Advocate general issues opinion on concept of acquiescence

European Union
In Budejovický Budvar, národní podnik v Anheuser-Busch Inc (Case C-482/09, February 3 2011), Advocate General Trstenjak has given her opinion on a number of matters concerning the defence of acquiescence, in response to questions referred to the Court of Justice of the European Union (ECJ) by the Court of Appeal of England and Wales in October 2009. 
 
The opinion is the latest judicial consideration of the longstanding dispute between Anheuser-Busch Inc and Budejovicky Budvar, národní podnik over the BUDWEISER mark (for further details please see "Questions referred to ECJ in BUDWEISER dispute").
 
The advocate general first considered the question of whether acquiescence is a concept of EU law. In her view, acquiescence is a concept of EU law, and is not a matter to be determined by each national court.

Second, the advocate general considered whether a trademark owner can be held to have acquiesced when it has been unable to prevent use of the later mark. She stated that the concept of acquiescence implied that the person acquiescing was theoretically in a position to do something about an undesired situation, but deliberately did not do it. Therefore, if legal or factual impossibility prevented a trademark owner from taking countermeasures, its failure to do so could not be considered acquiescence.

The advocate general then considered that the commencement of the five-year period for acquiescence would depend on three conditions being satisfied:
  • the later mark must be registered;
  • the later mark must be used; and
  • the proprietor of the earlier mark must be aware of the registration and use of the later mark.
It was the actual knowledge of the earlier trademark owner that really mattered to start the period running, rather than potential knowledge arising when the trademark owner could be expected to know of the registration and use of the later mark.

However, there was a statutory presumption that the five-year period would start on the date of registration of the later mark (an event which was publicised). This gave some protection to the expectation of the owner of the later trademark that no application would be made for the invalidity of that mark five years after registration. This statutory presumption would not, however, exclude the possibility that the owner of the earlier trademark may be able to rebut it in a particular case if it could show that it actually acquired knowledge at some other time.

The advocate general further considered whether the five-year period for acquiescence can commence before the earlier mark is registered. In her opinion, the five-year period could begin to run, and theoretically end, before the proprietor of the earlier trademark obtained actual registration of its mark, provided that the three conditions necessary for acquiescence could be satisfied. This was because the concept of 'earlier mark' depends on the date on which registration was applied for, rather than that of registration.

The advocate general then turned to the question of whether Article 4(1)(a) of the First Trademarks Directive (89/104/EEC) enables the owner of the earlier mark to prevail even where there has been a long period of honest concurrent use. In her view, the English doctrine of honest concurrent use is not compatible with the directive. The only exceptions to the relative grounds for refusal or invalidity of a trademark in Article 4(1) of the directive are regulated exhaustively, and none of those exceptions made provision for the coexistence of two identical marks on the basis of honest concurrent use. Article 4(1)(a) thus precludes, in principle, the long-established concurrent use of two identical marks covering identical goods by two different proprietors of the marks.

However, the advocate general considered that the directive was not in fact applicable to the current proceedings. The Court of Appeal's decision in 2000, which resulted in the registration of both Anheuser's and Budvar's marks on the grounds of honest concurrent use, had applied the Trademarks Act 1938 due to the dates on which those applications had been filed, and the directive did not have retrospective effect. The situation giving rise to the current proceedings had also arisen as a result of the legal position in the United Kingdom before the directive had effect.
 
Nevertheless, the advocate general expressed the view that the principles of legal certainty and the protection of legitimate expectations militated, in light of the facts, in favour of exceptionally permitting the coexistence of the BUDWEISER marks, and leaving untouched the decision reached by the Court of Appeal in 2000.
 
A final issue considered by the advocate general in giving her opinion was whether Anheuser's actions in bringing its invalidity claim on the last day before acquiescence - thereby depriving Budvar of the possibility of defending itself against the application - was an abuse of rights.
 
The advocate general was firmly of the view that there was no abuse of rights, and to find otherwise would be detrimental to legal certainty. She stated that it should 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, and until that period has expired, the proprietor of a later mark should be prepared to take countermeasures at any time. 
 
A judgment by the ECJ which follows the advocate general's opinion is likely to be welcomed as a clarification of the conditions required for acquiescence. The opinion makes it plain that knowledge of the use of a trademark is irrelevant for the purposes of acquiescence, and that the earliest date on which acquiescence can be claimed is five years following the date of registration of the later mark.
 
Jeremy Dickerson and Jennifer Gibson, Burges Salmon LLP, Bristol

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