Would parmesan by any other name smell as sweet?

In brief 13 min read

The deadline is approaching to lodge an objection to the proposed geographical indications in the Australia-EU Free Trade Agreement. The very high level of protection the EU is seeking for the list would affect Australian consumers and producers, as well as traders of any competing Australian and imported (EU or non-EU) goods.

Key takeaways

• The Federal Government has invited interested parties to lodge objections to the list of geographical indications (GIs) the European Union (the EU) has proposed be protected in the Australia-EU Free Trade Agreement (the A-EU FTA), currently under negotiation. The EU has proposed 236 names of spirit drinks and 172 names of agricultural and other foodstuffs be listed in the A-EU FTA.
• The Government has asked that objections be based on the very high level of protection the EU currently proposes be set out in the A-EU FTA (although Australia has not committed to accepting this proposal).
• Under this proposal, the effect of a name being listed in the A-EU FTA expands far beyond the name itself. 'Indirect' use of a GI, and using a name that 'evokes' the GI, would be prohibited; eg because Parmigiano Reggiano is included in the list, the generic use of parmesan would be prohibited in Australia, as would comparative advertising that references one of the listed GIs; and packaging evoking the place indicated by a GI could also be prohibited.
• Objections to the EU's list must be submitted by Wednesday, 13 November 2019.

Background

Australia and the EU began negotiating the A-EU FTA in June 2018. Consistent with its approach to recent FTA negotiations, one of the EU's published objectives for the A-EU FTA is to seek strong protection of EU GIs in Australia.

GIs are names that identify goods as originating in a country, region or place, and thereby associating some quality, reputation or other characteristic with the goods. Under the international Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Australia, the EU and all other members of the World Trade Organisation (WTO) are required to protect GIs that originate in other WTO member countries. TRIPS has two standards of protection:

• For most goods, under Article 22 of TRIPS, the obligation is to prevent (in the designation or presentation of a product) any misleading indication or suggestion of the place of origin, or a use that constitutes unfair competition.
• For wines and spirits only, under Article 23 of TRIPS there is an additional obligation to prevent any use for relevant products not originating in the place indicated, even if the true origin is indicated, or the GI is used in translation, or is accompanied by an expression such as 'kind', 'type', 'style' or 'imitation'.

There is no obligation for a country to protect a foreign GI that has become the customary term for the common name of the goods.

In Australia, as in most common law countries, most GIs are protected as certification trade marks and by the common law. For example, there are four Australian registered certification marks relating to Parmigiano Reggiano. Pursuant to an earlier agreement with the EU, Australia has a separate registration system for wine GIs and certain other terms via the Wine Australia Regulation 2018 (under the Wine Australia Act 2013).

By contrast, the EU has established registration schemes for GIs, as 'protected geographical indications' (PGIs) and 'protected designation of origin' (PDOs), for food, agricultural products, wine, spirits and aromatised wines. GI protection in other sectors is left to member states. Each registration specifies an area from which the product originates, and details of how it is raised, grown or made. PGIs and PDOs do not have to be geographical names, they only need to indicate a place: eg Feta is a PDO even though it simply means 'slice', and is not the name of any place.

The technical criteria for a GI to qualify as a PDO are more stringent than for a PGI, but EU law offers both PGIs and PDOs the same, high, level of protection. The level of protection offered to food and agricultural GIs under EU law is as high as, if not higher than, the 'Article 23' standard required for wine and spirits under TRIPS.

The EU's ask in the A-EU FTA

The EU's proposal for the A-EU FTA would require Australia to protect a list of GIs originating from the EU, with a level of protection that matches EU law. The listed GIs are required to be protected against:

• any direct or indirect commercial use of a GI name:
  • for comparable products, or
  • in so far as such use exploits the reputation of the GI, including when that product is used as an ingredient;
• any misuse, imitation or evocation, even if the true origin of the product is indicated or if the protected name is translated, transcribed, transliterated or accompanied by an expression such as 'style', 'type', 'method', 'as produced in', 'imitation', 'flavour', 'like' or similar, including when the product is used as an ingredient;
• any other false or misleading indication as to the origin, nature or essential qualities of the product, on the inner or outer packaging, advertising material or documents relating to the product concerned, and the packing of the product in a container liable to convey a false impression as to its origin, including when the product is used as an ingredient; or
• any other practice liable to mislead the consumer as to the true origin of the product.

This is a higher level of protection than required by the EU's recent FTAs with Canada, Singapore or South Korea, and would represent a significant increase in the level of protection given to food and agricultural GIs in Australia – and a corresponding reduction of the freedom to operate in Australia for producers and traders of competing products.

The most direct effect of the approach the EU proposes is that producers and traders will not be able to use the listed names in relation to comparable products that do not come from the specified area, or do not meet the production specification. For example, the PDO Feta can only be used for cheese produced in specified parts of Greece using specified ingredients and a specified method. If Australia accepts the EU's proposal, feta cheese made in Australia (or even in the Greek islands that fall outside the specification) would not be permitted to be sold in Australia as 'feta' cheese or even 'feta-style' cheese.

Many of the names on the EU's list are largely used in Australia only in relation to imports from the EU that meet the specifications. However, some are likely to be controversial because the names are used generically in Australia, or are not perceived as indications of geographical origin at all. For example, the EU's list includes cheese names such as Feta, Beaufort and Gorgonzola, and meat product names such as Scotch Beef, Scotch Lamb, and West Country Beef.

It's not just about the name

However, even for names on the list that are themselves non-contentious, the scope of protection the EU is seeking extends significantly beyond direct uses. Based on EU case law interpreting the corresponding EU legislation, further issues that may affect producers and traders include the following:

• 'Indirect use' – the prohibition of 'indirect use' is potentially wide. In the most straightforward scenario, if a competing product is not sold under the GI name, but the GI name is included in a logo that is used in relation to the product, this would be prohibited as an 'indirect use'.
• 'Evocation' – the prohibition of 'evocation' is given a wide reading in EU law. The registration of a GI would not only prevent its use, but also other names or even imagery that evokes the name or the place that it indicates. As an example, the registration of Parmigiano Reggiano (for a cheese from Parma, Reggio Emilio and some other places) prevents the use of 'parmesan' generically, even though 'parmesan' only evokes one of the several places indicated by the GI. As another example, the registration of 'Queso Manchego' (for a cheese from La Mancha) prevents the use of an image of Don Quixote or the name of his horse 'Rocinante' on packaging of other cheeses not meeting the specification, because these 'evoke' the La Mancha region – even if those cheeses were in fact also made in La Mancha.
• Comparative advertising – the prohibition against 'indirect use' and 'evocation' is likely to catch comparative advertising that references a GI. Beyond advertising that compares the quality of a generic product with that of the GI-protected product, advertising that states the generic product can be substituted for the GI-protected product is also likely to be caught. Under EU law, a separate piece of legislation protects comparative advertising that references or evokes a GI if the advertising complies with certain criteria. Australian law protects comparative advertising that uses registered trade marks (section 122A of the Trade Marks Act 1995 (Cth)), but comparative advertising would still be seen as a breach of the GI regulation (if it is implemented in the form the EU proposes). In this respect, the EU's proposal for the A-EU FTA is in contrast to the language used in recent EU FTAs. For example, the EU-Canada agreement did not expressly prohibit 'indirect use' or 'evocation', and the Canadian implementing legislation specifically protected comparative advertising.
• Downstream processing – depending on the terms of a PGI/PDO's specification, imported GI-protected products may not be able to be sold under the protected name after undergoing further processing. For example, the specification for Prosciutto di Parma PDO requires that it is sliced and packaged in Parma. As a result, imported PDO-protected Parma ham cannot be sold as 'Parma ham' if it is pre-sliced and re-packaged by a supermarket outside Parma (slicing it at the deli counter in front of the customer is, however, permitted).
• Use as ingredients – the ability of a downstream food producer to indicate that a GI-protected product was used as an ingredient is limited. The EU Commission's guidelines suggest that the GI name should only be used 'in or close to the trade name' of a downstream food product, or in labelling, presentation and advertising, if the downstream food product satisfies a number of criteria, including that it should not contain any comparable ingredient (so, a 'Roquefort sauce' should not contain any non-Roquefort blue-veined cheese), and that the GI-protected ingredient should be used in sufficient quantities to confer an 'essential characteristic' on the food.
• Co-existence with prior trade marks – Australian certification marks follow normal principles of trade mark priority, so, generally, a later mark cannot co-exist with an earlier registration for the same or confusingly similar mark for the same or similar goods or services. The EU's proposal for the A-EU FTA, however, adopts the approach in EU law of allowing a later GI to exist even if it conflicts with an earlier trade mark in some circumstances. Under this approach, an existing trade mark registration will prevent an identical name being registered as a GI where the prior mark is well known, such that consumers will be misled as to the identity of products sold under the GI. As an often-cited hypothetical example, the well-known 'Tabasco' pepper sauce trade mark is likely to prevent the registration of a GI for chili sauce from Tabasco province in Mexico. However, unregistered trade marks or registered trade marks that do not have the requisite reputation are at risk of a conflicting GI being allowed to co-exist.

These issues will affect not only Australian producers but also producers and traders of goods produced anywhere that fall outside the GI specifications and are sold in Australia.

How will Brexit impact the proposal?

The EU's proposed list includes PGIs/PDOs indicating places in the UK, such as Scotch Whisky and Scotch Beef. The EU's PGI/PDO registry includes GIs originating outside the EU, but the list proposed for the A-EU FTA includes only GIs originating in the EU (so, eg Jersey Potatoes PDO is not included, as Jersey is not part of the EU). Post-Brexit, PGIs/PDOs originating in the UK will continue to be protected in the EU, but the EU may drop them from the A-EU FTA list.

Post-Brexit, the UK Government intends to create parallel UK PDO/PGI schemes, and current PDOs/PGIs on the EU register that designate places in the UK or the island of Ireland (eg Irish Whiskey) will be automatically protected. (The currently negotiated withdrawal agreement requires that PDOs/PGIs originating in the EU will also be given automatic protection under the UK scheme.) It is therefore possible that GIs will be an issue in the post-Brexit Australia-UK FTA.

Next steps

The Australian Government has invited interested parties to submit objections to the list of food, agricultural goods and spirit drinks GIs the EU has requested. Objections (with reasons) need to be lodged by Wednesday, 13 November 2019. The EU has also requested protection for two additional wine GIs not currently protected in Australia: Prosecco and Vittoria, but these are not part of the current objection procedure. Objections can be made in relation to a listed GI name, or part of a name, or any translation, transliteration or transcription of the name.

Interested parties need to consider the full implications of the EU proposal to prohibit (among other things) 'evocation' and 'indirect use'. The current objection procedure is only about the names included in the EU list, not the level of protection for those GIs, but the Australian Government has asked for submissions to be based on the level of protection the EU proposes. Of course, the EU's proposal may well be watered down during the negotiation of the A-EU FTA, and Australian courts may interpret any implementing legislation differently from EU courts. However, for the purpose of the objection procedure, producers, traders and consumer groups in Australia (and in third countries that export to Australia) should carefully review their current operations not just against names on the list but against the full breadth of potential protection to be conferred on those names.

Interested parties should, in particular, consider whether related names (eg translations) should be objected to, even if the listed name is not problematic. Equivalent lists included in past EU FTAs often included annotations where a listed name is protected but a related name is considered generic and excluded from protection (eg parmesan is excluded while Parmigiano-Reggiano is protected). It is likely that this kind of annotation will also be possible in the A-EU FTA.

Objections must be based on one of the following grounds:

• the name is used in Australia as the common name for the relevant good;
• the name is used in Australia as the name of a plant variety or an animal breed;
• the name is identical to, or likely to cause confusion with, a trade mark or GI that is registered or the subject of a pending application in Australia;
• the name is identical to, or likely to cause confusion with, an unregistered trade mark or GI that has acquired rights through use in Australia;  or
• the name contains or consists of scandalous matter.
• Given that the EU proposal is based on EU legislation and the objections are ultimately to be negotiated with the EU, parties who wish to lodge objections should be mindful of EU case law. For example, if an objection is on the basis that a particular GI is generic in Australia, and the question has already been considered in an EU case, it is likely to be helpful for the submission to address the factors considered in that case.

If you require assistance with lodging an objection, or would like more information, please contact any of the people below.