Prosecco producers have toasted victory over rival Nosecco

The institution behind Italian Prosecco producers, the  Consorzio di Tutela della Denominazione di Origine Controllata Prosecco, triumphed in its trademark dispute against  Les Grands Chais de France (GCF) in the  English High Court on June 24.

Mr Justice Nugee upheld a decision by the  UK Intellectual Property Office (UKIPO) to refuse GCF’s application to register a trademark for Nosecco, a non-alcoholic drink.  This was due to the Consorzio’s possession of an EU Protected Designation of Origin (PDO) for Prosecco, restricting the use of the term “Prosecco” to products that conform to the strict requirements of the PDO specification.

In this case, at least 85% of a Prosecco bottle’s contents must be derived from a single grape variety, Glera. In addition, the grapes must be grown within nine specified provinces in north eastern Italy, and the natural alcohol level must be at least 9%. Prosecco is enormously popular in the UK. According to  evidence submitted by the Consorzio, 97 million litres of prosecco were exported to the UK in 2017—the equivalent of almost 40 Olympic-sized swimming pools full of the sparkling wine, and more than one third of the total amount exported from Italy that year.

There is, however,  growing demand in the UK and beyond for non and low alcohol substitutes, and retail sales of non and low alcoholic drinks grew by 39% in 2018,  according to research firm Mintel. In May 2017, GCF launched Nosecco. Like Prosecco, it is a bottled carbonated drink made from grapes, but it contains no alcohol. Although Nosecco is produced in France for a French wine company, bottles were marked with various indicia evoking Italy, such as “edizione speciale”, “spumante” and “Da Angelo Taurini”.

Grapes of wrath

In January 2018, GCF applied to the UKIPO to register ‘Nosecco’ as an international trademark. The Consorzio opposed this application and, in November 2019, the UKIPO sided in favour with the Consorzio on two grounds, each based on the PDO. The UKIPO hearing officer rejected further opposition grounds of “bad faith” and “passing off”.

The UKIPO determined the name “Nosecco” evoked “Prosecco”, contrary to EU Regulation 1308/2013, under which the PDO is protected. The office also decided that this evocation meant there was a sufficiently serious risk that consumers would be deceived as to the nature, quality and/or geographical origin of Nosecco.

GCF stated that the name “Nosecco” was coined to refer to the non-alcoholic nature of its goods. It then argued, somewhat inconsistently, that secco means “dry” in Italian and sec is a common word used in the wine industry to denote a dry taste, and so the public would understand “Nosecco” to mean “not dry”. GCF also argued that if the public were to perceive the brand as referring to Prosecco, this would indicate an absence of Prosecco, ie, “Nosecco” would be seen as a parody of or a witty play on the word and, consequently, as a name that points away from Prosecco.

These arguments were problematic because they suggest that “Nosecco” evokes “Prosecco”. It is clear from the relevant case law involving products such as Scotch Whisky (Scotch Whisky Association v Klotz [2018]) and Calvados (Viiniverla [2016]), that such evocation, without any further aggravating factors, provides a sufficient basis to oppose a trademark application using a PDO.

GCF tried to convince the judge that the UKIPO drew wrong or unsupported conclusions from the evidence. For example, GCF argued that the hearing officer’s finding that “Nosecco” evokes “Prosecco” should have been supported by evidence from consumers. However, while case law requires the court to base its decision on the “presumed reaction of consumers”, this does not make consumer evidence mandatory. When a UK court is required to assess the probable view of the average consumer or the relevant public, the submission of survey evidence is a rarity.

This is unsurprising, given that judges are consumers too, and it is expensive to collect survey evidence and difficult to eliminate bias from such evidence. The UKIPO hearing officer had access to marketing materials and social media posts from consumers as evidence, which the judge implied may be more helpful in litigation than heavily prepared witness statements or survey evidence. The appeal failed and the application to register the ‘Nosecco’ trademark in the UK was once again refused.

Brexit implications

The English High Court’s decision underlines the power of a PDO, and of its close relation within the scheme of geographical indications (GIs): the protected geographical indication (PGI). Any misuse, imitation or evocation of a PDO or PGI may infringe. This is the case even if the true origin of the relevant product is indicated, eg, by way of a disclaimer that states the product name is a translation, transcription or transliteration of the GI, or if the product name includes expressions such as “style”, “type” or “imitation”.

In this way, the protection afforded by these forms of GI may be stronger and broader than the protection afforded to trademarks that are well-known within the EU and the UK. As a result of its withdrawal from the EU, the UK is setting up its own register of GIs and adjusting the system of GI protection, due to come into effect at the end of the Brexit transition period on December 31, 2020.

Existing GIs for products originating from the EU will remain protected in the UK, and vice versa in the EU but, in theory, the position of new GIs remains up for grabs in ongoing trade negotiations. In practice, the UK will have to, and has confirmed that it will, respect its obligations under the 1995 TRIPS Agreement.

UK protection of the names of wines and spirits, which benefit from “enhanced” protection, whether originating from the EU or other TRIPS members, will remain much the same as now. The UK government has also confirmed that beers and ciders will benefit from the same “enhanced” levels of protection. Beyond this, we will have to wait and see—the UK government has so far shown that it is willing to use the protection of GIs as a bargaining chip in negotiating its new trading relationship with the EU.

Alex Woolgar is senior associate at law firm Kemp Little. He can be contacted at  alex.woolgar@kemplittle.com.

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