In Budějovický Budvar, národní podnik v Anheuser-Busch, Inc, C- 482/09 (22 September 2011), the Court of Justice of the European Union (CJEU) ruled that both Anheuser-Busch and Budvar can continue to use the BUDWEISER trade mark in the United kingdom as there had been a long period of honest concurrent use. The CJEU found that Budvar’s use of its registered mark did not have any adverse effect on Anheuser-Busch’s registration, which was a prerequisite for granting a declaration of invalidity under Article 4(1)(a) of the Community Trade Mark (CTM) Directive (89/104/EEC, now replaced by 2008/95/EC).

BACKGROUND

Budvar and Anheuser-Busch have used the sign BUDWEISER (or expressions including the sign BUDWEISER) in the United Kingdom since 1973 and 1974 respectively. In December 1979, Anheuser-Busch applied to register BUDWEISER as a UK trade mark. Budvar opposed the application before submitting its own application in June 1989, which Anheuser-Busch opposed. The Court of Appeal dismissed the oppositions in February 2000, holding that both parties could register and use the BUDWEISER trade mark under the honest concurrent use principle. Both Budvar and Anheuser-Busch obtained registrations for the mark BUDWEISER on 19 May 2000.

On 18 May 2005, i.e., one day before the expiry of the five year period of acquiescence prescribed in Article 9(1) of the CTM Directive, Anheuser-Busch brought an invalidity action against Budvar’s mark, claiming that Anheuser-Busch’s mark was an earlier trade mark. The UK Registry declared Budvar’s mark invalid. Budvar’s appeal to the High Court of England and Wales was unsuccessful.

DECISION

Budvar appealed to the Court of Appeal, which referred questions to the CJEU for a preliminary ruling concerning the meaning of “acquiescence” and, in particular, whether a trade mark proprietor was required to have his trade mark registered before being able to “acquiesce” in the use by another of an identical or similar mark. The Court also sought guidance on exactly when the period of “five successive years” to which Article 9 refers commenced, and whether Article 4(1)(a) applied so as to enable the proprietor of an earlier mark to prevail even where there had been a long period of honest concurrent use of two identical trade marks for identical goods.

Considering the ordinary meaning of the word “acquiescence”, the CJEU held that “acquiescence” was not the same as “consent”. Accordingly, the proprietor of an earlier trade mark could not be held to have acquiesced in the long and wellestablished honest use, of which he has long been aware, by a proprietor of a later identical trade mark, if he was not in any position to oppose that use. The CJEU held that both parties had “acquiesced” in the use by the other of the BUDWEISER mark in the United Kingdom for more than 30 years.

The CJEU further held that registration of the earlier mark was not a prerequisite for the five year limitation period in consequence of acquiescence to commence. For the period to begin running, the later mark had to be registered in good faith, it had to be used, and the owner of the earlier mark had to be aware of its registration and use.

With regards to the application of Article 4(1)(a), each party had been marketing their beers in the United Kingdom under the BUDWEISER mark for almost 30 years before the marks were registered. Both parties were authorised to register jointly and concurrently their marks following the Court of Appeal’s judgment and had used their marks in good faith. Although the names were identical, given the different taste, price and getup, consumers were well aware of the difference between the beers and respective parties. Therefore, the CJEU said, Article 4(1)(a) had to be interpreted as meaning that, in circumstances such as these (which the CJEU remarked were “exceptional”) a long period of honest concurrent use of two identical trade marks designating identical products neither had, nor was liable to have, an adverse effect on the essential function of the trade mark, which was to guarantee to consumers the origin of the goods or services. If there was any dishonesty associated with the use of the BUDWEISER marks in the future, the CJEU held that such a situation could, where necessary, be examined in light of the rules relating to unfair competition.

COMMENT

The CJEU’s ruling is perhaps of little surprise given the “exceptional” period of honest concurrent use.