SHAMPANSKOYE: A potential Geographical Indication dispute between France and Russia?

Earlier this month, the Russian Government brought in force a new law, that requires all foreign producers of sparkling wine to make use of the words “sparkling wine” on the back of the label if they want to sell their products in Russia. On the other hand, the Russian producers of sparkling wine are permitted to use the word “shampanskoye” which is the Russian word for champagne. This legislation creates a new framework for protecting the interests of local wine producers in Russia, and potentially aid in creating space for their products in the foreign market. Neverthless, it negatively affects the rights of the foreign producers and local Russian customers.  Further, at the same time, it invites criticism from France, which has protected the term “champagne” as part of their intellectual property laws.

The use of the term champagne has been protected in France through the concept of Geographical Indication. This recognizes and protects the value of intellectual property associated with the geographical origin of the products, and may be considered as similar to trademark, albeit in the manner that it confers certain exclusive rights to the owner, thereby allowing the owner to market the product, and protect the association of the product with the region.  As a matter of fact, France has been one of the first countries to design a system that protects Geographical Indication, known as Appellation d’Origine Contrôlée, or the “AOC.”, which makes it unlawful to manufacture and sell a product under a Geographical Indication already identified and protected by the AOC. Further, France has sought to protect the appellation on Champagne not only within the country, but also across 121 countries where champagnes are sold. The same has been done through the World Trade Organization’s 1994 agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).

The new law that has created Russian Champagne is inspired by the use of brand names such as Sovetskoye Shampanskoye (Soviet Champagne) and Rossiyskoe Shampanskoye (Russian Champagne) that had been produced in Soviet Union and its successor states. The definition of the latter in the Russian Law implies that only the domestic producers of sparkling wine in Russia can use the brand name Russian champagne for their productions. This comes forth as an interesting aspect, especially in light of the fact that the use of the word champagne has always been with reference to production of sparkling wine in France, but now the said term will also be used for sparkling wines produced in Russia. The reason why it can be considered as a potential GI conflict is in light of the fact that the use of the term champagne has been protected for France ever since the TRIPS Agreement has been signed. Thus, while this product is being marketed, the impression in the minds of the consumers is that champagne comes particularly from France. Thus, when Russian wine producers make use of the term shampanskoye, which is the Russian translation of the term “champagne”, the same becomes violative of the GI protection already granted to France across various boundaries. It is important to note that geographical indication merely protects the origin, quality, and reputation of any product. Further, particularly in the case of France, the term champagne has been protected as an appellation of origin, thereby implying that the quality or characteristics of a product must be strongly related to their place of origin. An extension of this closeness of quality is that the place from where raw materials are sourced, their processing should take place in the same region. In the present matter, the use of the term champagne has already been linked to and protected in terms of the use and processing of French grapes. Thus, in light of these understandings, it will be an interesting sight to witness how does this new law promote and support the Russian products in reaching foreign markets, particularly in the light of already existing protection to the term champagne, and also the response of the French government in the light of violation of the TRIPS Agreement with reference to champagne.