GIs: New World Countries Must Bargain

March 2, 2008 by Svetlana Ora Shpigelman

Geographical Indicators are terms used to define names that are affixed to predominantly agricultural products (although GIs are also used for other products such as crafts and jewellery, this kind of use is less common) originating from specific geographical regions where these products are grown and manufactured and from which they derive their quality and reputation (as a result of both human and natural factors). Moreover, GIs are a unique kind of IP in that this form of trademark is shared by all of the people producing in a certain region. Since GIs indicate both quality and reputation to consumers they have become very lucrative (as the products to which they are affixed gain an economic advantage over similar products that do not bear these names).

Since GIs help add economic value, those countries that have a lot of GIs (specifically the EU countries) want to protect them, especially since they feel that New World countries (such as Canada, Australia, and the U.S.) have been abusing European GIs by affixing them to products manufactured in the New World and causing consumer confusion. It is clear that the drive to protect GIs comes from their economic value (the fact that affixing a GI results in recognition of the product and its quality, a higher price, and more sales). As such, it is easy to understand why countries that have a lot of GIs feel that they are losing out when a product manufactured elsewhere with the same name is chosen over theirs. Old World countries claim that this New World product is purchased over the Old World product only because consumers are tricked into believing that the New World product actually comes from the specific region whose name it bears and is merely sold for a cheaper price. However, I find it difficult to believe that a reasonable consumer is as stupid as the EU claims. First of all, any consumer can simply look at 2 bottles and see a “Made in Canada” or “Made in France” tag to distinguish between them and second of all I believe that for most consumers, the price would be enough to indicate that one was clearly imported while the other was not (this can be observed at one’s local LCBO where Andres Canadian Champagne, which is produced in Canada, costs a mere $12.95 for 1500 mL while 99 Clos Des Goisses (Champagne Philpponat), which is produced in Champagne, France, costs $495.00 for 750 mL.).

Driven by a fear that their products are outsold by imitations, Old World countries (such as those of the EU) argued for stronger protection by phasing out the use of their GIs even if a “Made in Canada” tag or an expression such as “kind,” “like,” “type,” or “imitation” are affixed. The TRIPS agreement, which came into effect in 1996 in developed countries and in 2006 in its least developed signatories, was successful in establishing this kind of virtually absolute protection for wines and spirits through Article 23. However, to the EU’s chagrin, Article 24 exempted all GIs that were used in good faith prior to 1994, were used as generic names, and were not protected in their country of origin. As such it was left up to each of the signatories to make their own bilateral agreements with each other if they truly wanted their GIs to be protected.

 One such bilateral agreement is the Wines and Spirits Accord, which was signed by the EU and Canada in September 2003. This agreement called for the gradual phasing out of 21 EU wine names and 2 EU spirit names to be completed by 2013. In return, Canada received the protection of 1 GI: “Rye Whiskey.” This clearly shows that New World countries, which have very few GIs to protect, are at a major disadvantage and must shoulder most of the burden of GI protection. Unfortunately I was unable to find any information on whether or not this agreement has been implemented and to be honest I hope that it has not because I feel that Canada has lost out in the negotiations. If Canada is to respect the EU’s claim for GI protection it must use such negotiations to its advantage (for example, since it doesn’t have many GIs to protect it must argue for other things such as respect to their boundaries in the arctic or fair use through the licensing of GIs). True progress in this area can only occur as a result of compromise.