Geographical Indications and its Economic Impact on Local Communities

What are Geographical Indications (GI)?

A geographical indication (GI) is a sign used on products with a specific geographical origin and possess qualities or a reputation that are due to that origin and possess qualities or a reputation that is due to that origin. A sign must identify a product as coming from a specific location in order to serve as a GI.[1]

Additionally, the product receives its qualities, characteristics, and reputation due to its place of origin. This helps establish a direct link between the product and its geographical place of production. They are used for agricultural products, wine, drinks, foodstuffs, handicrafts, and industrial products.

Some geographical indications include Chanderi saree, Manipuri black rice, Amroha dholak, Scotch Whiskey (UK), Kampot Pepper (Cambodia), etc.

A geographical indication enables those who have the right to use the indication and prevent its use by any other third party whose product does not conform to the given standards. However, it does not enable the holder to prevent any other person to produce the same product using the same technique.

LEGAL FRAMEWORK OF GEOGRAPHICAL INDICATIONS

A. International legal framework

1. TRIPS Agreement and its provisions on GI

The Trade-Related Aspects of Intellectual Property Rights (TRIPS) is a comprehensive multilateral agreement on intellectual property rights (IPR) that sets minimum standards for various forms of IPR, including GIs. It is administered by the World Trade Organization (WTO).

Part II Section 3 (Article 22 to 24) of the TRIPS Agreement sets out the provisions for protection of GI. 

Article 22: Protection of Geographical Indication

• Definition: GIs are defined as indications identifying a good as originating in a member’s territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin.[2]
• Protection against Misleading Use: Members must provide the legal means to prevent the use of any indication that misleads the public as to the geographical origin of the goods.
• Protection against Unfair Competition: Members must prevent any use that constitutes an act of unfair competition.

  Homonymous Indications: Members must provide protection even where the true origin is indicated or the GI is used in translation or with expressions like “kind,” “type,” “style,” etc.

Article 23: Additional Protection for GIs for Wines and Spirits

• Enhanced Protection: GIs for wines and spirits receive additional protection, regardless of whether the public is misled. Legal means must be provided to prevent the use of a GI for wines or spirits not originating in the place indicated by the GI.
• Homonymous GIs: Members must determine conditions for the use of homonymous GIs for wines to ensure equitable treatment and prevent misleading consumers.
• Negotiations: Members agree to negotiate increasing protection for GIs

Article 24: International Negotiations; Exceptions

• Negotiations: Members must enter negotiations to increase the protection of GIs.
• Exceptions: Includes provisions for generic terms and continued use of certain GIs.
• Prior Trademark Rights: Registration of trademarks containing GIs can be refused or invalidated if misleading as to the true origin.
• Generic Terms: GIs not protected or ceased to be protected in their country of origin do not need to be protected.
• Procedures for Protection: Members must provide means for interested parties to prevent use of non-compliant GIs.

2. World Intellectual Property Organization (WIPO) and GIs.

The WIPO is a specialised agency of the United Nations that oversees international treaties and agreements related to intellectual property, including GIs.

Key treaties and agreements administered by WIPO:

Libson Agreement for protection of Appellations of Origin and their International Registration (1958)

• Appellations of Origin: This agreement provides protection for appellations of origin, which are a specific type of GI. It allows for the international registration and protection of appellations of origin.
• Geneva Act (2015): Modernizes the Lisbon Agreement, extending its scope to cover GIs, providing more flexible procedures and broadening participation.

Madrid Agreement Concerning the international registration of Marks (1891) and the Protocol relating to the Madrid Agreement (1989)

• While primarily focused on trademarks, the Madrid System can also cover certification marks and collective marks used as GIs.

WIPO’s Role

• Capacity Building: WIPO provides technical assistance, capacity-building programs, and support for the development and implementation of GI protection systems.
• Dispute Resolution: Offers arbitration and mediation services for disputes related to intellectual property, including GIs.

B. National Legal Framework (India)

India has a robust legal framework for the protection of Geographical Indications (GIs), established under the Geographical Indications of Goods (Registration and Protection) Act, 1999. This Act provides the basis for the registration and protection of GIs in India, aiming to protect the unique qualities and reputation associated with goods originating from specific regions.

Key Provisions of the Geographical Indications of Goods (Registration and Protection) Act, 1999.

• Definition and Scope:

1. • An indication that distinguishes commodities as coming from a certain area, region, or locality in India, where a particular quality, reputation, or attribute of the goods is fundamentally attributable to their geographical origin, is known as a geographical indication (GI), according to the Act.[3]
   • It applies to agricultural goods, natural goods, manufactured goods, handicrafts, and industrial products.

• Registration Process:

1. • GIs can be registered with the Geographical Indications Registry, which is overseen by the Controller General of Patents, Designs, and Trademarks.
   • The application for registration must include details about the geographical region, the specific characteristics of the goods, and the historical and cultural significance of the GI.

• Rights Conferred by Registration:

1. • Registration of a GI grants the registered proprietor and authorized users the exclusive right to use the GI in relation to the goods for which it is registered.
   • Unauthorized use of a registered GI by others can be challenged legally, and infringement actions can be taken.

• Duration and Renewal:

1. • The registration of a GI is valid for ten years and can be renewed indefinitely for further periods of ten years each.

• Protection against Misuse:

1. • The Act provides legal measures to prevent the use of GIs that mislead the public regarding the geographical origin of goods.
   • It also addresses the use of GIs that constitute an act of unfair competition.

• Penalties for Infringement:

1. • The Act includes provisions for penalties against those who falsely use registered GIs, including imprisonment and fines.

• Special Provisions for Homonymous GIs:

1. • The Act includes provisions for the registration of homonymous GIs (GIs that are identical or similar in spelling or pronunciation) to ensure that such registrations do not confuse consumers.

Impact and Importance

The legal framework for GIs in India plays a crucial role in:

• Economic Development: Enhancing the marketability and global recognition of Indian products, leading to increased exports and income for local producers.
• Cultural Preservation: Protecting traditional knowledge and cultural heritage associated with regional products.
• Consumer Protection: Ensuring that consumers receive authentic products with the quality and characteristics associated with their geographical origin.

The Geographical Indications of Goods (Registration and Protection) Act, 1999, thus serves as a vital tool in safeguarding India’s rich diversity of regional products and promoting sustainable economic growth for local communities.

ECONOMIC IMPACT ON LOCAL COMMUNITIES

1. Increased Market Value and Premium Pricing

GIs enable producers to charge higher prices for their products due to their unique qualities and reputation:

• Higher Prices: A study on the economic impact of GIs in the European Union found that GI products sold for an average of 2.23 times more than comparable non-GI products.
• Increased Income: In India, the GI status of Darjeeling tea has led to higher market prices and improved income for tea growers.

2. Enhanced Market Access and Export Opportunities

GIs facilitate access to niche and international markets:

• Global Market Recognition: GIs like Champagne (France) and Parmigiano Reggiano (Italy) have strong brand recognition globally, leading to increased exports.
• Export Growth: The GI registration of Basmati rice has enhanced its export value, benefiting Indian and Pakistani farmers.

3. Employment Generation and Skill Development

The labour-intensive nature of GI product production generates employment and fosters skill development:

• Job Creation: The GI protection of Pochampally Ikat (India) has created numerous jobs in the textile sector.
• Skill Enhancement: Traditional production methods preserved through GIs help maintain and develop specialized skills, such as those used in the making of Feni (Goa).

4. Rural Development and Infrastructure Improvement

GI recognition often leads to investments in rural infrastructure:

• Infrastructure Development: Increased economic activity from GI products can drive improvements in local infrastructure, such as roads, storage, and processing facilities .
• Rural Revitalization: The success of GI products can prevent rural-urban migration by providing sustainable livelihoods in rural areas .

5. Preservation of Cultural Heritage and Traditional Knowledge

GIs help protect and promote cultural heritage and traditional knowledge:

• Cultural Preservation: GIs like Kanchipuram Silk (India) help preserve traditional weaving techniques .
• Sustainable Practices: The GI status of Tequila (Mexico) has promoted sustainable agave farming practices .

6. Social Cohesion and Community Empowerment

GI registration fosters community cooperation and empowerment:

• Collective Action: The GI process for products like Darjeeling tea has necessitated collective action among producers, fostering a sense of community.
• Empowerment: GIs empower local producers by giving them greater control over their economic future and reducing exploitation by intermediaries.

Case Studies and Examples

• Darjeeling Tea (India): GI status has helped protect the reputation of Darjeeling tea, leading to higher prices and better market access. It has also promoted sustainable tea cultivation practices and improved the economic conditions of tea growers.
• Roquefort Cheese (France): GI protection has preserved traditional production methods and boosted the local economy through tourism and increased sales.
• Parmigiano Reggiano (Italy): GI status has maintained the quality and authenticity of Parmigiano Reggiano cheese, leading to premium pricing and global recognition, benefiting local dairy farmers.

CHALLENGES FACED BY LOCAL COMMUNITIES

1. High Costs of Registration and Maintenance

The process of registering and maintaining a GI can be costly:

• Registration Fees: The initial registration process involves substantial fees, which can be a financial burden for small producers.
• Legal and Administrative Costs: The legal and administrative costs associated with preparing the documentation and navigating the registration process can be high.
• Ongoing Compliance: Maintaining compliance with GI standards requires ongoing investment in quality control and certification processes, which can be expensive.

2. Lack of Awareness and Knowledge

Many local producers may lack awareness and understanding of GIs:

• Limited Knowledge: Producers often do not fully understand the benefits and requirements of GI protection.
• Educational Gaps: There may be insufficient educational and training programs to inform producers about the GI registration process and its advantages

3. Complexity of the Legal Process

The legal process of obtaining and enforcing GI rights can be complex and challenging:

• Bureaucratic Hurdles: The bureaucratic procedures involved in GI registration can be lengthy and complicated.
• Legal Expertise: Access to legal expertise is often necessary to navigate the GI system, which can be difficult for small or remote communities.

4. Market Access and Distribution Challenges

Even after obtaining GI status, accessing markets and distribution channels can be difficult:

• Market Penetration: Breaking into national and international markets requires substantial effort and resources.
• Distribution Networks: Establishing effective distribution networks is critical but challenging, particularly for remote or rural producers.

5. Competition and Misuse

Local communities face challenges from both domestic and international competition:

• Competition from Non-GI Products: Competing against non-GI products that may be cheaper or more widely available can be difficult.
• Infringement: Unauthorized use and imitation of GI products can dilute their value and reputation.

6. Sustainability and Quality Control

Maintaining the quality and sustainability of GI products is crucial but challenging:

• Quality Standards: Ensuring that all producers adhere to the defined quality standards can be difficult, particularly in regions with many small producers.
• Environmental Impact: Sustainable production practices are necessary to maintain the natural characteristics that contribute to the product’s reputation, but these practices can be costly.

7. Economic Inequality

The benefits of GIs are not always evenly distributed within communities:

• Wealth Disparity: Larger producers or those with better resources may benefit more than small-scale or marginalized producers.
• Access to Resources: Producers with better access to resources, such as finance and technology, are better positioned to benefit from GIs.

CASE LAWS

1. Darjeeling Tea Case

Case Name: Tea Board, India v. ITC Limited and Others (2011)

Facts: The Tea Board of India filed a case against ITC Limited, alleging that the use of the word “Darjeeling” for ITC’s hospitality services (Darjeeling Lounge) constituted infringement and passing off under the Geographical Indications of Goods (Registration and Protection) Act, 1999.

Judgment: The Calcutta High Court held that the use of “Darjeeling” by ITC for its lounge did not amount to infringement of the GI for Darjeeling tea. The court observed that the word was being used in a context completely different from the product (tea) for which the GI was registered.

Impact: This case highlighted the limitations of GI protection and emphasized the importance of context in determining infringement.

2. Basmati Rice Case

Case Name: Agricultural and Processed Food Products Export Development Authority (APEDA) v. Krbl Limited and Others (2018)

Facts: APEDA, the authority responsible for the promotion of Basmati rice exports, filed a suit against several companies for unauthorized use of the GI “Basmati” for rice that did not meet the required standards.

Judgment: The Delhi High Court issued an injunction against the companies, restraining them from using the GI “Basmati” for their rice products. The court emphasized the need to protect the reputation and quality associated with Basmati rice.

Impact: The case reinforced the strict standards required for GI protection and the need for compliance to maintain the integrity of GIs.

3. Naga Mircha Case

Case Name: Nagaland State Agricultural Marketing Board v. H.P. Marketing Board (2021)

Facts: The Nagaland State Agricultural Marketing Board filed a case against the H.P. Marketing Board, alleging misuse of the GI “Naga Mircha” (Naga chili) for products that did not originate from Nagaland.

Judgment: The Intellectual Property Appellate Board (IPAB) ruled in favor of the Nagaland State Agricultural Marketing Board, emphasizing that only products originating from Nagaland could use the GI “Naga Mircha”.

Impact: This case underscored the importance of geographical origin in GI protection and the role of local authorities in safeguarding regional products.

4. Khadi Case

Case Name: Khadi and Village Industries Commission (KVIC) v. Khadi Gram Udyog Samiti and Others (2019)

Facts: KVIC, a statutory body for promoting Khadi and village industries, filed a case against various organizations using the term “Khadi” without authorization, arguing that it constituted misuse of the GI “Khadi”.

Judgment: The Delhi High Court granted an injunction, prohibiting the defendants from using the term “Khadi” for their products. The court recognized the significance of Khadi as a GI and the need to protect its authenticity and heritage.

Impact: This case highlighted the protection of traditional and culturally significant products under the GI framework.

5. Mysore Silk Case

Case Name: Karnataka Silk Industries Corporation Ltd. v. Goldwin Apparels (2012)

Facts: Karnataka Silk Industries Corporation (KSIC) filed a case against Goldwin Apparels for using the term “Mysore Silk” for their products, alleging infringement of the GI.

Judgment: The Karnataka High Court ruled in favor of KSIC, stating that the use of “Mysore Silk” by Goldwin Apparels was misleading and constituted infringement. The court ordered the defendant to cease using the term for their products.

Impact: The case reinforced the importance of GI protection for safeguarding regional and traditional products against misleading and unauthorized use.

CONCLUSION

Geographical Indications (GIs) significantly impact local communities by fostering economic development, preserving cultural heritage, and enhancing social cohesion. The unique qualities and reputations tied to specific regions enable producers to charge premium prices and access global markets, as seen with products like Darjeeling tea and Parmigiano Reggiano cheese. GIs also generate employment, drive rural development, and empower local producers through collective action and skill preservation. Despite these benefits, challenges such as high registration costs, market access difficulties, and maintaining quality standards persist. Addressing these challenges is crucial to maximizing the potential of GIs and ensuring equitable benefits for all community members. Through robust legal frameworks and international cooperation, GIs can continue to play a vital role in promoting sustainable economic growth and preserving the rich cultural diversity of local products.

References 

[1] WIPO, Geographical Indications https://www.wipo.int/geo_indications/en/, assessed on 4/08/24

[2] TRIPS Agreement Article 22 clause 1