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“Port Charlotte”- Case C-56/16 P

Following several appeals and crossed appeals, on September 14, 2017, the Court of Justice confirmed the General Court decision which concluded that “Port Charlotte” is not an evocation of the Protected Denomination of Origin (PDO) PORTO or PORT.

The Court of Justice also held that the body of legal rules applicable to the protection of PDOs for wines is exclusively and exhaustively laid down in Regulation No. 1234/2007.

Background of the case:

The Scottish company Bruichladdich Distillery Co. Ltd. (BD) filed a trademark application for “Port Charlotte”, for alcoholic beverages, in 2006.

In 2011, after Instituto dos Vinhos do Douro e Porto, IP (IVDP) filed an application with the EUIPO for a declaration that the mark was invalid, BD limited the list of goods to whiskey.

IVDP’s application was rejected by the EUIPO and, as a consequence, IVDP appealed to the General Court. However, the General Court confirmed the compatibility of the contested mark with the PDO “Port”.

Both the EUIPO and IVDP appealed this decision.

The EUIPO appeal addressed the controversy of whether or not the body of legal rules applicable to the protection of PDOs for wines is exclusively and comprehensively laid down in Regulation No. 1234/2007.

IVDP’s appeal included three sets of arguments:

i. That Regulation 1234/2007 does not contain the exhaustive regime applicable to wine PDOs and shall be completed by national Law;

ii. That trademark “Port Charlotte”, for whiskey, derives unfair advantage from Port PDO’s reputation;

iii. That trademark “Port Charlotte” evokes the products protected by the PDO.

Opinion rendered by the Advocate General:

The Advocate General expressed the view that the General Court’s judgement should be set aside and the decision of the EUIPO should be annulled.

As to the controversy of whether or not the body of legal rules applicable to the protection of a PDO for wines is exclusively and comprehensively laid down in Regulation No. 1234/2007, the Advocate General’s opinion is that EU Law is comprehensive in this regard. To sustain that conclusion, the Advocate General recalls that the procedure to grant a wine PDO takes into consideration national legislation; in fact, with regard to wines, it was because PDO Port already benefited from protection under Portuguese Law as “quality wines produced in specific regions”, that, once Portugal forwarded that information to the Commission, it was automatically protected under Regulation No. 1234/2007. In any case, national provisions cease to apply once PDO status is granted under Regulation No. 1234/2007.

The Advocate General addressed IVDP’s argument that “Port Charlotte” derives unfair advantage from Port PDO’s reputation, by concluding that irrespective of the meaning of “Port” in different languages, the PDO cannot be left without protection. Furthermore, given the proximity of products (alcoholic beverages), targeted at the same type of public and using the same distribution networks, the PDO Port cannot be used, on its own or with other words, as trademark for these products, as otherwise the trademark owner is likely to derive unfair advantage from the reputation of the PDO.

Finally, concerning the evocation claim, the Advocate General reminded that the prohibition of evocation is not necessarily linked to the likelihood of confusion by the public (since the General Court had concluded that this was not a case of evocation, due to the fact that it had found no likelihood of confusion between the products in stake). In this case, the General Advocate found that “Port Charlotte” may evoke the wines protected by the Port PDO, in the mind of a reasonably well informed and observant European consumer.

Decision by the Court of Justice:

The Court of Justice considered that the body of legal rules applicable to the protection of PDOs for wines is exclusively and exhaustively laid down in Regulation no. 1234/2007. The conclusion about the exhaustive nature of regulation and on the consequent preclusion of protection to PDOs under national law results from the following reasoning:

a. Although it is true that the system of protection established by Regulation No. 1234/2007 is not identical to that provided for by Regulation No. 510/2006, the General Court was right in holding that those two systems were, essentially, the same in nature, since their objectives and characteristics were similar.

b. If the Member States were permitted to allow their producers to use, within their national territories, one of the indications or symbols which are reserved, under Regulation No. 1234/2007, for designations registered under that regulation, on the basis of a national right which could meet less strict requirements than those laid down in that regulation for the products in question, the risk is that that assurance of quality, which constitutes the essential function of rights conferred pursuant to Regulation No. 1234/2007, could not be guaranteed;

c. Since the decision to register a designation may be taken by the Commission only if the Member State concerned has submitted to it an application for that purpose and such an application may be made only if the Member State has checked that it is justified. The national registration procedures are therefore incorporated in the decision-making procedure at EU level and constitute an essential part thereof. They cannot exist outside the EU system of protection. Article 118f(7) of Regulation No. 1234/2007, a provision essentially identical to Article 38(7) of Regulation No. 479/2008, provides that Member States may, on a transitional basis only, grant national protection to a name until a decision on the application for registration is taken by the Commission.

d. A provision of that kind would be rendered redundant if the Member States were able to retain their own systems of protection for designations of origin and geographical indications for the purposes of Regulations No. 1234/2007 and No. 479/2008 and have them coexist with that resulting from those regulations;

e. Accordingly, Article 118s of Regulation No. 1234/2007, a provision which is essentially identical to Article 51 of Regulation No. 479/2008, provides for a transitional system of protection, the aim of which is to maintain, for reasons of legal certainty, the protection of wine names already provided for prior to 1 August 2009 under national law. That transitional system of protection is, as is apparent from the wording of Article 118s(1) of Regulation No. 1234/2007, organised at EU level pursuant to Regulation No. 1493/1999 and granted automatically to wine names already protected under, inter alia, that latter regulation;

f. Furthermore, Article 118s(4) of Regulation No. 1234/2007 provided that, until December 31, 2014, that automatic protection of wine names could be cancelled by the Commission, acting on its own initiative, if those wine names did not meet the conditions laid down in Article 118b of that regulation. Such a transitional system of protection for existing designations of origin and geographical indications would be pointless if the system of protection for such names, which is provided for by Regulation No. 1234/2007, were not exhaustive in nature, implying that the Member States retained in any event the ability to maintain them for an indefinite period.

The Court of Justice therefore concluded that the General Court erred in law in holding, in the judgment under appeal, that the protection conferred on protected designations of origin and geographical indications under Regulation No. 1234/2007, provided that they are ‘earlier rights’ within the meaning of Article 53(1)(c) of Regulation No. 207/2009, read in conjunction with Article 8(4) and Article 53(2)(d) of that regulation, ‘may be supplemented by the relevant national law granting additional protection’.

The Court of Justice also concluded to be correct the General Court’s assessment that the relevant public, namely the average consumer in the European Union with at least a basic knowledge of English or a Romance language, will understand the sign ‘PORT CHARLOTTE’ as designating a harbour named after a person called Charlotte, without making a direct link with the designation of origin ‘Porto’ or ‘Port’ or a port wine, is a factual assessment and cannot, as such and since IVDP has not established that there was a manifest distortion of evidence which is capable of affecting that assessment, be reviewed on appeal. It the Court’s view there are not enough facts showing that that “Port Charlotte” derives unfair advantage from Port PDO’s reputation and evokes the products protected under the PDO.

The Court of Justice also considered that even though the term ‘port’ forms an integral part of the contested mark, the average consumer, even if he is of Portuguese origin or speaks Portuguese, in reaction to a whisky bearing that mark, will not associate it with a port wine covered by the designation of origin in question. That assessment is confirmed by the not insignificant differences between the respective features of a port wine and a whisky in terms of, inter alia, ingredients, alcohol content and taste, of which the average consumer is well aware. Thus, the Court of Justice concluded that “Port Charlotte” is not an evocation of PORT or PORTO.


02-10-2017