No safe harbour for PORT CHARLOTTE trade mark registration, as GI storm brews

From Katfriend Nuno Sousa e Silva who teaches in the Law School of the Portuguese Catholic University, Porto (Portugal), comes an analysis of an issue that is not only sensitive within Europe in general but which may divide the Portuguese from the Scots: the interaction of Europe's laws on the protection of geographical indications with those which allow for the registration of trade marks.  Nuno writes as follows:

National GIs for wines can be invoked to invalidate trade marks; OHIM must change its practice.

Geographical Indications (GIs) are often regarded as an enigmatic, rural, and rather bizarre intellectual property rights.  Art. 22(1) TRIPS defines them as “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin”. However, GIs do not need be geographical in name (FETA and BASMATI are two notable examples).

In the EU the rules on GIs are spread across three different Regulations:

* Regulation 1151/2012 concerning certain foodstuffs and certain non-food agricultural products (the ‘Foodstuffs Regulation’);

* Regulation 1308/2013 concerning wines and sparkling wines (this extensive piece of legislation establishes a common organisation of the markets in agricultural products.  The part concerning GIs is found on Arts 93–111);

* Regulation 110/2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks.

These regulations, which are actually quite alike, were preceded by several other Regulations with similar content.

One should also bear in mind the Rules on labelling and presentation for aromatised wines (Regulation 1601/91) and the ongoing debate about the possibility of extending the EU system of GI protection to non-agricultural GIs.

Under EU Law GIs are protected against:

• consumer deception (Arts 13(c) and (d) of the Foodstuffs Regulation and corresponding provisions in the other regulations)
• commercial use in comparable products (Art 13(a) of the Foodstuffs Regulation and corresponding provisions in the other regulations)
• commercial use exploiting reputation (Art 13(a) of the Foodstuffs Regulation and corresponding provisions in the other regulations)
• misuse, imitation or evocation (Art 13(b) of the Foodstuffs Regulation and corresponding provisions in the other regulations)

GIs cannot become generic (Art 13(2) of the Foodstuffs Regulation and corresponding provisions in the other regulations)

The co-existence of national systems of protection for GIs with protection existing at EU level has been controversial. In 2009 the CJEU confirmed in Case C-478/07 Budĕjovický Budvar (the BUD case) at para 114 that the aim of Regulation 510/2006 [replaced by Regulation 1151/2012]

“is not to establish, alongside national rules which may continue to exist, an additional system of protection for qualified geographical indications, like, for example, that … on the Community trade mark … but to provide a uniform and exhaustive system of protection for such indications” (emphasis added).

It was however unclear whether this reasoning extended to EU-level protection of GIs for wines and for spirits. On 18 November the General Court issued a decision which shows that it does not: at least for wine, GIs national rules apply and must be taken into account by OHIM.

Background to the dispute

In October 2006, Bruichladdich Distillery Co. applied to register the words PORT CHARLOTTE as a trade mark for “alcoholic beverages” (class 33), later restricted to “whisky”. In 2011 Instituto dos Vinhos do Douro e do Porto, IP (IVDP) — a public body responsible for the protection of the GI PORTO/PORT — filed an application for invalidity under Art 8(4)of the Community Trade Mark Regulation (CTMR) based on EU law and Portuguese law.

Under Art 312(4) of the Portuguese Industrial Property Code:

“The use of an appellation of origin or geographical indication with a reputation in Portugal, or in the European Community, in products that are not identical or similar, whenever its use aims at, without due cause, exploiting the distinctive character or reputation of the appellation of origin or might harm them [the distinctive character or reputation] is forbidden.”

This provision mirrors the protection against dilution established for trade marks, applying without regard to the principle of speciality. There is a considerable amount of case law that protects the Appellation of Origin PORTO under Art 312(4) of the Portuguese Industrial Property Code.  To give but a few examples: PORTO7 for cinemas, shows & exhibitions, PORTO BRASA for restaurants, GPORT for meat, fruits, and olive oil, and PORTO ORIENTE for tapestry were all refused in 2014 under this Article.

IVDP argued that the trade mark PORT CHARLOTTE would not be admissible under the provision of Portuguese law cited above should therefore be invalidated under Article 53(2)(c) CTMR.

It is clear that the OHIM must take into account GI protection (Art 14 of the Foodstuffs Regulation and corresponding provisions in the other Regulations). As the General Court held in Case T-291/03 Grana Biraghi §55-56:

“...OHIM is bound to apply [the CTMR] in such a way as not to affect the protection granted to PDOs .... Consequently, OHIM must refuse to register any mark which is covered by one of the situations described in Article 13 [now Reglation 1151/2012]... and if the mark has already been registered, must declare that registration to be invalid.”

However, up until now, following the BUD decision mentioned above, OHIM considered that the wine and spirit regulations established a uniform and exhaustive system of protection and that, therefore, national laws on GIs could not be invoked against a trade mark registration. That principle is found on p.11 of this section of the official guidelines.

The Board of Appeal (Case R 946/2013-4) followed this understanding and rejected the application for invalidity.  IVDP then appealed to the General Court on several grounds.

The decision

In Case T‑659/14 IVDP v OHIM (PORT CHARLOTTE) General Court held:

“…it is clear that neither the provisions of Regulation No 491/2009, nor those of Regulation No 207/2009, state that the protection under the former must be construed as being exhaustive in the sense that that protection cannot be supplemented, beyond its particular scope, by another system of protection. On the contrary, it follows from the unequivocal wording of Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof, and from that of Article 53(2)(d) of that regulation, that the grounds for invalidity may be based, individually or cumulatively, on earlier rights ‘under the [EU] legislation or national law governing [their] protection’. It follows that the protection conferred on (protected) designations of origin and geographical indications under Regulation No 491/2009, provided that they are ‘earlier rights’ within the meaning of the abovementioned provisions of Regulation No 207/2009, may be supplemented by the relevant national law granting additional protection.” (para 44).  

That means:

“…The question of the extent to which a sign which is protected in a Member State confers the right to prohibit the use of a subsequent trade mark must be examined in the light of the applicable national law. In this connection, account must be taken, in particular, of the national legislation relied on and the judicial decisions delivered in the Member State concerned….”(para 47).

Accordingly

“...the Board of Appeal was not entitled to dismiss that evidence and fail to apply the Portuguese legislation in question, on the ground that the protection of those designations of origin or geographical indications fell within Regulation No 491/2009 exclusively, and indeed the exclusive competence of the European Union” (para 48) … “Consequently, the Board of Appeal’s approach proceeds from a manifest misinterpretation of the scope of Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof, and of Article 53(2)(d) of that regulation, which vitiates the legality of the contested decision” (para 49).

The second part of the decision analysed the claimed violation of Art 118m(2) of Regulation 491/2009 (now Art 103/2 Regulation 1308/2013) and found that the trade mark PORT CHARLOTTE neither used nor evoked the GI PORTO/ PORT.

The Court also rejected the absolute grounds of Arts 7(1)(c) and 7(1)(g), invoked under Arts 52(1)(a) CTMR. It did not consider the trade mark descriptive nor deceptive.

What does this mean?

Unless reversed on appeal, this decision is a departure from established practice and means that national laws on GIs can make a significant difference in the possibility to register some CTMs. The possibility of extended protection against dilution for famous GIs can be regarded as justified or as an undue burden on free commerce. That is up for debate.

This Kat agrees that national laws can't be ignored or swept under the carpet unless there is some explicit legal statement -- or an extremely strong implication -- that can serve to disapply them.  Merpel however wonders what good can come from this decision. As a seasoned drinker, she struggles to see how her drinks cabinet could not be cosmopolitan enough to hold both PORTO wine and PORT CHARLOTTE whisky.  What, from PORTO's point of view, is there to be lost or needs to be protected?  Both Kats fancy that there will be an appeal ...

How to pronounce Bruichladdich here and here