WIPO NATIONAL SEMINAR ON ENHANCING AWARENESS

AND BUILDING CAPACITYOF SMES TO BENEFIT FROM THE

INTELLECTUAL PROPERTY SYSTEM

Kuala Lumpur, Malaysia, Sep 7 and 8, 2006

Marketing and Branding Strategies:Marketing and Branding Strategies:

The Role of Collective Marks, The Role of Collective Marks, Certification Marks and Certification Marks and

Geographical Indications for Geographical Indications for Business SuccessBusiness Success

Lien Verbauwhede KoglinConsultant, SMEs Division

World Intellectual Property Organization (WIPO)

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1.

Introduction

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The Challenge of Marketing for SMEs

• Some products have to face competition of other products on the market that are often similar or almost identical

• Need to find mechanism that creates and maintains loyal clientele

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Choosing a textile product

• Materials and texture:– quality silk, pure wool– vegetable colors

• Quality: – colorfastness– easy to clean– density of the knots

• Design: – traditional designs – fashion trends– unique

• Manufacturing technique:– weaving/knitting technique– hand woven– woven by women

• Reputation

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Marketing a textile product

• Materials and texture

• Quality

• Manufacturing technique

• Design

• Reputation

•Give information

•Send a message

• Create image that differentiates you

• To maintain credibility, confidence and loyalty

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Role of IP in Marketing

• Consumers are unable to assess the quality of products on the market

• Trademarks, collective marks, certifications and geographical indications (GIs) refer to the reputation and to certain qualities of the products

• Trust in the mark/GI is the reason why consumers may be willing to pay more

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IP and Marketing

• Collective marks• Certification marks• GIs

Trademarks

Individual marketing

Joint marketing

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• Acting individually, it is often difficult to gain recognition for your products in the marketplace

• Some knowledge and production techniques belong to entire communities and can therefore hardly be attributed to a particular individual

“If you can’t beat them, join them”

SMEs have grouped in associations ( organized geographically or per industrial sector)

Working collectively, SMEs can benefit from the advantages of a joint undertaking.

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2.

Certification Marks

My: “certification trade marks” - Section 56 TMA

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What is a certification mark?

• Sign indicating that the goods/services have been certified by an independent body in relation to one or more characteristics– Origin, material, mode of manufacture, quality, accuracy,

etc.

• Owner is usually an independent enterprise, institution, governmental entity, etc. that is competent to certify the products concerned (My: ‘person’)

• Registered in trademarks register

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How does certification mark work?

• Rules of use– Cases in which the owner is to certify the goods/services

• quality, composition, other characteristics– Cases in which the owner is to authorize the use– Other provisions required by Registrar

• e.g. control measures, sanctions

• My: Mark must be to the public advantage

• Authorization to use– anyone who meets with the prescribed standards– not confined to membership – generally: licence agreement (fee)– owner not allowed to use

• Control

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Benefits

• For Consumers: – Guarantee for consumers of certain quality

• For SMEs: – Benefit from the confidence that consumers place

in users of certification mark

– Strengthen reputation

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• For example, certify that:

Product is handmade

Certain ecological requirements have been respected in the production procedure

No children were employed in the production process

Products have been produced in specific geographical region

Products are made 100% of recyclable materials

Products are made by indigenous group

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Case Study: “RUGMARK”

• Global non-profit organization working to end child labor and offer educational opportunities for children in India, Nepal and Pakistan

• RUGMARK label is assurance that no illegal child labor was employed in the manufacture of a carpet or rug

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Case Study: “RUGMARK”

• To be certified by RUGMARK, carpet-manufacturers sign legally binding contract to:– Produce carpets without illegal child labor– Register all looms with the RUGMARK Foundation– Allow access to looms for unannounced inspections

• Carpet looms are monitored regularly by RUGMARK

• Each labeled carpet is individually numbered

enables origin to be traced back to the loom on which is was produced

also protects against counterfeit labels

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Case Study: “WOOLMARK”

– Registered by Woolmark Company

– Quality assurance symbol denoting that the products on which it is applied are made from 100% wool and comply with strict performance specification set down by the Woolmark Company

– Registered in over 140 countries

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“Through ownership and licensing of the Woolmark, we provide unique worldwide quality endorsement.

Our brands and symbols are protected by rigorous and extensive control checks and recognized globally as unrivalled signs of quality and performance.

If a wool product carries our brands, it carries our guarantee of product quality.”

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Case Study: “TOI IHO”

• Exciting initiative for Maori artisans, artists and businesses

• Denotes that products are authentic quality indigenous Maori arts and crafts

• The creation of the mark was facilitated by Te Waka Toi, the Maori arts board of Creative New Zealand, in consultation with Maori artists.

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Case Study: “CRAFTMARK”

– Registered by the All India Artisans and Craftworkers Welfare Association (AIACA)

– Logo symbolizes ‘threads’ from craft product. Also metaphor for the hands of the craft worker.

– Certifies that product is genuine Indian handicraft or handloom

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– Minimum standards + norms for labeling

– Fee based on turnover of the applicant

– Increases consumer awareness of distinct handicraft traditions

- AIACA is working towards building the

Craftmark into a strong brand

- national advertising campaign - in-store displays and posters - direct mailing to consumers- tying up with international craft support

organizations to publicize the Craftmark in other countries

- Website: www.craftmark.org

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Case Study: “SIRIMLINK”

• SIRIMLINK provides access to technical information, stored in SIRIM

– Malaysian Standards

– Malaysian Patents

– Technical Abstracts from journals

– Malaysian Experts in Science and Technology, etc

• Owner = Sirim Berhad (government owned company)

• Logo can be used by? Rules of Use?

• Certifies what?

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Case Study:

“VETERINARY HEALTH MARK”

– Awarded under the Veterinary Inspection and Accreditation Program of the Department of Veterinary Services (DVS), Ministry of Agriculture, Malaysia

– Given to plants processing livestock products

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– Accredited plants allowed to imprint the logo on the label of approved products / packaging material

– Benefits:

• Consumer confidence on food safety

• marketing tool

• easier acceptance in applications for access to foreign markets

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3.

Collective Marks

My: not available

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What is a collective mark?

• Sign capable of distinguishing the origin or any other common characteristics of different enterprises which use the sign under the control of the registered owner

• Typically, the owner of collective mark is an association of which the producers are members

• Registered as such in trademarks registry

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How does collective mark work?

• Rules of use– persons authorized to use – criteria for membership – conditions of use

• e.g. particular features/qualities of the products

– sanctions against misuse

• Authorization to use– membership – application or automatic – comply with the rules

• Control

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• Thus, function of collective mark is to INFORM the customers :

– About the origin of the products • e.g. ceramic artisan, member of a specific association in

Thailand

– About a level of quality or accuracy, geographical origin, or other features set by the association

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Benefits for SMEs

1. Economies of scale (registration cost, advertising campaign, enforcement, etc.)

2. Reputation acquired on the basis of common origin or other characteristics of the products made by different producers/traders

3. May facilitate cooperation amongst local producers/traders

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4. Creation of collective mark hand in hand with development of certain standards and criteria (rules) and common strategy

collective marks can become powerful tool for local development

harmonization of products/services, enhancement of quality

no licenses

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Example: “Interflora”

• To buy, order and send flowers at almost anywhere in the world

• > 70.000 florists in 150 countries

• emblem : Mercurio with flowers in hand

• Slogan: “Say it with flowers"

• Guarantees freshness, flower quality and value of every Interflora relay order

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CASE STUDY: “La Chamba”

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Project “La Chamba, Tolima”

• Mapa del Tolima

The project

• 3 municipalities: El Guamo, Flandes, El Espinal

• Population: 12.100 inhabitants

• 1.300 ceramic artisans (10%)• 284 workshops • 70% women• 12% without formal eduction• 21% without public services

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Project “La Chamba, Tolima”

Added value:

• traditional know-how transferred from generation to generation

• 89%: handwork or with simple tools

The product

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Project “La Chamba, Tolima”

Problems:

• little enterprise management capacity

• paternalism

• individual leaders

• lack of organizational structure

Solution:

• cooperation

• development of enterprise management capacity

• common strategy

Organization

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Project “La Chamba, Tolima”

Marketing

Problem:

• Added value (handmade, tradition, quality) of the product not advertised• Need to find new clients, enter new markets

Solution:

• Certification “Hecho a Mano” (handmade) • Creation of culture of CONSISTENT QUALITY• Collective Mark (joint project WIPO)

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Project “La Chamba, Tolima”

COLLECTIVE MARK

Association:• Members allowed to use the collective mark• Exchange of experiences• Joint advertising and promotion

Regulation of use:• Production process (mine extraction, preparation of clay, moulding, heating,

glazing)• Quality control and inspection homogeneous products

Objectives:• Strenghten image of Chamba ceramics• Reputation of consistent quality and tradition• Differentiate on the market Chamba ceramics from other ceramics• Preserve cultural heritage• Foster commercialization

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Collective Mark

•Only members that comply

•Control by association

•Simple authorization

•Free use

•Owner allowed to use

•Cooperation

Certification

•Anyone who complies

•Control by independent entity: stronger

•Authorization through license agreement

•Fee

•Owner not allowed to use

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4.

Geographical Indications

My: Geographical Indications Act 2000

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What is a GI?

• Sign used on goods that have a specific geographical origin and possess qualities or a reputation that are due to that place of origin

• Source identifiers• Indicators of quality

• Not created. Can only be recognized

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• Most commonly, consists of the name of the place of origin of the goods

• Country, region, city

• E.g. Champagne (France), Havana (Cuba)

Matterhorn, Switzerland

Eiffel Tower,Paris

Tower Bridge,London

• In some countries : can also be figurative sign• E.g. Eiffel tower, Egyptian pyramid

• E.g. birds, animals associated with a place

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• Authorization to use

– Collective right of use– Each enterprise located in the area has right to use

• For products originating from that area LINK• Possibly subject to certain quality requirements

How does a GI work?

• Link between product and place

• Place where product is produced (industrial products, crafts)

• Place where product is extracted (clay, salt)• Place where product is elaborated (liquor,cheese)

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• Unauthorized persons may not use GIs if such use is likely to mislead the public as to the true origin of the product

• for not originating from geographical place

• for not complying with prescribed quality standards

• Stronger protection for wines & spirits

• Sanctions: – Court injunctions preventing unauthorized use

– Payment of damages

– Fines

– Imprisonment

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GI – Who does what?

Government:

– supplies the legal framework

– approves GIs, verifies compliance

– “external” (independent) control system + enforcement

Producers groupings:

– talk to government

– help define the mandatory specifications (book of

requirements) to be met

– ‘’internal”control

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Typical examples:

• Agricultural products that have qualities that derive from their place of production and are influenced by specific local factors, such as climate, type of soil, altitude, etc

– E.g. wine, champagne, cognac, port, sherry, whiskey – E.g. cheese, yoghurt– E.g. olive oil, ham, potatoes, honey, rice

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Typical examples:

• Also: handicrafts and medium-tech goods

– E.g. ‘Hereke’ (Turkey) for carpets– E.g. ‘Limoges’ (France) for porcelain– E.g. ‘Swiss’ for watches– E.g. ‘Arita’ (Japan) for ceramics

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Examples in Asia:

Laos: • Coffee and Green tea from Paksong• Silk from Pak Eum• Algea from Luang Prabang• Benzoin from Laos

Indonesia: • Tobacco from Deli (Sumatra)• Cocoa from Bone Bone• Coffee from Kintanami (Bali) or Toraja• Clove from Ternate

Benzoin raisins

clove

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Examples in Asia:

Vietnam: • Pepper from Phu Quoc• Pomelo from Nam Roi• Tan Lam Coffee

Cambodia: • Khampot Pepper• Prahoc• Durian

Philippines: • Dried mangos from Cebu

Pomelo Nam Roi

Cebu mango

durian

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- Exported throughout the world over the last 100 years

- Gained international recognition by chefs and gourmets

- Distinctive flavour and taste

through years of agro-research

- Sarawak’s tropical climate and fertile hill slopes are ideal for pepper cultivation

Case Study: “Sarawak pepper”

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Geographical Indications No: GI03-00001Class: 3Name of Registered Proprietor: Pepper Marketing BoardRegistered From: 4th day of November 2003Expiry Date: 3rd day of November 2013

Goods: In respect of the following goods

SARAWAK PEPPER IN ANY FORMS (WHOLE, GROUND, PICKLED, ETC). ALL GRADED PEPPER,

VALUE ADDED PEPPER PRODUCTS AND PEPPER-BASED PRODUCTS FROM MALAYSIA

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Quality, Reputation or Other CharacteristicSarawak, the largest state in Malaysia is an establish producer of “King Of Spice”-Pepper, where

about 98% of pepper production in Malaysia comes from Sarawak. Pepper cultivation in Sarawak was commercialized by the White Rajah Charles Brooke with the introduction of

‘Gambier and Pepper Proclamation’* in the 1870’s. Ironically, Sarawak a latecomer, went on to become a significant producer in world pepper industry. Starting with a modest output of 4

tonnes* in 1870s, pepper production now averages 30,000 tonnes a year (over 90% is for export) and in 2002, Malaysia was the fourth biggest pepper exporter in the world. Currently, there are about 70,000 pepper farmers throughout Sarawak and their cultivation covered about 14,000

hectares.

Sarawak Pepper is synonymous with quality in the spice trade and it has been recognized in the international market as one of the high quality pepper. Nowadays, Sarawak Pepper Sarawak value-added pepper such as Creamy White Pepper (CWP), Mikrokleen (MK) and Naturally

Clean Pepper (NCP) are well accepted, particularly by clients who would not compromise on quality. (Refer to the brochures on CWP, MK and NCP and Grade Specification of Sarawak

Pepper attached). In this respect, Pepper Marketing Board (PMB) as one of the main government agencies entrusted with the development of the pepper industry in Malaysia has to ensure that

only quality Sarawak Pepper will be exported to overseas.In order to enhance buyers confidence towards Sarawak Pepper, the Board has embarked on

efforts to improve the quality of Sarawak Pepper right from the farm level up to the export level. In 2002, the board was awarded with SAM ISO 17025 accreditation and ISO 9001:2000 for

Testing Laboratory and Statutory Grading respectively. This recognition has to put PMB on the fast track of pepper industry by having a testing laboratory and grading unit with worldwide

recognition.

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• National

• Regional

• International

How is a GI protected?

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Protection on national level

– Specific title of protection• Registration with IP office (Russia)• Decree (France)• Special laws for the protection of GIs (India, Malaysia)

– Act of public law– Defines area of production and production standards– Enforcement through public law bodies (fair trading bodies, consumer protection

bodies etc)

– Unregistered: through Passing-off, Unfair Competition, Consumer Protection laws

• if reputation + misleading

• Pass off: e.g. Scotch whisky – Peter Scot in India

• Cons prot: e.g. ‘made in Japan’; Egyptian cotton– Only successful if you can prove damages (if goodwill)

– Protection only effective between parties of the proceedings. Entitlement to protection of given GI must be demonstrated every time enforcement is sought.

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Protection on national level

– Certification marks or collective marks • May certify or indicate origin of products• Cert: e.g. in the U.S.A.: Darjeeling, Swiss, Stilton• Coll: e.g. Japan; agricultural label in France

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Protection on international level

– No legally binding international register for all GIs

– Bilateral agreements • e.g. EU-Bulgaria for wine names

– International treaties

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– International treaties • TRIPS:

– minimum standard of protection for WTO members

– if misleading or act of unfair competition

– enhanced level of protection for wines and spirits

– no protection if GI is generic term for the goods in the member state

• Lisbon:

– international registration system

– member countries must prohibit imitations, including terms like “type” or “kind”

– cannot become generic, as long as protected in country of origin

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• GIs shift focus of production to quality increased production local job creation

• Reward producers with higher income in return for efforts to improve quality

• Provide consumers with high-quality products whose origin and mode of production is guaranteed

Benefits for SMEs

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– Inconsistent protection

• Absence of GI system in many countries

• Civil law

– Registration

– Only similar goods

• Common law

– Repution enough (e.g. Champagne in India)

– Also dissimilar products

• Additional protection for wines and spirits

– GIs may become generic terms (e.g. Chablis in America, China for porcelain)

Disadvantages

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GI

•Protects indication that links product’s origin and quality/reputation based on that origin

•Most often: public right; owner= State

•Anyone can use

•Proscribed list of unauthorized actions

•Action: private + public

Certification

•Protects certification of product’s particular characteristics (not necessarily origin)

• Most often: private right; owner = trade association or producer group

•License needed

•Protection against those who don’t have license

•Action: owner of certification

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4.

Conclusions

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• Trademark is powerful instrument to differentiate your individual products from those of your competitors

• However, in order to be effective (strong reputation), the enterprise in question must have a high level of organization and production

• Collective marks, certification marks and GIs may be useful (additional) tools to help enterprises overcome the disadvantages associated with their small size and isolation in the marketplace 

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• Capable to acquire a high reputation

• Protection can be maintained indefinitely

• No monopoly, but simply limit group of people who can use a specific symbol

• Protect goodwill and reputation acquired by a group of producers over centuries

Economic benefits of collective marks, certification marks and GIs

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IP and Marketing

• Collective marks• Certification marks• GIs

Trademarks

Individual marketing

Joint marketing

•Origin: enterprise•Individual reputation •Origin: geographical

•Common reputation, characteristics,

qualities

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Lien Verbauwhede Koglin

WIPO, SMEs Division: www.wipo.int/sme/