How to identify fine Cognac: BNIC returns to Finland

Author: Pessi Honkasalo (Krogerus Attorneys, Helsinki, Finland)

Bureau National Interprofessionnel du Cognac v Oy Gust. Ranin, KHO 2011:120, Supreme Administrative Court of Finland, 30 December 2011

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps103, first published online: July 10, 2012

A trade mark for the sales denomination of a Cognac, containing the term in the vernacular, was held to convey a false impression as to the origin of the drink under Article 16(c) of Regulation 110/2008.

Legal context

In accordance with Article 16(c) of Regulation 110/2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks, and repealing Council Regulation 1576/89, the geographical indications registered in Annex III of the Regulation are protected against any ‘false or misleading indication as to the provenance, origin, nature or essential qualities on the description, presentation or labelling of the product, liable to convey a false impression as to its origin’. Under the said Annex III, the denomination ‘Cognac’, among others, is a geographical indication in product category No 4, wine spirits, the country of origin of which is France. Unlike Council Regulation 1576/89 laying down general rules on the definition, description and presentation of spirit drinks, Regulation 110/2008 contains a provision, Article 23(1), that the registration of a trade mark which contains or consists of an annexed geographical indication is to be refused or invalidated if its use would lead to any of the situations referred to in Article 16. The Regulation applies from 20 May 2008.

Sections 14(1)(1), (2) and (11) of the Finnish Trade Marks Act (7/1964, as amended by Law 56/2000) provide that a trade mark is not registered if it is contrary to law and order, or to morality; if it is liable to mislead the public; or if there is an obstacle to registration within the meaning of Council Regulation on the protection of geographical indications and designations of origin for agricultural products and foodstuffs. Under s 21(1) of the Act, after an opposition, the registering authority must revoke a trade mark registration to the extent there is an obstacle to registration. What the Act used to be silent about, however, is the relation between trade marks and the protection of geographical indications for spirit drinks; Regulation No 2081/92 to which the national statute refers does not, by virtue of Article 1(1), apply to such products. As of 1 January 2011, s 14(1)(11) was amended so that the list now includes also an obstacle to registration within the meaning of Article 23 of Regulation 110/2008.

Facts

Gust. Ranin Oy applied to the Finnish registration authority on 19 December 2001 for registration of a trade mark in the form of a bottle label. The pictorial mark consisted of words ‘COGNAC L&P V.S. HIENOA KONJAKKIA Lignell & Piispanen 40% Vol. Product of France 500ml’ (see Figure 1). ‘Lignell & Piispanen’ is the auxiliary trade name of Oy Gust. Ranin and ‘L&P’ is the abbreviation thereof. HIENOA KONJAKKIA is the Finnish expression for ‘fine cognac’ and, as any connoisseur of French brandy would know, the three-star appellation ‘VS’, or very special, indicates that the youngest eau-de-vie in the blend has aged for at least two years. By decision of 31 January 2003, the authority registered the mark under No 226350.

Figure 1

The Bureau National Interprofessionnel du Cognac (‘BNIC’) opposed the registration, but the registering authority dismissed BNIC's opposition and confirmed the validity of the mark. The Board of Appeals at the National Board of Patents and Registration of Finland similarly dismissed BNIC's appeal. BNIC then brought proceedings before the Supreme Administrative Court. Owing to the adoption of Regulation 110/2008 while the action was pending, the Supreme Administrative Court stayed the proceedings and referred the matter to the Court of Justice for a preliminary ruling. The case was consolidated with another reference and decided as Joined Cases C-4 and 27/10 Bureau National Interprofessionnel du Cognac [2011] ETMR 53 (discussed by Miguel Angel Medina González, ‘Protection of Geographical Indications against Translation, Generic Use, Evocation, and Other Potential Enemies’ (2012) 7 JIPLP 20).

The Court of Justice (First Chamber) ruled, inter alia, that subject to the limitations set forth in Article 23(2) Regulation 110/2008 is applicable to the assessment of the validity of the registration of a trade mark containing a geographical indication protected by the Regulation irrespective of whether that registration took place before or after the Regulation entered into force (para 37), and that Article 23(1) of the Regulation is directly effective (para 45).

Analysis

The Supreme Administrative Court started its legal assessment by reiterating that independently of the protection it enjoys under French law, the term ‘Cognac’ has been protected as a geographical indication under EU law since 15 June 1989, the date on which Regulation No 1576/89 entered into force. The trade mark at issue was registered after 1 January 1996, so that the limited derogation provided for in Article 23(2) of Regulation 110/2008 was inapplicable.

Consequently, it was to be decided whether the use of the mark led to any of the situations referred to in Article 16 of the Regulation. The Court noted that the intervening party's mark contained a geographical indication registered in Annex III, ‘Cognac’, as well as a common noun for and a translation of that indication in the partitive case (‘KONJAKKIA’). The proprietor of the trade mark had argued that in Finnish language the term ‘konjakki’ describes the kind of the product. However, it follows from Article 15(3) of the Regulation that the geographical indication ‘Cognac’ may not—as in cannot—become generic; names that have become generic may not be registered in Annex III. Under Article 14(2), the geographical indication Cognac ‘shall not be translated on the label nor in the presentation of the spirit drink’.

The trade mark had been registered for a wine spirit drink which, as such, complies with the specifications of the technical file provided for the geographical indication at issue. Notwithstanding, the mark also contained the Finnish expression HIENOA KONJAKKIA and adverted to the auxiliary trade name of a Finnish company, but did not mention the producer of the drink. This, held the Court, was liable to convey a false impression as to its origin. According to the Court, the inscription ‘Product of France’ in small characters did not tone down the impression that the product designated by the trade mark would be of Finnish origin. The trade mark was therefore considered a misleading indication within the meaning of Article 16(c) of the Regulation.

On those grounds the Supreme Administrative Court annulled the decisions of the registration authority and of the Board of Appeals at the National Board of Patents and Registration of Finland, and returned the matter to the former for cancellation of the registration of mark No 226350.

Practical significance

KHO 2011:120 serves as an effectual reminder of the legal effect of European Union regulations. By Article 288 of the Consolidated Version of the Treaty on the Functioning of the European Union:

A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.

From the date that an EU regulation enters into force, it automatically forms part of the domestic legal order of each Member State and requires no implementing legislation at national level. Unless there is an explicit requirement to that effect, it is actually illegitimate for a Member State to adopt national execution measures (see Case 39/72 Commission v Italy [1973] ECR 101; Case 34/73 Fratelli Variola v Amministrazione italiana delle Finanze [1973] ECR 981). In accordance with settled case law of the Court of Justice, regulations ‘operate to confer rights on individuals which the national courts have a duty to protect’ (Bureau National Interprofessionnel du Cognac, para 40).

Figure 2

In the proceedings that formed the other limb of Joined Cases C-4 and 27/10 between the same parties, KHO 2011:119, the Supreme Administrative Court rendered its judgment on the same day. This case concerned a pictorial trade mark including the endorsement ‘KAHVI-KONJAKKI Cafe Cognac Likööri – Likör – Liqueur 21% Vol Lignell & Piispanen 500 ml’ (see Figure 2). In English, KAHVI-KONJAKKI reads ‘café cognac’; likööri and likör are the Finnish and Swedish words for liqueur, respectively. The Court, following the advice it had received from Luxembourg, noted that the product for which the trade mark had been registered did not meet the specifications set for the used indication. The use of the mark was therefore held to exploit the reputation of Cognac's registration under Regulation 110/2008 seeing that consumers, when confronted with the name of the product, would trigger in their mind an image of the product whose designation is protected. Oy Gust. Ranin's trade mark fell foul of both Articles 16(a) and (b) of the Regulation by being a direct commercial use and evocation of the geographical indication for which the BNIC acts as a watchdog.

In both judgments the Supreme Administrative Court emphasized that because the trade marks at issue were in violation of Article 16 of the Regulation and their registrations therefore had to be invalidated under Article 23(1) of the same, it was unnecessary to consider whether there would be any grounds for cancellation on the basis of national law alone.