WIPO NATIONAL SEMINAR ON ENHANCING AWARENESS AND BUILDING CAPACITY OF SMES TO BENEFIT FROM THE INTELLECTUAL PROPERTY SYSTEM

Kuala Lumpur, Malaysia, Sep 7 and 8, 2006

Marketing and Branding Strategies:

The Role of Collective Marks, Certification Marks and Geographical Indications for Business Success

Lien Verbauwhede Koglin

Consultant, SMEs Division World Intellectual Property Organization (WIPO)

1.

Introduction

3

The Challenge of Marketing for SMEs

• Some products have to face other products on the market that are often similar or almost identical

competition

of • Need to find mechanism that creates and maintains

loyal clientele

4

Choosing a textile product

•

Materials and texture

: – quality silk, pure wool – vegetable colors •

Quality:

– colorfastness – easy to clean – density of the knots •

Design:

– traditional designs – fashion trends – unique •

Manufacturing technique:

– w eaving/knitting technique – hand woven – woven by women •

Reputation

5

Marketing a textile product

•

Materials and texture

•

Quality

•

Manufacturing technique

•

Design

•

Give information

•

Send a message

•

Reputation

•

Create image that differentiates you

•

To maintain credibility, confidence and loyalty

6

Role of IP in Marketing

• Consumers are unable to assess the quality of products on the market • Trademarks, collective marks, certifications and geographical indications (GIs) refer to the

reputation

and to certain

qualities

of the products • Trust in the mark/GI is the reason why consumers may be willing to pay more 7

IP and Marketing

Trademarks Individual marketing

• • •

Collective marks Certification marks GIs

Joint marketing

8

• Acting individually, it is often difficult to gain recognition for your products in the marketplace • Some knowledge and production techniques belong to entire communities and can therefore hardly be attributed to a particular individual

“If you can’t beat them, join them” SMEs have grouped in associations ( organized geographically or per industrial sector) Working collectively, SMEs can benefit from the advantages of a joint undertaking.

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2.

Certification Marks

My: “certification trade marks” - Section 56 TMA 10

What is a certification mark?

• Sign indicating that the goods/services have been

certified

by an independent body in relation to one or more characteristics – Origin, material, mode of manufacture, quality, accuracy, etc.

• Owner is usually an

independent

enterprise, institution, governmental entity, etc. that is

competent

products concerned (My: ‘person’) to certify the • Registered in trademarks register 11

How does certification mark work?

•

Rules of use

– Cases in which the owner is to certify the goods/services • quality, composition, other characteristics – Cases in which the owner is to authorize the use – Other provisions required by Registrar • e.g. control measures, sanctions •

My: Mark must be to the public advantage

•

Authorization to use

– anyone who meets with the prescribed standards – not confined to membership – generally: licence agreement (fee) – owner not allowed to use •

Control

12

Benefits

• For Consumers

: – Guarantee for consumers of certain quality

• For SMEs

: – Benefit from the confidence that consumers place in users of certification mark – Strengthen reputation 13

• For example, certify that:  Product is handmade  Certain ecological requirements have been respected in the production procedure  No children were employed in the production process  Products have been produced in specific geographical region  Products are made 100% of recyclable materials  Products are made by indigenous group 14

Case Study : “RUGMARK”

• Global non-profit organization working to end child labor and offer educational opportunities for children in India, Nepal and Pakistan • RUGMARK label is assurance that no illegal child labor was employed in the manufacture of a carpet or rug 15

Case Study : “RUGMARK”

• To be certified by RUGMARK, carpet-manufacturers sign legally binding contract to: – Produce carpets without illegal child labor – Register all looms with the RUGMARK Foundation – Allow access to looms for unannounced inspections • Carpet looms are monitored regularly by RUGMARK • Each labeled carpet is individually numbered  enables origin to be traced back to the loom on which is was produced  also protects against counterfeit labels 16

Case Study:

“WOOLMARK”

– Registered by Woolmark Company – Quality assurance symbol denoting that the products on which it is applied are made from 100% wool and comply with strict performance specification set down by the Woolmark Company – Registered in over 140 countries 17

“Through ownership and licensing of the Woolmark, we provide unique worldwide quality endorsement. Our brands and symbols are protected by rigorous and extensive control checks and recognized globally as unrivalled signs of quality and performance.

If a wool product carries our brands, it carries our guarantee of product quality.

”

18

Case Study:

“TOI IHO”

• Exciting initiative for Maori artisans, artists and businesses • Denotes that products are authentic quality indigenous Maori arts and crafts • The creation of the mark was facilitated by Te Waka Toi, the Maori arts board of Creative New Zealand, in consultation with Maori artists.

19

Case Study:

“CRAFTMARK”

– Registered by the All India Artisans and Craftworkers Welfare Association (AIACA) – Logo symbolizes ‘threads’ from craft product. Also metaphor for the hands of the craft worker.

– Certifies that product is genuine Indian handicraft or handloom 20

– Minimum standards + norms for labeling – Fee based on turnover of the applicant – Increases consumer awareness of distinct handicraft traditions - AIACA is working towards building the Craftmark into a strong brand - national advertising campaign - in-store displays and posters - direct mailing to consumers - tying up with international craft support organizations to publicize the Craftmark in other countries - Website: www.craftmark.org

21

Case Study:

“SIRIMLINK”

•

SIRIMLINK

provides access to technical information, stored in SIRIM – Malaysian Standards – Malaysian Patents – Technical Abstracts from journals – Malaysian Experts in Science and Technology, etc • Owner = Sirim Berhad (government owned company) • Logo can be used by? Rules of Use?

• Certifies what?

22

Case Study:

“ VETERINARY HEALTH MARK ”

– Awarded under the Veterinary Inspection and Accreditation Program of the Department of Veterinary Services (DVS), Ministry of Agriculture, Malaysia – Given to plants processing livestock products 23

– Accredited plants allowed to imprint the logo on the label of approved products / packaging material – Benefits: • Consumer confidence on food safety • marketing tool • easier acceptance in applications for access to foreign markets 24

3.

Collective Marks

My: not available 25

What is a collective mark?

• Sign capable of distinguishing the origin or any other

common characteristics

of

different enterprises

under the

control

which use the sign of the registered owner • Typically, the owner of collective mark is an

association

of which the producers are members • Registered as such in trademarks registry 26

How does collective mark work?

•

Rules of use

– persons authorized to use – criteria for membership – conditions of use • e.g. particular features/qualities of the products – sanctions against misuse •

Authorization to use

– membership – application or automatic – comply with the rules •

Control

27

•

Thus, function of collective mark is to INFORM the customers :

–

About the origin of the products

• e.g. ceramic artisan, member of a specific association in Thailand –

About a level of quality or accuracy, geographical origin, or other features set by the association

28

Benefits for SMEs

1.

Economies of scale

(registration cost, advertising campaign, enforcement, etc.) 2.

Reputation

acquired on the basis of common origin or other characteristics of the products made by different producers/traders 3. May facilitate

cooperation

producers/traders amongst local 29

4. Creation of collective mark hand in hand with development of certain standards and criteria (rules) and common strategy   collective marks can become powerful tool for

local development

harmonization of products/services, enhancement of

quality

 no licenses 30

Example : “

Interflora

” • To buy, order and send flowers at almost anywhere in the world • > 70.000 florists in 150 countries • emblem : Mercurio with flowers in hand • Slogan: “Say it with flowers" • Guarantees freshness, flower quality and value of every Interflora relay order 31

CASE STUDY : “La Chamba”

32

Project “La Chamba, Tolima” The project • 3 municipalities: El Guamo, Flandes, El Espinal • Population: 12.100 inhabitants • 1.300 ceramic artisans (10%) • 284 workshops • 70% women • 12% without formal eduction • 21% without public services •

Project “La Chamba, Tolima” The product

Added value:

• traditional know-how transferred from generation to generation • 89%: handwork or with simple tools 34

Project “La Chamba, Tolima” Organization

Problems:

• • • • little enterprise management capacity paternalism individual leaders lack of organizational structure • • •

Solution:

cooperation development of enterprise management capacity common strategy 35

Project “La Chamba, Tolima”

Marketing Problem :

• •

Added value (handmade, tradition, quality) of the product not advertised Need to find new clients, enter new markets Solution:

• • •

Certification “Hecho a Mano” (handmade) Creation of culture of CONSISTENT QUALITY Collective Mark (joint project WIPO)

36

Project “La Chamba, Tolima” COLLECTIVE MARK • • •

Association: Members allowed to use the collective mark Exchange of experiences Joint advertising and promotion

• •

Regulation of use: Production process

glazing) (mine extraction, preparation of clay, moulding, heating,

Quality control and inspection



homogeneous products

• • • • •

Objectives: Strenghten image of Chamba ceramics Reputation of consistent quality and tradition Differentiate on the market Chamba ceramics from other ceramics Preserve cultural heritage Foster commercialization

37

Collective Mark Certification

•Only members that comply •Anyone who complies •Control by association •

Control

by independent entity: stronger •Simple authorization •Authorization through license agreement •Free use •Fee •Owner allowed to use •Owner not allowed to use •

Cooperation

38

4.

Geographical Indications

My: Geographical Indications Act 2000 39

What is a GI?

• Sign used on goods that have a specific

geographical origin reputation

and possess

qualities

that are due to that place of origin or a • Source identifiers • Indicators of quality • Not created. Can only be recognized 40

• Most commonly, consists of the name of the place of origin of the goods • Country, region, city • E.g. Champagne (France), Havana (Cuba) • In some countries : can also be figurative sign • E.g. Eiffel tower, Egyptian pyramid • E.g. birds, animals associated with a place

Matterhorn, Switzerland Eiffel Tower, Paris Tower Bridge, London

41

How does a GI work?

•

Authorization to use

– Collective right of use – Each enterprise located in the area has right to use • For products originating from that area 

LINK

• Possibly subject to certain

quality requirements

•

Link between product and place

• Place where product is produced (industrial products, crafts) • Place where product is extracted (clay, salt) • Place where product is elaborated (liquor,cheese) 42

• Unauthorized persons may not use GIs if such use is likely to

mislead

the true origin of the product the public as to • • • for not originating from geographical place for not complying with prescribed quality standards Stronger protection for wines & spirits • – – –

Sanctions

: Court injunctions preventing unauthorized use Payment of damages Fines – Imprisonment 43

GI – Who does what?

Government:

– supplies the legal framework – approves GIs, verifies compliance – “external” (independent) control system + enforcement

Producers groupings:

– talk to government – help define the mandatory specifications

(book of requirements)

to be met – ‘’internal”control 44

Typical examples:

•

Agricultural products

that have qualities that derive from their place of production and are influenced by specific local factors, such as climate, type of soil, altitude, etc – E.g. wine, champagne, cognac, port, sherry, whiskey – E.g. cheese, yoghurt – E.g. olive oil, ham, potatoes, honey, rice 45

Typical examples:

• Also:

handicrafts

and

medium-tech goods

– E.g. ‘Hereke’ (Turkey) for carpets – E.g. ‘Limoges’ (France) for porcelain – E.g. ‘Swiss’ for watches – E.g. ‘Arita’ (Japan) for ceramics 46

Examples in Asia:

Laos

: • Coffee and Green tea from Paksong • Silk from Pak Eum • Algea from Luang Prabang • Benzoin from Laos

Indonesia

: • Tobacco from Deli (Sumatra) • Cocoa from Bone Bone • Coffee from Kintanami (Bali) or Toraja • Clove from Ternate

Benzoin raisins clove

47

Examples in Asia:

Vietnam

: • Pepper from Phu Quoc • Pomelo from Nam Roi • Tan Lam Coffee

Cambodia

: • Khampot Pepper • Prahoc • Durian

Philippines

: • Dried mangos from Cebu

Pomelo Nam Roi durian Cebu mango

48

Case Study:

“Sarawak pepper”

- Exported throughout the world over the last 100 years - Gained international recognition by chefs and gourmets - Distinctive flavour and taste through years of agro-research Sarawak’s tropical climate and fertile hill slopes are ideal for pepper cultivation 49

Geographical Indications No:

GI03-00001

Class: 3 Name of Registered Proprietor: Pepper Marketing Board Registered From: 4th day of November 2003 Expiry Date: 3rd day of November 2013 Goods: In respect of the following goods SARAWAK PEPPER IN ANY FORMS (WHOLE, GROUND, PICKLED, ETC). ALL GRADED PEPPER, VALUE ADDED PEPPER PRODUCTS AND PEPPER BASED PRODUCTS FROM MALAYSIA 50

Quality, Reputation or Other Characteristic

Sarawak, the largest state in Malaysia is an establish producer of “King Of Spice”-Pepper, where about 98% of pepper production in Malaysia comes from Sarawak. Pepper cultivation in Sarawak was commercialized by the White Rajah Charles Brooke with the introduction of ‘Gambier and Pepper Proclamation’* in the 1870’s. Ironically, Sarawak a latecomer, went on to become a significant producer in world pepper industry. Starting with a modest output of 4 tonnes* in 1870s, pepper production now averages 30,000 tonnes a year (over 90% is for export) and in 2002, Malaysia was the fourth biggest pepper exporter in the world. Currently, there are about 70,000 pepper farmers throughout Sarawak and their cultivation covered about 14,000 hectares.

Sarawak Pepper is synonymous with quality in the spice trade and it has been recognized in the international market as one of the high quality pepper. Nowadays, Sarawak Pepper Sarawak value-added pepper such as Creamy White Pepper (CWP), Mikrokleen (MK) and Naturally Clean Pepper (NCP) are well accepted, particularly by clients who would not compromise on quality. (Refer to the brochures on CWP, MK and NCP and Grade Specification of Sarawak Pepper attached). In this respect, Pepper Marketing Board (PMB) as one of the main government agencies entrusted with the development of the pepper industry in Malaysia has to ensure that only quality Sarawak Pepper will be exported to overseas.

In order to enhance buyers confidence towards Sarawak Pepper, the Board has embarked on efforts to improve the quality of Sarawak Pepper right from the farm level up to the export level. In 2002, the board was awarded with SAM ISO 17025 accreditation and ISO 9001:2000 for Testing Laboratory and Statutory Grading respectively. This recognition has to put PMB on the fast track of pepper industry by having a testing laboratory and grading unit with worldwide recognition.

51

How is a GI protected?

•

National

•

Regional

•

International

52

Protection on national level

–

Specific title of protection

• Registration with IP office (Russia) • Decree (France) • Special laws for the protection of GIs (India, Malaysia) – Act of public law – Defines area of production and production standards – Enforcement through public law bodies bodies etc) (fair trading bodies, consumer protection –

Unregistered: through Passing-off, Unfair Competition, Consumer Protection laws

• if reputation + misleading • Pass off: e.g. Scotch whisky – Peter Scot in India • Cons prot: e.g. ‘made in Japan’; Egyptian cotton – Only successful if you can prove damages (if goodwill) – Protection only effective between parties of the proceedings. Entitlement to protection of given GI must be demonstrated every time enforcement is sought.

53

Protection on national level

–

Certification marks or collective marks

• May certify or indicate origin of products • Cert: e.g. in the U.S.A.: Darjeeling, Swiss, Stilton • Coll: e.g. Japan; agricultural label in France 54

Protection on international level

– No legally binding international register for all GIs – Bilateral agreements • e.g. EU-Bulgaria for wine names – International treaties 55

– International treaties

•

TRIPS:

– minimum standard of protection for WTO members – if misleading or act of unfair competition – enhanced level of protection for wines and spirits – no protection if GI is generic term for the goods in the member state •

Lisbon:

– international registration system – member countries must prohibit imitations, including terms like “type” or “kind” – cannot become generic, as long as protected in country of origin 56

Benefits for SMEs

•

GIs shift focus of production to quality



increased production



local job creation

•

Reward producers with higher income in return for efforts to improve quality

•

Provide consumers with high-quality products whose origin and mode of production is guaranteed

57

Disadvantages

–

Inconsistent protection

• Absence of GI system in many countries • Civil law – Registration – Only similar goods • Common law – Repution enough (e.g. Champagne in India) – Also dissimilar products • Additional protection for wines and spirits –

GIs may become generic terms

(e.g. Chablis in America, China for porcelain) 58

GI Certification

•Protects indication that links product’s origin and quality/reputation based on that origin •Protects certification of product’s particular characteristics (not necessarily origin) •Most often: public right; owner= State • Most often: private right; owner = trade association or producer group •Anyone can use •License needed •Proscribed list of unauthorized actions •Protection against those who don’t have license •Action: private + public •Action: owner of certification 59

4.

Conclusions

60

• Trademark is powerful instrument to differentiate your individual products from those of your competitors • However, in order to be effective (strong reputation), the enterprise in question must have a high level of organization and production • Collective marks, certification marks and GIs may be useful (additional) tools to help enterprises overcome the disadvantages associated with their small size and isolation in the marketplace 61

Economic benefits of collective marks, certification marks and GIs

•

Capable to acquire a high reputation

•

Protection can be maintained indefinitely

•

No monopoly, but simply limit group of people who can use a specific symbol

•

Protect goodwill and reputation acquired by a group of producers over centuries

62

IP and Marketing

Trademarks

• • •

Collective marks Certification marks GIs Individual marketing

Joint marketing

•

Origin: enterprise

•

Individual reputation

•

Origin: geographical

•

Common reputation, characteristics, qualities

63

Lien Verbauwhede Koglin WIPO, SMEs Division: www.wipo.int/sme/

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