GEOGRAPHICAL INDICATIONS MORE THAN A MARKETING TOOL PART

GEOGRAPHICAL INDICATIONS: MORE THAN A MARKETING TOOL PART – I A PRESENTATION BY RAJENDRA KUMAR PARTNER K&S PARTNERS, NEW DELHI APRIL 6, 2010

Lets first talk about concepts and forms of Intellectual Property

Common Misconceptions or Wrong Descriptions n Many times we read and hear: – Patent this brand – Copyright this Idea – This patent gives Ricetec exclusive right to use the name “Basmati” – Neem has been patented – Government of India to protect Basmati and Darjeeling trademarks – All these reveal confusion about IP rights

FORMS OF IPR Trade Secrets Trademarks or Brands Patents IPR Designs Geographical Indication Copyright Plant Varieties Act

What are Patents n Patent – – An industrially useful invention – Which is new and not part of the public domain – Confers upon the patentee monopoly in the use of the invention for a fixed period – Protects the workable idea and the concept of an industrially useful invention

What Does “Copyright” Mean n Copyright– Protects the expression of an idea rather than the idea itself – Gives to a copyright owner excusive right to a bundle of rights in the protected work to the exclusion of all others

What are Industrial Designs n Design- – Protects the external aesthetic / ornamental appearance or characteristics of a product – Judged solely by the eye of the observer

What are Trademarks n Trademark- – Is a word / device / sign / symbol / combinations thereof and is capable of graphical representation – Indicates the origin of goods or services and distinguishes these from those of others n Coca Cola n Microsoft Pepsi Dabur Godrej Colgate

TRADEMARKS SAMSUNG, SONY, HONDA, HYUNDAI, HAIER

What are Geographical Indications n Geographical Indications – This is a collective right as opposed to a private right – Identifies the product as originating in a country or region thereof – Whose quality, reputation or other characteristics are attributable to its geographical origin BASMATI, DARJEELING TEA, CHAMPAGNE, SCOTCH WHISKY, HAVANA CIGARS, ALPHONSO MANGOES

TYPES OF GIs Ø GEOGRAPHICAL INDICATION Ø Product name indicates the origin Ø SCOTCH whisky Ø DARJEELING tea Ø HAVANA cigars, Ø Product is traditionally associated with a particular region Ø ALPHONSO Ø FENI Ø BASMATI

STRATEGIC USE OF TRADEMARKS l Macro economic function- identifies product l Accountability to customers l Strategic marketing role in individual enterprises l Consumer advertising to promote product sale l Cements consumer loyalty

STRATEGIC USE OF TRADEMARKS l Trademarks help owners to: l Increase profitability l Respond to unfair competition l Expand maintain market share l Differentiate products l Introduce new product lines l Gain royalties through licensing programs l Support strategic partnership & marketing alliances l Justify corporate valuation in financial transactions

VECTORS OF NATIONAL IDENTITY l Countries l Coca Cola, Marlboro, Nike l Ferrari, l evoked by: - Gucci, Benetton l Chanel, Dior l Sony, Honda Trademarks convey positive commercial appeal about country of origin

CASE STUDIES l JAPAN l Post world war II- “Made in Japan” l SONY – Latin Name - Chosen in 1954 l Today Japan known for high quality electronic goods l One of the per capita richest countries

CASE STUDIES l KOREA l 1960 s - low GNP country l Today eleventh largest economy in the world l Major brand exporting country l SAMSUNG, HYUNDAI – technical competence, manufacturing excellence, modernity

WHAT MADE THEM SUCCEED? l Small countries - export-led economic development l Developing domestic expertise – controlled external trade l State supported industrial development l State supported export of branded domestic products l Quality recognised as a benchmark

STRATEGIC USE OF GEOGRAPHICAL INDICATIONS ØLike any other IPR, a GI can also be economically exploited ØProvides benefit to all stake holders ØContributes to human and social development of community ØCan be used as a means to protect some traditional knowledge and traditional cultural expressions (Madhubani paintings, Aranmula metal mirror & other products of handicrafts)

STRATEGIC USE OF GEOGRAPHICAL INDICATIONS ØHelps in preventing migration of the art / craft out of the region by keeping the artisans rooted in the region ØActs as an ambassador of tourism for the GI region (E. g. , Champagne tours, Scotch Whisky trails, Napa Valley Wine tours)

STRATEGIC USE OF GEOGRAPHICAL INDICATIONS Ø PROTECTION OF GIs IMPORTANT: ØPromotes products having certain characteristics of considerable benefit to the rural economy ØEnsures the supply chain integrity of GI products ØFacilitates distribution and sale of GI products – especially relevant to developing countries whose markets are in industrialized countries

STRATEGIC USE OF GEOGRAPHICAL INDICATIONS Ø PROTECTION OF GIs IMPORTANT: ØImproves the income of farmers and retains the rural population in less favoured remote areas ØProtects consumers against acts of unfair competition by ensuing correct labeling information ØActs as a vehicle for producers to compete on quality rather than quantity

STRATEGIC USE OF GEOGRAPHICAL INDICATIONS Ø Studies in Europe have shown enhanced economic benefits for origin guaranteed products Ø French GI cheeses: a premium of 2 Euro Ø Italian Toscano oil : a premium of 20% Ø French Poulet de Bresse : a premium of 4% Ø Producers of milk for ‘Comte’ cheese: a premium of 10% Ø These products are sold at a premium today both in the domestic and international markets

How do we unlock the wealth? Ø Legal: ØNeed for protection of GI at domestic and international levels ØNeed for integrity and sanctity of supply chain through certification at source ØNeed for pro-active and defensive steps to prevent usurpation of GIs

Colombian Coffee Case Study n Colombian coffee – Coffee produced in Colombia – Rich taste and aroma – Handpicked berries – Soaked in cold mountain water for 24 hours – Carefully washed in long concrete troughs – Dried on great open terraces

Colombian Coffee Case Study n Colombian Coffee Federation (NFC) – Owned & controlled by over 50, 000 Columbia’s coffee farmers – Markets & advertises to promote Colombian Coffee around the world by way of the Juan Valdez logo – Lays down rigorous quality control standards – Certifies 100% Colombian Coffee with no other origins blended in

Colombian Coffee Case Study

Colombian Coffee Case Study n Advertising history – Early 60’s -to 80’s Initial Educational Campaign to create awareness of Colombian Coffee’s superiority – Early 80’s - Image Campaign - to create a positive image of Colombian Coffee – The 100% Colombian Coffee Campaign- The Juan Valdez logo developed in March 1981 – The right to use the logo is strictly enforced as to the manner and form of use

Colombian Coffee Case Study – Juan Valdez (the quintessential cafetero/ coffee farmer), his mule and the Colombian mountains in the background – Serves as a seal of 100% guaranteed Colombian Coffee as approved by NFC – Logo was introduced to print & consumer spot television advertising – 1983 - the logo was included in all creative material on a national basis

Colombian Coffee Case Study – 1990’s - The Grab Life by the Beans Campaign to reflect the Espresso Bar culture of young coffee drinkers – Currently all three campaigns run simultaneously to compliment and enhance the brand equity of Colombian Coffee

Colombian Coffee Case Study n How has the protection benefited the poor cafetero? – Standard of living of more than 4 million (around 15% of the total population) Colombians improved – Thousands of miles of access roads built to the production area

Colombian Coffee Case Study – Safe and adequate water supply and electricity – Schools for the cafeteros’ children – Health centers – Overall improved living conditions – Today, Colombia’s 300, 000 small independent coffee growers are no longer alone in the vast world of international trade

Colombian Coffee Case Study – And Colombia is now getting known for its coffee tourism! – Since the early 1990 s, coffee farms are being opened to visitors for a fee. – Guided tours laced with activities such as coffee roasting, coffee cupping etc.

Phu Quoc Fish Sauce A case study from Vietnam – Fermented fish sauces considered a delicacy in many East Asian countries – Nuoc Mam from Vietnam’s largest island called Phu Quoc considered among most famous – Phu Quoc in the Gulf of Thailand surrounded by waters rich in silvery, translucent, long-jawed anchovies – Traditional recipe is secretly guarded by the Phu Quoc Islanders

Phu Quoc Fish Sauce A case study from Vietnam – However, the process lasting almost one year essentially involves: catching, layering and salting anchovies, decomposing them in special wooden casks that are said to flavour the sauce – Island of Phu Quoc has about 90 fish sauce enterprises – collectively producing 10 million liters of sauce each year – EU alone a major buyer of around one million liter

Phu Quoc Fish Sauce A case study from Vietnam – Appellation of origin under Regulation 510/206 sought – Ever since implementation of a geographical indication scheme in 2001: n Prices in the home market increased from 0. 5 to 1. 5 Euro per liter n Attracted Unilever under a ten-year contract to team up with local fish sauce producers in Phu Quoc for upgradation of processing and bottling plant to international hygiene standards

Phu Quoc Fish Sauce A case study from Vietnam n Resulting in a world class product under Unilever’s Knorr Trademark along with Phu Quoc as a mark of origin – Unilever committed to contribute to secondary ventures: n n Building a museum of fish sauce on the island Research by scientists in anchovies to suggest patterns of sustainable harvest of these tiny fish – The Phu Quoc example is a precedent for developing countries to exploit/ preserve their undermarketed traditional products sold under GIs

END OF PART - I

GEOGRAPHICAL INDICATIONS: MORE THAN A MARKETING TOOL PART –II Indian Experience

Indian Experience – GIs protected in India through: n Certification Trademarks under the Trade Marks Act, 1999 (and the erstwhile repealed Trade Marks Act of 1958) n Sui Generis GI law n Passing-off actions

Statutory protection in India common elements – Collective body with locus standi – Specification / characteristics of the product – Whether geographical or traditional name – Type of goods – Proof of origin – historical records – Method of production – Inspection body – Geographical area of production and map

Some important provisions of the GI law – Section 2(1) (e): defines a ‘geographical indication’ in very broad terms on the TRIPS 22. 1 definition and includes agricultural goods, natural goods or manufactured goods – Traditional cultural expressions (TCEs) in the field of food stuffs, products of handicraft or traditional textiles registrable subject matter

Some important provisions of the GI law – Section 11(1): An applicant can be: any association of persons or producers or n authority established by or under any law for the time being in force representing the interest of the producers of the concerned goods n

Civil and criminal remedies – Both civil and criminal remedies are available to the rights holder – In a civil action the rights holder may maintain an infringement action based on a registered GI and a passing-off action based on common law rights – The law classifies offenses as cognizable with powers of search and seizure vested in the police both directly and under a warrant issued by a magistrate

An Indian Success Story DARJEEL ING TEA

THE DARJEELING TEA STORY ØDarjeeling tea goes back to 1835 ØStatutorily controlled by the Government as part of the Tea industry from 1933 under various enactments culminating in the Tea Act, 1953 ØThe Tea Board is vested with the authority to administer all stages of tea cultivation, processing & sale through various orders ØCultivated currently in 87 designated gardens in the Darjeeling district spread over 17800 hectares of land

THE DARJEELING TEA STORY Ø The Darjeeling tea industry Ø Employing over 52000 people on permanent basis Ø Additional 15000 persons engaged during plucking season – March to November Ø 60% of the work force is women employed on family basis Ø Income of a garden worker half in the form of cash and the other half by way of perquisites with access to free accommodation, subsidies cereal ration and free medical benefits Ø As against the world tea production of 3750 million kgs for the year 2009, India’s tea production accounted for 981 million kgs Ø Darjeeling tea accounted for 9. 5 million kgs

THE DARJEELING TEA STORY Ø Protection of Darjeeling tea: ØBeneficial for the plantation worker ØWould ensure better prices ØBetter economic health of the industry ØSustainable educational and health systems ØA better quality of life

WELFARE ACTIVITIES BY TEA BOARD Ø Ø Ø Grant of educational stipend to wards of plantation workers Grant of financial assistance for construction / expansion of school and college buildings Capital grants for setting up sports facilities in tea plantation districts

THE DARJEELING TEA STORY LEGAL PROTECTION Ø 1997 - Benelux Countries (Belgium, Netherlands, Luxembourg) – Collective mark protection for DARJEELING logo Ø 1998 – World Wide Watch agency Compu. Mark (now called Thompson) appointed to monitor conflicting marks. Pursuant to the watch agency being appointed: Ø Ø Instances of attempted registrations found Some challenged through oppositions & cancellations and sometimes negotiations.

THE DARJEELING TEA STORY LEGAL PROTECTION Ø 1998 – UK - Certification mark protection for DARJEELING word Ø 2002 - USA – Certification mark protection for DARJEELING word Ø 2003 – Russia – Trade mark registration for DARJEELING word Ø 2003 - India - GI application filed for DARJEELING word & logo marks, since registered in July 2004

THE DARJEELING TEA STORY LEGAL PROTECTION Ø 2004 for Ø 2004 - India – Copyright registration obtained DARJEELING logo Japan – Collective mark application filed for DARJEELING word Ø 2004 - Australia – Certification mark registrations for DARJEELING word and logo marks granted Ø 2004 - Germany – Collective mark application filed for DARJEELING word

THE DARJEELING TEA STORY LEGAL PROTECTION Ø 2007 – On November 12, 2007, DARJEELING applied for under ECR 510/2006 as a PGI

THE DARJEELING TEA STORY LEGAL PROTECTION • The following are some decisions favoring Tea Board issued by some national courts: • France • Applicant Dusong adopted the following mark in respect of goods in classes 16, 35 & 41

THE DARJEELING TEA STORY LEGAL PROTECTION • While the Tribunal de Grand Instance rejected Tea Board’s claim, the Court of Appeal Paris upheld the same • The court held that Darjeeling is a GI and the acts of Mr. Dusong were parasitic and amounted to unfair competition • Further, the bad faith adoption was writ large from the fact that he used a tea pot device along with the mark

THE DARJEELING TEA STORY LEGAL PROTECTION • The court also imposed heavy costs to the tune of Euros 2000 on Mr. Dusong and directed him at his expense to publish the decision in three newspapers (English or French) of the Tea Board’s Choice within a total of Euros 5000.

THE DARJEELING TEA STORY LEGAL PROTECTION • USA • DARJEELING v. DARJEELING NOUVEAU • Opposition filed by Tea Board before the Trademark Trial and Appellate Board (TTAB) USA • Based on its US CTM registrations, Tea Board demanded that the mark ‘Darjeeling Nouveau’ by Republic of Tea (ROT) be refused • ROT filed a counterclaim that Tea Board’s CTM registrations be cancelled on alleged grounds of genericness

THE DARJEELING TEA STORY LEGAL PROTECTION • While granting Tea Board’s claims, TTAB held that: • Darjeeling is an inherently distinctive certification trademark indicating geographic origin • ROT adduced no evidence to prove claims of genericness and Tea Board had adequate control over the use of the CTM • The test for determining genericness of a mark is its primary significance to the relevant public

THE DARJEELING TEA STORY LEGAL PROTECTION • TAIWAN – November 18, 2009 • Darjeeling registered in Taiwan by the French company, DELTA Lingerie in Class 25; • The Tea Board objected to the registration based on its rights in the Darjeeling word and logo marks for tea; • On November 18, 2009 the Taiwan Intellectual Property Office (TIPO) cancelled the registration, holding: - Darjeeling is a well known mark of origin represented by the geographical reach of registration, use, promotional and advertising activities world wide - DELTA Lingerie’s mark was highly similar to the Darjeeling CTM owned by Tea Board - The use of DELTA Lingerie’s mark in respect of the similar goods would be diluted of the Tea Board’s strong Darjeeling Certification Mark.

THE DARJEELING TEA STORY COMMRERCIAL ANGLE COMMERCIAL ANGLE • Commercial angle is as important to GI protection as legal angle • What constitutes commercial angle? • Projection and promotion of the GI through advertisements • Need for building brand equity through promotional campaigns in diverse markets

THE DARJEELING TEA STORY COMMRERCIAL ANGLE • Tea Board has been: • • Conducting Tea Festivals in foreign jurisdictions Organizing seminars on IPRS and in particular GIs Issuing advertisements in the national and international media promoting Darjeeling Creating awareness

Trade Supply Chain Integrity System n Introduced a trade chain management system for surveillance and monitoring of the supply chain and addressing traceability issues in the Darjeeling tea trade chain. n Two computerized data collection centers have been setup in Darjeeling and Kolkata, connected through internet enabled services.

Trade Supply Chain Integrity System n The system entails computerized collection and validation of all plantation and processing related data, namely; – Daily green leaf plucking records – Daily area plucked records – Daily Manpower used records – Daily green leaf transfer/purchase records – Daily processing records – Daily invoice entry records – Daily dispatch records n All 87 registered Gardens have been provided with customized software for the data entry and submission

Trade Supply Chain Audit n Appointed an independent certification agency to conduct trade chain audit to check and validate the authenticity of the data collected through the Trade Supply Chain Integrity System. n The certification agency will conduct onsite checking and verification of all the data submitted by all entities in the trade chain. n Approximately 33 % of the all entities registered under each category will be audited each year, with every entity undergoing a complete verification once in 3 years.

Trade Supply Chain Audit n Annually 10% of all the registered entities will be subject to random and totally unannounced spot checks. n Full verification/spot-check will be conducted each year on the basis of a risk analysis. n All data/information/material obtained/generated during the audits will be kept strictly confidential.

Tea Estate Factory Auction broker (no physical handling or custody of materials Tea Estate Factory Estate company’s Exporter/ Trader’s Warehouse/Processi ng unit Warehouse and /Processing unit Final Exporter/ Domestic buyer’s warehouse First Overseas Handler Second overseas Handler Final domestic Handler S U P P L Y C H AI N

All Darjeeling Tea leaving the shores of India today is guaranteed 100% Darjeeling Tea

IMPACT OF GI PROTECTION ON DARJEELING TEA TRADE n Increased number of certificate of origin (COO) issued (1924 in 204 to 2095 in 2008) and destinations (35 in 2004 to 43 in 2008) n 2000 -2007 period showed less fluctuations in Darjeeling prices at auctions n Overall brokens and fannings have moved up steadily n Entrepreneurs bullish on the Darjeeling tea trade

IMPACT OF GI PROTECTION ON DARJEELING TEA TRADE n All 87 tea estates in Darjeeling commercially operational today with a consolidation of ownership in the Darjeeling Tea industry over the last 4 years n Adherence to regulations and labeling guidelines n Launch of origin brands (Hindustan Unilever Limited withdrew its famous Lipton Green Label brand introdued Lipton Darjeeling in India

‘Aarogyappacha’ The Healthy Green One n A herb that grows in the Western Ghats in Southern Kerala; n Having medicinal and other properties known only to the Kani tribe; n In December 1987, a group of scientists on a botanical expedition accompanied by a few members of the Kani tribe;

Aarogyappacha’ The Healthy Green One n During the arduous trek the Kanis constantly keeping themselves energetic and agile by exploring and eating some fruits (offered these fruits, scientists felt a sudden flush of energy and strength) n The Kanis were reluctant to reveal the source of these fruits considered sacred information, however, were persuaded to reveal the origin for scientific research; n Detailed scientific investigation of the plant including chemical screening undertaken and showed the leaves to possess anti-stress, anti-hepatotoxic and immunodulatory properties;

Aarogyappacha’ The Healthy Green One n The findings led to the development of a drug Jeevani and a licence granted to a private company for a fee of 1 Million Indian Rupees; n Most importantly the Kanis were granted 50% of the licence fee as well as 50% of the royalty obtained by the Tropical Botanic Garden & Research Institute (TBGRI); n In November 1997, some Kanis with assistance of TBGRI formed Kerala Samudaya Kshema Trust with 09 tribal members and with objectives: - Welfare and development activities of the Kanis in Kerala; - Preparation of biodiversity register to document the knowledge base of the Kanis; - To evolve and support methods to promote sustainable use and conservation of biological resources

WHAT CAN YOU DO TO PROTECT YOUR GIs? Ø So what is the need of the hour? Ø Know that what you have is a GI, recognize it and elevate it to such a status Ø Form an association of producers of such a GI and make rules as to how to protect the GI Ø Define and document traditional practices used to produce the goods branded as GIs …contd.

WHAT CAN YOU DO TO PROTECT YOUR GIs? Ø So what is the need of the hour? Ø Define the geographical boundary where the GI is produced Ø Even if your GI is not registered, start taking action against any attempts to abuse your GI Ø Form rules and regulations for production of the same and urge all right holders to adhere to the same

INDIA AS A BRAND EXPORTER n n Second most populous country: 1. 07 billion Primarily agricultural economy: 21. 8 % of GDP (rice, wheat, tea, coffee, cotton, potatoes) The service sector – a fast growing sector The Indian diaspora as a brand ambassador

INDIA AS A BRAND EXPORTER l Post independence – protectionist industrial policy l Recognition of foreign investment in high-tech industries l Post liberalization – FDI allowed in many sectors l State intervention in public sector reduced l A broad industrial base in public/private sectors

INDIA AS A BRAND EXPORTER l Use of IP as a instrument of economic growth l Large domestic market – An opportunity for domestic brands l Agricultural economy - unbranded exports of commodities – Basmati rice, Darjeeling tea.

INDIA AS A BRAND EXPORTER l Success stories l Maruti Suzuki – Maruti now a strong international mark l Tata – Major export brand l Mahindra l Kingfisher Beer l Hidesign – leather accessories l Atlas cycles l Infosys l Wipro

THANK YOU! © 2010 K&S Partners India rajendra@knspartners. com