Publications
European IP Bulletin, Issue 15, September - Hot Topics
Hot Topics
1. UK Launches National Intellectual Property Crime Strategy
On 10 August 2004, Industry Minister, Jacqui Smith, launched a blueprint to crackdown on the trade in fake goods as she unveiled the first National Intellectual Property Crime Strategy.
The strategy is the government’s response to tackle the impact on society of the trade in fake goods. Industry estimates suggest that 18% of world trade is in counterfeit products and it seems that no product is too cheap to counterfeit and no brand immune. Several categories of effects were widely recognised:
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Consumer health and safety: there is a risk in buying fake goods of all kinds as they can be harmful to the consumer. For example, counterfeit children's toys and clothing are not safety-tested, fake perfumes may burn the skin, counterfeit mobile phone and appliance batteries may explode, whilst fake vodka can present serious health risks
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Quality: fake goods have no guarantee of quality. For example, films on DVD run for limited periods before breaking up whilst the quality of sound and vision is often poor
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Economic impact: fake goods cost the worldwide economy in lost revenues, damage legitimate businesses, and affect employment. Counterfeiting is part of the black market economy where only the seller profits as no tax is payable to the State. Last year alone counterfeiting and piracy is estimated to have cost the UK economy £10 billion and 4,000 jobs
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Links to other crime: counterfeiting is a global business run by highly-organised criminals using it as a low-risk way of laundering money and raising funds for other criminal activities.
The IP crime strategy, developed in conjunction with the Patent Office, brings together brand owners, police, trading standards and customs to coordinate the response to the trade in fake goods. It aims to better co-ordinate the agencies involved in the fight against intellectual property crime by increasing intelligence sharing, improving training for those working at the front-line and monitoring progress and success through publishing an annual national enforcement report.
Creative industry plays a vital role in the UK economy, and piracy and counterfeiting threaten to hinder the development and utilisation of innovative technologies. It is important that both government and industry work together to support this key economic sector and find ways to maximise the benefit from appropriate IP protection. Hopefully the first National IP Crime Strategy will help inform the public of the risks associated with fake goods and confirm the government’s commitment to tackle offenders.
2. Protection of Geographical Indications and Designations of Origin in the European Union
Commercial and non-commercial value
PGIs provide an important economic as well as non-economic value to a
country’s economy. Many PGIs have acquired special reputations among
consumers and allow for the development and, where appropriate, preservation
of the local agricultural economies. PGIs indicate to the consumer the
products’ origin, high quality and expected characteristics. Furthermore,
they guarantee that products are produced using traditional methods. These
characteristics have gained importance for the consumers so that they accept
higher pricing of the products. The result is an increase in sales and
exports. Under the protection of the PGIs, producers are able to earn a
considerably higher return on their investment. Within the European Union,
for example, a total of 600 PGIs for foods and 4,000 PGIs for wine and
spirits are protected which realise a total of over 40 billion Euros in
annual sales. France, on its own, registered 593 PGIs in 2003, generating a
value of 19 billion Euros and providing a lifeline for 138,000 farms.
Legal protection of PGIs
PGIs are protected under national laws against unfair competition and
trademark law in general, and specific laws for the protection of PGIs. On
an international level, they are protected by multilateral agreements such
as the Paris Convention for the Protection of Industrial Property 1883, the
Lisbon Agreement for the Protection of Appellations of Origin 1958, and the
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS
Agreement) 1995 together with specific European legislation. Further, some
are covered by bilateral agreements (e.g. EU-Australia Wine Agreement of
1994).
TRIPS Agreement
Present status
The TRIPS Agreement, enacted 1 January 1995, represents a milestone in the
development of multilateral treaties. It is binding on all member states of
the World Trade Organisation (WTO) and establishes standardised minimum
protective rules. Articles 22 to 24 of the TRIPS Agreement deal with the
international protection of PGIs, especially focusing on wine and spirits.
However, the TRIPS Agreement provides the following two exceptions to the
general requirement to protect PGIs:
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First, WTO member states are not required to protect a PGI if a term represents the generic name for the product in the same member state. For example, the United States may continue to use the word “Champagne” as a synonym for sparkling wine or Chablis for white wine because those appellations are established generic terms within the US
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Second, if a trademark was registered, applied for, or acquired in good faith prior to the date of application of the TRIPS Agreement for a particular WTO member state or before the PGI was protected in its country of origin, the trademark maintains its presumptive legal superiority based on the principle of “first-in-time, first-in-right”.
Current PGI proposals
The protection of PGIs was debated in the last WTO Doha Round (WTO member
states). In particular, the European Union and other important members of
the WTO expressed special interest in improving the level of protection of
PGIs.
The European Union is especially interested in the expansion of the PGI
scheme due to the shift in agricultural policy that now encourages producers
to compete on quality instead of price. Sufficient protection of the
respective PGI is essential to implement this change.
The objectives of the discussions included:
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The creation of an automatic multilateral registration and notification system for PGIs for wines and spirits
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The establishment of additional regulations under the TRIPS Agreement for products other than wine and spirits
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The revival of certain PGIs which have been worthless in the past because they have been considered trademarks or generic terms in several countries. According to this plan, the appellation “Parmesan” could no longer be used globally as a generic term for hard cheese but only for cheese produced in the relevant restricted areas.
Protection within the European Union
Regulation No. 2081/92
Within the European Union, Regulation No. 2081/92 as amended has adopted
strict rules to protect the PGIs for agricultural products and all kinds of
foodstuffs.
This Regulation provides a strong basis for protection. It differentiates
between the terms Protected Geographical Indication (PGI) and Protected
Designation of Origin (PDO). The fundamental difference lies in the type of
relationship required between the product and the specific geographical
area.
The requirements for PDOs are more stringent than for PGIs. A PDO requires
that the products are produced, processed and prepared in the geographical
area. For example, the use of the PDO Parma-Ham (Proscuitto di Parma)
requires that not only the meat itself has to originate from the specific
area, but also the slicing and packaging has to be performed locally.
In contrast, a PGI (e.g. cheeses from Roquefort) only requires that at least
one stage of the entire production process (consisting of production,
processing and preparation) is performed within the geographical area.
Protection is obtained by submitting an application to the Member State in
which the geographic area is located. If the Member State supports the
application, it is sent to the EU Commission, which decides whether the
product qualifies for protection. Third parties may file objections to
either the Member State or the Commission. If no agreement can be reached,
the Commission will decide whether or not the PGI should be registered.
Regulation No. 692/2003
Regulation No. 692/2003 amends Regulation No. 2081/92 and creates
consistency between the EU regulations and the TRIPS Agreement. There are
three important modifications:
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It allows non-EU nationals to file objections against an application to register a PGI or PDO
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Non-EU nationals will also be entitled to secure protection for geographical indications, if their country provides the same protection on the basis of reciprocity
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Product specification may provide that packaging must take place in the specific geographical area, where this is necessary to guarantee quality, traceability and control.
Conclusion
While the European countries together with several other countries want to
extend the PGI protection globally, other countries, led by the US, are more
reluctant. In particular, the US does not want to jeopardise existing
trademarks and monopolise generic names like Feta, Sherry or Burgundy. Due
to these different points of view, a multilateral agreement is unlikely in
the near future. Nevertheless, the European Union continues to advance its
own protection of PGIs and recently added seven new names to the
ever-growing list of protected PGIs in the European Union.
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