Anheuser-Busch, Inc v Budějovický Budvar, Národní Podnik

the first respondent 29 The first respondent is a Czech company, wholly owned by the Czech Republic, which manufactures and sells beer. Its principal European brewery is located in a town in the Czech Republic called Ceské Budějovice (in the Czech language) or Budweis (in the German language). The predecessor to the first respondent was established in 1894 or 1895 as a joint stock company named 'Cesky akciový pivovar v Ceských Budějovicich' (meaning Czech Joint Stock Brewery in Budějovice).

30 It is appropriate at this point to say something about translation. The name of the town, Ceské Budějovice, is not 'translated' into German as Budweis; rather, for many centuries, German speakers have lived in the town and in this part of Europe (Bohemia), and from time to time have ruled this part of Europe. There is a German name for the town: Budweis. From the seventeenth century (under Habsburg rule), with the growth of the vernacular, German was one of the official languages in Southern Bohemia. The town has a Czech name and a German name, though except for the interruption of the Second World War, the official name since 1918 has been Ceské Budějovice. The point was made by Mr Bocek, the 'General Director' (chief executive officer) of the first respondent, when he pointed out in his evidence that Ceské Budějovice is in Bohemia and there is another Budějovice, in Moravia, not called 'Budweis' or 'Moravian Budweis'. 31 The town name, Ceské Budějovice or Budweis, has adjectival or possessive forms in Czech and German, being Budějovický and Budweiser, respectively. 32 The pronunciation of the syllable 'Bud' in all these Czech and German forms is in a manner approaching rhyming with 'good' (represented the phonetic symbol Ş), as opposed to rhyming with 'mud' (represented by the phonetic symbol Λ). Also, the 'w' and the 's' in the German form are pronounced in German as a 'v' and resembling a soft 'z' in English, respectively.

the history of beer making in Ceské Budějovice by the first respondent and its predecessors

33 It is necessary to set out a little more history to place this dispute in its commercial context. 34 The town Ceské Budějovice or Budweis was established in 1265 as a royal town under the then Bohemian King, Ottokar II, as part of the colonisation and renewal of central European regions, including Bohemia. Settlements such as Ceské Budějovice or Budweis were often (as this one was) established under royal, as opposed to local feudal or ecclesiastical, control; and commercial rights were generally granted to such new urban centres. One of the commercial privileges (and a valuable one) given to Ceské Budějovice or Budweis was a brewing right. Free born citizens of the town were granted the right to brew beer in their houses for their own consumption and business. The town itself was also granted this right. From this time brewing has been carried on in the town and brewing rights continued to be attached to homes in the town and to the town itself, down to the formation of the immediate predecessor of the first respondent in 1894 or 1895. A brewery was established in the town in 1495 and later expanded. Under the Habsburg and Austro-Hungarian Empire, regulation made exporting beer from the town or locality, where it was produced, generally not possible. However the beer from Ceské Budějovice or Budweis gained some notoriety for its style and quality in and from the sixteenth century so as to permit some distribution outside the town as beer from the town - in a sense, 'Budweiser' beer. Thus, the town has a history of making beer going back over seven centuries. 35 This long history of beer-making in the town leads to the question as to the extent to which the use of the adjectival forms Budějovický and Budweiser carry the meaning: 'of or from Budějovice' and 'of or from Budweis'. For the purposes of this case it can, I think, be readily accepted that Czech and German speakers, or perhaps, some Czech and German speakers familiar with the brewing of beer in Ceské Budějovice or Budweis, would ascribe this meaning to these possessive or adjectival forms. However, in Australia, few, if any, English speakers would appreciate this linguistic structure. 36 There is a history in Europe of brands of beer being referable to geographic, especially urban, locations. At least in part, this was because the commercial privilege of beer production was lucrative and often protected by restrictions on who could produce and sell beer in any given town and on the restrictions on export from towns and localities where it was produced. This, together, one assumes, with the difficulties of transport over long distances, led to the practice of beer and foodstuffs being labelled or marked with their geographical or town origins. Examples of such beers still made and sold are Kulmbach Bier (from Kulmbach), Warsteiner Bier (from Warsteiner), Weltenburger Bier (from Weltenburg), Oud Hoegaards Bier (from Hoegaarden in Belgium), Chimay (from Forges-lez-Chimay in Belguim) and Westmalle (from Male in Belgium). 37 In the late eighteenth century another brewery was established in the town known as the Burgher Brewery which was officially called Die Budweiser Bräuberechtigten-Bürgerliches Bräuhaus. This brewery was German owned (that is owned by German speakers of the town); and the brewery established in 1495 was Czech owned (that is by Czech speakers). 38 In 1894 or 1895 the joint stock company, Cesky akciový pivovar v. Ceských Budějovicich, was established. I will refer to this entity until the events of, and after, the Second World War as 'Cesky akciový pivovar' or 'the joint stock company'. In 1894 and 1895, there was still in existence the Burgher Brewery, referred to above, the brewery owned by German speakers, which was also producing beer in the town. 39 At this point it is necessary to understand a little more about events in the United States. 40 It is not clear on the evidence when Cesky akciový pivovar first began to sell beer in the United States. It does appear that prior to 1911 it was not selling beer in the United States under the name or brand 'Budweiser'. However, it does appear that the Burgher Brewery was doing so, or wanted to do so. In November 1909 the Burgher Brewery sought cancellation of the registration of trademark number 64,125 for the word 'Budweiser', registered on 23 July 1907 in the United States Patent Office in the name of Anheuser-Busch Brewing Association. On 4 September 1911 the Burgher Brewery 'conferred judgment' in favour of the 'registrant', Anheuser-Busch Brewing Association. From the evidence before me, in particular the cross-examination of Mr Bocek, I infer that this was part of wider arrangement between the two sides, that is Anheuser-Busch and the Burgher Brewery. 41 Mr Hajn (the archivist of the first respondent) deposed to the fact that Budweiser beer began to be sold abroad and from 1872 on the American market. He produced copies of letters from the nineteenth century in support of this statement. These letters, together with the evidence of Mr Bocek, make it tolerably plain that it was the Burgher Brewery exporting this named beer into America, and probably elsewhere overseas in the nineteenth century. 42 At about the same time, in 1911, Cesky akciový pivovar and Anheuser-Busch had dealings. On 19 August 1911 a document was signed on behalf of Cesky akciový pivovar by the chairman of the board of the company and a director, both being duly authorised. It was in the following terms: Anheuser-Busch Brewing Association, a joint-stock company with its principal seat in the city of St. Louis, Missouri, United States of America, uses, while selling and distributing its beer products manufactured in the United States of America, for vessels of all kinds, for bottles and other packaging devices for filling its beer products, as well as for labels, caps and other devices for sealing bottles the verbal trademark 'Budweiser', which trademark, as a trademark registered in the name of the joint-stock company Anheuser-Busch Brewing Association, has been entered in the Trademark Register of the Patent Office of the Department of the Interior of the United States of America under ref. no. 64.125. The undersigned Ceský akciový pivovar in Ceské Budejovice hereby states that Ceský akciový pivovar expressly acknowledges the right of the joint-stock company Anheuser-Busch Brewing Association to use the aforesaid trademark, registered in the name of Anheuser-Busch Brewing Association in the Trademark Register of the Patent Office of the Department of the Interior of the United States of America under ref. no. 64.125, in course of selling and distributing its beer products, as well as in course of marking the same, whether in the territory of the United States of America or in other non-European countries. Ceský akciový pivovar in Ceské Budejovice therefore recognizes that it is not in the position to hold any objection against the joint-stock company Anheuser-Busch Brewing Association hereafter marking its products, as well as any and all means and aids used for the distribution thereof, with the word 'Budweiser', especially on vessels, stoppers, cases and other packages, and against its using the word 'Budweiser' in launching its products into distribution, whether per se or in combination with any other marks, patterns or additions chosen by it, with the exception of the word 'Original' or any similar designation or depiction that might mislead the public to believe that the beer products of Anheuser-Busch Brewing Association originate from the city of Budejovice in Bohemia. The foregoing statement of the joint-stock company Ceský akciový pivovar in Ceské Budejovice also applies to the use of the word 'Budweiser' for marking of beer products of the joint-stock company Anheuser-Busch Brewing Association on notices, offers, price lists and public announcements. Ceský akciový pivovar in Ceské Budějovice hereby expressly states that, by virtue of its statement to the effect that it is not in the position to object against the joint-stock company Anheuser-Busch Brewing Association using the aforesaid trademark registered in the Trademark Register of the Patent Office of the Department of the Interior of the United States of America under ref. no. 64.125, it does not waive its right to mark its own products with the word 'Budweiser' and/or other marks, patterns or additions for identifying the geographical origin of its beer products in selling or causing such products to be sold anywhere, i.e. including, without limitation to, the territory of the Unites States of America or other non-European countries. IN WITNESS WHEREOF, Ceský akciový pivovar in Ceské Budejovice affixed its notarized signature hereunto. Ceské Budejovice, on August 19, 1911. [diacritical element above the letter 'e' lacking in original] 43 Anheuser-Busch Brewing Associations paid 30,000 crowns for this document. The parties agreed that this sum was not commercially nominal at the time. The signed documentary receipt says 'against issuance of a document given in Ceské Budějovice on 19 September 1911'. Despite the discrepancy in date, the parties agreed that the document and the 30,000 crowns were directly related. 44 The first relevant trade mark of the joint stock company was the word mark 'Ceský budějovický granát' registered in Ceské Budějovice on 16 August 1922. The word 'granát' means garnet. 45 On 27 March 1925 the trade mark 'Ceský budějovický crystal' was registered by the joint stock company in Ceské Budějovice. 46 On 28 April 1930 the trade mark 'BUDVAR' was registered in the name of the joint stock company locally in Czechoslovakia and on 1 March 1932 in the international register in Berne at the Office of International Industrial Property. Mr Hajn explained that the word 'Budvar' was a word coined from parts of the words 'Budějovický' and 'Pivovar': that is, a coined word from the phrase Budějovický Brewery. 47 In 1931 the joint stock company was registered in the Commercial Register of Ceské Budějovice as 'Budvar, Ceský akciový pivovar'.

48 On 13 February 1934 the joint stock company registered in Ceské Budějovice a trademark for use in the English language containing the word 'Budweiser'. This mark was for the neck and body of a bottle as follows:

49 On 14 May 1936, by resolution of the general meeting, the joint stock company changed its name from 'Ceský akciový pivovar v. C.Budějovicich' to 'Budvar, Ceský akciovy pivovar v. C. Budějovice'. The resolution also dealt with the company's name in different languages. After the general meeting of the company on 14 May 1936, section 1 of the Articles of the company was in the following terms: The firm name, which originally in Czech read as 'Ceský akciový pivovar v Ceských Budějovicich' was changed by a resolution of the General Meeting held on May 14, 1936, and reads in Czech as follows now: 'Budvar, Ceský ackciový pivovar, Ceské Budějovice', in German: 'Budbräu, Böhmisches Aktienbräuhaus, Budweis', in Slovak: 'Budvar, Ceský úcastinársky pivovar, Ceské Budějovice', in French: 'Budvar, Brasserie tchčque par actions ŕ Ceské Budějovice', in English: 'Budvar, Czech Joint-Stock-Brewery, Ceské Budějovice', in Serbo-Croation: 'Budvar Ceška dionicka pivara, Ceské Budějovice', in Bulgarian: 'Budvar, Cechska akcionerna pivovarna fabrika, Ceské Budějovice' in Hungarian: 'Budvar, Cseh Részvény-Sörfözde, Ceské Budějovice'. 50 The word 'Budvar' appears to have been placed in the name of the company because beers so marked were very popular. Indeed Mr Hajn said that the company name in fact changed to include 'Budvar' two years before the official change in 1936. 51 After prohibition ended in December 1933, the joint stock company commenced exporting to the United States. There was a debate before me as to whether this was a recommencement or a commencement. I will return to this in due course. It is sufficient here to note that Mr Hajn, who was not cross examined, said (in para 29 of his affidavit of 23 June 1999) that after prohibition in the USA 'had ended' the joint stock company 'started again exporting into this area'. In 1936 the joint stock company filed for registration of a trade mark in America. The mark was registered in 1937. It was as follows: 52 No claim was made in the American trade mark for the word 'Budweiser' or for any wording except 'Bohemian Brewery Ltd'. 53 In 1938, Anheuser-Busch requested the joint stock company to give up the words 'Budweiser', 'Budweis' and 'Bud' for the whole world, except Europe. This was refused. After negotiations, an agreement was signed on 11 March 1939 to which Anheuser-Busch Inc. and the joint stock company were parties (together with the latter's importing agent into the United States). The agreement (not a deed) contained the following recitals: … WHEREAS, Ceský, for some time past, has imported its product into the United States under a label which prominently displays the words 'Budweiser Beer', which label it caused to be registered in the Patent Office of the United States No.348,769, on August 10, 1937, a copy of which label is hereto attached marked 'A'; and … WHEREAS, since about 1875 A-B Inc. and its predecessors have been brewers of beer in the United States and have sold its product in the United States and elsewhere continuously since that year under the trade-mark 'Budweiser'; and WHEREAS, the public in the United States and in other localities where A-B Inc.'s product has been sold, have become accustomed to identify and designate the beer of A-B Inc. and no one else, by the trade-mark 'Budweiser' and its abbreviated form 'Bud'; and WHEREAS, Ceský through Rudolf is now importing its product into the United States, where it is sold in bottles or other containers bearing the above-mentioned trade-mark and is sold in competition with the product of A-B Inc. identified by its trade-mark 'Budweiser', and WHEREAS, Ceský's product is frequently passed off and sold as and for the product of A-B Inc. by reason of the fact that the name 'Budweiser' is used on the said label and in connection with the sale of its goods, and WHEREAS, it is the desire of all parties hereto to avoid such confusion and to insure that the product of each is distinctively marked and sold only on its own merits: … 54 The operative clauses included the following: … NOW, THEREFORE, the parties hereto, in consideration of the sum of $/50.000 /fifty thousand Dollars/ or at the option of Ceský its equivalent in Czechoslavak Crowns according to the official exchange value on the day of remittance, to be paid by A-B Inc. to Ceský, and the sum of $15.000 / fifteen thousand Dollars/ or at the option of Rudolf its equivalent in Czechoslavak Crowns according to the official exchange value on the day of remittance, to be paid by A-B Inc. to Rudolf, and of the respective terms of this agreement to be performed by each of the parties hereto, all the said parties agree as follows: 1. Ceský and Rudolf admit that A-B Inc. and its predecessors were the first to use the word 'Budweiser' in the connection with its beer and others of its products as a trade-mark and trade name, and that since such first use thereof in and about the year 1875 have used 'Budweiser' continuously on and in connection with its merchandise as its trade-mark and trade name in the United States and elsewhere. Ceský and Rudolf hereby undertake and agree that within six months from date hereof they will discontinue in countries of the North American Continent north of and including, the Republic of Panama, the West Indies, Philippines, Hawai, [sic] Samoa, and any present territories possessions or protectorates of the United States, all hereinafter referred to as North America, the use of the name 'Budweiser', 'Budweis', 'Bud', or any combinations, derivations, abbreviations or simulations thereof, in or in connection with, their corporate or firm names, or in connection with their merchandise and also will discontinue in said countries the use of any designs or any oral, written,, printed or otherwise reproduced or communicated utterances, publications, designs or pictures similar in style of letter, word, colour or form to those used by A-B Inc.; and that if they desire to indicate, in connection with their merchandise, that such merchandise is brewed or manufactured in Ceské Budějovice, they will not use the words 'Bud', Budweis' or 'Budweiser' but will use only the exact words 'manufactured/or brewed/in Ceské Budějovice, Czechoslovakia' in inconspicuous letters. In the event that the official name of Ceské Budějovice is changed to Budweis, the latter name being the only officially admitted name, then if either Ceský and Rudolf desire to indicate in connection with Ceský's merchandise that such merchandise was brewed or manufactured in Budweis, they may indicate this fact so long as the name remains Budweis, by the exact words 'brewed / or manufactured/ in Budweis City', but by no other words. … 55 In November 1940, the joint stock company registered the trade mark 'Budweiser Budbräu' in Ceské Budějovice (now, officially, Budweis). This mark used a script and underlining in the word 'Budbräu' similar to the use on containers presently used by the first respondent. I note this because the applicant says that the first respondent has deliberately intended to play on the goodwill of the applicant's mark. One of the matters pointed to by the applicant is what is said to be the emphasis on the introductory syllable 'Bud' by its shape and underlining. This mark, registered in occupied Ceské Budějovice (Budweis) in 1940, at least indicates the lineage of that part of the script. The trade mark was as follows: 56 In 1941, the joint stock company changed its name to 'Budwar, Ceský akciový pivovar v C. Budějovicich' (in Czech) and 'Budbräu, Böhimisches Aktienbräuhaus, Budweis' (in German). 57 During the occupation by the Germans, a Nazi trustee administrator was appointed to the joint stock company, but the Burgher Brewery remained in the hands of its German speaking owners. 58 In January 1946, the joint stock company was nationalised. By ministerial decree dated 13 September 1946 there was established a brewing industry 'national enterprise'. The property of the nationalised joint stock company was transferred to the new entity. The name of this nationalised entity was 'Ceskobudějovický pivovar, národní podnik' (in Czech) and (according to the translation in Exhibit IH 11 to the affidavit of Mr Hajn) this translates into English as 'Brewery of Ceske Budějovice, national enterprise'. 59 In 1946, the Burgher Brewery (whose German ownership I infer was not disturbed by the forces of occupation) was confiscated as a possession of 'traitors and collaborators' and was transferred to the national administration. Apparently, there was not at this time (and perhaps unsurprisingly) an official German language name of the nationalised entity. Also, the official name of the town had reverted to Ceské Budějovice. 60 By ministerial decree of 31 May 1948 the name 'Ceskobudějovický pivovar, n.p.' was changed to 'Ceskobudějovické pivovary, n.p.' The translation of the ministerial decree of 31 May 1948 effecting this change in Exhibit IH 12 to the affidavit of Mr Hajn contains the following: … the present corporate name 'Brewery of Ceské Budějovice, national enterprise' is replaced by the corporate name 'Breweries of Ceské Budějovice, national enterprise'. 61 By ministerial decree dated 10 July 1948, effective as of 1 January 1947, the property of the Burgher Brewery, previously confiscated, was incorporated into the Ceskobudějovické pivovary, n.p. This was described in the English translation (Exhibit IH 13 to the affidavit of Mr Hajn) as the 'incorporation of the confiscated enterprise… into the … national enterprise.' The precise jurisprudential nature of the transfer is not important. 62 By ministerial decree dated 30 August 1948 the 'Ceskobudějovické pivavory, n.p.' were renamed 'Jihoceské pivovary, n.p.'. This latter name is translated in Exhibit IH 14 as 'South Bohemian Breweries, national enterprise'. 63 The first respondent was created in 1967. Mr Hajn said (see paragraph 22 of his affidavit of 23 June 1999) that the first respondent 'was separated in 1967 from Jihoceske pivovary ("Southbohemian Breweries, n.c.") and it was registered as Budějovický Budvar, národní podnik.' In the English translation of the extracts from the trade and companies register of the County Court in Ceské Budějovice it appears that the assets, including property and rights, including patent, trade mark, protected designs and designation of origin rights of the former Ceský akciový pivovar (as the joint stock company was called before the Second World War) or Budwar, Ceský akciový pivovar in C. Budějovice (as it was renamed in 1940) were 'excluded', which I take to be removed, from the national enterprise known since 30 August 1948 as Jihoceské pivovary, n.p. and were 'incorporated into' a (new) national enterprise (which is the first respondent) called Budějovický Budvar, n.p.. Mr Hajn said that after the establishment of the first respondent in 1967, the re-registration of all the trademarks of the joint stock company took place. He also stated that 'some rights of the original Burgher Brewery' were transferred to the first respondent. 64 The new enterprise (the first respondent) was established by a measure of the relevant ministry dated 21 December 1966 with effect from 1 January 1967. According to extracts from the trade and companies register of the County Court in Ceské Budějovice and orders reflected in official notices dated 21 December 1966 and 22 June 1970, the first respondent was created and registered as the following (the various linguistic forms being contained in the original court record of registration): [Czech] Budějovický Budvar, národní podnik [English] Budweiser Budvar, National Corporation [French] Budweiser Budvar, Entreprise Nationale [German] Budweiser Budvar, Nationalunternehmen

65 The official notices of 21 December 1966 and 22 June 1970 entitled the first respondent, referred to as the 'national enterprise' (being the translator's words in Exhibit IH 16), to be registered in the Register of Companies as at 1 January 1967. The foreign versions of the first respondent's corporate name were set out in enclosures to the notices, which enclosures were said to form an integral part of the official notices. The English, French and German names are set out above. Each of the Spanish, Italian, Polish and Portuguese versions of the name was 'Budweiser Budvar' followed by a comma and a phrase equivalent to 'national corporation' in that particular language. 66 There was evidence before me of the state of the court register in 1986 and 1999. In 1986, there were eight names of the first respondent for countries of various linguistic background: Russian, English, French, German, Spanish, Italian, Polish and Portuguese. All, except Russian, had the phrase 'Budweiser Budvar', plus a corporate designation, as the name of the first respondent. In 1999, it seems that the list of names in the Register had been reduced to three - a Czech, an English and a French version. 67 It is convenient to note at this point that these company registrations entitle, but do not oblige, the first respondent under Czech law to call itself Budweiser Budvar, National Corporation in an English speaking country such as Australia. No Czech law would be infringed by the first respondent calling itself 'Budějovický Budvar, národní podnik' in Australia. This question was raised by me during the hearing, which proceeded, in particular in relation to defences under s 122 of the TM Act, on this basis. 68 It is also convenient to note at this point that discussion took place during the hearing as to the basis of the applicant's attack on, or resistance to, the pleading of good faith under s 122 of the TM Act by the first respondent. In the course of that discussion, and by the provision of further particulars, it was made clear that no reliance whatever was placed by the applicant on the choice of names reflected in the company register, which was made either by the company or its officers or officials or members of the government of the Socialist Republic of Czechoslovakia in 1967, being people unconnected with those involved in the prosecution of the defence in this case. 69 I have sought to trace the corporate history of the various companies which can be said to be the predecessors of the first respondent because of matters which were relevant to criticism of Mr Bocek's evidence. There is a diagrammatic representation of these events (and the later renaming and division of the Jihoceské pivovary, n.p.) in Exhibit IH 17. It is sufficient to say at this point that it is a little simplistic to view the activities of the Burgher Brewery as unrelated to any predecessor of the first respondent. 70 In 1968 there were registered in the International Office for Protection of Intellectual Property the phrases 'Budějovický Budvar' and 'Budweiser Budvar' as indications of origin (appellation d'origine). 71 I note that the official translations of documents from Czech to English made for this case and put into evidence generally do not translate the Czech name Budějovice to Budweis to aid comprehension of the name of the town. It is undoubted that in a German speaking context the town is referred to as Budweis. 72 Mr Hajn, who was not cross examined, said in his affidavit: The name of town 'Budweis' is used in common practise of Germans and other people, which use German language and for all official translations… 73 Among the exhibits to Mr Hajn's affidavit are photographs of traffic signs from Austria (some in English) which all use the word 'Budweis'; for example 'Historic Hotel Zvon Budweis Main Square'. Also in those exhibits were envelopes addressed in English to various people at the first respondent, some using the word 'Budweis' and others 'Budějovice' as the denomination of the town. 74 The first respondent has the trade mark 'Budějovický Budvar' in various countries. Mr Hajn explained that 'Budějovický'has never been used on a label otherwise than in conjunction with 'Budvar'. The word 'Budvar' has been used itself (that is without the presence of 'Budějovický' or 'Budweiser') as a trade mark and on labels. 75 On a number of occasions since the late nineteenth century the beer produced by the joint stock company, by the entities formed after the Second World War and by the first respondent has been awarded various awards for its quality. 76 In the second half of the twentieth century Anheuser-Busch entered negotiations with the Czechoslovak Socialist Republic and later the Czech Republic about commercial matters concerning the first respondent and its predecessors. In the 1990s Anheuser-Busch sought to buy the first respondent. These negotiations ended in 1996. 77 Since 1996 various lawsuits and administrative procedures have been brought around the world, including these proceedings, in which Anheuser-Busch attacks the first respondent's use of the marks 'Budweiser', 'Budějóvický', 'Budvar' and other marks containing the letters 'Bud'. These proceedings and actions have been instigated in Argentina, Austria, Bosnia, China, Croatia, the Benelux countries, Great Britain, Greece, Denmark, Egypt, Estonia, Finland, France, Germany, Hong Kong, Hungary, Ireland, Italy, Japan, Kirgizstan, Latvia, Liechtenstein, Lithuania, Macedonia, Moldova, Norway, New Zealand, Portugal, Republic of Korea, Russia, Slovenia, Spain, Sweden, Switzerland, Taiwan, Ukraine, Uzbekistan, Venezuela, Vietnam and Yugoslavia.

78 The first respondent is the fourth largest brewing company in the Czech Republic. It exports its beer to more than 50 countries under the marks 'Budweiser Budvar' and 'Budějóvický Budvar'. Exports constitute 50% of its annual production. It is the leading beer exporter from the Czech Republic. In 1996 it exported 495,000 hectolitres of beer. In 1996 it was the twenty-fifth largest beer exporter in the world. In 1996 Heineken Nederland NV exported 7,010,000 hectolitres and was the leading exporter. The first respondent's export sales were of a similar volume in 1996 to those of Tsingtao: 500,000 hectolitres (China), Pabst: 500,000 hectolitres (USA), Grolsche Nederland: 600,000 hectolitres (Netherlands), and Carlton and United: 430,000 hectolitres (Australia). Anheuser-Busch in 1996 was the world's eighth largest exporter with 2,200,000 hectolitres. 79 In 1996 the brand of the first respondent's beer sold in Germany as 'Budweiser Budvar' was the second most popular imported beer in that country. In 1996 in England it was (as 'Budweiser Budvar') the thirteenth most popular imported beer. In 1996 in Austria it was (as 'Budweiser Budvar') the second most popular imported beer.

80 The first respondent's beer is promoted and sold in the Czech Republic and Slovakia as a premium brand at the highest price level. The words 'Budějóvický Budvar', 'Budvar' and 'Budweiser' are used on the local label. In the years 1995 to 1998 the first respondent spent US$2,019,200, US$3,718,000, US$3,505,200 and US$4,750,000, respectively, promoting its beer in the Czech Republic and Slovakia by radio, television, billboards and other advertising, including sponsorship of sporting teams from Ćeske Budějovicé. The first respondent sponsors the Czech Film Festival.

abroad 81 In countries where the first respondent's beer is sold as 'Budějóvický Budvar' point of sale material is provided to importers. 82 In Finland, at least, there has been advertising on buses using the words 'Budějóvický' and 'Budvar'. 83 The first respondent participates in international exhibitions, aimed at the drink and food industry and, depending on the location of the exhibition, advertises or has its stall labelled as 'Budweiser Budvar' or Budějóvický Budvar'. Such food and drink industry exhibitions from 1994 to 1998 have been held in Germany, Austria, Italy, Switzerland, London, Slovakia, the Czech Republic, Belgium, Poland, Spain, Russia, France, Norway, Hungary, Finland, Holland, Ukraine, America, Japan, Macedonia, Burkina-Faso, Sweden, and Togo. 84 The mark 'Budějóvický Budvar' is also presented on the internet website of the first respondent, though much less prominently than 'Budweiser Budvar'. 85 The words 'Budějóvický Budvar' are registered or applied for in a number of countries. The first respondent has 345 registrations and applications in 94 countries of 'Budějóvický', 'Budweiser', 'Budvar' and other marks and logos. 86 Application has been made in Australia for the trade mark 'Budějóvický Budvar' as a logo and a label. This has been opposed by Anheuser-Busch. 87 The first respondent exports beer under the trade mark 'Budweiser Budvar' to the following countries: Germany Nigeria England Italy Austria Benin Hungary Luxembourg Switzerland Togo Israel Belgium Spain France Ireland Netherlands Norway Croatia Russia Turkey Poland Latvia Ukraine Macedonia Azerbaijan Lithuania Bosnia and Herzegovina Armenia Georgia Estonia Albania Tadzhikistan Vietnam Kazakhstan Moldavia Portugal Morocco Mongolia Rumania Slovakia Kirghizstan Serbia Bulgaria Pakistan 88 The first respondent exports beer under the trademark 'Budějovický Budvar' to the following countries: Finland Cyprus Sweden Maldives Malta Japan Denmark Hong-Kong New Zealand Thailand 89 It wishes to export beer to Australia under the brand 'Budějovický Budvar'.

90 The 'General Director' of the first respondent, Mr Bocek, swore that in countries (such as Australia) in which Anheuser-Busch has first registered 'Bud' and 'Budweiser' the first respondent 'respects the present state and registers its long-term used Czech registered trade mark "Budějóvický Budvar" in the special graphical form in order to avoid possible conflicts.'

the issues in more detail 91 There were, in effect, two trade mark cases pleaded. The first concerns the allegations maintained throughout the hearing that the first respondent was responsible for the sale and distribution in Australia of the so-called 'first label' bottles and cans, as defined in paragraphs 13(a) and (b) of the Third Further Amended Statement of Claim (the Statement of Claim). These were the containers bearing the trade mark 'Budweiser Budvar' on the front and back labels of the bottle and on the can, and the trade mark 'Budweiser Budbräu' on the neck of the bottle. These bottles and cans are found in Exhibits GRB 6, GRB 7, WLM 5 and NRS 7. 92 The first respondent says, and has said for some time, that it was not and is not responsible for these importations. Notwithstanding this, it has proffered undertakings to the Court, in the 'Second Amended Permanent Undertaking by First Respondent' filed in Court on 11 September 2001, which are in the following terms, in so far as they deal with the first label bottles and cans: 1. The first respondent hereby permanently undertakes to the Court, without admissions and subject to paragraph 2 below, that it will not, whether by itself, its servants and agents, without the licence of the applicant, while the registrations of Australian Registered Trade Marks Nos 163033 and 36684, being the trade marks 'Budweiser' and 'Budweiser, King of Beers' respectively in class 32, are valid (a) export to Australia or sell, offer for sale, distribute, promote or advertise in Australia, the 'First Label Beer' as defined in paragraphs 13(a) and (b) and 16 of the Second Further Amended Statement of Claim filed herein, being beer marketed under the mark 'Budweiser Budvar', or any point of sale or other promotional materials to be used in marketing the First Label Beer; or (b) knowingly assist or authorise any person to import the First Label Beer into Australia or to sell, offer for sale, distribute, promote or advertise such beer in Australia. 2. Save that, in relation to its supply to its authorised distributor from time to time, of the Second Label Beer as defined in paragraphs 13 and 16 of the Second Further Amended Statement of Claim, it will continue to provide to its authorised distributor from time to time solely for the use of the authorised distributor internally in its business and not for the use of any third party (a) catalogues of point of sale materials relating to the first respondent's products substantially similar to the catalogue a copy of which is Exhibit TH 12 to the affidavit of Thomas Hraba sworn 5 August 1999; (b) invoices in the form of the invoice of a copy of which is Exhibit TH 7 to the affidavit of Thomas Hraba sworn 5 August 1999, which have printed in the border of the document the words 'Budweiser Budvar' and which display the name of the first respondent as 'Budweiser Budvar National Enterprise'. 93 Undertaking 1 is sufficient to remove from the proceedings the substantive claim for injunctive relief against the first respondent based on the TM Act, the TP Act and the law of passing-off. No damages and no account are or is sought by the applicant in relation to the first label bottles and cans, as I understand the case as pressed. 94 However, the first label bottles and cans remained in the proceedings in four respects. First, the applicant maintained to the end that the first respondent was responsible for the importation of these goods. This responsibility was said to be based on its authorisation of whoever did sell the goods into Australia. The authorisation of the importation was specifically pleaded in para 16A of the Statement of Claim. This was said to be relevant for two reasons: costs and the question of intention. Whilst the parties have asked me to leave costs to be dealt with by agreement (if possible) after publication of these reasons, I understood from what was said before cross-examination of the witnesses began that the parties wanted this issue determined as a matter relevant, amongst other things, to the question of costs. That was also the understanding of Mr Yates SC, senior counsel for the first respondent. There was some discussion with Mr Catterns QC, senior counsel for the applicant about this in the context of the address. In written submissions, the applicant asked me not to deal with the first respondent's involvement (or lack thereof) in relation to the first label. It was said that there had not been cross-examination of Mr Hraba about the topic, which would have occurred had the matter been in issue. I made plain at the time of this discussion that the first respondent's involvement (or lack thereof) in the importation was an issue before me. At the time of this discussion Mr Hraba had returned to the Czech Republic. No application to recall him was made. It is appropriate that I deal with the matter as a relevant consideration for the parties to take into account (or for me to take into account, failing agreement) as to costs. 95 Secondly, it is necessary to deal with the matter in relation to what was referred to as 'intention'. The chief executive of the first respondent gave evidence. He was cross-examined. It was put to me that, in a number of respects, I should not accept his evidence and that he was seeking to mislead the Court in his affidavit. Allied to these matters, with which I will deal in due course, was the submission that the first respondent had set out to appropriate the reputation and goodwill of the applicant in a way, it was submitted, that should lead me to conclude that the first respondent's conduct would be adequately summarised by a passage from the reasons for judgment of Dixon J and McTiernan J in Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641at 657: … when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive. 96 As part of these allegations, it was put that by authorising the importation of the first label goods, the first respondent was sensitising the market to the Czech product. 97 These are serious allegations, which demand to be put at rest, one way or the other. 98 For these reasons, the question of the involvement (or lack thereof) of the first respondent is an issue and is dealt with below. 99 The third residual aspect of the first label bottles and cans arises from the amended cross-claim of the first respondent. In the cross-claim complaint is made as to what are claimed to have been the unjustified threats of infringement by the letters of the solicitors for the applicant. As part of the justification for those letters, the applicant (as cross-respondent) points to the fact that the importation and sale of the first label bottles and cans involved infringement of its trade marks. Thus, the applicant said that I need to deal with this question in the context of the cross-claim. 100 Fourthly, and returning to the undertakings referred to in [92] above, it will also be necessary to consider the legitimacy of the qualification contained in paragraph 2 thereof. The first respondent wishes to send catalogues to its authorised distributor or distributors (I would take the singular 'distributor' to cover possibly more than one) from time to time, for 'internal use in its business' and to send invoices in a particular form. These documents contain wording of a kind used on the first label bottles and cans. The applicant opposes this qualification and, indeed, submits that orders should be made enjoining such conduct. Paragraph 16A of the version of the Statement of Claim filed in Court on 12 September 2001, and which paragraph is relevantly denied, alleges that the first respondent, amongst other things, advertised or promoted or authorised the advertisement or promotion of the first label beer in Australia and paragraph 25 pleads the continuing threat to so infringe. I will deal with the materials referred to in paragraph 2 of the undertaking in due course. There may also arise the question of wider restraint beyond these two examples of materials, but any such debate can occur in the course of discussion of relief, the formulation of which both parties have requested abide the consideration of my reasons. 101 The above disposes of the issues concerning the first label bottles and cans of the first respondent. 102 The second trade mark case was, with some qualification, fought to the end. This covered what was referred to as the 'second label' beer, as pleaded and particularised in and under para 13(c) of the Statement of Claim. There were a number of versions of the labels described as 'second label'. 103 The first of these labels, which the first respondent exported to Australia until May 1998, is found in Exhibit GRB 11 (on a bottle) and in Exhibit TH 10 (as a black and white reproduction). Exhibit TH 10 is set out at [122] below. Changes were made to the label and the first respondent then exported to Australia beer in bottles as found in Exhibit GRB 12 (a bottle) and Exhibit TH 11 (a black and white reproduction of the label). Exhibit TH 11 is set out at [124] below. The third version of the second label is found in Exhibit TH 101 (see [126] below). The first respondent has not exported any beer to Australia under this label. This litigation intervened. However, it is the label presently intended to be used for export to Australia. There are a number of immaterial differences in these three forms. The material variation was on the lower coloured strip (the dark strip on the black and white reproduction). The pre-May 1998 bottle had 'Budweiser Budvar' and 'national enterprise' on two lines, and the former phrase was in larger print than the latter. Each of Exhibits TH 11 and TH 101 had 'Budweiser Budvar', National Corporation' on one line and in smaller print than 'Budweiser Budvar' in Exhibit TH 10. 104 Paragraph 3 of the 'Second Amended Permanent Undertaking By First Respondent' contained a further undertaking dealing with the contents of the coloured strip on the front label. That undertaking was as follows: 3. The First Respondent hereby permanently undertakes to the Court, without admissions, whether by itself, its servants or agents that it: (a) shall not export to Australia or sell, offer for sale, distribute, promote or advertise in Australia beer displaying a label with the name of the First Respondent over two lines; and (b) shall only export to Australia or sell, offer for sale, distribute, promote or advertise in Australia beer displaying a label with one of the First Respondent's registered names as recorded in exhibit HL-8, represented on one line and in the type size shown with respect to 'BUDWEISER BUDVAR, NATIONAL CORPORATION' in exhibit TH-101 to the affidavit of Tomás Hraba sworn 27 July 2001 filed 6 August 2001. 105 Subparagraph 3(a) deals with the organisation of the words on the strip such that they will be in one line. Subparagraph 3(b) deals with the size of the print on that one line. The names recorded in Exhibit HL 8 are 'Budějovický Budvar, národnípodnik', 'Budweiser Budvar, National Corporation' and 'Budweiser Budvar, Entreprise Nationale'. In effect, the first respondent undertakes not to export to Australia bottles with labels as in Exhibits GRB 11 and TH 10; but it does not undertake to limit the use of its name to the Czech version, 'Budějovický Budvar, národní podnik'. 106 The trade mark case considering the second label has a number of aspects. First, was the label on Exhibits GRB 11 and TH 10 an infringement? This involves the following questions: (a) Whether the phrase 'Budějovický Budvar' on the neck seal and front and back white labels (avowedly used as a trademark) was substantially identical with, or deceptively similar to, any of the applicant's marks. (b) If, contrary to the submission of the first respondent, the word 'Budějovický' was to be looked at as trade mark use, separately from the word 'Budvar', whether that word was used in good faith by the respondent to indicate geographical origin for the purposes of para 122(1)(b)(i). (c) Whether the phrase 'Budweiser Budvar' on the coloured strip was trade mark use. 107 Secondly, the trade mark case concerning the post-May 1998 labels, Exhibits GRB 12, TH 11 (as exported) and TH 101 (as proposed to be exported) is the same as (a), (b) and (c) above, with one additional issue. If the phrase 'Budweiser Budvar' on the strip is trade mark use, a defence under para 122(1)(a)(i) in relation to these later labels is propounded, to the effect that the phrase is used as part of the corporate name of the first respondent. The first respondent now has three official corporate names, as set out in Exhibit HL 8 and referred to in [66] above, one in Czech, one in English and one in French. Exhibits GRB 12, TH 11 and TH 101 have the official English language name on the label. This defence is not propounded in respect of the pre-May 1998 label as the words there used 'Budweiser Budvar, National Enterprise' did not comprise an official name of the first respondent under any version. 108 In the light of paragraph 3 of the undertaking, the applicant's claim for injunctive relief was directed, in effect, to labels of the kind found in Exhibit TH 101. 109 It is necessary to assess whether the pre-May 1998 labels (Exhibits GRB 11 and TH 10) involved an infringement, not for the purpose of establishing the entitlement to damages or an account of profits which, as I understand the case as pressed, are not claimed, but to assess whether the threats made by the solicitors for the applicant, about which complaint is made in the cross-claim, were justified. 110 The conduct in respect of which complaint is made under the TM Act also forms the foundation for claims that the first respondent has engaged in, and proposes, unless restrained, to engage in, conduct which is, and would be, in contravention of s 52 and paras 53(c) and (d) of the TP Act, and which amounted, and would, amount to passing-off. 111 Submissions were filed in relation to these latter claims under the compendious heading 's52/passing off'. It was not suggested by either party that I need go beyond the application of s 52 adequately to deal with these matters. 112 Orders were sought to the effect that the first respondent withdraw or cancel trade mark applications it has made for the mark 'Budějovický Budvar', with and without a device. The claim for those orders was not pressed. The applicant will pursue its opposition to those applications in the normal way. 113 I should add two things. First, as to the infringement action, TP Act and passing-off claims, it is the labels in question and the marks thereon with which I am dealing. I am not dealing with any other use of the words 'Budějovický' or 'Budvar'. Secondly, save to the extent of the stationery and catalogues dealt with in paragraph 2 of the undertakings (see [92] above), I am not called on to deal with other conduct which may or may not be something about which the applicant might want to complain. For instance, the downloaded contents of the first respondent's website was tendered (Exhibit K). The tender of this was objected to on the grounds of relevance. The tender was justified on the basis of credit and as further evidence relevant to a conclusion that the first respondent intends Australian consumers to perceive some association between the applicant's product and the first respondent's product. Exhibit K contains various references to 'Budweiser Budvar' as well as a variety of other information. The rear label on Exhibit TH 101 gives the website address. However, there has not been pleaded or agitated before me, the question whether this site, and any invitation to it is in some way a legal wrong in this country, whether by reference to the TM Act, the TP Act or general law. No questions of the kind dealt with by Jacob J in Euromarket Designs Inc v Peters & Anor [2001] FSR 288 were raised in the proceedings.

the question of the importation into Australia of beer labelled 'Budweiser Budvar'

114 It is clear that prior to the institution of these proceedings some beer manufactured and sold (somewhere) by the first respondent and labelled 'Budweiser Budvar' and 'Budweiser Budbräu' entered Australia and was sold here. 115 The first respondent claims not to have been responsible for the importation. Nevertheless, without admissions, it has proffered undertakings to the Court in the form to which I have referred ([92] above). 116 The applicant contends that the first respondent was responsible for this importation. This is denied. 117 Mr Hraba the Chief of the Export Department of the First Respondent gave evidence that exporting is done through exclusive distributors in each country who are were prohibited from re-exporting. It is unnecessary to deal with the specifics of the contractual provisions dealing with this. 118 There was no evidence that the first respondent was in any way connected with the importing of 'Budweiser Budvar' into Australia. There is no basis in the evidence for any proposition that the first respondent encouraged or even turned a blind eye to any known or suspected re-exporting to Australia. 119 On the evidence there is no basis to conclude that the first respondent authorised or participated in any way in the exporting to Australia of 'Budweiser Budvar'. I reject the submissions that this occurred, whether to 'sensitise' the market, or not.

exporting beer labelled 'Budějovický Budvar' to Australia

120 In 1996 the first respondent carried out some research in Australia, in particular ascertaining the state of the applicant's marks. The extent of that research was not explored. The first respondent then began exporting beer to Australia under the mark 'Budějovický Budvar'. The first confirmation of sale to the third respondent was dated 9 April 1997. That confirmation note sent to the third respondent had at the top of the page 'Budweiser Budvar', though the consigned goods were described as '315 cartons Beer in cartons Budějovický Budvar lager beer 12% A.B.V. 5%' priced at USD 7.20 per carton. This sale was delivered in May 1997. An export document was raised in respect of this sale which referred to the consigned goods as 'Budweiser Budvar'. Mr Hraba said that this document contained an error and the consignment was of beer labelled cartons 'Budějovický Budvar'. I accept Mr Hraba's evidence. 121 Mr Hraba said that the beer in this consignment was packed in paper cartons with the following markings:

122 The bottles exported to Australia in this consignment, an example of which is Exhibit GRB 11, had labels on the body of the bottle (being Exhibit TH 10) as follows (in black and white):

123 The neck labels of these bottles had a castle and lion rampant in dark orange encircled by the words 'BUDĚJOVICKÝ BUDVAR' in brown. 124 In or about May 1998, the labels for export to Australia were changed. Mr Hraba used the verb 'modernised'. That new label in black and white form in Exhibit TH 11 was as follows:

125 The orange hue of the neck label was not changed, but the body label was changed from an orange to a red. Relevantly for these proceedings is the change on the orange, now red, strip on the label on the front of the body of the bottle of the size and placement of 'BUDWEISER BUDVAR'. An example of this bottle is Exhibit GRB 12. 126 The first respondent intends to export bottles of beer to Australia with a slightly different label as contained in Exhibit TH 101 which (apart from some differences as to colour, especially as to the yellow) is in the following form: THE TRADE MARK CASE

127 I leave to one side, for the moment, the first label bottle and can pleaded in paragraphs 13(a) and (b) of the Statement of Claim. As I have found, though manufactured by the first respondent, it was not responsible for its importation into and sale in Australia.

128 As I indicated earlier, to determine the question of actual breach, the pre-May 1998 label (Exhibit TH 10) and its bottle Exhibit GRB 11 and the post-May 1998 label (Exhibit TH 11) and its bottle Exhibit GRB 12, must be considered. To determine the question of threatened breach, the latest version in Exhibit TH 101 must also be considered.

129 For there to be infringement the first respondent must use as a trade mark a sign that is substantially identical with, or deceptively similar to, any trade mark of the applicant, that is 'Budweiser' or 'Bud' or 'Budweiser King of Beers': s 117 of the TM Act. Use 'as a trade mark' is given content by reading together ss 7 and 17 of the TM Act. It means (in relation to goods - see subs 7(4) and s 17) use of the trade mark upon, or in physical or other relation to, the goods as a sign used, or intended to be used, to distinguish goods dealt with or provided in the course of trade by the first respondent from goods so dealt with or provided by any other person. 130 Section 10 of the TM Act defines 'deceptively similar' as follows: For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion. 131 Section 6 of the TM Act defines 'sign' as including: …the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent. 132 Thus, for there to be infringement, or threatened infringement, and subject to the operation of s 122 of the TM Act, to which I will come, it is necessary for me to conclude (adopting for the moment the way the applicant identifies the first respondent's trade mark usage) that the use of the phrase 'Budějovický Budvar' on the seal on the neck, or on the large white front label, or on the smaller white back label, or the word 'Budějovický' in those places, or the word 'Budvar' in those places, or the phrase 'Budweiser Budvar' on the lower red strip on the front of the label, or the word 'Budweiser' there, or the word 'Budvar' there, is: (a) the use of letters or a word or words (a sign), (b) used or intended to be used to distinguish, in the course of trade, the first respondent's beer from the beer of others, and (c) that the letters or a word or words (the sign) so used are or is substantially identical with 'Budweiser' or 'Bud' or 'Budweiser King of Beers' or so nearly resemble or resembles 'Budweiser' or 'Bud' or 'Budweiser King of Beers' that they are or it is likely to deceive or cause confusion. 133 As to the use of the phrase 'Budějovický Budvar' in the three places it is used, there is no dispute that each is used as a trade mark. A further question as to indication of geographical origin might arise under para 122(1)(b)(i) of the TM Act should I find there otherwise to be an infringement by the trade mark use of the singular word, 'Budějovický'. 134 There is a dispute about the phrase 'Budweiser Budvar' on the red strip. The applicant says that in either pre-May 1998 or post-May 1998 form, [122], [124] and [126] above, the phrase was used as a trade mark. The first respondent says that it was not; it says that it was merely part of the statement of the first respondent's corporate name.

substantial identity 135 There being no definition in the TM Act of the phrase 'substantially identical', recourse is to its ordinary or usual meaning: in substance the same, or essentially the same: Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411 at [70]. 136 The assessment of substantial identity requires the consideration of the first respondent's mark side by side with the registered marks 'Budweiser', 'Bud' and 'Budweiser King of Beers', noting the similarities and differences. The importance of these differences and similarities should be assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity from the comparison: The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407, 414 (The Shell Co). 137 The applicant submitted that each of the words 'Budějovický' and 'Budvar' was substantially identical to the mark 'Bud'. The applicant started from the proposition that, as is self evident, each word begins with the exact same syllable which constitutes one of the relevant marks: 'Bud'. In the written opening and in written submissions the applicant relied on Mark Foys Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190, 205 (Mark Foys) to found the proposition that the addition of other letters is irrelevant to the use of the mark already made by the first syllable. However, in address, Mr Catterns resiled from that. He accepted that one must look at the whole word, and not break it down into component syllables in order to find identity. 138 Neither the phrase 'Budějovický Budvar' nor the word 'Budějovický' nor the word 'Budvar' is substantially identical to 'Budweiser', 'Bud', or 'Budweiser King of Beers'. The syllable 'Bud' introduces each word, but it is the first syllable in two obviously foreign words, complete with diacritical elements. As I think was accepted by the applicant, reliance upon what Williams J said in Mark Foys, supra at 205 was not legitimate. Williams J there was pointing out that once it is found that the defendant has used the registered mark as a trade mark, the fact that the commercial origin of the goods is made clear by further words is irrelevant. Here, the enquiry is the antecedent one: whether the respondent has used the applicant's mark. 139 There was debate between the parties as to whether the mark, as used by the first respondent, is the phrase 'Budějovický Budvar' as one trade mark use, or each word 'Budějovicky' and 'Budvar' as separate trade mark uses. I do not think this debate matters at this point. None is substantially identical to any of the registered marks. 140 For there to be substantial identity the applicant must say that the use of the syllable 'Bud' as part of two foreign words, is sufficient. Subject to the question of abbreviation, to which I will come (and which leads to a merging into the broader and encompassing question of deceptive similarity: cf Shanahan Australian Law of Trade Marks and Passing Off 2nd Ed, p 172), there is no substantial identity. The marks, as written, are two foreign words, together or separately, with the first syllable 'Bud' (whether pronounced to rhyme with 'mud' or with 'good'). There is no warrant to ignore the further syllable and syllables of the words. It is the words (together or separately) which are being used as a trade mark. The written syllable 'Bud', alone, is not being used as a trade mark. It is not sufficient to identify that the mark 'Bud' is an identifiable element in the first respondent's mark, that is that it retains its identity as a syllable. Rather it must be shown that, within the first respondent's mark as used, it has retained its separate identity as the distinguishing or essential feature of the impugned mark: Shanahan op.cit. pp 170-72; cf Angoves Pty Ltd v Johnson (1982) 43 ALR 349, 362 and Seven-Up Co v Bubble Up Co Inc (1987) 9 IPR 259. If this were so, then one might be able to say that the impugned mark was really just the use of the syllable 'Bud'; or the question may shade into one of deceptive similarity. Here, when one looks to the words, one does not see 'Bud' as the distinguishing feature. One sees the letters 'Bud' as the first syllable embedded in two unfamiliar foreign words. The question of aural similarity and, in particular, abbreviation, is better analysed under deceptive similarity, as to which see below.

141 The applicant also submitted that each of 'Budějovický' and 'Budvar' or the phrase 'Budějovický Budvar' was deceptively similar to the applicant's marks. The applicant's preferred approach was to look at the words individually. 142 Mr Catterns submitted that ultimately the infringement case came down to whether the words (he submitted, individually) would be viewed mentally as, or abbreviated in expression to, 'Bud'. 143 The question of deceptive similarity must be judged by a comparison different from the side by side comparison undertaken to assess substantial identity; the question being the likelihood of deception or confusion from a recollection or impression of the registered mark. Thus, a side by side comparison is inadequate, and too narrow a test. The comparison is between, on the one hand, the impression based on recollection of the registered mark used in a normal or fair manner that persons of ordinary intelligence and memory would have, and, on the other hand, the impressions that such persons would get from the impugned mark as it appears in the use complained of: The Shell Co, supra at 414; Re Smith Hayden & Co Ltd's Application (1946) 63 RPC 97; Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89, 128; and cf Johnson & Johnson v Kalnin (1993) 114 ALR 215, 220. 144 The proper approach to the answering of this question is laid out in judgments of high authority. First, there is what was said by Parker J (as his Lordship then was) in In the Matter of an Application by the Pianotist Company Ltd for the Registration of a Trademark (1906) 23 RPC 774, 777 which was applied by Dixon J, Williams J and Kitto J in Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 at 538: 'You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade mark is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion - that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods - then you may refuse the registration, or rather you must refuse the registration in that case.' To the same effect see Australian Woollen Mills Ltd v F S Walton & Co Ltd [(1937) 58 CLR 641 at p 658]; Reckitt & Colman (Aust) Ltd v Boden [(1945) 70 CLR 84], in this Court. 145 As set out in Cooper Engineering, supra at 539, it is not sufficient that the two marks convey merely the same idea. 146 In Wingate Marketing, supra at 128-9, Gummow J said: Where the comparison of the marks is necessary to determine whether that of the defendant is deceptively similar to the registered mark of the plaintiff, who sues for infringement, the primary comparison must be between the registered mark on the one hand and the mark as used by the defendant on the other. The comparison differs from that in a passing off action where the plaintiff points to the goodwill built up around the mark by reason of prior use and then points to the conduct of the defendant as leading to deception (or perhaps merely confusion) and consequent damage to that goodwill of the plaintiff. ... ... (i) The comparison is between any normal use of the plaintiff's mark comprised within the registration and that which the defendant actually does in the advertisements or on the goods in respect of which there is the alleged infringement, but ignoring any matter added to the allegedly infringing trade mark; for this reason disclaimers are to be disregarded, price differential [has been] considered irrelevant ... [as have] the differences in use by the parties of colour and display panels, and ... the differences in the respective sections of the public to whom the goods were sold. (ii) However, evidence of trade usage, in the sense discussed above, is admissible but not so as to cut across the central importance of proposition (i). (iii) In particular, in making an aural comparison of the marks, whilst ordinarily one is concerned with what appears to be the natural and ordinary pronunciation, evidence in my view is admissible that those in the trade pronounce the defendant's mark in a manner which otherwise might be thought to vary from the normal fashion. (iv) Evidence of cases of deception or confusion may be taken into account …(v) Although, as Australian Woollen Mills ... itself decides, it is not decisive, evidence is admissible that the defendant's mark was adopted with a view to 'sailing costs to the wind' ...

147 The task is one requiring the application of common sense and impression, which can depend on a combination of visual and aural impression and the estimation of the effect likely to be produced in the ordinary conduct of affairs: Australian Woollen Mills, supra at 659 and Murray Goulburn Co-operative Co Ltd v NSW Dairy Corporation Ltd (1990) 16 IPR 289, 296. 148 The passage in Australian Woollen Mills, supra at 658 referred to by Dixon J, Williams J and Kitto J in Cooper Engineering, supra, bears repetition: … But, in the end, it becomes a question of fact for the court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained. In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of the potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight. 149 See also The Shell Co, supra at 415 and 416. 150 The concept of deception has been said to imply the creation of an incorrect belief or mental impression, in contrast to the concept of confusion encompassing something less, which may 'go no further than perplexing or mixing up the minds of the purchasing public': New Zealand Breweries Ltd v Heineken's Bier Brewerij Maatschappij NV [1964] NZLR 115, 141; Pioneer Hi-Bred Corn Co v Hy-line Chicks Pty Ltd [1979] RPC 410, 423; Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265, 273-74. Though, the High Court in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595 affd at 608 was of the view that 'likely to deceive' was wide enough to catch confusion: cf Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460, 472-73 and Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 (Puxu). In any event, s 10 of the TM Act distinguishes the two. The relevant confusion is about whether it might not be the case that the two products (bearing the marks being compared) come from the same source, it being sufficient if there be a real and substantial danger that an ordinary person would entertain a reasonable doubt about the trade source of the goods bearing the impugned mark: Southern Cross Refrigerating Co, supra at 595 affd at 608; Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at [83]: Murray Goulburn Co-operative, supra at 294-95; Coca-Cola Co v All-Fect Distributors Ltd (2000) 96 FCR 107, 123; and see also Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 31 IPR 375, 382-83. 151 Ultimately it is a matter to be decided by the trial judge as a 'jury question' on which the judge gives his or her opinion as to the likelihood of deception or confusion and in so doing is not confined to evidence from witnesses called as to that matter, though, of course, giving such weight as is thought appropriate to such evidence: see generally Murray Goulburn, supra at 296; and General Electric Co v General Electric Co Ltd [1973] RPC 297, 321-22. 152 A mere possibility of confusion is not enough; there must be proof of a likelihood. 153 The setting or surrounding circumstances for the comparison include, relevantly, how the product will be sold and promoted. The first respondent's beer, as an imported or specialty beer, will be sold in hotels, bottle shops, restaurants, bars and like places. It will very often be on display whether in a refrigerator or on a shelf, to be picked up by the customer himself or herself and located, quite possibly, not far from the applicant's beer. One can anticipate occasions on which the customer, knowing of the product, will ask for it. In other circumstances, for example a restaurant liquor list, its name will be written down and a request made. In these circumstances, I think the visual effect and impression of the impugned mark is of greater significance than the aural. On most occasions on which the customer will be called on to speak of the mark it will be proximate, as an item for sale or on a list. In these circumstances, whilst the aural impression may not be best described as of 'diminished' importance: cf Mars GB Ltd v Cadbury Ltd [1987] RPC 387, 395, I think that the question of sound should be kept, to a significant degree, within the proximate frameworkof the visual effect and impression. 154 The first respondent stresses that the mark as used by it (being the subject of comparison with the registered mark) is 'Budějovický Budvar'. The first respondent submits that it is wrong to split the mark, as used, into its component words, or to break those words down into syllabic parts. The comparison is between the impugned mark, as used, and the registered mark. I agree that it is a false enquiry to break up the mark or compare part of the impugned mark with the registered mark. It is the whole mark as used which is the subject of comparison with the registered mark: In re William Bailey (Birmingham) Ltd's Trade Mark Application (1935) 52 RPC 136, 151-52; Re Broadhead's Application for Registration of a Trade Mark (1950) 67 RPC 209, 219; and cf Pepsico Australia Pty Ltd v The Kettle Chip Company Pty Ltd (1996) 33 IPR 161, 163. 155 The mark as used here is composed of two foreign words, one of which has unfamiliar signs (the diacritical elements), both of which have no English meaning or connotation (one in fact being coined), which are placed in close spatial proximity to each other, which are written in similar script and which together receive prominence on the label of equal proportion on the neck and slightly different prominence on the main white front label ('Budějovický' being slightly larger in size than 'Budvar'). Looked at objectively, the sign used to distinguish, or intended to be used to distinguish, this beer in the course of trade from beer of others is the phrase 'Budějovický Budvar'. For Australians it may convey little or no cognitive meaning and may be difficult to pronounce in whole, and thus it may tend to some abbreviation (as to the effect of which see below), but that combination is the trade mark. 156 It may not matter whether one views it as one foreign and assonant phrase and as one trade mark, on the one hand, or whether one views them as two foreign words and as two trade marks, on the other hand. In the former case, one has to look at the mark as a whole. In the latter case, the immediately proximate presence of the other word is part of what the first respondent does in the label: Wingate Marketing, supra at 128G; and cf [228] below. However, I would conclude, that, objectively, the words used would be likely to be understood by relevant readers as the two word name or brand of the beer. That is as a composite single mark: 'Budějovický Budvar'. Since few beer buyers in Australia would recognise each as individual words, there would be no reason to view them otherwise than as a foreign word combination making up the beer brand. It is on this basis that I hereafter deal with the matter.

157 One then compares the look and sound of the impugned mark 'Budějovický Budvar' with 'Bud' and 'Budweiser'. They are all applied to beer. The customer is an English speaking Australian who buys, or wishes to consider buying, an imported beer. No particular class or age group (as long as the person is above 18) is relevant. The multi-syllabled two words of foreign and unknown meaning do not, apart from a common syllable, bear any real visual resemblance to 'Budweiser', 'Bud' or 'Budweiser King of Beers'. The reader or viewer of the label or its equivalent may notice a resemblance in the common syllable. That, however, taking the mark as it is used, is, in my view, insufficient to make it likely that buyers will be caused from a visual examination to question whether it comes from the same trade source as 'Bud' or 'Budweiser' or 'Budweiser King of Beers' or whether it is associated with any recollection they may have of those marks. The applicant's entitlement to write its marks in any fair and normal manner would enable it to use a cursive script; but none of the registered marks has, or calls for, any diacritical elements. The diacritical elements assist in distinguishing visually the words from the registered marks. I do not think that any impression or recollection of 'Budweiser' or 'Bud' taken away will cause the visual appearance of the mark 'Budějovický Budvar', as used, to create any confusion or questioning as to whether the trade source of the 'Budějovický Budvar' product might be the same as that of the registered marks, 'Bud' or 'Budweiser' or 'Budweiser King of Beers'.

158 The applicant says that 'Bud' is the essential, indeed the only, feature of its mark 'Bud'. It says that the addition of '-ějovický' and '-var', being collocations of letters with no English meaning will not dispel the likelihood of deception or confusion caused by the use of 'Bud'. But that submission tends to break up the words used by the first respondent into syllables, giving, or assuming, an operative deceptive or confusing effect of the first syllable, not being dispelled by the later syllables. The submissions significantly rely on cases where the claimant's mark has had added to it a prefix or a suffix. Kerly's Law of Trade Marks and Trade Names (13th Ed) at [16-39] refers to the 'sounder approach' of treating the defendant's mark as a combination having 'one individual thing which is a monopoly of the plaintiff': The Sanitas Company Ltd v Condy (1887) 4 RPC 530 and cf Ravenshead Brick Co Ltd v Ruabon Brick & Terra Cotta Co Ltd (1937) 54 RPC 341. The authors of Kerly put it that it is necessary to consider how important that thing is to the whole; or, as Shanahan says (op.cit p 172), whether it retains its identity in the later mark as a distinguishing or essential feature. The applicant also stresses that it is the first syllable which is identical to the mark and that there is a tendency in English, recognised in the cases, to slur the termination of words: Kerly op.cit [16-69]. Comparison with 'Budweiser' is said by the applicant to be somewhat different. There are said to be visual and aural similarities between 'Budweiser', a longer word than 'Bud', with a foreign language ending and both 'Budějovický' and 'Budvar'. To this is added the 'shared core' of 'Bud'. 159 I see no deceptive similarity between 'Budějovický Budvar' and 'Budweiser' or 'Bud', on a visual comparison. Though three of the words are foreign, and though these three share a first syllable, I do not think anyone would be confused about the trade source of the products. Anyone with any, even the most rudimentary, background of European language would appreciate that different languages were being used with 'Budějovický Budvar' and 'Budweiser'. In the absence of any such appreciation, they just look like different foreign words. I do not think that anyone would be likely to view them as, or question whether or not they were, marks of related 'Bud products' or question whether or not they came from the same trade source. They look like different foreign words with a common first syllable. There is that resemblance, but I do not think that the essential or distinguishing feature of the words is 'Bud' as it strikes the eye or fixes in the recollection. Thus, I do not think that there is any likelihood from a visual impression of an evoked association of the phrase 'Budějovický Budvar' with the word 'Budweiser' or the word 'Bud' causing confusion of the kind to which I have referred. However, there is a question of abbreviation to which I will come in a moment. 160 As to aural comparison, the effect of the spoken mark 'Budějovický Budvar' must be considered. A number of things should be noted. First, many Australians are likely, I think, to pronounce the 'Bud' in 'Budějovický Budvar' and 'Budweiser' as rhyming with 'mud', not 'good'; even though Mr Noonan's evidence tends to indicate that at least some will say it rhyming with 'good'. Secondly, whilst the presence of the Slavonic diacritical elements in the impugned mark distinguishes the visual appearance of the mark, as used, from the appearance of the registered marks, it makes pronunciation of the phrase in full difficult, or at least an unfamiliar challenge, for the English speaker, or speaker of English in Australia. In that context, and for that reason, I think that the mark is, from its nature, likely to be the subject of some abbreviation. The ordinary buyer, rather than struggle with the unfamiliar five syllable word, 'Budějovický', not knowing of the correct way to deal with the diacritical elements above the letters, ignorance of the effect of which will cause uncertainty and might cause embarrassment, is likely to take something easier to say from the mark. What that something is, is a matter of some importance. The first respondent says that if abbreviation occurs it is likely to be to 'Budvar'; the applicant says that it is likely to be abbreviated further to 'Bud'. Further, to the extent that abbreviation does not take place, I do not think there is any likelihood from the pronunciation of 'Budějovický Budvar' of an evoked association with 'Budweiser' or 'Bud' causing confusion of the kind to which I have referred. 161 As to abbreviation, I think a mechanical syllable by syllable reduction of the phrase 'Budějovický Budvar' to 'Bud', through the intermediate abbreviation to 'Budvar', because Australians often abbreviate, and the proposition that 'Budějovický Budvar', like 'Budweiser Budvar' elsewhere, will be abbreviated to 'Bud', place too little weight upon a number of factors. First, the evidence is that people called it 'Budvar' while it was on sale in Australia. I deal with this evidence below. Secondly, 'Budvar' is a convenient abbreviation of 'Budějovický Budvar', in that 'Budvar' is eminently pronounceable to the English speaker. Thirdly, the abbreviation to 'Budvar' allows the abbreviator to retain the European meaning or content to his or her request. Fourthly, and related to the previous point, as I understood what Ms Strachan was seeking to say in cross-examination on this question, one reason not to abbreviate to 'Bud' is the pre-existence in the market of a well known brand or word 'Bud', in the context of beer. The abbreviator is likely to choose 'Budvar', rather than 'Bud', as long as he or she is not confused as to trade source by the visual impression of the impugned mark, which, as I have said, I do not think will occur. This last point is not illegitimately to intrude get-up or reputation into the process of comparison of the relevant marks. It is necessary at this stage of the analysis to consider whether the consumer will abbreviate, and if so, to what. In that analysis the acceptance of the fact that consumers are familiar with 'Bud', and will, in the context of beer, associate it with the 'Budweiser' product through the 'Bud' mark, is a fact relevant to the abbreviation process. If the visual impression of the impugned mark is one which causes the viewer to think that the trade source is a 'Bud' or 'Budweiser' trade source, then it is likely that the abbreviation will go straight to 'Bud'. If the visual impression of the impugned mark is one which causes the viewer to question whether the trade source is a 'Bud' or 'Budweiser' trade source, then it is quite possible that the abbreviation will be made to 'Bud'. But, if, as I think is the case, the viewer will not be caused to question from the mark 'Budějovický Budvar' whether the trade source is a 'Bud' or 'Budweiser' trade source, then I think it is likely that the abbreviator, recognising the separate identity of the 'Budějovický Budvar' mark, will choose an abbreviation conformable with the mark and its European idea and consistent with a separation from his or her recognition of the pre-existing mark 'Bud'. 162 The first respondent also submitted that the proposition that people in Australia will abbreviate 'Budějovický Budvar' to 'Bud' was mere conjecture and not inference: Seltsam Pty Ltd v McGuinness (2000) 49 NSWLR 262, 275-77; Luxton v Vines (1952) 85 CLR 352, 358; Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125, 141; Australian Competition & Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344, 361. There is some force in this criticism. However, Dr Beaton did give evidence that he thought the abbreviation would be made to 'Budvar' or to 'Bud'.But, this could be described as no more than his professional conjecture. No evidence of people actually confronted with the label, whether direct, or by survey, or in what Ms Strachan and Dr Beaton would call a 'focus group' was given. It was a subject available for evidence: George Ballantine & Son Ltd v Ballantyne Stewart & Co Ltd [1959] RPC 273; United Kingdom Tobacco Co Ltd's Application (1912) 29 RPC 489. Though, on balance, I do not take too much from its absence. 163 As I said, there was evidence of how the first respondent's product, being sold as 'Budweiser Budvar' and 'Budějovický Budvar', was referred to in Australia. Mr Noonan was a director of the third respondent from 1996 to July 1999. He had business experience in the food and liquor industries at retail and distribution level in Australia. In about 1996, he, with another man, developed a business (later carried on by the third respondent) importing what were perceived as beers at the very top end of the beer market, as specialty beers. As part of this business, the third respondent imported 'Budějovický Budvar'. He gave evidence that from his reading, experience and knowledge of the liquor industry, he knew the beer produced by the first respondent as 'Budvar'. He also said that from his experience and knowledge of the beer industry, the word 'Budvar' was commonly used in Australia to describe the first respondent's beer in Australia and that people in the liquor trade referred to the first respondent's beer as 'Budvar'. That, he said, was the most common usage in the trade. That evidence might well be affected by the liquor trade and customers being influenced by the presence in Australia of beer bearing the 'Budweiser Budvar' label for a time. However, it is evidence as to the type of abbreviation which might well take place from the mark 'Budějovický Budvar'. Other witnesses bore out the proposition that the first respondent's product was generally referred to as 'Budvar'. In conversations with the enquiry agents employed by the applicant, a number of sellers used the word 'Budvar' to describe the first respondent's beer. 164 Dr Beaton thought that the visual focus would be on the syllable 'Bud' and that this is what the consumer would take away. He thought that consumers would identify and refer to the first respondent's product as 'Bud' or 'Budvar', preferring not to use the word 'Budějovický'. On that basis he was of the view that there was a very real likelihood that Australian consumers, particularly first time buyers or drinkers, would be confused between the applicant's 'Budweiser' product and the first respondent's 'Budějovický Budvar' product and will be misled or deceived as to the origins or source of the first respondent's product. This view of the visual impression was important to his views about expression and abbreviation. I disagree with his views as to visual impression. 165 Reference was made by the applicant to George Ballantine & Son Ltd v Ballantyne Stewart & Co Ltd [1959] RPC 47 and on appeal at 273. In that case the defendant sold Scotch whisky under labels which carried the words 'Ballantyne Stewart's', 'Ballantyne Stewart & Co Ltd', 'Blenders and Bottlers Ballantyne Stewart & Co Ltd' and 'Ballantyne Stewart's Old Argyll'. The plaintiff's marks consisted of the word 'Ballantines'. At first instance, Lloyd-Jacob J said at 48-9: It is plain that such display must inevitably result in bottles so labelled being identified in the market by reference to these prominent features, and, having regard to the common practice of abbreviation obtaining in trade channels, the existence of which in the retail distribution of whisky in bottle was spoken to in evidence, it must be taken as reasonably probable that the form of reference will be to 'Ballantyne's'. Such reference is phonetically identical with the sound of two of the Plaintiffs' aforesaid marks registered in respect of the same goods and would prima facie establish that the Defendant Company, in putting bottles so labelled upon the market, were infringing the exclusive right conferred by registration to the use of the Trade Mark in relation to the goods in respect of which it is registered. 166 Reference was also made by the applicant to Baume & Co Ltd v A H Moore Ltd [1958] RPC 226, 234; Carnival Cruise Lines, supra at 383-84; Seven-Up Co, supra at 266-69; RKH Pty Ltd v Christian Dior (1985) 6 IPR 78, 81; Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 26 IPR 246; United Kingdom Tobacco Co's Application (1912) 29 RPC 489; Sturtevant Engineering Co Ltd v Sturtevant Mill Co of USA Ltd (1936) 53 RPC 430, 440; Associated Rediffusion Ltd v Scottish Television Ltd [1957] RPC 409, 414; and Crystalate Gramaphone Record Manufacturing Co v British Crystalite Co Ltd (1934) 51 RPC 315, 320. However, as submitted by the first respondent, these cases deal with different, though related, questions: that infringement will occur where the infringer has taken the trade mark or a word that is an essential feature of the mark; and that once infringement occurs, it is not avoided by the adding of other words. 167 More difficult is the position where the word or, as here, syllable, is merged into the totality of the mark, so as no longer to have a distinct and separate appearance visually, or a distinct and separate sound when the whole mark is spoken or where the likely abbreviation is made. Yet, what if a not insignificant number of people will still abbreviate it to the registered mark or something close to it? In the light of the view I have taken that I do not think abbreviation to 'Bud' will occur, it is unnecessary to deal with the distinction identified by Mr Yates between, on the one hand, abbreviation from the mark because of the cognition of the shortened form as an essential integer of the mark, from which it can be reasoned that the infringer has taken the essential element of the mark; and, on the other hand, the abbreviator, who through some linguistic habit, uses first syllables, but who does not see in the impugned mark the syllable functioning as a mark. 168 In most cases, where oral abbreviation occurs, that will be because the syllable or word to which abbreviation is made is seen as an essential, or sufficiently important, integer of the impugned mark. As set out in [159] above, my view that 'Bud' does not play that role visually in 'Budějovický Budvar', as used, is important to my conclusion regarding abbreviation. 169 My view is the same in respect of the aural comparison with the registered mark 'Budweiser'. Whilst the syllables after 'Bud' in both 'Budweiser' and 'Budvar' are European, they are likely to be expressed differently: 'Budweiser' with the 'ei' pronounced as in 'eye', or as in 'bee'; and 'Budvar' with 'var'. I think that those different sounds are sufficiently different to form the basis of a distinction between 'Budweiser' and 'Budějovický Budvar' shortened to 'Budvar', which will mean that confusion is unlikely. This is so whether the 'Bud' is pronounced to rhyme with 'mud' or 'good'. 170 The applicant submitted that the first respondent, and in particular Mr Bocek, intended and expected consumers to utilise the short form 'Bud' in reference to its beer. This, it was said, was a form of expert evidence: Who better, the applicant asked, to assess the likely effect of its marketing on the public, but a beer maker and seller of long experience who has sold its and his products all over the world, including to English speaking countries? 171 There is significant force in the proposition that an experienced and knowledgeable businessman such as Mr Bocek is an expert in his field. In Australian Woollen Mills, supra at 657 Dixon J and McTiernan J said: The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive. Moreover, he can blame no one but himself, even if the conclusion be mistaken that his trade mark or the get-up of his goods will confuse and mislead the public. 172 Mr Catterns did not put the matter on the basis of a legal presumption, that is the effect of a rule of law. In that he was correct; for the issue of deception or confusion is ultimately a matter of fact for the Court, as was said by Dixon J and McTiernan J shortly afterwards in the same paragraph, at p 658; and see also Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH [2001] FCA 1874at [91]. Rather, he said that I should find this intention on behalf of Mr Bocek; and this, coming from a man of such experience and knowledge, would assist me in concluding that consumers will shorten to 'Bud', thereby causing confusion in the market. 173 I should add, at this point, that these matters were also relied on by the applicant in the refuting of the claim of good faith by the first respondent under para 122(1)(a)(i) of the TM Act, to which I will come in due course. 174 The applicant's submission as to what the first respondent intended was founded significantly on what, it was said, I should take from the evidence of Mr Bocek. This involved an attack on the credit of Mr Bocek. It will be necessary to deal with this at a little more length later in dealing with good faith. However, I think it appropriate to make some general comments about his evidence based on my examination of his affidavit, the surrounding documents and my observation of him under cross-examination. Whilst his affidavit was at times couched in a way which required qualification, I do not think that Mr Bocek, at any time, sought to give me evidence in cross-examination which was other than truthful. He struck me, if I may say so, as a determined and resolute man, intent upon dealing with a thoughtful and skilful cross-examiner and cross-examination, to the best of his ability. He appeared, at times, not prepared to give anything away, but that, I think, was a product of a careful and measured response to questions crafted with precision, and delivered in a foreign language. I should add that whilst his spoken English was passable and no doubt such as to give him a facility in everyday commercial and social exchanges, and while he could plainly read and write English, his command of the language was not up to a cross-examination of this kind, and he had the assistance of an interpreter. Though, it should be noted, at times he did answer directly in English. (Where the transcript records 'Witness' rather than 'Interpreter', Mr Bocek himself answered.) I do not think the difficulty that Mr Catterns sometimes had of extracting an answer to his liking, which sometimes later came, was ever a deliberate and conscious attempt by Mr Bocek to deflect the truth. I will say something more on this topic later, but by way of commencing to deal with this attack on him, I would say that I conclude that Mr Bocek was a truthful witness. 175 The first matter pointed to by the applicant is affidavit evidence in English sworn by Mr Bocek in proceedings in Estonia and Lithuania. These proceedings were not explained in full before me. No evidence was given as to the issues raised in each, beyond that given by Ms Lejtnarová. She was an in-house lawyer at the first respondent. In Estonia in 1995 and 1996, proceedings were commenced by Anheuser-Busch in the Estonian Ministry of Economy in the 'Industrial Property Board of Appeals'. An appeal appears to have been bought by Anheuser-Busch from that body in the 'Administration Court'. What I take to be Ms Lejtnarová's summary of these proceedings (see Exhibit HL 5) was as follows: Anheuser-Busch, Inc. files the Appeals with the Board of Appeals as the registration of the trade marks has not violated the Trade Marks Law and thereby the cancellation of the registrations is false. Anheuser-Busch, Inc. files the appeals No. 131, 132, 133 with the Board of Appeals. In the appeals it is requested to cancel the registration of trademarks Budweiser Budvar, Budeweiser Budvar combined and Budweiser in the name of Budějovický Budvar. 176 I take the last phrase in the quotation 'in the name of Budějovický Budvar' to refer to the first respondent and not to indicate that that phrase was one of the marks of which cancellation was sought. (By saying that I am not concluding that there was any such registration.) 177 In Lithuania proceedings were commenced in 1996, 1997 and 1998 by Anheuser-Busch in the Patent Office, Board of Appeal. There are also proceedings in the Vilnius District Court seeking declarations of the invalidity of the marks 'Budweiser Budvar' and 'Budweiser Budbräu'. The Patent Office proceedings were described in Ms Lejtnarová's affidavit (see Exhibit HL 5) as follows: Objection to the registration of trade mark Bud. Objection to the registration of trade marks Budweiser Budvar Nr. 7904, Budweiser Budvar label Nr. 24237 and Budweiser Budbräu Nr. 24236. Objection to the registration of trade mark Budweiser Nr. 26407. 178 It would appear that it was in this context that Mr Bocek said the following, amongst other things, in the affidavits in both proceedings: My Company became a typical and traditional representative of the Czech beer brewing as well as of the Czech Republic, since this country occupies on the world scale first place in beer consumption per head with 155.3 litres/head/year and beats all competition. This position made the Czech beer brewing famous all over the world, Pilsner Urquell and Budweiser Budvar or Budvar being the foremost well-known marks. At a later date to the trademarks Budweiser Budvar and Budvar the trademark BUD was added, the origination of which was due to the fact that BUD is on one hand an inseparable part of all trademarks of my company, on the other hand another incentive for the origination of this trademark came from the consumers of the Budweis beer, who have been using it as an abbreviation. … The beer brewed in the city of Ceské Budějovice /Budweis being its currently used German and English translation since olden days until the present time has been designated since the very beginning as Budweis beer. Gradually my company, National Corporation has been creating a trademark series a characteristic feature of which is the geographical denomination 'Budějovický' /Budweiser/, derived from the name of the seat of my company, which is at the same time the place where the Budweis beer is brewed. All these trademarks begin by the syllable BUD… This holds good also for the name of the National Corporation, a name which coincides with the principle trademark BUDWEISER BUDVAR. In view of the fact that the Budweis beer possesses special characteristic quality features attained only in my company as well as the fact that beer brewing has been connected throughout full 700 years with the geographical locality of Ceské Budějovice /Budweis/, the denomination Budějovický /Budweiser/ derived thereof has been complying and the time complies with the requirements laid down both by the Czech legislation and by the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration on an appellation of origin. Also [unreadable] denominations were granted protection as appellations of origin. … 179 This evidence was, as the subject matter of the proceedings shows, directed primarily to the trade marks which comprise or include 'Budweiser' and 'Budvar'. No doubt shortening to 'Bud' occurs in countries of various linguistic bases where these words are used as the marks. The applicant's beer is so abbreviated. I have already concluded that, in my view, such a shortening would occur here if people thought the first respondent's product, on looking at the mark as used, was 'Budweiser'. I know nothing about how the product or name has been promoted in these countries, about the reputation of the product in these countries and about the language habits of speakers in these countries. I do not think that this evidence and this episode in cross-examination comprise a sound premise upon which to conclude that Mr Bocek and the first respondent were intending and expecting Australians to abbreviate 'Budějovický Budvar' in the way it appears on the white labels and neck seal, to 'Bud'. Much the same can be said for the cross-examination of Mr Bocek on an affidavit filed in English proceedings by an officer of the first respondent. In England the first respondent sells beer under 'Budweiser Budvar' brand and has a sizeable reputation there under that brand. I know nothing as to how it has been promoted there. In these circumstances, what Mr Bocek thought about abbreviation to 'Bud' there really does not assist me. 180 The submission was put that because an abbreviation of 'Budweiser Budvar' to 'Bud' was recognised in some countries (without, I would add, my being apprised of reputation, promotion, history and context of those words in those countries) it followed, 'a fortiori' that there will be an abbreviation of 'Budějovický', because it was foreign. A number of things can be said about this proposition. First, one is not within the universe of logic, but impression, perception, habit and behaviour (the latter two in respect of abbreviation). Secondly, one is not looking at 'Budějovický' in isolation, nor at 'Budvar' in isolation. If one were, it may be that the conclusion would be open that English speaking Australians would shorten either or both (viewed singularly) to 'Bud'. Rather, one is dealing here with the mark 'Budějovický Budvar' as used on this label. That is the relevant field of enquiry. I will not repeat my views about this expressed elsewhere, see [159] to [162] above. 181 Thus, subject to what follows, I would conclude that the use of 'Budějovický Budvar' on the front white label, rear white label and seal on the neck label is not an infringement of the marks 'Bud', 'Budweiser' and 'Budweiser King of Beers' under s 120 of the TM Act. The qualification to that statement arises by reason of what appears on the strip on the front label below the white section. Until May 1998 there was an orange strip as set out in [122] above, with the phrase 'Budweiser Budvar' above 'National Enterprise'. After May 1998 there was (and the intention is that there will be in the future) a red strip as set out in [124] above, with the phrase 'Budweiser Budvar' on the same line as 'National Corporation'. 182 It is necessary to assess whether what appears in the orange and red strips has any effect upon what would otherwise be my conclusion about the use of the phrase 'Budějovický Budvar' on the front white label. This involves the question as to whether the proximity of the word 'Budweiser' otherwise affects my views as to the unlikelihood of confusion from the use of 'Budějovický Budvar' and as to the likely abbreviation therefrom, and the consequences of that. It is convenient, before coming to that matter, to deal with what I will call the 'Budweiser Budvar' use on the orange and red strips as a separate and distinct infringement complaint of the applicant.

183 Two issues arise here. The first is whether the use of the word 'Budweiser' or the phrase 'Budweiser Budvar' in the corporate name is use 'as a trade mark' for s 120 of the TM Act. If it is, and if characterised as trade mark use of the word 'Budweiser', there was no dispute that it is substantially identical with the trade mark 'Budweiser' or, if characterised as trade mark use of the phrase 'Budweiser Budvar', it is one identical with, or deceptively similar to, the trade mark 'Budweiser'. The second question, though relating only to Exhibits GRB12, TH 11 and TH 101, if the answer to the first is in the affirmative, is whether the first respondent is entitled to the protection of para 122(1)(a)(i) of the TM Act; that is whether the first respondent uses 'Budweiser' or 'Budweiser Budvar' in good faith as part of its name.

184 The notion of trade mark use is now given content by ss 7 and 17 of the TM Act. See [129] above. 185 The task is to examine the way the words are used in their context, including the totality of the packaging, to assess their nature and purpose in order to see whether they are used to distinguish the goods from goods of others: The Shell Co, supra at 422-25; Mark Foys Ltd, supra at 198-200; Johnson & Johnson Aust Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326, 335, 342-45, 347-49; Pepsico Australia, supra at 162-63, 167-69 and 178-82; Musidor BV v Tansing (t/as Apple Music House) (1994) 52 FCR 363, 376-77; Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 48 IPR 257, 265-66; and Aldi Stores, supra at [22] to [30] and [54] to [58]. 186 The assessment is made from the perspective of what a person looking at the label would see and take from it, as to the purpose and nature of its use: The Shell Co, supra at 425; Wrigley's (Australasia) Ltd v Life Savers (Australasia) Ltd (1936) 37 SR (NSW) 9, 16; Aldi Stores, supra at[22] to [24] and [76]. 187 Taking Exhibit GRB 11 and Exhibit TH 10 first (the pre-May 1998 bottle) it is important to note that the phrase, as part of the name of the company, appears on the front of the label in a place immediately adjacent to the main trade mark use of 'Budějovicky Budvar'. Secondly, it is in a larger size print to 'National Enterprise' which itself is in larger print than 'Brewed and bottled by the brewery'. Thirdly, 'Budweiser' is a well-known mark. It is a word which has a brand reputation. It is not a descriptive word to Australian English speakers. Only those with a knowledge of German would understand its possibly adjectival role in relation to the proper noun 'Budweis'. The mark is reasonably well known as the applicant's beer. It is not an impermissible resort to reputation in comparing marks to recognise the existence of this reputation at this point, because one is seeking to ascertain what this word, in this context, will tell the person looking at it. Just as the court will examine whether a word is descriptive and whether it is used descriptively: Johnson & Johnson v Sterling Pharmaceuticals, supra, it will also examine whether the word carries a secondary or brand meaning or association: Pepsico Australia, supra. Here, the word has such a secondary or brand meaning: the applicant's beer. Fourthly, as a word with that secondary or brand meaning, the word is adjacent to 'Budvar' which is a repetition of one word in the avowed trade mark use not far above on the white label. Fifthly, the phrase 'Budweiser Budvar', comprised of two words with brand meanings or association (one from the viewer's common knowledge, the other from its coined or foreign origin on the label adjacent to clear trade mark usage adjacent to 'Budějovicky') is placed virtually below the main brand and separated by a description of the product, 'Original Czech Lager'. 188 If one reads the whole of the writing on the orange strip one appreciates that there is a usage of the phrase as part of telling the reader the name of the brewery making the product. That, of course, is to express in words the actual trade connection, though it would not necessarily follow that the words, or any of the words, used to express the content of that trade connection were being used to distinguish the goods in the relevant sense for s 17. 189 The usage of a word may fulfil more than one purpose on a label. For example a word may have a descriptive element, but also an element of trade mark or branding or distinguishing role: Johnson & Johnson v Sterling Pharmaceuticals, supra at 335. Equally, a word may have a role in identifying a geographical location, but also a trade mark or branding or distinguishing role. It depends on context. 190 Here, dealing with Exhibit GRB 11 and Exhibit TH 10, the matters to which I have referred above, taken in conjunction with the fact that the words 'Budweiser Budvar', and the word 'Budweiser', are used in a collocation of words giving information about the trade connection and from the impression which I think someone who reads it will take, lead me to the conclusion that 'Budweiser' and 'Budweiser Budvar' is and are being used as trade marks on the orange strip. 191 It is not to the point, with respect, to say that because another part of the label (the white section with 'Budějovický Budvar') is the obvious and important 'brand', that another part of the label cannot act to distinguish the goods. The 'branding function', if that expression is merely used as a synonym for the contents of ss 7 and 17 of the TM Act, can be carried out in different places on packaging, with different degrees of strength and subtlety. Of course, the existence on a label of a clear dominant 'brand' is of relevance to the assessment of what would be taken to be the effect of the balance of the label. 192 My conclusion is the same concerning Exhibit GRB 12 and Exhibit TH 11 (see [124] above) and Exhibit TH 101 (see [126] above). Whilst the size of the phrase 'Budweiser Budvar' has been reduced and the phrase has been included on the same time as 'National Corporation', I am still of the view that the other factors to which I have referred lead to the conclusion that one of the impressions that the viewer of the label will take away is that the word 'Budweiser' and the phrase 'Budweiser Budvar' are being used in a way to distinguish the goods.

193 Reliance is placed on para 122(1)(a)(i) of the TM Act in respect of the use of 'Budweiser' in the coloured strip. Paragraph 122(1)(a)(i) is in the following terms: (1) In spite of section 120, a person does not infringe a registered trade mark when: (a) the person uses in good faith: (i) the person's name or the name of the person's place of business… 194 The history of the various 'foreign' names of the first respondent is set out above (see [64] to [71] above). It is worth recalling that the applicant does not impugn the conduct of those involved in 1967 in the choice of the foreign names, all of which (except the Russian) contain the word 'Budweiser' in Latin script. Also, importantly, it is not part of the first respondent's case on good faith that paramount Czech law requires the first respondent to call itself 'Budweiser Budvar, National Corporation' in English speaking countries, such as Australia. If it chose to, the first respondent could, in Australia, call itself 'Budějovický Budvar, Národní Podnik', and it could do so in such a manner which made clear that this was the Czech name of the company which made the beer in the bottle. 195 The first difficulty encountered by the first respondent is that Exhibit GRB 11 and Exhibit TH 10 nowhere use the correct name of the first respondent. There is no registered name 'Budweiser Budvar, National Enterprise'. The English name is 'Budweiser Budvar, National Corporation' and the French is 'Budweiser Budvar, Entreprise Nationale'. Thus, the name of the first respondent was not used on Exhibit GRB 11 and Exhibit TH 10 for s 122 to apply. The first respondent accepts this and so the trademark use of 'Budweiser' or 'Budweiser Budvar' on the orange strip on Exhibit GRB 11 and Exhibit TH 10, up to May 1998, was infringement, irrespective of anything on the white label and of any effect of 'Budweiser Budvar' on the meaning of what is on the white label. 196 However, from May 1998 a version of the registered name of the first respondent was used on the red strip: 'Budweiser Budvar, National Corporation' - see Exhibits GRB 12, TH 11 and TH 101. For the first respondent to avoid the conclusion of infringement by what appears on the red strip, I must conclude that this use was use in good faith.

197 There was no debate between the parties that para 122(1)(a)(i), if made out, will exempt from a conclusion of infringement the use of a word as a trade mark which is identical with, or deceptively similar to, the trade mark of the applicant. However, that conclusion of lack of infringement would not conclude the enquiry in respect of s 52 or s 53 of the TP Act or passing-off. 198 Once again, the credit of Mr Bocek and the intention that he and the first respondent had in using the 'Budějovický Budvar' label in Australia are of importance. 199 The first respondent conducted research and investigation in Australia before exporting its 'Budějovický Budvar' product in the form of Exhibit GRB 11 to Australia. It recognised the applicant's registration. The stated position of the first respondent is set out in [90]. Implicit in this, and express in Mr Bocek's evidence, is a denial of an intention to set out to appropriate any part of the trade reputation of the applicant. I accept his evidence in this regard as truthful. However, I do not think that that is the end of the matter. As is clear from the evidence of Mr Bocek and others in proceedings elsewhere (see [175] to [179] above), speakers of German and English do sometimes associate 'Bud' with 'Budweiser' and with 'Budvar' and some will abbreviate these latter two words to 'Bud'. The first respondent knew, I would infer, that Australia was a largely English speaking country. It knew that Anheuser-Busch had registered 'Budweiser' and 'Bud' here. Research was done in Australia, as least as to registration. Little useful detail of the research was given in evidence. From knowledge of the sales activities of Anheuser-Busch in many countries and the strong reputation of Anheuser-Busch in some countries, plainly the first respondent and Mr Bocek knew of the existence of a reputation for 'Budweiser' in Australia but not, perhaps, of its level. The following exchange took place in the cross-examination of Mr Bocek: MR CATTERNS: … Do you agree that in 1996 and 1997 you knew that it was likely that Anheuser-Busch had a reputation in Australia in the marks Budweiser and Bud? THE WITNESS: In this time period I knew that those products are sold under Australian territory but not in the big volume and in this time I wasn't able to measure the level of reputation. MR CATTERNS: You knew they would have a reputation in Australia? THE WITNESS: If somebody sell - if somebody sells the product on the territory it is quite logical that the product has some reputation but the question - the level - the reputation and the quality of the reputation, that's two different points. 200 I will not repeat anything I earlier said about what appears on the orange and red strips. I think there was and is trade mark use of 'Budweiser' or 'Budweiser Budvar'. However, I also think it is one of those judgments, of the kind abounding in this area, where minds might differ. Just because I have found that the use was trade mark use does not lead me to conclude that Mr Bocek was, or that others at the first respondent, or those advising them, were of the view that this was trade mark usage. 201 The use of the wording on the coloured strips has been defended in submission and in evidence by what is clearly a strongly held view as to the moral and historical entitlement to call this company by a name which includes the word 'Budweiser'. I will come to the justification for that shortly. However, having seen Mr Bocek and read the affidavit and documentary evidence, I conclude that Mr Bocek and others have a strong and honestly held view as to the moral and historical entitlement of the first respondent to the word 'Budweiser' in connection with the first respondent's beer. However, also, Mr Bocek and others at the first respondent recognised and recognise that legal entitlements of Anheuser-Busch can constrain, as they do here, the full expression of that moral and historical entitlement. 202 The first respondent made a significant point of the history of brewing in Ceské Budějovice or Budweis. The applicant was somewhat dismissive of its relevance, let alone its importance. Indeed, it was put that Mr Bocek's claim on behalf of the first respondent to the lineal heritage of 'Budweiser' was part of the reason why I should not accept his evidence as truthful. I think, with respect, that is to deny weight to the perception of history which, on the evidence, is real to Mr Bocek and others in the first respondent. It does not matter whether the joint stock company began selling beer with a label containing the word 'Budweiser' in 1895 or 1934 or that the first respondent is better analysed as the corporate lineal descendant of the joint stock company, rather than the German brewery. German or Czech, the citizens of this town in Bohemia, have been making beer since the town was established in 1265, which was the year of Dante's birth, but eight years before the King of Bohemia, Ottokar II, lost the election as King of the Romans to Rudolf, the first Habsburg Emperor, and about twenty years after the last of the Mongol armies left Central Europe. These are not intended as idle flourishes. They illuminate, depending on one's culture and history, the length of the historical tradition to which those at the first respondent, including Mr Bocek, feel part, albeit through the production of beer. The evidence of Mr Bocek and Mr Hraba says as much. It may, sometimes, lead to what Mr Catterns referred to as 'corporate propaganda'. However, this was not the case in the evidence of Mr Bocek or anyone else. The recognition of their part in the tradition of beer production in this part of their country informs and informed their actions and leads to a perception in them, I think, of a commercial struggle with an American company which has 'only' been making and selling beer since the last quarter of the nineteenth century, and which used the name of their town to promote its own beer. 203 Whilst all this may seem irrelevant to issues in Australia under the TM Act, it forms a background to the evidence of Mr Bocek and is one of the factors which, I think, informed and informs his honest belief in an entitlement, when law permits, to use the name 'Budweiser Budvar', and also which informs what I perceive to be his (and the first respondent's) fierce determination to go as far as he and it can towards advancing the interests of the first respondent and using, where possible, the name or words 'Budweiser Budvar', so long as it is lawful. 204 Thus, when an opportunity arises to place the name of the brewing and bottling company on the bottle, and thus to place 'Budweiser' on the bottle, if the 'English' name is used, and if there is an available justification for that within local trade mark law, (such as under s 120 or the availability of a defence under s 122) it seems to me that the first respondent will take such an opportunity, and here did just that. I think that explains the company name on the coloured strips, whether in the form in Exhibits GRB 11 or GRB 12. 205 In so expressing matters, I am not making a finding of conscious dishonesty or of a conscious and deliberate attempt to appropriate the goodwill of Anheuser-Busch. There is this claim of right, which is held by the first respondent, exhibited through Mr Bocek's evidence and the affidavit evidence of others. There is also, it seems to me, an insistence on using 'Budweiser', if it lawfully can be used. It is, from the evidence, the preferred trade mark, and seen as preferable to 'Budějovický Budvar', at least in English and German speaking countries. However, all this is done in what I find must be, and must have been, the knowledge that though not the primary label of the product, the writing on the orange and red strips was on the front label and well able to be read. It may well be that a not insignificant proportion of people would not read what is on the coloured strip. But it must have been evident to the first respondent, and I so find, that there was the real possibility, depending upon the strength of the reputation of 'Budweiser' in Australia, that consumers would recognise the word and associate it with the Anheuser-Busch product. There is no evidence that any research which was undertaken by the first respondent tended to a view that this would not occur. 206 As it happens, as I have found, the Anheuser-Busch product is reasonably well known in Australia as 'Budweiser'. Whilst 'Budweiser' and 'Bud', on the evidence, are not household names in Australia, they are tolerably well known, at least among drinkers of beer. I think it highly unlikely that those at the first respondent responsible for export to Australia could have been confident (if they had thought about it) that no-one who read the label would associate their product, or question the association of their product, with the existing 'Budweiser' product and so Anheuser-Busch. In saying this, I should add, and I deal with it later, that I think the get-up of the first respondent's product is quite different to that of the applicant. In that respect, I think those at the first respondent could perhaps have taken the view that significant appropriation of reputation and goodwill would not occur. 207 Thus, though informed by an honest belief in a moral and historical entitlement to use 'Budweiser' and an honest belief that such usage as had been made of 'Budweiser' on the coloured strips was, or would be, lawful, nevertheless, I find that there was, or must have been, an awareness in the first respondent that the applicant had or would have an existing reputation in Australia of commercial value, and that there was a possibility which was real and not fanciful or remote that for those who read the label on the bottle, the company name (which need not have been used - 'Budějovický Budvar, Národní Podnik' could have been) would evoke the product already sold in Australia and could, at least, cause consumers to question the relationship between the two products. 208 The applicant puts the matter higher than this. The applicant sought to undermine the basis for the so-called historical and moral right, so as to have me characterise it as disingenuous and mere commercial propaganda. I think that, as with many personal, corporate or national views of history, the underpinning factual material at times does not wholly support the long and strongly held view. That does not make the view dishonestly held. 209 The applicant first points to the fact that of itself, the joint stock company and the first respondent, it (that is, the applicant) was the first to use the word 'Budweiser' on its labels. At one level this is correct. Anheuser-Busch was using the word in the nineteenth century. It is unclear on the evidence when the joint stock company commenced to use the word 'Budweiser'. It registered it in Budějovice in 1934, see [48] above. There was some evidence that the joint stock company sold beer into the United States before prohibition, see [51] above. There was some less than precise evidence of Mr Bocek in his affidavit of use by the joint stock company of the word from the late nineteenth century. The joint stock company certainly began to use the word 'Budweiser' in the United States in about 1936. However, the first operative clause of the 1939 agreement (see [54] above) contains an admission by the joint stock company that Anheuser-Busch Inc. and its predecessors were the first to use the word 'Budweiser'. However, the German brewery had made beer since 1795; the town had, in one sense, made 'Budweiser' (that is beer from the town in a recognised style) for centuries and, as a product of this town, the beer had received a measure of renown. Whilst the joint stock company and the first respondent were entities with a Czech heritage, those at the joint stock company and the first respondent no doubt saw themselves as close to, and to a degree entitled to share in, the renown of all the beer made in Budějovice/Budweis, irrespective of the linguistic or racial heritage of its brewers. As I have earlier said, it is too simplistic to say that the German brewery was not a predecessor of the first respondent. It is also too simplistic to say that Anheuser-Busch sold 'Budweiser' before the joint stock company, at least in this context of exploring the genuineness of this moral and historical claim. 210 The applicant said that Mr Bocek's affidavit was deliberately misleading in a number of respects. First, it was said that Mr Bocek sought to speak of a 'trade collision' between the applicant and the predecessor of the first respondent through trading activity in America. The applicant pointed out that the German brewery had the trade collision, not the joint stock company. This is strictly true, but as I have said, it is too simplistic to say that the first respondent and the German brewery are unrelated in terms of lineage and in terms of the reputation of the city as a source of beer. Also, the joint stock company must have come to Anheuser-Busch's attention to some degree, since the 1911 arrangement was entered for more than nominal consideration. In a sense, this can, perhaps, be described as an aspect of a 'trade collision'. No evidence about the topic was led by the applicant. There may have been a degree of inaccuracy in Mr Bocek's affidavit. However, I am not prepared to find that there was no usage of the word 'Budweiser' by the joint stock company before 1934 or that there was not, at least, a threat by it to do so in North America in 1911 or thereabouts. I do not find these matters as facts, but I am not prepared, on the historical evidence, to characterise any evidence given by Mr Bocek about these matters as deliberately wrong. 211 The evidence of Mr Bocek of the effect of the 1911 documentation was to a degree inaccurate. The document provided no restraint on Anheuser-Busch. However, he could hardly have been intending to deceive the Court in circumstances where the documentation was presented in full annexed to his affidavit. I think this illustrates how facts can become somewhat attenuated in history or belief, given a desire, over time, and over generations, to view things in a particular way. 212 It was put that Budweis was no longer the name of the city by 1967. The evidence was that the official name of the town was Ceské Budějovice; but the town was and is still known and referred to by German speakers as Budweis. The official name of the city since 1918 (apart from the time of its occupation in the Second World War) has been in Czech. However, the word 'Budweis' is used and always has been in common parlance by German speakers. It appears in atlases in the index of places; a cross reference to Ceské Budějovice is generally made, which, as the official name, appears on the map. 213 I think the attack on Mr Bocek is unwarranted. I am not prepared to go beyond the findings which I have earlier expressed, at [174] to [179] and [200] to [207] above. 214 The first respondent relied on what the Court of Appeal said in Baume & Co Ltd, supra at 235, about the phrase 'bona fide' in the equivalent United Kingdom legislation in the provision, which was as follows: The next point which was discussed before us was as to the meaning of 'bona fide use' in Sec. 8. Danckwerts J., said that he understood that 'bona fide' normally 'means the honest use by the person of his own name, without any 'intention to deceive anybody or without any intention to make use of the 'goodwill which has been acquired by another trader'; and in that sense he acquitted the Defendants of any want of bona fides in the present case. We agree with the learned Judge's definition of the term 'bona fide' and we see no reason to attribute a different or special meaning to the phrase in its context in Sec. 8. The mere fact in itself that a trader is using his own name which too closely resembles a registered trade name of which he is aware does not prevent the user from being 'bona fide', provided that the trader honestly thought that no confusion would arise and if he had no intention of wrongfully diverting business to himself by using the name. The truth is that a man is either honest or dishonest in his motives; there is no such thing, so far aw we are aware, as constructive dishonesty. In our judgment, if a trader is honestly using his own name, then no action will lie for infringement of trade mark and any rival trader who thinks himself aggrieved must sue, if at all, for passing off. 215 Notwithstanding what there appears about the clear distinction between honesty and dishonesty, notions of objective dishonesty are not foreign to the law of equity and related areas, for example, the law governing third party accessory liability in equity: Royal Brunei Airlines v Tan [1995] 2 AC 378, 390. 216 Leaving this qualification to Baume & Co Ltd, supra, aside, it is clear that the Court of Appeal required for there to be 'bona fide use' that 'the trader honestly thought that no confusion would arise'. No witness for the first respondent so deposed. No witness explained why it was thought inappropriate (if anyone did so think) to use Budějovický Budvar, Národní Podnik as the company name and why it was thought appropriate to use a name with 'Budweiser' in it. Rather, the only explanation was that it is the 'English' name in the Court Register. However, as I have elsewhere noted, the case was conducted on the basis that there was no paramount Czech law requiring the use of this name in Australia. The using of a name including 'Budweiser' was informed by a moral claim and, no doubt, a belief in a legal claim. However, the likely existence of a reputation of its rival in the territory was known. At best, the first respondent was only unaware of its strength. In these circumstances, if it had been positively believed that there would be no confusion, I think someone would have said so. I think that if one were aware of the reputation of 'Budweiser' and 'Bud' in Australia, it would be tolerably clear that despite the get-up differences and the obviously European source, there could well be some confusion in consumers as to whether this 'Budweiser' did, or did not, have some connection with the 'Budweiser' with which they were familiar. If Mr Bocek, as he says, was not aware from his company's research of the 'level' or quality of the reputation of 'Budweiser' in Australia, that does not assist his or the first respondent's position. He knew of a reputation. He knew of wide sales around the world of Anheuser-Busch's 'Budweiser' beer. He must have known that, as was the fact, it could well be the case that the 'Budweiser' reputation was not insignificant in Australia. It is hard to see how he and his company could be sure, or could hold the view, that no confusion would arise. They have not persuaded me that anyone did hold that view. In these circumstances, I think it can be said that, though the first respondent and Mr Bocek were not consciously dishonest, the first respondent did not use, and does not intend to use, its own name in good faith for the purposes of s 122 of the TM Act. 217 The satisfaction of the requirements of good faith is not concluded by a conclusion of lack of fraud or lack of conscious dishonesty: Johnson & Johnson v Sterling Pharmaceuticals, supra at 355-56 per Gummow J, with whom Lockhart J agreed on this point. In Adrema Ltd v Adrema-Werke GmbH [1958] RPC 323, 334, in a passage referred to with approval by Gummow J in Johnson & Johnson v Sterling Pharmaceuticals, supra, Danckwerts J said at 334: I think that the Defendants knew that such use was likely to cause confusion, and they were determined to make use of the goodwill in connection with the machines which was associated with the word 'Adrema'. It may be that the German Company resented the loss of the trade marks and the claim that the goodwill in the United Kingdom associated with the name 'Adrema' was the property of an English Company which they had formed and of which they had lost control as a result of the war. But, in my view, these motives do not justify what the Defendants have done or make that bona fide. 218 Whilst the findings which I have made do not quite reach what Danckwerts J said - that Mr Bocek and the first respondent knew that it was likely that confusion would result from the use of the company name 'Budweiser Budvar', they have, I think, the same consequence. This is especially so when one considers the undermining of the benefits and protections intended to be afforded to registration which would occur if the facts, as I have found them, were to be characterised as exhibiting good faith: cf Re Bali Brassiere Co Inc's Registered Trade Mark and Berlei Ltd's Application (1968) 118 CLR 128, 133. There was an element of risk taking (cf Riv-Oland Marble Co (Vic) Pty Ltd v Settef SpA (1988) 19 FCR 569, 573, per Bowen CJ), probably as much a function of the strongly felt claim of right to which I have referred as anything else, not entirely dissimilar to the feelings of the German company referred to by Danckwerts J in Adrema, supra at 334 (see [217] above), which is not sufficient to damn the conduct as dishonest or fraudulent, but which is sufficient to deny the conduct the blessing of the characterisation of good faith. 219 Mr Yates submitted that it is the use which must be in good faith, not the choice of name to use. Ordinarily this will be so; but where there are alternative names available to the party, I do not see why the choice of one over the other is not, or may not, as here, be part of the analysis of the question of use.

the effect of 'Budweiser Budvar' on 'Budějovický Budvar'

220 I have earlier expressed my conclusion that none of the avowedly trade mark uses of 'Budějovický Budvar' on the white front and back labels and the neck seal is an infringement under s 120. That conclusion was expressed to be subject to the presence of what was on the orange and red strips on the front of the label. 221 The applicant submitted that, whether or not the use of 'Budweiser Budvar' on the coloured strip was trade mark use and whether or not s 122 provided a defence for the use of the word 'Budweiser' on the coloured strip, I could take into account the use of the word 'Budweiser' and the phrase 'Budweiser Budvar' on the coloured strip as part of the process of comparison of the marks 'Budějovický Budvar' on the white label with the registered marks. 222 I have already found that the use of 'Budweiser Budvar' was and is trade mark usage and is not saved by s 122. Within my reasons for coming to the conclusion that the word 'Budweiser' and the phrase 'Budweiser Budvar' was and were used, in part, as trade marks, was the fact that the word 'Budweiser' is a known trade mark of the applicant, that is the word has acquired a secondary meaning or a reputation in Australia as the mark of the applicant. 223 Questions now arise whether, in assessing whether the phrase 'Budějovický Budvar' so nearly resembles 'Budweiser' or 'Bud' that it is likely to deceive or cause confusion, I can place the phrase in the context of what appears on the coloured strip and, further, whether in so doing, I can take into account that the 'Budweiser' mark has a well known reputation.

224 First, it is necessary to return briefly to the nature of the comparison being undertaken (see [143] to [149] above). As Gummow J said in Wingate Marketing, supra at 128 the comparison is 'between any normal use of the plaintiff's mark comprised within the registration and that which the defendant actually does in the advertisement or an the goods in respect of which there is the alleged infringement, but ignoring any matter added to the allegedly infringing trade mark…' The comparison is the registered mark (as recalled) with the mark (as used). The applicant submits that one does not take the mark, as used by the alleged infringer, and block out all that is around it, rather one can put it in its context in the label actually used. The first respondent says that one must restrict one's comparison to the mark as used and not extend it to the mark in its surrounding context. That, Mr Yates says, is the province of the law of passing-off and s 52 of the TP Act.

225 It is appropriate to return to the terms of the TM Act. It is the use (s 120) of a sign (s 120) if it (that is the sign or impugned mark (s 10)) so nearly resembles that other trade mark that it is likely to cause confusion, that will amount to infringement. The statute directs one to the mark and its resemblance to the other mark. It does not direct attention to the use of the infringing mark: Wingate Marketing, supra at 103-105.

226 There is a fine distinction between, on the one hand, taking into account surrounding material in order to appreciate the meaning, effect and impression of a word, and, on the other hand, appreciating the meaning, effect and impression of a word and then using surrounding material or context to qualify it or add to the meaning or impression taken from the word. There is clear authority that disclaimers will be of no avail and are to be disregarded, as are questions of get-up, to the extent that they may say something about the true trade source: Wingate Marketing, supra 128-29; Mark Foys Ltd, supra 205; Koninklijke, supra at [9]. These are examples of words surrounding the mark, or get-up, adding to the meaning or effect of the mark, as already ascertained. But if the placement of a word or phrase proximate to the impugned mark gives content or context to the meaning or appearance of the impugned mark making it more likely that a viewer of the impugned mark will be caused to question whether the goods carrying the impugned mark are derived from the same source as those of the registered mark, that may not be impermissible. 227 However, I need not decide that question because, in my view, the word 'Budweiser' and the words 'Budweiser Budvar' on the strip does not, and do not, give meaning or context to the mark 'Budějovický Budvar' on the white label; rather, I think, each makes its own independent effect which is to be analysed by reference to its own usage - whether as trade mark use or within the context of the overall get-up and effect of the label for the purposes of an analysis under the TP Act and passing-off. 228 This makes it also unnecessary to deal with the question of the role of reputation in the comparison of trade marks gently touched by counsel: cf CA Henschke v Rosemount Estates Pty Ltd (2000) AIPC 91-640 at [43] to [52]; Coca Cola Company v All Fect, supra; Registrar of Trade Marks v Woolworths Ltd, supra; in respect of which see also Campomar, supra at [86].

the question of stationery and catalogues - the qualification to paragraph 2 of the undertaking 229 The stationery referred to in para 2(b) of the undertaking set out in [92] above, Exhibit TH7, uses on its border a repeated word arrangement: "BUD… BUDVAR… BUDWEISER… Budweiser Budvar… Budweiser Budbräu…". The stationery is not intended to be circulated amongst the public generally. It is only for use between the first respondent and its distributor. 230 The applicant's marks are plainly used. Each is used as a trade mark on stationery in relation to goods in respect of which the trade mark is registered: In re 'Thunderbird' Trade Mark (1974) 48 ALJR 456, 459-60; Pioneer Electronic Corporation v Registrar of Trade Marks (1977) 17 ALR 43, 56 and 57; Shanahan op.cit. pp 21 and 338. 231 The use of 'Bud' and 'Budweiser' is plainly infringing. The use of 'Budweiser Budvar' and 'Budweiser Budbräu' is also infringing. As to the use of the single word 'Budvar' on the invoice, its context, immediately adjacent to 'Bud' and 'Budweiser' does direct attention to the first syllable 'Bud' such that it can be seen as part of one continuous trade mark use of 'Bud' and 'Budweiser' or their essential integer, 'Bud', and as such amounts to infringement also. I think the use of this invoice should be restrained. 232 The point of sale catalogue (Exhibit TH 12) is a large cardboard springback folder with replaceable pages inside. On the outside there are a number of prominent usages of the phrase 'Budweiser Budvar' on photographs of a bottle and a glass and otherwise on the cover. The usages are clearly as a trade mark on each occasion. In my view, they infringe, at least, the mark 'Budweiser'. The contents of the catalogue contain numerous other uses of the phrase. My conclusions about each is the same. Each infringes. I see no reason why the first respondent should be allowed to distribute to its distributor from time to time in relation to the selling of its goods a catalogue containing infringing uses. I think the use of the catalogue should also be restrained. PASSING-OFF AND THE TRADE PRACTICES ACT CLAIM 233 The parties approached the matter before me on the basis that a conclusion by reference to the application of s 52 of the TP Act would necessarily carry with it a conclusion in respect of paras 53(c) and (d) of the TP Act and under the law of passing-off. 234 The principles in relation to s 52 are found conveniently expressed in S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd (1998) 88 FCR 354; Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994 at pp 50,950-951. See also Puxu, supra, and Campomar, supra. 235 The relevant class of persons by reference to which and whom the first respondent's conduct must be judged is that of persons in Australia who sell, buy or drink beer and who may sell, buy or drink beer which is imported or is of a 'specialty' type. The advertising and promotion by the applicant of its beer has been directed in Australia to younger male drinkers of about 25 to 35 years or thereabouts. However, the advertising worldwide has not been so restricted and I do not think that the appropriate class or group to judge deception should be so limited. 236 It is necessary to identify in relation to such people why the misconception from the first respondent's conduct has arisen or is likely to arise, if no injunctive relief be granted: Campomar, supra at [103]. 237 The relevant date to consider the applicant's reputation is the date at which the first respondent commenced the relevant conduct complained of: Cadbury-Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1981] RPC 429, 494; [1980] 2 NSWLR 851, 861; Thai Wood Import and Export Co Ltd v Shuey Shing Pty Ltd (1989) 17 IPR 289, 302, that is 1997. 238 The impugned conduct must be judged as contemplating the effect of the conduct on reasonable members of the relevant class not displaying extreme or fanciful reactions, though including the astute and the gullible, the intelligent and the not so intelligent, the well-educated and the poorly educated: Puxu, supra at 199 per Gibbs CJ, Campomar, supra at [105]; Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177, 202 per Deane J and Fitzgerald J. 239 It is a question of fact to be judged in all the circumstances as to whether the conduct of the first respondent engaged in, and threatened, is, or would be, misleading or deceptive or likely to mislead or deceive: S & I Publishing, supra at 363, Taco Bell, supra at 202, referred to with approval by the High Court in Campomar, supra at [100]. 240 The first respondent was critical of the evidence concerning reputation led by the applicant. It certainly was the case that the deponents to the affidavits read by the applicant gave significant parts of their evidence, as it turned out, on a hearsay basis. But, in the end, in the light of the clarity of the agreement of Dr Beaton and Ms Strachan on the matter and the fact that most of the primary facts upon which the reputation was based were not seriously in issue, I am reasonably confident that the conclusions that I have reached about reputation earlier in these reasons accurately reflect the position. 241 As I have said, it appears to be the case that promotion has been to what might be described as the primary market, being males of 25 to 35 years, perhaps older, in the medium to upper socio-economic market. While this may be accurate, I do not think I should conclude that this is the only group in which 'Budweiser' and 'Bud' is likely to have a reputation or that it is the only group whose members might be looking at these products as part of a decision to buy a specialty or imported beer. 242 Likewise, the direction of the applicant's promotion of such matters as 'hipness' and American culture referred to [25] above does not mean that only those people who associate or wish to associate with such values will be the persons who will be looking at these products in making a decision to buy a specialty or imported beer. 243 It is also fair to say that there was no attempt to prove through direct evidence that people were or would be misled. Given the sophistication of marketing research and the widespread use of 'focus groups' qualitatively to analyse products, it is legitimate for the first respondent to point to the absence of such material. I do not think that such evidence would necessarily be fanciful. However, I am not prepared to put too much weight on the absence of direct evidence in circumstances where the question ultimately, I think, comes down to one of impression and judgment. This is especially so in circumstances where both sides called highly experienced and articulate expert witnesses with long experience in marketing and promotion. There was evidence of a number of conversations between investigators and shop owners or attendants. I think that this evidence does little to show any confusion or deception likely to arise from these bottles. If anything, the evidence tended to prove the recognition, at least in the trade, of the different American and Czech products. 244 I do not intend any disrespect either to the carefully expressed views of Dr Beaton and Ms Strachan or to the careful and thoughtful submissions of counsel, but I do not propose to analyse exhaustively their evidence and the differences between them. I will, however, make some general comments. First, I benefited greatly, not only from their written evidence, but also from their cross-examination in the formulation of my thought processes. If I may say so, without disrespect to Dr Beaton, this was especially so in the cross-examination of Ms Strachan, who was always prepared to make appropriate concessions in the course of dialogue with counsel. Secondly, there are elements in the evidence of each of them which I find persuasive, to which I will come in a moment. Thirdly, I do not think that the answer to the questions posed by s 52 and the law of passing-off is answered by the conceptual and theoretical construct or approach put forward by Dr Beaton; though I think the notion that part of what is written on a label, if visually distinctive, can very easily provide the 'hook' upon which a consumer's perceptions are hung, is persuasive. To this extent, I do not think that the degree of emphasis laid by Ms Strachan on the 'Gestalt' of the packaging provides the correct answer. Of course, overall get-up, feel or 'Gestalt' of a product is very important in brand and product differentiation; but I do not think that in any particular case that denies the importance of the existence and recognition of a particular word or syllable, if sufficiently clear and distinctive. 245 If the labelling of the bottles, whether Exhibit GRB 11 or GRB 12 or TH 101 did not have 'Budweiser Budvar' on the coloured strip I would conclude that, just as there was no likelihood of deception or confusion for the purposes of ss 120 and 10 of the TM Act, there was no misleading or deceptive conduct or passing-off. For the reasons I have already set out, I do not think the mark 'Budějovický Budvar' evokes 'Budweiser' or 'Bud' as it appears on the labels and neck seal. Further, the get-up of the first respondent's product, its colour, style and Europeanness, all create and reinforce a product distinct from that of the applicant. 246 However, on the front label appears the word 'Budweiser'. It is visible. It can be plainly seen from a number of feet. In Exhibits GRB 11 and TH 10, of course, the word 'Budweiser' could be seen from a greater distance than could the word appearing on Exhibits GRB 12, TH 11 and TH 101. In Exhibits GRB 11 and TH 10 'Budweiser' is in clear white letters against a strong contrasting colour. Ms Strachan's view was that the totality of the effect of the label, its Gestalt, was sufficiently strong as to overwhelm any effect of 'Budweiser' on the strip, or that people would not read or look at this part of the label. I do not agree. The word is tolerably well-known. It means or evokes the applicant's beer. It is used on the front label. It tells the reader of an association with 'Budweiser'. That the brewery is in the Czech Republic (as the smaller writing says) does not deny the association brought about by the word. The bottle may well be placed adjacent or near to the applicant's beer in the specialty beer section of shops. I accept that perhaps not everyone looking at the bottle will take in this part of the label, but a significant number, I think, will. For them, this is the hook which associates the first respondent's beer with the applicant's. I do not think that the balance of the get-up or information on the bottle would prevent the assumption being created in a consumer that this was a European version of the applicant's beer. Whilst this would be contrary to the applicant's promotion of the values referred to at [25], it would be a result, I think, of the usage of 'Budweiser' with its clear associations with the applicant, and could be perceived as a product or brand extension. 247 Even if I had been of the view that the first respondent had made out a case under para 122(1)(a)(i) of the TM Act, my views as to s 52 and passing-off are such that I would be prepared to grant relief under these heads. In that circumstance, it may have been appropriate to make orders with the qualifying effect referred to by Upjohn LJ in Parker-Knoll Ltd v Knoll International Britain (Furniture & Textiles) Ltd [1961] RPC 346, 362. 248 It was legitimately put by the first respondent that from evidence of Mr Noonan and Mr Gerendasi it could be said that the trade was not confused or misled by these bottles; that the trade saw a difference between the American and the Czech 'Budweiser' as different products and saw that they came from different sources. Also, it very well may be that consumers with a European heritage would not be misled. These were Mr Gerendasi's customers. However, I think that for many people in the class of consumers purchasing imported or specialty beer, which I have identified, the clear association of 'Budweiser' with the maker of the applicant's beer could well lead some of them to think that there is an association between the first respondent's beer and the applicant's beer even though, otherwise, the product is quite differently got up.

249 The first respondent as first cross-claimant complains about the threats of legal proceedings made by the solicitors for the applicant that there had been trade mark infringement. 250 There were a significant number of letters. They are particularised under paragraphs 3 and 8 of the amended cross-claim filed in August 2001. 251 Many of the letters relate to beer sold under the first label, 'Budweiser Budvar', not the label with which these reasons are principally concerned: 'Budějovický Budvar'. The first label would, subject to para 122(1)(b)(i), have plainly infringed the applicant's trade mark. I doubt whether para 122(1)(b)(i) could be successfully invoked in the light of the reputation of the applicant and the lack of any substantial local linguistic knowledge that it is an adjective in German, meaning 'of or from Budweis'. No debate took place on the application of para 122(1)(b)(i) to 'Budweiser'. No reliance was made on this paragraph in the defence. 252 Whilst I have found that the first respondent was not responsible for the importation into Australia of the first labelled beer - the 'Budweiser Budvar' beer - I do not think that there could be any basis to criticise the applicant for the threats made about this beer, to the extent that they were asking people who were selling it to give undertakings not to sell it in Australia. 253 If it is necessary to find that the trade mark use of 'Budweiser Budvar' (not 'Budějovický Budvar') was infringement I would do so. The first respondent recognised and recognises the applicant's trade mark in this country. I have difficulty in seeing how it could be successfully put that 'Budweiser' was a use in good faith to describe in Australia the geographical origin of the first respondent's product. Further, even if para 122(1)(b)(i) did apply, I would have little hesitation in restraining its use as a contravention of s 52 of the TP Act. 254 The letters were based not only on alleged trade mark infringement, but also passing-off and s 52. 255 The letters which dealt with the 'Budějovický Budvar' label complained (wrongly in my view) that these words were substantially identical with, or deceptively similar to, the applicant's marks; but, they also complained (rightly in my view) about the use of 'Budweiser Budvar' on the coloured strip and of the proximity, on the front label, to 'Budějovický Budvar'. 256 In these circumstances, whilst the width of some of the assertions or opinions in the letters was wider than my findings, that does not affect the substantive complaint about the letters by the cross-claimant. That complaint was that there was no entitlement to seek these undertakings from people and to interfere with the first respondent's business. On the findings I have made, the letters were justified in relation to both the first and second labels. 257 I do not propose to parse and analyse each letter. In so far as the letters deal with the 'Budějovický Budvar' product, there is a statement that the proximity of 'Budějovický Budvar' to 'Budweiser' was calculated to deceive and confuse. However, immediately after this paragraph is a statement of the advice that had been provided by Sprusons to the applicant. It was not suggested that Sprusons had not provided advice to the following substantive effect reflected in the letters: - The mark 'BUDĚJOVICKÝ BUDVAR' is a mark substantially identical with or deceptively similar to our client's 'BUDWEISER' and 'BUD' trade marks; - the importation, offering for sale and sale of the (New) Offending Products in Australia is calculated to and will deceive members of the trade and members of the public and will pass off those products as products manufactured by or on behalf of our client; - the importation, offering for sale and sale of the (New) Offending Products in Australia will infringe one or more of the Trade Mark Registrations (as defined in our letter to you dated 17 February 1997) including the use of the reference 'BUDWEISER BUDVAR national enterprise' on the front labelling of the Offending Products: - your conduct (and that of persons aiding, abetting, counselling or procuring that conduct) in importing, offering for sale and selling the (New) Offending Products in Australia will constitute a breach of Section 52 and 53 of Trade Practices Act 1974 in that it is conduct which is misleading or deceptive or is likely to mislead or deceive members of the Australian public into believing that the (New) Offending Products are products manufactured by or on behalf of our client, or with the licence, sponsorship or approval of our client: and - your conduct in importing, offering for sale and selling the Offending Products (being imported food products) without the Importer's Labels in Australia will constitute an offence under Section 13 of the Food Act, 1989. 258 The letter expressly and impliedly alleges an infringement of the TM Act. I have found that there was such an infringement. The letter sets out advice which, in part, I find to be correct and, in part, incorrect. That, however, does not make the statement of what the advice was misleading or deceptive. 259 There was an express and implied threat of legal action for infringement. There was an infringement, though not entirely for the reasons contemplated by the advice. Thus, it cannot be said that there was no ground for making the threat. A claim under s 129 of the TM Act has not been made out. 260 To the extent that it might be said that there was an incorrect assertion as to the reasons for the applicant's stated position of infringement and misleading or deceptive conduct or passing-off, in the light of the whole content of the letters and the accurate statement of the advice given by the solicitors, I do not think that the letters were misleading or deceptive or likely to mislead or deceive and so I conclude that they were not a contravention of s 52 of the TP Act.

261 The parties asked me to hand down my reasons, indicating the nature of the orders to be made. I am content to do this. These reasons, I think, conform to that request. Any debate about the appropriate form of the orders can take place on a date to be fixed. Should either party be of the view that I have overlooked any contention, I would expect this to be taken up in the debate about the orders. The orders to be agreed should include an order dealing with the safe custody of all exhibits by one or both solicitors. Numerous bottles and other physical exhibits were placed in evidence. It would be preferable for the solicitors to store these exhibits safely. 262 I would like to express my thanks to solicitors and counsel, senior and junior, for the efficient and helpful manner in which the case was conducted. I certify that the preceding two hundred and sixty two (262) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate: Dated: 5 April 2002 Counsel for the Applicant: Mr D K Catterns QC Ms S J Goddard Solicitor for the Applicant: Sprusons

Counsel for the Respondent: Mr D M Yates SC Ms A Bowne

Dates of Hearing: 4, 5, 6, 10, 11, 12, 13 and 14 September 2001