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WTO: Beyond the Agreement on Agriculture, TRIPS

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Naming Rights for "Geographical Indications"

An issue gaining attention in the current round of multilateral trade negotiations is the debate over geographical indications (GIs) in the naming of products. A GI is a type of intellectual property associated with goods that originate in a specific place and possess qualities, a reputation, or other characteristics that are due to that place of origin. GIs in the United States are protected through various Federal and State trademark and certification laws and regulations (an example is the Idaho Potato Commission's "GROWN IN IDAHO" design and slogan for Idaho potatoes).

Famous Idaho Potatoes

Over time, some product names or text on product labels have become generic and are used regardless of place of origin. However, under the current round of global trade talks, the European Union (EU) and other countries are calling for terminating the use of certain generic names for food, wine, and spirits unless the products come from a specific region. The EU presented a list of GIs to the WTO during the Fifth Ministerial Meeting in Cancún, Mexico in September 2003. The EU requested that 41 product terms be protected by WTO members. The list is subject to negotiations.

Geographical indications proposed by the European Union to the WTO in September 2003*

Wines and spirits
Beaujolais
Bordeaux
Bourgogne
Chablis
Champagne
Chianti
Cognac
  Grappa (di Barolo, del Piemonte, di Lombardia, del Trentino, del Friuli, del Veneto, dell'Alto Adige)
Graves
Liebfrau(en)milch
Malaga
Marsala
Madeira
  Medoc
Moselle
Ouzo
Porto
Rhin
Rioja
Saint-Emilion
Sauternes
Xerez, Jerez
Other products
Asiago
Azafrán de la Mancha
Comté
Feta
Fontina
Gorgonzola
Grana Padano
  Jijona y Turrón de Alicante
Manchego
Mortadella Bologna
Mozzarella di Bufala Campagna
Parmiggiano Reggiano
Pecorinow Romano
  Prosciutto di Parma
Prosciutto di San Danielle
Prosciutto Toscano
Queijo São Jorge
Reblochon
Roquefort

* According to the EU proposal, the proposed protected terms covers translations such as "burgundy," "champaña," "conñac," "port," "sherry," "parmesan/o," "Parma ham."

In the last few years, meaningful discussion on GI protection has taken place only in the World Trade Organization's (WTO) Trade Related Aspects of Intellectual Property Rights (TRIPS) Council and at the World Intellectual Property Organization's Standing Committee on the Law of Trademarks, Industrial Designs, and Geographical Indications. The current round of multilateral negotiations initiated in Doha, Qatar in November 2001 does not require WTO members to negotiate GI naming rights in the agriculture negotiations. In fact, the report of the Fourth Ministerial Meeting at Doha (the Doha Ministerial Declaration) specifically mentions the TRIPS Council as the forum for discussion of GI issues.

A wide range of food and agricultural products are known by their quality attributes, place of origin, or other specific local factors. Over time, some product names or text on product labels have become generic and are used regardless of place of origin. Parmesan cheese is an example of a name that has become generic. "Parmesan" is referred to in a 1953 USDA publication, Cheese Varieties, as the "name in common use outside Italy and sometimes in Italy for a group of very hard cheese." Parmesan cheese is made in many parts of the world and traded internationally. In the United States and some other countries, parmesan is a generic name for an aged hard cheese (American parmesan cheese is made mostly in Wisconsin and New York). However, in Italy, the term is used to identify a specific cheese produced in a specific region under specific conditions. The debate surrounding naming rights of agricultural and food products referring to geographical origin could potentially affect a number of generic product names, preventing their use.

Why Are Naming Rights Suddenly an Issue for Agricultural Trade?

At the Ministerial Meeting in Doha, WTO Ministers agreed to complete negotiations on a multilateral system of notification and registration of geographical indications for wine and spirits. For agricultural commodities other than wines and spirits, the Ministers agreed only to discuss (not negotiate) extension of the protection (limitation) of GI use.

Many WTO members, including the United States, strongly object to addressing GI protection as they believe that it is an issue outside the agricultural negotiations. Others, including the EU, feel that protection under the TRIPS Agreement for products other than wines and spirits (TRIPS Article 22) is insufficient. They believe that the "higher level" of protection provided by TRIPS Article 23 for wines and spirits is needed for other products, including agricultural and food products, even if the names are generic. The debate appears to be focused on the mandatory rather than voluntary nature of the EU proposal on GI protection and registration for products other than wines and spirits. Debate continues as to whether the Doha Declaration provides a mandate for negotiating a higher level of protection for products other than wine and spirits.

Current International Rules on Naming Protection for Geographical Indications

The TRIPS Agreement, which became effective in 1995, envisions two kinds of naming protection to avoid unfair competition and prevent consumers from being misled.

  • For products other than wine and spirits, countries are expected to provide legal means to prevent false or misleading claims of geographical origin. TRIPS Article 22 defines GIs as "indications which identify a good as originating in the territory of a [WTO] Member, or a region or locality in that territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin." Examples of GIs in the United States are "Washington State" apples, "Idaho" potatoes, and "Florida" oranges. "Vidalia" is the name for onions grown in the region around Vidalia in Southern Georgia.

Washington apples: The best apple flavors on Earth

  • Wine and spirits are protected even if using the names would not mislead consumers or would not constitute an unfair competition. TRIPS Article 23 provides GI protection for indicated sources of wines and spirits: "Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question, even where the true origin of the goods is indicated or the geographical indication is used in translation or accompanied by expressions such as 'kind,' 'type,' 'style,' 'imitation,' or the like."

TRIPS permits WTO members to use their existing legal systems, provided they meet the stated obligations for GI protections (TRIPS Articles 22-24). In the United States, protection is provided under various Federal and State trademark, certification, and fair trade laws and regulations. Examples of food product laws and regulations administered by USDA include the Agricultural Marketing Agreement Act of 1937, the Perishable Agricultural Commodities Act, and Food Safety and Inspection Service rules on meat and poultry labeling.

For wines and distilled spirits, the Department of Treasury's Alcohol and Tobacco Tax and Trade Bureau (formerly the Bureau of Alcohol, Tobacco and Firearms) regulates the use of geographical indications through labeling and advertising rules. For wines, this is accomplished by appellations of origin (including the establishment of viticultural areas such as Napa Valley), and class and type designation standards (e.g., for Porto and Mosel). According to the Tax and Trade Bureau, a wine is entitled to an appellation of origin if 1) at least 75 percent of its volume is derived from fruit or agricultural products grown in the place or region indicated by such appellation, 2) it has been fully manufactured and finished within the State in which such place or region is located, and 3) it conforms to the requirements of the laws and regulations of such place or region governing the composition, method of manufacture, and designation of wines for home consumption. For distilled spirits, regulations include standards of identity or class and type designations (e.g., for Bourbon whiskey and Tequila).

EU Proposals for Geographical Indications

The EU submitted a proposal to the WTO TRIPS Council in 1998 to extend a higher level of GI protection to agricultural and food products other than wine and spirits. The proposal was later revised in 2000. The EU discussed expanding GI protection in its December 2002 Proposal for Modalities in the WTO Agriculture Negotiations. In June 2005, the EU followed up with a detailed proposal calling for the TRIPS Agreement to be amended.

Extending GI protection is controversial, and so far no consensus has emerged among WTO members. Those in favor of the mandatory extension include Bulgaria, the EU, Guinea, India, Jamaica, Kenya, Madagascar, Mauritius, Morocco, Pakistan, Romania, Sri Lanka, Switzerland, Thailand, Tunisia, and Turkey. Other countries prefer a voluntary notification and enforcement system, which would allow WTO members to provide notification on their GIs if they are TRIPS-consistent (and therefore legal under the WTO). These include Argentina, Australia, Canada, Chile, Colombia, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, New Zealand, Panama, Paraguay, the Philippines, and the United States. The United States and other WTO members—such as Argentina, Australia, Canada, and New Zealand—have pointed out that the EU does not currently protect GIs of other countries—for wines, spirits, or any other products—except through bilateral agreement.

The extended system of protection for products other than wines and spirits as proposed by the EU is similar to a system currently operating in the EU. A significant feature of the EU agricultural system is protection of agricultural and food products, wine, and spirits based on their appellation of origin (signifying qualities that are due to the geographical environment in which the products are produced). For food and agricultural products other than wines and spirits, protection is provided under EU Regulation No. 2081/92 and amendments (see EUR-Lex, the portal to European Union law). For wines and spirits, GI protection is provided under various regulations, including EU Regulation No. 753/2002 on wine labeling, which took effect in 2002.

Under EU law, there are two levels of naming protection for food products: protection of designations of origin (PDO) and protection of geographical indications (PGI). PDO provides a higher level of protection than PGI. The majority of wine and cheese names are protected under PDO. According to the EU definition, a PDO refers to "the geographical names of a country, region, or locality which serves to designate a product originating therein, and the quality and characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors." Simply put, "a PDO covers the term used to describe foodstuffs that are produced, processed, and prepared in a given geographical area using recognized know-how," according to EU law. Examples of EU PDO products are Roquefort and Parmigiano Reggiano for cheese and Prosciutto di Parma for ham.

To receive PGI protection, a product must have a geographical link in at least one stage of production, processing, or preparation. Examples of EU PGI products are scotch beef and scotch lamb.

EU regulation No. 2081/92 (and its amendments) established PDO and PGI. Since the regulation took effect in the early 1990s, about 600 food names (other than wines and spirits) have been registered for protection. Some of the registrations are controversial, and various court cases throughout the EU since the late 1990s have resulted.

Number of protected food and beverage names in the EU in 2003

For wine and spirits, the EU has signed bilateral agreements with various countries, including South Africa and Chile, involving protection for thousands of geographical (e.g., cities and regions) and nongeographical wine names. Examples of protected names under the agreements are "sherry" and "port." The recent EU regulations related to wine labeling within the EU impose additional protection on its wine names and terms. As in the bilateral agreements, not all of the protected descriptive terms refer to geographical origin; some are common generic terms such as "vintage." It is doubtful whether these regulations can be applied internationally, because generic terms such as "vintage" have no legal basis for protection under the WTO TRIPS Agreement.

What's at Stake

Naming rights related to geographical origin or geographical indications likely will be discussed in the global trade talks. The EU, as part of its agricultural proposal, has called for terminating the use of certain generic names for food, wine, and spirits unless the names come from a specific region.

Extending GI protection to generic names of food products other than wines and spirits is beyond current TRIPS rules (Article 22 protection does not apply to generic names). For example, the United States currently cannot market "Prosciutto di Parma" since the name has been reserved for ham from Parma, Italy. But under the EU proposal, could firms still market ham using a generic name such as "prosciutto," since this specific term does not refer to the geographical origin of the product? Representatives for Italian parmesan producers are claiming the name "parmesan" for cheese produced in the Parma region. Generic terms such as gorgonzola, mozzarella, parmesan, and romano for cheese have been commonly used for years. What would be the effects on producers and consumers if these names cannot be used?

It is uncertain whether countries would agree on an approach to extend the naming protection of products other than wines and spirits in the WTO. What is certain is that names reflecting attributes of geographical origin do matter to some consumers and producers. Some consumers may be willing to pay a premium for higher quality and differentiated products. For example, an Iowa State University study found that meat from high-quality, grain-fed cattle raised along U.S. Interstate 80 is often called "I-80 beef" by Japanese consumers. Even though "I-80 Beef" does not exist as a brand, the I-80 name signifies a certain quality beef to Japanese consumers. A study by the University of Georgia showed that Vidalia onions command a significant premium over the same type of unbranded onions.

However, an array of unfamiliar names may hurt, rather than help, marketing if manufacturers are forced to seek alternatives to generic names they can no longer use. Many French wine companies currently adopt wine naming conventions that refer to wine by grape variety instead of by geographical origin (which may be unfamiliar to U.S. consumers) in order to market their wine in the United States. Ultimately, consumers would make their preferences known through their purchasing power.

The stakes for the United States are high not only because of the potential loss of generic names, but also because the country uses certain marks—under U.S. trademark law—to protect geographical indications. U.S. agricultural product exports are potentially threatened because U.S. certification marks would not be protected. GI protection would take precedence over certification marks, as indicated in the EU proposal.

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For more information, contact: Suchada Langley

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Updated date: August 12, 2009