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Saturday, 5 March 2016

“Verlados”, “Calvados”, GI's and the question of "evocation"


It is relatively rare for the CJEU to rule on a case about geographical indications involving spirit drinks. Lindesay Low, Senior Legal Counsel at the Scotch Whisky Association, has shared his thoughts on the recent case of Viiniverla Oy V Sosiaali- ja terveysalan lupa- ja valvontavirasto.

"In the decision of C-75/15 Viiniverla Oy V Sosiaali- ja terveysalan lupa- ja valvontavirasto, the CJEU responded to a request by the Finnish Market Court (markkinaoikeus) for a preliminary ruling to assist it in considering whether the use of the name “Verlados” on a Finnish cider spirit, was an illegal evocation of the geographical indication “Calvados”. The case is interesting not only because rulings about spirit drink GI’s are comparatively few, but also because the Court has given some clear guidance on the scope of the protection that they enjoy in the European Union.

Under EU law, geographical indications, or “GI’s”, for spirit drinks enjoy their own exclusive system which is contained in EC Regulation 110/2008, known as the Spirit Drinks Regulation. Article 16 of the Regulation lists the various things that they are protected against, which includes:
(b) any misuse, imitation or evocation, even if the true origin of the product is indicated or the geographical indication is used in translation or accompanied by an expression such as “like”, “type”, “style”, “made”, “flavour” or any other similar term.
Calvados, a potent apple brandy from Normandy, is one of the GI’s covered by the Regulation. The Finnish company Viiniverla Oy produced its own cider spirit in the Finnish village of Verla and in 2001 began to sell it under the name “Verlados”. The French were not happy and complained. After some pressure from the EU Commission, the Sosiaali- ja terveysalan lupa- ja valvontavirasto (the Finnish National Supervisory Authority for Welfare and Health) issued an order prohibiting Viiniverla Oy from using the name on the grounds that it was an evocation of Calvados, contrary to Article 16(b) of Regulation 110/2008.

Viiniverla, which argued that its customers were fully aware that their product was made in Verla, applied to the Market Court to have the order annulled. The national court posed three questions to the CJEU:
(1) When assessing where there has been an “evocation” within the meaning of Article 16(b) of Regulation [No 110/2008], should reference be made to an average consumer who is reasonably well informed and reasonably observant and circumspect?
By reference to past case law, including two cases brought by the Bureau National Interprofessionel du Cognac (C-4/10 and C-27/10) regarding evocation of the well-known French wine spirit, the CJEU noted that “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, i.e. the GI. It is for the national court to determine if evocation exists.

As the purpose of Regulation 110/2008 includes the attainment of a high level of consumer protection, again having regard to past case law, it is necessary for the national court to take account of the presumed expectation of the average consumer, who is reasonably well informed and reasonably observant and circumspect (e.g. Mars C-470/93).However, importantly, the court added that to ensure the uniform protection of GI’s it is necessary to take account of the presumed expectation of the European, rather than the Finnish consumer.

(2) When assessing whether to prohibit the use of the name Verlados used to market nationally a spirit drink distilled from apples in order to protect the geographical indication “Calvados”, what importance should be given to the following facts in the interpretation of the concept of “evocation” in Article 16(b) of Regulation No 110/2008 and the application of that regulation:

(a) The first part of the name Verlados, Verla, is a village in Finland whose name may be recognised by Finnish consumers;

(b) The first part of the name Verlados, Verla, refers to the producer of Verlados, Viiniverla Oy;

(c) Verlados is a local product produced in Verla village of which a few hundred litres on average are sold each year in the winery’s own restaurant and a limited amount by order from the State-owned alcohol business referred to in the Law on alcohol;

(d) The words Verlados and Calvados have only one syllable in common (“dos”) out of three, although the last four letters (“ados”) of the words, that is, half of the total number of letter in each word, are identical?
The CJEU essentially answered that these matters had no relevance to the question at hand. For similar products, in this case two apple spirits, the relevant factors to be considered are the phonetic and visual relationship between the names and also any evidence that the relationship is not fortuitous i.e. not accidental. (It was claimed that the Finnish drink was previously known as “Verla” and Viiniverla only added the last syllable to its name around the time that Calvados became popular in Finland).

(3) If there is considered to be an “evocation” within the meaning of Article 16(b) of Regulation No 110/2008, may the use of the name Verlados nevertheless be authorised on one of the grounds mentioned above or on other grounds, such as that Finnish consumers at least are unlikely to imagine that Verlados is produced in France?’
The simple answer was that, in the absence of any specific rules in Regulation 110/2008, the national court could not take account of the factors in question 2. Further the question of whether or not there is confusion is not relevant when considering if there is evocation. (After all Article 16(b) provides that there can be evocation even where “the true origin of the product is indicated”).

This decision will be welcome to all who are interested in protecting GI’s. Whereas the CJEU had previously considered when a trade mark application could be refused for evoking a spirit drink GI in the “Cognac cases”, here they were looking at the situation where the national court was being asked to prevent the sale of an infringing product. The judgment succinctly summarises what constitutes the evocation and drives home the point that deception is unnecessary. It is also helpful in pointing out that it is the viewpoint of the European Union consumer, and not the local consumer that must be considered, even, as in this case, when it was mainly local consumers who were drinking the infringing product. The only depressing point is that it seems to have taken Calvados almost 15 years to achieve this result.

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