Budejovicky Budvar Narodni Podnik v Anheuser-Busch Inc

Using substantive and procedural rules to obtain a tactical advantage is not, without more, an abuse of process or unconscionable conduct. Equitable estoppel requires conduct inducing a mistaken belief and detrimental reliance; mere surprise or strategic delay does not suffice. In long-standing honest concurrent use of identical marks, Article 9 of Council Directive 89/104/EEC raises arguable questions about whether acquiescence includes enforced tolerance where use could not be prevented, and whether the five-year period can begin before registration. Article 4(1)(a) may also require consideration of whether the guarantee of origin is impaired. These questions were not acte clair and required reference to the European Court of Justice.

Two brewers had honestly used and registered identical Budweiser marks in the United Kingdom after prolonged litigation and concurrent use. AB applied in May 2005 to invalidate BB’s registration under Article 4(1)(a) of Council Directive 89/104/EEC, relying on its earlier application date and the fact that five years had not elapsed since registration. BB argued that AB was prevented by equitable estoppel and that Article 9 applied after the parties’ long-known coexistence. The appeal was from the Chancery Division decision of Norris J. The central issues were the meaning and timing of acquiescence and whether Article 4(1)(a) permits an exception for long-established honest concurrent use.

1. English law defences. The Court of Appeal rejected the equitable estoppel and abuse of process arguments. The point had not been pleaded or raised before the Trade Marks Registry, and the court would not assume facts showing that AB had deliberately lulled BB into security. Even on the assumed facts, a party may use substantive and procedural rules to its legitimate advantage. Mere surprise is not an abuse of process. Abuse would arise in cases such as re-litigating decided matters or vexing a party again without good reason: Johnson v Gore Wood [2002] 2 AC 1.
2. Applying the unconscionability approach in Habib Bank v Habib Bank AG Zurich [1981] 1 WLR 1256 and the five probanda stated in Wilmott v Barber (1880) 15 Ch. D 96, the necessary elements were absent. BB had not shown a mistake about its legal rights, detrimental reliance, AB’s knowledge of such a mistake, or encouragement by AB. The equitable estoppel defence therefore failed.
3. Article 9. The meaning of acquiescence in Article 9(1) was not acte clair. The court considered both the narrower concept of knowingly standing by while able to stop use and the wider concept of enforced tolerance. The travaux préparatoires supported BB’s contention that the provision was directed to legal certainty after prolonged known use. The court also considered that acquiescence might begin before registration, given the availability of unfair competition remedies under the Paris Convention.
4. Article 4(1)(a). The apparently automatic same-mark/same-goods rule might require qualification where long-established honest concurrent use means that the mark no longer guarantees origin from one proprietor. The court noted exceptions recognised in Hölterhoff v Friesleben, Adam Opel v Autec and Celine v Celine, and referred the further question to the European Court of Justice.
5. The original Council Directive 89/104/EEC was used because the relevant facts pre-dated Directive 2008/95/EC, following the approach identified in L’Oréal, Case C-487/07. The court did not decide any future infringement claim under Article 5(1)(a). Questions were formulated for reference, with liberty to propose essential amendments within 14 days.

• Court of Appeal (Civil Division)—heard the appeal from the Chancery Division, rejected the English law defences, and decided that questions under Council Directive 89/104/EEC required reference to the European Court of Justice.
• Chancery Division—the appeal was from a decision of Norris J. The judgment records that Norris J had followed and agreed with Sunrider Corp. v Vitasoy International [2007] EWHC 37 (Ch) on the relevant acquiescence issue.