Using Quality Standards as an SMEs Competitive Advantage: the Role of GIs, Certification TMs and Collective TMs Using Quality Standards as an SMEs Competitive Advantage: the Role of GIs, Certification TMs and Collective TMs PRESENTED AT WIPO – ITALY INTERNATIONAL CONVENTION ON INTELLECTUAL PROPERTY AND COMPETITIVENESS OF MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES (MSMES) by Getachew Mengistie, Intellectual Property Law Consultant and Attorney Rome, December 10 and 11, 2009

Introduction GI, TMs, certification and collective marks are useful marketing tools They help to : distinguish a certain product from similar products, capture and further build good will and reputation of Distinctive products improve competitive position and enhance earnings GI, TMs, certification and collective marks are are commonly used as marketing tools by companies in the developed countries and the newly industrialized countries Dcs can successfully use similar tools-this evidenced by the Ethiopian Fine coffee designations trade marking and licensing initiative

Introduction Contd. Initiative started in 2004 Initiative is led by Stakeholders committee & facilitated by EIPO Initiative has Technical & advisory support from LYIP Free Legal Support from Arnold & Porter Financial support- Donor organizations, stake holders & the government Purpose and scope of presentation-highlight the grounds, objectives, Choice of appropriate legal, business and marketing tools, major achievements and Lessons learned

Grounds for the Initiative Ethiopia produces some of the finest coffee in the world having Distinct flavor and aroma Can be distinguished from coffee of other countries The Fine coffees have been recognized, identified and sold by Coffee Designations/ brand names as Harar, Yirgacheffee and Sidamo

Grounds Contd. Little return from the Specialty coffee High retail price-example 2004-Harar $24/lb, 2005 Sidamo-$26/lb Only 5-10 percent comes to Ethiopia Fluctuation of price of coffee Impacts of low price of coffee unable to meet basic needs, school, health etc Cutting down coffee trees and planting chat Cases of misappropriation or attempt to misappropriate coffee names

Objectives of the Initiative Ensure Ethiopias ownership of coffee brands Increase Income of Poor farmers & Exporters Create & Strengthen partnership with Foreign Coffee importing, roasting & distributing Companies Building IP Asset Protection & Management Capacity

Trade marking of the Fine coffee brands TM Applications filed in 36 countries Trade mark registration for three of the coffee designations secured in 29 countries and two of the coffee designations are protected in one country Applications are pending in the rest of the countries TM registration only meets one of the objectives set Need for Business strategy Stake holders opted for Licensing

Licensing of Coffee TMs The Licensing program aims at Facilitating the use of Ethiopian Trademarks Capturing the reputation & good will of fine coffee around the trademarks Establishing & strengthening partnership with the coffee importers, retailers & distributors Catering to the interests of the key actors etc., Promote the Ethiopian fine coffees License agreement is made simple and clear License is offered free of royalty Obligations of Licensees

Licensing contd. Negotiated license agreements with 96 foreign coffee companies and 50 local coffee exporting companies and coffee producers unions. Example of use of the Trademarks

Branding Trade Marks Branding Trade Marks Need for Marketing strategy Stakeholders opted for branding A UK based branding company employed Brands and brand guidelines developed under supervision of the Stakeholders Committee Stake holders decision and unveiling of the brands on May 2008 Brand guideline approved in July 2008

Umbrella Brand Umbrella Brand

Individual Brands Individual Brands

Impact of the Initiative Strategy helped to: differentiate the Ethiopian fine coffees from the coffee of other countries build confidence and Improve bargaining position of coffee producers and exporters Enhance the demand of the Fine Coffees Improved negotiating and Marketing Position-power to control, require disclosure of sales information, joint promotion, uniform branding and negotiate export price

Impact contd. Increased demand, rise in the price of coffee and income of coffee producers /export income of the country Encouraging Change in the lives of Producers-housing, sending children to school etc. Contributed to an increase in export earning – ex Greater recognition of the value of intellectual property assets and the need for protection in Ethiopia Stimulated other countries to embark on a similar initiative

Lessons Learned Top Leadership Support & Direction is critical for success Need for initial technical, financial and legal support from international partners while simultaneously building the requisite capacity for IP Asset identification, protection, exploitation & management Ensure ownership and involvement of stake holders

Lessons contd. Significance of public & private partnership wining the support of as many partners as possible Preparatory works, advance planning and regular evaluation Use foreign companies that buy the cause of initiative Seek for a win-win situation

Conclusion GI, TMs,CTMs, CTMs may be used as a significant marketing tool Ownership of TMs, GIs, CTMs or CMs not enough- need to develop and implement business and marketing strategies Need to devise strategies to establish and strengthen partnership with foreign companies Need to develop IP assets management capacity

Contact Address Getachew Mengistie IP Law Consultant & Attorney P.O.Box 4706 Addis Ababa, Ethiopia Tel (office) Fax