Bud vs. Bud: American Beer Giant Loses Trademark Battle To Tiny Czech Rival.
By: Ainsley Brown
Hey it’s Friday and after a long week of work I can be forgiven if my mind I s drifting – oh the joys of a nice ice-cold-beer.
MMMMMMMMMM.
Anyway before I get too ahead of myself, I still have the day to complete before I can enjoy said beer. However, I can at least think about it. In fact I can do much more than that; I can blend my love of beer, law and business all together. So if you are reading this – maybe with an ice cold beer – you can always claim as I do that you are working. Yes, working. You are improving your market/business awareness – after all Commercial Awareness Is Global.
My friends it is quit simple, all you are doing is taking a closer look at the legalities of doing business in beer. And no I am not reaching here; you will soon see my point. So without any further ado here it is.
This is a story about a 100 year war, a cross border beer war, over a name. Yes, that’s what I said a name. From a business perspective it’s all about fiercely defending the brand and marketing of beer and beer related products under that brand. From a legal perspective it is a global trademark war. As for the beer lover – who cares as long as I can have get a great tasting beer at a good price, others would just say as long as it s cold.
What I am referring to is, and say it with me now: Bud-Weis-Er (remember the frog ad campaign from a few year ago).
The US beer giant, Anheuser-Busch, has lost the lasted round in this protracted trademark battle over the use of the of the Budweiser name to the tiny state owned Czech brewery Budejovicky Budvar. The European Court of Justice of First Instance (ECJ) rules that the commercial right to use the term Budweiser as a European wide trademark already belonged to Budvar. The court ruled that the EU trademark office was correct in rejecting Anheuser’s bid to register Budweiser as an EU wide trade mark as Budvar had proven that it already owned the trademark in Germany and Austria going back at least five years before Anheuser tried to register.
This ruling now calls into question the successes of Anheuser in other EU countries, namely Denmark, Finland and Spain, in stopping Budvar from selling its products under the Budweiser name. That is to say if Budvar already as an EU wide trademark by virtue of its commercial presence in Germany and Austria no domestic court ruling can stop it from using this trademark to market its products. However, Anheuser’s position should still be well secured Australia, New Zealand and Argentina.
Say it with me now: Bud-Weis -Er.
This is yet another loss for Anheuser, who lost six years ago from stopping Budvar from marketing and selling its beer under the Budweiser name in the UK. And it was a good thing as well or I wouldn’t have gotten a chance to try their beer. A New York Attorney friend of mine, Eran Grossman who was also studying for his Master in International Commercial Law at the University of Westminster – an endeavor worth every penny – made me aware of the difference and the trademark war. At his insistence I tried the Czech beer and I must say I was pleasantly surprised – it was excellent and much better than American Bud.
For me, and this is not because of my admitted taste bias, I don’t really see how Anheuser could really win – well at least not in Europe anyway. Yes, admittedly the Anheuser branding the Budweiser name is far more globally recognizable and may even be so in some parts of Europe but the pint – sorry – the point still remains that Budvar is located in the city of Ceske Budejovice and has been producing a Budweiser since 1876. The town is also known by its historical German name Budweis. Additionally, the Anheuser-Busch company was founded in St Louis, Missouri by German immigrants. So I just wonder where the name came from.
Say it with me now: Bud-Weis -Er.
From a business perspective both companies have to fiercely defend and control what they deem to be their, it is after all what they are selling. That is to say they are not in business of selling beer but rather they are selling the concept of beer drinking and beer enjoyment. Now from a legal perspective, I am intellectually quite intrigued by this whole morass, however, as a future lawyer I would be bound ethically and contractually to defend the interests of my client, whom ever that might be, irrespective of my taste bias. However, the beer drinker in me, and I am sure a lot of you can appreciate this; I want to have the choice. Some time you feel like a Budweiser (Anheuser) and some times you feel like a Budweiser (Budvar).
Say it with me now: Bud-Weis -Er
Interesting. I just finished looking at another trademark issue with Anheuser Busch which I will describe if anybody is interested.
Recently, Labatts Canada was purchased by InBev, a Belgian company and the largest brewer in the world. Even more recently, InBev purchased Anheuser Busch. Before the deal was finalized, the US Competition Bureau made a ruling that InBev had to divest its US division of Labatts because otherwise InBev would have a near monopoly in Syracuse, Rochester, and Buffalo NY. InBev sold its US assets to a 3rd party, and licensed all of the intellectual property necessary for that 3rd party to brew Labatts beer. As part of the deal, InBev agreed to stop producing Labatts for US consumption.
This deal is of particular interest to Canadians employed at Labatts facilities in Canada; it means that their facilities must stop exporting beer to the US, which entails a concurrent drop in production and an inevitable loss of jobs. The issue was interesting to me because the ruling of the US Competition Bureau amounts to a government order that forces InBev to license its Labatts trademark to a 3rd party. This is completely prohibited by NAFTA: Chapter 17 prohibits the compulsory licensing of trademarks, and InBev qualifies for this protection as a Canadian national because it would be considered a Canadian national under the Paris Convention. Further, the exceptions in NAFTA for competition-related issues do not apply to this situation. The Canadian government should be complaining on behalf of InBev and Canadian Labatts employees…and it should be doing so loudly.