The Relevance of Collective Marks, Certification Marks and Geographical Indications WIPO Training of Trainers Program for SMEs Kuala Lumpur February 21 – 25, 2011

Overview Introduction Collective Marks Certification Marks Geographical Indications

1. Introduction

Why “specific” marks might be of interest for your business? SMEs often face double competition from other traditional artisan products and standardized industrial products Need to obtain consumer recognition and customer loyalty SMEs often find it difficult individually to develop a powerful marketing campaign that will enable them to position their products and create a reputation for their goods that will attract consumers the small scale of production SMEs often face double competition from other traditional artisan products and standardized industrial products

“If you can’t beat them, join them” Working collectively, SMEs can benefit from economies of scale and broader brand name recognition shifting from just production to the marketing in the same manner as larger companies Trademark Shared marks: Collective marks Certification marks Geographical Indications Joint marketing reference to the reputation and to certain qualities of the products Individual marketing

Why “specific” marks might be of interest for your business? The requirements and conditions for protection vary considerably from country to country Art of playing on several fronts Particular choice - a question of legal feasibility and the socio-economic priorities of the members

2. Collective marks

Collective marks Signes used to distinguish certain valued characteristics common to the products of the members of an association/cooperative e.g. geographical origin, material, mode of manufacture Registered in the trademarks registry Typically, the owner of the collective mark is an association/ cooperative of which entrepreneurs/artisans are members The owner does not use the mark for commercial purposes, but to advertise and promote the products/services of its members who sell their products under the collective seal Function of Collective Marks is to inform the consumers about: about the origin of the products (artisan, member of a specific association) about a level of quality or accuracy, geographical origin, or other features set by the association

How does a 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 no licenses Control

Collective marks Cooperation on all stages Creation of an association/consortium Set of products characteristics and quality standards Set of rules to use the collective mark and sanctions for non-compliance with the standards and regulations Common marketing and communication strategy Possibility for members to use their own trademarks along with the collective mark

Benefits for the SMEs 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 Framework for cooperation amongst local producers/traders 4. Collective marks can become powerful tool for local development and harmonization of products/services, enhancement of quality An effective tool for joined product development, marketing and branding domestically and internationally Might be a tool to overcome the some of the challenges assosciated with SME’s size and isolatipon in the market place Might be also a tool for “shared” value-adding strategy based on links with cultural, social, geographical characteristics of traditional products A framework for cooperation between local producers Collective «re-inventing» of traditions or setting quality standards and production processes

Strategic considerations: Might be a good strategy that leaves the door open for later protection as GI for various reasons: Lack of regulatory framework for GIs The mere convenience of being able to operate quickly Protection of the market: “Closed” character of the mark In cases when products cannot apply for GI in a given country

Case Study: “La Chamba, Tolima” Chamba ceramics Added value: traditional know-how transferred from generation to generation 89%: handwork or with simple tools Areas of improvements: Organization and management Exploitation of mines Product design and development Marketing: Certification “Hecho a Mano” (handmade) forming an association and registration of a collective mark Problem: Added value (handmade, tradition, quality) of the product not advertised No stimulation for export Need to find new clients, enter new markets Solution: design as a differentiated value of ceramics tradition and innovation (new products for new demands) merging supply and demand Problems: supply not merged with demand little product variety some products out of production (stewpans) little enterprise management capacity paternalism individual leaders lack of organizational structure cooperation development of enterprise management capacity common strategy Certification “Hecho a Mano” (handmade) Zero custom duties for exportation Creation of culture of CONSISTENT QUALITY Collective Mark (joint project WIPO) 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

Case Study: “Iran’s carpets” Iranian carpets woven in the various regions of the country are known for the distinctive characteristics associated with each region: traditional motifs, the type of knots and methods used while weaving, the dyes based on local plants, etc. Local cooperatives and guilds have for many years used collective marks to protect these regionally specific characteristics Current availability and use of GI for protection But now the Iranian parliament has also approved a Law for the Protection of Geographical Indications (2005), which further strengthens the hand of carpet weavers to safeguard the distinctive elements which make the carpets of their region special. 14

2. Certification marks

Certification marks Distinctive signs used to indicate compliance with standards and characteristics pre-established by the owner of the mark - in respect of origin, materials, mode of manufacture, quality, accuracy or other characteristics but are not confined to any membership Registered in trademarks register Owner is usually an independent enterprise, institution, governmental entity, etc. that is competent to certify the products concerned

How does a certification mark work? Regulation of use features of the products that are certified conditions of use control proceedings against unauthorized use Autorization to use anyone who meets with the prescribed standards not confined to membership generally: licence agreement (fee) owner not allowed to use Control

Benefits for SMEs Adding value strategy: The message conveyed by a certification mark is that the products have been examined, tested, inspected, or in some way checked by a person who is not their producer, by methods determined by the certifier/owner Benefit from the confidence that consumers place in users of certification mark Strengthen reputation For consumers: Guarantee for consumers of certain quality «Voluntary certification» Importance for export

Certification marks 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 Especially in the US certification marks are a widespread legal means of recognizing and protecting GI. The proprietor is usually a federal state or producers association. There are many products protected in the EU by registered GIs, which in the US are registered under a certification mark that guarantees both the origin and the qualities of the product: Manchego cheese from Spain and Roquefort from France One of the Indonesian government’s ways of protecting its traditional Indonesian heritage takes place in the field of batik textiles. One goal is to establish the world’s perception that Javanese batik-patterned textile, which includes the traditional practice of dying cloth through wax-resist methods, originates from Indonesia. government now issues a certification mark, called “Batikmark”, through its Department of Industry (Departemen Perindustrian RI) that can be applied to properly certified Indonesian batik products. The first purpose of having “Batikmark” certification is to assert Javanese batik-patterned textile as an Indonesian traditional cultural heritage. Further, the “Batikmark” certification also serves as a quality assurance label for batik-patterned textile that originates from Indonesia. This helps protect consumers of Javanese batik-patterned textiles by assuring that the consumers are indeed purchasing an original Indonesian Javanese-batik patterned textile that has been certified by an authorized national institution. Lastly, “Batikmark” certification is meant to face competition of other similar or almost identical products on the market and to overcome the threat of unauthorized copying of Indonesian Javanese batik-patterned textile by foreign textile manufacturers. These practices have been ongoing, as many Asian and African countries have been copying Indonesian batik patterns. Indian “SILK MARK” and “Handloom” marks Indonesian “Batikmark”

Case study: Egyptian Cotton (ECL) Madrid Registration # 756059 from 23.04.2001 Nice Classification: 22 Coton brut Alexandria Cotton Exporters Association, Egyptian Ministry of Economy and Foreign Trade (1932) Registered in 58 countries, the Egyptian Cotton mark guarantees the product is made of 100% Egyptian Barbadense cotton A licensing scheme for commercialization and promotion of Egyptian cotton Licensing agreements with two leading textile firms in the United States Authorizing the latter companies to use the logo on their products made of Egyptian cotton in the United States of America and Canada 80,000 tons of Egyptian cotton were exported in the 2008-09 fiscal year

Case Study: “RUGMARK” and “GoodWeave” Global non-profit organization RugMark International (RMI) 15 years of protecting children and promoting ethical carpet and rug production, working to end child labor and offer educational opportunities for children in India, Nepal and Pakistan RugMark and GoodWeave labels assure that no children under age 14 were employed by the facility responsible for making the labeled rug GoodWeave’s five-country network, operating in both producer (India and Nepal) and consumer countries (U.S., U.K. and Germany) through: Standard-setting, Monitoring and Certification Rehabilitation and Education to Child Workers Child Labour Prevention Market Promotion and Expansion International Governance and Accountability

Case Study: “Oeko-Tex” Association for the Assessment of Environmentally Friendly Textiles The Oeko-Tex® system provides the textile and clothing industry with a globally uniform standard for assessment of harmful substances, testing and certification of raw materials, intermediate and end products at all stages of processing throughout the manufacturing chain, including accessories The tests for harmful substances in textiles specified in the Oeko-Tex® Standard 100 were first introduced in 1992 Oeko-Tex® Standard 1000 for production ecology in 1995 http://www.oeko-tex.com/

Case Study: “Oeko-Tex” The Oeko-Tex® Standard 1000 requires that companies: • comply with specified criteria to avoid or limit the use of harmful substances in production • observe stringent limit values relating to waste water and exhaust air • optimise their energy consumption • ensure low noise and dust pollution • introduce measures to ensure safety at work The use of child labour is prohibited

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

3. Geographical Indications

Geographical indication (GI) Sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that place of origin “Champagne,” “Cognac,” “Roquefort,” “Chianti,” “Tequila” “Swiss” for watches, “Arita” (Japan) for ceramics, “Hereke” (Turkey) for carpets, “Argan oil” (Morocco) ‘Sarawak Pepper’, ‘Sabah Tea’, ‘Tenom Coffee’, ‘Borneo Virgin Coconut Oil,’ ‘Sabah Seaweed’ Malaysia: Geographical Indications Act 2000

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 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)

How does a GI work? 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

GI – Who does what? Government: supplies the legal framework approves GIs, verifies compliance “external” (independent) control system + enforcement Producers groupings: collectivization talk to government help define the mandatory specifications to be met ‘’internal” quality control The initial external technical, legal, financial and promotional help is essential

Benefits for SMEs GIs shift focus of production to quality and marketing the products of regional origin economies of scale for small producers 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

Disadvantages Registration Only similar goods 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 2. International protection depends on national protection 3. GIs may become generic terms

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

GI protection in Malaysia 1) What is Geographical Indication? Geographical Indications Act 2000 defines geographical indication as an indication which identifies any goods as originating in a country or territory, or a region or locality in that country or territory, where a given quality, reputation or other characteristic of the goods is essentially attributable to their geographical origin. 2) Does Malaysia have product that qualifies to be registered under Geographical Indications Act 2000? Malaysia has a number of goods that can be registered as geographical indications. These goods have been commercially exploited at local and international market for example ‘Sarawak Pepper’, which is a pepper-based product produce in Sarawak. This pepper has gained reputation and recognition at international level due to the quality of the pepper. In addition, ‘Sabah Tea’, ‘Tenom Coffee’, ‘Borneo Virgin Coconut Oil’ and ‘Sabah Seaweed’ are the registered geographical indication goods in Malaysia. These four geographical indications are from Sabah.

GI protection in Malaysia 3) Is geographical indication applicable only to an agricultural product? Geographical indication is not limited to agricultural product. It can also be used on natural product such as Langkawi Gamat and any product of handicraft like Terengganu Songket, Kelantan Batek and food products such as Papar Belacan and Kelantan Budu. 4) Is registration of geographical indication compulsory? Registration of geographical indication is not compulsory. However, registration of geographical indication is encouraged to protect the interest of producer and consumer. The registered proprietor of geographical indication has the exclusive rights to exploit the geographical indication and gains recognition at domestic and international level. 5) Can an individual register a geographical indication? Registration of geographical indication is based on an affiliation ownership concept for the producers who are carrying on an activity in that specified geographical area and not an individual ownership concept. Geographical indication can also be registered by the competent authority such as local authority, government agency, statutory body; and trade organization or association.

GI protection in Malaysia 7) What is the duration of protection of geographical indication? A registered geographical indication is protected for ten years from the date of filing and is renewable for every ten years as long as it is still in use. 8) What is the scope of protection of a geographical indication in Malaysia? Geographical indication’s protection in Malaysia is territorial. To seek protection in other countries, application must be filed with the respective countries. 9) What is the difference between geographical indication and trade mark? Trade marks is a mark which distinguishes the goods and services of one trader from those of another. It gives its owner the right to exclude others from using the trade marks. On the other hand, a geographical indication indicates where the goods are produced and has characteristics that are attributable to the place of the geographical origin. In addition, the geographical indication goods may have different trade marks amongst the traders as long as the geographical indication goods produce by the registered proprietor of geographical indication.

GI protection in Malaysia 10) What action can an aggrieved party commence in the event a geographical indication has been falsely represented to the public? Any aggrieved party may file an action in the High Court (Intellectual Property). Source: http://www.myipo.gov.my/en/faq/geographical-indication.html

Case Study: “Pochampally Ikat” (India) Pochampally is a small town in Nalgonda district of Andhra Pradesh. Known for its handloom fabric having unique traditional designs, Pochampally Ikat, for centuries Special technology of tie-and-dye is used for making the designs Material is either cotton or silk or a combination of the two only. Having a unique single, combined or double Ikat in several illustrations Misappropriation: manufacture and marketing of products with Pochampally name and design by large mills outside Pochampally using power looms Reduced Income for about 5000 handloom weavers KAT - is a type of weaving where the warp, weft or both are tie-dyed before weaving to create designs on the finished fabric. . Kno Based on “Capturing & Protecting Intangible Value Using IP The Pochampally Ikat Case” by T C James 37

Case Study: “Pochampally Ikat” The Governmental Textiles Committee launched a cluster initiative to facilitate the local associations “Pochampally Handloom Weavers’ Coop. Society Ltd” Associations obtained registration of various IP rights such as copyrights, trade marks, designs and geographical indications during 2004-05 Financial, Technical & Legal Support Awareness seminars and workshops were organised Obtaining of GI protection for the Pochampally handloom sari from unfair competition and counterfeit Based on “Capturing & Protecting Intangible Value Using IP The Pochampally Ikat Case” by T C James

Case Study: “Pochampally Ikat” Media attention on Pochampally Artisans Motivation & Morale boost for Weavers Networking and social cohesion among the weavers Increased market penetration -- 20% increase in sales Launching an internet site with selling options Increased Investment: Pochampally Handloom Park Enforcement of the Geographical Indications for preventing copying & passing off Establishing the legal identity in the international market – Creation of brand image Setting up of mechanisms for quality control Based on “Capturing & Protecting Intangible Value Using IP The Pochampally Ikat Case” by T C James

Conclusions 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 May be a core element of a collective value-adding strategy around a traditional product of regional origin based on quality and differentiation Careful choice of product to which value is to be added, equitable management and coordination of joined efforts, choice of suitable legal means for protecting, strict quality control are the core elements of success

Thank you for your attention! anil.sinha@wipo.int