper who infringed it either owner of the mark could obtain an injunction: Dent v. Turpin (1861) 2 J. & H. 139 and Southorn v. Reynolds (1865) 12 L.T. 75.
I make no apology for this lengthy quotation. I believe it has important lessons for us today. Just as the expansion of trade within an individual nation state of the 19 th century required trade mark law to accommodate cases where two owners had independently and honestly commenced use of their respective but identical or confusingly similar marks, so in today's globalising market there may be a need for a similar accommodation. And that is particularly true of the law of the European Union, one of whose main purposes is to have a single market.
Turning back to the facts here, after the goalless draw the two protagonists,...
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