The CJEU has confirmed that "Port Charlotte", registered as an EU trade mark for whisky, does not evoke (infringe) the protected designation of origin (PDO) for "porto" or "port". The decision will be significant for consumer products businesses as it confirms that EU (not national) law applies to enforcement of Protected Designations of Origin (PDO) and highlights the importance of ensuring continued protection of UK PDOs post-Brexit.
Interestingly, the CJEU did not find that the use of "Port Charlotte" as a brand for whisky would have a detrimental impact upon the PDO for port (and the port producers protected by this designation). Yet we await the outcome in a not dissimiliar dispute before the CJEU between the Champagne wine producers and Aldi over the sale of champagne favoured sorbet (see our blog here for a report of the Aldi case).
1. Business Impact
The CJEU's ruling that Regulation1234/2007 (which sets out the rules on PDOs for wine) (the "Regulation") exclusively and exhaustively lays down the legal rules in the EU applicable to the protection of PDOs, to the exclusion of any national laws which seek to provide additional protection, confirms that the system for PDO protection is entirely as set out in the relevant EU law, and cannot be supplemented at a national level.
Assessing consumer perception of the meaning of a mark, throughout the EU, will be relevant to the assessment of whether that mark "evokes" in the mind of the consumer the PDO in question. The impact of this point will be fact specific, in each case. The likelihood that a PDO is evoked may also be affected by the similarity, or otherwise, of the features of the products in question.
In a post-Brexit world, the UK will need to give thought to the interaction of PDOs granted under the EU system and what level of protection would be offered going forwards to existing PDOs in the UK and whether the UK continues with its own system of protected designations and geographical indications for distinctive UK foods (such as cheeses and pork pies) and beers/wines (such as ales and bitters).
In 2006, the Scottish company Bruichladdich Distillery Co. Ltd ("BD") filed an application for registration of an EU trade mark for "Port Charlotte" for a range of alcoholic beverages, which was granted in 2007. The official Portuguese body responsible for promoting the port industry, IVDP, subsequently sought a declaration that the mark was invalid, on the basis of prior rights in the PDOs "port" and "porto", both of which are protected under the Regulation, as well as under Portuguese law. In response, BD limited the list of goods in respect of which the trade mark was registered from "Alcoholic beverages" to "Whisky". At first instance, the EUIPO rejected IVDP's claim for invalidity. On appeal, the General Court confirmed the compatibility of the contested mark with the PDO "Port" and dismissed the claim (although it annulled the EUIPO's own decision). Both the EUIPO and IVBD appealed this decision.
The EUIPO appealed the General Court's ruling, solely on the question as to whether or not the legal rules applicable to the protection of PDOs for wine are exclusively and comprehensively set out in the Regulation, or whether national law could provide additional protections for a PDO.
IVDP cross-appealed on three grounds, contending that:
1. The PDO for wine is not exclusively governed by the Regulation, but is also covered by national law.
2. The trade mark "Port Charlotte" infringes the Regulation by exploiting the reputation of the PDO, which should be protected against any direct or indirect commercial use, even for products that are not comparable. IVDP claimed that the General Court was wrong to conclude that consumers would not associate Port Charlotte whisky with PDO-protected port wine. The products were comparable and, if the General Court had recognised this, they would have found the mark invalid under the Regulation.
3. The contested trade mark constitutes an imitation or an evocation of the PDO "porto" or "port"; the General Court had erred in its reasoning as it had not considered that, in Portuguese, the word "port" would be understood as referring to port wine, and not to a harbour. As such, the mark evoked the subject matter of the PDO.
3. The decision
The CJEU agreed with the Advocate-General's opinion that EU law was comprehensive as to the protection of a PDO for wines, and that the body of relevant legal rules was exclusively and exhaustively laid down in the Regulation. If Member States were permitted to allow producers to use, within their national territories, one of the indications or symbols which are reserved for designations protected under the Regulation, on the basis of a national right meeting less stringent requirements, assurance of quality could not be guaranteed. This runs counter to the essential function of rights conferred pursuant to the Regulation and would risk jeopardising the attainment of free and undistorted competition in the internal market.
National registration procedures are incorporated in the decision-making procedure at EU-level. Article 118(7) of the Regulation provides that a Member State may, on a transitional basis only, grant national protection to a designation until a decision on the application for registration is taken by the Commission; this provision would be rendered redundant, if each Member State was able to retain its own systems for PDOs.
As a result, the CJEU concluded that the General Court had erred in law in holding that protection conferred on PDOs under the Regulation may be supplemented by relevant national law.
The General Court was entitled to hold that the contested trade mark could not be regarded as using the designation of origin "porto" or "port". Unlike the protected appellation of origin, the contested trade mark does not refer expressly to a wine but to the female first name Charlotte, which is directly associated with the element "port", the primary meaning of which is "harbour", in a number of European languages. As such, the sign "Port Charlotte" would be understood by the relevant public as designating a harbour named after a person, with no direct link being made with the designation of origin "porto" or "port". On the basis of the factual assessment that the first name, Charlotte, constitutes the most important and distinctive element of the contested trade mark, the CJEU supported the General Court's ruling and rejected IVDP's second ground of appeal.