Philosophical Justifications of Geographical Indications

A Geographical Indication (GI)1 is a notice of a specific product having been produced in a particular place.2 Just as a Trademark (TM) they are indications as to source. GIs are in relation to goods originated or manufactured in a said territory where a given quality-reputation or other characteristic of such goods is attributable; this quality may be attributable to the specific environmental conditions3, the processes of manufacture, or for that matter the traditional knowledge that has developed over a massive number of experiential years.4

Geographical indications are understood by consumers to denote the origin and the quality of products. Many of them have acquired valuable reputations which, if not adequately protected, may be misrepresented by dishonest commercial operators. False use of geographical indications by unauthorized parties is detrimental to consumers and legitimate producers. The former are deceived and led into believing to buy a genuine product with specific qualities and characteristics, while they in fact get a worthless imitation. The latter suffer damage because valuable business is taken away from them and the established reputation for their products is damaged.5 This entails two philosophical justifications for the protection of GIs. Firstly, the protection against the misleading use of GIs6 – an argument based on the recognition as to source of goods in the nature of passing off protection accorded to unregistered marks and also based one the Trade Marks’ justification regime7 and secondly, the protection against dilution argument. In case of the former argument there is expression of a consumer protection concern. Protection is offered against the use of the GI on products not originating in the geographical area to which the indication refers, where such use of the indication misleads the public. For the use of an indication to be considered ‘false’ – and hence mislead the public – it must be the case that the public perceive the (original) GI to refer to a certain geographical area.8 In case of the latter argument one sees an expression of a producer-protection ethos and introduces elements of unfair competition.9 This again might be in two ways – either by way of deceiving the public to believing that the product sold is of the same quality10 or by making them believe that the origin of the product is that what it is represented to be even if the quality is the same11. Under the Paris Convention, both of such practices are protected against by the principle of unfair competition.12

The economic rationale for protecting GIs emerges from economic theories of information and reputation. Economists have classified goods on the basis of how information is accessed by and/or conveyed to consumers:13

• Search goods: These are goods where consumers can develop a robust notion of the quality prior to purchase through either inspection and/or research.

• Experience goods: These are goods where consumers tend to prefer to purchase them and assess quality through use and experience; the latter then guiding future choice.

• Credence goods: These are goods where neither prior inspection nor subsequent use is sufficient for developing a robust notion of quality.

Agro-food products fall in each of these three categories. This is because consumers like to form their own opinions of attributes such as flavor, how a product stands up when cooked, cooking time and so on. Some attributes are a combination of experience and credence such as the level of safety and nutritional properties. Others are necessarily credence attributes, such as the extent to which the production process is environmentally friendly or treats animals humanely. These differing aspects of a good are of varying importance to consumers. Thus, a segment of consumers might be most interested in credence attributes (e.g. environmental and labor standards), while others might give greater importance to experience attributes (e.g. flavor and cooking time). These differences between consumers relate to producers’ efforts at differentiating products and manifest in the form of market segments. However, information about product-related attributes is not easily accessible; thus placing consumers in positions of relative weakness – a result of information asymmetry. While this disallows optimal consumer choice, various efforts by the government, the private and the not-for-profit sectors are directed at improving communication between producers and consumers. These include advertising, use of a variety of quality-related signs, product guarantees and certificates, information labeling, to name some. Privately owned trade marks can help overcome this information asymmetry to a limited extent but on the other hand a GI would be in a better position to overcome this barrier as the same is government managed on behalf of the communities that own them. Thus from the above it transpires that the economic theory of information relates to the common law tradition of consumer protection against misleading use of a protected indication – thus disallowing deliberate information asymmetries. It also transpires that the economic theory of reputation relates to the common law tradition of producer protection against dilution of reputation created with collective effort. Thus we see that GIs define who can make a particular product, where the product is to be made, and what ingredients and techniques are to be used so as to ensure ‘authenticity’ and ‘origin’.

Originally posted at: https://manuluvshahalia.blogspot.com/2021/06/GIsPhilosophicalJustifications.html

1 The WTO Secretariat (IP/C/W/253) adopts the term “Indication of Geographical Origin” (IGOs) as a common denominator to refer to the different instruments used by member countries to indicate the geographical origin of goods, in order to avoid confusion with specific terms that are otherwise legally defined at national, regional or international level. In the EU literature the term in use is ‘origin-labeled product’. But this paper uses that term GIs as is considered under the Geographical Indications (Registration & Protection) Act, 1999 [Indian Act now on].

2 Under the Indian Act we see that s.2(1)(e) defines a GI as: GI in relation to goods, means an indication which identifies such goods as agricultural goods, natural goods or manufactured goods as originating, or manufactured in the territory of a country, or region or locality in that territory, where a given quality, reputation or other characteristic of such goods is essentially attributable to its geographical origin and in case where such goods are manufactured goods one of the activities of either the production or of processing or preparation of goods concerned takes place in such territory, region or locality, as the case may be. Explanation: For the purpose of this clause, any name which is not the name of a country, region or locality of that country shall also be considered as the GI if it relates to a special geographical area and is used upon and in relation to particular goods originating from that country, region or locality as the case may be. This explanation is in the light of the fact that the GI may take the form of a word/phrase or be an iconic symbol or emblem. Thus, iconic symbols like the Pyramids for Egyptian goods, the Taj Mahal for Indian goods, or the Statue of Liberty for American goods are permissible. Further, as there is no requirement for the indication to be a direct geographical name, non-geographical indications are permitted. “This aspect of the TRIPS definition has not been missed by legislators in India where interest in protecting an indication like ‘Basmati’ exists”, Dr. Dwijen Rangnekar, “GeographicalIndications, A Review of Proposals at the TRIPS Council: Extending Article 23 to Products other than Wines and Spirits”, UNCTAD/ICTSD Capacity Building Project on Intellectual Property Rights and Sustainable Development International Centre for Trade and Sustainable Development (ICTSD), 2003 at 23 at < http://www.origin-gi.com/upload/download/DocsDivers/UNCTAD_Rangneka-cil_May2003.pdf> as visited on 08/11/2003.

3 A type of GI called appellations of origin [AO from now on] that comprises of GIs owing their characteristics to, say, that soil, climatic conditions, etc. of a particular place, for example, Roquefort Cheese and Jasmine Rice [Thailand]. This would also be applicable to the Chikmagalore Coffee where the taste is attributed to the soil of the region. Article 2 of The Lisbon Agreement for the Protection of Geographical Indicators and the Appellations of Origin and their International Registration, October 31, 1958 as amended in September, 1979 (between the Lisbon Countries namely - Algeria, Bulgaria, Burkina Faso, Congo, Costa Rica, Cuba, Czech Republic, France, Gabon, Haiti, Hungary, Israel, Italy, Mexico, Portugal, Slovakia, Togo, Tunisia and Yugoslavia) [The Lisbon Agreement now on] defines appellations of origin as “the geographical name of a country, region, or locality, which serves to designate a product originating therein, the quality and characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors”.

4 Manu Luv Shahalia, “Geographical Indications & Environmental Law”, Many Sides to A Coin: Perspectives in Intellectual Property Law (Manu Luv Shahalia ed., Delhi: Universal Law Publishing Co., 2003).

5 WIPO – International Bureau, 2002 at <http://www.wipo.int/about-ip/en/index.htrademarkl> as visited on 21/12/2003.

6 Protection against the false and misleading use of GIs is provided in the TRIPS Agreement through Article 22.2(a), and Article 22.4 provides for the case of ‘deceptive’ use of GIs. A higher level of protection for wines and spirits incorporating this doctrine exists in Article 23.1 where there is no need to establish the public is mislead – instead, the indication cannot be used if the goods do not originate in the indicated geographical area.

7 “For what its worth” kind of an argument – protection of a Trade Mark because of the proprietary interest of the holder in the same by way of registration.

8 It is often suggested that in certain countries, such as southern European countries, there is a strong link between GI and the product; thus, for example, “the denomination Beaufort signifies all the elements which are included in the cheese it designates: area of production, breeds of cows and their food, methods of production, etc. and also all the immaterial substance the denomination is endowed with: tradition, landscape, regional identity value, etc.”, Thévenod-Mottet, “The Protection of Geographical Indications in Multilateral Systems: A Cultural Clash”, A Paper presented at the DOLPHINS Meeting, Florence, September, as cited in Dr. Dwijen Rangnekar, “Geographical Indications, A Review of Proposals at the TRIPS Council: Extending Article 23 to Products other than Wines and Spirits”, UNCTAD/ICTSD Capacity Building Project on Intellectual Property Rights and Sustainable Development International Centre for Trade and Sustainable Development (ICTSD), 2003 at < http://www.origin-gi.com/upload/download/DocsDivers/UNCTAD_Rangneka-cil_May2003.pdf> as visited on 08/11/2003.

9 Dr. Dwijen Rangnekar, “Geographical Indications, A Review of Proposals at the TRIPS Council: Extending Article 23 to Products other than Wines and Spirits”, UNCTAD/ICTSD Capacity Building Project on Intellectual Property Rights and Sustainable Development International Centre for Trade and Sustainable Development (ICTSD), 2003 at 20 at < http://www.origin-gi.com/upload/download/DocsDivers/UNCTAD_Rangneka-cil_May2003.pdf> as visited on 08/11/2003.

10 A simple example would be selling ordinary long grain rice in the name of basmati rice.

11 A simple example would be selling basmati rice grown outside the Geographical Region of the Indus Plains region under the name of Basmati. The strongest protection against this is under the Lisbon Agreement for the Protection of Geographical Indicators and the Appellations of Origin and their International Registration, October 31, 1958 as amended in September, 1979 [The Lisbon Agreement now on] where Article 3 states: “Protection shall be ensured against the usurpation or imitation, even if the true origin of the product is indicated or if the appellation is used in translated form or accompanied by terms such as “kind”, “type”, “make”, “imitation” or the like”. The TRIPS Agreement gives this protection in a much diluted form only to wines and spirits under Article 23.1.

12 Article 10bis, and incorporated under Article 22.2(b) of the TRIPS Agreement.

13 P. Nelson, “Information and Consumer Behavior”, 78 Journal of Political Economy 311, (March-April, 1970).