From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Sunday, 11 October 2015

Cristal mighty, what a Carrion! Roederer keeps its bottle while Cava loses its sparkle

Roederer v J Garcia Carrion S.A. & Others [2015] EWHC 2760 (Ch), a 6 October 2015 decision of Mrs Justice Rose, sitting in the Chancery Division of the High Court, England and Wales, has attracted a lot of attention on account of its subject matter: the sparkling white wines on which British consumers spend a disproportionate amount of their money in the opinion of at least one member of the Kat team who prefers dry red wines that don't go up your nose when you try to drink them.  Paying close attention to this ruling was long-term Katfriend and occasional guest contributor Aaron Wood. who leads us through the case like this:

In the past, High Court judges have been criticised for being too old and too out of touch.  The decision of Mrs Justice Rose in the CRISTAL/CRISTALINO case suggest that she is more hip-hop than hip-op. 
For those who have not yet had the pleasure, CRISTAL is Louis Roederer’s flagship brand of champagne.  For historical reasons it differs from other bottles on the market in that it comes in a clear bottle with no indentation: it was commissioned by the Tsar of Russia in 1876, who sought a bottle which allowed him to ensure he was not being poisoned and which could not have explosives hidden in the indentation.  Roederer's bottle, label and trade mark are depicted on the right.
J Garcia Carrion (JGC) launched a brand of cava in the UK called CRISTALINO.  The bottles are depicted below, left.

Roederer sought to prevent the sales of this product and brought proceedings on the basis of a likelihood of confusion and on the basis of its reputation, alleging tarnishment, unfair advantage (free-riding) and detriment to distinctive character and repute.  UK supermarkets Asda and Morrisons were added as co-defendants, but since each of these settled early it appears there was little activity on the UK market. 
On the question of reputation, Roederer relied upon factual evidence of its activities and profile together with survey evidence.  Roederer produces approximately 500,000 bottles of CRISTAL a year, of which approximately 40,000 are sold in the UK (its fourth-largest market).  It is, therefore, a small producer and enjoys a small part of the UK market.  T court however found that the sales since 1949 were significant and had been valuable for several decades. 
Importantly, Roederer provided third-party statements from various publications describing “the famous Cristal”, “the cult-vintage bubbly Cristal …  the Champagne that ran away with itself. Synonymous with decadence as much as excellence ...”, “21st century phenomenon.” The judge gave the following comment:
“The position is perhaps best described by an article in the Mail on Sunday in December 2006. It describes the dilemma facing the management of an elite London night club on finding that they had run out of Cristal champagne when they were expecting a visit from some wealthy patrons. The solution was to fly a private jet to a club member living in the South of France to collect some of his stock … The label has always been popular among the super-rich, but few outside of those jet-setting circles had ever heard of it until the mid-Nineties when it was adopted as a status symbol by US hiphop stars. In the rap world, being seen to drink Cristal signified that you had arrived, you were a 'playa', and it's been eulogised in records by stars such as Notorious BIG, P Diddy, Jay-Z and 50 Cent. Later, being seen to 'waste' Cristal made an even more grandiose statement. Thus in rap videos, instead of being imbibed, the exquisite champagne was sprayed over scantily-clad women. Over the past year, the practice has found its way to London - most notably in Mo'vida. It was from here that reports emerged of a French investment banker spending £41,000 on Cristal in one night …" 
Rose J concluded that this shows a strong reputation in the United Kingdom.
Roederer went further and supported this with survey evidence, the expert witness (Mr Malivoire) using the same method used in the survey he conducted (and which was relied upon) in Enterprise Holdings v Europcar Group UK Ltd [noted by Aaron on the IPKat here]. It showed prompted and unprompted recognition, in the latter case this being 14% of respondents, on seeing the simple word CRISTAL, recognising it as a brand of champagne.  The Court found that this had to be viewed in light of the fact that the number of survey respondents who were likely actually ever to have bought or even tasted CRISTAL champagne is tiny, since only 30,000 – 40,000 bottles are sold in the UK annually and the lowest price at which they are available is £175.  Further, despite the potential association with crystal or glassware (which some did make), it was found to be highly significant that some people still made the connection between the plain word on a piece of paper and a product that they were unlikely ever to have bought or tasted. 
What mark was used by JGC 
JGC alleged it did not use CRISTALINO alone, but rather the sign 'CRISTALINO JAUME SERRA'. The court rejected JGC’s assertion, stating that the word CRISTALINO appeared in much larger and bolder font than JAUME SERRA. 
Similarity of the marks 
Making the traditional visual, phonetic and conceptual comparisons, the Court accepted that visual similarity is particularly important in this case where the sign is printed on a convex surface of the cylindrical bottle. If the bottle is stacked on the shelf at the store, the view of the customer may well be focused on the first part of the name rather than on the complete name. Indeed, the end of the name may be obscured if the bottle is not directly facing the front.  As such, the identity of the first part of the mark is key.  On phonetic similarity, it was held that the marks may be uttered in a noisy environment such as a night club or restaurant where the 'ino' may get lost. As such it found strong aural similarity. Conceptually it considered the sign and the mark very similar. Both refer to the word 'cristal' or 'crystal' with its connotation of something high quality and precious, and of something sparkling, glittering and pure. 
Tellingly, the Court found that the addition of 'ino' in the sign did not detract from this, but merely suggested a diminutive.  The importance of this finding came to light later in the case. 
As a result, the Court found the marks to be similar.  For good measure, it added that the longer sign CRISTALINO JAUME SERRA was also similar. 
When considering the respective goods, the Court concluded that the nature of champagne and cava is the same, their purpose is the same, they are loosely in competition and are often sold alongside each other at wine merchants, sharing trade channels. 
In considering whether there was a likelihood of confusion, the Court commented that ,since Asda and Morrisons were stopped very shortly after they started selling the product following the swift intervention of Roederer, the lack of confusion was not problematic. Further, the Court concluded that instances of confusion would have been more likely to emerge from JGC's disclosure since they rather than Roederer would be on the receiving end of any complaints.  JGC provided no disclosure and so this would have weighed against them.  It also found that indirect confusion may arise because of so-called “second wine” practice, where wine labels release slightly lower quality produce under different names and consumers have this as an affordable entry to the market.  The Court was directed to the fact that Château Mouton-Rothschild produce a second wine called Le Petit Mouton-Rothschild, Château Grand Corbin-Despagne produce a second wine called Petit Corbin-Despagne and Château Cheval Blanc produce a second wine called Le Petit Cheval. 
The Court further found that the sign CRISTALINO would lead to dilution or blurring: 
The word CRISTAL itself has no particular link with wine or champagne but more usually refers to the clarity, purity and sparkle of rock, glass or water. It is therefore a very distinct mark in relation to Roederer's champagne. Roederer's use of the word over the centuries has created a strong link in consumers' minds between 'Cristal' or 'crystal' and fine champagne ….  The CRISTAL mark for champagne both displaces and yet also trades upon the ordinary meaning of the word 'crystal'. If another sign makes that same connection between the qualities of crystal and sparkling wine, that will dilute the association of those qualities with Roederer champagne in the mind of consumers. The association with Roederer specifically will be blurred into an association simply between those crystal qualities and all sparkling wines. 
Noting that Roederer must show a change in consumer behaviour, it stated that in relation to dilution this relates to a change in the conduct of Roederer's customers, not just a finding that, for example customers will buy JGC's cava rather than another brand of cava. Roederer did not have to show that people will buy CRISTALINO cava instead of CRISTAL champagne – only that they will buy less CRISTAL champagne if the name ceases to be linked with luxury and prestige. 
The Court found this to be the case, finding that the allure of CRISTAL and the value of the brand lies not only in the fact that it is a guarantee of the high quality of the champagne in the bottle but in the perception that drinking CRISTAL is a sign that one is able to lead the glamorous life of an A-list celebrity. It found that at least some people choose to drink it and to be seen to drink it because it signals something about their status in the world they inhabit. That kind of caché on the part of the premium product is hard won and easily lost – people can easily drop some brand that has been fashionable hitherto and take up a rival brand as the new drink to be seen drinking. The Court further commented in such a case, where the prestige of the mark is fragile, the dilution of the CRISTAL mark by the use of CRISTALINO sign in connection with a cheap sparkling wine will lead to a reduction in sales of CRISTAL. In particular, other prestigious brands such as Le Monde d'Hermès and Aston Martin will be less keen to join in marketing initiatives with Roederer and prestigious venues will be less enthusiastic about entering into sponsorship deals. These are the ways in which Roederer chooses to promote CRISTAL. If they are compromised, then there is likely to be a change in the behaviour of Roederer's customers. 
On the question of tarnishment, the Court was not willing to conclude that the use on cava would constitute tarnishment.  It felt that to do so would be a step forward in the law to say tarnishment was established simply by using on a cheaper, more ordinary product. 
On the question of free-riding, the Court concluded that the use of CRISTALINO was intended to be interpreted as the brand name of the cava. It has the objective effect that consumers would take notice of it and it would attract attention.  Roederer put in evidence a number of references from social media in the US which the Court held were relevant: 
I find one set of screen shots is particularly telling. This was taken from the social media photograph sharing site Flickr showing people with bottles of Cristalino pretending that it is Cristal. One photograph is of two young men in Michigan, one holding a bottle of vodka and one holding a bottle of Cristalino. The caption to the photograph is "Drinking Cristal .. Okay it was Cristalino but whatever'. Another photograph is a close-up of the label of a bottle of CRISTALINO and the caption is "Wow …. CristalINO". Another photograph shows a young woman pulling the cork from a bottle with the caption "poppin' bottles of CRISTALino hahaha" and one shows a bottle of CRISTALINO in an ice bucket with the caption 'Cristal Champagne? We wish … CristaLINO for us!" 
The Court held that those on social media seemed to have bought Cristalino rather than any other brand of cava so that they could post their photos and make the joke which, at base, is 'Look I'm pretending to be the kind of rich person who can drink Cristal champagne and I am using this bottle of Cristalino as a prop to make the joke'
Roederer also referred to references in the press to CRISTALINO being in effect a poor man's CRISTAL. 
In relation to free-riding, the Court found that the economic change should be among the customers of the defendant's goods, and it found a change of behaviour on the part of cava buyers in choosing CRISTALINO cava because of its quasi-association with the CRISTAL brand. 
The Court also noted that it must decide whether the use affects the functions of the mark.  It concluded that the relevant functions were the origin function, the advertising function and the investment function.  It noted that the advertising function is not affected where the infringement merely requires the proprietor to intensify its advertising in order to maintain or enhance its profile, and that the investment function is not affected where the use merely obliges him to adapt his efforts to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. Nonetheless, the Court found damage to all three functions. The origin function was clearly going to be affected in light of the finding on likelihood of confusion.  On the advertising function, the Court commented that while a trade mark owner can respond to competitive use by improving his own offer or extolling its virtues in his own advertising: 
The allure and prestige of the CRISTAL mark as a high quality and exclusive brand – and hence its advertising and investment function – depend not only on the continued use and promotion of the brand by Roederer but on the absence of other associations of the word CRISTAL with other lower quality and mundane products. The investment function of the brand has been relied on by Roederer to promote the CRISTAL mark by sponsorship as well as by advertising and I find that this function is also damaged by the CRISTALINO sign. 
This is a very brand-friendly decision, and is clearly one which will be relied upon not only by the true “CRISTAL” brands, but quite probably the “CRISTALINO” brands, too.  One hopes that its value will not be diluted through overuse.  It marks a notable departure from cases such as Moroccanoil [noted by the IPKat here and here], and suggests that perhaps retailers in the UK need to distinguish between copying of merely popular consumer goods and copying the presentation of those who rely upon prestige and exclusivity.
Move over Champagne and cava, here comes Prosecco
Allergic reactions to Champagne here
Cooking with Champagne here
Bathing in Champagne here

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