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WIPO ASIA SUB-REGIONAL WORKSHOP

ON THE USE OF INTELLECTUAL PROPERTY (IP)

BY SME SUPPORT INSTITUTIONS FOR THE PROMOTION OF

COMPETITIVENESS OF SMEs IN THE FOOD PROCESSING SECTOR

ORGANIZED BY

the World Intellectual Property Organization (WIPO)

in cooperation with

the Intellectual Property Organization of Pakistan (IPO-Pakistan)

in association with

the Small and Medium Enterprise Development Authority (SMEDA)

and

With the assistance of

The Japan Patent Office (JPO)

Lahore, June 5 and 6, 2007

THE ROLE OF COLLECTIVE MARKS, CERTIFICATION

MARKS AND GEOGRAPHICAL INDICATIONS

By

AMARJIT SINGH

AMARJIT & ASSOCIATES

SUITE 404, LAW ARCADE

18 PUSA ROAD,NEW DELHI-110005

P : +91 11 28758805, 28755155, 28756797, 28753141

F : +91 11 28754798

E : info@amarjitassociates.com & asmonga@vsnl.com

W: www.amarjitassociates.com

In order to understand and appreciate the role of Collective Marks, Certification Marks and Geographical Indications, it is necessary to understand the nature of such marks as compared to the Trade Marks.

The definition of mark includes a device, brand, name, word or label and a mark could be in any such form.

Trade Marks

When a mark is used to indicate a connection in the course of trade with the goods of a particular manufacturer, it plays the role of a Trade Mark.

The Trade Mark is defined as a mark so as to indicate a connection in the course of trade for the purposes of identifying the trade origin. It is a name given to the product by the manufacturer so as to indicate to the consumer a connection between such goods and the origin thereof. The consumer ultimately identifies, recognizes and demand the goods of a particular manufacturer with reference to the trade mark applied to such goods on being satisfied with the quality of such products. It is like a name given to the child by his parents for the purpose of his identification and recognition. The name given to a living person by his parents performs an equivalent role to that of a Trade Mark applied by the manufacturer to his goods.
The Trade Mark is owned and possessed by an individual as a proprietor thereof. The individual could be a firm, a corporate, a society or a partnership firm. It is the juristic personality of an individual, which possess the ownership right in a trade mark to the exclusive use and exploitation thereof. The owner of Trade Mark is entitled to deal with his Trade Mark in any manner of his choice including the right to license, assign or mortgage the same for his individual benefit.

Collective Marks

The collective marks are also marks at the first instance and could be in the form of a device, name, word or label. The purpose and nature of collective marks is to distinguish the goods or services of the members of an association of persons as against an individual juristic personality as in the case of trade mark. The collective marks also indicate a connection in the course of trade but such connection is not with a particular manufacturer but with an association of persons of which such manufacturer is a member. The collective mark is not owned by any individual manufacturer or member of the association. It is collectively owned and possessed by the association of persons, which could be in the form of an incorporated company, a society registered under The Society’s Act. The partnership firms are not eligible to own collective marks under most of the legislations in the World.

The association of persons, who own collective marks may compose of the manufacturers, traders, producers or professional bodies like Institute of Chartered Accountants, Patent Agents, Trade Mark Agents, Board of Cricket Control or alike.
The function of Collective Marks is to distinguish and identify the goods or services of the members of the association of persons which own such collective marks. The association of persons generally adopt some device, name, or symbol and such devices, names or symbols are used by the members to indicate their membership of such association to the members of the trade, general public or all others connected with such goods or services offered by the association.
The members of the Bar, by using a device or symbol of the Bar are easily identified as members of the Bar. The Resident’s Welfare Associations also adopt such collective Marks, which are used by their Members. The Membership of a particular Club, Bar or Residents Association and use of collective mark by the members itself gives an identification and recognition to the members’ of having a connection in the course of trade or services with a particular level of reputation, status or quality, as the case may be.
A person is entitled to the use of a collective mark so long as he continues to be a member of the association of persons formed with the objective of providing minimum standard of quality for being admitted as a member. No individual member of such association can claim an exclusive right to the use or exploitation thereof to the exclusion of other members of the association.
Like any other mark it allows to distinguish products and services from those of competitors, to increase consumers’ confidence and to charge a premium for products or services protected as collective marks. For the same reason, the collective mark must be indicative of the source of the goods and services thereby consumers can be able to distinguish it from other marks.
As above said, the collective mark can represent a very powerful and suitable formula in the food segment. Under a collective mark, the rights holders determine themselves the quality level of the protected goods or services. Participating firms have to satisfy the quality standards and rules required by the association itself; in exchange they receive a collective sign on their product and services, which allows consumers to associate their products with a particular set of standards, where issues such as safety, hygiene and quality of the raw materials in general can be usually decisive factors.
As to the benefits which a collective mark can bring, every business enterprise can turn this IP tool into a huge advantage in respect of many aspects.
In particular, a collective mark helps to strengthen social, cultural and economic development of the cluster since it certainly improves the cluster’s position in the market. For instance, it gives a significant contribution in terms of protection against unfair competition or illegal copying and building reputation.
Secondly, the establishment of collective marks enhances investors’ confidence by helping to minimize the risk and gain trust among the investors.
Furthermore, a collective mark has a significant importance in terms of contribution to upgrade the know-how of local businesses and to improve the cluster’s marketing strategy as well.
It also has to be added that a collective mark certainly helps the single enterprises to improve their brands imagine since the establishment of collective marks usually gets involved in developing local participation and cooperation as reinforcing a community’s institutions.
For example the letters AAA inside an oval device indicate membership with the American Automobile Association. These letters perform the role of a collective mark.
The persons who do not qualify to be members or are not admitted to the membership of that association are not entitled to the use of name, device or symbol adopted or used by such associations as a collective mark.

Certification Marks

The certification marks are also in the nature of marks as are used or are capable of being used by any person meeting the criteria of minimum standard of quality or accuracy as laid down by a Certifying Agency. The Certifying Agency may be a governmental or non-governmental bodies incorporated with the object of laying down standard of quality and ensuring the due maintenance thereof by the manufacture or service provider desirous of using certification mark. The certification marks are given to those who do not themselves trade but who certify that goods or services satisfy prescribed standards concerning origin, material, mode of manufacture, quality, accuracy and other characteristic. In the case of certification marks, the Certifying Agency responsible for maintaining the standard or accuracy of the goods or services permits a qualifying person to the use of such certification marks.

The certification mark is a symbol or name or a device, which convey an assurance as to the quality, standard and accuracy of the goods and / or services.
The certification marks are owned and possessed by the certifying Agency and not by any individual or an association of persons as in the cases of Trade Marks or Collective Marks.
The use of windows (Logo) is allowed by Microsoft for Software or hardware containing such software, which meets certain standard of Compatibility with the Windows operating system. This is an example of use of Certification Mark. The WOOLMARK (Logo) is another example of conveying to the public that the goods bearing WOOLMARK meets minimum standards of quality.
The international organization for standardization (ISO) is an international standard setting body composed of representatives from various national standards bodies. The said organization produces worldwide industrial and commercial standards. While the ISO defines itself as a non-Government organization, its ability to set standards that often become Law, either through treaties or national standards, makes it move powerful than most NGOs. ISO acts as consortium with strong links to Governments and has nearly 158 countries as members.
ISO cooperates with International Electrotechnical Commission (IEC), which is responsible for standardization of Electrical Equipments.
In India “Agmark” is certification mark used for food items including spices, milk products etc.
Bureau of Indian Standards (BIS) is engaged in formulating Indian standards laying down parameters for the products. These parameters are prepared by Technical Committees. BIS certification mark is made compulsory for items meant for mass consumption, consumer safety, health and energy.
“Hallmark” for Jewellery is a purity certification. ECO mark scheme is for labeling of household and other products which meet certain environmental criteria along with quality requirements.
Three organizations in Pakistan namely Pakistan Standards Institution (PSI) Central Testing Laboratories (CTL) and Metal Indus Research & Development Center (MIRDC) have been merged in to PSQCA i.e. Pakistan Standard and Quality Control Authority to provide one window services for standardization and quality control.
PSQCA is a member of International Organization for Standardization (ISO), International Electrochemical Commission (TEC) and International Organization for Legal Metrology (IOML).
The adoption of most of the Pakistan Standards by the Local Industry is voluntary, but it is mandatory to manufacture items according to Pakistan Standard as announced by the Government of Pakistan from time to time.
I believe that presently the said list includes about 46 items like Edible Oils, Banaspati Ghee, Margarine, Biscuits and other major items like Cement, Electric Bulbs, Tube Lights, Safety Razors, Blades, PVC Pipes, Natural Mineral Water, Bottled Drinking Water and two / three Wheeler Auto Vehicles.
Pakistan standards specifications are, thus, available on a wide range of products and services. The adoption of ISO standard as Pakistan Standard specifications will have a far-reaching consequences increasing trade within and outside the country.
Under PSQCA Act of 1996 the manufacturers of notified items under certification marks, scheme need licenses to manufacture. These licenses are issued after ascertainment of proper quality control facilities with the manufacturer. PSQCA monitors the quality by periodic check and collection of samples.
Quality control centre (QCC) undertakes testing and assessment of industrial materials and finish products to establish their quality, grade and dimensions with reference to national and international specifications of quality in the field of chemical, mechanical, engineering, electrical goods and appliances, building material and textile materials and to provide scientific device to industrial units in regard to improve the quality of their products.
The services offered by Technical Services Centre (TSC) has been utilized by public and private sector.
Pakistan National Accreditation Council (PNAC) is an autonomous body established to regulate the Accreditation and Registration system in the country. This body assess the quality and supervise certification agencies, laboratories, training course provides etc.
The competitive potential in the use of collective marks and certification marks and their role in brand building exercise have not been exploited in most countries in the world.

Geographical Indication

The geographical indications are also in the nature of marks but are neither indicative of the source of a particular manufacturer (as in the case of Trade Marks) nor indicative of the membership of a particular association of persons (as in the case of Collective Mark) nor indicative of minimum standards of quality laid down by a certifying agency (as in the case of Certification Marks).

The geographical Indications are indicative of the region wherefrom a particular quality of goods or services originate. The examples for such geographical indications could be numerous at a national as well as at international level. The mark Scotch is indicative of a Geographical reference to particular quality of alcholic drink which is brewed in Scotland. The Scotch Whisky Association has objected to the use of the mark Scotch for alcoholic drinks all around the world as the said products were not originating from Scotland.
The mark ‘BASMATI’ represent a particular quality of rice originating from India and / or Pakistan. Banarsi Saree, Kolapuri Chhapul, Aligarh Locks, Bikaneri Bhujia, Bengali Rasgula are some of the other examples of Geographical Indications.
The implication of geographical indications as a Intellectual Property instrument is that it gives right to the people who produce those products in a specified region to stop others from using the geographical name in marketing the products which does not originated from the defined areas. Examples of such products are Wines, Champagnes, Cognac etc. The geographical indications have been effectively exploited in western countries but it is yet to be put in practice in developing nations where traditional goods (Agricultural or non-agricultural) have been in existence for century. The provisions of geographical indications are yet to be effectively exploited by the Government in most of the developing countries. Once the geographical indication has been registered in a country then steps must be taken for global recognition in International acceptance of such geographical indications. Geographical indications can become a very competitive tool for the industry involved in the manufacturing and marketing of agricultural goods, food stuff or the goods of traditional arts.
The case of Basmati Rice is of great interest to the people of this region. In late 1997, an American Company was granted a patent in aromatic rice grown outside India/Pakistan described as Basmati. The American Company entered the International Basmati market by describing the Aromatic rice produced in the United States/Canada by describing it as Basmati Rice. The exploitation of geographical indications of India/Pakistan by the American Company on account of the grant of said Patent had grave repercussions as India alone was to loose out on the 45000 tonne United States Import market, which forms 10% of the total Basmati export. In addition, there was a similar repercussion for Pakistan who is also a major exporter of Basmati Rice. The patenting of Basmati in the United States was termed as a erosion of the history and culture of this region.
TRIPS defines geographical indications as a good originating in a territory of a members, or a region or locality in that territory, where a given quality, reputation or other characteristic of the goods is essentiality attributed to this geographical origin.
Basmati Rice is exclusively associated with India and Pakistan as champagne is to France and Scotch whisky is to Scotland.
Darjeeling is another classic example of geographical indications of a particular quality of tea.
The Trade Marks, collective marks and certification marks are part of the Trade Mark’s legislations and the procedure for their protection and enforcement are laid down in such legislations of many countries in the world.
The law governing Geographical Indications has separately been codified in many jurisdictions including India. The Geographical Indications of Goods (Registration and Protection) Act of 1999 came into force on 15^th of September, 2003. The Law relating to Geographical Indications, though codified in Pakistan is yet to be notified.
Looking at the respective nature, function and purpose of trade marks, collective marks certification marks and geographical indications and the importance thereof to the industry in general and food industry in particular it is apparent that the advantages such mark offer to the industry and economy as a whole are very extensive.
In the global market, where tastes and preference continuously evolve, every business enterprise is likely to succeed by developing trust, confidence and loyalty in its products.
Therefore it’s necessary to develop and maintain a distinct identify or reputation in order to move customers quickly from brand awareness to brand preference, a point at which the customers are willing to pay an higher price for the brand product and, at the same time, to refuse to accept other alternatives.
The importance of creating a strong and successful brand is given that it can bring to the enterprise many benefits in terms of market share, sales, profit margins and it can also create entry barriers thereby limiting growth of competitors. According to recent survey of business the value of brand represents just over 10% of the total value of the firm in the industrial sector but it goes up even to 90% in the luxury goods or food sector.
Naturally the creation of a distinctive brand image requires a right use of the IPR tools that help to increase a brand image, extend products life cycle and provide a basis for an expansion of the business, supported by a legal protection. In this regard, an aspect of considerable significance in the field of trademark is represented by “Geographical Indication” and this becomes more important especially for the food sector.
It has also to be noted that GI can become a very powerful competitive tool for the Small Medium Enterprises segment, especially when it’s represented by enterprise collectively involved in manufacturing and marketing of agricultural goods.
With regard to this particular segment, the GI serves to protect the products originated from any particular geographical location that is responsible for the key characteristics of the products. Naturally, an economic value for producers is created from any sort of geographic link only if the market price for a specific product is increased. It means that the geographic link must provide buyers with information about one or more attributes of a product. In other terms, the buyers must perceive that there is some value generated by buying a product that originates in a defined area. Of course, the extent to which to the increased value can be sustained depends on the ability of local producers to maintain quality while limiting supply expansion by local competitors.
With respect to the GI, Europe and United States have taken much different position.
It has to be mentioned the 1992 EU policy to protect high-quality agricultural products based on geographical origin using two designations of GI: the PDO (Protection of Designations of Origin) and the PGI (Protection of Geographical Indication). An increased protection of GI increases consumers’ confidence that a product actually complies with claimed attributes and this can enhance consumers’ willingness to pay for the product.
In contrast with the EU position, in United States a few state governments have adopted slogans, usually owned by government agencies, under which products grown within the state’s boundaries can be promoted. Can be reported as examples “A Taste of Iowa”, Ohio Proud”, “Pride of New York”, “Fresh from Florida”.
Of course, using a GI as a signal that a product comes from a region with a known reputation for producing a distinct food is far different than using a region’s name in an advertising slogan to market the products.
The vast majority of value in US agriculture is generated by commodities that are marketed anonymously and practically none of them is marketed under a GI.
However, an example of US producers increasing their profitability through the use of geographical indication can clarify its potential for playing a much larger role in main stream US agriculture.
A Vidalia onion is one of the 17 approved varieties of hybrid yellow Granex onions produced in a specific geographic area in Georgia. The Georgia Department of Agriculture owns the trademark name “Vidalia” and it is responsible for maintaining and enforcing requirements of the US Certificate Mark License Agreement for use of the name “Vidalia”. In addition, onion growers in 20 cities in southeastern Georgia were granted a federal marketing order.
This combination of a trademark that contains a geographic name with a federal marketing order, perhaps strengthened by a third party certifier, seems to be able to resolve the problem of false labeling, which is likely to happen when the right to decide who can use the name can be sold from the owner of a trademark to another company. In that case, it would be not granted that the production market under the name actually originates in the geographical location contained in the name. The use of a federal marketing order can prevent it by its power to allow producers in a region to take action, like strengthening the range of quality standards, and to specify the geographical region from which production can take place.
Collective marks differ from geographical indications, which identify and protect the goods of a particular region. In contrast, collective marks inform the consumer of the ownership structure of a mark and their standards qualities required but say nothing about the territorial origin of a given product.
Comparing the two IP tools in terms of contribution to business enterprises marketing strategy, collective marks seem to be more efficient.
First, contrary to a collective mark, a geographical indication may not license to market participants outside the protected region.
Secondly, while a GI only serves to protect goods thus it only provides for a partial protection, a collective mark serves to protect goods and services.
In addition, in contrast with IG, the managerial functions of collective marks go far beyond the single concept of a negative right, which serves to exclude others rather than create an efficient environment for cluster creation.
The procedure for the protection and enforcement of collective marks, certification marks and geographical indication is duly prescribed in the respective legislations. For a mark to qualify to be registered as a collective mark, the applicant must be an association of persons and the application must be accompanied by the regulation governing use of such marks. The object of the association, the conditions of membership and relationship of each member as well as the sanction against the misuse are some of the pre-requisites required to be specified for registration of a collective mark. The certification mark, can be registered only in the name of a person who does not carry on the trade in the goods of the kind certified or a trade of the provisions of services of the kind certified. The registration of geographical indication is granted to the association of persons or organizations or authority established by laws representing the interest of the producers of the concerned goods. The rights in collective marks, certification marks and geographical indications are enforceable with an action for infringement and the proprietor in respect thereof is entitled to all the remedies in respect thereof.
The Intellectual Property therefore certainly plays a primary role in the growth of business enterprise: marketing and innovation and must therefore be used and exploited by the industry for overall growth for itself, the members, society and country as a whole.

Amarjit Singh