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. Last Updated: 07/27/2016

Anheuser-Busch Wins Rights to Bud Brand

The world's largest brewer is coming back to Russia — after more than a decade of legal wrangling that prevented it from selling its top beer here.

Anheuser-Busch announced Thursday that state patent agency Rospatent had issued it a registration for the name Bud, short for Budweiser, allowing the company to legally sell products baring its best-selling trademark.

Rospatent issued the U.S. company the rights in May, some five months after revoking the registration of Czech brewer Budejovicky Budvar, which still has the rights to the Budweiser brand.

"We are in the early stages of developing a plan to bring Bud to the Russian market. We hope to make the brand available to Russian beer drinkers soon," said Stephen Burrows, president and CEO of Anheuser-Busch International Inc., in an e-mail interview from his company's headquarters in St. Louis.

Anheuser-Busch lawyers lauded Rospatent's rulings as a step in the right direction for protecting intellectual property rights.

Budvar said the decision will not alter its position on the Russian market and that they still have the opportunity to appeal. "I definitely see this as a positive development for protection of IP rights in the former Soviet Union and Russia specifically. The decision is based on the facts and not other considerations," said Alexander Shelemekh, vice president of the PBN Co., a public affairs consultant to Anheuser-Busch.

For more than a century, the two beer producers have clashed heads around the world, both claiming rights to the Bud and Budweiser brand names. Budvar said the competitors are currently embroiled in 40 cases of court litigation and 40-plus administrative proceedings before various patent offices.

In Russia, the battle came down to the legitimacy of Budvar's "appellation of origin" argument for the Bud name. Budvar claims that Bud beer is produced in an area called Bud, the abbreviation for the town of Ceske Budejovice.

Around 1996, Rospatent agreed, giving the Czechs exclusive rights to the name in Russia. "The Rospatent decision was based on the national registration of Bud in Czech Republic. The decision was based on trust, not its own research," Shelemekh said.

The key point in a successful "appellation of origin argument" is that the product can not be produced anywhere else, be it because of climate, land or human resources. Champagne, produced in the French town of that name, is one example. Anheuser-Busch argued that there is no geographic area called Bud in the Czech Republic. It also argued that beer could not be subject to the geography argument since chemicals can alter the water in beer no matter where it comes from. Budweiser challenged that 1996 decision, and Rospatent overturned it in December after two years of hearings. Budvar has until mid-August to submit an appeal to the Supreme Patent Chamber within Rospatent.

Another battle will likely be brewing in the future over the Budweiser name. The Czech company still has exclusive rights to use that name and will continue selling Budvar Budweiser in Russia, while Anheuser-Busch is prevented from using the name.