Warnink (Erven) Besloten Vennootschap v J Townend & Sons (Hull) Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE BUCKLEY,LORD JUSTICE GOFF,SIR DAVID CAIRNS
Judgment Date19 Apr 1978
Judgment citation (vLex)[1978] EWCA Civ J0419-1
Docket Number1975 E. No. 2348

[1978] EWCA Civ J0419-1

In The Supreme Court of Judicature

Court of Appeal

On Appeal from The High Court of Justice

Chancery Division

Group A

(Mr Justice Goulding)

Before:

Lord Justice Buckley

Lord Justice Goff

(not present on delivery of Judgment)

and

Sir David Cairns

1975 E. No. 2348
Between:
Erven Warnink Besloten Vennootschap and Victoria Wine Co. Limited
Plaintiffs (Respondents)
and
J. Townend and Sons (Hull) Limited and H. Keeling & Co. (Sued as a Firm)
Defendants (Appellants)

MR. JOHN GRIFFITHS Q.C. and MR. JOHN HAMILTON (instructed by Messrs. Gouldens, Solicitors, London, agents for Messrs. J.A. Iveson, Solicitors, Hull) appeared on behalf of the Defendants (Appellants).

MR. D. FALCONER Q.C., MR. WILLIAM ALDOUS Q.C. and MR. SIMON THORLEY (instructed by Messrs. Ashurst, Morris, Crisp & Co., Solicitors, London) appeared on behalf of the Plaintiffs (Respondents).

LORD JUSTICE BUCKLEY
1

The defendants appeal from the judgment in this action of Mr. Justice Goulding given on 29th July 1977, when he decided in favour of the plaintiffs and granted an injunction restraining the defendants from (1) advertising, offering for sale, selling or distributing any product under or bearing the name or description Advocaat or any word so nearly resembling Advocaat as to be likely to be confused therewith unless such, product basically consists of spirit and eggs and does not include wine and (2) representing that a mixture of wine and eggs is Advocaat. He also directed an enquiry as to damages.

2

The first plaintiff, a company incorporated in Holland ("Warnink") manufacture in Holland an alcoholic beverage which they market under the name Warnink's Advocaat. They export this product to this country, where it is distributed by the second plaintiff, The Victoria Wine Co. Ltd., who are both wholesalers and retailers in this respect. Both the plaintiff companies are members of the group of companies known as The Allied Breweries Group. This trade has been carried on by the plaintiff companies or their respective predecessors for a long time. Warnink began importing Advocaat into this country in about 1911. Other Dutch makers of Advocaat also market their Advocaat in the United Kingdom, but Warnink are the brand leaders in this market and for at least 12 years before this action was brought they had sold 75% or more of the Advocaat marketed in the U.K.

3

Until 1974 virtually all the Advocaat on the market in the U.K. has been of Dutch origin. Advocaat has become a popular drink in this country. From 1949 to 1974 Warnink's sales of Advocaat in this country increased by a fairly regular progression from about 20 thousand cases in 1949 to about 411 thousand casesin 1974. In those same years the total importation of Dutch Advocaat into this country was of the order of 109,500 cases in 1949 and 538,000 cases in 1974. The U.K. market in Advocaat is no doubt a valuable market to the Dutch manufacturers and particularly to Warnink.

4

The first defendant is a company incorporated in England ("Townend & Sons") and the second defendant is a partnership which is closely associated with Townend & Sons in its business. For practical purposes they can be regarded as one, and consequently I shall ignore the second defendant in this judgment. In about 1974 Townend & Sons began to manufacture and market in the U.K. a product which they called Keeling's Old English Advocaat. This they were able to do at about 50p a bottle cheaper than the price in this country of Warnink's Advocaat. The reason for this is that the alcoholic content of Warnink's Advocaat is a spirit called brandewijn, whereas the alcoholic content of Keeling's Old English Advocaat is a fortified Cypriot wine. The rate of duty payable on fortified wine is substantially lower than the rate of duty payable on spirits, which accounts for the ability of Townend & Sons to market their product at a cheaper price than Warnink can market theirs. Keeling's Old English Advocaat came on the market in June 1974. It rapidly proved a commercial success. In 1974 the sales amounted to 8,000 cases, in 1975 to 20,000 cases and 1976 to 60,000 cases.

5

The plaintiffs contend that Advocaat can not be properly so called unless its alcoholic content consists of a spirit. Townend & Sons contend that their product made with a reinforced wine is Advocaat.

6

On 4th August 1975 the plaintiffs issued the writ in thisaction, claiming an injunction in the terms of that which the learned judge granted, save that originally the words "and does not include wine" were omitted. Those words were added to their claim by amendment on 30th October 1975They also claimed ancillary relief.

7

Paragraph 4 of the statement of claim (as amended) reads as follows: "The beverage, Advocaat, as produced by the first named plaintiff and others in Holland consists basically of a mixture of eggs and alcoholic spirit but not including wine. Such a beverage has been widely advertised, offered for sale and sold in the United Kingdom for many years and is well known to the trade and the public. By reason of the aforesaid, the name Advocaat denotes in the United Kingdom a beverage consisting basically of the aforesaid ingredients"

8

Paragraph 5 is in these terms: "The Defendants have passed off and intend to pass off a beverage not consisting basically of the aforesaid ingredients as and for Advocaat by advertising, offering for sale and selling a beverage, being an egg flip, consisting basically of a mixture of wine and eggs".

9

Paragraphs 6, 7 and 8 allege: "(6) Further, at all material times, the Defendants well knew of the difference between the said basic ingredients of Advocaat and egg flip. Despite the aforesaid, the Defendants have produced and sold their said beverage under the name Advocaat. In the premises the defendants at all material times intended and still intend to pass off their beverage as and for Advocaat and intended and still intend that others should pass off as aforesaid".

10

"(7) Further or alternatively the aforesaid acts of the Defendants and each of them have constituted and are intended to constitute unfair trading".

11

"(8) By reason of the Defendants' acts aforesaid the Plaintiffs and each of them have suffered and will suffer damage".

12

All these allegations were put in issue by the defence, save that the defendants admitted that they had advertised, offered for sale and sold an alcoholic beverage called Keeling's Old English Advocaat consisting basically of eggs and wine fortified with brandy, and that they intended. Unless restrained, to continue to do so.

13

In paragraph 5 of the defence the defendants plead: "If, which is specifically denied, the name Advocaat denotes any basic admixture in the United Kingdom the defendants will contend that it denotes an admixture basically of eggs and brandy, that the plaintiffs' beverage 'Warninks Advocaat' does not contain brandy, and that the plaintiffs accordingly have no proprietary or other right or interest in the name Advocaat which can or should be protected by this Honourable Court. Without prejudice to the generality of their contention that the name Advocaat denotes an admixture basically of eggs and brandy, the defendants rely hereunder on the registration of Registered Trade Mark No. 931405. It was at all material times up to the 18th February 1977 a condition of the registration of the said Mark that in use in relation to goods included in the specification other than alcoholic beverages manufactured from eggs and brandy the Mark will be varied by the substitution of the name or description of such goods for the word 'Advocaat'. In the premises, the plaintiffs have on Registration of the said Mark and thereafter until the 18th February 1977 represented to the Comptroller-General of Patents Designs and Trade Marks and to the public that the said Mark was being used and/or was intended to be used in relation to alcoholic beveragesmanufactured from eggs and brandy. Further, or alternatively, the use of the said Mark in a manner not varied by the substitution of any name or description of goods for the word 'Advocaat' constituted a continuing representation to the said Comptroller-General and to the public that the said Mark was being used, and at all material times up to the 18th February 1977 has been used, in relation to alcoholic beverages manufactured from eggs and brandy". They also raised a trade mark point which I pass over for the time being.

14

It will be observed that the statement of claim does not allege that Townend & Sons have passed off, or intend to pass off, their Advocaat as Advocaat manufactured by Warnink, but as Advocaat. So this is not a passing-off action of the classic type in which the plaintiff asserts that the defendant is passing off goods which are not the plaintiff's goods as the plaintiff's goods. The plaintiffs rely in support of their claim to relief upon the decision in the Spanish Champagne Case ( Bollinger v. Costa Brava Wine Co., (1960) Reports of Patent Cases, 16; (1961) Reports of Patent Cases, 116.) That decision has been followed in a number of later cases at first instance, but has never yet been challenged in this court. In this case the appellants do challenge it, saying that it was wrongly decided.

15

The production of Advocaat in the Netherlands is legislatively controlled. An English translation of Articles 1 and 4 of a Dutch Decree made in 1953, as subsequently amended from time to time, is set out in the judgment of the learned judge at page 4 of the transcript. This provides that the name "Advocaat" may designate solely and must designate a product which contains as its characteristic constituents hens' egg yoke or the whole contents of hens' eggs, ethyl alcohol and sugar; and that the product designated as"Advocaat" may not contain any substances other than those present in a mixture of hens' egg yoke or the whole...

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