Study on Geographical Indications protection for non-agricultural

products in the internal market

David Thual, Team LeaderPublic Hearing - 22 April 2013

Provide the European Commission with:

• An assessment of the regional, national and international legal means and models of protection available in EU Member States & 4 countries for the protection of non-agricultural GI products

• An economic analysis of the market for existing and potential non-agricultural GI products

• In the light of the above, relevant and feasible options for the possible creation of a unitary title of protection of geographical indications for non-agricultural products across the EU.

Objectives of the study

Team: 24 local and European experts with different backgrounds and a good understanding of IP issues

Steps:1. Identification of existing and potential non agricultural GIs: non

exhaustive list of 834 products identified through desk research as well as contacts with trade associations and public authorities at the regional, national, European and International level

2. Selection of 129 non-agricultural GI products representing a good sample: different sectors, processed and unprocessed products, large number of countries covered (23), different IP protection tools used

3. Collection of detailed legal and economic data on these products

Methodology

Methodology4. Comparative analysis of legal means and models of protection

available in the 31 countries and at the international level

5. Economic analysis of the data available for the selected non-agricultural GI products

6. Detailed case study on 29 products

7. A survey of stakeholders: 700 producers and non producers contacted, 219 replies received

8. Identification of options for the possible creation of a unitary system of protection across the EU

Overview of the legal means of protection available

• Unfair competition and consumers deception lawsAvailable in all 31 countries covered by the study and to all non-agricultural GI

productsNo full harmonisation within the EU (and EEA): differences with regard to

evidence to be brought up, timeframe for action, remedies, competent authorities and their ability to act ex officio

In practice, consumer deception or unfair commercial practice can be difficult to prove.

• Passing off (misrepresentation of the origin of a product can be condemned by a Court)

This means is available only in three countries: Cy, Ire, UKNo recent case of protection through passing off was found

Overview of the legal means of protection available

• Trade mark lawAll 31 countries provide for the protection of non-agricultural GIs

through their trade mark system.Protection can also be secured through the Community trade mark

(CTM) valid throughout the 27 Member States63 products identified in the context of the study are protected through

a trade mark, mostly figurative or semi-figurative marksOnly 17 through the CTM and 4 collective CTM: 1 word mark, 3 figurative

marksOnly 20 registered trade marks in third countriesIn practice, registration of a word mark with a geographical name

appears difficult to secure. Many producers have raised concerns with the costs of enforcing trade mark rights

Overview of the legal means of protection available

• Sui generis legal frameworks14 countries have a general GI law or specific laws to protect certain

products at the national or regional levelNo harmonisation in terms of GI definition, procedure for GI protection,

scope, effect and cost of protection.

• International legal instrumentsNon agricultural GIs products covered by relevant international treaties,

notably WTO TRIPs and WIPO administered Lisbon Agreement on Appellations of origin and WIPO Madrid system for the protection of trade marks

Also included in agreements between Member States, with third countries signed by CH but also EU recently

with Colombia & Peru

Infringements and imitations problems

94 products studied reported infringements to their IP rights

For 57.4% of them, this is a major problem

Types of infringement• Fake products, imitations and/or counterfeited products present on the

market• Use of evocation of the name• Use of the specific products’ pattern by an infringer • Cheap and poor quality copycat sold over the internetImpact• Loss of revenue, market share and export market; lower

profits• Consequences on enterprises’ innovation and investment

activities• Costs of actions taken to fight against infringements

(campaigns; legal actions to protect rights)

Overview of our economic findings• Characteristics of the analysed products

– 119 products have a defined geographical area– 81 use local raw material - the others source their raw material from

domestic, European or International markets

• Enterprises– Most of non-agricultural GIs are produced by Micro (51.6%) and Small-size

enterprises (28.5%)– Proportion of enterprises run by a single person is high (33 products out of

127)

• Employment – Available sample: 160 579 full-time equivalent jobs– For 44,4% of the studied products, the contribution to local employment is

more than 5%– Two thirds of the regions from which non-agricultural GI products originate have a poverty rate or an employment rate above 20%

• Turnover– Consolidated turnover for 72 products with solid data is estimated at

4.174 billion Euros in 2010– For a majority of products, the turnover has been stable over the last

years

• Markets– For 65 products, the main market segment is the domestic and regional

one– 70 products face strong competition; 15 declare having no competitors

• Marketing strategy– Collective labelling schemes are not widely used by enterprises involved

in the production of non-agricultural GI products– Almost 50% of the studied products do not invest to promote their product

Overview of our economic findings

Stakeholders’ survey

Aim: gather the view of private and public stakeholders on:• the current legal tools available for the protection • Their needs and expectations in relation to a potential legal future

instrument of protection at EU level.

Methodology• Experts sent two questionnaires (1 for producers and their

associations; 1 for non producers’ stakeholders) by e-mail to over 700 producers, private and public bodies in all countries covered by the study.

• 206 answers received: 97 from producers, 54 from EU public bodies, 41 from EU private bodies, 3 from Swiss producers, 5 from non EU public bodies and 6 from non EU private bodies

Main conclusions of the surveyA majority of respondents: • Producers are not satisfied with existing means of protection

• Public bodies are rather satisfied with their national system and neutral on the issue of the protection at the EU level

• Producers and non producers would welcome a uniform legal protection non-agricultural GI products at the EU level

• Considers that the benefits would be an EU-wide protection; a better communication tool for the producers and a better information given to the consumers; clear conditions set out to use the GI name

• Does not believe that such protection could have an impact on the price of the products

• Considers that public bodies should play a key role to verify production requirements and the link with the specific origin, be in charge of controls and allow for oppositions to the registration of a GI

Options for the creation of a EU system of protection

The authors of the study consider that:

• There is a case to be made for an EU sui generis GI protection system for non-agricultural GIs

• Different options explored in the study show advantages and disadvantages

The authors of the study consider that there are strong arguments to establish a system that provides for:• Only one GI definition and protection of a geographical name or a traditional denomination

• Mandatory registration and a one step procedure at the EU level

• Clear and transparent procedures for registration, modification and cancellation of EU and third countries’ GIs

• Well defined specification file prepared by the producers and a mandatory independent public or private control system

• A one-off small registration fee

• A register of non-agricultural GI names protected in the EU

• An extensive legal protection of registered names

• Clear provisions on the relationship between trade marks and GIs and on homonymous names

• The management of the system to be given to an office of the EU (possibly OHIM)

Options for a EU system of protection

More informationhttp://ec.europa.eu/internal_market/indprop/geo-indications/

index_en.htm

d.thual@insight-consulting.eu