Budejovicky Budvar Narodni Podnik v Anheuser -Busch Inc

Long-established honest concurrent use of identical marks for identical goods can prevent invalidation under article 4(1)(a) where it neither has nor is liable to have an adverse effect on the mark’s essential origin function. The origin guarantee may, in that exceptional setting, identify the goods of either established user. Some continuing and more than negligible confusion does not alone establish impairment.

A proprietor relying on Trade Marks Act 1994 section 5(1) must plead and prove the facts needed to establish adverse effect. An appellate court may allow a point of law raised on the existing evidence, but need not remit the matter for a new evidential case where the party bearing that burden failed to advance it.

Anheuser-Busch sought cancellation of Budejovicky Budvar’s later registration of Budweiser for identical goods. The Hearing Officer allowed the challenge under section 5(1) of the Trade Marks Act 1994, treating identity of marks and goods as decisive. Norris J dismissed Budejovicky Budvar’s appeal on 19 February 2008.

In an earlier judgment, [2009] EWCA Civ 1022, the Court of Appeal resolved domestic defences and referred questions to the Court of Justice of the European Union. On the resumed appeal, the CJEU’s answer established that long honest concurrent use could defeat the challenge if it did not adversely affect the essential function of the earlier mark. The issues were whether Budejovicky Budvar could raise that point, whether the existing evidence showed adverse effect, and whether the case should be remitted for further evidence.

1. Appeal allowed. The Court held that Anheuser-Busch could not invalidate Budejovicky Budvar’s registration. Under article 4(1)(a) of Council Directive 89/104/EEC, long-established honest concurrent use of identical marks for identical goods falls outside the prohibition where it neither has nor is liable to adversely affect the essential function of the earlier mark.
2. The CJEU’s ruling was not confined to cases of merely negligible confusion. The earlier findings showed some real confusion, but the beers had co-existed for many years with different tastes, prices and get-ups. Consumers were by and large aware of the difference. In those exceptional circumstances, each mark’s origin guarantee signified the goods of either established user. Continuing confusion alone did not show impairment of that guarantee.
3. Sir Robin Jacob held that Budejovicky Budvar could raise the legal point on appeal because it rested on the evidence already before the Hearing Officer. It had pleaded the point in its notice of appeal and Anheuser-Busch had not been taken by surprise. A different conclusion could follow where the new point required factual investigation and evidence.
4. The Hearing Officer had erred in treating concurrent use as irrelevant once marks and goods were identical. Anheuser-Busch bore the burden of pleading and proving an adverse effect on the essential function of its mark. It had alleged neither such effect nor facts capable of proving it. Remittal would require a new case caused by that failure and was refused.
5. Warren J agreed that the appeal should be allowed. Although he considered the fairness objection more substantial, confusion evidence could not establish the necessary adverse effect and Anheuser-Busch had identified no further evidence capable of doing so despite having had ample notice. Ward LJ agreed.

• Court of Appeal (Civil Division): Allowed Budejovicky Budvar’s appeal. Its earlier judgment, [2009] EWCA Civ 1022, decided certain domestic-law defences and referred questions of trade mark law to the Court of Justice of the European Union.
• High Court: Norris J dismissed Budejovicky Budvar’s appeal from the Registry on 19 February 2008.
• Trade Marks Registry: On 2 August 2007, the Hearing Officer upheld Anheuser-Busch’s challenge under section 5(1) of the Trade Marks Act 1994.