Slovakia fends off Hungary to keep its Tokaj wine designation

In Hungary v European Commission (Case C-31/13 P), the Court of Justice of the European Union (ECJ) has dismissed an appeal against a decision of the General Court in which the latter had rejected Hungary’s application for cancellation of Slovakia’s registration for the protected designation of origin (PDO) ‘Vinohradnícka oblast’ Tokaj’ in the E-Bacchus database.

The Tokaj wine-growing zone spreads across north-east Hungary and south-east Slovakia, and allegedly contains around 600 wineries.

The lists of quality wines psr (ie, produced in a specified region) published by the Commission in 2006 and 2007 in accordance with Article 54(5) of Regulation 1493/1999 on the common organisation of the market in wine included the protected designation of origin ‘Vinohradnícka oblast' Tokaj’ to describe wine from the viticultural region of Tokaj in Slovakia. This designation was registered on the basis of information provided by the Slovak authorities, since it was a PDO under Slovakian law. However, the final list of quality wines psr published in 2009 - before the introduction of the European Union's E-Bacchus database - referred to the PDO ‘Tokajská/Tokajské/Tokajský vinohradnícka oblast’’. On August 1 2009 the PDO ‘Tokajská/Tokajské/Tokajský vinohradnícka oblast’’ was duly listed in the E-Bacchus database.

In November 2009 the Slovak authorities wrote to ask the Commission to replace ‘Tokajská/Tokajské/Tokajský vinohradnícka oblasť’ with the PDO ‘Vinohradnícka oblasť Tokaj’ or just ‘Tokaj’, explaining that those names were those that actually appeared in their national provisions in force on August 1 2009. The Commission refused: only the term ‘Vinohradnícka oblasť Tokaj’ appeared in the Slovak provisions. The Commission said that the term ‘Tokaj’ appeared in the national provisions, not on its own but as part of compound terms consisting of a number of words, such as ‘Vinohradnícka oblasť Tokaj’, ‘Akostné víno pochádzajúce z vinohradníckej oblasti Tokaj’ or ‘Tokajské víno’. However, in February 26 2010 the Commission relented, taking note of further submissions from Slovakia.

In March 2010 the Hungarian authorities claimed that the correct designation of origin was ‘Tokajská vinohradnícka oblast’’ and not ‘Vinohradnícka oblasť Tokaj’, pointing to later Slovak legislation on wines which came into force on September 1 2009, in which the term ‘Tokajská vinohradnícka oblast’’ appeared. In April 2010 the Slovak Parliament adopted a new law to recognise the PDO ‘Tokaj’. This new law entered into force on June 1 2010.

Hungary brought an action before the General Court for annulment of Slovakia's PDO registration with the Commission; the Slovak Republic was granted leave to intervene in support of the Commission. Before the General Court, the Commission raised a plea of inadmissibility, claiming that the entry in the E-Bacchus database did not constitute an ‘actionable measure’ for the purposes of Article 263 of the Treaty on the Functioning of the European Union: since the protection of the PDO ‘Vinohradnícka oblast’ Tokaj’ was based on Slovak national legislation, the entry at issue was devoid of legal effects.

The General Court agreed and relied on, among other things, the automatic nature of the protection in the European Union of wine names already protected under Regulation 1493/1999:

“It follows from the automatic nature of the protection of wine names already protected under Regulation 1493/1999, as laid down in Article 118(1) of Regulation 1234/2007 [establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products]… that, as regards those wine names, an entry in the E-Bacchus database is not necessary for them to benefit from protection at EU level. The wine names in question are ‘automatically’ protected under Regulation 1234/2007… without that protection being dependent on their entry in the database. That entry is only a consequence of the automatic transition of the pre-existing protection from one regulatory regime to another and not a condition of that protection. Therefore, since the protected designation of origin ‘Vinohradnícka oblasť Tokaj’ is one of the wine names already protected under Regulation 1493/1999, its inclusion in the E-Bacchus database was not necessary for its protected designation of origin to benefit from protection at EU level.”

The General Court also found that:

“[t]he Community protection of wine names established by [Regulation 1493/1999] was based on wine names such as they were determined by laws of the member states in compliance with the relevant provisions of that regulation. That protection did not result from an autonomous Community procedure or even from a mechanism under which the geographical indications recognised by member states were incorporated in a binding Community measure.”

The court further held that:

• this conclusion was not called into question either by the erroneous publication of the protected designation of origin ‘Tokajská/Tokajské/Tokajský vinohradnícka oblast’’ in the list of quality wines psr published in the Official Journal of the European Union on July 31 2009, or by the adoption of Slovakia's latest law;
• an erroneous publication in the ‘C’ Series of the Official Journal of the European Union “does not invalidate the protection granted to PDOs which benefit from protection under Slovak law, including the designation ‘Vinohradnícka oblasť Tokaj’”; and
• regardless of the principle of sound administration obliged the Commission to verify the accuracy, timeliness, authenticity and adequacy of the information provided by the member states, that obligation could not in any event bring about a distinct change in the situation of the interested third parties.

On February 13 2014 the ECJ dismissed Hungary's appeal, ordering Hungary to pay costs (except for Slovakia's own costs). Arguably, this outcome was to be expected - the Commission has a pretty good track record when it comes to litigation before the European Union's courts on any matter pertaining to intellectual property and, in this instance, while its errors were scarcely to be commended, there is still a gap to bridge between the propositions "the Commission made a mistake" and "the Commission's actions are of no legal effect".

Jeremy Phillips, IP consultant to Olswang LLP, London