On April 13, 2022, the European Commission submitted a proposed regulation on the protection of Geographical Indications for Craft and Industrial Products (CIPs), along with amendments to existing EU regulations on trademark registration and accession to the Geneva Act of the Lisbon Agreement. (EU Regulations (EU) 2017/1001 and (EU) 2019/1753) (“the Proposal”).
If implemented, the Proposal would provide companies increased protection for such CIPs, which are a category of non-agricultural products with a certain quality, reputation or other characteristics linked to their geographical origin. This post provides (1) background on the Lisbon Agreement and Geneva Act; (2) the need to protect CIPs; (3) an overview of key aspects of the Proposal; and (4) conclusions.
Lisbon Agreement, Geneva Act
The Lisbon Agreement for the Protection of Appellations of Origin of 1958 (the “Lisbon Agreement”), in its original version, limited protection only to appellations of origin, a subset of geographical indication for products with a particularly strong link with a specific place of origin.
On February 26, 2020, the entry into force of the Geneva Act of the Lisbon Agreement (the “Act”) extended the scope and protection of the Lisbon Agreement to geographical indications regardless of the nature of the goods to which they apply. The interaction of the Act and the Lisbon Agreement provides a more comprehensive legal landscape for the protection of distinctive designations of origin-based quality products. Additional benefit of the Act is the enhanced flexibility of the implementation of the protection standard. In fact, protection can be obtained through (i) sui generis appellations of origin; (ii) the geographical indication system; or (iii) trademarks.
While the European Union acceded to the Geneva Act at the end of 2019, there is still no implemented protection regime for CIPs. Aside from regular bureaucracy, the delay is also due to partition of competence. The EU’s accession as a single entity creates issues for EU Member States who wish to individually accede because of the EU’s exclusive competence to file applications for the international registration of geographical indications originating within the EU territory.
The Need to Protect CIPs
As indicated above, Craft and industrial products (CIPs) are a category of non-agricultural products originating in a certain geographic area with significant reputation for their qualities. The Act defines CIPs as “names that identify craft and industrial products with given quality, reputation or other characteristics linked to their geographical origin”. The definition clearly excludes any product that is considered “agricultural” (as defined in (EU) 1151/2012). In addition, the Act specifically excludes certain categories: spirits (as regulated by EU 2019/787), and wines (EU 1308/2013).
Some examples of authentic CIPs are Murano glass, Limoges porcelain, Solingen knives, Carrara marble, Bohemian crystal or Madeira embroidery. The estimated total number of geographical indications for CI protection in the EU amounts to 800. Evaluation reports have shown that GI protection schemes for agricultural products create positive effects on the internal market, and allow for fair competition among producers in the GI value chain, including better income for the value-adding characteristics of their products. Similar effects can arguably be applicable to non-agricultural products, hence the incentive to provide a specific legal instrument to obtain intellectual property protection for these type of geographical indications too.
What makes the implementation of CIP protection even more necessary is the well-documented decline of regional craftsmanship skills, which stems from both socio-economic factors such as globalization and mass production, but also from a lack of a solid and comprehensive legal landscape that would provide both protection and added value to these traditional forms of craftsmanship.
Overview of Key Aspects of the Proposal
Under the Proposal, to qualify for GI protection as a CIP, a product must comply with the requirements listed under Article 5: “(a) The product originates in a specific place, region or country; (b) its given quality, reputation or other characteristic is essentially attributable to its geographical origin; and (c) at least one of the production steps of the product takes place in the defined geographical area.
Applications for registration of geographical indications can be submitted by “applicant producer groups,” composed by several entities producing the product sought to be registered, with the optional help of regional or local entities with respect to the preparation of the application. Single producers may also apply for registration, provided that they can prove to be the only producer willing to submit an application for the particular CIP, as well as establish that the geographical area concerned is defined by natural features and the product’s characteristics differ appreciably from those of products emanating from neighboring areas.
Additionally, under Article 7 of the Proposal, products registered as a geographical indication must comply with certain minimum product specification information, including the name to be protected as geographical indication which may be either a geographical name of the place of production of a specific product, or a name used in trade or in common language to describe the specific product in the defined geographical area; (b) a description of the product, including, if appropriate, the raw materials; (c) the specification of the defined geographical area , (d) evidence that the product originates in the defined geographical area, etc.
The Proposal also lays out, in detail, the procedure to apply for a CIP. Each EU Member State is required to maintain and designate a national competent authority to manage the national phase of the application and registration of CIPs. This authority will oversee the examination of the national phase application for compliance with the GI CIP requirements. If the examination is successful, the competent authority is required to publish the application for opposition for at least 60 days for any person having a legitimate interest to oppose the registration of the application. During this phase, however, only opposers resident in the territory of the Member State can lodge an opposition.
The Proposal sets out what effectively is a two-stage examination. The first stage, on a national level, establishes the filing, examination and publication for opposition of the application on a national level by a designated competent authority. Upon completion of all these phases, and if the competent authority of the Member State issues a favorable decision on registration, then it is required to lodge a so-called “Union Application” for registration on a EU-level.
The Union Application essentially undergoes the same procedure, but on a EU-level as opposed to a national level. To limit the inconvenience of a double examination, the Proposal requires the EU examination to be completed in under 6 months. Because of this two-stage process there is, in fact, also a second publication window of 3 months for out-of-State entities to oppose the registration of the CIP originating in a Member State different from the one of residence.
Grounds for opposition vary, and include the failure to comply with the requirements set forth in the Proposal, the full or partial conflict with an existing trademark or products marketed for at least 5 years, and the genericness of the term.
Of course, the Office has the ability to deny registration upon examination of an application. The Proposal provides the framework for applicants to appeal adverse decisions. Specifically, the appeal suspends examination and producers can be joined by their Member State in challenging the Office’s decision. Applicants are required to file a notice of appeal within 2 months from the adverse decision and, if the Board of Appeals confirms the adverse decision, final recourse is before the General Court within 2 months of the confirmation of the adverse decision.
Even valid registrations however, can be cancelled. Cancellation can be sua sponte – the Office or a Member can request cancellation where compliance with the requirements of the Proposal can no longer be ensured, or where no product has been placed on the market for at least 7 consecutive years. What is interesting, is that cancellations can also be request by third-parties. Both natural and legal persons with a legitimate interest can seek cancellation of a registered GI.
But what exactly does registration offer to applicant producers? First of all, protection against any direct or indirect commercial use of the GI for products not covered by the registration, where those products are similar to the ones included in the registration. It also affords protection against any misleading indication as to the provenance, origin, nature or qualities of the products, including the unauthorized use of the GI coupled with terms such as “style”, “type, “method”, “as produced in”, etc. This is a welcome addition, based on the experience of protecting agricultural products.
Producers in the United States – agricultural, craft or industrial – do not enjoy protection for geographical indications as comprehensive as their European counterparts. While U.S. law provides certain protection through certification marks, the EU has developed a more pervasive and structured approach to protecting geographical indications. The proposed EU Regulation would not affect U.S. producers who plan to keep their business domestic, but it would certainly affect U.S. producers looking to market their products in the EU. Any imported product from the United States similar to a registered CIP would fall under the scope of the Regulation.
Protection is particularly broad considering it applies to both goods entering the customs territory of the Union, and goods sold by means of distance selling (e.g. e-commerce). This naturally ties in with the provisions relating to the interaction of a valid CIP registration and the operation of domain names encompassing registered matter. EU-based registries may, upon request of a natural or legal person with rights on a particular GI, revoke or transfer domain names based on registration. Additional benefit is the protection of the craftsmanship’s value in the future: a registered GI CIP will be shielded from “genericide,” avoiding the loss of protection due to generic use of the term after registration.
The Proposal is a welcome addition to an already rather established EU legal framework on the protection of geographical indications. It is a first step in countering the decline of regional craftsmanship skills, by bolstering protection and facilitating monetization of these skills. Some elements may require further clarification: for example, the proposal lacks a precise definition of “generic terms” as referenced in Article 37. Assuming standard implementation timelines, the Proposal may enter into force in 2024.