by Yuan Fang (L.L.M. 2019)
The tradition of multi-agency administration for Chinese GI protection derives from the unique history of Chinese IP protection. While the multi-agency system played an important role in protecting Chinese GI at the beginning, the increasingly distinct weaknesses of the traditional regime call for reform. Comparing the GI systems of the US and EU, the US system provides a better model for the Chinese GI system because it offers more effective mechanisms to protect consumers and fairer environment for foreigners to acquire GI protection. Accordingly, China should reform its multi-agency system to a system of single agency by integrating the functions of former AQSIQ and MOA in terms of GI into CTMO (SAIC).
I. Introduction
The Chinese geographical indication (GI) system is the regulatory framework designed for Chinese GI management. The Chinese GI system is characterized by its multi-agency administration. While the system has been playing significant roles in protecting Chinese GI, the overlapping and conflicts between the different agencies’ responsibilities calls for reforms and changes. This post explores the source of these problems and potential legal solutions to address them. It consists of four parts: an introduction to the original multi-agency system for Chinese GI protection; an analysis of the need to reform the multi-agency system; a comparison between the GI systems adopted by the US and EU to analyze which could be a better fit to solve the challenges faced by the Chinese GI system; and finally, some suggestions for reforming the existing multi-agency system will be considered.
II. History of the Multi-Agency System for Chinese GI Protection
It is important to examine how the multi-agency structure of Chinese GI protection was formed and has evolved over time.
The development of the Chinese GI system is closely connected with development of the Chinese IP system in general. Due to the character of Chinese political culture, imperial China did not develop a sustained indigenous counterpart to intellectual property law, despite encouragement to do so from the West. [1] In fact, IP law in the modern sense wasn’t adopted in China until as recently as 30 years ago, when China began to appropriate IP laws from abroad.[2] Accordingly, the Trademark Law of the People’s Republic of China was adopted in 1982; IP-related issues appeared in the General Principles of the Civil Law in 1986; the Copyright Law of the People’s Republic of China was adopted in 1990; and the Patent Law of the People’s Republic of China was adopted in 2009.
The Chinese GI system similarly originated from legal borrowing. Practically speaking, the existing Chinese system for GI protection is a combination of the US and EU systems. This post will discuss how this affects its operation, and how to solve the tension created by use of two different systems.
For specific agencies in the Chinese GI system, there are some differences between pre-consolidation and post-consolidation. Prior to the consolidation of agencies, three agencies were relevant to GI protection in China: first, the Chinese Trademark Office (CTMO) (中国商标局), which is a part of the State Administration for Industry & Commerce of the People’s Republic of China (SAIC) (国家工商总局); second, the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (AQSIQ) (质检总局); and third, the Ministry of Agriculture of the People’s Republic of China (MOA) (农业部). After the consolidation of agencies, the SAIC and AQSIQ became part of the State Administration for Market Regulation (SAMR) (国家市场监督管理总局), while the MOA became the Ministry of Agriculture and Rural Affairs of the People’s Republic of China (MARA) (农业农村部). The number of agencies involved in Chinese GI protection has accordingly decreased from three to two. However, the Chinese GI system generally remains a multi-agency system.
III. Weaknesses of the Multi-Agency System in China
After looking at the history of the multi-agency system of GI protection in China, this section will focus on the weaknesses of the existing system by observing how the responsibilities of different agencies may create conflict.
As previously mentioned, the existing multi-agency system for Chinese GI protection is a combination of systems from the US and the EU. Its weakness follows from the inherent chaos of such a combination. The two systems differ considerably in their approaches to GI protection: while GI is seen as a private right in the US,[3] it is treated as a public right in the EU. Thus, while GI is protected via trademark law in the US, it is protected independently in the EU.[4] While the two systems can work well in their respective contexts, they will inevitably conflict with each other when transplanted to a third country that lacks the tradition of GI protection.
The chaos created by the combination of these two systems can be identified throughout the Chinese system. On the one hand, influenced by the US GI system, Chinese Trademark Law protects GI. Article 1 of the Trademark Law highlights the purposes of protecting GI, including “strengthening trademark administration, protecting the right to exclusively use a trademark, urging producers and dealers to guarantee the quality of goods and services, maintaining the reputation of trademarks, protecting the interests of consumer, producers and dealers, and promoting the development of the socialist market economy.”
On the other hand, influenced by the EU GI system, China also regulates GI-related issues in the AQSIQ’s Provisions on the Protection of Geographical Indication Products (“Provisions”), and MOA’s Measures for the Administration of Geographical Indications of Agricultural Products (“Measures”). Article 1 of the Provisions describes AQSIQ’s GI protection responsibilities as “effectively protecting the products of geographical indications in our country, regulating the use of names and special signs of geographical indication products, and ensuring the quality and characteristics of geographical indication products.” Article 1 of the Measures describes MOA’s GI protection responsibilities as “regularizing the use of geographical indications of agricultural products, guaranteeing the quality and characteristics of agricultural products with geographical indications and improving the market competitiveness of agricultural products.”
These examples illustrate that different agencies have different scopes of control over GI protection in China: the CTMO (SAIC) focuses on trademark management and the protection of consumers, the AQSIQ focuses on the regulation of product quality, and the MOA focuses on the quality of agricultural products.[5] However, there will unavoidably be overlapping areas between the responsibilities of different agencies. For instance, the duties of AQSIQ and MOA may conflict, since what AQSIQ regulates, the agricultural product, may fall within the scope of product, which is regulated by MOA. Additionally, while the CTMO (SAIC) is in charge of consumers, consumer protection falls under the purview of AQSIQ and MOA, as well, since the quality of agricultural and other products may affect consumer health.
Agencies’ conflicting responsibilities may lead to negative consequences both internally and externally. With respect to domestic impact, the Chinese National IP Strategy (2014-2020) emphasizes that “…geographical indications…will be effectively protected and reasonably utilized”[6] in the next five years; to achieve this, “[t]he intellectual property law enforcement and administration systems need to be strengthened.” [7] Conflicting responsibilities between agencies will not only harm the administrative system of GI protection, but also further impact the efficiency and effectiveness of GI law enforcement in China, which may eventually devalue the goal set in the Chinese National IP Strategy (2014-2020) for GI.
Externally, conflicts in responsibilities between different agencies may cause embarrassment and misunderstanding in the context of international cooperation. For instance, on May 22 and 23, 2006, a Sino-US conference about how to better protect GI under the trademark system was held in Beijing. While the United States Patent and Trademark Office (USPTO) was the sole US representative, many Chinese agencies were involved in the conference, including but not limited to the CTMO (SAIC), AQSIQ, and MOA.[8] The administrative complexity may render negotiations between China and foreign countries about GI protection less efficient.
The discussions above have illustrated the significance of making some changes to the present structure of Chinese GI system. As mentioned, formation of the multi-agency system of Chinese GI system is attributable to the combination of the US and EU systems. Perhaps choosing one of the two systems is an appropriate approach to address the existing challenges. In order to decide which system is better suited to address the issues, it is important to compare the two GI protection regimes.
IV. Comparison between US and EU Regimes for GI Protection
A. Introduction to US and EU GI Protection
The US GI administration is primarily comprised of three authorities: the USPTO, TTB, and US GI system. The most important authority regarding GI protection in the US is the Trademark Office (USPTO), which regulates GI under trademark law. One of the most significant laws to assure trademark protection in the US is the 1946 Lanham Act, which provides protection to a wide variety of GIs. [9] As in China, GIs are generally protected as a collective mark or certification mark in the US.[10] The second authority regarding GI protection in the US is the Alcohol and Tobacco Tax and Trade Bureau (TTB), which is primarily responsible for ensuring that only qualified persons engage in the alcohol beverage industry.[11] TTB has promulgated regulations to protection wines and spirits. Finally, the US GI system is characterized by its common-law protection for GIs as a certification mark, which is completely absent in China.[12]
It seems like the US GI administration is a multi-agency system as well. However, the US GI system usually has a clearer responsibility distribution than the Chinese system. Generally, registration-related issues regarding GI always go to the USPTO while the common law protection is provided for unregistered GIs[13] and the TTB oversees GI enforcement only.
The GI system of EU is different from the US because of its special political structure. Under the EU GI system, “GI” generally refers to two things: Protected Designation of Origin (PDO) and Protected Geographical Indication (PGI) .[14] Specifically, four types of products are protected by the EU GI system: agricultural products and foodstuffs,[15] wines,[16] spirits,[17] and aromatized wines.[18]
B. Comparison Between US and EU GI Systems
This section compares the US and EU GI system from two aspects: the general purpose of the GI legislation and the level of fairness to foreigners.
1. Purpose of legislation
There is a clear difference between the US and EU GI systems’ legislative purpose. While the US system’s main goal is to provide consumer protection,[19] the EU system focuses primarily on controlling GI to facilitate the development of certain industries. In fact, this distinction is a result of the tension between the two systems. Because the US treats GI as a private right, the US system focuses more on the protection of individuals. Conversely, the EU treats GI as public right, giving the authorities more power to regulate it.
The question here is whether China’s GI system should focus more on facilitating industry development or protecting consumers. For a number of reasons, it seems that contemporary China considers consumer protection more important. First, China has one of the highest levels of trademark counterfeiting in the world, revealing a need for consumer protection.[20] Second, there are many alternative ways for China to support developing industries. Even though China and the EU share similarities in terms of the richness of natural resources, which could be a ground for applying similar GI systems, China is dramatically distinctive from the EU as it has a powerful and centralized government. Leveraging its centralized government, China is able to effectively promote the development of certain industries without following the EU model.
Given the legislative intent of GI, the Chinese GI system should do more to emulate the US system instead of the EU system.
2. Level of Fairness to Foreigners
The US system is generally more attractive to foreigners than the EU system. The US generally gives foreign GIs national treatment,[21] while foreign GIs often struggle to receive the same level of enforcement in the EU.[22]
In China, fairness to foreigners in GI protection varies by agency. With respect to the CTMO (SAIC), Article 17 of the Trademark Law states that “[w]here a foreign national or a foreign enterprise applies for trademark registration in China, it shall be handled in accordance with an agreement concluded between the applicant’s country and the People’s Republic of China or an international treaty acceded to by both countries or according to the principle of reciprocity.” Generally, the Trademark Law gives foreigners national treatment in terms of GI, which is consistent with Article 3.1 of the TRIPS Agreement. Accordingly, CTMO (SAIC) has approved 91 foreign GIs for registration in China up to the end of 2017. The three countries that have the most registered GIs in China are France (38 GIs), Italy (20 GIs), and the US (14 GIs).[23]
As to the AQSIQ, the Provisions allows for the registration of foreign GIs. However, no detailed rules for foreign registration were provided until the Measures on the Protection of Foreign Geographical Indications were published in 2016. Prior to 2016, AQSIQ approval of foreign GIs was based on the Memorandum of Understanding on Geographical Indications between the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China and the General Directorate of Trade of the European Commission, signed in 2005. The AQSIQ has approved 16 foreign GIs since 2009.[24]
With regard to the MOA, Article 24 of the Measures states that the MOA “accepts applications for the registration of geographical indications of agricultural products from foreign countries, and protects them once they have been registered in the People’s Republic of China.” Nonetheless, no detailed rules have been provided for the implementation of this article.
Despite the progresses already made, the Chinese GI system’s attractiveness to foreigners is still far from satisfactory. The Chinese GI system would do well to learn more from the US system than the EU system in this regard.
V. Suggestions for Chinese GI Administration
After comparing the US and EU system, the US system arguably provides a better framework for the Chinese GI system. China is supposed to reform its multi-agency system and turn it into a system of a single agency by integrating the functions of former AQSIQ and MOA in terms of GI into CTMO (SAIC). Trademark Law is designed to protect consumers and generally treats foreign GIs fairly, and this reform is expected to serve the purpose of both of those ends simultaneously.
[1] William P. Alford, To Steal a Book is an Elegant Offense: Intellectual Property Law in Chinese Civilization 2 (1995).
[2] Id at 3.
[3] Lynne Beresford, Geographical Indications: The Current Landscape, 17 Fordham Intell. Prop. Media & Ent. L.J. 979, 979 (2007).
[4] Molly Torsen, Apples Oranges (and Wine): Why the International Conversation Regarding Geographic Indications is at a Standstill, 87 J. Pat. & Trademark Off. Soc’y 31, 31-32 (2005).
[5] Xiaobing Wang & Xiuqin Lin, A Comparative Study of Protection of Geographical Indications in China and the EU, 3 Journal of Xiamen University (Arts & Social Sciences) 125, 126 (2012).
[6] WIPO, Outline of the National Intellectual Property Strategy (2014-2020), at 3.
[7] Id, at 4.
[8] Anwei Liu, Strengthening the GI Protection under the Trademark System: Summary of the Sino-US conference on GI Protection, 10 Biweekly of Administration for Industry and Commerce 48, 48 (2006).
[9] Jeff Young, The Lanham Act and Geographical Indications Used on or in Connection with Wines or Spirits, 19 J. Contemp. Legal Issues 95, 95-98(2010).
[10] 15 U.S.C.§ 1054 (2007).
[11] TTB, Our Mission, https://ttb.gov/consumer/responsibilities.shtml (last visited Nov.28, 2018).
[12] Institut National Des Appellations v. Brown-Forman Corp., 47 U.S.P.Q.2d 1875, 1884 (T.T.A.B. 1998).
[13] Id.
[14] Natalie Nathon, Geographical Indications in the EU, https://www.moag.gov.il/yhidotmisrad/research_econo
my_strategy/publication/2018/Documents/NATHON_EU_GI_policy.pdf (Nov.28, 2018).
[15] Protected under Regulation (EU) No 1151/2012.
[16] Protected under Regulation (EC) No 1308/2013.
[17] Protected under Regulation (EC) No 110/2008.
[18] Protected under Regulation (EU) No 251/2014.
[19] Qi Zhang, Comparison and Reference Significance of the Protection of Geographical Indications in EU and America, Thesis for Master Degree, 2015.
[20] Martin K. Dimitrov, Privacy and the State: The Politics of Intellectual Property Rights in China 3 (2009).
[21] USPTO, Geographical Indication Protection in the United States, https://www.uspto.gov/sites/default/files/w
eb/offices/dcom/olia/globalip/pdf/gi_system.pdf (last visited Nov.28, 2018).
[22] A complaint brought by the US against the EC on the protection of GI for agricultural products and foodstuffs can be used to illustrate the different treatment to foreigners given by the EU system. In this case, the US claimed that Regulation (EC) 2081/92 was inconsistent with the EC’s obligations under the TRIPS Agreement and the GATT 1994 because it discriminates against foreign nationals and foreign products with respect to GI protection. Article 3.1 of the TRIPS Agreement states that “each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property…” On April 19, 2005, the WTO DSB ruled in favor of the US.
[23] CTMO/SAIC, Annual Development Report on China’s Trademark Strategy 2017, http://sbj.saic.gov.cn/gzdt/
201805/P020180510371114049422.pdf (last visited Nov.28, 2018).
[24] AQSIQ, Overseas Geographical Indication Products Protected in China, http://kjs.aqsiq.gov.cn/dlbzcpbhwz/
swdlbzbh/zh/ (last visited Nov.28, 2018).
