Alexey Martynenko’s article for Forbes

Annually Rospatent receives dozens of claims from the Russian regions about exclusive rights for the product. However, not all the manufacturers are able to meet the declared requirements....
Alexey Martynenko’s article for Forbes /upload/resize_cache/iblock/398/1190_730_1/_DDE2177_1.jpg
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Annually Rospatent receives dozens of claims from the Russian regions about exclusive rights for the product. However, not all the manufacturers are able to meet the declared requirements.

Intellectual property patent provides its holder with production monopoly. Exclusive production rights can belong to not only a specific company, as with a trademark, but also to a whole region if the product is registered as appellation of origin of goods (AOD). This status means that the product quality directly depends on the unique characteristic of a certain region, first of all, natural conditions and traditional technologies.

In Russia AOD is granted to either food products, e.g. Tula pryanik (gingerbread), Vologda butter, Narzan or Russian vodka, or handicrafts, e.g. Rostov finift (enamel), Orenburg shawl, Gzhel and Khokhloma. Seemingly easy registration process brings about numerous attempts to gain monopoly on popular products: according to Rospatent for the last five years Russian manufacturers filed 297 such applications. However, only less than half of them have been approved: to eliminate unfair competition the Committee checks each application. After receiving the patent right holders’ difficulties only begin: AOD status requires strict following the technology, and expenses on manufacturing such a product are much higher. For instance, to manufacture famous Vologda butter, highest-quality cream has to be heated during a precisely defined time period, whereas the product warranty is minimal. An impressive number of requirements to the production technology are rigidly observed; that is why the product keeps an exclusive right for its name. The Republic of Adygea was also faced with serious difficulties, which in 2004 patented the technology of Adygei cheese production (registration number 74), but was unable to stick to it and returned to the production according to GOST (Russian National Standard).

Adygea collision

Throughout its existence Adygei cheese has become a sort. Sort itself cannot be registered as a protected trademark. A certain global practice has already emerged in this sense, and below we will talk about it.

Adygei cheese (Adygeysky Syr) first appeared in Uglich in 1979 (OST (All-Union Standard) 49 155-80). Its production standards were formulized in GOST (Russian National Standard) ‘Soft cheeses. Technical specifications’ and were based on old Circassian recipes of Matek'uae cheese. According to GOST Adygei cheese is made from whole milk by adding to it lemon or vinegar acid. Signature pattern on the cheese surface reminding of a wicker basket trace is a result of molding in special plastic pans with uneven surface.

In 2004 the Republic of Adygea finally managed to obtain the AOD certificate prohibiting the production of this cheese in other regions. This is how a legal collision came about: simultaneous validity of two documents which clash with one another – GOST and AOD. Nevertheless, the majority of Russian supermarket chains removed from their shelves the Adygei cheese produced by other Russian companies, which, according to the AC Nielsen data, brought about plummeting of the Adygei cheese market by 43% insofar.

However, having obtained the AOD patent Adygea manufacturers did not immediately start observing its requirements, and continued production by GOST and technical specifications (their product’s wrapping contains correspondent marking). The technology described in the patent proved impossible to implement on the mass-production scale. For instance, it concerns the requirement to form cheeses in handmade wicker baskets. Besides difficulties in production such baskets poorly yield to disinfection and, consequently, can become contagious with pathogenic microflora. Besides, the patent implies that Adygei cheese should be produced exclusively from the milk of the cows grazing at the foothills of the Greater Caucasus. Nevertheless, the share of the local cheese in the Adygei cheese production is less than 10% according to AdygeaStat and SoyuzMoloko. The republic can hardly increase production fast enough to the scale when it would be able to provide the whole country with Adygei cheese.

Thus, Adygei cheese makers are breaking the very rules they use to try and protect their exclusive rights: manufacturing by GOST themselves, they prohibit it to other cheese makers. This is why the lawsuit from the union of ‘Adygei Cheese’ manufacturers to ZAO Umalat demanding to prohibit the use of ‘Syr Adygeysky’ (Adygei Cheese) name was dismissed: the court declared that the Adygea manufacturers abuse of their right and unfairly limit the competition.

Global expertise

The practice of regional brands came to Russia from Europe, where protection of appellations of origin is well developed, which is no surprise, taking into account its reach gastronomical traditions. AOD’s analogue in Europe is PDO (protected designation of origin), valid for all the EU countries. At the same time, each of these countries has its own national system: for instance, in France it is Appellation d'origine controlee, a mark we can find on expensive French wine bottles. Products with this status are manufactured according to strictly defined technologies: for example, in the production of Sicilian cheese Ragusano all the production conditions are checked, including the product’s aroma and the combination of herbs cows are fed with.

The legislation is based on the main principle: if the name of the cheese produced by a certain region has become a sort of the product, then its name is complemented by reference to the region, e.g. Camembert de Normandie. Another famous example is mozzarella which dates back to 1000 years ago and originates from the South of Italy, Campania and Puglia regions, but later became widespread all over the country. To set their cheese apart, the Campania manufacturers obtained PDO status for the Mozzarella di Buffala Campana product made from black buffalo’s milk by special technologies. At the same time, other cheese makers from Italy and other countries are entitled to produce mozzarella from the milk of cows, buffaloes, sheep and even goats, observing the production requirements codified in TSG (traditional specialities guaranteed), a document guaranteeing adherence to the recipe and technological process.

A similar situation happened to the brown ale in the UK: in 1927 Newcastle breweries started brewing this brand of ale which soon became popular all over the world. In its production two types of malt were used: paled English and dark caramelized, and the beverage was characterized by mild caramel taste with nut and fruit tones. However, brown ale was produced all over the UK and was famous in different varieties, so the Newcastle brewers patented their sort under the name ‘Newcastle Brown Ale’.
There exists a number of similar examples: balsamic vinegar and traditional balsamic vinegar from Modena (Balsamico di Modena) or Reggio nell'Emilia; traditional and Neapolitan pizza; cheddar and West Country Farmhouse Cheddar – the list can be continued indefinitely.

As distinct from Europe and Russia, in the USA organized protection of appellations of origin does not exist: rights for a certain product are guaranteed by a trademark belonging to one manufacturer and do not depend on a specific region. This stance resulted in a long lasting conflict: the USA regard the brand usage limitations as a EU protectionism instrument, and the EU blames American manufacturers in misleading consumers, as they make products under protected European names.

However, protection of appellations of origin is still possible in the US, for instance as collective or certificate trademarks. This is how, for instance, Idaho potato, Florida orange and Vidalia onion are registered. This approach is also used in Australia, Canada and China.

In many countries organized protection of appellations of origin is still under formation; the same concerns Russia, where such system appeared only in 1992 and still leaves much to be desired. Simultaneous application of AOD and GOST systems to one product is a vivid example to it, as in the Adygei cheese case.

To further develop the system it is vital to ensure that patented products correspond to the specified technologies and have an extended name indicating the region. At the same time, it is important to allow manufacturers production of already famous and beloved sorts of certain products irrespective of the production location. Strict monopoly, in turn, brings about market decline and limitation of the end customer’s choice. Besides, it is important to start fighting falsifications in deed and not in name, but this is a topic for a different article.
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