The IP Factor

The UK Court of Appeal has now referred a series of questions to the European Court of Justice (ECJ) in the latest round of the long-standing dispute between Anheuser-Busch (maker of US Budweiser beer) and Budejovicky Budvar, a Czech company making beer under the same name. Both the US  and the Czech brewers have registered trade marks for the word BUDWEISER and for many years both companies have sold beer in the UK under the BUDWEISER trade mark.

As a result of an earlier English court decision including a previous Court of Appeal decision, it had been assumed that both companies had the right to use the Bud and Budweiser names in the UK. Despite the fact that the parties’ BUDWEISER products had been co-existing in the market place for many years, Anheuser-Busch applied to invalidate the Budejovicky Budvar’s registered trade mark. The Czech brewers have strongly defended their trade mark in the Trade Mark Registry, in the High Court and now in the Court of Appeal.

Background

In 1876, Adolphus Busch and Carl Conrad, a liquor importer, developed a “Bohemian-style” lager, inspired after a trip to the region. Brewers in Bohemia generally name beers after their town, with the suffix “er.” Thus beer produced in the town of Pilsen are called Pilsners. 65 miles south of Pilsen and known for its breweries is the town of Böhmisch Budweis and beer has apparently been brewed there since it was founded as Budiwoyz in 1245. Thus the name Budweiser means “of Budweis.”

In modern terms, the US company would be considered as misleading re origin and acting in bad faith, but 130 years later, Budweiser has more than 50% of the market in the US. 

Comment

Is it feasible to apply ”appellation of origin” type rules to this type of IP? I am not sure. Would it be fair to prevent ground-beef patties not originating in Hamburg as hamburgers and sausages not originating in Frankfurt as frankfurters? The analogy is not strictly correct of course, as hamburger and frankfurter are considered generic terms (unlike Wimpy, Big Mac, etc.). Kentucky fried chicken could be considered  even more problematic as there is a name and an area. 

In general, coexistence is of the same trade name for the same product by two manufacturers is not a good idea, as even where the parties have no problem, there is also a need to protect the public. In this case, one party objects. However, it is extraordinarily difficult to cancel long-established names where there is no indication of bad faith.

Israeli Angle

In Israel, the Turkish paint manufacturer Dewilux lost their trademark many years after its registration due to ICI complaining that the name was a take-off of Dulux. However, recently two producers of energy drinks have been allowed to sell energy drinks under the same name XL, which seems to be a very strange decision indeed, particularly as the Dulux ruling was justified based on likelihood of confusion when ordering over a counter as commonly happens in a hardware suppliers, but the XL case was ruled based on one product being fizzy and the other still; one sold in aluminium cans and the other in bottles, where one would presume that at least sometimes the product is ordered in restaurants, hotels or pubs and not taken from shelves in supermarkets. In that case, the adjudicator based his decision on the fact that there was no indication of one firm copying the other. I believe that is a serious issue, but the public interest is generally more compelling.

Back to Budweiser, we can assume that afficados prefer one beer to the other and that they may even have different intoxicating properties. Nevertheless, both companies have long-standing usage of the name. We suspect that we have not heard the end of the saga.

Incidentally, an old friend from way back when we were in Yeshiva at the same time, and fellow patent attorney Shabtai Atlow (NDS) wrote an excellent satire on the issue based on Lewis Carrol’s poem re Tweedledum and Tweedledee, that was published on the IPKAT last week. http://ipkitten.blogspot.com/2009/11/haiku-competition-best-ineligible.html

Bud-o-var and Bud-e-J
Agreed to have a battle;
For Bud-o-var said Bud-e-J
Had spoiled his nice new rattle.

Just then flew down a monstrous Robin,
As black as judge’s robes;
Which frightened both the heroes so,
They quite forgot their quarrel.