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14 July 2018

Does this taste like Champagne your honour?

If it does and the foodstuff concerned has Champagne as an ingredient, it is acceptable, in certain circumstances, for the product to be called by a name which incorporates the term “Champagne”. This is according to a recent decision of the Court of Justice of the European Union (CJEU) concerning the use of the protected term “Champagne”.

The Comité Interprofessionnel du Vin de Champagne (CIVC), the trade association which protects the interests of independent Champagne producers and Champagne houses, vigorously polices any misuse of the term Champagne. Its enforcement actions in this respect concerning wines are well documented and, with few exceptions, it would indeed be a foolhardy trader that sought to call its sparkling wine Champagne if that wine did not emanate from the Champagne region of France and was not produced in strict conformity with the product specifications that define a Champagne.

But what is the position where the term Champagne is used in relation to other foodstuffs (i.e. not wines) that contain Champagne as an ingredient? After rumbling on for more than 5 years, a case concerning the use of Champagne in the context of a frozen dessert is close to a conclusion.

Back in 2012, the discount supermarket chain Aldi sold a sorbet in Germany called CHAMPAGNER SORBET. Champagner is the German word for Champagne. The Champagne content of Aldi’s sorbet was 12% and the packaging of the product looked like this:

The CIVC sought an injunction from the German Courts preventing Aldi from continuing to sell this product. The CIVC claimed that Aldi’s use of Champagne as the name of this product was an infringement of the Protected Designation of Origin (PDO) for Champagne. The CIVC was successful at first instance but this was overturned on appeal and then further appealed to a higher court. This court was inclined to agree with The CIVC and rule that Aldi’s use was an infringement of the PDO but it first sought the guidance of the CJEU.

PDOs protect geographical names associated with agricultural products that are prepared, processed and produced within a specific region and whose unique properties result from the geographical environment. So, a sparkling wine can only be called Champagne if it comes from the Champagne region of France and is produced in accordance with certain criteria concerning, for example, the grape varietal content and the method of fermentation.

In addition to ring-fencing the use of Champagne for sparkling wines (and comparable products), the PDO protects against, inter alia, other uses by third parties which would “exploit the reputation” of Champagne. The CIVC argued that Aldi’s use of Champagne as shown above did exactly that. Its view was that by using the word Champagne in this way, the concepts of luxury and prestige that are associated with Champagne would be transferred to Aldi’s product. This would result in an unfair commercial gain for Aldi and was therefore an exploitation of the reputation of Champagne. The CIVC also argued that Aldi’s use was misleading and conveyed a false impression as to the origin of the product.

The CJEU firstly confirmed that the protection afforded by PDOs is broad and not limited solely to the specific agricultural product covered by the PDO. Insofar as Champagne is concerned, the protection extends not only to sparkling wines and “comparable products” but also to unrelated products such as Aldi’s sorbet. So, from a legal perspective, the PDO for Champagne can be used to restrain the use of Champagne as the name of a foodstuff even where the foodstuff has Champagne as an ingredient. However, not all such uses of Champagne are automatically deemed an infringement of the PDO. Instead the question to be answered is whether the use commercially exploits or takes unfair advantage of the reputation connected with Champagne. According to the CJEU there would be no such exploitation/ unfair advantage if the inclusion of Champagne, as an ingredient, confers onto a foodstuff an “essential characteristic” of Champagne. Such an essential characteristic can be the “aroma or taste”. Where Aldi’s sorbet was concerned, the CJEU was of the view that use of Champagne as an ingredient was intended to convey the taste of Champagne to the sorbet.

So, following this reasoning, if Aldi’s sorbet actually tastes of Champagne then Aldi should be free to call its sorbet “Champagne Sorbet”. Such use would not be exploiting or taking unfair advantage of the reputation associated with Champagne.

The inherent difficulty in this approach would seem to lie in how to assess whether an ingredient imparts an “essential characteristic” of a protected name to a foodstuff; in this case how, and on the basis of what criteria, can it be judged that Aldi’s sorbet does or does not taste of Champagne? The CJEU comments that the relevant test in this respect should be qualitative rather than purely quantitative. So, whilst the quantity (12%) of Champagne contained in Aldi’s sorbet “is a significant factor” in this assessment it is not “in itself a sufficient factor”. Instead what needs to be decided is whether the taste of the sorbet is “attributable primarily to the presence of Champagne”. Given that the sensation of taste is, to a degree, subjective and is difficult to evaluate and measure, it will be interesting to  follow  developments in this area. The case will now be remitted back to the referring German court for a final decision  and it remains to be seen how the judges there will interpret the CJEU’s guidance. It seems however they may be deprived of actually putting the sorbet to the taste test as it was apparently discontinued some time ago.

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