ECJ ruling raises questions over GI protection for 'Bud'

European Union
In Budejovický Budvar, národní podnik v Rudolf Ammersin GmbH (Case C-478/07, September 8 2009), the European Court of Justice (ECJ) has issued its latest ruling on the protection of the designation 'Bud' as a geographical indication. 

The ruling was made following a second reference from an Austrian court in the long-running dispute between Czech brewer Budejovický Budvar, národní podnik, the producer of Budweiser Budvar and Budejovicky Budvar beer, and Rudolf Ammersin GmbH, which markets American Bud beer produced by US brewer Anheuser-Busch

Ammersin wanted to import and sell American Bud in Austria. In 1999 Budvar commenced proceedings in Austria seeking to restrain this on the basis that the designation 'Bud' was protected for use exclusively in relation to Czech Bud by virtue of a bilateral agreement entered into by Austria and the Czech Republic (prior to its accession to the European Union, which was not until 2004). Budvar contended that although 'Bud' was not actually the name of a place or region, it was nonetheless capable of identifying the place of origin of the goods. The Austrian court granted an interim injunction and stayed the proceedings, referring a series of questions to the ECJ regarding the compatibility of the EC Treaty and EU regime for the protection of geographical indications with the effects of the bilateral agreement at issue. 

In November 2003 the ECJ ruled that EU law did not prevent the protection of simple and indirect indications of geographical source under national laws (pursuant to the bilateral agreement), irrespective of whether there was any risk of consumers being misled, provided that the protected name had not, either at the date of entry into force of that agreement or subsequently, become generic in the state of origin. It was for the national court to determine whether:

"according to factual circumstances and perceptions in the Czech Republic, the name Bud designates a region or place located in the territory of that state and its protection is justified there on the basis of the criteria laid down in Article 30 [of the EC Treaty]."

The Austrian court then sought further clarification of the requirements for compatibility with Article 28 of the EC Treaty of the protection of a designation as a geographical indication which, in the country of origin, is neither the name of a place nor that of a region. As a separate matter, the Austrian court also asked whether the fact that a designation had not been registered pursuant to Regulation 510/2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs meant that the existing national protection or protection that had been extended bilaterally to another member state became void. 

The ECJ has now answered as follows:
"In order to determine whether a designation can be considered to constitute a simple and indirect indication of geographical provenance, protection of which under the bilateral agreement is capable of being justified on the basis of the criteria laid down in Article 30 [of the EC Treaty], the national court must ascertain whether, according to factual circumstances and perceptions prevailing in the Czech Republic, that designation, even if it is not in itself a geographical name, is at least capable of informing the consumer that the product bearing that indication comes from a particular place or region of that member state.

The national court must also ascertain, again in the light of factual circumstances and perceptions prevailing in the Czech Republic, whether the designation has not, either at the time of the entry into force of the bilateral agreement or subsequently, become generic in that member state.

It is for the national court to decide, in accordance with its own national law, whether a consumer survey should be commissioned for the purpose of clarifying factual circumstances and perceptions prevailing in the Czech Republic in order to ascertain whether the designation 'Bud' can be classified as a simple and indirect indication of geographical provenance and has not become generic in that member state. If it finds it necessary to commission a consumer survey, the national court must also determine, for the purposes of making the necessary assessments, the percentage of consumers that would be sufficiently significant.

Article 30 EC does not lay down specific requirements as to the quality and the duration of the use made of a designation in the member state of origin for its protection to be justified in the light of that article. Whether such requirements apply in the context of the dispute in the main proceedings must be determined by the national court in the light of the applicable national law, in particular the system of protection laid down by the bilateral agreement

In relation to the second question on Regulation 510/2006, the ECJ stated that the EU system of protection established by the regulation (which applied to the Czech Republic only after 2004) is exhaustive in nature. Consequently, the regulation precludes the application of a system of protection established by agreements between two member states (eg, the bilateral agreement at issue) which confers on a designation, recognized under the law of a member state as constituting a designation of origin, protection in another member state where that protection is actually claimed, despite the fact that no application for registration of that designation of origin has been made under the regulation. In the present case, the transitional provisions in relation to Czech national designations of origin allowed for the 'Bud' designation to be applied for under the regulation for a period of time. It seems that no such application was made within the relevant period and so, effectively, the Czech designation is no longer enforceable by means of this bilateral agreement.
Tamsin Holman, Ashurst, London

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