Registered 'soviet bubbly' label not customary for sparkling wine

The Circuit Court of Tallinn has rejected a cancellation action filed against the trademark registration for the label of a sparkling wine known throughout the former Soviet Union as 'soviet champagne' or 'soviet bubbly' (Case 2-06-8681, November 24 2006).

The dispute finds its origin in 1932 when a winery in the Crimean peninsula started to produce a sparkling wine using a so-called 'soviet' method. The sparkling wine was meant only for selected circles, but in the 1950s it became more widely available and a number of wineries producing the drink were established throughout the Soviet Union, including Latvia. The sparkling wine was sold under the name Советское Шампанское (meaning 'Soviet Champagne') in the Soviet Union and Советское Игристое (meaning 'Soviet Bubbly') abroad. The two types of label featured, among other things, a stylized cluster of grapes and medals won by different producers in international wine competitions.

Several wineries continued to produce the sparkling wine after the collapse of the Soviet Union. In 1997 AS Latvijas Balzams, the Latvian producer, filed a trademark application in Estonia for its 'soviet bubbly' label. The Estonian Patent Office granted the registration, but several importers and representatives of other wineries started to dispute the registration on various grounds.

In the most recent proceedings, initiated by AS Mediato, the County Court of Harju found that the main point of dispute was whether the registered label as a whole had become common for the sparkling wine and thus should remain free for others to use. There was no dispute about the history of the method of production itself or the fact that the wine thus produced was sold in the Soviet Union. In addition, the Estonian Patent Office and the Board of Appeal disclaimed protection for the words 'Советское' and 'Игристое', and other descriptive elements.

The court concluded that the labels used by the various producers in Estonia are not identical, even though they all feature a cluster of grapes and medals. Accordingly, it rejected Mediato's action.

On appeal, the Circuit Court of Tallinn affirmed the decision. It clarified that Article 7(4) of the Trademark Act also applies to figurative trademarks. According to that provision, trademarks that consist exclusively of signs and indications that (i) have become customary in the current language in relation to the goods or services for which the application is made, or (ii) have become customary in economic and business activities, are not protected. The court found that as the labels used in Estonia are not identical, it cannot be concluded that Latvijas Balzams' registered label had become customary in economic and business activities. Accordingly, the court rejected the cancellation application.

Mari Toomsoo, Käosaar & Co, Tallinn