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.