CHAMPAGNE cannot be registered as trademark for Class 3 goods

In a significant decision, the Industrial Property Appeal Court has reversed a decision of the National Institute of Industrial Property (INAPI) in which the latter had rejected in part and accepted in part an application for the registration of CHAMPAGNE as a trademark for the class heading of Class 3 of the Nice Classification. Following the decision of the appeal court, the partial acceptance of the application is now without effect, and the application has been rejected in its entirety.

This decision is of particular relevance as it harmonises different dispositions of the trademark law and even reflects the spirit of others laws, such as the Unfair Competition Law and the Consumers Defence Law. The decision means that the famous and reputed appellation of origin 'Champagne' cannot be registered as a trademark, even for products other than those specifically connected to the source to which it refers. Further, based on the terms of the decision, it appears that this doctrine and the court's conclusions would be applicable to any other appellation of the same quantitative and qualitative relevance.

The application at issue was filed by a Chilean resident and citizen, and was opposed by the Comité Interprofessionel du Vin de Champagne. The opponent argued that 'Champagne' corresponds to the name of a French region and to a famous appellation of origin protected by the French state. Therefore, such an appellation does not have the distinctiveness necessary to be subject to trademark protection; in addition, the appellation indicates the source of the products to be distinguished and, if registered by a third party, it could mislead consumers as to the source and quality of the goods to be protected. 

The applicant argued that 'Champagne' was an appellation of origin for particular goods in Class 33, which had no connection with goods in Class 3. Additionally, he claimed that consumers were not so unprepared as to associate the term applied for with goods in Class 3 and, therefore, there was no reason for the public to be confused.

At first instance, the INAPI upheld the opposition only in respect of “soaps, essential oils, cosmetics and hair lotions”, stating that registering CHAMPAGNE for these products would lead to errors or confusion among consumers, who might attribute to the goods characteristics that they do not necessarily possess.

At second instance, the court upheld the opposition for all the products covered by the application. It stated that, since 'Champagne' was a famous appellation of origin, which was synonymous with high quality and had an undisputed reputation in connection with a particular type of wine, and was recognised in its country of origin and under the Free Trade Agreement between Chile and the European Union:

• its registration as a trademark for products of Chilean origin, even for goods in Class 3, would directly mislead consumers into thinking that the goods come from the French region of Champagne and that they are of a very high quality; and
• CHAMPAGNE as a trademark for the goods covered by the application did not have distinctive character, as it was a protected appellation of origin indicative of geographic source; therefore, it could not be registered by a third party, even for products other than those distinguished by that appellation, as there was no real link between the products covered by the application and the established source of origin.

The court further held that, under Section 10bis of the Paris Convention, member countries are bound to assure "effective protection against unfair competition" and, in particular, prohibit “all acts of such a nature as to create confusion by any means”, meaning that the registration of trademarks that may create such confusion should be prevented.

Sergio Amenábar Villaseca, Estudio Villaseca, Santiago