Scotch whisky rulings clarify scope of protection of geographical indications

Background

Only products that have a specific geographical origin and possess a quality and reputation or other characteristic associated with that quality can be protected as geographical indications. In the case of whisky, the description ‘Scotch Whisky’ can only be used on whisky produced in Scotland and in accordance with strict production and labelling requirements, set down in law. Scotch must be distilled in Scotland from water and malted barley with specified alcohol levels, and matured in Scotland¹.

In recent years, the Scotch Whisky Association has brought proceedings against several whisky manufacturers in different jurisdictions for infringement of the ‘Scotch Whisky’ geographical indication. Interestingly, what all these actions have in common is the fact that the trade name complained of does not actually contain any words present in the protected geographical indication itself. In light of these decisions, in this article we consider what it takes to evoke a geographical indication.

The legal framework

The geographical indication protections in relation to ‘Scotch Whisky’ are set out in Regulation 110/2008, the Drinks Spirit Regulation (the ‘Regulation’). The protections are found in Articles 16(a)-(c) of the Regulation, as set out below.

• Article 16(a) of the Regulation protects registered geographical indications from “any direct or indirect commercial use in respect of products not covered by the registration in so far as those products are comparable to the spirit drink registered under that geographical indication or in so far as such use exploits the reputation of the registered geographical indication.”
• Article 16(b) of the Regulation provides protection against “any misuse, imitation or evocation even if the true origin of the product is indicated”; and
• Article 16(c) of the Regulation provides protection against “any other 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.”

The decisions

In the Glen Buchenbach case (case C-44/17), the CJEU was asked to provide guidance on the correct interpretation of Articles 16(a)-(c) of the Regulation and how a geographical indication could be infringed. The case involved the sale of Glen Buchenbach whisky made by the Waldhorn distillery in the Buchenbach Valley in Germany. The Scotch Whisky Association had claimed that the use of the word ‘Glen’ by the German distiller infringed the Scotch Whisky geographical indication, even though it did not use any part of the protected ‘Scotch Whiskey’ indication. Our earlier article on this case can be read here.

In 2018, the CJEU gave guidance on the interpretation of Articles 16(a)-(c) of the Regulation in its judgment in the Glen Buchenbach case, but left the decision to the national courts as to whether the requirements are met. Following the ruling of the CJEU, the Hamburg District Court found that the use of the designation Glen Buchenbach for a German whiskey to be misleading in accordance with Article 16(c) of the Regulation. However, in this case the Court did not consider the use of Glen to be an unlawful evocation according to Article 16(b) of the Regulation.

Following the decision in Glen Buchenbach, the Scotch Whisky Association brought a similar action against the German manufacturer of ‘Glen Els’ in the Higher Regional Court of Hamburg. Glen Els is a single malt whisky manufactured in the German Harz mountain region and has been on the market for over 17 years. Interestingly, in this case the Court not only found that the use of the term ‘Glen’ was a misleading indication (according to Article 16(a) of the Regulation), but it also found that the use of ‘Glen’ was sufficient for a finding of ‘evocation’ of the Scotch Whisky geographical indication under Article 16(b) of the Regulation.

Unlike the use of a geographical indication in accordance with Article 16(a), a finding of evocation in accordance with Article 16(b) does not require use of the protected indication itself. In reaching its decision, the Higher Regional Court applied the CJEU’s guidance that it must be determined whether an average European consumer would directly bring to mind Scotch Whiskey when confronted with a comparable product bearing the designation, in this case Glen.

The guidance provided by the CJEU on the interpretation of Article 16(b) of the Regulation stated that for the purpose of establishing that there is an ‘evocation’ of a registered geographical indication, the court is required to determine whether, when the average European consumer is confronted with the disputed designation, the image triggered directly in his mind is that of the product whose geographical indication is protected. In making that determination, in the absence of “(i) any phonetic and/or visual similarity between the disputed designation and the protected geographical indication and (ii) any partial incorporation of that indication in that designation”, the court must take account of the conceptual proximity, if any, between the designation and the indication.”

In this case, the Scotch Whisky Association had provided evidence that in the EU the only Glen whiskies on offer were Scotch Whiskies. The Court also found that the association between Glen and Scotch Whisky is not merely indirect as market surveys were also provided to show that the average consumer would believe that Glen is a component of Scotch Whiskies. The Court also considered how the disputed product is already associated with Scotland in the mind of the circumspect consumer, and the inclusion of Glen only served to reinforce that association.

Having found the use of Glen to be evocative, the Court also noted how the deception cannot be removed by the manufacturer indicating the true origin on the product or an explanation as to origin: In this case, the manufacturer had indicated how the water use to make the whiskey originated from the nearby River Elsbach. An appeal to the Federal German Supreme Court was not permitted.

Comment

Following this decision, the German distillery has decided to rename its single malt whiskey Elsburn, removing all reference to Glen. The decision of the German Courts in Glen Els has gone beyond the decision in Glen Buchenbach, and serves as a warning to food and drink manufacturers when deciding whether to include geographical references in a product name.

Manufacturers intending to market food or drink products in categories for which geographical indications have been obtained should think both creatively and carefully when designing product names, so as not to fall foul of evoking a protected geographical indication.

The more interesting question is how far can ‘evocation’ protect you? There is a new reference to the CJEU from France that may shed further light (C-490/19). It concerns a cheese and its distinctive look. That case raises serious issues because if successful, production of the product away from the area and class of Protected Designation of Origin (PDO)/Protected Geographical Indication (PGI) producers might be prevented. Is this in the consumer’s interest? How important is the right to produce similar products? Should we only be concerned if the product is misleading consumers?

It is clear a balance needs to be found, but far from clear where the policy line and rights should be drawn. Classes of producers and protected products are permitted for the purpose of protecting valuable rights and ensuring the public is not misled. However, the monopoly rights are expanding via evocation cases and it is probably time policy makers and legislators looked at this.

[1] The Scotch Whisky Regulations 2009.