socio-economic and rural development through geographical
TRANSCRIPT
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DPIIT, MCI Chair on Intellectual Property Rights &
Centre for Intellectual Property Rights Research and Advocacy
National Law School of India University, Bangalore
“Socio-Economic and Rural Development Through
Geographical Indications”
Under the Guidance of
Prof. (Dr) T. Ramakrishna,
MCI Chair Professor on IPR
Submitted By
Badugu Surya Chandra
B.A., LL.B.[Hons.]- 2nd Year
Damodaram Sanjivayya National Law University
Visakhapatnam
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Certificate
This is to certify that Badugu Surya Chandra, student from Damodaram
Sanjivayya National Law University [DSNLU], Visakhapatnam, has
successfully completed and submitted his report, Socio-Economic and Rural
Development through Geographical Indications. This has been submitted in
fulfilment of his internship at the Centre for Intellectual Property Research and
Advocacy (CIPRA)- National Law School of India University [NLSIU],
Bangalore during the month of 1st December to 31st December 2020.
Bangalore, 21st January 2021
Prof. (Dr.) T. Ramakrishna
DPIIT, MCI Chair Professor of IPR
Research Associate
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DECLARATION
Certified that this research work is my original work and I have not borrowed
any material from other’s work nor have I presented this partly or fully to any
other institution/college/university.
I have completed with all the formalities prescribed in this regard.
Date: 21st January 2021 Signature
Place: Bangalore NAME- Badugu Surya Chandra
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ABSTRACT
The socio-economic development promise for rural communities comes with Geographical
Indications (GIs). This paper is an effort to find out the nature and significance of Geographical
Indication Protection. It also helps to enhance the awareness of geographical indications
through rural growth, increased social benefits, economic benefits, environmental benefits,
benefits for consumers and benefits for producers, etc.
RESEARCH QUESTION
Whether Geographical Indications (GIs) coming with the promise of socio-economic and Rural
development for rural communities.
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CONTENTS
• Introduction -------------------------------------------------------------------------------- 5
• Role of GI in Rural Development and benefits ------------------------------------- 5
• Incorporating CSR/Fair-Trade into the Geographical Indication System --- 7
• Imposing positive requirements as a precondition for the use of GI’s -------- 8
• Conclusion --------------------------------------------------------------------------------- 10
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INTRODUCTION
Geographical indications open door for consideration of many more different items identified
with the geography, climatic conditions etc. The concept of Geographical Indication began in
nineteenth century Europe. GIs are identified by the World Trade Organization (WTO) as:
"indications identifying a good as arising in the territory of a country or locality or region of
that country, in which the standard, reputation or other attribute of the good is essentially
attributable to its geographical origin". Geographical Indication is an aggregate approved right
to invent that identifies an item as originating from a specific location, and the features or
prestige of an item or good originating from that place of origin. By passing product data, GI
fills up as a marketing tool. The security of GI1 is more oriented towards agricultural products;
it protects not only the characteristics of agricultural products, but also all the factors involved
in the manufacturing process in order to make them available to the public on the market.
Calboli (2015) claimed that a name or sign used on items relating to a particular geographical
place or origin is a geographical indication. In order to define product quality, highlight brand
identity and credibility, geographical indications are considered. It has a significant role to play
in maintaining cultural values. A geographical indication cannot be assigned or licenced to a
person not belonging to a group of authorised producers outside that area. In Europe, GI
protection is found, other developing nations have lately begun to update GI enactment locally
and pursue protection in foreign trade agreements with the goal of fostering rural development
and protecting local heritage and natural condition.
ROLE OF GEOGRAPHICAL INDICATIONS IN RURAL DEVELOPMENT
In addition, geographical indications may provide a powerful rural advancement tool that has
been viewed by the EU as reflected in various policies and regulations. This rural development
ability will require developing countries to understand and promote origin-labelled goods
within their jurisdiction as an exceptionally strong base. In rural areas, the security of GI goods
promotes the tolerance of commercial events. GIs are typically conventional goods made by
rural communities. In rural development, the role of geographical indication relates to the
following aspects:2
1 Amit, sing. Tulip. Suman. & Tripura, V. (2015). Interfaces and synergies between Intellectual Property right and
Consumer Protection Law in India: An analysis. Journal of Intellectual Property Rights. 20. 2001-09. 2 Carina, Folkeson, Geographical Indications and Rural Development in the EU, pp15.
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Social Benefits
Development of separate agricultural products needed by the minority of consumers due to the
nature of the commodity, the climate of protection and prospective unity. The production area
and the goods are linked, the speak to a secure comparative preferred stand point, which can
be used as a force for encouraging economic activity in remote and or under privileged territory.
These safe products can provide an opportunity for the region or area because of GI; they can
create job opportunities that can personally lift the financial status of inhabitants, which can
also prevent rural exodus to urban areas. Local producers can upgrade their product's credibility
with the aid of GI and can sell directly, in this way it can additionally go up against huge
organisations and GI's reputation can boost the region or region's distinction. GIs are therefore
seen as a factor in rural financial growth and in strengthening the economy.3
Economic Benefits
Producers of legitimate goods may charge a price premium by retaining a particular lowest
standard of quality and asserting this to the customer, and customers may retaliate by
decreasing future purchases if quality does not satisfy desire. Producers depend on the way
customers compare GI-designated goods to a separate GI-designated region in order to capture
the respect associated with products bearing their GI. GI manufacturers need protection from
legal guarantee against confusing employment of words identical or similar to their GIs. They
claim that they need protection against free riders who might use the GIs beyond their precise
geographical sense, not with sanding when customers are not confused, as these "non-
geographically accurate" uses could lead to the loss of the GIs' peculiarity.4
Consumer’s benefits
Geographical indications are aimed at providing customers with information on the nature and
characteristics of products on a regular basis. This will potentially engage customers to make
more informed purchase decisions. In fact, this rather superficial now and then, but the same
can be said for the most part of ads and trade mark in particular. All things considered;
geographical indication is a little different. Geographical indication can provide important
information on the origin, safety and 'quality' of geographical indication products by telling the
3 Irene, Calboli. (2015). Geographical indications of origin at the cross roads of local development, consumer
protection and marketing strategies. International review of intellectual property and competition law. 47 (7). 760-
780. 4 Cerkia Bramley. The Economics of Geographical Indications: Towards A Conceptual Framework for
Geographical Indication Research in Developing Countries. Wipo-pub1012-chapter4.pdf.
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customer about the origin of the natural substance and the training that goes into producing the
articles.
Producer’s benefits
Geographical indications raise local producers' incomes and meet the needs of more aware and
demanding entrepreneurs. Amit et al (2015) suggested that producers suffer losses and harm as
they reduce their significant business and damage their built-up credibility for the products. So,
for producers, the protection of geographical indications is very critical. Geographical
indications show the greatest opportunity for local producers to benefit where conventional
small-scale manufacturing is still present on the supply side, and where end-use goods are
advertised to customers directly. In other words, when the object is a commodity that is
fundamentally traded in bulk, they are less likely to suit (Downes and Laird (1999)). This
confirms the ability to use the economic advantages of geographical indications to boost
prosperity for local communities in the developing world.
INCORPORATING CSR/FAIR-TRADE INTO THE GEOGRAPHICAL INDICATION
SYSTEM
Before determining how the GIs system could be used to bring about more equity into
value/supply chains, it is sensible to set out the common standards shared by the CSR and fair-
trade models considered above. These common standards could provide the basis for a
framework to reconsider the GIs system. Accordingly, the CSR/fair-trade models share the
following common standards:
Fair wages/reasonable prices: CSR initiatives aimed at creating shared value have
focused on guaranteeing fair wages not only in respect of employees within the
corporate structure of a company but also across its supply chains. As the LEGO and
Nestlé examples demonstrate, suppliers involved in a product’s value/supply chain are
independently audited to ensure that labourers/workers employed by the suppliers are
paid a fair wage. The fair-trade model ensures that farmers/producers are paid a
minimum price for their produce by the industry players. When employees and workers
throughout the value/supply chain of a product are paid a minimum and reasonable
wage or price, this improves productivity and enriches the long-term sustainability of
the product.
Better working conditions: by focusing on the health and safety of employees not only
within a company but also across value/supply chains, CSR initiatives strategically
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create shared value among the various stakeholders especially at the grassroots. A
similar strategy is employed by the fair-trade model, where funding (e.g., the Fairtrade
Premium) is provided to farmers’ organisations to improve farming conditions. Just as
fair pay and prices, better working conditions increases productivity and sustains long-
term value/supply chains.
Education and training: providing employees and stakeholders connected with a
company’s business with education and training, particularly in a field related to the
company’s business, is a CSR strategy that could generate considerable shared value.
The fair-trade model too focuses on training farmers and producers. These initiatives
could foster innovation among stakeholders, leading to sustainable and efficient
methods of production.
Protection of human rights: CSR and fair-trade initiatives that focus on supply/value
chains guarantee compliance with human rights norms. This commitment, in effect,
shapes labour and working conditions across supply/value chains. By committing to
protect human rights, practices that lead to unfair or discriminatory labour, such as the
payment of excessively low wages or providing unsafe working conditions, as well as
the use of children in the workforce, can be suppressed.
If industry actors dealing with GI products embrace the aforesaid common standards (which
we refer to as ‘non-GI standards’, as they do not relate to the origin, quality or characteristics
of GI products), in effect, that could facilitate GI premiums to be more equitable distributed
across supply/value chains. However, both CSR and fair-trade remain voluntary initiatives.
Therefore, it becomes necessary to determine whether the legal framework for the protection
of GIs could be utilised to incentivise compliance with the common non-GI standards that we
have identified above. A consequential question that must be addressed is the extent to which
governments/states could regulate GIs within the framework of TRIPS and obligations flowing
from it. These matters are considered next.
IMPOSING POSITIVE REQUIREMENTS AS A PRECONDITION FOR THE USE OF
GEOGRAPHICAL INDICATIONS
GIs add significant value to the products to which they are attached. As was noted before, GIs
guarantee that the underlying products originate from a particular geographic region and attract
certain specific qualities that arise as a result of their place of origin. For this reason, GIs play
a crucial role in communicating the ‘product/place’ linkage to consumers. If products bearing
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GIs, such as Ceylon Tea, Darjeeling Tea or Hom Mali Rice were stripped off their respective
GIs, they would no longer be regarded as premium products by consumers.5 For this reason, it
is crucial for GI products to display their respective GIs on packaging and labels. Thus, it is
clear that the use of GIs on product packaging or labelling play an important role in the
marketing and sale of GI products. This necessity may be exploited to encourage, if not
incentivise, industry actors dealing in GI products to adhere to the common non-GI standards
that we have set out above.
The establishment of an institutionalised framework that promotes the cooperation of
government officials, producers and those involved in the exportation, distribution and
marketing of GI products is crucial for the success of a GI.6 Thus, whether GIs are protected
as certification marks or are registered in a GIs register, they must be administered by a
centralised body that warrants, and maintains control over, the origin, quality and
characteristics of the corresponding GI products. Accordingly, the certification or registration
process requires the centralised body, as a representative of the state and community of
producers, to set out the boundaries delineating the geographic region and conditions/standards
upon which the GI products are produced within that region. For instance, in the case of teas,
the Ceylon Tea and Darjeeling Tea GIs are owned and controlled by the respective Tea Boards
in Sri Lanka and India. Similarly, in the case of Hom Mali Rice, Thailand’s Ministry of
Commerce controls that GI. As a consequence, products (such as tea or rice) that are produced
outside the specified regions relating to a GI or that do not meet the specified GI standards,
will not qualify for the use of the GI on packaging and labels. Any attempt to do so could
potentially lead to an action for infringement at the instance of the entity responsible for the
administration of the GI, or one of its authorised licensees. In other words, the entitlement to
use a particular GI stems from complying with certain standards set out in respect of that GI
by a centralised body, which is often a government ministry or statutory body. This interplay
between the registration, use and the centralised monitoring of GIs may be put into good use
to ensure that industry actors that make use of GIs in promoting their products adhere to the
common standards that we identified above that relate to non-GI elements such as
5 Megha, Ojha. (2017). geographical indications and rural development; opportunities and economic impact of
protection of fruit crops in India. International Research Journal of Human Resources and Social Sciences. 4. (11). 6 Felix Addor and Alexandra Grazioli, Geographical Indications beyond Wines and Spirits: A Roadmap for a
Better Protection for Geographical Indications in the WTO/TRIPS Agreement’ (2002) 5 Journal of World
Intellectual Property 865, 893.
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fair/reasonable wage and prices, access to education and training, safe working conditions, and
so on.
As a matter of policy, the body responsible for administering a GI, could require compliance
with non-GI standards, in addition to the GI-specific standards, before authorising industry
actors to use the GI on their packaging or labels. This way, if an industry actor is to benefit
from the use of a GI, it must, in addition, also adhere to specified non-GI standards that aim to
ensure that GI premiums are better distributed throughout supply/value chains for the benefit
of the stakeholders at the grassroots. This approach contemplates the attachment of a positive
obligation on the part of industry actors to comply with additional non-GI standards before
deriving the entitlement to use a GI on product packaging and labels. Given that the use of GIs
on retail packaging and labels is crucial for enabling consumers to distinguish between GI
products and non-GI products of the same class, industry actors are likely to be motivated to
comply with the additional non-GI standards in order to ensure that they are permitted to use
the GIs on product packaging and labels.7
CONCLUSION
Geographical Indication helps to create a relationship between the commodity and the region
from which the object belongs or originates. Through well-developed promotion and marketing
methods, economic activities in rural areas have increased, resulting in improved production
of GIs. In rural areas, most geographic regions are surrounded by rural areas. This creates more
rural growth opportunities. The objective of this paper was to highlight an inconsistency
between how GIs are perceived, as robust tools of rural development, and the reality that exists
at the grassroots, where some of our most treasured GI products come from. This paper does
not seek to question the utility of GIs in achieving rural development. Rather, it posits that there
are problems in how GI premiums are shared and distributed among stakeholders across
value/supply chains. In order to consider ways of addressing this anomaly, we looked outside
the GIs system for inspiration, which took us in the direction of CSR and the fair-trade system.
CSR has been strategically used by enterprises to create shared value on the part of
stakeholders, while the fair-trade model has been successfully employed to address poverty
among farming communities. Both the CSR and fair-trade models we considered share certain
common standards that seek to guarantee fair wages and prices, access to education and
training, healthcare and safe working conditions, and human rights to stakeholders involved
7 Michelle Agdomar. (2014) “Removing the Greek from Feta and Adding Korbel to Champagne: The Paradox of
Geographical Indications in International Law, 18 Fordham Intell. Prop. Media & Ent. L. J. 541,578-580
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across supply/value chains.8 These common standards are significant contributors towards
enriching the lives and livelihoods of communities in rural areas. Since GIs designate the
geographical origin of products, and are controlled and monitored by centralised bodies that
are responsible for guaranteeing the origin, quality and characteristics of GI products, the GIs
system can be effectively used to replicate the CSR/fair-trade models that we have considered
in this paper. In fact, there is a sound argument in favour of ensuring that those involved in the
production of GI products are treated fairly and with dignity, as the supply/value chains of GI
products are heavily reliant on local labour in the geographic areas from where the products
originate. Unless industry actors that deal in GI products are able to ensure the long-term
sustainability of supply/value chains, GI products will slowly but surely disappear with time.
The benefits of geographical indications are the preservation of people's monetary activities
and the improvement of their standard of living. People in rural areas are the main recipients
of GI goods that create more prospects for revenue and jobs. One of GI's key benefits is that it
sends direct signals to the ultimate customers that convey both the origin and the consistency
it possesses. Huge investments in ads can also be avoided. GI removes the search expense from
the customer component, and thus they are able to pay an additional premium for each
commodity. Since GIs designate the geographical origin of products, and are controlled and
monitored by centralised bodies that are responsible for guaranteeing the origin, quality and
characteristics of GI products, the GIs system can be effectively used to replicate the CSR/fair-
trade models that we have considered in this paper. In fact, there is a sound argument in favour
of ensuring that those involved in the production of GI products are treated fairly and with
dignity, as the supply/value chains of GI products are heavily reliant on local labour in the
geographic areas from where the products originate. Unless industry actors that deal in GI
products are able to ensure the long-term sustainability of supply/value chains, GI products
will slowly but surely disappear with time.
8 Winson, Thomas. (2013). Economic Competitiveness through Geographic Indications. International Journal of
Marketing, Financial Services & Management Research. 2 (9). 2277-3622.