In the latest dispute between EU member states over the bloc's geographical indications (GI) system, the court ruled that German producers do not have the right to use the parmesan name on hard cheeses made in the country.
The verdict means that the parmesan name can only apply to the " Parmigiano Reggiano" cheese made in a designated zone around Parma and Reggio Emilia in Italy.
The product is protected and registered under the EU's GI system as a protected designations of origin (PDO) product.
A PDO is one of three forms of GI designed to protect certain food and beverage products, by legally requiring them to be made in a certain geographic zone or manner in order to obtain use of the name.
In making the ruling, the court, which is the highest in Europe, went against an earlier recommendation from its own advocate general, who backed German claims that parmesan should be considered a generic name for hard cheese.
However, the court ruled Tuesday that the term parmesan was both phonetically and visually similar to "Parmigiano Reggiano" and therefore evoked the PDO product, meaning it could not be used as a general name for hard cheeses.
The term Parmesan will now be restricted in line with a number of food and beverage products in the bloc, which includes Champagne and the cheeses Roquefort, Gorgonzola and Feta.
However, in addition to the ruling, the court dropped charges against German authorities over claims that it had failed to sufficiently protect the "Parmigiano Reggiano" PDO in the country.
The court said that it was the job of the Italian authorities, to whom the PDO in question belongs to, which must ensure compliance with the law.
Geographical indication The GI system is broken down into classifications on protected designations of origin (PDO), protected geographical indication (PGI), and traditional speciality guaranteed (TSG) food and drink products.
PDOs, must be produced, processed and prepared in a given geographical area using a recognised, specified method.
PGIs, such as Newcastle Brown Ale, require a link between at least one stage of production, processing or preparation and the region, place or country of origin.
TSGs, such as the Belgian cherry-flavoured beer Kriek, highlight the traditional composition or a traditional method of processing or preparation of a product.
Producer impact The decision is likely to affect multinationals like Kraft Foods, which have long wished to put their own mark on Parmesan production.
By contrast, the ruling will be met with an enthusiastic response from Italy's "Parmigiano Reggiano" industry, which has complained of slowly losing its heritage, despite an increase in export sales.
Numbers of producers in the region have been dwindling since the end of World War Two, when there were more than 2,000 groups huddled on the small pocket of northern Italy manufacturing the cheese.
By the end of 2006 there were just 492 makers of the cheese, down from more than 500 in 2005, according to the official Parmigiano Reggiano Consortium.
Only a handful of truly independent businesses remain in this bloc, after many pooled their resources in co-operatives to reduce costs and up profits.