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No abuse, no answers: AG gives Budweiser's dirty tricks a clean bill of health

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

Amazing! Having turned the magician into a little red ball, the rabbit then proceeded to make the Budvar trade mark vanish ...

The moment he said he'd go pop if there was anything else coming from the Court of Justice of the European Union today, the IPKat realised that the fates were bound to conspire against him. Well, here's another whopping great Opinion from the Court, this time from Advocate General Trstenjak, in Case C?482/09 Bud?jovický Budvar, národní podnik v Anheuser-Busch, Inc., on a reference from the Chancery Division, England and Wales.

The facts in the case leading to this reference for a preliminary ruling can be found here, in an earlier IPKat post. The casus belli is a dirty trick played by Anheuser-Busch on Bud?jovický Budvar, národní podnik, applying for a declaration of invalidity of the latter's mark, which was concurrently valid with its own, just one day before the expiry of the five-year period of acquiescence and when Bud?jovický Budvar had no opportunity to respond to it.

The questions relate to the issue of whether the trick in question was legal under the harmonised European Union trade mark law, not whether it was dirty, and focused on the interpretation of the words of Article 4(1)(a) of the Council Directive 89/104 on the approximation of trade mark laws:

"Further grounds for refusal or invalidity concerning conflicts with earlier rights

?1. A trade mark shall not be registered or, if registered, shall be liable to be declared invalid:

(a) if it is identical with an earlier trade mark, and the goods or services for which the trade mark is applied for or is registered are identical with the goods or services for which the earlier trade mark is protected; ...".

The Advocate General has advised the Court today that it doesn't need to answer the questions, since neither the retroactive application of Article 4(1)(a) nor its application from the date of entry into force of the directive are possible in the main proceedings. Accordingly,

"... in a case such as that at issue in the main proceedings, it must be decided in accordance with national law [and not Article 4(1)(a)] whether the proprietor of an earlier trade mark may apply for a mark to be refused registration or, if registered, to be declared invalid even where there has been long-established honest concurrent use of those marks for identical goods". [This is the Europeanese for "Good luck, boys, from now you're on your own!"]

The IPKat, noting the identity of the warring parties, doesn't think that we will have heard the last of this dispute, even once the Court gives its ruling.  Merpel is fascinated with what the AG had to say about abuse of right:

"121. The submissions of the Czech and Slovak Governments must be understood as arguing that, in their opinion, the abuse of the right under Article 4(1)(a) of the directive lies in AB?s making the application for a declaration of the invalidity of the trade mark ?Budweiser? registered for BB one day before the expiry of the five-year period of acquiescence, thereby depriving BB of the possibility of defending itself against the application. I find that argument unconvincing, as it rests on the questionable basic assumption that the acquiescing party is to be prevented from making full use of the period specified in Article 9(1), out of consideration for another party who, generally unlawfully, is using an identical mark. But the right-holder must be conceded the right to apply the rules of substantive and procedural law in the way that is most to his advantage without laying himself open to an accusation of abuse of rights.

122. Regardless of the question already considered in detail of whether the coexistence of the two marks on the basis of the doctrine of honest concurrent use recognised in national law is permissible under European Union law, this argument must therefore be countered by stating that it must be possible in principle for an action which is necessary for complying with a time-limit to be done up to the end of the last day. That corresponds both to the principles of the procedural laws of the European Union and its Member States and to the objectives of the directive. The expectation of the proprietor of the later mark that he will be able to use it free from objection by the proprietor of the earlier mark is already adequately protected by the fact that European Union law provides for limitation of rights to occur on the expiry of the five-year period of acquiescence. Until that period has expired, the proprietor of the later mark must be prepared for the other proprietor to take countermeasures at any time. The determination of a fixed time-limit of five years, as already explained, promotes legal certainty and effectively protects both parties by creating legal stability. To prevent the proprietor of the earlier mark from asserting his rights under Article 4(1)(a) of the directive one day before expiry of the five-year period of acquiescence would ultimately amount to calling into question the validity of that provision. Blurring the fixed time-limit on considerate grounds, as the Czech and Slovak Governments envisage, would be detrimental to the principle of legal certainty and thus not within the intention of the legislature. Their argument must therefore be rejected.

123. Consequently, no abuse of the right under Article 4(1)(a) of the directive may be seen in the fact that the application by AB for a declaration of invalidity of the later mark was made one day before the expiry of the five-year period of acquiescence".

Merpel remains unconvinced. Of course Anheuser-Busch is legally entitled to do what it did -- but the result is what we Kats, laymen, peasants and fools call an abuse.  Only erudite and sophisticated judges are unable to see this.

Full post as published by IPKat on February 03, 2011 (boomark / email).