Is the protection of GIs governed exclusively by EU law? No, says General Court

European Union

In Instituto dos Vinhos do Douro e do Porto IP v Office for Harmonisation in the Internal Market (OHIM) (Case T-659/14, November 18 2015), which concerned the Community trademark (CTM) PORT CHARLOTTE, the General Court has annulled the decision by the Board of Appeal, stating that the board had been manifestly mistaken and had failed to apply national law correctly. If the decision is allowed to stand, OHIM’s guidelines would need to be updated.

The case goes back to 2006 when Bruichladdich Distillery Co Ltd, domiciled in the United Kingdom, filed a CTM application for the word mark PORT CHARLOTTE. The application covered alcoholic beverages in Class 33 of the Nice Classification, and the mark was registered in 2007. In 2011 the Instituto dos Vinhos do Douro e do Porto IP (IVDP) (Portugal) filed an application for a declaration of invalidity based on the appellations of origin ‘porto’ and ‘port’, which are protected under Portuguese and European law. Bruichladdich Distillery then limited the list of goods to whisky.

The Cancellation Division of OHIM rejected the application for a declaration of invalidity, and in 2014 the Fourth Board of Appeal of OHIM confirmed the rejection.

IVDP brought the matter before the General Court, claiming that the Board of Appeal’s decision should be annulled and the registration of the trademark PORT CHARLOTTE should be declared invalid. Before the court, IVDP relied on one plea as to fact, namely that the statement in the contested decision that the Portuguese name of the city of Porto is Oporto, and not Porto, was incorrect.

IVDP also relied on the following pleas in law:

  • The Board of Appeal had failed to take account of the fact that the terms ‘porto’ and ‘port’ were protected by Portuguese law as appellations of origin and constituted geographical indications covered by Regulation 491/2009 (now Regulation 1308/2013).

  • The Board of Appeal was wrong in finding that the protection of designations of origin for wines was governed exclusively by EU law and not also by national law.

  • The appellations of origin ‘porto’ and ‘port’ conferred on their proprietor, under both Portuguese law and EU law, the right to prohibit the use of a subsequent trademark.

  • The trademark PORT CHARLOTTE could deceive the consumers by leading them to believe that goods bearing the mark were port wine or associated with port wine.

  • The trademark PORT CHARLOTTE should be refused, as it is descriptive of a geographical origin.

The court considered the first three pleas concerning the name Oporto/Porto and the protection of geographical terms together. The court found that the name of the city in question is Porto and that the Board of Appeal had been wrong in stating that it was Oporto. However, this was not sufficient to annul the board's decision.

The court went on to consider whether the protection of designations of origin or geographical indications fell within the exclusive competence of EU law, even if the designations as such were determined by national legislation. Contrary to the Board of Appeal, the court concluded that the protection conferred on (protected) earlier designations of origin and geographical indications may be supplemented by relevant national law granting additional protection. Accordingly, the court agreed with IVDP that the Board of Appeal had been wrong in disregarding the evidence of Portuguese law and practice that had been filed. The third plea was upheld, whereas the first and second pleas were rejected.

In support of the fourth plea, IVDP submitted that the appellation of origin ‘porto’ or ‘port’ was well known, and that an average consumer seeing PORT CHARLOTTE on a bottle could believe that the beverage was somehow related to port wine.

First, the court considered the issue of the relevant public. The Board of Appeal had taken the view that the relevant public was the average Portuguese consumer. The court found, however, that both port wine and whisky are goods of mass consumption marketed in all EU member states, and that the relevant public was the average consumer in the European Union.

The court confirmed the Board of Appeal’s view that the relevant public would understand the sign PORT CHARLOTTE as designating a harbour named after a person called Charlotte. Therefore, the sign did not use or evoke the designation of origin, and it was not necessary to verify if it had a reputation. Furthermore, the average consumer would not be likely to associate a whisky under the mark PORT CHARLOTTE with port wine, and the fourth plea was rejected.

The court also rejected the fifth plea concerning the deception of consumers, stating that consumers would easily recognise that whisky has different characteristics from port.

The sixth and last plea – that Port Charlotte is a geographical term – was rejected as well. The court found that it had not been established that it was in the public interest that the term 'Port Charlotte' remained freely available.

Due to the illegalities found in the Board of Appeal’s decision, it was annulled. The court refused, however, to alter the decision by declaring the trademark PORT CHARLOTTE invalid. OHIM was ordered to pay the costs, but Bruichladdich Distillery was ordered to bear its own costs.

This decision is significant, and contrary to OHIM’s guidelines which state that "the EU system of protection of PGIs for foodstuffs, wines and spirits is exhaustive in nature and supersedes national protection for those goods".

The next development - whether it be an appeal or a change in OHIM’s guidelines - will be eagerly awaited.

Lisbet Andersen, Aumento Law Firm, Copenhagen

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