ECJ: Protected Designation of Origin can also be infringed when used for services

Background

The defendant owns several tapas bars in Spain and uses the sign “Champanillo” (= 'little champagne': composition of the Spanish word “champán” (= champagne) and the diminutive suffix “illo”) both to designate and advertise his bars. To illustrate the sign, the defendant uses two clinking glasses filled with sparkling wine.

The French plaintiff, an Association representing the interests of winegrowers and trading houses in Champagne, considered the use of the sign “Champanillo” as being an infringement of the PDO “Champagne”. The Association therefore brought an action before the commercial court in charge in Barcelona. However, the court dismissed the action on the ground that no evocation to the PDO “Champagne” could be established, reasoning that the sign "Champanillo" was used for tapas bars, in which no Champagne was served, and not for alcoholic beverages. Consequently, the products in question were deemed to be different from those protected by the PDO and, moreover, aimed at a different public. The court thus held that the PDO was not infringed.

The plaintiff appealed against the judgment to the Barcelona Provincial Court. The latter referred the case to the ECJ for a preliminary ruling pursuant to Article 267 TFEU. The Provincial Court asked the ECJ the following questions on the interpretation of the relevant Article 13(1)(b) of Regulation No 510/2006 and Article 103(2)(b) of Regulation No 1308/2013:

1. Are PDOs only protected against practices which relate to products or are they also protected against practices which relate to services?
2. Is it necessary, in order to establish a likelihood of infringement resulting from an “evocation”, that the product covered by a PDO and the product or service covered by the sign at issue are identical or similar, and what are the relevant criteria for establishing an “evocation”?
3. Does "evocation" or "exploitation" within the meaning of the provision require unfair competitive conduct?

ECJ preliminary ruling

The ECJ first pointed out that the provisions of Union law on the protection of PDOs were uniform and exhaustive in character. Therefore, contrary to the Court of Appeal`s assumption, any national or bilateral protection schemes for geographical indications were not applicable alongside EU law.

Next, the ECJ stated with regard to the first question that, although according to Articles 92 and 93(1)(a) of Regulation 1308/2013 a PDO could only be used for products, the PDO was protected against any misuse, imitation or evocation pursuant to Article 103(2)(b), even if the actual origin of the product “or service” was indicated. Consequently, the PDO was protected against practices relating to both products and services.

With regard to the interpretation of the term "evocation", the ECJ stated that the decisive factor was whether the consumer was induced by a designation such as "Champanillo" to make an immediate association with the product covered by the PDO. In this context, it might be relevant whether the products at issue were similar and/or whether the sign used and the PDO were phonetically or visually similar. However, the ECJ stated that the latter were by no means mandatory requirements for the existence of an "evocation". Rather, it was a decision which had to be taken in the light of all relevant factors of the case. According to the ECJ, the national court would have to take into account in this context the average European consumer who was reasonably well informed and reasonably observant and circumspect.

With regard to the last question, the ECJ clarified that an "evocation" within the meaning of Art. 103(2)(b) of Regulation No. 1308/2013 did not require unfair competitive conduct, as the provision granted a special and independent protection that applied independently from the provisions of national law on unfair competition. According to the ECJ, it was rather an objective provision which required neither fault nor any competitive relationship.

Conclusion

The decision of the ECJ brings a welcome clarification. Accordingly, a protected designation of origin can also be infringed by an inadmissible use for services. A similarity or identity between the product covered by the PDO and the product or service covered by the sign at issue (here: “Champanillo”) is not even required. Hence, the protection conferred by the PDO reaches in certain respects further than trademark protection.

Overall, the ECJ once again strengthens the protection of protected designations of origin against commercial free-riding, and once again the PDO "Champagne" is the driving force behind this development (see our earlier publication on the "Champagne Sorbet" dispute).

Authored by Yvonne Draheim and Patrick Fromlowitz