Winelawcentre Bulletin Board
11th June 2010
Collective "RIOJA" trade mark trumps proposed "RIOJAVINA" trade mark
The EU General Court has upheld an appeal against an OHIM decision that there was a likelihood of confusion between a proposed Community trade mark for "RIOJAVINA" and a figurative Community collective mark containing the word "RIOJA". The latter was registered for wine (class 33), and the former was sought for vinegars (class 30), and retailing, export and other services relating to vinegars (class 35). The EU Court confirmed that although there was low degree of similarity between the goods and services, that was offset by a high degree of similarity between the marks, given that the word "Rioja" was the dominant element of both marks. The relevant public (EU consumers) was likely to believe that the vinegar and the services for marketing the vinegar offered under the RIOJAVINA mark had the same commercial origin as wines marketed under the RIOJA mark. The fact that RIOJA was registered as a collective mark by an administrative body, rather than by a wine producer, did not of itself mean that there could be no confusion.Félix Muñoz Arraiza v OHIM, Case T-138/09, 9 June 2010.
See also collective trade marks.
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21st April 2010
Retention of title in practice
Retention of title (ROT) usually comes into play where your customer has become insolvent, and is holding stock which you have supplied and he hasn't paid for. But a recent case illustrates the importance of ROT in a rather different context.
A supplier (S) sold beer to a customer (C). HM Revenue & Customs suspected that C was dealing in goods on which excise duty had not been paid. It seized the contents of C's warehouse, which included a quantity of beer supplied by S that C had not paid for. S claimed ownership of the beer. There was no problem in identifying the beer S had supplied, it was accepted that S had supplied C subject to ROT, and S's case was that it had itself obtained the beer duty paid. However, HMRC detained the beer for so long that some of it passed its sell-by date and/or became fly-infested. The issue was how long it was reasonable for HMRC to detain the beer while it investigated the position. The judge held that HMRC's investigation had taken longer than it should have done. HMRC was therefore ordered to compensate S for the loss of any duty paid goods which had become unsaleable as a result of the excessive delay. (Checkprice v HRMC, High Court, 31st March 2010).
NB: It's worth noting a small — but very important — practical point. Depending on your ROT wording, you may have to be able to relate the stock held by your customer's administrator or liquidator (or HMRC!) to specific unpaid invoices. For that reason it is essential that the invoices show the lot numbers of the relevant products. It is also advisable to mark the lot numbers on the outside of every case, to avoid arguments about whether sealed cases may be broken open in order that every single bottle can be examined.
For further, recently updated, guidance on this subject see Retention of Title.
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10th February 2010
Vodka copykat cops for it
In Diageo v Intercontinental Brands (ICB) (High Court, 19th January 2010), it was held that the marketing of an alcoholic drink made from vodka and fermented alcohol, under the brand name “ VODKAT”, amounted to passing that product off as vodka. The judge held that "vodka" had a reputation giving rise to a protectable goodwill, and that there was substantial evidence of confusion among consumers, wholesalers and retailers. ICB's marketing had been calculated to deceive a substantial number of members of the public into believing that the product was vodka, or a weaker version of vodka.
This decision extends the line of cases establishing that product descriptions such as Champagne, Sherry, Scotch Whisky, and Advocaat are protectable in the UK in this way. But it makes you wonder why it took a private lawsuit by a vodka producer, based on the common law doctrine of “passing-off”, rather than action by the responsible regulator, to get ICB to stop what they were doing.
http://www.winelawcentre.com/private/Vodkat-case/
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16th December 2009
Applicable law -- distribution agreements
The EU "Rome I" Regulation takes effect in relation to contracts made after 17th December 2009. It introduces revised rules for determining the law applicable to contracts, which are intended to be more clearly understood and uniformly applied across the EU. The parties' choice of law will still generally be upheld, but there are more rigid and specific rules in the absence of an express or inferred choice. One such rule provides that distribution contracts are governed by the law of the country where the distributor has his habitual residence (in the case of a company, the place of its central administration).
Under the old rules (the Rome Convention 1980), it was usually necessary to determine which party was to effect the "characteristic performance" under the contract. In England, the Court of Appeal (Print Concept GmbH v GEW (EC) Ltd (2001)) has held that the characteristic performance under a distribution agreement is that of the supplier/seller of the goods in question. Some courts in other EU countries took the opposite view: the distributor would effect the characteristic performance — the main object of a distribution agreement is that the distributor will develop the market in his territory for the supplier's goods. The latter, we thought, was the better view. At first sight, therefore, the new standard rule under Rome I was to be welcomed.
Unfortunately, the attempt to achieve EU-wide uniformity on this basis appears to have been botched. The wording of the relevant provisions of Rome I means that where a distribution agreement regulates both obligations in relation to the distributorship and obligations in relation to the individual sales made under it, it may be necessary to apply the old rules. Print Concept is, therefore, still likely to be followed in many cases despite the "standard rule" set out in Rome I. A recipe for continued uncertainty and disputation, precisely the opposite of what was intended. And another good reason for the parties to agree the choice of law wherever possible.
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11th November 2009
Commercial agency compensation claims and arbitration clauses
In a recent High Court case (Accentuate Ltd v Asigra Inc, October 2009) it has been held that an agreement which chose the law of Canada as the governing law, and also required disputes to be submitted to arbitration in Canada, was ineffective in preventing a party claiming to be a commercial agent from pursuing a claim in the English courts for compensation under the Commercial Agency Regulations. As regards the choice of law, the High Court was merely following the decision of the ECJ in Ingmar v Eaton Leonard. The novel question was whether the clause referring disputes to arbitration would prevent an agent from claiming compensation under the Regulations in the courts. The Accentuate decision does not mean that every clause requiring such a claim to be arbitrated will be invalid. Where there is an otherwise binding arbitration clause, but it is not disputed that the Regulations (or the law of another EU country) must be applied by the arbitrator, it is thought that the onus will be on the agent to show that insistence on arbitration would be to his detriment. See applicable law — mandatory rules of law.
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22nd October 2009
EU wine regulation
Jeremy Beadles of the WSTA has produced an excellent "idiot's guide" to the new EU wine regulatory regime, available on the Harpers website at: http://www.harpers.co.uk/misc/content/article/8439-jeremy-beadles-comment-october-2009.html.
Those wishing to lose themselves in the fine detail Council Regulation (EC) No 479/2008 of 29 April 2008 on the common organisation of the market in wine, and the further Regulations made pursuant to it, should visit: http://ec.europa.eu/agriculture/markets/wine/leg/index_en.htm.
For information about other regulations applicable to the production, packaging, labelling, distribution and sale of wine in the UK, see: http://www.winelawcentre.com/private/regulatory-matters/.
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13th October 2009
Retention of title and sub-sales
A producer (P) agrees to sell wine to his UK distributor (D). The contract includes a retention of title (ROT) clause. D re-sells the wine to his UK customer (C), and that sale is likewise subject to ROT. D becomes insolvent and a liquidator is appointed. At that point, C has not paid D, and D has not paid P. If the wine, or at least some of it, is still in C's possession, can P recover it — or claim payment for it — from C?
If D hasn't paid P for it, and hasn't paid D for it either, P must still be the owner, right? Sadly, it's not quite as simple as that in practice. See http://www.winelawcentre.com/private/ret-title-sub-sale/
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13th August 2009
When is an agent not a commercial agent?
We recently — February 2009, see below — pointed out the risks run by producers who allow their UK agents to collect customer payments for them. But such arrangements can also cause problems for agents. If the producer (P) invoices the agent (A), and A re-invoices the customer (C) for the same amount (invoicing P for commission):
- A may find himself facing a claim for VAT on the basis that his invoices to C are part of his sales turnover;
- by getting into a “hybrid” arrangement such as this A may inadvertently surrender rights he would have previously had under the Commercial Agents Regulations. If A's "back-to-back" invoice to C makes no reference to P, the court is likely to conclude that A, not P, is contracting with C. In Sagal (trading as Bunz UK ) v Atelier Bunz GmbH (Court of Appeal, 3rd July 2009), it was confirmed that an agent who contracts on a principal's behalf but in his own name is not a commercial agent. The case emphasises the importance of the contract documentation in establishing what the position is, and that it will normally be conclusive unless it can be shown to be a sham.
What can A do to protect his position? See http://www.winelawcentre.com/private/a-debt-collects/ for our suggestions.
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12th March 2009
Tough economic times — planning for the worst case
As conditions in the UK trade continue to get tougher, we review the issues that can arise when either a producer or his UK agent/distributor
becomes insolvent:
http://www.winelawcentre.com/private/insolvency/
... we look at an important, and very simple, way in which producers can protect themselves by claiming retention of title in respect of wine supplied but not paid for:
http://www.winelawcentre.com/private/retention-of-title/
... and we look at other ways in which producers can guard against late payment or - worse still - non-payment:
http://www.winelawcentre.com/private/payment-problems/
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5th February 2009
Wine producers beware! Allowing your UK agent to collect payments for you can seriously damage your health.
In an article recently published in Harpers, Andrew Park of APP Law outlined some of the dangers for producers whose UK export business is based on the agency model rather than the distribution model. Click here for the full article: http://www.winelawcentre.com/content/Harpers-30-01-2009.pdf
We can't emphasise too strongly how dangerous it can be for producers to allow their agents to collect payments for them. It may be the producer's money the agent is holding, but if they fall out the agent will be able to withhold it, and set it off against whatever he is claiming, unless the producer has insisted on putting proper legal protections in place. We have seen this more and more frequently over the last twelve months — often because a particular distributor is no longer seen as an acceptable credit insurance risk in these very tough economic times. In many cases, the amount held by the agent could be well into six figures, but no thought seems to have been given to what might happen if the worst came to the worst. For more information about suggested protective measures, see:
http://www.winelawcentre.com/private/a-debt-collects/
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30th July 2008
Enforcing compliance with an agency or distribution agreement
Following on from the item below, here's a new content page looking at the types of order the English courts can make to enforce compliance with an agency or distribution agreement where one party has terminated prematurely, or plans to do so.
http://www.winelawcentre.com/private/contract-injunction/
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3rd July 2008
What is "reasonable" notice of termination?
Where the parties to a distribution agreement, or to an agency agreement to which the Commercial Agency Regulations do not apply, have not agreed what notice of termination must be given, the notice given by either must be reasonable in all the circumstances at the time it is given. Where an "annual planning" modus operandi has been adopted, it may be arguable that a producer will only have a relatively short window each year in which he can reasonably give a notice of termination effective at the end of the following year. For further information see:
http://www.winelawcentre.com/private/notice-of-termination/#rnwindow
Dispute Resolution — Independent expert determination
It has been held in a recent High Court case that if the parties have agreed that an independent expert's decision will be final then — as long as the expert deals with the issue referred to him, ie answers the right question — his decision will bind them, even if he has made errors (even gross and obvious ones), or he has acted perversely or contrary to "natural justice". For further information, and suggestions on avoiding this problem, see:
http://www.winelawcentre.com/private/disputes/#expertdetermination
Commercial agents compensation
The first High Court case on the assessment of compensation to be reported since the Lonsdale decision (see below, 4th July 2007) supports the view that when assessing compensation you should deduct notional "market rate" salaries attributable to running the agency where those have not in fact been paid. See:http://www.winelawcentre.com/private/compensation-assessment/#salaries
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4th June 2008
Wine turns green
No, it's not about defective products! Sally Easton MW looks at the increasing focus on environmental, ethical and sustainability issues in the wine trade, and to what extent consumers can be confident they're buying what they think they're buying.
http://www.winelawcentre.com/private/easton-5/
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17th April 2008
We never signed the contract — how could we be bound by it?
It's surprising how often in the UK wine trade one party produces a draft agency or distribution contract for the other's consideration, which they have some dialogue about, but ends up never being signed.
This can, and frequently does, raise the question:
can a contract be binding even if it wasn't signed?
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20th February 2008
Entitlement to commission under the Commercial Agency Regulations
In 1996 the ECJ held (in Kontogeorgas) that where a commercial agent has "an exclusive right to a specific geographical area or specific group of customers" and the transaction is with a customer "belonging to" that area or group, the agent is entitled to commission even if he played no part in bringing the transaction about.
In Chevassus-Marche v Group Danone and others (17th January 2008) the ECJ was asked to extend this "agent-friendly" approach even further, by ruling that an agent is entitled to commission whenever the principal's products are sold to a customer in the agent's designated territory, even though (a) the agent has played no part in the transaction, and (b) someone other than the principal is the seller. A surprising suggestion, at first sight, but arguable. Click below to see what the ECJ made of it:
http://www.winelawcentre.com/private/commission-during/
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17th January 2008
Promotional discounting — everybody happy?
How does promotional discounting work in UK wine retail? What funding mechanisms are used, and do all concerned regard them as satisfactory? Andrew Catchpole investigates.
http://www.winelawcentre.com/private/catchpole-4/
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