Budvar wins partial victory over Austrian Bud name
rights to the Budweiser and Bud names in Austria if it can be shown
that both terms are linked inextricably with the town of Budweis,
according to a ruling by Europe's highest court.
Budejovicky Budvar, the Czech state-owned brewery, will be allowed the sole rights to the Bud and Budweiser brand names in Austria as long as the courts there can prove that the Czechs themselves still think of the beer as a product from a specific region.
The decision this week by Europe's highest court, the European Court of Justice, is the latest development in the lengthy trademark battle pitching Budvar against US rival Anheuser-Busch, which also sells its beer under the Budweiser name.
Budvar claims that only it should be allowed to call its beer Budweiser because it is the only company making its beer in Budweis - the German name for Ceske Budejovice - after which the beer is named. A-B disagrees, claiming that it was the first company to register the trademark and that Budvar is simply trying to profit from the reputation of one of the world's biggest selling beer brands.
The Austrian case began in 1999 when Budvar took legal action against Rudolf Ammersin - the local importer and distributor for Anheuser-Busch, which sells its beer there under the American Bud brand.
The company argued that a 1976 bilateral agreement between Austria and the then Communist Czechoslovakia granted protection to all Czech products with a specific designation of origin, and that both the Budweiser and Bud names were covered by that agreement.
Back in May this year, Advocate General Tizzano of the ECJ issued a non-binding opinion in favour of the Czech company, saying that the 1976 agreement was still valid even though Czechoslovakia no longer exists as a country.
But he also suggested that the final decision take into account the perception of Budweiser and Bud among Czechs themselves - a suggestion taken on board by the court in its final decision announced yesterday.
In a statement, the ECJ said that the definitive decision on which company has the rights to the brand in Austria would depend on the findings of the Austrian courts.
"If these show that, according to the prevailing perceptions in the Czech Republic the name 'Bud' designates a region or a place in the Czech Republic and must be protected under the scheme of protection for industrial and commercial property, Community law does not preclude such protection from being extended to the territory of Austria," the statement said.
"On the other hand, if 'Bud' does not either directly or indirectly designate any part of the territory of the Czech Republic, its absolute protection constitutes an obstacle to the free movement of goods and cannot be justified."
The ECJ added that the national courts must also rule on whether the bilateral agreement had remained in place after the break up of Czechoslovakia in 1993. If this was the case, the agreement would take precedent over other obligations assumed by Austria in 1995, when it joined the European Union.
Europe will be the battle ground for a number of other Budvar vs. A-B battles in the months to come. Another case, from Finland, is pending before the ECJ, and the accession of 10 new Member States - including the Czech Republic - to the EU in May next year could throw up more cases. Products of designated origin are highly protected in the EU, and Budweiser Budvar could benefit from the same protection as products such as Champagne and Parma ham.
Budvar has registered over 380 trademarks in more than 100 countries of the world. It is currently involved in more than 40 court cases and 40 other patent-related proceedings pitching it against Anheuser-Busch. The US brand had recent victories in Spain, Italy and Hungary, while Budvar triumphed in Portugal, Lithuania and Switzerland.