In brief 7 min read
With negotiations underway for the free trade agreement between Australia and the European Union (the A-EU FTA), Australian businesses that produce, buy or sell EU and non-EU food, agricultural goods and spirit drinks have to confront the possibility that Australia will agree to give much stronger protection to the names of hundreds of EU products that indicate their geographical origin.
We look at some of the key issues in the EU's proposal that would impact Australian businesses' operations and IP portfolios, and consider some of the agreed compromise positions in the EU's other recent FTAs.
Key takeaways
- The EU wants particularly strong protection for its geographical indications (GIs), limiting the freedom to use these names in Australia.
- The opportunity to object to individual EU GIs closed on 13 November 2019, but interested parties can still make general submissions to the Australian Government.
- Producers and traders who make, sell or use (including as an ingredient) affected products in Australia should review their operations and IP protection strategies now.
- While negotiations continue, the compromises agreed in the EU's other recent FTAs help illustrate possible outcomes for Australia.
Who in my organisation needs to know about this?
IP legal; compliance; marketing and brand strategy.
Is the EU trying to stop us selling 'Australian parmesan cheese'?
In short, yes.
GIs identify goods as originating in a country, region or place, and thereby associating some quality, reputation or other characteristic with the goods.
As we reported in Would parmesan by any other name smell as sweet?, the EU's proposal on GIs for the A-EU FTA is taken from EU law, and goes far beyond Australia's international obligations as a member of the World Trade Organization (the WTO) to protect GIs that originate in other WTO member countries.
The EU requests that Australia protect a list of 236 names of food, agricultural products and spirit drinks as GIs, as well as two wine names not already protected under Australia's existing wine GI system (which was set up under a previous agreement with the EU). The Australian Government conducted a process for objecting to the listing of individual EU names, which closed on 13 November 2019.
The level of protection the EU has proposed for these names goes far beyond just reserving use of the listed EU names to products from specified EU places and meeting production requirements specified under EU law. The EU wants Australia to also prohibit use of the EU names for other products even if the true origin of the product is clear: eg 'Feta-style Australian cheese'.
Further, the EU wants Australia to prohibit both 'direct or indirect commercial use' and 'misuse, imitation or evocation' – words that have potentially wide effect. Based on how these words are interpreted under EU law, they would eg:
- extend to a wide class of names, including loose translations (eg the listing of 'Parmigiano-Reggiano' will prevent the use of 'parmesan'), and images that 'evoke' the name or the place indicated (eg the listing of 'Queso Manchego' will prevent the use of pictures of Don Quixote and windmills on cheese); and
- prohibit comparative advertising (eg 'Australian prosciutto is as good as Parma ham' or 'Use these olives in any Kalamata olive recipe'), and place strict limits on use of the names in downstream products that use the product as an ingredient (eg 'Roquefort sauce').
An increase in protection for GIs means a corresponding reduction of the freedom to operate in Australia for producers and traders of competing products.
The EU's proposal will also impact existing trade mark portfolios in Australia. Australia currently protects GIs (other than wines) as certification marks, which 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 would require Australia to change this, to allow a later GI to exist even if it conflicts with an earlier trade mark, if the earlier mark is not sufficiently well known.
Do we need to start painting over windmills on cheese packaging? And think of a new name for 'Grappa'?
Hold your (non-geographically specific) horses! It is not a given that the final text of the A-EU FTA will adopt the EU's proposal. The EU's recent FTAs with Canada, Japan, Singapore and South Korea all adopted compromise wording that was softer than EU law.
Below, we look at how some of the key issues with the EU's proposal were dealt with in the EU's other recent FTAs.
Use of related names such as translations, or with suffixes like 'style' or 'method'
The EU's other recent FTAs generally also extend beyond protection of the name itself to cover translations and use that is accompanied by suffixes like 'kind', 'type', 'style' or 'imitation', even if the true origin has been made clear. However, these FTAs do not expand the prohibition to 'indirect use' or 'misuse, imitation or evocation' of GIs.
Further, other recent EU FTAs provided a range of exceptions to this prohibition. For example, the EU-Canada agreement specifically provides exceptions for the use of translations that are the common names of the products (even if the relevant GI is listed). Further, the agreement sets out specific variants or translations of listed names that are not protected, such as 'parmesan' or 'tiroler bacon', where this does not mislead the consumer as to the true origin.
The EU Canada agreement also allowed a set of specific names (eg 'Feta') to be used for other products if they are used with qualifying terms such as 'style' or 'type' and the true origin is indicated.
The EU-Japan agreement also provided specific exceptions for certain names (mainly cheese names, including 'parmesan') related to listed GIs.
Comparative advertising
Like Australia, the EU has domestic laws that permit non-misleading comparative advertising.
Unlike the proposal for the A-EU FTA, the EU's recent FTAs do not include the 'indirect use' and 'evocation' wording, which has allowed room for the partner country's laws permitting comparative advertising to operate. The EU confirmed in its publicity material that this allowed Canada to permit comparative advertising that used GIs, and this exception was enacted in Canadian implementing legislation.
Existing users of the name
Most of the EU's recent FTAs take into account that there may be existing producers who are legitimately using the listed name. Exceptions are often given for these producers to continue to use the name indefinitely or for a transitional period, eg:
- The EU-Canada agreement allows a person (or its assignee) to continue using a listed name if they made prior commercial use of relevant products. For some names, this right continues indefinitely. For others, it is indefinite if the person has made at least five or ten years of use (depending on product type); and if the period of use falls short of this requirement, that person is instead given a transitional period of five years.
- The EU-Japan agreement provided a maximum transitional period of seven years for agricultural products and foodstuffs, and five years for wine, spirits and other alcoholic beverages.
- The EU-Singapore agreement allowed for continued use where the person had made prior use of the name either in good faith, or for a period of ten years.
When Australia agreed with the EU to protect wine GIs such as 'Champagne', Australian producers of champagne and other GI-protected wines were afforded a transitional period of approximately 17 years.
Co-existence with prior trade marks
The EU's recent FTAs all provide for the possibility of GIs being registered even though they may conflict with prior trade mark rights. Rights to maintain and use the existing trade marks are protected.
The EU-Japan agreement specifically provides that it is left to each country's government to determine rules for deciding when a GI can be registered if it conflicts with prior trade mark rights. The EU-Canada agreement is silent on this aspect, which appears to have the effect of also giving Canada freedom to determine its own conflict rules.
The EU-Singapore agreement, on the other hand, specifically provides that Singapore is not required to protect a later GI where, 'in the light of a reputed or well-known' trade mark, such protection is liable to mislead consumers as to the 'true identity of the product'. This provision is similar to the EU's proposal for the A-EU FTA.
Actions you can take now
- Review your operations, including the way your products are described, advertised and packaged (including imagery), as well as (if applicable) the way you use and describe relevant ingredients, and consider whether they are likely to be impacted by the protection in Australia of the proposed EU GIs. Consider both the breadth of protection the EU has proposed and potential negotiation outcomes.
- Review your registered trade mark portfolio in Australia against the list of proposed EU GIs, and consider whether any of them might be vulnerable to an identical or similar GI being registered despite the existence of the prior trade mark.
- If any aspect of the proposed regime is likely to have a particularly big impact on your business, consider making a submission to the Australian Department of Foreign Affairs and Trade.