• Cheese Ruling Grates For Parmesan Producers

    The ECJ struck a blow to cheese producers recently, curtailing their ability generically to dub certain Italian cheese PARMESAN. The Court ruled that the use of PARMESAN is unlawful where the cheese does not comply with the special rules for the Italian cheese Parmigiano Reggiano, a Protected Designation of Origin ("PDO"). The ruling in Commission v. Germany (Case C-132/05) has wide-ranging implications for cheese producers and supermarkets alike.

    Grating on Their Nerves

    The seeds of the dispute were sown in Germany, where supermarkets and the like were selling various Italian hard cheeses that were grated or intended for grating under the name PARMESAN.

    PARMESAN was not the same as, but was arguably similar to, a PDO granted in 1996 for "Parmigiano Reggiano," under Regulation 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs. Among other things, Parmigiano Reggiano cheese had to be produced in the Parma region of Italy.

    Some cheeses sold as PARMESAN in Germany did not comply with the PDO rules for Parmigiano Reggiano, and in 2003 the E.U. Commission ordered Germany to take action to stop the sale of such goods. Germany declined, on the grounds that PARMESAN was generic for hard Italian cheeses that were grated or intended to be grated. Germany asserted, moreover, that even if PARMESAN was not generic, it was not obliged to take action against infringing goods of its own motion, as the responsibility for such action lay with the PDO inspection authorities in the PDO country, namely Italy.
    The E.U. Commission brought legal action in an effort to force Germany's compliance.

    PARMESAN Not Generic

    In the action, the Commission argued that PARMESAN was a translation of, and evoked, the PDO Parmigiano Reggiano. Under Article 13 (1) (b) of Regulation 2081/92, a PDO is entitled to protection against "any misuse, imitation or evocation, even if the true origin of the product is indicated or if the protected name is translated or accompanied by an expression such as ‘style,' ‘type,' ‘method,' ‘as produced in,' ‘imitation' or similar."

    Germany countered that the PDO was a two-word, compound designation, whereas PARMESAN was a single word, only arguably similar to one element of the PDO. In its view, the PDO was not entitled to separate protection for each of its elements. Germany further argued that PARMESAN had become generic for Italian hard cheeses that were grated or intended to be grated. It supported its assertions with extracts from dictionaries and specialist literature.

    The ECJ was unmoved by Germany's defence. It approved the Commission's submission that each element of a PDO is entitled to independent protection unless one element is regarded as generic, which would normally be indicated in a footnote at the time of registration. No such footnote had been entered for Parmigiano Reggiano.

    Moreover, although the Court recognised that certain PDOs could lose their geographical significance over time and come to indicate a type of product rather than a product emanating from a specific region (it cited BRIE and CAMEMBERT as examples), in this case it was "far from clear" that PARMESAN fell into that category.

    The burden was on Germany to prove that PARMESAN had become generic, and in the Court's view it had failed to so. Merely filing extracts from dictionaries and specialist literature did not go far enough to cast light on how the average consumer perceived cheese sold under the PARMESAN name in Germany. No figures on the amount of PARMESAN cheese sold and consumed in Germany, by comparison with the amount of Parmigiano Reggiano cheese sold and consumed there, had been filed.

    In the circumstances, the ECJ declined to find that PARMESAN was generic, following its similar decision in 2002 in Dante Bigi v Consorzio del Formaggio Parmigiano Reggiano (Case C-66/00, para. 20).

    Images of Italy

    Having rejected the argument that PARMESAN was generic, the ECJ considered whether it evoked or imitated the Parmigiano Reggiano PDO.

    It was, in the Court's view, noteworthy that labelling for the non-complying PARMESAN cheeses in Germany typically depicted Italian landscapes or cultural references. This encouraged the average consumer to associate such cheeses with Italy. The word PARMESAN was, moreover, inherently similar visually, phonetically and conceptually to Parmigiano Reggiano, and even if there was no likelihood of confusion the Court was persuaded that PARMESAN inherently evoked the idea of Italy and the well-known Italian cheese from the Parma region, and that the labelling tended to reinforce that link.

    It was therefore, in the Court's view, irrelevant whether PARMESAN was a pure translation of Parmigiano Reggiano. Also unimportant was whether any consumers were likely to be confused. The mere evocation of the PDO was enough.  
    The Court ruled that the use of PARMESAN breached Article 13 (1) (b) of Regulation 2081/92.

    Comment

    In the event, Germany escaped lightly. Although the Court held that the PARMESAN cheese sold there infringed the PDO, it nonetheless declined to find that the German government was obliged to take action against the infringements.

    Such action was already available to consumers, competitors and trade organisations under laws introduced by the German government, and in any event the Court found that the obligation to enforce the PDO vested only in the inspection body based in the PDO country-in this case, Italy.
    Germany's partial success, though, is mainly of interest to governments. The point on which Germany lost, namely the alleged generic status of PARMESAN, is much more serious for manufacturers and retailers.
    The decision is, indeed, likely to have wide commercial implications. Cheese labelled PARMESAN still graces some supermarket and shop shelves, and grated Italian hard cheese is commonly referred to as PARMESAN by the average consumer. Many manufacturers of non-PDO Italian hard cheeses have already taken the precaution of removing references to PARMESAN from their packaging, and for those who have not done this, the need for action has become more urgent.

    Arguably the outcome of this case could have been different had Germany assembled a better case on the evidence. The anecdotal case for PARMESAN enjoying generic status is compelling, and stronger evidence might have included extracts from broader general literature showing generic use of PARMESAN together with survey evidence going to what the average consumer understood by the designation PARMESAN. Such a survey might well have disclosed a statistically significant sample of people who understood PARMESAN as merely grated cheese for sprinkling on pasta. If generic PARMESAN cheese outsold Parmigiano Reggiano cheese in Germany, evidence to that effect might also have helped show that the average consumer did not expect PARMESAN cheese to emanate from the Parma region in particular, but rather simply to be an Italian cheese.
    Nevertheless, unless and until a further challenge is brought, the continued use of PARMESAN for cheese not originating from Parma and complying with the Parmigiano Reggiano rules could have legal consequences for producers and distributors. Even restaurants offering "PARMESAN" cheese with their pasta may be well advised to change their menus unless the cheese is authentic Parmigiano Reggiano. Buono appetito may still ring true, but let the seller beware.