Trade marks: protected designations of origin

01 November 2017

Audrey Horton

The European Court of Justice (ECJ) has refused to make a declaration of invalidity of a mark for whisky, which was based on earlier rights in protected designations of origin (PDOs) for port wine, and held that national law was irrelevant.

Background

In the EU it is possible to register PDOs for agricultural products and foodstuffs under Council Regulation (510/2006/EC) (2006 Regulation), and for alcoholic drinks under Council Regulation (1234/2007/EC) (2007 Regulation).

Direct or indirect commercial use of a protected name is prohibited if it exploits the reputation of a designation of origin or a geographical indication (Article 118m(2)(a)(ii), 2007 Regulation) (Article 118m(2)(b)). Article 118m(2)(b) protects PDOs against any misuse, imitation or evocation.

In Budĕjovický Budvar, the ECJ held that protection under the PDO Regulation was exhaustive, and so precluded the application of a system of protection between two EU member states (C-478/07).

An EU trade mark (EUTM) shall be declared invalid if there are earlier rights in a sign that fall within the scope of Article 8(4) of that Regulation (Article 53(1)(c), EU Trade Mark Regulation (207/2009/EC)) (Article 53(1)(c)).

Facts

A Scottish company, B, registered PORT CHARLOTTE as an EUTM for whisky. A Portuguese body, IV, sought a declaration of invalidity of the EUTM on the basis of PDOs for "port" and "porto" that were protected under Portuguese law and the 2007 Regulation.

The EU Intellectual Property Office (EUIPO) rejected the invalidity claim. IV appealed.

The General Court of the EU dismissed the appeal. It also held that, for the purpose of invalidity claims, Article 53 permitted rights in a PDO to be supplemented by additional protection granted under national law.

The EUIPO appealed, arguing that the General Court's interpretation contravened Article 53(1)(c). IV continued with its invalidity claim and cross-appealed.

Decision

The ECJ upheld the EUIPO's appeal and dismissed IV's cross-appeal. It rejected the invalidity claim.

The General Court was correct to apply Budvar even though the present proceedings related to a different system of protection under the 2007 Regulation, than Budvar, which related to the 2006 Regulation. The two systems of protection were essentially the same in nature, having the same objectives and characteristics. As Budvar applied, any Portuguese law that might have offered additional protection to IV's PDO was irrelevant.

The 2007 Regulation would not cover a mere indication of geographical provenance, that is, a name which made no direct link between geographical origin and a specific quality, reputation or other characteristic, and so would not prevent national law from applying to that indication. However, the "port" and "porto" PDOs clearly fell within the 2007 Regulation, so that the General Court's remarks on the potential applicability of other systems of protection had been incorrect here.

On the question of whether PORT CHARLOTTE evoked or used either of IV's PDOs, the ECJ agreed that the General Court had wrongly assessed the meaning of "port" because it did not consider that in Portuguese it referred to port wine rather than to a harbour, and therefore evoked the subject matter of IV's PDO for whisky. However, the General Court's conclusion that the average consumer in the EU would understand PORT CHARLOTTE as designating a harbour named after a person called Charlotte was a factual finding and had to stand, in the absence of any distortion of the evidence. The General Court had correctly applied Article 118m(2)(b) so as to find that those consumers would not perceive either of IV's PDOs in the mark PORT CHARLOTTE.

On the question of evocation, the General Court had correctly applied relevant case law relating to the 2006 Regulation. Its findings were factual ones and could not be revisited.

As the ECJ ruled that national law was not applicable, all IV's claims failed.

Comment

This decision illustrates the principle established in Budvar that EU systems for the protection of PDOs are based entirely on the relevant EU Regulations and that it is not open to member states to provide additional protection for PDOs outside this system.

Case: EUIPO v Instituto dos Vinhos do Douro e do Porto IP C-56/16P.

First published in the November 2017 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.

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