The “Salame Felino” war ends in a victory for Kraft

A lengthy Italian judicial saga on geographical indications, which also spawned a European Court of Justice preliminary ruling, has finally come to an end with Court of Cassation ruling no. 28228/2015, published on the 12th of February 2015.

A producers’ trade association for the protection of “Salame Felino”, supported by its members, had sued the Italian subsidiary of Kraft Food before the District Court of Parma for offering a salami sausage for sale called ‘Salame Felino’, which is made outside of the territory of the Parma region (where the city of Felino is located) — specifically in Cremona (Lombardy). Assica, the trade association of meat and sausage producers, had intervened in support of the defendant.

The District Court of Parma, whilst acknowledging that ‘Salame Felino’ was not a designation of origin or geographical indication registered at Community level and was, therefore, not protected under the applicable Community provisions (at the time, regulation no. 2081/92, since then replaced by regulation no. 510/06 and subsequently by regulation no. 1151/12), had nevertheless held that the plaintiff‘s claims were grounded under a 1996 national law implementing mandatory provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights and granting protection to geographical indications.[1] Having found that ‘Salame Felino’ had acquired a reputation among consumers with respect to its characteristics, stemming from a particular feature related to the geographical environment, the Court of Parma held that the conduct of Kraft constituted an act of unfair competition under the abovementioned national provisions.

The Court of Appeal of Bologna, before which Kraft appealed the ruling, upheld it; Kraft then brought the matter before the Court of Cassation, the court of last resort in the Italian judicial system.

The Court of Cassation decided to stay the proceedings and request a European Court of Justice preliminary ruling on the conditions under which a geographical designation may be protected when that designation is not recognised as a protected designation of origin or a protected geographical indication under Regulation n. 2081/92.

In their judgment in Case C-35/13, the Luxembourg judges responded that if, on the one hand, the abovementioned regulation does not offer protection to a geographical designation which did not obtain registration at Community level, on the other hand the same designation can be protected, subject to certain conditions, under national provisions falling outside the scope of the regulation, i.e. provisions concerning designations serving only to highlight the geographical origin of a product, regardless of its particular characteristics; in other words, designations relating to products for which there is no specific link between their characteristics and their geographical origin.

Based on the ECJ preliminary ruling, the Court of Cassation eventually upheld Kraft’s appeal and, ruling on the merits of the case, rejected the claims of the respondents (plaintiffs in the first instance proceedings), de facto sanctioning Kraft’s victory.

The Court considered that the national provision invoked by the plaintiffs in the first instance proceedings contained a definition of geographical indication based on the link between the geographical origin and the characteristics of the products, thus falling within the scope of regulation 2081/92. It follows, in the Court’s view, that the lower courts should not have applied this provision.

The defeat was made perhaps even more bitter for the association for the protection of the Salame Felino and its members by the Court’s additional finding that, notwithstanding the above, the unregistered geographical name could have still, in the abstract, obtained protection under unfair competition rules.

The Court noted, in fact, that Article 31 (2) of Legislative Decree 198/96 provided for two distinct instances of unfair competition: one consisting of the indication on the product of a geographical name different from the actual place of origin, regardless of any reference to the quality of the products originating from that place; the other consisting of the false attribution to a product of qualities linked to a given geographical origin.

The former, in the Court’s view, fell outside the scope of regulation 2081/92, as it prevented the use of a geographical name on products originating outside the locality to which the name refers, without any connection to a product’s qualities and characteristics; it would therefore be rightfully enforceable before Italian courts.

In the case at hand, however, the plaintiffs had failed to invoke it, having based their claims exclusively on the alleged violation of the geographical designation in connection with the product’s qualities related to its place of origin.

Accordingly, as already mentioned above, the Court overturned the lower instance decision, and, ruling on the merits of the case, rejected all the claims of the original plaintiffs.

Picture withdrawn from salamefelino.com

[1] Article 31(1) and (2) of Legislative Decree No 198/1996, in force at the time, stipulated:

1.      Geographical indications shall be indications which identify a product as originating in a country, a region or a locality, where a given quality, reputation or characteristic of the product is exclusively or essentially attributable to its geographical origin, including natural, human and heritage factors.

2.      Without prejudice to the provisions of Article 2598(2) of the Civil Code and to the special provisions applying to this subject matter, as well as to trademark rights which were acquired previously in good faith, the use of geographical indications or of any other means in the designation or presentation of a product which indicate or suggest that such product originates in a locality other than its true place of origin, or that the product has such qualities as are typical of products originating in a locality designated by a geographical indication, shall constitute an act of unfair competition where it is liable to mislead the public.

Legislative Decree No 198/1996 has since been repealed, while these provisions have been reproduced in the current Italian Intellectual Property Code.