OPINION OF ADVOCATE GENERAL
CAMPOS SÁNCHEZ-BORDONA
delivered on 18 May 2017 (1)
Case C‑56/16 P
European Union Intellectual Property Office (EUIPO)
v
Instituto dos Vinhos do Douro e do Porto, IP
(Appeal — Community trade mark — Word mark ‘Port Charlotte’ — Application for a declaration of invalidity lodged by the Instituto dos Vinhos do Douro e do Porto — Indications of geographical source — Regulation (EC) No 1234/2007 — Comprehensive protection under EU law — Possibility of granting an additional level of protection under national law)
1. The Court already has a substantial body of case-law on protected designations of origin (PDO) and protected geographical indications (PGI). This appeal will enable the Court to apply that case-law to the dispute between a PDO for wines and an EU trade mark which, according to the proprietors of the PDO, has used without due cause the characteristic geographical name of the PDO Porto/Port. (2)
2. The main proceedings are between the Instituto dos Vinhos do Douro e do Porto, IP (‘IVDP’) and the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (‘OHIM’; now the European Union Intellectual Property Office, ‘EUIPO’). The latter, after registering the distinctive sign ‘Port Charlotte’ as an EU trade mark claimed for the identification of whisky, dismissed the action brought by the IVDP for a declaration that that mark was invalid.
3. The General Court (3) partially upheld the action brought by the IVDP against the decision of EUIPO, which has led to a double appeal: (a) EUIPO submits that the judgment under appeal erred in finding that the protection of PDOs is also governed by national (in this case, Portuguese) law, while (b) the IDVP submits that the General Court erred in law in confirming the position of EUIPO to the effect that the mark ‘Port Charlotte’ is compatible with the PDO Porto/Port.
I. European Union law
A. Regulation (EC) No 207/2009 (4)
4. Article 8(4) provides:
‘Upon opposition by the proprietor of a non-registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for shall not be registered where and to the extent that, pursuant to the Union legislation or the law of the Member State governing that sign:
(a) rights to that sign were acquired prior to the date of application for registration of the EU trade mark, or the date of the priority claimed for the application for registration of the EU trade mark;
(b) that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.’
5. Article 53 provides:
‘1. An EU trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings:
…
(c) where there is an earlier right as referred to in Article 8(4) and the conditions set out in that paragraph are fulfilled.
…’
B. Regulation (EC) No 1234/2007 (5)
6. Paragraph 1 of Article 118b, ‘Definitions’, provides:
‘1. For the purposes of this Subsection, the following definitions shall apply:
(a) “designation of origin” means the name of a region, a specific place or, in exceptional cases, a country used to describe a product referred to in Article 118a(1) that complies with the following requirements:
(i) its quality and characteristics are essentially or exclusively due to a particular geographical environment with its inherent natural and human factors;
(ii) the grapes from which it is produced come exclusively from this geographical area;
(iii) its production takes place in this geographical area; and
(iv) it is obtained from vine varieties belonging to Vitis vinifera;
(b) “geographical indication” means an indication referring to a region, a specific place or, in exceptional cases, a country, used to describe a product referred to in Article 118a(1) which complies with the following requirements:
(i) it possesses a specific quality, reputation or other characteristics attributable to that geographical origin;
(ii) at least 85% of the grapes used for its production come exclusively from this geographical area;
(iii) its production takes place in this geographical area; and
(iv) it is obtained from vine varieties belonging to Vitis vinifera or a cross between the Vitis vinifera species and other species of the genus Vitis.’
7. Article 118f, ‘Preliminary national procedure’, provides in paragraphs 6 and 7:
‘6. Member States shall introduce the laws, regulations or administrative provisions necessary to comply with this Article by 1 August 2009.
7. Where a Member State has no national legislation concerning the protection of designations of origin and geographical indications, it may, on a transitional basis only, grant protection to the name in accordance with the terms of this Subsection at national level with effect from the day the application is lodged with the Commission. Such transitional national protection shall cease on the date on which a decision on registration or refusal under this Subsection is taken.’
8. Paragraph 1 of Article 118l (‘Relationship with trade marks) reads:
‘Where a designation of origin or a geographical indication is protected under this Regulation, the registration of a trademark corresponding to one of the situations referred to in Article 118m(2) and relating to a product falling under one of the categories listed in Annex XIb shall be refused if the application for registration of the trademark is submitted after the date of submission of the application for protection of the designation of origin or geographical indication to the Commission and the designation of origin or geographical indication is subsequently protected.
Trademarks registered in breach of the first subparagraph shall be invalidated.’
9. Pursuant to paragraphs 1, 2 and 3 of Article 118m, ‘Protection’:
‘1. Protected designations of origins and protected geographical indications may be used by any operator marketing a wine which has been produced in conformity with the corresponding product specification.
2. Protected designations of origins and protected geographical indications and the wines using those protected names in conformity with the product specification shall be protected against:
(a) any direct or indirect commercial use of a protected name:
(i) by comparable products not complying with the product specification of the protected name; or
(ii) in so far as such use exploits the reputation of a designation of origin or a geographical indication;
(b) any misuse, imitation or evocation, even if the true origin of the product or service is indicated or if the protected name is translated or accompanied by an expression such as “style”, “type”, “method”, “as produced in”, “imitation”, “flavour”, “like” or similar;
(c) any other false or misleading indication as to the provenance, origin, nature or essential qualities of the product, on the inner or outer packaging, advertising material or documents relating to the wine product concerned, and the packing of the product in a container liable to convey a false impression as to its origin;
(d) any other practice liable to mislead the consumer as to the true origin of the product.
3. Protected designations of origin or protected geographical indications shall not become generic in the Union within the meaning of Article 118k(1).’
10. In accordance with Article 118n (‘Register’):
‘The Commission shall establish and maintain an electronic register of protected designations of origin and protected geographical indications for wine which shall be publicly accessible.’
11. Article 118s, ‘Existing protected wine names’, stipulates:
‘1. Wine names, which are protected in accordance with Articles 51 and 54 of Regulation (EC) No 1493/1999 and Article 28 of Commission Regulation (EC) No 753/2002 of 29 April 2002 laying down certain rules for applying Council Regulation (EC) No 1493/1999 [of 17 May 1999 on the common organisation of the market in wine (OJ 1999 L 179, p. 1)] as regards the description, designation, presentation and protection of certain wine sector products, shall automatically be protected under this Regulation. The Commission shall list them in the register provided for in Article 118n of this Regulation.
2. Member States shall, in respect of existing protected wine names referred to in paragraph 1, transmit to the Commission:
(a) the technical files as provided for in Article 118c(1);
(b) the national decisions of approval.
3. Wine names referred to in paragraph 1, for which the information referred to in paragraph 2 is not submitted by 31 December 2011, shall lose protection under this Regulation. The Commission shall take the corresponding formal step of removing such names from the register provided for in Article 118n.
4. Article 118r shall not apply in respect of existing protected wine names referred to in paragraph 1.
The Commission may decide, until 31 December 2014, at its own initiative and in accordance with the procedure referred to in Article 195(4), to cancel protection of existing protected wine names referred to in paragraph 1 if they do not meet the conditions laid down in Article 118b.
…’
12. Under the heading ‘Stricter rules decided by Member States’, Article 120d provides:
‘Member States may limit or exclude the use of certain oenological practices and provide for more stringent restrictions for wines authorised under Community law produced in their territory with a view to reinforcing the preservation of the essential characteristics of wines with a protected designation of origin or a protected geographical indication and of sparkling wines and liqueur wines.
Member States shall communicate those limitations, exclusions and restrictions to the Commission, which shall bring them to the attention of the other Member States.’
II. Background to the dispute
13. It is apparent from paragraphs 1 to 15 of the judgment under appeal that, on 27 October 2006, Bruichladdich Distillery Co. Ltd (‘Bruichladdich’) applied to register the Community trade mark ‘Port Charlotte’ for goods in class 33 of the Nice Agreement, (6) ‘alcoholic beverages’.
14. The mark was registered on 18 October 2007 under the number 5421474, and published in Community Trade Marks Bulletin No 60/2007 of 29 October 2007.
15. On 7 April 2011, the IVDP filed an application with EUIPO for a declaration that the mark was invalid pursuant to Article 53(1)(c), read in conjunction with Article 8(4), Article 53(2)(d), and Article 52(1)(a), read in conjunction with Article 7(1)(c) and (g), of Regulation No 207/2009.
16. In response to that application, Bruichladdich limited the list of goods in respect of which the contested mark was registered to ‘whisky’.
17. In support of its application for a declaration of invalidity, the IVDP relied on the PDOs ‘porto’ and ‘port’, which it claimed (a) were protected, in all the Member States, by several provisions of Portuguese law and by Article 118m(2) of Regulation No 491/2009 and (b) were registered and protected under the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration of 31 October 1958, as revised and amended, in France, Italy, Cyprus, Hungary, Portugal and Slovakia
18. The Cancellation Division of EUIPO rejected the application for a declaration of invalidity on 30 April 2013.
19. On 2 February 2014, the IVDP filed a notice of appeal with EUIPO against the decision of the Cancellation Division.
20. By decision of 8 July 2014, the Fourth Board of Appeal of EUIPO dismissed the three grounds on which the appeal was based.
21. In the first place, the Board of Appeal rejected the argument regarding infringement of Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof. The Board of Appeal held in essence that the protection of PDOs for wines was governed exclusively by Regulation No 491/2009 and, therefore, fell within the exclusive competence of the European Union. The Board of Appeal further held that the PDO in this case was protected only for wine, a product not comparable to whisky, and that the mark ‘Port Charlotte’ did not evoke port wine. The Board of Appeal added that it was not necessary to determine whether the geographical names ‘porto’ and ‘port’ had a reputation because the disputed mark neither used nor evoked those names.
22. In the second place, the Board of Appeal rejected the argument regarding infringement of Article 53(2)(d) of Regulation No 207/2009, based on the fact that the PDOs ‘porto’ and ‘port’ were registered with the World Intellectual Property Organisation (WIPO) on 18 March 1983 under the number 682, in accordance with the Lisbon Agreement. The Board of Appeal held that that registration protected only the term ‘porto’ — not just in Portugal — which was not part of the contested mark.
23. In the third place, the Board of Appeal rejected the arguments regarding infringement of Article 52(1)(a) of Regulation No 207/2009, read in conjunction with Article 7(1)(c) and (g) thereof. The Board of Appeal took the view that the contested mark could not refer at the same time to a place — existing or imaginary — called Port Charlotte and to ‘the city of Oporto (Porto)’. The Board of Appeal went on to state that the absolute ground for refusal under Article 7(1)(c) of that regulation had been referred to ‘only on appeal’, from which it followed that the IVDP was not entitled to raise that ground. At all events, the contested mark was not liable to mislead the public as to the geographical origin of the goods covered by it within the meaning of Article 7(1)(g) of that regulation.
III. The procedure before the General Court and the judgment under appeal
24. On 15 September 2014, the IVDP lodged an application for annulment with the General Court against the decision of the Board of Appeal. That application was divided into six pleas of which the third, concerning the infringement of Article 53(1)(c) in conjunction with Article 8(4) of Regulation No 207/2009, is of particular interest for the purposes of this appeal.
25. The IVDP complained that the Board of Appeal wrongly held that the protection of wines covered by the PDO Porto/Port was governed exclusively by Regulation No 491/2009, thereby excluding the protection provided by Portuguese law.
26. Within the same plea but separately from the references to Portuguese law, the IVDP criticised the findings of the Board of Appeal regarding the compatibility of the mark ‘Port Charlotte’ and the PDO Porto/Port, referring to Article 118m of Regulation No 491/2009.
27. In relation to that same provision, the IVDP claimed successively: (i) that it prohibits the direct or indirect commercial use of a PDO for comparable products, as is the case of port wine and whisky; (ii) that, even if they were not comparable products, the commercial use of the term Port, to which the PDO relates, by the contested mark constituted exploitation of the reputation or prestige of that PDO, conduct also precluded by the provision; and (iii) that, in any event, there was an imitation or evocation of the PDO Porto/Port by the mark ‘Port Charlotte’.
28. The General Court upheld the IVDP’s arguments concerning the application of national law. The General Court’s analysis led it to find that the grounds for invalidity of a registered mark may be based, individually or cumulatively, on earlier rights ‘under the [EU] legislation or national law governing [their] protection’. The General Court took the view that the protection conferred on PDOs may be supplemented by the relevant national law where it grants PDOs additional protection.
29. On that basis, and given that the IVDP had relied on the relevant rules of Portuguese law concerning the PDO Porto/Port, the Board of Appeal was not entitled to fail to apply the national legislation on the ground that the protection of that designation of origin fell within Regulation No 491/2009 exclusively, and indeed the exclusive competence of the European Union.
30. As to the remaining pleas for annulment raised by the IVDP, the General Court confirmed the compatibility of the contested mark with the PDO Porto/Port in an assessment similar (albeit with slight differences) to that of the Board of Appeal.
IV. The appeal lodged by EUIPO
31. In its single ground of appeal, EUIPO complains essentially about the finding of the General Court that PDOs are entitled, under national law, to protection additional and parallel to that afforded under EU law. EUIPO claims that that position constitutes an incorrect application of Article 53(1)(c), in conjunction with Article 8(4), of Regulation No 207/2009, and of Article 53(2)(d) of that regulation.
32. EUIPO acknowledges that ‘porto’ and ‘port’ were, on the date of the application to register the mark ‘Port Charlotte’ (27 October 2006), terms covered by the Community legislation governing the protection of PDOs. The applicable legislation on the date when the application for a declaration that the registered trade mark was invalid was filed (7 April 2011) was Regulation No 1234/2007, as amended by Regulation No 491/2009. That amendment, by means of which Articles 118a to 118t were included in Regulation No 1234/2007, merely reproduced Articles 33 to 51 and 53 of Regulation (EC) No 479/2008. (7) In order to examine the EU legislature’s intention regarding the protection of PDOs for wines, it is therefore necessary to take into account not only the provisions and the recitals of Regulation No 1234/2007 but also those of Regulation No 479/2008.
33. EUIPO relies on the Budĕjovický Budvar, (8) and draws a parallel between the rules on protection of PDOs for wines and the rules on protection of PDOs for foodstuffs and agricultural products, governed by Regulation (EC) No 510/2006. (9) In EUIPO’s submission, that judgment supports its contention that the General Court erred in law by accepting national provisions providing for additional protection, for, since there are uniform provisions of EU law, any other protection under national law is excluded. The provisions of Regulation No 491/2009 are uniform and comprehensive across the whole territory of the Union.
34. EUIPO puts forward three arguments in that connection: (i) in order for national law to coexist with the provisions of EU law or to derogate from those provisions, there must be express provisions authorising this, while Article 8(4) of Regulation No 207/2009 cannot be accepted as such a provision for those purposes. The reference concerned is a general reference which does not confer on national law the right to derogate from the EU system of protection; (ii) in accordance with Article 2(2) TFEU, the principle of subsidiarity in the exercise of shared competence does not enable Member States to exercise their competence once the EU institutions have decided to exercise theirs; and (iii) according to the case-law of the Court on the protection of designations of origin for agricultural products and foodstuffs, (10) the level of protection provided by national law ceases when the protection provided by EU law enters into force.
35. The IVDP disputes that approach and rejects any parallel between Regulation No 491/2009, applicable to PDOs for wines (Articles 118a to 118z), and Regulation No 510/2006, applicable to designations of origin for other agricultural products and foodstuffs. The application to the wine sector of the Court’s case-law on Regulation No 510/2006 (11) should therefore be rejected, and the IVDP submits that that position is bolstered in the light of paragraph 28 of the judgment in Assica and Krafts Foods Italia. (12)
36. The IVDP contends that Article 8(4) of Regulation No 207/2009 justifies the application of the protection provided for in national law. The IVDP criticises EUIPO’s assertion regarding the possible distortion of the operation of the internal market if it is found that national laws are able to afford additional protection and states that the protection granted by Portuguese law to PDOs with a strong reputation is identical to that granted under EU trade mark law.
37. Bruichladdich essentially supports EUIPO’s line of argument concerning the comprehensive nature of the protection granted by EU law to PDOs and PGIs.
38. The Portuguese Government, by contrast, submits that it is necessary to reject the argument that the protection granted to PDOs by EU law is comprehensive and takes precedence over any other level of national protection.
V. The IVDP’s cross-appeal
39. In addition to lodging a response to EUIPO’s appeal, the IVDP has lodged its own appeal, consisting of three grounds. The first ground (13) is broadly the same as the arguments it put forward against the corresponding ground raised by EUIPO regarding the exclusive application of the protection afforded to PDOs under EU law.
40. By its second ground, the IVDP claims that, by finding that the contested mark neither used nor evoked the PDO Porto/Port, meaning that there was no need to establish its reputation, the General Court (14) breached Article 118m(2)(a) of Regulation No 491/2009.
41. In the IVDP’s submission, the inclusion of the word ‘port’ in the contested trade mark imitates or evokes the PDO Porto/Port, which is eligible for the protection provided for in Article 118m(2)(a)(ii) of Regulation No 491/2009. The Court has previously explained that evocation exists where the term used to designate a product incorporates part of a PDO, so that when the consumer is confronted with the name of the product, the image triggered in his mind is that of the product whose PDO is protected. (15)
42. By its third ground, the IVDP claims that the finding of the General Court, (16) to the effect that use of the contested mark does not involve misuse, imitation or evocation of the PDO Porto/Port, infringes Article 118m(2)(b) of Regulation No 491/2009. In that regard, the IVDP rejects the considerations of the General Court concerning the characteristics of port wine and whisky, on which basis it concluded that both alcoholic beverages are well known to the average consumer. In the IVDP’s submission, they are, in fact, comparable products.
43. EUIPO submits that the second and third grounds of appeal are inadmissible because they do not relate to appraisals of law by the General Court but rather to the assessment of the evidence and facts. EUIPO relies in that connection on Viiniverla (17) in which the Court held that the assessment of evocation is not a question of law.
44. In the alternative, as regards the comparability of the mark and the PDO, EUIPO claims that the IVDP has simply reproduced its arguments at first instance without establishing that the General Court erred in law or distorted the facts. EUIPO further argues that the General Court applied correctly the case-law laid down in Viiniverla (18) regarding the concept of evocation.
45. As regards the first ground of appeal put forward by the IVDP, EUIPO refers to the statements made in its own appeal regarding uniform and comprehensive protection under EU law.
46. Bruichladdich also contests the IVDP’s first ground of appeal and requests that it be dismissed, in accordance with the case-law of the Court relating to Regulation No 510/2006, which the General Court applied correctly. The fact that the system is exclusive does not preclude the application of national laws governing PDOs and PGIs but only where the latter do not fall within the scope of the regulations.
47. Bruichladdich points out that, in the areas covered by the Community regulations, it can be seen that there is a common aim of creating a single system of protection at EU level, which precludes dual protection based on both national law and EU law. The sole exception permitted is the provision for application of transitional arrangements (Article 5(6) of Regulation No 510/2006 and Article 118f(6) and (7) of Regulation No 491/2009).
48. Lastly, Bruichladdich contends that the second and third grounds of the IVDP’s appeal are unfounded. There is no likelihood of confusion on the part of the relevant European Union public when it compares the contested mark with the PDO Porto/Port. The PDO refers to a region of Portuguese territory whereas the contested mark does not refer to that region but to a coastal area associated with a port or a female name (Charlotte), which is the main element of the mark. The lack of similarity between the signs precludes the possibility of applying Article 118m(2) of Regulation No 491/2009, without it being necessary to examine the conditions laid down in that provision, in particular the condition relating to exploitation of the reputation of the PDO ‘porto’ or ‘port’. In any event, the products concerned are not comparable in terms of their ingredients, their taste or their alcoholic strength.
VI. Analysis
A. Preliminary remark
49. The proceedings in this (dual) appeal have mainly focused on whether the body of legal rules applicable to the protection of a PDO for wines is, exclusively or comprehensively, that laid down in Regulation No 1234/2007. (19)
50. In line with the judgment under appeal, the IVDP argues that Portuguese law should be applied since it offers a higher level of protection than EU law. However, that proposition cannot be accepted. In fact, in the pleadings lodged with the Court of Justice, the IVDP remained silent about the substance of that alleged higher level of protection. (20) That was not the case before the General Court, since, in the application for annulment, (21) the IVDP stated that Portuguese law prohibited the use of the PDO Porto/Port not only if there was a likelihood of confusion but also if its illicit use (by a trade mark) was liable to damage the reputation of the PDO by taking unfair advantage of its distinctive character or prestige.
51. I repeat that that proposition is incorrect because the protection provided by EU law to PDOs for wines is, at least, as strong as that afforded by the Portuguese legislation to which the IDVP refers. In particular, one of the grounds precluding the registration of an EU mark is where that mark seeks to take unfair advantage of the prestige of a PDO for wines.
52. The IVDP itself acknowledges, implicitly and explicitly, that that is the case from a dual perspective. First, when developing its cross-appeal it relies on Regulation No 1234/2007 to argue that Article 118m(2)(b)(ii) of that regulation allows it ‘to obtain protection against the use of the contested trade mark, since “such use exploits the reputation” of the designation of origin “PORT”’. (22) Second, the IVDP states that the ‘protection granted under Portuguese law to Geographical Indications with high reputation is identical to the protection granted to well-known trade marks under EU law’. (23)
53. Since Portuguese law and EU law provide equivalent protection in those cases, I believe that the debate which has arisen concerning whether one takes precedence over the other, as a result of the alleged higher level of protection of PDOs under the national provisions is, to a large extent, artificial. The General Court could, therefore, have confined itself to examining the remaining grounds of appeal without needing to address a broader problem which, while undoubtedly interesting, did not occur in the situation at issue.
54. Since the judgment under appeal includes considerations (and an operative part based on those considerations) contrary to the comprehensive application of EU law to delimit the protection of PDOs for wines, it will be necessary to address the criticism made of those considerations in the appeal. I shall say straightaway that the solution will come from an interpretation of the applicable regulations, in particular Regulation No 1234/2007, as amended by Regulation No 491/2009. (24)
B. The single ground of EUIPO’s appeal and the first ground of the IVDP’s cross-appeal
55. I believe it is necessary to analyse the single ground of EUIPO’s appeal jointly with the first ground of the IVDP’s cross-appeal. Whilst they use different approaches, both relate to the comprehensive application of Regulation No 1234/2007, contrary to the view that PDOs for wines are entitled to additional protection under national law.
56. EUIPO relies on the judgment in Budĕjovický Budvar (25) to counter the proposition that national law can provide PDOs with a higher level of protection than that stipulated in EU law. In that case, the Court was required to give a decision on the same issue, (26) albeit in relation to the protection afforded by Regulation No 510/2006 in relation to a geographical indication for beer. The judgment held that that protection was comprehensive, since the aim of the regulation was not ‘to establish, alongside national rules which may continue to exist, an additional system of protection for qualified geographical indications, like, for example, that introduced by Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), but to provide a uniform and exhaustive system of protection for such indications’. (27)
57. The opposing positions in the appeal respectively maintain or dispute that the case-law of the Court on Regulation No 510/2006 is applicable to the scope of Regulation No 1234/2007. The IVDP submits that PDOs for wines have such specific features that their protection must differ from that which EU law grants to similar concepts.
58. The General Court acknowledges (28) initially that Article 118m(1) and (2) of Regulation No 1234/2007 governs uniformly and exclusively the authorisation and the limits of geographical indications and, where appropriate, the prohibition of their commercial use. However, it then goes on to state (29) that Article 8(4) of Regulation No 207/2009 (on the EU trade mark) enables the registration of a trade mark to be prohibited, or the mark to be cancelled if it is already registered, where that mark conflicts with an earlier sign which is protected by EU law or national law. It infers from this that the PDO Porto/Port is eligible for the additional protection conferred by Portuguese law.
59. In theory, a reading of Article 8(4) of Regulation No 207/2009 in isolation supports the finding reached by the General Court. However, its interpretation cannot ignore the consequences arising from other legislative elements of EU law. In particular, regard must be had to the rules governing PDOs and PGIs, since the EU exercised its own powers in relation to them. It did so, moreover, by introducing into Regulation No 1234/2007 a specific provision (Article 118l) for determining the relationship between those types of intellectual property right (which are collective in nature) and EU registered trade marks (which are individual in nature).
60. The EU legislature decided to exercise its competence in relation to PDOs and PGIs in the areas of agricultural products and foodstuffs (Regulation No 510/2006), spirit drinks (Regulation No 110/2008) (30) and the wine sector (Regulation No 1234/2007). Outside the areas covered by those regulations, designations of origin and geographical indications remain within the competence of the Member States.
61. In the sectors brought within the scope of EU law, the protection afforded by EU regulations does not extend to all designations of origin or geographical indication but rather only to those referred to in the regulations. As regards the former, protection extends to PDOs designating products whose quality and characteristics are essentially and exclusively due to a particular geographical environment, including the natural and human factors inherent in that environment. As regards the latter, protection is afforded only to qualified indications, covering products which possess a quality, a reputation or other special characteristics attributable to their geographical origin (PGI). PGIs and PDOs both include the territorial component but the latter are reserved for goods whose special attributes are due to natural or human factors in their place of origin.
62. 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. (31) Member States may exercise their discretion when laying down rules for simple (not qualified) geographical indications; that is, those which do not require that products must have a special attribute or a certain reputation derived from the place in which they originate but must be sufficient to identify that place. The EU legislation applies only to PDOs and PGIs but it does so comprehensively whereas simple geographical indications receive protection under national law.
63. The essential parallels between Regulation No 510/2006, on the one hand, and the section relating to PDOs for wines in Regulation No 1234/2007, on the other, are, in my view, undeniable. They have the same aim of assuring consumers — and, from another perspective, the proprietors of the respective designations — that the goods concerned are of a high level of quality based on their geographical origin. The similarity also extends to the requirement that those products (wine in one case, foodstuffs and agricultural products in general in the other) must be made subject to the same system of registration and subsequent uniform protection throughout the territory of the Union, regardless of their national origin.
64. Regulation No 479/2008 (the provisions of which would be included in Regulation No 1234/2007 following its amendment) makes clear that the latter is merely the transposition to the area of PDOs for wines of the principles laid down in Regulation No 510/2006. Recital 27 of Regulation No 479/2008 explicitly states that ‘applications for a designation of origin or a geographical indication [for wines] are [to be] examined in line with the approach followed under the Community’s horizontal quality policy applicable to foodstuffs other than wine and spirits in Council Regulation (EC) No 510/2006 of 20 March 2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs’.
65. The parallel thus established is clear when an examination is made of the features of the procedure for registration of PDOs and PGIs. The judgment in Budĕjovický Budvar observed that, ‘unlike other Community systems for the protection of industrial and commercial property rights, … the registration procedure under Regulations No 2081/92 and No 510/2006 is based on powers shared between the Member State concerned and the Commission, since the decision to register a designation may be taken by the Commission only if the Member State concerned has submitted to it an application for that purpose and such an application may be made only if the Member State has checked that it is justified ([judgment of 6 December 2001, Carl Kühne and Others, C‑269/99, EU:C:2001:659], paragraph 53). The national registration procedures are therefore incorporated in the Community decision-making procedure and constitute an essential part thereof. They cannot exist outside the Community system of protection’. (32)
66. That model was included in Regulation No 479/2008, in relation to the wine sector, (33) and Regulation No 110/2008 (Article 17), in relation to spirit drinks. The Court’s arguments in Budĕjovický Budvar (which I have transcribed in the previous point) regarding that (procedural) aspect of Regulation No 2081/92 and Regulation No 510/2006 can, therefore, be applied to Regulation No 1234/2007.
67. Moreover, the fact that the adoption of the regulations applicable to PDOs and PGIs replaces the national systems of protection is confirmed by the regulations themselves through the establishment of transitional provisions, in view of the fact that national systems which already had legislation governing designations of origin co-existed in the Union with others which did (or do) not have such legislation. (34)
68. In relation to wines, it is necessary to go back to Regulation No 1493/1999, Article 54(2) of which defined ‘quality wines produced in specified regions’ (‘quality wines psr’). Article 54(4) provided that ‘Member States shall forward to the Commission the list of quality wines psr which they have recognised, stating, for each of these quality wines psr, details of the national provisions governing the production and manufacture of those quality wines psr’. Since the PDO Porto/Port benefited from protection under Portuguese law, the wines covered were recorded on the list of quality wines psr and were automatically protected, pursuant to Regulation No 1234/2007 (Article 118s(1)), and the Commission included them in the register provided for in Article 118n of that regulation (E-Bacchus list). (35)
69. However, that automatic protection is qualified by Article 118s of Regulation No 1234/2007, which included a number of precautions to ensure that the wines on the E-Bacchus list satisfied the conditions laid down, setting time limits for the Member States to send essential information and for the Commission to scrutinise whether or not addition to the register was appropriate. (36)
70. Where a Member State has no national legislation concerning PDOs, Article 118f(7) of Regulation No 1234/2007 authorises that State, on a transitional basis, to grant protection to the name at national level. That transitional protection ceases on the date on which the Commission adopts a decision on registration or refusal under that regulation.
71. All those transitional provisions confirm — if that is necessary — that the Member States have lost the power to provide additional and enhanced protection to PDOs for wines, since these now have the status granted to them by Regulation No 1234/2007. Otherwise, it would make no sense to provide for the transition from the old to the new situation, the aim of which is to structure the transfer of the competence to establish the framework for protection. Once again, the arguments in this respect in Budĕjovický Budvar, (37) concerning Regulation No 510/2006, are applicable to Regulation No 1234/2007.
72. In response to those criteria (and the other criteria underlying the judgment in Budĕjovický Budvar, (38) which I do not believe it is helpful to discuss further), the IVDP draws attention to the differences between Regulation No 510/2006 and Regulation No 479/2008. Without denying that some of those differences are present, I believe that they do not undermine the strong similarity between the two as regards their aims and essential characteristics.
73. The IDVP relies on recital 28 of Regulation No 479/2008 to argue that the European Union intended to respect the specific national features of the protection of wines, as its wording shows: ‘In order to preserve the particular quality characteristics of wines with a designation of origin or a geographical indication, Member States should be allowed to apply more stringent rules in that respect.’
74. However, I do not find that reasoning persuasive. Recital 28 of Regulation No 479/2008 must, on the contrary, be interpreted in conjunction with Article 120d of Regulation No 1234/2007, pursuant to which Member States may require the use of certain oenological practices and provide for more stringent restrictions for wines covered by PDOs produced in their territory. That provision does not undermine the uniformity or exclusivity of the system of protection granted to PDOs whose wines have achieved minimum quality levels. If a Member State establishes that its wines can only obtain PDO status after complying with more stringent production practices, it may legitimately do so. But, I repeat, that requirement does not mean that the system of protection of the PDO, once it has been registered in respect of the entire EU, can be left to national law. (39)
75. The considerations set out above lead me to propose that the single ground of appeal raised by EUIPO should be upheld. Whilst the General Court rightly drew attention in its judgment to the ‘exclusive’ nature of the protection afforded by Article 118m(1) and (2) of Regulation No 1234/2007, (40) it erred in law in that it invalidated that correct assertion later in the judgment (paragraphs 44 to 49) by accepting the additional protection under national law that it had previously and implicitly rejected.
C. The second and third grounds of the IVDP’s cross-appeal
1. The admissibility of the grounds
76. An initial reading of those two grounds of appeal raised by the IVDP could lead to a ruling that they are inadmissible, as the other parties to the proceedings claim, since they appear to be directed against mere assessments by the General Court which are exempt from the scrutiny of the Court of Justice, according to the latter’s settled case-law. (41)
77. If the subject matter of those two grounds was confined to disagreement with the assessments of the General Court regarding the similarity of the mark and the PDO, or to the predominant elements of the perception that the public is likely to have of the mark and the PDO, or to the likelihood of confusion between the mark and the PDO, I would agree with the plea of inadmissibility raised.
78. However, I believe that that is not the true sense of the two grounds of appeal and that those grounds raise a genuine issue of law and not an issue involving a mere assessment of facts or what the Court calls ‘considerations of a factual nature’. It is necessary to establish whether the General Court’s interpretation of Article 118m(2)(a) and (b) of Regulation No 1234/2007 was consistent with the legislative content of that provision. In order to confirm or reject that interpretation, it is obviously necessary to turn to legal definitions (use, misuse, imitation, evocation, exploitation of reputation) which, when applied to certain distinctive signs and to PDOs, will require a concrete and not merely an abstract assessment. If, in carrying out its appellate task, the Court of Justice were unable to examine whether the interpretation made by the General Court in this area is lawful, I fear that its powers of review would be somewhat diminished.
79. In support of its plea of inadmissibility, EUIPO relies on paragraph 31 of Viiniverla (42) in which the Court observed that it was for the referring court ‘to assess whether the name “Verlados” for cider spirits constitutes an “evocation” within the meaning of Article 16(b) of Regulation No 110/2008 of the protected geographical indication “Calvados”’. However, it cannot be inferred from that assertion, which is logical in the context of a reference for a preliminary ruling, that the Court is prohibited from giving a ruling in an appeal on the manner in which the General Court has interpreted and applied the legal concept of evocation (or any other analogous concept) in its judgment.
80. Moreover, what is at issue here, given the terms of the judgment at first instance, is the very ability of the PDO Porto/Port (although it could be any other PDO) to fulfil the functions inherent in it and to benefit from the protection of EU law. If it were found — and this is what follows from the interpretation made by the General Court in confirming the earlier interpretation of the Board of Appeal — that that geographical name has a very weak distinctive character, (43) so that the addition of any other term (in this case, ‘Charlotte’) to the term Port would be sufficient to enable registration of EU marks identifying other alcoholic beverages, I believe that the PDO Porto/Port would suffer serious harm by being unable to defend itself against subsequent marks for alcoholic beverages which use its characteristic element (Porto/Port) alongside any of the thousands of possible geographical or toponymic terms.
81. In other words, the error of law underlying that part of the judgment at first instance consists, in my view, of a failure to observe the rule of EU law enshrining the right of the PDO Porto/Port, derived from Regulation No 1234/2007, to prevent the registration of any mark for alcoholic beverages which uses that word. The right of exclusion (ius excludendi alios) is key to the protection granted to PDOs for wines under that regulation, Article 118m(2) of which protects PDOs against any direct or indirect commercial use in so far as such use exploits the reputation of a PDO (subparagraph (a)), and against misuse, imitation or evocation of a PDO (subparagraph (b)). Both types of protection are referred to in the grounds of the IVDP’s cross-appeal, which in my view are admissible.
2. The second ground of the IVDP’s cross-appeal
82. The IDVP argued before the General Court, in its application for annulment, that the Board of Appeal infringed Article 118m(2)(a)(ii) of Regulation No 1234/2007 by refusing to accept that the inclusion of the PDO Porto/Port in the trade mark ‘Port Charlotte’ amounted to exploitation of its reputation. The General Court responded to that claim by confirming the view of the Board of Appeal, to the effect that ‘the contested mark neither used nor evoked the designation of origin in question, so that it was not necessary to verify whether it had a reputation’. (44)
83. First, that response of the General Court deviates to an extent from the argument put forward by the applicant. When introducing the discussion of whether the reputation of the PDO was exploited, the General Court refers to the concept of evocation, which does not appear in Article 118m(2)(a)(i) of Regulation No 1234/2007 but in Article 118m(2)(b), which was the subject of another ground of appeal.
84. The General Court is inconsistent when it confirms that ‘the contested mark neither used nor evoked the designation of origin in question’ (paragraph 72 of the judgment) but then goes on to state that ‘the term “port” forms an integral part of the contested mark’ (paragraph 76 of the judgment under appeal, dealing with the analysis of evocation).
85. Leaving aside, for now, the difficulties relating to evocation, to which I shall return when I deal with the next ground of appeal, it is undeniable that the mark ‘Port Charlotte’ reproduces the term included in the PDO: ‘Port’. It is clear from a mere glance that its initial component is identical to the PDO. The first essential condition for the protection provided under Article 118m(2)(a)(ii) of Regulation No 1234/2007 is therefore fulfilled and the General Court erred in not accepting that at paragraph 72 of the judgment.
86. The wines covered by the PDO also have a reputation, a matter on which there is no dispute because they can be regarded as well known. (45) The discussion is therefore confined to establishing whether the use of the term included in the PDO in the contested mark entails the exploitation of that reputation, for the purposes of Article 118m(2)(a)(ii) of Regulation No 1234/2007.
87. The reasons why the General Court refused to accept the existence of such exploitation are based on a legally incorrect premiss, to which I have referred. In the General Court’s view, the PDO Porto/Port lacks its own distinctive character because its single term (Porto/Port), when included in a trade mark for alcoholic beverages which reproduces that term alongside another word, will be perceived by the public as denoting a mere geographical place (a port) identified by that second element. Therefore, according to that view, Porto/Port is a designation — whether generic or merely common — which can be appropriated by any economic operator who wishes to use it, alongside another word (for a person, a city or any toponym or geographical feature), to identify his own alcoholic beverages.
88. To my mind, that premiss cannot be accepted, since it weakens the distinctive character of the PDO Porto/Port to such an extent that it transforms it de facto into a generic designation, contrary to the express prohibition in Article 118m(3) of Regulation No 1234/2007. (46)
89. Accepting, as the General Court does, (47) that, also in the context of alcoholic beverages, the term ‘port’ is associated with a river or coastal harbour rather than with the PDO, deprives the PDO of substance to the point of attributing to it generic characteristics which deprive it of protection. Although ‘port’ means harbour in English and in French, that factor cannot justify leaving the PDO without protection: the decision to afford it the same protection as the other PDOs for wines, and not lesser protection on the basis of a number of semantic considerations, was adopted when the EU authorities approved its registration on the list of PDOs.
90. The effect of that protection conferred by EU law is, in the instant case, that the term ‘Port’ could not be used, on its own or with other words, in marks identifying alcoholic beverages that were likely to derive unfair advantage from its reputation (particularly beverages in competitive proximity, since they are targeted at the same type of public and use the same distribution and sales networks).
91. Therefore, the General Court erred in law in that 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.
3. The third ground of the IVDP’s cross-appeal
92. This ground alleges the infringement of Article 118m(2)(b) of Regulation No 1234/2007. The IVDP claims that the General Court did not recognise (48) the evocation of the PDO Porto/Port by the contested mark.
93. Since the previous ground of appeal has been upheld, it is possible to refrain from analysing this ground because the identification of a breach of Article 118m(2)(a)(ii) of Regulation No 1234/2007 necessitates the quashing of the judgment of the General Court. Nevertheless, I shall examine this ground.
94. According to the case-law of the Court, (49) evocation ‘covers a situation where the term used to designate a product incorporates part of a protected designation, so that when the consumer is confronted with the name of the product, the image triggered in his mind is that of the product whose designation is protected’. (50)
95. The prohibition of evocation is not necessarily linked to the likelihood of confusion on the part of the public. It is not essential that the consumer believes that the mark evoking the PDO covers the same products as those protected by the PDO evoked. The Court has consistently held that there may be evocation of a PDO even where there is no likelihood of confusion between the products. (51)
96. The General Court referred in paragraph 76 of the judgment under appeal to the case-law of the Court of Justice to the effect that a likelihood of confusion is not required for there to be evocation. However, in developing its position on this point, it endorsed the finding of the Board of Appeal that ‘there was no “evocation” of a port wine … since whisky is a different product and there was no potentially misleading or confusing statement in the contested mark’. (52) Having set down that proposition, the General Court rejected the associated plea for annulment on the basis of ‘the considerations set out in paragraph 71 above’ in relation to the use of the contested mark. (53)
97. I believe that, in adopting those arguments, the General Court committed a twofold error of law: (a) first, 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 (b) second, it repeated, by referring to an earlier passage of the judgment, the error which I established above in the analysis of the IVDP’s second ground of appeal.
98. Even ‘in the absence of any likelihood of confusion’ (54) 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. The General Court should have disregarded the likelihood of confusion (55) in order to focus on whether the new mark created ‘in the mind of the public an association of ideas regarding the origin of the products’, (56) particularly since the products concerned are similar in appearance, both being bottled as alcoholic beverages, and in the light of the (partial) aural similarity between the well-known PDO and the mark in respect of which a declaration of invalidity was sought. (57)
99. In summary, I believe that the two grounds of appeal raised by both EUIPO and the IDVP should succeed, which will lead to the setting aside of the judgment under appeal.
100. In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice, if the decision of the General Court is set aside, the Court of Justice may give final judgment in the matter where the state of the proceedings so permits. To my mind, that is the situation in this appeal.
VII. Conclusion
101. On the basis of the foregoing considerations, I propose that the Court:
(1) set aside the judgment of the General Court of the European Union of 18 November 2015, Instituto dos Vinhos do Douro e do Porto, IP v OHIM — Bruichladdich Distillery (T‑659/14, not published, EU:T:2015:863);
(2) annul the decision of the Fourth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 8 July 2014 (Case R 946/2013-4) concerning an application for a declaration of invalidity of the trade mark ‘Port Charlotte’, number 5421474;
(3) order each party to pay its own costs.