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Happy World Whisky Day!

Tomorrow, May 18, 2019, is World Whisky Day, a day that “celebrates all types of whisky/whiskey and encourages everyone to enjoy whisky responsibly.” As a law blog, there is no better way to celebrate such a day than with a post on a whisky court case! On June 7, 2018, the European Court of Justice (ECJ) had to decide a case between the Scotch Whisky Association and the German whisky producer Michael Klotz, who markets a whisky under the designation “Glen Buchenbach.” The case was submitted to the ECJ by the Regional Court of Hamburg, Germany in accordance with article 267 of the Treaty on the Functioning of the European Union (TFEU) (request for a preliminary ruling). The Scotch Whisky Association sought an order that Mr. Klotz cease marketing his whisky under the designation “Glen Buchenbach” on the ground that use of that designation infringes European Union (EU) law which protects certain geographical indications, including “Scotch Whisky.” The ECJ held that the national court must determine whether a consumer thinks directly of the protected geographical indication ”Scotch Whisky” when he sees a comparable product bearing the designation “Glen.” On February 7, 2019, the Regional Court of Hamburg ruled in favor of the Scotch Whisky Association and held that using the designation “Glen” is misleading consumers as to the true origin of the whisky in question and therefore prohibited under EU law. The German distillery has appealed the case to the Higher Regional Court of Hamburg. The case is still pending.

Bottles and barrel of confiscated whiskey. Between 1921 and 1932. Library of Congress Prints and Photographs Division. //hdl.loc.gov/loc.pnp/cph.3b42139.

Applicable Law

EU Regulation No. 110/2008 sets rules regarding the definition, description, presentation, and labeling of spirit drinks, and for the protection of geographical indications of spirit drinks. (EU Regulation No. 110/2008, art. 1.) Spirit drinks are generally defined as alcoholic beverages intended for human consumption with a minimum alcoholic strength of 15%. They are produced either directly by distillation, by maceration, or by the addition of flavorings, or by mixing a spirit drink with another drink, ethyl alcohol of agricultural origin, or certain distillates. (Id. art. 2.) A geographical indication identifies such a drink as “originating in the territory of a country, or a region, or locality in that territory where a given quality, reputation, or other characteristic […] is attributable to its geographical origin.” (Id. art. 15.) Geographical indications are registered in Annex III of the EU Regulation. One of the registered geographical indications is Scotch Whisky from Scotland.

Court Cases

The defendant Michael Klotz markets a whisky under the designation “Glen Buchenbach”, which is produced in Berglen in the Buchenbach valley in Swabia. The label on the bottles reads: “Waldhornbrennerei [Waldhorn distillery], Glen Buchenbach, Swabian Single Malt Whisky, Deutsches Erzeugnis [German product], Hergestellt in den Berglen [produced in the Berglen].” (ECJ, supra, paras. 9 & 10.) According to the website of the distillery, they chose the name “Glen Buchenbach,” because the Gaelic term “glen” means “valley” and Berglen is located in the Buchenbach valley.

The Scotch Whisky Association alleges that using the term “Glen” for the German whisky infringes the registered geographical indication “Scotch Whisky” and misleads the consumer as to the origin of the whisky despite the clarification on the label. It contends that the EU Regulation protects a geographical indication also against any reference that suggests the geographical origin of that indication. In its view, the term “Glen” evokes an association with Scotland and Scotch Whisky. (Id. paras. 11 & 12.) The Regional Court of Hamburg stated that, according to the jurisprudence of the ECJ, it is not sufficient that the disputed element evokes “some kind of association with the protected geographical indication or the geographical area relating thereto” but the association has to be direct. It held that this is not the case here, because the terms “Scotch Whisky” and “Glen” are not similar and in particular are not synonyms. (Regional Court of Hamburg, supra, para. 48.) However, the Court held that the name is nonetheless misleading, because the average European consumer will think it is from Scotland as the majority of whiskys with Glen in their name are from Scotland. (Id. at 51; EU Regulation No. 110/2008, art. 16(c).) In addition, the Court reiterated that the ECJ explicitly stated that the context surrounding the disputed element, or the fact that that element is accompanied by an indication of the true origin of the product concerned, is irrelevant for the determination. (Regional Court of Hamburg, supra, para. 51.)

As mentioned, the German distillery appealed the case. It argues that the Court should have taken into account that only one percent of surveyed consumers actually made a direct association between the term Glen and Scotch Whisky. It remains to be seen what the Higher Regional Court will decide. Stay tuned for updates on the case here on the blog or in our Global Legal Monitor.

Prost!

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