Anheuser-Busch Ducks Czech Brewer’s Protests

(CN) - A Czech brewery cannot challenge Anheuser-Busch's use of the Bud trademark in EU member states, the General Court ruled Tuesday.

Budweiser is a German word indicating origin from a city in former southern Bohemia, which is now the Czech Republic. Anheuser-Busch has brewed Budweiser since its U.S. founding in the 1870s, while the version made by Czech brewery Budweiser Budvar dates back to 1886.

Anheuser-Busch, which has been an InBev subsidiary since 2008, filed four applications in Europe between 1996 and 2000 to register a community trademark. The trademark consisted of the word "Bud" and its depiction for use in relation to the sale of beer and other items.

After the European Union's trademark office rejected opposition from Budvar to Anheuser-Busch's trademarks, the Czech brewer filed suit before the EU General Court - then known as the Court of First Instance.

In 2008, that court said the trademark office had placed too much of a burden on the Czech brewer. Though every European consumer may not identify Bud as coming from the Czech Republic, Budvar adequately claimed that "Bud" was a protected term in France, Italy and Portugal under the 1975 Lisbon agreement.

After Anheuser-Busch appealed, the Court of Justice found that the lower court made several mistakes in its ruling and remanded the case for another round.

This time, the court sided with Anheuser-Busch.

To qualify for "appellation of origin," products must meet certain standards of geographic origin. Gruyere cheese and several French wines are examples of products that meet these criteria.

"A right of opposition of that kind must be reserved to signs with a real and actual presence on their relevant market," according to the ruling.

Here, Budvar failed to show "that a sign of more than mere local significance was used in the course of trade" in France, Italy, Austria and Portugal, the court found.

The General Court discarded a number of invoices the brewery submitted as evidence, finding them predated by Anheuser-Busch's trademark-related filings.

Of the invoices that were produced before Anheuser-Busch made its first trademark request, the court found that they related to a very limited volume of products delivered to just three French towns.

As a result, "the condition of use in the course of trade of a sign of more than mere local significance is not satisfied as regards French territory," the ruling states.

Similarly, documentation of Budvar products in Austria reveal that sales were very low both in terms of volume and turnover, the court found.

Thus "the condition of use in the course of trade of a sign of more than mere local significance is not satisfied as regards Austrian territory either," according to the ruling.

In different prong of the trademark battle, Europe's high court ruled in 2011 that Anheuser-Busch and Budvar could both sell Budweiser in the United Kingdom.

Both companies have marketed Budweiser beer there since the 1970s. The American company filed an application in 1979 to register Budweiser as a trademark in the UK. While this was still under consideration, Budvar followed with its own application, 10 years later.

Since both companies had used the name for nearly 30 years on the English market in good faith, they should be able to continue to coexist, the Court of Justice found.

British consumers can clearly distinguish between both Budweisers, as they have distinct tastes, prices and packaging, the court said.

In 2011, the same court barred Anheuser-Busch from applying a blanket Budweiser trademark in Europe.

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