Small and medium-size businesses can benefit from intellectual property protection for their businesses, for example with the regime of geographical indications (GI). A geographical indication is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. There has to be a clear link between the product and the characteristics of the original place of production. All members of the World Trade Organization are obligated by Article 22 of the Agreement on Trade-Related Aspects of Intellectual Property Rights to implement a protection system for geographical indications. Some countries protect place-based products through trademark systems, while others protect these products through sui generis GI protection systems and unfair competition systems, amongst others.
The appealing aspect of GIs is that all businesses in an area that meet the protection criteria can benefit from the protection. Having a GI protection means that the business can market their product better. The marketing can be tied with the name of the place, for example the Scotch Whisky is associated with Scotland and well-known all over the world. If the place is already well-known, that will give the product authenticity and consumers are more likely to buy it, because they believe in the quality of the original product. The local product can compete globally under the geographical indication certification. On the other hand, if the region is not well known (yet), it can become a nostalgic piece from holidays for people visiting the region.
It has to be noted, that the law by itself does not create commercial or reputational value. The business has to have an effective marketing strategy to make the product known. Therefore, a partner can be beneficial to maintain a long-term relationship to commercialize the product. Once a GI is registered, there is no limitation in time. The registration may be cancelled, if the conditions from the product specification are no longer ensured.
In the European Union, there are three types of GIs: The protected designations of origin (PDO), the protected geographical indications (PGI) and the geographical indication of spirit drinks and aromatised wines (see also Traditional Specialty Guaranteed). For a product to have a PDO logo, the proven characteristics have to result solely from the terrain and abilities of producers in the region of production with which they are associated. For food products, this means that all stages of the production must be carried out in the terrain. This is the case for example for the Swaledale Cheese or Orkney Lamb.
Products having the PGI logo have a specific characteristic or reputation associating them with a given place, and at least one stage in the production process must be carried out in that area, while the raw materials used in production may come from another place. An example would be Welsh Beef and the West Country Lamb.
According to a recently published study by the European Commission, 3.207 agri-food and drink products sold under GI protection in the EU represent a sales value of 74,76 billion € (products registered by 2017). The study also found out that the sales value of a product with a GI certification on average double that for similar non-GI products.
Especially interesting for SMEs is the Geneva Act of the Lisbon System administered by the World Intellectual Property Organization, which came into force in 2020. It will make it easier for small and medium-sized businesses to apply for GI protection for their product. A GI, like other forms of intellectual property rights, is a territorial right, it means it will just have force within the country’s borders. With the new system, the business can get GI protection for their product in all the member states with only one form of application, and most importantly – one fee. It is called an “international registration”. Once protected in the country of origin, the holders of the right to use the appellation of origin may request their government to file an application for international registration under the Lisbon Agreement. This creates an encouraging environment for small and medium-sized businesses, because the joint application fee makes the protection more affordable and also available in more countries. Although a GI certification in one jurisdiction can be economically beneficial for businesses, sales will most likely increase with protection in multiple jurisdictions and can help the business to kickstart its growth.
For more in GIs, see:
- Coombe, R. J., Ives, S, Huizenga, D, Geographical Indications: The Promise, Perils and Politics of Protecting Place-Based Products –In: David and Halbert eds., Sage Handbook on Intellectual Property (2014), pp. 207-223.
- WIPO: Geographical Indications
- WIPO news: Geneva Act of Lisbon System
