Budvar set to win exclusive right to BUD in Austria

European Union

In Budejovicky Budvar Narodni Podnik v Rudolf Ammersin GmbH, Advocate General Antonio Tizzano has opined that Czech brewer Budejovicky Budvar (BB) has the exclusive right to use the BUD mark in Austria on the grounds that a bilateral treaty between an EU member state and a non-member state supersedes EU law if that treaty was entered into before the member state acceded.

When Rudolf Ammersin began importing Bud-labelled beer into Austria from US brewer Anheuser-Busch, BB instituted proceedings in the Austrian Commerce Court for trademark infringement. BB argued that Austria and the Czech Republic had signed a bilateral treaty for the protection of geographical indications, and the Czech company's use of BUD for beer was specifically mentioned.

Rudolf Ammersin argued that (i) Bud is not a geographic indicator, and (ii) EU law supersedes bilateral treaties with non-EU member states if the treaty in question is contrary to EU law.

The Commerce Court submitted two important questions to the European Court of Justice (ECJ). First, is the application of a provision of a bilateral agreement concluded between a member state and a non-member state, protecting a geographical indication that in the country of origin is not the name of a region or place, compatible with Council Regulation 2081/92? Second, even if such a provision is not compatible with Council Regulation 2081/92, must it be given full force and effect if the treaty was agreed prior to the date of the member state's accession to the European Union.

Tizzano opined that although the provision in question is not compatible with EU law, it must be enforced because the bilateral treaty was entered into before Austria became a member of the European Union.

It remains to be seen whether the ECJ will follow Tizzano's opinion or whether it will adopt a more restrictive approach.

For discussion of other cases involving BB's struggle to protect its BUD mark, see Budvar chalks up another victory against Anheuser-Busch, Anheuser-Busch fails to revoke Budvar trademarks and Anheuser-Busch wins Budweiser dispute on appeal.

Reinhard Schanda and Stephanie Heine-Geldern, Sattler & Schanda Rechtsanwälte, Vienna

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