Last week, Europe’s highest court, the Court of Justice of the European Union (ECJ) set aside the 2015 General Court decision in the long running ‘Port Charlotte’ trademark case. The ECJ concluded that the trademark ‘Port Charlotte’ used in relation to Scottish whisky is not attempting to evoke Port wine and that when considering a Protected Designation of Origin (PDO), EU law exclusively applies. This decision is also an unusual example of the ECJ departing from an opinion of the Advocate General (AG), in certain important respects.

Background and Timeline

Date Event
October 2006 Scottish Distiller, Bruichladdich Distillery Co. Ltd (BD,) files an application for registration of a Community Trade Mark, ‘Port Charlotte’, with the Office for Harmonisation in the Internal Market.
October 2007 The mark is registered and published in the Community Trade Marks Bulletin. The description of the goods it covers is ‘alcoholic beverages’.
April 2011

Instituto dos Vinhos do Douro e do Porto (IVDP) files an application for a declaration of invalidity with OHIM (now known as the EUIPO).

In response to this, BD limits the description of the goods the trademark covers to ‘Whisky’.

April 2013 The Cancellation Division rejects the application for a decision of invalidity.
July 2014 The Fourth Board of Appeal of OHIM dismisses the appeal against the decision of the Cancellation Division.
November 2015 The EU General Court annuls the decision of the OHIM Board of Appeal.
May 2017 Advocate General, Campos Sánchez-Bordona, issues his opinion that the ECJ should set aside the decision of the General Court but should itself annul the decision of the OHIM Board of Appeal or the EUIPO.
September 2017 The ECJ sets aside the decision of the General Court and upholds the EUIPO’s appeal.

The Facts
The ECJ decision deals with both the main appeal, raised on a single ground by the EUIPO and a cross appeal, raised on three grounds by IVDP.

Appeal
The EUIPO raised its appeal on the basis that the legal rules applicable to PDOs fall within the exclusive competence of the European Union and are governed exclusively by EU law. As a result, the EUIPO contended that the General Court erred by taking domestic Portuguese law into account. Specifically, the EUIPO contended that the General Court erred by holding that it is ‘possible for such designations of origin to benefit from supplementary protection granted under national legislation’. In this case the General Court had applied principles set out in the 2009 Portuguese judgment Budĕjovický Budvar (C 478/07, EU:C:2009:521).

Cross Appeal
IVDP raised its appeal on the basis that the General Court erred by considering that: 

  1. Regulation No 1234/2007 is not exhaustive in the context of wine PDOs and can be supplemented by the domestic law of Member States;
  2. ‘The contested mark neither used nor evoked the protected designation of origin ‘Porto’ or ‘Port’ of which IVDP is the proprietor, with the result that it was not necessary to verify whether that designation of origin had a reputation’; and
  3. ‘The use of the contested mark ‘Port Charlotte’, which is registered in respect of a whisky, did not involve ‘misuse, imitation or evocation’, within the meaning of that provision, of the protected designation of origin ‘Porto’ or ‘Port’.’

Opinion of the Advocate General
The AG agreed with EUIPO that ‘in the case of PDOs for wine, the EU's legislative action has extended to the entire sphere of protection in the interests of ensuring uniformity of the rules governing such PDOs in all the Member States.’

However, despite this, he recommended that the decision of the General Court be set aside on two grounds:

  1. ‘It erred in relation to the very definition of evocation, as interpreted in the case-law of the Court of Justice, in that it found that there is no evocation in this case because there is no likelihood of confusion between whisky and port wine; and
  2. ‘It failed to assess correctly the extent of the protection afforded to PDOs for wines (including the PDO Porto/Port) as a criterion for determining whether or not their reputation has been exploited by marks which appropriate their characteristic term.’

Decision
The ECJ upheld the EUIPO’s sole ground of appeal declaring that ‘the system of protection provided for by Regulation No 1234/2007 is exhaustive in nature, with the result that that regulation precludes the application of a national system of protection for geographical indications’. Essentially the domestic law of Member States cannot apply in this context, overturning the decision of the General Court. 

The ECJ rejected all three of IVDP’s grounds of appeal notwithstanding the fact that in the AG’s opinion, grounds two and three should be upheld. This was on the basis that the average consumer would not confuse ‘Port Charlotte’ whisky with the fortified wine from Portugal protected by the PDO. The ECJ also found that the General Court was entitled to find that ‘the contested mark could not be regarded…as using the designation of origin ‘Porto’ or ‘Port’.’ As a result, if the incorporation of the word protected by the PDO ‘does not lead the relevant public to associate that mark or the goods in respect of which it is registered with the designation of origin concerned or the wine product in respect of which it is protected’ then the trademark cannot be found to have exploited the reputation of the protected name.

As the EUIPO’s appeal was upheld, the General Court action was dismissed ‘in its entirety’. The ECJ also found it was not necessary to refer the case back to the General Court.

What can we take from this decision?
The case is an unusual example of where the ECJ has departed from a decision of an AG. It is also now clear that the consideration by the courts of PDOs is within the exclusive jurisdiction of the European Courts and EU law exclusively applies. The domestic law of Member States cannot be considered alongside EU law.  Practitioners have now been provided with some clarity as to the applicable law when considering PDOs.

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