“In victory, you deserve champagne”: PDO “Champagne” wins against “Champanillo”

When does a third-party sign unlawfully evoke the denomination “Champagne”? The Barcelona Appeal Court recently weighed in on the question in the latest stage of the multi-year litigation between PDO “Champagne” and a Spanish tapas bar “Champanillo” (case SAP B 2691/2022).

The court found that “Champanillo” is an evocation of “Champagne” and thus an infringement under the EU law on geographical indications (GIs). The case, which included a request for preliminary ruling to the CJEU, went as follows.

Louis-Michel and his siesta

The defendant, a company called GB and based in Barcelona, owns several bars with light snacks, called “Champanillo”, which is composed of the Spanish word for champagne, “champán”, and a diminutive suffix “-illo”. As its menu shows, the bars have been commercially offering a red sparkling wine in a champagne coupe, under the name of “Champanillo”. This same image of sparkling wine in a coupe also appears on the bar’s logo.

On two occasions, GB tried to register “Champanillo” at the Spanish Trade Mark Office. Each time, the application was rejected on the basis of the existing PDO “Champagne”. To prevent GB from using “Champanillo” commercially, the association of champagne producers (Comité Interprofessionnel du vin de Champagne, CIVC) filed a lawsuit with the Barcelona Commercial Court. CIVC affirmed that “Champanillo” constituted an evocation of PDO “Champagne”, which is considered an infringement under Regulation (EU) No 1308/2013. CIVC also argued that GB is taking unfair advantage of the reputation of the PDO “Champagne”, and asked the court to order GB to cease use of all logos and advertisement documents with “Champanillo” sign, to cancel the registration for the domain name “champanillo.es” and close all social media accounts with this name.

The Barcelona Commercial Court dismissed the action. It relied on the judgment of the Spanish Supreme Court in the 2016 case “Champín”. There, CIVC challenged a producer of non-alcoholic drinks for children under the name “Champín”. The Supreme Court found that the evocation of the PDO “Champagne” was “tenuous and irrelevant”, so no infringement took place. The Court pointed to a low phonetic similarity between the two names, dissimilar products, and an absence of “a clear and direct link” in the mind of the consumer, as required by CJEU jurisprudence when establishing evocation.

Circling back to “Champanillo”, the Barcelona Commercial Court found that here, too, the evocation is tenuous and irrelevant. “Not all evocation constitutes an infringement”, concluded the court. CIVC then appealed to the Barcelona Appeal Court.

In considering the case, the Barcelona Appeal Court expressed uncertainty regarding the interpretation of Regulation (EU) No 1308/2013, and so it requested for a preliminary ruling (case C‑783/19).

In short, the Spanish court inquired, whether-- (1) if a GI is registered for products, it may be infringed by the name of a service; (2) there is a step-by-step procedure to establish evocation; and (3) such evocation, even if found, may be deemed tenuous and irrelevant, as held by the Spanish Supreme Court; and (4) an evocation of GI is an independent act of infringement, or is merely a part of an act of unfair competition.

The answer by the CJEU was largely in line with its earlier jurisprudence on evocation of GIs [savoured by The IPKat here and here]. First, it reminded that the scope of GI protection covers “any misuse, imitation or evocation, even if the true origin of the product or service is indicated” [emphasis added]. Such conflicting products or services do not have to be identical or similar. Thus, a GI may also conflict with services, such as restaurant services provided by a bar.

An important point here is that CIVC argued in the national proceedings that because the PDO “Champagne” enjoys “a high reputation and renown”, its scope of protection extends to dissimilar products and services. However, under the CJEU interpretation, any GI, and not merely the ones with a high reputation, may extend its scope of protection to dissimilar products or services.

Second, evocation requires that between the contested name and a GI there is a sufficiently clear and direct link in the mind of an average European consumer, who is reasonably well informed and reasonably observant and circumspect.

Interestingly, the Court did not comment on the notion of a “tenuous and irrelevant” evocation. This is so, despite that the Advocate General (AG) had previously stated that the concept of evocation cannot be calibrated: it either exists (when there is such a clear and direct link), or it does not.

Third, the CJEU affirmed that evocation provides protection independently of the national law relating to unfair competition.

Building on the CJEU’s guidance, the Barcelona Court of Appeal found that the use of “Champanillo” constituted an evocation of PDO “Champagne”. The analysis is done in three main steps.

First, the court confirms that there is visual, phonetical and conceptual similarity between the two names. Moreover, “Champanillo” is advertised with an image featuring two glasses of red sparkling wine, while the design of the glass is typical for use in drinking champagne.

Second, the court concludes that “Champanillo” is used to designate a bar, where sparkling wine is served. Thus, these services are linked or, at least, are not foreign or distant to the marketing or consumption of beverages of the same type as the product covered by the PDO “Champagne”.

Third, as part of its analysis of evocation, the court analyses whether an unfair advantage of PDO “Champagne” reputation took place. The court includes this step in its analysis, based on an interpretation from the AG. In paras. 36-37 of his Conclusions (which the CJEU brings in para. 50), the AG states that all types of conduct under Art. 103(2) Regulation (EU) 1308/2013 prohibit “any practice aimed at taking undue advantage of the reputation of a PDO (or PGI) through association with it”.

Though certain national courts had already been analysing an unfair advantage of reputation when addressing evocation, it was not explicitly required on the EU level. Earlier, it was only required for Art. 103(2)(a), which prohibits any direct or indirect commercial use, in so far as such use exploits the reputation of a designation of origin or a geographical indication. Now, through the case law, the requirement has also been expanded to other situations, including evocation.

The Barcelona Appeal Court confirms that “Champanillo” took unfair advantage of PDO “Champagne” reputation, by facilitating among customers an association with the PDO “Champagne”, The average consumer living in Spain is led to perceive a direct and clear link between the sign “Champanillo” and PDO “Champagne”.

Based on these three steps, the Barcelona Appeal Court affirms that “Champanillo” is an evocation of PDO “Champagne”, and thus infringes CIVC’s rights to this GI.

While national courts have long time struggled with interpreting the concept of “evocation”, the case C-783/19 may well be last preliminary ruling on the matter of the interpretation of “evocation”. This spring, the European Commission presented its Proposal to review the geographical indications’ system. For the first time since 1992, the draft Regulation includes a proposed definition of “evocation”, building on the earlier jurisprudence of the CJEU. The evocation will not only require a direct and clear link, as mentioned above, but also harm to the GI’s reputation – a more recent addition to the interpretative guidance from the CJEU.