Luxembourg - Czech brewery Budějovický Budvar (Budweiser Budvar) has reaped another significant victory in its worldwide branding dispute with US rival Anheuser-Busch.

The European Court of Justice has backed an appeal filed by Budvar and annulled earlier rulings by the EU's Office for Harmonization in the Internal Market (OHIM) on the registration of Bud as the protective trademark for beer in the EU countries.

Anheuser-Busch in 1996 and 2000 applied for the EU registration of a number of its products bearing the trademark Bud, including beer. Budvar challenged the request, arguing that Bud was already recognised as a protected indication of geographical origin for beer coming from České Budějovice (Budweis in German) by Austria and France.

But OHIM turned down Budvar's complaint, ruling that Bud cannot be considered a designation of origin since the Czech brewer failed to prove that it really uses the Bud designation in trade. "European consumers cannot recognise Bud as an abbreviated name of the Czech city České Budějovice, which is called Budweis in German," said OHIM.

Court rules OHIM erred

Now the European Court of Justice has reversed that decision, ruling that OHIM should have taken into account that France and Austria have recognised Bud as Budvar's protected designation. "By requiring a proof of 'real' usage of the Bud designation by Budvar on all territory affected by this designation's protection, [OHIM] made a faulty legal judgement," the court has ruled.

The court said OHIM made a mistake by failing to consider all circumstances relevant for the decision whether Austrian and French laws provide Budvar with a right to ban the usage of the designation by other parties.

Anheuser-Busch, which was in July taken over by Belgian group InBev, is involved in more than 100 legal battles against Buvar in 30 countries around the world. Budvar has successfully registered Budweiser or Bud as its protected trademark in more than 60 countries to date.