EUROPEAN COMMISSION - DG AGRI Unit H2 L130 03/168 Rue de la Loi, 200 1049 Bruxelles By email to: Agri-H2@ec.europa.eu 3 July 2012 The Proposal for a Regulation of the European Parliament and of the Council on Agricultural Product Quality Schemes Additional comments of the MARQUES Geographical Indications Team Dear Sirs The Geographical Indication Team of MARQUES, the European Association of Trade Mark Owners, would like to respectfully submit further comments as to the proposal for a Regulation of the European Parliament and of the Council on agricultural product quality schemes SEC (2010) 1524 final, SEC (2010) 1525 final, which affects the regulations currently in force in respect of designations of origin, geographical indications and traditional specialties guaranteed. It is appreciated that on 25 June 2012 the Special Committee on Agriculture (SCA) supported the compromise text agreed by the Council and the European Parliament representatives during the last trilogue and that this text is a part of the so called Quality Package consisting of a set of proposals aimed at putting in place a coherent agricultural product quality policy. It is noted that according to the agreement between MARQUES Ltd - Unit Q, Troon Way Business Centre, Humberstone Lane, Thurmaston, Leicester LE4 9HA United Kingdom Phone +44 116 274 7355 Fax +44 116 274 7365 Email: info@marques.org /aromeo@marques.org 1
the Council and the European Parliament, once all procedural steps are completed, including a vote by the Parliament at the plenary session, the regulation regarding the agricultural product quality scheme will be adopted by the Council and the European Parliament in the first reading (source: Official Press Release of the Council of the European Union, 11863/12, Brussels 25 June 2012). It is further noted that a Debate and Vote in the European Parliament are scheduled respectively on the 12 th and 13 th September 2012. Unless otherwise specified, the present comments address the proposal as it was originally published and relate to aspects which have not been affected by the amendments proposed by the Rapporteur of the European Parliament s Agricultural and Rural Development Committee. The present comments aim at supplementing those submissions that were presented by MARQUES in response to the consultation that took place in view of the preparation of the Quality Package proposals as designed to put in place a coherent agricultural product quality policy. 1. Preliminary Remarks First of all, MARQUES would like to express its appreciation of certain aspects of both this proposal and other regulations concerning geographical indications which have entered into force in the meantime, in particular: the simplification of the system through the unification in a single regulation; the use of a same procedure for registering geographical indications/designations of origin concerning certain products and Traditional Specialities Guaranteed (which we expect that it will only be a step to a more extended unification which comprehends all the products protected by PGIs and PDOs in the future, independently of their nature); the possibility of entering on to the EU register the designations of origin and geographical indications protected via international agreements to which the EU is party, as their non-inclusion causes uncertainty; and the point of view of the EU that existing rules concerning the continued use of names that are generic should be clarified to the effect that generic terms which are similar to or form part of a protected or reserved name or term should retain such generic status. However, in MARQUES opinion, there are other aspects of the proposal that ought to be reconsidered. 2
2. Specific comments 2.1. New definition (Article 5) The proposed new definition significantly expands the definition of designations of origin and geographical indications, which fact increases the scope of potential conflict between trademarks and geographical indications and would dilute the commercial value of geographical indications and, in particular, of designations of origin. The current regulation limits the protection of both a designation of origin and a geographical indication to "the name of a region, a specific place or, in exceptional cases, a country used to describe an agricultural product or a foodstuff ( )" (as well as traditional terms). Conversely, the new proposal would introduce a much wider definition based on which it is defined as eligible a "name which identifies a product originating in a specific place, region or, in exceptional cases, a country" (with further requirements concerning a link between the qualities of the product and the area). MARQUES believes that the above proposed change in the definition would - make the scope of the system less predictable - remove it further from its original rationale - blur the line between trademarks and geographical indications (for example, consumers may associate a trademark with the place of the seat of the trademark owner, but that does not convert a trademark into a geographical indication) - expand the possible conflict zone between trademarks and geographical indications. By broadening the definitions, significantly more designations could qualify for protection under the regulation. This would lead to a dilution of the commercial value of existing geographical indications and, in particular, of designations of origin. In the future, it may be difficult - if not even impossible - for a consumer to associate any value to the qualification of a designation as a PGI or PDO. In MARQUES view, in overstretching the scheme by allowing too many designations, the system would be overall weakened. It is noted that a broader definition had also been discussed in the course of the legislative process that led to the adoption of Regulation 510/06 and that eventually, the definition of Regulation 2081/92 was maintained with some adaptations. Accordingly, MARQUES would recommend maintaining the definition of Regulation 510/06 rather than expanding it further. 3
2.2.- Grounds of opposition (Article 10) MARQUES is concerned about the wording of paragraph 2 of Article 10, which stipulates that "the grounds for opposition shall be assessed in relation to the territory of the European Union." It is unclear what is meant by "territory of the European Union" in this context, and this provision raises serious doubts on its compatibility with the obligations to afford protection to trademark owners according to Article 16 of the TRIPS Agreement, as it could be interpreted in a way that objections based on trademark rights existing only at the level of the EU member states rather than on an EU-wide basis - would not be permissible. As in the case of Community trademarks, where a CTM application can be challenged based on earlier rights existing in any member state, also trademark rights valid in a member state must be eligible to protection under Article 16 TRIPS and should prevail against a later geographical indication. A similar provision had been suggested in the legislative process of Regulation 510/06 and was subject to criticism by both MARQUES and other trademark associations. Regulation 510/06 as finally adopted clarifies that for IP rights, the examination must be conducted in relation to the jurisdiction(s) where they are protected (Article 7 (3): "The criteria ( ) shall be evaluated in relation to the territory of the Community, which in the case of intellectual property rights refers only to the territory or territories where the said rights are protected"). The second-half sentence should be maintained and introduced into Article 10 of the draft Regulation. 2.3.- Relationship between trademarks, designations of origin and geographical indications (Article 14) MARQUES welcomes the change of the reference date in proposed Article 14(2) in order to bring it in line with the priority principle in a similar form as provided under Regulation 2081/92 in its consolidated form prior to the adoption of Regulation 510/06. However, MARQUES is concerned about the inclusion of the words "for that product" in proposed Article 14(2), as this may raise doubts on the extent according to which existing trademarks may continue to be used and renewed. Those words should accordingly be deleted to clarify beyond any doubt that the right to use and renew prior trademarks will not at all be affected by later geographical indications. 2.4.- Cancellation procedure (Article 51) Whilst Article 51 includes a desirable explicit provision allowing the Commission to initiate cancellation proceedings based on non-use, the suggested draft provision can be interpreted as limiting the possibilities for third parties other than producers of the 4
product marketed under the registered name to request a cancellation. Generally, cancellation proceedings should be freely available, to allow the removal of terms for which there is no longer an actual interest. MARQUES would recommend maintaining the ground of cancellation as provided under Article 12(2) of the current Regulation, which stipulates that "any natural or legal person having a legitimate interest may request cancellation of the registration, giving reasons for the request". Moreover, the second sentence of draft Article 51(1) should be contained in a separate paragraph, to clarify that it relates to a separate ground for cancellation. 2.5.- Information to consumers (Articles 4/7/8) Article 4 sets as an objective the provision of clear information on the value-adding attributes of the product to consumers. MARQUES considers that even if the contents of articles 7 (product specification) and 8 (content of application for registration) make reference to the fact that details bearing out the link between the quality or characteristics of the product and the place must be given, this is not sufficient for consumers. Consumers do not usually gain access to that information, but only to the information which is on the market and usually on the product itself. (e.g. on labels). In cases where products benefit from the right to use a geographical indication only because of a certain characteristic - which could even be just the reputation of the product - being due to the geographical place identified by that geographical indication, it may only be because one of the relevant steps - process, elaboration, transformation, etc. - has taken place in the area concerned (as it is the case, e.g., with the PGIs). Information which accurately reflects which specific characteristic and/or step takes place in the geographical area in question should be provided in a clear manner to consumers. Otherwise consumers may link that GI to characteristics or steps which are neither linked to that origin nor play any essential role in the quality of the product, and they would thus make the wrong associations with the geographical name. This could amount to an indirect and unfair benefit for producers of other products of that area visà-vis producers of the same product in other area(s). A fictitious example could be the case of a confectionary product mainly made of a specific raw material which benefits from a certain PGI. Its protection is not due to the specificity of the raw material (which could even come from a different geographical area), the public might think that the raw material in question comes from the geographical area identified by the PGI. This may benefit from the reputation of the confectionary product and be in a better situation to compete with raw material of the same nature which comes from outside the PGI area, and which might even be the raw material used by that PGI. 5
It is important to note that publications in official journals do not usually reach consumers. Rather, consumers tend to collect information from product labels, packaging or advertising material. In MARQUES view it would be appropriate to communicate this information to consumers via such labels or materials. It must be stressed that it is not always appropriate to assume that consumers will be able to digest information in the same way as competitors and stakeholders in the market can do. Consumers require a different and much clearer kind of publicity. They do not engage watch services regarding official publications, do not often study and review technical specifications and are not necessarily acquainted with legal terms and requirements concerning the use of distinctive signs and geographical indications. This situation can also apply, in many cases, to other stakeholders. 2.6.- GIs protected under international agreements (Article 11) Art. 11.2 of the proposal provides that designations of origin or geographical indications of third countries which are protected in the EU under an international agreement to which the Union is a contracting party may be entered in the Register. MARQUES considers that it would be preferable to go one step further and establish that the inclusion on the EU Register is a requirement to ensure effective protection for the sake of certainty in the market. It is always easier to consult one database rather than having to search among scattered International agreements to find out whether a name is protected. Furthermore, the fact that some of the PDO/PGIs protected in the EU are entered into the Register and others are not, might lead to confusion as to the status of those PDO/PGIs which have not achieved the same status. This is in line with the recent EU Commission Regulation (EU) No 538/2011 of 1 June 2011, where it is said that traditional terms protected in Annex XII thereto should be transferred to the electronic database E-Bacchus thus gathering protected designations of origin, protected geographical indications and protected traditional terms in a single IT tool, easily available for consultation purposes. 2.7.- Traditional Specialities guaranteed (Article 18) As to Title III Traditional Specialities Guaranteed, notably Article18.1 (b), MARQUES gladly notes that this has been removed from the proposal as initially published. MARQUES respectfully considers that TSGs should not be used as a means to provide increased market outlets for products covered by protected designations of origin and protected geographical indications by setting a requirement for the protection of Traditional Specialities Guaranteed that such products include as essential ingredients. 6
2.8.- Protected terms MARQUES considers that it would be advisable that some provision is added to clarify situations which might prove controversial, in order to avoid interpretations which might leave certain stakeholders and the consumers unprotected otherwise. For instance, in the judgment of the General Court (Third Chamber) of 11 May 2010 (Case T-237/08, Abadía Retuerta S.A. v Office for the Harmonization in the Internal Market -OHIM), it was considered that the geographical name EL PALOMAR was protected as a geographical indication of a quality wine psr ( produced in a specified region ) under EC Regulation 1493/1999. This was because the Designation of Origin VALENCIA had been registered as a psr appellation and the national regulations governing the Designation of Origin VALENCIA set out that its protection extended to many other specific names, including EL PALOMAR, even if such other geographical names had not been published in the EU Gazette, and even though the Court expressly recognized that: 102. It is sure that the way in which the Commission published the information forwarded by the Kingdom of Spain hardly seems effective to ensure that the public is fully and completely informed, in so far as the name of the local administrative areas which benefit from an indication of origin in relation to, inter alia, the region VALENCIA... - including the name of the local administrative area El Palomar- do not appear in the list published by the Commission. Even if a similar situation may unlikely occur in the case of agricultural products and foodstuffs, such possibility cannot be completely ruled out. The adoption of the new regulation would be a good opportunity to remove any uncertainties by clarifying aspects which might otherwise lead to doubts in the market. For instance, with respect to use of generic terms, Article 38.1 of the proposal provides appropriate provision that the regulation will not affect use of terms that are generic in the European Union, even if the generic term is part of a name that is protected under a quality scheme. A similar clarification may prove appropriate to explain that only those names which are expressly registered as PDO, PGI or TSG are protected according to this regulation while any other geographical names of places included in the geographical area of the PDO, PGI or TSG are not likewise protected under the regulation. Amendment 47 in the ***Report A7-0266/2011 of the Committee of Agriculture and Rural Development of the European Parliament on the proposal for a regulation of the European Parliament and the Council (COM (2010) 0733-C7-0423/2010-2010/0353 (COD)), constitutes a step forward on the way to legal certainty by providing - in relation to Article 11, paragraph 3, of the proposal - that the register shall contain, as a 7
minimum, the single document, the product specification and the Commission acts of approval. In this regard, Article 47 of the proposal, concerning publication for opposition, sets out that the single document (which includes the name of the PGI or PDO) and the reference to the publication of the product specification shall be published in the Official Journal of the European Union, in case of applications under the scheme set out in Title II (namely, GIs and DOs). Similarly, it would prove proper to expressly clarify that only that name expressly mentioned in the single document will be protected as DO or GI according to the rules laid down in this regulation. 2.9.- Streamlining of the registration procedure and opposition period The shortening of the registration procedure should mainly be assessed on the grounds of decision-making factors. Opposition deadlines should not be shortened so much as to reduce the opposition period from six to only two months, as provided by Article 48.1 of the current proposal. The current time period of six months should be maintained. In fact, the complexity of the GI system require more time to assess the feasibility of any opposition than in other systems, as there are many more legal issues to consider, before taking a decision. In MARQUES view, the six-month opposition period is not the main cause of any possible delays that may occur in the registration procedure, notably for those more complex cases, and the shortening of the opposition period to two months would not solve most of the existing problems. It is understood that the term to file the reasoned statement should be counted from the date on which the deadline to file the notice of opposition expires and not from the date on which the opposition was filed. It is appreciated that this would improve legal certainty in the interest of all concerned parties. 2.10.- Searches for prior rights In conclusion, it could also prove desirable to set out the obligation for the authorities in charge of the application procedure to carry out a search and issue a report on identical and similar prior rights, at least in respect of prior CTMs and national trademarks. The owners of the earlier rights cited in the search reports should then be individually informed of the existence of the new PDO/PGI/TSG applications. This procedure would 8
follow the practice already adopted in many trademark systems in respect of trademark applications. Respectfully submitted, MARQUES Geographical Indications Team 9
About MARQUES MARQUES is the European association representing brand owners' interests. Our mission is to be the trusted voice for brand owners. Established in 1986 and later incorporated in the United Kingdom as a not-for-profit company limited by guarantee, MARQUES unites European and international brand owners across all product sectors to address issues associated with the use, protection and value of IP rights, as these are vital to innovation, growth and job creation, which ultimately enhance internal markets. Its membership includes brand owners and IP professionals in more than 80 countries. MARQUES is an accredited organisation before the Office for Harmonisation in the Internal Market (OHIM), appointed observer at the OHIM Administrative Board and Budget Committee, an official non-governmental observer at the World Intellectual Property Organisation and a registered interest representative organisation (ID 97131823590-44) in the Transparency Register set up by the European Parliament and the European Commission, which extends and replaces the former Register of Interest Representatives, opened by the commission in 2008. More information about MARQUES and its initiatives is available at www.marques.org. 10