Miguel Torres S.A. v Cantine Mezzacorona S.C.A.R.L.

This is an appeal from a decision of Neuberger J of 26 March 2003. Permission to appeal was granted by Aldous LJ. The appellants are Miguel Torres S.A., the respondents Cantine Mezzacorona S.C.A.R.L. I shall call them Torres and Cantine respectively.

Cantine are the applicants for registration of a device mark which looks like this:

Cantine is one of the largest wine growing co-ops in the Trentino area in northeast Italy where wine is grown. Within that area is a small town called Mezzocorona. The name Cantine Mezzacorona was chosen because when the region was within the Austro-Hungarian Empire the village of Mezzocorona was called Mezzacorona.

Cantine’s mark has been widely used since 1983 and has been registered in many countries, including a number within the European Union (notably Italy). It has been used in the United Kingdom since 1988. There is no suggestion that its use has ever misled anyone in any way (whether by confusion with another’s trade mark or in any other way). Nor has any regulatory authority in any country even queried its legitimacy.

Torres, a major producer of wines in Spain, Chile and California, have a number of marks consisting of pictures with crowns and the words Coronas and Gran Coronas. In part, Torres’ opposition to registration of the mark was based on what may be called conventional grounds, namely alleged deceptiveness having regard to the Torres marks and their use. The Hearing Officer and Neuberger J rejected those conventional grounds. No appeal is pursued in respect of them.

The sole ground of appeal now pursued is based upon s.3(4) of the Trade Marks Act 1994. This prohibits the registration of a trade mark:

“If or to the extent that its use is prohibited in the United Kingdom by any enactment or rule of law or by any provision of Community law.”

It is contended that the use of the mark is indeed prohibited by virtue of Regulation number 2392/89 (now replaced by a later Regulation number 493/99 which, so far as this case is concerned, contains no changes). It lays down general rules for the description and presentation of wines and grape musts. I shall call it the Regulation.

One may wonder why Torres pursue this point, given that there is and never has been any commercial confusion. It was said that Torres, like all other producers of quality wines, have an interest in the rules being obeyed. Even if that is so, it is odd to raise the question obliquely by way of a trade mark opposition. For even if the opposition succeeded, Cantine would remain at liberty to use the mark. Only a successful prosecution would stop them. But that is by the way.

The Regulation is a long and detailed document running to 45 paragraphs and 24 pages. By virtue of the Rome Treaty and the European Communities Act 1972 it takes direct effect and forms part of United Kingdom law. The question is whether it forbids the use of the mark.

The Judge helpfully sets out all the parts of the Regulation relevant to this case. My quotations here are made by cutting and pasting his exposition in paragraphs 63 to 71 with a few alterations and additions.

The 13^th recital of the Regulation includes the following:

“Whereas, with a view to providing effective protection to geographical names used for the description of wine products, trade marks should be abolished which contain wording that is identical to a geographical name used to describe a table wine, a quality wine produced in a specified region, hereinafter referred to as ‘quality wine psr’, or an imported wine, the description of which is regulated by Community provisions, without the product described by the trade mark in question being entitled to such a description.”

Articles 11, 12 and 13 are under the heading “B.1. Labelling” which is the initial part of section B, entitled “Description of quality wines produced in specified regions” of Chapter 1 of the Regulation, which is itself entitled “Description of products originating within the Community”

Article 11(1) sets out the information which is required to be included “in the case of quality wines psr”. These requirements include:

“(a)

The name of the specified region of origin;

…

(d)

In the case of … containers with a nominal volume of not more than 60 litres: the name or business name of the bottler and the local administrative area or part thereof and the Member State in which his head office is situated;

…”

Article 11(2) provides that:

“In the case of quality wines psr, the description on the labelling may be supplemented by the following information…”

There then follows 21 subparagraphs, including:

“(c)

A brand name, in accordance with the conditions laid down in Article 40;

(d)

The names or business names of the natural or legal persons or group of persons involved in the distribution of the quality wine psr in question, and the local administrative area or part thereof in which their head offices are situated;

…

(l)

The name of a geographical unit which is smaller than the specified region, in accordance with the conditions laid down in Article 13.”

Article 12.1 makes it clear that the provisions of Article 11 are exclusive, in that it begins by providing:

“Only the information specified in Article 11 shall be allowed for the description on the label of a quality wine psr.”

It goes on to provide three exceptions, of which the third is in these terms:

“Member States may allow the statement of the specified region referred to in Article 11(1)(a) to be accompanied by a statement of the name of a larger geographical unit of which the specified region is a part, in order to indicate its whereabouts, provided, however, that the conditions governing use of the name of the said specified region and of the name of the said geographical unit are complied with.”

As to Article 13, it is appropriate to set out the first two paragraphs:

“1.

In the description of a quality wine psr on the labelling, the name of a ‘geographical unit which is smaller than the specified region’, as referred to in Article 11(2)(l), shall be taken to mean the name of:

- a small locality or group of localities,

- a local administrative area or part thereof,

- a wine-growing sub-region or part thereof.

2.

Producer Member States may allocate the name of a geographical unit which is smaller than the specified region in question to quality wine psr provided that:

this geographical unit is well defined,

all the grapes from which the wines have been produced originate in that unit.”

Article 40, which is referred to in Article 11(2)(c), is under the title “General Provisions”. So far as relevant, it is in the following terms:

“1.

The description and presentation of the products referred to in this Regulation, and any form of advertising for such products, must not be incorrect or likely to cause confusion or to mislead the persons to whom they are addressed, particularly as regards… the information provided for in Articles 2, 11, … This shall apply even if the information is used in translation or with a reference to the actual provenance…

2.

Where the description, presentation and advertising of the products referred to in this Regulation are supplemented by brand names, such brand names may not contain any words, parts of words, signs or illustrations which

(a)

are likely to cause confusion or to mislead the persons to whom they are addressed within the meaning of paragraph 1; or

(b)

are:

liable to be confused by the persons to whom they are addressed with all or part of the description… of a quality wine psr, or of an imported wine whose description is governed by Community provisions, or

identical to the description of any such product unless the products used for making the final products referred to above are entitled to such description or presentation.

3.

By way of derogation from point (b) of the first subparagraph of paragraph 2, the holder of a registered trade mark for a wine… which is identical:

to the name of a geographical unit smaller than a specified region used to describe a quality wine psr…

may, even if he is not entitled to use such a name pursuant to the first subparagraph of paragraph 2, continue to use that trade mark until 31 December 2002 provided that the trade mark in question… (a) was registered not later than 31 December 1985…”

Mrs Madeleine Heal appeared for Torres, conducting the appeal with clarity and precision. The start point of her argument was Art. 12, laying down that only Art. 11 information was allowed on a quality wine psr. Mr Tritton for Cantine did query whether Art 11 could be a complete code as to what could go on a label, pointing out that phrases describing the nose or palette of a wine were not covered by any of the items of permitted information. One would have thought that the Regulation would not ban this sort of information, and there is nothing in any of the Recitals suggesting any legislative purpose to that end. We do not have to explore this further, because the heart of Mr Tritton’s argument is that use of the mark applied for is indeed permitted by Art 11.

Before proceeding further I mention another point which I do not think concerns us. At one point Mrs Heal suggested that nothing else than Art. 11 information was allowed – even a picture, such as one by a well-known artist having no trade mark significance. I doubt that can be right – matter which is not information at all is simply outwith the Regulation altogether. Chateau Mouton Rothschild can carry on using a different famous artist each year. But that does not matter here.

For present purposes, therefore, I accept the premise that the use of the mark applied for must be permitted (or required) by Art. 11. I also accept that if that use is not so permitted or required, Art.44 forbids it within the EU. The consequence would be that the mark would not be registrable by virtue of s.3(4) of the 1994 Act.

So I turn to Art. 11. It has two parts, that which must, and that which may, be included in the description on the labelling. Mrs Heal submitted that the mark applied for was neither of these.

She pointed out that the mark did not comply with Art. 11.2(l). This allows “a geographical unit which is smaller than the specified region in accordance with the conditions laid down in Art. 13.” The specified region here is Trentino and the town of Mezzocorona is smaller than that. However, submitted Mrs Heal, there is no compliance with the conditions laid down in Art. 13. Although a Member State may allocate the name of a geographical unit which is smaller than the specified region in question, it can only do so if the unit is well defined and all the grapes used to make the wines come from that region. She submitted neither condition was satisfied and that Italy not only had not made any allocation of the name of the geographical unit Mezzocorona but could not do so.

She is right on this point, and Mr Tritton so accepted. He does not contend that Art. 11 permits use of the mark applied for by virtue of Art.11.2(l). He says it is permitted by Art. 11.2(c) – that the mark applied for is information that supplements the description on the labelling and is a brand name in accordance with the conditions laid down in Art.40.

Firstly then is the mark applied for a “brand name?" One only has to look at it to see that it is a trade mark – the word MezzaCorona appears twice, once in the circle device and once underneath, in each case in fancy lettering. The mark applied for is obviously a trade mark, as is the word “MezzaCorona” within it. It is a brand name.

Neuberger J was of this opinion too. He held that the word was both a geographical name and a brand name. As to the former he said “the mark in issue should be treated as the name of a place, at least for the purpose of the Regulation.” He then went on to reject the contention that it could not be treated as a brand name for the purpose of the Regulation. And he held it was implicit from Art. 40(3), which allowed a limited continuation of use of a registered trade mark identical to the name of a geographical unit, that a geographical name could be a brand name too.

Mrs Heal latched onto the finding that the mark was a place name and submitted that it was a finding of fact with which we, conducting a review rather than a rehearing, could not interfere unless satisfied it is wrong in principle. I do not agree. The question is essentially one of mixed fact and law – how does the mark strike the eye (a question of fact); what is the legal conclusion (a question of law). For myself I think the mark is plainly just a trade mark – though the single letter difference makes it confusingly similar to the place name. It is not, as such, the place name.

Actually however, the point does not matter – for the question is whether it is a brand name, not whether it is a geographical name too.

Even if it is a brand name, submitted Mrs Heal, it is not one which “supplements” the description on the labelling. I do not understand this submission (it was actually made in the context of Art.40, though the point is the same as under Art.11(2)). The label used by Cantine clearly has other, required, information on it – for instance the name of the specified region of origin (“Trentino”) the amount in the bottle, the name of the producer and so on. The trade mark supplements this.

Thus I hold that the mark is a brand name within Art. 11(2)(c) if it is in accordance with Art. 40, to which I now turn.

Mrs Heal first focuses on Art. 40(1). She submits that the “description” and “advertising” of the Cantine wine are “incorrect” within the meaning of Art.40(1). She points out that the provision, by including “incorrect” goes beyond “likely to cause confusion or mislead”. So it does not matter, she says, that the mark applied for has never misled anyone, either here or elsewhere and is unlikely to do so. Even if it is not misleading, it is nonetheless “incorrect.”

I am prepared to accept that “incorrect” may have a wider meaning than “misleading” though it is difficult to think of a concrete case. Perhaps putting more wine in the bottle than the label says might be an example of something incorrect but not likely to affect consumers (“the persons to whom they are addressed”). But let that pass.

Mrs Heal’s argument on Art. 40(1) founders for two reasons. First there is nothing “incorrect” about the use of MezzaCorona. If one regards the word as the same as the place name, it is the name of the producer and bottler, the place where the wine is made, as well as the headquarters of the bottler.

Mrs Heal submits that the name is incorrect because, regarding it as the place name, its use does not comply with Art. 13(2) and is not, and cannot be, allocated by Italy. But this is simply to say that it does not comply with Art. 11.2(l). The unarticulated premise of her argument is that if the mark is not permitted by this provision it cannot be permitted by any other of the list of permitted descriptions in Art.11.2, Once the premise is made articulate, the argument obviously falls: each item of the permitted descriptions is clearly independent – because you do not fall within one does not mean you cannot be within another.

Thus it is not surprising that the three trade mark cases considered by the ECJ have not been concerned with Art.40(1). Once the mark in question is a brand name, Art. 11 provides permission provided there is compliance with Art.40 – which takes one to Art.40(2).

Mrs Heal first submits that the mark does not “supplement” the description – it is the description. But whenever it is used on a wine label there will be other material used with it – see para. 30 above.

Next she submits that the brand name is “identical to the description” (i.e. the place name Mezzocorona) and is not “entitled to the description,” thus falling foul of the second indent of Art.40(2)(b). This breaks down for two reasons – first I do not think there is identity between the mark applied for and the geographical name and secondly Art.40(2)(b) relates to the “products used for making the final product” which is irrelevant here.

The first of these points is worth a little elaboration. In the field of trade marks the ECJ has ruled that the test of “identity” is strict (LTJ Diffusion v Sadas, “Arthur et Felicié” Case C-291/00 [2003] IP&T 994). Given the visual differences here, as well as the different spelling it is fairly clear there is no identity for trade mark purposes. Mrs Heal submits that trade mark considerations do not apply here – this being a wine labelling Regulation. But I do not see why – this is the trade mark bit of the wine labelling Regulation and the purpose is essentially the same.

This being a Community instrument it is of course vital to consider the recitals to find the legislative purpose. I can find nothing which suggests that a trade mark which contains or consists of a geographical name which is not regulated by Community provisions should be prohibited. Indeed Recital 13 by implication suggests otherwise since it is confined in its application.

I therefore conclude, without the benefit of the guidance from the ECJ, that the Regulation does not forbid the use of the mark applied for – it is permitted by Art.11.2(c).

Moreover I reach this conclusion without finding it necessary to go the positive part of Art.11 – specifying that which must be on the label. For one of the faintly surreal features of this case is that it stands accepted that both the name of the bottler (Cantine Mezzacorona) and the local administrative area in which he has his head office (Mezzocorona) must actually be on the bottle. It is true that there are detailed rules about the size of lettering and field of view laid down in another Regulation (3201/90) but size, or whether it forms part of a separate trade mark, cannot be relevant. It is worth noting in particular that the name of the bottler in whatever size is undoubtedly trade mark use – it tells you who is responsible for the product as much (if not more) than a fancy name or design.

There is more than ample confirmation in the ECJ’s case law of the position I have reached. The most directly relevant case is Borie Manoux v INPI, Case-81/01 [2003] ETMR 29. Registration of the mark “Les Cadets d’Aquitaine” was sought in France. A question arose as to whether its use was forbidden by the Regulation, Aquitaine not being a name which had been specified by France. When the matter reached the Cour de Cassation a question was referred to the ECJ. It was:

“Must Art. 40 of Regulation 2392/89 be interpreted as prohibiting the registration as a trade mark, for the products covered by the regulation, of a geographical reference the use of which is not provided for by Art. 11, even where the registration of such a trade mark is not likely to mislead the consumer as to the provenance of the wine and does not give rise to any confusion with a registered geographical designation, insofar as such registration might suggest that the geographical reference in question, which relates to the region where that wine is actually produced but which covers other designations of origin, is protected?”

The answer given by the Court was:

“30.

Article 40 of Council Regulation 2392/89 of 24 July 1989 laying down general rules for the description and presentation of wines and grape musts, as amended by Council Regulation 3897/91 of 16 December 1991, is to be interpreted as not prohibiting the use of a trade mark which contains a geographical reference and is intended for use in connection with the sale of wine and is likely to give the false impression that the geographical reference is protected, unless there is a real risk that use of such a mark will mislead consumers and, as a result, alter their economic behaviour. It is a matter for the national court to determine whether or not that is the case.”

This is unambiguous. The language of both question and answer on its face applies whether the unit is larger or smaller than a specified region. Mrs Heal sought to deal with this by submitting that the Court was either wrong, or that its decision should be read as applying only to a unit larger than a specified region.

I do not think either will do. It is not open to this Court to find that a decision of the ECJ was wrong, at least when there are no problems of conflicting decisions or the like. Nor does it make any sense to read the decision as applying only to smaller geographical units. The reason for the ECJ’s decision is clear: trade marks that contain a geographical reference are permitted unless they will deceive. That applies as much to a larger unit as a smaller unit. Deception is the touchstone.

The other two cases are to much the same effect, though they were not concerned with geographical names. The cases are Langguth, Case C-456/93 [1995] ECR I-1737 and Sektkellerei, Case C-303/97 [1999] ECR I 513. In Langguth a trade mark owner used, as part of his brand name, the reserved quality indications ‘Kabinett’, “Spätlese” and “Auslese”. The question arose as to whether this was permitted. The Court, noting that this was a brand name case (so within Art.11.2(c)), went straight to Art.40(2). It then isolated the key consideration, was the mark liable to deceive? Notably it said:

“27.

On that point, it should be noted first of all that the Community legislation, and Article 40 of Regulation No 2392/89 in particular, does not impose any restriction concerning the lettering of the characters and the size of a brand name in relation to the indication on the label of the name of the specified region or of a geographical unit smaller than the specified region.

28.

Accordingly, the fact that a brand name is presented in a conspicuous manner does not mean that it is likely to cause confusion or mislead the persons to whom it is addressed, even if it contains a word that has been designated by the rules in question as information which may be used in the appellation of a quality wine psr.

29.

Moreover, the wording of Article 40 of Regulation 2392/89 shows that it is aimed primarily at prohibiting the untruthful use of brand names, a point which is not at issue in this case.”

So it was a case where required information was permitted also as part of a brand name – just as here. And the reference to “geographical unit smaller than the specified region” in para 27 is directly in point here.

Finally there is Sektkellerei. This issue was, in the words of Fennelly A-G, at para 1:

“[Is] the continued use of an established trade mark for Sekt, ‘Kessler Hochgewächs’ prohibited because of an abstract risk of confusion with the name ‘Riesling- Hochgewächs reserved in both Community and notional law for wines made exclusively from Riesling grapes?”

Again the Court (and AG) passed over Art.40(1) and went to Art.40(2). Again it focused on a likelihood of confusion as being the touchstone. And it emphasised, in effect, that there should be a real risk of this before a brand name was not allowed. It said:

“32.

Moreover, as the Commission and the German Government have pointed out, by authorising the use of brand names to supplement the description, presentation and advertising of sparkling wines, the Community legislature necessarily intended to balance the interests involved as between, on the one hand, the protection of consumers, and in particular the right not to be misled as to the intrinsic qualities of a product, and, on the other, the protection of intellectual property rights and, in particular, the legitimate interest of the owners of a brand name to use and exploit it for commercial purposes. That process of balancing the interests involved would be seriously undermined if a mere risk of confusion, found to exist without even taking the opinions and habits of the consumers concerned into consideration, were enough to prevent the use of an appellation protected as a brand name.”

This consideration clearly applies here too. For if Torres were right, a perfectly harmless brand name that has developed a valuable and established goodwill – a property right - would be destroyed to no purpose. Fennelly AG observed (para. 26):

“Having regard both to Art 222 of the Treaty and the general principles of Community law under which ‘both the right to property and the freedom to pursue a trade or business’ (see amongst others Case C-280/93 Germany v Council [1994] ECR I-4973, para. 78)) are assured, the germane question to ask is rather whether the exercise by Kessler of its property rights has been curtailed in the interests of avoiding the risk of confusion posed by the disputed brand name”

An exactly analogous question applies here and the answer is the same as was given there.

So both as a matter of first impression and on the authorities, I think this case is clear and the appeal should be dismissed.

Sir Martin Nourse: I agree.

Lord Justice Peter Gibson: I also agree.