A united front

IPM Interview
Bernard O’Connor, who is representing trade union Unite.
A united front
In January, trade union Unite launched legal action as part of an overall plan to gain geographical
indication protection for ‘Waterford’ crystal. Catherine White speaks to NCTM partner
Bernard O’Connor, who is representing the union, about a case where IP and politics collide
In March 2009, a national catastrophe hit
Ireland’s oldest city after its famous Waterford
Crystal factory shut down, resulting in the
loss of 600 jobs. The brand of the iconic Irish
crystal manufacturer, which became renowned
for producing extremely fine flint glass since
the 1700s, was bought by US private equity
company KPS Capital Partners, which switched
production in Eastern Europe. The news about
the outsourcing not only sent shockwaves
throughout the city of Waterford, but also the
country, eventually reaching global headlines.
Not only were livelihoods at stake but also,
potentially, the artisan heritage of the local
community.
From an IP angle, the story is a significant
legal and commercial precedent to successfully
protect the link between the name of a region
and the products made there and to ensure
that the ‘skill and tradition’ involved in making
such products is safeguarded.
History and heritage
Waterford Crystal dates back to 1783 when
brothers George and William Penrose founded
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a crystal manufacturing business in the busy
port of Waterford. They employed 50 to 70
people with merchant ships sailing regularly
from the port with cargoes of crystal bound
for Spain, the West Indies, New York and
Newfoundland. However, less than 100 years
later, the company folded due to lack of capital
and excessive taxation. Despite its short lifespan,
Waterford Crystal acquired a strong enough
reputation that carried over the centuries and
landed in a post-war-torn Europe, where the
brand was revived in 1947 by Czech immigrant
Charles Bacik, who set up a small glass factory
in Waterford just 11 miles away from the
original glass factory site. In 1987, Waterford
Crystal merged with Wedgwood to create
an Ireland-based luxury brands group – and
luxury it certainly was. In 2000, in celebration
of the New Millennium, Waterford Crystal
designed New York’s fourth New Year’s Eve Ball
dropped in Times Square that was made from
an astonishing 2,668 crystals. Waterford also
crafted the winning trophies for the French and
German Grands Prix in Formula One. However,
despite its allure, the group fell into receivership
April 2013
and its trademarks were consequently acquired
by New York-based KPS.
Battle of the trademarks
In June 2010, KPS opened up a new visitor city
centre called The House of Waterford Crystal
with the help of the city council, and currently
produces a number of crystal items in the
region, creating around 120 jobs. However,
even though most manufacturing has moved
away and is outsourced to other EU countries,
such as Slovenia, the product is still being sold
under the original Waterford trademark. As a
result, trade union Unite, Britain and Ireland’s
biggest trade union with 1.5m members, has
launched a legal challenge against use of the
trademark for glass not produced in Waterford.
It claims that outsourcing to other EU countries
not only threatens the future of manufacturing
in Waterford, with its 300 year history, but also
breaches trademark legislation as it misleads
consumers as to its geographic origin. The
union is taking the case to the Office for
Harmonization in the Internal Market (OHIM),
hoping that a win will bring jobs back to the
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Photo credit: AP Photo/Louis M Lanzano
region. However, the challenge will take a year
or more before OHIM takes a view.
Unite wants protected geographical
indication (PGI) for the name ‘Waterford’ just
like the protection received for ‘Champagne’
in the region of Champagne, France, and
‘Tequila’ for liquor originating from the town of
Tequila located in the State of Jalisco, Mexico,
where the liquor has been produced for over
200 years. In 2005, the Court of Justice of
the European Union held that Greece had
the exclusive right to protect its famous salty
cheese ‘feta’.
Unite’s battle has received strong backing,
especially from Waterford Labour party MEP
Phil Prendergast, who in February, called
upon the EU commissioner for industry
and entrepreneurship Antonio Tajani, to
extend the protection of EU geographical
indications to manufactured products that
exploit a community’s historical tradition. Irish
businessman Sir Anthony O’Reilly has also, in
the past, urged Ireland to create world-class
brands and named Waterford Crystal as the
only Irish brand to achieve such status.
In a statement, Prendergast said, “After
the traumatic closure of the Waterford Crystal
factory... the equity firm that acquired the
company relocated the bulk of production
abroad but still banks on the worldwide renown
and prestige owed to generations of skilled
Waterford Crystal workers over centuries... To
me, it is crystal clear that the time has come for
the EU to extend the denomination of origin
to more categories of artisan and traditional
products.”
Waterford Crystal’s Millennium New Year’s ball in Times
Square.
Under current EU law, if there is a link between
the characteristics of certain agricultural
products and their geographical origin, they
may qualify for either a PGI or a protected
designation of origin (PDO). The latter covers
the term used to describe foodstuffs that are
produced, processed and prepared in a given
geographical area using recognised know-how
(such as Mozzarella di Bufala Campana), while
PGI indicates a link with the area in at least
one of the stages of production, processing or
preparation.
Article 22.1 of the Trade-Related Aspects of
Intellectual Property Rights (TRIPS) agreement
defines a PGI as “indications which identify
a good as originating in the territory of
a member, or a region or locality in that
territory, where a given quality, reputation or
other characteristic of the good is essentially
attributable to its geographical origin”. A
geographical name can therefore operate as
a PGI once a given quality, reputation or other
characteristic of the product using the name
is essentially attributable to the geographical
origin. The fundamental concept behind PGIs is
that specific geographic locations yield product
qualities that cannot be replicated elsewhere.
Because the place is said to be essential to the
product, proponents argue that producers
outside a specified region cannot be permitted
to use its place name in marketing and on
product labels. Commonly, PGI protection is
offered to foodstuffs and agricultural products,
with nearly 90% of the registered PGIs relating
to wine and spirits in the EU.
As a result, EU member states, Switzerland
and most developing countries have proposed
to expand the higher level of protection
currently given to wines and spirits (under
Article 23) to other products. However, this has
been met with resistance from other countries
such as the US and Canada, who believe that
extending the level of PGIs to other products
would be highly costly and burdensome.
Canada’s Foreign Affairs and International
Trade department said an extension could
result in producers being “forced to stop using
commercially significant terms, and to rename,
re-label and find new ways of marketing
products that use such terms, in both domestic
and overseas markets”.
So, with the current framework in a state
of flux, will Unite’s bid to extend GI protection
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April 2013
Geographical protection
to a manufactured product be successful? IPM
spoke to Irish lawyer Bernard O’Connor, who
is representing Unite in its trademark battle,
and has worked in Brussels for the last 30 years
practising EU and World Trade Organization
(WTO) law, along with agricultural and GI law.
Although Unite’s ‘Waterford Crystal’
trademark battle story broke in January
2013, was there talk of filing litigation
soon after the factory closed and the new
one opened sometime later?
I was contacted some time ago about the case
and asked if I thought something could be
done in regards to the Waterford trademark.
I gave my initial opinion, pretty much off the
cuff, that something could be done. At a later
stage, I was then asked to give a more formal
opinion on the case and if it could succeed. On
the basis of this, decisions were then taken to
launch legal action.
This case is interesting in that it is
attempting to extend GI protection
to manufactured goods that exploit
the heritage of a local community and
also stop the outsourcing of traditional
products
Outsourcing is something that happens
and under existing EU GI law there are two
categories – the denomination of origin and
protected GIs. The difference between those
two classes in terms of the agricultural sector
is that under the denomination of origin, pretty
much everything must happen in a place of
origin. Whereas, in the case of protected
GIs, you can have things coming in from the
outside. For example, if you’re making pies
in Melton Mowbray, Leicestershire, and the
pies are made from different ingredients, it’s
possible that the flour comes from outside the
defined geographical area. So, in that sense,
GI law can be considered somewhat neutral
in relation to sourcing as it allows a degree of
flexibility. In the protected GI area, you’re also
protecting the skills and traditions of a region
but some ingredients/elements can come from
the outside.
In terms of extending GI protection to
goods that exploit the heritage of a local area,
we think the law needs to change and that
there should be laws on industrial geographical
indications. In Europe, we do have some
national laws, for example, ‘Solingen knives’ is
a protected GI in the German city of Solingen,
also known as the ‘City of Blades’, for its
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skilled manufacturing in fine swords, knives
scissors and razors. In France, there is Limoges
‘porcelain’ and in Italy, ‘Murano’ glass is
protected. There isn’t, however, an overriding
EU framework for this and we argue that
there should be. As a first step and, specifically
to Waterford, we’re stating that under the
trademark regulation, you can’t deceive a
consumer as to the geographical origin of
the product. Therefore, we’re arguing that as
Waterford Crystal is being produced by KPS
outside of Waterford, and continuing to call
the product ‘Waterford’, its being deceptive.
This is not a challenge to the ownership of the
mark but to its use.
framework. This differs from GI protection
in the sense that the state authorises the use
of a public name in restricted and specific
circumstances and has a role in ensuring that
the name is used correctly.
How will you prove that Waterford Crystal
deserves GI protection?
Simply, we’ll argue that the current use of
the trademark is deceptive and is misleading
consumers. People think that Waterford Crystal
comes from Waterford and to the extent that it
does not, is deceptive. Then we will argue that
‘Waterford’ should be protected under either
national or European GI law rather than, or in
parallel with, trademark law.
intended to keep the issue low profile. The fact
that MEP Prendergast brought this issue up in
European Parliament has helped immensely
and shows the importance of the case.
Do you think OHIM will be supportive of
your case?
I believe we have a winnable case. There
are some precedents in our favour. For
example, in 2009, OHIM revoked Mövenpick
of Switzerland’s Community trademark for
chocolate food products (under Class 30) on
the grounds of misleading the public, as its
product mark contained the geographical
indication ‘Switzerland’, even though it was
manufactured in Germany. This ruling on
Swiss chocolate shows the importance of
geographical origins in relation to trademarks.
Under European Union law, ‘the
protection of geographical indications
and designations of origin for agricultural
products and foodstuffs’ framework
came into effect in 2006. As Unite’s case
is calling for an extension to GI protected
products, do you think the law has
struggled to evolve?
Yes I think it is struggling. We believe
the EU Commission is currently working
on background studies to see what a
community-wide GI regulation would look
like, what it will cover and what elements will
be in it. I think that the situation is evolving
but I have no idea on the time-scale of this. I
think there is serious interest from a number
of constituents on doing something on a
European level.
This case is unusual as it has a ‘human
element’ to it. Do you think it’s important
for people to realise this battle is not just
about a brand but also people’s livelihoods
and maintaining a region’s heritage?
Yes, very much so. I think this case demonstrates
the importance of regional heritage and
livelihoods. The brand and the fame grew up
because of the skills and dedication from the
people of the city and County of Waterford and
their collective investment and work over time.
In that sense, the city and County of Waterford
should be able to benefit from this collective
effort and tradition. There is something wrong
with the fact that you can buy this tradition
and take it away and go to Slovenia, Poland or
Eastern Europe.
What are the main components of GI
protection?
GI protection is the protection of a quality that
is recognised in law. If someone complies with
that quality they have the right to use a public
name in an exclusive manner. A good example
of this is ‘Parma’. Parma is a city in Italy and is
a public name, in a way. Yet, if you want to
use that name in relation to ham or cheese,
then you’re allowed to do so just as long as
you comply with the specifications that are laid
down in the law for ham and cheese.
Is this the first-IP related suit filed by Unite?
This is a very innovative case for Unite. I don’t
think it has tried this approach in other cases
before. If they’re successful, it will definitely
give them the confidence to launch similar
suits in the future. This case gives Unite a way
of protecting interests, not just in the case of
IP, but also in the fact that it’s protecting the
interest of its members and the places they
come from. I think if they win, it will clearly
stimulate similar types of progressive thinking
of how best to protect members’ interests.
How does GI differ from trademark
protection?
Trademark protection isn’t necessary a public
name like Parma but is a sign that distinguishes
goods and services from competitors. Parma,
Champagne or Waterford are public names.
A trademark is privately owned and enforced.
The role of the state is only to set up the
Unite’s fight has received a lot of
support, especially from Labour MEP
Phil Prendergast. Do you think this has
enabled your case to become more highprofile?
Yes, I think this has certainly helped raise the
profile of our case. When we launched the
case in Ireland we got some publicity but we
Catherine White is an assistant editor and
staff writer for Intellectual Property Magazine.
April 2013
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What will winning mean for Unite?
A win means that production will have to come
back to Waterford. Clearly, there are issues
of costs and investments and financing that
need to be addressed for this to happen but
essentially, it means that you can’t just pick up
a trademark or brand that has a geographical
element to it and take it somewhere else.
Waterford is a trademark that is associated
to the city and that association must remain.
We’re hoping to establish this legal principle.
There is a general idea that you don’t trademark
geographical names. Our case demonstrates
why there is that general prejudice or
prohibition on registering geographical names.
With Coca-Cola you can go to South Africa,
India or anywhere and produce it, but you can’t
do that with Waterford.
If the case is not successful, what will be the
impact to the brand name and the region?
If the case fails, OHIM will allow geographical
names to fly free of their geographical origin
and this is a big ask. The idea that you allow
a geographical name to fly free is rather
difficult. There are a few examples, like Mont
Blanc for pens, but these are very rare. Pens
were never made on Mont Blanc, but crystal
has been made in Waterford. I think it will be
very difficult for OHIM to allow geographical
names to move freely in that way.