Leeds Metropolitan University

EC Business Law

Individual Assignment

Protected Designation of Origin, EU

Competition Law, and Free Movement of

Goods.

Atilla Kibar

Hand in Date: 08.01.2007

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Abbreviations

________________________________________________________

Commission European Commission

Court European Court of Justice

EC European Community

ECJ European Court of Justice

EEA European Economic Area

EU European Union

GBC Green Bike Corporation

PDO Protected Designation of Origin

PGI Protected Geographical Indication

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Content

1.Question (1) Protected Designation of Origin 4

1.1 Introduction 4

1.2 Protected Designation of Origin (PDO) 4

1.2.1 Criteria 5

1.2.2 Application Process 6

1.3 Related Cases 6

1.3.1 The "Feta" Case 7

1.3.2 The "Dante Bigi" Case 7

1.4 Conclusion 8

2. Question (3) (a) 9

2.1 General Principles 9

2.2 Free Movement Of Goods 9

2.3 Article 25 EC (ex 12 and 16) 10

2.4 Conclusion Question 3 a) "Tennis Ball Case" 10

3. Question (3) (b) 12

3.1 Article 82 EC (ex 86) 12

3.2 Dominant Position and Relevant Market 12

3.2.2 The Relevant Product Market 12

3.2.3 The Geographic Market 13

3.2.4 The Temporal Market 13

3.2.5 Other Factors 13

3.3 Conclusion Question 3 c) "Green Bike Corporation Case" 14

Bibliography 16

Books 16

Internet sources 16

Appendix 18

Definitions 23

Treaty Articles 24

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1.Question (1) Protected Designation of Origin

1.1 Introduction

The central mission statement laid in article 2 of the treaty of Rome proves that "the

Community shall have as its task, by establishing a common market and progressively

approximating the economic policies of member states, to promote throughout the community

a harmonious development of economic activities, a continuous and balanced expansion, an

increase in stability, an accelerated raising of the standard of living and closer relations

between the states belonging to it".1

However, it is in the interest of the society that markets perform efficiently. A general

principle accepted by economists is that free trade is a condition in which markets optimise

output and income levels permanently. The common market in the EU is founded on the

general principles of free movement goods whereas inter alia a creation of equal opportunities

for trade should be guaranteed. Furthermore there is competition in such markets and the

participants in the competitive process can be divided into two groups: on the one hand

suppliers of goods and services and on the other hand customers.2

1.2 Protected Designation of Origin (PDO)

Markets are always influenced by variances. In the last years consumers were changing their

perceptions for high quality products. The interest is directed towards to receive products with

high quality standards. Indeed, quality can be a key to success therefore the increasing

demand for high quality products also benefits producers.

As a result the EU adopted the Regulation (EEC) No 2081/923 on the protection of

geographical indications and designations of origin for agricultural products and foodstuffs in

order to satisfy both producers and consumers needs.

Protected designations of origin and geographical indications under Regulation (EEC) No

510/2006 offers the opportunity to buildup local value chains. These value chains are

appropriate to satisfy consumer needs, to be conducive to local agriculture and to create jobs

in local areas.4 The EU distinguishes between two conceptions, on the one hand designations

of origin (PDO) and on the other hand geographical indications (PGI). The PDO of

agricultural products or foodstuffs based on Article 25 is awarded by the Community if

1 See Birtwistle 2006 / 07

2 See Lasok (2001)

3 Now repealed by Council Regulation 510/2006/EC of 20 March 2006

4 See http://www.origin-food.org/pdf/pdo-pgi.pdf

5 See Appendix (EU Regulation 510/2006/EC)

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· "the quality or characteristics of the product is essentially or exclusively due to the

particular geographical environment of the place of origin; the geographical

environment is taken to include inherent natural and human factors, such as climate,

soil quality, and local know-how

and if

· the production and processing of the raw materials, up to the stage of the finished

product, takes place in the defined geographical area whose name the product bears".6

Different local areas have different images, e.g. the Black Forest in Germany or the

Champagne in France. This special image can be a reference to a certain product and is

reflected in natural conditions, local traditions and cultures of particular geographic regions.

Consumers then have a defined imagination about the quality of a certain product which is

manufactured in a particular geographic area. Consequently a PDO provides information

about the quality of a certain product or foodstuff. For this reason a PDO becomes such as a

certification mark or rather a brand name. To create a strong brand name or an image is

always costly for enterprises. To establish a strong brand is only profitable if this enables the

company to generate a greater value for particular goods or services e. g. providing it for a

higher price. To avoid misuse and imitation of product names which is based on Article 137 of

Regulation 510/2006/EC the EU adopted this safeguard. Furthermore it should help

consumers by giving them information concerning the specific character of the products.8

1.2.1 Criteria

However, this safeguard is subject to strict conditions. The EU has laid down exacting criteria

how the PDO can be obtained:

· Producing and processing of the product must be demonstrable traditionally in the

designated geographical region.

· There must be a verifiable link between product and its geographical origin regarding

to characteristic, quality and image.

· Producing and processing must be occurred by selected and reviewable guidelines

which will be examined by an independent institution.9

6 See http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2006/l_093/l_09320060331en00120025.pdf

7 See Appendix (EU Regulation 510/2006/EC)

8 See http://opus-ho.uni-stuttgart.de/hop/volltexte/2006/153/pdf/haa-nr12-2.pdf

9 See http://ec.europa.eu/agriculture/publi/gi/broch_en.pdf

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The claim for a PGI by contrast is minor as it is for a PDO. Producing and processing of

goods must not be in specific geographic area. The meat for the "Schwarzwälder Schinken"

for instance can be delivered from other areas then the Black Forest. Only meat curing hast to

be in the Black Forest. Applications for PDOs and PDIs can be put forward by any interested

parties which respect the above mentioned criteria. The procedure for registration of

designations of origin is defined in Article 510 of Regulation 510/2006/EC 11. At present in

total 696 products are registered inside the European Union. The following Table shows some

examples:

Cheeses

Meat based products

Oils and fats

Fruits and vegetables

Drinks

Allgäuer
Bergkäse

Schwarzwälder Schinken

Spreewälder Gurken

Herfordshire

(GE)

(GE)

Rhodos (GR)

(GE)

cider/perry (UK)

Camembert
de
Normandie

Göppinger Quelle

(FR)

Jambon de Bayonne (FR)

Sabina (IT)

Coco de Paimpol (IT)

(GE)

Jersey Royal Potatoes

Feta (GR)

Prosciotto di Parma (IT)

Antequera (ES)

(UK)

Domfront (FR)

1.2.2 Application Process

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"A group of producers must define the foodstuff according to precise specifications. The

application, including the specifications, must be sent to the relevant national authority, where

it will be studied first and thereafter transmitted to the Commission. After some control

procedures a first publication in the Official Journal of the European Communities will

inform those in the Union who are interested. If there are no objections, the European

Commission publishes the protected product name in the Official Journal of the European

Communities".13

1.3 Related Cases

As mentioned above the safeguard of the EU allows to benefit producers as well as consumers

and this will consequently also benefit trade between member states. But there are also

complications and obscurities which makes it often difficult for the Court to judge certain

cases. The following examples will show how the Court has reacted to specific cases.

10 See Appendix (EU Regulation 510/2006/EC)

11 See http://opus-ho.uni-stuttgart.de/hop/volltexte/2006/153/pdf/haa-nr12-2.pdf

12 See Appendix (EU Regulation 510/2006/EC) Article 4 and 5

13 See http://ec.europa.eu/agriculture/foodqual/quali1_en.htm

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