CJEU opinion to German Courts on PDOs: if it says Champagne, it must taste like Champagne

A "Champagne Sorbet" may only bear the name "Champagne" if the taste of the sorbet is also essentially characterized by Champagne. After years of litigation up to the Court of Justice of the European Union (CJEU) the Higher Regional Court of Munich recently ruled and strengthened the protection of protected designations of origin (PDO) (Higher Regional Court Munich, decision of 1 July 2021 - 29 U 1698/14).

Background of the case

The German defendant operates food discounters and had its intervener, who was involved in the lawsuit, produce frozen products, one of which was a "Champagne Sorbet". According to the list of ingredients, the sorbet consisted of, inter alia, 12% Champagne. The French claimant, an association representing the interests of winemakers and trading houses in the Champagne region, considered the marketing of the frozen product under the name "Champagne Sorbet" as being an infringement of the PDO "Champagne". The action brought by the association was upheld by the Regional Court Munich I. On appeal by the intervener, however, the Higher Regional Court of Munich reversed the judgment and dismissed the action. As a result, the claimant filed an appeal on points of law to the German Federal Court of Justice (FCJ). In the course of this appeal, the FCJ referred the case to the CJEU pursuant to Art. 267 TFEU in order to clarify, amongst others, whether the relevant regulations for the protection of products covered by a PDO were applicable and when a product that did not comply with the PDO product specification, but contained an ingredient that complied with the PDO product specification, exploited the reputation of the PDO.

In its decision, the CJEU stated that the regulations applied and that exploitation of the PDO's reputation had to be assumed if the product did not have, as an essential characteristic, a taste that was mainly caused by the presence of the ingredient protected by a PDO. Based on the CJEU decision, the FCJ upheld the appeal and referred the case back to the Higher Regional Court of Munich for another hearing and decision. In particular, the Higher Regional Court had to address the previously neglected question whether or not the champagne determined the taste of the sorbet in question.

Decision

The Higher Regional Court of Munich upheld the decision. It referred to the statements of the CJEU and FCJ, according to which the name of a food product infringed upon a PDO if the product did not have any essential characteristic deriving from the name-giving and PDO-protected ingredient. The ingredient's percentage would be an important, but by no means sufficient, criterion for the question whether the ingredient attributed an essential characteristic to the product, so said the court. Rather, the decisive factor was that the food product had an essential characteristic directly associated with the ingredient. The court stated that this characteristic often consisted in the aroma and taste added by the ingredient.

According to the Higher Regional Court, the burden of proof with regard to the fact whether the sorbet in question tasted like Champagne or not was with the claimant. The CJEU and the FCJ had previously stated that the taste of the foodstuff was a fact that required and was amenable to proof. Since a tasting of the sorbet in dispute was no longer possible due to the expiration date in 2014, a witness was questioned who had tasted the sorbet at the time and who, amongst others, trains sommeliers in the field of Champagne. According to the witness, the sorbet tasted more like a "pear sorbet with a hint of alcohol", but not like Champagne. Based on these statements - in the context of the further statements of the witness - the court considered it as being proven that the taste of the product was not mainly characterized by the ingredient (Champagne). Accordingly, a misleading statement within the meaning of Art. 118m para. 2 lit. c of Regulation (EC) No. 1234/2007 and Art. 103 para. 2 lit. c of Regulation (EU) No 1308/2013 was given, the court stated. The court further said that the term "Champagne" in the product name would indicate to the public that the product actually tasted like Champagne. Since this was to be denied in the case at hand, a cease and desist claim was granted to the claimant in analogous application of Section 135 of the German Trademark Act (MarkenG) in conjunction with Section 8 para. 3 no. 2 of the German Unfair Competition Act (UWG) as well as Article 118m of Regulation (EC) No. 1234/2007 and Article 103 of Regulation (EU) No. 1308/2013.

Conclusion

The decision of the Higher Regional Court of Munich as well as the principles established by the CJEU in the context of the preliminary ruling contain a significant message for similar cases. If food manufacturers want to use the name of a PDO for their products that do not comply with the product specification of a PDO, but contain an ingredient corresponding to this product specification, the food must have as an essential characteristic a taste that is based on the ingredient with the PDO. It is not sufficient to add a certain percentage of the ingredient with the PDO to the food without it having a significant impact on the taste.

The judgment is not yet final. The Higher Regional Court did not allow an appeal on points of law because the Federal Court of Justice and the European Court of Justice had already dealt with the case and the question of taste. However, the defendant can still challenge this by filing a non-admission appeal.

Authored by Yvonne Draheim and Patrick Fromlowitz

 

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