• Court Diary

    The Snarling Buds’ Affray

    In a recent decision, the Court of Appeal has cast some light on what counts as use of a trade mark in the UK.

    The case was part of the long running dispute between the US brewer, Anheuser Busch (AB), and their Czech competitor, Budejovicky Budvar (BB), over the ownership of the trade marks Budweiser and Bud. AB had applied to revoke two of BB’s UK trade mark registrations covering beer and similar in Class 32, under Section 46 of the 1994 Trade Marks Act, on the ground of five years non-use. The registrations protected stylised forms of the marks Budweiser Budbräu and Bud. The evidence showed that a variation of the former mark had been used by BB on the neck of bottled beer sold in the UK, the variation being the two words in plain capital letters configured to form a circle. BB also showed that they had used the combination Bud-Budvar-Budweiser in the form of a dot matrix print on the top of boxes of beer sold in this country, although not on the bottles themselves. About a third of these boxes were sold to consumers from cash and carry outlets and the like.

    Under Section 46(2) of the 1994 Act, use of a different mark to the one registered counts as use (of the registered mark) if it is “in a form differing in elements which do not alter the distinctive character” of the registered mark. The question to be decided in both of the revocation actions was therefore whether BB’s use qualified as genuine use of their registered marks under Section 46(2).

    In both cases, the Hearing Officers found that BB’s use did save their registrations. However, on appeal, the Court (Mr Thorley Q.C.) disagreed (2002 RPC 38). On further appeal, the Court of Appeal reinstated the Hearing Officers’ original decisions, ruling as follows:

    • For the purposes of Section 46(2), it was necessary to identify the part (or parts) of a registered mark that gave it its distinctive character. A necessary factor in this analysis was the impact of the registered mark on the average consumer.
    • In these cases, the Hearing Officers had decided that the distinctive feature of the registered marks were the words Budweiser Budbräu and Bud respectively. The stylised nature of both marks did not detract from this. In both instances, therefore, the analysis made had been correct.
    • It followed that the use of Budweiser Budbräu in plain block capitals on the neck of bottled beer sold by BB in the UK amounted to genuine use of the stylised, registered mark (under Section 46(2)).
    • As far as BB’s use of Bud-Budvar-Budweiser in dot matrix form on boxes of beer was concerned, the Court of Appeal agreed with the Hearing Officer that this was use of the separate mark Bud, rather than a composite mark. It followed that this use also amounted to genuine use of the stylised registered mark.
    • For these reasons, both applications to revoke BB’s registrations were dismissed.

    BB had also shown use of its stylised, registered Bud mark on beer mats in the UK. The High Court had decided that this counted as genuine use of the registered mark in respect of beer. The Court of Appeal declined to comment on this aspect of the case.

     

    Comment

    The Court of Appeal’s comments on the application of Section 46(2) are to be welcomed. In the above cases, the stylisation of the word marks was limited, and it was therefore clear that the distinctive feature, in both cases, was the word (or words). How far this can be taken is a matter of judgement. There must be a point, however, when a registered mark is so heavily stylised (as in, for example, some signatures) that use of the same word or words in block capitals would not save the registration under Section 46(2).

    It is perhaps surprising that the use of Bud in the combination Bud-Budvar-Budweiser was found to be separate use of the registered mark. The combination could easily be viewed as either a composite mark or even a slogan in which Bud is inextricably linked to the rest of the expression. If that had been the case, then the registered mark (Bud stylised) would presumably not have been saved, since the expression as a whole clearly has certain distinctive elements not present in the registered mark.

     

    Stop Press:

    It is understood that just prior to going to press, the House of Lords denied AB’s appeal against the Court of Appeal’s ruling.