WORLD TRADE
ORGANIZATIONIP/C/W/386
8 November 2002
(02-6146)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
IMPLICATIONS OF ARTICLE 23 EXTENSION
Communication from Argentina, Australia, Canada, Chile, the Dominican Republic,
El Salvador, Guatemala, New Zealand, Paraguay, the Philippines,
Chinese Taipei and the United States
By means of a communication dated 18 September 2002, the Secretariat has received a copy
of this document with the request that it be circulat ed to Members.  It was circulated as an advance
copy at the TRIPS Council meeting of 18 September 2002.
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1. Extension of Article 23 of the TRIPS Agreement to cover geographical indications for all
goods has been advertised as a solution to what some regard as unfair special treatment for
geographical indications for wines and spirits.  Extension has also been promoted as providing market
access benefits to WTO Members.  If extension of Article 23 were actually able to provide these
claimed benefits, many WTO Members have goods that would stand to gain from such an extension.
For that reason, we have carefully reviewed proposals aimed at extending Article 23 to geographical
indications for goods other than wines and spirits with an eye toward gaining such benefits for our
industries.  However, after thoughtful review, we have concluded that extension will not provide
meaningful benefits but will instead create new difficulties.
Issue 1:  Imbalance in Numbers
2. Not all WTO Members are producers of wines and/or spirits.  Not all WTO Members are
consumers of wines and/or spirits.  However, all WTO Members produce and/or consume a variety of
agriculture products.  Thus, at first glance, it seems appropriate to request extension of Article 23 togeographical indications for goods other than wines and spirits since all WTO Members might
potentially benefit.
3. If the extension discussion were purely one of intellectual property policy, it would make
sense to treat all products in the same manner legally. However, we note that the WTO TRIPS
Council discussion takes place in the context of trade policy and the additional protection providedgeographical indications for wines and spirits resulted from the Uruguay Round of multilateral trade
negotiations. Thus, the fact that some WTO Members have geographical indications for many
products for which they seek additional protection, while other Members have only a few, if any,
geographical indications for which such additional protection would apply is quite relevant to the
extension discussion.
4. One Member may only have a few geographical indications for domestic products in which it
is interested, but would be obliged to provide th e means to protect hundreds or thousands of GIs from
Members with formal systems for such indications.  For example, EC Member States have registeredIP/C/W/386
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nearly 600 names for foodstuff, beer and other beverages under the EC geographical indication
regulations and could be expected to seek protection for these in any negotiation.  This imbalance is
exacerbated by the fact that, under the current EC regulations,  the EC does not appear to provide
protection for non-EC geographical indications (i.e ., place names of other WTO Members), except on
the basis of bilateral agreements, or if the EC has determined that a country has a system forgeographical indications that is equivalent to the detailed system of the EC.  Therefore, Members need
to evaluate the true commercial opportunities they would receive as a result of extension of Article 23
compared with the protection they would have to provide.  The United States has found that, while
there may be enthusiasm for shouldering burdens when those burdens are academic, the real costs of
implementation mean that new obligations go unmet.  There seems little point in agreeing to new
obligations when it is clear that existing obligations are not being met.  Thus, the balance of
concessions is not satisfactorily addressed, even with respect to existing obligations, and, wereextension agreed to, it would create an additi onal dichotomy between the benefits those WTO
Members with many geographical indications would receive and the costs to those Members with few
geographical indications.
Issue 2:  The Definition of "Geographi cal Indications" is Still a Barrier
5. WTO Members that are looking towards extension of Article 23 to provide protection for
specific terms in the territory of other WTO Members might discover that those terms do not receive
protection because other WTO Members conclude th at the terms do not meet the definition of a
"geographical indication."
1  For example, some WTO Members might not consider the name of a
country to be eligible for protection as a geographical indication.  Some WTO Members might not
consider a fanciful term to be eligible for protection as a geographical indication.  Some WTOMembers might require that the term identify the present name of a geopolitical entity.  Thus, it is
unlikely that extension of Article 23 to geographical indications for other goods would provide the
promised protection for all terms in all WTO Members.
Issue 3:  Article 22 is Sufficient, But Not Used
6. Geographical indications to which exceptions in Article 24 do not apply already are provided
sufficient protection under Article 22.2.  However, few WTO Members' nationals have made use of
the protections provided under Article 22.2.
7. Article 22 provides for protection against misleading uses of geographical indications.  The
Article 22 standard can ensure that geographical indications do not become generic.  As we have
noted in the past, indications of geographic origin used in one country began to be used in other
countries, not because the indications were well-known world-wide and the users sought a "free ride,"
but because citizens of the first country emigrated to the second and used the same terms for theirproducts that they had used in their home countries.  Much of that emigration took place because of
political, economic and other conditions from the 17
th to the mid-20th centuries, in many cases before
appellation of origin protection had even been established in the territories of those Members that now
claim those terms.  With the advent of the TRIPS Agreement, however, if a more recent geographical
term becomes generic, it likely would be because th e owner of the GI is not using the means available
to prevent unauthorized use of that GI, which is the obligation of the owner of a GI since, as
recognized by the TRIPS Agreement's preamble, intellectual property rights are private rights.
8. In the United States, for example, GIs such as STILTON for cheese, PARMA for ham,
ROQUEFORT for cheese, and SWISS for chocolate already receive Article 22 level protection.
                                                     
1 The Secretariat has provided a summary in JOB (00)/5619 of 19 September 2000 of the responses to
the Article 24.2 questionnaire on the differences in national law standards for determining what is entitled to
protection as a geographical indication.IP/C/W/386
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Interestingly, the owners of these GIs have taken steps to prevent unauthorized uses of their GIs in the
United States.  The United States' legal system currently offers the legal means to prevent
unauthorized or misleading use of a geographical indication.  Thus, the Swiss GI "Etivaz," which
identifies an indigenous cheese from Switzerland, can be asserted to prevent unauthorized use of the
term ETIVAZ (or a similar term) for any cheese-or related product-that falsely suggests a connectionto the ETIVAZ cheese from Switzerland.
9. As another example of the ways in which the current Article 22 standard provides substantive
protection for geographical indications in the United States, we note that the US Patent and
Trademark Office's Trademark Trial and Appeal Board affirmed an examiner's refusal to register the
proposed mark AMERICAN LIMOGES as deceptive.  The proposed mark was considered deceptive,
and therefore unregistrable, even though it indicated that the goods were American because it
suggested a misleading connection with the French porcelain.  The Board said "[s]uch deception does
not exist in the actual place where applicant's dinnerware is made, but in the fact that purchasers may
be deceptively misled into believing that applicant's dinnerware is of the same quality, type or grade
of dinnerware made in Limoges…." In re Salem China Co ., 157 USPQ 600, 601 (TTAB 1968).
Issue 4:  Article 24 Exceptions Preclude Protection for Many Promised Terms
10. The promised benefits of Article 23 extension would not be so comprehensive as some have
claimed.  The benefits sought will likely not be achieved because terms for which protection is sought
do not qualify as geographical indications under the Article 22 definition are misleading, or will not
be covered by an extension of Article 23 because they are already fall into one of the Article 24
exceptions.  For example, many delegations at the TRIPS Council have indicated certain terms for
which they would like Article 23-level protection;  however, many of these terms are already genericin some other countries.  Extension of Article 23 will not provide protection for these terms because
they would fall under the Article 24.6 exception for terms of customary usage and Members would
not be obligated to protect them.
Examples
11. The following are terms that have been mentioned in the TRIPS Council as examples of terms
that are deserving of as much protection as wines or spirits and would only receive such protection if
Article 23's scope were extended.  Many of these terms are sufficiently protected under an Article 22
standard without any confusion or would not be eligible for protection if Article 23 were expanded, as
indicated below.
Etivaz cheese – is a GI recognized by Switzerland and would be entitled to
protection under Article 22 in other Members' territories unless it fell within one of
the Article 24 exceptions in particular Members' territories.  If Etivaz is well knownfor cheese, any use of the name for a cheese not originating in Etivaz would be
misleading and, therefore, use could be prevented under Article 22.
Geneva clocks – could be a GI if so recognized in its country of origin.  If so, the
indication could be entitled to protection under the Article 22 standard.  Suchprotection would be sufficient to protect against unauthorized uses.
Carolina rice – protection is not being sought for this term as a geographical
indication.  The rice was  originally planted in 1800s in North Carolina, but is now
grown in TX, CA, etc., and therefore, although raised by other delegations, the termis not relevant for this discussion.IP/C/W/386
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Bukhara carpets – may have been eligible for GI protection, but is a generic term in
the United States for a style of carpet.   Article 24.6 provides that Members can except
generic terms from protection under their laws and therefore, the term would not
benefit from expanded Article 23 level protection.
Basmati Rice  – We are not aware that the term is protected as a geographical
indication in the country of origin, and, under Article 24.9, other WTO Members
would not be obligated to extend protection.  Therefore, the term would not benefit
from extension of Article 23 to geographical indications for products other than wines
and spirits.  Further, some WTO Members might not consider "basmati" to be a term
eligible for protection as a GI since it does not identify an actual place to which the
particular quality and characteristics of the rice are attributable.  Additional issuesmight be raised if exclusive protection for the proposed GI was requested by more
than one WTO Member.
Jasmine Rice  – We are not aware that the term is protected as a geographical
indication in the country of origin, and, under Article 24.9, other WTO Memberswould not be obligated to extend protection.  Therefore, the term would not benefit
from extension of Article 23 to geographical indications for products other than wines
or spirits.  Further, some WTO Members might not consider "jasmine" to be a term
eligible for protection as a GI since it does not identify a real place to which the
particular quality and characteristics of the rice are attributable.  Even if the term forprotection was further specified to be "Thai Jasmine Rice," the term may not be
considered to be eligible for protection by Members that do not believe that country
names qualify for protection as  geographical indications.  Additional issues might be
raised if exclusive protection for the proposed GI was requested by more than one
WTO Member.
Bulgarian Yoghurt  – Apparently, the term "Bulgarian Yoghurt" is used as a generic
term in France.  Even if Article 23 were extended, France could apply the exception
for generic terms and Bulgaria would not receive the expected protection as a result
of extension.  The use of the term "BULGARIAN" as a generic reference is
consistent with the view of some WTO Members that country names might not be
eligible for protection as geographical indications.
Issue 5:  Article 24.6 Exception
12. In accordance with Article 24.6, whether a term is considered to be generic is determined by
each Member within its territory.  The exceptions under Article 24.6 apply on a per-Member basis.
Thus, even if a term is generic (Article 24.6 exception) in one WTO Member, it may be a protectedGI in other WTO Members.  For example, if Member X concludes sufficient bilateral agreements for
absolute protection of the term "XYZ," producers in a WTO Member where "XYZ" is a generic term
will nonetheless be precluded from exporting to any WTO Member with whom Member X has
concluded such a bilateral agreement.  Therefore, du e to that bilateral agreement, the producers in the
WTO Member where the term is generic would not be able to export that product using the genericterm to other markets.
Issue 6:  Substantial Costs
13. Contrary to claims that extension of Article 23-level protection can be implemented merely
through extending to geographical indications for all goods what is currently done with respect to
geographical indications for wines and spirits, the implementation burdens are not that simple forthose WTO Members that would use wines and spirits regimes as a model for extension to otherIP/C/W/386
Page 5
goods.  Implementation of an extended Article 23 could necessitate serious costs to governments,
manufacturers, and consumers in the form of ne w administrative mechanisms to implement the
broadened standards, re-labelling and repackaging, and confusion costs to consumers who cannot find
the products that they are accustomed to buying.
Costs to Governments
14. Extension of Article 23 will require more complicated implementation than is the case for
Article 22 implementation; countries will have to in stitute a system that protects a wide variety of
products and may have to change fundamental concepts in their laws.  For Members that have not yet
implemented Articles 22 and 23 or have "implemented" by reproducing the language of these articles
verbatim in their laws, they will have to impl ement them substantively by creating mechanisms to
define and enforce these provisions.
15. Were Article 23 extended, implementation of the new Article 23 provisions would certainly
be required.  Once the Article 23.4 multilateral system negotiations are completed, it is likely that the
EC will enforce implementation through dispute settlements based upon Articles 22, 23 and the
Article 23.4 multilateral system:  the EC clearly places high importance on its GIs and theirprotection.  Because Article 23, in the EC view, e ssentially requires a labelling regime wherein all
labels are policed for compliance with the Article 23 requirements, the implementation burdens of
such a system become very complicated.  Were Article 23 extended to cover geographical indications
for all goods, the labels to be reviewed and policed increase exponentially.
16. For countries that have a system of protection for geographical indications based on
trademarks, collective marks, certification marks, and unfair competition law, extension of Article 23
protection would "dilute" one of the fundamental concepts of trademark systems and unfair
competition law - the confusion or misleading standard - which could necessitate a substantial
overhaul of the entire trademark or unfair competition regime.
Government as Enforcer
17. The EC and Swiss systems for recognition of GIs provide for government recognition,
oversight and enforcement of the standards established for the use of geographical indications.  In
Members that do not have such a system, having the government assume those responsibilities would
require considerable resources to set up the system and ongoing resources to maintain.
18. Countries such as the United States treat GIs as private rights, as they are identified in the
TRIPS Agreement, and provide the owners of those rights, and other interested parties, the means to
prevent improper use.
19. It should be noted that the recent EC paper does not explicitly require governments to enforce
the GIs.  However, given that the EC's system of GI protection - and that of some other demandeurs -
does not appear to provide national treatment, but rather, provides protection for other WTO
Members' names only if the other Member has an "equivalent" system of government enforcement,
we are concerned that, rather than amending its systerm, the EC will seek to export its system of
government enforcement.
Overhaul of Trademark Regimes
20. If a Member currently provides protection for geographical indications based primarily on a
trademark system, then it prevents use of a similar or identical name when that use is misleading or
confusing to the public.  If Article 23 were extended to cover geographical indications for all goods,IP/C/W/386
Page 6
then the traditional trademark standard and confusion analysis would not be sufficient because
Article 23 requires implementation of an "absolute" standard – if the goods do not come from the
place named, then the GI is invalid regardless of whether its use would mislead the public.  To require
the trademark regime to begin using a different standard - one not based on consumer confusion -
would necessitate, at least in the trademark regimes of some Members, a fundamental philosophicalchange.  This is a cost that must be acknowledged.
Administrative Burden Costs
21. The EC is currently amending its regulations on geographical indications – Regulation
2081/92 – and in its most recent draft, has deleted geographical indications for mineral waters.  The
reason given for the deletion was that there were too many GIs for mineral waters in the EC andtherefore, the EC could not handle the administrati ve burden of registering and enforcing these terms.
Even the EC has found its system too burdensome.
22. We believe that another reason the EC has proposed deleting mineral waters from
Regulation 2081/92 might be because of potential conflicts between European trademarks for mineral
water and European geographical indications for water.  The mark "Evian" for mineral water couldalso qualify as a geographical indication.  If the EC received a GI registration application for Evian, it
would have to decide whether its own regulations w ould apply so as to cause commercial harm to the
Evian trademark by allowing the geographical indica tion and the trademark to coexist, even if the
Evian trademark was established first, or by cancelling the trademark altogether.  As an example, this
potential conflict highlights why any discussion of extension must include a discussion of the proper
relationship between geographical indications and trademarks.
Costs to Manufacturers
23. All Members' domestic companies that export goods would have to do a country-by-country
analysis of every export market in order to determine if they are allowed to use the terms on their
current packaging, a very burdensome and expensive process.  The Article 24 exceptions would only
apply in the markets where the company has been us ing a term for some time.  If the term has not
been used in the export market in a particular WTO Member's territory, the company would lose the
ability to use that term in that market.  Companies would be forced to change current packaging for all
markets or use different packaging for different markets, which is expensive and would certainly
confuse their current customers, perhaps affecting their market share negatively.
24. Moreover, as noted above, the EC's practice has been to demand elimination of the use of
exceptions as a condition for the bilateral agreements it has entered into.  It would have even more
incentive to demand elimination of the exceptions through the TRIPS process because it would apply
to all WTO Members.  Elimination of the exceptions in Article 24, such as the exception for generic
terms, would force companies to abandon names even  in domestic markets no matter how long those
names have been used or how much has been invested  in them.  We note in this regard that, following
a recent decision of the European Court of Justice regarding "FETA", the EC has decided to adopt a
regulation that will no longer allow non-Greek cheese producers from using the term "FETA" within
the EC.  The term "FETA" is considered to be generic by many WTO Members.  We understand that
this prohibition is likely to have serious commercial implications for the producers in Denmark,France and Germany.  One would expect that the EC would seek to eliminate such use by producers
in the territories of other Members.  In cases where a company is forced to abandon use of the term, it
would lose the benefit of the reputation built up in that product, their market access, and the benefit of
use of a well-known name.  Although difficult to quantify, our industries are very concerned that such
losses would be substantial.  Other Members' industries likely share those concerns.IP/C/W/386
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25. The following are just a few examples of terms that producers are concerned about losing
because they could be eligible for protection under an extended Article 23:  asiago cheese, balsamic
vinegar, camembert cheese, edam cheese, emmentaler cheese, feta cheese, gouda cheese, kalamata
olives, parmesan cheese and pilsner.
Costs to Consumers
26. Consumers currently are not confused regarding the products they are buying because the use
of terms that are misleading to consumers are already dealt with under an Article 22 standard.
Article 22 already allows interested parties to protect geographical indications for all goods in
instances where their use could confuse consumers.  However, were an Article 23 standard to be
applied for all goods, the increase in costs to industry to rename, relabel and repackage would bepassed on to consumers resulting in higher priced goods.  Also, consumers will no longer be able to
recognize the products that they are used to purchasing.
Conclusion
27. In summary, extension of Article 23 to all goods would not be the panacea that many
Members envision.  The benefits of such extension would accrue to those WTO Members with many
geographical indications protected under formal registration systems policed and enforced by the
government.  The burdens will fall on those Members with few geographical indications, those that
protect geographical indications through trademark and unfair competition regimes, and thoseMembers with domestic food industries that have for many years used, in marketing their products
domestically and abroad, geographic terms that originated in countries from which the founders of
those industries emigrated for economic, political, or religious reasons.  For the latter Members, the
benefits would be few.  In light of the considerations expressed in this paper, we believe that the
issues below are relevant to, and should be included in, any discussion related to expanded protectionof geographical indications.
- The definition of geographical indication and application of Article 22.1.
- The impact of the principle of territoriality on implementation of Section 3,
part II of the TRIPS Agreement.
- The interaction between trademarks and geographical indications in light of
relevant TRIPS provisions, such as Articles 16 and 24.
- The cost differential between Article 22 vs. Article 23 protection.
- The exceptions set forth in Article 24.
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