Thursday, August 18, 2005
How Would You Rule…for or Against Budweiser?
By ROGER M. GRACE
For decades, there was a feature in the Saturday Evening Post called “You Be the Judge.” A fact situation was presented, and the reader was asked, “If you were the judge,” how would you rule?
Unabashedly copping that format, here are fact situations from some federal cases involving Budweiser beer. The holdings appear below.
•The Budweiser Malt Products Corp. came into being in 1920, the year national Prohibition went into effect. Its malt syrup was used in making home brews. Anheuser-Busch, whose “Budweiser” trademark was registered in 1907, was no longer producing beer, but was marketing a “near-beer” (with a trace of alcoholic content). It sued in New York to prevent the use of the word “Budweiser.”
The president of Budweiser Malt Products Corp. insisted that the name his company was using referred to the City of Budweis in Bohemia, from whence his father had purchased some malt syrup 15 years earlier.
If you were the judge, would you grant an injunction?
•Budd-Wise Malt Company in 1918 began marketing malt syrup, both regular and hop-flavored. In 1921, Budweiser started producing plain malt syrup and in 1925 added the hop-flavored variety. Anheuser-Busch sued in Maryland to enjoin use of the name Budd-Wise and for an accounting.
If you were the judge, what would your ruling be on the application for an injunction.
•Power City Brewery of New York in 1938 introduced “Niagara Bud Beer.” As you would expect, Anheuser-Busch sued.
If you were the judge, would you grant a preliminary injunction?
•Bavarian Brewing Co. brought suit against Anheuser-Busch, Inc. to retrain that company from marketing beer labelled “Bavarian.” The plaintiff, which distributed its beer in Northern Kentucky, Southeastern Indiana, and Southern Ohio, pointed out it (or its predecessor) has been selling “Bavarian Beer” since 1889, except during Prohibition, and that its beer is well-known in the area. In 1955, the plaintiff noted, it obtained federal registration of its trademark.
Anheuser-Busch countered that “Bavarian” connotes a type of beer, and counterclaimed for cancellation of the trademark.
At trial, the plaintiff presented testimony showing that in the area, “Bavarian,” as applied to beer, as acquired a secondary meaning. Literature showed that “Bavarian” was no longer used to describe a type of brown beer, but that words such as “Munich” now was employed.
If you were the judge, how would you decide the case?
Buddweiser Malt decision: injunction granted.
“The fundamental question in cases of trade-mark or unfair competition...is whether the public is being misled and deceived.... [¶] The defendant contends that beer is not a malt product and should not be so considered, but the ordinary man, in my judgment, would not, and the judge should not, make this distinction. Malt is known to be an ingredient of beer, and Budweiser malt syrup suggests at once to the unsophisticated a by-product of Anheuser-Busch.”
Note was made of the decision in the District Court in Illinois spurning the contention of the Pabst Brewing Company that “Blue Ribbon Malt” infringed its trademark. The judge in the Budweiser Malt case remarked: “[i]t might...well be contended that the term ‘Blue Ribbon’ is not necessarily so distinctive as ‘Budweiser.’” (1921) 287 F. 243; affirmed 1923, 295 F. 306.
Budd-Wise decision: injunction granted; special master appointed to reckon damages, profits.
“The similarity [in names] is so striking, both to the eye and the ear, that nothing more need be said. That deception must result is inevitable. The comparatively slight difference in spelling and display is but a part of a self-evident scheme to deceive.”
The fact that Budd-Wise malt syrup came out before Budweiser’s was dismissed as lacking pertinence to a resolution of the dispute which “must be judged by the facts as they were when this suit was commenced, not by the facts of a different condition at an earlier time.” (1930) 37 F.2d 393.
Niagra Bud decision: preliminary injunction granted.
“Applying the ordinary rules of determination, it seems, upon the proof now presented, that the use of the word ‘Bud’ in the designation of a beer is calculated to deceive the ordinary purchaser and cause him to believe that it was made by the maker of Budweiser Beer, by reason of the fact the ‘Bud’ has long been used as an abbrevation or nick-name of ‘Budweiser’ and as such is ordinarily associated with the plaintiff’s product. It has acquired a secondary meaning and plaintiff is entitled to the same protection in its use as it is regarding the parent word.” (1939) 28 F.Supp. 740.
Bavarian Beer decision: injunction granted, but limited to present distribution area.
“Plaintiff has sustained its burden of proof that the use by plaintiff of the word ‘Bavarian’ and/or ‘Bavarian’s’ in connection with the sale of beer, has been so long continued and so exclusive that the term ‘Bavarian’ and/or ‘Bavarian’s’ has ceased to be geographically or otherwise descriptive of the product, and has acquired a secondary significance in plaintiff’s area of distribution as denoting the beer of plaintiff....[D]efendant has failed to sustain the burden of proof of its counterclaim that the word ‘Bavarian’ when used in connection with the sale of beer currently designates a kind or type of beer. The better opinion appears to be that that which was known as ‘Bavarian’ type was changed to Munich or Bohemian at about the close of World War I.” (1957) 150 F.Supp. 210.
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