Good faith irrelevant when selling non-misleading sausages

The highest courts of the European Union have this week been commemorating National Sausage Week.  On Wednesday the Court of First Instance gave its verdict on an appeal against OHIM's refusal to allow registration of a very pretty pretzel configuration of five sausages (see earlier post here). Yesterday, moving the focus from German to Italian sausages, Advocate General Eleanor Sharpston QC gave her Opinion to the Court of Justice of the European Communities in Case C‑446/07 Alberto Severi, in his own name and representing Cavazzuti e figli SpA, now known as Grandi Salumifici Italiani SpA v Regione Emilia-Romagna, a reference for a preliminary ruling from the Tribunale Civile di Modena, Italy.

What was this reference all about? Felino is a small town in the Emilia-Romagna region of Italy. Cavazzuti (now Grandi Salumifici Italiani SpA -- GSI for short) makes local salami sausages which it sells as ‘Salame Felino’ and/or ‘Salame tipo Felino’. Since 1970 it has produced this salami around 50 km down the road in nearby Modena. In May 2006 the region of Emilia-Romagna imposed an administrative penalty on GSI for using the name ‘Salame tipo Felino’ on its labelling in a way that was misleading to consumers. The region took the view that GSI had infringed Article 2 of Legislative Decree 109/92, which transposed Article 2 of Directive 2000/13 into national law in Italy (essentially: thou shalt not mislead consumers by mislabelling goods). At this crucial phase of Italian history the term ‘Salame Felino’ was neither registered as a Protected Designation of Origin (PDO) nor as a Protected Geographical Indication (PGI). An application had however been made to protect ‘Salame Felino’ as a PGI.

GSI applied to the Tribunale Civile di Modena to have the administrative penalty overturned on the grounds that ‘Salame Felino’ was generic and had been used for a number of years and in good faith outside the municipality of Felino, including in respect of a collective trade mark. The Tribunale Civile stayed the proceedings and referred the following questions to the Court of Justice:

‘1. Must Articles 3(1) and 13(3) of Regulation ... 2081/92 (now Articles 3(1) and 13(2) of Regulation ... 510/06), read with Article 2 of Legislative Decree 109/92 (Article 2 of Directive 2000/13/EC), be interpreted as meaning that the name of a food product containing geographical references, for which, at national level, the submission of an application to the Commission for registration as a protected designation of origin (PDO) or a protected geographical indication (PGI) within the meaning of those regulations has been “rejected” or blocked, must be considered generic at least throughout the period for which such “rejection” or blocking remains effective?

2. Must [the same provisions] be interpreted as meaning that the name of a food product which is evocative of a place, but not registered as a PDO or PGI within the meaning of those regulations, may be legitimately used in the European market by producers who have used it in good faith and uninterruptedly for a considerable period before the entry into force of Regulation ... 2081/92 (now Regulation ... 510/06) and in the period following the entry into force of that regulation?

3. Must Article 15(2) of the First Council Directive 89/104 ... to approximate the laws of the Member States relating to trade marks be interpreted as meaning that the proprietor of a collective mark for a food product containing a geographical reference is not allowed to prevent producers of a product having the same characteristics from using to describe it a name similar to that contained in the collective mark, where those producers have used that name in good faith and uninterruptedly over a period of time considerably pre-dating the registration of that collective mark?’

Yesterday AG Sharpston recommended that the Court should answer the first two questions referred by the Tribunale Civile di Modena as follows:

(1) [The relevant provisions] must be interpreted as meaning that the name of a food product containing geographical references, for which an application has been made for registration as a protected designation of origin or a protected geographical indication within the meaning of those regulations, cannot be assumed to be generic unless and until the application has been rejected by the Commission on the ground that the name has become generic.

(2) The same provisions, read with Article 2 of Directive 2000/13/EC ... on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs, must be interpreted as meaning that the name of a food product which is evocative of a place, but not registered as a protected designation of origin or a protected geographical indication within the meaning of those regulations, may legitimately be used provided that the name is not used in a way which is likely to mislead the average reasonably well-informed, observant and circumspect consumer. In assessing whether that is the case, national jurisdictions may have regard to the length of time during which the name has been used. The good faith (or otherwise) of the producer is, however, irrelevant".

What, the Kats hear you ask, happened to the third question? AG Sharpston deemed it inadmissable:

"The Italian Government argues that the third question is inadmissible because the case before the national court does not concern collective trade marks. The region of Emilia-Romagna neither holds the mark, nor alleges that GSI infringed it. Moreover, the Italian Government suggested at the hearing that the referring court was concerned only with whether GSI’s labelling was likely to mislead the consumer, and that despite the APTSF’s intervention in the proceedings, an allegation that a collective trade mark had been infringed was no part of the case before the national court.

72. The Court may decline to answer a question referred for a preliminary ruling if it has no relation to the actual facts of the main action or to its purpose.  The third question referred asks whether Directive 89/104 might provide another basis for preventing GSI from using the name ‘Salame Felino’. However, the administrative penalty contested in the main proceedings was based solely on an alleged infringement of the national provisions transposing Article 2 of Directive 2000/13.

73. Although the administrative penalty noted that ‘Salame Felino’ is a registered mark, that was in the course of establishing that GSI’s use of ‘Salame tipo Felino’ was misleading to consumers. Similarly, GSI referred to the use in good faith of the name ‘Salame Felino’ by traders outside the municipality of Felino in relation to a collective trade mark as part of its argument that its use of the name on labelling did not mislead consumers.

74. The absence of any allegation that there has been an infringement of a collective trade mark indicates that the question of whether a holder of a collective trade mark may oppose the use in good faith of a name similar to that found in the collective mark is irrelevant to the central issue before the national court, namely, the circumstances in which a company is likely to mislead consumers by the use of a geographical name on the labelling of its products.

75. The third question is therefore inadmissible".

The IPKat will be watching this one with interest, since there isn't what you'd call a large volume of jurisprudence in Europe on the interface between trade marks, collective marks and geographical indications and whatever happens in the final ruling will affect both strategic thinking and porfolio development issues involving the exploitation of terms where that exploitation is not coextensive with the area they signify. Merpel and Tufty chime in, Salame Felino sounds like an exotic cat!

Salame Felino here

Make your own salami here

Health risks of sausages here, here and here

Sausage that intellectual property lawyers find indigestible here