Jorge Vicente Martínez. Intellectual Property Lawyer | Litigation Department

The Supreme Court has handed down judgment No. 303/2026, dated 3 February, concerning a dispute between two wineries in the Rioja Alavesa region that use the term “Valcavada” in the name of their wines. This is a dispute between the exclusive rights arising from a national trademark and the common use of geographical names linked to the product’s origin.

The claimant, the owner of the Spanish national word mark VALCAVADA, registered for wines, argued that the defendant’s use of the sign “1808 VALCAVADA” infringed its exclusive rights recognised under Article 34 of said regulation, and that it constituted an unfair exploitation of its reputation. It also seeks a declaration of invalidity of Spanish trademark No 3603122, ‘1808 TEMPERAMENTO NATURAL VALCAVADA SINGULAR VINEYARD’, on the grounds that it incorporates the same term. In turn, the defendant argued that “Valcavada” was not a made-up term, but the name of an actual place located in Laguardia, where both wineries operate, and that its use therefore constituted a legitimate geographical reference.

Against this background, the judgment addresses the ius prohibendi of place names in trademark law. The Supreme Court bases its ruling on a decisive factual point, namely that “Valcavada” identifies a real geographical place where there are vineyards and wineries, which implies that the sign is linked to the origin of the product. Consequently, the Court holds that place names, when they refer to the origin of products, have only weak inherent distinctiveness, which limits the scope of the protection they can receive as trademarks.

In this regard, the ruling emphasises that the inclusion of a place name in a trademark does not entitle its owner to exclusive rights over that term. Protection is granted to the sign as a whole, but not to the geographical element taken in isolation. This approach is particularly relevant in the wine sector, where reference to geographical origin is an essential feature of the product and is also protected by specific schemes for geographical indications and designations of origin. The Court therefore insists that the use of the name “Valcavada” cannot be restricted outright.

The judgment elaborates on this point by analysing the likelihood of confusion in accordance with Articles 6(1)(b) and 34(2)(b) of the Trademark Law. The Court applies the traditional criteria for a global comparison of the signs in their graphical, aural and conceptual aspects, but introduces a decisive factor, namely the lack of distinctiveness of the common place name. Since “Valcavada” functions primarily as a geographical indication, its significance in the assessment of confusion is reduced. A comparison of the trademarks reveals that the similarity is limited to that minor element, whilst the remaining components, including numerical elements and additional designations, create a distinct overall impression. The Court therefore concludes that there is no likelihood of confusion or association on the part of the average consumer.

The Supreme Court points out that geographical names must remain available to all operators established in the relevant territory. This principle addresses the need to ensure free competition and to prevent a business owner from appropriating an element that describes a shared objective reality. Consequently, the registration of a trademark that includes a place name does not confer on its proprietor an exclusive right to that term vis-à-vis third parties who use it legitimately.

In this regard, the judgment emphasises that the use of a place name by various traders constitutes an exercise of the right to describe the geographical origin of products, provided that such use is in accordance with fair industrial or commercial practices, as set out in Article 37 of the Trademark Law. Consumers are accustomed to seeing multiple producers refer to the same place of origin, particularly in the wine sector, where geographical indications have essential informative value. This circumstance reduces the likelihood that the coincidence will be perceived as indicative of a business connection, which directly contributes to the exclusion of the likelihood of confusion.

The Court recognises that a place name may form part of a valid trademark when combined with other elements which, taken together, generate a sufficiently distinctive impression. However, this protection applies to the sign as a whole and not to the geographical element in isolation. Therefore, a trademark owner cannot prevent third parties from using the same place name in their own trade names, provided that the overall impression is sufficiently distinct and does not cause confusion.

With regard to the possible existence of an unfair exploitation of another’s reputation, the judgment rules out such a scenario. On the one hand, it has not been established that the trademark in question is well-known in the sense required by case law. On the other hand, the Court puts forward a broader argument by noting that the use of a common place name can hardly be considered an act of parasitism, given that it is an element in the public domain the use of which corresponds to an objective geographical reality. In this way, the enhanced protection of trademarks is prevented from extending beyond its reasonable limits.

This judgment should be understood as a consolidation and clarification of criteria. It does not introduce a new criterion, but rather draws on established case law that limits the exclusive appropriation of place names and emphasises their descriptive nature, both at the national and European level, as demonstrated by the numerous references to relevant judgments, such as the ECJ judgment of 4 May 1999, Chiemsee.

In short, the ruling reaffirms the balance between the exclusive rights arising from a national trademark and the need to preserve free competition. Place names, even when incorporated into registered trademarks, retain their nature as descriptive elements linked to the territory and must remain available to all operators who legitimately carry out their activities within the relevant geographical area. In this way, the Supreme Court provides particularly relevant guidance for the application of trademark law in sectors where geographical origin constitutes an essential element of the product.