Friday, October 08, 2010

Comité interprofessionnel du vin de Champagne v. Unilever

Today's ruling in Comité interprofessionnel du vin de Champagne v. Unilever is interesting exactly for what it assumes rather than deciding. In par. 4.1 we find:

Niet in geschil is dat Unilever door het verhandelen van de Champagne shampoo inbreuk heeft gemaakt op de beschermde oorsprongsbenaming Champagne in de zin van artikel 118 quaterdecies van “Verordening 491/2009” (de voorzieningenrechter begrijpt: Verordening 1234/2007 zoals die luidt na wijziging door Verordening 491/2009).

Meaning (my translation):

Not in contention is that Unilever has infringed on the Protected Indication of Origin Champagne by selling Champagne shampoo, as forbidden by art. 118m of Regulation 491/2009 (the Court in Expedited Procedure understands: Regulation 1234/2007 as it is after amendment by Regulation 491/2009).

Given that parties seem to have stipulated to this fact, the rest of the ruling is quite straightforward. CIVC gets its injunction, backed up by a penalty payment of € 5.000 per day, with a maximum of € 500.000.

Based on the text of that provision, it is not surprising that the actual infringement was not incontention. It reads:

Article 118m

1. Protected designations of origins and protected geographical indications may be used by any operator marketing a wine which has been produced in conformity with the corresponding product specification.
2. Protected designations of origins and protected geographical indications and the wines using those protected names in conformity with the product specification shall be protected against:
(a) any direct or indirect commercial use of a protected name:
(i) by comparable products not complying with the product specification of the protected name; or
(ii) in so far as such use exploits the reputation of a designation of origin or a geographical indication;
(b) any misuse, imitation or evocation, even if the true origin of the product or service is indicated or if the protected name is translated or accompanied by an expression such as “style”, “type”, “method”, “as produced in”, “imitation”, “flavour”, “like” or similar;
(c) any other false or misleading indication as to the provenance, origin, nature or essential qualities of the product, on the inner or outer packaging, advertising material or documents relating to the wine product concerned, and the packing of the product in a container liable to convey a false impression as to its origin;
(d) any other practice liable to mislead the consumer as to the true origin of the product.


This is a surprisingly broad provision, given that we're talking about PDOs and PGIs here, not trademarks. It seems to allow not only direct infringement proceedings, but also dilution claims of the kind brought by CIVC here. I'm not sure that I agree with the rationale for such a high level of protection. Of course, users of PDOs, just like trademark holders, invest in brand capital, and are entitled to see that investment protected by the courts, but unlike trademarks PDOs are a collective good, meaning that its users will have a much smaller investment. Also, PDOs are in a real sense a gift from the legislature; it is about truth in advertising as much as about trademark law.

For these reasons, I would consider the damage done to the Champagne PGI by the introduction of Champagne shampoo much smaller than the damage that would be done if Unilever introduced Chanel shampoo. (Assuming Chanel aren't in the shampoo business themselves, which they may well be.) Given that these laws are about a balance of equities between the users of the PDO or PGI on the one hand and the company that would like to use the designation in question on the other hand, I would have favoured a more narrow protection for PDOs in this regard.

Of course, given that the entire 56 page Regulation, like the 149-page original, is devoted to "establishing a common organisation of agricultural markets and (...) specific provisions for certain agricultural products", it is easy to see how this generous protection came about, but that doesn't make it any less unfortunate.

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