In the past twenty years, the world wine market has been characterised by New World producers rapidly taking market share from EU producers who were constrained by several agreements that prevented them from mounting challenges, but there is a contradiction in the way the European Union has been seeking protection of Geographic Indications and traditional expressions for labeling purpose, argues Rajiv Seth.
While these New World producers could excel because of their developing innovative grape and wine production techniques, resulting in consistent quality wine at competitive prices, the ability of EU producers to ward off this heightened competition was constrained by the various Uruguay Round agreements that seek to lower tariff and nontariff barriers to world wine trade as well as the strict industry regulations.
Traditionally, tariffs have been the most important barriers to world wine trade. However, the outcome of the Uruguay Round has been for WTO member countries to reduce tariff rates on commodities including wine. This in turn has placed greater pressure on the major wine producing countries, particularly in the EU, to rely on various nontariff trade barriers in order to maintain a similar level of protection for their wine industry as that established before the Uruguay Round.
Non-tariff Barriers
It is these non-tariff barriers that have become the focus of future WTO rounds for the worlds wine industry in the recent past. On the other hand the EU benefits from a large amount of intra-EU wine trade and a number of wine-specific agreements with countries which export to its member countries.
The reduction in tariff protection has pressurized EU to increasingly turn to non-tariff barriers as means of protecting their domestic industries. Of particular concern was the way the European Commission has been imposing its ownership of various wine related terms, particularly generic wine terms, through various wine agreements. While the TRIPS agreement recognises the concept of geographical indications, the European Union has been attempting to extend this protection to what it terms traditional expression.
However, there is a contradiction in the way that the European Union has been seeking protection of traditional expressions for labeling purpose. On the one hand, it said that consumers need information about where and how wine is produced so that they can make informed decisions. On the other hand, it has been seeking to restrict the use of everyday terms - traditional expressions - that consumers can understand and, hence, useful for making informed decisions.
Controversies surrounding GI
The new world producers and a number of third world countries have been surrendering their claims on traditional knowledge in the wake of intense political tactics by EU and some other powerful nations.
The claim on traditional expression is posing a very significant trade barrier to trade. For example, to describe ‘vintage tawny port’ using non-traditional expressions would leave consumers confused. That is, efficient operation of the market would not be facilitated by exclusive rights to these traditional expressions. Some countries are challenging this approach on the grounds that these generic terms do not imply any particular Geographical Indication GI.
The EU has also been promulgating new labeling regulations for wine. Among the new concepts espoused is the attempt to restrict certain bottle shapes to wine from a given GI. Certain bottle shapes were reserved for certain types of wine, such as French ‘Flute d’ Alsace’. While the bottle shapes that were proposed in the regulation were innocuous, the principle is unacceptable.
Semi Generics and the US
Most of us are familiar with the concept of a name – be it a trademark or geographical indication becoming generic – losing all connotation of a specific producer or place. US Wine law has a category of wine – called “semi-generics” where the name has a geographic significance and has also become a description of a class or type of wine.
There are a number of such names, including Champagne, Port, Sherry, Chablis and Burgundy. In U.S. these terms may be used so long as the true place of origin is disclosed to the consumer. Thus, we have California or New York Champagne. Many, but not all, believe that the users of those names have a legitimate right to keep using those names or be compensated for giving them up. The rule permitting such use is clearly articulated in TRIPs Article 24.
The overriding purpose of a wine label is to prevent misleading the consumer. The regulations concerning semi-generics require that the true place of origin be stated on the label in direct conjunction with the semi-generic term being used. Lengthy studies are unnecessary to establish the obvious.
No one could think that California Chablis comes from any place other than California. Consumers, who buy Chablis because it has a geographical connotation and want Chablis from Chablis, can simply read the wine label. Thus it is ridiculous to suggest that a consumer looking at a bottle labeled “American Champagne” or “California Champagne” would assume it to be from France.
If a geographical term is used as the common designation of a kind of product, rather than an indication of the place of origin of that product, then the term no longer functions as a geographical indication. Where this has occurred in a certain country, then that country may refuse to recognize or protect that term as a geographical indication. For example, the term “cologne” now denotes a certain kind of perfumed toilet water, regardless of whether or not it was produced in the region of Cologne.
Because Gls are a relatively new species of intellectual property, most producers in developing countries are yet to realize their critical importance and potential value. Many of the traditional agricultural products of these countries which have gained world wide reputation for their taste and quality run the risk of becoming generic names.
Basmati Rice- GI or Generic?
Basmati rice is a case in point. Basmati is long-grain aromatic rice originating in the sub-Himalayan region of the Indian sub-continent. Due to its popularity in the west, scientists have attempted to develop several different varieties of aromatic rice naming them as Basmati, although many of these aromatic rice varieties do not contain any parental line of the traditional Basmati. In September 1997, a US company, M/s Ricetec, managed to get a patent for a new plant variety that is a cross between American long-grain rice and Basmati rice.
The likely impact of this will be that if the American version is able to establish itself in the international market through advertising etc and the Indian and Pakistani exports of Basmati rice will take a serious hit. To prevent this, India disputed the patent claim, while at the same time, alleging that Basmati is a GI. On the other hand Ricetec Inc argued that it is a generic name and therefore, it can not be protected as a GI.
India contended that according to the definition given in the Article 22.1 Basmati is a non-generic GI because though Basmati was not the name of geographical region, its character and reputation was inextricably linked to its region of origin. The dispute was largely settled when the USPTO eventually granted narrower patent to Ricetec only a few variants of Basmati.
Despite this settlement there is no guarantee that the Basmati can be saved from becoming generic. There are several hurdles in the way before India can manage to get protection for Basmati rice. Basmati rice is now grown in many parts of the world and is no longer confined to the northern regions of India and Pakistan. It has become virtually impossible to demarcate the geographical regions/areas in which rice of this variety can be given the exclusive name of ‘Basmati’. Hence, without proper demarcation, GI protection cannot be awarded. Most significantly, Ricetec has taken the argument that the term ‘Basmati’ has been used for decades in a generic way describing this variety from other sources such as American Basmati, Uruguayan Basmati and Thai Basmati.
In other words, even if the term did fit the TRIPS definition at one point of time it has fallen into the public domain and has become generic through lack of efforts to protect the name internationally. Even if India takes this matter to court; the likelihood is that Ricetec will escape liability. This is because Ricetec labels its product as ‘American style Basmati rice’, a practice restricted under Article 23 (1) of TRIPS only for GIs relating to wines and spirits and thus we see California Champagne.
The above illustrations clearly shows how countries like USA can, arbitrarily extend the use of Article 23 (1) of TRIPS granted to wines and spirits to suit their own goals. Apart from economic consequences, the Basmati patent evoked an extremely sentimental response as the patent granted to the US Company was considered a theft of collective intellectual and biodiversity heritage on Indian farmers. Indian people felt the patent was like snatching away our history and culture.
The outcome of Basmati case led to some other US companies to exploit India’s Traditional Knowledge and heritage in order to gain economic benefits. Neem tree case, Turmeric case are same other examples of US Biopiracy of exploiting our traditional knowledge. Ultimately, even if a system of multilateral registration is created, GI protection can be opposed by saying that the terms used to describe the product have become generic by virtue of their usage in different parts of the world for a long period of time.
The stalemate to extend the same level of protection to other agricultural commodities granted to wines and spirits in article 22 and 23 of TRIPS and by stalling the negotiation process envisaged under article 23.4, the US and EU has created a multilateral risk for a number of products from developing countries being misused as Generic by virtue of their usage in different parts of the world for a long period of time and this biopiracy has serious economic consequences for the developing world.
Gis for non wine and spirits
Some of the famous Indian GIs are Benarasi Silks, Kashmir Carpets, Darjeeling Tea, Assam Tea, Pashmina Shawls, Alphanso Mangoes, Nagpur Oranges, Maysore Silks, Bangal Cotton and Kohlapuri Slippers etc.
The countries which favor the extension of GI to products other then wines and spirits argue that GI are an intellectual property right equal to tradements, designs or patents. To this end, the TRIPS provision granting wines and spirits higher protection can not be justified in law. Further there are no commercial, economic or legal reasons to limit effective GI protection to only wines and spirits or not to provide such protection also to GIs for all other products.
An extension will create a level playing field in the TRIPS agreement for all products by making attractive to all WTO members.
 Rajiv Seth
Rajiv Seth became the first Indian in 1987 to receive a gold medal from the wine and spirit education trust, London. Presently he is making continuous efforts in educating the lab assistants of a number of wineries on procedures of vinification through his manuals. He also writes for delWine. The views expressed here are entirely his own..
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