The ECJ has for once rejected the Advocate General’s recommendations on two key issues in Veuve Clicquot’s fight to stop Belgian beer packaging using “brut”, “a la methode traditionnelle” and other champagne terminology. Simon Maughan uncorks the top court’s findings.
Topic: Comparative
Who: De Landtsheer Emmanuel SA -v- Comité Interprofessionnel du Vin de Champagne (CIVC) and Veuve Clicquot Ponsardin SA
Where: Judgment of the European Court of Justice (ECJ)
When: April 2007
What happened:
In December 2006 we reported on the decision of Advocate General Mengozzi in this case. The judgment of the ECJ has finally been delivered and, somewhat surprisingly, the ECJ has taken a different approach to two key questions, namely:
(1) whether the comparative advertising directive applies to generic types of products (e.g. champagne) as opposed to specific products or competitors (e.g. Veuve Clicquot); and
(2) whether article 3a(1)(f) of the directive prohibits the comparison of products without a protected designation of origin ("PDO") (e.g. Belgian beer) with products having a PDO (e.g. champagne).
It will be recalled that the issues in the case revolved around a Beligian beer launched by De Landtsheer under the name 'Malheur Brut Réserve'. The beer was marketed using phrases such as "Brut Reserve", "La première bière BRUT au monde" and "méthode traditionnelle" and was also described as a "champagnebier". The champagne-producing community sought to prevent De Landtsheer from using the language of champagne production as they felt that the beer manufacturer was seeking to take unfair advantage of the reputation.
In relation to the first question, the Advocate General's view was that the directive did not apply unless the relevant advertisement expressly or impliedly identified a specific competitor or its products. The ECJ took a contrary view, holding that the directive applied even where a competitor or its products or services were only brought to mind by implication. The mere fact that an ad only referred to a type of product did not mean that the directive had no application, and it was irrelevant that a number of competitors might be identified by implication, rather than a single competitor.
In relation to the second question, the Advocate General had concluded that, on a proper construction of the directive, the comparison of products without a PDO with products having a PDO was unlawful. The ECJ declined to construe the directive in this way, holding that the directive was intended to facilitate fair comparative advertising. Since another provision of the directive (article 3a(1)(g) expressly laid down rules ensuring that advertisers could not take unfair advantage of a PDO, it was unnecessary to construe article 3a(1)(f) as prohibiting comparisons of this kind.
The ECJ reached similar findings to the Advocate General in relation to two other questions which had been referred to the Court:
On the issue of competing products, it decided that the mere fact that a particular business or product could be identified in an ad did not, of itself, mean that there was necessarily a competitive relationship between the identified business and that of the advertiser. The national court should look to the nature of the market and consumer preferences, among other things, to determine whether the businesses or products were truly competing. In addition, the ECJ concluded (not surprisingly) that the test for deciding whether products were competing for the purposes of article 2(2a) (i.e. for determining whether an ad fell within the scope of the directive at all) was not the same as the test under article 3a(1)(b) which set down one of the conditions to be satisfied by a comparative ad in order to be lawful.
On the question whether the directive applied to ads which compared a type of product without identifying a specific competing product, the ECJ held that it did not and said that the national court should instead apply any other relevant national or European legislation even if that afforded a lower level of protection for consumers or competing businesses.
Why this matters:
This judgment confirms that the provisions of the directive will apply even where an ad only hints at a competing business or product. As a result, advertisers need to take great care that any comparative ad they produce, even one which does not mention a competitor by name, is fully compliant with the directive.
Secondly, it is now clear that products having a PDO are not immune from being featured in comparative advertising provided the comparison is fair. The majority of advertisers will regard this as a good thing and would probably have felt that the Advocate General's view was overly protective to manufacturers of products with a PDO. Conversely, the likes of the champagne houses and the camembert producers will now be concerned that rivals will (subject to the directive) be able to raise the profile of their products by comparing them with products having a PDO, for that was surely the intention of De Landtsheer in this case.
