‘Champagne’ said the wording on a box of German supermarket sorbet. ‘Champagne 12%’, echoed the list of ingredients. However, the supermarket’s sorbet is not from the Champagne area of France, and the commercial use of the word ‘Champagne’ is governed by the EU’s ‘geographical indication’ Regulations.
In Germany, a supermarket has been caught selling ‘Champagne Sorbet’. However, the sorbet is not from the French Champagne and the commercial use of the word ‘Champagne’ is governed by the EU’s ‘geographical indication’ Regulations. Therefore, the Comité Interprofessionnel du Vin de Champagne has sued the German supermarket in the German courts. The dispute has been escalated up to the German Supreme Court.
At the German Supreme Court
The relevant Regulation was No 1308/2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007, (OJ  L347/671).
Article 103 of Regulation 1308/2013 provides:
1. A protected designation of origin and a protected geographical indication may be used by any operator marketing a wine which has been produced in conformity with the corresponding product specification.
2. A protected designation of origin and a protected geographical indication, as well as the wine using that protected name in conformity with the product specifications, shall be protected against:
a) any direct or indirect commercial use of that protected name:
i) by comparable products not complying with the product specification of the protected name; or
ii) in so far as such use exploits the reputation of a designation of origin or a geographical indication;
b) any misuse, imitation or evocation, even if the true origin of the product or service is indicated or if the protected name is translated, transcripted or transliterated or accompanied by an expression such as “style”, “type”, “method”, “as produced in”, “imitation”, “flavour”, “like” or similar;
c) any other false or misleading indication as to the provenance, origin, nature or essential qualities of the product, on the inner or outer packaging, advertising material or documents relating to the wine product concerned, as well as the packing of the product in a container liable to convey a false impression as to its origin;
d) any other practice liable to mislead the consumer as to the true origin of the product.
The initial legal issue was whether the supermarket was using the word ‘champagne’ commercially. In light of the fact that the word was on a commercial product, and was mentioned in the ingredients list, the judges thought that the supermarket was using the word commercially but since the consumer was not buying a champagne drink and the supermarket was not putting wine on the market but a sorbet, the judges felt it appropriate to ask the CJEU its first question.
The second issue was whether harm was being done to the reputation of the protected word. According to EU law, a defendant must be ‘taking undue advantage’. The key here was not whether consumers would be confused by the use of the geographical indication ‘Champagne’ but rather to ask if there was an ‘evocation’.
In a dispute about whether a Finnish spirit drink called ‘Verlados’, evoked the French spirit drink ‘Calvados’, the CJEU in Case C-75/15, Viiniverla ECLI:EU:C:2016:35, the CJEU had reasoned:
45 Finally, the Court has already held that there can be ‘evocation’ even in the absence of any likelihood of confusion between the products concerned (judgments in Consorzio per la tutela del formaggio Gorgonzola, C-87/97, EU:C:1999:115, paragraph 26, and Commission v Germany, C-132/05, EU:C:2008:117, paragraph 45), since what matters is, in particular, that there is not created in the mind of the public an association of ideas regarding the origin of the products, and that a trader does not take undue advantage of the reputation of the protected geographical indication (see, to that effect, judgment in Bureau national interprofessionnel du Cognac, C‑4/10 et C 27/10, EU:C:2011:484, paragraph 46).
With the ‘champagne’ forming an important feature of the sorbet which determined the taste of the product, there seemed to be an evocation.
A third issue then arose: did the control of the champagne makers extend to the situation in which their product was a taste ingredient in another product? That seemed to be so in light of the CJEU’s aforementioned reasoning in C-75/15, Viiniverla, and in light of what the CJEU had said in paragraph 21, namely:
According to the Court’s case-law, the concept of ‘evocation’ covers a situation in which the term used to designate a product incorporates part of a protected designation, so that when the consumer is confronted with the name of the product the image triggered in his mind is that of the product whose designation is protected (see, as regards Article 16(b) of Regulation No 110/2008, judgment in Bureau national interprofessionnel du Cognac, C‑4/10 and C‑27/10, EU:C:2011:484, paragraph 56; see also, concerning Article 13(1)(b) of Council Regulation (EEC) No 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs (OJ 1992 L 208, p. 1), judgments in Consorzio per la tutela del formaggio Gorgonzola, C‑87/97, EU:C:1999:115, paragraph 25, and Commission v Germany, C‑132/05, EU:C:2008:117, paragraph 44).
The fourth issue was then whether the supermarket was misusing the term ‘Champagne’. The geographical indication Regulation banned misleading or inaccurate uses of a geographical indication. What was unclear to the German judges was whether the bans in the Regulation would only apply to a situation in which a consumer was being misled as to the geographical origin of the product concerned.
Judge Büscher and four other judges in the German Supreme Court decided to make a preliminary reference to the CJEU.
My unofficial translation of the questions asked by the German Supreme Court reads:
1. Must Article 118(m)(2)(a)(ii) of Regulation 1234/2007 and Article 103(2)(a)(ii) of Regulation 1308/2013 be interpreted as also being applicable when the protected geographical indication is used as part of a name for a foodstuff that does not correspond with the product specification but where an ingredient is added that does correspond with the product specification?
2 If the answer to the first question is in the affirmative, then must Article 118(m)(2)(a)(ii) of Regulation 1234/2007 and Article 103(2)(a)(ii) of Regulation 1308/2013 be interpreted as meaning that the use of a protected geographical indication as part of the name for a foodstuff that does not correspond with the product specification but to which an ingredient has been added that corresponds to the product specification, comes close to the exploitation of the reputation of the protected geographical indication where the name of the foodstuff corresponds to the common name that is used by the relevant public, and the ingredient is added in sufficient quantity such that it constitutes an essential quality of the product?
3. Must Article 118(m)(2)(b) of Regulation 1234/2007 and Article 103(2)(b) of Regulation 1308/2013 be interpreted as meaning that the use of a protected geographical indication in a situation as described in Question 2, constitutes misuse, imitation or evocation?
4. Must Article 118(m)(2)(c) of Regulation 1234/2007 and Article 103(2)(c) of Regulation 1308/2013 be interpreted as meaning that they are only applicable to false or misleading indications which for the relevant public could give rise to misunderstandings about the geographical origin of a product?
Consumer protection also takes account of the presumed expectation of the average consumer. That said, the division of jurisdiction between the EU Courts and the national courts means that it is left to the national courts to rule on the question of whether the labelling of certain products is likely to mislead the consumer or whether a sales description is potentially misleading; see further, the CJEU’s judgment in Case C-195/14, Teekanne – selling raspberry vanilla tea without raspberries or vanilla.
Update – 3 September 2016
There is a further preliminary reference currently pending before the CJEU about geographical indications, this time in the context of trade mark law. According to the website of the UK’s Intellectual Property Office, the questions in Case C-139/16, Moreno Marin are:
1. May the prohibitions in Article 3(1)(c) of Directive 2008/95 include the use of a sign referring to the characteristic of a product or service which is that it can be found in abundance in a single place with a high degree of value and quality?
2. May a sign with these characteristics be regarded as a sign of geographical origin in so far as the product or service will always be concentrated in a specific physical area
Update – 26 September 2016
There is another food-labelling case from Germany; see further, Case C-422/16, TofuTown.com – selling ‘tofubutter’ and ‘veggiecheese’ without butter or cheese.