I Introduction
Protection of indications of geographical originFootnote
1
(IGO) forms an important aspect within the regulation of protected IGOs. In EU law, protected (ie registered) IGOsFootnote
2
are safeguarded on the basis of so-called protection norms, which provide the scope of their protection and are discussed individually in legal literature.Footnote
3
The Court of Justice of the European Union (CJEU or Court) affirmed this division by indicating that these norms “refer to various situations”Footnote
4
by perceiving and applying them as independent norms, each with its own scope. The first protection norm refers to “any direct or indirect commercial use”; the second refers to “any misuse, imitation or evocation”; the third refers to “any other false or misleading indication”; while the fourth and last refers to “any other practice liable to mislead”. These protection norms were first introduced into EU law in 1992 with adoption of Regulation No 2081/92.Footnote
5
However, this regulation covered only protection of IGOs in respect of agricultural products and foodstuffs other than wines and spirits. These four protection norms were continuously included in subsequent replacement regulations succeeding the original regulation.Footnote
6
Likewise, they were gradually (with minor differences in the case of wines other than aromatised wines) introduced for protection of IGOs in the excluded product types. They were introduced for protected IGOs in respect of spirits in 2008,Footnote
7
wines (other than aromatised wines) also in 2008Footnote
8
and aromatised wines in 2016.Footnote
9
So far, the CJEU has had the chance to clarify the first three protection norms in relation to a situation when a protected IGO was used as part of a disputed sign.Footnote
10
That the CJEU has so far not directly interpreted the fourth protection norm is explained by the fact that no question for its interpretation has been referred to the court. However, from the systematic point of view, it would be appropriate to consider the four protection norms jointly as based on distinct and internally united regulation (an approach which the CJEU has confirmed in its court practice, as is discussed in Section IV below). This conclusion is valid, even though the four protection norms are included in different regulations, due to their almost identical wording.
Recently, however, the CJEU was given the opportunity to continue its clarification of the first three protection norms in Case C-44/17 in respect of a completely different situation.Footnote
11
Specifically, the case concerned a dispute involving the protected IGO Scotch Whisky, on the one hand, and the disputed sign Glen Buchenbach, on the other, when the protected indication and the disputed sign share neither fully nor partially common elements. In particular, the dispute concerned the issue whether use of the designation “Glen” in the disputed sign constituted an infringement of the protected IGO Scotch Whisky, despite the fact the protected IGO does not contain the designation Glen at all.Footnote
12
In this case, the CJEU had the opportunity to apply the first three protection norms to that situation by establishing the boundaries of their application.
II Facts
The facts of the case are listed in paras 8–13 of the CJEU judgment under discussionFootnote
13
and may be summarised as follows.
The protected IGO Scotch Whisky has been protected at the EU level since 15 December 1989, when Regulation No 1576/89Footnote
14
– the predecessor of the Spirits Regulation – became applicable.Footnote
15
The indication was included in Annex II, Point 2(a) of Regulation No 1576/89 in respect of whisky. Protection as an established geographical indication continued to be ensured by the currently effective Spirits Regulation, which replaced the former regulation in 2008.
The Scotch Whisky Association is an organisation constituted under Scottish law whose objectives include protecting trade involving the protected IGO Scotch Whisky.
Whisky distillers in Scotland have consistently and widely used the term “Glen” in designations in respect of whisky as a part of names attributed to the whisky they produce. The term “Glen” is a Gaelic word meaning “a narrow valley” used instead of the term “valley” by various Scottish whisky producers.Footnote
16
At the same time, several German whisky distillers have been using the term “Glen” to designate whisky produced in Germany (possible production in other countries was not subject to assessment in the CJEU case under discussion). For instance, whisky under the designation Glen Slitisa is produced by the Schlitzer Distillery. However, the term Glen, as indicated in the webpage of that distillery, “was dropped later, though, to prevent any conflicts with the Scottish Whisky Association, and the latest edition is simply called Slitisian whisky, Slitisa being the medieval name for Schlitz”.Footnote
17
Another example is whisky designated by the term Glen Els produced by the distillery “Hammerschmiede”.Footnote
18
Additionally, the Waldhorn distillery, located in Berglen, in the Buchenbach valley in Swabia, Germany, produced whisky under the designation Glen Buchenbach. The labelling of that whisky contained different designations demonstrating that this whisky is produced in Germany (discussed below in Section IV).
The Scotch Whisky Association brought a claim before the Hamburg Regional Court against Michael Klotz, who markets whisky under the designation Glen Buchenbach on an internet platform. The national court applied to the CJEU with a request for a preliminary ruling on interpretation of the first three protection norms included in Article 16(a)–(c) of the Spirits Regulation. The questions referred to the CJEU are further summarised in Section III below.
The significance of the case is also attested to by the number of intervening EU Member States, which amounted to four (Greece, France, Italy, the Netherlands).
III Judgment
The referring national (German) court asked the CJEU several questions in relation to interpretation of the first three protection norms of protected IGOs included in Article 16(a)–(c) of the Spirits Regulation. The CJEU had the opportunity to consider the Opinion of Advocate General Henrik Saugmandsgaard Øe which was delivered on 22 February 2018.Footnote
19
The CJEU answered these three questions one by one, but without examining them together, as it sometimes does.
Notably, the present case demonstrates that the Advocate General and the Court shared the same opinion on the majority of issues. This is evident not only in the similarity of answers proposed by the Advocate General and reflected in the CJEU judgment under discussion, but also in references to the Opinion of the Advocate General in the judgment itself.
The first question related to interpretation of the term “indirect commercial use” explicitly regulated within the first interpretation norm (Article 16(a) of the Spirits Regulation) and its interrelation with the term “evocation” envisaged by the second interpretation norm (Article 16(b) of the Spirits Regulation). The answer to this question was split by the CJEU into two parts.
The first part related to interpretation of the term “indirect commercial use”. In this situation, the CJEU had already interpreted the term “direct commercial use” in two previous cases. However, the CJEU did not go into detail in these cases concerning understanding of the terms “use”, “direct” and “indirect”.Footnote
20
In the present case, the CJEU proceeded to clarify these terms one by one.
As regards the term “use”, the CJEU approved its previous practice and established that this term is understood when the sign in question is used in one of two situations: either “in an identical form” or “in a form that is phonetically and/or visually highly similar”.Footnote
21
In this way, the term “use” refers to the visual appearance of a protected IGO covering its use in either an identical or similar form in the disputed sign. This approach concerning interpretation of the term “use” resembles protection of trade marks (other than a trade mark with a reputation) where both situations are identified yet in slightly different terminology, ie identical use or confusingly similar use.Footnote
22
The CJEU did not follow the approach of trade mark law and referred to a “highly similar” likelihood rather than a likelihood of confusion. Likewise, the CJEU did not follow the approach suggested by two intervening EU Member States (Greece, Italy) and the Scotch Whisky Association, who considered that the term “use” may also extend to a situation when the designation in question (in this case, Glen) is not incorporated in the disputed designation.Footnote
23
As it appears from the CJEU reasoning mentioned above, the CJEU explicitly rejected that such a situation may fall within the first protection norm.
On the other hand, the CJEU drew a distinction between direct and indirect commercial use (although the CJEU did not clarify the term “commercial”, as discussed in Section IV below). By approving the conclusion of the Advocate General, the CJEU established that direct use relates to affixing the designation in question to labelling or packaging, whereas indirect use relates to “supplementary marketing or advertising”.Footnote
24
In this way, the terms “direct” and “indirect” refer to the way in which the visual appearance of the disputed designation may take place. Both types of use are known in trade mark law, yet they are listed as certain activities without distinguishing between direct or indirect use.Footnote
25
The second part, concerning differentiation between the first two protection norms, was more difficult to resolve. The CJEU noticed that both protection norms “must necessarily be distinguished”, otherwise the second protection norm “would be devoid of practical effect”, by relying on a similar conclusion reached by the Advocate General.Footnote
26
By differentiating direct or indirect commercial use from evocation, the CJEU held that the latter term (as well as misuse or imitation referred to in the second protection norm) covers the situation “in which the sign at issue does not use the geographical indication as such but suggests it …”.Footnote
27
That interpretation of the terms “use” and “direct or indirect” regulated within the first protection norm, as the CJEU considered, complies with the objectives of that norm, namely to ensure a “high level of consumer protection” and protection not only of “the interests of consumers, but also the interests of producers”.Footnote
28
In the result, discussion of the above two parts of the first question led the CJEU to the conclusion that indirect commercial use in the first protection norm covers the situation where the protected IGO in question is used in an identical form or similar (though not highly similar) form, whereas mere evocation is not sufficient to fit within one of these forms.
The second question specifically related to the second protection norm, which was partially also clarified by the CJEU in the answer to the first question. The national court asked whether similarity and the context in which the disputed sign was used is material within application of this protection norm.
By affirming its own previous court practice, the CJEU held that evocation would take place when “an average European consumer who is reasonably well informed and reasonably observant and circumspect thinks directly of the protected geographical indication, namely ‘Scotch Whisky’, when confronted with a comparable product bearing the disputed designation, in this case ‘Glen’”.Footnote
29
As the CJEU added, the national court should make such an assessment even in the absence of any similarity and full or partial incorporation of the protected indication in the disputed designation.Footnote
30
Therefore, the CJEU explicitly admitted the possibility that evocation might take place in the situation when the protected IGO does not contain the designation (in the present case, Glen) in question.
However, the CJEU held that the possibility of mere association, ie some kind of association, cannot be used for establishing evocation of a protected indication in a disputed sign as “it does not establish a sufficiently clear and direct link between that element and the indication concerned”.Footnote
31
As regards the context in which the disputed sign is used, the CJEU held, by affirming its previous practice, that that context is “immaterial”; in other words it is irrelevant whether the disputed sign “corresponds to the name of the undertaking and/or place where the product is manufactured”.Footnote
32
The final question concerned clarification of the third protection norm and related to the issue whether the context in which a “false or misleading indication” is used plays any role. The CJEU affirmed – also in the case of the third protection norm – that account “is not be taken of the context in which the disputed element is used”Footnote
33
because this norm affords “extensive protection”Footnote
34
and otherwise the norm would be “deprived of practical effect”.Footnote
35
In that regard, the CJEU explicitly rejected the argument of the European Commission that the context in the case of the third protection norm in relation to false or misleading practices should be taken into account.Footnote
36
IV Comment
This CJEU judgment should be considered as a further development and deepening of the clarification provided by the CJEU in relation to the four protection norms as a whole covering protected IGOs.
In its previous court practice, the CJEU had the opportunity to interpret the four protection norms in several cases that are discussed briefly in subsequent paragraphs. However, all these cases related to a situation where the disputed sign itself contained a part of the protected IGO, in contrast to the case here under discussion, where the protected IGO does not contain the disputed designation (ie Glen) at all.
As regards the second protection norm, covering “any misuse, imitation or evocation”, the notion “evocation” was the first and most-interpreted term by the CJEU in all cases when any of the four protection norms were clarified.Footnote
37
For the first time, the CJEU dealt with interpretation of that term in a dispute involving the protected IGO Gorgonzola and the disputed trade mark Cambozola;Footnote
38
later in a dispute between the protected IGO Parmigiano Reggiano and the disputed designation Parmesan;Footnote
39
and later in a dispute between Calvados and Verlados;Footnote
40
Cognac and Konjakki/Konjakkia;Footnote
41
and Champagne and Champagner Sorbet.Footnote
42
As regards interpretation of the term “evocation” itself, the most important conclusions by the CJEU were drawn in the first two cases and these were approved in the subsequent cases mentioned above. From this point of view, it seems questionable that the CJEU in the present case referred to the Konjakki/Konjakkia case (Viiniverla, as cited by the CJEU) which was reviewed without an Opinion of the Advocate General, but not to the first two cases on which the former case is explicitly grounded.
In addition, other protection norms were interpreted by the CJEU in some of the above cases involving either the first and/or the third protection norms.Footnote
43
Technically, the interpretation provided by the CJEU in respect of the first three protection norms in these cases concerned different regulations in which these protection norms were envisaged.Footnote
44
However, the CJEU did not justly differentiate among the regulations in which the protection norms interpreted were included (despite certain differences within the wording of the first protection norm). Instead the CJEU examined these four protection norms as a whole, relying on interpretation of those norms even if included in another regulation.
The CJEU clearly faced several difficulties in the case under discussion. The first difficulty related to lack of legislative sources which could be used for interpretation of the four protection norms. The scope and contents of the four protection norms could be more easily clarified if legislative documents were available providing an insight into their understanding, for instance, a draft regulation containing an explanatory memorandum providing an understanding of the four protection norms. However, neither the proposalFootnote
45
for adoption of Regulation No 2081/92 – which first introduced the four protection norms into EU law on IGOs – nor the proposal for the Spirits RegulationFootnote
46
contains any clarification of the four protection norms. In the case of Regulation No 2081/92, the draft merely states – concerning the four protection norms – that “Article 14 lays down a scheme of protection under which every Member State is required to protect registered geographical indications and designations of origin”.Footnote
47
Therefore, due to lack of travaux préparatoires, the CJEU had no option (similarly to the Advocate GeneralFootnote
48
) but to rely on logical assumptions: either considering regulation structure included in the four protection norms,Footnote
49
or relying on the premise that an opposite interpretation would lead to a situation where some protection norm “would be devoid of practical effect”.Footnote
50
This approach by the CJEU differed from that employed by the CJEU in earlier cases, which involved interpretation of the four protection norms. For instance, in a dispute involving the protected IGO Gorgonzola and the disputed trade mark Cambozola, the CJEU established the meaning of the notion “evocation” without any detailed substantiation.Footnote
51
Another difficulty concerned the situation in the present case, namely that the disputed sign neither fully nor partially contains the protected IGO. In the result, the case turned on the question whether the right holders of the protected IGO Scotch Whisky could challenge the use of the designation Glen in the disputed sign. In the wording of the CJEU, this case turns on an assessment of whether consumers would think of the protected IGO Scotch Whisky when confronted with a German whisky containing the designation Glen.
On the one hand, this issue involves the scope of protection of protected IGOs, because the indication is protected in the form in which it is registered. This situation was discussed before the CJEU in respect of IGOs in previous cases and was explicitly rejected by the CJEU in Parmesan.Footnote
52
On the other hand, this situation depends on the scope of the boundaries of the four protection norms.
The CJEU clarified the internal interrelation among the four protection norms by indicating, as the Advocate General suggested, that Article 16 of the Spirits Regulation – which envisages these protection norms in respect of spirit drinks – “contains a graduated list of prohibited conduct”.Footnote
53
However, this formulation could hardly be admitted as precise because each of the four protection norms simply addresses a different protection objective. Rather, another Advocate General’s conclusion was more to the point, by noting that the four protection norms set out “a series of situations which refer more and more indirectly” to the protected IGO in question.Footnote
54
The CJEU provided clarification in respect of the first protection norm by distinguishing the notion “commercial use” from the phrase “direct or indirect” and following the approach suggested in the Opinion of the Advocate General. In previous practice, the CJEU had not distinguished between the notions, stating that there is “direct commercial use”, as in the case involving disputed trademarks containing the designation Konjakki or Konjakkia.Footnote
55
This understanding of the first protection norm should undoubtedly be differentiated from the understanding of the term “evocation” in the second protection norm, which is much more specific, as indeed was made clear by the CJEU in the present case.
The interpretation provided by the CJEU concerning the first protection norm was suggested in legal literature.Footnote
56
Indeed, it was noted that the first protection norm should cover comparable products or exploitation of reputation;Footnote
57
or it should cover identical and “indirect use, ie the [registered] name used in a modified form or used in a different form and way than the registered one”.Footnote
58
However, the wording “direct or indirect” in legal literature had been linked with the use of a disputed sign but not its presentation such as in labelling etc.Footnote
59
In addition, an obvious shortcoming of the present judgment relates to the fact that the CJEU elegantly omitted to clarify the term “commercial”, instead focusing on clarifying the term “use”, one the one hand, and the terms “direct” and “indirect” in relation to the term “commercial use”, on the other. This issue, therefore, should be subject to further clarification by the CJEU in future cases.
Another issue in the present case involved interpretation of the context in which the disputed sign was used in respect of the second and third protection norms. This context in the present case involves the so-called delocalising phrase (reservation) that shows the true origin of the product in question. Indeed, the disputed sign is used with additional designations on the label of the product demonstrating that the product is produced in Germany, ie a reference to a particular German distillery, the indication that it is a Swabian product or the indication “German product” in German (Deutsches Erzeugnis).Footnote
60
The question, therefore, turns on assessing whether the context should be taken into account.
By affirming its previous practice, the CJEU in this case held that the context (or “appearance” in which a disputed sign is used as was characterised by the CJEU in earlier court practiceFootnote
61
) should not be taken into account.Footnote
62
This position is well-grounded in the case of the second protection norm (“any misuse, imitation or evocation”) but not in the case of the third protection norm (“any other false or misleading indication”), for which the CJEU did not take into account the rationale for protection of distinctive signs in general and IGOs in particular. This rationale dictates that protection of distinctive signs including IGOs is based either on absolute or relative protection.Footnote
63
The context (or appearance) in which the sign is used does not influence the application of rules providing absolute protection, ie protection without misleading consumers. However, relative protection is based on the prohibition of misleading practices, where the context in which a disputed sign is used should be of the essence.
The argument used by the CJEU – namely, that the third protection norm referring to “any other false or misleading indication” should be assessed without considering the context (in other words, within absolute protection) otherwise it “would be deprived of practical effect”Footnote
64
– goes much further than the third protection norm actually envisages. This author’s conclusion is based on the fact that the third (as well as the fourth) protection norm covers false or misleading indications (being based on protection against deception in the meaning of unfair competition lawFootnote
65
) which fall within relative protection. In the case of relative protection, the context should actually be taken into account, without discussion as to whether it is practical or not.
Consequently, the CJEU rightly concluded that the context in which a disputed sign is used is immaterial when absolute protection is involved, ie the second (as well as the first if such would be the case) protection norm covering “any misuse, imitation or evocation”. However, the Court went too far when it reached the conclusion that the context in which a disputed sign is used should not be taken into account in respect of “any other false or misleading indication” within the third protection norm (this conclusion, by implication, also relates to the fourth protection norm). It remains to be seen whether the Court will step back in future court practice from this conclusion in respect of the third and fourth protection norms.
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I Introduction
Protection of indications of geographical originFootnote 1 (IGO) forms an important aspect within the regulation of protected IGOs. In EU law, protected (ie registered) IGOsFootnote 2 are safeguarded on the basis of so-called protection norms, which provide the scope of their protection and are discussed individually in legal literature.Footnote 3 The Court of Justice of the European Union (CJEU or Court) affirmed this division by indicating that these norms “refer to various situations”Footnote 4 by perceiving and applying them as independent norms, each with its own scope. The first protection norm refers to “any direct or indirect commercial use”; the second refers to “any misuse, imitation or evocation”; the third refers to “any other false or misleading indication”; while the fourth and last refers to “any other practice liable to mislead”. These protection norms were first introduced into EU law in 1992 with adoption of Regulation No 2081/92.Footnote 5 However, this regulation covered only protection of IGOs in respect of agricultural products and foodstuffs other than wines and spirits. These four protection norms were continuously included in subsequent replacement regulations succeeding the original regulation.Footnote 6 Likewise, they were gradually (with minor differences in the case of wines other than aromatised wines) introduced for protection of IGOs in the excluded product types. They were introduced for protected IGOs in respect of spirits in 2008,Footnote 7 wines (other than aromatised wines) also in 2008Footnote 8 and aromatised wines in 2016.Footnote 9
So far, the CJEU has had the chance to clarify the first three protection norms in relation to a situation when a protected IGO was used as part of a disputed sign.Footnote 10 That the CJEU has so far not directly interpreted the fourth protection norm is explained by the fact that no question for its interpretation has been referred to the court. However, from the systematic point of view, it would be appropriate to consider the four protection norms jointly as based on distinct and internally united regulation (an approach which the CJEU has confirmed in its court practice, as is discussed in Section IV below). This conclusion is valid, even though the four protection norms are included in different regulations, due to their almost identical wording.
Recently, however, the CJEU was given the opportunity to continue its clarification of the first three protection norms in Case C-44/17 in respect of a completely different situation.Footnote 11 Specifically, the case concerned a dispute involving the protected IGO Scotch Whisky, on the one hand, and the disputed sign Glen Buchenbach, on the other, when the protected indication and the disputed sign share neither fully nor partially common elements. In particular, the dispute concerned the issue whether use of the designation “Glen” in the disputed sign constituted an infringement of the protected IGO Scotch Whisky, despite the fact the protected IGO does not contain the designation Glen at all.Footnote 12 In this case, the CJEU had the opportunity to apply the first three protection norms to that situation by establishing the boundaries of their application.
II Facts
The facts of the case are listed in paras 8–13 of the CJEU judgment under discussionFootnote 13 and may be summarised as follows.
The protected IGO Scotch Whisky has been protected at the EU level since 15 December 1989, when Regulation No 1576/89Footnote 14 – the predecessor of the Spirits Regulation – became applicable.Footnote 15 The indication was included in Annex II, Point 2(a) of Regulation No 1576/89 in respect of whisky. Protection as an established geographical indication continued to be ensured by the currently effective Spirits Regulation, which replaced the former regulation in 2008.
The Scotch Whisky Association is an organisation constituted under Scottish law whose objectives include protecting trade involving the protected IGO Scotch Whisky.
Whisky distillers in Scotland have consistently and widely used the term “Glen” in designations in respect of whisky as a part of names attributed to the whisky they produce. The term “Glen” is a Gaelic word meaning “a narrow valley” used instead of the term “valley” by various Scottish whisky producers.Footnote 16
At the same time, several German whisky distillers have been using the term “Glen” to designate whisky produced in Germany (possible production in other countries was not subject to assessment in the CJEU case under discussion). For instance, whisky under the designation Glen Slitisa is produced by the Schlitzer Distillery. However, the term Glen, as indicated in the webpage of that distillery, “was dropped later, though, to prevent any conflicts with the Scottish Whisky Association, and the latest edition is simply called Slitisian whisky, Slitisa being the medieval name for Schlitz”.Footnote 17 Another example is whisky designated by the term Glen Els produced by the distillery “Hammerschmiede”.Footnote 18 Additionally, the Waldhorn distillery, located in Berglen, in the Buchenbach valley in Swabia, Germany, produced whisky under the designation Glen Buchenbach. The labelling of that whisky contained different designations demonstrating that this whisky is produced in Germany (discussed below in Section IV).
The Scotch Whisky Association brought a claim before the Hamburg Regional Court against Michael Klotz, who markets whisky under the designation Glen Buchenbach on an internet platform. The national court applied to the CJEU with a request for a preliminary ruling on interpretation of the first three protection norms included in Article 16(a)–(c) of the Spirits Regulation. The questions referred to the CJEU are further summarised in Section III below.
The significance of the case is also attested to by the number of intervening EU Member States, which amounted to four (Greece, France, Italy, the Netherlands).
III Judgment
The referring national (German) court asked the CJEU several questions in relation to interpretation of the first three protection norms of protected IGOs included in Article 16(a)–(c) of the Spirits Regulation. The CJEU had the opportunity to consider the Opinion of Advocate General Henrik Saugmandsgaard Øe which was delivered on 22 February 2018.Footnote 19 The CJEU answered these three questions one by one, but without examining them together, as it sometimes does.
Notably, the present case demonstrates that the Advocate General and the Court shared the same opinion on the majority of issues. This is evident not only in the similarity of answers proposed by the Advocate General and reflected in the CJEU judgment under discussion, but also in references to the Opinion of the Advocate General in the judgment itself.
The first question related to interpretation of the term “indirect commercial use” explicitly regulated within the first interpretation norm (Article 16(a) of the Spirits Regulation) and its interrelation with the term “evocation” envisaged by the second interpretation norm (Article 16(b) of the Spirits Regulation). The answer to this question was split by the CJEU into two parts.
The first part related to interpretation of the term “indirect commercial use”. In this situation, the CJEU had already interpreted the term “direct commercial use” in two previous cases. However, the CJEU did not go into detail in these cases concerning understanding of the terms “use”, “direct” and “indirect”.Footnote 20 In the present case, the CJEU proceeded to clarify these terms one by one.
As regards the term “use”, the CJEU approved its previous practice and established that this term is understood when the sign in question is used in one of two situations: either “in an identical form” or “in a form that is phonetically and/or visually highly similar”.Footnote 21 In this way, the term “use” refers to the visual appearance of a protected IGO covering its use in either an identical or similar form in the disputed sign. This approach concerning interpretation of the term “use” resembles protection of trade marks (other than a trade mark with a reputation) where both situations are identified yet in slightly different terminology, ie identical use or confusingly similar use.Footnote 22 The CJEU did not follow the approach of trade mark law and referred to a “highly similar” likelihood rather than a likelihood of confusion. Likewise, the CJEU did not follow the approach suggested by two intervening EU Member States (Greece, Italy) and the Scotch Whisky Association, who considered that the term “use” may also extend to a situation when the designation in question (in this case, Glen) is not incorporated in the disputed designation.Footnote 23 As it appears from the CJEU reasoning mentioned above, the CJEU explicitly rejected that such a situation may fall within the first protection norm.
On the other hand, the CJEU drew a distinction between direct and indirect commercial use (although the CJEU did not clarify the term “commercial”, as discussed in Section IV below). By approving the conclusion of the Advocate General, the CJEU established that direct use relates to affixing the designation in question to labelling or packaging, whereas indirect use relates to “supplementary marketing or advertising”.Footnote 24 In this way, the terms “direct” and “indirect” refer to the way in which the visual appearance of the disputed designation may take place. Both types of use are known in trade mark law, yet they are listed as certain activities without distinguishing between direct or indirect use.Footnote 25
The second part, concerning differentiation between the first two protection norms, was more difficult to resolve. The CJEU noticed that both protection norms “must necessarily be distinguished”, otherwise the second protection norm “would be devoid of practical effect”, by relying on a similar conclusion reached by the Advocate General.Footnote 26 By differentiating direct or indirect commercial use from evocation, the CJEU held that the latter term (as well as misuse or imitation referred to in the second protection norm) covers the situation “in which the sign at issue does not use the geographical indication as such but suggests it …”.Footnote 27
That interpretation of the terms “use” and “direct or indirect” regulated within the first protection norm, as the CJEU considered, complies with the objectives of that norm, namely to ensure a “high level of consumer protection” and protection not only of “the interests of consumers, but also the interests of producers”.Footnote 28
In the result, discussion of the above two parts of the first question led the CJEU to the conclusion that indirect commercial use in the first protection norm covers the situation where the protected IGO in question is used in an identical form or similar (though not highly similar) form, whereas mere evocation is not sufficient to fit within one of these forms.
The second question specifically related to the second protection norm, which was partially also clarified by the CJEU in the answer to the first question. The national court asked whether similarity and the context in which the disputed sign was used is material within application of this protection norm.
By affirming its own previous court practice, the CJEU held that evocation would take place when “an average European consumer who is reasonably well informed and reasonably observant and circumspect thinks directly of the protected geographical indication, namely ‘Scotch Whisky’, when confronted with a comparable product bearing the disputed designation, in this case ‘Glen’”.Footnote 29 As the CJEU added, the national court should make such an assessment even in the absence of any similarity and full or partial incorporation of the protected indication in the disputed designation.Footnote 30 Therefore, the CJEU explicitly admitted the possibility that evocation might take place in the situation when the protected IGO does not contain the designation (in the present case, Glen) in question.
However, the CJEU held that the possibility of mere association, ie some kind of association, cannot be used for establishing evocation of a protected indication in a disputed sign as “it does not establish a sufficiently clear and direct link between that element and the indication concerned”.Footnote 31
As regards the context in which the disputed sign is used, the CJEU held, by affirming its previous practice, that that context is “immaterial”; in other words it is irrelevant whether the disputed sign “corresponds to the name of the undertaking and/or place where the product is manufactured”.Footnote 32
The final question concerned clarification of the third protection norm and related to the issue whether the context in which a “false or misleading indication” is used plays any role. The CJEU affirmed – also in the case of the third protection norm – that account “is not be taken of the context in which the disputed element is used”Footnote 33 because this norm affords “extensive protection”Footnote 34 and otherwise the norm would be “deprived of practical effect”.Footnote 35 In that regard, the CJEU explicitly rejected the argument of the European Commission that the context in the case of the third protection norm in relation to false or misleading practices should be taken into account.Footnote 36
IV Comment
This CJEU judgment should be considered as a further development and deepening of the clarification provided by the CJEU in relation to the four protection norms as a whole covering protected IGOs.
In its previous court practice, the CJEU had the opportunity to interpret the four protection norms in several cases that are discussed briefly in subsequent paragraphs. However, all these cases related to a situation where the disputed sign itself contained a part of the protected IGO, in contrast to the case here under discussion, where the protected IGO does not contain the disputed designation (ie Glen) at all.
As regards the second protection norm, covering “any misuse, imitation or evocation”, the notion “evocation” was the first and most-interpreted term by the CJEU in all cases when any of the four protection norms were clarified.Footnote 37 For the first time, the CJEU dealt with interpretation of that term in a dispute involving the protected IGO Gorgonzola and the disputed trade mark Cambozola;Footnote 38 later in a dispute between the protected IGO Parmigiano Reggiano and the disputed designation Parmesan;Footnote 39 and later in a dispute between Calvados and Verlados;Footnote 40 Cognac and Konjakki/Konjakkia;Footnote 41 and Champagne and Champagner Sorbet.Footnote 42 As regards interpretation of the term “evocation” itself, the most important conclusions by the CJEU were drawn in the first two cases and these were approved in the subsequent cases mentioned above. From this point of view, it seems questionable that the CJEU in the present case referred to the Konjakki/Konjakkia case (Viiniverla, as cited by the CJEU) which was reviewed without an Opinion of the Advocate General, but not to the first two cases on which the former case is explicitly grounded.
In addition, other protection norms were interpreted by the CJEU in some of the above cases involving either the first and/or the third protection norms.Footnote 43
Technically, the interpretation provided by the CJEU in respect of the first three protection norms in these cases concerned different regulations in which these protection norms were envisaged.Footnote 44 However, the CJEU did not justly differentiate among the regulations in which the protection norms interpreted were included (despite certain differences within the wording of the first protection norm). Instead the CJEU examined these four protection norms as a whole, relying on interpretation of those norms even if included in another regulation.
The CJEU clearly faced several difficulties in the case under discussion. The first difficulty related to lack of legislative sources which could be used for interpretation of the four protection norms. The scope and contents of the four protection norms could be more easily clarified if legislative documents were available providing an insight into their understanding, for instance, a draft regulation containing an explanatory memorandum providing an understanding of the four protection norms. However, neither the proposalFootnote 45 for adoption of Regulation No 2081/92 – which first introduced the four protection norms into EU law on IGOs – nor the proposal for the Spirits RegulationFootnote 46 contains any clarification of the four protection norms. In the case of Regulation No 2081/92, the draft merely states – concerning the four protection norms – that “Article 14 lays down a scheme of protection under which every Member State is required to protect registered geographical indications and designations of origin”.Footnote 47 Therefore, due to lack of travaux préparatoires, the CJEU had no option (similarly to the Advocate GeneralFootnote 48 ) but to rely on logical assumptions: either considering regulation structure included in the four protection norms,Footnote 49 or relying on the premise that an opposite interpretation would lead to a situation where some protection norm “would be devoid of practical effect”.Footnote 50 This approach by the CJEU differed from that employed by the CJEU in earlier cases, which involved interpretation of the four protection norms. For instance, in a dispute involving the protected IGO Gorgonzola and the disputed trade mark Cambozola, the CJEU established the meaning of the notion “evocation” without any detailed substantiation.Footnote 51
Another difficulty concerned the situation in the present case, namely that the disputed sign neither fully nor partially contains the protected IGO. In the result, the case turned on the question whether the right holders of the protected IGO Scotch Whisky could challenge the use of the designation Glen in the disputed sign. In the wording of the CJEU, this case turns on an assessment of whether consumers would think of the protected IGO Scotch Whisky when confronted with a German whisky containing the designation Glen.
On the one hand, this issue involves the scope of protection of protected IGOs, because the indication is protected in the form in which it is registered. This situation was discussed before the CJEU in respect of IGOs in previous cases and was explicitly rejected by the CJEU in Parmesan.Footnote 52
On the other hand, this situation depends on the scope of the boundaries of the four protection norms.
The CJEU clarified the internal interrelation among the four protection norms by indicating, as the Advocate General suggested, that Article 16 of the Spirits Regulation – which envisages these protection norms in respect of spirit drinks – “contains a graduated list of prohibited conduct”.Footnote 53 However, this formulation could hardly be admitted as precise because each of the four protection norms simply addresses a different protection objective. Rather, another Advocate General’s conclusion was more to the point, by noting that the four protection norms set out “a series of situations which refer more and more indirectly” to the protected IGO in question.Footnote 54
The CJEU provided clarification in respect of the first protection norm by distinguishing the notion “commercial use” from the phrase “direct or indirect” and following the approach suggested in the Opinion of the Advocate General. In previous practice, the CJEU had not distinguished between the notions, stating that there is “direct commercial use”, as in the case involving disputed trademarks containing the designation Konjakki or Konjakkia.Footnote 55 This understanding of the first protection norm should undoubtedly be differentiated from the understanding of the term “evocation” in the second protection norm, which is much more specific, as indeed was made clear by the CJEU in the present case.
The interpretation provided by the CJEU concerning the first protection norm was suggested in legal literature.Footnote 56 Indeed, it was noted that the first protection norm should cover comparable products or exploitation of reputation;Footnote 57 or it should cover identical and “indirect use, ie the [registered] name used in a modified form or used in a different form and way than the registered one”.Footnote 58 However, the wording “direct or indirect” in legal literature had been linked with the use of a disputed sign but not its presentation such as in labelling etc.Footnote 59
In addition, an obvious shortcoming of the present judgment relates to the fact that the CJEU elegantly omitted to clarify the term “commercial”, instead focusing on clarifying the term “use”, one the one hand, and the terms “direct” and “indirect” in relation to the term “commercial use”, on the other. This issue, therefore, should be subject to further clarification by the CJEU in future cases.
Another issue in the present case involved interpretation of the context in which the disputed sign was used in respect of the second and third protection norms. This context in the present case involves the so-called delocalising phrase (reservation) that shows the true origin of the product in question. Indeed, the disputed sign is used with additional designations on the label of the product demonstrating that the product is produced in Germany, ie a reference to a particular German distillery, the indication that it is a Swabian product or the indication “German product” in German (Deutsches Erzeugnis).Footnote 60 The question, therefore, turns on assessing whether the context should be taken into account.
By affirming its previous practice, the CJEU in this case held that the context (or “appearance” in which a disputed sign is used as was characterised by the CJEU in earlier court practiceFootnote 61 ) should not be taken into account.Footnote 62 This position is well-grounded in the case of the second protection norm (“any misuse, imitation or evocation”) but not in the case of the third protection norm (“any other false or misleading indication”), for which the CJEU did not take into account the rationale for protection of distinctive signs in general and IGOs in particular. This rationale dictates that protection of distinctive signs including IGOs is based either on absolute or relative protection.Footnote 63 The context (or appearance) in which the sign is used does not influence the application of rules providing absolute protection, ie protection without misleading consumers. However, relative protection is based on the prohibition of misleading practices, where the context in which a disputed sign is used should be of the essence.
The argument used by the CJEU – namely, that the third protection norm referring to “any other false or misleading indication” should be assessed without considering the context (in other words, within absolute protection) otherwise it “would be deprived of practical effect”Footnote 64 – goes much further than the third protection norm actually envisages. This author’s conclusion is based on the fact that the third (as well as the fourth) protection norm covers false or misleading indications (being based on protection against deception in the meaning of unfair competition lawFootnote 65 ) which fall within relative protection. In the case of relative protection, the context should actually be taken into account, without discussion as to whether it is practical or not.
Consequently, the CJEU rightly concluded that the context in which a disputed sign is used is immaterial when absolute protection is involved, ie the second (as well as the first if such would be the case) protection norm covering “any misuse, imitation or evocation”. However, the Court went too far when it reached the conclusion that the context in which a disputed sign is used should not be taken into account in respect of “any other false or misleading indication” within the third protection norm (this conclusion, by implication, also relates to the fourth protection norm). It remains to be seen whether the Court will step back in future court practice from this conclusion in respect of the third and fourth protection norms.