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Under Secretary for Intellectual Property Applauds United States Win on Geographical Indications and Trademarks
WTO Report helps American food producers

Today, the World Trade Organization (WTO) released a panel report affirming the United States’ assertion that European Community (EC) regulations discriminate against foreign owners of geographical indications (GIs), and that the EC cannot deny trademark owners their rights. Accordingly, the panel found the EC’s GI Regulation inconsistent with the EC’s WTO obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), as well as the General Agreement on Tariffs and Trade (GATT 1994).

Under Secretary of Commerce for Intellectual Property and U.S. Patent and Trademark Office (USPTO) Director Jon Dudas applauded the Report’s findings. “This is a breakthrough for the international intellectual property system, and it facilitates U.S. international commerce in food.” Director Dudas also noted that this WTO Report will help correct persistent misunderstandings about geographical indications, the role governments play protecting geographical indications, and the status of trademarks in relation to GIs.

Background

"Geographical indications" (GIs) under the WTO TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights) are "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 geographic origin.” Examples could include Parma ham, Roquefort cheese, Florida oranges, Vidalia onions, or Idaho potatoes.

History of the Dispute Settlement Case

The United States requested WTO dispute consultations on the EC GI Regulation in June 1999. On August 18, 2003, the United States requested the establishment of a panel, and panelists were appointed on February 23, 2004. The panel issued a confidential draft report in December 2004, and that report is now released to WTO Members. Both Parties have the opportunity to request an appeal within 60 days.

The United States challenged the EC GI Regulation on two main grounds: (1) discrimination against U.S. GIs (national treatment) and (2) failure to protect U.S. trademarks.

Under Secretary Dudas noted that the Panel Report was of special importance because “USPTO continues to be very concerned that owners of U.S. geographical indication certification and collective marks are excluded from the EC GI protection regime, merely because the United States has a different system for protecting GIs – through the trademark system.”

Lois Boland, Director of the Office of International Relations echoed Under Secretary Dudas’ remarks, explaining that “the discrimination against U.S. GI owners has been all the more frustrating because the United States provides robust protection for GIs, whether of domestic or foreign origin. The U.S. system has proved to be very flexible, easy to use, and a powerful tool against infringement for the owner’s of these valuable intellectual property rights. We were also concerned that under the terms of the EC Regulation, U.S. trademark owners were losing their ability to preserve the distinctiveness of their marks in Europe if they had to market their products alongside products using a similar geographical indication. USPTO is very pleased with the Panel’s findings and looks to the resolution of this case as providing an opportunity to move towards a closer working relationship with the European Communities on geographical indications issues.”

Claims

The United States objected to the EC’s Agriculture regulation, on several grounds, including the following:

  • No “National Treatment” Provided for Foreigners: Government Intervention Should Not be Mandatory to Assert Trademark or GI Rights

The EC Regulation creates a system for registering and protecting geographical indications for agricultural goods sold in the EC market. But while the Regulation allows EC rightholders to apply directly to register and protect their GIs for EC products, non-EC nationals must rely on their government to apply for the protection in the EC on their behalf, as well as to object to GI applications in the EC.

  • Mirror System Required for Consideration of Protection

Under the EC’s Regulation, foreign governments must adopt a system of GI protection that mirrors the EC’s and that provides reciprocal protection to EC products in order for their foreign rightholders to be considered for benefits of the EC Regulation’s protections.

The WTO Panel found that these aspects of the GI Regulation – the requirement for government-level intervention as well as the requirement of reciprocal protection for EC products and equivalent systems of protection – discriminate in favor of EC products and EC GI rightholders and against the GI rightholders and products of other WTO Members.

  • Respect for Trademark Rights

On the trademark claim, the United States argued that the EC GI Regulation would not permit certain trademark owners to enforce their trademarks - that is, they would not be able to stop the confusing uses of similar GIs, which is one of their rights under the WTO TRIPS Agreement. The TRIPS Agreement requires that the owner of a registered trademark be able to prevent all others from using identical or similar marks or signs, which includes GIs, when consumers would be confused by the later uses.

The Panel agreed with the United States but clarified that the EC could provide for a very limited exception to trademark rights for certain trademarks with respect to later-registered GIs. The exception is very narrow in that, according to the Panel, GIs that are likely to create confusion with prior trademarks are unlikely to be registered as GIs in the first place. Further, the Panel noted that only a few people are allowed to use the GI that conflicts with the prior trademark, and the exception only applies to certain trademarks that do not have reputation or renown.

But more importantly, the Panel found that the GI Regulation could only protect GI names as registered, and not translations of the GIs where those translations as they appear on labels in Europe cause confusion with European trademarks owned by U.S. companies. The panel agreed with the United States that this would present concerns under the TRIPS Agreement.

(15Mar2005)

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