Anheuser-Busch Scores a Win Against Budweiser Budvar in Argentina

On June 6, 2011, Division II of the Federal Court of Appeals upheld the first instance's decision in re: Budweiser Budvar National Corporation v. Anheuser-Busch, Incorporated (Case 2071/1999), putting an end to twelve years of litigation in which the Czech brewery attempted to register the BUDEJOVICKY BUDVAR trademark in Argentina, and Anheuser-Busch counterclaimed for cease of use of the BUDWEISER BUDVAR trademark.

Budweiser Budvar National Corporation (“BB”) filed trademark applications for BUDEJOVICKY BUDVAR in classes 16, 21, 25 and 32 in Argentina, and Anheuser-Busch, Incorporated (“A-B”) filed oppositions against such applications on the basis of their trademarks BUDWEISER and BUD.

BB filed a court action requesting that the oppositions be declared groundless. A-B answered the complaint and filed a counterclaim objecting to BB’s advertisement of BUDWEISER BUDVAR in a magazine called “Bebidas Latinoamericanas” which circulated in Argentina at that time.

A-B also filed a preliminary injunction against BB aimed at stopping the use of the trademark and the advertisement of BUDWEISER BUDVAR beer in Argentina until a final decision had been rendered. The court of first instance granted the injunction and, on appeal, Division II of the Federal Court of appeals upheld such decision in December 3, 2002.

After a lengthy trial, the court of first instance rendered a decision and rejected BB’s complaint regarding the opposition case and ruled that A-B’s oppositions were founded. In so deciding, the judge pointed out the following:

1. the trademarks BUDWEISER and BUD are famous and well-known;
2. the first syllable of the trademark BUDWEISER and the trademark BUD are identical and located in the same position as the two words which make up BB’s trademark application BUDEJOVICKY BUDVAR;
3. BB’s trademark is in Czech which is difficult for Spanish-speaking people to pronounce, whereas A-B’s trademarks are in English, which is a language familiar to Argentine consumers;
4. A-B’s and BB’s trademarks can be confused by consumers. Furthermore, there is likelihood of confusion among the people who sell the products.

The court also admitted A-B’s counterclaim and ordered BB to stop advertising beer using A-B’s trademarks BUD and BUDWEISER or any other that includes the term “BUD.”

On appeal, the Federal Court of Appeals shared the arguments of the first instance judge and, citing precedents of the Supreme Court, said that this case should not be resolved by restricting the analysis to a mere theoretical comparison of the trademarks, but to the real interests at stake, which leads to considering the special circumstances of the case.

The appellate court also considered that BUDWEISER is a well-known trademark for beers, which is registered in the country and its products have a significant market share Argentina. Conversely, the extent of use and the registration of the trademarks by BB in the Czech Republic, or in other countries, are not relevant to decide the case in view of the territorial protection of trademarks. Therefore, it concluded that BB’s applications for BUDEJOVICKY BUDVAR could not coexist with defendant’s trademarks BUDWEISER and BUD.

The appellate court further said that it was proved that BB advertised the trademark BUDWEISER BUDVAR in Argentina, and concluded that BB infringed Section 10 bis of the Paris Convention as well as A-B’s trademark rights derived from Argentine Trademark Law.

The decision constitutes an important setback for the Czech brewery, as the Argentine Trademark Office will reject their BUDEJOVICKY BUDVAR applications and they will be prevented from advertising BUDWEISER BUDVAR beer in Argentina, as well as using BUD, BUDWEISER, BUDEJOVICKY and BUDVAR, or any other word including BUD.

Marval, O’Farrell & Mairal advised Anheuser-Busch, Incorporated in the dispute, and the litigation team included partners Miguel B. O’Farrell and Gustavo Giay, and associates Martín Chajchir and Cecilia Pérez Junqueira.