Anheuser Busch Inc. v Budejovicky Budvar N.P.

Under section 11 of the Trade Marks Act 1938, the objection is between the applicant and the public. It requires a hypothetical assessment of any normal and fair use of the mark after registration, rather than an assessment confined to the applicant’s existing use. A failed passing-off claim does not determine the section 11 issue. Section 12(2) is a distinct provision. It may override a section 11 objection where there has been honest concurrent use or other special circumstances. Its discretion must be exercised on all the circumstances, including the risk of confusion, honesty, public interest and commercial consequences. The prescribed factors in Pirie’s Application are guidance, not an exhaustive code.

Anheuser Busch Inc. and Budejovicky Budvar N.P. competed over the use and registration of BUDWEISER and related marks for beer. Earlier passing-off proceedings failed because Anheuser Busch lacked the necessary goodwill at the relevant time, and earlier trade mark proceedings permitted registration of BUD as a contraction of BUDWEISER.

In the present proceedings, the Assistant Registrar allowed applications by both parties to register BUDWEISER. Rimer J dismissed both appeals. The Court of Appeal considered whether Budejovicky Budvar’s application for BUDWEISER alone was objectionable under sections 10, 11, 12, 17, 21 and 68 of the Trade Marks Act 1938, and whether section 12(2) justified registration despite the likelihood of confusion.

1. Appeal and cross-appeal dismissed. The registrations were permitted, with costs to be assessed. Leave to appeal to the House of Lords was refused.
2. Lord Justice Peter Gibson held that the passing-off decision did not determine the section 11 objection. Passing off concerned the private rights of the parties, whereas section 11 concerned the applicant and the public. The question arose at the date of the application and was whether any normal and fair use of BUDWEISER by Budejovicky Budvar would be likely to deceive or cause confusion.
3. Normal and fair use included labelling and promoting the beer as BUDWEISER alone. That use created a real tangible danger of increasing the existing confusion with Anheuser Busch’s beer. The section 11 objection was therefore made out. The section 2 preservation of passing-off rights did not alter that conclusion.
4. The section 10 and section 21 objections were separate, but section 12(2) expressly contemplated registration by more than one proprietor of identical or nearly resembling marks. Those objections therefore yielded to section 12(2).
5. The court accepted that there had been honest concurrent use. Budejovicky Budvar had used BUDWEISER alone to a limited extent, the word was predominant in BUDWEISER BUDVAR, and traders and customers commonly used BUDWEISER or BUD to refer to its beer. The absence of dishonesty was undisputed.
6. The same matters, together with the earlier litigation and registration of BUD, constituted special circumstances. Section 12(2) conferred a broad discretion, to be exercised on the particular facts. The factors identified in Pirie’s Application were not determinative in every case.
7. Lord Justice Judge agreed that the section 11 objection was not resolved by the passing-off decision and that the section 12(2) discretion could not be impugned. Mr Justice Ferris likewise held that registration would increase the potential for confusion, but agreed that honest concurrent use and the unusual circumstances justified exercising the discretion in favour of registration.

• Court of Appeal (Civil Division): Appeals from Rimer J’s decision reported at [1998] R.P.C. 669 dismissed.
• High Court, Chancery Division: Rimer J dismissed appeals from the Assistant Registrar’s decision permitting both parties’ applications to proceed to registration.
• Assistant Registrar: Mr Harkness permitted the applications by both parties to proceed to registration.