A Tale of Two Ports? GC holds PORTWO GIN to be an exploitation of PDO

Kat friend, Becky Knott, promises that she doesn’t just write about alcohol, see here, but a recent decision involving the Protected Designation of Origin for ‘Porto’ caught her eye (palate?).

Protected Designation of Origins (PDOs) seem to invariably raise interesting issues, and the recent decision of the General Court for 'Porto' proved to be no exception. In it, the GC considered whether an application for PORTWO GIN constituted use and exploitation of the reputation of ‘Porto’ within the meaning of Article 103(2)(a)(ii) of Regulation No. 1308/2013.

The GC thought “yes”. Let’s take a look [BoA decision here, GC decision here, case no T-417/20].

Background

On 31 January 2017, Joaquim Jósé Esteves Lopes Granja (“Granja”) applied to register PORTWO GIN as an EU trade mark for “Spirits [beverages]”. The application was published for opposition on 6 February 2017. On 19 April 2017, Instituto dos Vinhos do Douro e do Porto (“Instituto”) filed an opposition against Granja’s application, submitting that it infringed the PDOs ‘Porto’ and ‘Port’ in the territory of Portugal.

At first instance, the EUIPO’s Opposition Division rejected the opposition in its entirety. It held that the opposition was not well founded under Article 8(6) of Regulation No. 2017/1001 (which the GC later said must be understood to refer to Article 8(4a) of Regulation No. 207/2009 due to the date of filing of the application).

Instituto filed an appeal, which was upheld by the BoA. The BoA held that:

(1) the PDO ‘Porto’ enjoyed a reputation within the meaning of Article 103(2)(a)(ii) of Regulation No. 1308/2013; (2) ‘use’ required that the mark applied for made use of the PDO, either in the form as registered or in a form so close that it was indissociable; (3) PORTWO GIN and ‘Porto’ were very similar; (4) the relevant consumer would likely associate the mark applied for with ‘Porto’; (5) use of PORTWO GIN was likely to affect consumers’ preferences by inducing them to believe that Granja’s spirits complied with the strict requirements and quality standards of the PDO; and (6) PORTWO GIN made direct use of ‘Porto’ and its use for the goods at issue was likely to exploit its reputation.

Accordingly, the BoA annulled the decision of the Opposition Division and rejected the application for PORTWO GIN in its entirety. Granja then appealed to the GC.

The GC’s decision

Granja requested that the GC annul the contested decision and register PORTWO GIN. He did not dispute the reputation of ‘Porto’. However, he submitted that the BoA had erred in its assessment of: (1) the similarity of the signs;(2) the likelihood of association between the two; and (3) the likelihood that use of PORTWO GIN for the goods at issue would exploit the reputation of ‘Porto’.

The GC first noted that Article 8(4a) of Regulation No. 207/2009 “must be read with regard to the relevant provisions of EU law concerning the determination and protection of geographical indications as regards wine products” (paragraph 24). As such, it held that the BoA was correct to refer to PDOs and PGIs registered under Regulation No. 1308/2013 (see here for the Regulation).

The GC noted that the scope of protection afforded by Article 103(2)(a) is broad, in that it protects a PDO/PGI from any direct or indirect commercial use, insofar as that use exploits their reputation (paragraph 31 of the decision). It also noted that, according to settled case law, for there to be “use” of a PDO/PGI, the contested sign must:

'make use of the geographical indication itself, in the form in which that geographical indication had been registered or, at least, in a form with such close links to it, in visual and/or phonetic terms, that the contested sign clearly cannot be dissociated from it' (paragraph 33).

The question was therefore whether the BoA was correct to find: (i) a “use” of ‘Porto’; (ii) that the relevant public would associate PORTWO GIN with the PDO; and (iii) that PORTWO GIN was likely to take advantage of and exploit the reputation enjoyed by ‘Porto’.

The GC upheld the BoA’s finding of similarity between the marks. In particular, it emphasised that “the addition of a word to a contested element cannot alter the conclusion concerning the use of an earlier PDO in the mark applied for” (paragraph 43). Consequently, it found that “the sign whose registration is contested is clearly indissociable from the earlier PDO” (paragraph 44).

The GC next agreed with the BoA that it was probable that the relevant consumer would associate PORTWO GIN with ‘Porto’. In doing so, it noted a “proximity” between the spirits in Class 33 and Port wines,

'given that they are alcoholic beverages, that they are targeted at the same type of consumer, that they are consumed on the same occasions and that they share the same channels of distribution and of sale' (paragraph 47).

Lastly, the GC agreed that there was a risk of exploitation. It held that the BoA was correct to find that use of PORTWO GIN was likely to affect consumers’ preferences. It considered that the image and distinctive qualities enjoyed by ‘Porto’ for wines were transferable to the goods covered by Granja’s application.

As a result, the GC upheld the BoA’s decision, dismissing Granja’s action in its entirety.

Comment

The essence of this case distils down to the meaning of “use” and provides further clarity on the operation of PDOs in an opposition context.

It is interesting that the GC held that the image and qualities of ‘Porto’ could transfer to gin. This emphasises that, as the GC detailed in its decision, the courts are generally willing to give PDOs a wide scope of protection, to protect the interests “not only of consumers but also of producers who have made concerted efforts to guarantee the qualities expected of goods displaying such PDO or PGI legitimately” (paragraph 37).

Picture on the upper right is by Ceri Knott, who has granted right of reproduction.

Picture on the lower left is Jon Sullivan, who has released it into the public domain.