UPDATE 1-AB InBev loses EU ruling over Budweiser trademark

* EU's second-highest court upholds lower court's ruling

* AB InBev can appeal to EU's highest court

LUXEMBOURG, March 25 - Anheuser-Busch InBev, the world's largest brewer, lost out again to a European minnow in the latest round of its battle to register Budweiser as a trademark in the European Union.

The EU's second-highest court, noting Czech brewer Budejovicky Budvar has the right to use "Budweiser" commercially for beer in Germany and Austria, upheld a lower court ruling denying AB InBev the right to register Budweiser as a trademark.

U.S. brewer Anheuser-Busch, bought by Belgian rival InBev last year, applied for an EU trademark in 1996 for Budweiser for its "beer, ale, porter, malted alcoholic and non-alcoholic beverages".

The application was opposed by Budejovicky Budvar, which makes beer marketed in the EU as Budweiser Budvar and in North America as Czechvar.

Budvar's opposition was upheld by the European trade mark office, OHIM. After a failed appeal at OHIM, Anheuser-Busch took the case to the Luxembourg-based EU Court of First Instance

"The Court of First Instance upholds OHIM's decision not to register the word 'Budweiser' as a community trademark, inter alia for beer, for the American brewer, Anheuser-Busch," the court said in a statement on Wednesday.

It said the use of the word for non-alcoholic beverages might confuse consumers into thinking all the products were from the same brewer.

AB InBev said it already owned the rights to Budweiser or Bud trademarks in 23 of the 27 EU member states and the ruling had no impact on these. In Germany, AB Inbev's Budweiser is sold as Anheuser-Busch Bud.

It said the filing had been designed to extend its Budweiser rights and gain additional protection. Its plan to develop Budweiser as a global brand remained in place.

An appeal on points of law may be brought before the European Court of Justice, the EU's highest court, within two months of notification.