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Gaining competitiveness throughGeographic Indications in Sri

Lanka

Ravindra A. Yatawara

Head, International Economic PolicyUnit and Research Fellow,

Institute of Policy Studies of Sri Lanka

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GI as a source of competitive

advantage

Can an intellectual property basedstrategy be successful in promotingparticular industries?

GIs are indications used todistinguish goods having certainproperties. GIs identify a particular

geographical areawhich is connectedto the properties of the goods.

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Economic Rationale for GIs

Product differentiation, niche marketingbased on reputed high quality

Higher profits through price premiums

Consumer protection- prevents deception

Producer protection- stimulatesinvestment

Rural Development- most GIs exhibit ruralbias- agric, use traditional knowledge

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TRIPS GI Regime

According to TRIPS (Art. 22.1),Geographical indications are, for thepurposes of this Agreement, indicationswhich identify a good as originating in the

territory of a Member, or a region orlocality in that territory, where a givenquality, reputation or other characteristicof the good is essentially attributable to itsgeographical origin.Art 24 exceptions-generic GI not protected in country of originArt 23-more protection 4 wines and spirits

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TRIPS does not specify nationalimplementation

1)Laws focusing of business practices andconsumer protection

2)Trademark laws

3)Special sui generis system of

protection-countries use combinations of above, alsodiffer within category

international protection of GIs

depends on meeting differingrequirements in each of the countrieswhere protection is sought

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GI Protection in Sri Lanka-

1)Laws Focusing on Business Practice

or consumer protection

Unfair Competition Law Section 160of the Intellectual Property Act 2003

Consumer Protection Law- CosumerAffairs Authority Act , No. 9, 2003

False trade prescriptions- 186(1)(d)of the IP Act 2003

Action for passing-off

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GI Protection in Sri Lanka-

2)Trademark Law

GI is protected against beingregistered as an ordinary trademark,incl if mark is geographical name

Allows certification marks, collectivemarks- but limitations in the use ofgeographic name- Nuwara Eliya

versus Ceylon

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GI Protection in Sri Lanka-

3) Special Sui generis system

Part IX, Chapter XXXIII of the IP Act 2003- adopts TRIPsdefinition of GI applicable to wines and spirits, extends it toservices.Relief includes injunction, damages and destruction ofinfringement goods

Does not provide for registration/ prior recognition-protection based on eligibility criteria in the particularaction brought- drawbackHowever, section 191(b) of the IP Act 2003 provides thatany person who makes a false declaration in respect of [a]geographical indication inclusive of Ceylon Tea and CeylonCinnamon shall be guilty of an offence

sui generis system by regulation- a means forimplementing a special system of protection for GIs in theparticular industry or sector-power given to the relevantMinister or statutory Authority to adopt regulations

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Economic Costs of GIs

Marketing costs to establish reputation,differentiation to global consumers

Costs of obtaining registration/GI recognition-vary by country

-i) feesii) onerous requirements of foreign authorities-

e.g. EC Regulation 2081/92 requires qualityverified by third party inspection

iii) legal costs when registration opposed byinterested parties abroad. Parma in USA- US$ 1mln and 10 years.

Cost of enforcing GI in case of infringement

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Experience with GIs-The case of

CEYLON TEA

Introduced in 1867, traditional exportOrthodox vs. CTC (cut tear curl) methodsProducers, brokers, buyers at ColomboauctionColombo auctions- most of the tea isbought for supplying packers overseas, ordomestic processing into value-addedforms for overseas brands.

The Sri Lanka Tea Board exercisesregulatory supervision of the tea industry-monitoring of minimum quality standardof made tea at the point of sale.

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Sri Lanka leading global exporter-followed by Kenya

Ranking in production- China, India,

Sri Lanka, KenyaSL (orthodox) and Kenya (CTC)export share by volume similar, but

by value SL $ 640 mln, Kenya$432 mln

Recently SL promoting specialty teas

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Position of Tea IGOs

Ceylon Tea identifies tea originating inSri Lanka (Ceylon till 1972), whichpossesses a distinctive quality and

reputation essentially attributable to itsgeographical origin. meets TRIPS def ofGIs

-also eligible are the 6 main agro-climatic

regions- Nuwara Eliya, Dimbula, Kandy,Ruhuna, Uva and Uda Pussellawa.

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Sri Lanka Tea Board has registered Ceylon Tea Symbol of Quality accompanied by a logo of a

lion, as a trademark under the IntellectualProperty Act, No. 36 of 2003.mark may only be affixed on retail containers(value-added teas) packed in Sri Lanka -the teashould be 100 per cent Ceylon Tea above ISO

3720 standardsection 191(b) of the IP Act 2003 specificallyrecognises Ceylon Tea as a GI, entitling it to theprotection provided by Chapter XXXIII of the IPAct 2003. Accordingly, Ceylon Tea and the

Ceylon Tea indication satisfy the domesticprotection criterion giving rise to the right toprotection under TRIPS, and which is aprerequisite for extending protection to foreignGIs under most national sui generisGI systems.

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The Tea Board has also registered the Ceylon Teamark as a trademark in around 80 countries

normally a geographically descriptive namecannot be registered under the trademark system

as an ordinary trademark.in many markets, registration has only beenpermitted of the lion logo withouttheaccompanying words Ceylon Tea,

falls short of protecting the GI Ceylon Tea.

Six sub- regions can achieve protection through aspecial system under the Tea Board Law

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Cost of GI protection abroad willdepend on opposition from foreignpackers and this opposition will

depend on Tea Board rules of GIusage. Currently trademark use onlyfor domestic packers

To include foreign packers, will haveto have inspection mechanismabroad- financed by license fees

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Scope of SAARC Cooperation

Typically no natural role forcooperation from SL perspectivesince GI is based on differentiation

Cooperation in technical aspects inparticular markets, US, EU, CIS

Joint stand in extending article 23level protection to non-wine andspirits products

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Thank You