UPDATE 3-Budweiser wins trademark case vs German brewer

(Adds Bitburger comment)

BRUSSELS, Oct 19 (Reuters) - Europe's second-highest court dismissed on Thursday a case brought by German brewer Bitburger Brauerei against U.S. rival Budweiser -- owned by Anheuser-Busch <BUD.N> -- over the right to use the word "Bud" as a trademark.

The German company, which brews Bitburger Beer, took the case to the Court of First Instance in a bid to overturn a 2004 decision by Germany's Office for Harmonisation in the Internal Market in which it found in favour of the U.S. brewer.

Bitburger based its opposition on the existence of its own national trademark "BIT" and the earlier figurative trademarks "BIT" and "Bitte ein Bit", which it said were close to the word "Bud".

"The Court of First Instance concludes that, considered as a whole, the marks at issue are not similar and there is no likelihood of confusion," the Luxembourg-based court said in a statement.

Bitburger, which said it would examine the decision, has two months to appeal the decision to the European Court of Justice, Europe's highest court.

"However, this decision does not change the fact that Anheuser Busch may not use the brand name American Bud or Bud in Germany, which is based on the decision of the German federal court of justice," the German brewer said in a statement.

Anheuser-Busch, founded by German immigrants Adolphus Busch and Busch's father-in-law Eberhard Anheuser, is banned from using the "Budweiser" trademark in Germany due to legal disputes with Czech brewer Budweiser Budvar.

Germans must buy their Budweiser beer under the "Anheuser-Busch Bud" label.

Budweiser welcomed Thursday's decision against Bitburger, saying it clarified the situation.

"This decision will strengthen our 'Bud' trademark position in Europe, where we are have registered in 21 of the 25 EU countries for the 'Budweiser' or 'Bud' trademarks," Stephen Burrows, chief executive of Anheuser-Busch said in a statement.

The case had been put on hold during the soccer World Cup after Budweiser, an official sponsor of the tournament, agreed to give 30 percent of sales to the family-run German brewery following a public outcry over the awarding of the rights.

Under the agreement, Budweiser was allowed to use the term "Bud" for the duration of the eight-week tournament in June and July.

Only the Czechs and Irish drink more beer per capita than the Germans, whose beer market is the world's third-largest after the United States and China. ((Reporting by Darren Ennis, editing by Elizabeth Fullerton/Jane Baird; Reuters Messaging: darren.ennis.reuters.net@reuters.com. Email: darren.ennis@reuters.com. Tel: +32 2 287 6842))

Keywords: FOOD GERMANY BUDWEISER