June 2007
The Battle of the Buds: Appellation of Origin
The European Court of First Instance (CFI) has sided with Anheuser-Busch in the latest instalment of the battle of the buds. The American beer giant will be able to use the Budweiser and Bud brand names for goods other than beer.
It all started back in 1996 when Anheuser-Busch attempted to register the word marks BUDWEISER and BUD for various merchandising goods including clothing, food and household goods in the EU. They also tried to register a figurative sign containing the term BUDWEISER for the same goods and, more importantly, beer and other alcoholic and non-alcoholic beverages. The state-owned Czech brewer, Budějovický Budvar, from the town of Ceske Budejovice, brought opposition proceedings claiming the name Budweiser came from the German translation of their home town’s name, Budweis. They had been brewing beer there since the 1800s.
The CFI accepted Budvar’s argument that they had a geographic claim to the word mark BUDWEISER in respect of “beer, ale, porter, malted alcoholic and non-alcoholic beverages”, on the basis that the beer was inherently linked to the name of the town. This is known as the appellation of origin rule and is covered by the Lisbon Agreement which all 27 EU members have signed up to. It was introduced specifically to protect agricultural and food products that are linked to specific regions in the EU such as Feta Cheese, Parma Ham and Champagne. However Budvar were not able to rely on the same rule for other goods such as T-shirts and household goods, and the Court in dismissing the opposition allowed Anheuser-Busch to register both BUDWEISER and BUD for these other products.
Both parties are remaining bullish; Budvar reacted to the decision by stating:
"Today's decisions are not substantial from the point of view of Budejovicky Budvar's beer sales and do not threaten its current business activities in EU countries."
Meanwhile Tom Santel, president and chief executive officer, of Anheuser-Busch International, Inc. maintained:
"Promotional items continue to play an important role in building the Budweiser and Bud brand names Anheuser-Busch first developed more than 130 years ago,"
Both parties have 2 months to appeal the decision.
Briffa’s Opinion
This decision should not come as a huge surprise to either party but it will be a massive boost for Anheuser-Busch which is much more than just a brewery from St. Louis, Missouri. The Budweiser brand has become a household name and the company will now undoubtedly use its massive marketing budget to diversify their product range and promote merchandise.
Meanwhile Budvar, which had a turnover of 2.5bn Crowns (approx. £226m) last year, is likely to remain state-owned for the foreseeable future amid fears that Anheuser-Busch will simply buy it out if it goes private.