Published article in WTR Daily (25 October 2013)

In Budweiser Budvar v Anheuser-Busch LLC, the Supreme Court has put an end to a series of court actions in connection with the use, protection and alleged invalidity of the trademark (or series of trademarks) BUDWEISER.

On May 17 2002 US company Anheuser-Busch LLC (AB) sued Czech brewery Budweiser Budvar (BB), challenging the use and registration of the Italian extension of international trademarks consisting of, or including, the word ‘Budweiser’. The actions were based on the ground of prior use; AB alleged that it had used the trademark for decades, and that such prior use had already been ascertained in other proceedings before the Court of Milan (decision at first instance of November 26 1998 and decision of the Court of Appeal of December 10 2000).

Following the Court of Appeal’s ruling in favour of the US company (Decision No 1082/2007), BB appealed to the Supreme Court alleging, among other things, that AB could not claim exclusive rights over the trademark BUDWEISER, and requesting that the court clarify which rule of law should apply.

Since 2003 (when the Czech Republic became a member of the European Union via the Athens Treaty), the word ‘Budweiser’ has been considered as an appellation of origin due to its connection with the Czech territory. Thus, in principle, while the US company’s use of BUDWEISER would be geographically misdescriptive, BB, as a Czech company producing beer in the Czech territory, would be allowed to use the trademark at issue.

In this respect, the Court of Appeal had found that the word ‘Budweiser’ had nothing to do with the appellation of origin ‘Budejovice’, which actually corresponds to a Czech city. In fact, today the old city of Budweis has no link whatsoever with any modern city, so that the use of BUDWEISER by the US company did not mislead consumers as to the geographical origin of the products, because Budweis is no longer the name of a city.

Pursuant to Article 29 of the Italian Code of Industrial Property, geographic indications and appellation of origins identifying a country, region or particular geographical area must be protected. In addition, Article 14 of the code prohibits the use of signs that would deceive consumers as to the geographic source of the products.

On appeal, the Supreme Court stated that Article 14, “which applies to this case, does not even mention ‘geographic indications’ or ‘appellation of origin’, but simply recognises the ‘generic geographic source’ of goods. Such a term includes any designations indicating the geographic area from which the products originates’.

Therefore, the Supreme Court found that the rule of law on appellations of origin was applicable to this case, because the word ‘Budweiser’ (meaning ‘originating from Budweis’) was still well known and recognised, despite the fact that the name of the modern city was now Budejovice.

The court stated that it was very common for areas, cities or entire regions (especially sites of ancient history) to have had different names in the past. In addition, regardless of the modern names, the old names are still often used extensively and recognised by consumers as belonging to a particular geographic area. In other words, the issue here was not whether a geographical name was being used officially, but whether consumers were able to recognise the geographic origin of such products.

Based on the foregoing, the Supreme Court ruled in favour of the Czech brewery and annulled the decision of the Court of Appeal.

This decision will have a significant impact on any further actions by the parties, especially in a country with such a great historic heritage. The Supreme Court has put an end to the dispute for now, but it remains to be seen whether the battle over the BUDWEISER mark – fought for many years through contracts and the courts – is really over.