dr' Cornelia Rotaru

1
Support services to SMEs for the development of
the entrepreneurial culture referring to local
brands in Romania
dr. Cornelia Rotaru Chamber of Commerce and
Industry of Romania
The 8th CEI Summit Economic Forum CECCI Seminar
on agribusiness focus on local brands protection
regulations Bratislava, 23-24 of November, 2005
2
Introductory remarks

• The Intellectual property a strong tool for
  economic development
• intangible assets the driven forces of the
  sound economic development
• the inventive concept
• - question knowledge imagination innovation
  intellectual property solution (product)
  reaches to economic development
• The creation and innovation natural world
  resources
• The increasing of the intangible assets share in
  the market value of one company
• The new business models based on the right to use
  intangible assets franchise
• From the product trademark to the country brand
  the globalisations effect

• The modernization of the IP management both at
  the micro and macro level (easy access to IP
  information through Internet, on-line IP
  registration)
• The politicization of the IP issues

3
The IP issues related to local brands protection
regulation in agribusiness
Types of local brands

• trade mark
• geographical indication
• appellation of origin

The difference between IP categories

• A trademark
• a sign used by an enterprise to distinguish its
  goods from those of other enterprise
• it gives its owner the right to exclude others
  from using the trademarks
• it can contain within a geographical indicator
• limited protection in time

4
A geographical indication

• shows consumers that a product is produced in a
  certain place and has certain characteristics due
  to that place of production
• it may be used by all producers who make their
  products in the place designated by a
  geographical indication and whose products share
  typical qualities
• it contains only a reference to a country,
  region, place, river, mountain etc.
• the protection got has no time limit
• the GI that got or will get protection based on
  bilateral or multilateral agreements signed with
  Romania are not the subject of registration

5
An appelation of origin

• It is a special kind of geographical indication
  used on products that have a specific quality
  that is exclusively or essentially due to the
  geographical environment in which the products
  are produced
• The concept of geographical indication
  encompasses appelations of origin.

6
Agribusiness the domain of using local brands

• it is well know that agricultural products
  typically have qualities that derive from their
  place of production being influenced by specific
  local factors such as climate and soil
• local brands can be used strategically for
  promoting local, regional or national enterprise

7
The current Legislative Framework for Trademarks
and Geographical Indications in Romania

• The first law on Trademark was adopted in 1879
• 1998
• The Parliament adopted the Law on Trademarks and
  Geographical Indication (Law nr. 84/1998)
• Romania has signed the Paris Convention and the
  Arrangement of Madrid
• The Agriculture and Food Ministers Decision
  regarding the approval of the geographical
  indications protected and recognised in Romania
  (wines, spirit, food products, soft drinks)
• 1977
• The Law of the vineyard and wine
• The Ministry of Agriculture updated the
  limitation of the vineyard areas with appellation
  of origin
• The keeping of the Wine Growing Register
• The conditions for getting Appellation of origin
  by wines
• The quality conditions for producing wine and
  derivated products
• the TRIPS Agreement gave a definition of the
  geographical indications in order to regulate the
  field of a supplementary protection for IP rights
  derived from the use of the GI of wines and
  spirits

8
Additional provisions for wines

• In the case of the homonym GI for wines, each GI
  has to mention the denomination of the respective
  wine and Producers Association
• Authorized persons by OSIM to use a GI for wines
  and spirits can forbid the using of the
  respective GI by any person for the wine and
  spirits that are not coming from the place
  contained by the GI, even in the case where the
  origin indicated is a real one, and on the
  product are mentioned expressions such as of
  type, of sort, etc.
• An interested person can ask to the Court the
  cancellation of one registration if it was made
  unlegally
• The Court Decision is published in the Official
  Bulletin of IP

9
The Law of the vineyard and wine
The main provisions

• Romania adopted the national legislation in line
  with the European Union one
• It permits the protection of the domestic GI, but
  not in the EU space
• In the case of wines and spirits a Bilateral
  Agreement for reciprocal recognition and
  protection of the appellation of origin is in
  force
• In the case of trademarks they can ask
  international protection
• For exporting the traditional products outside of
  Europe, the registration of the trademarks in the
  target country is the single one solution for
  protecting the national producer
• According to the Agreement between Romania and
  European Union the GI registered by OSIM are
  protected and recognised in EU countries

10
The sanctions provided by law

• It is considered offence and it is punished with
  3-month to 3-year imprisonment  or with fine
• delivering on the market the products having
  false geographical indications with a view to
  misleading the customers about the geographical
  origin of the product
• holder of that  wrong geographical indication can
  ask the Court to decide upon the measure of
  confiscating and,if it is necessary, of
  destroying the products bearing illegal
  geographical indications .

11
The Institutional Framework for GI, Appellation
of Origin
General Framework

• OSIM State Office for Patents and Marks
• Ministry of Agriculture and Food

Specific Framework for wines and viticulture

• State Inspection for Technical Checking of Wine
  and Viticulture
• National Office for Vineyard and Wines
• National Office of the Origin Appellations for
  Wine and other derivated Products

12
The legal procedure for GI registration
Note The registration of GI on the name of a one
Producers Association do not constitue an
obstacle for another Association of the same
Geographical area to ask for GI registration
13
Wine Local brands and competition on EU Single
Market

• Exporting in the EU countries is a challenge for
  the local brands
• The wines producers should to
• apply the standards and procedures of the EU
• invest million euros in order to become
  competitive
• improve the vinyard and technology
• keep the prices at the lower level than European
  wines
• invest more much in the brands promotion and
  advertising

14
Statistics 2004
Production vineyards 400 vineyards 194,900
ha/100,000 ha (noble) grapes production
963,000 tones/541,000 tones noble wine
production 6,000,000 hl (3 million hl noble
wine) annual consum/inhabitant 22 l (Luxemburg
63,4 l) workforce 1 million people value of
the wines market 250 million euros winestype
over 400 types Export 0,8 share of world
market 42 million litri
USD 25 million 70 oriented to EU countries
mainly to Germany and United Kingdom. An
important increasing of wine was registered for
the USA market
15
The position of Romania 8th place in Europe
Romania represents

• 5,4 of the viticulture surface of Europe (place
  5 in Europa)
• Romania produces
• 3,1 of grapes and wine European production
  (place 6th )
• 2,9 of wines production (place 6th )

International Awards

• Bruxelles 2005 Wines World Competition
• 8 awards out of which Murfatlar 5 Vincon
  Vrancea 1

16
The Role of the Innovative SMEs in the global
economy

• The innovation and technology transfer are tight
  interconnected with IP
• The SMEs have to understand and use the
  advantages of IP rights
• The SMEs are the backbone of the economy in each
  country
• The movement of the products and services means
  as well the movement of the IP rights

17
The Innovation and IP Protection within SMEs
sector

• Ways used by the innovative SMEs acting in
  industry to protect IP right)
• Less than 10 of the innovative SMEs have applied
  at least one way of IP protection
• The most used types of IP protection were
• the trademark registrations
• 7 small enterprises
• 19 medium enterprises
• 13 large enterprises
• the registration of design and models
• 5 small enterprises
• 8 medium enterprises
• 19 large enterprise
• _____________ Information source Annual
  Raport on SMEs in Romania for 2004, carried out
  by the National Agency for SMEs and Cooperative
  Sector

18
IP issues an increasing concern of the
enterprises manager

• IP rights have a strategic role in the
  enterprises marketing in strengthening the
  market share and attracting more clients
• IP assets increase the market value of the
  business (so called hidden value)
• IP rights are more and more used in the merging
  strategies or in trade relations
• IP creates new business opportunities and new jobs

19
How to develop an IP culture?

• The main actors involved in the process
• officials and governmental bodies (legislative
  framework, carrying out the national strategy,
  incentives for those who develop and use IP
  assets)
• local administration supports (stimulating the
  protection of the local brands, providing
  incentives to the producers and exporters of
  traditional Romanian goods) focused on preserving
  the geo-social regional conditions to ensuring
  the constant level of the quality (environment
  infrastructure, training, promotion)
• private sector (multinational companies and SMEs,
  NGOs, civil society)
• academic sector (general and dedicated training)

20
Are the Romanian enterprises prepaired for
ensuering the protection of IP issues?

• The answer is given by the level of the
  entrepreneurs culture on IP issues
• The entrepreneur has to be well informed related
  to
• the basic issues of IP
• the protection given by the IP registration
• the duration and geographical area of the
  protection got by registration
• the institutions dealing with IP registration

21
The role of CCIR in the development of IP culture
within the entrepreneurial behaviour
Basic framework

• the Cooperation Agreement signed by CCIR and OSIM
  
• the setting up the network of 16 IP Information
  Centres within the local chambers of commerce
• the involvement of CCIR in the elaboration and
  implementation of the IP National Strategy as
  well as in enforcement of IP rights
• CCIR is the main shareholder in a company dealing
  with IP matters
• the cooperation with Chamber of IP Councellors
• participation in the ICC IP committee

22
Support services provided to SMEs

• CCIR supported monthly training courses for
  start-up and entrepreneurs in order to initiate
  them in IP issues. The trainings were delivered
  by OSIM and Customs Authority experts.
• Continuous provision of information through the
  IP Information Point set up within the CCIR
• dissemination of IP News and practical
  information using the CCIR newsletter (on paper
  and electronic), website
• the dissemination of State Aid program supporting
  the increasing of industrial and food products
  competitiveness through
• intangible investments
• registration of IP rights in EU countries
• the support services provisions to entrepreneurs
  for accessing State Aid program
• organisation of the seminars, workshops
  international conference (within the support of
  TAIEX) on the IP matters for awareing, informing
  and educating the entrepreneurs on the
  importances of IP development and protection in
  the strategy of their business
• involvement in the Counterfeiting actions (the
  organization of the Annual Conference on
  Counterfeiting Matters)