Anheuser-Busch wins Budweiser dispute on appeal

New Zealand

The New Zealand Court of Appeal has found that the use of the word 'Budweiser' on bottle labels produced by Czech beer company Budweiser Budvar National Corp infringes the trademark rights of the US brewer of Budweiser - Anheuser-Busch. The court reached this decision even though it rejected Anheuser-Busch's claims of passing off and confusion.

The appeal challenged the decision of the New Zealand High Court in 2001 which had rejected Anheuser-Busch's application to revoke the Czech company's 1996 trademark registration of BUDEJOVICKY BUDVAR. The High Court held that the trademark did not infringe Anheuser-Busch's BUD and BUDWEISER marks. It concluded that the Czech company's use of its trademark on its bottle labels neither amounted to passing off the goods as those of Anheuser-Busch, nor was it misleading or deceptive conduct in breach of the Fair Trading Act 1986.

The Court of Appeal upheld the High Court decision in most respects, refusing to revoke the Czech company's trademark and finding the company not guilty of passing off or breaching the Fair Trading Act. However, the appellate court did find that the use of the word 'Budweiser' on the labels infringed Anheuser-Busch's trademarks.

The appellate court analyzed the likelihood of the BUDEJOVICKY BUDVAR logo being taken as either BUDWEISER or BUD and held that the appearance, pronunciation and overall impression were clearly so different as to overcome any likelihood of association between the two companies' marks. However, the use of 'Budweiser Budvar' on the packaging, even in the form "Brewed and bottled by the Brewery Budweiser Budvar, national enterprise, Ceske Budejovice", was held to be an infringement of the BUDWEISER mark. On this basis, the court held that Anheuser-Busch was entitled to an injunction restraining the Czech company from importing, advertising, offering for sale, or selling beer under or by reference to the name 'Budweiser'.

In an interesting aside, the court discussed whether inconsistency exists between certain provisions of the New Zealand Trademarks Act 1953 regarding defences to infringement. One provision suggests that in an action for infringement of a trademark it shall not of itself be a defence that the infringement arose from the use of the name under which a company has been registered. Another provision provides that any bona fide use by a person (a company being a legal person) of the person's own name shall not amount to infringement.

The president of the Court of Appeal held that the former provision prevents companies from using the 'own name' defence; the other two members of the court dissented. However, the dissenting judges held that in this case the Czech company could not rely on the own name defence so there was no effect on the result of the appeal.

Edwin Hamilton, Baldwin Shelston Waters, Wellington

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