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Geographical Indications The Case Against the EC Ana Martini Shelly Michael Stephen Kraly.

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1 Geographical Indications The Case Against the EC Ana Martini Shelly Michael Stephen Kraly

2 Geographic Indicators Geographic Indicator (GI)- is a name or sign used on certain products or which corresponds to a specific geographical location or origin (eg. a town, region, or country). The use of a GI may act as a certification that the product possesses certain qualities, or enjoys a certain reputation, due to its geographical origin. (Wikipedia 2006) For Example: Wines and cheese

3 History of GIs Protection –Late nineteenth century –European legacy Tradition of association with food products in certain regions. –European Union Law »Protected Designation of Origin (PDO) »Protected Geographical Indication (PGI) »Traditional Specialty Guaranteed (TSG)

4 International law GIs harmonization –1883 Paris convention –1958 Lisbon agreement –1994 TRIPS Article 22, 23 and 24

5 Complainants and Respondent Complainant: United States –June 1, 1991 Request for consultation Third-Party Complaints –Argentina; Australia; Brazil; Canada; China; Chinese Taipei; Colombia; Guatemala; India; Mexico; New Zealand; Turkey (WTO) Respondent: European Communities

6 Actions taken… Request of consultation –June 1, 1991, April 3, 2003 –EC Regulation 2081/92 Established July 14, 1992 Failed consultation –Request for panel August 18, 200

7 Actions Taken by Third Party.. Australia –Request for consultation April 17, 2003 EC regulation inconsistent with: –Articles 1, 2,3,4,16,20,22,24,41,42,63 and 65 TRIPS agreement –Articles I and III of GATT 1994 –Technical Barriers to Trade (TBT) Article 2 –WTO agreement XVI:4 (WTO:European Communities dispute settlement)

8 Dispute Settlement Body DSB –Separate Request for Panel August 18, 2003 –Consideration of complaints Joint panel Third party rights –Panel February 23, 2004

9 (EEC) No 2081/92 Within the EU, GIs are governed by EC Regulation 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs (The GI Regulation). This divides GIs into protected geographical indications (PGIs), protected designations of origin (PDOs), and (TSGs). Article 2 stipulates that, to qualify as a PGI, a food or product must: (a) originate in a region, specific place or country; (b) possess characteristics attributable to that geographical origin; and (c) be either produced, processed or prepared in the defined geographical area. PDOs are slightly more prestigious in that the food or product must be produced, processed and prepared in the defined geographical area. Traditional Specialities Guaranteed (TSGs) indicate a traditional production method rather than the region in which a product is made. At present there are only nine registrations of TSGs.

10 Agreements and Provisions Involved (1) TRIPS Agreement Articles 1.1, 2.1 (incorporating by reference Article 2 of the Paris Convention for the Protection of Industrial Property (Paris Convention (1967), 3.1, 4, 16.1, 20, 22.1, 22.2, 24.5, 41.1, 41.2, 41.4, 42, 44.1, 63.1, 63.3, 65.1; and (2) Articles I and III:4 of the GATT 1994. __________


12 TRIPS - Article 2 Intellectual Property Conventions 1.In respect of Parts II, III and IV of this Agreement, Members shall comply with Articles 1 through 12, and Article 19, of the Paris Convention (1967).

13 TRIPS - Article 3 National Treatment 1.Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property, subject to the exceptions already provided in, respectively, the Paris Convention (1967), the Berne Convention (1971), the Rome Convention or the Treaty on Intellectual Property in Respect of Integrated Circuits. In respect of performers, producers of phonograms and broadcasting organizations, this obligation only applies in respect of the rights provided under this Agreement. Any Member availing itself of the possibilities provided in Article 6 of the Berne Convention (1971) or paragraph 1(b) of Article 16 of the Rome Convention shall make a notification as foreseen in those provisions to the Council for TRIPS. 2.Members may avail themselves of the exceptions permitted under paragraph 1 in relation to judicial and administrative procedures, including the designation of an address for service or the appointment of an agent within the jurisdiction of a Member, only where such exceptions are necessary to secure compliance with laws and regulations which are not inconsistent with the provisions of this Agreement and where such practices are not applied in a manner which would constitute a disguised restriction on trade.

14 TRIPS - Article 4 Most-Favoured-Nation Treatment With regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members. Exempted from this obligation are any advantage, favour, privilege or immunity accorded by a Member: (a)deriving from international agreements on judicial assistance or law enforcement of a general nature and not particularly confined to the protection of intellectual property; (b)granted in accordance with the provisions of the Berne Convention (1971) or the Rome Convention authorizing that the treatment accorded be a function not of national treatment but of the treatment accorded in another country; (c)in respect of the rights of performers, producers of phonograms and broadcasting organizations not provided under this Agreement; (d)deriving from international agreements related to the protection of intellectual property which entered into force prior to the entry into force of the WTO Agreement, provided that such agreements are notified to the Council for TRIPS and do not constitute an arbitrary or unjustifiable discrimination against nationals of other Members.

15 TRIPS - Article 16 Rights Conferred 1.The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed. The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making rights available on the basis of use.

16 TRIPS - Article 22.1 & 21.2 Protection of Geographical Indications 1.Geographical indications are, for the purposes of this Agreement, 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. 2.In respect of geographical indications, Members shall provide the legal means for interested parties to prevent: (a)the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of origin in a manner which misleads the public as to the geographical origin of the good; (b)any use which constitutes an act of unfair competition within the meaning of Article 10bis of the Paris Convention (1967).

17 TRIPS - Article 24.5 International Negotiations; Exceptions 5.Where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith either: (a)before the date of application of these provisions in that Member as defined in Part VI; or (b)before the geographical indication is protected in its country of origin; measures adopted to implement this Section shall not prejudice eligibility for or the validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication.

18 TRIPS - Articles 41.1, 41.2,and 41.4 ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS 1.Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse. 2.Procedures concerning the enforcement of intellectual property rights shall be fair and equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays. 4.Parties to a proceeding shall have an opportunity for review by a judicial authority of final administrative decisions and, subject to jurisdictional provisions in a Member's law concerning the importance of a case, of at least the legal aspects of initial judicial decisions on the merits of a case. However, there shall be no obligation to provide an opportunity for review of acquittals in criminal cases.

19 TRIPS - Article 42 - Fair and Equitable Procedures Members shall make available to right holders civil judicial procedures concerning the enforcement of any intellectual property right covered by this Agreement. Defendants shall have the right to written notice which is timely and contains sufficient detail, including the basis of the claims. Parties shall be allowed to be represented by independent legal counsel, and procedures shall not impose overly burdensome requirements concerning mandatory personal appearances. All parties to such procedures shall be duly entitled to substantiate their claims and to present all relevant evidence. For the purpose of this Part, the term "right holder" includes federations and associations having legal standing to assert such rights. The procedure shall provide a means to identify and protect confidential information, unless this would be contrary to existing constitutional requirements.

20 TRIPS - Article 44.1 Injunctions 1.The judicial authorities shall have the authority to order a party to desist from an infringement, inter alia to prevent the entry into the channels of commerce in their jurisdiction of imported goods that involve the infringement of an intellectual property right, immediately after customs clearance of such goods. Members are not obliged to accord such authority in respect of protected subject matter acquired or ordered by a person prior to knowing or having reasonable grounds to know that dealing in such subject matter would entail the infringement of an intellectual property right.

21 TRIPS - Article 63.1 & 63.3 Transparency 1.Laws and regulations, and final judicial decisions and administrative rulings of general application, made effective by a Member pertaining to the subject matter of this Agreement (the availability, scope, acquisition, enforcement and prevention of the abuse of intellectual property rights) shall be published, or where such publication is not practicable made publicly available, in a national language, in such a manner as to enable governments and right holders to become acquainted with them. Agreements concerning the subject matter of this Agreement which are in force between the government or a governmental agency of a Member and the government or a governmental agency of another Member shall also be published. 3.Each Member shall be prepared to supply, in response to a written request from another Member, information of the sort referred to in paragraph 1. A Member, having reason to believe that a specific judicial decision or administrative ruling or bilateral agreement in the area of intellectual property rights affects its rights under this Agreement, may also request in writing to be given access to or be informed in sufficient detail of such specific judicial decisions or administrative rulings or bilateral agreements.

22 TRIPS - Article 65.1 Transitional Arrangements 1.Subject to the provisions of paragraphs 2, 3 and 4, no Member shall be obliged to apply the provisions of this Agreement before the expiry of a general period of one year following the date of entry into force of the WTO Agreement.


24 GATT 1994 - Article III:4 Provides that products of the territory of a Member imported into the territory of another Member must be afforded treatment no less favorable than that accorded to like products of national origin in respect of laws, regulations, and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution, or use

25 US AND GI The United States protects geographical indications through a trademark system because, like trademarks, GIs are source- identifiers, indicators of quality, and business interests. As with trademarks, geographical indications are eligible for relief from acts of infringement and unfair competition. However, while the US is pressing for strong intellectual property protections in general, it has proposed more limited protections for geographical indications.

26 THE US CLAIMS The United States challenged the European Communities (EC) Council Regulation (EEC) No. 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, as amended, on two main grounds: (1) discrimination against foreign nationals and foreign products with respect to geographical indication protection, and (2) failure to protect foreign trademarks.

27 THE US CLAIMS In adopting Article 2 and its predecessors, the EC was keenly aware that, as concerns the protection of industrial property, a Member would have to provide the same advantages to nationals of other Members as it provides to its own nationals, regardless of the domestic laws or regulations in those other Members relating to intellectual property.

28 THE US CLAIMS the EC will not register and protect the home-based GIs of another Member’s nationals unless that Member itself – not the national claiming the right, but the Member – satisfies certain requirements.

29 EC CLAIMS Even so, the EC argued to the Panel that the terms of the Regulation essentially do not allow for coexistence of prior trademarks and later GIs because: 1) there are very few if any trademarks that can be registered which could conflict with later GIs because geographic terms cannot be registered as trademarks in the EC if the geographic name is currently linked to the product concerned, or could be in the future;and 2) a GI will not be registered if--by virtue of the acquired distinctiveness and reputation of a prior trademark--the GI would be misleading to consumers as to the true identity of the product, i.e., if a geographic term is registered as a trademark because the name has become distinctive through use and therefore has reputation and renown, a confusing GI will not be registered.

30 EC CLAIMS As of the date of establishment of the Panel, the EC authorities had registered more than 600 geographical indications. The complainants have never alleged that any of those geographical indications has resulted in a likelihood of confusion with any prior registered trademark, let alone with a trademark owned by a US national.

31 EC CLAIMS Because of the registrability criteria provided under EC trademark law, the risk of confusion between trademarks and geographical indications is very limited.

32 EC CLAIMS The Napa Valley example: The Napa Valley title is a famous geographical indication for wine. Prior to its official recognition by the US authorities, the term “Napa” had been registered as part of several trademarks, some of which were not used for wine originating in that region. On the complainants’ interpretation, the owners of those trademarks should be entitled to prevent the winemakers of Napa Valley from using that term in order to describe the origin and the characteristics of their wine. This result would be manifestly inequitable. And, indeed, the US authorities seem to agree. The applicable regulations reserve the term “Napa Valley” exclusively for the wine originating in that region. By way of exception, prior trademarks including that name are allowed to “co-exist” with that geographical indication, subject to certain labeling requirements. This solution is similar to that provided under Regulation 2081/92. The EC, therefore, fails to understand why the United States has considered it necessary to bring this claim against Regulation 2081/92.

33 NATIONAL TREATMENT The principle of national treatment embodied in the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) requires WTO Members to provide the same (or better) treatment of foreign nationalsregarding intellectual property rights as provided to domestic nationals. The United States brought the national treatment claim against the EC because foreign geographical indication (“GI”) owners do not have the same access as EC GI owners to the protections and benefits of the EC GI Regulation 2081/92 and thus are denied national treatment. This obvious feature of the EC GI Regulation is underscored by the fact that nearly 700 GIs have been registered under the EC Regulation and not one of them is a GI from a foreign country.

34 INTERESTS: US US’s international interest is to be able to compete, in their view, more fairly with the EC which is seen as very protective of their members and therefore increase theuir market share in the EC But the US also needs to protect their own domestic market as there are geographic indicators not only from country to country but within regions

35 INTERESTS: EC The EC is seen international as probably the most protective group of countries that works fiercly to protect their industry and their farmers So the EC seems to have more of a national interest of protecting their industry than an International one since they strongly believe in strict GIs

36 PANEL’S DECISION WTO has released a dispute-settlement panel ruling in Geneva that found that the EU GI registry violates WTO agreements on protection of intellectual property rights and on trade in goods because it discriminates against non-EU products.

37 PANEL’S DECISIONS Requirement for Foreign Government Intercession is an Unjustified Hurdle for Foreign GI Owners Nationals of countries that do not have a system in place whereby their government accepts, examines, transmits and verifies the GI application or opposition for consistency with the EC regulations are worse off than EC nationals – whose governments are required by EC Regulations to institute such a system -- in getting a GI registration in the EC or in opposing a GI application. The Panel noted that other sovereign governments have no obligation under EC law to establish such a system, yet the EC has delegated the task to other governments of carrying out specific steps on behalf of their nationals for the purposes of complying with the EC Regulation.9

38 PANEL’S DECISION The Panel found that the EC never proved that cooperation by governments is necessary to ensure that the GI meets EC requirements, nor could the EC explain why the applicant – the entity most directly involved and knowledgeable about the GI – could not provide the evidence required to meet EC criteria.

39 PANEL’S DECISION Requirement for Foreign Government Monitored Inspection Structures is Not Necessary for Compliance with Regulation and is an Unjustified Hurdle for Foreign GI owners The Panel found that the EC allegation that public oversight of inspection structures is necessary to ensure compliance with the Regulation was not sufficiently proved by the EC. Furthermore, the Panel found that the requirement for governmentally monitored inspection structures for GIs discriminates against foreign nationals since foreign governments are not required to establish, approve and monitor inspection structures for GIs.

40 PANEL’S DECISION But the Panel did not find that the Regulation operated as the EC argued and that it did in fact provide for coexistence of the trademark and the later GI in some circumstances, impermissibly impinging on the rights of the trademark owner. The Panel found that: 1) for trademarks with reputation, whether consumers are mislead as to the “true identity of the product” is a more limited determination than as to whether the consumer is likely to be confused by the use of the later GI (the TRIPS standard for trademark infringement). The EC Regulation does not give the trademark owner the ability to argue this larger claim granted to them under TRIPS to prevent the GI from registering; and 2) for trademarks without reputation, those owners are unable to challenge the registration of the GI and must coexist with the GI.

41 PANEL’S DECISION The EC Regulation violates Article 16.1 of TRIPS by denying the trademark owner the exclusive right to prevent confusing uses as to later applied for and registered GIs. The Panel agreed, with caveats, that the Regulation creates only a limited exception under Article 17 but only because: 1) a GI will not be registered if consumers would be mislead by the GI as it relates to a prior trademark, thus preventing registration of a GI if it would cause a high likelihood of confusion with the prior trademark; 2) a GI application is subject to direct opposition by interested third parties; 3) the EC Regulation only authorizes a right to use the GI as it appears in the GI registration certificate, and therefore, a prior trademark owner may prevent the GI from being used in a translated form which conflicts with that prior trademark and is likely to cause confusion. By virtue of this reading of the EC Regulation, the WTO Panel was able to find that the EC Regulation fit within Article 17’s narrow exception.

42 PANEL’S DECISION The Panel agreed, finding that the EC GI Regulation is inconsistent with Article 16.1 of the TRIPS Agreement.The EC Regulation provides that the GI cannot be established if consumers would be misled as to the true identity of the product due to a conflict with a prior trademark Panel Orders EC to Accept Direct Applications and Direct Objections

43 The Dispute Settlement Body on 20 April 2005 adopted the panel report on the European Communities' protection of trademarks and geographical indications for agricultural products and foodstuffs. The DSB ruled that the EC GI Regulation discriminates against foreign nationals by requiring equivalent systems of protection in the foreign country, reciprocal protection for EC GIs in that country,15 and foreign government intercession in the EC GI application 16 and objection processes. DISPUTE SETLEMENT BODY

44 The DSB recommended that the EC bring its regulation into conformity with its obligations. Presumably, the EC will have to amend its Regulation to allow foreign nationals to apply directly and obtain protection for foreign GIs in the EC without intervention or action by their government in the process, and without any requirement that the foreign national’s own government has a GI system that is equivalent to the EC’s.

45 DISPUTE SETLEMENT BODY Also, according to the DSB’s recommendations and rulings, the EC cannot require a foreign government to create or monitor inspection structures for ensuring GI specifications are met as a condition for the foreign national to get GI protection in the EC. The EC must also allow foreign nationals to file objections to GI applications of others directly with the Commission.

46 Implementation Europe request ample time for implementation Agreement on allotted time for Implementation on DSB Recommendations –11 months and 2 weeks April 3, 2006 EU claimed will implement DSB decision in allotted time. –Regulation 2081/92 No longer in Force

47 Proposals Fairly new legislation –As long as EU follows through with implementation then there will be no problem. –However there are always losers Supplier of foodstuff that are protected under the GIs. May cause further cases the new legislation or just another form of protection

48 References Communities - Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs (WT/DS174, WT/DS290) Comments of the United States on the Reply of the World Intellectual Property Organization To the Panel’s Letter of July 9, 2004. September 28, 2004 European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs Oral Statement of the European Communities

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