I. Identification

1. The Issue

This issue involves United States of America and the Czech Republic. For past hundred years, an international legal dispute continued between the American brewer Anheuser-Busch and the Czech beer producer Budejovicky Budvar over the right to use the trademark name Budweiser on their products. Currently, both of the brewers produce beer beverage labeled Budweiser, and battle over who does have the legal right to the commercial use of this name. Both the brews have a long history of existence. The disagreements over the right to use the trademark started in late 1870s, when the brewers began to export their like-named products to markets beyond their national borders. Attempting to legally win the exclusive right to the trademark use, the dispute has been taken to courts in different countries. The results so far did not provide either party the exclusive right to the name, but rather resulted in the division of market.2.Description

The American and the Czech beer companies both claim to have the right to the name Budweiser. Currently, there are two different beer brands both named Budweiser being brewed by different producers, and such situation is a source of obvious disagreements. At the begining, the reasoning behind the dispute was that two beer beverages of similar type with the same name would be a source of confusion in the markets that both the brewers wished to target, and therefore only one should have the right to use it. Later, each of them, of course, believing in authenticity and better quality of its own product, expressed the “fear” of one party taking advantage of the other one’s prestige. Lastly, since neither one managed to win the exclusive right to the use of name in general, respective law suits were filed in respective countries, markets of which were of interest to the brewers. The rulings differ, and each of the parties were able to gain trademark rights in only some cases thus the dispute did not win them exclusive rights, but led to the division of market.

Anheuser-Busch was founded by German immigrants, the American brewers say. Adolphus Busch (a German-born American beer brewer) adopted the name Budweiser in 1876. He is said to had thought it was a great idea to give the beer distinct and evocative name –Budweiser – that reminded him of his old country which already was well-known for its high quality beer products, and was also to be brewed in the same style the Czech/German lager-style beers were.⁵.

The (then Czechoslovak) company named Budejovicky Budvar was founded in the town of Ceske Budejovice in 1895. The beer, however has been brewed in Budejovice ever since the 14th century. The disputed “Budeweiser” name is an adjective originating from the German name of the Czech town Ceske Budejovice Budweis- where the beer was born in the Middle Ages and thus describing the origin of the brew. Budweiser means the beer of the Budweis region, same as Champaign in France describes the wine of the Champaign wineries. Logically then, the Czechs claim to have the right to the name from long before the Americans even started the beer brewing.⁶.

The Czech brewer wished to start exporting its then already existing Budvar into the markets beyond those of the Old Continent but found out another Budweiser existed. Since Anheuser-Busch has already had the trademark registered in the United States, Budvar was temporarily sold in the US under a different name – Crystal. Similarly, the American brewer, also interested in expanding its market, but now aware of the other Budweiser’s existence [and due to the disputes] would use the name -Bud abroad to get around the issue. The disagreement, however, grew larger and later included also the right to the variations of the name Budweiser which includes the name Bud (which is, now , already produced by both brewers). Teoretically, the two companies were to honor agreements about avoiding the market dominated by the other party, but they have eventually engaged in a legal dispute over who should have the right to use the trademark.

Legal Cases

As an outcome of the above described events, a number of lawsuits were filed by Anheuser -Bush in order to restrict or ban the sale of Budvar. Later Budejovicky Budvar also engaged in the legal law suits, and and some sort of legal action was employed by one or the other party in several different countries. Although Anheuser-Busch still holds unchallenged rights to the Budweiser name in most of the world, including North and South America and virtually all of Asia.⁷, some of the decisions ruling in favor of the Czech brewer were upheld. Following are several examples for illustration:

• Switzerland

Switzerland’s Supreme Court ruled against American brew “Bud” beer in a dispute over the Budweiser and Bud names.American beer should not be sold as “Bud” in Switzerland because of a risk of confusion with the name “Budweiser,” used by Czech brewer Budejovicky Budvar. Anheuser-Busch will sell its product under different name.⁷

• GERMANY

Germany is one of the largest and most important economic partners for the Czechs. Czech Budweiser® has been registered and sold there for years, Ruzicka states. For that reason, the Anheuser-Bush had to sell its product under the name Anheuser-Busch B. Problems were created, however, when Anheuser-Busch used “Budweiser” in the commercial campaigns and advertising for its product. Budvar, protecting its German legally registered trademark, filled lawsuits to defend its rights.

• IRELAND

Irish importer of Budvar is said to have terminated the import contract with Budvar as a consequence of demands for high financial compensation by Anheuser-Busch. Budvar is seeking to find different ways to distribute its product in Ireland.²

• NORWAY

Czech Budweiser Budvar has been registered and sold as such in Norway since 1992. It was sold under both–Budvar and Budweiser–names. When Anheuser-Busch attempted to start exporting to Norway, Budvar believed this initiative to be an attempt of the Americans to push aside the Czech beer, while Anheuser -Busch felt that Budvar has been trying to prevent American producer form entering the Norwegian market and thus employed the legal means to pursue its goals.².

• ENGLAND (United Kingdom)

Anheuser-Busch and Budejovicky Budvar have been battling in England since the 1970s. Recently, the Court of Appeal in London ruled that American brewery Anheuser-Busch and Czech brewery Budejovicky Budvar may both use the Bud and Budweiser name in England ⁴. England has thus recognized that both the brewers have the right to use both the trademarks.

• LITHUANIA & LATVIA

American producer ,interested in the markets of these Baltic countries, filed alike law suits in both of them, asking for ban of Budweiser trademarks used by the Czechs. In both countries, however,the ruling was in favor of the Czech brewer, which (in Lithuania and Latvia) remains the exclusive importer of Budweiser Bier (and its variations). Anheuser-Busch is to use Anheuser-Busch B. label on its product in these countries.[Czech daily paper DNES. December 23, 1999].

• HONG-KONG

The dispute had reached even Hong Kong when Anheuser-Bush took the Budvar brewery to court to try to have the Czech-brewed Budejovicky Budvar beer taken off Hong Kong store shelves. The American brewery alleged that Budvar is infringing upon their copyright. The final decisions are not yet available.

• UNITED STATES

Anheuser-Busch filed a complaint with the International Trade Commission charging the Czech Brewer with breaking the agreement form 1939 that forbids the Czech Budweiser form the US Market. Basis of Anheuser-Busch’ accusations were allegations of the Czech beer being sold in the State of Maryland under the ‘Budweiser Beer’ label which , in the United States, belongs exclusively to Anheuser-Busch.

Czech brewer , in its defense, denied the accusations claiming to have always honored the 1939 Agreements. Only Budweiser Budvar beer exported to the United States is in the shipments for the Diplomatic Corps and Embassies ( only exception from the treaty) which are not a part of the American Jurisdiction nor constitute supply for American market. Consequently, the beer that was said to have been sold in the state of Maryland was alleged to have been imported by a third party, not supplied by the Czech Brewer. St. Louis’ Anheuser-Busch has registered the Budweiser trademark in the United States in 1876, and since remains to have exclusive rights for the trademark in the US Market.3. Related Cases