Coffee and chocolate – can we help developing country farmers through geographical indications? Justin Hughes A report prepared for the International Intellectual Property Institute, Washington, D.C. 2009 Coffee and chocolate – can we help developing country farmers through geographical indications? Justin Hughes♦ “Coffee is simply an export crop to be consumed elsewhere. A major exception is when quality is embedded in a geographical origin (national, regional, local, or single-estate). When this is the case, producers and their cooperatives, associations or governments create symbolic attributes. It is not only the material coffee that is sold, but also a place, a story, sometimes a sense of exoticism.” 1 Daviron & Ponte OUTLINE INTRODUCTION AND EXECUTIVE SUMMARY ................................................................................4 PART I – AN OVERVIEW OF THE LAW AND ECONOMICS OF GEOGRAPHICAL INDICATIONS......................11 A. The 1958 Lisbon Agreement on the Protection of Appellations of Origin and their International Registration.................................................................................................................11 B. The TRIPS Agreement and continued negotiations .......................................................13 C. Domestic law in producer states?.............................................................................22 1. GI laws in sub-Saharan Africa ................................................................................23 2. Domestic GI laws in Latin American and Caribbean countries.........................................25 D. The economic impact of GIs – rhetoric and (largely unknown) reality ...............................28 PART II - REAL WORLD PRACTICES IN COFFEE AND COCOA ............................................................38 A. Structural and macroeconomic issues directly related to GI-based marketing of coffee and cocoa products .....................................................................................................................44 B. Appreciating coffee, cocoa, their terroir, and their markets .............................................51 PART III - WHAT CAN BE DONE? – AVOIDING SIMPLE ERRORS, ADVOCATING INCREMENTAL STEPS ............60 A. Understanding that legal protection and successful marketing are completely distinct issues....61 B. Understanding the limited role of GIs in protecting traditional knowledge ..........................70 C. Self-marketing versus marketing programs that leverage corporate interest -- and the push toward even greater geographic specification .................................................................................80 1. The marketing of Colombian coffee .........................................................................81 2. Corporate marketing of coffee and cocoa GIs..............................................................88 ♦ Professor of Law, Cardozo Law School, New York, New York, USA. This study was prepared under a grant from the International Intellectual Property Institute (IIPI). © Copyright Justin Hughes and IIPI. Early work in this study benefited from the research of Julien Bourrouilhou. Thanks to Jose-Juan Mendez for his assistance with points on Mexican law. 1 BENOIT DAVIRON AND STEFANO PONTE, THE COFFEE PARADOX – GLOBAL MARKETS, COMMODITY TRADE, AND THE ELUSIVE PROMISE OF DEVELOPMENT 129 (Zed Books, 2005) D. Governmental quality control for developing country coffee and cocoas.............................97 E. Locating GI rights with producers..........................................................................104 1. The 2006 Ethiopia-Starbucks dispute......................................................................106 2. Locating GI rights with farmers because of non-transparent public institutions...................115 IV. THE IMPACT OF “ARTICLE 23 EXTENSION” FOR COFFEE AND COCOA PRODUCERS -- STRONGER GI RIGHTS VERSUS BETTER ENFORCEMENT ................................................................................123 A. The actual nature of Article 23 protection for GIs.......................................................124 B. The impact of Article 23 “extension” on coffees and cocoas/chocolates ...........................127 C. The question of enforcement – public and private.......................................................131 CONCLUSION.................................................................................................................134 a-ip27E.docx/page 3 INTRODUCTION AND EXECUTIVE SUMMARY The changes in the production, distribution, and consumption of food that occurred in the nineteenth and twentieth centuries are commonly described with a few key terms: homogenization, commodification, standardization, and consistency. Adoption of irrigation, fertilization, and pesticide practices made harvests more consistent; vast changes in distribution produced temporal homogenization in the sense that fresh strawberries, grapes, and apples became available year around whether they come from California, Ohio, Chile, Spain, or New Zealand. Commodification of basic products – establishing quality and measurement standards for wheat, corn, flour, eggs, dairy products, seafood, and all other kinds of ingredients for our cooking – became the basis for industrial scale production of processed foods, permitting standardization in the final product consumed, whether it is a packaged juice box on a grocery store shelf in Amsterdam or Atlanta – or the burger made right before your eyes at a Wendy's in Kansas City or Kuala Lumpur. For many decades, there have also been counter-currents against this homogenization and commodification of food culture. Today consumers in wealthy countries continue to look for ways to differentiate their food intakes from mainstream, homogenized supplies, seeking better or special qualities in their products. Some of the differentiating characteristics being sought by these consumers are endogenous to the product, i.e. “organic,” “natural,” or “without RBH.” Some of the characteristics being sought by consumers are exogenous to the product, i.e. “fair trade” or “local” [where the sought characteristic is minimal transportation, not a particular locale]. Some of the distinguishing characteristics – and, therefore, identifiers -- for food are arguably both endogenous and exogenous. For example, “hallal” or “kosher” for meat imparts exogenous information about minimizing the pain the animal experienced in slaughter, but can also impart endogenous information about sanitation. “Shade grown” imparts principally exogenous information – the cultivation occurs in a way that permits a a-ip27E.docx/page 4 broader, contemporaneous eco-system – but can also impart endogenous information if one believes that shade-grown plants produce a different quality or taste. Perhaps the greatest force in de-homogenizing and decommodifying food markets today is increasing consumer interest in products of distinct geographic origins. This is visible in supermarkets more and more displaying the source of produce (California, New Zealand, etc.) and in farmers’ markets systematically describing the location of vendor farms. But no geographic identifiers for food are more interesting for their mix of characteristics both endogenous and exogenous to the product in question than “geographical indications,” a special form of intellectual property in which the “indication” – the markings or label -- identifies a good as originating in a particular territory of a Member and that the good has certain qualities, reputation or other characteristics that are essentially attributable to that geographical origin. Most countries are now obliged to provide legal protection for “geographical indication” (GIs) through the TRIPS Agreement and membership in the WTO, but unlike the laws on patents, copyrights, and trademarks, the “GI” is a concept of public international law and does not exist as such in most domestic laws. Instead, a great variety of legal tools are used by national laws to provide protection to GIs. France continues its system of appellations d’origine controlée (AOCs); the Italians and Spanish have parallel systems (Denominazione di origine controllata, denominación de origen); the European Union merges French and German juridical notions with its bifurcated system of Protected Designations of Origin and Protected Geographical Indications; the US, Canada, and Japan provide GI protection principally through certification mark law; Mexico has long-standing appellations law in its Industrial Property Code; the Brazilian, Chinese, and Indians have recently implemented special GI laws (in response to TRIPs); and to complicate things further, most major wine-producing jurisdictions have special laws on geographic names used in conjunction with wines and spirits (EU, US, Australia, South Africa, Chile). From a comparative law perspective, GI laws around the world make global legal norms for patent and copyright law look like tidy, harmonized packages. a-ip27E.docx/page 5 Indeed, unlike in copyright and patent, TRIPS itself recognizes the uncompleted nature of the GI legal norms it prescribes to WTO Members by calling for further negotiations on GIs in several distinct ways. Since the Marrakesh Agreements, the EU – driven by France, Italy, and Spain – has pushed the hardest for strengthening and extending GI law, both in multilateral for a and in its bilateral trade dealings. For the European Commission, GIs are – in the words of two