Anheuser Busch Inc. v Budejovicky Budvar NP

Factual and Procedural Background

The litigation concerns a long-standing trademark dispute between two companies, hereafter referred to as Company A and Company B, over the use and registration of the mark "Budweiser" in the United Kingdom. The dispute dates back to the early 20th century, with initial conflicts resolved in the United States in 1911. Subsequent litigation in the UK included a passing off action brought by Company A against Company B, reported at [1984] FSR 413, and a related "Bud" trademark action decided by Walton J in 1987 ([1988] RPC 535). These decisions recognized that both companies could use the trademark "Bud" and that there was an inevitable colloquial contraction of "Budweiser" to "Bud". The current litigation focuses on Company B's entitlement to register the mark "Budweiser" alone, without the addition of "Budvar", which it had previously used in conjunction with the mark. Company A opposes this registration. The case was heard by Mr. Justice Rimer in the High Court, with appeals subsequently heard in the Court of Appeal.

Legal Issues Presented

1. Whether Company B is entitled to register the trademark "Budweiser" alone under the Trade Marks Act 1938, particularly in light of the statutory prohibitions in sections 11 and 12.
2. Whether the failure of Company A's passing off action is determinative of Company B's entitlement to registration under the Trade Marks Act.
3. Whether the court should exercise its discretion under section 12(2) of the Trade Marks Act 1938 to permit registration of identical or nearly identical marks by both companies based on honest concurrent use or other special circumstances.

Arguments of the Parties

Appellant's Arguments (Company A)

• Company A argued that the use of "Budweiser" by Company B without the distinguishing "Budvar" would increase confusion among consumers.
• They contended that the passing off action failure was not determinative but that the statutory tests under section 11 of the Trade Marks Act should prevent Company B's registration.
• Company A maintained that Company B's use of "Budweiser" was primarily as part of the composite "Budweiser Budvar" and that use of "Budweiser" alone was limited and insufficient to justify registration.
• They argued that registration of the mark by Company B would build on and increase the potential for confusion, which the court should not permit.

Respondent's Arguments (Company B)

• Company B asserted it had used the word "Budweiser" as a trademark both alone and as part of "Budweiser Budvar" since about 1973.
• They argued that their use was honest and concurrent with Company A's use, justifying registration under section 12(2) of the Trade Marks Act.
• Company B emphasized the practical realities of the market, where consumers distinguish or do not distinguish between the two products, and that denying registration would unfairly disadvantage their commercial interests.
• They contended that the circumstances were sufficiently special to justify the exercise of the court's discretion to allow registration of identical marks for the same goods.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully distinguished between the private rights protected by passing off actions and the public interest considerations underpinning trade mark registration under the Trade Marks Act 1938. It noted that the failure of Company A's passing off claim did not preclude Company B's application for registration, as the statutory tests under sections 11 and 12 of the Act required separate analysis.

Section 11 prohibits registration of marks likely to deceive or cause confusion, while section 12(1) prevents registration of marks identical or nearly resembling those already registered by others. Section 12(2) grants the court discretion to permit registration in cases of honest concurrent use or other special circumstances.

The court found that Company B had used the mark "Budweiser" both alone and as part of "Budweiser Budvar" since about 1973, and that this use was honest and concurrent with Company A's use. The court acknowledged a degree of ongoing confusion in the market but considered the practical realities, including consumer awareness and commercial adjustments made by both companies over many years.

The court rejected the view that the passing off decisions conferred an entitlement to use the mark "Budweiser" alone but accepted that the prior decisions influenced the commercial context. It concluded that registration by Company B of the mark "Budweiser" alone would increase potential confusion but that this confusion was unlikely to be of more than minimal significance.

Balancing the interests of the public and the commercial rights of both companies, and given the absence of any evidence of dishonesty by Company B, the court exercised its discretion under section 12(2) to permit registration of the mark by both parties. The court emphasized that this was a rare and special circumstance arising from a unique historical and commercial context.

Holding and Implications

The court DISMISSED both the appeal by Company A and the cross-appeal by Company B, thereby allowing the registration applications of both companies for the mark "Budweiser" to proceed.

This decision maintains the status quo in the commercial market between the two companies, permitting both to use and register the mark "Budweiser" despite the potential for some consumer confusion. No new legal precedent was established; rather, the ruling reflects the court's discretionary balancing of competing commercial interests in a unique factual context. The court refused leave to appeal to the highest appellate court.