Geographical indications outside the European regulation of PGIs, and the rule of free movement of goods: Lessons from cases judged by the Court of Justice of the European Communities

Several recent cases judged by the Court of Justice of the European Communities (the Court) have raised interesting issues related to the possibility for operators of food chains to use national quality signs to indicate territory of origin, which are different from the regulatory European 'Protected Geographical Indications'. The various attempts by France (a list of quality signs), Germany ('Markenqualität aus deutschen Landen' sign) and Belgium ('Walloon' sign) have all been condemned as protectionist policies contradicting the free movement of goods in the European Market. These national quality signs can be seen as attempt to defend the viability of specific kinds of activities (involving small enterprises) in specific places (rural areas). These cases are a good illustration of the difficulties that a Member State of the European Communities (Member State) faces in trying to protect its traditional activities and/or rural areas in a way that is compatible with free markets. The paper analyses the recent court decisions underlining economic aspects such as information delivery and the cost of alternative protection mechanisms for these activities. We highlight in particular the collective trademarks and the kind of intellectual property right they form by the economic theory of clubs, and make some comparisons with protected geographical indications.