The European Court of Justice confirms two users of the identical trade mark BUDWEISER for beer

On Thursday 29th September the European Court of Justice confirmed that two longstanding users of the identical trade mark BUDWEISER for beer could both continue to use and register the mark in the UK.

The ECJ refused to allow Anheuser-Busch InBev NV (ABI) to cancel the BUDWEISER trade mark registration of its competitor, Budejovicky Budvar NP, in the UK.

This finding will provide some comfort for “honest concurrent users” of identical marks in the European Community, although whether it will end the dispute over the BUDWEISER mark, now entering its sixth decade, is another matter.

Budvar and AB InBev have been marketing their beers in the UK using the Budweiser sign since 1973 and 1974 respectively. In February 2000 the Court of Appeal had held that both Budvar and AB InBev could register the sign as a trade mark and both their applications proceeded to registration on the same day.

In May 2005, AB InBev made an application for a declaration that Budvar's trade mark was invalid, on the basis that it is a later trade mark.

The action was expertly timed, being launched exactly one day short of the statutory acquiescence period, thus ensuring that Budvar could not avail themselves of this defence, whilst by the time notice of the action had been served on Budvar they were out of time to launch a counter-attack.

The case was appealed from the Trade Marks Registry to the High Court, who referred a number of questions regarding the nature and timing of acquiescence to the ECJ

On Thursday the ECJ held that if consumers are unlikely to confuse the origin of products bearing the same trade mark, concurrent use of those marks cannot be said to have an adverse effect. In doing this, the ECJ focused on the fact that the necessary conditions for conflict / infringement were not satisfied rather than considering defences or barring the action on the grounds of acquiescence.

In a statement, the ECJ confirmed that in this case “a long period of honest concurrent use of the two identical trade marks concerned neither has, nor is liable to have an adverse effect” on AB InBev’s trade mark, since UK consumers “are well aware of the difference” between the products of each manufacturer.

The approach of the ECJ is consistent with the market reality in the European Union, where the CTM system in particular has to deal with the fact that there inevitably a number of concurrent users of identical trade marks, either due to a long lost common origin or completely independent adoption.

Whilst not disturbing the clear interpretation of the five year acquiescence rule, this decision further develops the concept of the “essential function” of a trade mark and applies this to the test for conflict / infringement, even in cases where an identical marks covering identical goods on the face of the Act would make a finding of conflict unavoidable.

The unusual facts in this case are clearly key to the ECJ’s decision and in particular the finding that UK consumers were perfectly capable of telling the two brands apart. The result would likely have been very different if the evidence indicated that consumers were being confused.