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Case No: CHANF/1998/0733/4/A3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
Mr. Justice Rimer
Royal Courts of Justice
Strand, London, WC2A 2LL
Monday, 7 February 2000
B e f o r e :
LORD JUSTICE PETER GIBSON
LORD JUSTICE JUDGE
and
MR JUSTICE FERRIS
|
ANHEUSER
BUSCH INC.
|
Appellant
|
|
-
and -
|
|
|
BUDEJOVICKY
BUDVAR N.P.
|
Respondent
|
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
Mr. Geoffrey Hobbs Q.C. (instructed by Messrs. Norton Rose of London
for the Appellants)
Mr. David Kitchin Q.C. and Mr. James Mellor (instructed by Messrs.
Olswang of London for the Respondents)
Judgment
As Approved by the Court
Crown Copyright ©
Monday, 7 February 2000
JUDGMENT
LORD JUSTICE PETER GIBSON:
1. This dispute is the third round of the continuing conflict in the English
courts between the American brewer, Anheuser-Busch Inc. ("AB"), and the Czech
brewer, Budejovicky Budvar N.P. ("BB"), over the use and registration of the
mark BUDWEISER and related marks in relation to beer.
2. The mark is derived from the name of the town in Bohemia which was known,
when the town was part of the Austro-Hungarian empire, by its German name
Budweis but which is now called by its Czech name Ceske Budejovice in the Czech
Republic. For hundreds of years beer has been brewed there. BB is the
successor of a brewing enterprise established in 1895. Its brewery is in the
town. AB established its brewing business in Missouri during the 19th century.
In 1875 it adopted Budweiser as the trade name under which it sold its beer in
the U.S.A. In so doing AB was inspired by the method of brewing adopted in
Budweis, but its use of the name is simply as a trade mark with no
signification of the geographical origin of the product.
3. In 1919 BB and another brewery in Budweis which exported beer to the U.S.A.
objected to the registration in the U.S.A. of the BUDWEISER trademark, that
objection being based on a claim that the Budweiser name signified a
geographical origin. That dispute led to a compromise agreement by which BB
acknowledged AB's right to use the mark in connection with its beers in the
U.S.A. and all other extra-European countries while AB acknowledged BB's right
to use the word Budweiser whether in Europe or in North America and other
extra-European countries as descriptive of the geographical origin of beer
brewed by it at Budweis. Neither that agreement nor a further agreement made
in 1939 by AB and BB specified that either was entitled to use BUDWEISER as a
trade mark in the U.K.
4. Prior to 1919 BB had used the word Budweiser as descriptive of its beer's
geographical origin but not as a trade name, the beer being marketed under
trade names one of which was Budvar. That is a combination of the first three
letters of Budweis (or Budejovice) and "var," the Czech word for "brew".
Between 1920 and 1960 the labelling concentrated generally on the trade name,
Budvar. In 1960 BB registered BUDWEISER as an international mark in Europe,
and that word was then incorporated from 1960 to 1970 into export labels
printed in German, French and English. In some the prominent word remained
Budvar, but in others prominence was given to Budweiser, with Budvar in smaller
lettering. Save only for two labels in German, the two words were used in
combination. In 1967 BB effected various registrations as appellations
d'origine with the International Bureau for the protection of intellectual
property, including Budweiser Bier and Budweis Beer.
5. After 1967 beer with labelling giving prominence to Budweiser (with Budvar
in smaller lettering) was consigned to (amongst other countries) Great Britain.
The label stated in English that the beer "was brewed and bottled by the
Budweiser Budvar Brewery, Ceske Budejovice, Czechoslovakia". BB obtained its
designation Budweiser Budvar in 1967. No serious attempt was made by BB to
export its beer to the U.K. prior to 1969 (save for a small quantity in 1959).
BB had registered the name BUDVAR as a trade mark for beer, ale and porter and
in 1962 had registered BUDWEISER BUDBRÄU but disclaiming any exclusivity
in the use of the word BUDWEISER. In 1971 the mark BUDWEISER BUDVAR was
registered, again with a similar disclaimer. Prior to 1973 no significant
quantity of BB's beer was sold in the U.K. and BB had no significant reputation
here.
6. From 1973, when sales were only worth £4,000, BB's sales here
increased steadily. By midsummer 1979 BB had sold in excess of 1,000,000
bottles. From 1974 the retailers, Oddbins, stocked and sold BB's beer, listing
it in their published price lists simply as Budweiser.
7. AB made no sales of its Budweiser beer in the United Kingdom otherwise than
in the U.S. Embassy and PX stores catering not for the general public but for
American service personnel between 1945 and 1973. From 1974 to 1979 there were
small sales to the general public not exceeding in total 240,000 cans or
bottles. Sales of AB's beer to American servicemen were, however, substantial
between 1962 and 1973, varying from 3,600,000 cans to 6,000,000 cans a year.
Further Budweiser as a name associated with AB's beer became well-known to a
substantial number of people in the U.K. as a result of visits to the U.S.A.
and of advertisements in films and American magazines circulating here.
8. On 1 August 1979 AB commenced proceedings ("the passing off action")
against BB, seeking an injunction to prevent BB from selling or dealing in any
beer not being AB's beer by the name Budweiser or Bud and from passing off in
any other manner. BB counterclaimed for similar relief against AB. Whitford
J., in a decision reported under the name Anheuser-Busch v Budejovicky
Budvar [1984] F.S.R. 413, dismissed both the claim and the counterclaim.
He held that neither AB nor BB was disentitled to use the name Budweiser since
in 1979 there was a dual reputation and neither had achieved the reputation
improperly and neither was making a misrepresentation. He recognised that some
degree of confusion might result, but he said that this was true in the case of
marks used in pursuance of registration under s. 12 (2) of the Trade Marks Act
1938 ("the Act"). By that provision, he said, Parliament had recognised that
circumstances might arise in which two different persons ought to be entitled
to use one and the same mark in respect of the same goods. He regarded Bud as
the inevitable abbreviation of the name Budweiser. AB, but not BB, appealed,
but this court dismissed the appeal. It accepted that there was substantial
evidence of the name Budweiser as associated with AB's beer, and said that
there was ample and unchallenged evidence of BB's beer being confused with AB's
beer with ample evidence that in the minds of several people the two were in
some way connected. This court held that the critical time was when BB first
entered the English market in a not negligible way in 1973/4 by which time AB
had a reputation with a substantial number of people in this country as the
brewer of its Budweiser beer. But it reasoned that because this reputation did
not constitute goodwill, there being no sales to the general public and no
business in England by then, AB could not succeed in the passing off action.
This court confirmed that both AB and BB were entitled to use the name
Budweiser in this country.
9. The second round of litigation ("the Bud action") between the parties was
triggered by BB applying in 1979 to register BUD as a trade mark in class 32
for beer. This was opposed under s. 11 of the Act by AB. The Assistant
Registrar, Mr. Myall, held that the application was properly registrable under
s. 12 (2) and that the opposition failed. On appeal Walton J. agreed (see
BUD Trade Mark [1988] R.P.C. 535). He referred to the evidence as
showing that the use of Bud as a contraction for Budweiser was how drinkers of
AB's or BB's beer demanded the beer they wanted. He held that s. 11 did not
apply because
"[w]hat would be the equity in refusing a person registration of a contraction
of his proper trade mark, which cannot be complained of at all, which his
customers are invariably, as the evidence runs, going to use. Of course
precisely and exactly the same applies to AB's Budweiser and the use by their
customers of BUD, but I cannot think that if the substantive mark of
"Budweiser" in both cases can be fairly used, there can be any question of a
court of equity at any time saying: "But you cannot possibly use the way in
which your customers are going to describe it." The one must, as a matter of
equity and justice carry the other." He therefore agreed with Mr. Myall that
the opposition failed and further that s. 12 (2) pointed in the same direction,
there being honest concurrent use and the special circumstance that customers
for both beers were accustomed to use the same abbreviation as an abbreviation
of the real name which both were free to use as against each other. Following
that decision, AB registered the same mark for its beer.
10. Four further applications for registration have occasioned this third
round of litigation. Three applications were by AB, each for a registration of
a mark in class 32. First, on 11 December 1979 AB applied to register the mark
BUDWEISER for beer, ale and porter. Second, on 12 June 1980 AB applied to
register a label mark for lager beer, that label bearing the word Budweiser as
the prominent name with the words PREMIUM BEER in smaller lettering below.
Third, on 22 October 1981 AB applied to register a label mark for beer, that
label bearing the word Budweiser as the prominent name with the words KING OF
BEERS in smaller letters below. The two label marks are reproduced in the
decision of the Assistant Registrar, Mr. Harkness, which is reported (together
with the judgment of Rimer J. on the appeal and cross-appeal from him) at
[1998] R.P.C. 669, at p. 671. BB filed oppositions to all those applications
on 3 February 1988, the basis of that opposition being that the mark was not
capable of distinguishing AB's goods within the meaning of s. 10 of the Act and
that BB had made continuous use of the mark BUDWEISER for many years in the
U.K. The fourth application was by BB on 28 June 1989. Thereby BB applied to
register the mark BUDWEISER in class 32 for "Beer, ale and porter; malt
beverages; all included in Class 32; but not including any such goods for
supply to, or sale in, the United States of America's Embassy and PX stores in
the United Kingdom." To that AB filed its opposition on 24 August 1990.
11. The basis of AB's opposition was (a) that the use of the mark applied for
by BB would be calculated to deceive or cause confusion and would be
disentitled to protection in a court of justice and so registration would be
contrary to s. 11, (b) that the mark so nearly resembled the marks covered by
AB's three applications that it would be calculated to deceive or cause
confusion and so registration would be contrary to s. 12, and (c) BB had not
used and did not have the requisite intention to use the mark BUDWEISER alone
and so the application was not properly made under the provisions of ss. 17 and
68 of the Act.
12. The litigation made surprisingly slow progress: it was not until 30 July
1997 that Mr. Harkness gave his determination on the four applications. By
then the Act had been repealed and replaced by the Trade Marks Act 1994. But
it has at all times been common ground that these proceedings, having begun
under the provisions of the Act, must continue to be dealt with under the
Act.
13. In his decision Mr. Harkness observed that almost all the evidence filed
in the proceedings before him was before the court in the earlier proceedings
and had mostly been considered in some depth during those proceedings. He said
that the additional evidence to a large extent merely repeated or embellished
the earlier evidence. That additional evidence showed that both AB and BB had
since 1979 continued to trade on an increasing scale in the U.K., AB's trade
being very substantially greater than that of BB. Thus in 1992 AB's sales
totalled £53.5 million and its advertising costs £5.5 million. BB's
sales that year totalled just over £5.5 million and its advertising and
promotional costs £72,282. Both AB and BB put in evidence as to how their
products were presented to the public both on the get up of the bottles and
cans and in promotional material. The bottles and cans of AB are readily
distinguishable from BB's bottles in appearance. The bottles of BB use both
Budweiser and Budvar together as the name of BB's beer.
14. Most of the promotional material produced by BB also refers to Budweiser
Budvar. But there are three examples of such material referring to BB's beer
as Budweiser alone. In one leaflet dating from 1984-5 Courage Ltd., which has
distributed BB's beer since 1984, showed a rondel containing the word Budweiser
alone. In another leaflet supplied by BB Supply Centre Ltd., through which
until the end of 1991 the U.K. importer of BB's beer sold the beer and which
has since the beginning of 1992 been the sole U.K. importer of BB's beer,
Budweiser alone appears as the heading with "INTRODUCING BUDWEISER LAGER" as
the subheading, and there are two further references to "Budweiser Lager".
However the leaflet also portrays a bottle with BB's Budweiser Budvar label on
it. In a CAMRA beer festival brochure BB's beer is referred to as Budweiser
alone. There was also a good deal of evidence that those in the beer trade as
well as members of the public refer to BB's beer as Budweiser or Czech
Budweiser or Bud or Czech Bud. Thus Lynne Zilkha of BB Supply Centre Ltd.
said:
"The entire beer trade in the U.K. usually refers to beer which is produced by
[BB] as "BUDWEISER" or "CZECH BUDWEISER" without using "BUDVAR". This applies
to both written and verbal references and to wholesalers and retailers as well
as to members of the public."
Whilst evidence like that can be criticised for being unspecific, no
cross-examination of those giving such evidence was ever sought. Mr. Harkness
found nothing in the decisions in the passing off action and the Bud action to
indicate that there was any restriction of the rights of both AB and BB to use
the mark BUDWEISER. He concluded that they both had rights in the mark and
that in the context of s. 17 both could claim ownership. He therefore decided
that both parties' marks should proceed to registration. He did not expressly
deal with the objections under s. 11 or s. 12.
15. AB appealed against the decision of Mr. Harkness on BB's application. BB
also appealed against his decision on AB's three applications, but made clear
to Rimer J., who heard the appeals, that its primary position was that both
AB's appeal and BB's appeal should be dismissed. The judge in his judgment
said that he accepted that at all times since about 1973 BB had used Budweiser
as a trade mark not just as part of the composite Budweiser Budvar label but
also on its own. He referred to the evidence, including evidence that BB's
beer is commonly referred to simply as Budweiser by those traders and customers
who order it and said that the thrust of this court's decision in the passing
off action was that BB was entitled to use Budweiser in relation to its beer
just as was AB and that that was the basis on which Walton J. approached the
Bud action. Rimer J. said that he agreed with that approach. He said that in
the absence of AB there would be no difficulty in allowing BB's application,
and that the only real question was whether AB had made good its objection
under s. 11, and, if it had, whether that objection should be overridden under
s. 12 (2). He rejected the s. 11 objection on the ground that this was a case
where BB's right to use the name Budweiser concurrently with AB had been
established by the decision in the passing off action. If wrong on that, he
said that this was a case where there had for long been an honest concurrent
use by both AB and BB of the mark Budweiser and the unusual circumstances of
the case, including in particular the use by BB's traders and customers of the
word Budweiser to refer to BB's beer, were sufficiently special to justify
overriding under s. 12 (2) any s. 11 objection. He accordingly dismissed both
AB's and BB's appeals.
16. In this court AB appeals from the dismissal of its appeal on its objection
to BB's application and BB appeals from the dismissal of its appeal on its
objections to AB's three applications. BB's primary contention is again that
the decision to allow the applications of both AB and BB to proceed to
registration is correct, and so both appeals should be dismissed. BB's
alternative contention is that if AB's appeal is allowed, with the result that
BB's application to register BUDWEISER is refused, then AB's applications
should also be refused.
17. It is convenient at this point to refer to those provisions of the Act
which are relevant to the matters in dispute and to the authorities which
explain those provisions.
18. S. 10 (1) provides that in order for a trade mark to be registered it must
be capable of distinguishing goods with which the proprietor of the trade mark
is or may be connected in the course of trade from goods in the case of which
no such connection subsists. By s. 10 (2) in determining whether a trade mark
is so capable regard may be had to the extent to which the trade mark is
inherently so capable and by reason of the use of the trade mark and any other
circumstances the trade mark is in fact so capable. The term "trade mark" is
defined in s.68 (1) as meaning (so far as is relevant) a mark used or proposed
to be used in relation to goods for the purpose of indicating, or so as to
indicate, a connection in the course of trade between the goods and some person
having the right as proprietor to use the mark, whether with or without any
indication of the identity of that person. "Mark" is expressed to include a
device, brand, heading, label, ticket, name, signature, word, letter, numeral,
or any combination thereof. By s. 68 (2) references in the Act to the use of a
mark are to be construed as references to the use of a printed or other visual
representation of the mark, and references to the use of a mark in relation to
goods are to be construed as references to its use upon, or in physical or
other relation to, goods.
19. S. 11 is in this form:
"It shall not be lawful to register as a trade mark or part of a trade mark any
matter the use of which would, by reason of its being likely to deceive or
cause confusion or otherwise, be disentitled to protection in a court of
justice, or would be contrary to law or morality, or any scandalous design."
A provision in substantially the same form was found in the earliest trade mark
legislation, s. 6 Trade Marks Registration Act 1875. As Lord Diplock explained
in GE Trade Mark [1973] R.P.C. 297 at pp. 325-6, to understand the words
"would .... be disentitled to protection in a court of justice", one must go
back to the practice of the Court of Chancery prior to the 1875 Act. He
pointed out that 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. The following principles were established by 1875:
(1) It was unnecessary to prove 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 was a right to restrain others
from using the mark.
(2) That right was an adjunct of the goodwill of a business and incapable of
separate existence dissociated from the goodwill. To be capable of being the
subject matter of property a trade mark had to be distinctive, in the sense of
being 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.
(3) The principal remedy for the protection of the trade mark was the
discretionary equitable remedy of an injunction to restrain infringement. The
interest of the general public required that they should not be deceived by the
trade mark, either as to the character of the goods to which the trade mark was
attached or as to the origin of the goods. But the interest had to be
accommodated within the traders' vested right of property in trade marks which
they had honestly adopted and which by public use had attracted a valuable
goodwill.
(4) Marks which were identical or resembled one another closely might be
innocently adopted by traders in different locations and goodwill might be
divided. Under the doctrine of honest concurrent use a trade mark was 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 not
involving any dishonesty or wrongful conduct by the proprietor of the mark. If
his own wrongful conduct had played a part in making that use of the mark
deceptive, under the "clean hands" doctrine an injunction would be denied. In
cases of honest concurrent user, neither of the owners of the mark could
restrain the other from using it, but as against an infringer either owner
could obtain an injunction.
20. There are two other features of s. 11 which I should mention. One is that
the section gives the public an interest in resisting an unlawful registration.
As was said by Lord Macnaghten in Re Dunn's Trade Mark (1890) 7 RPC 311 at p. 319, the section raises a matter between the applicant and the
public. Accordingly any member of the public can rely on the section. The
other is that the question whether the use of any matter as a trade mark would
not be entitled to protection as being likely to deceive or cause confusion is
a hypothetical question. Mr. Kitchin Q.C. for BB argued that once there is a
pattern of trade by the parties the court looks at the actual circumstances. I
do not accept that. The language of s. 11 shows plainly that the question
thereby posed is hypothetical. As Lord Diplock explained in GE Trade
Mark at pp. 320, 1 the question posed by the section is "a hypothetical
question which first arises on an original application for registration. It
looks to the future use of the matter as a trade mark and embraces any normal
and fair use which as registered proprietor the applicant would be entitled to
make of it in the ordinary course of trade in respect of goods of the class for
which it is registered." The question whether a s. 11 objection would be
overridden under s. 12(2) is a distinct question.
21. 12 (1) prohibits, subject to subs. (2), the registration of a trade mark
which is identical with or nearly resembles a registered mark belonging to a
different proprietor. Subs. (2) provides:
"In case of honest concurrent use, or of other special circumstances which in
the opinion of the Court or the Registrar make it proper to do so, the Court or
the Registrar may permit the registration by more than one proprietor in
respect of -
(a) the same goods,
(b) the same description of goods, or
(c) goods and services or descriptions of goods and services which are
associated with each other,
of marks that are identical or nearly resemble each other, subject to such
conditions and limitations, if any, as the Court or Registrar, as the case may
be, may think it right to impose."
It is not in dispute that s. 12(2) is not merely an exception to s. 12(1) but
also can override a s. 11 objection. There is no doubt but that s. 12(2) does
require consideration of the actual use of the mark. It confers a discretion
on the Court or Registrar. How that discretion was exercised in the particular
circumstances of one case was explained by Lord Tomlin in Pirie's
Application (1933) 50 R.P.C. 147 at p. 159:
"In my opinion, when once the two factors, viz., the previous registration of
the Appellants' mark and the Respondents' knowledge of the Appellants' mark
have fallen into their right perspective, the case becomes easy of decision and
should in my opinion be determined in favour of registration for the following
reasons:- (1) While recognising the possibility in certain, perhaps somewhat
remote, contingencies of confusion from phonetic similarity between the two
words and giving due weight to the possibility of mistake arising from
inaccurate or ill-remembered impression on the mind of one or other of the
marks, I am of opinion that the possibility of confusion is slender. (2) The
choice of the word "Abermill" was honestly made. (3) Five years' honest
concurrent user has been proved. (4) It is the user and not the registration
which is liable to cause confusion, and the commercial user has not produced
any proof of confusion. This fact cannot be regarded as unimportant even
though allowance be made for difficulty of proof; and (5) the Appellants' trade
is small, and for some years has remained more or less stationary. The
Respondents, on the other hand, have built up with their trade mark a large and
increasing business.
Bearing these matters in mind, the hardship to the Respondents of refusing
registration appears to be out of all proportion to any hardship to the
Appellants or inconvenience to the public which can possibility result from
granting it."
But there are dangers in seeking to apply the five reasons found determinative
in Pirie as the determinative criteria in every case. As is said in
Kerly's Law of Trade Marks, 12th ed. (1986), para. 10-18:
"The discretion of the tribunal is unfettered and concurrent registration may
be allowed even when the probability of confusion is considerable. Every case
has to be determined on its own particular merits and circumstances."
17(1) provides (so far as is relevant):
"Any person claiming to be the proprietor of a trade mark used or proposed to
be used by him who is desirous of registering it must apply to the Registrar in
the prescribed manner for registration...."
That provision makes clear that the trade mark user which is relevant for
registration is that of the proprietor himself. By s. 17(2) the Registrar has
a discretion whether to refuse the application or accept it absolutely or
subject to such amendments, conditions or limitations as he might think
right.
22. The final statutory provision which I should mention is s. 21(1). This
provides that where the proprietor of a trade mark claims to be entitled to the
exclusive use of any part thereof separately, he may apply to register the
whole and any such part as separate trade marks, but each such separate trade
mark must satisfy all the conditions of an independent trade mark. It must
therefore satisfy the requirements of s. 10. This is exemplified by Parker
Knoll Ltd. v Knoll International Ltd. [1961] R.P.C. 346. In that case the
plaintiff was the registered proprietor of the trade mark Parker Knoll. This
court held that the plaintiff was not entitled to register the word Knoll alone
because on the evidence that word meant to a number of persons the goods of the
defendant and it could not satisfy all the conditions of an independent trade
mark; in particular it was not inherently capable of distinguishing the
plaintiff's goods.
23. Mr. Hobbs Q.C. for AB advanced two main arguments in support of AB's
appeal, the first relating to s. 11 and the second relating to s. 12.
24. He said that the judge was wrong to reject AB's objection under s. 11. He
criticised the judge's reasoning under this head, based as it was on the
decision of this court in the passing off action. Mr. Hobbs argued that the
decision in the passing off action was not directed to, and was not
determinative of, the acceptability of BB's application to register the word
BUDWEISER alone under the 1938 Act. He contended that BB's application had to
be judged by reference to the hypothetical question posed by s. 11 by which the
court was required to consider the likelihood of deception and confusion if the
applicant made any normal and fair use of the trademark sought to be
registered. He drew our attention to the dictum of Oliver L.J. in the passing
off case, My Kinda Town Ltd. v Soll [1983] R.P.C. 407 at p. 425, that
where there is already a substantial potentiality for confusion of two
businesses simply by reason of their being engaged in the same trade, a trader
cannot legitimately build on and increase that potentiality in such a way that
confusion becomes worse confounded. He also referred us to the decision of
Stirling J. in Saunders v Sun Life Assurance Co. of Canada [1894] 1 Ch 537 in which it was held that the defendant was not entitled to use the name
"The Sun" or "the Sun Life" without the addition of the words "of Canada"; this
was so despite the fact that there was evidence that the additional words were
naturally dropped for the sake of brevity. Mr. Hobbs described it as plain
common sense that to allow BB to register BUDWEISER alone for its beer would
exacerbate the confusion which this court acknowledged in the passing off
action already existed with BB's Budweiser Budvar beer being confused with AB's
Budweiser beer. Such registration, he said, would close the gap which has
existed for many years between the branding of BB's beer and the branding of
AB's beer.
25. Mr. Kitchin's riposte was that there was no gap as BB had already used
BUDWEISER as a trade mark and he submitted that its use by BB would not be
disentitled to protection. He accepted that it was possible to contemplate
ways in which BB's beer could be marketed such that the risk of confusion with
AB's beer was increased, but he pointed to s. 2 of the Act as the answer to
that, providing as that section does that nothing in the Act affects the rights
of any person in passing off. He said that if BB presented its product in a
way which would cause deception or confusion, AB would have its remedy against
BB in passing off. He supported Rimer J.'s view that the decision of this
court in the passing off action establishing BB's right to use the name
Budweiser concurrently with AB defeated the S. 11 objection.
26. For reasons on which I shall enlarge when I come to s. 12 (2), I accept
that there has been some use by BB of BUDWEISER as a trade mark, though it is
clear that BB has to a much greater extent used the composite BUDWEISER BUDVAR
as a trade mark. In my judgment it is appropriate to keep separate the test
posed by s. 11 and that posed by s. 12(2) and not to conflate the two. With
due respect to the judge, I do not see that the decision in the passing off
action is determinative of the s. 11 objection. That decision related to the
private rights of the parties to the passing off action. AB's action failed
because at the date of the inception of the conduct complained of, in 1973/4,
AB, whilst possessing the reputation in the name Budweiser and whilst proving
confusion and the risk of deception could not establish that it possessed
goodwill in this country. Under s. 11 it is a matter between the applicant and
the public. The position to be looked at is at the date of application (28
June 1989) and the hypothetical question to be asked is whether any normal and
fair use by BB of the trade mark BUDWEISER would be likely to deceive or cause
confusion and so whether the mark would be disentitled to protection. In
BALI Trade Mark [1969] R.P.C. 472 at pp 496,7 Lord Upjohn said:
"It is not necessary in order to find that a mark offends against section 11 to
prove that there is an actual probability of deception leading to a passing off
or (I add) an infringement action. It is sufficient if the result of
registration of the mark will be that a number of persons will be caused to
wonder whether it might not be the case that the two products come from the
same source. It is enough if the ordinary person entertains a reasonable
doubt, but the court has to be satisfied not merely that there is a possibility
of confusion; it must be satisfied that there is a real tangible danger of
confusion if the mark which it is sought to register is put on the
register."
27. A normal and fair use by BB of BUDWEISER would be to label its product
Budweiser alone and to promote it as such. That is what it must be taken to
have applied to do and it must be assumed that such use is intended. This is a
change from the use which it has pleaded in its counter-statement:
28. "The [applicants] have used the trade mark "BUDWEISER BUDVAR" in the
United Kingdom for many years in relation to their beer and in this way have
already used the trade mark "BUDWEISER" on beer".
To my mind there is a real tangible danger that to drop the name Budvar from
Budweiser Budvar for BB's beer would be likely to increase the existing
inevitable confusion of that beer with the more widely marketed and better
known beer of AB. If one leaves s. 12(2) aside, that is not something to be
encouraged. I cannot accept that s. 2, merely by preserving rights to sue in
passing off, can convert what is otherwise an application objectionable because
of the likelihood of deception and confusion into one which cannot be defeated
by s. 11. The s. 11 test must be applied regardless of s. 2. Subject to s.
12(2) therefore, in my judgment the objection under s. 11 is made out.
29. Mr. Hobbs took the further point under ss. 10 and 21 (1) against
registration that BB could not show that it satisfied all the conditions for
registration of an independent trade mark when BUDWEISER was widely known as
the mark of AB and its beer. Indeed Mr. Kitchin took a similar point in his
argument against AB's applications, relying on BB's reputation and goodwill
under the BUDWEISER trade mark. I see force in that point, but it is separate
from the s. 11 objection and it too must yield to s. 12 (2), expressly
contemplating as it does that two traders will obtain registration of the same
trade mark.
30. I come now to s. 12(2). The applicant for registration of a trade mark
used by another must bring himself within either "honest concurrent use" or
"special circumstances" or both. I shall consider them in turn.
31. The reason why Rimer J. held that this was a case of honest concurrent use
by BB as well as by AB of the trade mark BUDWEISER was that all times since
about 1973 BB had used the word Budweiser not just as part of the composite
Budweiser Budvar but also on its own. He considered that the thrust of the
decision of this court in the passing off action was not that BB was entitled
to use the word Budweiser to describe its beer only as part of the composite
Budweiser Budvar but that it was entitled to use the word Budweiser in relation
to its beer just as was AB. Mr. Hobbs criticised the judge's approach. He
said that the decision in the passing off action did not decide the entitlement
of BB to use Budweiser's name for trade mark registration purposes, that
decision producing a stalemate. He submitted that there had not been honest
concurrent use by BB of the trade mark BUDWEISER alone.
32. I own to finding this a difficult point, but I am persuaded by Mr. Kitchin
that there has been honest concurrent use by BB of BUDWEISER. Jiri Bocek, a
director of BB, in his statutory declaration accurately stated the position
when he said: "In the UK market for beer, the beer brewed by my company is sold
mainly under the trade mark "BUDWEISER BUDVAR" but the trade mark "BUDWEISER"
is also used and the product is known commonly as Czech BUDWEISER or Czech BUD
or BUDWEISER or BUD." In my judgment in addition to the limited use by BB of
BUDWEISER alone in the promotional material to which I have already referred,
it is clear that the emphasis in its use of BUDWEISER BUDVAR has in general
been on the first word BUDWEISER, which was always likely to be the focus of
attention for traders and the public alike. There can be no doubt but that in
the passing off action Whitford J. and this court treated BB as using the trade
mark BUDWEISER even when the evidence showed it was used in conjunction with
BUDVAR. Whitford J. ([1984] F.S.R. at p. 440) described as "the real question"
whether AB could stop BB from using the word Budweiser as a trade mark. It is
of significance that that judge, with his vast experience in this field, found
that in their claims for passing off AB and BB were in a situation analogous to
that covered by s. 12(2) (see pp. 441-2), a point also observed by the also
very experienced Mr. Myall in his decision in the Bud action (see [1988] R.P.C.
at p543). As Mr. Myall also said, that was not a view disputed by this court
on the appeal in the passing off action. Oliver L.J. said that BB had for some
time used the name Budweiser, sometimes as an indication of the geographical
origin of its beer "but more recently as a trade name in its own right ([1984
F.S.R. at pp. 448,9). He referred (at p. 468) to BB in 1973 first starting to
market in Great Britain under the name Budweiser and he ended his judgment (at
p. 471) by agreeing with Whitford J.'s conclusion that both AB and BB were
entitled to use the name Budweiser in this country. Dillon L.J. at p. 472
described AB's passing off claim as one to restrain BB from marketing its beer
under the name Budweiser and spoke of BB as first starting to market its beer
under that name in 1973. He too supported Whitford J.'s conclusion that there
was a dual reputation in that name. O'Connor L.J. agreed with both Oliver and
Dillon L.JJ.
33. There can be no doubt but that Walton J. thought that this court had
decided that both AB and BB were entitled to use the name Budweiser of which
both were proprietors. His decision was based on that premise. His conclusion
that BB was entitled to obtain registration of the trade mark BUD as a
contraction of BUDWEISER, if correct, necessarily entails that BB is also
entitled to obtain registration of the unabbreviated trade mark BUDWEISER.
There was no appeal by AB from that decision and Mr. Hobbs does not dispute
that it is binding on AB.
34. In the light of all the circumstances I accept that there has been
concurrent use by BB as well as AB of the trade mark BUDWEISER. Mr. Hobbs has
made no suggestion that if there has been such use it was nevertheless not
honest. On the facts any such suggestion could not be sustained. Both
Whitford J. and this court in the passing off action and Walton J. in the Bud
action roundly dismissed the notion that BB had acted dishonestly in such
use.
35. Rimer J. also found special circumstances justifying the overriding under
s. 12(2) of the s. 11 objection. They consisted of the unusual circumstances
of the case, indicating in particular the use by BB's traders and customers of
the word Budweiser to refer to its beer.
36. Mr. Hobbs again challenged the correctness of the judge's reasoning. He
submitted that the abbreviation made by such persons, as distinct from BB
itself, of the trade mark BUDWEISER BUDVAR to BUDWEISER should not be treated
as significant. However he accepted that it was a circumstance which could be
taken into account. In my judgment it would be wholly unrealistic not to treat
as significant the fact that on the unchallenged evidence of BB its beer was
known in the trade and referred to by members of the public as Budweiser alone.
I agree with Walton J. in the view he expressed in the Bud action that the way
customers refer to a product by a name in a trade mark sense is a relevant
special circumstance. In my judgment the previous litigation between the
parties and in particular the registration of BUD as a trade mark contraction
of BUDWEISER is also a special circumstance. I agree, therefore, with the
judge that notwithstanding the danger of confusion special circumstances
justify the overriding of the s. 11 objection.
37. In follows that despite the excellence of Mr. Hobbs' arguments I would
dismiss AB's appeal. Mr. Kitchin accepts that in that event BB's cross-appeal
should also be dismissed and it is unnecessary to consider his alternative
contention.
LORD JUSTICE JUDGE:
38. The self indulgence of narrating and commenting on the history of events
in the Austro-Hungarian empire and the town known to its German speaking
inhabitants as Budweis, or indeed the brewing methods originating in that area
which were taken to and adopted in Missouri in the United States of America in
the second half of the nineteenth century must be avoided.
39. At that time the limitations of geography, and more restricted methods of
business and transport than those available to contemporaries, would have meant
that very few individuals familiar with the beer brewed in either Bohemia or
Missouri would have had very much idea, or interest, if any, about the beer
being brewed abroad. When however the Czech brewery, which I shall describe as
BB, sought to expand its sales into the United States in the early part of the
last century, battle was joined.
40. The first dispute was compromised in the United States as long ago as
1911. All the relevant history, particularly in relation to the development of
both businesses in the United Kingdom after World War II is fully narrated in
the earlier judgment of this court ("the passing off action") brought by the
American company, described hereafter as AB and reported at [1984] FSR 413.
The second round in the battle (the "Bud" action) was concluded before Walton J
in July 1987 ([1988] RPC 535). On his analysis of the Court of Appeal's
decision, both BB and AB were entitled to use the name "Budweiser" and neither
could prevent the other from doing so. In 1982 Whitford J had observed that
the contraction of Budwieser to "Bud" was inevitable, and Walton J concluded
that both BB and AB were to be regarded as proprietors of the trademark "Bud",
if they wished. This recognised the reality that given the ease with which the
word trips off the tongue, evoking, as it does, concepts of warmth and
friendship similar to those found in words like "buddy", "mate" and "pal", a
customer ordering Budweiser, whether in its American or Czech variety, would be
likely to employ the diminutive "Bud". There was no appeal against this
decision which, together with that of the Court of Appeal in the passing off
action, has had practical consequences for the businesses of both companies.
In other words, the decisions of the Court of Appeal and Walton J respectively,
have been taken into account and their logical consequences applied by both
companies when organising their marketing arrangements in the United Kingdom
and their continuing competition with each other.
41. The subsequent history is brought up to date in the judgment of Peter
Gibson LJ, and, again, nothing is gained by repetition.
42. The principal issue between AB and BB in the present litigation concerns
the entitlement (or otherwise) of BB to register the mark "Budweiser", omitting
altogether any reference to "Budvar" which until now, largely but not
invariably, has been used by BB in conjunction with Budweiser, while AB has
employed Budweiser, by itself, and without any further embellishment or
additional words.
43. The relevant statutory provisions are set out in Peter Gibson LJ's
judgment. In summary, s11 of the Trade Marks Act 1938 prohibits the
registration as a trade mark of any matter "the use of which would, by reason
of its being likely to deceive or cause confusion or otherwise, be disentitled
to protection ... " Such registration would not be "lawful". S12(1) prohibits
the registration of any trade mark "in respect of any goods or description of
goods that is identical with or nearly resembles a mark belonging to a
different proprietor and already on the register ...".
44. Self evidently, as a trade mark Budweiser Budvar is not identical to
Budweiser. If it were, BB would not be seeking to register the word
"Budweiser" on its own. Mr Hobbs QC is right when he argues that if AB had
thought that some commercial advantage would follow, BB would not have taken
kindly to the addition of the word "Budvar" to its product by AB. Further it
seems to me likely that there is some continuing confusion between the two
products, at any rate in the cases of those individuals who do not appreciate
that there are differences between American Budweiser and Czech Budweiser.
45. As a matter of law the failure of AB's passing off action was not
decisive of the question whether the present application fell within the
statutory prohibitions against registration. The issues arising for
consideration were not and are not identical. Therefore to the extent that the
judge founded his decision on this proposition, and essentially for the reasons
given by Peter Gibson LJ and Ferris J, I disagree with him. Therefore I need
not analyse the point more closely.
46. S12(2) of the 1938 Act provides that in cases of "honest concurrent use,
or ..... other special circumstances" it may be proper to permit the
registration notwithstanding that marks used by two proprietors are identical,
or nearly so. Such registration may be permitted where the specific condition
identified in the sub section (honest concurrent use) applies, or in any other
circumstance which can properly be described as "special".
47. Guidance about the basis on which this discretion should be exercised is
provided by Lord Tomlin in Pirie's Application [1933] 50 RPC 147 at
p159. This decision, and the criteria he identified, do not represent a
reworking of the statutory provision, sufficient to cover every case where the
court is considering whether to exercise its discretion in favour of
registration. Given the nature of the prohibitions in s11 and s12(1) it seems
to me that, normally at any rate, account should be taken of the nature and
extent of the risk of confusion or deception, potentially damaging to the
public generally, and where the mark has already been registered by another
party, damaging to its business, and also whether the party seeking the
exercise of the discretion, has, in the context of a serious competitive
market, conducted its business on the issues in relation to which registration
arises with reasonable integrity. I doubt whether there will be very many
circumstances, or combination of circumstances, that are "so special" that the
discretion would be exercised in favour of a party whose use of a mark could
properly be stigmatised as dishonest. Ultimately the decision depends on all
the relevant facts which arise in the individual case and the balanced exercise
of the judge's discretion. Save on well known principles this court should not
interfere with it.
48. In my judgment the decisive factor in this litigation is that the exercise
of the judge's discretion under s12(2) cannot be impugned. It focused on the
practical realities, at least in part consequent on the sensible application of
the previous decisions of the Court of Appeal and Walton J. Customers for
either product who genuinely appreciate that there are two products, and that
they are different, and who favour the one over the other, are likely to make
their orders by specifying or referring to American Bud, or Budweiser, or Czech
Bud, or Budweiser. If they are ignorant of the difference, or the difference
is immaterial to them, they will ask for Budweiser or Bud and be supplied with
whichever product the vendor has in stock. If he happens to stock both, he
may ask the customer to specify which, and may then, at any rate if business is
slack, become involved in a discussion of the differing qualities of the two
beers, and if in expansive mood, with a history lesson. As to the variety he
may elect to stock, if he only has room for one, his preference will be for the
brew which experience suggests that the majority of his customers prefer. I
remain unpersuaded that any consequent problems following the registrations
sought by both AB and BB would give rise to confusion or difficulty in the
public mind which would be of more than minimal significance and in my judgment
it is too late for anything practical now to be done, without simultaneously
putting one or other product at a significant and unfair commercial
disadvantage as against the other.
49. In view of the way this commercial dispute has developed, and the history
already outlined in so many judgments, and the absence of any evidence to
justify the conclusion that BB acted dishonestly in respect of its use of
Budweiser, or in procuring its customers to use the diminutive "Bud" when
ordering its beer, and balancing both the public interest, and the proper
preservation of the commercial interests of each of the protagonists, these
registrations should be permitted.
50. I agree that the appeals by both AB and BB should be dismissed.
MR JUSTICE FERRIS:
51. The factual basis on which Rimer J decided this case appears in a passage
at the end of his judgment (see [1998] RPC 669 at pages 696-7). It reads as
follows:
"I accept ... that at all times since about 1973 BB has used the word Budweiser
as a trade mark not just as part of the composite Budweiser Budvar label, but
also on its own. As I have said, that was precisely the assertion made against
BB by AB in the passing off action. During the whole of the relevant period
the word Budweiser on BB's labels has been the more prominent of the two words
Budweiser Budvar. It is that word which is commonly going to be recognised and
used by the customer to refer to BB's beer. It appears from the judgments in
the passing off case that BB's beer was, at least by certain traders, stocked
and sold simply as Budweiser (see, for example, [1984] FSR 413 at 456). There
is evidence in these proceedings, albeit of a fairly modest extent, proving the
continued use of the word Budweiser alone in certain advertising and
promotional material relating to BB's beer. There is also evidence that the
beer is commonly referred to simply as Budweiser by those traders and customers
who order it, which I do not find surprising. There is, though, of course, a
considerable volume of evidence showing that it is also widely advertised, sold
and referred to by its full name of Budweiser Budvar. The thrust of the
decision of the Court of Appeal was not, however, that BB was entitled to use
the word Budweiser to describe its beer, but only as part of the composite
Budweiser Budvar. It was entitled to use the word Budweiser in relation to its
beer, just as was AB. That was the basis on which Walton J approached the Bud
proceedings; and, if I may respectfully say so, I consider it was the right
approach."
52. Before us there was a good deal of debate about whether BB itself, as
distinct from its customers, can truly be said to have used the word Budweiser
alone, without Budvar, to any significant extent. Unfortunately there was no
cross-examination on this point in the earlier stages of the case and a degree
of imprecision may have crept in as the result of the treatment as evidence in
this case of material deployed in the passing-off action, when attention may
not have been focused on the issue in the way it has before us. The evidence,
such as it was, has been summarised by Peter Gibson LJ and I do not propose to
explore it further in this judgment. I think that the Judge was right to
describe it as being "of a fairly modest extent".
53. There is more evidence of the use of Budweiser alone if the usages of BB's
customers are taken into account. As to this, I agree with Mr. Hobbs that this
is of less significance than use by BB itself, but I do not think it falls to
be left out of account altogether, because it represents an almost inevitable
colloquial contraction of the full Budweiser Budvar, which is the name that BB
itself normally uses.
54. The matter is not wholly straightforward, but I am content to agree with
the Judge in what he said in the first part of the passage which I have quoted.
What follows about the thrust of the Court of Appeal decision and the following
of the approach of Walton J in the Bud case is, I think, more debatable.
55. Mr. Hobbs argued that Mr. Harkness and Rimer J had looked at the passing
off action on the wrong basis. First they had failed to appreciate that the
test to be applied in a passing off action is different from that which has to
be applied to a trade mark objection under Section 11 of the 1938 Act. In a
passing off case the issue relates to the private rights of the parties. The
only interest which the court is prepared to protect is the proprietary
interest of a trader in his goodwill. If the court is not satisfied that a
claimant has a goodwill to protect it will not intervene at the instance of
that claimant and the other issues which have to be considered in relation to a
claim in passing off will not arise. In contrast to this, the issue under
Section 11 is one between the applicant for registration and the public (see
particularly Re Dunn's Trade Mark (1890) 7 RPC 311 at 319 and BALI
Trade Mark [1969] RPC 472 at 495-496). Hence the fact that a party has
failed in a passing off action against a trader who has used a particular trade
name is not determinative of the question whether that trader is entitled to
register the name as a trade mark. As it was put by Lord Upjohn in the BALI
case (at page 496):
"The whole emphasis is upon the question whether the owner of the mark in suit,
assuming him to bring some action against another trader, would be disentitled
from succeeding for any of the reasons set out in section 11; not whether
anyone would succeed against him. This is the chief distinction between
section 11 and section 12. Section 12 is principally a weapon in the hands of
a registered proprietor though it is not necessary that he personally should
object."
56. Having regard to this difference it is necessary to examine exactly what
was the basis on which the passing off action was decided in the Court of
Appeal. As to this, it is apparent from the judgment of Oliver LJ that he
considered that AB's claim in passing off had to be looked at at the time when
BB first entered the English market in 1973/74. At that time AB already had
significant sales of its beer to American forces in this country through their
PX sales. He said that the question to be considered was
"How far is it an essential ingredient of a successful claim in passing off
that the plaintiff should have established in this country a business in which
his goods or services are sold to the general public on the open market?" (see
[1984] FSR 413 at 462).
57. O'Connor and Dillon LJJ approached the matter in a similar way (see at
pages 471 and 473 respectively). All three members of the court concluded that
the suggested ingredient is an essential one. Accordingly AB's action failed
because AB could not establish the existence of goodwill at the relevant time
and the suffering or likelihood of suffering damage to that goodwill, these
being two of the essentials for a successful passing off action as expounded in
Erven Warnink BV v J. Townend & Sons (Hull) Ltd [1979] AC 731.
58. On this analysis it is, in my view, going too far to say that the thrust
of the Court of Appeal decision in the passing off action was that BB "was
entitled to use the word Budweiser in relation to its beer, just as was AB".
The Court of Appeal did not directly decide that there was any such
entitlement. What it decided was that AB could not establish the essential
ingredients of a passing off action against BB. It was not suggested that BB
could do so against AB. Thus neither party could complain of what the other
had been doing. To elevate this into an entitlement has, I think, a potential
to mislead. Certainly it cannot be said, in my view, that the Court of Appeal
decision has disposed of AB's Section 11 objection to BB's application.
59. This matter must be determined by applying the tests prescribed by Section
11 itself. One can leave out of account any question of the mark applied for
being contrary to law or morality or scandalous or objectionable on grounds
other than a tendency to deceive or cause confusion. The question is whether
the use of the mark Budweiser by BB would be disentitled to protection in a
court of justice by reason of being likely to deceive or cause confusion. It
is clear that this has to be approached as a hypothetical question which looks
to the future use of the trade mark on the basis that BB may use the mark in
any way in which a registered mark may ordinarily and fairly be used (see GE
Trade Mark [1973] RPC 297 at page 320 per Lord Diplock). Hence
representations on the part of BB as to how it has used the word Budweiser
before registration and how it would continue to use it are not pertinent if,
after registration, BB could lawfully use it differently or more extensively.
What has to be considered is what BB would be entitled to do as trade mark
owner if it were so minded, not what it says it intends to do.
60. The test of whether the use of a particular name or mark would cause
confusion is, I think, the same in both passing off and trade mark law. In the
passing off action both Whitford J and the Court of Appeal took the view that
there was and would remain a degree of confusion between the products of AB and
BB respectively. While there were references to a degree of commercial
adjustment to this situation these do not alter the fact that at first instance
and on appeal the decision proceeded on the basis that there was and would
remain an underlying element of confusion resulting from the use of BB's
Budweiser Budvar and AB's Budweiser. Turning to trade mark registration, it is
difficult to see why BB would wish to register Budweiser alone as a trade mark
unless it thought that it would thereby obtain a degree of commercial advantage
which it does not now enjoy. The use of the mark in order to secure this
advantage is bound, in my view, to give rise to a tendency for the existing
confusion to increase. This is not, I think, something which the court can
accept with equanimity. In My Kinda Town Ltd v Soll [1983] RPC 407,
which was a passing off case, Oliver LJ said (at page 425):
"The question to be asked is, no doubt, in all cases the same - is the get-up,
or the method of training" (sic, presumably this is a misprint for `trading')
"or the use of a particular trading name by the defendants calculated to lead
to the belief that their business is the plaintiff's business? But it becomes
an extraordinarily difficult question to answer where there is already a
substantial potentiality for confusion of the two businesses, simply by reason
of their being engaged in the same trade. That does not mean, of course, that
a defendant is legitimately entitled to build on and increase that potentiality
in such a way that confusion becomes worse confounded, but it does mean that
where evidence of actual confusion is tendered it has to be approached ... with
the caveat that there may well be reasons why it occurs which involve no
question of legal liability at all."
61. In the present case the question being, as I have said, a hypothetical
one, we are not concerned to appraise evidence of actual confusion. But the
indication that it is not legitimate for a party to build on and increase an
existing potential for confusion "in such a way that confusion becomes worse
confounded" is, in my judgment, of assistance. It seems to me that the
registration by BB of the word Budweiser alone, when no such registration now
subsists, would build on and increase the potential for confusion (indeed the
reality of such confusion) and that this is something which leads to the
conclusion that the use of that word is disentitled to protection in a court of
justice by reason of confusion.
62. I therefore differ from the Judge on this point and find that the Section
11 objection is made out on this basis. To the extent that Walton J based his
conclusion in the Bud case on the view that the matter had effectively been
determined in the passing off action I think that he too was wrong, although I
do not question the correctness of his decision so far as it was based on other
grounds.
63. It then becomes necessary to consider the effect of Section 12(2) of the
1938 Act. At first sight it might be thought that this qualifies only Section
12(1). It was, however, common ground before us that Section 12(2) is capable
of overriding Section 11 as well as Section 12(1). So far as material it
provides:
"(2) In case of honest concurrent use, or of other special circumstances which
in the opinion of the Court ... make it proper so to do, the Court may permit
the registration by more than one proprietor in respect of ... the same goods
... of marks that are identical or nearly resemble each other."
64. The marks which AB and BB respectively seek to register are, of course,
identical and so are the goods in respect of which registration is sought. It
would not be lawful to register both these marks except in exercise of the
power conferred by Section 12(2). BB's preferred result is that both marks
should be allowed to proceed to registration, with Section 12(2) being applied
in favour of both. AB's contention is that Section 12(2) should not be applied
for the benefit of BB, with the result that its own application would be the
only one to succeed and it need place no reliance itself on Section 12(2).
65. As I see it the questions which need to be considered are (i) whether
there has been honest concurrent use of the name Budweiser; (ii) whether there
are other special circumstances; and (iii) if either (i) or (ii) is made good,
whether the discretion of the Court should be exercised in favour of
registration of the identical marks.
66. As to the first of these matters, no doubt is cast upon the honesty of
BB's conduct. The question is whether BB's use of the name Budweiser amounts
to use which can appropriately be described as concurrent with AB's undoubted
use of the same name. Mr. Hobbs argued that it cannot because it was use only
as part of the composite name Budweiser Budvar´. But as I have already
said, I agree with the conclusion of Rimer J that "at all times since about
1973, BB has used the word Budweiser as a trade mark not only as part of the
composite Budweiser Budvar label but also on its own". This finding was in my
view justified not only by the "fairly modest" use of Budweiser on its own, but
by the fact that the word forms the predominant element of the composite name
and the giving of proper, but not undue, weight to the way in which BB's beer
is referred to by traders and customers. Having regard to this conclusion I am
satisfied that there has been honest concurrent use. I am fortified in this
view by the fact that Whitford J seems to have taken a similar view in the
passing off case, as did Walton J in the Bud case.
67. It is not, therefore, strictly necessary to consider whether there are
"other special circumstances", although I propose to state my conclusion as the
matter is really one of impression, not capable of much elaboration. Looking
at all the facts of this case the circumstances appear to me to be very
unusual. Even if I were wrong in thinking that what has occurred amounts to
honest concurrent user, I would take the view that the circumstances are, by
any standards, "special".
68. That leaves the question whether the Court ought to exercise the
discretion conferred by Section 12(2) in favour of BB. The discretion was that
of Rimer J rather than of this Court. Although I disagree with his conclusion
on Section 11 this does not affect his decision on Section 12(2), which he
carefully expressed to be made in case he was wrong on the Section 11
objection. I agree with that part of his decision and would reach the same
conclusion if the discretion were mine.
BB's appeal
69. Although BB has appealed against that part of the order of Rimer J
which dismissed BB's appeal against the decision of Mr. Harkness to allow AB's
applications, as well as BB's, to proceed to registration, Mr. Kitchin
explained to us that this appeal was mainly precautionary, to cover the
possibility that we should not allow BB's own application to proceed. In that
event BB contended that AB's applications should not proceed either. As that
position has not been reached, I do not find it necessary to go into BB's
appeal
Conclusion
70. In my judgment both appeals should be dismissed.
Order: Appeal and cross-appeal dismissed with costs to be assessed. Leave to
appeal to House of Lords refused.
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