Last March 21, 2022 the Second Board of Appeal of EUIPO finally ruled the victory of our client Bolgheri Consortium against the mark BOLGARE’ owned by the Bulgarian vinery Domain Boyar International. The decision is a lesson in coherence about PDO protection taught by the European Trademark Office to the European Commission. As a matter of fact, their recent approval of the request for traditional term for the Croatian wine PROŠEK outraged the Italian and foreign wine-making industry. Anyway, let us go through the turbulent trial case and the highlights of EUIPO’s long-awaited and long-considered decision which follows in the wake of the well-known verdict of the Court of Justice re the lawsuit CHAMPAGNE vs CHAMPANILLO.
The controversy Consortium CDO Bolgheri and Bolgheri Sassicaia vs Domain Boyar International
Through our firm, on August 9, 2017 the Consortium filed an opposition to the registration of the EUTM BOLGARE’ applied for by Domain Boyar to distinguish a broad range of wines and alcoholic beverages in class 33. The grounds for opposition were the risk of confusion with the earlier EU collective trademark BOLGHERI pursuant to art. 8(1)(b) of the EUTMR and reputation of the same under art. 8(5) EUTMR, as well as evocation of the protected designation origin BOLGHERI, pursuant to the then new art. 8(6) EUTMR, introduced by the EU Regulation No. 1001 of June 2017, which established a specific ground for opposition based on PDOs and PGIs for the legitimate protection Consortiums. In view of the products identity and the doubtless similarity of the signs, as well as the clear evocation of PDO BOLGHERI, it appeared self-evident that the consortium would get the upper hand.
The defense of Domain Boyar, one of the leading wine makers and exporters of Bulgarian wine across Europe, was grounded on the fact that BOLGARE’ is the name Bulgarians were given by Thracians when they colonized modern Bulgaria a couple of millennia ago, and such name, or to put it better, its Cyrillic version БОЛГАРЕ (which was not the subject of the trademark application) is still being used by a few historians or academics to refer to Bulgarians or Bulgaria; as evidence, Domain Boyar filed ancient documents, mostly written in Cyrillic, targeting niche Bulgarian academic circles only.
It goes without saying that the Consortium contested this reconstruction of the meaning of BOLGARE’, incomprehensible to most consumers of European wines who, far from taking it out as a synonym with “Bulgarian” or “Bulgaria”, would have undoubtedly associated it with the renowned Italian wine BOLGHERI.
In the meantime, in March 2018, Domain Boyar launched their range of BOLGARE’-branded wines in Europe, which they sold even on Amazon (except in the Italian market…) and in April 2019 they filed an application for the trademark BOLGARE’ in the United States too, the main market for the fine Italian wine BOLGHERI, yet the Consortium promptly stopped this application with a winning opposition. Interestingly, in filling the application for the USA trademark, Domain Boyar claimed that the trademark BOLGARE’ has no meaning…
In December 2018, after the parties submitted their observations, referral to EUIPO Examination Department to reassess the absolute grounds for rejecting the trademark application BOLGARE’ appeared encouraging. As a matter of fact, the reform of the EUTM (EU Regulation No. 2015/2424, subsequently amended by the EU Regulation No. 1001/2017) has added conflict with earlier PDO/PGI among the reasons preventing a EUTM (art. 7(1)(j)) from being registered.
Surprisingly, in May 2019 EUIPO Examination Department advised there were no reasons why the trademark application should have been rejected due to absolute grounds and the opposition proceedings would be reopened.
The first decision by the Opposition Board
Contrary to expectations, in September 2019 EUIPO’s Opposition Division unfortunately rejected the Consortium’s opposition on grounds that they deemed there was no conflict between the trademark BOLGARE’ and the collective trademark BOLGHERI or PDO BOLGHERI.
As regards the examination of the risk of confusion between the two trademarks, the Opposition Division deemed the trademark BOLGARE’ to be graphically and phonetically very similar to the trademark BOLGHERI but conceptually different, mainly in Eastern European countries where consumers would perceive the trademark BOLGARE’ as a reference to Bulgaria or Bulgarian people and stated the weakness of the trademark BOLGHERI, which would resonate with European consumers solely against the geographic location renowned for its wine. A couple remarks arise spontaneously. Firstly, what is the value of the geographic derogation of collective trademarks if a collective trademark constituted by a placename is deemed to have virtually no distinctiveness? Secondly, it appears obvious that Bolgheri, a hamlet of Castagneto Carducci with just 131 inhabitants, would be geographically unknown were it not for its renowned wine and, in this case, could we not talk about “secondary meaning” and even of well-known mark in relation to the placename BOLGHERI associated with wine? Instead, the first instance Division tore even the opposition ground of the well-known mark to pieces by maintaining that it is the very PDO to be well-known vs the mark. Yet, is it not for the purpose of protecting designations that EUIPO grants Consortiums and Consortiums alone the possibility to register PDOs/IPGs as word marks too? What’s the use if, eventually, these marks are not enforceable?
As regards the second ground for opposition based on the conflict with PDO BOLGHERI, the examiners’ considerations appeared as weak. While they acknowledged that the mark BOLGARE’ might evoke PDO BOLGHERI and that the notion of “evocation” applies irrespective of an actual risk of confusion for the public and despite the products’ identity, the examiners eventually tipped the scales in favor of the lack of bad faith, lack of unfair advantage from association with PDO BOLGHERI, and deemed that the similarity of the signs BOLGHERI and BOLGARE’ is merely “fortuitous”, which would justify the adoption of a mark similar to a PDO and, accordingly, opted for the lack of evocation of PDO BOLGHERI. Nevertheless, “bad faith” is not one of the legal requirements that must be met pursuant to art. 103.2 of the EU Regulation No. 1308/2013, nor is fortuitous linguistic coincidence a justification.
The appeal decision
In January 2020 the Consortium filed an opposition before the Board of Appeal by reporting the Opposition Division’s abovementioned assessment errors and submitted a consistent case law by the Court of Justice to conclude that “evocation” is an objective criterion irrespective of the proof of bad faith as well as of the etymology of the evocative mark, where the meaning may be comprehensible to part of the European target consumers only.
After the parties submitted their observations, each of them standing firm, a long silence from EUIPO followed for approximately 18 months. We had the impression that the Opposition Division was struggling about what action to take and almost expecting further indications from the Court of Justice about the scope of the concept of evocation. Finally, those indications were set forth in the decision of September 9, 2021 in the case No. C-783/19, trying the Spanish mark CHAMPANILLO used for promoting tapas bars (vs wine), evocative of PDO CHAMPAGNE, thus further extending the protection scope of designations of origin as much as to include also protection against illegal use not for comparable products but even for services (in this case catering services) and stressing once again that protected designations can be protected, as per art. 103.2(b), also in the event of “evocation” of the designation as held by the Court of Justice in the ruling Scotch Whisky, C-44/17. “Evocation” may apply when the contested sign incorporates part of a PDO/PGI or in the presence of phonetic and visual similarity between the contested sign and the PDO/PGI as well as in the event of mere “conceptual proximity” between the signs and, ultimately, whenever the average European consumer establishes a sufficiently clear and direct mental link between the term used for designating the product concerned and the protected designation. Moreover, the Court underlines, the fact that evocation does not exist among the consumers of one or two Member States is unrelevant as it must apply to the entire territory of the European Union and, indeed, it is enough for evocation to exist even in just one Member State. The CHAMPANILLO decision is important because the Court clarifies that, since the protection of designations of origin is an objective one, it does not require to demonstrate fraud or negligence and it applies irrespective of competition between the products as well as of the existence of a risk of confusion, nor it requires a finding of unfair competition.
Last March 21, 2022, legitimated by the Court of Justice, EUIPO’s Board of Appeal finally issued a decision in the opposition BOLGHERI vs BOLGARE’ upholding of all our arguments and rejecting in full the application for the trademark BOLGARE’.
As to the comparison between the signs BOLGHERI and BOLGARE’, the Board looked at the Italian target consumers (and no longer only Eastern European consumers) and ruled that “BOLGARE’ is visually and phonetically strikingly similar to PDO BOLGHERI”. On grounds of procedural economy, the similarity of signs across all EU countries was not taken into consideration because it was enough for the risk to exist in one country alone for the trademark application to be rejected.
As regards the products protected by the mark BOLGARE’, the Board deems that because it is all alcohol-based products, the PDO evocation exists and, however, the recent decision of the Court of Justice in the CHAMPANILLO case clarified that evocation applies irrespective of the products similarity.
In view of the strong similarity between the signs and the products proximity, the Board concluded the global evocation assessment stating that “the Italian target consumer is likely to establish a sufficiently clear, direct connection between the contested sign BOLGARE’ and the PDO BOLGHERI”.
Moreover, they rejected the counterparty’s good faith argument in choosing the name BOLGARE’ and approved our argument that evocation is an objective criterion and applies regardless of Domain Boyar’s intentions. They also pointed out that they should have carried out more extensive searches so as to avoid adopting a mark with such a strong similarity with a PDO registered for wine.
On grounds of procedural economy, the second ground of our opposition, namely infringement of the collective mark BOLGHERI, was not addressed since the appeal had already proved fully successful on account of the PDO.
The decision of the Board of Appeal of EUIPO in the opposition BOLGHERI vs BOLGARE’ further testifies to the European Union’s intention to extend the protection scope of PDOs and GPIs to all the cases of objective evocation of a designation and, when it comes to choosing marks, it cautions all producers to consider designations of origin as invalidating prior rights just like trademarks and the other distinctive signs.