30-09-2013, 04:08 PM
Emerging Issues for Geographical Indication Branding Strategies
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Abstract
Branding strategies centering on the geographical origins of a product can provide a
basis for differentiating commodity products. The use of such “geographical indications”
(or GIs) can involve unique quality characteristics associated with a particular location or
quality images that are based on the history, tradition, and folklore in a region. In this pa-
per we describe the benefits and pitfalls (such as the threat of new entrants, oversupply,
the broadening of boundaries to include more producers, and limiting generic use of such
names) of using GI branding strategies. We also focus on trademark issues germane to a
company’s ability to (1) adopt GI-based trademarks as a means of gaining a competitive
advantage and (2) protect the rights associated with such marks in order to sustain this
source of competitive advantage.
INTRODUCTION
Brand names allow producers to achieve market recognition, differentiate their offer-
ings, and gain legal protection. These brand-level assets, in turn, allow companies to
command a premium for their products. However, the power of branding has eluded pro-
ducers of commoditized products. Very few producers (notably, Dole and Chiquita) have
been successful in using traditional branding strategies to sell commoditized products
(such as pineapples and bananas). An alternative, and perhaps more common, method of
creating differentiation for commoditized products is based on “varietal” differences, as
when apple producers distinguish their products based on the variety of the apple pro-
duced (e.g., Braeborn, Gala, Jonathan, and Granny Smith). Unfortunately, “varieties”
cannot be branded in a traditional sense, given that anybody anywhere can produce those
same varieties.
A promising new development is the use of geographical origin as a basis for brand-
ing commodities. Florida Oranges, Idaho Potatoes, Maine Lobster, Napa Valley Wine,
and Washington State Apples are all examples of geographical indication (GI) brands that
have gained prominence in the United States. Geographical identities can afford produc-
ers “brand name” equity and protection usually not available to commodity products.
With GI protection, producers are able to command premiums for their products, espe-
cially if perceived and/or actual quality differences exist, including product differences
attributable to their unique geographical as opposed to varietal origins.
Geographical Indication Designations
GIs, also referred to as appellations of origin, are “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” (World Trade Organization n.d.). Obtaining the status of pro-
tected GI requires “a precise product specification which includes a definition and evi-
dence of the link to the geographic area in which the product originates” (The Journal
2004). As an example, Newcastle Brown Ale is protected as a GI in the United Kingdom
because it originates in the city of Newcastle-upon-Tyne and because its “unique recipe
was developed to meet local tastes using yeast grown at the brewery and a unique
salt/water mix” (The Journal 2004). In essence, special status is conferred upon generic
terms that describe qualities and characteristics of goods based on their geographical ori-
gins. For instance, wines emanating from a particular region are granted the rights to use
the GI defining that region while winemakers producing wines outside that region are
prevented from doing so in the marketing of their goods.
Conceptual Underpinnings of Trademarks
A trademark is “any word, name, symbol or device, or any combination thereof
adopted and used by a manufacturer to identify his goods and distinguish them from
those manufactured by others” (Eagle Snacks, Inc., v. Nabisco Brands, Inc. 1985; Cohen
1991). Trademark rights historically have been granted based on “use in commerce” as
signified by a demonstrated investment in marketing actions (e.g., advertising and distri-
bution) associated with the use of such marks. Under the Trademark Revision Act, how-
ever, trademark protection can be gained prior to actual use in commerce if registrants
display evidence of a “bona fide intention to use” the mark. Under the latter system,
while trademark registrations are granted when actual usage of the mark in commerce
occurs, rights to the mark are applied retroactively to the date at which the trademark ap-
plication is filed (Cohen 1991).