In a reference from the UK Court of Appeal in this long-running dispute between Anheuser-Busch and Budvar, the Court of Justice of the European Union has ruled that both parties can continue to use the trademark BUDWEISER in the United Kingdom.   In light of the fact that there had been a long period of honest concurrent use and that UK consumers were aware of the difference between the respective parties’ beers, 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 Trademark Directive (89/104/EEC, now replaced by 2008/95/EC).  Budějovický Budvar, národní podnik v. Anheuser-Busch, Inc., Case C-482/09   (CJEU, Sept. 22, 2011).

Budvar and Anheuser-Busch have used the marks BUDWEISER and formatives thereof in the United Kingdom since 1973 and 1974, respectively.   In December 1979, Anheuser-Busch applied to register BUDWEISER as a UK trademark.  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 trademark under the “honest concurrent use” principle.  Both Budvar and Anheuser-Busch obtained registrations for the mark BUDWEISER on May 19, 2000.

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

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 trademark proprietor was required to have his trademark 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 trademarks for identical goods.

Considering the ordinary meaning of the word “acquiescence,” the CJEU held that “acquiescence” does not have the same meaning as the word “consent.”  Accordingly, the proprietor of an earlier trademark could not be held to have acquiesced in the long and well-established honest use, of which he has long been aware, by a proprietor of a later identical trademark 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 and had to be used and the owner of the earlier mark had to be aware of its registration and use.

Concerning the application of Article 4(1)(a), the court noted that 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 authorized to register jointly and concurrently their marks following the Court of Appeals’ judgment and both had used their marks in good faith.  Although the names were identical, given the differences in taste, price and get-up, 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 trademarks designating identical products neither had, nor was liable to have, an adverse effect on the essential function of the trademark, 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, if necessary, be examined in light of the rules relating to unfair competition.

Practice Note:   The CJEU’s ruling is perhaps of little surprise given the “exceptional” period of honest concurrent use.  It remains to be seen whether this decision will find wider application in future cases.