ARC 2020: CAP and E-Commerce - Are Quality Schemes Protected?

EU agri-food products protected by quality schemes such as geographical indications can face counterfeiting and usurpations in third countries, resulting in significant economic losses for EU producers. With the dynamic development of e-commerce, it is quite likely that this will be exacerbated due to weak control and tracking mechanisms on the Internet. The reform of the EU's Common Agricultural Policy after 2022 envisages extending the intellectual property (IP) of quality schemes to e-commerce platforms, but it is not entirely clear how this will be implemented to protect EU producers and those outside it. An answer to this and other questions on the topic is given in a survey of the information platform ARC 2020. The following text is adapted from the publication.

Quality schemes of EU

EU quality policy aims to protect the names of specific products to promote their unique characteristics, linked to their geographical origin as well as traditional know-how.

These products can receive a Geographical Indication (GI) certificate if they have a specific connection to the place where they were produced. GI allows consumers to differentiate quality products from specific area and in the same time helps producers to market their production. Recognized as intellectual property, geographical indications play an increasingly important role in trade negotiations between the EU and other countries.

EU maintains registers of GI granted products. They include information on the geographical and production specifications for each product.

Other EU quality schemes emphasise the traditional production process or products made in difficult natural areas such as mountains or islands.

The protection of intellectual property rights for agri-food quality schemes may be compromised by the lack of a harmonized system for monitoring and enforcing intellectual property rights across various online sales channels in the 27 Member States, including e-commerce platforms.

Quality schemes and e-commerce

The growing digitization of industries and increasingly widespread Internet connectivity inevitably reflects on the trade of agricultural products - especially food and beverages. The past two years of the COVID-19 pandemic have seen a rapid acceleration of e-commerce. Consumers around the world have been forced to shop for food products online, and with the improvement of e-commerce platforms, this trend is expected to continue its growth.

In view of the rapid development of the global digital market, protecting agri-food quality schemes from fraudulent practices and violations of the law is becoming an even more complex matter. The level of protection for quality schemes will depend not only on the rules on intellectual property rights and their enforcement mechanisms in the EU, but also on the conditions laid down in association agreements with non-EU countries, and last but not least, on capacity for market participants and authorities to understand, negotiate, meet, circumvent, enforce and appeal these conditions.

CAP and quality scheme protection

As part of the European Green Deal, the European Commission pledged to reform legislation to meet the ambitions of the Farm to Fork and Biodiversity strategies, in light of environmental goals such as pesticide reduction or increased organic farming, and socio-economic objectives, such as strengthening the position of farmers and producer groups along value chains within the EU and/or in foreign markets. For example, For instance, the Commission’s proposal to revise the EU regulation for quality schemes was part of the intention to promote fairer, authentic, high-quality food markets internationally, and ultimately reinforce the position of agricultural producers and improve the rural economy

This legislative proposal gives importance to the expansion of mechanisms for protection of intellectual property rights, particularly in e-commerce. It also draws attention to the need for the creation of a mechanism for monitoring the intellectual property of products that have received certificates under the quality schemes. The proposal envisages simplifying the procedures for producer groups from third countries that decide to register quality schemes and directly make them recognizable throughout the EU single market. It was presented in March 2022 and is still under negotiation.

Besides this proposal, the agreed legislations for the CAP reform post-2022 extend the protection of quality schemes’ IP rights to e-commerce platforms in different amendments to the previous regulations. Apart from setting out a wider EU framework, the impact of these CAP amendments on the protection of non-EU quality schemes still depends on Member States' monitoring mechanisms and the level of protection/enforcement as a result of negotiated agreements on association.

Conclusions

Overall, the development of IPR enforcement systems occurs at different speeds in EU Member States, thus affecting the level of protection for both EU and non-EU producers. For example, Italy is at the forefront of protecting intellectual property rights on its own products on e-commerce platforms, given the large number of registered quality schemes in the EU, but it is not clear how Italy and other EU member states protect quality outside EU single market schemes.

Hence, even if the post-2022 CAP reform has made some progress in introducing legal provisions that extend the protection of quality schemes in e-commerce platforms, according to the ARC 2020 analysis, these provisions must be accompanied by consistent EU-wide mechanisms for monitoring and enforcement of intellectual property rights of international products in a digital context of single market schemes.

Read about the full survey here: https://www.arc2020.eu/cap-and-e-commerce/#_ftn11