Geographical Indications

It’s hot as the blazes in most of the U.S., Europe and Central America these days. Which makes a watermelon salad with mint and feta cheese sound very appealing, to say the least.  But the recipe calls for “real” feta cheese, the salty kind, to offset the sweetness of the melon. Is there more than one kind of feta cheese?

That question is at the heart of a simmering dispute between the U.S. dairy industry and EU trade negotiators.  While the US has been largely thumbing its nose at multilateral trade agreements since November 2016, the EU has been astutely promoting protections for a list of “geographical indications” (GIs) it holds dear.  The vehicle of choice to obtain protection and enforcement mechanisms for selected European GIs for foodstuffs, spirits and wines has been the negotiation of Free Trade Agreements. In a remarkably short time (especially in view of the anti-trade agreement climate in the U.S.), the EU has concluded FTAs with Canada (called CETA), Japan and China and is in the process of finalizing lists of protected GIs with Mexico and the Mercosur region (comprising Argentina, Brazil, Paraguay and Uruguay) after reaching agreements in principle on FTAs in each case. In the cheese department, and depending on which specific FTA is at issue, we’re talking about enhanced protection in those markets for PARMAGIANO ROMANO, PECORINO ROMANO, ASIAGO, FONTINA, GORGONZOLA, DANBO, ROQUEFORT and MUENSTER among others.  But the cheese that has gotten the most attention is known in the trade as the F-word: FETA.

A recent article by the US trade association Consortium for Common Food Names (June 4, 2018) screamed bloody murder: “Mexico is failing its trading partners by giving away Common Names in EU Deal.” Mexico’s potential sin? Agreeing to grant protection to “Feta” and “Munster” cheese.

Whats a GI anyway? A designator of place of origin

In our very first blog, we explained the nature of GIs and why this type of protection is emerging as a key trade policy issue for the EU.

A GI is commonly understood as a sign or designation used on products that have originated in a specific place and possess qualities or a reputation that are due to or depend on that place of production. In other words, there is a link between the product and its place of production. If the link is very strong, such that the quality or characteristic of the product is said to result exclusively or essentially from the geographic origin, then the GI is known in some systems as an Appellation of Origin (AO). Wine producers and wine aficionados will likely be familiar with AOs, but in fact, AOs can apply to a variety of other products including cheese, meat, rice, even handicrafts. The connection between a product and the geographic environment may be due to natural factors, like terroir, or human factors, like the traditional means of production. In either case, for AOs, the reputation of the product must rest essentially on the connection to a specific place.

The quintessential example of an AO applied to food is Roquefort cheese. It is produced in a very specific manner in the SW French town of Roquefort-sur-Soulzon, from the milk of indigenous sheep in a manner that involves traditional know how, including aging the cheese in local cliffs for two weeks. It’s hard to imagine a product more tied to a specific place with a sound rationale for preventing others from impersonating a true Roquefort.  For GIs, a somewhat looser association with a geographic place is required. It is sufficient for a GI that a given quality or characteristic of a product originate in a specific place; not all steps of production must be conducted in that place for the GI to be acceptable.

In effect, a GI acts as an indicator of quality, informing a consumer that the product has actually been produced in the place that has become famous for that item and according to the methods of production that account for the prized taste, color, texture, etc.  Achieving protection for a GI, especially when that is indicated by a snazzy new label, means that the quality of the product can be readily recognized by consumers. It’s easy to understand why GIs would hold such importance for agricultural economies like the EU member states seeking to compete in the world market based on high-quality products from smaller scale artisanal and traditional producers.  Their ostensible interest in promoting GI is to prevent fraud and counterfeits and foster rural development while educating new consumers to the authenticity and value of their place-related products.  Thanks to the new EU FTAs, consumers in Beijing or Tokyo can rely on the labels CAMEMBERT DE NORMANDIE, PARMA HAM or SCOTCH WHISKEY to signal the authenticity of products for which a premium will be charged at the checkout stand.

Legal Protections of GIs

GIs are recognized and can be protected through a variety of legal mechanisms. Individual countries, like Costa Rica and Colombia, may adopt a sui generis GI system within their own borders to draw attention to the special qualities of products that are linked to a specific place. Other countries protect certification marks under a trademark-like registration scheme to designate products that adhere to certain standards in quality or conditions overseen by a third party. Think IDAHO POTATOES or KONA COFFEE GROWERS, designators overseen by regional trade councils or growers’ associations. On the international level, several international treaties are relevant to the protection of GIs, including the 1958 Lisbon Agreement for the Protection of Appellations of Origin that deals expressly with AOs and its more recent Geneva Act addressing GIs, as well as Article 22 of the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) that was part of the WTO Agreement that came into effect on January 1, 1995.

Under TRIPS, signatory countries must have legal means to prevent use of GIs that mislead the public as to the geographical origin of the product as well as prevent other uses that constitute unfair competition within the meaning of Article 10bis of the Paris Convention. There are also interactions with trademark regimes as well. The registration of a trademark which uses a GI in a way that misleads the public as to the true place of origin must be refused or invalidated ex officio if the legislation so permits or at the request of an interested party.

Worldwide, the EU is probably the strongest proponent of protection for GIs. Why? For one, it represents the interests of its 28 member states, many of which have well-established specialty agricultural producers. Second, patience apparently has worn thin. The TRIPS Agreement was thought to lay the framework for protection of GIs, but work on the ancillary negotiations that would make that enforcement a reality for foodstuffs and handicrafts (and not just wine and spirits addressed in TRIPS as signed) has been dilatory at best.  EU has found other means to achieve its ambitions. A study commissioned and financed by the Commission of the European Communities (a precursor to the Commission of the European Union) sometime around 2003 was entitled “Geographical Indications and TRIPS 10 Years Later… a Roadmap for EU GI holders to get protection in other WTO Members[1]”.

Whatever its other failings, the EU is very good at following roadmaps. Fifteen years after the mentioned report, the place of GIs in the EU internal market as well as in EU bilateral and multilateral trade policy is firmly established. Within the EU system, a sui generis form of protection and registration is in place for GIs on three levels: Protected Designation of Origin (PDO); Protected Geographical Indication (PGI) and Traditional Specialty Guaranteed (TSG).  Each has a corresponding symbol (insert symbols) that may be applied to packaging for products that meet the conditions for protection. The highest level of protection is the PDO, reserved for agricultural products and foodstuffs, and more recently, handicrafts, that are produced processed and prepared in a given geographical area using recognized know-how. This represents the crème de crème of the EU system. And more often than not, the PDOs form the basis of the negotiation lists that the EU seeks to enforce through the FTAs.

FETA is a PDO and is not Generic

In October, 2002, the EU issued a regulation approving FETA as a PDO within the EU’s own sui generis GI registration system. Since then, a cheese marketed within the EU as FETA must be produced from the milk of ewes and goats of local breeds that have been reared in a “traditional” manner. Moreover, the feed for such animals must be based on the flora in the pastures of the designated areas in mainland Greece and the island of Lesbos.  (Other Greek islands and archipelagos were excluded because they do not enjoy the necessary natural or human factors, such as traditional production methods.) The FETA regulation, which was based on studies and detailed questionnaires completed by the EU member states, concluded that FETA was not generic within the EU and was always associated in the public mind with Greece (even if some producers sold French or Danish-made cheeses as “real” Feta to immigrant communities.)

Feta Cheese from Ewe and Goat Milk imported from Greece. Copyright, 2018, the author.

When is a Cheese Name Generic?

Thanks to the spread of the EU-FTAs, the conclusion that FETA is not a generic term for a sharp tasting white cheese from sheep and goat’s milk now has implications far beyond the borders of the EU.  Like the earlier TRIPS obligations, the obligations under the EU FTAs require a signatory country to prevent infringement of agreed GIs and to take steps to enforce against such infringements. Signatory countries must protect against any direct or indirect commercial use of a registered GI for comparable products to those covered by the GI registration or where the name of a product exploits the reputation of the protected GI. Effectively, this amounts to a requirement to block the importation or sale of a product within their jurisdictions that uses a protected GI as the name for products that do not meet the GI registration requirements for place or method of manufacture.  Thus, no lawful use of ASIAGO for cheese sold within China if the cheese so marked does not originate from the Asiago plateau of the Veneto Region of Italy. In addition, signatory countries must protect against misuse, imitation or evocation of the GI, even if the true origin of the product is indicated on a label. Terms like “in the style of” “type” or “imitation” are also outlawed.  Thus, a US cheese exported to China and labeled “GORGONZOLA Style” would run afoul of China’s enforcement obligation under the new EU FTA.  Any other false or misleading information about the provenance, origin or nature of the essential quality of the product designated by a protected GI would also be prohibited.

A public domain for Cheese Names?

In effect, US cheese producers are arguing that some cheese names have fallen into a supposed worldwide “public domain” for names and no longer indicate the geographic origin of a product. This claim is bolstered by other New World dairy associations, whether in Australia or Uruguay, whose origins harken to European immigrants who introduced into their new countries the cheesemaking processes they learned in the Old World.  Today, Wisconsin’s Bel Gioioso Cheese company, headed by a fourth generation Italian-American, is among the most outspoken backers of the claim that certain cheese names have become generic and thereby ineligible for protection as GIs.

But what does it mean for a cheese name to be a “common name” or “generic” name? What is the appropriate country of reference?  CCFN, the US trade association, argues that the widespread production and global distribution of American cheeses with names like fontina, asiago, munster and, yes, feta, have caused those terms to become dissociated from any particular place of production. Rather, argues CCFN, the content of cheeses is (or should be) regulated by the Codex Alimentarius health and safety food standards of the World Health Organization and the Food and Agriculture Organization of the United Nations. And any producer meeting those standards should be free to use compliant cheese names. But the Codex Alimenatarius website explains that it is independent of local law and not determinative with respect to food labeling.

The opposite point of view is espoused by OriGins, the Organization for an International Geographical Indications Network, a nonprofit NGO based in Geneva that promotes the advancement of GI protections and represents the interests of some 500 producer associations from more than 40 countries. For OriGins members like the regional producers’ consortia for QUESO MANCHEGO (Spain) or COMTE cheese from France, advocating for GIs is a question of fairness: protecting producers’ hard-won reputations and safeguarding the consuming public by assuring authentic products are available in the marketplace. Not overlooked is the revenue potential for sophisticated products that benefit from strict controls over production locale and methods.

But for GI and trademark analysis, the appropriate reference to determine whether a name has become generic is the consuming public, not an agricultural regulatory body.  But how can a producer from the U.S. or elsewhere establish in China or Japan or a Mercosur country that FONTINA has achieved common name status in that place and is not understood as originating in the Val d’Aosta in Italy? Will this require consumer surveys? What if a product is being introduced for the first time to new cheese consumers in a country that was not traditionally a dairy-minded place? Can there be any grounds to argue genericness in that case?

Cheese made in Wisconsin USA with the suggestion of a Greek connection. Copyright, 2018, the author.

Despite some built-in safeguards under the FTAs, US producers have complained that they are not broad enough. For example, there is a period for objection or submission of statements to persuade a local authority that recommended GI protection should not be extended on either of two possible grounds: first, that granting GI protection would undermine or infringe prior established trademark rights in that jurisdiction; and, second, that the GI has prior status as a common name (i.e. generic name) for the product in question. Equally troubling for US producers have been perceived obstacles in intervening in national processes that may be only quasi-public and for which comment periods and deadlines may be opaque at best.

South of the Border Down Mexico Way

Mexico is shaping up to be the real battleground. The US dairy industry has a long and prominent presence in the Mexican market. At this moment, US is trying to renegotiate the terms of the North American Free Trade Agreement (NAFTA) that came into force on January 1, 1994.  If Mexico were to agree with the EU that FETA is a protected GI, Mexican companies could no longer import Wisconsin feta cheese made from cow’s milk without penalty. To be sold lawfully in Mexico, such cheese would have to be re-labeled something else entirely that might jar Mexican consumers accustomed to the prior names. “Wisconsin Salty Crumble Cheese” perhaps?

A joint letter from top executives of the U.S. National Milk Producers Federation, the U.S. Dairy Export Council and International Dairy Association to Secretary of Agriculture Sonny Perdue and the U.S. Trade representative Robert Lighthizer captured the intensity of what’s at stake in a $400 million annual export business: “..[w]e ask that you make neutralizing Europe’s attacks on U.S. dairy products a NAFTA goal. Mexico, is by far, our largest and most important dairy market.”

As reported in Agri-Pulse.com, Secretary Perdue has taken up the salvo: “(Trading partners with the U.S.) better be careful about accepting any sort of geographical indicators from the EU,” the Secretary was quoted as saying. Tough talk from the folks who withdrew from various multilateral FTA negotations in recent years.

Mercosur countries, take note. You may be next on the receiving end of such attacks.

In our next blog, we’ll look at how the growing pressure from EU trade negotiators to recognize and protect additional GIs for wine beyond those included in TRIPS is putting pressure on the California wine industry.

Pass the soave, won’t you, with that Watermelon F*** Salad?

 

 

 

 

 

 

[1] A report prepared by O’Connor and Company for the European Commission, available today on the website of the European Union.

 

 

 

For our inaugural issue, and because it’s harvest time in California where we are located, we’ll devote space to a little understood form of intellectual property protection called geographical indicators or GIs that are about to become headline news. In the U.S., GIs can be protected as certification marks or perhaps collective marks through registration at the USPTO and some trademarks may incorporate geographic terms.  But other countries and the European Union have more elaborate sui generis systems for protecting and registering GIs; some treaties also protect GIs. This difference in approach and attitude is fueling tensions in several international arenas that have direct effects on producers in California and other states, and policymakers in Washington, D.C.

WIPO and Free Trade Agreements

Developments at the World Intellectual Property Organization (WIPO) in Geneva about Geographical Indicators (GIs) and new Free Trade Agreements (FTA) negotiated by the European Union (EU) with Canada, Japan and China in recent months will have direct bearing on the worldwide marketability of dairy and viticulture products, not only those originating in the U.S., but also those from other large exporting countries like Argentina and Australia. http://money.cnn.com/2017/07/04/news/economy/japan-eu-trade-deal-summit/index.html The EU FTA negotiations with the Mercosur countries of Argentina, Brazil, Paraguay and Uruguay began in early October in Buenos Aires and will continue through the end of this year. It’s likely the EU will seek to extend within the Mercosur countries the same protections it achieved for its list of GIs agreed earlier with Canada, Japan and China. Old World and New World norms in food culture are clashing, and the talks are peppered with old-fashioned trade policy maneuvers.

Your Feta or Greek Feta

The push for expanded GI protections has now reached international proportions. It affects the bottom line of US and other New World producers who argue that many Old-World designations for cheese in particular have become mere common names or generic terms for food items in North and South America and Asia and are no longer deserving of special protection. At stake is the use of such terms as Feta, Asiago, Gorgonzola or Fontina, among others, to label cheeses that move in the global marketplace. In this two-part article, we’ll look at the essential vocabulary for understanding this form of intellectual property protection and analyze the regulations and policy issues at play that may affect clients in these important industries.

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