Impact assessment on a Proposal for a Regulation of the European Parliament and of the Council concerning geographical indication protection for craft and industrial products

The initiative aims to address two main problems in particular. The first problem relates to the limits of international protection for CI GI products. In the absence of EU level protection in place, the EU cannot secure protection in third countries for GIs for CI products originating in the EU by using the Lisbon/Geneva route, as there can be no EU registration to start with. The EU also has to refuse protection of GIs for CI products originating in third countries, as such protection is not available at EU level. Furthermore, the EU cannot grant protection of GIs for CI products via bilateral trade agreements by means of including GIs for CI products in the list of GIs to be protected by such agreements. The second problem relates to missed opportunities for European CI producers. Due to a complex landscape of available protection routes in the EU (EU trade mark, EU collective mark, national GI right where available, national collective mark, national certification mark where available), it is hard for producers to navigate towards obtaining and enforcing protection. Discrepancies among various protection routes result in complicated and costly ways of securing protection that are unworkable for a typical cluster of small firms producing CI products. Moreover, the variety and divergence of national initiatives results in legal uncertainty for producers, may mislead consumers, weaken intra-Union trade, and make way for abuses of GI infringements offline and online.

The Commission announced in its communication of 25 November 2020 entitled ‘Making the most of the EU’s innovative potential – An intellectual property action plan to support the EU’s recovery and resilience’ (COM(2020) 760 final) that it would consider the feasibility of a GI protection system for non-agricultural products at EU level.

The absence of EU-level protection for CI products is not only an internal issue, though. In November 2019, the EU acceded to the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications, a treaty administered by the World Intellectual Property Organization. The Geneva Act offers a route to obtain protection of GIs regardless of the nature of the goods to which they apply, including handicrafts and industrial products. While the EU should meet its international obligations under the Geneva Act and establish a protection scheme for CI products at EU level, there is still room for manoeuvre on how to do this in the most cost-effective way.

At EU level, special or sui generis geographical indication (GI) protection has been established for wines, spirit drinks, aromatised wines, as well as agricultural products and foodstuffs. However, there is currently no harmonised or unitary GI protection for craft and industrial (CI) products at EU level. Sixteen EU Member States have national sui generis GI schemes in place to cover CI products. These regimes differ in terms of protection, administration, fees, and do not offer producers protection beyond the national territory. Other Member States have no GI protection scheme in place at national level for CI products and provide for the use of consumer protection laws or trade marks. When producers of CI products seek protection throughout the EU, they can only do so separately in each Member State as available at national level. This situation may be a disincentive to investment in the traditional crafts in the EU, adding up to increased costs and legal uncertainty for producers.

The specific objectives are set to evaluate how to achieve compliance with the Geneva Act obligations in the most efficient and effective way. In particular the new system should achieve: (i) Applicant friendly and affordable registration system; (ii) Effective and affordable system of control and enforcement; and (iii) Low cost for public authorities.

The general aim of the initiative is to enable effective fulfilment of the EU’s obligations under the Geneva Act of the Lisbon Agreement, and to maximize profits from the EU’s accession to the Lisbon system for producers in the EU and from bilateral trade agreements. Furthermore, it aims to create a functioning internal market for geographically linked CI products by establishing an efficient and harmonised regulatory framework for their protection.

An EU-wide approach would also enable the EU to fully benefit from the opportunities offered by the international system of appellations of origin and GIs (Lisbon system). National protection systems alone cannot achieve this objective, as only those Member States which are parties to the Lisbon Agreement may maintain registrations and submit new applications in this limited framework.

The problem of regulatory fragmentation would be effectively solved at EU level. An EU initiative could provide for equal protection conditions in all Member States, thus creating legal certainty and incentives for investment in geographically rooted CI products. In comparison, the variety and divergence of national initiatives results in legal uncertainty for producers seeking protection, mislead consumers, impede intra-Union trade, and make way for unequal competition in marketing products of a special, geographically rooted quality.