Whisky and a German-Scottish dispute over geographical indications

drink-428319_960_720.jpgThe European court ruled in case C‑44/17 Scotch Whisky Association v Michael Klotz, which concerns the following:

The Scotch Whisky Association is an organisation constituted under Scottish law. Its objectives include protecting the trade in Scottish whisky both in Scotland and abroad.

Mr Klotz markets, via a website, a whisky under the designation ‘Glen Buchenbach’, which is produced by the Waldhorn distillery in Berglen, located in the Buchenbach valley in Swabia (Germany).

The label on the whisky bottles in question includes, in addition to a stylised depiction of a hunting horn (Waldhorn in German), the following information: ‘Waldhornbrennerei’ (Waldhorn distillery), ‘Glen Buchenbach’, ‘Swabian Single Malt Whisky’, ‘500 ml’, ‘40% vol’, ‘Deutsches Erzeugnis’ (German product), ‘Hergestellt in den Berglen’ (produced in the Berglen).

The Scotch Whisky Association brought an action before the Landgericht Hamburg (Regional Court, Hamburg, Germany) seeking an order that Mr Klotz, inter alia, cease to market that whisky, which is not Scotch whisky, under the designation ‘Glen Buchenbach’, on the ground that use of that designation infringes, in particular, Article 16(a) to (c) of Regulation No 110/2008, which protects the geographical indications registered in Annex III to that regulation, which include ‘Scotch Whisky’.

According to the Scotch Whisky Association, those provisions ensure that a geographical indication registered for a spirit drink is protected not only against the use of such an indication but also against any reference that suggests the geographical origin of that indication. It argues that because the designation ‘Glen’ is very widely used in Scotland instead of the word ‘valley’ and, in particular, as an element of the trade mark in the names of Scottish whiskies, it evokes in the relevant public an association with Scotland and Scotch Whisky despite the fact that other information is included on the label, which specifies that the product at issue is of German origin. Mr Klotz contends that the action should be dismissed.

The Landgericht Hamburg (Regional Court, Hamburg) states that whether the claim is to succeed depends on the interpretation to be given to Article 16(a) to (c) of Regulation No 110/2008. It has therefore decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)  Does “indirect commercial use” of a registered geographical indication of a spirit drink in accordance with Article 16(a) of [Regulation No 110/2008] require that the registered geographical indication be used in identical or phonetically and/or visually similar form, or is it sufficient that the disputed element evokes in the relevant public some kind of association with the registered geographical indication or the geographical area?

If the latter is sufficient: When determining whether there is any “indirect commercial use”, does the context in which the disputed element is embedded then also play a role, or can that context not counteract indirect commercial use of the registered geographical indication, even if the disputed element is accompanied by an indication of the true origin of the product?

(2) Does an “evocation” of a registered geographical indication in accordance with Article 16(b) of [Regulation No 110/2008] require that there be a phonetic and/or visual similarity between the registered geographical indication and the disputed element, or is it sufficient that the disputed element evokes in the relevant public some kind of association with the registered geographical indication or the geographical area?

If the latter is sufficient: When determining whether there is any “evocation”, does the context in which the disputed element is embedded also play a role, or can that context not counteract any unlawful evocation of the registered geographical indication, even if the disputed element is accompanied by an indication of the true origin of the product?

(3) When determining whether there is any “other false or misleading indication” in accordance with Article 16(c) of [Regulation No 110/2008], does the context in which the disputed element is embedded play a role, or can that context not counteract any misleading indication, even if the disputed element is accompanied by an indication of the true origin of the product?’

The Court decision:

1.  Article 16(a) of Regulation (EC) No 110/2008 of the European Parliament and of the Council of 15 January 2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks and repealing Council Regulation (EEC) No 1576/89 must be interpreted as meaning that, for the purpose of establishing that there is ‘indirect commercial use’ of a registered geographical indication, the disputed element must be used in a form that is either identical to that indication or phonetically and/or visually similar to it. Accordingly, it is not sufficient that that element is liable to evoke in the relevant public some kind of association with the indication concerned or the geographical area relating thereto.

2. Article 16(b) of Regulation No 110/2008 must be interpreted as meaning that, for the purpose of establishing that there is an ‘evocation’ of a registered geographical indication, the referring court is required to determine whether, when the average European consumer who is reasonably well informed and reasonably observant and circumspect is confronted with the disputed designation, the image triggered directly in his mind is that of the product whose geographical indication is protected. In making that determination, the referring court, in the absence of (i) any phonetic and/or visual similarity between the disputed designation and the protected geographical indication and (ii) any partial incorporation of that indication in that designation, must take account of the conceptual proximity, if any, between the designation and the indication.

Article 16(b) of Regulation No 110/2008 must be interpreted as meaning that, for the purpose of establishing that there is an ‘evocation’ of a registered geographical indication, account is not to be taken either of the context surrounding the disputed element, or, in particular, of the fact that that element is accompanied by an indication of the true origin of the product concerned.

3. Article 16(c) of Regulation No 110/2008 must be interpreted as meaning that, for the purpose of establishing that there is a ‘false or misleading indication’, as prohibited by that provision, account is not be taken of the context in which the disputed element is used.

Image: jarmoluk / 1443 images, Pixabay.
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Scotch Whisky, geographical indications and a General Court decision

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The General Court of the EU ruled in Case C‑44/17, The Scotch Whisky Association, The Registered Office v Michael Klotz. The case concerns the following:

The Scotch Whisky Association, The Registered Office (‘TSWA’) is an organisation constituted under Scottish law. Its objectives include protecting the trade in Scottish whisky both in Scotland and abroad.

Mr Michael Klotz markets, via a website, a whisky under the designation ‘Glen Buchenbach’ which is produced by the Waldhorn distillery in Berglen, situated in the Buchenbach valley in Swabia (Baden-Württemberg, Germany).

The label on the whisky bottles in question includes, in addition to the full address of the German producer and the stylised drawing of a hunting horn (called a ‘Waldhorn’ in German), the following information: ‘Waldhornbrennerei [Waldhorn distillery], Glen Buchenbach, Swabian Single Malt Whisky, 500 ml, 40% vol, Deutsches Erzeugnis [German product], Hergestellt in den Berglen [produced in the Berglen]’.

TSWA brought an action before the Landgericht Hamburg (Regional Court, Hamburg) to stop Mr Klotz’s use of the designation ‘Glen Buchenbach’ for the whisky at issue, on the ground that such use infringes, in particular, Article 16(a) to (c) of Regulation No 110/2008, (5) which protects the geographical indications registered in Annex III to that regulation, including the indication ‘Scotch Whisky’. TSWA claims, inter alia, that, on the one hand, those provisions apply not only to the use of such an indication itself, but also to any reference that suggests the protected geographical indication of origin and that, on the other, the designation ‘Glen’ evokes in the relevant public an association with Scotland and Scotch Whisky, notwithstanding the addition of other references to the German origin of the product. Mr Klotz contends that the action should be dismissed.

In that context, by decision of 19 January 2017, received at the Court on 27 January 2017, the Landgericht Hamburg (Regional Court, Hamburg) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘(1) Does “indirect commercial use” of a registered geographical indication of a spirit drink in accordance with Article 16(a) of Regulation No 110/2008 require that the registered geographical indication be used in identical or phonetically and/or visually similar form, [ (6)] or is it sufficient that the disputed element evokes in the relevant public some kind of association with the registered geographical indication or the geographical area?

If the latter is sufficient: When determining whether there is any “indirect commercial use”, does the context in which the disputed element is embedded then also play a role, or can that context not counteract indirect commercial use of the registered geographical indication, even if the disputed element is accompanied by an indication of the true origin of the product?

(2) Does an “evocation” of a registered geographical indication in accordance with Article 16(b) of Regulation No 110/2008 require that there be a phonetic and/or visual similarity between the registered geographical indication and the disputed element, or is it sufficient that the disputed element evokes in the relevant public some kind of association with the registered geographical indication or the geographical area?

If the latter is sufficient: When determining whether there is any “evocation”, does the context in which the disputed element is embedded also play a role, or can that context not counteract any unlawful evocation of the registered geographical indication, even if the disputed element is accompanied by an indication of the true origin of the product?

(3) When determining whether there is any “other false or misleading indication” in accordance with Article 16(c) of Regulation No 110/2008, does the context in which the disputed element is embedded play a role, or can that context not counteract any misleading indication, even if the disputed element is accompanied by an indication of the true origin of the product?’

The Court decision:

(1) Article 16(a) of Regulation (EC) No 110/2008 of the European Parliament and of the Council of 15 January 2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks and repealing Council Regulation (EEC) No 1576/89 must be interpreted as meaning that ‘indirect … use’ of a registered geographical indication, prohibited by that provision, requires the disputed designation to be identical or phonetically and/or visually similar to the indication in question. Accordingly, it is not sufficient that the disputed designation is liable to evoke in the relevant public some kind of association with the registered geographical indication or the geographical area relating thereto.

(2) Article 16(b) of Regulation No 110/2008 must be interpreted as meaning that the ‘evocation’ of a registered geographical indication prohibited by that provision does not necessarily require there to be phonetic and visual similarity between the disputed designation and the indication in question. It is not, however, sufficient that the disputed designation is liable to evoke in the relevant public some kind of association of ideas with the protected indication or the geographical area relating thereto. In the absence of such similarity, it is necessary to take account of the conceptual proximity existing, if it be the case, between the indication in question and the disputed designation, in so far as that proximity is of such a nature as to lead the consumer to have in mind, as reference image, the product whose indication is protected.

For the purposes of establishing the existence of an ‘evocation’ prohibited by Article 16(b), it is not necessary to take account of additional information found alongside the sign at issue in the description, presentation or labelling of the product concerned, in particular with regard to its true origin.

(3) Article 16(c) of Regulation No 110/2008 must be interpreted as meaning that, for the purposes of establishing the existence of a ‘false or misleading indication’ prohibited by that provision, it is not necessary to take account of additional information found alongside the sign at issue in the description, presentation or labelling of the product concerned, in particular with regard to its true origin.