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Old World v. New World: An International Legal Perspective on Geographical Indications

I read an article recently that summarized the personalities of Old World and New World wines in perfect prose: “New World winemaking has the romance of rugged individualism. With properties bankrolled by previous enterprises such as construction or tobacco, winery owners can break rules (even with scant rules to break), creating new styles . . . and new campaigns to reach new markets . . . But in the Old World, where small family farms have supported ever-growing families for generations, life as an individual can prove too rugged.” (See Pros and cons of both New and Old world wine making.) From my experiences as a wine drinker, I like to classify the personality of Old World wines as more of a traditionalist style and one that seeks to preserve customs, a lifestyle of wine drinking comparable to old world Hollywood glamour (think: Cary Grant, Grace Kelly, Audrey Hepburn, Jimmy Stewart, and Humphrey Bogart—just to name a few).

Indeed, it would only be suitable that wine laws and regulations of Old World wine regions match this philosophy, preservation of tradition, whereas those laws and regulations in New World wine regions support  individual invention and discovery of alternative practices, a manifestation of economic progress. Although Old World and New World wine products are two patently distinct products in taste, texture, and composition, contributed to differences in climate, soil composition, and topography (collectively termed terroir), and thus one might think the difference in protection of geographical indications for regionally-distinct products acceptable, the United States’ approach to intellectual property rights has been the cause of much aggravation throughout European communities.

The United States protects geographical indications through a system of regulations called trademarks. This system developed through economic reasoning, positing that an inventor of a certain product should receive financial benefits through the protection of exclusivity of their creations. Essentially, this form of intellectual property regulation encourages individualism, creativity, and market expansion through the production of new goods by rewarding the creator with a form of legal manufacturing immunity. It remunerates the individual for novelty that stirs economic development.

The trademark regulation system of the United States does provide geographical indications with protection, but such protection is eradicated if the name of the product becomes generic and thus undistinguishable from its original source. The United States allows usage of semi-generic terms, including Champagne, Port, and Chablis, as long as said labels indicate the true appellation of origin of the wine. (See Acquiring a European Taste for Geographical Indications.) The usage of such semi-generic terms by wine producers in the United States, although legal under its current system, has caused many loopholes and much frustration, in addition to claims of misappropriation of true European wines, to wine-producing communities throughout Europe. (See Trademarks and Geographical Indications: Policy Issues and Options in Trade Negotiations and Implementation.) European communities have encouraged New World wine regions, including the United States, to adapt its more stringent regulations and thus eliminate these alleged ambiguities.

Compare the method of the United States to the European system (predominantly that of European communities (EC)) of intellectual property regulations through geographical indications. “Trademarks grant monopolistic IP rights to a single owner. In contrast, GIs grant protection to all the qualified goods produced within a particular geographical entity.” (See Acquiring a European Taste for Geographical Indications.) The EC’s aim through intellectual property regulation is to preserve gastronomical history and combat fraud through appellations designated for the growth of grapes in specific wine regions under certain conditions. This regulation is committed to preserving quality, heritage, reputation, and authenticity—promoting individuality and innovation are of lesser importance, if not completely disregarded. Likewise, the regulations of ECs are more stringent than those of its overseas counterpart; the EC protection of geographical indicators is endorsed by its Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”), specifically Articles 22–24. (See Agreement on Trade-Related Aspects of Intellectual Property Rights, Part II, Section 3, Articles 22–24.)

Aside from its goals of promoting consumer protection and overseeing fraud, it has been argued that the geographical indications are the intellectual property of the region in which they are grown. (For example, a bouquet grown in Champagne, France is, arguably, the intellectual property of that region and should be labeled accordingly; if grown in the Napa region of California, it is not the intellectual property of Champagne and should thus be labeled in correspondence with its region.) Many of the ECs have pushed that wine products produced in regions outside of the approved geographical entities is a form of misappropriation and, aside from the cause of consumer confusion, is a per se violation of the current geographical indication system of the ECs.

Notwithstanding various negotiations and provisions that have invariably existed between ECs and the United States (and other New World wine regions) with respect to geographical indications of alcoholic beverage regulation, the disparity of protection still exists—with neither of the two entities likely to concede. From a perspective on international trade, a concession between Old World and New World geographical protections might be in favor of preserving transactions and reducing consumer confusion and subsequently increasing consumer protection. There are many other reasons to consider adopting the European system of geographical indications, including the creation of new geographical indications, expanding worldwide protection of current geographical indications, and even buttressing the American system of intellectual property. Alternatively, the diversity between Old World and New World wine regions has prevailed for centuries by reason of geographical barriers and distinctive cultural and historical philosophies. Perhaps the two systems of geographical indications, although not always mutually exclusive, exist for a fundamental reason.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

Lindsey A. Zahn

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Lindsey is the founder and author of On Reserve: A Wine Law Blog. She is an alcohol beverage and food attorney and is admitted to the New York State Bar.

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