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European Affairs
Trade Relations
The EU Wants to Protect its Prestige Place Names
By Roger Kampf
Together with many of its trading partners, the European Union firmly believes that the effective protection of geographical indications as a form of intellectual property under the rules of the World Trade Organization is of crucial importance for producers, consumers and governments. For example, the usurpation of European place names, such as Champagne or Chablis, by producers in other countries can mislead consumers and undercut efforts by European producers to protect their investments and maintain high quality products.
Legitimate issues of market access are at stake, because genuine products can be driven out of a market by fake items bearing the same names. This is not just a European problem, as illustrated by the following statement from a Mexican official in a WTO trade policy review: "We enjoy a growing trade surplus in the alcoholic beverage industry, and this is in part the result of concerted efforts by authorities to ensure that Mexican appellations of origin receive adequate protection in foreign markets, i.e., to eliminate fake tequila." This shows that when a country has identified at national level a name it can protect as a geographical indication, it will soon see the benefits of promoting and enforcing rights to the name beyond its borders.
Geographical indications are not a new form of protectionism, as some have alleged. That is simply wrong. A recent report from the Organization for Economic Cooperation and Development concludes that, "there is insufficient evidence to consider appellations of origin as non-tariff barriers to trade." It cannot be emphasized strongly enough that the WTO agreement on intellectual property (TRIPS) does not prevent any producer of imitation items from continuing to make exactly the same product. It is just that, if protection is effectively implemented as required under the agreement, the name must be changed, unless one of the exception clauses applies.
The latest round of multilateral trade negotiations in the WTO, launched in Doha in late 2001, offers two venues for addressing the concerns expressed by the European Union and others, and for negotiating increased protection for geographical indications, not only for Europeans but for all countries around the world.
These venues are the negotiations on trade-related intellectual property rights under the auspices of the TRIPS agreement and the negotiations on improving market access for agricultural products. The European Union has put forward proposals for increased protection of place names in both sets of negotiations.
In the TRIPS negotiations, our objectives are shared by a large number of other WTO members. We aim first to establish a meaningful register with certain legal implications for names that would be eligible for protection around the world. Such a register would make it easier to enforce the protection that is already offered by the TRIPS agreement, but which is not always easy to apply across borders because of the diversity of national protection regimes.
We also, however, have a second, separate TRIPS objective: to extend the higher level protection currently available under Article 23 of the TRIPS agreement for wines and spirits to other products, including food with distinctive place names such as Stilton Cheese, Parma Ham or Parmesan, as well as handicrafts, such as Porcelaine de Limoges. Under this so-called additional protection, interested parties are permitted to prevent the use of a geographical indication for products not originating in the specified place, without undergoing the burdensome and costly procedures of proving first that the public is being misled or that unfair competition is taking place.
Current WTO rules offer far from complete protection. "Bourbon whiskey," for instance, in theory benefits from protection under the TRIPS agreement. But distillers in countries such as Canada, Bulgaria and Mexico have called their whiskeys "bourbon" in the past, and it is difficult to stop them - either under bilateral trade pacts like the North American Free Trade Agreement or under the multilateral TRIPS agreement.
This is precisely where our proposed register would help. If Bulgaria, for example, did not oppose the registration of "bourbon" by the United States, the producers of the genuine bourbon would find it much easier to enforce their rights in Bulgaria in future because the burden of proof would be reversed. The fact the name was registered would speak in favor of the U.S. producers, unless a Bulgarian competitor proved that it was entitled to use the word "bourbon," for example because of an exception clause in the TRIPS agreement, such as the one covering generic names.
Under current rules, the holders of rights to geographical indications have the difficult task of proving the validity of their claims whenever they are challenged in other WTO member countries. Our proposal would not grant absolute protection once a name was registered in Geneva, but it would place the burden of proof on usurpers to justify their practices.
We are certainly not suggesting that conflicts over the register should be referred to the WTO dispute settlement system. Our proposal simply recommends that member countries should hold bilateral negotiations to resolve any disagreement, in line with the TRIPS provisions.
Thus, the multilateral register envisaged by the European Union would help producers to enforce their rights and consumers to identify the origin of products. It would ensure transparency and provide all users of the register with a degree of legal certainty. With a single registration point, producers would not have to register in each and every country to preserve their rights.
Consumer associations would find it easier and cheaper to go to court to prevent usurpers from selling misleadingly labeled products. Perhaps most important, registration would ensure a full range of choice between genuine and imitation products and meet the growing demand for products with identifiable origins and guaranteed methods of production.
Another advantage of a register is that it would prevent geographical indications from becoming generic names, and thus usually losing their protection and value, in other WTO member states. Countries that had not opposed the registration of a name would no longer be allowed to characterize it as generic in the future.
We do not believe, however, that all the problems posed by the misuse of place names can be resolved by current negotiations under the TRIPS agreement. Provisions to protect intellectual property would not help to protect names that have already become generic, or "semi-generic" in U.S. terminology, and are widely used to describe products that are not made in the place where the name originated - even though they may be similar to those that are. Examples of such names would be Burgundy, Chablis or Champagne.
This is where the agriculture negotiations come into play, because we are conscious of the fact that TRIPS addresses only the future. We have decided to use the current negotiations on agriculture to try to phase out certain "grand-fathered" uses of geographical indications and prior trademarks registered in good faith, as well as generic and "semi-generic" names used by producers other than the original ones.
We are suggesting that certain names, not 400 or 500 as has been claimed, should be listed as qualifying for absolute protection in other WTO member countries, just as they already do in the European Union. The names we are interested in reclaiming would include those of some foods, as well as wines and liquors. This would obviously take place as part of a broader trade-off of concessions.
I believe that the European Union and the United States both want to protect producers that have invested in quality products and to avoid confusing consumers. In fulfilment of the existing negotiating mandate, we hope we can agree on a meaningful register of protected items by the WTO ministerial meeting due to be held in Cancun later this year. Meanwhile, we must keep up a constructive dialogue.
Roger Kampf is the Deputy Head of Unit, Directorate-General for Trade, New Technologies, Intellectual Property and Public Procurement at the European Commission. He served most recently as a Counselor at the European Commission's Permanent Delegation to International Organizations, with responsibilities for intellectual and industrial property issues and public procurement.