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1. There has been a tradition of brewing in Kilkenny city for three centuries. In 1710 the Smithwick family established a brewery and that brewing enterprise is still being carried on by the second named Plaintiff. For the first 200 years of its existence the Smithwick enterprise had a competitor, the O'Sullivan brewery, which was established in Kilkenny in 1702. That enterprise was wound up in 1922 and its land and assets were purchased by the second named Plaintiff. For the past 75 years there has only been one brewery operating in Kilkenny - the Smithwick brewery. In 1965 the Smithwick brewery was taken over by the Guinness group of companies (Guinness) and the second named Plaintiff is now a subsidiary of Guinness Ireland Holdings Limited.

2. In 1987 Guinness added a new product to its range of beers - a red beer which has been described as being characterised by its distinctive ruby colour and rich creamy head. Since 1987 this beer has been brewed by the second named Plaintiff at the St. Francis Abbey Brewery in Kilkenny and has been marketed and sold under the name "Kilkenny Irish Beer".

3. All of the Plaintiffs are associated, in that they are all in the Guinness fold, being subsidiaries of Guinness Ireland Holdings Limited, and they are all incorporated in the State. The first named Plaintiff develops, markets and distributes the Guinness brands of beers, ales and stout, including Kilkenny Irish Beer. The third named Plaintiff holds Irish registered trademarks used in connection with the Guinness brands.

4. The Defendant was incorporated on 14th December, 1995 as a limited company under the Companies Acts, 1963-1990. Its primary object as set out in its Memorandum of Association is to:-

5. With effect from 15th December, 1995 the directors of the Defendant included Paul Smithwick (Mr. Smithwick).

6. The existence of the Defendant came to the Plaintiffs' attention as a result of a search in the Companies Office carried out following the publication of an article in "The Sunday Independent" on 25th February, 1996 which heralded the establishment of a "brewery, night-club and restaurant" in the Martello Tower on Strand Road in Sandymount in Dublin which would be "home for a new brand of beer, O'Sullivan's, under the imprimatur of the Kilkenny Beer Company....".

7. It is clear from the evidence that there was nothing surreptitious or underhand about the incorporation of the Defendant under the name Kilkenny Brewing Company Limited. From about March 1995 a number of persons, including Mr. Smithwick and Jorg Von Geitz, were developing a concept for establishing a micro brewery, which in broad terms is a small brewery which produces a natural "non-additive" beer, and restaurant in an old building in Kilkenny known as "The Maltings" which up to the mid-1980's had been used by the Smithwick brewing enterprise as malt stores. By November 1995 the planning of the project had progressed to the stage that a contract for the acquisition of "The Maltings" might require to be executed. A corporate vehicle was required to hold the property. Mr. Smithwick wanted the corporate vehicle to have a name which was tied in with the property and with its historic association with the brewing tradition in Kilkenny city. He chose the name "Kilkenny Brewing Company Limited". The intention was that the Defendant would merely hold the property. The business intended to be carried on in "The Maltings" would be carried on by another company, O'Sullivan Brewing Company Limited, the name of which also reflected the brewing tradition in Kilkenny.

8. The micro brewing and restaurant project planned for "The Maltings" has not advanced beyond the stage it was at when the Defendant was incorporated in December 1995. "The Maltings" had not been acquired and the Defendant has never traded in any sense.

9. From February 1996 an alternative micro brewery project in Dublin - the project in the Martello Tower in Sandymount, the subject of the article in "The Sunday Independent" - was under active consideration by Mr. Smithwick, Mr. Von Geitz and their associates. Mr. Smithwick testified that the reference in that article to the Martello Tower project being "under the imprimatur of Kilkenny Beer Company" was incorrect. Independently of the Plaintiffs' investigation following the publication of the article, Mr. Von Geitz sought a meeting with the management of Guinness in Dublin to explore commercial opportunities for the micro brewing project. A meeting was held on 19th April, 1995 at which Mr. Von Geitz outlined to the management of Guinness, including the managing director and the company secretary of the first named Plaintiff, the micro brewery concept being developed by him and his associates. The understanding of the Guinness personnel was that Mr. Von Geitz and his associates were seeking a distribution arrangement with an established brewing company for the distribution of beer produced in the micro brewery in the Martello Tower and in other micro breweries which they might establish throughout Ireland, including a micro brewery in The Maltings. Mr. Von Geitz was asked by the Guinness management to submit a business plan. However, he was also told that the Guinness management had serious concerns about the use of the name "Kilkenny Brewing Company Limited" by him and his associates because of the potential for confusion with the Guinness product, Kilkenny Irish Beer.

10. The micro brewery project planned for the Martello Tower has not progressed because the question of the entitlement of the promoters of the project to a lease of the Martello Tower from the owner thereof is currently the subject of litigation. In fact, the whole micro brewery project is "on hold" pending the outcome of that litigation.

11. On 22nd April, 1996 the Plaintiffs' Solicitors, McCann Fitzgerald, wrote to the secretary of the Defendant at the registered office of the Defendant claiming that Guinness had acquired an exclusive reputation in the use of the name Kilkenny in conjunction with beer and that it was inevitable that the use of the Defendant's name in association with beer was likely to confuse people into perceiving a link or association between the Defendant and Guinness. Litigation was threatened if the Defendant did not change its name. These proceedings were initiated by plenary summons which issued on 31st May, 1996 before a response was received to that letter. The response of the Defendant was contained in a letter dated 11th June, 1996 from Smithwick & Co., the Solicitors' firm in which Mr. Smithwick is a member, in which it was stated that the promoters of the Defendant had no intention of there being any confusion of any nature and that the intention was that the micro brewing enterprise in Kilkenny city would operate "under the name of O'Sullivan's Brewing Limited". Mr. Smithwick testified that he had not responded sooner because he had been "inflamed" when he received the letter of 22nd April, 1996, having regard to the close connections between his family and the management of the St. Francis Abbey Brewery in Kilkenny and also the management of St. James's Gate Brewery in Dublin and the openness of the promoters of the micro brewery concept about their intentions. His view, as had been stated in his letter of 11th June, 1996, was that a simple telephone call to one of the promoters would have allayed the concerns of the Plaintiffs.

12. The concerns of the Plaintiffs have not been allayed. The essence of the Plaintiffs' case is that they have an established reputation in the word "Kilkenny" when used in connection with beer and that it is inevitable that the use of the name of the Defendant in association with beer is likely to confuse people into perceiving a link or association between the Defendant and the Plaintiffs and, in particular, the Plaintiffs' product "Kilkenny Irish Beer". The Plaintiffs seek injunctions restraining the Defendant from commencing or carrying on business under its existing name and directing it to change its name.

13. The species of the tort of passing off which the Plaintiffs contend is being perpetrated by the Defendant calling itself by a name which includes the word "Kilkenny" in conjunction with the word "brewing" is explained in the following passage from the judgment delivered by Kenny J. in the Supreme Court in C&A Modes -v- C&A (Waterford) Limited , (1976) I.R. 198 at page 214:-

14. The factual background to the decision in Ewing -v- Buttercup Margarine Company Limited , (1917) 2 Ch. 1 is particularly apposite. The plaintiff had been carrying on a business under the name "Andrew Ewing, trading as the Buttercup Dairy Co." from 1904, dealing with margarine, tea and other goods. The defendant company, Buttercup Margarine Company Limited, was registered in November 1916. It had not traded prior to the trial. In his judgment at page 11, Lord Cozens-Hardy M.R., having stated that the defendant company and its directors had asserted their right to use the name, went on to state:-

15. In his judgment at page 13 Warrington L.J. said:-

16. It was submitted on behalf of the Defendant that the Plaintiffs' claim cannot succeed because they have failed to establish an intention to deceive, create confusion or give the wrong impression of a connection between the Defendant and the Plaintiffs or their product "Kilkenny Irish Beer". On the evidence I am satisfied that the name Kilkenny Brewing Company Limited was chosen innocently and without any consciousness of the possibility of confusion being created in consumers' minds of a connection between the Defendant and the Plaintiffs. Moreover, on the evidence I am satisfied that the Plaintiffs' efforts to procure that the Defendant's name be changed prior to and in these proceedings have been resisted in the bona fide belief that the Plaintiffs are not entitled to require the Defendant to change its name. However, it was well settled that the defendant's state of mind is wholly irrelevant to the existence of the cause of action of passing off (cf. Wadlow on The Law of Passing-Off , 2nd Ed. (1995) at page 200). Indeed, it is clear from the passage from the judgment of Kenny J. in C&A Modes -v- C&A (Waterford) Limited, which I have quoted above, that neither intention nor a degree of knowing culpability is a necessary ingredient in the tort of passing off.

17. One of the few areas in which a conflict of evidence arose related to telephone conversations between Andrew McMeekan, a former marketing director for Guinness in Ireland and in the United Kingdom, who acted as a consultant to Mr. Smithwick and his associates in connection with the micro brewery concept and was both the chairman and a director of O'Sullivan Brewing Company Limited, and Paddy Gallagher, the company secretary of the first named Plaintiff, in September 1997. While I conclude that Mr. Gallagher's recollection of the telephone conversations is more reliable that Mr. McMeekan's, because Mr. McMeekan was merely acting as a "go-between" between Mr. Smithwick and his associates, on the one hand, and his former colleagues in the management of Guinness, on the other hand, and was not personally or intimately involved in the issues between the proponents in these proceedings, I am satisfied that what transpired between Mr. McMeekan and Mr. Gallagher at all times constituted a bona fide attempt to compromise these proceedings and, consequently, constitutes privileged communications which are inadmissible.

18. It was also submitted on behalf of the Defendant that the Plaintiffs' claim must fail on two other grounds, namely:-

19. On the evidence I find that by December 1995 the Plaintiffs had an established goodwill in the name "Kilkenny" when used in connection with the word "beer". As I have already stated, the Plaintiffs' product, which has been marketed and sold under the name "Kilkenny Irish Beer", was first introduced in 1987. Initially, that product was marketed and sold on mainland Europe, first in Germany and then extending to the Benelux countries and throughout Europe. It was launched on the United Kingdom market in 1994. It was launched on the Irish market in July 1995. The Irish launch was accompanied by a very intensive promotional campaign. The evidence establishes that between July 1995 and December 1995 the Plaintiffs expended £1.1 million on launching and promoting Kilkenny Irish Beer on the Irish market. The marketing campaign was successful and the measure of its success was that between July 1995 and December 1995 the sales volumes achieved on the Irish market for draught beer was 4826 hectolitres (0.8 million pints) having a retail sales value of £1.8 million. In the following five months up to May 1996, when these proceedings were initiated, a further £700,000 was expended on marketing the product, which continued to thrive on the Irish market giving rise to retail sales for draught beer valued at £2 million in the five month period. At the end of that period the product was in 841 public houses in Ireland. In November 1995 the product was launched in cans.

20. Apart from evidence of goodwill arising from direct advertising and marketing in this jurisdiction and the launch and sale of the brand on the Irish market, there was also evidence that even before the launch on the Irish market the product was known to consumers in Irish public houses: Irish people who had come across the product in establishments on mainland Europe and in the United Kingdom; and tourists from mainland European and the United Kingdom who were familiar with the product in their own countries. Prior to the launch on the Irish market Kilkenny Irish Beer was available abroad in twenty countries. The evidence established that even before the launch patrons in licenced establishments here asked for the product, which in the market is just known by the name "Kilkenny" and is ordered as a "pint of Kilkenny".

21. The Defendant contends that there is no likelihood of confusion between its business and that of the Plaintiffs because its purpose is merely to hold land - the micro brewery premises - and it will not be a trading company for the business carried on or the products produced in the micro brewery. Moreover, it is contended that the product which is produced in a micro brewery is a different product to the Plaintiffs' product, Kilkenny Irish Beer. This argument, it seems to me, does not address the real issue, which is whether the public will get the impression that the micro brewing and licenced trade carried on in the premises owned by the Defendant, Kilkenny Brewing Company Limited, is associated or connected with the Plaintiffs, who have an established goodwill in the name Kilkenny when associated with beer through their product, Kilkenny Irish Beer.

22. Three persons very experienced in the licenced trade in Ireland testified that consumers would be likely to get the wrong impression of an association between a company named Kilkenny Brewing Company Limited and Guinness and Smithwicks. Such wrong impression might arise from assuming that that company brewed Kilkenny Irish Beer and was owned by Guinness (as suggested by Paul Macauley, the beverage manager of the Temple Bar Hotel), or from concluding that the company was a branch of Smithwicks or Guinness (as suggested by P.J. McCaffrey, the proprietor of "The Hole in the Wall" on Blackhorse Avenue and "Nancy Hands" in Parkgate Street), or from being "mixed up" and unable to distinguish whether that company brewed Kilkenny Irish Beer or not (as suggested by Cyril Mulligan, the proprietor of the Clifton Court and of the Arlington Hotel in Dublin).

23. While the propensity to create the wrong impression of a connection between businesses may not be as starkly obvious in the instant case as in Ewing -v- Buttercup Margarine Company Limited, where the impression was created by the similarity of the name under which the plaintiff traded to the defendants' corporate name, nonetheless, in my view, there is a real likelihood that the public would get an impression of a connection between the business carried on in the Defendant's premises and the business of the Plaintiffs, whom the public identify with beer or brewing associated with Kilkenny because of their brand, "Kilkenny Irish Beer".

24. I think it is somewhat disingenuous to argue that there is no likelihood of confusion or giving the wrong impression because the Defendant will merely be a land holding company. Under Section 114 of the Companies Act, 1963, every company has certain statutory obligations in relation to the publication if its name - on the exterior of every premises in which it carries on business, on its letterheads, cheques, invoices etc. Moreover, the evidence is that the primary objects clause in the Defendant's Memorandum of Association is deliberately broad in scope because of a realisation that the regulatory authorities might require it to be so, for instance, if the Defendant was applying for a licence in the future. In my view it is unrealistic to assume that the name of the Defendant can be immured from the public perception so as to avoid giving a wrongful impression of a connection with the Plaintiffs' business.

25. Accordingly, the Plaintiffs have established that they are entitled to injunctions restraining the Defendant from continuing to exist under the name Kilkenny Brewing Company Limited and for Orders restraining the use of that name and directing the Defendant to take steps to change its name.