Anheuser-Busch, Inc. v. Budweiser Malt Products Corporation
| Decision Date | 05 November 1923 |
| Docket Number | 53. |
| Citation | 295 F. 306 |
| Parties | ANHEUSER-BUSCH, Inc., v. BUDWEISER MALT PRODUCTS CORPORATION. |
| Court | U.S. Court of Appeals — Second Circuit |
Archibald Cox, of New York City, and Daniel N. Kirby, of St. Louis Mo., for appellee.
Before ROGERS and MANTON, Circuit Judges, AUGUSTUS N. HAND, District judge.
The complainant is a corporation organized under the laws of the state of Missouri, and its principal place of business is in the city of St. Louis. It filed its bill of complaint against the defendant, which is a New York corporation, with its principal place of business in the city of New York. The complainant is engaged in the business of manufacturing and selling certain malt products. In connection with its business it uses as a trade-mark the name 'Budweiser.' Its bill alleges that the defendant infringes its trade-mark, and it seeks a perpetual injunction restraining its use of that trade-mark in connection with any malt product not made by or for the complainant. It also prayed that a temporary restraining order might issue without delay, restraining the defendant from doing business under the name 'Budweiser Malt-Products Corporation.' An accounting and damages are also asked. The court below has issued a preliminary injunction which may be found in the margin. [1]
It appears that in or about the year 1875 one Carl Conrad, the complainant's predecessor, commenced the manufacture in St. Louis of a beer of distinctive character and excellence through the firm of E. Anheuser & Co., consisting of Eberhard Anheuser and Adolphus Busch. This beer was brewed exclusively in the complainant's brewery, and it was sold and consumed in large quantities throughout the United States and elsewhere. For more than 40 years the complainant or its predecessor in title has put on the market a 'Budweiser' beer, and by its skill and care built up an extensive reputation and demand for its product. The result was that at the time when the Act of Congress of November 21, 1918, known as the War-Time Prohibition Act went into effect, more than $10,000,000 had been expended advertising said 'Budweiser' and more than 3,000,000,000 bottles of 'Budweiser' had been sold in the United States alone, and the complainant's product, identified as such by the designation or mark 'Budweiser,' had been for upwards of 30 years sold everywhere throughout the United States, and in Mexico, Canada, South America, and elsewhere, and in the market named had been the best-known and most popular malt product of its kind produced in this country. The mark 'Budweiser' had become generally known throughout the United States to those interested in malt products as meaning the complainant's product.
The complainant on July 23, 1907, registered as its trade-mark the term 'Budweiser' under the 10-year clause of the Act of Congress of February 20, 1905. Its registration was for beer. On August 12, 1920, the complainant filed an application for the registration of the term as a trade-mark for malt syrup, claiming use since August 6, 1920. The application was opposed by defendant, which claimed prior use of a month or more. The case was pending in the Patent Office when the preliminary injunction was issued; and it is our understanding that the case is still pending in that office, awaiting the decision of this court in this case.
It appears from the testimony of the complainant's technical director and chief chemist, who had been in the service of complainant since 1893, that in the manufacture of its 'Budweiser' beer the principal ingredient that entered into its manufacture was barley malt, made out of choice barley grain. The barley malt always constituted at least 60 per cent. of the ingredients entering into its manufacture. It also appears from his statement that the present beverage made by complainant under the name 'Budweiser' is also made by the use of at least 60 per cent. of barley malt, so it is proper to call Anheuser-Busch's present 'Budweiser' beverage a malt product. He added that the present beverage 'Budweiser' is a malt product manufactured strictly in compliance with the requirements of the Volstead Act, and it is a malt liquor, in that the process of fermentation constitutes part of the process used in its manufacture; but the alcoholic content of the finished article is reduced as required by the Volstead Act, so that the finished product as offered for sale complies with that act. It also appears that the complainant manufactures and sells 'Budweiser' Malt Extract for the use of bakers, which is a pure malt extract; that it also for many years has manufactured a pure malt extract called Malt Nutrine, which is a medicinal malt tonic; and that for some time it has been engaged in preparation for the manufacture of a malt sugar syrup for the manufacture of which malt will be used.
It appears that beer has been brewed in the town of Budweis, Bohemia, formerly a portion of Austria, since the eleventh century; that that beer was world-renowned for its excellent quality, which was due largely to the particularly fine quality of the barley raised in the vicinity and malted there. It was also due to the use in its manufacture of Bohemian pitch and Bohemian yeast as well as Sasser hops; and it appears that the complainant's predecessor, who designated his beer as 'Budweiser,' originally imported Bohemian barley, Bohemian pitch, Bohemian yeast, and Sasser hops from which it manufactured its beer in this country.
This brings us to a consideration of the law applicable to the facts. It has been suggested that the term 'Budweiser' is a geographical term, and therefore not a technical trade-mark. If 'Budweis' and 'Budweiser' are so nearly alike that the latter could properly have been called a geographical term, a question which it is not necessary now to decide, it is clear that the term 'Budweiser' is one which has acquired in this country a secondary meaning. As was said by the court in Coca-Cola Co. v. Koke Co., 254 U.S. 143, 145, 41 Sup.Ct. 113, 65 L.Ed. 189, we may say in this case that:
'Whatever may have been its original weakness, the mark for years has acquired a secondary significance, and has indicated the plaintiff's product alone.'
The right of this complainant to enjoin the use of the name of 'Budweiser' was sustained in 1898, 25 years ago, in Anheuser-Busch Brewing Association v. Fred Miller Brewing Co. (C.C.) 87 F. 864, in a decision by Judge Seaman. That case was decided on the ground of unfair competition. The court did not then recognize the complainant as having any property right in the name 'Budweiser,' which it thought was to be regarded as geographical, and therefore not subject to appropriation as a trade-mark. The court declares, however, that:
'If the manufacture of beer was not of such character as to make this name specially applicable, and it was selected arbitrarily, and for the purpose of taking advantage of the established reputation of the complainant's Budweiser, and with the effect of disturbing its trade therein, such use constitutes unfair competition-- is 'unfairly stealing away another's business and good will'-- and must be regarded,...
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