Of Faded Jeans And Champagne

Updated: Sep 29 2004, 05:30am hrs
Two disputes in different parts of the world are expected to provide a lot of material for discussion on important issues under the Convention of Biological Diversity (CBD) and the World Trade Organisations (WTO) trade-related intellectual property rights agreement (Trips).

The CBD commits parties to a fair, equitable sharing of the benefits accruing from the utilisation of genetic resources, while Trips, among other things, covers the issue of protection of products which belong to a particular geographical area.

The points for discussion for CBD followers will come from the recent row between Kenya and a US chemical company. Kenya has recently launched a multi-million dollar claim in the US to get a share in profits from the sale of a chemical used by jean companies to give the much in vogue faded look.

The Kenyan authorities, according to The Observer newspaper, have claimed that the Leicester University and a US biotech company have illegally acquired a unique method of giving denim jeans the naturally worn look.

In 1992, a microbiologist from the Leicester University discovered two organisms living in the hot caustic geysers of Lake Bogaria and Lake Nakuru. The organisms, the scientist found, softens the fabric and eats indigo dye from jeans.

A US company bought the samples of these organisms from the scientist and then patented and cloned them on an industrial scale and is supposed to have made over $1 million in sales to detergent manufacturers and textile firms.

The Kenyan authorities have now claimed that the microbiologist had not taken the governments permission to take samples of the micro-organisms from Kenya for research and was, therefore, not allowed to sell it to the US company.

Kenya is claiming its share of profits from a US chemical company
France and a Swiss village have lockedhorns over the brand name Champagne
The case and its fallout would be interesting to understand how a countrys genetic resources can be protected. The second issue for Trips enthusiasts comes from the row between a small village in Switzerland and the French, which has been highlighted by the WSJ.

Near the Lake of Neuchatel in Switzerland, a small village with a population of 670 people produces 280,000 bottles of red and white wine from local Chasselas grapes and called it Champagne. However, the French have barred this village from using this name for its wine since Champagne is the Geographical Indication for sparkling wines produced in the Champagne district of France.

The Swiss villagers are up in arms against this move and have decided to go to court on the issue. Their case is as follows.

First, the Swiss claim that they have historical documents to prove that the village has been producing this wine from the 10th century while the French sparkling variety did not surface until the 18th century. So they claim that they have the right to use the name and not the French.

Second, they say the two wines are packaged distinctly and it would be impossible to confuse them.

Third, the Swiss variety is sold within Switzerland while the French version has a worldwide market. Champagne exports by the French were valued at Euro 1.7 billion in 2003.

For the Swiss village of Champagne the stakes are high too. Losing the brand name would mean the price of a bottle of wine could come down to about Swiss Franc 2 from the existing level of Swiss France 8. This would mean a loss of about two million francs a year. For a village where every tenth person is involved in the wine business this is something worth a fight. The two cases provide some interesting insights. The first Kenyan case shows that developing countries are waking up to the fact that they need to gain from their resources. Multinationals will now have to be extra cautious to the use of resources, which emerge from developing and least developed countries. They have to ensure that local people also gain from any creation of wealth that comes from the use of resources from their region.

The second case, the row over Champagne, is a pointer to the need for greater and deeper debate on Geographical Indications at the Trips Council meetings at WTO. Both these cases are about livelihood concerns of people and therefore calls for a deeper debate.

The author is Head CII-Geneva Office. These are his personal views