European Union: Tastes Like Champagne

Last Updated: 5 January 2018
Article by Barbara Niemann Fadani

In 2012 the discount supermarket Aldi was sued by Comité Interprofessionel du Vin de Champagne (CIVC), the French Committee for Champagne producers, because Aldi offered and sold a sorbet with the name "Champagner Sorbet" (Champagne Sorbet) in their German stores. Champagne makes up 12% of the product ingredients.

The law suit was based on Art. 103(2)(a)(ii) of Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and Art. 118m(2)(a)(ii) of the preceding Regulation (EU) No. 1234/2007. 

These rules provide that a protected designation of origin and a protected geographical indication may be used only by an operator marketing a wine which has been produced in conformity with the corresponding product specification, and that they are thus protected against direct or indirect commercial use of the protected name:

-  by comparable products not complying with the product specification of the protected name, or

- where the use exploits the reputation of a designation of origin or a geographical indication.

CIVC argued that using the name "Champagner Sorbet" could lead to the reputation of the prestigious wine region being transferred to Aldi´s sorbet product, which would, consequently, exploit the reputation in a deceptive and unfair manner.

Whilst the Regional Court in Munich had followed the opinion of CIVC, the Court of Appeal found that Aldi had a legitimate interest in using the name Champagne because it was an important ingredient (12%) of their product and, therefore, the use of the name was not deceptive or unfair.

The lawsuit is now pending further appeal before the German Federal Court of Justice (BGH); the German Federal Court has found it necessary to seek clarification from the Court of Justice of the European Union (CJEU) regarding the interpretation of the rules in question. This procedure is foreseen by Article 267 of the Treaty on the Functioning of the European Union (TFEU).  According to Article 267, the CJEU has jurisdiction to give preliminary rulings concerning the interpretation of the Treaties, where such a question is raised before any court or tribunal of a Member State, and it considers that a decision on the question is necessary to enable it to give judgment. 

The German Federal Court raised 4 questions, namely:

  1.  Are the articles quoted above also applicable if the protected designation of origin is used for products that are not comparable to the product specified under it, but the product specified under the designation was added as an ingredient to the product?
  2.  If so, is such use exploiting the reputation of the protected designation of origin, if the ingredient has been added sufficiently, so that it gives the product an essential characteristic?
  3. Are the rules in question to be interpreted in such a way that the use described above should be considered unfair and deceptive?
  4. Are the rules in question to be interpreted in such a way that they only apply if the relevant consumer is led to an incorrect impression regarding the geographical origin of the product? 

The CJEU found that Art. 103(2)(a)(ii) of Regulation (EU) No 1308/2013 and Art. 118 m of Regulation (EU) No. 1234/2007 do apply in cases where the protected designation of origin is used for products that are not comparable to the product specified under it, but the product specified under the designation was added as an ingredient, so it affirmed the first question. 

Regarding the second and third questions, it clarified that the use of a designation of origin in the name of a product different from the one specified under the designation is not necessarily exploiting the reputation of the designation if the ingredient that is protected under it is an essential characteristic of the product.  It needs to be assessed in every single case, by the national courts, whether such exploitation takes place. The CJEU points out that in most cases an ingredient gives the product an essential characteristic. Such a characteristic is often the aroma or the flavour that is given by the ingredient.

Consequently, a sorbet may be sold under the name "Champagner Sorbet" if it has, as one of its essential characteristics, a flavour that is mainly attributed to the champagne as an ingredient. 

Such use of a protected designation of origin cannot be considered unfair or deceptive. 

The CJEU further clarified, with regard to question four, that the rules in question apply not only if the relevant consumer is led to an incorrect impression regarding the geographical origin of the product, but also if the consumer is led to incorrect conclusions regarding the essential characteristics of a product.

The case of Aldi's "Champagner Sorbet", has now been handed back to the German Federal Court who, bound by the rulings of the CJEU, will take a final decision on the case.

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