Italy: the use of "Budweiser" trademark by the US Company Anheuser-Bush Inc. deceives the public as to the geographical origin of the beer

17 January 2014

Giovanni Galimberti, Evelina Marchesoni

Within the framework of the never ending worldwide litigation concerning the "Budweiser" trademarks, on 13 September 2013 the Italian Supreme Court filed a judgement[1] in favour of the Czech brewery Budeweiser Budvar ("BB") in the proceedings filed against it by the American competitor Anheuser-Bush Inc. (ABI)[2].

This decision is only the last of a long lasting dispute between the two companies on the right to use the sign "Budweiser" for beers in Italy.

Background

In 2002 ABI summoned BB before the Court of Rome seeking the invalidity of the Italian portion of three international composite trademarks containing the word "Budweiser" registered by BB. According to the plaintiff, these trademarks are invalid both for lack of novelty since ABI had previously used the designation "Budweiser Budvar" and "Budweiser Budbrau" and for having been registered in bad faith.

BB appeared in the proceeding claiming the dismissal of the counterpart's claims and pointing out, among others, the invalidity of the trademarks used by ABI since they are able to deceive the public as to the geographical origin of the beers at issue, which ABI brewed in US and not in Czech Republic. As a matter of fact, the word "Budweiser" derives from the German name of the ancient town Budweis where the Bohemian beer was brewed.

Furthermore BB filed counterclaims requesting the ascertainment of its right to use the signs as protected indication of origin which, as such, can be used only by BB.

By judgement dated 17 May 2005 the Court of Rome declared the invalidity for lack of novelty of the registered trademarks of BB and rejected the counterclaims filed by the Czech company.

First of all, the Roman Judges recognized the res judicata of a previous judgement of the Court of Milan[3] as to:

  1. the quality of the trademarks "Budweiser" and "Bud" as well-known marks in compliance with     Article 6 bis of Paris Convention for the Protection of Industrial Property;
  2. the inexistence of a right of BB in Italy over the names "Budweiser" and "Bud" both as trademarks and as appellation of origin according to the Lisbon Agreement;
  3. the existence of an exclusive right of ABI on the trademarks "Budweiser" and "Bud" thanks to the prior use made since the 40's in Italy.

In any case the Court of Rome examined the influence on this res judicata of the intervening Treaty of Athens of Accession of the Czech Republic to the European Union of 2003. As a matter of fact the Treaty provides, among others, that "the names “Budeˇjovicke pivo”, “Cˇeskobudeˇjovicke pivo” and “Budeˇjovicky´ meˇšt’ansky´ var” shall be registered as protected geographical indications (PGI) and listed in the Annex in accordance with specifications submitted to the Commission. This is without prejudice to any beer trademark or other rights existing in the European Union on the date of accession".

According to the Court of Rome, the three names provided by the Treaty of Athens were different to those which BB allegedly claimed to have an exclusive right and, in any case, the Treaty excluded any possible interference of the protected geographical indications with the prior trademarks owned by ABI.

It follows that, also taking into consideration the Treaty of Athens, the sign "Budweiser" could not be protected as geographical indications.  

Consequently the Judges of the Court of Rome rejected the plea raised by BB of invalidity of the trademark "Budweiser" since allegedly able to deceive the public as to the geographical origin of the beer.

As a matter of fact, as already declared by the Court of Milan, the word "Budweiser" is unable to determine in the consumer any expectation as to particular characteristics which depend from natural or human factors due to a specific geographical origin of the beer. Consequently the use of the sign "Budweiser" by ABI could not be deceptive.

In light of the above, the Court of Rome rejected all the claims of BB and declared the invalidity for lack of novelty of the Italian portion of the international composite trademarks owned by BB containing as dominant element the word "Budweiser".

Against this first instance decision BB filed an appeal which was rejected by the Court of Appeal of Rome by decision dated 5 March 2007.

In particular the Court of Appeal of Rome reaffirmed that the indications of origin provided by the Treaty of Athens does not have anything to do with the word "Budweiser", a German word which, even if it derives from the German denomination of the ancient town of Budweis, does not correspond to any present geographical place. Consequently ABI could lawfully use the trademark "Budweiser" for its beer brewed in the US.

Therefore BB lodged an appeal before the Italian Supreme Court.

Grounds of the decision of the Italian Supreme Court

By decision no. 21023 dated 13 September 2013 the Supreme Court reversed the previous judgement of the Court of Appeal of Rome, pointing out that the trademark "Budweiser" owned by ABI is able to deceive the public as to the geographical origin of the beer.

According to the Supreme Court, to examine if a trademark is deceptive as to the geographical origin, it is not relevant that the geographical name is no longer officially used but it sufficient that the public knows it.

Besides it is usual that in the past towns or regions had names different from the actual ones, sometimes in a different language, but such names remained in the common language and keep on being known to the public.

This principle is confirmed by Article 29 of the Italian IP Code, which provides the protection of the geographical indications or denomination of origin identifying a country, a region or a locality as well as by Article 14 of Italian IP Code prohibiting the registration of a trademark able to deceive the public as to the geographical origin. As a matter of fact both rules do not require that the geographic name is actually used.

In the case at issue the word "Budweiser" can constitute indication of origin of the ancient town Budweis since, even if the latter is not actually used, its notoriety for the public persists. Consequently the public could wrongly believe that the beer "Budweiser" brewed in US by ABI is Bohemian.

In light of the above, it is clear that the requirements for the appellation of origin required by the Lisbon Agreement[4] are stricter than those provided to determine a deceptive trademark in compliance with Article 14 of Italian IP Code.

As a matter of fact, a geographical name that does not constitute appellation of origin may lawfully be used as trademark only when there is no link between the product distinguished by the trademark and the geographical place and its typical product. But in this case the typicality of the product does not have to meet the strict requirements of link with the territory requested for the appellation of origin: it is sufficient that in a specific locality there is a product known as coming from there to prohibit that the name of that locality is used as trademark for the same kind of product according to Article 14 of Italian IP Code.

Now the Court of Appeal of Rome shall decide again the case in light of the principles affirmed by the Supreme Court. In particular the Judges of the Court of Appeal shall re-examine the issue concerning the protection as geographical indications in compliance to the Treaty of Athens for the three denominations in Czech language of the beers brewed by BB.



[1] Decision no. 21023/2013 in Budweiser Budvar vs Anheuser-Bush Inc..

[2] For the sake of completeness please consider that on 19 September 2013 the Italian Supreme Court filed another very similar judgement in the proceedings against ABI and the Italian distributors of BB K. Kiem and Italsug Trade (decision no. 2147/2013).

[3] I.e. the decision of the Court of Milan dated 27 November 1997 confirmed by the Court of Appeal of Milan by decision dated 10 October 2000 and then by the Italian Supreme Court by decision no. 13168 dated 10 September 2002.

[4] As known, according to Article 2 of the Lisbon Agreement, "“appellation of origin” means the geographical denomination of a country, region, or locality, which serves to designate a product originating therein, the quality or characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors".

Authors

Giovanni Galimberti

Giovanni Galimberti

Co-managing partner
Italy

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