The trademark dispute

The famous Budweiser trademark is used not only by the Czech company Budweiser Budvar in České Budějovice but also by other companies. Among them is as well the American company Anheuser-Busch in St. Louis. How did this come about? The history behind the Czech brand being adopted in such a far away country is connected to the business activities of German immigrants in America. In 1852 a certain Mr. Schneider set up a small brewery in St. Louis which soon went bust but production was started up again by a company called Urban and Hammers with financial assistance from a soap manufacturer Ebehard Anheuser. The brewery was given the name 'Bavarian'. As early as in 1857 the brewery went bankrupt and Ebehard Anheuser became the owner. In 1865 he entrusted the running of the brewery to his son-in-law Adolphus Busch who was German and had emigrated to the USA in 1857. Although he was not a brewer he was familiar with European beers from his commercial travels and visits to Bohemia, especially Karlovy Vary and Marianske Lazne. In addition, at that time a number of European beers were being exported to America, among them Pilsner Urquell, Budweiser Bier from Mestansky pivovar in Ceske Budejovice since 1872, and later also Michelob from Měcholupy u Žatce and Liebotschaner Bier from Libočany u Žatce, which were extremely popular.

It was a German emigrant and drinks salesman C. Conrad who came up with the idea of selling Budweiser beer, or rather Budweiser Lager Bier (obviously also because the name was familiar to the local inhabitants) and began brewing it at his friend's, Mr. Busch's, brewery. Žatec (Saatz) hops then started to be imported and in 1876 an American Budweiser Lager Bier appeared on the local market - more than six hundred years after beer was first brewed in České Budějovice (Budweis). (It can be proved that Budweiser beer was exported to the USA from 1872). But the two businessmen did not stop at the unauthorised adoption of just this name, soon they were also making Pilsner Beer, Michelob Beer and Liebotschaner Beer, in the last two cases they were brands of beer from Czech breweries in Měcholupy and Libočany.

After a certain amount of time Budweiser beer was being made on the American continent by other companies such as the Dubois brewery in Pennsylvania (1896-1972). In Brooklyn there was the Budweiser Brewing Cox brewery (1884-1898). Some reports say that the Budweiser brand was also used by beer producers in Canada. In 1878 C. Conrad's company registered the Budweiser Lager Bier trademark in the USA even though he did not own the beer production. Then in 1891 he granted it to the Anheuser-Busch Brewing Association. In 1907 (23.7.) for the first time Anheuser-Busch registered for itself the trademark which led to the unauthorised adoption of the word Budweiser. This combined with the expansion of the American beer led to a conflict with the two large breweries that existed at that time in České Budějovice - Měšt'anský (founded in 1795) and Ceský akciový pivovar (Czech Joint-stock Brewery - founded in 1895, now Budweiser Budvar N.C.). In 1911 the first agreement was reached when for a financial settlement both České Budějovice breweries permitted Anheuser-Busch to use its registered trademark no. 64125 in all areas outside Europe. The Budějovice breweries kept the right to use the word Budweiser, derived from the place of origin, throughout the whole world. However a supplement was added to the contract which stated that Anheuser-Busch was not permitted to use the word 'original' on its products containing the word 'Budweiser'. The result then was that the Budějovice breweries permitted AB's trademark to coexist in non-European countries with the geographical name 'Budweiser' which is logically derived from the name of the town of České Budějovice (Budweis).

New disputes broke out after the Czech Joint-stock Brewery, in accordance with the 1911 contract, registered its trademark Imported Original Bohemian Budweiser Beer from Budweis City in the USA on 10th August 1937. It had been using this as a label since 1934 and brought it to the USA because it contained the geographical appellation of origin. This enabled it to export its beer to the USA. And it made ample use of this opportunity. In 1939, at the time when the border regions of what was then Czechoslovakia had been taken over by the Nazis and the whole of Europe was on the brink of a second world war, another agreement was signed (a week after it was signed the Czech Republic ceased to exist) which meant a significant restriction of the Budějovice breweries' rights. They both pledged not to use the names Budweiser, Bud and Budweis in countries specified in the contract on the American continent from Panama northwards and at the same time were forced to make other concessions. They signed partly because they were afraid of their merchandise being seized in the USA and also because they hoped for at least some security and financial compensation. In the contract both Budweiser breweries acknowledged the priority of legal registration but not the priority of the use of the Budweiser name. It is useful here to note how large national tragedies can be quickly misused against companies in the affected country.

In 1978 AB's management, due to Budweiser Budvar's N.C. strengthening position on foreign markets, but in particular in Europe, tried to obtain due financial compensation for the coexistence of both Budweiser brands in Europe. This was not acceptable to the Czech side. Therefore a new round of legal disputes started in a number of countries. After the revolution in 1989 the Anheuser-Busch brewery submitted a proposal to buy a capital share in Budweiser Budvar (1990). This was also the reason why a moratorium on legal disputes was signed and which lasted until 30th September 1994. Two years later, in 1996, the Czech Ministry of Agriculture rejected AB as a strategic partner for the privatisation of Budweiser Budvar. Since then both breweries have only been in contact through their lawyers and as they strengthen their commercial positions the tension grows. At the beginning of the year 2000 the number of legal disputes over trademark rights grew to 40 and the number of patent office proceedings to 45. Budweiser Budvar does not go looking for legal disputes but in the current situation it realises that it has to go through them because they are a part of business. The results which generally end in success for Budweiser Budvar, prove that the company which wants to assert the originality of Budweiser beer over the American copy is on the right route. More so especially since the signing of the GATT/TRIPS agreement in the mid-1990's which around 150 countries, including the USA, have already signed up to, the principles protecting geographical names places Anheuser-Busch at a disadvantage. The signatories to the agreement confirm that they are prepared to protect through national laws the geographical names for places where traditional and renowned products are made and, in so doing, protect the customer from being deceived due to a misuse of such names. This of course is a source of worry to Anheuser-Busch and so it is casting doubt on the geographical appellation of origin contained in the Budweiser trademark and claims that it is only a trademark or an invented denomination.

But it is not at all easy to claim that Budweiser beer, originates from St. Louis. More so because in 1993 during its mass-media campaign in which Anheuser-Busch tried to convince the Czech public of its noble intentions it openly admitted that the name Budweiser is taken from the Czech Republic. Thanks to the phenomenon of geographical names, at the end of the 1990's Budweiser Budvar N.C. also won several important disputes over trademark rights, for example in Switzerland (here Anheuser-Busch had demanded that Budweiser Budvar's trademark 'Bud' be deleted) and in Greece where disputes over Budweiser Budvar's N.C. trademarks 'Budweiser' and 'Budweiser Budbräu' had begun in the 1980's.

In 2000 Budweiser Budvar N.C. has also defended its position in Lithuania where Anheuser-Busch had demanded that Budweiser Budvar's trademarks 'Budweiser' and 'Budweiser Budbräu' be deleted and had requested instead that its trademark 'Budweiser' be registered. The court turned down AB's requests. The same fate awaited AB's legal action in neighbouring Latvia where AB tried to use the court to contest the registration of Budweiser Budvar's N.C. trademark 'Budweiser'.

In 1999 the importer in Great Britain considerably succeeded with the trademark "Budweiser Budvar" when the magistrate court in London rejected AB's case. It occurred after AB contested the information which appeared on the rear labels on Czech Budweiser Budvar beer and as an advertisement in the magazine Cheers to Inns. The texts state that Budweiser beer has been brewed in Budějovice since 1265. According to AB the use of this information on products and in advertisements was false, misleading and deceitful. The case was turned down with the justification that the plaintiff had not proved that the information was incorrect. The court's verdict thus confirmed the historical truth that Budweiser beer comes from Bohemia and it has been brewed here for centuries.

The United Kingdom is also the first country where according to a decision passed by the High Court of Justice both companies have the right to register and use the Budweiser trademark. The first verdict in AB's case against Budweiser Budvar N. C. that was connected with the use of denomination on the market was passed by the court in 1984. The second, with the same result as the first, which allows the brands of both breweries to be registered, after a further case brought by the Americans was passed in February, 2000.

Recently Budweiser Budvar N.C. has also had success in the USA where it is allowed to import its beer to external territories such as embassies or UN bodies. After a bottle with Budweiser Budvar beer was said to have appeared in the state of Maryland AB complained to the International Trade Commission. But before the Commission had time to look into the matter an out-of-court settlement was reached between the two companies. They have agreed to adhere to the existing agreements in the USA, including that Budweiser Budvar N.C. can supply its beer to the external territories in the country.

Budweiser Budvar N.C. is also defending its intangible and business rights in Austria (where Budweiser Budvar is the biggest selling imported brand) where Anheuser-Busch is trying to enter under the name American Bud as Austrian law effectively protects geographical terms for renowned food and drink products from misuse. These protected terms also include Budweiser beer (Budweiser Bier) and the term Bud which is not only the brewery's trademark but also a protected geographical appellation of origin according to the bilateral agreement between the Czech Republic and Austria

BORN IN 'BUDWEIS'
(LESSONS IN ORIGINALITY)

1st lesson in originality
Budweiser beer had been made in České Budějovice for several centuries before Mr. Adolf Busch told the court in 1878: 'The idea was simple - to make a beer of the same quality, colour and taste as the beer made in Budweis or in Bohemia'
(Mr. Adolf Busch's statement made before the District Court of South New York, USA, at 10.30 a.m. on Thursday 26th April 1894).

2nd lesson in originality
Budweiser beer had been made in České Budějovice for several centuries before America was discovered and most certainly before Mr. Adolf Busch told the court in 1894: 'The brewing process which I have described is the method, according to my knowledge, used to brew beer in České Budějovice. I have acquired knowledge about this process from books and from people who worked there'.
(Mr. Adolf Busch's statement made before the District Court of St. Louis, state Missouri - USA, in 1878)

3rd lesson in originality
Budweiser beer had been made in České Budějovice for several centuries before the first Independence Day celebrations and most certainly before Mr. Adolf Busch told the court in 1894: 'Budweiser beer is brewed according to the procedures used for the Czech Budweiser beer'.
(Mr. Adolf Busch's statement made before the District Court of South New York, USA, at 10.30 a.m. on Thursday 26th April 1894)

4th lesson in originality
Budweiser beer had been made in České Budějovice for several centuries before the Civil War broke out in America and most certainly before Mr. Adolf Busch told the court in 1894: 'Question 163: You stated that each year you test the imported Budweiser beer. When did you carry out the first test ? Answer: I first carried out this test in 1868 or 1869'.
(Mr. Adolf Busch's statement made before the District Court of South New York, USA, at 10.30 a.m. on Thursday 26th April 1894)