Many geographical indications (GIs) are compound denominations, consisting most often of a non-geographical name, followed by a geographic identifier, e.g., Ricotta Romana. The scope of protection of such compound names is the object of heated discussions, especially whether single non-geographic elements, when used alone, can be protected against third-party use.

The discussion stems from the fact that non-geographic names did not develop from a geographical name. These terms can be said to fulfill three roles: (a) exclusive descriptive words, which can never be monopolized (e.g., cheese, vinegar); (b) generic terms that are not protected (e.g., Emmental); and (c) distinctive non-geographical names that are strongly linked to a location, such as ‘Brunello’ in the wine denomination BRUNELLO DI MONTALCINO. Consumers perceive this term as a synonym of the whole denomination.

Are single non-geographic components protected in the EU?
It depends. Protection has been granted to single components of compound denominations in the judgments Grana Padano and Parmigiano Reggiano. This was possible because the non-geographic elements were not considered generic. By way of example, in Grana Padano,  the term ‘Grana’ was declared to be non-generic (‘Grana’ means grainy texture). According to the Court, it is ‘used in Italian as an abbreviated form of Grana Padano (..)” [Para. 71]. Therefore, the use of ‘Grana’ by third parties was considered an infringement as it fell into the scope of protection of the denomination. 

The CJEU ruled in Parmigiano Reggiano that every single element was protected. The Court decided that the registration of every element was not needed for them to be protected, thereby disregarding the decision rendered in Prosciutto di Parma, which stressed the importance of observing the exact product specification [par. 37]. The Court’s case-law hence presents certain inconsistencies.

GIs are protected against direct and indirect commercial use, misuse, imitation and evocation as laid down on Art. 13 of Regulation 1151/2012 (the Regulation), which means GIs are protected broadly, without much room for third parties to use them. However, when a GI contains a ‘generic name’ within the denomination, according to Art. 13(1) of the Regulation, third parties can use these generic elements if such use is not misleading or takes undue advantage. This must be determined by the courts.

Are Aceto and Balsamico generic terms?
Considering the above, the German Federal Court of Justice (BGH), in Consorzio Tutela Aceto Balsamico di Modena vs. Balema GmbH, asked the CJEU as to whether the individual non-geographical components of the GI (‘Aceto’, ‘Balsamico’, ‘Aceto Balsamico’) were protected as part of the GI or whether they were considered descriptive or generic.

The CJEU held that the scope of protection did not extend to its non-geographic components, attributing to ‘Balsamico’ an exclusively descriptive meaning, namely "vinegar" (Commission v. Italy). Following the case law in Chiciak and Fol, not every element of a compound GI is protected [par. 39]. While the entire GI cannot become generic, their constituent parts can become or be generic.

The genericness assessment in the EU depends on a global evaluation, especially the consumers’ perception (Article 41 of the Reg.). According to the Court, the evidence presented, which demonstrated that German consumers connected the term ‘Balsamico’ to Italy and Modena, was not considered to be sufficient. Instead, it was considered generic, in describing a type of vinegar.

However, when assessing compound names, they can be common rather than generic. The perception that all descriptive terms are generic damages the GI. By way of example, common names describe characteristics but they also have a traditional/historical meaning. For example, ‘Claret’ is used to denote BORDEAUX wines in Britain. This is different from generic terms, which indicate a type of product rather than a specific product. An example is Cheddar.

Will the ruling impact other well-known compound PGIs?
If non-geographic names are not protected, compound GIs face the risk of being diluted. Nobody is expecting to own words such as ‘Aceto’ (oil) but when assessing words very closely linked to a source in the mind of the relevant public, as in the case of ‘Balsamic’, the conclusion is not straightforward. Unfortunately, the decision rendered in Aceto Balsamico did not clarify the issue more generally.

It remains to be seen if the German court will find that ‘Deutscher Balsamico’ infringed the PGI. A finding against infringement risks to jeopardize consumers' expectations and producers’ investments. Where non-generic terms have become distinctive for a particular product, it should be recognized that without protection, third parties can free ride on prestigious names, linked to European cultural heritage.