Fujian Sees Gold in Geographical Indications

UNCLAS SECTION 01 OF 02 GUANGZHOU 016875 SIPDIS USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE STATE FOR EB/TPP MASSINGA, FELSING STATE PASS COPYRIGHT FOR TEPP STATE PASS USPTO FOR DUDAS, BROWNING, BOLAND, ANTHONY, NESS STATE PASS USTR FOR MENDENHALL, MCCOY, ESPINEL, CELICO USDOJ FOR SUSSMAN DHS/CPP FOR PIZZECK USPACOM FOR FPA SENSITIVE SIPDIS E.O. 12958: N/A TAGS: KIPR ECON ETRD WTRO CH SUBJECT: Fujian Sees Gold in Geographical Indications (U) This document is sensitive but unclassified. Please protect accordingly. ¶1. (SBU) Summary: Fujian's agricultural sector can rise above its domestic and international competitors by tapping into China's trademark system for geographical indications (GIs),according to officials at a recent conference on GIs organized by the U.S. Patent and Trademark Office (USPTO) and the China Trademark Office (CTMO). Fujian officials believe the GI system can "put a region on the map", and allow local farmers in particular to create strong brands for their products and reap the resulting economic benefits. Three separate newspapers covered the event, all stressing the economic advantages of the GI system. This bodes well for CTMO, which supports the U.S. GI system and is engaged in a struggle with the Administration of Quality Supervision Inspection and Quarantine (AQSIQ) for authority over GI protection in China. End summary. Background on the GI Issue -------------- ¶2. (SBU) Following a similar conference in Beijing on May 23, USPTO and CTMO held a conference on GIs in Xiamen, Fujian on May 25. The purpose of the conference was to explain the U.S. system for protecting GIs, which is based on trademark law and gives GIs and trademarks equal weight. This differs from the European GI system, under which a GI trumps a trademark. China currently has a dual system for GIs, in which both CTMO and AQSIQ have governing authority. CTMO supports the U.S. model while AQSIQ supports the European model. ¶3. (U) Participants in the conference included officials from USPTO, CTMO, and the Fujian Administration of Industry and Commerce [AIC]; an Australian government trademark policy advisor; and representatives from the Idaho Potato Commission, the Florida Citrus Commission, and Anheuser- Busch. Attendees included agricultural producers, local government officials, and media. CTMO Status Report -------------- ¶4. (SBU) In his opening remarks, CTMO Director An Qinghu stressed CTMO's commitment to encouraging the growth of GIs in China and highlighted CTMO's recent activities. CTMO has received a total of 600 GI applications and has issued 171. Seventeen of the GIs went to foreign entities, three of which were U.S. rights holders. Five additional U.S. GI applications are pending. (The Florida Citrus Commission holds a GI in China. The application from the Idaho Potatoes Commission is reportedly close to approval.) Fujian: A Test Case for the GI System -------------- ¶5. (U) Zhu Changbin, Vice Director of the Fujian AIC and head of trademark issues for the office, said GIs offer an effective way to increase rural income and agricultural efficiency. GIs lead to greater consumer awareness and give farmers more incentive to improve the quality of their products. As a result, farmers can charge more for their products than the industry average, and local employment grows as a result. Zhu highlighted Fujian's tea industry as a beneficiary of the GI system. In Anxi county, which is particularly well-known for its tea, 800,000 of its one million residents are involved in the tea industry. Anxi saw its foreign trade growth increase 22 percent annually from 1998 to 2003. Foreign investment in the county has also increased drastically in recent years. ¶6. (U) Zhu said Fujian can use the GI system to support the central government's New Socialist Countryside initiative, in which rural areas will receive an increased proportion of central government assistance. Nevertheless, Zhu added that educating farmers of the GI systems is a challenge, and the application process is still too lengthy. He added that local governments must pay increasing attention to anti- GUANGZHOU 00016875 002 OF 002 counterfeiting in order to build a successful GI model. One- third of Fujian trademark cases in 2005 involved agricultural goods, including such products as fertilizer and pesticide. U.S. Industry Chimes In -------------- ¶7. (SBU) Representatives from the Florida Citrus Commission and the Idaho Potato Commission spoke about their efforts to build strong brand recognition of their GIs. Both organizations depend on funds contributed by producers. In addition to brand promotion, these funds pay for certification inspections and anti-counterfeiting enforcement. When asked how they mandate payments, the representatives explained that their organizations are governed in part by state law, which requires growers within defined regions to participate and pay the fee. Positive Press Coverage a Welcome Surprise -------------- ¶8. (U) Three different daily newspapers gave significant coverage to the GI issue during the week of the conference. The newspapers, from Xiamen, Quanzhou, and Fujian Province, all focused on the potential economic benefits to regional businesses and highlighted local success stories. The Xiamen Daily linked the GI system to the central government's New Socialist Countryside initiative and also outlined the "ABCs" of registering a GI with CTMO. Comment -------------- ¶9. (SBU) The GI issue offers a unique area of agreement between the United States and China in the IPR realm, and bilateral engagement will hopefully boost the position of CTMO in guiding central government policy on GI protection. Fujian has registered 22 GIs with CTMO -- second only to Zhejiang among China's provinces -- and thus has a particularly strong voice on the issue. The extensive press coverage shows that this relatively obscure issue is nevertheless striking a chord with those who believe GIs are a partial antidote to China's struggling rural economy. ¶10. (U) Embassy IPR Attache Mark Cohen has approved this cable. DONG