A Geographical Indication (GI) is a sign, usually a name, used on goods that have a specific geographical origin and possess qualities, characteristics or a reputation essentially attributable to that place of origin. Typically, a geographical indication includes or consists of the name of the place of origin of the goods. This name can be collectively used by all enterprises from the given area which manufacture a given product in a prescribed way. Champagne and Prosciutto di Parma are examples of some world-famous GIs.
Why give protection to GIs?
GIs can be misused by producers with no link to the designated place of origin, free-riding on the reputation of the original goods. The purpose of protecting a GI is to ensure fair competition for producers and to provide the consumer with reliable information on the place and/or method of production and the quality of the product. The protection GIs give is instrumental in preserving traditional and high-quality products and the know-how and jobs relating to them. Protecting GIs therefore also supports small and medium-sized businesses and manufacturers (SMEs). GIs emphasise the relationship between human activity, culture, land and resources, and help to protect intangible assets such as reputation and quality standards.
GI protection is also an incentive for investing in new technologies and innovation to protect the high quality of the products while maintaining competitiveness.
GIs have special features that distinguish them from other intellectual property rights: they are generally not a property of one single entity as is usually the case for trademarks or patents. GIs are available to all producers whose products originate in the defined geographical area and comply with the specifications set out for the GI.
Do GIs help consumers?
In today’s globalised world, the range of products offered to the consumer is almost unlimited. To make an informed choice, consumers need to gather and compare information on the price and characteristics of an increasing number of goods. Price and basic features of a product may not be the sole deciding factors. Consumers are also looking for ways to identify authentic, original quality products, and expect that the quality and specific features advertised provide the qualities that they value, for which they are often willing to pay a premium. Reliable GIs are a key tool for consumers to make such informed choices.
What is the legal framework for GIs in the EU?
In Europe, GI protection is available for both agricultural and non-agricultural products. Agricultural products and foodstuffs (wines, spirits) can enjoy unitary protection granted exclusively at EU level. Non-agricultural GIs are protected only at national/regional level, through various national legal frameworks.
At EU level, unitary GI protection has been established for wines (1970), spirits (1989), aromatised wines (1991) and other agricultural products and foodstuffs (1992). Through these systems, protected names for the products covered enjoy far-reaching unitary protection throughout the EU with just one application process. At the end of April 2014, 336 names of spirits, 1,577 names of wines and 1,184 names of foodstuff and agricultural products were registered at EU level. The estimated sales value for EU GIs in 2010 amounted to €54.3 billion, including €11.5 billion of export sales (15% of EU food and drink industry exports).
The EU system of GI protection for agricultural products is generally considered a success story, as illustrated by a recent study commissioned by the European Commission. It has brought tangible benefits for consumers and producers, such as detailed information and a quality guarantee for consumers, more stable profit margins for producers, improved visibility, often resulting from participation in trade fairs, access to new domestic and/or export markets, better access to promotion funds and investment aid for producers. GI protection also helps maintain local infrastructure and employment, especially in poorer areas, benefiting society as a whole.
Differing national legal frameworks for non-agricultural products
Member States’ laws on protecting non-agricultural GIs are not harmonised. The relevant national frameworks vary significantly from one Member State to another. There are significant differences in definitions, registration procedures and cost, scope of protection, and enforcement means. As a result, non-agricultural GIs are subject to varying levels of protection, depending on their country of production, building on the basic protection set out in the TRIPS agreement.
In all Member States, non-agricultural products are covered by laws on unfair competition or consumer deception. This is also the case for trade mark law, which may also provide a degree of protection. Specific systems providing GI protection to non-agricultural products are currently operating in 14 Member States. These laws take various forms, ranging from regional or national regulations on specific crafts (e.g. ceramics), to specific laws on a certain product (e.g. Solingen knives) or to regional or national laws that protect all non-agricultural GI products.
As a consequence, to protect non-agricultural GIs in the EU today, the only possibilities are to register the product Member State by Member State where that possibility exists (14 Member States in total), or to rely on other tools such as trademark protection, litigation and/or action via administrative authorities in case of unfair commercial practice or consumer deception.
Why is there currently no protection for non-agricultural GIs at EU level?
Geographical indication protection at EU level is historically rooted in the EU's agricultural policy. However, the objectives of such protection (e.g.to enable fair competition for producers, better inform consumers, promote quality of products, etc.) also apply to non-agricultural products. This is why the Green Paper reflects on the possibility of extending the EU-wide GI protection to this category of products.
Is there an international legal framework for GI protection?
These international agreements allow for GI protection to be granted to all product types, both agricultural and non-agricultural. They differ significantly, however, as to the definition, scope, related enforcement measures and other aspects of GI protection.
Has the Commission decided to legislate on non-agricultural GIs?
No. A Green Paper is a consultation document aimed at sparking discussion and feedback from all stakeholders before the Commission takes any decision on the next steps.
Do GIs constitute undesirable obstacles to trade?
GIs do not restrict trade in any way. Their aim is to provide consumers with reliable information on the specifications and origin of goods, and prevent free-riding on their acquired reputation. GIs also have the particularity of being non-exclusive intellectual property rights: the use of the name or the sign is accessible to all producers from the given area who manufactured the product in the way prescribed, which is in general linked to longstanding traditions.
Is there a risk that introducing such protection for non-agricultural products could harm innovation by going back to old manufacturing processes?
No. On the contrary, all the products that form part of Europe’s traditional knowledge and cultural heritage have a considerable economic potential. Giving the companies producing these goods the right conditions for their exploitation will foster, also in this sector, innovation and technological progress, which are instrumental in getting the best out of local expertise and heritage.
What could the benefits of EU-wide GI protection at international level be?
It is a major objective for the Commission in trade negotiations to obtain geographical indication protection in third countries for its successful agricultural products, like wines and spirits, produced in the EU. To obtain such protection, the EU is regularly asked by trading partners to provide an equivalent protection at EU level for the non-agricultural products originating from those third countries. For the time being, the EU cannot offer this protection beyond measures that are in place at national level. EU-wide GI protection for non-agricultural goods could enhance our bilateral trade relationships with several of our important partners.
What would the cost of establishing such protection at EU level be?
At this early stage, when the Commission has just started inquiring on the merits and various options for a potential new system, it is too early to estimate the costs of its establishment. As a prerequisite to any potential new system, a thorough impact assessment would be carried out and any new system should bring the least possible financial and administrative burden for producers, Member States and EU institutions and benefits should clearly outweigh costs.