The law at issue
Council Regulation (EC) No 2081/92 on the
Protection of Designations of Origin established a system for the
registration of PDOs, i.e. the name of a region or geographical area used
to describe a product from that area which possesses a special quality or
distinction attributable to the characteristics, both natural and human,
of that area.
Once registered, the PDO is protected against misleading use, application and imitation.
The facts of the case
In 1996, the Italian Republic applied
for a Community PDO registration of "Parmigiano Reggiano" (translated as
"Parmesan") under the simplified registration procedure of Art 17 of the
Regulation for names already protected by national law or established by
use. Parmesan comes from the town of Parma and its environs, the qualities
of the cheese deriving from the characteristics of that specific area.
Dante Bigi had been producing in Italy a dried, powdered cheese made from a mixture of several cheeses of different origin, none of which were Parmigiano Reggiano according to the PDO registration, but sold under labels clearly marked "Parmesan".
Importantly, the cheese was intended for export exclusively to Member States other than Italy.
In 1999 consignments of the cheese were seized and criminal proceedings brought against Bigi for fraudulently trading and selling cheese with misleading labels.
Bigi sought to argue a defence under the transitional exemption in Art 13(2) of the Regulation. This article allows Member States to continue national systems permitting the marketing of products that do not comply with PDOs, but for no more than five years. Bigi claimed that since his cheese was intended for the markets of Member States in which the cheese was lawful it was covered by the derogation.
The ECJ Decision
The principal question the ECJ was asked to
consider was whether the transitional exemption under Art 13(2) could be
applied to products which do not comply with a PDO and originate in the
Member State which obtained the registration of that PDO, but are then
exported exclusively to Member States where they are lawful according to
national laws.
In its decision, the ECJ says that the derogation of Art 13(2) is there to provide an adjustment period for producers who have lawfully been using names for a long time under national laws, but on products which would now fall foul of the PDO. However, as the ECJ points out, it only applies to names that have been registered under the Art 17 simplified procedure in respect of products that do comply with the PDO. As with the "Parmigiano Reggiano" PDO registration it is presupposed under the simplified procedure that the name is already protected by national laws of the Member State that registers it.
For the purpose of a producer in the Member State where the application was made the transitional exemption is therefore not applicable. The producer cannot therefore market in that state or export to other Member States. The ECJ states that this interpretation is consistent with objectives of consumer protection and competition.
Accordingly, the derogation can only apply to products sharing the protected name, but originating in States other than those in which the PDO is registered.
Conclusions
In this decision the ECJ has demonstrated that it
is willing to give tight protection to producers of PDO products, and
consumers, both within and without the state where the Community
registration is made. To this extent (although it was not expressly
discussed in the case) the protection of industrial property appears to
have taken precedence over the free movement of goods. It is interesting
to speculate whether this is further evidence of a trend within the ECJ in
favour of national rights over free movement
(related article).
In this respect it is worth comparing the opinion of the Advocate General (AG) in the Prosciutto Di Parma (Parma Ham) and Grana Padano cases where PDOs specify that the slicing and grating of these respective products should take place in the region of production. The AG has said that the restriction on the free movement of goods that results from this is not justified as the expertise and equipment necessary to slice and grate in the specified way can be found in, or move to, other Member States.
Although it was not an issue in Bigi, the ECJ commented obiter that products which do not comply with the specification, but are manufactured in a Member State other than that which made the PDO registration, and are therefore subject to derogation, cannot be sold freely in the Member State which has applied for registration.
Compare this to the references to the ECJ in the "Chocolate" cases where Italian and Spanish national laws prohibited the marketing of chocolate containing vegetable fats in addition to cocoa butter, in the name of consumer protection. In those cases the AG was of the view that the consumer is sufficiently protected by the ingredients label and so the ban is contrary to the free movement of goods. PDOs were not in issue here.
The ECJ decisions in the Parma Ham and Chocolate cases are awaited.
© Herbert Smith 2002
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