England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		19 February 2008

Mr Justice Norris:

1. Anheuser-Busch Inc ("AB") is a Missouri brewer that has since about 1875 sold beer under the name "Budweiser". Budejovicky Budvar Narodni Podnik ("BB") is a brewer in the town of Ceske Budovice (formerly "Budweis") which has since 1895 also sold beer under a name consisting of or including "Budweiser". Disputes over the right to use the word "Budweiser" in connection with such beer have existed since at least 1911. The current appeal is the latest round of such disputes in this jurisdiction.
2. BB first actively entered the UK market in 1973. AB gradually entered the UK market in the period 1974 to 1979. Apart from the common use of the word "Budweiser" there was no similarity of taste or appearance between the two beers and their containers were different. But the use of the identical mark "Budweiser" in connection with identical categories of goods (albeit that the goods themselves were distinctive) has continued for over 30 years.
3. In November 1976 BB applied to register the mark "Bud" in script as a trademark in Class 32. The application was opposed by AB.
4. In 1979 AB commenced passing-off proceedings against BB claiming an injunction to prevent BB from selling or dealing in beer by the name of "Budweiser". BB counterclaimed for the same relief against AB. The trademark application was stayed to await the outcome of the passing off proceedings.. The decision of Whitford J. at first instance is reported [1984] FSR 413. He held that neither brewer could be disentitled to use the word "Budweiser" since neither was employing it improperly. AB appealed that decision and BB cross-appealed. The decision of the Court of Appeal dismissing the appeal is reported at [1984] FSR 448. Dillon LJ pointed out (at page 476) that the right of property for the invasion of which a passing-off action is a remedy, is a right of property, not in the mark or name or get up improperly used, but in the business or goodwill likely to be injured by the misrepresentation made by passing off one person's goods as the goods of another. The Court held that AB had no goodwill capable of being damaged, so that the trial judge had correctly concluded that there was a dual reputation in the name "Budweiser" which a neither party could claim had been improperly achieved.
5. Following the decision of the Court of Appeal the trademark application was revived. Section 11 of the Trade Marks Act 1938 provided:-

" It shall not be lawful to register as a trademark … any matter the use of which would by reason of its being likely to deceive or cause confusion…. be disentitled to protection in a court of justice.."

The registrar (whose decision is reported at [1988] RPC 535) decided that AB's evidence did not disclose a sufficient degree of confusion, and the section 11 ground of opposition to BB's application to register "Bud" as a mark failed. Section 12(2) of the 1938 Act provided:-

"In case of honest concurrent use, or of other special circumstances which in the opinion of the Court or of the Registrar make it proper so to do, the Court or the Registrar may permit the registration of trademarks that are identical or nearly resemble each other in respect of the same goods… by more than one proprietor"

The Registrar found that there was honest concurrent use and would have registered BB as proprietor of the mark "Bud" also on that basis.

6. AB appealed this decision. The decision of Walton J. is reported at [1988] RPC 547. He affirmed the Registrar's decision on both the principal and the alternative grounds. His reason was that if the substantive mark of "Budweiser" could be freely used by BB, and if (as was the case) customers in fact contracted this to "Bud", then there could be no question of the Court saying that BB was not permitted to use the way in which its customers were actually going to describe its product. As a further ground Walton J. was in no doubt that there had been honest concurrent use, and in no doubt that there were special circumstances; so he would have registered under section 12(2) of the 1938 Act as well. Following this victory for BB, AB itself also successfully registered "Bud" as a mark.
7. It had now been judicially established that neither AB nor BB was, as against the other, exclusively entitled to the goodwill attaching to the name "Budweiser": and that BB was entitled to register the mark "Bud" because it could freely use the name "Budweiser" of which the mark was simply a contraction (in respect of which there was in any event honest concurrent use) - and that AB was likewise so entitled. This left outstanding trademark applications relating to the mark "Budweiser". On the 11th December 1979 AB had applied to register the mark "Budweiser" for "beer, ale and porter", which application was opposed by BB. On the 28th June 1989 BB itself applied to register the mark "Budweiser" for "beer ale and porter; malt beverages", which application was in turn opposed by AB.
8. AB's application of the 11^th December 1979 and BB's application of the 28^th June 1989 were eventually judicially determined in February 2000 and both marks were put on the register on the 19^th May 2000. These dates are crucial to the present application.
9. The process of determining AB's and BB's respective rights to the mark "Budweiser" had taken so long that the Trade Marks Act 1938 had been repealed and replaced by the Trade Marks Act 1994, but it was common ground that the proceedings having begun under the provisions of the 1938 Act had to continue to be dealt with under that Act. (There was apparently no suggestion that the terms of the 1994 Act had rendered the battle entirely without point). The battleground therefore remained the competing provisions of section 11 and section 12(2) of the 1938 Act. The Court held ([2000] RPC 906 at 916) that the outcome of the passing off action was not determinative of the trademark applications then before it (passing off being a matter of private right between AB and BB and the registration of a mark being a matter between the applicant and the public), but that section 12(2) required a consideration of the actual use made of the mark (ibid 914) and that the situation covered by section 12(2) was analogous to that considered in the passing off action. Peter Gibson LJ noted that

" There is no doubt but that Walton J. thought that this Court had decided that both AB and BB were entitled to use the name Budweiser of which both were proprietors. His decision was based on that premise. His conclusion that BB was entitled to obtain registration of the trade mark BUD as a contraction of Budweiser, if correct, necessarily entails that BB is also entitled to obtain registration of the unabbreviated trade mark Budweiser. There was no appeal by AB from that decision and [Counsel for AB] does not dispute that it is binding on AB".

The Court decided that AB had made out its objection under section 11 (that BB's use of the Budweiser mark might cause confusion) but that the case also fell within section 12(2) of the 1938 Act because of BB's honest concurrent use since 1973 and/or special circumstances arising from the earlier litigation (which had established shared entitlement to the goodwill and shared entitlement to the trademark "Bud"). Accordingly both AB and BB could register the mark. In dismissing the appeal Judge LJ commended the decision below as "focused on the practical realities, at least in part consequent upon the sensible application of the previous decisions of the Court of Appeal and Walton J.".

10. Any hope that judicial determination of the "passing off" claim and of the right to register the mark "Budweiser" in its full form and in its contracted form "Bud" would put an end to the litigation was shortlived. The Trade Marks Act 1994 afforded further possibilities.
11. Section 5(1) of the 1994 Act provides that a trademark shall not be registered

" if it is identical with an earlier trademark and the goods or services for which the trademark is applied for are identical with the goods or services for which the earlier mark is protected."

Section 6(1) of the 1994 Act defines "an earlier trademark" as "a registered trademark….. which has a date of application for registration earlier than that of the trademark in question, taking account (where appropriate) of the priorities claimed in respect of the trademarks". In this case it was not suggested that the qualification had any application to the issues on appeal: accordingly AB's registration of "Budweiser" is "an earlier trademark" in comparison with that of BB for the purposes of the 1994 Act (even though both were actually registered on the same day).

12. Section 5(2) of the 1994 Act enlarges upon the preceding subsection and provides that a trademark shall not registered if (because it is identical with an earlier trademark and is to be registered for goods similar to those for which the earlier mark is protected) there exists a likelihood of confusion on the part of the public, including the likelihood of association with the earlier trademark.
13. If a mark is registered then section 40(3) of the 1994 Act provides that it shall registered "as of the date of filing of the application for registration; and that date shall be deemed for the purposes of [the] Act to be date of registration".
14. Section 47(2) of the 1994 Act then provides that

" the registration of a trademark may be declared invalid ….on the ground that there is an earlier trademark in relation to which the conditions set out in section 5(1) [or] (2) obtain….. unless the proprietor of that earlier trademark…. has consented to the registration".

But section 48 imposes a form of statutory limitation period in respect of such applications for declarations of invalidity by providing that

" where the proprietor of an earlier trade mark….. has acquiesced for a continuous period of five years in the use of a registered trade mark in the United Kingdom, being aware of that use, there shall cease to be any entitlement on the basis of that earlier trade mark…. to apply for a declaration that the registration of the later trademark is invalid…. unless the registration of the later mark was applied for a bad faith".

15. Before I take up the narrative of events again I should note that (as is apparent from the preamble to the Trade Marks Act 1994) the Act implements the EC First Council Directive 89/104 ("the TM Directive") (and in particular, in relation to the sections which I have cited, Articles 4 and 9). I should further record that my attention was drawn to no relevant transitional provisions (though passing reference was made to paragraph 18(2) of Schedule 3 in connection with a subsidiary argument).
16. Pursuant to BB's application dated 28^th June 1989 it was registered as proprietor of the mark "Budweiser" on the 19^th May 2000. Although AB was also registered as proprietor of the identical mark that same day, its mark is an "earlier trade mark" under section 6(1) of the 1994 Act because it applied for the registration of its mark on the 11^th December 1979. On the 18^th May 2005 (four years and 364 days after the registration of " Budweiser" as BB's mark) AB applied for that registration to be declared invalid under the provisions of section 47(2) of the 1994 Act (a) pursuant to section 5(1) in respect of the registration of the mark in relation to "beer, ale and porter" and (b) pursuant to section 5(2) in respect of registration of the mark in relation to "malt beverages". The timing of the application was such that although it was issued within the five year period, it was not served on BB until after the five-year period had expired. BB was thereby disabled from making its own cross- application under section 47(2) seeking a declaration as to the invalidity of AB's registration of the mark "Budweiser" based on BB's earlier trademark "Bud".
17. AB's case is of the utmost simplicity. Under section 6(1) its mark "Budweiser" is undoubtedly an "earlier trade mark". It is indisputable that BB's mark "Budweiser" is identical to AB's earlier trademark. It is not in dispute that in so far as both marks are registered in respect of "beer ale and porter" they cover identical goods. Under section 47(2) of the 1994 Act the registration is therefore liable to be declared invalid. The fact that BB's registration of the mark "Budweiser" was the result of a judicial determination is irrelevant, because the basis of entitlement to register was "honest concurrent use" and "special circumstances" neither of which finds any place in the TM Directive or the 1994 Act.
18. This argument succeeded before the Hearing Officer, Mr Mike Foley, who expressed "a certain unease at the position in which I find myself". As he pointed out:-

" The Court of Appeal issued a decision that on the facts, allowed the status quo in the reality of the market to continue. In concentrating on the legal issues the parties have left me in the position of having to determine these proceedings on the thinnest of evidence, and I must now decide this on essentially a notional basis. Adopting the global approach advocated by the case law I do not see that there can be any other finding other than in favour of [AB]."

19. That decision is before me on appeal. My present task is not to rehear the application, but to review the decision of the Hearing Officer with the object of correcting any errors of principle in it, and not with the object of substituting my view for that reached by him without error. In approaching that task I have been reminded that I must be careful not to find that the Hearing Officer has committed an error of principle simply because he could have better expressed his decision.
20. Before dealing with the grounds of appeal I should deal with certain matters which this appeal has not been about.

(a) This appeal has not been about whether AB can immediately prevent BB using "Budweiser" as a mark in selling its beer. As is conveniently summarised in section 2 of the 1994 Act, a registered trademark is a property right obtained by the registration of the mark under the Act, and the proprietor of the registered mark has the rights and remedies provided by the 1994 Act. AB's application is obviously designed to deprive BB of the rights and remedies provided by the 1994 Act, but whether AB is itself able to enforce those rights and remedies as against BB (even if it successfully deprives BB of its defence to an infringement claim under s.11(1) of the 1994 Act) remains to be determined another day. Such a day will surely come. But AB's application and this appeal are purely concerned with the question of the registration of BB's mark (and the property rights which derive from that registration).

(b) It has not been argued on this appeal that either the Hearing Officer had or I have any discretion whether to grant or withhold relief. Although the language of the section is on its face permissive (".. the registration of a trade mark may be declared invalid..") the case has been argued on both sides on the footing that if AB establishes its right (by bringing itself within the statute and by BB failing to make good any substantive defence to the statute) then there is no separate discretion to be exercised judicially in relation to the remedy. I raised the point at the conclusion of argument and was referred by both sides to paragraph 10-022 of Kerly's "Law of Trade Marks and Trade Names" (14th edition) which notes a former debate and states

"There is no residual discretion in proceedings for invalidity… With the benefit of hindsight, it is perhaps surprising that this was considered a serious issue".

Thus admonished I bow to the inevitable for the purposes of this appeal (though recording the view that I am unconvinced by the argument, such as it is).

(c) Section 47(2) says that application may be made to invalidate a later mark unless the later mark was registered with the "consent" of the proprietor of the earlier mark. It has not been argued on this appeal that for the purposes of section 47(2) of the 1994 Act the judicial dismissal of an objection to registration is to be treated on the same footing as consent to registration, so that no application can be made under section 47(2) at all. A trade mark is a property right. If AB is right then anyone who has the benefit of a registered mark because of honest concurrent use or other special circumstances under the 1938 Act was, upon the commencement of the 1994 Act, at risk of being deprived of that accrued property right. It might be argued that (with or without the assistance of section 3 of the Human Rights Act 1998) a construction of section 47(2) which avoided the expropriation of a legally established right was appropriate: it was not so argued, possibly because the point may be a bad one.

(d) It was accepted for the purposes of argument before me that the registrations were in respect of "identical goods" ("beer, ale and porter ") even though it was also common ground before me that for 30 years the two beers bearing the "Budweiser" name had existed in the market as distinct products.

I therefore turn to the points that were argued before Hearing Officer and on appeal.

21. BB in essence accepted AB's starting point, but said that it had substantive and procedural defences.
22. The first limb of BB's case was that there had been statutory acquiescence within section 48 of the 1994 Act because AB had acquiesced for a continuous period of five years in the use by BB of the registered trademark "Budweiser", being aware of that use. The argument of Mr Mellor QC was that the focus of section 48 is upon the use of the later mark and acquiescence in that use, and that if the focus was upon use in the market place then there was no reason why the period of acquiescence to should run only from the date of completion of the registration procedure in May 2000 (rather than from the date of the application for BB's mark in June 1989, made in support of its then existing use). In that connection he relied upon

(a) Section 40(3) of the 1994 Act (which says that the date of filing the application is to be deemed for the purposes of the Act to be the date of registration of the mark), which he said indicated that actual registration was not significant:

(b) Article 4 of the TM Directive (which fixes priorities expressly by reference to the date of application for registration, subject to the registration being completed):

(c) Article 9 of the TM Directive (which refers to the proprietor of the earlier mark acquiescing " for a period of five successive years in the use of a later trade mark…. while being aware of such use", a "later trade mark" simply being a trade mark with a date of application for registration after that of the earlier mark (see Article 4.2) (which again indicated the insignificance of the date of registration):

(d) The preamble to the TM Directive (which explained that it was "important for reasons of legal certainty and without inequitably prejudicing the rights of a proprietor of an earlier trademark to provide that the latter may no longer request a declaration of invalidity nor may he oppose the use of a trademark subsequent to his own of which he has knowingly tolerated the use for a substantial length of time") which demonstrated the significance of use and the relative insignificance of registration:

(e) The contrast between the language of Article 9 (with its simple reference to acquiescence in the use of a later trade mark) and Article 10 (with its specific reference to an application for revocation being made "within a period of five years following the date of the completion of the registration procedure").

Deploying this material he submitted that where section 48 refers to acquiescence "in the use of a registered trade mark" it requires only toleration of the use of a mark for which application has been made and which is ultimately registered, so that the period of the earlier proprietor's "acquiescence" commences with the date of application for the registration of the later mark, not with the date of completion of the registration procedure for the later mark. He buttressed this argument with the submission that (as is apparent from the references in section 48(1) to "[an] earlier trademark or other earlier right") statutory acquiescence applies not only to the proprietor of an earlier registered mark but also to the holder of an earlier right (including rights acquired by use such as under the law of passing off), and deprives the holder of the earlier right of the ability to oppose the use of the later mark. To such a situation "registration" had no application. The entire focus of the section was accordingly upon use not upon registration,

23. The consequence of this argument is, of course, that AB lost its right to apply for a declaration of the invalidity of BB's mark before it had ever acquired that right. That is because AB only became "the proprietor of an earlier mark" when it was registered as such on the 20^th May 2000, by which time BB had been using its later mark for the 11 years since it applied for registration. This would be a surprising construction of the section: but perhaps no more surprising than the conclusion for which AB contends (viz. that a mark registered in consequence of an order of the Court of Appeal and based on 30 years' concurrent use is nonetheless "invalid").
24. But what stands directly in the way of an acceptance of Mr Mellor QC's submission is the decision of Warren J. in Sunrider Corporation v Vitasoy International Holdings Ltd [2007] EWHC 37(Ch). Sunrider was the registered proprietor of the mark "Vitalite", for which it had applied in 1993 and of which it became proprietor by registration in December 1999. In October 2004 Vitasoy applied to have that registration declared invalid because the mark was similar to its own mark "Vita" (for which application had been made in 1991 and which was registered in November 2000) and registered in respect of identical or similar goods. "Vita" was therefore actually registered after "Vitalite", but the application for the registration of "Vita" pre-dated that for "Vitalite"; so "Vita" was the "earlier mark" under s.6 of the 1994 Act. Vitasoy became "the proprietor of an earlier trade mark" when it was registered as such in November 2000. Its application for invalidity of the "Vitalite" mark was brought within 5 years of the registration of "Vitalite" as a mark, but 13 years after Sunrider's application to register "Vitalite". Sunrider therefore argued that for the purposes of section 48 Vitasoy's five-year period of acquiescence "in the use of a registered trade mark" started to run from the date of date application for registration of the "Vitalite" mark (as the deemed date of registration), not from the date of the actual registration itself (relying in particular on s. 40(3) and upon s.9(3) of the 1994 Act, which says that the rights of the proprietor have effect from the date of filing of the application for registration).
25. This argument was rejected by Warren J. after considering the effect of sections 9(3) and 40(3) of the 1994 Act, and the terms of the Preamble to and Article 9 of the TM Directive, because

(a) the more natural meaning of the expression " acquiesced ….in the use of a later trade mark registered in [any] Member State whilst being aware of such use" is that the acquiescence relates the use of a registered mark ;

(b) restricting acquiescence to a period commencing with the registration of a mark was consistent with the parallel provisions of the TM Directive relating to opposition to registration (why should five-years acquiescence in the use of a mark pending registration bar the right to seek invalidity if it is ultimately registered, but the same acquiescence not bar the right to oppose registration?)

(c) the policy of the TM Directive is to protect registered marks, and whilst it is possible to understand why in the interests of legal certainty there should be a derogation from the protection afforded to the proprietor of an earlier mark who acquiesces in the use of a later registered mark, there is no compelling policy reason to derogate from the protection in respect of the use of an unregistered later mark (there is an apparent mistake in paragraph 99 of the judgement where an intended reference to a "later" unregistered mark appears as a reference to an "earlier" unregistered mark).

26. Mr Mellor QC accepted that the Hearing Officer was bound by that decision but he submits that I am not so bound, and that the decision is wrong:-

(a) He submits that the construction of statutory provisions by reference to their "natural meaning" is simply the statement of a conclusion rather than the giving of a reason. I disagree. Giving effect to the ordinary meaning of words is a tool of construction, the application of which supports a legal conclusion. I agree with Warren J. that the natural meaning of section 48 is that the proprietor of the earlier mark must acquiesce in the use of a registered trademark (being aware of that use), not the use of an unregistered trademark for which an application to register has been made.

(b) He submits that Warren J. failed to take into account the fact that some Member States do not have any machinery for opposing the registration of a mark, registration being a purely administrative process. In such states no long period will elapse between application and registration, and the TM Directive (and the 1994 Act which implements it) should be construed with that in mind (making a policy that time runs from the date of the application perfectly understandable). I accept that the 1994 Act must be construed by reference to the TM Directive, and that the TM Directive should itself be construed against the background that some Member States do and some do not have a machinery for opposition. But of itself that consideration seems to me to be neutral; policy can no more be discerned (and the appropriate construction accorded) by reference to one set of Member States than by reference to the other.

(c) He submitted that Warren J. did not have the relevant policy considerations drawn sufficiently forcefully to his attention, in particular that everything in the TM Directive revolves around the date of application. Instead his attention was focused upon s.9(3) (which is a domestic or "homegrown" provision not derived from the TM Directive). I do not agree. The point (whether derived from section 9(3) or the provisions of the TM Directive) is that for some important purposes the system works by reference to the date of application: and Warren J. had that well in mind. Moreover, the submission that the TM Directive "revolves around" the date of application overstates the position. Registration of a mark (not the making of an application) governs the right (for example) to seek a declaration of invalidity or to bring an action for infringement.

(d) He submitted that a comparison between the right to seek a declaration of invalidity and the right to oppose registration was unhelpful because the latter was in fact subject to "a self-limiting mechanism". Mr Mellor QC argued that opposition to a later mark had to be assessed at the date of the application for the later mark, and the longer the proprietor of the earlier mark left it before seeking to prevent the use of the later mark, the longer the public had to get used to both marks being in existence, and the harder it would be to establish the requisite confusion upon which opposition to registration would be founded. There was therefore no need to address the possibility that acquiescence may bar the right to oppose registration. I cannot be sure that this argument was addressed to Warren J.: but I do not in fact accept it. Confusion (and risk of being unable to establish it) would appear to be relevant only where the opposition to registration was founded on section 5(2) of the 1994 Act, so the "self-limiting mechanism" could not operate where the later mark was identical to the earlier mark and was registered in respect of identical goods. Thus the whole edifice is erected upon the very slender foundation, and is I think a speculation. Like Warren J. I think that a consideration of acquiescence in the context of an application for a declaration of invalidity and of an application in opposition to registration is helpful: and like him, in my judgement it points to the period of acquiescence commencing with the date of registration of the later mark.

27. The decision in Sunrider is of persuasive authority; I am not satisfied that there are any arguments of substance that have been addressed to me that were not addressed to Warren J and I would on that ground follow it in the interests of consistency at first instance. In fact I fully agree with Warren J.'s conclusions. The period of acquiescence by the proprietor of the earlier mark for purposes of section 48 begins with the date of registration of the later mark. On that footing AB's application is brought in time.
28. In the event that he failed to persuade me of AB's "statutory acquiescence" Mr Mellor QC sought to persuade me of AB's "common law acquiescence". By this he meant (in the words of Patten J. in Perlman v Rayden [2004] EWHC 2192 (Ch) at para.73) " the type of conduct which is sufficient to give rise to an estoppel in the defendant's favour". The citation continues:-

"What is required to be shown is that the person with the legal right has stood by in knowledge of the infringement so as to cause the Defendant to belief that he assents to what is being done. Conduct of this kind is sometimes described as giving rise to an implied representation that the legal right will not be enforced, but a representation as such is not a necessary ingredient of the equity. What the Court is looking to identify is conduct which resulted in the Defendant, to the Claimant's knowledge, proceeding to expend money or otherwise act to his detriment in the belief that there would be no objection to what he was doing. In such circumstances it would be unreasonable for the claimant to be allowed subsequently to assert his legal rights".

Acquiescence giving rise to an estoppel bars the enforcement of the legal right.

29. In paragraphs 26 to 28 of his Decision the Hearing Officer rejected BB's case on common law acquiescence. The heart of his reasoning is found in these words:-

"That there is an Article in the Directive specifically relating to the issue of acquiescence indicates this to be a circumstance that those engaged in its drafting considered could "directly affect the functioning of the internal market". Whether or not they turned their minds to any non-statutory remedies contained within national law, the authors of the Directive saw fit to include a statutory provision. As I see it acquiescence under English common law cannot mean more than Article 9(1) of the [TM Directive]. I therefore dismiss the defence based on the non-statutory defence of acquiescence."

I entirely agree with the Hearing Officer that the concept of "acquiescence" in the TM Directive as carried into effect in the 1994 Act is not to be equated with the common law concept of "acquiescence". The term must be construed in the context of the T M Directive, not in the context of the national law of one Member State. But I respectfully disagree that the mere existence of the statutory defence precludes the application of the English doctrine of estoppel by acquiescence if made out on the facts (and Mr Bloch QC did not so argue). In my judgement the Hearing Officer made an error of principle (and did not simply use infelicitous language).

30. It is therefore necessary to consider the possibility of an estoppel by acquiescence. Mr Bloch QC for AB submitted (and Mr Mellor QC for BB accepted) that there was no direct evidence filed by BB addressing its state of belief or the reason why it had acted or not acted in a particular manner. Mr Mellor QC argued that it was unnecessary.
31. BB had pleaded that the existence of acquiesence had been judicially determined in the course of the earlier litigation to which I have referred. Mr Mellor QC rightly did not make that submission on appeal. Instead the argument below was recast as an argument that the Court could see from the uncontentious circumstances that the relevant governing mind of BB must have held a particular belief, as to which direct evidence was unnecessary.
32. In his skeleton argument Mr Mellor QC submitted that AB had stood by without complaint for 20 years during which time BB had plainly sought to increase its business in the UK, promoting and selling its beer under the Budweiser mark relying on the absence of any opposition by BB to that use, and that at no time since the judgement of the Court of Appeal in March 1984 had AB made any attempt to prevent such continued use. That is not a version of history that I recognise. The decision the Court of Appeal in 1984 related to "passing off": rights to trademarks were thereafter hotly contested. The present right which AB seeks to enforce did not exist before the coming into effect of the 1994 Act, and could not be pursued until AB itself became proprietor of its earlier mark. It cannot be said that AB allowed BB to use the Budweiser mark without complaint when just such a complaint was before Court until February 2000.
33. Mr Mellor QC's oral submissions had a different emphasis. He submitted that the failure to issue the application now before the Court until the very last day of the statutory "limitation period", and in circumstances where it must be inferred that AB knew that its application would be served upon BB outside the statutory "limitation period" (and that accordingly BB would be disabled from making an identical cross application), amounted to a representation that the right to apply for a declaration of invalidity would not be exercised, and the manner in which it was eventually exercised made it unconscionable for AB to seek to resile from its representation. I regret that in my judgement this strong appeal to the merits lacks a legal or evidential foundation. I do not consider that the failure to issue the invalidity application (notwithstanding the apparent all-out war) amounts to a representation that no such application would be issued, and there is no evidence that AB's failure was so seen by BB's governing mind. The events are equally consistent with the present position simply having never occurred to BB's management.
34. In my judgement there is no estoppel by acquiescence which prevents AB from asserting its right under the 1994 Act to which it became entitled in May 2000.
35. Mr Mellor QC then advanced an argument based on abuse of process. His room for manoeuvre was cramped by the decision of the Court of Appeal in Special Effects Ltd v L'Oreal SA [2007] EWCA Civ 1 The defendant opposed the registration of the mark "Special Effects", but did so unsuccessfully. When proceedings were brought against it for infringement it counterclaimed for a declaration of invalidity of that very registered mark. The counterclaim was met with a charge that it was precluded by cause of action estoppel or issue estoppel and that it represented an abuse of process. The Court of Appeal held that an application for registration (and opposition to it) did not amount to "a cause of action" the determination of which gave rise to res judicata ; and that the coexistence of the provisions for opposition to registration with those for a declaration of invalidity of registration demonstrated that a decision to register despite opposition was not a final decision so as to be capable of being the basis for an issue estoppel. On that analysis, and taking account of the circumstance that proceedings in the Trade Marks Registry were designed to be economical and expeditious with limited cost recovery for the successful party, it was held wrong to regard the counterclaim as abusive of the Court process. The Court added (paragraph 77):-

" We are told that sometimes opposition proceedings are conducted in a manner similar to that of High Court litigation, with counsel representing the parties and with disclosure and cross examination. We could imagine the possibility that, if the issues had been fought in that way in the Registry on and opposition, it might then properly regarded as an abuse to fight the same issues again in Court".

36. The Hearing Officer held (paragraphs 46 to 50):-

(a) that the decision in Special Effects confirmed that an application for invalidation could be made without it being an abuse of process notwithstanding earlier opposition proceedings;

(b) that the assertion of invalidity was not an argument that could have been properly advanced in earlier proceedings;

(c) that if (as in Special Effects) a party could bring invalidation proceedings under the 1994 Act having opposed registration under the 1994 Act there must be even less reason to find abuse here, where the application is made under different legislative provisions (the 1994 Act) from those under which registration was originally opposed (the 1938 Act);

(d) that the present application was not in any sense an attack upon or an attempt to relitigate the substance of a previous decision, rather it was the exercise of a fresh right (apparently made available as the result of a positive decision not to protect registrations made under the old law - compare the protection from allegations of infringement given to registrations made under the old law by paragraph 4 of Schedule 3 to the 1994 Act).

37. Although this reasoning was attacked by Mr Mellor QC, in my judgement it is sound and betrays no error of principle. It is not sufficient simply, as Mr Mellor QC invited me to do, to step back and "make a broad merits-based judgement which takes account of the public and private interests involved" (per Lord Bingham in Johnson v Gore-Wood [2002] 2AC 1 at 31d). It is necessary (as the passage from which that quotation is extracted makes clear) to "[focus] attention on the crucial question whether in all circumstances a party is….abusing the process of the Court by seeking to raise before it the issue which could have been raised before" (emphasis supplied). Invalidity under the 1994 Act could not have been raised in the earlier opposition proceedings under the 1938 Act: and insofar as similar questions of law and fact were considered and ruled upon it seems to me that the Court of Appeal found that there was an identical mark, identical goods and (at that time) a risk of confusion (i.e the matters on which AB now relies) but refused to allow opposition to the mark because of honest concurrent use and special circumstances. However much I seek to focus upon the practical realities and to achieve a sensible application of previous decisions, I do not consider that I can properly regarded the present proceedings as an abuse of process.
38. I therefore hold that there is no statutory acquiescence under section 48, no estoppel by acquiescence and no abuse of process. The appeal on these grounds must be dismissed.
39. Mr Mellor QC addressed a subsidiary argument based upon "TRIPS" (Annexe 1C to the Agreement establishing the World Trade Organisation entitled "Trade Related Aspects of Intellectual Property Rights" which became a Community Treaty on the 1^st January 1995). Article 16 of TRIPS provides that the owner of a registered trademark shall have the exclusive right to prevent all third parties not having his consent from using, in the course of trade, identical signs for goods which are identical or similar to those in respect of which the mark is registered, where such use would result in a likelihood of confusion. It concludes

" The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making rights available on the basis of use"

Mr Mellor QC says that as at 1^st January 1995 BB had "existing prior rights" (arising under the Court of Appeal's decision in the passing off case) which are not to be prejudiced. Those existing prior rights were, of course, rights relating to the use of the name in connection with BB's existing goodwill (in which the property right itself subsisted), and Mr Mellor QC fairly acknowledged that perhaps the correct occasion on which to advance this argument was if BB's use of " Budweiser" was challenged (rather than, as now, its right to register "Budweiser" as a mark).

40. In my judgement the argument based on TRIPS does not assist now. A registered mark which, in relation to an "earlier trade mark" under section 6 of the 1994 Act, is a "later mark" is not "an existing prior right" for the purpose Article 16 of TRIPS. A later mark cannot be a prior right. Article 16 means that where the proprietor of a trade name has a right falling within the scope of TRIPS and which arose prior to that conferred by the trademark with which it is alleged to conflict, and which entitles him to use a sign identical or similar to that trademark, such use cannot be prohibited by virtue of the exclusive right conferred by the trade mark on its proprietor under the opening provisions of Article 16. Authority for this proposition will be found in paragraph 89 of the judgement of the ECJ dated 16^th November 2004 in case C-245/02 in Finnish proceedings between these very parties.
41. There is however one respect in which this appeal succeeds. AB's application for a declaration of invalidity extended to the whole of BB's registration in respect of " beer ale and porter; malt beverages;" (although its own registration related only to "beer ale and porter"). In his decision the Hearing Officer regarded it as obvious that in respect of "beer, ale and porter" the respective specifications encompassed the same goods (and the contrary has not been argued before me). He said:-

"The only possible area of contention is the description "malt beverages" in the mark in suit. The term covers all beverages made with malt, including "malt beers" and the like. Accordingly the specification of the registration that is the subject of these proceedings is covered in its entirety by the specifications of [AB's] earlier mark"

This is a determination of a mixed question of fact and law which I must approach with caution. But in my judgement this passage discloses an error of principle. AB's earlier mark covered only "beer, ale and porter". BB's included "malt beverages". The specification of AB's earlier mark simply did not cover entirely the specification of the mark in suit. It is necessary to decide whether "malt beverages" can only be "beer ale and porter", or whether "malt beverages" can include goods which are not identical with or similar to "beer ale and porter".

42. I do not consider that "malt beverages" can only be (and are therefore identical with) "beer ale and porter". The form of the specification would indicate that "beer, ale and porter;" is one category and "malt beverages" another, with possibly an overlap between the two. One is not simply an alternative description for the other. The case therefore fell within section 5(2) of the 1994 Act, so that questions of "similarity" and "confusion" arose and had to be determined. AB filed no evidence directed to these questions: and the deficiency cannot be supplied by trawling through decisions in the 1980's and 1990's to see what the Court might then have found the position to be. I consider that contemporaneous evidence was necessary. I do not think that it can simply be asserted that the goods are "similar" and the risk of confusion "obvious". American Budweiser and Czech Budweiser have been sold side-by-side for 30 years. As was pointed out in paragraph 15-49 of the 12^th edition of Kerly (a passage not to be found in the current edition)

".. if two somewhat similar marks are used side-by-side for any considerable time, the interested public may well learn to distinguish them; so that a mark whose used does in fact cause confusion when it is new, may, if nothing is done to stop its continued use, cease to be an infringement".

"Confusion" cannot simply be asserted; it must be proved.

43. Addressing the question the Hearing Officer failed to address, I would therefore hold that neither "similarity" nor "confusion" had been established on the evidence and that the case for declaring BB's registration of Budweiser invalid in relation to "malt beverages" has not been made out. I would therefore allow the appeal insofar as the declaration of invalidity extends to "malt beverages". Save for that I would dismiss the appeal.
44. I share the unease of the Hearing Officer at being compelled to this conclusion. I am of opinion that the issues raised before me merit consideration by the Court of Appeal: and I share the view expressed by Mr Mellor QC that in the respects argued on this appeal the TM Directive cannot be considered acte clair. But I am able to dispose of the appeal on the basis of existing binding or persuasive authority, and it is for a higher Court to make any reference.
45. My provisional order on costs is that I will make no order as to the costs of the appeal (the appellant having succeeded but only on part of the appeal).
46. I will formally hand down this judgement at 10.30 a.m. on Tuesday 19th February 2008. I do not expect attendance. If either party notifies me by 10 a.m. on that day of any intended application, I will adjourn such application to a time to be fixed through the usual channels. If any such application is made respecting costs I will consider that matter entirely afresh.

Mr Justice Norris…………………………………………………….15 February 2008