Another trademark victory for Budvar

- Last updated on GMT

The trademark battle between Czech brewer Budejovicky Budvar and US
giant Anheuser-Busch has continued this week with the resolution of
a dispute between the two players in South Korea.

The courts in Seoul have this week decreed that the state-owned Czech beer maker was not infringing the Budweiser trademark of its US rival and that the Budejovicky Budvar trade name could be registered in South Korea.

Anheuser-Busch had, as always, argued that the use of the Budvar trademark and company name was a conflict with its own trademark, and the company may appeal the decision at the country's highest court.

While the two companies have been at loggerheads over the trademark issue in South Korea since the late 1990s, the 'David and Goliath' tussle between the two firms has been going for decades worldwide.

Budvar claims the sole rights to the Budweiser name because only it makes its beer in Budweis (the German name for Ceske Budejovice) after which the brew is named. A-B refutes the claim, saying it was the first to register the trademark worldwide and that the Czechs are simply trying to benefit from its years of building up the brand.

While many countries have backed the Czech brewer against its US rival, many more have supported A-B's right to the name, including most of North and South America and virtually all of Asia. Some (such as the UK) allow both brands to exist side-by-side using the Budweiser and Budweiser Budvar names, while others oblige Anheuser-Busch to call its beer American Bud to distinguish it from the Czech brew. In yet others (such as the US), Budvar has to use the name Czechvar.

The privatisation of the state-owned Budvar is still being considered by the authorities in Prague, but there is still considerable opposition to such a move, not least because A-B is seen as the mostly likely buyer of the brewer. While such a move would obviously end the worldwide trademark tussle, some fear it could also lead to a 'watering down' of the distinctive Czech beer.

But tinkering with the flavour would be risky at best - and bad business at worst. Such has been the success of Budvar (and indeed other Czech beers) worldwide that A-B would be mad to deprive itself of the potential revenues from the Czech brand by changing anything more than its name.

This would, perhaps, be a recognition of the fact that Budvar's success has been built primarily on its taste rather than the 'fraudulent' use of the Budweiser name, and is certainly not something the company would admit to unless (or indeed even if) it got its hands on the Czech company.

The Czech Republic, like Germany and Belgium, has an international reputation for making world class beer, something which could not be said of the US, despite the fact that A-B is the world's largest producer. It is this reputation as much - if not more - than the name which has turned Budvar into a real threat to A-B - and it is this which also makes it an attractive takeover target for the US group.

Related topics: R&D

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