1. WIPO NATIONAL SEMINAR ON ENHANCING AWARENESS AND BUILDING CAPACITY OF SMES TO BENEFIT FROM THE INTELLECTUAL PROPERTY SYSTEM Kuala Lumpur, Malaysia, Sep 7 and 8, 2006

2. Marketing and Branding Strategies: The Role of Collective Marks, Certification Marks and Geographical Indications for Business Success
Lien Verbauwhede Koglin
Consultant, SMEs Division
World Intellectual Property Organization (WIPO)

3. 1. Introduction

4. The Challenge of Marketing for SMEs
Some products have to face competition of other products on the market that are often similar or almost identical
Need to find mechanism that creates and maintains loyal clientele
- what are the most important products from Cambodia
- choose mass products: what are the problems SMEs encounter to market their products

5. Choosing a textile product
Materials and texture:
quality silk, pure wool
vegetable colors
Quality:
colorfastness
easy to clean
density of the knots
Design:
traditional designs
fashion trends
unique
Manufacturing technique:
weaving/knitting technique
hand woven
woven by women
Reputation

6. Marketing a textile product
Materials and texture
Quality
Manufacturing technique
Design
Give information
Send a message
Create image that differentiates you
To maintain credibility, confidence and loyalty
Reputation

7. Role of IP in Marketing
Consumers are unable to assess the quality of products on the market
Trademarks, collective marks, certifications and geographical indications (GIs) refer to the reputation and to certain qualities of the products
Trust in the mark/GI is the reason why consumers may be willing to pay more

8. IP and Marketing Joint marketing Trademarks Collective marks
Certification marks
GIs
Individual marketing
Joint marketing

9. Acting individually, it is often difficult to gain recognition for your products in the marketplace
Some knowledge and production techniques belong to entire communities and can therefore hardly be attributed to a particular individual
“If you can’t beat them, join them”
SMEs have grouped in associations ( organized geographically or per industrial sector)
Working collectively, SMEs can benefit from the advantages of a joint undertaking.

10. 2. Certification Marks My: “certification trade marks” - Section 56 TMA

11. What is a certification mark?
Sign indicating that the goods/services have been certified by an independent body in relation to one or more characteristics
Origin, material, mode of manufacture, quality, accuracy, etc.
Owner is usually an independent enterprise, institution, governmental entity, etc. that is competent to certify the products concerned (My: ‘person’)
Registered in trademarks register

12. How does certification mark work?
Rules of use
Cases in which the owner is to certify the goods/services
quality, composition, other characteristics
Cases in which the owner is to authorize the use
Other provisions required by Registrar
e.g. control measures, sanctions
My: Mark must be to the public advantage
Authorization to use
anyone who meets with the prescribed standards
not confined to membership
generally: licence agreement (fee)
owner not allowed to use
Control

13. For Consumers: For SMEs: Benefits
Guarantee for consumers of certain quality
For SMEs:
Benefit from the confidence that consumers place in users of certification mark
Strengthen reputation

14.  No children were employed in the production process
For example, certify that:
 Product is handmade
 Certain ecological requirements have been respected in the production procedure
 No children were employed in the production process
 Products have been produced in specific geographical region
 Products are made 100% of recyclable materials
 Products are made by indigenous group

15. Case Study: “RUGMARK”
Global non-profit organization working to end child labor and offer educational opportunities for children in India, Nepal and Pakistan
RUGMARK label is assurance that no illegal child labor was employed in the manufacture of a carpet or rug

16. Case Study: “RUGMARK”
To be certified by RUGMARK, carpet-manufacturers sign legally binding contract to:
Produce carpets without illegal child labor
Register all looms with the RUGMARK Foundation
Allow access to looms for unannounced inspections
Carpet looms are monitored regularly by RUGMARK
Each labeled carpet is individually numbered
 enables origin to be traced back to the loom on which is was produced
 also protects against counterfeit labels

17. Case Study: “WOOLMARK”
Registered by Woolmark Company
Quality assurance symbol denoting that the products on which it is applied are made from 100% wool and comply with strict performance specification set down by the Woolmark Company
Registered in over 140 countries

18. “Through ownership and licensing of the Woolmark, we provide unique worldwide quality endorsement.
Our brands and symbols are protected by rigorous and extensive control checks and recognized globally as unrivalled signs of quality and performance.
If a wool product carries our brands, it carries our guarantee of product quality.”

19. Case Study: “TOI IHO”
Exciting initiative for Maori artisans, artists and businesses
Denotes that products are authentic quality indigenous Maori arts and crafts
The creation of the mark was facilitated by Te Waka Toi, the Maori arts board of Creative New Zealand, in consultation with Maori artists.

20. Case Study: “CRAFTMARK”
Registered by the All India Artisans and Craftworkers Welfare Association (AIACA)
Logo symbolizes ‘threads’ from craft product. Also metaphor for the hands of the craft worker.
Certifies that product is genuine Indian handicraft or handloom

21. Minimum standards + norms for labeling
Fee based on turnover of the applicant
Increases consumer awareness of distinct handicraft traditions
AIACA is working towards building the Craftmark into a strong brand
national advertising campaign
in-store displays and posters
direct mailing to consumers
tying up with international craft support organizations to publicize the Craftmark in other countries
Website:

22. Case Study: “SIRIMLINK”
SIRIMLINK provides access to technical information, stored in SIRIM
Malaysian Standards
Malaysian Patents
Technical Abstracts from journals
Malaysian Experts in Science and Technology, etc
Owner = Sirim Berhad (government owned company)
Logo can be used by? Rules of Use?
Certifies what?

23. “VETERINARY HEALTH MARK”
Case Study:
“VETERINARY HEALTH MARK”
Awarded under the Veterinary Inspection and Accreditation Program of the Department of Veterinary Services (DVS), Ministry of Agriculture, Malaysia
Given to plants processing livestock products

24. Accredited plants allowed to imprint the logo on the label of approved products / packaging material
Benefits:
Consumer confidence on food safety
marketing tool
easier acceptance in applications for access to foreign markets

25. 3. Collective Marks My: not available

26. What is a collective mark?
Sign capable of distinguishing the origin or any other common characteristics of different enterprises which use the sign under the control of the registered owner
Typically, the owner of collective mark is an association of which the producers are members
Registered as such in trademarks registry

27. How does collective mark work?
Rules of use
persons authorized to use
criteria for membership
conditions of use
e.g. particular features/qualities of the products
sanctions against misuse
Authorization to use
membership
application or automatic
comply with the rules
Control

28. Thus, function of collective mark is to INFORM the customers :
About the origin of the products
e.g. ceramic artisan, member of a specific association in Thailand
About a level of quality or accuracy, geographical origin, or other features set by the association

29. Benefits for SMEs
1. Economies of scale (registration cost, advertising campaign, enforcement, etc.)
2. Reputation acquired on the basis of common origin or other characteristics of the products made by different producers/traders
3. May facilitate cooperation amongst local producers/traders

30.  collective marks can become powerful tool for local development
4. Creation of collective mark hand in hand with development of certain standards and criteria (rules) and common strategy
 collective marks can become powerful tool for local development
 harmonization of products/services, enhancement of quality
 no licenses

31. Example: “Interflora”
To buy, order and send flowers at almost anywhere in the world
> florists in 150 countries
emblem : Mercurio with flowers in hand
Slogan: “Say it with flowers"
Guarantees freshness, flower quality and value of every Interflora relay order
Mercurio, dios del comercio de los antiguos romanos y antiguo Heraldo de los dioses griegos
Garantia de calidad de servicio + flores. Yo utilizo (internet)
Permite de livrar en todo el mundo

32. CASE STUDY: “La Chamba”

33. Project “La Chamba, Tolima”
The project
3 municipalities: El Guamo, Flandes, El Espinal
Population: inhabitants
1.300 ceramic artisans (10%)
284 workshops
70% women
12% without formal eduction
21% without public services
Mapa del Tolima

34. Project “La Chamba, Tolima”
The product
Added value:
traditional know-how transferred from generation to generation
89%: handwork or with simple tools

35. Project “La Chamba, Tolima”
Organization
Problems:
little enterprise management capacity
paternalism
individual leaders
lack of organizational structure
Solution:
cooperation
development of enterprise management capacity
common strategy

36. Project “La Chamba, Tolima”
Marketing
Problem:
Added value (handmade, tradition, quality) of the product not advertised
Need to find new clients, enter new markets
Solution:
Certification “Hecho a Mano” (handmade)
Creation of culture of CONSISTENT QUALITY
Collective Mark (joint project WIPO)

37. Project “La Chamba, Tolima”
COLLECTIVE MARK
Association:
Members allowed to use the collective mark
Exchange of experiences
Joint advertising and promotion
Regulation of use:
Production process (mine extraction, preparation of clay, moulding, heating, glazing)
Quality control and inspection
 homogeneous products
Objectives:
Strenghten image of Chamba ceramics
Reputation of consistent quality and tradition
Differentiate on the market Chamba ceramics from other ceramics
Preserve cultural heritage
Foster commercialization

38. Collective Mark Certification
Only members that comply
Control by association
Simple authorization
Free use
Owner allowed to use
Cooperation
Certification
Anyone who complies
Control by independent entity: stronger
Authorization through license agreement
Fee
Owner not allowed to use

39. 4. Geographical Indications My: Geographical Indications Act 2000

40. What is a GI?
Sign used on goods that have a specific geographical origin and possess qualities or a reputation that are due to that place of origin
Source identifiers
Indicators of quality
Not created. Can only be recognized
- ask examples of GIs (champagne, cognac, roquefort, havana, burgundy, tequilla
- what do they have in common? Famous places + relate to products of certain quality and nature
- in commerce: valuable assets, able to acquire high reputation, often exposed to counterfeiting, protection is highly desired

41. In some countries : can also be figurative sign
Most commonly, consists of the name of the place of origin of the goods
Country, region, city
E.g. Champagne (France), Havana (Cuba)
In some countries : can also be figurative sign
E.g. Eiffel tower, Egyptian pyramid
E.g. birds, animals associated with a place
Matterhorn, Switzerland
Eiffel Tower,
Paris
Tower Bridge,
London
- ask examples of GIs (champagne, cognac, roquefort, havana, burgundy, tequilla
- what do they have in common? Famous places + relate to products of certain quality and nature
- in commerce: valuable assets, able to acquire high reputation, often exposed to counterfeiting, protection is highly desired

42. How does a GI work? Authorization to use
Collective right of use
Each enterprise located in the area has right to use
For products originating from that area  LINK
Possibly subject to certain quality requirements
Link between product and place
Place where product is produced (industrial products, crafts)
Place where product is extracted (clay, salt)
Place where product is elaborated (liquor,cheese)

43. Unauthorized persons may not use GIs if such use is likely to mislead the public as to the true origin of the product
for not originating from geographical place
for not complying with prescribed quality standards
Stronger protection for wines & spirits
Sanctions:
Court injunctions preventing unauthorized use
Payment of damages
Fines
Imprisonment

44. GI – Who does what? Government: – supplies the legal framework
– approves GIs, verifies compliance
– “external” (independent) control system + enforcement
Producers groupings:
– talk to government
– help define the mandatory specifications (book of
requirements) to be met
– ‘’internal”control

45. Typical examples:
Agricultural products that have qualities that derive from their place of production and are influenced by specific local factors, such as climate, type of soil, altitude, etc
E.g. wine, champagne, cognac, port, sherry, whiskey
E.g. cheese, yoghurt
E.g. olive oil, ham, potatoes, honey, rice

46. Also: handicrafts and medium-tech goods
Typical examples:
Also: handicrafts and medium-tech goods
E.g. ‘Hereke’ (Turkey) for carpets
E.g. ‘Limoges’ (France) for porcelain
E.g. ‘Swiss’ for watches
E.g. ‘Arita’ (Japan) for ceramics

47. Coffee and Green tea from Paksong Silk from Pak Eum
Examples in Asia:
Laos:
Coffee and Green tea from Paksong
Silk from Pak Eum
Algea from Luang Prabang
Benzoin from Laos
Indonesia:
Tobacco from Deli (Sumatra)
Cocoa from Bone Bone
Coffee from Kintanami (Bali) or Toraja
Clove from Ternate
Benzoin raisins
clove

48. Examples in Asia: Vietnam: Pepper from Phu Quoc Pomelo from Nam Roi
Tan Lam Coffee
Cambodia:
Khampot Pepper
Prahoc
Durian
Philippines:
Dried mangos from Cebu
Pomelo Nam Roi
durian
Cebu mango

49. Case Study: “Sarawak pepper”
Exported throughout the world over the last 100 years
Gained international recognition by chefs and gourmets
Distinctive flavour and taste through years of agro-research
Sarawak’s tropical climate and fertile hill slopes are ideal for pepper cultivation

50. Goods: In respect of the following goods
Geographical Indications No: GI
Class: 3
Name of Registered Proprietor: Pepper Marketing Board
Registered From: 4th day of November 2003
Expiry Date: 3rd day of November 2013
Goods: In respect of the following goods
SARAWAK PEPPER IN ANY FORMS (WHOLE, GROUND, PICKLED, ETC). ALL GRADED PEPPER, VALUE ADDED PEPPER PRODUCTS AND PEPPER-BASED PRODUCTS FROM MALAYSIA

51. Quality, Reputation or Other Characteristic
Sarawak, the largest state in Malaysia is an establish producer of “King Of Spice”-Pepper, where about 98% of pepper production in Malaysia comes from Sarawak. Pepper cultivation in Sarawak was commercialized by the White Rajah Charles Brooke with the introduction of ‘Gambier and Pepper Proclamation’* in the 1870’s. Ironically, Sarawak a latecomer, went on to become a significant producer in world pepper industry. Starting with a modest output of 4 tonnes* in 1870s, pepper production now averages 30,000 tonnes a year (over 90% is for export) and in 2002, Malaysia was the fourth biggest pepper exporter in the world. Currently, there are about 70,000 pepper farmers throughout Sarawak and their cultivation covered about 14,000 hectares.
Sarawak Pepper is synonymous with quality in the spice trade and it has been recognized in the international market as one of the high quality pepper. Nowadays, Sarawak Pepper Sarawak value-added pepper such as Creamy White Pepper (CWP), Mikrokleen (MK) and Naturally Clean Pepper (NCP) are well accepted, particularly by clients who would not compromise on quality. (Refer to the brochures on CWP, MK and NCP and Grade Specification of Sarawak Pepper attached). In this respect, Pepper Marketing Board (PMB) as one of the main government agencies entrusted with the development of the pepper industry in Malaysia has to ensure that only quality Sarawak Pepper will be exported to overseas.
In order to enhance buyers confidence towards Sarawak Pepper, the Board has embarked on efforts to improve the quality of Sarawak Pepper right from the farm level up to the export level. In 2002, the board was awarded with SAM ISO accreditation and ISO 9001:2000 for Testing Laboratory and Statutory Grading respectively. This recognition has to put PMB on the fast track of pepper industry by having a testing laboratory and grading unit with worldwide recognition.

52. How is a GI protected?
National
Regional
International

53. Protection on national level
Specific title of protection
Registration with IP office (Russia)
Decree (France)
Special laws for the protection of GIs (India, Malaysia)
Act of public law
Defines area of production and production standards
Enforcement through public law bodies (fair trading bodies, consumer protection bodies etc)
Unregistered: through Passing-off, Unfair Competition, Consumer Protection laws
if reputation + misleading
Pass off: e.g. Scotch whisky – Peter Scot in India
Cons prot: e.g. ‘made in Japan’; Egyptian cotton
Only successful if you can prove damages (if goodwill)
Protection only effective between parties of the proceedings. Entitlement to protection of given GI must be demonstrated every time enforcement is sought.
Passing off = legal remedy for cases in which the goods/services of one person are presented as being those of somebody else.
As regards the enforcement of GIs in India, the Khoday Distilleries case shows how sensitive the Indian courts are towards protecting world famous GIs. In this case the Scotch Whisky Association, based in Scotland, argued that the use of the word Scot in relation to whisky by an Indian company passes off the reputation of Scotch Whisky, which is geographically indicative. The mark in question was Peter Scot. This mark was registered in India in the name of Khoday Distilleries Limited (registration in class 33) in The Scotch Whisky Association asked the Trade Marks Registrar in India to remove the mark Peter Scot from the Register. The Registrar allowed the application. Khoday Distilleries subsequently appealed to the High Court. While hearing the appeal, the judge in the Madras High Court said that even the use of the word "Scot" by an Indian Distillery in relation to whisky is unacceptable.
Unfair competition = act of competition contrary to honest practices in commercial or industrial matters
At international level: Paris Convention: basic international rule concerning protection against unfair competition. National level: remedy against unlawful and dishonest practices of competitors. Commercial practices which are misleading the public with respect to the geographical origin of products offered by an enterprise = act of unfair competition

54. Protection on national level
Certification marks or collective marks
May certify or indicate origin of products
Cert: e.g. in the U.S.A.: Darjeeling, Swiss, Stilton
Coll: e.g. Japan; agricultural label in France
Passing off = legal remedy for cases in which the goods/services of one person are presented as being those of somebody else.
As regards the enforcement of GIs in India, the Khoday Distilleries case shows how sensitive the Indian courts are towards protecting world famous GIs. In this case the Scotch Whisky Association, based in Scotland, argued that the use of the word Scot in relation to whisky by an Indian company passes off the reputation of Scotch Whisky, which is geographically indicative. The mark in question was Peter Scot. This mark was registered in India in the name of Khoday Distilleries Limited (registration in class 33) in The Scotch Whisky Association asked the Trade Marks Registrar in India to remove the mark Peter Scot from the Register. The Registrar allowed the application. Khoday Distilleries subsequently appealed to the High Court. While hearing the appeal, the judge in the Madras High Court said that even the use of the word "Scot" by an Indian Distillery in relation to whisky is unacceptable.
Unfair competition = act of competition contrary to honest practices in commercial or industrial matters
At international level: Paris Convention: basic international rule concerning protection against unfair competition. National level: remedy against unlawful and dishonest practices of competitors. Commercial practices which are misleading the public with respect to the geographical origin of products offered by an enterprise = act of unfair competition

55. Protection on international level
No legally binding international register for all GIs
Bilateral agreements
e.g. EU-Bulgaria for wine names
International treaties
TRIPS
- does not prevent GIs from becoming generic
- does not prevent abuse of GI name by trademark holder

56. International treaties
TRIPS:
minimum standard of protection for WTO members
if misleading or act of unfair competition
enhanced level of protection for wines and spirits
no protection if GI is generic term for the goods in the member state
Lisbon:
international registration system
member countries must prohibit imitations, including terms like “type” or “kind”
cannot become generic, as long as protected in country of origin
TRIPS
- does not prevent GIs from becoming generic
- does not prevent abuse of GI name by trademark holder

57. Benefits for SMEs GIs shift focus of production to quality
 increased production
 local job creation
Reward producers with higher income in return for efforts to improve quality
Provide consumers with high-quality products whose origin and mode of production is guaranteed

58. Disadvantages Inconsistent protection
Absence of GI system in many countries
Civil law
Registration
Only similar goods
Common law
Repution enough (e.g. Champagne in India)
Also dissimilar products
Additional protection for wines and spirits
GIs may become generic terms (e.g. Chablis in America, China for porcelain)
Common law:
USA protects GIs that are not registered. E.g., Cognac is protected as a common law (unregistered) certification mark in the USA. Purchasers primarily understand Cognac to refer to a brandy originating in the Cognac region of France, and not to a brandy produced elsewhere.
Generic:
TRIPS does not require that a WTO member extend protection to a GI if that GI is the generic name for the goods of the member.
E.g., in the USA Chablis is often used to refer to any sort of white wine: a generic term in the USA. Therefore, the USA can continue to permit the use of Chablis as a synonym for white wine.
E.g. Champagne in the USA is generic term for light-colored wine with bubbles
E.g. Parmigiano cheese in Italy is generically known as parmesan cheese in Australia and the USA.
Other exception in TRIPS: situations where a trademark already exists.

59. GI
Protects indication that links product’s origin and quality/reputation based on that origin
Most often: public right; owner= State
Anyone can use
Proscribed list of unauthorized actions
Action: private + public
Certification
Protects certification of product’s particular characteristics (not necessarily origin)
Most often: private right; owner = trade association or producer group
License needed
Protection against those who don’t have license
Action: owner of certification

60. 4. Conclusions

61. Trademark is powerful instrument to differentiate your individual products from those of your competitors
However, in order to be effective (strong reputation), the enterprise in question must have a high level of organization and production
Collective marks, certification marks and GIs may be useful (additional) tools to help enterprises overcome the disadvantages associated with their small size and isolation in the marketplace 
Coll marks, cert marks and GIs are important for the same reasons as TMs:
source indicators + indicators of quality

62. Economic benefits of collective marks, certification marks and GIs
Capable to acquire a high reputation
Protection can be maintained indefinitely
No monopoly, but simply limit group of people who can use a specific symbol
Protect goodwill and reputation acquired by a group of producers over centuries

63. Individual reputation
IP and Marketing
Trademarks
Collective marks
Certification marks
GIs
Individual marketing
Joint marketing
Origin: enterprise
Individual reputation
Origin: geographical
Common reputation,
characteristics,
qualities

64. thank you Lien Verbauwhede Koglin
WIPO, SMEs Division: