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MFAT launches public consultation on EU proposal to protect 2,148 geographical indications in NZ

Home Insights MFAT launches public consultation on EU proposal to protect 2,148 geographical indications in NZ

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Contributed by: Sarah Salmond, Joe Edwards, Rachel O'Brien and Hamish Saunders

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Published on: January 24, 2019

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As part of the New Zealand (NZ)-European Union (EU) free trade agreement (FTA) negotiations, the EU has proposed a list of 2,148 food, wine and spirits product names it wants recognised and protected as geographical indications (GIs) in NZ. If approved, these names would be reserved for exclusive use by European producers, and New Zealand producers would be prohibited from using them in their branding and marketing materials on the domestic market. The EU's proposal is likely to be controversial as some of the names on the EU's list are widely used here, including Budweiser, Feta, Gruyère, Kalamata Olives, Prosecco, Scotch Beef, and Scotch Whisky.

The Ministry of Foreign Affairs and Trade (MFAT) would like to receive submissions on the EU's proposal from New Zealand companies up until 19 March 2019.

This alert provides further details about MFAT's consultation on the EU's proposal, along with an overview and appraisal of NZ's existing protections for GIs.

GIs

GIs are names that identify a product as originating from a territory or region where a quality, reputation or other characteristic of the product is essentially attributable to its geographical origin (e.g. Marlborough Sauvignon Blanc, Parma Ham, or Tequila). From a legal point of view, GIs are collectively-owned intellectual property rights that are usually associated with primary or traditional products.

GI protection in NZ

As a World Trade Organisation (WTO) member, New Zealand is already obliged to provide interested parties with the legal means by which to protect their GIs against misuse (i.e. use that misleads consumers as to the true origin of goods, or use that amounts to unfair competition). For wines and spirits, legal protection must be provided, even if the true origin of goods is indicated or the GI is accompanied by expressions such as ‘kind’, ‘style’ or ‘like’.1

GI protection is provided for in New Zealand by the Fair Trading Act 19862, the common law tort of ‘passing off’3, trade mark law4, and the GI (Wine and Spirits) Registration Act 2006.5  New Zealand's current legal framework provides a reasonable amount of protection for GIs, in theory. However, in practice, the framework is largely ineffective as:

  • despite some recent prosecutions (some of which are currently before the New Zealand courts), the Commerce Commission dedicates few resources to monitoring compliance and will only take meaningful enforcement action if a breach is serious and causing widespread harm, and if it is in the public interest to act6 ; and
  • the evidential7 and cost8 requirements associated with taking private action to protect a GI are generally prohibitive. An added complication in New Zealand is that private companies are seldom organised into the kind of regional groups that have the mandate, will and resources necessary to brings claims for GI misuse.

In the absence of effective legal protections, GI misuse goes largely unchallenged in New Zealand.

EU proposal

For these reasons, one of the EU's top priorities in the FTA negotiations is to secure NZ's commitment to establish a domestic GI register that would ensure more robust protection for the EU's GIs on the NZ market. If adopted, the EU proposal would almost certainly oblige the New Zealand Government to monitor compliance more earnestly and take enforcement action on behalf of rights' holders when warranted.

The EU has proposed an extensive and diverse list of 2,148 product names that it wants NZ to protect via a GI register. These product names are all protected GIs in the EU. Controversial entries on the list include:  

  • Cheeses – Feta, Gorgonzola, Gruyère, Queso Manchego, Roquefort, and White and Blue Stilton Cheese
  • Plant – Kalamata Olives
  • Meat – Scotch Beef and Scotch Lamb
  • Beer – Budweiser
  • Wine – Prosecco
  • Spirits – Scotch Whisky

The scope and level of protection that the EU is seeking is also very broad. In essence, the names would be protected against any use in New Zealand in relation to any products, including as ingredients, that do not originate from within the EU and that were not produced according to the relevant EU product specification. The EU also proposes to prohibit any imitation of a registered GI, even if the true origin of the product is indicated or if the protected name is accompanied by an expression such as “style”, “type”, “method”, “as produced in”, “imitation”, “flavour".

Submissions

MFAT is interested in receiving submissions on the EU proposal from New Zealand companies up until 19 March 2019. In particular, MFAT would like to hear from primary producers who consider that protection of any names on the EU list may negatively impact upon them. Such producers are invited to submit their "substantiated objections" to MFAT. Objections can be raised on a number of grounds including that the product name is:

  • used in NZ as the common name for the relevant good;
  • used in NZ as the name of a plant variety or an animal breed; or
  • identical to a trade mark or GI that is currently in use in NZ.  

There is also an opportunity for NZ to provide the EU with a list of NZ product names for consideration as GIs for protection in the EU. As such, MFAT would welcome submissions from New Zealand companies with an interest in protecting their GIs on the EU market.

How Russell McVeagh can assist you

Russell McVeagh's specialist international trade and IP lawyers are able to advise New Zealand businesses on the EU's proposal and assist them in drafting their substantiated objections and wider submissions.

Members of our team have significant experience advising on the protection of GIs in NZ and the EU, and on related international trade and IP-related issues. Whilst working in the UK, Legal 500 UK ranked Sarah Salmond's practice 'Band 1' for EU, Trade, WTO and Customs in 2008, 2009, 2010 and 2011. Joe Edwards, one of our IP Litigation partners regularly advises on GI and country of origin claims, and has been counsel for prosecutions relating to origin labelling in NZ. Rachel O'Brien is one of our IP specialists and advises on GIs, trade mark and copyright issues in NZ.

Further details about MFAT's consultation (including the EU's list of GIs) can be found here.  

For further information, please contact Sarah Salmond, Joe Edwards or Rachel O'Brien.

FOOTNOTES
  1. WTO TRIPS Agreement, art 23.
  2. The FTA prohibits misleading and deceptive conduct generally and the making of false or misleading representations concerning the place of origin of goods or services.[1] If a GI is used in trade to create a misleading impression as to the geographical origin, quality, or some other characteristic of a product, this could be a breach of the FTA. Both the Commerce Commission and private parties can bring actions for breaches of the FTA.
  3. The tort of passing off prevents one trader from passing its goods or services off as those of another. For a passing off action to succeed, there must be: (i) goodwill attached to the complainant's goods or services; (ii) a misrepresentation by the respondent, whether intentional or not; and (iii) resulting damage to the complainant's goodwill.[1] Only private parties with rights in a GI's goodwill can bring passing off actions.
  4. Trade mark law enables parties to register GIs in New Zealand as collective or certification trade marks. Only trade mark owners and licensees can bring trade mark infringement actions.
  5. The GI Act was brought into force in 2017. It provides a regime for registering New Zealand place names as GIs for wine or spirits. It allows for foreign GIs for wines or spirits to be registered in New Zealand.
  6. Please see Commerce Commission, Enforcement Response Guidelines and Enforcement Responses Register.
  7. Brand owners seldom bring passing off actions in New Zealand as it is very difficult to adequately identify, quantify and evidence the damage incurred as a result of a GI's misuse.
  8. For example, obtaining an injunction to prevent a party from misusing a GI can cost in excess of $100,000.[1] If a substantive court hearing is necessary, that cost will increase significantly.
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