View Parallel Citation
name of his hotel or restaurant in a wide sense, that the travel agents or other persons to whom he sends advertisements
know of his establishment. Again he may acquire a reputation in a wide sense in the sense of returning travellers speaking
highly of that establishment, but it seems to me that those matters, although they may represent reputation in some wide
sense, fall far short of user in this country and are not sufficient to establish reputation in the sense of material for the
purpose of a passing off action. It is very clear that in such circumstances the foreign trader has not acquired anything which
in law could be described as goodwill in this country."
In the Athletes Foot case the plaintiffs carried on in the United States of America and elsewhere, but not in Great
Britain, an extensive business in which they granted franchises to independent stores to sell footwear for athletes
under the name "The Athlete's Foot". During 1978 and 1979 they had taken steps to secure a franchise agreement
for the United Kingdom and a prospective franchisee had gone so far as to order goods and stationery with a view
to establishing a chain of stores under the name "The Athlete's Foot". However, no franchise contract had been
concluded and no sales had in fact been made under that name. There was nevertheless an awareness of the
plaintiffs' trade name and trading activities in a substantial section of the public in England as a result of overspill
publicity through American journals circulating there.
An application for injunctive relief against a trader who sought to use the name in England was refused. After a
full review of the earlier cases, the court (Walton J) held as follows at 350, lines 1320:
"... as a matter of principle, no trader can complain of passing off against him in any territory ... in which he has no
customers, nobody who is in a trade relation with him. This will normally shortly be expressed by saying that he
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does not carry on any trade in that particular country ... but the inwardness of it will be that he has no customers in that
country: no people who buy his goods or make use of his services (as the case may be) there."
In the AnheuserBusch case the plaintiffs and their predecessors were brewers of beer in the United States of
America. Their beer had been sold since 1875 under the "Budweiser" trade mark. The first defendants were from
1895 brewers of beer in Ceske Budejovice, a town in Czechoslovakia formerly known by its German name of
Budweis. In sales in Europe the first defendants used the word "Budweiser" in relation to their beer.
Before 1973, when the first defendants first sold a significant quantity of beer in the United Kingdom, the
plaintiffs exported no beer to the United Kingdom for normal commercial sale and domestic consumption. Between
1974 and 1979, when action was taken against the first defendants, the plaintiffs' sales in the United Kingdom
were minimal, failing to exceed 240 000 cans a year, the principal outlets for which were Americanstyle restaurants
and clubs. However, from the years 1962 to 1973, an annual average of more than 5 million cans of their beer were
imported for use and sale in United States military and diplomatic establishments in England. These cans were
available for purchase, duty free, by serving Americans and by British employees of American service
establishments, but were not available for general purchase.
View Parallel Citation
In 1973 the first defendants actively entered the United Kingdom market, and by 1980 their sales amounted to
some 300 000 bottles per annum.
In 1979 the plaintiffs issued a writ by which they sought, inter alia, by injunction to prevent the first defendants
from selling or dealing in any beer by the name of "Budweiser" except for the plaintiffs' own beer. By counterclaim
the defendants sought by injunction to prevent the plaintiffs from selling or dealing in any "Budweiser" beer unless
it was brewed by the first defendants or otherwise originated from the town of Budweis. Whitford J in the Chancery
Division refused both the claim and the counterclaim. He held that neither brewery could be disentitled to use the
word "Budweiser" since neither was employing it improperly and neither was making a misrepresentation,
notwithstanding the fact that some degree of public confusion was apparent. The plaintiffs appealed.
On appeal it was accepted that the plaintiffs' Budweiser beer enjoyed a significant reputation among members
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of the public in the United Kingdom as a result of visits to the United States and spillover advertising. Such
reputation was, however, not enough. What was required was a goodwill in the United Kingdom, which could not
exist without a business there. This was expressed by Oliver LJ as follows (at 470):
"Mr Kentridge argues that once a goodwill exists it is for the owner of the goodwill to choose when and how he will go into
the market with his product. But this, with respect, begs the question, because it assumes the existence of the goodwill apart
from the market, and that, as it seems to me, is to confuse goodwill, which cannot exist in a vacuum, with mere reputation
which may, no doubt, and frequently does, exist without any supporting local business, but which does not by itself constitute
a property which the law protects."
And O'Connor LJ said (at 471)
"As a result of the plaintiffs' enormous business in the U.S.A. expanded by ever increasing advertising, I am in no doubt that
the evidence showed that ... the plaintiffs' Budweiser beer enjoyed a significant reputation among members of the public in
this country. That is not sufficient to found an action for passing off. It is the goodwill of a business carried on in this country
that can be protected, not the reputation goodwill if you like of a business carried on in another country."