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Friday, 19 October 2012

Not just trade mark law: dilution applies to butter too

The Czechs couldn't believe it either --
but with water content of up to 58%,
it certainly wasn't ...
Product labelling is an important part of European consumer law; it is also of significance to the branding and trade mark fraternities, since some terms cannot be used to describe a product at all and, where they allude to a characteristic quality of a product, any trade mark granted for them may find itself being invalidated.  In this context, yesterday's ruling in Case C-37/11 European Commission v Czech Republic, is worth noting.  This decision of the Court of Justice of the European Union is also somewhat overdue, if the interests of consumers are supposed to be protected against false and misleading labelling, since it is the culmination of a chain of events going back to March 2007. This Kat wonders how many Czech shoppers have purchased fortified water in the expectation that it was butter over the past five and a half years: if very few, then the law regulating use of the word 'butter' is of little relevance to the real world and, if many, then why on earth has it taken so long?

The case in question is the subject of a media release from Curia, which is reproduced below, garnished with comments:
A milk product which cannot be classified as butter cannot be marketed under the designation ‘pomazánkové máslo’ (butter spread)

The Czech Republic has infringed EU law, by allowing that product to be marketed under that designation 
In accordance with the Single CMO Regulation [Council Regulation  1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products], only products with a milk-fat content of not less than 80% but less than 90%, a maximum water content of 16% and a maximum dry non-fat milk material content of 2% can be marketed under the designation ‘butter’. However, that rule does not apply to the designation of products the exact nature of which is clear from traditional usage and/or when the designations are clearly used to describe a characteristic quality of the product. The products benefiting from this derogation appear on a list drawn up by the Commission. 
Pomazánkové máslo is a product similar to butter which is used as a spread and also as an ingredient in manufacturing other food products. As it has a minimum fat content of 31% by weight, a minimum dry material content of 42% and a water content of up to 58%, it does not satisfy the requirements under the regulation for being marketed under the sales designation ‘butter’ [quite right, says Merpel. With a water content of up to 58% one can make out a good case for calling it 'water']. The Czech legislation none the less allows the product to be marketed under the designation ‘pomazánkové máslo’ (butter spread).

Since it considered that, by allowing the marketing under the designation ‘pomazánkové máslo’ of a milk product which could not be classified as butter, the Czech Republic had infringed the regulation, the Commission brought an action before the Court of Justice against the Czech Republic for failure to fulfil obligations.

In its judgment of today, the Court of Justice starts by finding that ‘pomazánkové máslo’ does not satisfy the criteria laid down in the regulation for it to be marketed under the designation ‘butter’ [note for non-Europeans -- the CJEU does have the power to make findings of fact in proceedings of this nature, even though it may not make such findings in references for preliminary rulings from national courts or on Community trade mark and design appeals]. The Court also notes that the product is not included in the list of products which can benefit from a derogation and not be subject to the restrictions in the regulation concerning designations.

The Court examines the Czech Republic’s argument that products whose exact nature is clear from traditional usage and/or whose designation is clearly used to describe a characteristic quality of the product automatically benefit from that derogation without their inclusion in that list, and hence prior authorisation by the Commission, being necessary [this sort of argument doesn't normally succeed at CJEU level, says Merpel, since the Court is more impressed by law than by expressions of sentiment]. The Court rejects this argument, pointing out that the regulation expressly empowers the Commission to draw up an exhaustive list of products to which the derogation may be applied, on the basis of the lists sent by the Member States, and holds that the application of the derogation therefore requires a prior decision by the Commission. 
In those circumstances, the Court finds that the Czech Republic has failed to fulfil its obligations under the regulation, by allowing a milk product which cannot be classified as butter to be marketed under the sales designation ‘pomazánkové máslo’.
Indeed, as the Court stated at [61]:
"If the Czech Republic’s argument were followed, it would call into question both the competence of the Commission, as delegated to it by the Council of the European Union by ... Regulation 1234/2007 for the purpose of adopting the detailed rules for the application of that regulation, and also the effectiveness of that regulation, in so far as it aims to standardise the usage of marketing designations in order to preserve competition and protect consumers".
Butter: the benefits here
How to make real butter here
A dangerous butter here
Pioneer of erotic cinematographic butter: farewell to Sylvia Kristel here

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