Barcelona Court rules on “Champanillo” and the “Champagne” protected designation of origin

In 2016, Le Comité Interprofessionnel du vin de Champagne (the “CIVC”), the organization authorized to defend the protected designation of origin Champagne (the “PDO”), filed a lawsuit against the owner of several “tapas” bars located in the city of Barcelona and its surrounding area (the “Defendant”), arguing the infringement of the PDO as a result of the use by the Defendant of the name “Champanillo” (the “Designation”) in relation to restaurant services.

The Commercial Court of Barcelona (Juzgado de lo Mercantil de Barcelona) rejected CIVIC’s claim in first instance on the basis that the Defendant used the Designation for restaurant services, which significantly differ from the products protected under the PDO, and thus he was targeting a different consumers’ audience. CIVC appealed the decision before the Provincial Court of Barcelona (the “Court”) which requested a preliminary ruling from the Court of Justice of the European Union (the “CJEU”) on the protection granted to PDOs in accordance with the provisions of Regulation (EU) No 1308/2013 (the “Regulation”).

As already reported in this Blog, on September 9, 2021 the CJEU handed down its judgement (C-783/19, Comité Interprofessionnel du Vin de Champagne), whereby it declared that the protection of PDO should be interpreted broadly so that it reaches conducts relating not only to products but also services; that the concept of evocation set forth by the Regulation does not require as a prerequisite that the products covered by the PDO and the products or services for which the disputed sign is used are identical or similar; and also that evocation is established when the use of a designation produces in the average European consumer who is reasonably well-informed and reasonably observant and circumspect, a sufficiently direct and unequivocal link between that designation and the PDO (the existence of such a link may result from various elements, including the partial incorporation in the contested denomination of the PDO, the similarity between the two conflicting designations and also from a similarity between the products covered by that PDO and the products or services covered by the contested designation). At the same time, the CJEU emphasized that the act of unfair competition, by illegally benefiting from a third-party reputation, is not a compulsory element for finding “evocation” of the PDO.

On March 18, 2022 the Provincial Court of Barcelona issued its follow-up sentence, which along the lines of the CJEU founds the designation “Champanillo” to evoke, and thus infringe, the PDO “Champagne”.

More in particular, the court finds: (i) that both designations are phonetically and conceptually similar (the addition of a suffix does not prevent an average consumer from perceiving said similarity); (ii) that the contested designation is used for services closely connected to the products protected by the PDO; and (iii) that, as a result, the average consumer based in Spain will establish a direct and unequivocal link between the contested designation and the PDO, which causes the Defendant to take illegal and undue advantage of the PDO reputation.

The sentence of the Provincial Court of Barcelona (and the CJEU previous decision) are steps towards a very much needed clarification of the “evocation” concept set forth by the Regulation. In this regard, it is also important to note that the recently published initiatives of the EU Commission involving the protection geographical indications on agricultural and -the new- nonagricultural products (the Proposal for a Regulation on European Union geographical indications for wine, spirit drinks and agricultural products and the Proposal for a Regulation on geographical indication protection for craft and industrial products) include a definition of evocation (which is missing in the current Regulation): “the evocation of a geographical indication shall arise, in particular, where a term, sign, or other labelling or packaging device presents a direct and clear link with the product covered by the registered geographical indication in the mind of the reasonably circumspect consumer, thereby exploiting, weakening, diluting or being detrimental to the reputation of the registered name.” We will need to follow the development of these proposals to find out if we finally end up with a legal concept of this disputed term.