Effective protective appellation of origin in Peru
An appellation of origin is a special kind of geographical indication used on products which have a specific quality or characteristics that are essentially due to the geographical environment in which they are produced. These special characteristics imbue these products with a unique and distinctive quality.
In spite of the fact they are not distinctive signs in the strict sense, they generate rights, and the use of the appellation by any other marketer is prohibited.
In other words, an appellation of origin is not a mark but it generates rights in accordance with international treaties and national laws of each country and it is used to legally protect products that are manufactured in a given area against producers from other places who would take advantage of the good name that the originals have.
Producers who qualify for the appellation of origin are obliged to maintain the highest quality and traditional production of the product. In the case of wine, for example, it is required to use the traditional local grape. Also, there is often a regulatory public body which allows producers that fulfil the necessary requirements to use the appellation of origin.
The most important advantage of the appellation of origin is that it guarantees the consumer a constant quality level and some specific characteristics. In return, producers get legal protection against the production or processing of such products in other areas, even those which use the same ingredients and procedures, providing price pressure on those products. It also encourages the organisation of the sector and facilitates access for producers to national and international markets.
In Peru, only appellations of origin recognised by the National Institute for the Defense of Competition and IP (INDECOPI) are protected. In order for appellations of origin from foreign countries to be protected, a treaty between Peru and the country concerned is required.
INDECOPI has issued a welcome resolution granting indirect protection to the foreign appellation of origin ‘Solingen’, which was registered as a trademark for protecting products made from a special type of steel on behalf of Industrie- und Handelskammer Wuppertal-Solingen-Remscheid from Germany.
It does not make sense to annul a trademark which is also an appellation of origin, even if it is stipulated in the IP law.
Because of the filing of many complaints against importers of products under this brand, one of the accused, a repeat offender, filed a nullity action against the brand Solingen, stating that it was a geographical indication. The curious thing was that its grounds were very contradictory since the infringing products do not came from Solingen in Germany but from China. Therefore, it was not a correct geographical indication; in fact, the infringing goods had misleading geographical indications, and therefore could not create rights in any way.
A foreign appellation of origin needs to benefit from a treaty between the country of origin and Peru, but in this case no treaty exists. INDECOPI, specifically the second instance Administrative IP Office, stated that in spite of the fact that the designation of origin Solingen is not protected in Peru, and because not everyone in Peru knew the existence of this place, the IP office decided to keep the word ‘Solingen’ as a trademark, granting the exclusive use of it to our client, allowing the true owner of the name to continue denouncing unscrupulous traders who import products from China under a fake appellation of origin.
The first instance administrative court had agreed with the nullity action of the trademark, but the second instance changed this verdict because it does not make sense to annul a trademark which is also an appellation of origin, even if it is stipulated in the IP law. We point out that although it is stipulated in the act, the rules should not be always applied literally, but should be considered in the context of the object and purpose of the law. This point was taken by the court of INDECOPI.
Our main ground and also INDECOPI’s opinion, was that if the brand Solingen was annulled, this word would be without protection, vulnerable to any pirate or counterfeiter who could use this sign to mislead consumers. Therefore, annulling the trademark would open the door to the pirates.
We can say that now the brand Solingen has a better protection because any ground based on the lack of distinctiveness of the mark would be discharged in advance by the division of IP of INDECOPI.
We hope INDECOPI continues its efforts to protect the market, protecting diligent traders and fighting bad actors.
Alain C. Delion is legal manager at Estudio Delion. He can be contacted at: acd@estudiodelion.com.pe
Marcos Fernández-Dávila is a legal adviser at Estudio Delion. He can be contacted at: mfd_legal@estudiodelion.com.pe
