Waters of Eden – Nature’s Champagne

Mei Eden

Mei Eden (Waters of Eden) is a mineral water bottler and distributor.  Mei Eden advertised their mineral water as Nature’s Champagne.

The Comite Interprofessionnel du vin de Champagne (CIVC) which represents the wine manufacturers in the Champagne region of France, who perform a second fermentation of their wines in the bottle to produce a sparkling wine, have a geographical appellation. Only wine from that region may be called Champagne. The Comite Interprofessionnel sued Mei Eden on grounds of Infringement of their Geographical Appellation of Origin, Unjust Enrichment, the TRIPS Amendment to Israel’s IP Laws 1999 and Commerce relates torts 1999.

We note that MEi Eden is sold in blue tinted plastic bottles. Notably, in the period on question, the company did not sell sparkling mineral water, only still mineral water.

In an erudite 52 page ruling Judge Ginat reviewed Israel trademark cases, TRIPS legislation, Perrier related decisions from Germany, and UK rulings by well respected IP Judges Arnold and Laddie.

I can’t be bothered to reproduce the whole ruling here. I will confine myself to two quotes:

“The necessary elements for a claim in passing off were restated by the House of Lords in Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 as follows:

the claimant’s goods or services have acquired goodwill in the market and are known by some distinguishing name, mark or other indication;
there is a misrepresentation by the defendant (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by the defendant are goods or services of the claimant; and
the claimant has suffered or is likely to suffer damage as a result of the erroneous belief engendered by the defendant’s misrepresentation”

As noted above, both of these points were well explained by Laddie J in Irvine, in particular in the following passages:

“First, it is well established that, even in the absence of competition and hence diversion of sales, a misrepresentation leading to the belief that the defendant’s business is associated with the claimant’s is damaging to the claimant’s goodwill. Secondly, it is also well established that, if there is a misrepresentation which erodes the distinctiveness of the indication in question, then that is damage for the purposes of a claim in passing off.”

Expressed in these terms, the purpose of a passing-off action is to vindicate the claimant’s exclusive right to goodwill and to protect it against damage. When a defendant sells his inferior goods in substitution for the claimant’s, there is no difficulty in a court finding that there is passing off. The substitution damages the goodwill and therefore the value of it to the claimant. The passing-off action is brought to protect the claimant’s property. But goodwill will be protected even if there is no immediate damage in the above sense. For example, it has long been recognised that a defendant cannot avoid a finding of passing off by showing that his goods or services are of as good or better quality than the claimant’s. In such a case, although the defendant may not damage the goodwill as such, what he does is damage the value of the goodwill to the claimant because, instead of benefiting from exclusive rights to his property, the latter now finds that someone else is squatting on it. It is for the owner of goodwill to maintain, raise or lower the quality of his reputation or to decide who, if anyone, can use it alongside him. The ability to do that is compromised if another can use the reputation or goodwill without his permission and as he likes.”

In his ruling, Judge Gideon Ginat issued an injunction against Mei Eden using the term Champagne to describe their water, fined the water bottler 400,000 Shekels and awarded a further 200,000 Shekels in legal fees.

02-22286-33 Comite Interprofessionnel vs. Mei Eden LTD et al. Judge Gidon Ginat, 19 May 2015

COMMENT
This decision issues as WIPO members are hammering out the Geneva Act of the Lisbon Agreement. See here for more details.
I have nothing against appellations of origin per se being taken seriously. However, this specific case was filed well after the events and long after the advertising Champagne campaign was initiated. Once a complaint was made the defendant stopped using the slogan. Arguably therefore, there were adequate grounds to throw the case out. I can, however, see grounds for issuing an injunction to prevent Mei Eden describing their product as Nature’s Champagne.

Damages? Unjust enrichment? Not convinced.

Unlike some Israeli sparkling wines which are as good as the French ones, mineral water, no matter how good, is not confusingly similar to Champagne wine, regardless of how bad. Mei Eden is not a sparkling water nor is it sold in glass bottles like Perrier. It cannot be compared to Babycham which was a cider that could allegedly be confused with Champagne by occasional Champagne drinkers or by the inebriated.

I don’t think that Laddie’s comments regarding an alleged misrepresentation leading to the belief that the defendant’s business is associated with the claimant’s is damaging to the claimant’s goodwill are in anyway relevant to this case.

I don’t find the argument of “passing off’ convincing. I don’t see a reasonable likelihood of customer confusion, or even a faint possibility of customer confusion. I can accept that European trademark practice would consider this type of usage ‘dilution’ and would forbid it. I can therefore see a legitimacy in the Comite Interprofessionnel suing for an injunction, and obtaining their costs. However, I don’t see a justification for this rather large fine. At worse, Mei Eden promoted their water using this Nature’s Champagne campaign. Arguably they increased Mei Eden’s market share of the mineral water market and maybe even increased mineral water consumption, but I seriously doubt it was at the expense of Champagne sales. I just don’t buy this.
The basis of the costs ruling was statutory damage and the damages awarded were “estimated” after weighing up all the considerations. I suspect that this sum will be appealed.

Peckham Spring

Readers are referred to “Mother Nature’s Son” the 1992 Christmas Special of Only Fools And Horses, which is perhaps the most iconic episode ever, and one of the funniest programs ever aired by the BBC, where the Trotters successfully market Peckham Spring Water.
http://www.bbc.co.uk/comedy/onlyfools/christmas/1992.shtml

One Response to Waters of Eden – Nature’s Champagne

  1. Shulamit Hirsch says:

    Hi Michael, I agree with your view.

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