“Port Charlotte” Whisky Does Not Infringe EU Protected Designation of Origin “Port” or “Porto”

• 19/09/2017
• Articles

On 14 September 2017, the Court of Justice of the European Union (“ECJ”) handed down a judgment in case C-56/16 P with regard to the Protected Designations of Origin (“PDO”) “Porto” and “Port” in relation to the use of the trademark “Port Charlotte” for a whisky.

The appeal stemmed from a dispute relating to the registration by Bruichladdich Distillery Co. Ltd (the “Applicant”) of the word sign “Port Charlotte” for whisky. After registration of the challenged trade mark, the Instituto dos Vinhos do Douro e do PortoIP (“IVDP”) filed an invalidity application with the European Union Intellectual Property Office (“EUIPO”) pursuant to Regulation 207/2009 on the Community trade mark based on the protection under Portuguese law of the appellations of origin “Porto” and “Port” of which it is the proprietor.

The Cancellation Division had rejected IVDP’s invalidity claims and the Board of Appeal had dismissed IVDP’s appeal mainly on the grounds that the protection of designations of origin for wines is governed exclusively by Regulation No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (the “Regulation”) and, therefore, falls within the exclusive competence of the EU and not Member State law.

IVDP appealed to the General Court of the European Union (the "General Court"). In its judgment of 18 November 2015 (T-659/14), the General Court upheld IVDP’s claim that the protection conferred on PDOs, provided that they qualify as “earlier rights” within the meaning of Article 53(1)(c) of Regulation 207/2009 on the Community trade mark, may be supplemented by national law granting additional protection and rejected the other pleas. On that basis, the General Court annulled the decision of the Board of Appeal.

The EUIPO then sought to have the judgment of the General Court set aside arguing that the rules applicable to PDOs fall within the exclusive competence of the European Union and that the exhaustive nature of the system of protection of PDOs in the European Union precludes the granting by a national provision of any additional protection under national law which supplements or supplants that provided for under the Regulation.

By a cross-appeal, IVDP sought to have the judgment of the General Court set aside in part. To that end, it argued that the General Court erred in law in finding (i) that the Regulation governs, in a uniform and exclusive manner, both the authorisation of and limits to, and even the prohibition of, commercial use of protected designations of origin and protected geographical indications under EU law; (ii) that the challenged trade mark neither used nor evoked the protected designation of origin “Porto” or “Port” and so it was not necessary to verify whether that designation of origin had a reputation; and (iii) that the use of the challenged trade mark “Port Charlotte” did not involve “misuse, imitation or evocation” of the protected designation of origin “Porto” or “Port”.

For its part, the ECJ first held that the system of protection provided for by the Regulation is uniform and exclusive as well as exhaustive in nature, meaning that the Regulation prevents the application of a national system of protection for designations of origin and geographical indications.

Second, the ECJ rejected IVDP’s second ground of appeal on the basis that the incorporation in a trade mark of a name protected under the Regulation does not exploit the reputation of that designation of origin inasmuch as that incorporation does not lead the relevant public to associate the challenged trade mark with the designation of origin.

Third, the ECJ also held, in relation to IVDP’s third ground of appeal, that the average consumer will understand the sign “Port Charlotte” as designating a harbour named after a person called Charlotte, without associating it with a port wine covered by the designation of origin “Porto” or “Port’”.

Interestingly, the judgment of the ECJ deviates from the opinion of Advocate General Campos Sanchez-Bordona. The AG had argued that IVDP’s second and third grounds of appeal should be upheld under the assumption that even in the absence of any likelihood of confusion with the PDO Porto/Port, the trade mark “Port Charlotte” may evoke, in the mind of a reasonably well informed and reasonably observant European consumer, the wines protected by that PDO, therefore affecting the reputation or prestige of that PDO.