AG opinion regarding Aceto Balsamico leaves a sour taste for Modena
In Case C-432/18 Consorzio Tutela Aceto Balsamico di Modena v Balema GmbH, Advocate General Hogan has advised the Court of Justice to rule that the terms "Aceto", "Balsamico" and "Aceto Balsamico" should not qualify for protection as Protected Geographical Indications (PGIs) under Regulation No. 1151/2012.
[For any readers looking for a refresher, the requirements for a PGI to be granted are less stringent than for a Protected Designation of Origin (PDO): for a PDO, all of the production steps (as opposed to at least one) must take place in the specified locality, and the product specification must be "due to" the inherent human and natural characteristics of the locality (as opposed to being "essentially attributable" to the geographical origin).]
Background
"Aceto Balsamico di Modena (PGI)" has PGI status under Regulation 1151/2012, as conferred by Regulation No. 583/2009. Balema produces and markets in Germany vinegar-based products under the names "Balsamico" and "Deutscher Balsamico"; their labels note that the products are manufactured from local (Baden) wine. The Consorzio (owner of the PGI) alleged trade mark infringement by Balema on the basis that Balema’s products do not conform to the product specifications required for lawful use of the PGI. Balema sought a declaration that there had been no infringement.
Balema failed at first instance but succeeded on appeal, because the appeal court considered that only the whole name - "Aceto Balsamico de Modena" - was protected, and not the non-geographical component parts of the PGI. The case was further appealed to the Bundesgerichtshof (Federal Court of Germany), which referred the following question to the Court of Justice:
"Does the protection of the entire name 'Aceto Balsamico de Modena' extend to the use of the individual non-geographical components of the term as a whole ('Aceto', 'Balsamico', 'Aceto Balsamico')?"
The AG’s Opinion
The AG approached the above question from three standpoints, the latter of which appears to be fatal to the Consorzio’s case:
1. Are the above terms "generic terms" within the particular meaning of Article 3(6) of Regulation 1151/2012? Such terms are "names of products which, although relating to the place, region or country where the product was originally produced or marketed, have become the common name of a product in the Union", and Article 6(1) prohibits their registration under the Regulation. For example, in Cases C-465/02 and C-466/02 Germany and Denmark challenged the PDO status of "Feta". Although the word "feta" means "slice" in Italian and a majority of consumers in Denmark thought that the term was generic, the Court of Justice held that there remained a deliberate and indelible link between "feta" and Greece.
The AG suggested that "Aceto" etc. might be generic in the narrow sense of Article 3(6) and therefore incapable of independent registration/protection. "Aceto" is a common Italian word meaning "vinegar", and although consumers might associate "balsamico" with the Consorzio's products, the basic root words "balsam" and "balm" also refer to an oily substance extracted as plant sap, which is said to have healing properties. [Balsamic vinegar gets its name for its similar appearance to balsam.] Whether or not a term is generic is however judged through the eyes of the average consumer, and the AG noted that there is no consumer evidence before the referring court to assist its reasoning.
2. Could the terms be generic in a broader sense? The AG pointed to Article 13(1) of Regulation 1151/2012: "where a [PDO/PGI] contains within it the name of a product which is considered to be generic", use of such name will be exempt from certain kinds of infringement. [Note: once a PGI/PDO has been duly registered, Article 13(2) rules out any possibility of later genericide of the PGI/PDO in the exact form in which it appears on the register.] Article 13(1) does not use the language "generic term" and appears to be broader in scope than Article 3(6). What matters, said the AG, is not really whether the name/term itself is in common parlance, but instead whether the name/term lacks a geographical connotation. So, for example, "prosciutto" from the PDO "Prosciutto de Parma" was commonly used to refer to many types of ham before registration of the PDO in 2013, and is likely to be a generic term within the meaning of Article 3(6). As would be expected given his opinion regarding Article 3(6) genericness, the AG thought that the contested terms are also generic in the broader sense of Article 13(1).
3. What is the impact of the recitals to Regulation 583/2009? This was the killer blow. Regulation 583/2009, which registered "Aceto Balsamico di Modena" as a PGI was passed following objections by Germany, Greece and France (as recorded in Recitals 2, 3, 5 and 7). It was alleged that "Aceto Balsamico" is generic in character. Recital 10 states that "protection is granted to the term 'Aceto Balsamico di Modena' as a whole. Individual non-geographical components of that term may be used...throughout the Community, provided that the principles and rules applicable in the Community's legal order are respected." However, Annex I to the Regulation (in which the PGI is defined) does not specifically exclude the three contested terms from protection. Given that the recitals to a Regulation only have interpretive effect, the failure to specify in Annex I that only the exact form of the PGI enjoys protection might have swung the AG in the Corsozione's favour (given equivocal case law on this point - see C-129/97 and C-130/97 on one hand, and C-132/05 on the other).
Nevertheless, the fact that the registration of this PGI was hotly contested and the unequivocal recitals (and the fact that other PDOs have been registered only in a similar form i.e. "Aceto Balsamico di [...]") led the AG to advise that "Aceto", "Balsamico" and "Aceto Balsamio" are not protected individually. The terms may be used freely, as long as the EU's principles and rules are respected.
Comment
The AG’s Opinion looks to be legally correct (even if some might question his view of genericness under Articles 3(6) / 13(1)). One would expect the Court of Justice to follow the AG's reasoning.
The Bundesgerichtshof (BGH) has already indicated that if the above terms are not protected under Regulation 1151/2012, Balema’s appeal will succeed. This presumably means that the BGH is satisfied that Balema's product names do not use the contested terms in a misleading manner that might be contrary to Article 13(1)(c) or (d) (which are not subject to the exemption under Article 13(1) discussed above), or such claims are not being run. Presumably this also means that a legal alternative such as an unfair competition claim (perhaps a claim akin to extended passing off in the UK) will not get off the ground.
Salad days for Balema!
Trivia of the day (courtesy of the AG)
Your pub quiz team will thank you:
In Wagner's final opera, Parsifal, Amfortas (King of the Grail Knights) receives balsam brought from Arabia, in order to ease the pain from a self-inflicted wound from his holy spear.
[For any readers looking for a refresher, the requirements for a PGI to be granted are less stringent than for a Protected Designation of Origin (PDO): for a PDO, all of the production steps (as opposed to at least one) must take place in the specified locality, and the product specification must be "due to" the inherent human and natural characteristics of the locality (as opposed to being "essentially attributable" to the geographical origin).]
Background
"Aceto Balsamico di Modena (PGI)" has PGI status under Regulation 1151/2012, as conferred by Regulation No. 583/2009. Balema produces and markets in Germany vinegar-based products under the names "Balsamico" and "Deutscher Balsamico"; their labels note that the products are manufactured from local (Baden) wine. The Consorzio (owner of the PGI) alleged trade mark infringement by Balema on the basis that Balema’s products do not conform to the product specifications required for lawful use of the PGI. Balema sought a declaration that there had been no infringement.
Balema failed at first instance but succeeded on appeal, because the appeal court considered that only the whole name - "Aceto Balsamico de Modena" - was protected, and not the non-geographical component parts of the PGI. The case was further appealed to the Bundesgerichtshof (Federal Court of Germany), which referred the following question to the Court of Justice:
"Does the protection of the entire name 'Aceto Balsamico de Modena' extend to the use of the individual non-geographical components of the term as a whole ('Aceto', 'Balsamico', 'Aceto Balsamico')?"
The AG’s Opinion
The AG approached the above question from three standpoints, the latter of which appears to be fatal to the Consorzio’s case:
1. Are the above terms "generic terms" within the particular meaning of Article 3(6) of Regulation 1151/2012? Such terms are "names of products which, although relating to the place, region or country where the product was originally produced or marketed, have become the common name of a product in the Union", and Article 6(1) prohibits their registration under the Regulation. For example, in Cases C-465/02 and C-466/02 Germany and Denmark challenged the PDO status of "Feta". Although the word "feta" means "slice" in Italian and a majority of consumers in Denmark thought that the term was generic, the Court of Justice held that there remained a deliberate and indelible link between "feta" and Greece.
The AG suggested that "Aceto" etc. might be generic in the narrow sense of Article 3(6) and therefore incapable of independent registration/protection. "Aceto" is a common Italian word meaning "vinegar", and although consumers might associate "balsamico" with the Consorzio's products, the basic root words "balsam" and "balm" also refer to an oily substance extracted as plant sap, which is said to have healing properties. [Balsamic vinegar gets its name for its similar appearance to balsam.] Whether or not a term is generic is however judged through the eyes of the average consumer, and the AG noted that there is no consumer evidence before the referring court to assist its reasoning.
2. Could the terms be generic in a broader sense? The AG pointed to Article 13(1) of Regulation 1151/2012: "where a [PDO/PGI] contains within it the name of a product which is considered to be generic", use of such name will be exempt from certain kinds of infringement. [Note: once a PGI/PDO has been duly registered, Article 13(2) rules out any possibility of later genericide of the PGI/PDO in the exact form in which it appears on the register.] Article 13(1) does not use the language "generic term" and appears to be broader in scope than Article 3(6). What matters, said the AG, is not really whether the name/term itself is in common parlance, but instead whether the name/term lacks a geographical connotation. So, for example, "prosciutto" from the PDO "Prosciutto de Parma" was commonly used to refer to many types of ham before registration of the PDO in 2013, and is likely to be a generic term within the meaning of Article 3(6). As would be expected given his opinion regarding Article 3(6) genericness, the AG thought that the contested terms are also generic in the broader sense of Article 13(1).
3. What is the impact of the recitals to Regulation 583/2009? This was the killer blow. Regulation 583/2009, which registered "Aceto Balsamico di Modena" as a PGI was passed following objections by Germany, Greece and France (as recorded in Recitals 2, 3, 5 and 7). It was alleged that "Aceto Balsamico" is generic in character. Recital 10 states that "protection is granted to the term 'Aceto Balsamico di Modena' as a whole. Individual non-geographical components of that term may be used...throughout the Community, provided that the principles and rules applicable in the Community's legal order are respected." However, Annex I to the Regulation (in which the PGI is defined) does not specifically exclude the three contested terms from protection. Given that the recitals to a Regulation only have interpretive effect, the failure to specify in Annex I that only the exact form of the PGI enjoys protection might have swung the AG in the Corsozione's favour (given equivocal case law on this point - see C-129/97 and C-130/97 on one hand, and C-132/05 on the other).
Nevertheless, the fact that the registration of this PGI was hotly contested and the unequivocal recitals (and the fact that other PDOs have been registered only in a similar form i.e. "Aceto Balsamico di [...]") led the AG to advise that "Aceto", "Balsamico" and "Aceto Balsamio" are not protected individually. The terms may be used freely, as long as the EU's principles and rules are respected.
Comment
The AG’s Opinion looks to be legally correct (even if some might question his view of genericness under Articles 3(6) / 13(1)). One would expect the Court of Justice to follow the AG's reasoning.
The Bundesgerichtshof (BGH) has already indicated that if the above terms are not protected under Regulation 1151/2012, Balema’s appeal will succeed. This presumably means that the BGH is satisfied that Balema's product names do not use the contested terms in a misleading manner that might be contrary to Article 13(1)(c) or (d) (which are not subject to the exemption under Article 13(1) discussed above), or such claims are not being run. Presumably this also means that a legal alternative such as an unfair competition claim (perhaps a claim akin to extended passing off in the UK) will not get off the ground.
Salad days for Balema!
Balsamic vinegar: more delicious than it looks
Trivia of the day (courtesy of the AG)
Your pub quiz team will thank you:
In Wagner's final opera, Parsifal, Amfortas (King of the Grail Knights) receives balsam brought from Arabia, in order to ease the pain from a self-inflicted wound from his holy spear.
