GIs - the EU v US positions and the SEA battlefield

The EU and US do not see eye to eye on GI protection. Until now the non agreement hasn’t been contentious, but the 2020 USTR Special 301 report just released raises the temperature. It argues that the EU position “significantly undermines the scope of trademarks and other IP rights held by U.S. producers”.

The US does not protect GIs specifically, but allows them in practice as certification marks unless they are generic terms and provides some protection to wines through the American Viticultural Area (AVA). However many terms are generic in the US due to the historic immigrant use from the places in question. For example Italian immigrants widely used ‘Parmesan’ in the US rendering it generic in the US for that type of cheese. Meanwhile the EU has a huge GI industry (estimated at E25 million in value in 2014). There are 2 levels of GI protection – Protected Designation of Origin and Protected Geographical Indication. Above this the TRIPS rules protect GIs, with additional protection for wines and spirits, but allow non confusing uses in certain circumstances. The EU and US don’t agree on what constitutes non confusing use.

In SE Asia most countries now have sui generis GI laws. But as in many other markets, a battle is being played out as the US and EU increasingly negotiate IP protections at a bilateral level. EU FTAs with IP chapters propose extensive GI protection. This sits well in economies with strong agri sectors.

Thailand has rapidly built a national GI portfolio of agricultural and non-agricultural products (i.e. handicrafts) – 118 domestic GIs are now registered. It also has 6 foreign GI products registrations from Thung Kula Rong Hai hom mali rice in the EU to Lamphun brocade Thai silk in Indonesia. A series of other Thai GIs are still at application stage,  from Phetchabun sweet tamarind in Vietnam to Doi Tung coffee in Cambodia. Thailand is committed to developing and promoting more GIs from all of its provinces to generate income for communities. It aims to hit a billion dollars in GI based trade in the next 5 years. 

Vietnam has signed an EU FTA (which is awaiting ratification after which they will automatically protect each other's GIs) and is also known to be keen to develop more GIs.  Indonesia has filed one GI in the EU for Kopi Gaya coffee and is trying to develop more domestic GIs.

Meanwhile the US seeks to insist in its negotiations that GI protection must not override legacy trademark rights. Some GI names are incorporated into US trademarks and their export capability is diminished in third countries if GI protection is too strong. The EU typically conditions an FTA to provide mass reciprocal mutual GI recognition. The EU also requests extensive unfair competition type protection against any misleading uses.  The US goes on to argue there is inconsistency in the EU position (notably some exceptions, where some EU countries use others’ GIs as descriptors).

It is unclear how SE Asian countries should approach this, whether to offer wide and reciprocal protection to the EU (therefore enabling EU market access for their GIs), or whether to carve out exceptions for US brands (e.g. California Champagne). So far few of the US trademarks at issue seem to have reached disputes in the region but that will change over time. Thailand clearly intends to use GIs to support its agri and handicrafts sector, and countries with large agri sectors will presumably do the same; which could create a market access barrier to some US brands.

Singapore refuses protection for Ferrero Rocher shape and packaging

Given the season,  chocolate is on IP Komodo's mind. Its also on the mind of the the Intellectual Property Office of Singapore (IPOS). Ferrero, the chocolate company, had applied to register its product image as a trademarks (left - without wording). It was refused by IPOS for lack of distinctiveness.  The mark did not function as a trademark to indicate origin said IPOS. 

Consumers need logos and words to identify producers usually. Only in exceptional circumstances will shape and packaging become recognized without any.  Under Singapore caselaw distinctive character as an indication of origin is conveyed by the appearance of the mark in itself. There had certainly been extensive sales and marketing in Singapore for the products, almost always with the brand wording. A simple survey failed to show consumers independently recognized the product without the wording. 

It seems a narrow approach, given how recognizable the product above is. A better survey design that didn't draw consumers' minds to the question, might have shown clearer results. In the past children have been known to identity cookies and cereals on shop shelves, long before they can read. Maybe better evidence on appeal might work. 

Meanwhile IP Komodo has his own chocolate collection definitely distinguishable from other products, ready for the holidays! 

Indonesia franchise rules improvements

Like many countries Indonesia has special franchising rules. Some are common, others more localized.  See here for the background. The consensus has been that that franchising complexity is a challenge and restricts franchise growth. 

A new regulation called Regulation of Minister of Trade Number 71 of 2019 on Franchising and was issued on 4 September 2019. It makes several changes:

1. Clearer details about franchise business criteria are set out (uniqueness, track record, written manual, clear business model, ongoing support and IP).
2. Providing a prospectus for 2 weeks applies to all forms of Franchiser 
3. Franchisers appoint more than one Franchisee provided there are clear separate zones.
4. The new MoT Regulation 71/2019 does not include the previous (challenging) obligation to source of 80% domestic products, but only prioritizes raw materials from Indonesia.
5. Reporting requirements are changed. 
6. Franchises must use the regulatory application system called the Online Single Submission (OSS) for all trading licenses.

Many prior franchising regulations are being revoked and declared invalid. 

Indonesia's trademark law proves to be Kryptonite to Superman

Indonesia’s problem of trademark piracy has reared its head again. This time, DC Comics lost a recovation case against Marxing Fam Makmur‘s SUPERMAN trademark. The Supreme Court then upheld the decision. 

The problem is that this was a very old registration from 1993. Marxing Fam Makmur is connected to a large public F&B maker called Siantar Top, and they have made a SUPERMAN chocolate wafer bar for many years. DC Comics' own trademark for similar foods was rejected so they tried to cancel Marxing Fam Makmur‘s SUPERMAN trademark on the grounds of bad faith. 

Indonesia’s IP authorities usually take a narrow view of bad faith.  However the case did not get that far. Unfortunately the decision focused on procedural issues rather than the substantive case.  The suit was ruled to be vague and unclear because DC tried to combine several claims into one suit - first the trademark cancellation, then termination Marxing Fam Makmur's pending trademark applications and an order for the Co-Defendant (DGIP/IP Office) to grant registrations for Superman related marks to DC Comics.

This might not seem wrong but the latter two remedies don't exist in the law. The proper route was to cancel the registrations, deal with the pending applications separately and for DC to file its own marks which would be examined independently. DC Comics was further undone by its own Power of Attorney which was only for cancellation of Marxing’s trademark registrations but did not authorise the other claims.

Great care must be taken with litigation in Indonesia. Getting caught out on procedural issues is a common problem. Elsewhere in the world a court would just reject the bad claims; here they throw the whole case out. That is a case of judicial rigidity applying procedure over justice.  

New product labelling rules in Indonesia

New product labelling rules in the F&B, personal care and pharma sector aim to improve consumer safety.  Indonesia’s FDA (a.k.a. BPOM) issued its Regulation 22 in late 2018 to require BPOM issued bar codes to be used. All foods and drugs health supplements, cosmetics and processed foods must now have a bar code,  issued by BPOM and put it on the label.  This will apply to locally produced and imported goods.  Track and trace technology will enable verification and digital reporting will support this.  

Making IP financing work in Indonesia

Jumping on the bandwagon of forward thinking IP plans, the Indonesian Creative Economy Agency is trying to set up a financing system for IP.  The aim is to enable banks to use IP as collateral for loans in the creative industries (focused on copyright especially).  Their attempts so far has stumbled at the point of valuation, there being a lack of IP valuers in Indonesia, and a lack of databases of rights.

The latter shouldn't be a problem for of course as there is a copyright office database which could be used. Malaysian bank Maybank has expressed interest in the system. The challenge is not the more traditional creative business sectors like F&B and crafts, but musicians and graphic artists. The Agency is working with the Indonesian Society of Appraisers on the valuation and royalty calculation side. Indonesia believes its overall creative sector is worth USD73 billion nationally.

Protecting cultural IP

Indonesia worries about foreign appropriation of its cultural assets.  A longstanding dispute with Malaysia over traditional batik designs, as well as songs and dances which both countries claim as their own is an example. Another is Toraja Coffee, a coffee from Sulawesi, but the name was appropriated into a Japanese brand some years ago.  See here for more.

Now Indonesia has decided to start a catalogue of its cultural assets to prevent IPR infringements by other countries. The Tourism Ministry and Indonesian National Archives issued a statement announcing the step last week. Indonesian National Archives Chairman Mustari Irawan said "We don't want other countries to claim our tourism assets, so we need to keep a complete catalogue." The intention is for the catalogue to capture a wide range of Indonesia's cultural assets. Some will be tourism focused, others driven by IP ownership.

Of course one of the reasons Malaysia and Indonesia share similar cultural traditions is that the two were for hundreds of years part of the same, but largely forgotten state, the Sriwijaya kingdom which dominated SE Asia a thousand years ago. So in one sense modern national legal barriers create disputes over what should be commonly owned concepts. The Japanese use of Toraja has been equally sensitive partly because it is alleged that Japanese traders and farming technology helped rebuild the failing Toraja coffee industry. "A well-kept and well-organized catalogue will prevent misuse of the country's assets," Mustari said reflecting the modern nationalistic approach.

 

Indonesia does need to do more to protect its diverse cultural heritage, as a huge multi ethnic archipelago. The register won't technically stop others from trying to capitalize on these assets. The real solution is for local groups to commercialize themselves, which creates the value and thus, IP creation, ownership and protection.