Insights | January 24, 2020

CJEU landmark ruling on protected geographical indications

The Court of Justice of the European Union has recently handed down an important ruling in which it limited the scope of protection of the Protected Geographical Indication of an Italian balsamic vinegar and similarly registered products. The Court held that the protection of the name "Aceto Balsamico di Modena" does not extend to the individual non-geographical components of that name. Therefore, the terms "aceto" and "balsamico" are not individually protectable.

Background

Consorzio Tutela Aceto Balsamico di Modena is an Italian consortium of producers of vinegar-based products originating from the provinces of Modena and Reggio Emilia and designated by the name “Aceto Balsamico di Modena”. The name “Aceto Balsamico di Modena” has been registered since 2009 in the register of protected designations of origin and protected geographical indications (PGI).  Balema GmbH is a German producer of vinegar-based products and has marketed its products using terms “Balsamico” and “Deutscher balsamico”.

In a lengthy dispute, Balema had brought an action in Germany against the Consortium after receiving a formal notice claiming that the use of the term “Balsamico” infringes the PGI “Aceto Balsamico di Modena”. By its action, Balema sought a negative declaration from the obligation to refrain from using the term “Balsamico” for vinegar-based products produced in Germany.

After the action was upheld on appeal, the Consortium appealed to the Federal Court of Justice (Bundesgerichtshof).  As the outcome of the action depended on whether the term “Balsamico” or the phrase “Deutscher balsamico” infringed the PGI of the Consortium under the Agricultural Foodstuff Regulation (Regulation (EU) No 1151/2012) and the Commission Regulation (No 583/2009) concerning the entry of the PGI into the register, the Federal Court of Justice requested a preliminary ruling from the Court of Justice of the European Union (CJEU).

The legal question referred to the CJEU concerned whether the protection of the entire name “Aceto Balsamico di Modena” extended to the use of the individual non-geographical components of the term as a whole (such as “Aceto”, “Balsamico” or “Aceto Balsamico”).

Proceedings in the CJEU

On 4 December 2019, the CJEU gave its ruling (Case C-432/18, Consorzio Tutela Aceto Balsamico di Modena v Balema GmbH) in which it largely accepted the arguments previously given in the opinion of the Advocate General. Basing its reasoning primarily on the wording of Article 1 of the Regulation (EC) No 583/2009 read in conjunction with its recital 11 and Annex I, the CJEU held that the protection of “Aceto Balsamico di Modena” does not extend to the use of the individual non-geographical terms of that name.

According to the CJEU, the mere fact that the regulation registering a name as a PGI does not contain a footnote specifying that registration is not sought for one of the parts of that name, does not necessarily mean that each of them is protected individually.

While possible that in the absence of specific circumstances pointing to the contrary, the protection afforded by a regulation establishing a PGI might not only cover the compound name as a whole, but also each of its constituent parts. The CJEU held this could only be the case if the constituent part is neither a generic nor a common term. Reflecting upon its earlier case law, the CJEU noted that “aceto” is a common term in itself and the term “balsamico” is the Italian translation of the adjective “balsamic”.

In this context, “balsamico” is commonly used to refer to vinegar with a bitter-sweet flavor. Therefore, the CJEU concluded that the protection of “Aceto Balsamico di Modena” does not extend to the use of its individual non-geographical terms, even though the term “Balsamico” is particularly associated by consumers with the Italian vinegar-based products and their reputation.

Conclusions and implications

The ruling provided legal certainty for vinegar producers as well as other players in the food industry wishing to use individual non-geographical terms in their products and marketing activities. However, as such individual components of the PGI are not necessarily protectable any longer, the judgment of the CJEU significantly narrows down the scope of protection of PGIs similar to “Aceto Balsamico di Modena”.

Accordingly, it becomes even more important in the future for companies operating in the food industry seeking to protect their brands that upon choosing a form of protection, they take the necessary steps to ensure that it covers the most well-known and valuable constituent parts of the name for which protection is sought.