C-312/98

2. I would note at the outset that the terminology used in this area itself risks being a fruitful source of confusion. I will 3. The defendant, which operates a brew- use the term 'geographical indication of ery in Warstein, is the owner of the German source' 2in the sense simply of a place trade mark No 1 166 399 'Warsteiner' for name designating a product where, first, 'beer of Pilsener style', which was regis- there is no link between the characteristics tered on 24 October 1990. In Autumn of the product and its geographical prove- 1990 the defendant acquired the Paderborn brewery, situated 40 km from Warstein. * Original language: English. 1 — OJ 1992 L 208, p. 1; as amended by Council Regulation (EC) No 535/97 of 17 March 1997, OJ 1997 L 83, p. 3. 3 — 'Indication géographique' and 'geographische Angabe'. 2 — 'Indication de provenance géographique' and 'geogra- 4 — 'Appellation d'origine' and 'Ursprungsbezeichnung'. phische Herkunftsangabe'. 5 — See paragraph 25 below for the full definitions.

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'Specially brewed in accordance with the German beer purity law and bottled in our new PADERBORN BREWERY'. 7. The Landgericht (District Court), Mann- heim, after obtaining a consumer survey, essentially upheld the application for an injunction and by order of 10 June 1994 prohibited the defendant from offering for sale, distributing and/or putting into circu- lation with the labels referred to above the 'Warsteiner Premium Light' and 'Warstei- 5. I would note at this point that it is ner Premium Fresh' beers brewed in the common ground first that 'Warsteiner', the Paderborn brewery. The Landgericht based adjectival form of 'Warstein' as a place its decision on Paragraph 3 of the Gesetz name, is a geographical indication of gegen den unlauteren Wettbewerb (law source and secondly that beer brewed in against unfair competition; 'UWG'). 7 Warstein has no special features attributa- ble to locality: the reputation of Warsteiner branded beer derives from the quality of the beer and promotion of the mark.

8. On appeal, the Oberlandesgericht (Higher Regional Court), Karlsruhe, after a supplementary expert opinion on the 6. The applicant, an association whose consumer survey, quashed the judgment of object according to its statutes is to combat unfair competition, considers that the 6 — The relevant national legislation is set out in paragraphs 11 design of the labels is misleading and that and 15 below. the geographical indication of source 'War- 7 — See paragraph 11 below.

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the Landgericht and dismissed the action. It 10. Written observations have been pre- considered that the survey showed that the sented by the parties, the Austrian, French, designation did not mislead a significant German, Greek and Italian Governments part of the customer groups surveyed in a and the Commission. The parties, the Ger- manner decisive for consumer behaviour. man, Greek and Italian Governments and Ultimately only 8% of those consumers the Commission were represented at the surveyed who drank beer, even if only hearing. occasionally or rarely, both knew that there was a place called Warstein and, when asked, also regarded that place as of importance.

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ing Paragraphs 126 to 129) is headed which they designate, if with the use of 'Protection of geographical indications of such names, indications or signs for source', while the second (Paragraphs 130 goods or services of other origin there to 136) is headed 'Protection of geographi- is a risk of misleading as to the cal indications and designations of origin geographical provenance. within the meaning of Regulation (EEC) No 2081/92'. The third section contains provisions delegating authority for the adoption of regulations.

14. Paragraph 126 of the Markengesetz is headed 'Names, indications or signs pro- (2) If the goods or services marked with a tected as geographical indications of geographical indication of source have source'. Paragraph 126(1) provides: particular characteristics or a particu- lar quality, the geographical indication of source may be used commercially for the corresponding goods or services of that source only if the goods or services have those characteristics or 'Geographical indications of source within that quality. the meaning of this Law mean names of places, areas, regions or countries and other indications or signs used commercially to designate the geographical provenance of goods or services.'

15. Paragraph 127 of the Markengesetz, (3) If a geographical indication of source headed 'Scope of protection', provides in so enjoys a particular reputation, it may far as relevant: not be used commercially for goods or services of other provenance, even if there is no risk of misleading as to the geographical provenance, where use for goods or services of other prove- nance is liable unfairly to exploit or '(1) Geographical indications of source affect adversely, without justification, may not be used commercially for the reputation of the indication of goods or services which do not come geographical source or its distinctive from the place, area, region or country force.'

'An action for a prohibitory order may be brought against a person who uses names, indications or signs commercially contrary to Paragraph 127 by those entitled to bring claims under Paragraph 13(2) of the Law 19. The Bundesgerichtshof continues by on Unfair Competition.' stating that, since incorrectly indicating the geographical provenance of goods is prohibited on grounds of the protection of competitors, geographical indications of source may be protected also when the provenance of the goods is unimportant for the consumer's decision to purchase. Pro- tection of simple geographical indications 17. According to the order for reference, of source under Paragraph 127(1) of the Paragraph 13(2) of the UWG refers to Markengesetz requires merely that the competitors, trade associations, consumer place indicated is not recognisably exclu- organisations and chambers of industry ded as a place of production on the basis of and commerce or craft trade associations. its particular character or the special nature of the goods; 8it does not presuppose that the consumer associates with the indication a special quality attributable to regional or local characteristics or that the indication is known to customers as such. For the present case, therefore, it is not relevant whether the consumer associates particular 18. The Bundesgerichtshof stresses in the expectations as to quality with the place of order for reference that the protection of provenance of the beer or to what extent geographical indications of source embo- the designation 'Warsteiner' as geographi- died in Paragraphs 126 to 128 of the cal indication is of importance for the Markengesetz is to be regarded as a lex consumer's decision to purchase. Since the specialis of a protection which by its nature defendant fails to provide sufficient and is a matter of competition law; Paragraph 3 reasonable clarifying indications as to the of the UWG may now be invoked only for place of brewing, Paderborn, it is prohib- situations which do not fall within Para- ited from using the local designation 'War- graph 126 et seq. of the Markengesetz. steiner' for beer brewed in Paderborn. Geographical indications of source are not, however, an additional type of intellectual property in the absence of an allocation of 8 — The defendant gives 'Mont Blanc' pens and 'Havana' razor the designation to a specified (exclusive) blades as examples from the national case-law of indications in which the place indicated was regarded as so recognisably holder. Individual protection still arises excluded.

The relevant Community legislation

... the scope of this Regulation is limited to certain agricultural products and foodstuffs for which a link between product or food- stuff characteristics and geographical origin Regulation No 2081/92 exists;... however, this scope could be enlarged to encompass other products or foodstuffs;

21. Regulation No 2081/92 provides, for designations which satisfy its conditions

9 — This is mentioned on both labels of the 'Fresh' beer but on ... existing practices make it appropriate to neither label of the 'Light' beer. define two different types of geographical

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describe an agricultural product or a or legal person may apply for registration foodstuff: in respect of agricultural products or food- stuffs which it produces or obtains within the meaning of Article 2(2)(a) or (b); the Commission verifies whether the applica- tion contains all the prescribed particulars and, if satisfied, publishes the details in the Official Journal; if there has been no — originating in that region, specific place opposition within six months of publica- or country, and tion, the name is registered.

— which possesses a specific quality, reputation or other characteristics attributable to that geographical origin and the production and/or processing and/or preparation of which take place in the defined geographical area'. The labelling and advertising directives

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28. Directive 79/112 enacts Community goods or services; 'misleading advertising' rules of a general nature on labelling which is defined in Article 2(2) to mean any are applicable horizontally to all foodstuffs advertising which in any way deceives or put on the market and intended for sale to is likely to deceive the persons to whom it is the ultimate consumer. 12 The prime con- addressed or whom it reaches and which, sideration is the need to inform and protect by reason of its deceptive nature, is likely to the consumer; the rules are also to prohibit affect their economic behaviour or which, the use of information which would mis- for those reasons, injures or is likely to lead the purchaser. 13 'Labelling' is defined injure a competitor. Article 3 makes clear to include any words, particulars, trade that, in determining whether advertising is marks or brand name relating to a food- misleading, account is to be taken of any stuff and placed on any label; 14 it must not information it contains concerning the be such as could mislead the purchaser to a geographical or commercial origin of material degree, particularly as to the goods. Article 7 provides that Member characteristics of the foodstuff including States may retain or adopt provisions with its origin or provenance. 15 a view to ensuring more extensive protec- tion for, inter alia, consumers.

observations. Since however the observa- link between their geographical origin and tions concentrated substantially on the their particular quality — and does not scope of Regulation No 2081/92, the sub- preclude national legislation protecting ject-matter of the sole question referred, the other types of geographical indications. Court asked that observations at the hear- ing should also address the links between national protection of simple geographical indications of source and the Treaty provi- sions on the free movement of goods and, in that connection, on the compatibility of the Bundesgerichtshofs interpretation of 32. The German Government adds that Paragraph 127(1) of the Markengesetz with Directive 79/112 on the labelling, presenta- the requirements of Community law, in tion and advertising of foodstuffs 18 and particular concerning consumer protection. Directive 84/450 on misleading advertis- I will consider first the question referred, ing 19 require Member States to prohibit all namely whether Regulation No 2081/92 misleading indications, including therefore permits the co-existence of national legisla- misleading indications as to geographical tion on simple geographical indications of provenance; it would be contrary to those source. Directives if the Regulation rendered Mem- ber States powerless in the area of geogra- phical indications of source. 20 Moreover, if the Regulation were exhaustive the mis- leading use of such indications of source would be uncontrolled at both national and Community level.

36. First, it is to my mind clear that the Regulation itself extends only to those agricultural products and foodstuffs whose characteristics are linked to their place of origin: see the ninth recital in the pream- 34. The defendant and the Greek Govern- ble 24 and the definitions in Article 2(2) of ment, in contrast, submit that the Regula- 'designation of origin' and 'geographical tion has exhaustively regulated the protec- indication', to which the Regulation is tion of all types of geographical indications expressly limited in Article 1(1). 25 It is and designations of origin and thus pre- common ground that simple geographical cludes national legislation in the area indications of source do not fall within that (although the defendant in submitting definition. observations at the hearing on the addi- tional issues raised by the Court proceeded on the basis that the national legislation was not so precluded). The defendant adds that the Regulation does not affect national competition laws which have as their object the protection of the consumer against misleading practices, in particular those implementing Directive 79/112 on the 37. It could of course be argued that, since labelling, presentation and advertising of strict conditions are necessary to qualify for foodstuffs 22 and Directive 84/450 on mis- 'geographical indications' within the mean- leading advertising. 23 ing of the Regulation, it would be strange if simple indications could be protected with- out any conditions being imposed. The answer to that argument is that, within the field of 'true' designations of origin and geographical indications (namely those 35. In my view it is apparent from both the within the definitions in Article 2(2)), strin- purpose and wording of the Regulation gent conditions are justified to warrant that it does not preclude national systems Community-wide protection under a Com- of protection of simple geographical indi- munity regime, but that that should not cations of source, namely indications where preclude Member States from granting such national protection as they think fit (pro-

38. The defendant argues that, although by virtue of Article 2 the Regulation protects 40. In my view the Directives do not assist by registration only designations of origin with the argument whether the Regulation and geographical indications as there is exhaustive. They are however of some defined, the scope of the Regulation as set relevance to the question whether the out in Article 1 extends to all types of national legislation is lawful independently geographical designations and indications of the scope of the Regulation. I will and thus precludes national protection of accordingly consider them below, in that all such types including indications of context. source. That seems to me a somewhat contrived interpretation; it is moreover contrary to the statement in the preamble to the Regulation that its scope is limited to products for which a link between char- acteristics and geographical origin exists. 26 41. I accept that it is not obvious whether the Regulation precludes the co-existence of national systems of protection of pro- ducts and foodstuffs within the scope of the Regulation, namely products and foodstuff described by geographical indications and 39. As mentioned above, several parties designations of origin there defined. That refer in support of their arguments to question however is not at issue in the Directive 79/112 on the labelling, presenta- present case, which is concerned solely with tion and advertising of foodstuffs 27 and the lawfulness of a national system of Directive 84/450 on misleading advertis- protection of simple geographical indica- ing. 2 8 The Directives have been cited both tions of source, clearly not within the scope by those submitting that the Regulation of the Regulation. cannot be exhaustive, on the basis that it would in that case prevent Member States from complying with their obligations under the Directives to prohibit labelling and advertising which misleads as to pro- venance, and by the defendant, which argues that the Regulation, although pre- 42. I therefore conclude on the question referred by the Bundesgerichtshof that the Regulation does not preclude national 26 — Ninth recital, set out in paragraph 22 above. 27 — Cited in note 10. legislation such as Paragraph 127(1) of 28 — Cited in note 11. the Markengesetz which protects simple

44! It may be wondered whether the facts giving rise to the main proceedings fall within the scope of that article, given that German legislation is sought to be enforced by a German association against a Ger- many company in the context of beer brewed in Germany. Indeed the representa- tive of the Italian Government raised this 46. In the present case in contrast no such doubt at the hearing. The defendant, how- link is involved. I remain of the view that, ever, and by implication the French and German Governments consider that Arti- cle 30 is in principle applicable on the basis 29 — Joined Cases C-321/94, C-322/94, C-323/94 and C-324/94 of the potential effects of the national Pistre and Others [1997] ECR I-2343, paragraph 35 of the judgment. legislation on intra-Community trade. 30 — Paragraphs 44 and 45 of the judgment.

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50. The defendant responds that the main proceedings in this case may be distin- guished from those in Exportur in a critical respect. In that case, the Court appeared to accept that indications of source were entitled to protection because they 'may... enjoy a high reputation amongst consumers and constitute for producers established in 48. It accordingly remains to be determined the places to which they refer an essential whether the national provision at issue may means of attracting custom'. 36 Protection be justified either by virtue of Article 36 of of such indications of source was therefore the Treaty (now, after amendment, Arti- justified because of the risk that their cle 30 EC) or as an overriding requirement reputation might otherwise be exploited within the meaning of the Cassis de by another. In this case however the Dijon 3 3 case-law. national legislation prohibits the use of indications of source whether or not there

31 — Case C-448/98 Ministère Public v Guimont, paragraphs 5 to 8 of the Opinion delivered on 9 March 2000. 34 — Case C-3/91 [1992] ECR I-5529. 32 — Case 8/74 Dassonvilie [1974] ECR 837. 35 — See paragraph 37 of the judgment. 33 — Case 120/78 Rewe v Bundesmonopolverwaltung für 36 — Paragraph 28. Branntwein [1979] ECR 649.

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It seems to me that it strains accepted use of Community law concepts to regard the legislation pursuant to which such an 51. I find those submissions on behalf of action is brought as falling within the scope the defendant convincing. Exportur arose of 'the protection of industrial and com- out of an action brought by a Spanish mercial property' within the meaning of association of exporters of the product in Article 36. question (nougat called 'Turrón de Ali- cante' and 'Turrón de Jijona'), formed with the aim of launching and promoting export, against two French manufacturers of nougat called 'tourons Alicante', 'tour- ons type Alicante', 'tourons Jijona' and 'tourons type Jijona', in which the appli- 52. Moreover, the Court in its case-law on cant sought an injunction prohibiting the the scope of that derogation has consis- defendants from using the Spanish names in tently ruled that Article 36 admits deroga-

tion. Whether or not simple geographical an invention with a view to manufacturing indications of source such as those at issue in Exportur can sensibly be considered to be on a par with mainstream intellectual 37 — See paragraphs 28 and 37 of the judgment. property rights such as patents, trade marks 38 — Case 78/70 Deutsche Grammophon v Metro [1971] ECR and copyright, it is none the less clear that 487, paragraph 11 of the judgment; frequently affirmed

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industrial products and putting them into vention sought to protect designations of circulation for the first time, as well as the origin, indications of source and names of right to oppose infringements; 39 in the case certain products, none of which at the time of a trade mark, it is the guarantee that the of the facts giving rise to the main proceed- owner of the trade mark has the exclusive ings was protected at Community level. 4 1 I right to use that trade mark for the purpose am not persuaded that the Court's general of putting products protected by the trade statement that the objective of that Con- mark into circulation for the first time; the vention 'may be regarded as falling within guarantee is intended to protect the owner the sphere of the protection of industrial against competitors wishing to take advan- and commercial property within the mean- tage of the status and reputation of the ing of Article 36' should apply to the much trade mark by selling products illegally narrower field of simple geographical indi- bearing the mark. 40 The object of national cations of source, all the more so now that legislation such as Paragraph 127(1) of the designations of origin are within the scope Markengesetz is manifestly not to safe- of the Regulation and protected at Com- guard any comparable rights in connection munity level pursuant thereto. with indications of source; indeed the Bundesgerichtshof is at pains to stress that, in the absence of an allocation of the indication of source to a specified exclusive holder, it is inappropriate to speak in terms of intellectual property rights. In my view, 54. I accordingly conclude that national the principles developed by the Court in the legislation such as Paragraph 127(1) of the context of industrial and commercial prop- Markengesetz does not fall within the erty in the strict sense of alienable rights derogation for measures for the protection such as patents, trade marks and copyright of industrial and commercial property are an inherently inappropriate framework within the meaning of Article 36 of the for assessing the lawfulness of national Treaty. legislation on simple geographical indica- tions of source.

could constitute justification on grounds of 57. The Bundesgerichtshof in its order for public policy under Article 36, 42 subse- reference stresses its view that Paragraph quent case-law has made it clear that, since 127(1) of the Markengesetz is a competi- Article 36 derogates from a fundamental tion law provision; the German Govern- rule of the Treaty enshrined in Article 30, it ment emphasises that it is based on con- must be interpreted strictly and cannot be sumer protection. That aspect of the legis- extended to objectives — such as protec- lation is clear not only from its tenor but tion against unfair competition and con- also from the facts that, pursuant to the sumer protection — which are not combined provisions of Paragraph 128(1) expressly mentioned therein. 43 Justifica- of the Markengesetz and Paragraph 13(2) tion on the grounds of consumer protection of the UWG, consumer associations are for the national legislation at issue must entitled to bring proceedings for infringe- accordingly be sought elsewhere. ment of Paragraph 127(1), and that Para- graph 3 of the UWG, which Paragraph 127(1) of the Markengesetz appears designed to supplement if not to supplant in the area of indications of provenance, has been frequently analysed by the Court as a provision for the protection of con- sumers. 4 7

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arise together; 50 indeed the twin aims of been misled and a prohibition on marketing consumer and producer protection underlie the product under such indication, osten- Regulation No 2081/92. 51 sibly for the protection of consumers, would clearly be a disproportionate and inappropriate means to that end.

59. It is clear from the case-law of the Court that the risk of misleading consumers cannot override the requirements of the free movement of goods and so justify barriers to trade unless that risk is sufficiently 61. It appears from the figures cited in the serious 52 and that in assessing the level of order for reference (drawn from the con- risk the relevant criterion is the presumed sumer survey on which the Oberlandesger- expectations of an average consumer who icht, Karlsruhe, based its judgment) that, is reasonably well-informed and reasonably although nearly 8 1 % of frequent consu- observant and circumspect. 53 mers of beer know of the place Warstein, a mere 8% of consumers who drink beer, even only occasionally or rarely, also regard that place as important to their decision to purchase.

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Conclusion

66. I accordingly consider that the question referred by the Bundesgerichtshof should be answered as follows:

(1) Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs does not preclude application of national legislation which prohibits the misleading use of a simple geographical indication of source, that is, an indication in the case of which there is no link between the characteristics of the product and its geographical provenance.

(2) Where such national legislation has an actual or potential effect on trade between Member States and is interpreted by the national court so as to prohibit use of a simple geographical indication of source even where it was not liable to mislead a reasonably well-informed and reasonably observant and circumspect consumer, it will be contrary to Article 30 of the EC Treaty (now, after amendment, Article 28 EC).