Leave a request

Farewell to Cognac, and Hello to Ukrgnak!

Date of publication: 18 January 2019

Dmytro Nikulesko, Attorney at Law

Source: ZN.ua

Further to signing EU-Ukraine Association Agreement, our producers will have to gradually abandon the use of so-called protected geographical names.

So, from 2026 Ukraine will have to refuse from using the name “brandy” given to products produced in Ukraine. At the end of January, the Ministry of Agrarian Policy is planning to discuss a new name with domestic producers. So far, the name “brandy” is in the lead, although there are more original options, for example, “Solntsedar”, “amber”, “dubniar” and, of course, “ukrgnak”. But the said amendments will not only affect cognac, as the terms of the Association Agreement apply to a wide range of products. The words that are common to our ears, such as “champagne”, “feta”, “madeira”, “sherry” or “calvados”, will soon be applicable only to the products of particular producers, and not to the names of certain types of goods.

Such amendments are due to the obligations on the recognition and protection of the geographical indications originating from the EU countries, which Ukraine assumed in connection with the signing of the Agreement. It should be noted that Section IV of the Agreement, which contains the provisions on geographical indications, came into force in Ukraine from 01 January 2016, and the Agreement itself entered into full force and effect on 01 September, 2017, but the producers were given time to change the names of their products.

Pursuant to Article 22 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter TRIPS Agreement”) geographical indication are the 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

Instead of the term “geographical indication” the Law of Ukraine On the Protection of Rights to Indication of the Origin of Goods (hereinafter – the “Law”), uses the term “indication of the origin of goods”. And despite the fact that pursuant to the Law this term includes three more concepts (simple indication of the origin of the goods, the name of the place of origin of the goods and the geographical indication of the origin of the goods), in general, it does not generally contradict the definition given in the TRIPS Agreement.

As of the date of entry of Section IV of the Agreement into force 3110 objects (the full list of which can be found on the website of the State Enterprise “Ukrainian Institute of Intellectual Property” (Ukrpatent)) have been submitted to the relevant State Register of Ukraine.

As noted in Article 205 (2) Agreement, if the geographical indication is protected in accordance with this Agreement, the use of the name of such protected object shall not be subject to any registration of users and settlement of additional fees.

It means that persons whose products are marked subject to the directions registered under the Agreement should not receive additional licenses and register them separately, as required by the Law, with respect to the geographical indications not mentioned in the Agreement. They are already subjects entitled to:
– use the registered geographical indication by placing it onto the product or label, on the packaging of the goods, use in advertising, texts of letterheads, invoices and other documents accompanying the products;
– take measures to prohibit the use of geographical indication by persons who do not have the right to use it;
– to demand termination of the violations and compensation of material and moral damage from individuals who violated their rights according to the procedure established by law.

Thus, today, in the case of violations of its rights to geographical indications, for example, the producer of Scotch whiskey may initiate the prosecution process against the offender. Legal liability includes the following types:
– civil (filing a lawsuit to terminate the violation and receive compensation for losses);
– administrative (filing relevant motions to the competent state authorities for the purpose of prosecution);
– criminal (filing applications about the commission of crimes).

If bringing the offenders to civil and criminal liability in the field of intellectual property, as a rule requires, lodging of the application by the corresponding right holder, the administrative liability may be imposed by the state authorities at their own discretion further to the identification of the corresponding violation of rights.

Thus, the Antimonopoly Committee may institute proceedings and bring the guilty party to responsibility for the unlawful use of designations or dissemination of misleading information (Article 5 paragraph 151 of the Law of Ukraine On Protection of Rights from Unfair Competition). Customs authorities may institute proceedings related to violation of customs rules for the transportation of goods across the customs border of Ukraine in violation of customs rules (Article 476 of the Customs Code of Ukraine). Law enforcement agencies may hold the offending persons liable for violation of the rights to the objects of intellectual property rights (Article 512 of the Code of Administrative Offenses).

However, the Agreement also contains positive aspects regarding the use of geographical indications that many consumers in Ukraine identify as product-type indications. Article 208 of the Agreement specifies a transition period for certain indications, where manufacturers may continue using them. So, the ten-year period since the entry of the Agreement into force is given in relation to the following indications: a) Champagne, b) Cognac, c) Madera, d) Porto, e) Jerez/Sherry, f) Calvados, g) Grappa, h) Anis, i) Armagnac, j) Marsala, k) Malaga, l) Tokaj, and seven years in relation to: a) Parmigiano Reggiano, b) Roquefort, c) Feta.

Thus, nowadays manufacturers of products, which labels actively indicate such widely-familiar names as “brandy”, “champagne” or others and more likely mean the types of products rather than their geographical origins, should refrain from using such names. The manufacturers of cognac can tag their products as brandy, champagne may be called sparkling wine, etc. And the transition period should be used for accommodating their business to new rules.