Importance of Geographical Indications for Global Business

Geographic indications (GIs) stand at the intersection of three hotly debated issues in international law: international trade, intellectual property and agricultural policy. Akin to a trademark, a GI identifies a good as originating in a particular region, where a given quality of the good is attributable to its place of origin. Well-known GIs include champagne and wines. Although GIs have a long history, in recent years they have become central to the debate over the expansion of intellectual property rights in the World Trade Organization. We argue that GIs have gained greater political salience and economic value due to major changes in the global economy. Proponents of GIs also raise more diffuse concerns about authenticity, heritage and locality in a rapidly globalizing world. After explaining the origins of the effort to protect GIs in international law, we assess the normative justification for these unusual intellectual property rights. Some GI protection in international law is justifiable. But the existing level of protection afforded by the World Trade Organization – as well as current demands of the European Union for even greater protection – is unjustified. We defend this position through careful consideration of the major theoretical bases for property rights.
Geographical indications were given universal attention and protection only in 1995, with the signature of the TRIPS Agreement. Broadly, GIs are protected under the TRIPS Agreement on the grounds of consumer and goodwill protection. There are, however, two standards of protection, a minimum level that applies to all goods and revolves around the so-called “non-misleading requirement”, and an increased level of protection for wine and spirits. The Doha Round of multilateral negotiations opposes, among others, those countries that favour the extension of the additional protection to all products to those that favour the statu quo.
The TRIPS negotiations focused primarily on the familiar trio of copyright, trademark and patent. The agreement also addresses less well-known issues: rights over plant genetic resources, semi-conductor mask works, and of course geographic indications. While similar to trademarks, GIs differ in that they attach to goods from a particular region rather than from a particular producer. Some GIs, such as cognac and Roquefort, are very well known. Others, such as Kolhapuri chappals from India or Zhostovo metal painted trays from Russia, are more obscure. GIs are a particular focus of European states. Indeed, enhanced GI protection has been widely understood as an effort by the Old World to secure legal protection against the New, particularly for agricultural products. Agriculture is highly protected and subsidized in most advanced industrial states, and farmers are often a politically powerful lobby.
GI protection is one arrow in the quiver of governments, particularly in European states, that seek to protect their agricultural sector from low-cost competition from abroad. Falling at the confluence of agriculture, trade and intellectual property, GIs have become ‘a red-hot issue’ in international law.The TRIPS Agreement provides for an additional level of protection for GIs of wine and spirits, in the tradition established in the Madrid Agreement of 1891 and in the aftermath of World War I. First, there is a “non-misleading requirement”. Second, the use of a GI is prevented “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”.
Several bilateral agreements on GIs have been negotiated, most of them on the basis of the TRIPS clause that mandates GI wine and spirits negotiations at the request of a WTO Member. Bilateral agreements are usually negotiated and enforced under the umbrella of Free Trade Agreements (FTAs), which facilitate trade-offs in other sectors over the course of the negotiations.The list of Bilateral agreements in wine and spirits negotiated by the European Commission appears. Regarding wine and spirits alone, by 2010 the European Commission had concluded agreements with Albania, Australia, Bosnia-Herzegovina, Canada, Chile, Croatia, the Former Yugoslav Republic of Macedonia, Mexico, Montenegro, South Africa, Switzerland, and the United States. Through these bilateral agreements, the EU has secured the protection of its GIs in territories where these were formerly used as generic terms, and this notwithstanding the grandfather clauses and genericity exemptions of the TRIPS Agreement. In trade jargon, this practice has been labelled the “claw-back” of GIs.
Estimates of GI registrations, value-added and exports are neither comprehensive nor consistent; figures from different sources indicate great disparities in number and value. The number of legally protected GIs globally is estimated to be close to 10.3 thousand, with an estimated trade value of over USD 50 billion (EUR 39 billion). Approximately, 90 per cent of GIs originate in the OECD countries, with France, Italy and Spain accounting for approximately 10 per cent of all registered GIs, and 70 per cent of the total value of GIs worldwide. The participation of the rest of the world is small but increasing.
23 aug, 2018


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