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Thursday, 3 February 2011

What they say about today's AG Opinions ...

The IPKat always enjoys the press ...
Here are some early reports and responses to today's three big Advocate Generals' Opinions from the Court of Justice of the European Union -- plus a warning.  Just to remind readers: these Opinions are NOT rulings of the court, but merely "advisories" which the Court is free to accept (as it does around 80% of the time) or reject.  If you are a British journalist with the popular press please read that warning three times.  If by then you haven't understood it, phone me and I'll explain it to you slowly and one syllable at a time.

In the dispute between the two Budweisers over the underhand way in which one tried to dispose of the concurrently valid trade mark of the other, Bloomberg (via Stephanie Bodoni) reports this:
"Anheuser-Busch InBev NV should lose a challenge at the European Union s top court to get the sole U.K.trademark right for Budweiser over Czech competitor Budejovicky Budvar NP, an adviser to the court said. 
The EU law invoked by AB InBev is not applicable in this case, Advocate General Verica Trstenjak of the European Court of Justice said in a non-binding opinion today. The case must be decided in accordance with national law to see if Budvar's trademark can be declared invalid. The Luxembourg-based EU court follows opinions in most cases. 
While AB InBev, the world s largest brewer, and Budvar were both granted U.K. trademark rights to Budweiser by an English court in 2000, AB InBev argues that its right is the only one that should prevail. AB InBev told the EU court at a hearing last year that its market for Budweiser was 10 times bigger, rejecting Budvar s arguments of a long co-existence. 
If the Court of Justice adopts this opinion, we believe we will ultimately be successful before the U.K. Court of Appeal, Leuven, Belgium-based AB InBev said in an email. 
The two brewers have been entangled in a fight going back to the early 1900s over the right to the Bud or Budweiser names for beer, merchandising and other products. Budvar claims the rights because its beer comes from Ceske Budejovice, which is called Budweis in German. Anheuser-Busch, founded by German-born immigrant to the U.S. Adolphus Busch, says it started using the Budweiser trademark in 1876, 19 years before Budvar was formed.
In today's case, a U.K. court sought the EU tribunal s guidance on whether a trademark can be invalidated after having co-existed for a certain time with an identical right. ..."
And this was giant IP practice Marks & Clerk's comment (this firm represented Budvar)
"The Advocate General of the European Court of Justice has this morning advised that the court rule against the attempt of Anheuser-Busch (maker of US Budweiser beer) to invalidate Czech rival Budějovický Budvar’s concurrent trade mark for the ‘Budweiser’ name.

Both companies were given permission by the Court of Appeal to simultaneously register the ‘Budweiser’ trade mark in 2000, given their long-standing history of honest coexistence in the UK market. However, in 2005, Anheuser-Busch started legal action to invalidate Budvar’s ‘Budweiser’ mark on the grounds that their application for the registration of the mark in the UK (1976) predates Budvar’s application (1989).

Today AG’s opinion on questions referred to the European Court of Justice (ECJ) by the Court of Appeal regarding the case sides with Budvar, affirms that there is no room for Anheuser-Busch’s argument in European law. The final judgment – on which the AG opinion is non-binding – is expected at a later date.

... Kirsten Gilbert, Partner, comments:

“We are pleased with the favourable tenor of the AG’s opinion. The two brands have co-existed in the UK for decades, differing in image, taste, price, and target market. The identical nature of the ‘Budweiser’ marks is an honest, historical co-incidence, and causes no significant confusion amongst UK consumers.

“We now await the ECJ’s final ruling, in the hope that it will concur with the AG’s opinion.”

The dispute between the two brands has been live for decades, culminating in a number of different battles for the Budweiser name across different territories and legal systems".
See also this short note in the Wall Street Journal and "Opinion goes against AB InBev in Budweiser Trade Mark Dispute" in The Publican.


In the dispute over the right of broadcasters to control live TV transmissions of football matches through the use of country-specific decoders, the English Premier League commented as follows:
"The Premier League are currently considering the detail of Advocate General Kokott’s Opinion but our initial view is that it is not compatible with the existing body of EU case law and would damage the interests of broadcasters and viewers of Premier League football across the EU.
“The Opinion expressed by Advocate General Kokott may reflect a particular policy view in relation to the provision of audio-visual services throughout the EU. However, if her opinion were to be reflected in the ECJ's judgment, it would prevent rights holders across Europe from marketing their rights in a way which meets demand from broadcasters whose clear preference is to acquire, and pay for, exclusive rights within their own territory only and to use those rights to create services which satisfy the cultural preferences of their viewers within that territory.
“We would hope that when the ECJ comes to its judgment in our case that the current European law, framed to help promote, celebrate and develop the cultural differences within the EU, is upheld.
“If the European Commission wants to create a pan-European licensing model for sports, film and music then it must go through the proper consultative and legislative processes to change the law rather than attempting to force through legislative changes via the courts.
“The ECJ is there to enforce the law, not change it.”"
See also "Football not facing TV doomsday" (BBC Blog here), "Pub lady goes 1-0 up over cheaper football" in the Guardian here, "Landlady 1-0 up against Sky in Fight for Cheaper Football" (Metro, here).


On the dispute over whether, and if so how, counterfeit goods can be seized by customs officers in the EU if they're in transit from one non-EU country to another, the IPKat was disappointed to see how little media coverage emerged.  Reuters' report is here ... and that's about all.

7 comments:

Hugo said...

If it is not possible to license rights at different rates in different territories, won't the end result be that right owners will be forced to make poorer countries pay more for their licences? The effect will be to flatten out the Single Market but the less well-off countries will lose out. Has competition law become a religious dogma the practical consequences of which are being ignored? (By the way, these really are questions to anyone who has an opinion, not rhetorical questions.)

Anonymous said...

Could not one of the two trade marks for Budweiser (I leave it as an exercise for the reader to figure out which one I am referring to) be revoked on the basis that it is misleadingly registered for beer?

Matthew Taylor said...

@Hugo: I'm not clear how "...the less well-off countries will lose out", unless you're suggesting that local providers would simply refuse to purchase the content altogether. Prices in some territories may go up, but it's just as likely prices in others (especially the UK) will fall.
When I hear the Premier League talking about "cultural preferences of viewers [in other] territories", I know we're through the Looking Glass, but I'm not sure we've reached the point where businesses are willing to simply ignore revenue.

The way in which content owners have sought to recreate national markets within the single market has always run contrary to the principle of exhaustion, and to the strand of cases striking down attempts to use contractual provisions to recreate barriers to cross-border competition. I'm not clear why we should be surprised that the AG has finally applied this principle to a sacred cow.

The far more interesting issues will be with non-sporting content: a number of UK digital channels have built business models on offering "exclusive" content (Sky Atlantic, anyone?) and that model could be holed beneath the water line. If the ECJ follows the AG's opinion, it is the market for this content, far more than sporting content (which has a short shelf-life, is not routinely repeated, and isn't suitable for medium to long term distribution by on demand services) which will be changed.

It's odd that so little of the media comment has focused on the implications for B2C sales of satellite television services - while this case is about a B2B sale, the principles should apply equally to B2C. There are technical things that the broadcasters can do - notably altering the power of their signals, and changing the satellites which they use - but it will be impossible to eliminate cross border seepage of a satellite TV signal. The regulatory issues could be fascinating; at present, Ofcom regulates broadcasts "into" the UK, but doesn't - as I understand it - purport to regulate broadcasts which can merely be received in the UK (e.g. by realiging your satellite dish to use a different bird, or importing foreign equipment, as in this case). How will the broadcast regulators deal with, for example, Greek satellite broadcasts being routinely consumed in the UK?

Hugo said...

@ Matthew - yes, that's the sort of thing I meant.

The licences in question are Sky (over 10 million subscribers for whom British football is a very important reason for being a customer) and NOVA in Greece (380,000 subscribers, only some of whom would find British football interesting).

According to the FT, analysts think Sky may lose £70 million a year if the decoder cards can be imported. Sky can be expected to request an equivalent reduction in their licence fee.

To make that up, FAPL would need to increase the Greek licence fee by £70 million. This works out at £184 per subscriber at least. So I would expect NOVA to be priced out of the market.

Matthew Taylor said...

@Hugo: I'm tempted to simply say "Welcome to the Free Market". The logic you're using here could be equally well deployed towards requiring *any* import/export restriction, on the ground that it would help protect local production. This would be a pretty unique case if you can seriously argue that protecting local production from overseas competitors has the general effect of keeping prices *low* - I'd want to see some evidence to support such an contrary assertion.

I'd allow that your position could be correct if the Greek broadcasters, and by extension the Greek consumers, have made only a token payment for access to this content, but if that is the case you are left arguing that UK consumers should subsidise Greek access to this content because...?

That aside, there are some pretty obvious flaws in what you're saying - notably the assertion that Sky would want, and could obtain, a 1:1 reduction in the fee paid to the Premier League, so as to reflect any loss it attributes to the increased competition. Domestically, Sky faces competition from other distribution channels, never mind other broadcasters, and competes on price when purchasing sporting rights. That competition is almost certain to increase over the next auction round - notably due to the expansion of high speed broadband since the last round - which will have an upward pressure on the price paid (there are countervailing forces, of course).

In making that argument, you ignore the extent to which Sky sells a bundled package. You cannot simply buy Channel X; you must buy Sky Package Y, and pay a bundled fee - if Sky needs to protect its margins can alter the package structures.

The assertion that for 10 million subscribers football is key is just that; you could equally argue that access to film channels is key (which has been done in the past in other contexts), or first run premium content (which Sky is now trying to push). There are also - according to Ofcom et al - a tranche of Sky subscribers who take the service because of reception issues...

Next we have an implicit assumption that the Premier League will conduct a similar auction to previous exercises - that remains to be seen, since the largest clubs now know that they can make more money from selling their own rights than they can from the bundle deal. There's a nested assumption that the Premier League would be willing to see 400 thousand Greek fans lose their ability to watch matches, with all the implications that has for the development of the Premier League as an international brand; implicit in that is the assumption that even if the Premier League was willing to allow this, those clubs with ambitions to be international brands would be prepared to see it happen.

Will prices in Greece go up? Possibly. Will prices in the UK come down? Probably not. Is this correct legal decision? Yes.

Anonymous said...

Is it not interesting to see the AG's suggestion that the copyright can be permitted provided it can only lead to reasonable royalties and not an injunction? Not sure how that fits in with the Enforcement Directive which requires that injunctive relief may be available. Of course, the Enforcement Directive is subject to the TFEU, but could this be our eBay v MercExchange?

Anonymous said...

While no particular fan of Sky & the premier league, I'm inclined to agree with the homogenised market concerns..

Films rights are similarly packaged out to territories for the vast majority of content produced outside of the ubquitous American studios. In that particular instance, I imagine it will result in less 'foreign language' films being made and certainly produce some consolidation among the main European production/distribution companies.

Even if my interest is more in the highbrow fare - it's worth bearing in mind, that the Lord of the Rings, having been dismissed by the major US studios as too expensive and risky, ended up being financed by an American 'mini-major', New Line Cinema, whose business model was to offset risk by pre-selling foreign rights.

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