Podnik v Anheuser-Busch Inc, Court of Appeal - Civil Division, October 29, 2002, [2003] RPC 25,[2002] EWCA Civ 1534

Resolution Date:October 29, 2002
Issuing Organization:Civil Division
Actores:Podnik v Anheuser-Busch Inc
 
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Case No: A3/2002/0048, A3/2002/0049

Neutral Citation No [2002] EWCA Civ 1534

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM CHANCERY DIVISION

Mr Simon Thorley, QC, (sitting as a Deputy High

Court Judge)

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 29th October, 2002

Before :

LORD JUSTICE PILL

LORD WALKER OF GESTINGTHORPE

and

SIR MARTIN NOURSE

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Between :

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James Mellor (instructed by Messrs. Blair & Co. London) for Budejovicky Budvar Narodni Podnik

Michael Bloch, QC and Michael Edenborough (instructed by Messrs. Macfarlanes London) for Anheuser-Busch Inc

Hearing dates : 23/24 July, 2002

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JUDGMENT : APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS)

Sir Martin Nourse:

Introduction

1. These two appeals from decisions given on 3rd December, 2001 by Mr Simon Thorley, QC, sitting as a deputy judge of the Chancery Division, raise questions of construction on s.46 of the Trades Mark Act 1994 (Revocation of registration). Before the judge there were three appeals against decisions of hearing officers acting for the Registrar of Trade Marks, but we are not concerned with the subject matter of the third appeal and I need not further refer to it. Nor is it necessary to repeat the procedural history of the matter as related by the judge.

2. The judge described the matter as a further round in the long running dispute between Anheuser-Busch Inc ("AB") and Budejovicky Budvar Narodni Podnik ("BB"), who are brewers in the United States and the Czech Republic respectively. He added that the beers of both companies are sold in this country under the trademark "Budweiser", and that the name of both beers is abbreviated by a significant number of their customers to the word "Bud". Much of the earlier and somewhat unusual history of the dispute can be gathered from the reports of passing off proceedings between the parties before Whitford J and in this court [1984] FSR 413 and BUD Trade Mark (Walton J) [1988] RPC 535.

3. So far as material to the present appeals, s.46 of the 1994 Act provides:

"(1) The registration of a trade mark may be revoked on any of the following grounds-

(a) that within the period of 5 years following the date of completion of the registration procedure it has not been put to genuine use in the United Kingdom, by the proprietor or with his consent, in relation to the goods or services for which it is registered, and there are no proper reasons for non-use;

(b) that such use has been suspended for an uninterrupted period of five years, and there are no proper reasons for non-use;.....

For the purposes of sub section (1) use of a trade mark includes use in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered, ..."

Each of the two appeals is concerned with the meaning of the words "use in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered" in sub section (2). The second appeal is also concerned with the meaning of the words "genuine use" in sub section (1)(a).

The First Appeal

The first appeal relates to a trade mark registered in the name of BB under number 807395 in Class 32 of the register in respect of "beer, ale and porter". It is in the following form:

On 24th July 1998 AB applied for the revocation of the registration under s.46(1)(b) of the 1994 Act on the ground of five years non-use. The application came before Mr Salthouse acting for the Registrar who, on 11th April, 2001, dismissed it. AB's appeal was allowed by the judge. With the permission of Lord Justice Robert Walker, BB appeals against the judge's decision and asks for Mr Salthouse's dismissal of the application to be reinstated.

BB has accepted throughout that there has been no use of the Budweiser Budbräu mark in the stylised form in which it was registered. But it claims that there was continuous use during the relevant five year period "in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered", within s.46(2). Two such uses were relied on by BB before Mr Salthouse. The first, clearly the more important of the two, was a label used on the neck of a bottle, which Mr Salthouse described thus:

The whole of the neck label is itself registered as a trade mark. The label consists of a central part which imitates a red wax seal. The words BUDWEISER BUDBRÄU are printed in block capitals in a circle on the seal. The words encircle a motif comprising a shield with a lion upon it, superimposed on a castle with towers. Beyond the red seal on each side is a white area banded with gold with, in the white area, a large stylised letter `B' in red.

Later, Mr Salthouse referred to evidence filed by BB, which indicated that in the three years 1992-1995 sales of beer in bottles with the neck label on them had amounted to £20m. He added that that was not disputed by AB and that that use could scarcely be regarded as anything other than genuine in nature. AB has not questioned that conclusion.

Mr Salthouse expressed his finding as to the neck label as follows:

(20) The first issue to be determined is whether the average consumer's reaction to the words BUDWEISER BUDBRÄU in the graphical form in which it is registered, would be any different to the word in block capitals, or in any other conventional form of presentation.....

(21) In my view what makes the mark in suit distinctive is that it is clearly recognisable as the words BUDWEISER BUDBRÄU. The different fonts and the underlining do not detract from, or add anything to, the central message. Consumers are used to different fonts being used and would see the underlining as a typical advertising flourish. I therefore find that the use of the words BUDWEISER BUDBRÄU in block capitals is use of the registered mark within the meaning of s.46(2) of the Act.

Later, Mr Salthouse added:

(23) In my view the average consumer would view the words Budweiser Budbräu as being the distinctive element of the neck label mark. Heraldic devices such as those included in the neck label are common on bottles containing alcoholic beverages. The various individual elements are relatively indistinct in themselves when compared to the words, and even when considered collectively do not overcome the basic tenet that words speak louder than devices. The words clearly indicate the origin of the goods.

Before the judge it was common ground that an appeal to the High Court in a revocation application is by way of review and not re-hearing. The judge recognised that he could only interfere in the decision below if he was satisfied that Mr Salthouse had erred in principle. He was satisfied that Mr Salthouse had made two such errors in paragraphs (20) and (21) of his decision. He said:

First, the correct approach to interpreting s.46(2) does not require a question to be asked as to what the average consumer's reaction to a mark is. The section requires the determination of the elements that make up the distinctive character of the mark and this is a matter which is to be viewed, in my judgment, through the eyes of the Registrar in assessing whether or not the mark should be registered. The two approaches may lead to the same result but they may not.

Secondly, I believe that Mr Salthouse was wrong in seeking to ascertain what was the central message of the mark. This is not the statutory test. The fact that the words Budweiser Budbräu are the most striking feature of the mark can make no difference. If Mr Salthouse were right then I anticipate that in a majority of cases use of a trade mark in ordinary letters, whether in upper or lower case, would constitute use of a stylised version of the mark. As a matter of generality that must be wrong.

The judge therefore proceeded to consider the question of s.46(2) afresh. Earlier, he had identified four elements that contributed to the overall distinctiveness of the mark: first, the word Budweiser; second, the word Budbräu; third, the specific fonts used for the two words and the contrast in fonts; fourth, the inter relationship of the two words, one being above the other and following behind the enlarged B of Budbräu. Having said that the use of the neck label did not embody the third and fourth of those elements, the judge continued:

To my mind these two elements each contribute a part to the distinctive character of the mark. This part is therefore missing in the use relied upon and other matter such as the device is added. I have no hesitation in holding that the use of the words Budweiser Budbräu in this context is a use in a form...

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