A Cheese by Any Other Name: The Impact of Geographical Indications on International Agricultural Trade

By Dillon Lightfoot

With United States (U.S.) agricultural exports reaching all-time highs, the U.S. Department of Agriculture (USDA) recently reported $196 billion in agricultural exports for the fiscal year 2022, Geographical Indications (GIs) have become a major sticking point in the battle between the U.S. and the European Union (EU) for international market dominance.[1]

What are GIs?

A GI is a mark or sign that identifies a product as having originated from a particular region or locality.[2] GIscommunicate to consumers that the labeled product contains inherent qualities resulting from its origination or production in a particular region.[3] GI protections can be granted to all sorts of goods; however, their greatest economic impact lies in the designation of agricultural products, primarily dairy, wine, and spirits. Some studies have shown that products containing a GI certification are sold for on average twice as much as equivalent products without GI certification.[4]

GIs work similarly to trademarks, as both provide intellectual property protections. At the international level, GIs are recognized through the World Trade Organization (WTO) Agreement on Trade-Related Aspect of Intellectual Property (TRIPS Agreement), the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration (Lisbon Agreement), and the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications (Geneva Act). All 164 members of the WTO are parties to the TRIPS Agreement, agreeing to provide legal means for the application and enforcement of GI certifications.[5] The Lisbon Agreement paired with the Geneva Act protects Appellations of Origin (AOCs), certifications for products whose quality and characteristics are due exclusively to their geographic origin, and GIs more broadly than the TRIPS Agreement.[6] However, the Lisbon Agreement is only recognized by 10 parties, including the EU, and the Geneva Act is only recognized by 15 parties, including the EU.[7]

In the European Union, GIs are certified as Protected Designations of Origin (PDOs), Protected Geographical Indications (PGIs), Geographical Indications (GIs), and Traditional Specialty Guaranteed (TSG).[8] PDO certifications are for food, agricultural products, and wine that are produced, processed, and prepared in a specific region.[9] PGI certifications are for food, agricultural products, and wine that are produced, processed, or prepared in a specific region.[10] GI certifications are for spirit products that are distilled or prepared in a specific region.[11] TSG certifications are for food and agricultural products prepared or produced using traditional methods, as opposed to originating from a specific region.[12]

In the United States., GIs designations are implemented using the same methods as trademarks through the U.S. Patent and Trademark Office (USPTO).[13] Specifically, the USPTO issues certification and collective marks.[14]Certification marks indicate a product’s quality as determined by its region of origin, material, or mode of manufacture.[15] Collective marks indicate that a product’s producer is a member of a cooperative, collective, association, or union.[16]

Conflict Between GIs in the U.S. and EU

Conflicts between the U.S. and EU systems of GI protections arise from differences in the determination of generic terms. A generic term is a common name or mark which has become customary in common language and is used to describe a class or category of products.[17] Like with trademarks, both the U.S. and EU recognize that generic terms are not eligible for GI certification.[18] Further, this determination is memorialized in the TRIPS Agreement.[19] The application of generic terms in the U.S. allows producers to market products in the EU that they would otherwise not be able to, given their certification as GIs.

Examples of the interplay between GI certifications and generic terms in the EU are exemplified in the cases of Parmigiano Reggiano and Feta cheese. In these cases, the European Court of Justice (ECJ) outlined the deterministic factors for genericness as: “a) the existing situation in the Member State in which the name originates and in areas of consumption, b) the existing situation in other Member States, and c) the relevant national or Community laws.”[20] In both cases, the ECJ determined that the names of the products were not generic terms and allowed both Italy and Greece respectively to retain their GI certifications.[21]

Alternatively, an example from the U.S. where the generic nature of a product name is upheld is the case of Gruyère. In 2015, the Swiss company Interprofession du Gruyère and the French company Syndicat Interprofessionnel du Gruyère filed a trademark application for the cheese Gruyère which was challenged by the United States Dairy Export Council and other U.S.-based agricultural organizations.[22] The U.S. District Court for the Eastern District of Virginia determined that contemporary consumers understood Gruyère as a type of cheese, rather than a place of origin, and as such, Gruyère is a generic term.[23] This shift in consumer understanding is the hallmark of generic term determination in U.S. trademark law.[24] In determining whether a term has become generic, U.S. courts look to customer perception, dictionary definitions, and market practices of consumers and producers.[25] Resulting of the Gruyère decision, U.S. producers retain the ability to market products as Gruyère within the U.S. Meanwhile, in the EU, France retains GI certification for Gruyère. French retention of GI certification for Gruyère limits market access for U.S. producers within the EU and within any country recognizing EU GI certifications pursuant to a free trade agreement.

Trade Examples

Limitations in market access, like those in the case of Gruyère, have developed into a point of contention between the U.S. and EU. Further, these contentions spill over into bilateral free trade negotiations between the U.S., EU, and third countries. Over the last decade, both the U.S. and EU have competed for market access in numerous countries by simultaneously negotiating free trade agreements where each seeks to propagate favorable GI policies. The EU’s goal is to expand their GI practices in other countries to ensure EU producers holding GI certifications solely retain market access for their GI-certified products.[26] The U.S. goal is not to diminish GI protections, but to expand the market access of U.S. producers through the recognition of generic terms internationally.[27]

Close to home, the EU has negotiated free trade agreements with both Canada and Mexico that include recognitions of large numbers of European GI recognitions.[28] Beginning in 2016, the EU and Mexico began renegotiating the EU-Mexico Trade Agreement (EUMTA), which has been in place since 1997.[29] By 2018, both parties reached an agreement in principle that expanded the recognition of European GIs in Mexico significantly.[30] This agreement in principle lists hundreds of European-held GIs that Mexico would be required to protect.[31] Mexico recognizing these European GIs would effectively prohibit U.S. producers from selling equivalent products in Mexico. Among the European GIs listed in the agreement in principle are Asiago and Gruyère, both of which are generic terms in the U.S. and products marketed by many U.S. producers.[32] Further, U.S. producers are increasingly frustrated with the EU’s attempts to monopolize Mexican markets, with respect to certain goods, because U.S. producers played a significant role in boosting those same products popularly in Mexico.[33] For example, U.S. dairy producers are largely responsible for the popularity of Asiago in Mexico and are now on the brink of losing access to that market altogether.[34]

Similarly, in Canada, the EU has engaged in similar tactics in negotiating the EU-Canada Comprehensive Economic and Trade Agreement (CETA). Signed in 2016, CETA went provisionally into force in 2017.[35] In addition to recognizing 171 European GIs, CETA significantly removes customs duties on agricultural products traded between both parties.[36] These moves are costly to U.S. producers as Canada is a major U.S. trading partner for agricultural goods, totaling $25 billion in exports in 2021.[37]

Moves by the EU to limit U.S. market access in Canada and Mexico are particularly costly considering the commitment to trade memorialized in the U.S.-Mexico-Canada Agreement (USMCA), signed in 2020.[38] The USMCA emphasizes transparency in the GI application process and an open period for opposition to GI designations.[39]Additionally, parties to the USMCA agree that terms customary in common language, or generic as referred to in the U.S., are ineligible for GI certification.[40] The procedures outlined for determining a term customary in common language are like procedures applied in U.S. courts when determining if a term is generic.[41] These procedures also lean on market practices, dictionary definitions, and consumer perception.[42]

Similar trends exist in free trade agreements negotiated with other countries. In Japan, both the U.S. and the EU have recently negotiated new trade agreements.[43] The EU-Japan Agreement pushes for increased recognition of European GIs, including 28 new GIs recognized by Japan in 2021.[44] Stated U.S. negotiation goals for an agreement with Japan placed focus on transparency GI in application and opposition procedures and a shared focus on the preservation of generic terms.[45] The U.S. stated similar goals in their negotiations for the UK-U.S. Free Trade Agreement (UKUSFTA).[46] In a public hearing between the Office of the U.S. Trade Representative (USTR) and interested stakeholders, USTR representatives advocated the propagation of a recognized list of generic terms in the UKUSFTA and future negotiations.[47] However, no progress on such a list has been reported. Meanwhile, the EU continues to push for increased GI recognition, this time pushing Australia to recognize 400 European GIs.[48] Moving forward, if the U.S. does not develop points of negotiation that protect and expand generic terms of agricultural products, U.S.-based agricultural producers will experience significant barriers to trade moving forward.

[1] Press Release No. 0032.23, U.S. Dep’t of Agric., 2022 Was Another Record Year for U.S. Farm Exports, (Feb. 10, 2023) (on file with author).

[2] U.S. Pat. and Trademark Off., Geographical Indications (Dec 6, 2022), https://www.uspto.gov/ip-policy/trademark-policy/geographical-indications.

[3] Id.

[4] European Commission, Directorate-General for Agriculture and Rural Development, Study on Economic Value of EU Quality Schemes, Geographical Indications (GIs) and Traditional Specialties Guaranteed (TSGs): final report, (Oct. 2019).

[5] The World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights art. 22, Apr. 15, 1994, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) [hereinafter TRIPS Agreement].

[6] Lisbon Agreement for the Protection of Appellations of Origin and their International Registration, Oct. 31, 1958, 923 U.N.T.S 205 (1974) [hereinafter Lisbon Agreement]; Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications, WIPO (May 20, 2015), https://www.wipo.int/edocs/pubdocs/en/wipo_pub_239.pdf [hereinafter Geneva Act].

[7] See Lisbon Agreement; Geneva Act.

[8] European Commission, Geographical Indications and Quality Schemes Explained, https://agriculture.ec.europa.eu/farming/geographical-indications-and-quality-schemes/geographical-indications-and-quality-schemes-explained_en.

[9] 2012 O.J. (L 343) 8.

[10] 2012 O.J. (L 343) 16.

[11] 2012 O.J. (L 343) 4.

[12] 2012 O.J. (L 343) 19.

[13] Supra note 2.

[14] Supra note 2.

[15] 15 U.S.C. § 1127.

[16] Id.

[17] See TRIPS Agreement art. 24.6.

[18] 15 U.S.C. § 1209.01(c); 2012 O.J. (L 343) 8.

[19] See TRIPS Agreement art. 24.6.

[20] Case C-132/05, Comm’n of the European Communities v. Fed. Republic of Ger., 2007 E.C.R. I; Cases C-465/02, Kingdom of Ger. et. al., v. Comm’n of the European Communities, enjoined with C-466/02, Kingdom of Den. et. al., v. Comm’n of the European Communities, 2005 E.C.R. I.

[21] See Case C-132/05 at V; See C-465/02 enjoined with C-466/02 at I.

[22] Interprofession du Gruyère et al., v. U.S. Dairy Export Council et al., No. 1:20-cv-1174. (E.D. Va.) (Memorandum Opinion).

[23] Id. at 32.

[24] Id. at 32.

[25] Id. at 15.

[26] Cong. Rsch. Serv., IF10188, Geographical Indications (GIs) in U.S. Agricultural Trade (2016).

[27] Off. of the U.S. Trade Rep., 2022 Special 301 Report, (Apr. 27, 2022).

[28] EU-Mexico Trade Agreement, art x.29, Apr. 28, 2018, (Agreement in principle) [hereinafter EU-Mexico Agreement]; Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part, art. 20.16, Jan. 1, 2017 [hereinafter CETA].

[29] European Commission, Report From the 1st Round of Negotiations for Modernising the Trade Pillar of the EU-Mexico Global Agreement, (Jun. 13-14, 2016).

[30] See EU-Mexico Agreement.

[31] See EU-Mexico Agreement Annex II

[32] Supra note 2; Interprofession du Gruyère et al., v. U.S. Dairy Export Council et al., No. 1:20-cv-1174. (E.D. Va.) (Memorandum Opinion).

[33] Off. of the U.S. Trade Rep., Public Hearing on Negotiating Objectives for a U.S.-Uk Trade Agreement, (2019), at 154.

[34] Id. at 154.

[35] See CETA art. 20.16.

[36] See CETA art. 2.4, annex 20-A.

[37] U.S. Dep’t of Agric., Canada 2021 Export Highlights, (Apr. 14, 2022).

[38] The United States-Mexico-Canada Agreement, U.S.-Mex.-Can., art. 20. 29, agreed to Oct.1, 2018, [hereinafter USMCA].

[39] See USMCA art. 20.30.

[40] See USMCA art. 20.32.

[41] See USMCA art. 20.30; Interprofession du Gruyère et al., v. U.S. Dairy Export Council et al., No. 1:20-cv-1174. (E.D. Va.) (Memorandum Opinion) at 15.

[42] See USMCA art. 20.32.

[43] Agreement between the European Union and Japan for an Economic Partnership, art. 14.22, Dec.27, 2018, O.J. (L 330) [hereinafter EU-Japan Agreement]; Trade Agreement Between the United States of America and Japan. Annex 1, Oct. 7, 2019, T.I.A.S. No. 20-101.2 [hereinafter USJFTA].

[44] See EU-Japan Agreement art. 14.22.

[45] Off. of the U.S. Trade Rep. Exec. Off. of the President, United States-Japan Trade Agreement (USJTA) Negotiations: Summary of Specific Negotiating Objectives (Dec. 2018).

[46] Supra note 32 at page 151.

[47] Supra note 32 at page 151.

[48] Off. of the U.S. Trade Rep. Exec. Off. of the President, United States-United Kingdom Negotiations: Summary of Specific Negotiating Objectives, (2019).