UK: Scotch Whisky Association Toasts Success In Europe In "Geographical Indication" Battle

Last Updated: 6 July 2018
Article by John MacKenzie

In a decision that could have implications for many different products, the Scotch Whisky Association has won an important battle geographical indicators before the Court of Justice of the European Union.

Fake, dangerous, whisky products

The Scotch Whisky Association is an organisation based in Edinburgh, Scotland but operates all round the world. Its objectives include protecting the trade in Scottish whisky. It plays an important role in protecting the "Scotch" brand, but also tackles fake, and often dangerous, whisky products.

The Scotch Whisky Association brought an action before the Landgericht Hamburg (Regional Court, Hamburg) seeking an order that Mr Klotz, cease to market whisky, (not Scotch whisky), under the label 'Glen Buchenbach', on the ground that use of that name infringed Article 16(a) to (c) of Regulation No 110/2008, which protects the geographical indications registered in Annex III to that regulation, which include 'Scotch Whisky'.

The SWA's argument was that:

"...those provisions ensure that a geographical indication registered for a spirit drink is protected not only against the use of such an indication but also against any reference that suggests the geographical origin of that indication. It argues that because the designation 'Glen' is very widely used in Scotland instead of the word 'valley' and, in particular, as an element of the trade mark in the names of Scottish whiskies, it evokes in the relevant public an association with Scotland and Scotch Whisky despite the fact that other information is included on the label, which specifies that the product at issue is of German origin."

Article 16 of Regulation No 110/2008 – Geographical Indications

There were three questions, corresponding to sub-paragraphs (a) to (c) of Article 16. That Article states that geographical indications registered in Annex III shall be protected against:

"(a) any direct or indirect commercial use in respect of products not covered by the registration in so far as those products are comparable to the spirit drink registered under that geographical indication or in so far as such use exploits the reputation of the registered geographical indication;

(b) any misuse, imitation or evocation, even if the true origin of the product is indicated or the geographical indication is used in translation or accompanied by an expression such as "like", "type", "style", "made", "flavour" or any other similar term;

(c) any other false or misleading indication as to the provenance, origin, nature or essential qualities on the description, presentation, or labelling of the product liable to convey a false impression as to its origin."

The judgement explains that:

"Mr Klotz markets, via a website, a whisky under the designation 'Glen Buchenbach', which is produced by the Waldhorn distillery in Berglen, located in the Buchenbach valley in Swabia (Germany).
... The label on the whisky bottles in question includes, in addition to a stylised depiction of a hunting horn (Waldhorn in German), the following information: 'Waldhornbrennerei' (Waldhorn distillery), 'Glen Buchenbach', 'Swabian Single Malt Whisky', '500 ml', '40% vol', 'Deutsches Erzeugnis' (German product), 'Hergestellt in den Berglen' (produced in the Berglen)."

Vague association not enough

The Court considered each question in turn. In summary it decided that:

In relation to Article 16(a) an "indirect use" of a registered geographical indication requires that the designation in question is either identical or phonetically/visually similar it. It is not sufficient that it is liable to evoke in the relevant public some kind of association with the indication concerned or the geographical area. This is perhaps logical given the terms of Article 16(b). On the facts Article 16(a) does not apply.

Next the court considered "evocation". There is infringement if, when seeing the product, the image triggered is that of the product whose indication is protected. This leads to the question – does the "Glen Buchenbach" customer (an average European consumer who is reasonably well informed and reasonably observant and circumspect) think of "Scotch Whisky"? A vague association is not enough. But this is a question of fact for the national court.

Third, the Court held that when determining whether there is infringement, "no account is not to be taken either of the context surrounding the disputed element, or, in particular, of the fact that that element is accompanied by an indication of the true origin of the product concerned." This was an important win given the clear wording that this particular product was made in Germany.

The court reinforced the breadth of the protection given to geographical indicators when considering Article 16(c). Closing off a potential work around that an infringer might try, it said:

"It follows from the foregoing that Article 16(c) of Regulation No 110/2008 affords extensive protection to registered geographical indications. If a false or misleading indication could nonetheless be permitted because it is accompanied by additional information relating, in particular, to the true origin of the product concerned, that provision would be deprived of practical effect."

So again, context should not be taken into account.

Protecting the interests of consumers and producers

The court was at pains to emphasise that the aim of the provisions of Regulation No 110/2008, in particular of Article 16, is to prevent the misuse of protected geographical indications, not only in the interests of consumers, but also in the interests of producers who have striven to guarantee the qualities expected of products lawfully bearing such indications. That policy background suggests a wide and generous approach given to the protection of geographical indicators.

As the court explained: "The Court has consistently held that, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (see, inter alia, judgments of 23 January 2018, Piotrowski, C 367/16, EU:C:2018:27, paragraph 40, and of 7 February 2018, American Express, C 304/16, EU:C:2018:66, paragraph 54)."

The decision is important not just for Scotch Whisky, but for geographical indicators generally. As the Court of Justice in Europe strengthens the protection (the monopoly) for certain geographical indicators, so we can expect to see more specialist producers taking action to protect their "patch".

Champagne anyone?

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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