Clifford Chance

Since 2010, defendant GB had tried twice, in vain, to register the word "Champanillo" as a trademark at the Spanish Trademark Office. Both applications were rejected, further to opposition proceedings brought by the Comité Interprofessionnel du vin de Champagne (CIVC), on the basis of the existing Protected Designation of Origin ("PDO") "Champagne".

Nonetheless, GB continued to use the "Champanillo" sign to designate its Spanish tapas bar. GB also used the term "Champanillo" in advertisements and on social media, often together with an image of two pompadour glasses.

Against this background, CIVC brought legal actions against GB in 2018, claiming that "Champanillo" constituted an evocation of the PDO Champagne, which is considered an infringement under Article 103.2.b of Regulation 1308/2013¹.

In the first instance decision, Barcelona Commercial Court number 6 dismissed the action on the basis that the potential evocation of Champagne would be too "tenuous and irrelevant" to violate Article 103.2.b of Regulation 1308/2013 since the sign "Champanillo" was not used to designate wines or alcoholic beverages but rather a tapas bar in which champagne was not served.

The Commercial Court relied on the judgment of the Spanish Supreme Court dated 1 March 2016 in the "Champín" case, in which the Supreme Court dismissed the claim of infringement of the PDO Champagne because the product at issue – a sparkling non-alcoholic grape juice for children – differed too much from champagne, also making the evocation too "tenuous and irrelevant".

CIVC appealed the decision before the influential Section 15 of the Barcelona Court of Appeal, which referred the case to the Court of Justice of the European Union ("CJEU") for a preliminary ruling on the interpretation of the term "evocation" contained in Article 103.2.b of Regulation 1308/2013.

In its judgment dated 9 September 2021 (case C-783/19), the CJEU held that:

(i) The scope of protection of PDOs (which are registered for products) not only covers products but also services potentially violating the PDO, given that the purpose of the legal rule is to provide wide-ranging protection designed to prevent any practices attempting to take unfair advantage of the reputation (i)     enjoyed by a PDO through association with it.

(ii) The meaning of the term "evocation" does not require the contested product or service to be identical or similar to the product covered by the PDO. Instead, an "evocation" exists when the use of a sign triggers, in the average consumer's mind, a sufficiently direct and unequivocal link between the sign and the PDO. In other words, no likelihood of confusion is required in order to find a PDO infringement.

(iii) The specific protection conferred by Regulation 1308/2013 is independent from that provided under unfair competition law, so the protection against PDO evocation does not require a finding of unfair competition.

Relying on the CJEU's interpretation, the Barcelona Court of Appeal analysed whether such a link existed between "Champanillo" and "Champagne" in its judgment dated 18 March 2022. Considering (i) the visual, phonetic, and conceptual similarities between the PDO Champagne and the sign "Champanillo" (which literally means "little champagne", as it is composed of the word "champán" – champagne in Spanish – and the diminutive suffix "illo"), and (ii) the closeness between champagne and a bar offering – among other products – sparkling wine, the Court of Appeal concluded that consumers would indeed directly and unequivocally link the sign "Champanillo" to the PDO Champagne. The Court of Appeal found that the use of the sign "Champanillo" generated a higher consumer attraction to the tapas bar by linking it to the PDO Champagne, thus taking unfair advantage of the reputation champagne enjoys. Therefore, the Court ruled that the defendant had infringed the CIVC's rights under Article 103.2.b of Regulation 1308/2013.

All in all, this judgment is welcome news for the wine industry, as it has confirmed that PDOs are given wide-ranging protection – independent from unfair competition – which can be found to be infringed even in the absence of a likelihood of confusion.

¹ Article of 103.2.b of Regulation 1308/2013 reads as follows:

"Article 103. Protection

1. A protected designation of origin and a protected geographical indication may be used by any operator marketing a wine which has been produced in conformity with the corresponding product specification.
2. A protected designation of origin and a protected geographical indication, as well as the wine using that protected name in conformity with the product specifications, shall be protected against:

(…)

(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, transcripted or transliterated or accompanied by an expression such as "style", "type", method", "as produced in", "imitation", "flavour", "like" or similar;"