Trademark Owners Must Always Consider Protecting Rights Outside the United States (Subtitled Anheuser-Busch Does Not Own the Rights to “Budweiser” in Portugal)

Any business owner that has spent the time and money to develop a trademark MUST consider protecting its trademark rights in countries other than the United States if there will be foreign sales.

The need to do so was highlighted once again by recent litigation proceedings in Portugal over ownership of the rights to the Budweiser trademark for beer. Given the immense fame and popularity of the Budweiser brand of beer throughout the world, most people would think it would be a no-brainer that Anheuser-Busch would own rights to the Budweiser mark everywhere. Not so.

Portugal’s Court of Appeal recently ruled that Anheuser-Busch cannot secure registrations for the Budweiser mark in Portugal because a company named Budejovicky Budvar NP already registered the mark there. (As a side note, these brewers have been battling over the “Budweiser” name for decades. Both companies began brewing beers named after the Czech town of Ceske Budejovice in the 19th century.) By its ruling, the court ruled that Anheuser-Busch had failed to demonstrate that its use of Budweiser was well-known in Portugal.

As another side note, Anheuser-Busch’s experience in Portugal parallels our firm’s personal experience litigating trademark rights in Portugal. Several years ago, we represented a very well-known skateboard shoe company in its trademark matters, including foreign distribution agreements and foreign trademark protection. While we were in the process of obtaining foreign registrations, one of our client’s distributors registered our client’s trademark in Portugal and then used its registration to have tens of thousands of pairs of valuable shoes impounded at the port of entry into Portugal. Even though our client’s trademark was very famous throughout the world, we were not able to overcome the distributor’s registration so our client had the abandon the entire country of Portugal as a potential market.

What many trademark owners do not realize is that there is a big difference between how trademark rights are acquired in the United States and how they are acquired in many foreign countries. In the United States, priority of rights arises from priority of use, not priority of registration in most cases. In contrast, in many foreign countries, the first to file a registration application can acquire priority of rights even though it may be the junior user.

Any trademark owner contemplating foreign sales should consult with trademark counsel about possible foreign protection of trademark rights. The good news is that it currently is significantly easier to obtain foreign protection that it used to be. In the “old days,” a trademark owner often had to file individual applications in the countries where it wanted protection. Now, various international treaties have significantly streamlined the process.

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