Last updated: 
10 October 2018

This is the transcript for the video: The value of certification trade marks to business and the food industry.

Speakers:

  • John Braybrooks, Assistant General Manager, Trade Mark Examination, IP Australia
  • David Jones, General Manager, Adjudication Branch, ACCC

(John Braybrooks)

Okay, we'll talk a little bit about what a certification trademark actually is. It's one of a number of different forms of trademarks, it's basically something that indicates the goods or services have been certified, as meeting a particular standard, or quality, or accuracy. As having a particular composition, mode of manufacture, geographical origin, or some other characteristic.

Now, these aren't necessarily applicable just to one brand owner, but they're normally applicable to a certain area, or a certain style, or a certain owner of this quality system. And the important thing about that is, that, if it's managed properly, if it's produced properly, if it's used properly, then it sends a message to the customer.

And, in the business of trademarks, in the business of brands, sending a message to the customer is an extremely important thing. And as a brand owner, as a person in a peak body, one of the essential things that everyone wants to do is to actually come up with something which immediately sends a message. And a well produced, well presented, well developed certification mark can do just that.

Importantly, once a certification mark is filed with IP Australia, it has to have a range of rules outlining the process that somebody needs to meet to be able to use the certification mark.

We don't deal with those at IP Australia, but we hand them over to the ACCC, and the ACCC will be speaking next, and talking about some of the details around that. A little bit more about some of the differences between a standard mark, and a certification trade mark.

A standard trademark is basically a personal property right, intended to be used in the course of trade, and for the commercial benefit of its owner.

That's what it's there for, but a CTM is a different thing. It's basically not primarily for the benefit of the owner of the CTM, but for the benefit of the users of the CTM, or the people who are owners of the region, or quality system, or area wherein they're trying to certify something.

The owner essentially manages the scheme, which allows the mark to be applied to goods and services to meet certain identifiable quality requirements. It's basically an open scheme, so anyone who meets those requirements should be able to apply, and should be able to use that certification mark.

So straight away, we're seeing the importance of actually developing some sort of scheme, some sort of quality scheme, some sort of reputation, which can then be put into some rules and on the basis of those rules, people who meet those rules can actually then use a symbol on their trademarks to indicate they've met those rules, that they are in fact, qualified to have a certification mark for these rules on their goods, or on their packaging, and on this basis they will be sending a message directly to the consumer. An important message which, there again, can actually be part of the reason why somebody purchases something.

This is probably a well known mark. Has everyone heard of Parma? Or Parma Ham? No. Parma Ham, of course is a GI in Italy. It's actually a geographical indication there. It's been a GI in Italy for a long, long time. It's something which has, because of the way the ham's been produced, because of the conditions of the livestock industry there, because of what happens in a certain part of Italy, it's actually come to the point of being a specific geographical indication.

Now in Australia, our view is that geographical indications can be protected by the certification trademark system. And so, using the same rules that supported the GI overseas in Italy, the client came to Australia, and was able to gain a certification mark. Which also gave them equivalent rights here in Australia, or rights which were of a noteworthy nature.

Basically, if we look at benefits for the food industry, consumers buy goods with a CTM reference. As they're dependable, and independently verifiable indications of quality, content and regional origin.

CTM's can assist in providing support and promotion for a region. So from a regional point of view, if there is something about that region, in Australia, or overseas, but certainly in Australia as we're talking about Australian trademarks at the moment.

In Australia it can be used as the basis for actually getting a certification mark which appropriately refers to that region. It's a positive link to certain desirable characteristics in products and services. It provides a higher quality. So, on top of an ordinary brand name, having a certification mark which has been properly developed, properly used and properly presented to consumers, it can lift the level of understanding and quality. And therefore foster goodwill and produce what every brand owner wants, which is a repeat purchase.

It can allow for potentially higher prices for goods and services. Many things which have certification marks on them actually can be a focus of excellence. And that focus of excellence allows the product owners to actually get higher prices. It improves the reputation for products and where they originate. It also increases the market share of the product in the environment. It increases the market share of a product based on consumers' understanding of the quality associated, or the regional issues associated with that certification trademark.

And on another level, what it can do, as it does overseas, and as it does in the wine industry, it can actually promote tourism to the area. Because people are interested, where do these things come from? Let's go and have a look. And so in promoting tourism in the area,it can actually lift the level of the financial situations in that particular area. So it's actually very useful in relation to actually improving the area, its throughput in terms of people coming in, and its production of goods and services.

(David Jones)

So there's a legal test that the ACCC applies when we look at a certification trademark, and that trademark, essentially is, that the ACCC must only approve the certification trademark if, number one, the person who's using the trademark, or the business who'll authorize the use of the certification trademark is competent to do that. So they have to demonstrate that they're able to apply the trademark in a way that it's only used in the way they say it will be used.

And the second is, that the rules will not be to the detriment of the public. Now that's very broadly worded, but essentially we interpret that as a consumer protection and a competition provision. So we don't want consumers to be mislead, and we don't want producers who should be able to use the mark to be excluded for anticompetitive reasons.

So if you're an applicant who's lodged a certification trademark, or you're thinking about doing that, what must your certification trademark rules do? Now, we're not prescriptive about that, we don't tell you what should be in your rules, but there are certain minimum standards that need to be met. Sometimes we get hundreds of pages of rules, they can be very complicated and some of those geographical indications might be an example of that. But you might have a very simple set of rules, and as long as it meets these criteria, we're satisfied about that.

So just briefly running through what criteria must be met. It must be clear what requirements the good or service in question has to meet, in order to use the CTM mark. So that's about the good or service, it also must be clear what characteristic the owner, or the user must meet in order to use the CTM.

So it might be about, perhaps you're a particular type of producer, you have to qualify by meeting those characteristics. How are you gonna determine whether the goods or services meet the criteria? It needs to be objective and it needs to be clear, so that someone can look at it and say Ah ha! This is what I need to do to get that mark.

And who will do the certification? It has to be a competent person who has the necessary qualifications and attributes to make that assessment. You should have a dispute resolution process, because inevitably there will be cases where parties think that they should be able to use the mark, and a decision's made by the owner that no, they're not allowed to use it.

And there may be other requirements that you impose about the certification trademark. So, in terms of the process, we're obliged to conduct what's called an initial assessment. And what happens there, in effect, is that people in my team will conduct an assessment and send it to one of our commissioners, who'll satisfy themselves of whether the certification trademark and its rules meet the legal test.

If they're satisfied that it does, then they'll sign off on something called a certificate for an initial assessment. And that then goes to IP Australia who publish it in the Official Journal of Trademarks. Now we know not everyone is a subscriber to the Official Journal of Trademarks, so we do also make people aware of that mark who might be interested in commenting on it, and make people aware of that assessment.

So the initial assessment will say either that we propose to approve it, or we might put out a notice saying, that actually, we propose not to approve it and here's the reasons why. And then everyone has an opportunity to have a say on our initial assessment. Whether we've made a mistake, or whether we've missed something, or whether they agree with us.

It's also open to parties to call for a conference to be held, and that does happen on occasion, to discuss that initial assessment. So then we take into account any submissions we've received, anything that's said at a conference, and move to a final assessment of whether the relevant provisions of the law have been met.

And if they have, we let IP Australia know, we issue a certificate and they move to accept the certification trademark. Just a couple of things that we don't do, just to make it clear. We're not in the business of auditing, visiting the factories to see whether people are complying with the CTM rule, or that kind of thing.

This is a legal assessment as to whether there are clear, objective rules that are not misleading and are being administered by someone with the necessary capabilities. So, all of that sort of further enforcement of people subsequently misusing it, and not using the mark in accordance with the rules that they've set out, is done in a different process.

Just briefly, the types of things that we look out for as part of our assessment. Are the rules clear and objective? Do they unfairly exclude anyone? Even though that person or that company meets the requirements, is there some sort of restriction in there that seems designed really to be an anticompetitive restriction?

Is there anything in the rules that require users to engage in anticompetitive conduct? For example, we've seen rules that say you must price above a certain level. Now that obviously raises alarm bells for the competition regulator to see that sort of rule. Is the approved certifier competent to assess whether users are meeting the requirements?

So we want to see who's doing the certification and what is it that makes them a competent person to do that? And are consumers at risk of being misled? That's a really important part of our role. Given the nature of a certification trademark, as John said, it represents something to a consumer and if that thing that's being represented to a consumer is not borne out by the rules, so you're representing one thing, but you're actually providing something else, that's a real concern.

Because we want markets to work well where consumers can have confidence that they're buying what they think they're buying.