whisky
1 September 2013Trademarks

Scotch guard: how to protect whisky

For more 100 years Scotland has been at the forefront of whisky production. However, as its popularity grows, whisky has been increasingly targeted by counterfeiters looking to feed off its success.

What is the SWA responsible for in terms of IP?

Our principal remit is to both protect and promote Scotch whisky. From a protection point of view the legal affairs department will take control. This can take the form of litigation, administrative complaints, trademark watching or giving advice to our member companies and major producers on labelling and compliance issues. We also deal with trade barriers and government issues around the world.

What is the prime focus in terms of protecting IP rights?

Our main goal is to protect Scotch whisky as a geographical indication (GI) and we have sought to register it as such in countries where there is an existing register. Where there is not a register we are lobbying for specific protection in the national legislation of those jurisdictions. As it stands, Scotch whisky has some form of protection in a third of the world’s countries.

Where is Scotch whisky protected by a GI?

We have specific GI protection in 11 countries around the world that have the register but it also has protection as a GI throughout the EU by virtue of the Spirit Drinks Regulation. Some countries have also implemented their obligations under the WTO TRIPS Agreement which states that a product should be protected against the use of any means that indicate or suggest a GI. Furthermore, it is also recognised and protected in the national laws of 14 other countries and further applications are in hand.

What are the benefits of the GI indicator?

Where there is specific GI protection it makes our job much easier. When you don’t have specific protection you have to prove the brand’s reputation before the courts. If you have that protection you no longer need to because it’s already protected in national law. Overall, it makes for cheaper and more cost-effective action but also gives us the angle to use local enforcement authorities so we can make a complaint to them to take action.

What are the drawbacks of not obtaining protection?

In markets where we don’t have protection it can be uphill struggle as you have to fall back on general laws of unfair competition and consumer protection. In some jurisdictions the legal system can be a bit shaky. Aside from having to prove its reputation we also need to prove what the description ‘Scotch whisky’ itself means, which also adds costs and complexity to the case.

How has the Scotch whisky brand been misused around the world?

One of the most obvious ways to misuse a brand or GI is to put a specific Scotch whisky description on a fake product. However, what we are seeing more of is the use of other indicators of Scottish origin. Whereas it may not be described specifically as ‘Scotch’ whisky an image could be used showing a bagpiper or a kilt, and the consumer could wrongly assume it is from Scotland.

It’s become a very frequent occurrence and we are busy tackling this. The issue is recognised in IP law on a global level through the TRIPS Agreement so the ball is very much in our court when it comes to deciding what to take action on.

What is the system for monitoring trademark applications?

We have a trademark watching service which keeps a close eye on this. Around 2,000 notices for trademark applications pass through every month and we currently have around 400 active oppositions.

If a trademark is applied for including the word whisky, and we think it has a Scottish association, we believe the use could be deceptive and will oppose it. The watching service will look out for the specific trademark ‘Scotch whisky’ but also linked words and images. They are given a list of names to watch out for and know what appears frequently.

How are you made aware of suspected infringements?

Five lawyers in the department deal with different countries and use a variety of mechanisms such as the use of local lawyers and investigators. We also check the markets of problem areas on a frequent basis. Often problems are highlighted by our members who are checking shelves to see if their product is on sale. However, a large chunk of our business also comes from consumers who report having spotted a product abroad claiming to be Scotch whisky.

What are some of the most problematic jurisdictions?

This changes frequently. We have had a number of problems with China where Scotch whisky became very popular very quickly. However, the Chinese authorities have been excellent at handling complaints. We have had a GI registered there and a collective trademark; having dual registrations has enabled us to go direct to authorities and have strong action carried out against counterfeiters.

Australia has also posed a problem which has surprised many people. Since 2005 we’ve had to deal with 40 brands of fake Scotch whisky being produced by a host of local companies. In the year 2000 Australia deregulated a lot of its food standards definitions and removed a specific definition of Scotch whisky from its legislation, leaving a very vague definition of whisky.

In one case we sued a brand called Stirling Scotch Whisky which had sold at least 50,000 fake bottles. Assuming each brand owner sold the equivalent that would be at least two million infringing bottles in the Australian market alone.

Why has the problem increased?

Scotch whisky has been exported for more than 100 years and has a huge reputation around the world. Last year’s exports were in the region of £4.3 billion with more than a billion bottles exported from the UK. With that kind of reputation and fame counterfeiters are inevitably trying to come on the back of that and feed off its success and reputation.

How does Scotch whisky compete with other brands?

In any market where it is sold we ensure that all products described as whisky comply with the definition of whisky for that country, so we are protecting the whisky category in that country as well as stopping infringements on the Scotch brand.

We do this because we must compete against any other product described as whisky. So if Brazilian whisky doesn’t comply with the Brazilian definition of whisky we want to take action even though it is not being passed off as Scotch whisky.

What challenges does the organisation face?

We want to see Scotch whisky protected in all 200 countries around the world in which it is sold. Currently, we have around a third of the globe covered with some form of protection, whether it’s in national law, a GI registration scheme or a EU bilateral agreement, but there is still work to be done.

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More on this story

Trademarks
2 July 2015   A legal adviser to the organisation that protects Scotch whisky has told an industry event that while China was previously a hub for counterfeits, the problem has now moved “closer to home” and infringements are more common on European shores.