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Chapter 6 - Conclusions and Suggestions

Geographical Indications are not individual or private but public or collective

rights. These rights can be exercised by the authorised producers of the GI

product and eventually benefit the local economy. Given that the GI products

are not necessarily manufactured by big business enterprises with sophisticated

machinery but at most times by small local families and groups, it becomes

evident that they can go a long way in providing socio-economic benefits to

these producers.

The recognition of GIs as an intellectual property right also requires the

establishment of rules and a robust regulatory framework with sound

developmental policies. These rules, regulations and policies need to ensure the

participation of all relevant stakeholders in the development and management

of a GI system, to avoid the exclusion of concerned stakeholders and to ensure

that both social and economic issues are addressed.199

The fact that the GI product is intrinsically linked to a specific geographic

location means that this form of IP protection is available to only those who

reside in such areas and manufacture the specific product. This further

strengthens the argument that GIs can contribute extensively to local

development.

199 See generally ‘Enhancing Market Openness, Intellectual Property Rights, And Compliance Through Regulatory Reform In Slovenia’ OECD Report available at http://www.oecd.org/dataoecd/26/62/48263001.pdf

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Employment generation, increased incomes and enabling a better livelihood to

the producers of GI products are some of the benefits that can be derived from

GI identification and its protection.

One of the long term benefits of GI protection could also be attraction of

investment for creating better facilities to manufacture the products. Another

benefit that can be derived is based on the fact that once the GI product has

found a niche in the market, the interest of consumers or the public in general

on visiting these areas increases. This can in turn lead to benefit to the tourism

industry and would also greatly benefit the local community and other

businesses in these geographical areas.

The level of protection offered to GI products is a very important but not the

only aspect of the legal framework that national governments can and should

promote.

The existence of a sound legal framework with efficient and effective policies

for the protection and development of GI products, within the country and in

the international markets, is an important condition for the socio-economic

sustainability that GIs can provide.

While a lot of research has been done on the contribution of intellectual

property including GI’s towards economic development a relatively un-

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researched part is the contribution of IP towards the development of human

rights and human capabilities. Governments have a responsibility to protect

human rights and enhance human capabilities; economic development including

that which is proposed through IP can contribute to the same. However the

‘analytical framework provides formidable challenges posed to the

development of human rights to development posed by contemporary forms of

economic globalization’.200

This requires the integration of many different policy aspects at the local,

national, regional and international levels to ensure the system is transparent,

enforceable and efficient.201

Providing benefits in some form or the other for registration of GIs should be

considered in totality. Some small-scale producers for instance are perhaps

likely to be discouraged from applying for GI protection if the process involves

highly technical, bureaucratic or complex registration procedures. Another issue

could also be that small scale producers are not aware that their products

qualify for GI protection and therefore would not be in a position to avail of the

benefits therein. In such circumstances and situations, bigger producers who

possibly may have more resources to devote to the process of GI protection are

likely to gain an unfair advantage in the GI market.

200 See Upendra Baxi, The Future of Human Rights, at 234-302 (New Delhi, Oxford University Press, 2006; Second edition) 201 Creating conditions for the development of GIs: The role of public policies, available at http://www.fao.org/docrep/013/i1760e/i1760e05.pdf

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In addition to registration, it is also important to establish an efficient system

for the coordination and enforcement of GIs in practice. The national

institutional framework will greatly influence the effectiveness of the GI system

in this regard, in addition to the role played by local stakeholders in ensuring

adequate self-regulation and internal controls, such as through the establishment

of a participatory guarantee system.

.

To be effective, the legal framework and policies towards GIs that are adopted

should necessarily be accompanied by an adequate means of providing

information to all the stakeholders involved including the consumers.

From the standpoint on subsidies the European Community (EC) proposes that

the small owners of GIs be given certain subsidies to enable them to effectively

utilize their GIs. However these subsidies are linked more to the agricultural

products and therefore are considered mainly in the light of agricultural

subsidies.202

There counter to this proposed subsidy is that even small owners

of other forms of IP such as patents and trademarks should then also be entitled

to Government subsidies.203

This study amongst other things considered aspects of GIs from a socio-

economic perspective. It touched upon the various and contrasting issues in the

202 See generally Daniel R. Bereskin, ‘Legal Protection of Geographical Indications in Canada’ at http://islandtastesensations.com/attachments/File/GI/TM-Geographic-Bereskin%5B1%5D.pdf 203Worldwide Symposium On Geographical Indications, organized by WIPO & USPTO San Francisco, California, July 9 to 11, 2003 at http://www.wipo.int/edocs/mdocs/geoind/en/wipo_geo_sfo_03/wipo_geo_sfo_03_3-main1.pdf

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international arena. The study also touched Human Rights perspective. This

study has also looked at the merits and demerits of subsidies and thereafter

looked at the various GIs that had been registered in the State of Andhra

Pradesh.

6.2 Summary of the Chapters

The first chapter which was introductory in nature effectively highlighted the

need for the study to be undertaken. The chapter briefly outlined the importance

and relevance of GIs in the context of international trade and globalization. It

set out the essential elements of the study that was proposed to be undertaken

touching upon aspects of previous studies. The research questions and

hypotheses which formed the basis of the study were detailed in this chapter.

The second chapter looked at GIs in detail. It was crucial to understand the

concept of GIs to establish its role in the IP family. The chapter highlighted the

essential characteristics of what can be termed as a GI. The understanding of

what constitutes a GI product was critical given that it is not only an

agricultural commodity that can be seen as a GI but the scope is vast and can

range from food items to handicrafts and even medicines.

The granting of GI protection dates back to the fifteenth (15th) century, when

Roquefort a specialty sheep milk blue cheese from the south of France, was

regulated by a French Parliament decree. The genesis of GI protection was in

Europe (other European countries followed the French decree) and this is

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perhaps a reason why the EU is such a strong supporter and proponent of

enhanced protection of GIs in the international arena.

To be qualified as a GI, a product or service may be described and designated

as such only where specific aspects of that geography contribute to its

uniqueness. This creates the intrinsic link between the product and the

geographic location and is very critical when it comes to identification of GIs.

The basic definition of GIs as mentioned in the TRIPS agreement is

‘Geographical indications are, for the purposes of this Agreement, indications

which identify a good as originating in the territory of a Member, or a region or

locality in that territory, where a given quality, reputation or other characteristic

of the good is essentially attributable to its geographical origin’

Having understood the genesis of GIs and its characteristics the second chapter

also considered the role of GIs in the Intellectual Property family. IP law is

traditionally territorial in nature GIs fit within that aspect most comfortably. A

possible conflict given the territoriality principle vis-à-vis GIs is that two

different countries can have the same name of a particular geographic location.

This can create the possibility of confusion in the minds of consumers.

The second chapter then proceeded to look into GIs in the context of

international agreements, such as the Paris Convention for the Protection of

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Industrial Property (1883), the, 1891 Madrid Agreement for the Repression of

False or Deceptive Indications the Lisbon Agreement on Appellations of Origin

(1958). These agreements were important to consider as they gave rise to what

GIs in TRIPS represents today. Issues of the Doha Round of the WTO

negotiations was also addressed in this chapter.

The third chapter studied the legal and economic aspects of GIs. It established

the need and importance of GI protection. Protection of GIs has far reaching

implications for both producers and consumers alike. While consumers can be

assured of a particular quality when they look at products from a specific

geographical location, the producers can be assured that a premium on their

products is established.

It is estimated that the trade value for GI products worldwide is somewhere in

the region of US$ 50 Billion. That estimation is from the protected GIs alone.

Numerous other GIs that can be offered protection would further increase that

trade value.

The third chapter considered the socio-economic implications of GIs and how

they can help in the development of the rural areas from where such products

originate. The local culture and economies can greatly benefit from GI

protection. Not only would the producers generate employment and income but

even the tourism industry and therefore other businesses operating in those

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areas are able to benefit greatly. Wine tourism in Australia is reportedly valued

at nearly 1 Billion dollars.204

The contrasting positions between the US and the EU was also highlighted in

this chapter. The US does not have a specific legislation for protection of GIs

but are protectable under the trademarks, collective or certification marks

provisions of the Lanham Act. The EU on the other hand has a very stringent

outlook to protection of GIs. The EU has also sought enhanced protection and

has also proposed the claw-back provision which effectively seeks to have the

WTO members protect some 41 GI terms exclusively and also revoke any

previous trademarks granted for those terms. The proposal has not found favour

with WTO members such as the US and Australia.

The third chapter thereafter looked at the Indian perspective on GIs. In line with

its TRIPS obligations India enacted The Geographical Indication of Goods

(Registration and Protection) Act, 1999. The salient features of the Act were

considered and outlined in detail. The Indian law defines indication as ‘any

name, geographical or figurative representation or any combination of them

conveying or suggesting the geographical origin of goods to which it applies’.

The fact that the GI Act in India provides for civil and criminal action in the

event of infringement shows that India has kept GIs at par with trademarks and

considered them as a valuable asset.

204 Kolyesnikova, N., Dodd,T.H., Laverie, D.A, ‘Importance Of Winery Visitor Group Size On Feelings Of Gratitude And Obligation’ 3rd International Wine Business Research Conference, Montpellier, 6-7-8 July 2006 at http://academyofwinebusiness.com/wp-content/uploads/2010/05/Dodd.pdf

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The chapter then considers GIs and Trademarks and highlights the similarities

as also the fundamental differences between them. Both GIs and Trademarks

serve as source indicators and that is a key similarity between them. Perhaps

one of the most important differences is the nature of rights that GIs and

Trademarks offer. While trademarks are individual rights and can be owned

privately, GIs are seen as a public or collective rights. This essentially means

that GIs do not have the same elements as that of other forms of IP, such as

transfer, assignment and sale. They are inherently linked to the geographic area

and therefore cannot be moved from there,

The chapter considered the relationship between traditional knowledge (TK)

and GIs. While GIs relate to the product, TK refers to the information and both

then link to geographically confined people or a particular region or locality.

There is then a close relationship between GIs and TK.

The fourth chapter looked at the policy perspectives regarding subsidies. The

WTO Subsidies and Countervailing Measures (SCM) agreement was detailed in

this chapter and subsidies in India as also a look at the Andhra Pradesh

subsidies was considered.

The SCM agreement among other things stipulates that a financial contribution

by a government is not a subsidy unless it confers a benefit. However presently

the issue of what exactly constitutes and benefit is still not resolved at the WTO

level. This is important to consider in the light of the fact that this study

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proposes that GIs be considered as products that need a form of subsidisation

for developmental reasons.

The benefits of subsidies was also explored in this chapter and it is interesting

to note that while developing countries provide subsidies to improve standards

of living, the underdeveloped look at providing subsidies so that the population

in those countries can meet their bare minimum needs. The chapter also

considered what the Indian Constitution guarantees and stipulates and the aim

of principles of State Policy. It provided the rationale of subsidies in that

perspective. The chapter also looked at subsidies in the WTO context of what

are prohibited and what are permitted subsidies. It is important to understand

this issue as policy formulation on subsidies for GIs need to be considered

keeping in view all aspects and therefore avoid any challenge by other WTO

members on the subsidies that may be granted to GIs producers/products in

India.

The fourth chapter considered some of the merits and demerits of subsidies. It

was seen that if subsidies offered have the positive effect of creating extra

wealth and employment they will meet the desired results but if they are offered

for personal consumption, the subsidies may not be very desirable. Therefore it

is evident that subsidies have to consider the overall socio-economic welfare of

the people and not personal gain or benefit alone.

The fourth chapter thereafter looked at the subsidies in India and the broad

trends of state subsidies. The subsidies of the Government of Andhra Pradesh

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were also highlighted in this chapter. It is also important to note that between

2005 and 2009, Andhra Pradesh registered the biggest improvements in

economic freedom. This bodes well for the State as it is an indication that the

policies of the Government of Andhra Pradesh are well rounded. The chapter

also addresses the need for subsidies in the state of AP for increasing GI

registrations and the consequential economic development.

The fifth chapter detailed some of the GIs that have been registered in the State

of Andhra Pradesh. The GIs in Andhra Pradesh have ranged from sarees to

handicrafts, paintings, toys and food items. The range of GIs indicates that the

State has a variety of products that can lead to economic and social welfare for

the people of Andhra Pradesh. If effective policies are implemented for the

producers and regions from where these products originate, then these areas can

look at sound socio-economic development.

This chapter also highlighted a product based on traditional knowledge that can

be considered for a GI registration. Considering the close relationship between

GIs and TK, efficient policies on identification of TK that could perhaps be

protected as GIs becomes imperative.

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6.3 Contributions and Implications

The present study by the researcher contributes to existing literature on

geographical indications by addressing aspects of subsidies that should be

considered in the light of the socio-economic benefits of GIs. Subsidies in the

field of GIs is a subject that has seen the EU make proposal but link it to

agricultural products. Considering that India and especially the State of Andhra

Pradesh has a diverse range of GI products, it is important to consider the

subsidies more broadly and specifically in the context of GIs.

In order to reach the intended recipient, the subsidies on GIs should be well

designed, transparent and focused. The subsidies should consider all

stakeholders and not the producers alone.

Subsidies may be given to consumers or producers to increase consumption or

production. Permanent subsidies for GIs may not be in the interest of the state.

Short and medium term subsidies for GI products with a provision for review of

the effective utilisation of such subsidies from time to time should be

undertaken.

The innovative and new developments taking place in the world in the fields of

science and technology, trade and business and other evolving areas need to be

encouraged. In that context, promoting GIs should be encouraged so as to

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optimize and enable these products to reach world markets. This would possibly

results in the effective development of the socio-economic conditions of the

producer and the region.

There is very little awareness or expertise in filing GI applications. The

awareness is also limited in knowledge of what constitutes a GI. The

advantages of Brand image, better recognition / acceptability of the product and

better price are lost to the producers by non-recognition of a GI. Moreover,

there is a danger of others hijacking and filing GIs for the products already in

public domain which may result in prolonged and expensive litigation to undo

such damage.

There is a scheme of Government of India in Ministry of Science of

Technology to address such issues by starting an IPR Cell in every University.

The State would do well to access these grants through the Universities.

Similarly, the Technology Development Centers with AP Chapter of CII can

also be involved in these issues.

These institutions must be encouraged to identify GIs and create awareness on

filing applications for recognition and render all assistance needed till

registration is granted by the GI offices. By this process, the State funds are not

tied up permanently and would be available to sunrise activities to find their

feet and sustain themselves.

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6.4 Verification of Hypotheses

1. GI protection increases marketing avenues and brings about economic value

to protected products.

The researcher can state that based on the extensive literature researched and

reviewed and the study undertaken on the economic perspectives of GIs,

protection of GI products will indeed increase marketing avenues and thereby

provide not only economic but also social value. The estimation of a US$ 50

billion in trade value of protected GI products is a strong indication of this

hypothesis.

2. Subsidies have both a positive and negative impact.

The researcher has confirmed this hypothesis based on the understanding of the

various issues associated with the subject. Subsidies have a positive impact

when they are well thought out and look at the larger social welfare and not just

consider personal gain. The negative impact of subsidies are the dependence of

the target group on those subsidies also when given for personal gain.

.

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3. Subsidies require efficient monitoring and implementation systems.

The researcher based on the research on subsidies in India can confirm that

checks and balances need to be made so that the subsidies are efficiently

monitored and implemented. The failure of the LPG subsidy of the Government

and its much needed reform are still being studied. It is important that prior to

the grant of the subsidy the target group should be well informed of the term of

the subsidy and thereafter regularly monitored.

4. An effective system of subsidies in AP would benefit the producers of

protected GI products and have a larger socio-economic impact.

The researcher can stipulate with certainty that an effective system of subsidies

in AP will indeed benefit the producers of protected GI products. The fact that

the State was among the top two States in India, which registered an increase in

economic freedom shows that the policies and subsidies that have been adopted

by the State are indeed beneficial. The diverse range of GI products available in

the State is a strong indication of how these producers can enable generation of

income for themselves and in turn for the State and community.

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5. For achieving effectiveness, subsidies should be well designed, transparent

and focused and permanent subsidies may not be beneficial to the state.

This hypothesis is also confirmed by the researcher as the chapter on subsidies

has highlighted that not all subsidies are positive and need efficient monitoring

systems. As has been seen there is a danger of corruption when subsidies are

involved. In order to overcome that issue a sector specific subsidy which is well

formulated will be beneficial. Also the danger of permanent subsidies is that

those who avail the permanent subsidy will not feel the need to be self-

sufficient if they are aware that the subsidy will always be available to them.

6.5 Suggestions and Recommendations for further Research

The researcher having undertaken this study on GIs and issues of Subsidies has

focused on the State of Andhra Pradesh. The suggestions and recommendations

for further research are as follows:

The hypotheses as outlined by the researcher in this study can be

researched and verified with respect to other states in India. Given the

potential for identification and protection of GIs in a country like ours, it

would be essential to conduct a study for all the States.

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Providing other means of State assistance besides subsidies for the

identification and development of GIs can be another area that would

need to be researched and studied in detail.

Currently there is no statistical and empirical study of the accrued

benefits of GIs in the State of Andhra Pradesh. Further research in this

area would provide a detailed understanding of how the GIs in AP have

added to the economic well-being of the producers, region and the State

in general.

The role of economic development in the development of human rights

and human capabilities in particular the contribution of Intellectual

Property and specifically GIs needs to be thoroughly researched,

analysed and set forth.