GI Intro


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Introduction to concept of Geographical Indications - September 2008

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GI Intro

  1. 1. An Introduction to Geographical Indications Slow Food Nation 29 August 2008 Judson Berkey
  2. 2. Contents Background on Geographical Indications (GIs) Ways to Protect GIs – EU vs US Approach Issues Arising from the Different Approaches Where to Go Next 2
  3. 3. Background on Geographical Indications (GIs)
  4. 4. Why GIs are an Issue In the beginning all food production was local and reflected the unique environment and production methods used However, the late 20th century has seen an intense concentration of production due to industrial farming • 80% of the beef, 65% of soybean, 60% of wheat, 50% of chicken, and 45% of the pork processing in the US is handled by 4 companies (often the same 4) • More generally it is estimated that approximately 60% of the international food chain is controlled by 10 companies involved in seed, fertilizers, pesticides, processing, and shipment • Over the past 50 years, the farm population has declined by 85% in Germany, France, and Japan; 64% in the US; and 59% in Korea and UK. In the US, 6% of the farms receive 60% of total farm revenue • Food retailing is similarly concentrated with the top 10 firms in Europe accounting for 46% of total revenue in 2005 (estimated to grow to 60% in 2010). By 2010 it is estimated that the top 7 US food retailers will control 70% of retail revenue • Only 10% of the crop varieties used in the past are still actively farmed This has led to a renewed interest in mechanisms to help preserve and promote local and traditional production 4
  5. 5. What Benefits Can GIs Provide The goal is to provide a legal mechanism that allows producers in a specific region (typically small in scale) the use of a specific name to label a product as long as certain conditions are met • Criteria: a particular quality, reputation or other characteristic of the product must be attributable to its place of origin • Examples: Parmigiano-Reggiano, Prosciutto di Parma, Champagne, Roquefort This can provide a tool to • help rural development • preserve viability of small farming • protect traditional knowledge and promote tourism • shift from quantity to quality production • capture economic rent (e.g. Colombian Coffee) • preserve biodiversity and fight biopiracy (e.g. Basmati rice) • promote economic development for developing countries (e.g. Darjeeling tea) Potentially GIs could be expanded to protect other products (handicrafts and even manufactured goods) that have a specific reputation or contain traditional knowledge derived from the location (e.g. natural medicines, carpets, silk, crystal, watches) 5
  6. 6. However There are Concerns Not all agree that specific legal protection for GIs is the most useful way to promote development and to preserve traditional products Old vs New World • In the EU countries, there is a long history of such systems and as of October 2007 there were over 650 names registered (over 150 cheeses, 160 meat-based products, 150 fresh or processed fruits/vegetables, 80 types of olive oil) with 200+ applications being processed. More than 4500 wines and spirits are also protected. • However, in many new world countries (e.g. US, Canada, Australia, Argentina), there is a tradition of making products similar to those found in Europe and using the same names (e.g. Kraft foods sells Parmesan Cheese in the US). • Thus, if these names now need to be reserved for the traditional food product, companies fear they will lose the brand value they have built up over time (e.g. Kraft has to sell its cheese as Pamasello in the EU already). Developing Countries • Large developing countries (e.g. India, China, Kenya, Vietnam) are well placed to take advantage of such systems and have passed legislation to do so. • However, many smaller developing countries do not have the infrastructure and capacity to take advantage of any benefits (e.g. it is unclear if Gabon has the infrastructure capacity to manufacture and market the Gabon Sweet Potato in such a way as to take advantage of a GI). 6
  7. 7. Ways to Protect GIs – EU vs. US Approaches
  8. 8. Challenges to a Global Approach - EU GIs include agricultural products and other foodstuffs intended for human consumption only (but there are some exceptions such as mineral waters) GIs are registered based on an application that states why the product has a characteristic based on the place of production. There are two classes of products • PDO (AOC in Swiss system) – product must be produced, processed and prepared within the geographic area and quality or characteristics must be “essentially due” to the area. Cheeses are often PDO because the milk is sourced from cows in a specific region raised in a specific way. (439 – Oct 07) • PGI (IGP in Swiss system) – product must be produced, processed or prepared within the geographic area (thus, not all three activities) and quality or characteristics must be “attributable” to the area. Thus, the product does not have to originate in area and just one aspect and not the majority must be due to the area (e.g saucisson are often PGI because the meat can be sourced from 8 different locations). (323 – Oct 07)
  9. 9. Challenges to a Global Approach - EU Protection provided to GIs prohibits the following • Any direct or indirect commercial use of the name on products not covered in the application where the products are comparable or where using the name exploits the reputation Champagne in the EU can only come from the Champagne region of France and not California A French court even ruled that the use of term “Champagne” for a perfume was illegal because it traded on the reputation of champagne for a high quality product • Any misuse of the name even if the true origin is noted or if the name is modified with term ‘style’ or ‘type’ A “Champagne style” sparkling wine cannot be produced by a producer in Bordeaux or a producer in the Champagne region using non traditional methods (e.g. Merlot grapes) Instead a different name must be used • Any other false or misleading use of the name in such a way as to give a misleading impression of where a product originates from At least 80 other countries have similar systems 9
  10. 10. Challenges to a Global Approach - US In the US protection is provided under the trademark system via “certification marks” • Thus, GIs are not very different from any other trademark (e.g. Nike) and are assigned to a specific entity which owns the name (in the case of certification marks, this can be a collective entity that represents a group of producers). • A key distinction is that certification marks are not necessarily location specific and ownership can be transferred. GIs are location specific. • Another key distinction is that certification marks generally protect only against use of the mark on similar products and do not protect against a name becoming generic or being modified with “style” or “type”. Thus, the use of Champagne on a perfume would be allowed. • Finally, certification marks are only valid for 10 years and must be enforced by the owner. GIs are valid indefinitely and enforced by the state. GIs do exist in the US – Idaho Potatoes, Vidalia Onions, Copper River Salmon, Maine Lobsters, etc. (more than 800 wines and spirits and more than 80 other products) At least 50 other countries use a similar system 10
  11. 11. Challenges to a Global Approach - WTO The WTO agreements lean toward the EU approach with two key exceptions • Wines and spirits have legal protection closest to the EU standard. Once a GI is registered it becomes illegal to use the name on any similar product or service if it could have the effect of weakening the reputation of the product. This includes cases where the second product is labeled as ‘type’ or ‘style’ and would not necessarily be considered misleading. The name also cannot be included in a trademark if the product is not from the region • Other agricultural goods (and handicrafts) have less protection. The use of the GI is only prohibited when it is clear that the use of the name would mislead the public as to the true origin. In all cases, if the product is considered generic in a given country or subject to a prior trademark, then GIs do not have an exclusive right to the name. • Thus, if Feta or Champagne is considered a generic name in the US, the fact that it is a GI in the EU does not prevent companies in the US from using the name on products in the US. • Or if there is a trademark that uses the name already then the trademark can continue to use the name. 11
  12. 12. Issues Arising from the Different Approaches
  13. 13. GIs are not always Straightforward What is the geographic area of the GI • UK PGI for Melton Mowbray Pork Pies The defined jurisdiction encompassed an area where one company produced 62% of its produced pies while another company produced only 28%. Thus, the second company claimed the area was too large and disproportionately disproportionately benefited the other. The UK court ruled that the size of the area is not a priori limited in any way but the case limited has gone to the European Court of Justice for further review of criteria that should be applied when deciding on the geographic area. What is the actual product covered by the GI • Prosciutto di Parma producers vs UK supermarket chain ASDA ASDA was buying ham on the bone from an Italian producer that was part of the was Prosciutto consortium. ASDA then sliced and packaged the ham itself. The PDO registration specified that the cutting of the ham must occur in Parma. The ECJ ruled for the Prosciutto consortium but noted that if ASDA cut the ham in the same way as in Parma it could be sold as such. This shows that the definition of the GI is crucial and can be used creatively to ensure value add activities stay in the area. activities What about generic names • GIs are prohibited from becoming generic but a question arises when a name may already be considered generic – e.g. Feta Cheese. Greece registered it as a PDO but Germany, Denmark, France, and UK opposed based on sheep/cow’ claim that it is now a generic term for soft, white cheese made from sheep/cow’s milk. The ECJ ruled that Feta must originate from specific areas in Greece based on facts such Greece as 85% of consumption of Feta per person per year takes place in Greece and fact that other producers of Feta often allude to Greece in the packaging. Thus, other producers cannot use term “Feta style” but must rename their product. style” 13
  14. 14. GIs vs Trademark (Old vs New World) The most famous case is between the American company Budweiser and the boutique Czech brewery Budejovicky Budvar. • The Czech brewery in Budweis has brewed beer since the 13th century. • The American brand has become more internationally known in the 20th century. This dispute helped lead to WTO litigation on the legality of the EU GI system. The EU won on the point that in a country that recognises GIs, the GI can co-exist with a trademark (even if the trademark was registered first). • The exception would be where the GI would lead to confusion with a trademark that had a well established reputation. • It is unclear if Budweiser would meet this standard, particularly given the fact that the GI had been registered first in some countries. What this does not address is the reverse case – e.g. in a country that does not have a GI system can someone register a certification mark for a GI where a trademark already exists. • In Canada a trademark is already registered for Parma Ham. • Thus, the Prosciutto Consortium must sell its ham under the name “Ham No. 1” in Canada and not Parma Ham. The EU was also forced to open its system to 3rd countries. 14 • Cafe de Colombia and Napa Valley Wines have obtained GIs in Europe
  15. 15. How to Proceed at the Global Level The EU has proposed making the registration of wines and spirits mandatory and extending the system to all products. • Once registered with the WTO, a GI would be guaranteed legitimacy and could be used as the basis to invalidate a trademark application in any country. • The US opposes both on legal grounds (fear of requirement for co-existence of GIs with prior trademarks) and on practicality grounds (cost of setting up such a system for countries that do not have any type of protection in place now). • The US claims that the protection of GIs can occur under the trademark regimes already in place under national law. • Ultimately, the US is driven by economic interests of large companies that trade on the traditional names (e.g. Korbel California Champagne; Kraft Parmesan) The fear is not necessarily unfounded as the EU has published a list of 41 products for which it would like to reclaim the names. • These include products such as Feta, Parmigiano Reggiano, and Roquefort for cheese; Champagne, Chianti, and Port for wine; Prosciutto and Bologna for meat; and products like Turron from Alicante and Saffron from La Mancha • Under the EU proposal, these names would be re-protected and fall under a new WTO registration scheme which would even prohibit use of the words “style” or “type” on a similar product • The EU is signing bi-lateral agreements to reclaim some of these names (e.g. by 15 2013 Chablis, Port, Sherry, and Champagne will be protected in Canada)
  16. 16. Where to Go Next
  17. 17. What is a Possible Outcome There are two fundamentally different legal systems and philosophies involved. The EU approach would provide certainty. It also provides tangible incentives for rural development and for shifting from quantity to quality agriculture (Tuscan olive oil has a 20% premium; milk for Comte cheese has a 10% premium) Given the concerns of some new world producers about Feta-like results, some products (particularly the EU 41) may need to approached on a case by case basis. However, US companies should not be afraid of name changes. There can be opportunities (e.g when UBS rebranded it used this as the basis of a new advertising campaign – You and Us.) Compromise is probably necessary. No one is going to get their way completely but no one seems willing to give right now. • E.g. allow “Parmesan Cheese Made in the USA” to be sold in the EU • E.g. allow the real “Prosciutto di Parma” to be sold in Canada under its own name 17
  18. 18. The Situation in Switzerland The Swiss Parliament passed a federal law in 1997 establishing protection for geographical indications. There are two classes of protection – AOC and IGP . This is similar to the EU system. With only one exception (Bündnerfleish) all the raw material (even for IGPs) must at least be from Switzerland if not the specific geographic area. As of July 2008, there were 17 AOC products and 5 IGP products. In addition, there were 10 AOC candidates and 6 IGP candidates • 5 cheese (AOC) • 7 meats (2 AOC, 5 IGP) • 1 fruit (AOC) • 2 spirits (AOC) • 1 other (AOC - wood from the Jura) 18
  19. 19. The Situation in Switzerland 19
  20. 20. More Information – collection of resources for those interested in GIs. Links to national laws, international regimes, academic research, and organisations actively involved with GIs. - EU protection of quality products website. Contains lists of all products with protected status and provides updates on most recent activities. tion.htm - information on how GIs can be protected under US trademark laws. Also contains information on why the US believes trademark protection is sufficient. – Swiss system of GI protection. Includes list of proposed new products and links to contacts for products currently protected. - international organisation for GI producers. – EU sponsored research programs on GIs 20