Anheuser-Busch, the venerable American beer brewer, and Budejovicky Budvar NP, a Czech beer brewer, have been fighting since the 19th century over rights around the world to the BUDWEISER trademark. A Czech town called Ceske Budejovice is the original source of this dispute. That town is known in German as “Budweis” and both Anheuser and Budvar started brewing beers years ago using this German name as their inspiration.  Last week, a Portuguese appellate court upheld the national trademark office’s refusal to allow Anheuser-Bush to register BUDWEISER in that country since the Czech company had registered there first. This is not an isolated circumstance involving the BUDWEISER mark. Elsewhere in the European Union, including Germany and Austria, Anheuser cannot use the BUDWEISER mark, but can only distribute its beers under the mark BUD or some other mark. The Czech beer cannot be sold under the BUDWEISER name in the US or Canada, and is sold in these countries under the mark CZECHVAR. How could this happen?

Trademark rights exist on a country-by-country basis. Thus, with a few exceptions for internationally famous trademarks, rights in one country provide no protection outside that country. In the US, unregistered, common-law rights are recognized based upon actual use of a mark on a product or to provide a service. Such rights are limited to the actual geographic area of use plus a natural zone of expansion. A US trademark registration provides exclusive nationwide rights to a mark regardless of the area of geographic use, subject to any prior existing common-law rights. Moreover, trademarks must be used in the US in order for valid rights to exist and registrations to be maintained.

In most other countries of the world, however, trademark rights are based exclusively on registration. Thus, the first to obtain a registration will be the owner of the trademark rights in the country in which the registration issued. And, in most countries it is not necessary to prove use of the mark before a registration will issue. So, as the BUDWEISER situation illustrates, it is very possible for different entities to own rights to the same mark for the same goods and/or services in different countries around the world, depending upon who got where first.

To avoid this nightmare, it is crucial to develop an international marketing strategy as soon as possible and to file trademark applications in your countries of interest as early as possible. Do not wait to file applications until after press releases have issued announcing plans for global expansion. Do not wait to file applications until after you have begun negotiations with local distributors, joint venture partners, or other companies which will be assisting you on the ground in other countries. Do not wait to file applications until after you have begun shipping products to or providing services in other countries yourself or through licensees. It will be much more expensive to try to get your trademark back from someone who has already registered it in anticipation of your arrival in a particular country than it will be to file an early application to register the mark yourself. It will also be much more expensive to defend against claims of infringement if you begin selling goods or offering services in a country under a mark which is already registered in that country to a third party than it will be to file an early application yourself. The truth is that there are very “enterprising entrepreneurs” around the world whose only business plan is to beat companies with an expanding international presence to trademark offices around the world. Don’t be one of those companies forced to succumb to these “entrepreneurs.”

As for the BUDWEISER trademark, there are battles around the world yet to be fought to conclusion between these two beer companies before this saga will end.