On the use of GIs as ingredients: the aftertaste of Champagner Sorbet

While The IPKat has extensively covered the recent reform of EU geographical indications (GI) law [see here and here], one element deserves further attention: Art. 27 of the Regulation (EU) 2024/1143 concerning the use of GIs for wines and agricultural products as ingredients in processed products.

According to Art. 27, third parties may use GIs in the name of a processed product [think “pizza with Parmigiano Reggiano”], on its labelling or in its advertising materials under three cumulative conditions:

1. the processed product does not contain any other product comparable to the GI [so no generic hard cheese along with Parmigiano Reggiano];
2. the GI is used in sufficient quantities to confer an essential characteristic on the processed product concerned [though the Regulation neither establishes quantitative thresholds nor does it elaborate how this should be approached procedurally]; and
3. the percentage of the GI ingredient is indicated in the label.

The three conditions are, however, not new: Art. 27 codifies the Court of Justice of the European Union (CJEU) in the Champagner Sorbet case [see The IPKat here].

What has been added by the 2024 reform is that producers of prepacked food have to notify GI owners of such use in writing at least 4 months in advance. While Regulation (EU) 2024/1143 does not mention that GI owners could forbid such use when notified, notifications will surely draw GI owners’ attention and Art. 27 will be frequently invoked in national courts. Moreover, Member States are allowed to introduce stricter procedural rules for such cases.

This prompted this Kat to look back at the Champagner Sorbet case and see how German courts applied the CJEU’s criteria in practice.

Background

In 2012, German supermarket chain Aldi Süd began selling a frozen dessert labelled “Champagner Sorbet”, which, as per the packaging, contained 12% of champagne. Importantly, the sorbet’s producer used authentic, GI-protected champagne from the “Veuve Monsigny” brand [which is apparently produced exclusively for Aldi and is also known as “Aldi Champagne”, this Kat notes, intrigued].

The Association of Champagne producers, Comité Interprofessionnel du Vin de Champagne (CIVC), sued Aldi and the sorbet's producer arguing that the name “Champagner Sorbet” violated champagne’s rights under Article 118m(2)(a)(ii) of Council Regulation No 1234/2007, later replaced by Article 103(2)(a)(ii) of Regulation (EU) No 1308/2013. According to both provisions, GIs for wines are protected against any direct or indirect commercial use, in so far as such use exploits the reputation of a GI. The CIVC believed that the 12% of champagne was insufficient.

Rulings

The Munich District Court sided with the CIVC, but the Munich Court of Appeal reversed the decision. The latter found that 12% was a quantitatively significant amount to substantiate the use of champagne in the product name [the recipes this Kat has found online, such as here and here, seem to have roughly 50% of champagne].

In 2014, the CIVC appealed to the Federal Court of Justice, which in turn asked the CJEU about the approach to determine the legality of using a GI as an ingredient. In its ruling, the CJEU relied on the criteria from the non-binding 2012 Guidelines of the European Commission on the use of GIs for agricultural products as ingredients. The CJEU expanded these criteria to wines and made them binding.

It was up to the Federal Court of Justice to put the three criteria to use (I ZR 268/14). The parties did not dispute that only authentic champagne was used, and the percentage was indeed indicated in the packaging.

Thus, the main question was whether champagne had been used in sufficient quantities to confer an essential characteristic on Champagner Sorbet. As this fact had not been addressed by the lower instances, the Federal Court of Justice referred the case back to the Munich Court of Appeal. To decide on the matter, the Federal Court of Justice mandated that the Court of Appeal first determined the taste of the product, then the cause of such taste (para. 55). The burden of proof lied with the plaintiff.

In 2021, nine years after Champagner Sorbet was sold by Aldi, the Munich Court of Appeal was asked to decide whether the taste of this product was primarily defined by champagne (29 U 1698/14). Due to a protracted litigation, no samples of sorbet remained, preventing the court from relying on their own tasting experiences.

Instead, the court relied on the memory of a single witness, provided by the plaintiff. The witness in question had been representing the CIVC’s interests in Germany since early 1990s, with the CIVC’s being his main client. He held an honorary position with the plaintiff as Chancelier de l'Ordre des Coteaux de Champagne, which was remunerated until 2016. The witness was also in charge of market monitoring in Germany and was the first to alert the CIVC that Aldi had launched the Champagner Sorbet product. CIVC initiated the lawsuit based on the witness’s tasting of the product and his reports on the matter

During an oral hearing held in 2021, the witness, questioned by both parties, gave his account of the sorbet’s taste: the dominant taste was not champagne, but pear instead, followed by sugar, citric acid, and a hint of alcohol. The court found this convincing enough to conclude that Champagner Sorbet did not have a taste essentially caused by champagne. Hence, the product was found to have unfairly exploited champagne’s reputation.

Comment

Though this Kat is usually fond of German jurisprudence on GIs, this case left her puzzled: relying on a single witness (who works for the plaintiff) to testify on the subjective issue of taste from 9 years before seems overstretched.

Besides the obvious questions of partiality, another issue comes to mind: should not the assessment be done from the perspective of an “average consumer, who is reasonably well-informed and reasonably observant and circumspect”, as already done in evocation cases? While a whole section of the witness statement analyses which types of champagne could taste like pears (based on his experience in organising sommelier trips), the average consumer would be less prone to knowing these intricacies.

One thing is for sure: in case of litigation over the use of GIs, producers of processed food should better deep freeze a sample or two.