ECJ: Champagne v. Champanillo

The ECJ has ruled on the protection geographical indications and designations of origin in the legal dispute Champagne (PDO) v. Champanillo (trade name). An allusion within the meaning of the EU Regulation does not require the existence of unfair competition, the ECJ ruled.

Champagne v. Champanillo – this interesting legal dispute was brought by the Audiencia Provincial de Barcelona (Provincial Court of Barcelona) in Spain with a reference for a preliminary ruling to the ECJ. The original legal dispute was about the similarity between Champagne and Champanillo, but the legal questions before the ECJ focused on the protection of designations of origin and geographical indications.

Champagne is Protected Designation of Origin (PDO)

Because champagne is a protected designation of origin (PDO). And the association of Champagne producers, the Comité Interprofessionnel du Vin de Champagne (CIVC), also pays close attention to its property rights and possible infringements of rights. The CIVC did not miss the fact that the owner of tapas bars in Spain used the sign CHAMPANILLO for self-advertising, in social networks and also in advertising brochures. He also applied for registration of the mark CHAMPANILLO at the Spanish Patent and Trademark Office, but this was refused twice, both times after opposition by the CIVC.

In addition, he marketed a foam drink called Champanillo, but stopped this marketing in 2015 at the request of the CIVC.

The CIVC considered that the use of the sign CHAMPANILLO infringed the PDO “Champagne” and brought an action against the owners of the tapas bars before the Juzgado de lo Mercantil de Barcelona (Barcelona Commercial Court, Spain). The CIVC demanded that the use of the sign CHAMPANILLO – also in social media (Instagram and Facebook) – be stopped, that all company logos and advertising and business documents on which this sign is depicted be removed from the market and the internet, and that the domain name “champanillo.es” be deleted.

The respondent disagreed, arguing that the use of the sign CHAMPANILLO as a trade name by catering establishments did not entail any risk of confusion with the products covered by the PDO “Champagne” and that it in no way intended to profit from the reputation of this PDO.

The Commercial Court rejected the CIVC’s challenge to the Champanillo sign, and the CIVC appealed to the Barcelona Provincial Court. This court in turn asked the ECJ to interpret Article 13(1)(b) of Regulation 510/2006 and Article 103(2)(b) of Regulation 1308/2013, according to which any direct or indirect use of a registered name is to be prohibited (at least where there is at least a very high degree of similarity) which exploits the reputation of a designation of origin or geographical indication protected by registration (see ECJ Decision Morbier Cheese of 2020, C-490/19).

Case Champanillo: Interpretation of Article 103(2)(b)

The referring court wanted to know this more precisely: Does this protection of (geographical) designations of origin apply against services offered under a business name? And how is the term ‘allusion’ to be understood in the EU Regulation: must an allusion be established on the basis of objective criteria? Or must unfair competition also be established for a finding of allusion?

Protection of a PDO – also in relation to services?

The question as to whether the protection of a PDO also applies in relation to services was interesting, because according to Art. 92 and Art. 93(1)(a) of Regulation No. 1308/2013, a PDO can only be registered for products. Thus, no protection according to geographical or origin can be registered for services.

However, the ECJ referred to the objectives of this EU Regulation, which must also be taken into account. The court said that the protection of a PDO against counterfeiting must ensure a high degree of protection. Therefore, it should also be extended to services, the ECJ ruled, also in order to align it with the protection applicable in the wine sector.

Article 103(2)(b) of Regulation No 1308/2013 is to be interpreted as protecting PDOs against acts relating to both products and services, the ECJ ruled.

The term “allusion” within the meaning of the EU Regulation

The ECJ’s Champanillo judgment also provides more legal clarity with regard to allusion. According to the established case law of the Court of Justice, an “allusion” is deemed to exist if the consumer is prompted by the name of the product in question to make a mental association with the product (see, i. a., in Scotch Whisky Association, C-44/17).

This case law has now been confirmed once again by the ECJ. With regard to the term “allusion”, the ECJ explained in the Champanillo case that the decisive factor is whether the consumer is induced by a disputed name to make an immediate mental association with the product covered by the PDO. This had to be examined by the national court, the ECJ ruled, and it has to take into account, if necessary, the partial inclusion of a PDO in the disputed name, a phonetic and/or visual similarity of this name with the PDO or a proximity of the name to the PDO in terms of content. In principle, according to case law, figurative signs can also directly evoke the image of goods whose name is registered in the mind of the consumer because of their “conceptual proximity” to such a designation. However, a concrete similarity or identity does not have to be present for a finding of an allusion, the ECJ has stated in the case Champanillo.

The decisive factor is the mental connection that the consumer makes between a name or sign and a PDO, a “sufficiently direct and clear connection”, as the ECJ added. The consumer must be assumed to be an averagely attentive European, and effective and uniform protection of registered names must accordingly be ensured against any allusion to them throughout the territory of the Union.

In addition, the ECJ stated that the protection against the allusion to a PDO provided for under Article 103(2)(b) of Regulation No 1308/2013 is an objective protection regime. For its application, neither proof of intent nor of fault is required.

Nor does this protective regulation of an allusion require that an unfair competitive act be established. The court explained that it is indeed possible to have both an infringement due to allusion to a PDO and an unfair competition act. However, the protection of a PDO is an independent protection that applies independently of the national law on unfair competition, the ECJ ruled.

Would you also like to protect or defend a product?

Christmas time is the time of treats – and these are often protected geographical indications, think of Dresdner Christstollen, Nürnberger Lebkuchen, Aachener Printen or Lübecker Marzipan. And also after the present Champonillo case, the responsibility for the corresponding legal decisions remains in the hands of the national courts.

We would be pleased to support you in protecting or defending your product. Our lawyers are experienced and highly qualified in all fields of intellectual property law, both nationally and internationally.