http://ipkitten.blogspot.com/2024/07/venice-court-on-balsamic-vinegar-and.html
By decision of 19 December 2023 (not appealed),
the court of first instance of Venice ruled in favour of the Consorzio Tutela Aceto Balsamico di Modena (Consortium for the Protection of Balsamic
Vinegar of Modena, “the Consortium”) against two Italian companies
for acts of unfair competition due to the breach of Regulation (EU) No 1169/2011 on the provision of food
information to consumers and of the Italian Law of 12 December 2016 no.
238 (Law no.
238/2016) on the organic discipline of wine cultivation and wine production and
trade. The contested products were condiments marketed under names such as “Balsamico
di…” (Balsamic of …) or “Ristretto di Balsamico…” (Balsamic reduction),
alone or combined with the word “Aceto” (vinegar).
Background
of the case
The Consortium found that two Italian Companies
marketed bulk condiments labelled with names such as “Balsamico di” and “Ristretto
di Balsamico”. These condiments were then decanted, at the time of purchase,
into glass bottles labelled by hand with the product name and the brand “Teatro
del Gusto – sinfonia di sapori”.
The Consortium challenged the use of the term “Balsamic”
on the labels, arguing that it evoked the protected geographical indication
(GI) “Aceto Balsamico di Modena” (Balsamic Vinegar of Modena) without containing
this product, leading the consumer to the belief that the dressings had similar
characteristics to the protected GI, thus breaching Article 13(1)(b) and (c) of
EU Regulation No. 1151/2012 (recently replaced by EU Regulation No. 2024/1143 of 11 April 2024). The Consortium
further argued that the use in the labelling of the dressings of the term “Balsamic”
breached Regulation (EU) 1169/2011, as it was not sufficiently clear
on the real nature of the products, and that the use of the term “Vinegar” did not
comply with the characteristics, provided by Law No. 238/2016, reserved for products obtained exclusively
from the acetic fermentation of alcoholic or sugary liquids of agricultural
origin. In fact, the contested dressings mixtures also included additional
ingredients like sugar, sugar syrup, flavours, cooked must. The Consortium also
complained that all the above conducts were to be considered as acts of unfair
competition under Art. 2598 of the Italian Civil Code (acts aimed at creating confusion
with the products and the activity of a competitor, appropriation of the
product’s or business’ qualities of a competitor, acts contrary to professional
correctness).
The defendants contested the claims.
The
decision
As regards the evaluation of whether the terms “Aceto”
and “Balsamico”, parts of the GI “Aceto Balsamico di Modena”, are generic, the
Court of Venice referred to the case law of the Court of Justice according to which
if a GI contains a generic name, the use of that name is not contrary to the
regulations when any evocative effect is excluded (C-432/18; see the IPKat here). In this case the Court of Venice excluded
the evocative effect with the GI because the indications on the products in question
could not mislead consumers, given that the products were in no way associated
with the geographical area of Modena. Moreover, the term “balsamic” was used to
indicate a flavouring and not to suggest the presence of “Balsamic Vinegar of Modena”.
The Court of Venice then examined the case regarding
the use of the term “balsamic” and the name “vinegar” in labelling,
presentations and advertising. The Court held that the use of the names “Balsamico
di” and “Ristretto di Balsamico” were in breach of Regulation (EU) 1169/2011, as the indication on the bottles
was neither fully clear nor easy to understand by consumers. As for the use of
the denomination “vinegar”, the Court held that it could not be lawfully used
as the dressings were not produced according to the definition in Art. 49 of Law No. 238/2016 and therefore it was an undue use of a legal
denomination, also prohibited by Regulation (EU) 1169/2011.
The Venetian court then concluded that the
violations of the above cited rules became relevant as acts of unfair
competition and namely as acts contrary to professional correctness (Art. 2598 of the Italian Civil Code). The Court emphasised that all the
above cited EU and Italian rules are intended to place limits on
entrepreneurial activity in the food sector not only with regard to the welfare
of consumers and their conscious choices but also to the proper unfolding of
competition among entrepreneurs.
The Court of Venice thus granted an injunction towards
the defendants from the use of “Balsamico di …” and “Ristretto di Balsamico” as
well as of the word “vinegar” for the contested condiments in their labelling,
presentation or advertising, fixed a penalty for the possible breach of said
injunction and condemned the defendants to pay damages (to be determined in a
separate proceeding) in favour of the Consortium.
Comment
The decision of the Court of Venice is
interesting because, apart from the question of the possible evocative nature
of the use of the term balsamic (as recently discussed by the Italian Supreme
Court, see The IPKat here), it confirms that the breach of European
Union and Italian regulations on product indications on labels, presentations
and advertising becomes relevant (also) as acts of unfair competition among
competitors. It can therefore be highlighted a convergence between the
interests of consumers and those of competitors on the market, both of which
are protected by the rules on fair competition.
At the national level, various countries have
developed unfair competition protection in different ways. To give competitors
an effective remedy against the unethical and illegal business practices of
their rivals is, at the very least, a goal that unites all these various
strategies and that can be of benefit also for consumers. Applying national laws for the protection
against unfair competition requires determining whether a particular commercial
act is against honest practices in industrial or commercial matters. In all this, it is acknowledged that unfair
competition occurs when businesses engage in commercial practices that mislead
the public about themselves or their operations, especially when it comes to
the local products they sell.
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