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Geographical indications: Budweiser - the story continues
18 March 2009
The battle between Anheuser-Busch, Inc. and Budejovicky Budvar
NP over the right to use the names ‘Bud’ and ‘Budweiser’ has
already produced decades of litigation but shows no sign of
abating.
History of the litigation
Following the first brewing of beer under the name Budweiser in
Saint Louis, Missouri by Anheuser-Busch in 1879 and the foundation
of the Budvar brewery in the Czech town of Budweis in 1895, the two
companies initially coexisted amicably on the basis that each would
confine its sales to distinct geographical areas. However, once the
US company began to expand into Europe, the two companies
inevitably began to clash.
Geographical indications
Geographical indications (or ‘appellations of origin’) are
defined in the TRIPS Agreement as "indications which identify a
good as originating in the territory of a Member, or a region or
locality in that territory, where a given quality, reputation or
other characteristic of the good is essentially attributable to its
geographical origin."
In the European Union there are several means by which such an
indication can be protected: designations of origin (PDOs),
geographical indications (PGIs) (both under Regulation 510/2006),
national regimes (for example the AOC system for wine in France)
and simple geographical indications (again through Member States’
national laws).
Use of geographical indications in trade mark
oppositions
Between 1996 and 2000 Anheuser-Busch applied for four community
trade marks involving the mark ‘Bud’. Budvar opposed these
applications, but had its oppositions dismissed by the Second Board
of Appeal of OHIM.
Budvar’s opposition was at that stage solely based on the
appellation of origin ‘bud’, protected in France, Italy and
Portugal by way of registration under the Lisbon Agreement (which
provides for the reciprocal protection by contracting parties of
geographical indications recognised in the country of origin) and
in Austria through a bilateral convention, which protects the
specific products in the Czech Republic and Austria. In dismissing
the oppositions, the Board of Appeal held that the sign was not
capable of being an indication of geographical origin, that Budvar
had provided insufficient evidence to show use of the appellation
in the four countries and that it had not demonstrated that the
appellation gave it the right to prohibit use of the sign in
Austria or France.
Court of First Instance decision
In the latest judgment in December 2008, the CFI annulled the
Board of Appeal’s decision in all four cases, finding that the
latter had gone too far in determining whether ‘bud’ was an
appellation of origin. Under Article 8(4) of Regulation 40/94 on
the Community Trade Mark, which allows for oppositions to be
brought on the basis of signs other than earlier trade marks, the
Board should have taken account of the relevant national law
governing the claimed earlier rights rather than calling into
question their actual classification. The CFI further found that
the appellation, both under the Lisbon Agreement and the bilateral
convention, satisfied the requirements in Article 8(4).
Outcome
This decision, while providing Budvar with a relatively rare
success in the recent stages of this litigation, also highlights a
wider issue: the disparities between the regimes governing trade
marks and geographical indications. While it must surely be right,
under the current legislation, that OHIM has no jurisdiction to
rule on whether a geographical indication is valid, this draws
attention to the uncertainty surrounding such indications and the
difficulties posed by the need to challenge their legality through
a completely different system to that of trade marks.
Further news
January saw a further development in the Budweiser saga in the
shape of Advocate General Colomer’s opinion on the reference for a
preliminary ruling from the Handelsgericht Austria in
Budejovicky Budvar National Corporation v Rudolf Ammersin
GmbH.
This was the second such reference in this case’s decade long
history, which began when Budvar applied for an order preventing
the use of the Bud name in Austria by Ammersin (a company marketing
beer under the American Bud brand in that country), on the basis of
the Austrian bilateral convention. Following the decision of the
Austrian Supreme Court (in parallel proceedings) that such
protection under the bilateral convention was lawful and consistent
with Community law at national level, the Viennese court referred
questions to the European Court of Justice (ECJ), in part to
ascertain what criteria had to be satisfied to ensure
compatibility.
Following another series of decisions by the Viennese commercial
and appeal courts, a further set of questions has now been referred
to the ECJ. These questions requested further clarification of the
criteria set out in the first ruling for simple geographical
indications, together with questions relating to the
interrelationship of indications under Regulation 510/2006 and
protection under national law.
The conclusions in the opinion suggest that, if the ‘Bud’
geographical indication is found to qualify under Regulation
510/2006 as a PGI, it will be invalid as it has not been notified
to the Commission as required under the Regulation. However, if (as
held in the previous ruling by the ECJ) it is not within the
Regulation and therefore a simple geographical indication, then in
order for Budvar to be able to rely on it, the criteria require
that it must be sufficiently clear to call to mind its particular
place of origin and the product beer.
The opinion assumes that the regime of qualified rights must
have been intended to be exclusive, i.e. that an indication should
not be protected in any other way than under the Regulation.
However, this would appear to have the counterintuitive result that
in cases such as this, a party may prefer an indication not to
qualify for protection under the Regulation, in order that it may
benefit from national protection. The parties now await the ruling
of the ECJ.
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