By Kedar Ganesh Dhargalkar

 

In the words of Louis Litt, “Is that Champagne? From the region, in France? Because if it’s not, it’s called Sparkling Wine”, or in other words, it’s a ‘sham-pagne’. The reputation of champagne precedes it throughout the world, making it a quintessential symbol of class and luxury.

IP protection by the French – A mere Paper Declaration?

Now, it is well-settled that the French have cemented their rights over the geographical origin of this fine wine into the international IP jurisprudence. They have tried to collectively recognize their rights over its origin under the protection of Geographical Indication. This essentially safeguards the nativity of the product by restricting the association of its manufacturing, to the point of its origination, i.e., the ‘Champagne Region’ in France. ‘Indications Géographique’ is a broad term encompassing both indications of source and appellations of origin, the former of which, is now statutorily enforced by the World Trade Centre’s TRIPS Agreement and protects the French origin of Champagne in more than 120 countries worldwide. The latter terminology is statutorily enforced by Appellation d’Origine Contrôlée (AOC) and again, similarly guarantees that the characteristics of the product owe an integral association to its origin. But has this multi-fold international IP protection been successful in safeguarding the French interests against individual national legislations?

The Russian Licentiousness – A blatant disregard for an international statutory framework

Contrary to all these efforts, the Kremlin recently passed a new legislation which mandates that foreign wine-manufacturers should label their corresponding products as ‘Sparkling Wine’, if they want to sell their products in Russia. Simultaneously, the law goes on to permit the native Russian manufacturers to label the word ‘Shampanskoye’ on their wines, which is a Russian iteration of the word ‘Champagne’. The Putin government claims to have enacted this particular legislation with the ultimate goal of bolstering the sales local wine-makers and carving out the shelf space for their local product in various export markets. As expected, this legislative attempt to water down Champagne’s sanctity met with a stern French Backlash and the deliveries of this fine wine had been instantaneously halted by its supplier conglomerates.

Local & Global Implications of The Impugned Contravention of TRIPS Agreement

Art. 1516.2 (5) of the Civil Code of the Russian Federation prohibits registration of GI or AOG of products which have “a designation though being or containing a name of a geographic object that is generally used in the Russian Federation as a designation of goods of a certain kind but not relating to the place where manufactured”. The new legislation squarely contravenes this provision of Russian Traditional Law by encouraging and allowing the use of trademarks like Rossiyskoe Shampanskoye (Russian Champagne) or Sovetskoye Shampanskoye (Soviet Champagne), while also compelling the foreign producers to strictly label their wines as ‘sparkling wines’.

Also, in addition to Russian manufacturers being blacklisted by the French Champagne Producers, this legislative strategy seems to have failed on two other fronts. On one hand, the French boycott had cut-off Russia from a fresh influx of this exquisite product, and on the other, the sought-forth objective of putting Russian sparkling wines on the international stage and presenting them as a ‘viable Champagne-substitute’, available to foreign customers, seems to have failed. This is because, the customer-association of this fine wine, rests exclusively with noteworthy French wineries. Simultaneously, on the other hand, the use of trademarks like ‘Russian champagne’ will be considered illegal in the countries where there is a registered GI for champagne, thereby further diminishing the prospect of gaining international shelf-space.

Irrespective of the probable failure of this legislation, the capitulation of the international statutory framework to Putin government’s efforts highlighted the grave drawbacks, in its inability of streamlining national IP policies of member countries and has opened the floodgates for a broader WTO dispute.

Progressive realization of ‘origin rights’ – A step forward in Spain

Another dispute regarding the protected designation of origin (PDO) of Champagne arose, wherein Comité Interprofessionnel du Vin de Champagne (CIVC) filed a suit to restrict the use of the mark ‘CHAMPANILLO’ in the Barcelona Commercial-Court. This court rejected CIVC’s claim, on the ground that the impugned use of the mark did not amount to ‘evocation’, ergo, there was no infringement. The court opined that since the use of the term ‘CHAMPANILLO’ was not assigned to any alcoholic drink and rather to a different service that catered to an altogether different audience, the targeted customer acquisition of both the marks differed from one another.

Articulating the embedded issues – Summarization of questions & A referral to the CJEU

This verdict was referred to the Provincial Court of Barcelona, which summarized the entire issue to include the fact that there have been attempts to register the aforesaid trademark and the applications have been rejected on account of the fact that it has been objected by CIVC. That Court went on to refer this matter to the CJEU for a preliminary ruling posing a series of questions, namely, whether the protected designation of origins are safeguarded only if the practices are almost identical, comparable or relating to a product safeguarded under ‘protected designation of origin’ or can they also cover the products against practices which link to services of direct or indirect distribution of such protected products. Secondly, another issue was presented in the case, about how the term ‘evocation’ should be interpreted?

An Interpretive conundrum for the Spaniards – Evocation or Not?

As regards the impugned evocation, the issue was whether the aforesaid terminology implies a deceitful use of PDOs. Insofar as the question of evocation is concerned, the courts proceed on two judicially-evolved pre-requisites. Firstly, they analyse whether the said goods are profiting from a certain PDO; and whether the product is similar to a corresponding competitive product which is safeguarded under some PDO. The second judicial principle that needs to be pondered in this regard is whether such a parallel correlation between two competing products can be resolved by employing exclusively objective factors which tend to have a compelling influence on a general customer.

A ‘link of thought’ is enough to prove an overlapping infringement of PDO

With reference to the aforementioned second principle, the Court held that evocation would generally exist if an average shopper associates a direct resemblance of a certain product with another covered by PDO. It went on to delineate some parameters for the ‘objective factors’ such as, checking for a resemblance in phonetics, conceptual meanings or visual appearance of an impugned name with the one protected by PDO, or some similarities in names of any given products which may arise out of different languages or any other such factors which possess the potential of triggering an image in the consumer’s brain regarding the product protected by PDO. This established link of association should be reasonably obvious and categorical in nature. In the instant case, CJEU explicated that if the name ‘champanillo’ is probably capable of sparking a mental image of ‘champagne’, in any average European customer, then the Court can delve into the legal niceties of investigating evocation in the said matter.

Judicial Expansion of PDO protection by CJEU – Does it cover goods as well as services?

Another question which was summarized by the court was regarding the progressive interpretation of PDO protection. It was argued that it can safeguard the protected product against not just the identical or comparable ones but also against practices relating to services associated with direct or indirect distribution of the protected products. The EU court ruled in favour of this argument and thereby widened the contours of PDO protection. This turn in the European IP jurisprudence marks a milestone in the secure future for Champagne manufacturers.

 

The author is a 4th Year B.A., LL.B.(Hons.) Student at Adv. Balasaheb Apte College of Law, Mumbai University.  

Image Source: Photo by Pexels on Pixabay