The Swiss village of Champagne produces white wines.
Cornu produces bakery products in France and in Switzerland that carry the Champagne appellation.
The dispute between Cornu and the French trade associations and authorities has been going on for several years.
In 2004, an agreement was reached between Switzerland and the European Union resulting in Cornu being forbidden to use the Champagne appellation for its wines.
Since then, the baker and the villagers have launched several campaigns to be able to use the term Champagne.
Paris ruling Yesterday's ruling in Paris resulted from a case brought against Cornu in 2005 by the Champagne Growers and Houses trade association (CIVC) for using the Champagne appellation ('Appellation of Controlled Origin' or AOC).
This was used on the firm's packaging, its communications and in as a domain name on an internet site.
The Paris court ruled that the use of the term on the biscuit products could mislead consumers and enable Cornu to benefit from the notoriety of (French)
Champagne products.
The court also ruled that the Champagne appellation should be used exclusively to describe wines produced and made in the Champagne region of France.
The name Champagne cannot be used to describe any other products elaborated outside this region, it said.
As a result, the court forbade both companies to use the term Champagne for their products and ordered the closure of the domain name it was using.
However, at the time of writing, the domain name is still in use.
Previous rulings The court's decision confirms previous French rulings that have forbidden various companies from using the Champagne appellation for their products.
In the 1990s, before the law on the protection of AOC products was passed, the word Champagne started to flourish on products or services without any links with the wines of Champagne.
These products included cigarettes, yoghurts, perfume and soft drinks.
The CIVC told BakeryandSnacks: " The CIVC's decision to take the companies to court and the court's ruling are the continuation of a number of rulings which, over the years, have given the Champagne appellation a large protection against any use that could dilute the Champagne appellation or mislead consumers ".
Appellation of Controlled Origin' or AOC products are protected by the law of 2 July 1990.
The Appellation of Origin is a form of certification for consumers of the geographical origin of the product, and it states that the product meets a demanding qualitative norm.