Multilateral Matters #5: The Protection of Country Names and its Contribution to Development: A Brief Introduction to the Intellectual Property Issues

Photo September 28 2019-2Wend Wendland, Adjunct Professor, Department of Commercial Law, Faculty of Law, University of Cape Town, wend.wendland@uct.ac.za, @WendWendland

Multilateral Matters

An occasional blog on international developments related to intellectual property, innovation, development and public policy

Key points

Country names are valuable intangible assets, and developing countries can exploit their own names for economic and cultural benefit.

Country names are, however, vulnerable to misappropriation and exploitation by entities which have no connection with the country concerned.

This situation is exacerbated by the evolution of new top-level domain names, with countries struggling to prevent the misappropriation of their country names in the domain name system.

Country names receive some indirect protection against their registration as trademarks but are otherwise not adequately protected within the international intellectual property (IP) system.

Views differ as to whether country names should be regarded as part of some sort of “geographic commons” and protected defensively against misappropriation using conventional trademark principles, or whether they require positive sui generis protection as integral parts of a country’s identity and sovereignty.

Most people seem to agree, however, that it is in the public interest for country and other geographical names to remain available for use by entities connected with the countries and geographical areas concerned.

Complex multilateral discussions are underway at the World Intellectual Property Organization (WIPO) in Geneva on this topic. Several proposals from a mix of developing and developed countries are on the table.

Introduction

While there is as yet no international agreement on what a “country name” is exactly, for present purposes the concept covers the short name of a State or the name that is in common use, and may also include the country’s official name, historical name, translation and transliteration of the name as well as the use of the name in abbreviated form and as an adjective.

For example: “South Africa” (short name), “Republic of South Africa” (official name), “South African Republic” (historical name), “Zuid Afrikaansche Republiek” (historical name in Dutch), “Afrique du Sud” (short name in French), “ZA” (official abbreviation), “South African” (use of country name as an adjective).

This topic is important from an IP and development perspective because country names can be powerful brands.

As African countries such as Botswana, Egypt and South Africa have recognized, as have many other countries the world over like New Zealand, Peru, India, Ireland, Malaysia and Slovenia, countries that engage in proactive nation branding can compete more effectively for tourism, foreign direct investment and skilled immigrants, do better at promoting their exports and are more effective in global public diplomacy.

As has been stated, “The nation brand is a tool to promote the positive image of the country in the country and abroad”.1

“Country names” and “nation brands” are not the same. However, country names are often used as part of a nation’s brand, utilizing what Simon Anholt has described as the “country of origin effect”: the power of an explicit or implicit geographical name to add appeal to products and services, to create a price premium for them and to stimulate customer loyalty towards them.2

Often, a country’s heritage, history and culture can be channeled into a country’s positive country image. This is especially relevant for developing countries whose global image may suffer from international media bias, public ignorance and negative perceptions based on the past.

As Simon Anholt has summarized:

“. . .a national brand is national identity made tangible, robust, communicable and useful. A good brand represents a real competitive edge, and is without doubt the single most valuable item of intellectual property which any nation possesses; and knowing how to protect, develop and exploit this asset is the key for translating the intangible wealth of developing countries into economic growth.”3

Country names are, therefore, valuable intangible cultural and economic assets. However, as the Iceland case demonstrates (see below), they may not be adequately protected by the international IP system. As a result, they are vulnerable to misappropriation and exploitation.

Natalie GS Corthesy puts it in this way:

“The unresolved issue to be grappled with is how States can systematically avoid the misappropriation and wrongful exploitation of their sovereign state’s identity in commerce”. 4

In ongoing multilateral discussions on these issues, Indonesia has framed the issue in this way:

“. . .the name of a sovereign nation or geographical names of national significance should not be monopolized by private interests or private owners, especially when it could mislead customers, or prevent communities in a particular country or region from using their own country and regional names.”5

Countries should at least therefore ensure that their country names are defensively protected against use and monopolization by entities which have no connection with them and which simply wish to free-ride on the positive reputation associated with the country name.

Views differ, however, as to whether country names should be regarded as part of some sort of “geographic commons”6 and protected defensively against misappropriation according to conventional trademark principles, or whether they require positive sui generis protection as integral parts of a country’s identity and sovereignty. Multilateral negotiations at WIPO are attempting to reconcile these views.

Corthesy argues that:

“A more innovative approach is needed to balance the opposing interests of entrepreneurs seeking to co-brand their goods and services with country names, consumers who want reliable information about those goods and services, and states that support leveraging their national identity as long as this is done in accordance with honest practices”.7

Any sui generis approach should safeguard the necessity of an effective and flexible trademark system for users and not place undue burdens on applicants or administrators of the trademark system, while at the same time preventing the inappropriate monopolization and misuse of country names.

Finding appropriate solutions for country names may but need not necessarily require international norm-setting: indeed, some countries argue rather for reliance on the existing grounds of refusal and/or invalidity under trademark law to prevent misuse and misappropriation.

For an example of a regime established by a country with a very positive country name, see the text box “The sui generis Swissness model”.

The sui generis Swissness model: If “Switzerland” is on the outside, “Switzerland” must be on the inside too

Over many years, Switzerland witnessed how companies utilized the name of the State and its coat of arms to identify products that had little or no connection with Switzerland. Such cases triggered a series of unfavourable media headlines and, eventually, a debate between policy makers regarding the need to “safeguard the economic advantage that businesses enjoy by co-branding with the country name Swiss, and thus eliminate its illegitimate use on goods and service that have no connection whatsoever with Switzerland”.8

After seven years of discussion on the revision of the Trademark Protection Act, in January 2017, the “Swissness” provisions introduced strict legal criteria for the use of the designation “Swiss Made” in commerce. The legislation assigns different criteria for goods and services, and different criteria for different goods depending on whether they are natural products, foodstuffs and industrial products.

Goods can legitimately use the country name “Swiss” if:

  • In the case of natural products – such as mineral products, plant products, meat from livestock, game and fish and other animal-derived products – they have been kept, extracted, harvested, hunted or fished in Switzerland;9
  • In the case of foodstuffs, at least 80% of the raw materials used in the recipe of the foodstuff must come from Switzerland, except if the materials do not exist in Switzerland or are temporarily unavailable for reasons independent of the producers;10
  • In the case of industrial products, 60% of the production costs have been spent in Switzerland.11

Services can only use the indication of origin “Swiss” if the headquarters of the company which offers them is based in Switzerland, and all significant decisions and activities are taken there. If the services come from subsidiaries and foreign branches of a Swiss parent company, these services must actually be controlled by the parent company.12

Despite the complaints of some companies, since the adoption of this legislation, the Swiss authorities have reported13 positive results on the fight against the unlawful use of the country name “Switzerland” and its derivatives.

Protection of Country Names Against their Registration as Trademarks: National Laws and Practices

Application of the general principles of trademark law and practice provide indirect protection for country names against their registration as trademarks.

From a public policy point of view, country names should not be able to be registered as trademarks because the interest of the public is that such names remain available for use by any trader to provide information relating to the goods or services being sold.14

As extensive surveys of national laws and practices15 have found, there are opportunities at various stages before and after the registration as a trademark where the protection of country names against their registration as trademarks may be invoked.

The basic function of a trademark is to distinguish the goods or services of one undertaking from another. If the signs applied for designate the characteristics of the goods or services in question, such as by indicating their place of origin, the sign is likely to be refused registration because it lacks distinctiveness and is descriptive.16

According to the surveys referred to above, this is the most commonly used ground for refusal of the registrability of country names as trademarks. This ground of refusal is used in, for example, European Union countries, Norway and the United States of America.

Countries can use more than one ground for refusal, however. Some jurisdictions generally exclude marks that consist of geographical names from registration as trademarks, such as Argentina, Cambodia, China, Serbia and Venezuela,17, while others, such as European Union countries, Jamaica and Norway, adopt the terminology of Article 6quinquies B. 2 of the Paris Convention for the Protection of Industrial Property18 (the Paris Convention) and exclude from registration as trademarks those signs or indications which may serve in trade to designate the geographical origin of goods or services.

Another ground for refusing to register a country name as a trademark is that the mark would be misleading, deceptive or false. This would be the case if the goods and services clearly have no connection with the country whose name is used. This ground is used in inter alia Australia, the European Union and the Unites States of America.

From a procedural point of view, grounds for refusing to register a country name as a trademark may be raised ex officio by a trademark office or by third parties during opposition proceedings.

It is also important to add that the international IP framework provides protection against the registration as trademarks of national emblems and the like from a heraldic point of view (through Article 6ter of the Paris Convention), but this does not include country names, and against unfair competition (Article 10bis of the Paris Convention).

Finally, appellations of origin and geographical indications are two IP regimes that can effectively protect a country name when used in conjunction with specific goods, although not every country name is an appellation of origin or geographical indication and there are other important differences between the protection afforded to them and country names.19

The Iceland Case

Unfortunately, the protection of country names against their registration as trademarks is not as straightforward or complete as may initially appear.

This is what Iceland, the country, discovered as it has had to allocate considerable time and resources to protect its name from trademark registrations in almost all corners of the world.

The most renowned of these is the registration of the word mark and logo ICELAND by a British supermarket chain, Iceland Foods Limited, in the United Kingdom and the European Union.

According to the Government of Iceland20, Iceland Foods, the British company, has actively enforced its exclusive rights to the word mark ICELAND and opposed the registration of a number of trademarks containing the word “Iceland” by Icelandic businesses. It has also opposed the registration of “Inspired by Iceland” which is a national branding scheme partly sponsored and endorsed by the Government of Iceland. As the Icelandic Government has argued:

“It is unacceptable that a single private party can exclude Icelandic companies and producers, and even a national branding program sponsored by the Icelandic government, from referring to Iceland when identifying their products”.21

The Government of Iceland has recently succeeded in having the ICELAND trademarks of Iceland Foods Limited cancelled in the European Union by the European Union Intellectual Property Office (EUIPO).

The Government had claimed, among other things, that (1) Iceland Foods Limited hinders trading by companies from Iceland, and stops them from referring to their home country as part of their trade marks, (2) the word ICELAND cannot function as a trade mark since it describes the geographical origin and quality of certain goods and services, and (3) because of trade with the EU, consumers would associate the positive image of the country with the goods sold under the ICELAND mark and logo.

For its part, the company had claimed, among other things, that:

(1) the geographical name has a narrow reputation, therefore, the potential competitive impact between goods or services with the ICELAND mark and logo and those goods or services from which Iceland has a reputation is remote; and,

(2) it is unlikely that consumers will be deceived as to the origin of the goods and services bearing the ICELAND mark and logo.

In decisions recently handed down in April and May 2019, the EUIPO held that the ICELAND mark was or could have been perceived by the relevant public as a descriptive indication of the geographical origin of the goods and services concerned, and therefore cancelled the registrations.22

Iceland Foods Limited has appealed both decisions to the EUIPO Board of Appeal. We do not yet, therefore, have the final word on this case.

As this case shows, country names may not receive adequate protection under conventional trademark law. As a result of its experience so far, the Government of Iceland has called for a new norm-setting instrument to provide predictable and consistent protection of country names against registration as word marks.23

Multilateral Discussions and Proposals

During the 1980s, proposals were made to broaden the scope of Article 6ter of the Paris Convention to include also country names, but these were not accepted at that time.

In March 2009, Jamaica, in the WIPO Standing Committee on Trademarks, Geographical Indications and Designs (the SCT), formally requested that country names be added to the protected subject matter of Article 6ter.24

This proposal was not accepted but it launched fresh consideration at the international level of the protection of country names.

In the years that followed, numerous studies and compilations of current legislative provisions and practices in national or regional legislation relating to the protection of country names in the field of registration of trademarks were prepared under the auspices of the SCT.25 SCT-related side-events and information sessions also yielded useful materials.26

As of now, there are currently four main proposals being considered by the SCT.

  1. Jamaica’s proposal for a joint recommendation

In 2014, Jamaica submitted a proposal which enclosed a “Draft Joint Recommendation Concerning Provisions on the Protection of Country Names”.27 This draft is still under discussion.

It proposes inter alia that countries should protect country names against conflicting marks, business identifiers and domain names and prevent use of indications consisting of or containing country names in relation to goods or services which do not originate in the country indicated by the country name.

Interestingly, the proposal explicitly references the Joint Recommendations that the SCT had adopted in 1999, 2000 and 2001, as part of new approaches being tried at that time to the progressive development of international IP law. From this perspective, the adoption of non-binding Joint Recommendations was seen as a more flexible approach to international IP policy-making, so that it might be possible to achieve and apply results more rapidly, ensuring earlier practical benefits for administrators and users of the IP system (see Multilateral Matters #4 “Intellectual Property Norm-Building: Some Reflections on the Interplay between National and International Dimensions”).

  1. Protection of country names and “geographical names of national significance” in relation to trademarks and to the domain name system

There are currently two proposals concerning the protection of country names and “geographical names of national significance”, sponsored by Georgia, Iceland, Indonesia, Jamaica, Liechtenstein, Malaysia, Mexico, Monaco, Peru, Senegal, Switzerland and the United Arab Emirates. One is related to the trademark system28 and the second to the Domain Name System (the DNS). 29

To make sense of these specific proposals, it is necessary for me to include a few words on the protection of IP rights in the DNS in general (this is a very brief extract from a complete and detailed explanation available elsewhere30). See text box “IP rights in the Domain Name System”.

IP rights in the Domain Name System

As is well known, domain names are, because of their easy-to-remember and human friendly form, used routinely in advertising as a means of indicating the presence of an enterprise or business on the Internet. With the growth of the Internet over the last few decades, domain names have come into conflict with trademarks in that some persons have made it a practice to register, as domain names for themselves, the trademarks of other persons or enterprises (this practice is referred to as “cybersquatting”).

The Uniform Domain Name Dispute Resolution Policy (the UDRP Policy) sets out the legal framework for the resolution of disputes arising from alleged cases of cybsersquatting.

Dispute resolution under the UDRP is, however, only available for disputes related to the use of trademarks, not also geographical indications and country names.

As Switzerland, one of the co-sponsors has explained, the proposal related to the trademark system only aims at recognizing the principle that a country name or a geographic name of national significance should not be monopolized by a private individual, unless authorized by the State concerned. Second, the proposal does not contain any obligations and leaves it to States to determine, in accordance with national legislation, the conditions for registration of distinctive signs, such as trademarks. Third, the proposal only covers country names provided for in established internationally-recognized lists and thus deals with the delicate issue of the definition of a country name.31

The proposal related to the DNS deals first and foremost with the issue of the monopolization of names of countries, regions, capitals or other geographical names in the framework of generic top-level domain names attribution.32 The proposal aims at preventing the monopolization, by a private person, of a country name or a geographical name of national significance at the first level of the DNS, without the agreement of the country or community concerned.33 It contains a draft recommendation that would be adopted by WIPO.

Although one cannot generalize given the number of issues and perspectives on the table, countries such as Australia, Canada, Norway, Japan and the USA and the European Union have expressed their concerns with these two proposals. These concerns include resistance to the creation of a separate system for the protection of country names outside the trademark system, the administrative burden on applicants trying to register trademarks consisting of country names, restrictions there may be on the use of registered trademarks by their holders in order to avoid conflicts with protected country names, resulting in hindrance of economic activity, and that norm-setting in this area is premature.34

  1. A proposed sui generis “nation brand regime”

A proposal from Peru in 2018 stresses the importance and nature of nation brands. Underlining that nation brands should not be reduced to the level of mere trademarks, Peru proposes a sui generis “Nation Brand Regime” which would allow for them to be protected simply, effectively, cost-effectively and internationally so as to prevent the registration and use of identical or similar signs by third parties.35

Some countries have expressed concerns as to the breadth of the proposal and its potential impact, should it be adopted, on the trademark system and on existing trademark holders.

As an informed expert has pointed out to me, what the protection Peru seeks is similar to the protection afforded to the Olympic symbol by the Nairobi Treaty.36

The WIPO SCT will continue to consider all these proposals during its upcoming sessions.

Conclusions

It seems to me that the enhanced protection of country names is needed to enable countries and their traders to benefit suitably and in a balanced manner from the attractiveness inherent in country names and to prevent others from free-riding.

Four main proposals are on the table. Some address similar issues and have overlapping sponsors. Quite some work is still needed to clarify the objectives, scope and nature of any future international approach, which may or may not include a new international legal instrument/s.

Many countries, from both the developed and developing world, are engaged on this complex yet interesting topic.

IP considerations aside, country names can also be politically sensitive.

African countries don’t seem very engaged in this issue, however, and the protection of country names is not, so far at least, included in the IP protocol which is being considered within the context of the African Comprehensive Free Trade Agreement (the AfCFTA).

Multilateral discussions at WIPO are ongoing and are worth following.

Additional readings are listed on the Multilateral Matters portal (http://ip-unit.org/multilateral-matters/)

This blog is written exclusively in the author’s capacity as Adjunct Professor, Department of Commercial Law, Faculty of Law, University of Cape Town. Any views expressed are those of the author alone and do not necessarily represent the views of any organization or institution.

Endnotes

My thanks to Carla Bengoa for her research assistance and contributions.

  1. Delegation of Peru, “Proposal by the Republic of Peru for the Recognition and Protection of Nation Brands”, SCT/39/9, p. 1.
  2. Simon Anholt, “Three Interlinking Concepts: Intellectual Property, Nation Branding and Economic Development”, paper delivered at WIPO International Seminar on Intellectual Property and Development, May 2005, p. 2, available at https://www.wipo.int/edocs/mdocs/mdocs/en/isipd_05/isipd_05_www_103990.pdf (accessed August 7, 2019). See also Proposal by the Delegation of Peru, SCT/39/9.
  3. Simon Anholt, idem, p. 6.
  4.  Natalie GS Corthesy, “Trade marks, country names and misappropriation of national identity”, Journal of Intellectual Property Law and Practice, 2017, Vol. 12, No. 4, p. 302.
  5. SCT/40/10, p. 23.
  6. Corthesy, ibid., p. 302.
  7. Corthesy, ibid., p. 298.
  8. Corthesy, ibid., p. 303, citing R Vuignier, ‘La marque territoriale: fonctions et enjeux de cet outil marketing’, [The Territorial Brand: Functions and Stakes of this Marketing Tool], CEDIDAC Newsletter, Centre du droite de l’entreprise de l’Université de Lausanne, June 9, 2016.
  9. Switzerland, Federal Act of 28 August 1992 on the Protection of Trade Marks and Indications of Source (Trade Mark Protection Act, TmPA), Article 48(a).
  10. TmPA, Article 48(b).
  11. TmPA, Article 48(c).
  12. TmPA, Article 49.
  13. See reports produced by the Swiss Federal Institute of Intellectual Property, at https://www.ige.ch/en/services/newsroom/news/news-details/news/3255-das-ige-zieht-eine-erste-erfolgreiche-bilanz-gegen-swissness-missbrauch.html (accessed December 10, 2019).
  14. SCT/29/5 Rev. page 4, para. 19.
  15. SCT/29/5 Rev. See also WIPO/Strad/INF/7, SCT/35/4, SCT/37/3 Rev. ,SCT/38/2 and SCT 40/3.
  16. SCT/29/5 rev., page 4, para 19.
  17. WIPO/Strad/INF/7, pages 2 to 3.
  18. 1883, as most recently amended in 1979.
  19. Corthesy, ibid., pp. 301 and 302.
  20. Delegation of Iceland, “Note by the Delegation of Iceland”, SCT/37/6, available at https://www.wipo.int/edocs/mdocs/sct/en/sct_37/sct_37_6.pdf (accessed August 6, 2019).
  21. Ibid., p. 1.
  22. Icelandic Ministry for Foreign Affairs and Others vs Iceland Foods Limited, EUIPO, Cancellation No 14030 C (Invalidity), dated April 5, 2019.
  23. Ibid., p. 4.
  24. SCT/21/6.
  25. SCT/29/5 Rev. See also WIPO/Strad/INF/7, SCT/35/4, SCT/37/3 Rev. and SCT/38/2.
  26. Several informative presentations on nation branding, the legal aspects in particular in the EU, and the experiences of Jamaica and New Zealand, were made at a side-event at SCT 33 in March 2015, available at https://www.wipo.int/meetings/en/details.jsp?meeting_id=35589 (accessed on August 11, 2019). See also SCT40/3.
  27. SCT/32/2.
  28. “Protection of Country Names and Geographical Names of National Significance”, Proposal by the Delegations of Georgia, Iceland, Indonesia, Jamaica, Liechtenstein, Malaysia, Mexico, Monaco, Peru, Senegal, Switzerland and the United Arab Emirates (SCT/39/8 Rev. 3).
  29. “Protection of Country Names and Geographical Names of National Significance in the Domain Name System”, Proposal by the Delegations of Georgia, Iceland, Indonesia, Jamaica, Liechtenstein, Malaysia, Mexico, Monaco, Peru, Senegal, Switzerland and the United Arab Emirates (SCT/41/6). An earlier proposal “Protection of Geographical Indications and Country Names in the Domain Name System”, Proposal by the Delegations of Bulgaria, the Czech Republic, France, Germany, Hungary, Italy, Poland, Portugal, Republic of Moldova, Romania, Spain and Switzerland (SCT/31/8 Rev. 8) is no longer on the table.
  30. See for example https://www.wipo.int/amc/en/domains/ (accessed August 12 2019).
  31. SCT40/10, p 22, para. 92.
  32. SCT/40/10, p. 22.
  33. SCT/41/11 Prov. p. 21.
  34. SCT 40/10, pp. 21, 24, 26, 28.
  35. SCT/39/9. See also SCT/42/4.
  36. Nairobi Treaty on the Protection of the Olympic Symbol (September, 1981).