In Vino Veritas? The Dubious Legality of the EU’s Claims to Exclusive Use of the Term ‘Prosecco’

Abstract

The European Union (EU) maintains that the word “Prosecco” is a geographical indication for a type of wine made in Northern Italy, rather than a grape variety. This position has been relied on by the EU to ban the importation of any wine labelled as Prosecco into the EU, and into other countries with which the EU has free trade agreements. Moreover, the EU is demanding that Australian wine producers be prohibited from marketing wine labelled Prosecco in Australia, as a condition of its entry into a bilateral trade agreement. Based on a detailed historical analysis of the use of the term Prosecco in Italy, this article argues that that the EU’s characterisation of the term is erroneous and is intended to operate to protect Italian Prosecco producers from international competition. By implication, the EU regulation is likely to contravene Article 20 of the World Trade Organization’s Trade Related Aspects of Intellectual Property Agreement (which prohibits governments from unjustifiably encumbering the use of trademarks) and Article 2.1 of the Agreement on Technical Barriers to Trade, (which prohibits, inter alia, technical regulations pertaining to terminology and labelling that unjustifiably discriminate between similar domestic and imported products). Furthermore, a prohibition on the use of the word Prosecco on Australian products in the Australian market may be inconsistent with the Australian Constitution, which prohibits the acquisition of property by government on other than just terms. These issues also point to a more fundamental question: namely, whether and if so to what extent domestic legal systems may permissibly be used to generate claims to intellectual property that are then used to leverage international protection for that intellectual property.

Keywords: Prosecco, wine, grape varieties, geographical indications, trade marks, trademarks, WTO, European Union, TBT Agreement, TRIPS Agreement, protectionism, discrimination

JEL Classification: K19, K10, K29, K33