1 Introduction: The Excesses of the Trade-Related Approach

In the presentation of this chapter in draft form, I asked the following question, ‘how do you spot a dodgy international intellectual property claim?’ One possible answer to that question is that those who own intellectual property (IP) rights in one jurisdiction, where those rights have developed from local or regional policies, want those locally grounded rights exported to other legal systems in order to protect IP-related products exported to those jurisdictions. That proposition alone cannot be the only way to spot a ‘dodgy IP claim’ because that is a description of many international IP negotiations where there are attempts to gain at least some international agreement on minimum standards of protection. The ‘dodgy’ aspect arises when incumbents want more protection (without convincing evidence that more protection is needed), and in seeking that greater protection, those incumbents suggest that newcomers will gain immeasurable bounty. This is exactly how the European Union presents its geographical indications (GIs) policy to its trading partners. The argument usually involves three steps. First, multiple GIs have worked in Europe. Second, there are one or two instances of GIs working for developing countries. The following statement from the European Commission illustrates these first two steps:

The third step proffered to complete this argument is that because GIs ‘with commercial value are exposed to misuse and counterfeiting’,Footnote ² GI protection EU style should be the global legal norm in order to prevent this misuse and counterfeiting.

While there is plenty of truth in these statements – after all no one doubts the value of using the origin of a product to sell it when that origin has cachet – there is also a considerable weakness in the logic that purportedly links the three propositions. This weakness is because the success of GIs (as a legal model for exploiting the value in origin of goods) from one territory does not mean that success can be easily replicated in other territories. First, what makes GIs valuable, at least initially, is the place with which the GI-branded product is associated. Such associations (if they are genuine) are not identically replicable. More importantly, the success of GIs is dependent on multiple factors, including investment and infrastructure around the business, industry, place and communities concerned. The legal framework alone, for GIs, is unlikely to create development of the local industry without those other factors being present. Some chapters in this book suggest positive uses of GIs in Asia for those other than Darjeeling tea and Basmati rice,Footnote ³ but a remarkable amount of literature (including the above-quoted statement from the European Union) pinpoints these as examples of how developing countries could succeed in improving their agricultural economy with GIs. This sort of statement is often proffered without an appropriately corresponding analysis of the transferability of the GI mechanism to other communities and other products. In fact, as developing countries repeatedly have shown, the removal of agricultural subsidies in the developed world would make a real difference and enable developing countries to compete in world markets for agricultural products. In a manner prescient of an EU-directed path with GIs, most developed countries have not removed agricultural subsidies (with the notable exception of New Zealand) and, in order for developing countries to compete with developed countries, large developing countries now also subsidise agriculture.Footnote ⁴ The losers are those countries that cannot afford subsides, particularly the small developing countries, which may agree to implement GI regimes when they are in trade negotiations. This is the kind of outcome that happens when the ‘weak bargain with the strong’.Footnote ⁵

Just as the GI policy of one country may not be a good fit for another country, evidence that GIs have been effective as a development tool in one community is not evidence that the same model of GIs will be effective in all communities.Footnote ⁶ As William van Caenegem, Peter Drahos and Jen Cleary have discussed, the success of GIs as a tool in certain parts of the Australian wine industry, for example, is attributable not only to GIs but to certain other factors which are not simply replicable by enacting GI laws.Footnote ⁷ Their research demonstrates that certain industries have benefited from investment accompanied by GIs in Australia.Footnote ⁸ This research reveals that a careful calculus is required. The authors suggest that if that benefit of GIs is to be replicated, then Australian autonomy over the design of any law to extend GI protection is crucial.

The international minimum standards for GIs should not be moulded on a legal regime that cannot accommodate appropriate differences between different countries and even different communities in those countries. The benefits of GIs to local communities are only possible with appropriate legal framing to meet and enhance local needs. GIs can be part of a package to enhance development, but a legal mechanism without associated investment cannot effectively function as a source of development. GIs being “part of a package” means exactly that rather than a top-down imposition through trade agreements of a framework and detailed laws designed for the economic conditions of others. Put differently, there is no 100 per cent right or wrong position on GIs even though the debate is polarized. The reality is that one size does not fit all, but several sizes may fit some or possibly even many.

Perhaps the most significant argument against the export of EU-style GI law to developing countries is that while such export has been going on for some time, there are relatively few success stories in developing countries. This would seem to be because a successful sui generis GI regime requires infrastructure and related investment in development, which may be missing. Just as pharmaceutical patents are predominantly a cost to those who do not produce pharmaceuticals, establishing a GI protection regime is largely a cost to those who lack the resources and infrastructure to exploit the origin of goods, in the form of an IP right, in the global economy. In such places, registered GIs will largely be foreign-owned.Footnote ⁹

The approach of trying to force a one-size-fits-all model is certainly not the exclusive domain of the European Union in its trade agreements.Footnote ¹⁰ While the United States does not seek to export GI laws through its trade agreements, it does export its view of how trademark law should dominate and how GIs, if and where they exist, should not trump trademarks, but rather trademarks should prevail over GIs.Footnote ¹¹ Much of the global GI debate is thus characterized by a trans-Atlantic debate and the dominant parties in that debate seek to recruit support for their respective positions in countries around the world through bilateral and mega-regional trade agreements.

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) GI requirements are minimum standards.Footnote ¹² In other words, members of the TRIPS Agreement can implement GI-style protection in a variety of ways. This flexibility around implementation is reinforced by the general provision in the TRIPS Agreement that allows for countries to implement the obligations in their own legal system in a manner they deem appropriate.Footnote ¹³ It is well documented that since the TRIPS Agreement came into force there has been a proliferation of free trade agreements (FTAs).Footnote ¹⁴ These FTAs were initially predominantly bilateral and now frequently involve multiple parties and so are plurilateral, such as the Trans-Pacific Partnership (TPP).Footnote ¹⁵ Plurilaterals are often mega-regional agreements. Even though negotiations such as the Trans-Atlantic Trade and Investment Partnership (TTIP) are between the European Union and the United States rather than multiple parties, because of the size of the economies of those two parties, such an agreement is mega-regional in terms of the volume of trade it could cover. Geopolitically, the mega-regionals seem to be in competition with each other. The TPP did not include the European Union or China, and the Association of South-East Asian Nations (ASEAN) plus six parties negotiation for the Regional Comprehensive Economic Partnership (RCEP) does not include the United States, for example.Footnote ¹⁶ While at the time of this writing, the TPP will likely not come into force because of the United States withdrawal from it, the TPP IP chapter is emerging in other trade negotiation forums as proposals for negotiation. The text of the TPP relevant to this chapter was introduced into the RCEP negotiations. There is much opposition to such proposals.Footnote ¹⁷

Some bilateral FTAs designed and entered into by large economies, particularly the United States or the European Union (known as economic partnerships), articulate one of those major economies’ stance on GIs. Both the United States and the European Union through these FTAs recruit as many countries as possible to one GI stance or another. The trans-Atlantic rivals are dealing with this policy and legal framework collision in the TTIP.Footnote ¹⁸ At the political level, the rhetoric captures the difficulty:Footnote ¹⁹

In Section 2, certain approaches to GI protection in mega-regionals and bilateral FTAs are discussed. Section 3 considers some of the incompatibilities between the EU-dominated and US-dominated approaches. Section 4 raises questions about countries that purport to trade in both regimes, which include Singapore, Korea, Australia and New Zealand. The chapter concludes that unless a compromise is worked out in ongoing trade agreements such as the TTIP and the RCEP (or the proposed Free Trade Area of the Asia-Pacific (FTAAP)),Footnote ²² the GI debate will worsen, and as it does, the casualties will be small and medium-developing countries and those whose trade agreements have obligated them to both regimes.

2 Mega-Regional Agreements

The European Union is a large region. Its policy on GIs is summarized above.Footnote ²³ In contrast, the TTP takes a trademark-centric approach. The TPP was signed on 4 February 2016,Footnote ²⁴ and, as noted above, it is unlikely to come into force. It does, however, provide a detailed example of United States’ GI trade policy and the text is not dead as it is being used in other trade negotiation forums, most notably RCEP. This part refers to the TPP text as it is public, and at the time of this writing the exact state of the RCEP negotiations in relation to the same text is not publicly known. The TPP required that the parties to it protect country names from misuse in a misleading manner.Footnote ²⁵ In addition, the text defined a GI as

This definition is substantively identical to the definition in the TRIPS Agreement and thus immediately flags that the TPP would have gone no further than the TRIPS Agreement in the extent of its protection of GIs.Footnote ²⁷ The TPP did, however, delineate a relationship between GIs and trademarks that the TRIPS Agreement does not. The part of the TPP dealing with GIs sets out what might broadly be described as the United States’ preferred approach. In particular, GIs may be protected through trademarks, a sui generis system or other legal means.Footnote ²⁸ Significantly, there was a requirement that ‘each Party shall also provide that signs that may serve as geographical indications are capable of protection under its trademark system’.Footnote ²⁹ This would have required parties to the TPP with sui generis GI regimes to ensure that the trademark regime provides the same protection. This was a significant gain for the United States, as under the TRIPS Agreement it is quite possible for parties to have a GI system that does not accommodate trademark registrations for protection within the same regime. The various EU GI systemsFootnote ³⁰ are a quintessential example of non-trademark-embracing GI systems. So while the TRIPS Agreement allows for the recognition of GIs in trademark regimes, the TPP required it.

The TPP also included several grounds for opposing the registration of GIs. These grounds included where the GI applied for causes confusion with a trademark which is the subject of an existing registration or even a pending application.Footnote ³¹ Significantly, GIs could be opposed when the GI is a ‘term customary in common language as the common name for the relevant good’, i.e., the name is generic.Footnote ³² The agreement included guidelines for determining what amounts to customary in the common language, in particular ‘how consumers understand the term’.Footnote ³³ Again, this approach was required under the TPP but is a permissible approach under the TRIPS Agreement.Footnote ³⁴ The United States’ potential gain in the TPP had the effect of standing in the way of the EU approach of clawing back generic names, because arguably any list of required names for clawback purposes in future agreements will be inconsistent with the TPP. Some parties to the TPP (and RCEP) have existing GI obligations with the European Union. There is potential for conflicting obligations among the various agreements and so these countries and others will have had to work out (and no doubt will also have to do so as disputes arise) which obligations apply. Australia has already agreed to some EU clawbacks.Footnote ³⁵ Vietnam has agreed to recognize and protect certain EU GIs.Footnote ³⁶ Singapore has agreed with the European Union to review whether the EU GI list should be registered in Singapore.Footnote ³⁷ Further, as one commentator notes, ‘by exporting the principle of co-existence between geographical indications and trade marks the EU is chipping away at regulatory diversity in the area of geographical indications’.Footnote ³⁸ That ‘chipping away’ will likely be harder, if not impossible, in some countries depending on what happens to the mega-regional trade agreements.

In order to have made the TPP compatible with other agreements, it attempted to set other trade agreements in a TPP-aligned framework. There was a general clause relevant to all of the TPP agreement and applicable to FTAs that bind at least two parties that provided that

The above article did not, however, deal with the significant overlaps with agreements made with one TPP party and a non-member of the TPP, such as the European Union. However, as noted above, the TPP parties (and RCEP parties) included several parties who have either existing agreements with the European Union (such as Singapore and Australia) or negotiations with the European Union (such as Canada) that include provisions about GIs. For GIs, there was an explicit regime to deal with the overlap of agreements between TTP parties and non-parties. The result of this was a somewhat complex two-page clause which in essence seeks to make contradictory and opposing approaches to GIs functionally compatible.Footnote ⁴⁰ The central rule was that

The remaining parts of this article explained how information must be provided and how other parts, relating to opposition and administrative procedures, should apply even to prior protected GIs. Under the terms of the TPP, parties must have made available procedures to oppose and review GI registrations. It also required that analogous procedures were applicable to GIs that precede the TPP, even where that GI protection arises under other agreements.Footnote ⁴² The details of procedures required are somewhat complex.

The irony of this complexity is that the TPP was supposed to make trade easier. The practical results of the relationship between the above-described provisions (and an array of additional side-letters relating to GIsFootnote ⁴³) remain to be tested.

To illustrate some of the complexity, consider an agreement made between South Korea and Australia. Australia was part of the TPP and South Korea is not yet a party.Footnote ⁴⁴ A side-letter to navigate the differences between Australia’s and the European Union’s approaches to GIs, when South Korea has agreements with both, provides that

As mentioned above, another mega-regional trade agreement of particular importance to the Asia Pacific region is RCEP.Footnote ⁴⁶ The general negotiation principles of RCEP state that

A purported working draft of the negotiations dated October 2014Footnote ⁴⁸ proposes protection of trademarks that pre-date GIsFootnote ⁴⁹ and more broadly provides that

As noted above, South Korea and Japan are reputed to have introduced equivalent proposals to those that are found in the TPP IP chapter as a possible model for negotiation in RCEP.Footnote ⁵¹

It is important to include in this group of trade agreements that have been negotiated after the TRIPS Agreement, the mega-economy bilaterals, particularly as these are significant in the GI debate. As noted above, the negotiations between the European Union and the United States in the TTIP are significant. If those trading blocs can reach a workable compromise, then much of the rest of the world may also be able to do so.

The Canada-EU Trade Agreement (CETA) negotiation shows a kind of complicated compromise.Footnote ⁵² In CETA, GIs are defined as

Notably, this definition explicitly excludes the application of GI rules to non-agricultural and foodstuff products, which the European Union extends some GIs to and proposes to extend GIs even further.Footnote ⁵⁴

The CETA text provides a general requirement for the protection of GIs that are listed in annexes to the agreement.Footnote ⁵⁵ The protection must still be provided even where the true origin of the product is indicated or when the GI is used in translation or accompanied by expressions such as kind, type, style and the like.Footnote ⁵⁶ The parties must also ‘determine the practical conditions under which the homonymous indications … will be differentiated from each other’.Footnote ⁵⁷

There are some detailed exceptions, including that Canada shall not be required to provide laws to prevent the use of some terms including asiago, feta, fontina, gorgonzola and Munster, when such terms are accompanied by expressions such as kind, type, style and imitation.Footnote ⁵⁸ The combination of names and terms, e.g. ‘feta style’, must be both legible and visible.Footnote ⁵⁹

Overall CETA is a well-developed – even if complex – compromise between the extremities of the GI debate. At one extreme of the debate is insistence on the necessity of a sui generis GI system and at the other extreme the view that only trademarks are appropriate and necessary. There is some considerable detail required to reach CETA’s compromise and these details accentuate some of the incompatibility of the approaches found in the other mega-regionals.

3 Policy Incompatibilities of Approaches to Geographical Indications in Trade Agreements

This section does not discuss the various technical differences between GI and trademark systems, but rather focuses on some of the policy incompatibilities that have arisen and arguably are becoming entrenched in the mega-regional framework. As a starting point, the extension of local success to the global arena raises questions about the normative basis for so doing and the consistency between local policy and globalization of that policy.

The origins and justifications for GIs, which are linked to local conditions such as the terroir,Footnote ⁶⁰ risk distortion when linked to other parts of the world through the global trading. The overall basis for the claim for greater global harmonization of GIs is to protect the products that are ‘genuinely’ GI-labelled, not just in the domestic market, but also in foreign markets. As noted above, it is in export markets (both existing and potential) that the European Union claims its GI products are unfairly imitated. Notably, however, there can be no claim over making equivalent products,Footnote ⁶¹ and the complaint is about applying the GI to them. While there are some notoriously bad products which draw on GI products and their names, there are plenty of high-quality products which compete with GI products, both nationally and internationally, but that have not used GIs to acquire a market share.Footnote ⁶² The GI approach assumes that such products may be better off with GIs, but that is not necessarily so.Footnote ⁶³ Moreover, until appropriate analysis of local conditions, including investment and infrastructure, is in place, such claims are mere assertions calculated to push the GI export agenda rather than to encourage quality local-made food.

A localized reputation (even if extensive) is not, however, the same as a globalized reputation and so the need for export protection for many GI products is not necessarily obvious to the importing markets. The ubiquitous example of champagne is exactly on point. The value of the GI is intimately connected to the geographical region as both product and production factors are dependent on features of the Champagne region.Footnote ⁶⁴ International protection, outside of the European Union, of champagne (and other GI products) occurs under various regimes. These include sui generis recognition of GIs on similar grounds to the European Union, clawback provisions in trade agreements that have made ‘ungeneric’ the genericFootnote ⁶⁵ and claims to distinctive reputation in the local market that can give rise to either a certification or collective trademark and in some jurisdictions grounds for action under a common-law doctrine such as passing off.Footnote ⁶⁶ The latter two approaches can include geographical and place-based arguments as relevant to reputation and consumer perceptions; however, neither trademarks nor passing off necessarily depends on any direct connection to place for any protection.Footnote ⁶⁷

One might even argue that calibrations of local law, which are framed and developed to meet local needs (that is exactly what GIs represent), are the antithesis of the case for globalization. The framework of IP that utilizes minimum standards and domestic discretion, including modes of implementation, within the minimum standards framework creates the mechanism through which the global is reflected in the local and vice versa. The question, in relation to GIs (and all IP), is how prescriptive should the minimum standards be and thus how much autonomy is left to local discretion and how much is governed by international rules. The greater the level of prescription at the international level, the less room for national discretion and the more likely that the international obligation will be based on models designed for the conditions of some, but not all, economies. This is the top-down approach (edging towards a one-size-fits-all approach), which the trade agreements, discussed in Section 1 of this chapter, exemplify. The TRIPS Agreement, on the other hand, leaves much GI detail to national autonomy. However, neither the European Union nor the United States are prepared to stop at the TRIPS Agreement minimum standards level of protection, but rather seek to globalize their own agendas.

The fundamental objection to too much global harmonization or inflexible rules is the risk that GIs, rather than protecting genuine culturally anchored outputs, function as barriers to trade. As the development of globalized IP rules has shown, particularly in other areas such as patents, globalized rights tend to favour incumbents over new entrants. So how much protection is enough protection? Put differently, what protection of GIs globally is a legitimate use of IP as a non-tariff trade barrier and what level of GI protection exceeds that level?Footnote ⁶⁸

Internationally, IP is protected in different jurisdictions on the basis that the promise of exclusivity can provide an incentive for innovation and creativity. There is much commentary about the effectiveness and ineffectiveness of incentives and in which arenas they work and when they do not.Footnote ⁶⁹ The argument that GIs can assist with rural development that is consistent with cultural and sustainable practices is a kind of incentive argument. The counterargument is that GIs can sometimes be used to disincentivize innovation because they require production processes to conform to rules that do not allow for innovative alterations.Footnote ⁷⁰ Neither representation of GIs is true all of the time, but both are true sometimes.

In most areas of IP, both incentivizing and disincentivizing goes on. Balancing these tensions is core to how the IP regime (and some quasi-property IP rules) functions. It is known that exclusivity restricts third-party users and, thus, IP rights block immediate follow-on innovation, but temporal restrictions justify the imposition of exclusive rights.Footnote ⁷¹ Trademarks and GIs are different because they do not have temporal restrictions (unless fees are not paid) and so their overreach can cause disincentivizing effects with no possibility of change. In trademark law, this takes the form of trademarks substituting for copyright (and in some jurisdictions, design) after expiry of the copyright.Footnote ⁷² With GIs, the danger is that the GI protects too much both in the jurisdiction of origin and in export markets. As far as export markets are concerned, the issue is whether GI protection in the export market really incentivizes local development that is consistent with cultural and sustainable practices. In the jurisdiction of origin, consider, for example, the quintessential example of a GI protecting a product created through local practice. If that protection is extended to protect the method of production, then, in fact, the GI is protecting know-how (as opposed to innovation). This know-how is an area that copyright and patent protection, in particular, are supposed to not cover.Footnote ⁷³ Copyright protects original works. Patents are granted for processes and products, provided they are inventions that are new, involve inventive step and are useful.Footnote ⁷⁴ There is a fine line between protecting these things and protecting know-how. The cumulative effect of both protecting the know-how of process and production methods through GIs, by extending the GI justification relating to the commodification of products, and requiring protection of GIs when they are used beyond their locality in export markets, means that GI protection is all encompassing. At that point, what is left? Where is the space for innovation in and around existing IP? Unless GIs are appropriately framed, they will become the latest mechanism for IP overreach.

The preference for property or property-style rules to govern IP is based on the proposition that property comes after (ex post) creation or innovation and so the potential grant of property rights incentivizes creativity and innovation. Put differently, IP rights are a goal to reach and a reward when that goal is reached.Footnote ⁷⁵ Subsidies are thought to do the opposite because they are ex ante to creativity and innovation. This is why the World Trade Organization (WTO) system allows subsidies to be challenged where they amount to trade barriers. The details of impermissible subsidies, for WTO members, are found in the WTO Subsidies and Counterveiling Measures Agreement (SCM).Footnote ⁷⁶ In that framework, the issues of particular interest to the relationship between IP and subsidies, is the rules around research subsidies. In the early stages of the SCM the rules allowed subsidies for research and development without questioning them (these were known as green light subsidies). The SCM contained a provision that later moved these ‘green light’ subsidies to amber status. This made such subsidies actionable, rather than permissible simply because they were connected to research.Footnote ⁷⁷ In other words, research subsidies could be challenged under the SCM rules.

When IP rights overprotect, they take on the economic characteristics of subsidies.Footnote ⁷⁸ Too many incentives can lead to a lack of innovation. When it is ‘raining carrots’,Footnote ⁷⁹ one hardly needs to pursue costly innovation if substantive reward can be obtained from the existing regime. Expanded GI protections in foreign markets for products that do not necessarily retain their initial reputation in those foreign markets are, therefore, arguably overprotected. If the rationale for GIs is protection of the local to generate rural development, then that rationale does not simply slip over into export markets. In the export market, the desirability of protecting the local may simply disappear if the local product cannot compete with exports. The local product may, however, be cheaper and as the GI product is a speciality good it is often higher priced. That price may be justified on the assumption, which is perpetrated by both producers and consumers, of better quality. Global GI rules do not require proof of quality and they should probably not be formulated to do so because the necessary administration and resources to retain such a system are very costly and totally impractical for many countries.

Irene Calboli argues that the connection between the GI and the terroir should be strictly enforced so as to maintain the proper scope of GI protection.Footnote ⁸⁰ In many ways, this argument is attractive because it is an attempt to decouple overprotection, for what she calls ‘market-strategies’, from deeply held place-based cultural claims. Further, there are numerous examples where local culture cannot sustain global markets and attempts to do so undermine local traditions and can create sustainability and development issues. These sorts of issues will vary from place to place, just as the effectiveness of GIs varies.

If Calboli’s argument is correct, then it is also an important reason why GIs are not often a good fit for traditional knowledge, especially where the claimants of traditional knowledge have been dispossessed of their land at one time or another or permanently, which is often the case with indigenous peoples.

I have argued elsewhere that the GI framework is not a good framework for protecting many aspects of traditional knowledge.Footnote ⁸¹ The argument is multifaceted, but in essence rejects the similarities between GIs and claims to traditional knowledge (collective nature of ownership and possibility of indefinite protection) as for the most part superficial similarities. GIs enable the commodification of tradition, and claims for protection of traditional knowledge are often not about commodification.Footnote ⁸² In addition, the resources that are needed for the development of communities seeking traditional knowledge protection will not be achieved through having to pay for the costs of a GI framework and registration without investment in real development and infrastructure.Footnote ⁸³

That said, there is a similarity between what might be an appropriate GI framework of minimum standards and the appropriate framework for protecting traditional knowledge. If both frameworks are aligned with their normative underpinnings, which ought to be primarily about local communities, then any global minimum standards of protection should enable some considerable flexibility in implementation. This flexibility allows for appropriately calibrated domestic application based on local needs and rural development. Such drivers of GI policy are unlikely to be realized by detailed harmonized norms, but through a framework of minimum standards. The same case for a pluralistic approach to traditional knowledge can be made. To be clear, however, the appropriate framework for traditional knowledge is not the GI commoditization framework, but the similarity may be that pluralistic approaches need to be incorporated into the respective legal frameworks if the systems remain true to their normative drivers.Footnote ⁸⁴

It is important to remember that GIs, as intangible IP rights, are separate legal entities from the goods to which they attach. Using IP analogies, extensive GI protection has a parallel to some aspects of well-known trademarks. Well-known trademarks receive significant worldwide protection.Footnote ⁸⁵ Small- and medium-sized businesses cannot hope for this level of protection globally and often this means the businesses of small and medium countries cannot rival large economies on the international stage. Well-known GIs are not those of small- and medium-sized businesses either.

If the normative underpinning of GIs is the drive for local culture and sustainability, then that alone does not obviously require global rules. In fact, such aims may be more achievable without global rules. To the extent that minimum standards in GIs around the globe can be sufficiently broad to allow for local differences, such as the CETA compromise discussed above, the regime may work. The normative basis for harmonized rules is, however, somewhat hazy outside of the need to strike a trade deal. It may, therefore, be that not only are the multifaceted approaches to GIs well and truly here to stay; they may have to learn to function better together and support both legal and cultural diversity.

4 Trading in Both the EU and the US Geographical Indications Regimes

As noted in Section 1 of this chapter, there are several countries with trade agreements, with both the European Union and the United States, that purport to operate (one might say with prodigious care) under both trade regimes and other countries that are poised to do so. Carefully calibrated local laws might be able to meet the demands of both frameworks, but as noted above, such approaches are complex, expensive and require legal ingenuity and perhaps even fictions on some occasions.

Trade agreements are not only about GIs (or IP rights); they are also about goods and often include considerable negotiation, even if not resolution, about dairy products and the reduction of subsidies and market access. The European Union uses GIs to protect dairy products whereas the United States, Australia and New Zealand for the most part do not. That is not to suggest that other IP rights such as trademarks do not play an extensive role in the dairy sector. They most certainly do, and dairy products are one of the most contentious sectors in the international GI debate.

To illustrate further the problem of complex overlaps and potential incompatibilities of GI provisions in trade agreements, consider the following. New Zealand exports not only dairy products but also commodities used in dairy products such as milk. Imagine a product made in Australia and called ‘parmesan’ (and trademarked with other names) that includes New Zealand milk products. That product is made by an Australian company with New Zealand owners and is marketed under a label that alludes to Italian culture. It does not use the protected GI (or certification trademark in Australia and New Zealand) ‘Parmigiano-Reggiano’. Instead, the packaging utilizes techniques to suggest ‘Italian style’, such as green and red colouring. Under Australia’s and/or New Zealand’s trade agreements with Singapore (and other countries) that product has market access to Singapore. Under some trade agreement rules, such a product uses what is described as a common name (which is not recognized as a GI) and the mere use of colour does not give rise to protectable rights. It is arguable that this use of ‘geography’ could raise a GI issue in countries that have GI regimes. For the avoidance of doubt, it is not clear that Singapore’s GI regime will allow such concerns to be raised in a dispute, but it may. Another point of the example is to show that when Singapore (and other countries in analogous positions) agreed to create a sui generis GI regime with the European Union, it already had trade and market access obligations in relation to goods that it had to take into account and will have to continue to take into account when implementing and enforcing its GI regime.

In relation to GIs alone, the need to take into account existing trade agreements is evident in the text of the US-Singapore and EU-Singapore trade agreements.Footnote ⁸⁶ The agreement with the United States embodies a first-in-time-first-in-right principle.Footnote ⁸⁷ The later EU-Singapore agreement provides, therefore, that a GI that conflicts with a prior existing trademark in Singapore is capable of being registered only with the existing consent of the trademark holder.Footnote ⁸⁸ Whatever can be said about the ingenuity of Singaporeans to try to navigate the conflicting interests of its trading partners, such a complex regime requires extensive legal knowledge and resources, which will not be a solution available to many countries, and particularly developing countries.

This sort of balancing of interests is precisely why the CETA rules look as detailed as they do, but it is not at all clear that Singapore’s rules or indeed those in CETA and potential regimes, like the text of the TPP, are compatible. At a high level, they may appear to be so, but that remains to be tested. It is difficult to see how countries that have signed up to several regimes can easily make their obligations compatible.

5 Conclusion

On a case-by-case basis, incompatibilities in GI frameworks may be ironed out if and when disputes are resolved. The tug of war between the European Union and the United States to control the international GI framework is, however, costing other trading nations too much in the negotiation and implementation process. The complex hybridized systems are imposed via top-down models rather than generated locally on a fit-for-purpose basis.

Incumbents of the GI system seek international harmonization rather than any flexible minimum standards that would allow various cultures to calibrate and adjust their laws according to local needs. At the same time, the major opponent of the GI system, the United States, seeks its version of trade-mark requirements as a way to ‘correct’ EU policy. Neither approach is satisfactory. In both scenarios, the only likely winners are those whose products are well known.

1 Introduction

Under European Union (EU) law, geographical indications (GIs) are protected under three guises: the protected GIs (PGI), the protected designations of origin (PDOs), and the traditional specialities guaranteed (TSGs). For the EU, the protection of its GIs in and outside of Europe is a very relevant economic issue, as the value of GI products in 2010 was estimated at €54.3 billion, of which the sale of wines accounts for more than half.Footnote ¹ It is no surprise that the EU is vigorously trying to obtain protection for its GIs in major trade partner nations. However, in the context of the World Trade Organization (WTO), New World nations, most notably the North Americas, Australia and New Zealand, have consistently rejected the notion of a multilateral register for GIs that is dominated by European claims. Thus, it comes as no surprise then that in the context of the WTO negotiation mandate contained in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)Footnote ² under Article 23,Footnote ³ no significant progress has been made or can be expected in the near future.

As a result of this stalemate at the multilateral level, the strategy of the EU has been to place the protection of GIs at the heart of its intellectual property (IP) chapters in bilateral trade and investment agreements (BTIAs). In particular, Article 3(1)(e) of the Treaty on the Functioning of the European Union (TFEU)Footnote ⁴ provides the EU with the exclusive competence to deal with common commercial policy.Footnote ⁵ According to Article 207(1) of the TFEU,Footnote ⁶ this includes commercial aspects of IP. Not surprisingly, the number of EU BTIAs is quickly growing and the EU-South KoreaFootnote ⁷ and EU-SingaporeFootnote ⁸ Free Trade Agreements (FTAs), the recent Canada-EU Trade Agreement (CETA)Footnote ⁹ and the EU-Vietnam Trade AgreementFootnote ¹⁰ all contain annexes listing the GIs that are to be protected in the partner countries as part of the trade deal.

The nature of BTIAs, however, is that these are mixed agreements dealing with issues of tariffs and trade, but also with investment protection and, increasingly, investor–state dispute settlement (ISDS). In the context of the ongoing negotiations ISDS has become a highly controversial issue, including in the negotiation surrounding the Transatlantic Trade and Investment Partnership Agreement (TTIP).Footnote ¹¹ The controversy lies in the fact that the policy freedom of a signatory state to an agreement containing ISDS may become limited on account of investor expectations that have to be honoured. The controversy is remarkable to the extent that ISDS has been a prominent feature in international trade and investment frameworks since the mid-1970s. In fact, the proliferation of ISDS in bilateral agreements is so widespread and affects so many trading nations globallyFootnote ¹² that it is almost surprising that relatively few cases have been brought so far claiming violations under these provisions. Also regional trade agreements like the North American FTA (NAFTA)Footnote ¹³ and the Trans-Pacific Partnership Agreement (TPP)Footnote ¹⁴ contain ISDS clauses.

However, the concept of ISDS is relatively new in the field of IP. This is due to the fact that IP only became a global trade issue relatively recently through the integration of IP standards and IP enforcement in the WTO framework. That said, IP is also peculiar in the sense that the valuation of IP as an object of property that can be viewed as an investment is also a relatively new concept. Even now, various approaches to valuation according to income-based, market-based and review of cost-based approaches, coupled with diverging reporting standards, yield different results.Footnote ¹⁵ Still, the number of ISDS complaints is rising and the first cases involving core issues of IP expropriation are currently pending.

Of all IP rights, the EU regime on the protection of GIs invites a substantial involvement of public authority in defining GI specifications, as well as the quality maintenance thereof. This means that any change in the specification may give rise to an investor–state dispute. This chapter charts the likelihood that GIs may become a bone of contention under constitutional expropriation protection laws, WTO disputes and ISDS, and concludes that given the nature of GI protection’s inclusion of specifications, there is a higher state involvement, and accordingly, a higher likelihood that measures negatively affecting a GI proprietor’s rights can be attributed to a state.

2 Geographical Indications and Specifications in the European Union

The EU PGI, PDO and TSG schemes operate on the basis of registration in the Database of Origin and Registration (DOOR).Footnote ¹⁶ There are also product-specific regimes and databases, such as the E-BACCHUSFootnote ¹⁷ for wines and E-SPIRIT DRINKSFootnote ¹⁸ for spirits. EU law also protects GIs for aromatized wine products.Footnote ¹⁹ Generally, EU law applies to products originating from EU Member States and third countries that comply with EU rules. Alongside the existing public registries, there are several certification schemes for agricultural products and foodstuffs in the EU. These range from compliance obligations with compulsory production standards to additional voluntary requirements relating to environmental protection, animal welfare, organoleptic qualities, etc. Also, all kinds of ‘fair trade’ or ‘slave free’ epithets fall within these voluntary regimes. All these regimes should, however, be in compliance with the ‘EU best practice guidelines for voluntary certification schemes for agricultural products and foodstuffs’,Footnote ²⁰ in order to be in compliance with EU law.

In 2005, the United States (the US) and Australia successfully challenged the legitimacy of EC Regulation 2081/92Footnote ²¹ on GIs for agricultural products and foodstuffs, which was the regulation in force at the time, before the WTO. The regulation contained a number of contentious provisions, namely on (1) the equivalence and reciprocity conditions in respect of GI protection; (2) procedures requiring non-EU nationals, or persons resident or established in non-EU countries, to file an application or objection in the European Communities through their own government, but not directly with EU Member States; and (3) a requirement on third-country governments to provide a declaration that structures were in place on their territory enabling the inspection of compliance with the specifications of the GI registration. On all three points, the WTO PanelFootnote ²² found violations of Article 3(1) of TRIPSFootnote ²³ and Article III(4) of the General Agreement on Tariffs and Trade 1994 (GATT),Footnote ²⁴ and that the GATT violations were not justified by Article XX(d) of GATT.Footnote ²⁵ In the Australian Report, the WTO Panel further found that these inspection structures did not constitute a ‘technical regulation’ within the meaning of the Agreement on Technical Barriers to Trade (TBT).Footnote ²⁶ As a result, the EU changed its regime in March 2006 to ensure compliance with the WTO regime, currently primarily through the Foodstuffs Regulation,Footnote ²⁷ and corresponding provisions in the other Regulations.Footnote ²⁸ The scope or protection extends to consumer deception;Footnote ²⁹ commercial use in comparable products;Footnote ³⁰ commercial use exploiting reputation;Footnote ³¹ and misuse, imitation or evocationFootnote ³² in relation to the registered GI. The enforcement of a GI is, however, a private law issue.

More interesting, for the purpose of this chapter, however, is the product specification – its establishment, inspection and enforcement – as this requires the involvement of public authority. The definition of the product according to precise specifications and its analysis by national authorities is a process integral to the registration of the GI at the EU level.

Figure 7.1

Source: European Commission, http://ec.europa.eu/agriculture/quality/schemes/index_en.htm

The definition of the product comprises the following elements: the product name, applicant details, product class, the name of the product, the description of the product, a definition of the geographical area, proof of the product’s origin, a description of the method of production, the linkage between the product and the area, the nomination of an inspection body and labelling information.Footnote ³³ For PDOs, all production steps must take place within the geographical area, whereas for PGIs at least one production step must take place within the geographical area. It is also at this point where specific rules concerning slicing, grating, packaging and the like of the product to which the registered name refers may be stated and justified. Given the fact that these types of conditions on repackaging or slicing result in geographical restrictions having strong protectionist and anticompetitive effects, they are among the most controversial specifications.

In 1997, the Consorzio del Prosciutto di Parma,Footnote ³⁴ the Italian trade association of 200 traditional producers of Parma Ham, sought injunctions against Asda Stores in the United Kingdom to restrain them from selling pre-sliced packets of prosciutto as ‘Parma Ham’, a protected PDO. The ham was sliced by a supplier of Asda outside the production region, and pre-packaged without supervision by the inspection body responsible for enforcing EU production regulations. The slicing of the ham itself cannot be problematic as such,Footnote ³⁵ but the question is whether slicing the ham away from the consumer’s eyes and offering them as a pre-packaged product not bearing the Consorzio’s mark would be infringing upon the PDO. The Consorzio’s argument was that the consumer could not verify the origin, and the quality of the ham could not be guaranteed. The Court of Justice of the European Union (CJEUFootnote ³⁶) heldFootnote ³⁷ that protection conferred by a PDO did not normally extend to operations such as grating, slicing and packaging the product. The CJEU, however, stated that those operations were prohibited to third parties outside the region of production only if they were expressly laid down in the specification, and if this condition was brought to the attention of economic operators by adequate publicity in Community legislation. The latter was not yet the case under the old regime.Footnote ³⁸ Under Article 8.2Footnote ³⁹ of Regulation 1151/2012, the product specification is now to be included in the single document that is contained in the DOOR register, and the Consorzio can now enforce its slicing and packaging rules.

The specification also contains the names of the inspection bodies responsible for enforcing EU production regulations.Footnote ⁴⁰ In each Member State, public authorities or government agencies are entrusted with this task. When it comes to defining or redefining the specification, however, quite a lot of state involvement can be observed. A case on point is the enlargement in 2009, actively supported by the Italian government, of the area of production for ‘Italian Prosecco’.Footnote ⁴¹ The production of this sparkling wine has been traditionally confined to the Veneto Region around Venice, but it was suddenly ‘strategically’ expanded to include the town of Prosecco, which is located in the Friuli-Venezia Giulia Region near Trieste and the Slovenian border. This is the place where the Prosecco grape variety is believed to have originated from. Yet, upon accession to the EU in 2013, Croatia found that its sweet Prošek dessert wine, which is different from Italian Prosecco in all aspects of methods of production and grapes used, could no longer coexist in the EU with Italian Prosecco.Footnote ⁴²

In short, GIs are peculiar in the sense that they constitute a type of IP right where a lot of state involvement can be observed, especially in the drafting, maintenance and alteration of the GI’s specification. This may lead to the consortium of GI producers, or the (semi-)state authority itself to alter a GI specification after the GI has been registered. As a consequence, this may give rise to investor–state disputes by private parties that may consider themselves affected by these changes or the recognition of GIs in general (in that they may no longer be able to market their products under the same or similar names), since many of these measures leading to the definition of the GI’s specification can be directly or indirectly attributed to the state.

3 Geographical Indications as Property

Like other IP rights, GIs are protected as proprietary interests. This becomes apparent from the WTO Panel report in EC – Trademarks and Geographical Indications,Footnote ⁴³ but even more so in the context of the European Convention on Human Rights (ECHR).

In the case of Anheuser-Busch v. Portugal, the European Court of Human Rights (ECtHR) held that the protection provided for by Article 1 of the Protocol No.1 to the ECHR,Footnote ⁴⁴ which guarantees the right to property,Footnote ⁴⁵ is applicable to IP as such.Footnote ⁴⁶ This means that the owner of an intellectual ‘possession’ is protected in respect of (1) the peaceful enjoyment of property; (2) deprivation of possessions and the conditions thereto; and (3) the control of the use of property by the state in accordance with general interest. Inherent in the convention is the recognition that a fair balance needs to be struck between the demands of the general interests of society and the requirements of the protection of the individual’s fundamental rights.Footnote ⁴⁷

Since 2000 the EU Charter on the Protection of Fundamental Human RightsFootnote ⁴⁸ recognized similar principles that EU citizens can rely on. In Scarlet Extended v. Sabam,Footnote ⁴⁹ the CJEU held:

Opinions on how this balance should be struck, however, naturally differ, depending on one’s perspective. In a European case, British American Tobacco,Footnote ⁵⁰ involving challenges to restrictions on advertising, branding and trademark communication in relation to tobacco products, the CJEU held that restrictions on trademark use requiring labels to display health warnings by taking up 30 per cent of the front and 40 per cent of the back of a cigarette packageFootnote ⁵¹ amount to a legitimate restriction that still allows for a normal use of the trademark. The tobacco companies had argued that there is a de facto expropriation of their property in the trademark. A similar argument was made in the well-publicized constitutional challenge case to the Australian Tobacco Plain Packaging Act 2011.Footnote ⁵² The High Court of Australia in BAT v. Commonwealth of AustraliaFootnote ⁵³ held that there was no acquisition of property that would have required so-called ‘just terms’ protection under the Australian constitution. Yet it is the Australian Tobacco Plain Packaging Act 2011 that has also produced two WTO challenges to tobacco plain packaging, by UkraineFootnote ⁵⁴ and by a number of other states.Footnote ⁵⁵ Although Ukraine suspended its proceedings on 28 May 2015, the litigation by Honduras, Cuba, Indonesia and the Dominican Republic remains unaffected. Plain packaging also sparked investor–state disputes.Footnote ⁵⁶ These cases raise questions on the remaining policy freedom that nation states have in regulating the use or exercise of IP in light of societal interests, such as public health, in the context of multilateral and bilateral trade agreements, and investment protection agreements.

4 Investor–State Dispute Settlement and WTO Law

Bilateral free trade and investment agreements may provide additional protection to investors in relation to their investments that are then considered to be ‘possessions’ in the state where such investments have been made. The question is then to what extent protection granted by means of bilateral agreements changes the legal relations between WTO Members. Although the annexes to EU BTIAs list GIs that are to be protected under the agreement,Footnote ⁵⁷ it remains to be examined what their effect under the WTO Dispute Settlement Understanding (DSU) is.

The WTO Appellate Body, in Mexico – Taxes on Soft Drinks,Footnote ⁵⁸ rejected the notion that parties can modify WTO obligations by means of an FTA, whereas the WTO Panel in Peru – Additional DutyFootnote ⁵⁹ was not so categorically opposed. In the latter case, there are numerous references to Peru’s freedom to maintain a price range system (PRS) under an FTA with complainant Guatemala. The WTO Panel, however, observed that the FTA in question was not yet in force, and that its provisions should therefore have limited legal effects on the dispute at hand. Peru’s arguments in respect of the FTA were that, even assuming that Peru’s PRS was WTO-inconsistent, Peru and Guatemala had modified between themselves the relevant WTO provisions to the extent that the FTA allowed Peru to maintain the PRS. Upon appeal, the Appellate Body stated:

However, it also considered that WTO Members cannot modify WTO provisions such that these become WTO-inconsistent, even if these changes ‘merely’ operate bilaterally inter partes and not amongst all WTO Members. In particular, the Appellate Body held:

In the case at hand, this means that Peru under the FTA is only allowed to maintain a WTO-consistent PRS, which should meet the requirements of Article XXIVFootnote ⁶² of the GATT 1994, which permits certain specific deviations from WTO rules. All such departures require that the level of duties and other regulations of commerce applicable in each of the FTA members to the trade of non-FTA members shall not be higher or more restrictive than those applicable prior to the formation of the FTA.Footnote ⁶³

In Turkey – Textiles,Footnote ⁶⁴ the Appellate Body held that the justification for measures that are inconsistent with certain GATT 1994 provisions requires the party claiming the benefit of the defence provided for by Article XXIV GATT 1994 lies in closer integration between the economies of the countries party to such an agreement. It is clear that Peru’s PRS measure cannot be interpreted as a measure fostering closer integration; rather, it results in the opposite. The GI ‘claw-back’ annexes to EU BTIAs can arguably be held to contain obligations that approximate the economies of the parties to the agreement, providing the holder of such a GI legal certainty not only as to the protection and enforcement of the GI but also as to the protection of an ‘investment’ in terms of production and marketing of a GI product.

The WTO Dispute Settlement Body has meanwhile established dispute settlement panels in relation to Australia’s tobacco plain packaging measure. GIs are part of the property package on which the claim is based. The five complainants are arguing that the measure is inconsistent with Australia’s WTO obligations under TRIPS,Footnote ⁶⁵ TBTFootnote ⁶⁶ and the GATT 1994.Footnote ⁶⁷ In respect of trademarks and GIs, the claim is that restrictions on their use amount to an expropriation of property. There is only one caveat that will be of relevance to a decision in these casesFootnote ⁶⁸ in the context of TRIPS, and that is that in EC – Geographical Indications, the panel held:

5 Investor–State Dispute Settlement and Geographical Indications

The ISDS case of Philip Morris Asia v. AustraliaFootnote ⁷⁰ shows that investor–state disputes can be brought in support of, or as an alternative to, constitutional and WTO challenges. In this case, Philip Morris Asia challenged the tobacco plain packaging legislation under the 1993 Agreement between the Government of Australia and the Government of Hong Kong for the Promotion and Protection of Investments. The arbitration was conducted under the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules 2010.Footnote ⁷¹ In a decision of 18 December 2015, the Tribunal hearing the case ruled that it had no jurisdiction to hear Philip Morris Asia’s claim.

However, it is important to realize that the proliferation of ISDS clauses in bilateral trade agreements is increasing. Investor–state dispute settlement revolves around the question of whether expropriation, directly or indirectly, has been conducted according to the principles of Fair and Equitable Treatment (FET). FET is determined through applying principles of (1) reasonableness, (2) consistency, (3) non-discrimination, (4) transparency and (5) due process. In this context, the legitimate expectations of an investor are taken into consideration in order to assess whether the state has expropriated in bad faith, through coercion, by means of threats or harassment. Due to the fact that there is no true harmonized multilateral dispute settlement system in relation to investment disputes, the interpretation and application of these principles are not uniform. Due to the confidential nature of arbitration, not all arbitration reports are public. The most concrete expressions of what legitimate investor expectations are can be found in statements made in published cases that seem to indicate that a balance must be struck.

For example, in International Thunderbird v. Mexico,Footnote ⁷² a NAFTA dispute conducted under UNCITRAL Arbitration Rules, the panel held:

Conversely, in Saluka v. Czech Republic,Footnote ⁷⁴ an investor–state dispute also conducted under UNCITRAL Arbitration Rules, the panel held:

There are few ISDS cases involving IP.Footnote ⁷⁶ These are cases that have been argued under the rules of the International Centre for Settlement of Investment Disputes (ICSID), which is an independent branch of the World Bank.

First, there was a failed attempt at arguing a trademark infringement case under investor–state dispute settlement in AHS v. Niger.Footnote ⁷⁷ In this case, although a concession to service Niger’s national airport had been terminated, there was continued use of seized equipment and uniforms bearing the trademarks of the complainant. The panel held that it had no jurisdiction, as IP enforcement is a civil matter that cannot be raised in the context of the ISDS expropriation complaint.

Second, there is the ongoing case of Philip Morris v. UruguayFootnote ⁷⁸ that is argued under the Uruguay-Switzerland FTA,Footnote ⁷⁹ and where the legitimacy of plain packaging tobacco products is challenged. In this case jurisdiction has been established and proceedings on the merits are to follow.

Third, there is a NAFTAFootnote ⁸⁰ case argued under UNCITRAL Arbitration Rules. In Eli Lilly v. Canada,Footnote ⁸¹ pharmaceutical company Eli Lilly sought damages for $100 million CAD and challenged changes to the patentability requirements in respect of utility or industrial applicability, leading the Canadian patent office to invalidate two of Eli Lilly’s patents for the Strattera attention-deficit disorder pill and the Zyprexa antipsychotic treatment. Eli Lilly argued that the interpretation of the term ‘useful’ in the Canadian Patent Act by the Canadian courts led to an unjustified expropriation and a violation of Canada’s obligations under NAFTA on the basis that it is arbitrary and discriminatory. Canada conversely argued that Eli Lilly’s claims were beyond the jurisdiction of the Tribunal. Ultimately, in March 2017, the Tribunal dismissed Eli Lilly’s claims and confirmed that Canada was in compliance with its NAFTA obligations.Footnote ⁸²

Cases involving IP can be and are clearly brought if measures negatively impacting upon the ‘investment’ can be attributed to a state that has submitted to ISDS. Issues such as IP enforcement or thresholds for patentability as such appear to be outside of the remit of ISDS, as these are civil or administrative matters where access to judicial review is usually provided. However, complaints over (arbitrary or discriminatory) denial of justice may not be. In the cases described above, one can argue that the general measures taken are neither of an arbitrary nor discriminatory nature. GI specifications, on the other hand, are discriminatory by nature since they are always specifically targeted, and this characteristic exceeds the already exclusionary nature of an IP right. This is because, as we have seen, the definition of the product comprises not only the product name and related labelling but also the description of the product, a definition of the geographical area, proof of the product’s origin, a description of the method of production, the linkage between the product and the area, the nomination of an inspection body empowered to police the specification.

This means that there are a number of actions that may have an immediate impact, not only on the existence and exercise of a GI, but also on its value and costs. The example of the Italian Prosecco DOC reformFootnote ⁸³ comes to mind, as an enlargement of the geographical area, but also a possible reduction thereof has immediate effects for producers within and outside of the area. Production methods may also be subject to changes. Changes to production requirements resulting from a raise in food safety standards may be legitimized within the context of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS).Footnote ⁸⁴ Many of the GI production requirements are, however, steeped in a tradition and culture that solicit the demand for a particular product. If one, for example, orders Limburg Grotto Cheese,Footnote ⁸⁵ one expects the cheese to have been ripened through completely natural processes by exposure of the cheese to the atmosphere of a limestone cave that contains the Brevibacterium Linens that produces a cheese with a pungent odour. The cheeses ripen on oak wooden boards and need to be turned regularly. This is a delicate operation as the fungi growing on the cheeses are poisonous. The result of food safety standards (no oak, stainless steel racks, etc.) has been that the traditional production for the traditional connoisseur consumer has now moved literally and figuratively underground. As a result, only the more industrial producers remain around to sell a product that is compliant with legal standards. They are selling a product that may be safer (although this is often disputed) but is certainly far less traditional than the consumer is led to believe. Phasing-out rules concerning slicing, grating, packaging, etc. stem from a desire to free the market from anticompetitive restrictions, but arguably these could also be measures that have a negative impact on the investments made by producers benefitting from GI specifications containing such rules. These forms of proprietary protection of GIs via individual regulations are also open to non-European entities, as we have seen above. So, a US association that holds an EU GI, such as the Idaho Potato Commission,Footnote ⁸⁶ could then also sue before the special ISDS courts envisaged under the TTIPFootnote ⁸⁷ for a weakening or strengthening of protection standards in Europe. In most cases, after all, the measure can be attributed to the state, and despite attempts by EU Member States to deny private parties the right to invoke international treaties, the CJEU has affirmed the direct effect of international treaties that bind the EU.Footnote ⁸⁸

6 Conclusion

More than any other IP, a GI displays a very high level of state involvement in relation to specifications that do not directly concern the exercise of the IP right in terms of protection against consumer confusion and the like, but that very much influences the value of the GI for its owner. Definitions of territory, methods of production, sanitary and phytosanitary standards, and other more nefarious rules concerning slicing, grating, packaging, etc. can be changed at the behest of members of the consortium, but also of (semi-)state authorities or agencies. Insofar as these lead to a negative impact on members of the consortium, or third parties, there appears to be an increase in the options to challenge such measures under domestic constitutional and WTO rules, or bilateral and regional trade and investment agreements containing ISDS. These ISDS clauses are commonly included in recent US and EU trade and investment agreements, also those with Asian partners. To date, only a limited number of such cases that have been brought involve IP rights. The likelihood of success appears limited, but several key cases are still pending. In ISDS complaints over IP enforcement, tribunals seem hesitant to accept jurisdiction over these cases. In the plain packaging tobacco cases, the question will be the extent to which WTO Members have policy freedom in articulating exceptions to WTO obligations.

EU GI specifications are very targeted and individual in nature, so that any measure affecting them may be considered arbitrary or discriminatory much more easily as compared to general policy measures affecting the use, grant or scope of a trademark, design, copyright or patent right. Furthermore, many specifications are rooted in culture and custom rather than in science and utility, which raises the chances of a dispute over arbitrariness and discrimination in standards imposed when determining issues of culture and custom. Finally, measures affecting GI specifications are often attributable to a public authority or agency. This combination increases the likelihood of success of claims for protection of GIs as property and investments. If, for example, an EU company takes over (i.e., invests) a business located in Vietnam or Korea that is involved in the production of a GI product, and the Vietnamese or Korean authority redefines the geographical area in such a way that the EU company can no longer use that GI, this could give rise to an ISDS case. The same could be true for a US company making investments in Asian jurisdictions. This should be taken into consideration when drafting or changing GI product specifications.

1 Introduction and Structure

Asian countries are discovering geographical indications (GIs).Footnote ¹ There are two reasons for this. First, the recognition that GIs can serve as an advantageous identifier for the marketing of domestic products abroad. Second, a system for the protection of GIs has become an obligation under bilateral and multilateral agreements. The question of how GIs from Asia can be protected abroad thereby becomes of interest. This chapter analyses how Asian GIs would fare in Europe.Footnote ² ‘Would’, because as of yet there is very little actual experience in this respect. Very few GIs from Asia have been registered in Europe, be it as GIs or trademarks, and even fewer have been litigated. The examples used in this chapter demonstrate how ‘foreign’ GIs can, did or did not find protection in Europe, either at the level of European Community law or the domestic laws of individual European Union (EU) Member States.

This chapter is divided into four sections. Section 2 gives a brief overview of the interplay between social, economic and legal considerations when approaching the topic of protecting domestic GIs abroad. Section 3 discusses the possibilities for Asian GIs to obtain protection in Europe, be it under the sui generis protection offered by EU law or on the basis of bilateral or international agreements. Section 4 discusses protection under EU trademark law in different contexts: protection against registration of geographical names by third parties, protection based on trademark registration, protection based on the registration of a collective mark and protection once a trademark has received well-known status. Section 5 discusses non-proprietary protection in the context of unfair competition prevention law, namely as a guarantee of the ‘freedom to operate’ and market access.

2 Geographical Indications at the Crossroads of Culture, Law and Economy

Try to discuss GIs in a country with a strong heritage in food and beverages such as Italy, and tempers flare. Most consider it a huge injustice that Americans sell ‘Parmesan’ cheese that does not originate from Italy (and often tastes like grated wood), but would readily admit that neither ‘Parmesan’ nor ‘Parmigiano’ are protected indications in Italy itself (only Parmigiano Reggiano is). ‘Tokaj’ and ‘Prosecco’ are considered local indications by most Italians, yet few know or acknowledge that the fame of Tokaj is based on Hungarian Tokaj being sold to the Tsars of Russia, and even fewer know that ‘Prosecco’ is a place (let alone where it is on a map).Footnote ³ If they did, they would discover that this little village up the Karst region of Triest belonged to the Habsburg monarchy for almost 600 years, and the fame of the sparkling wine owes more to the Austrian Empire than to Italy. Particularly when it comes to national heritage and history, there is often a mismatch between local and global perception, and GIs are no exception. While for many, ‘Pilsener’ beer comes from Pilsen, ‘Budweiser’ beer from Budweis (Ceske Budejovice) and Bavarian beer from Bavaria, others take the view that ‘Pilsen’ is generic, ‘Budweiser’ comes from Anheuser Busch and Bavarian beer may come from Bavaria, or is generic, or may come from the Dutch brewery ‘Bavaria’. The same issues are discussed in the Asia-Pacific region. Australians strongly feel that ‘Ugg’ boots are Australian; Indians insist that ‘Basmati’ rice must originate from India (or, maybe, from Pakistan); and Thais feel the same about ‘Jasmine’ rice, while for many European consumers, these indications sound just as generic as Afghan dogs, bone China or Singapore Sling. Things are not helped by the fact that well-reputed indications often face an erosion from piggybackers: ‘Kobe beef’ produced in the United States and Australia is an example.Footnote ⁴

All this of course also has financial implications. Particularly, the European Union makes mantra-like claims about the financial benefits that GIs bring to producers (and paid for by consumers, of course).Footnote ⁵ Whether the figures are correct or inflated, it is certainly true that business identifiers through proper marketing can turn into extremely valuable brands and premium prices for products. ‘Champagne’ may be the most prominent example, but also the recognition of ‘Café de Colombia’, a relatively recent indication, should not be underestimated.Footnote ⁶

The question is then how and to what extent the cultural and financial interests in GIs can be safeguarded and enforced by legal means. In this respect, one should distinguish three different levels of legal protection. First, the freedom to operate; second, non-proprietary protection of an indication based on the principles of unfair competition (that is, protection against misleading use); and, third, proprietary protection based on registration, against the use of the indication for either similar or, at the highest level of protection, dissimilar goods.

The freedom to operate is normally guaranteed where the marketing of goods under an indication does not infringe third-party rights and is not considered misleading. Third-party rights may become an issue either where the GI in question has been registered by someone else (rare but possible, e.g., where two countries use the same indication, such as Ginseng in North and South Korea) or, more common, where conflicting trademark rights exist. The latter has been a particularly contentious issue in trade negotiations (see Section 3). Although unlikely, it may be that in accordance with local consumer perception even a true GI is considered misleading, e.g., where two different locations sharing the same name produce similar goods. Wines from ‘Cordoba’ could originate in Argentina or Spain.

The freedom to operate guarantees market access but does not allow the exclusion of others. In case the indication is considered generic, proprietary protection may not be available at all, nor would an action for misleading use succeed (e.g., ‘Pilsener beer’ would be considered generic in most countries). In order to avoid such genericide, significant efforts and investment are often necessary so as to prevent generic use. The example of ‘Greek Yoghurt’Footnote ⁷ demonstrates that this is possible, and producers of Basmati rice, Jasmine rice or Kobe beef may well consider a proactive enforcement strategy in Europe. Different from the laws on trademarks and GIs, remedies under unfair competition law can only be obtained at a national level based on domestic consumer perception. Such course of action may be the only avenue where the indication in question cannot be protected in its home country (as was the case for Greek Yoghurt).

3 The Framework of Geographical Indications Protection in Europe

4 Geographical Indications and European TradeMark Law

In contrast to GIs that confer a geographical origin, trademarks confer a commercial origin of an enterprise. The registration of names considered to indicate a geographical origin as a trademark should thus not be possible where such mark would be considered descriptive (of the geographical origin of the goods for which the mark is registered or applied) or misleading (as to its geographical origin). Such a bar to registration is also an important safeguard for all those using the name as an indication of geographical origin, and thus in a descriptive manner. Still, registrations of geographical names have been allowed in Europe either for goods or services different from those for which the geographical name is known (‘Darjeeling lingerie’, as elaborated below), in cases where the name is not known to consumers as conferring a geographical connotation (a significant problem for indications from Asia, as these tend not to be known) or (most questionable) where the applicant was an official body or even the state (‘Sidamo’, also as elaborated below). GIs can be registered as collective marks in Europe, however.

5 Non-Proprietary Protection

As has been explained in the previous two sections, proprietary protection of geographical terms, be it as GIs or trademarks, limits the possibility of third parties wishing to use the term. This is one of the reasons why the registration of geographical terms as a GI requires proper structures of control and supervision in order to make sure that all those entitled to make use of the geographical term can do so. In the case of trademarks, registrability of geographical terms is limited so as to guarantee the freedom to operate of those who can legitimately use the termFootnote ¹¹⁵ and in order to avoid misperceptions in trade.

The absence of proprietary protection first of all ensures the freedom to operate. Importers of ‘Kobe beef’ are not prevented from importing meat under this denomination due to third-party rights. Still, in cases where Kobe beef does not originate from Kobe (or even from Japan), Japanese importers have an interest to limit such denomination to beef from Kobe (or Japan). Whether they can successfully do so in the absence of proprietary rights depends on consumer perception. If Kobe beef is regarded as a purely generic term, or is completely unknown to those in the trade,Footnote ¹¹⁶ there is no cause of action. If Kobe beef is considered as indicating certain qualities, then there is a case against misleading use if beef of a different quality is sold under this name.Footnote ¹¹⁷ The same is true if Kobe beef is considered as originating from Kobe (or Japan), and beef of a different origin is sold. Remedies in such cases depend on national law. These may be administrative (by competition or consumer authorities) or civil (by consumer associations, or competitors). As there is no uniform European law on this matter, the following three examples from three different jurisdictions should give the reader some idea in this respect.

The English decision Greek YoghurtFootnote ¹¹⁸ affirmed consumer misperception for the use (not registration) of the term ‘Greek Yoghurt’ for yoghurt not originating from Greece. In the absence of a proper implementation of Article 10bis section 3(iii) of the Paris Convention,Footnote ¹¹⁹ the plaintiff in the United Kingdom must show confusion by proving goodwill and misappropriation,Footnote ¹²⁰ which is different from most other European countries where a case under unfair competition prevention law requires a misleading use but not a wide recognition of the indication. The action was brought by a major Greek producer of yoghurt.

The Italian decision Salame Felino rendered by the Supreme CourtFootnote ¹²¹ dealt with the question whether use of this term by producers outside the area of Felino was an actionable case of unfair competition (initiated by the producer association of Salame Felino). The Supreme Court ultimately rejected this, while the previous instances had affirmed. The reason lay more in the rather complicated interplay between national and EU law on the protection of GIs, however. ‘Salame Felino’ has meanwhile been registered as a European GI.Footnote ¹²²

The German decision Aceto Balsamico rendered by the Mannheim District CourtFootnote ¹²³ dealt with the question whether the use of the term ‘Aceto Balsamico’ for vinegar that originated in Germany was infringing the registered indication ‘Aceto Balsamico di Modena’, or, even if not, was misleading as to the origin of the product (the latter being an unfair competition claim). As the court had already affirmed the former under Article 13 of the Regulation 1152/2012,Footnote ¹²⁴ there was no need to decide on the latter. But even for the first claim, the court held that at least according to German consumer perception, ‘Aceto Balsamico’ was perceived to come from Modena despite the fact that ‘Aceto Balsamico’ was registered only with the addition ‘Modena’, and was perhaps perceived to be generic in Italy.

6 Conclusion

The protection of Asian GIs in Europe is an uphill battle. Most Asian indications face the problem of being latecomers; thus, they have to deal with prior trademark rights, with ignorance or with the perception that they are generic. The easiest way for proprietary protection might be through bilateral trade agreements. Alternative ways are registration under the Lisbon Agreement or the European Regulation on GIs that is limited to food products and requires the GI to contain the name of a region or locality.Footnote ¹²⁵

The administrative burden of monitoring quality and geographical scope can be onerous. The alternative of applying for trademark protection is dubious on legal grounds, and is not meant to indicate a geographical origin. The latter is also true for collective marks that are available for geographical terms. The minimum that should be achieved is the freedom to operate, for which it may be necessary either to oppose conflicting trademark applications or to sue against generic or misleading use. But a word of caution is necessary – many of the cases that have been litigated took years until a final decision could be obtained, as in the cases mentioned previously, and required considerable financial investment and a long-term perspective. This sounds a bit like the little steam locomotive that winds its way up from Colombo to Nuwara Eliya (a paradise for tea lovers); always an uphill struggle, but worth it.

1 Introduction

The current divide within the international community over the appropriate level of protection for geographical indications (GIs) is epitomized by the conflict between the European Union (EU) and the United States (US) in the context of the Transatlantic Trade and Investment Partnership Agreement (TTIP).Footnote ¹ While GIs receive extensive protections that go beyond international treaty standards within the EU, the US (along with other “New World” countries) has repeatedly opposed strengthening the existing international GI protections.

The US’s resistance to strong protection of GIs has become a popularized account. The history of the US’s interest in GI protection, however, is more complex. Since 1929, the US has been bound by a little-known international convention that ensures strong protection of GIs: the General Inter-American Convention for Trade Mark and Commercial Protection (Inter-American Convention).Footnote ² The Inter-American Convention is a regional agreement that was instituted by the US with several countries in the Americas. At the time in which the Convention went into force, the provisions on GIs in the Inter-American Convention were the most developed and strongest protections available in any international agreement. And remarkably, these provisions were developed by the US.

This history of the protection of GIs in the US remains enigmatic. Few scholars and lawyers are aware of the Inter-American Convention, let alone its chapter on GI protection. Why was such a chapter included, and why were similar provisions not included in the 1946 Trademark Act or subsequent international agreements? The treatment of GIs both in this convention and in the US Trademark Act is largely the result of the work of Edward Rogers and Stephen Ladas, two of the leading practitioners of US trademark law in the twentieth century. These two men had as sophisticated an understanding of US common law and international obligations as anyone at that time. The resulting texts of the Inter-American Convention and the Trademark Act – both of which they were instrumental in drafting – were no accident.

As the Inter-American Convention is still in force, it indicates the minimum standards for the protection of GIs in the US, at least with respect to beneficiaries of the Convention. It is also arguably a self-executing treaty in the US. Understanding this agreement therefore offers more than historical insight; it may offer an alternate approach to the protection of GIs. The Inter-American Convention also offers lessons for developing GI protection standards in other regions, such as Asia. One reason for the Convention’s inconspicuousness is that it was primarily intended to be used by US business in Latin America; it was not designed for the equal benefit of all member states. In addition, it was negotiated without the benefit of any experience protecting GIs on the part of the Latin American trading partners. Perhaps, it is not surprising then that the largely theoretical origins of the protections have resulted in the absence of a robust practice of applying them.

While the focus of this book is to consider GIs in Asia, this chapter will examine a particular historical moment in the legal protection of GIs that will expose a different view of the American approach to the protection of GIs. The reason to introduce this history is to offer policy makers in this region alternative approaches to GI protection beyond the current models advanced by the EU and the US. The short story is that the EU favors strengthening the current protections of GIs – it is said to be one of their greatest assetsFootnote ³ – while the US disfavors the development of additional protection for GIs beyond those offered by trademark law. The Inter-American Convention certainly complicates this story and provides a possible alternate approach.

2 The 1929 General Inter-American Convention on Trade Marks and Commercial Protection

The US experience with the international protection of GIs began with the 1929 Inter-American Convention on Trademarks and Unfair Competition. This relatively unknown Convention is still in force in all of the ten member states that were original parties to the Convention.Footnote ⁴ The Convention came out of the Pan-American movement, in which the US asserted its dominance in the region over British and European rivals in the postcolonial era. The Convention was an instance of the US effort to replace militarism with institutionalism. The US recognized that Latin America had much to offer in terms of a supply of raw materials and a potential market for US finished products. As a result, there was then an ambitious effort to unite the Americas through innovations such as the creation of a railway system, a customs union, and a common currency.Footnote ⁵ A harmonized intellectual property law was just one of the many attempts to create a regional market. The 1929 treaty was the last of six treaties concluded by the Pan-American Union that addressed trademarks.Footnote ⁶

The text, which was evidently prepared by the US delegation,Footnote ⁷ included, and still includes, some startlingly innovative provisions. Among theseFootnote ⁸ is an entire chapter, Chapter V, devoted to “the Repression of False Indications of Origin or Source.”Footnote ⁹ The legal concept captured by the phrase “indications of origin or source” is not the equivalent of “geographical indication.” Although the concept is not defined in the Inter-American Convention, indications of source generally do not demand a link to the geographical area, nor do they demand a reputation of the area for the goods.Footnote ¹⁰ Therefore, this chapter can be understood to address the use of geographic terms generally.Footnote ¹¹ As a result, it actually offers protection to a broader category of geographical terms than the protection offered to GIs under the Agreement on Trade-Related Aspects to Intellectual Property Rights (TRIPS Agreement).Footnote ¹² Ultimately, the Inter-American Convention’s protections are sweepingly broad.

For instance, Article 23 prohibits as “fraudulent and illegal” “any indication of geographical origin or source which does not actually correspond to the place in which the article, product or merchandise was fabricated, manufactured, produced or harvested.”Footnote ¹³ This language would seem to indicate that any false use of a geographical source is prohibited whether or not it is misleading.Footnote ¹⁴ Thus, Article 23 of the Inter-American Convention mirrors the strict standard of Article 23 of the TRIPS Agreement, but, significantly, it is not limited to wines and spirits.Footnote ¹⁵ In addition, the Inter-American Convention limits the use of generic terms.Footnote ¹⁶ Article 27 indicates that the exception for generic terms does not include “regional indication of origins of industrial or agricultural products, the quality and reputation of which, to the consuming public, depends on the production of origin.”Footnote ¹⁷ This article also indicates that “industrial” products are protected along with “agricultural products.”

Moreover, the chapter on geographical names in the Inter-American Convention not only prohibits the false use of geographical terms; it also limits the acquisition of trademark rights over geographical terms. Article 25 flatly states that “geographical names are not susceptible to individual appropriation.”Footnote ¹⁸ Depending on the interpretation given to “geographical names,” this restriction may prohibit any geographical term from being protected as a trademark in any of the member states.

In addition to a chapter on geographical names, another chapter of the Inter-American Convention, Chapter IV, is devoted to unfair competition and, in turn, applies to unfair competition-related uses of geographical names.Footnote ¹⁹ In particular, two of the five acts of unfair competition delineated in this chapter explicitly address the use of geographical terms.Footnote ²⁰ In notable contrast to the chapter on geographical terms, this chapter of the Inter-American Convention unmistakably addresses the deceptive use of geographical terms. Under this chapter, the use of a geographical term in a deceptive manner constitutes a prohibited act of unfair competition.Footnote ²¹ The fact that this chapter requires deception suggests that unfair competition protection is different from the protections in the chapter on geographical terms. This is further reason not to read in an implied deception requirement in the chapter on geographical terms. To do so would mean that the provisions in the unfair competition chapter are duplicative.

3 Lessons to Be Drawn from the Inter-American Convention

Many lessons can be drawn from illuminating this little-known chapter on international GI protection in the Inter-American Convention. Many of these lessons are cautionary, but the primary lesson is that the US GI tradition is a bit more complicated than many have thought.

In particular, the Inter-American Convention represents an alternative approach, and one generated by the US. Moreover, the Inter-American Convention represented an early example of a regional approach to IP protection. Interestingly, this early twentieth-century attempt at regionalism in the Americas, much like recent regional agreements, was motivated in part by a strategy of forum shifting. More specifically, the Inter-American Convention was an attempt by the US to create a regional alternative to the Paris Convention, which at that time was dominated by European countries with few Latin American signatories.Footnote ⁴¹

Also in common with more recent examples, we see in the Inter-American Convention one country imposing its interests on the other, weaker states and trading partners. In this respect, the Inter-American Convention appeared to be primarily intended to benefit US firms conducting business in Latin America. In contrast, almost nothing in the Convention would have benefited Latin American firms at the time. Ladas admitted as much when he noted that Latin American “countries rarely register any trademarks in US, and the problem of protection of their trademarks is hardly existing.”Footnote ⁴² Thus, the objective of the Inter-American Convention was to protect US businesses; it was never even anticipated that it would be used by another signatory as a beneficiary of the provisions of the Convention in a US court. So not only was the Inter-American Convention an example of an imbalance of expertise in negotiating positions, but it was also problematic as a regional agreement where, other than desiring trade relations, the signatories did not have much else in common.

Ultimately, as a result of the dominant interests and negotiating position of the US, the Inter-American Convention was drafted without the benefit of any experience protecting GIs on the part of the Latin American signatories. In other words, rather than developing out of a tradition of protecting GIs steeped in practice, the Inter-American Convention’s provisions had more of a theoretical origin. The lack of correspondence of the protections to a practice may in part explain why the Inter-American Convention fell into disuse in many of the member states and has been largely forgotten. Certain of the provisions, however, have continued to be used and taken advantage of by US trademark owners in Latin America.

Still, as obvious as it may sound, countries should endeavor not to forget a convention that obligates them. Moreover, just as efforts to engage in regional trade partnerships have continued since 1929, so too have developments in the international protection of GIs. In fact, the US has since signed six separate free trade agreements (FTAs) with countries that are members of the Inter-American Convention in the intervening years.Footnote ⁴³ Perversely, the Inter-American Convention was not explicitly referred to in any of these agreements even as these FTAs incorporated by reference other international agreements.Footnote ⁴⁴ In addition, the standards of protection for GIs in these more recent agreements are not consistent with the standards in the Inter-American Convention described above. These FTAs did not commence from the foundation set by the Inter-American Convention, but rather began from a blank slate as if there had been no agreement in place already. In this respect, it would have been useful to take account of the rights that have already been agreed to before moving forward with different standards.

In light of this, as I have suggested elsewhere, there is a real possibility that the Inter-American Convention is today a sleeping treaty.Footnote ⁴⁵ Were private parties to take notice of the Convention and make greater use of it as a basis for bringing individual claims in US courts, the US may be compelled to consider its obligations under it.

Notably, not only do countries not have the option to forget their obligations under treaties, but in this case there is a strong basis for resurrecting it in a US court. In 1940, the US Supreme Court pronounced the Inter-American Convention a self-executing treaty, and as such, the law of the land without the need for implementing legislation.Footnote ⁴⁶ In fact, the Inter-American Convention was drafted in such a manner as to anticipate its provisions being used directly as operable law. For instance, under Article 28, the final article in the chapter on GIs, parties are authorized to make a claim and seek a remedy under existing domestic trademark laws in the event that no local law exists implementing the Convention’s protections.Footnote ⁴⁷

Although there is some case law rejecting the assertion of rights under the Convention,Footnote ⁴⁸ the Trademark Trial and Appeal Board (TTAB), a body within the United States Patent and Trademark Office (USPTO), has ruled in a few cases, beginning in the year 2000, that the Convention is a self-executing treaty. First in British-American Tobacco v. Philip Morris,Footnote ⁴⁹ the TTAB concluded that the Inter-American Convention has the same force of law as the Trademark Act, is independent of the Trademark Act, and it grants the USPTO jurisdiction to cancel registrations when it is alleged that there is a violation of the Convention.Footnote ⁵⁰ Only one of these TTAB cases involved the false use of a geographical term, but this case happened to be brought under a different provision of the Convention.Footnote ⁵¹ As a result, we do not have an application of the GI provisions of the Convention in a US tribunal.

As the international community moves forward with the development of GI protections, it may be that considering the strengths and weaknesses of the Inter-American Convention proves helpful. But at a minimum, the Convention certainly serves to complicate the story about the US’s position on the protection of GIs, and demonstrates that the anti-GI narrative is of a more recent origin in the US.

4 United States v. European Union: Two Different Views and Objectives for the Protection of Geographical Indications

Despite the US’s complex history regarding the protection of GIs,Footnote ⁵² it appears that today’s US approach on GIs is generally referred to as the anti-EU approach. As is well known, the US and the EU have very different views about how GIs should be protected and to what extent they should be protected, and are referred to as being on opposite sides of the debate.Footnote ⁵³

The opposing views of the US and the EU on GIs were well documented in the negotiations leading to the adoption of the GI provisions in TRIPS, and later in the gridlock of the multilateral negotiations under the built-in TRIPS agenda and the Doha Development Agenda under the Doha Ministerial Declaration.Footnote ⁵⁴ More recently, the US and the EU have been engaged in a contest to see whose vision of GI protection will prevail as part of the negotiations for bilateral and plurilateral FTAs with third countries, including with countries in Asia.Footnote ⁵⁵ As several experts have noted, the two positions – from the US’s and the EU’s points of view – seem to be incompatible and thus a contest (and a race to lock in trading partners with the preferred view) has expectedly ensued.Footnote ⁵⁶ At present, Asia is certainly a main battleground, especially in light of the recently concluded Trans-Pacific Partnership Agreement (TPP), and the many bilateral agreements that the US and EU have respectively concluded or are negotiating in Asia.Footnote ⁵⁷ An example of this battle is Korea, who recently signed FTAs with both the US and EU and thus agreeing to incompatible protections for GIs.Footnote ⁵⁸

In particular, the EU supports a strong protection of GIs to safeguard its economic interest in goods such as wine and cheese, which strategically rely on GIs to distinguish themselves from nonlocal competitors.Footnote ⁵⁹ In the EU, GI protection is efficiently handled administratively by the EU Commission based on several EU Regulations.Footnote ⁶⁰ As part of the registration process, applicants need to identify both the internal and the external entities that will enforce quality control for the GI products.

A crucial component of the EU GI protection is that GIs are categorically protected from becoming generic terms (even in the case that consumers may refer to the product generically in practice),Footnote ⁶¹ which means that GIs cannot fall into the public domain and be used as generic terms.Footnote ⁶² In this way, EU law aims at preserving the advantages that historic regional industries have against competitors who may claim (as they do in the US) that a term has become generic. For instance, if Tabasco were a GI in the EU, the protection received under EU law would ensure that the name continued to signify a place and not a type of product. I refer to this objective of EU law as a type of protection against the dilution of registered GIs because it seeks to maintain the significance and reputation of GIs in the same way that trademark dilution protection seeks to maintain the significance and reputation of a famous mark against free riders who attempt to take advantage by creating an association with the mark.

These strong protections are partially balanced in EU law by restricting GI protection to a circumscribed subject area. Under current EU law at least, GI protection only applies to foodstuffs, wines, and spirits.Footnote ⁶³ Thus, manufactured products and services are excluded from protection, even though the EU is currently considering extending GI protection to nonagricultural products.Footnote ⁶⁴

The more recent position of the US with respect to GI protection is seemingly incompatible with the EU approach. In principle, the US appears to be against the enhancement of GI protection. Like the EU, the US position corresponds to economic realities, namely its interest in protecting its large food producers, who frequently use European names based on the claim that these names are generic terms.Footnote ⁶⁵

The fundamental difference, however, can be reduced to the legal approach taken by both the EU and the US. Notably, while the EU favors a sui generis approach based on the administrative requirement of GI registration, the US strenuously advocates addressing GI protection through trademark law exclusively.Footnote ⁶⁶ As a result, the source of GI protection in the US is not a registration system per se (even though GIs are protected primarily as registered trademarks), but a market understanding.Footnote ⁶⁷ Moreover, in order for US trademark law to protect a geographical name/GI as an ordinary trademark, the name must have acquired secondary meaning.Footnote ⁶⁸ Like other trademarks, a distinctive sign can also lose its source-identifying significance over time through generic use. Furthermore, US trademark law does not protect geographical terms against dilution; instead, it is incumbent on the producers from that region to maintain the meaning.Footnote ⁶⁹ Still, it should be noted that many GIs are protected in the US as certification and collective marks,Footnote ⁷⁰ and that the conditions to be satisfied in order to obtain this protection – which is granted to a collectivity of producers and not to individual undertakings – resemble, to a considerable extent, the process to be followed in order to obtain a GI registration under a sui generis system.

Relatedly, US trademark law leaves enforcement to interested parties. For example, although the term “ROQUEFORT” is registered with the USPTO as a certification mark for cheese produced in the Roquefort region in France,Footnote ⁷¹ if a producer of cheese not from that region were to use this designation on its products in the US market, it would be incumbent on the registrant to bring a private lawsuit in a federal court.Footnote ⁷² Finally, as US trademark law loosely follows consumer understanding of signs, it is possible for geographical terms to be protected for any type of product whether agricultural or manufactured. In addition, it is possible to achieve protection in the US based on use without first obtaining a registration. For instance, common-law certification marks such as “COGNAC” have been recognized by US courts.Footnote ⁷³

In sum, the EU and the US advocate for considerably diverging approaches to GI protection with the key features of these systems corresponding to different objectives. The EU system seeks to achieve a form of dilution protection through an administrative system. In contrast, the US system seeks to achieve a form of unfair competition protection limited by the contours of trademark law.Footnote ⁷⁴

5 An Alternate Approach

Presented with these two diverging approaches, Asian countries, such as Korea, find themselves in the unenviable position of navigating between the EU and the US in deciding their national systems of GI protection. In this respect, the model embodied in the Inter-American Convention, with its provisions on GIs and unfair competition principles described above, could represent a distinct alternate approach.

First, the Inter-American Convention offers an alternative to the strict public law–private law divide between the EU and the US as member states can meet their obligations to protect GIs through either method so long as they agree to the broadly stated standards.Footnote ⁷⁵

Second, both the EU and US approaches seem to work best at the national level (the regional level in the EU, in which GI protection is based on EU law). The Inter-American Convention approach, however, works best at a regional level (not strongly integrated as in the EU). As noted above, the Inter-American Convention was precisely an attempt to extend developing norms of unfair competition protection at the regional level among countries in the Americas. At the time when the Inter-American Convention was negotiated, the protection of GIs under US trademark law was not so well developed (and the current trademark act had not yet been adopted), and, thus, the convention aimed at (also) filling this gap.

Third, a model based on the Inter-American Convention may be better suited to address the conflicts that could possibly arise with respect to generic terms within a region. In particular, the generic exception – that is, the right to use foreign GIs on the basis that they are generic in the jurisdictions in question – is limited in the Inter-American Convention. As countries within a specific region – in Asia as much as in the Americas – may be more likely to share generic language and have awareness of the geographical meaning and reputations of GI regions and GI products from neighboring countries, the Inter-American Convention could represent a viable model for Asian countries to adopt a system of GI protection, which would take into account GIs registered in other countries in the same region.Footnote ⁷⁶ In other words, a dilution-like GI protection such as that is applied in the EU could be achieved in Asia by adopting a system similar to the Inter-American Convention.

Another possible and positive consequence of adopting a model of GI protection having its source in unfair competition law, as in the Inter-American Convention, is the breadth of subject matter that can be protected under this model. In particular, because unfair competition law seeks to protect the reputation of a good, this type of GI protection can be used to protect agricultural products as much as nonagricultural products. This is explicitly the case in the Inter-American Convention text. Such possibility is of particular relevance in Asian countries, as many of these countries are rich in traditional handicrafts and several of them already provide for GI protection for nonagricultural products.Footnote ⁷⁷

6 Protection for Geographical Indications in Asia

Considering GI protection in the Asian region allows us to open the discussion beyond GI protection from the perspective of the EU or the US. This discussion is important because the objectives in protecting GIs in other regions may not exactly mirror those of the EU and the US, as several of the chapters in this volume also demonstrate. In particular, the inflexibility of the models presented by the EU and US regimes limits regional experimentalism, and the Inter-American Convention may present a suitable alternative.

To date, several Asian countries have implemented or are considering primarily national systems of sui generis protection modeled after the EU regime. In addition, several countries in the region have negotiated or are negotiating FTAs with the EU or ad hoc agreements for GI protection. For instance, the EU and China have reached certain agreements where they reciprocate recognition of certain GIs (so far ten from China and ten from the EU) in the model of EU law. From the EU side, this includes “Grana Padano” cheese, “Prosciutto di Parma” ham, and “Stilton” blue-veined cheese – all these products are protected as sui generis GIs in China today.Footnote ⁷⁸ In reciprocation, the EU has agreed to recognize GIs for Chinese products such as “Pinggu da Tau” peaches and “Dongshan Bai Lu Sun” asparagus. It is debatable whether this reciprocal agreement is of equal benefit for both parties. Christopher Heath’s chapter in this volume indicates, for example, that seventeen Asian GIs are registered in the EU, yet none of which will likely be familiar to Europeans (at least to date).Footnote ⁷⁹

Of course, many Asian GIs are well known to consumers outside of Asia. For instance, “Basmati” rice and “Darjeeling” tea are two Indian GIs that are recognized around the world for agricultural products from India.Footnote ⁸⁰ Yet, the recognition and the rights to be recognized to each of these GIs have been legally tested under the EU and US GI regimes with mixed results for the GIs. In short, these GIs have not fared as well as desired by their owners, showing the still existing problems for the protection of foreign GIs under the US and EU systems.

The legal saga of “Basmati” in the US is well known to GI experts. “Basmati” is an Indian GI for aromatic, long-grain rice that grows in the Punjab region in northern India and across the Pakistani border.Footnote ⁸¹ India has repeatedly claimed that the distinctive characteristics of basmati rice are a byproduct of the Indian soil that is irrigated by the Himalayan Rivers.Footnote ⁸² India is the largest exporter of basmati rice in the world. The word “basmati,” however, has been used generically in the US for decades referring to aromatic long grain rice without regard to where the rice is grown. This US generic use predated any legal protection for “Basmati” in India. In the late 1990s, a US company provoked the ire of the Indian government by not only using brand names such as “American Basmati” and registering the trademark “Texmati,”Footnote ⁸³ but also attempting to patent its production of this rice.Footnote ⁸⁴ Moreover, in the US, the term “Basmati” is also used in connection with goods other than rice. Several “Basmati” marks have been registered, such as “Basmati Bus,” which is a registered service mark for food truck services.Footnote ⁸⁵ These registrations are generally not related to goods or services originating from India.

Furthermore, while the Indian government succeeded in invalidating the patents covering basmati rice, it could not prevent the US company from using the trademark “Texmati.” This episode angered the Indian public who believed that the use of the word “basmati” was pirating their indigenous product.Footnote ⁸⁶ Indian nongovernmental organizations have insisted that the US change its rice standards so that only rice grown in India and Pakistan can be branded with the word “basmati.”Footnote ⁸⁷ This dispute may have prompted the Indian government to protect basmati rice as a GI for the regions where it is being grown in India. However, this attempt was met with spirited opposition both from a state within India that produces basmati rice but had been excluded from the “Basmati region,”Footnote ⁸⁸ as well as the Basmati Growers Association of Pakistan, who protested that basmati rice is grown in both India and Pakistan.Footnote ⁸⁹

Similarly, the name “Darjeeling” has been the subject of several abuses, and legal challenges both in the US and the EU. The “Darjeeling” GI protects tea that is cultivated and grown in the Darjeeling region of West Bengal in India.Footnote ⁹⁰ The distinctive quality and flavor of Darjeeling tea has been globally recognized for over a century.Footnote ⁹¹ The distinctiveness of Darjeeling tea is said to be due to two main factors: the tea’s geographic origin, and the process by which the tea is made.Footnote ⁹² The tea is grown in tea gardens located 2,000 meters above sea level, and the environment at that particular elevation is said to add to the uniqueness of the tea.Footnote ⁹³ In addition to these two factors, the Tea Board of India’s quality control mechanisms ensure that the product maintains its high quality and that the tea originates only from the GI region.Footnote ⁹⁴

Hence, there have been several controversies around the use of the term “Darjeeling” for non-tea products outside India in recent years. For instance, the Tea Board of India disputed the use of “Darjeeling” as a mark by a French company for intimate lingerie.Footnote ⁹⁵ In this case, the Tea Board ultimately succeeded in protecting the name under EU trademark law, as Darjeeling was first registered as a mark in the EU,Footnote ⁹⁶ and only subsequently was registered as a sui generis GI.Footnote ⁹⁷ Still, in another dispute in France, an insurance company used “Darjeeling” as a mark for its services.Footnote ⁹⁸ In response, however, the French courts concluded that because Lipton marketed “Darjeeling” in French supermarkets, that the term did not have enough of a distinctive reputation to receive dilution protection under trademark law in France.Footnote ⁹⁹

In the US, several “Darjeeling” trademarks have been registered for non-tea products, again by parties unrelated to the producers of Darjeeling tea in India. For instance, “THE DARJEELING BAGS” is registered for luggage products.Footnote ¹⁰⁰ Additionally, “DARJEELING” is registered to a company that sells shirts, shorts, dresses, and ladies undergarments.Footnote ¹⁰¹ These registrations are still in force and it does not seem that it would be possible to obtain their cancelation based on US trademark law.

Under an unfair competition approach, such as the one that is embodied in the Inter-American Convention, GI protection is justified not only to ensure that consumers are not deceived, but also to protect producers from the region referenced. For example, out of fairness to consumers and producers, countries interested in combating unfair competition would not want companies to use “Basmati” on rice that does not come from that region. But, this justification for protection does not apply in situations where non-rice products are marketed with “Basmati” marks because there is no threat to competition. Thus, while the mark “Texmati” would probably not withstand a legal challenge under a provision similar to the Inter-American Convention, the use of “Darjeeling” for non-similar goods or service would unlikely be prohibited.

7 Conclusion

As I have elaborated in this chapter, the US history with respect to GI protection is a little more complex than most assume. In particular, the US has not consistently shied away from GI protection nor has it always relied upon a trademark system to achieve GI protection. In 1929, in drafting and ratifying the Inter-American Convention, the US forged a different approach to GI protection to be applied in several countries in the Americas. The Inter-American Convention offered a broader, more comprehensive system of protection to GIs compared to the systems of protection achieved in any other treaty at that time. While the US may no longer officially follow this (still in force) approach today, and many in the US may barely have been aware of the Inter-American Convention, a similar system may be interesting for Asia, and for other regional blocks of countries coming into this discussion, as a model to consider. Ultimately, the Inter-American Convention offers the international community an alternate approach, or a middle path between the current US and EU models, with its unfair competition foundation. At a minimum, the Inter-American Convention offers a variant to the sui generis system today applied in the EU and the trademark approach of the US.

1 Introduction

As a signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS),Footnote ¹ Singapore is obliged to confer protection to geographical indications (GIs). For the past fifteen years, the relevant legislation in Singapore has been the Geographical Indications Act (GI Act 1999),Footnote ² which came into force on 15 January 1999. However, with the successful conclusion of negotiations of the European Union (EU) and Singapore Free Trade Agreement (EU-Singapore FTA)Footnote ³ in 2013, the law on GIs in Singapore is set to change. One key takeaway from the EU-Singapore FTA Intellectual Property Chapter is that the EU and Singapore reached an agreement and Singapore will enhance its existing regime for the protection of GIs. Consequently, a new Geographical Indications Act (GI Act 2014) for Singapore has been passed by Parliament on 14 April 2014.Footnote ⁴ The new GI Act 2014 will replace the current GI Act 1999 once it is brought into force (as at the date of this writing and as of February 2017, just before this book goes to press, the GI Act 2014 has still not been brought into force in Singapore). Under the GI Act 2014, Singapore will strengthen its current protection by establishing an ad hoc register for GIs,Footnote ⁵ and a new chapter will begin for the protection of GIs.

In particular, the new GI Act 2014 heralds an enhanced protection regime for GIs in Singapore, and the provisions of the new Act will come into operation in several stages in tandem with the general ratification process of the EU-Singapore FTA. The first stage of implementation of the FTA will involve the establishment of the GI Registry.Footnote ⁶ However, the Registry will be established only when the EU ratifies the EU-Singapore FTA.Footnote ⁷ Likewise, the enhanced regime under the GI Act 2014 will be applicable only when the EU-Singapore FTA is implemented in the EU and Singapore. Furthermore, as part of this process, amendments related to the protection of GIs will have to be made to the current provisions of the Trade Marks Act 1998.Footnote ⁸ The final stage of implementation is supposed to take place within three years of entry into force of the EU-Singapore FTA. The same time frame will apply to the implementation of improved border enforcement measures with respect to registered GIs, as these measures will need to be adopted as part of Singapore’s obligations in the FTA. The staged approach adopted by the Singapore Parliament aims at ensuring that companies and government organizations will have sufficient time to adjust to the impact of the new GI protection regime in Singapore.

As Singapore moves into the next phase of legislative development on GIs with the enactment of GI Act 2014, this chapter examines and assesses the protection accorded to GIs in Singapore, but with a specific interest in the provisions of the new GI Act 2014. The chapter begins with a broad overview of the protection of GIs in Singapore under the GI Act 1999. It then addresses the adoption of the GI Act 2014. Next, the chapter focuses on the relevant provisions of the newly adopted (but not yet entered into force at the time of this writing) GI Act 2014 and discusses the legal issues as well as business implications that may be raised by the new GI provisions.

2 Legal Protection of Geographical Indications in Singapore

3 The New Law to Be in Singapore: Salient Features of the Geographical Indications Act 2014

The GI Act 2014 will repeal and re-enact with amendments the old GI Act 1999. Compared to the GI Act 1999, the number of provisions in the GI Act 2014 has significantly expanded from twelve to ninety.Footnote ³⁷ In broad terms, the GI Act 2014 is significant in three areas: (a) the establishment of a GI Registry;Footnote ³⁸ (b) the conferment of enhanced protection of GIs in Singapore;Footnote ³⁹ and (c) the provision of improved border enforcement measures for GIs.Footnote ⁴⁰

4 Issues and Implications of the New Geographical Indications Regime in Singapore

5 Conclusion

Undoubtedly, Singapore’s ratification of several significant international IP treaties and conventions is an important driving force in the rapid development of Singapore’s IP legal infrastructure. At the same time, free trade agreements to which Singapore is a signatory have also played a significant role in shaping Singapore’s IP legal landscape in recent years. We have seen the impact of free trade agreements on IP laws since the conclusion of the US-Singapore Free Trade Agreement in 2003 (US-Singapore FTA).Footnote ¹⁴⁴ As a result of the US-Singapore FTA, the regulatory framework for IP protection in Singapore has undergone substantial reforms in 2004,Footnote ¹⁴⁵ spanning across areas of copyrights and trademarks. Pursuant to her obligations under the US-Singapore FTA, Singapore has basically subscribed to a framework of protection of GIs which allows registration of signs including words associated with GIs as trademarks (subject to certain restrictions),Footnote ¹⁴⁶ and the person who registers the trademark associated with the GI first in time and who has successfully overcome opposition proceedings, if any, shall have the right to be protected.

A decade later in 2013, when Singapore concluded the negotiations on the EU-Singapore FTA, the stage was set once again for changes in IP laws with the most significant changes taking place in the area of GIs. The EU protects GIs with a specialized and extensive registration system that offers an enhanced protection. In the free trade agreements which the EU has previously entered into with South Korea and Canada, detailed provisions on the establishment of a registration system and various aspects of enhanced protection to be accorded to wines, spirits and other agricultural products can be found in the intellectual property chapters. The EU-Singapore FTA is no exception and Singapore has agreed to establish a Registry for GIs even though Singapore does not have any GIs of her own for which protection is sought.Footnote ¹⁴⁷ Before the adoption of the GI Act 2014, protection for GIs in Singapore was comparable to the level set out in TRIPS even in the absence of a registration system. Once the GI Act 2014 is brought into force, protection for GIs in Singapore will be significantly enhanced with the establishment of a dedicated GI Registry.

Admittedly, the registration of GIs in Singapore, in particular the automatic recognition and protection to a list of key EU GIs if accepted, would have a far-reaching impact on existing GI users and trademark owners. However, to minimize the impact of the change brought forth by the new law on GI protection, the Singapore government negotiated the EU-Singapore FTA and secured the agreement from the EU that there will be no automatic recognition and protection to a list of key EU GIs but that Singapore will be allowed to develop its own GI registration system. The list of key EU GIs will be subject to examination by the new GI Registry, and third parties who object to their registrations on the grounds of genericness would be given the opportunity to do so under the law. This may be seen as a significant break-through in trade negotiations on GIs, and may offer a ‘middle way’ in the resolution of divergent attitudes towards GI protection amongst countries. The Singapore government should be commended for her attempts to create a fair model of protection which, it is hoped, will better balance the interests of GI owners and legitimate GI users in general. Be that as it may, it should also be noted that the Singapore model is, however, the exception rather than the norm and that the arrangements of the EU-Singapore FTA for GIs ‘reflect the fact that Singapore’s legislation does not permit direct protection of geographical indications via the Agreement, and underlines that this does not constitute a precedent’.Footnote ¹⁴⁸

The implementation of the changes brought forth by the GI Act 2014 is unfortunately delayed as the EU-Singapore FTA is still awaiting ratification by the EU Parliament.Footnote ¹⁴⁹ In a recent report in July 2015,Footnote ¹⁵⁰ Prime Minister Lee Hsien Loong was of the view that a ratification of the EU-Singapore FTA would encourage an ASEAN-EU FTA deal, and he was quoted to say ‘Singapore is the bellwether. If you can do one with Singapore, I think that will encourage other deals to come in, including the ASEAN-EU deal.’Footnote ¹⁵¹ Of course, it remains to be seen whether the Singapore model on the protection of GIs will be accepted by the EU through the ratification of the EU-Singapore FTA and whether it will pave the way for a middle-ground approach where countries of differing views on GI protection may agree to meet each other half way.