THE EUROPEAN COURT OF JUSTICE SHALL DECIDE ON THE CORRECT APPLICATION OF THE PRINCIPLE OF EXHAUSTION OF THE TRADE MARK

16/01/2018

With a recent ruling, the Court of Justice of the European Union has settled the long-standing dispute between Schweppes International and the Spanish company Red Paralela over the use of the trademark „Schweppes“

 

Schweppes International owns the trade mark “Schweppes” in Spain, where the Spanish company Schweppes has the exclusive right to use that trade mark. In 2014, Red Paralela filed infringement proceedings against Red Paralela for importing and marketing in Spain tonic water bottles bearing the‘ Schweppes‘ mark from the United Kingdom, where the trade mark “Schweppes” is owned by Coca-Cola, which has acquired the rights following a transfer.

Schweppes claims that these acts are unlawful, since the bottles of tonic water were produced and marketed not by itself or with its consent but by Coca-Cola, which has no relationship with the Orangina Schweppes group. Schweppes also considers that, in view of the identity of the signs and products for which it is responsible, the acts referred to above are misleading for the consumer, who would not be able to distinguish the commercial origin of those bottles. Red Paralela, in its defence in that infringement action, pleaded exhaustion of the trade mark right which, in respect of goods bearing the trade mark‘ Schweppes‘ from Member States of the Union in which Coca-Cola is the proprietor of that trade mark, results from tacit consent. According to Red Paralela, between Coca-Cola and Schweppes International, the existence of legal and economic links cannot be denied in the joint exploitation of the sign‘ Schweppes‘ as a universal mark.

It is in this context that the Court of First Instance n. 8 of Barcelona decided to refer the matter to the Court of Justice in order to determine whether, in the light of the conduct of Schweppes and Coca-Cola following the territorially limited transfer of the trade mark‘ Schweppes‘, EU law precludes Schweppes from invoking its exclusive right under Spanish law to oppose the importation and marketing in Spain of‘ Schweppes‘ products from the United Kingdom. That court points out, in particular, that Schweppes International has strengthened the overall image of the trade mark‘ Schweppes‘, even though it is the proprietor of parallel marks in only a part of the Member States.

In its judgment of 20 December 2017, the Court ruled that “The Spanish company Schweppes cannot oppose the importation of bottles of tonic water bearing the trade markSchweppesfrom the United Kingdom if it itself has given the impression that it is a single, global trade mark”. The Courts of Luxembourg then dismissed the question on the ground that the Spanish General Court made a reference for a preliminary ruling, stating that‘ European Union law precludes the proprietor of a national trade mark from opposing the importation of identical goods bearing the same trade mark from another Member State, where that trade mark, which was originally the property of the same proprietor, is currently held by a third party who acquired the rights of that trade mark by transfer, whereas, as a result of that transfer, the owner of that trade mark.


ALDI WINS A FIGHT AGAINST FRENCH WINEMAKERS ALLOWING TO SELL BRANDED CHAMPAGNE SORBETS

09/01/2018

Aldi Süd, the giant discount supermarket chain from Germany, was allowed to carry on selling branded Champagne sorbets, notwithstanding EU protection of the name.

 

The Comité Inteprofessionnel du Vin de Champagne (“CIPV”), a French association of champagne producers, brought proceedings before the German courts against the German discount supermarket Aldi Süd to prohibit it from selling a sorbet under the name ‘Champagner Sorbet’. That sorbet, which Aldi Süd started selling at the end of 2012, contains 12% champagne. Taking the view that the distribution of that product under that name constituted an infringement of the PDO ‘Champagne’, the association of champagne producers, brought proceedings based on Article 118m of Regulation No 1234/2007 and Article 103 of Regulation No 1308/2013, prohibiting Aldi from using that name on the frozen goods market. According to the CIPV, the distribution of the sorbet under that name infringes the protected designation of origin (hereafter, PDO) ‘Champagne’. The German Federal Court of Justice has requested a preliminary ruling to the European Court of Justice for an interpretation of EU rules on the protection of PDOs.

Having analysed relevant provisions, the European Court of Justice upheld that Aldi could continue calling its product ‘Champagner Sorbet’ as it does not unfairly take advantage of the reputation that Champagne producers gain from using the iconic name. According to the Court, in the present case the use of the name ‘Champagner Sorbet’ to refer to a sorbet containing champagne is liable to extend to that product the reputation of the PDO ‘Champagne’, which conveys an image of quality and prestige, and therefore to take advantage of that reputation. However, such use of the name ‘Champagner Sorbet’ does not take undue advantage and, therefore, does not exploit the reputation of the PDO ‘Champagne’ if the product concerned has, as one of its essential characteristics, a taste that is primarily attributable to champagne.

It follows that the use of a PDO as part of the name under which is sold a foodstuff that does not correspond to the product specifications for that PDO but contains an ingredient which does correspond to those specifications cannot be regarded as an unfair use and, therefore, as a use against which PDOs are protected under Article 118m(2)(a)(ii) of Regulation No 1234/2007 and Article 103(2)(a)(ii) of Regulation No 1308/2013. As a consequence, it is for the national courts to determine, on the case to case basis, whether such use is intended to take unfair advantage of the reputation of a PDO.

Further, the European Court noted that if the sorbet in question did not have, as an essential characteristic, a taste which is primarily attributable to champagne, it would equally be possible to conclude that the name ‘Champagner Sorbet’ on the inner or outer packaging of the product constituted a false or misleading indication and was therefore unlawful. A PDO is protected not only against false or misleading indications which are liable to create a false impression as to the origin of the product concerned, but also against false or misleading indications relating to the nature or essential qualities of the product. Where the PDO ‘Champagne’ is used directly, by being incorporated in the name of the product in question, to openly claim a gustatory quality connected with it, that does not amount to misuse, imitation or evocation within the meaning of EU rules on the protection of PDOs.


THE BUSINESS DIVISION OF THE COURT OF MILAN DECLARES ITS COMPETENCE IN THE FIELD OF FRANCHISING

19/12/2017

With decision published on November 28, 2017, the Court of Milan – business division – ruled in favor of the plaintiff, rejecting among others the exception of territorial incompetence of the defendants.

 

The present judgment has been rendered at the end of a dispute deriving from the conclusion of a franchising agreement between the defendants and the plaintiff. The plaintiff, in particular, complained that the franchisee had continued to use, for at least two months, its distinctive signs, despite the fact that the agreement was terminated due to breach, by the franchisee itself, of the obligation to pay the amount due. For these reasons, the franchisor summoned the counterparty requesting, in addition to the order of payment of the not paid sum, also the order to pay a consistent amount as a penalty for the unlawful use of the plaintiff’s distinctive signs.

In this scenario, the appealed Court of Milan, business division, rejected the preliminary exception of incompetence raised by the defendant, underlining the existence of the competence of the business divisions in a dispute concerning a franchising agreement, when it does not only concern the execution of the contract, but also the exercise of industrial property rights, or the unlawful use of registered exclusive rights. In this case, the Milanese judges pointed out, the IP infringement attracts the competence on the request for fulfilment of the contract with regard to the payment due, with consequent application of the criteria indicated by Legislative Decree no. n. 30/2005 and following amendments.


THE COURT OF FLORENCE IMPOSES A BAN ON USING THE IMAGE OF MICHELANGELO’S DAVID FOR COMMERCIAL PURPOSES

11/12/2017

The State Attorney, the advisory and representative body of the Italian State, has lodged a precautionary appeal before the Court of Florence against the company Visit Today to obtain an order to prohibit the sale of unofficial tickets for the Galleria dell‘ Accademia in Florence and the use of brochures and materials depicting Michelangelo’s famous work

 

The so-called ‚ antibagarini‘ order issued by the Court of Florence, Chamber of the Court of Enterprise, prohibits the use, both in Italy and in Europe, of the image of Michelangelo’s David for commercial purposes without prior authorization of the Galleria dell‘ Accademia and payment of fees for its usage. It was the State Attorney who filed an application with the Florence Court against the company Visit Today that was selling the Galleria dell‘ Accademia in Florence tickets at a higher price using leaflets, promotional literature and the David’s image on their website. The Florentine judges held that Visit Today had never applied for or obtained permission from the administrative authority to use the image in question for lucrative purposes. The conduct of the resistant society has been classified as a general non-contractual offence pursuant to art. 2043 of the Italian Civil Code. The ordinance in question requires the withdrawal from the market of all the material disseminated and produced by the Visit Today that contains the reproduction of the work as well as elimination of the image of the famous sculpture from its website.

The decision is based on the provisions of the Italian Code of Cultural Heritage: article 106 establishes the general principle that the State, Regions and local public authorities may allow individual applicants to use these assets for purposes compatible with their cultural value, for example by means of reproduction acts. This means that the use of cultural goods for profit is subject to prior authorization. Articles 107 and 108 of the Code provide that the competent Public Administration may allow third-party uses of an item – including a work of art – belonging to the Italian cultural heritage, subject to payment of royalties that are determined based on the type of use required and economic advantage that the user would obtain from the use of the item. That said, authorization is not required in each and every case. Article 108, paragraph 3-bis, clarifies that non-profit uses of cultural heritage for the purposes of studies, research, freedom of expression or creative expression and promotion of knowledge of cultural heritage do not require prior authorization.


ORIGIN OF WHEAT ON THE LABEL: HEATED DEBATED ON THE DECREES SIGNED BY MARTINA AND CALENDA

09/11/2017

On 20 July 2017, Ministers Maurizio Martina and Carlo Calenda signed two interministerial decrees to introduce the obligation to indicate the origin of rice and wheat for pasta on the label, which is due to enter into force in February 2018.

 

The measures in question (i. e. the „wheat/pasta“ decree and the rice decree) provide for the obligation to state the origin of wheat, rice and pasta on the label for a two-year period of experimentation.

The packs of dry pasta produced in Italy must therefore indicate on the label both the country where the wheat is grown and the country of milling. If these phases take place in the territory of more than one country, the following indications may be used, depending on their origin: EU countries, NON-EU countries, EU countries and non-EU countries. If durum wheat is grown at least 50% in one country, such as Italy, the words „Italy and other EU and/or non-EU countries“ may be used.

With regards to the decree concerning rice, the measure provides that the country in which the rice is grown, the country of processing and the country of packaging must be indicated on the label. Even for rice, if these phases take place in the territory of more than one country, the following indications may be used, depending on their origin: EU countries, non-EU countries, EU and non-EU countries.

However, the decrees exclude from the obligation to indicate origin durum wheat pasta PGI (such as Gragnano), fresh and gluten-free pasta (rice, maize, soya, rye, etc.), organic pasta, spelt and kamut and so on. This exclusion has been criticised since the above decrees have been issued as measures aimed at implementing Regulation (EU) No 1169/2011. The primary objective of the regulation is making the principle of informed choice effective and, therefore, does not contain any exceptions similar to those provided for by the decree on pasta wheat.

Other criticisms of the decrees were expressed by some groups of farmers and pasta producers. In particular, Coldiretti argued that Italian pasta producers would be enormously damaged if they were obliged to make it clear that the wheat used does not come entirely from Italy.