Trademarks and GIs: Scotch Whisky success in Hamburg Court decision

Despite the apparent blow previously delivered by the CJEU to holders of geographical indications, Hamburg's Regional Court has found in favour of the Scotch Whisky Association in its dispute over use of the term 'Glen'.

We have previously written on the Court of Justice of the European Union’s (CJEU) decision regarding use of the term ‘Glen’ and its association with the protected geographical indication (GI) ‘Scotch Whisky’, in response to a referral from Landgericht Hamburg (Hamburg’s Regional Court). The referring Court has now issued its decision and despite the apparent blow previously delivered by the CJEU to holders of GIs, the Court has found in favour of the Scotch Whisky Association (SWA).

A sufficiently direct link

The question considered by the CJEU was whether the use of a term which is visually and aurally different to a protected GI constitutes an ‘indirect use’ or ‘evocation’ of a protected GI, and what should be taken into account when assessing whether use falls foul of EU legislation on the protection of registered GIs applicable to spirit drinks (Regulation (EC) No 110/2008).

In a decision which appeared to narrow the scope of protection for the protection of GIs, the main take-away points from the CJEU’s answers were as follows:

• ‘Use’ of a GI, under the first sub-provision of the relevant Article of the Regulation, is limited to use in an identical form or a form which is highly phonetically/visually similar.
• Under the second sub-provision of the relevant Article of the Regulation, ‘evocation’ does not require the protected GI to be partially included in the disputed term or for there to be any phonetic or visual similarity to the protected GI. Instead, these are merely factors that should be taken into account and in the absence of these factors, the conceptual proximity between the disputed term and the protected GI must be considered. The CJEU also stated that there must be a sufficiently direct link between the disputed term and the protected GI in the mind of the consumer, not merely ‘some kind of association’.
• When considering the question of whether there is a ‘false or misleading indication’ under the final sub-provision of the relevant Article of the Regulation, account is not to be taken of the context in which the disputed element is used. Liability cannot therefore be avoided simply because there are other elements which correct the false and misleading indication given by the disputed term. It is, however, worth noting that the earlier AG opinion stated that there must be a sufficient clear and direct link between the disputed element and the GI or country with which it is associated, to constitute a false or misleading indication.

A false or misleading indication of origin

The German Court has now considered the case in light of the CJEU decision and issued its decision in favour of SWA.

While the Court found no infringement under the first two sub-provisions of the relevant Article of the Regulation, the Defendant German Distillery’s use of ‘Glen’ has been, somewhat surprisingly, deemed to fall foul of the final sub-provision and constitutes a false or misleading indication. Specifically, the Court concluded that the use of ‘Glen’ on a whisky that is not a Scotch Whisky constitutes a misleading indication which is liable to convey a false impression regarding the product’s origin.

In its reasoning, the Court stated that it did not matter that not all Scotch Whisky bears the designation ‘Glen’. Moreover, the Court does not appear to have been persuaded by the fact that not all whisky which bears the designation ‘Glen’ would be Scotch Whisky. The decisive factor is whether there is a risk that consumers will think of Scotch Whisky when they encounter a whisky bearing the name ‘Glen’. It is not a question of whether they think of ‘Glen’ when they encounter Scotch Whisky.

In reaching its decision, the Court appears to have found a sufficiently clear and direct link between the disputed element and the GI with which it is associated. In accordance with the CJEU’s decision, the Court reiterated that the additional information on the disputed product which would dispel any misunderstanding on the part of the consumer should not be taken into account when assessing the liability for infringement.

While still open to appeal, the decision of the German Court has ordered the German distillery to cease use of the term ‘Glen’, which is a significant win for the SWA.

The CJEU’s judgment made it clear that the protection of GIs is important for brand owners, the market and consumers. Nevertheless, the answers given by the CJEU appeared, to a certain extent, to limit the ability of holders of GIs to enforce their rights against third parties using an indication which, while not identical or similar, alludes to the GI or the country to which that indication relates.  However, the decision of the German Court has arguably strengthened the position of the holders of GIs such as SWA, suggesting that the link in the mind of consumer need not be as strong as set out in the opinion of the Attorney General.

Avoiding disputes

The latest installment in this dispute reiterates that the protection granted to holders of GIs is relatively broad and businesses should be aware of the risk of conflicting with these rights.

Launching with a brand name that is already in use in a marketplace or potentially breaches registered GI protection can impact a business’s ability to market its product, even if it is ultimately successful in any legal challenge brought against it. Worse, if it is not successful, it could mean developing a new brand name from scratch at short notice, halting its production process, and even removing and destroying products that have already been produced.

We recommend taking advice in the earlier stages of your brand development, including conducting trademark searching to check the availability of a chosen mark, so as to assess the likelihood of dispute before a new product or service is marketed.

To find out more about trademark registration strategies, speak to your Novagraaf attorney or contact us below.

Vanessa Harrow is a Trademark Attorney in Novagraaf’s Manchester office