EU protection of geographical indications – does GLEN BUCHENBACH imply Scotch Whisky?

The CJEU has recently provided guidance on the extent of protection granted to geographical indications (‘GI’) under EU law.

The Scotch Whisky Association (‘SWA’) brought a case in the German courts against an online distributor of a whisky produced in Germany. SWA claimed that use of ‘Glen Buchenbach’ on the spirit in question infringed the GI for “Scotch Whisky” – a term reserved in the EU for use solely on whisky produced in Scotland. In particular, SWA objected to the use of the word “Glen”, a Gaelic term for ‘deep valley’, on the basis that use of this word implied that the product was of Scottish origin. SWA argued that the protection of a GI extends to any reference that alludes to the geographical origin of the indication (here Scotland) even though the label of the Glen Buchenbach bottle also clearly stated that the whisky was produced in the Waldhorn Distillery, Germany.

In its reference to the CJEU, the German Court asked a number of questions relating to the extent of protection granted to geographical indications, and in particular the interpretation of the provisions of Article 16 of Regulation 110/2008.  The German Court requested clarification on whether ‘indirect use’ or ‘evocation’ of a protected GI could be established in situations where the use complained of was neither identical nor similar to the registered GI. In addition, they asked for an indication of the factors to be taken into account when deciding whether a protected GI is infringed.

Under the first ground, the CJEU held that indirect commercial use must be in a form that is either identical, or phonetically and visually similar, to the registered GI – it is not sufficient for the complained of terms to imply an association with a registered GI. By this reasoning, use of ‘Glen’ is not sufficiently close to constitute indirect use of “Scotch Whisky”.

In instances where holders of protected GIs cannot rely on “direct” or “indirect” use, however, the Regulation also provides an additional ground of protection against “evocation” of the GI as well as false and misleading indications. Under this ground, and for the purposes of establishing ‘evocation’, the Court held that whilst there is no requirement of similarity, the visual and phonetic closeness of the two terms may be a relevant factor. In addition, the Court confirmed the importance of establishing both a direct link between the two terms and a level of conceptual proximity. In this case the question to be asked was whether use of  ‘Glen’ or ‘Glen Buchenbach’ triggers the average consumer to think of “Scotch Whisky”.

Finally, the Court was asked to consider the scope of the third ground: a ‘false or misleading indication’. Referring back to the intention of the EU legislature in the creation of this provision, the Court played down the importance of the particular context in which the disputed term is used. Instead, it was found to be immaterial that the bottle prominently displayed elements in addition to Glen (including the name of the distillery which produced the drink).

Whilst holders of registered GIs will be pleased to note the Court’s comments relating to the irrelevance of the context of use, the judgment does give a relatively narrow construction of “evocation” requiring a direct link and conceptual proximity, which is likely to limit the scope of protection afforded to GIs. Exactly how the test for infringement will be applied to these specific facts remains undecided – the case has now been referred back to the German National Court for its decision on the facts.

Authored by Danielle Jeeves

Plain Packaging and IP Rights

The debate around the plain packaging of cigarettes has been ongoing in the UK for a number of years. Advocates for plain packaging have argued that in lieu of trade mark branding, packets should be dominated by health warnings and deterrent images in order to reduce the appeal of tobacco products. On the other hand, opponents have claimed that this unlawfully deprives tobacco manufacturers of their trade marks, without compensation.

Several global tobacco manufacturers filed judicial review applications claiming that the Regulations were unlawful under International and EU law and UK common law. The claimants argued that the Regulations unfairly deprived them of their IP rights and that they violated the unitary character of EU trade marks. As well as concerns that the standardised packaging would lead to a loss of brand value, there were fears that the uniform nature of cigarette packaging would increase the likelihood of counterfeit products on the market and decrease brand loyalty.

Mr Justice Green handed down a High Court judgment on 19 May 2016 rejecting the challenge to The Standardised Packaging of Tobacco Products Regulations 2015 (“the Regulations”).

In his judgment, he addressed the nature of trade mark rights in great detail and much of his analysis centred on the question of whether trade marks are positive or negative rights.

The Department of Health argued that the rights afforded to trade marks are negative in nature and that because the Regulations only limit the use of trade marks, they do not deprive proprietors of the right to stop others using them. The tobacco manufacturers countered that the value of a trade mark lies in is commercial exploitation.

Mr Justice Green agreed with the manufacturers and held that the value of a mark lies “in its ability to forge links of recognition or identity and reputation in the mind of consumers”. Despite that finding, he held that it is not “correct to say that the substance of the rights has been wholly destroyed”.

In his conclusion, he found that whilst the Regulations substantially limit the use of trade mark rights, they “do so for entirely proper and legitimate reasons and they do so striking a fair balance between the right to property and opposing public health interests”. For this reason, Mr Justice Green refused to find that the tobacco companies were entitled to compensation for the deprivation of their trade mark rights.

Mr Justice Green also addressed the contention that the introduction of plain packaging in the UK prevents brand owners from exploiting the unitary character of EU trade marks and to use them in the same form throughout the EU. He dismissed this argument, concluding that the Regulations are consistent with the provisions of the EU Trade Mark Regulations.

In his discussion of the expropriation of IP rights, Mr Justice Green held that whilst the Regulations curtail the possible use of IP rights, rights are still owned by the tobacco companies and continue to serve their function as origin identifiers. (The Regulations do not prevent the use of word trade marks on cigarette packs – though the words must appear in a specific format.)

Mr Justice Green did accept that the case is slightly different for figurative marks but he maintained that, whilst the Regulations prevent the use of logos and designs on cigarette packaging, there would still be some vestigial uses of these figurative marks (and so the trade mark rights are not expropriated entirely).

Despite various media reports, it is not yet clear whether the decision will be appealed but assuming the decision stands, the introduction of plain packaging is likely to have wide-reaching impact on cigarette manufacturers in the UK and the value of their respective IP rights.[:]

EU Trade Mark Law Reform

The Community Trade Mark Amending Regulation was published in December and will enter into force on 23 March 2016. This new legislation implements long-discussed proposals for reform of EU trade mark law. As part of the reform and updating package, OHIM (the CTM Office) will be renamed the EU Intellectual Property Office (EUIPO) and the CTM will be known as the European Union Trade Mark.

There are a wide range of substantive changes to the law including most prominently:

• the abolition of the “3 for the price of 1” class fee structure for both trade mark applications and renewals. Instead, fees are incurred on a class by class basis. Notwithstanding this, applicants can expect to make significant savings as fees in general will be reduced (starting at €850 for filing in one class and an additional €50 for each extra class).

• an amendment to the period for filing opposition to EU designations of International Trade Mark Registrations. This period currently begins 6 months after publication and expires 9 months from publication. Under the new rules, the period runs 1 month from publication and expires 4 months from publication.

• The setting of a six-month period for proprietors of existing trade mark registrations to amend the specification of goods/services under their trade marks to be IP TRANSLATOR-compliant, where they wish to do so. (The IP TRANSLATOR decision of the Court of Justice held that where a proprietor of a trade mark filed before 22 June 2012 had used in its specification the “class heading” description of the Nice Classification, that description would be deemed to include not all of the goods/services of that class but those goods/services in the alphabetical list of the Nice Classification – which could still be a significantly broader range of goods/services than would be the case under a “literal” reading of the class-heading description used. The new Regulation now obliges a proprietor within the grace period to explicitly state that it intended to cover all goods/services in the alphabetical list, when using the class-heading description, in order to obtain that coverage. The intention being to ensure as far as possible that in the future specifications in CTM/EU registrations “mean what they say”.)

• the removal of the requirement to represent a trade mark ‘graphically’ in an application, enabling potentially easier registration of non-conventional marks such as sounds/smells etc.

The broad thrust of these reforms is to modernise the EU trade mark system and increase accessibility for smaller businesses.

Meanwhile, the European Commission has published the new Trade Marks Directive which aims to bring national trade mark systems further into line with each other. This will come into force on 13 January 2016 but Member States have a 3 year period to implement the required changes.

Sofaworks

The recent IPEC decision in Sofaworks has caused confusion around the question of genuine use of a mark in the EU and the threshold for retaining a CTM registration which is vulnerable to non-use revocation. By way of background, Sofa Workshop brought a trade mark infringement action against Sofaworks. In defence, Sofaworks claimed that, inter alia, the earlier CTM registrations relied on by Sofa Workshops were liable to revocation for non-use. The evidence of use filed by Sofa Workshop was heavily focused on the UK with HHJ Hacon acknowledging that the mark had been put to substantial use in the UK. Aside from this, evidence of use throughout the rest of the EU was light with proof of just one non-UK sale. Following OHIM practice after the Leno Merken decision, it was widely thought that use in one Member State could be sufficient to maintain a registration. However, following an analysis of Leno Merken¸HHJ Hacon explicitly stated that use in one Member State is not sufficient to maintain a CTM registration because the mark had not been used in a way that created or maintained an EU market share. As a result, Sofa Workshop’s CTM registrations were revoked (despite this, Sofa Workshop succeeded in the passing-off action). This decision raised a number of interesting questions and it is not yet clear whether the decision will be appealed. However, in light of this decision, CTM owners should seriously think about expanding use of a mark beyond one Member State, where possible, and, where not, filing national applications to provide fall-back protection for their trade mark[:zh]The recent IPEC decision in Sofaworks has caused confusion around the question of genuine use of a mark in the EU and the threshold for retaining a CTM registration which is vulnerable to non-use revocation. By way of background, Sofa Workshop brought a trade mark infringement action against Sofaworks. In defence, Sofaworks claimed that, inter alia, the earlier CTM registrations relied on by Sofa Workshops were liable to revocation for non-use. The evidence of use filed by Sofa Workshop was heavily focused on the UK with HHJ Hacon acknowledging that the mark had been put to substantial use in the UK. Aside from this, evidence of use throughout the rest of the EU was light with proof of just one non-UK sale. Following OHIM practice after the Leno Merken decision, it was widely thought that use in one Member State could be sufficient to maintain a registration. However, following an analysis of Leno Merken¸HHJ Hacon explicitly stated that use in one Member State is not sufficient to maintain a CTM registration because the mark had not been used in a way that created or maintained an EU market share. As a result, Sofa Workshop’s CTM registrations were revoked (despite this, Sofa Workshop succeeded in the passing-off action). This decision raised a number of interesting questions and it is not yet clear whether the decision will be appealed. However, in light of this decision, CTM owners should seriously think about expanding use of a mark beyond one Member State, where possible, and, where not, filing national applications to provide fall-back protection for their trade ma[:ja]The recent IPEC decision in Sofaworks has caused confusion around the question of genuine use of a mark in the EU and the threshold for retaining a CTM registration which is vulnerable to non-use revocation. By way of background, Sofa Workshop brought a trade mark infringement action against Sofaworks. In defence, Sofaworks claimed that, inter alia, the earlier CTM registrations relied on by Sofa Workshops were liable to revocation for non-use. The evidence of use filed by Sofa Workshop was heavily focused on the UK with HHJ Hacon acknowledging that the mark had been put to substantial use in the UK. Aside from this, evidence of use throughout the rest of the EU was light with proof of just one non-UK sale. Following OHIM practice after the Leno Merken decision, it was widely thought that use in one Member State could be sufficient to maintain a registration. However, following an analysis of Leno Merken¸HHJ Hacon explicitly stated that use in one Member State is not sufficient to maintain a CTM registration because the mark had not been used in a way that created or maintained an EU market share. As a result, Sofa Workshop’s CTM registrations were revoked (despite this, Sofa Workshop succeeded in the passing-off action). This decision raised a number of interesting questions and it is not yet clear whether the decision will be appealed. However, in light of this decision, CTM owners should seriously think about expanding use of a mark beyond one Member State, where possible, and, where not, filing national applications to provide fall-back protection for their trade ma[:]