This article is part of a series about what the renegotiation of the North American Free Trade Agreement means for the knowledge economy in Canada and for the people who turn ideas into innovations within one of the world’s largest free trade zones.
Pick up a few Ontario peaches from Canada, some Idaho potatoes from the United States or Ataulfo mangoes from Mexico and you have just filled your shopping basket with an exclusive selection of products that could be the subject of arduous debate during the renegotiation of the North American Free Trade Agreement (NAFTA) among these three neighbours. The United States recently announced its intention to renegotiate NAFTA, and the protection of geographical indications (GIs) for agricultural products and foodstuffs is one of the more contentious issues that will need to be reconciled among the parties.
GIs are an unconventional form of intellectual property (IP) that elicit very divisive perspectives among major global IP players regarding the scope of protection that they should be accorded; a renegotiated NAFTA is a key forum for contracting parties to stake their claim for — or against — enhanced recognition for GIs.
The notion of GIs as a distinct IP right has its roots in Europe and early European-based treaties. Europe is also credited with attempts to globally institutionalize GIs as the main form of protection for products that have unique linkages with their territories of origin.
Greater rights for GIs are a thorn in the flesh for the United States, and the renegotiation of NAFTA at the insistence of the Trump administration will not be without contention and concessions over GI rights. GIs have been applied to wine and spirit products by major global economies without much controversy and are extensively safeguarded under the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS).1
Internationally, GIs have evolved since TRIPS as discretionary rights, with jurisdictions choosing how and to what extent products that are GI registered, but are neither wine nor spirits, can obtain protection. By way of the Comprehensive Economic and Trade Agreement (CETA), the European Union influenced Canada in changing its approach to GIs. Canada will shortly recognize a broader scope of rights for GIs through amendments to its Trade-marks Act. The upcoming amendments will enable agricultural products and foodstuffs to be registered as GIs. Canada’s commitment to safeguard and, in some instances, claw back specific product names2 for use only in association with EU-based products marketed and sold in Canada is a focal part of CETA and is likely to be aggressively challenged by the United States in NAFTA renegotiations.
Canada’s approach to the GI provisions of a renegotiated NAFTA should be premised on the usefulness of GIs as strong tools for nation branding, product diversification, socio-economic development and cultural preservation of traditional ways of producing and building products. At a minimum, effectively safeguarding agri-food GIs requires more than a narrow approach to grounds of infringement.
Jurisdictions that have done well with GIs (the European Union, Switzerland, Japan and Colombia) have prohibited the use of GI names that include “imitation,” “style,” “such,” “like” or similar connotations on their labelling. Translations of GI terms are also prohibited. In effect, a competitor is prevented from free riding on the reputation of the GI product, even in instances where its product is differentiated by the use of such terms.
To foster a GI culture in Canada, this prohibitive provision needs to be included in a renegotiated NAFTA. The more expansive agri-food GI rights are, the more prohibitive market access is for goods that run counter to these provisions. Greater access to Canadian markets for its GI products influenced the European Union’s strategy in CETA. Having Canadian market access for its rivalling trademarked products will be paramount in the United States’ reluctance to accept Canada’s CETA commitments. In its recent 2017 Special 301 Report, the United States criticized Canada for its receptiveness to EU GI policies and cautioned Canada against extending GI rights to agricultural products and foodstuffs.
NAFTA’s GI provisions currently set a low bar for the protection of GIs. Two provisions in NAFTA illustrate its less than receptive approach to product name monopolies in the consumer market; this outlook contradicts CETA’s rules on EU-based GIs. First, NAFTA has a built-in flexibility for well-established GIs with similar names, permitting the continued use of both GIs as long as they were in use 10 years before the agreement or are used in good faith. Second, trademarks registered in good faith are not the subject of invalidation and neither can they be cancelled on the grounds of similarity with GIs.
How, then, should Canada approach NAFTA renegotiations in this highly charged GI atmosphere?
The tripartite negotiation involves parties of unequal bargaining power. Although Mexico has no domestic sui generis legislation for GIs, it protects GIs as appellations of origins, a form of IP that bears many definitional characteristics similar to a GI, but requires all the production stages of the product to be completed within the delimited zone.
Mexico’s GI interest is not sufficient for Canada to find an ally in Mexico during NAFTA GI negotiations with the United States. It is likely that the United States will challenge the border-measure preferences accorded to EU GI products under CETA. Under these provisions, products that contravene CETA’s border measures regarding the importation of products with either false GI names, translations of GI names or the use of GI names followed by “imitation of” or similar connotations are detained at the border as infringing items.
Impasses concerning GI provisions in free trade agreements are not new. Canada needs first to recognize GIs as an integral component of an IP and innovation strategy. This framework is a catalyst for advancing and maintaining strong positions in favour of GI rights in NAFTA renegotiations. Without this paradigm shift of perspectives, the United States may be able to obtain favourable rights in the agreement that override the gains expected from GI provisions under an amended Trade-marks Act.
1 Disputes over the extent of the use of semi-generic wine and spirit names still occur, as is the case between the European Union and the United States over names such as Champagne, Chianti, Burgundy and Chablis.
2 GI clawbacks refer to the retraction from the consumer market of product names that were previously associated with trademarked goods and the reservation of the names for the exclusive use of a specific GI producer.