Prosecco Wars: Singapore Court resolves bubbly tensions between Italy and Australia
Australia wants to call its sparkling wines “Prosecco”, but the Court of Appeal decides that the name should be used for wines only from the Italian region
What’s in a name?
Most know of Prosecco as the sparkling Italian wine that comes from the region of the same name and continues to grow in popularity. But Australia makes its own version from grapes of the same variety, and its producers argue that they have the right to name it as such. Italy’s winemakers disagree, and their attempt to bar Australia from labelling their wines as Prosecco has huge financial implications.
Australia’s argument can be explained by two of the most famous lines in English literature, where Shakespeare’s Juliet asserts that it does not matter that Romeo is from her family's rival house of Montague and that they should be allowed to marry.
What's in a name? That which we call a rose
By any other name would smell as sweet
Australia contends that “prosecco” is a grape variety grown around the world and not a Geographical Indicator (“GI”), so it should be allowed to call its sparkling wines by that name. They claim that Italy’s changing of the grape’s name from prosecco to glera in 2009 (to enable them to control and restrict the use of the Prosecco name) does not affect Australian producers, who were producing their wines years before.
A GI refers to an indication used in trade to identify a product originating from a certain territory or territories, which has given the said product a special quality or reputation. It is the special qualities of the landscape (the concept is known as “terroir” in French) that give a product its unique flavour or quality which consumers associate with that territory, and actively seek out.
One of the most well-known GIs is “Champagne”, a sparkling white wine from the Champagne province in France. There are other sparkling white wines, but only the ones produced in Champagne (the region), may be sold eponymously.
Prosecco is a cousin to Champagne – a sparkling wine that originates from Italy instead of France. Prosecco is named after a village in Italy in the Trieste province and is an Italian Denominazione di origine controllata (DOC) or “controlled designation of origin”. Italian winemakers label their Prosecco as such.
“Prosecco” is a registered Geographical Indicator in jurisdictions such as Italy and the EU. An Italian company sought to register “Prosecco” in Singapore as a GI that comes exclusively from specified regions in Italy, but this application was objected to by an Australian company on the basis that Australia also produces Prosecco wines. The High Court denied the application, but the Court of Appeal (“CA”) overturned that decision - the Italians won in the end.
The High Court Decision
“Prosecco” simpliciter was sought to be registered as a GI in Singapore by an Italian wine consortium (Consorzio), but the registration was opposed by AGWI, an Australian winemaker’s body, on the grounds that Australia also produces and sells Prosecco wine which has been available for purchase in Singapore since 2015. At first instance, the Principal Assistant Registrar hearing the case dismissed the opposition and allowed the Application GI to be registered. The Australians appealed and it was heard by Justice Valerie Thean in the High Court.
The Australians relied on 2 grounds of opposition under the Geographical Indications Act 2014:
The word “Prosecco” did not fall within the legal definition of “geographical indication” under the act (the “Legal Definition Argument”)
The word “Prosecco” was the name of a plant variety and was likely to mislead the consumer as to the true origin of the product (the “Plant Variety Argument”).
Thean J was convinced by the Plant Variety Argument and disallowed the appeal before her, thereby disallowing the registration of the word “Prosecco” by the Italians.
The Court of Appeal Decision
Recently, the Court of Appeal reversed the High Court’s decision and allowed “Prosecco” to proceed to registration as a GI.
There were 2 main issues on appeal:
What is the proper approach to be taken under s 41(1)(f) of the GIA?
Applying this approach, does the Australian’s ground of opposition under s 41(1)(f) of the GIA succeed?
Issue 1 – The Proper Approach
The first dispute here was regarding the interpretation of the statute. The Australians argued that it should be read literally, and the inquiry should be a matter of objective fact, while the Italians argued that it should be purposively interpreted to include the perspective of the average Singaporean consumer. The Italians argued that if the Singaporean consumer does not know that a word in a GI is the name of a plant or an animal breed, that ignorance would defeat any opposition brought under the sub-section by the Australians.
The High Court had agreed with the Australians and chose to read the subsection literally. The Court of Appeal considered the historical origins of the GIA as well as the treaty that resulted in the enactment of the statute (the European Union-Singapore Free Trade Agreement) and agreed with the High Court’s interpretation of the statute.
Prakash JCA, in the Court of Appeal, wrote that “it is the confusion requirement that serves as gatekeeper when it comes to the registration of GIs that contain the name of plant varieties or animal breeds”, and that an application GI containing the name of a plant variety or animal breed was a mere threshold requirement. In essence, the GIA allows for what is objectively the name of a plant variety or animal breed to be registered as a GI as long as it does not mislead consumers as to the true origin of the product.
The other sub-issue discussed was the definition of “true origin”. The Court of Appeal decided that it meant “true geographical origin” as opposed to the Italians’ proposed definition of “true plant origin”. “True geographical origin” would be consistent with the function of a GI and other instances where the draftsman of the GIA had regarded the term “true origin” to mean as such.
Ultimately, the Court of Appeal agreed with how the High Court framed the inquiry: whether the Application GI is likely to mislead consumers into thinking that “Prosecco” wine could only originate from the Specified Region when, in fact, their true origin could be other geographical locations where the “Prosecco” grape variety is used to make wine.
In tackling this inquiry, the Court of Appeal held that the knowledge/awareness possessed by the average Singaporean consumer was of utmost importance. To that end, she listed three (non-exhaustive) vital factors to take into consideration:
Whether the average consumer here is even aware that the name in question is indeed the name of a plant variety or an animal breed.
Whether the Singapore consumer is aware that the plant variety or animal breed in question is involved in the production of the product over which GI protection is sought.
The message conveyed by the Application GI, “Prosecco”, and not a GI named “Italian Prosecco”. The latter clearly conveys a very different message from the former.
Having determined the proper approach, the Court of Appeal applied it to the facts at hand.
Issue 2 – Applying the approach, is s 41(1)(f) made out?
The Court of Appeal ruled that the Australians bore the burden of proof and successfully discharged the burden vis-a-vis the threshold requirement of proving that “Prosecco” was, objectively, a plant variety. However, the Court of Appeal held that the Australians had failed to establish the second limb – that the Singaporean consumer was likely to be misled as to the true origin of the Application GI - disagreeing with the High Court.
The Australians relied on 2 main pieces of evidence: (1) advertising materials and (2) statistics to show the increase of Australian Prosecco wines imported into Singapore. The Court of Appeal found this to be insufficient. Neither piece of evidence shed light on the “material inquiry”: the knowledge of the Singaporean consumer, such as whether they might be aware that “Prosecco” is also the name of a grape variety used to make wine of the same name.
The Court of Appeal found that consumer surveys would have been much more persuasive, especially if additional evidence was adduced as to the methodology behind the surveys (what questions were asked, the demographics etc).
In sum, the Court of Appeal ruled in favour of the Italians because the evidence adduced by the Australians did not directly or adequately address the heart of the inquiry – the knowledge of the Singaporean consumer.
Conclusion
To date, there has been very little case law involving GIs, so this decision is a welcome development in the law. It provides much-needed guidance as to how we should deal with s 41(1)(f) GIA and the factors that should be taken into consideration. Crucially, it also touches upon the type of evidence (consumer surveys) that should be presented to the court in such instances.
Although Australia might continue to produce Prosecco following the recent collapse of free trade agreement negotiations between Australia and the EU, exporting it is now increasingly complicated. However, this probably won’t be the last we hear from Australia about the use of the name “Prosecco”.
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