In the world of trade marks a geographical indication can be a commercial asset. A geographical indication is a sign used on products that helps in indicating the following:
- Where the product originates from; and
- Characteristics or reputation associated with the place of origin.
Thus, geographical indications are well guarded and there can be costly consequences if used incorrectly. However, the recent judgement of the Court of Justice of the European Union (‘CJEU’) between the parties Balema and Consorzio Tutela Aceto Balsamico di Modena (‘CTMB’), illustrates that if it is interpreted too widely it can have a negative commercial impact on commercial trade.
Balema is a German company that both produces and sells vinegar-based products. It uses the wine from the Baden region in Germany to make its vinegar-based products.
The organisation CTMB were not happy with Balema using the terms ‘balsamico’ and ‘deutscher balsamico’ on its product labels. Consequently, Balema brought a claim in the German court stating that it had a right to use the above words on its products. The German Federal Court of Justice sought the CJEU’s assistance in advising on whether the terms ‘aceto’ and ‘balsamico’ could be considered a geographical indication. If it was, it meant that only vinegar-based products produced in Modena, Italy could use these words on their products.
The CJEU reasoned that although ‘Aceto Balsamico di Modena’ had a strong reputation throughout the world, it could not be interpreted to make ‘aceto’ and balsamico’ geographical indications. The terms ‘aceto balsamico’ and ‘balsamico’ have become associated with vinegar that they are non-geographical terms. Subsequently, the average consumer will not associate these terms with a certain place of origin or characteristics.