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When place names are worth bottling

Feature Articles

Cite as: (2008) 82(9) LIJ, p. 44

Europe has recognised the value of wine geographical origins for more than a century. Australian vineyards are also realising their value.

By Sarah Hinchliffe

One such measure was the Agreement between Australia and the European Community on Trade in Wine and Protocol 1994 (Australia-EU Wine Agreement),1 which was signed in March 1994. One objective of this agreement was to protect European Union wine geographical indications (GIs) in Australia. From Australia’s perspective, its goal in signing the agreement was to gain access to the European Union wine market by the removal of the non-tariff barriers to entry of Australian wine into that market.

A key ramification was that Australia established an Australian GIs system. The amendments to the laws which established that system required Australia to protect European registered wine geographical origins. Naturally, the EU agreed to protect Australian registered wine GIs. Of central importance, however, is that the agreement also gave rise to the current system of
assessment and registration of Australian wine GIs. This article looks at the fundamental gaps that have been exposed in relation to Australia’s approach to registering wine GIs and the impact of these on Australian vineyards.

“Old World” and “New World”

The “Old World” has a long history of wine production and prides itself on its vintage. Old World countries follow the lead set by France and describe wine by its “origin”. On the other hand, the “New World” producers – Latin America, Australia, the US, South Africa, New Zealand, North Africa, Israel and Asia – were originally concerned with the winery or “brand name”. However, that approach has now shifted.

The naming of wines by their locality is centuries old in Europe and regulation continues at the national level.2 The EU treaties and regulations provide a minimum threshold of protection by virtue of the doctrine of supremacy developed in Costa v ENEL,3 which established that European Community law is “directly applicable” to member states. This has now been drafted into Article 249 of the Treaty Establishing the European Community.4

By way of example, national French laws, in place since the start of the 20th century, allow only French wine made from grapes grown in the Champagne region to be called champagne.5 French laws enshrine local traditions known as “les usages locaux, loyaux et constants”, now codified as “Appellations d’Origine Contrôlée” (AOCs) or the recognition of origin. The AOC may refer to unique and fundamental identifiers of an area and include natural factors such as locality, microclimate and soil and human factors such as winemaking procedures, pruning methods and maturation.6 This is much more stringent than registration of wine GIs in the New World.

This can be attributed to the fact that the Australian wine industry is in an emergent state of development, where wine regions are predominantly determined by geography, not quality or natural factors, thus allowing a greater range of grape varieties to be cultivated and under a wide range of conditions, even within the same region.7 As will be discussed, the impact of this on the registration of wine GIs and on the value of these GIs has been significant.

Were GIs always protected in Australia?

GIs, per se, were not always protected in Australia. Historically, when selling and marketing wine Australia’s use of geographical descriptive terms has been limited. Some notable exceptions are Great Western and Hunter.8 Any dispute concerning a producer’s right to use a geographical name was resolved at common law and/or under consumer protection laws. The brand names of wines were often legally protected by registering them as trade marks, some deriving from geographical names. Take for example the name “Great Western Champagne”, a famous trade mark long before the Australian GI system. The name Great Western has also long been used for the town in Victoria where Seppelts makes the wine and has also been registered as a GI.

In addition, Australian wine was often sold with the brand name and the style using the terms “champagne”, “claret”, “burgundy” and the like, the major geographical descriptor being “Australia”.9 This was notwithstanding that certain wine-growing areas in Australia were well known for the quality and style of wine produced there. They include the Hunter Valley white burgundy (semillon), Rutherglen tokay and Coonawarra clarets (cabernet sauvignon).

Current laws regulating GIs in Australia

As mentioned, the Australian GI system was established in the wake of the signing of the Australia-EU Wine Agreement.10 European wine geographical origins which are now protected in Australia are listed in Schedule 1 of the Australian Wine and Brandy Corporation Regulations 1981 (Cth) (AWBC Regulations). Notably, amendments to the Australia-EU Wine Agreement, proposed for this year, will see all remaining generic terms used in Australia phased out, including “hermitage” and “lambrusco”. Australian producers will have to stop using them after the new agreement is signed. (The famous Penfold’s Grange Hermitage is already labelled simply Penfold’s Grange.)

The implementation of the Australia-EU Wine Agreement into domestic law11 reflects a minimal response to the exigencies of the Australian-EU Wine Agreement and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) – a level that has exposed some flaws in the use and determination of GIs. For instance, s40C of the Australian Wine and Brandy Corporation Act 1980 (Cth) (AWBC Act) makes it an offence for wine to be sold, exported or imported with a “false description and presentation”. The “description and presentation” of wine is false if it includes a registered GI and the wine did not originate in the country, region or locality for which the GI is registered. A wine can be said to “originate” from a particular place if the grapes used in making it come from that place. The Australian Wine and Brandy Corporation takes the view that in practice a wine that carries a GI must consist of at least 85 per cent of grapes from the region for which the GI is registered. Yet though the AWBC Regulations provide for an 85 per cent rule for an offence of intentionally selling, exporting or importing wine with a “misleading description and presentation”, it can be argued that this rule does not apply to the offence because there is no express 15 per cent leeway in the definition of “originates” in the AWBC Act.12

Other laws that protect GIs are trade marks legislation (Trade Marks Act 1995 (Cth)),13 trade practices legislation (Trade Practices Act 1974 (Cth)), truth in labelling legislation, e.g. the Commerce Trade Descriptions Act 1905 (Cth), the common law tort of passing off, the state and territory Food Acts, the Australian Food Standards Code and the state and territory Fair Trading Acts. Of these, only the AWBC Act provides for a formal registration procedure for GIs.

Registration and use of GIs in Australia

The Geographical Indications Committee (GIC) is responsible for making final determinations of the Australian GIs in accordance with reg 25 of the AWBC Regulations and the Australian Register of Protected Names, established under s40ZC of the AWBC Act. This register contains the GIs for wine regions and sub-regions in Australia and those foreign countries with which Australia has entered into an agreement on trade in wine, but not all countries.14 Objections to the determination of a GI may be lodged with the Registrar of Trade Marks under s40RB of the AWBC Act by an owner of a registered trade mark, by an applicant for a pending trade mark or by a person claiming ownership of an unregistered trade mark.15

The lack of specific guidelines in determining a GI under reg 25, save for merely a listing of relevant factors, and in particular the lack of direction as to the weight to be given to criteria such as “grape-growing attributes”, has caused significant problems in determining the precise boundaries of GIs. Yet it is a grey area exploited by vineyards wanting their land to be included in exclusive GIs. One of the most controversial and acrimonious episodes in the history of the Australian wine industry was the dispute over the boundary of the Coonawarra wine region in Beringer Blass Wine Estates v Geographical Indications Committee Limited (Beringer Blass).16 This case concerned an appeal to the Full Court of the Federal Court from the Administrative Appeals Tribunal in Coonawarra Penola Wine Industry Association, Inc & Others and Geographic Indications Committee.17 The Federal Court looked at the interpretation of various laws, in particular regs 24 and 25 of the AWBC Regulations and s40T(1) of the AWBC Act.18 The decision in this case highlights that a designated area can be large and because there is such a multitude of factors that the AWBC Act requires to be considered, it can also be geographically heterogeneous despite the AWBC Regulations requiring homogeneity.19

Overlap between trade marks and GIs – still an issue?

Before completion of the Australia-US Free Trade Agreement (AUSFTA) in 2004, the AWBC Act did not clarify the application of the “first in time” principle. In contrast, TRIPS does contemplate the co-existence of trade marks and GIs, giving priority to that which is “first in time” by virtue of Article 24(5).

The completion of the AUSFTA brought about several changes to the system for protection of GIs in Australia and appears to accept the “first in time” principle.20 Of significance is s40RB and reg 17A, which specifically permit cancellation procedures for GIs and the ability for a trade mark and GI to co-exist.

In 1998, an application by Grampians Winemakers Inc was made for Great Western to be registered as an Australian GI. The application was disputed by Southcorp Ltd and the dispute remained unresolved for several years. In 2005, Southcorp Ltd invoked s40RB of the AWBC Act by filing an objection with the Registrar of Trade Marks on the basis that Southcorp Ltd had prior trade mark rights.21 This objection was settled, with the result that Southcorp and Grampians Winemakers Inc agreed that the GI registration was to proceed subject to various conditions that protected Southcorp Ltd’s trade mark rights. A final determination was made and published in the Commonwealth of Australia Gazette approving Great Western as a GI.22

Conclusion

In one sense it appears that the privileges of French winegrowers, as illustrated by Champagne and Bordeaux, and the search for competitive advantage have influenced Australia’s recognition of the value of GIs. Still, notwithstanding the absence in Australia of long-established artisan production methods, it seems that the lack of constraints on innovation, usually associated with GIs in the Old World, has had little negative effect on rendering registered GIs attractive in Australia. This point is highlighted by litigation of vineyards wanting to be included in particular wine regions, such as Coonawarra. They have unearthed a grey area, namely the correct determination of a GI in Australia. With areas of provenance that are both large and often geographically diverse, the system commonly requires little real connection between local conditions and quality characteristics of the wine (irrespective of the legal requirements contained in the AWBC Act and the AWBC Regulations).

In this respect, it seems that the GIs are seen as becoming increasingly valuable in the New World. Perhaps the wine GI is worth more than just the name on the bottle. l


SARAH HINCHLIFFE is an assistant lecturer in the Department of Business Law and Taxation, Monash University, teaching taxation law, banking law, Australian company law and business law

The numbers in square brackets in the text refer to the paragraph numbers in the judgment.

1. Agreement Between Australia and the European Community on Trade in Wine, opened for signature 31 January 1994, 1820 UNTS 3 (entered into force 1 March 1994).

2. Stephen Stern and Christine Fund, “The Australian system of registration and protection of geographical indications for wine” (2000) 5 Flinders Journal of Law Reform 39, 34.

3. Case 6/64 Costa v ENEL [1964] ECR 585, 593. See also Case 11/70 Internationale Handelsgesellschaft mbH v. Einfuhr-und Vorratsstelle Fur Getreide und Futtermittel [1970] ECR 1125 at [3].

4. Treaty Establishing the European Community (consolidated text) OJC 325 of 24 December 2002.

5. “Champagne producers still fighting” (2002) 16 World Intellectual Property Report 11, 18.

6. Jancis Robinson, The Oxford Companion to Wine (3rd edn), 2006, Oxford University Press, p676.

7. See Australian Wine and Brandy Corporation Act 1980 (Cth), ss39A–39ZL; Australian Wine and Brandy Corporation Regulations 1981 (Cth), regs 18-22.

8. Stephen Stern, “The overlap between geographical indications and trade marks in Australia” (2001) 2 Melbourne Journal of International Law 224, 226.

9. Tony Battaglene, “The Australian wine industry position on Geographical Indications”, paper presented at the Worldwide Symposium on Geographical Indications, Italy, 27-29 June 2005, p4.

10. By way of amendment of the Australian Wine and Brandy Corporation Act 1980 (Cth).

11. TRIPS establishes the minimum standards for the protection of GIs which are contained in Articles 22-24.

12. Australian Wine and Brandy Corporation Regulations 1981 (Cth), reg 21; Australian Wine and Brandy Corporation Act 1980 (Cth), s5D.

13. Section 17.

14. Ernie Sullivan, The Wine Contact Newsletter – The Official Newsletter of the Australian Wine and Brandy Corporation, April 2005, p2.

15. Australian Wine and Brandy Corporation Act 1980 (Cth).

16. (2002) 70 ALD 27.

17. [2001] AATA 844, 5 October 2001.

18. Note 16 above, at 44-46.

19. See AWBC Regulations, reg 25.

20. See US Free Trade Agreement Implementation Act 2004 (Cth).

21. Registrar of Trade Marks, “Objection to determination of ‘Great Western’ as an Australian Geographical Indication”, Commonwealth of Australia Gazette, No 3, August 2005, p40.

22. No GN 8, 28 February 2007, 801–803

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