Finnish ‘Verlados’ to be considered as an evocation of ‘Calvados’ regardless of ‘attenuating circumstances’

In the EU, geographical indications of wines and spirits are protected under Regulation (EC) No 110/2008.1 Pursuant to that regulation, it is prohibited, inter alia, to misuse, imitate or even evoke protected indications such as “Calvados” on non-compliant products.

In a recent case opposing a Finish company and the Social and Health Sector Licensing and Supervisory Authority of Finland, the Finish Market Court referred three questions to the European Court of Justice (ECJ) on the concept of ‘evocation’. The ECJ rendered its judgement on January 26th, 2016, clarifying this somewhat obscure concept.2

Legal context and background of the dispute

The name ‘Calvados’ designates a cider spirit originating in France and is registered in Annex III of Regulation (EC) No 110/2008 as a protected geographical indication.

Article 16(b) of Regulation (EC) No 110/2008 protects all geographical indications registered in Annex III against any misuse, imitation or evocation, even if the true origin of the product is indicated or the geographical indication is used in translation or accompanied by an expression such as “like”, “type”, “style”, “made”, “flavour” or any other similar term.

Viiniverla is a Finish company manufacturing and marketing a type of cider spirit under the name ‘Verlados’ since 2001. However, in March 2013, the Commission found that the name ‘Verlados’ was not authorised and informed the Republic of Finland of its intention to open infringement proceedings against it if it failed to comply with that interpretation. Consequently, the Finish Authority adopted a decision prohibiting Viiniverla from marketing ‘Verlados’ as from 1 February 2014. Viiniverla reacted by bringing an action for annulment of that decision before the Finish Market Court. In this context, the Market Court stayed the proceedings and referred three questions to the European Court of Justice for a preliminary ruling.

Questions referred to the ECJ and findings of the ECJ

First question: is it required to refer to the perception of the ‘average consumer’ in order to assess whether the term ‘Verlados’ is an evocation of ‘Calvados’ ?

The Commission alongside the French and the Italian governments were of the opinion that it is not necessary, as such, to refer to the concept of ‘consumer’. More particularly, they considered that the finding of an evocation is objective in nature, and should be based solely on an examination of the names at issue.

In its judgement of 26 January 2016, the ECJ refutes that position holding that the concept of evocation covers a situation in which the litigious name incorporates part of a protected designation, so that “when the consumer is confronted with the name of the product the image triggered in his mind is that of the product whose designation is protected”.3 (Emphasis added).

The ECJ further considers that it is apparent from established case-law that the relevant consumer is the average consumer, “who is reasonably well informed and reasonably observant and circumspect”.

Most importantly, the ECJ emphasizes that, in the light of the need to guarantee effective and uniform protection of those geographic indications within the EU, the concept of the ‘average consumer’ covers European consumers in general, and not merely consumers of the Member State in which the litigious product is manufactured.

Second question: in assessing whether there is an ‘evocation’, can the referring court take some specific circumstances in consideration?

In its second question, the referring court asked what significance should be attached to the following circumstances in assessing the (non-)existence of an ‘evocation’:

• Firstly and secondly, the beginning of the name ‘Verlados’ corresponds both to the name of the Finnish village ‘Verla’ (well-known by Finish people) and the name of the company Viiniverla (which manufactures the concerned product);
• thirdly, Verlados is a local product manufactured and sold in limited quantities ; and
• fourthly, the terms ‘Verlados’ and ‘Calvados’ have only one syllable in common and / or that only the last four letters of each of those words are identical.

Regarding the first and second sub-questions (i.e. the circumstance that the name ‘Verlados’ refers to the village of Verla and the name of the company Viiniverla), the ECJ first stresses out that, according to Article 16(b) of Regulation No 110/2008, there may be an ‘evocation’ even if the true origin of the product is indicated (in that case, indirectly, the village of Verla). In other words, the fact that the true origin of the product is indicated (in its name or on the label) does not avoid the threat of the evocation of the name ‘Calvados’. The ECJ further recalls that the concept of ‘consumer’ covers the European consumers and not only the consumers of the Member State in which the litigious product is sold. Therefore, the fact that Finish consumers would recognise the name of the Finish village ‘Verla’ in the name of the litigious product is without any consequence since the same is not true for consumers from other Member States. Finally, and most importantly, the ECJ reminds that the concept of ‘evocation’ is a concept that must be appreciated independently from the likelihood of confusion. In other words, for establishing the existence of an evocation, it is not necessary to prove that consumers confuse between the two products. In view of all these elements, the circumstance that ‘Verlados’ refers to the name of the village of Verla and of the company that manufactures it, is not relevant in assessing whether the word ‘Verlados’ is an evocation of ‘Calvados’.

Regarding the third sub-question (i.e. the circumstance that Verlados is a local product manufactured and sold in limited quantities), the ECJ answers straightforwardly, recalling that the quantities in which the litigious product is sold or the area where it is is sold are in any case “irrelevant” since Regulation No 110/2008 applies to all spirit drinks placed on the market in the European Union without any ‘de minimis’ rule.

Regarding the fourth and last sub-question (i.e. the circumstance that the terms ‘Verlados’ and ‘Calvados’ both have only one syllable in common and/or end with the four letters ‘ados’), the ECJ confirms that the referring court must take into consideration any phonetic and visual relationship between the two names. The ECJ further states that the national court must also take into account any evidence showing that such a relationship is not fortuitous.4 Precisely, the French Government reported in its brief that (i) the product ‘Verlados’ was originally named ‘Verla’, the suffix ‘dos’ having been added only later, and that (ii) the syllable ‘dos’ has no particular meaning in the Finnish language. These facts tend to show that the relationship between the names ‘Verlados’ and ‘Calvados’ is not fortuitous and therefore that the name ‘Verlados’ could have been chosen precisely because it evokes the name ‘Calvados’.

Third question

In its third and last question, the referring court asks whether a name classified as an ‘evocation’ may nevertheless be authorised in the light of the circumstances already described, or because of the absence of a likelihood of confusion between the products at issue. The ECJ, after pointing out that Article 16(b) of Regulation No 110/2008 prohibits any evocation of geographical indications of wines and spirits, without any limitation or exception to this prohibition, simply concludes that the name ‘Verlados’ may not be authorised if there is an ‘evocation’, regardless of the ‘attenuating circumstances’ invoked by Viiniverla, and even in the absence of any likelihood of confusion.

Conclusion

This judgment confirms the broad scope of protection afforded to geographical indications of wines and spirits in the EU and, by analogy, to any protected name of agricultural or food products, such as meat, fruits and vegetables, oils and vinegars, pastry, confectionary goods, beers and others.5

In the past, for example, the name ‘Cambozola’ was already recognised as an evocation of the protected name ‘Gorgonzola’6 for soft blue cheese and the name ‘Parmesan’ as an evocation of the protected designation of origin ‘Parmigiano Reggiano’.7

What is the most striking is that the simple ‘evocation’ of a protected name, either phonetically or visually, suffices for the litigious term to be prohibited. This would still be the case even if the true origin of the litigious product is indicated on the packaging and even in the absence of any confusion in the mind of the consumer. In other words, evocation of protected names is prohibited as such, regardless of any ‘attenuating circumstances’ that could be invoked.

This interpretation is in line with the underlying objective of the EU to ensure a high level of protection for both competitors and consumers within the EU when it comes to the protection of the origin of food and beverages. The large scope of protection afforded to these products might be explained by the fact that protecting the origin of food and beverages – and thus the quality label attached to that origin – goes beyond protecting the private or economic interests of consumers and competitors, but also aims at protecting the tradition and public heritage linked to it.

1. Regulation (EC) No 110/2008 of the European Parliament and of the Council of 15 January 2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks and repealing Council Regulation (EEC) No 1576/89 (OJ 2008 L 39, p. 16).
2. ECJ, Verlados, Case C‑75/15, Judgement of 21 January 2016, ECLI:EU:C:2016:35.
3. Point 21, citing Bureau national interprofessionnel du Cognac, C‑4/10 and C‑27/10, EU:C:2011:484, paragraph 56. See also, ECJ, Consorzio per la tutela del formaggio Gorgonzola, C‑87/97, EU:C:1999:115, paragraph 25, and Commission v Germany, C‑132/05, EU:C:2008:117, paragraph 44.
4. Judgment in Consorzio per la tutela del formaggio Gorgonzola, C‑87/97, EU:C:1999:115, paragraph 28
5. Article 13.1 (b) of Regulation (EU) No 1151/2012 on quality schemes for agricultural products and foodstuffs of 21 November 2012 is equivalent to Article 16 (b) of Regulation 110/2008, as it also protects protected geographical indication (PGI) and protected designation of origin (PDO) against “any misuse, imitation or evocation, even if the true origin of the products or services is indicated or if the protected name is translated or accompanied by an expression such as ‘style’, ‘type’, ‘method’, ‘as produced in’, ‘imitation’ or similar, including when those products are used as an ingredient”. Furthermore, the 3d recital of Regulation (EU) No 1151/2012 on quality schemes for agricultural products and foodstuffs specifically provides: “Protection of designations of origin and geographical indications should be extended to the misuse, imitation and evocation of the registered names on goods as well as on services in order to ensure a high level of protection and to align that protection with that which applies to the wine sector”.
6. Consorzio per la tutela del formaggio Gorgonzola, C‑87/97, EU:C:1999:115.
7. Commission v Germany, C‑132/05, EU:C:2008:117.