E-Malt.com News article: 1816

The European Court of Justice has given Austria the right to stop the American brewer Anheuser Busch from marketing its flagship beer in Austria under the name 'American Bud', Europolitix agency reported on November 18. The case is yet another chapter in the protracted dispute between the Czech brewer Budejovicky Budvar and AB both of whom claim to be the rightful owners of the name ‘Budweiser’.

The Czech firm claims that its hometown village of Ceske Budejovice – called Budweis in German –gives it the rights to the Budweiser brand name. Conversely, AB - set up by German immigrants from Budweis to the US in the mid-nineteenth century - has been largely responsible for the global recognition the name Budweiser now has. The crux of the present case rests on a 1976 bilateral deal between Austria and its neighbour the then Czechoslovak Socialist Republic which gave BB exclusive rights to the name ‘Bud’.

The Austrian courts must now decide whether this deal was still valid when Austria joined the EU after the fracturing of Czechoslovakia in 1993 in the aftermath of the fall of the Soviet bloc. If the authorities consider the bilateral agreement untouched by political changes then it predates Austria’s accession to the EU in 1995 and is therefore legally binding despite contradicting EU rules on the free movement of goods. Furthermore, if Vienna decides that the name ‘Bud’ in the minds of Austrian drinkers designates a region or a place in the Czech Republic, then the name will come under a protection scheme for industrial and commercial products which must then be extended to Austrian territory as well.

AB and BB have fought similar cases across the world over the key issue of whether the average consumer fundamentally believes the term “Bud” designates beer from Ceske Budejovice or from America. Debate also rages over the grey area between the rights of national trademarks –owned in most cases by AB – and those of EU-wide ‘protected designations of origin’ (PDOs) which Brussels grants to protect foods whose production is linked to a particular area, such as Champagne or Roquefort cheese.

When the Czechs join the EU in May next year their Budweiser will automatically gain European recognition as a regional speciality, complicating matters even further. It is unlikely, however, that the court ruling will bring an end to the long-running saga over the Budweiser name. EU and US trade officials, as well as the companies themselves, have been negotiating a solution to the Budweiser ‘mark’ question since 1999.

Budweiser has been manufactured in the US since 1876, with AB first registering the name for trademark protection in 1907.



19 November, 2003