On September 9, 2021 in case No. C-783/19, the Court of Justice ruled that the Spanish mark CHAMPANILLO (which means “little champagne” in Spanish) used to promote tapas bars (vs. wine), could be declared in contrast with the Protected Denomination of Origin CHAMPAGNE, thus widening once again the scope of protection of designations of origin as protection would not apply to comparable products only but even to services (in this case restaurant services). The intention of the applicable Regulation No. 1308/2013 is, in fact, to extend protection to all uses which take advantage of the reputation enjoyed by products covered by one of those indications.

In such decision the EUCJ reiterates that PDOs and PGIs can be protected, based on art. 103.2 (b) even in the case of “evocation” of the denomination as interpreted by the same Court of Justice in the Scotch Whiskey decision, C-44/17. Namely, “evocation” may occur when the contested sign incorporates a part of a PDO/PGI, or in case the contested sign and the PDO/PGI are phonetically or visually similar, or even in case of a mere “conceptual proximity” between the signs, and ultimately whenever the average European consumer establishes a mental link, sufficiently clear and direct, between the term used to designate the product in question and the protected denomination, i.e. when the consumer is confronted with a disputed name, the image triggered directly in his or her mind is that of the product covered by the PDO/PGI. Furthermore, the Court stresses that it is enough for evocation to exist for consumers in a single member state of the EU, and that circumstances that may lead to exclude evocation for consumers of one or two member states should be disregarded.

The Champanillo decision is important also because the Court clarifies that the violation of the protected name by evocation is a specific and objective protection, which does not require proving a likelihood of confusion, nor the existence of willful misconduct or negligence, nor a competitive relationship between the products, and is not subject to the assessment of an attempt at unfair competition.

On September 22, 2021, 13 days after the above decision, the EU Commission published in the Official Gazette the request for registration of the name “Prošek” as a traditional term for a Croatian white wine, deeming it admissible despite its similarity to the world-famous Italian PDO PROSECCO. The decision shocked the Italian quality wine industry which has already filed an opposition against this registration.

Let’s try to understand the reasons for this sudden change of course of the EU, as well as the reasons that led Croatia to request the registration of the traditional term “Prošek”.

The starting point is that the Italian sparkling wine Prosecco has been the most successful worldwide phenomenon in the wine industry in recent decades. 8.000 producers, 500 million bottles put into the market worldwide in 2020 (export accounts for 78% of total), a 2.4 billion turnover with exponential growth over the years. In other words, a boom.

Source: CONSORZIO DI TUTELA DELLA DENOMINAZIONE DI ORIGINE CONTROLLATA PROSECCO

The famous Italian wine Prosecco derives its name from the historical toponym, dating back at least to the late 14th century, of a town near Trieste and today it constitutes one of its neighborhoods. The town of Prosecco was called “Prošek” in Slovenian during the domination of the Austro-Hungarian Empire, and road signs are still bilingual today demonstrating that “Prošek” is nothing but the translation of Prosecco. Wine has always been produced in this area, as evidenced by engravings, commercial agreements, literary works, etc.

The European Commission granted the Protected Denomination of Origin “Prosecco” in 2009 but the first PDO comprising Prosecco dates back to 1973. “Prosecco” is undoubtedly one of the best-known European Denominations of Origin.

Although the Croatian white wine Prošek is not as old as Prosecco, it is centuries old: the first mentions of the traditional term Prošek date back to 1774. It is a dessert wine, it is produced in Dalmatia by 30 winegrowers only, for a total of less than 3,000 bottles a year, mostly sold in Croatia.

The different figures clearly show the huge gap existing vis-à-vis the economic interests at stake, and it is legitimate wondering what reasons may have led Croatia into requesting to have Prošek recognized as a traditional term in the European Union for a currently local, small-scale production of wine. Another difference to be noted is that Prosecco is a Protected Designation of Origin and therefore an intellectual property right (IPR), while the term Prošek is just a “traditional term”, falling under the legislation on labeling, which enjoys a more limited protection and is certainly not an intellectual property right.

The EU Commission defends its decision to admit and publish “Prošek” as a traditional term for wine, based on Article 100 of the EU Regulation 1308/2013 which allows the registration of homonymous names under certain conditions… “a name for which an application is submitted and which is wholly or partially homonymous with a name already registered under this Regulation shall be registered with due regard to local and traditional usage and any risk of confusion”.

The same Article 100, however, goes on to say that “a homonymous name which misleads the consumer into believing that products come from another territory shall not be registered even if the name is accurate as far as the actual territory, region or place of origin of those products is concerned”.

The European Commission claims that it is up to the labeling of the bottles to ensure that there is no confusion between Prosecco and Prošek, as provided by paragraph 3 of the same art. 100: “A registered homonymous name may be used only if there is a sufficient distinction in practice between the homonym registered subsequently and the name already in the register, having regard to the need to treat the producers concerned in an equitable manner and the need to avoid misleading the consumer“, adding that Prosecco and Prošek wines are qualitatively very different from one another: in fact, the former is an Italian sparkling wine, while the latter is a Croatian dessert wine, and therefore there will be no confusion. But aren’t these precisely the arguments used by the detractors of PDOs / PGIs and by the fans of Italian sounding names?

The traditional term Prošek is used on the labels as a visually impactful brand. The images of Prošek’s bottles speak for themselves. Are we sure that the average European consumer (perhaps neither Italian nor Croatian) who is not an expert in wines would not be led into thinking that he is bringing on the table the famous Prosecco he heard of or, anyway, a similar wine?

Even assuming there is no risk of confusion, the scope of protection of designation of origin is much broader based on art. 103 of the EU Regulation 1308/2013 and includes cases in which there is only a risk of evocation, without a risk of confusion, as interpreted by the European Court of Justice, lastly in the Champanillo decision.

Keeping the conclusions of the Court of Justice in mind, it is clear that, regardless of the good or bad faith of the producers of Croatian Prošek (although doubts appear legitimate), and regardless of a risk of confusion for the average European consumer (in this regard, too, doubts seem legitimate), the traditional term Prošek, used for an identical product, i.e. wine, is evocative of the PDO PROSECCO because it incorporates a part of it, constitutes its translation, is phonetically and visually similar to the PDO, presents conceptual proximity to such PDO, and its use would take undue advantage of the enormous reputation of the PDO PROSECCO.