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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.

Budvars 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 Appeals 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 Colomers 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 cases 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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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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