./.RESTRICTEDWORLD TRADE
ORGANIZATIONIP/C/W/234
11 December 2000
(00-5371)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
OPPOSITION/CHALLENGE PROCEDURE IN THE MULTILATERAL SYSTEM OF
NOTIFICATION AND REGISTRATION OF GEOGRAPHICAL INDICATIONS
Communication from Hungary
By means of a communication, dated 27 November 2000, the following text has been
received from the Permanent Mission of the Republic of Hungary with the request that it be circulated
to Members.
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1. Hungary is clearly interested in the expeditious establishment of an adequate, effective and
credible multilateral system of notification and registration of geographical indications (GIs).  Thissystem should be in full conformity with the letter and spirit of Article 23.4, i.e. it should facilitate the
protection of GIs not only by setting up a database of information, but also by including an adequate
registration mechanism.  Among the various proposals submitted to the Council for TRIPS to date,
Hungary generally supports the one contained in the proposal from the European Communities and
their member States (IP/C/W/107/Rev.1), because, in Hungary's view, this is the only approach
suggested so far, which is in line with Article 23.4 in this latter respect.
2. The purpose of this communication is to move forward the mandated negotiations in the
Council for TRIPS on the establishment of the multilateral system of notification and registration by
providing some input with respect to the opposition/challenge procedure and its effects concerning the
registration of a GI notified under the system.
3. Hungary believes that an effective and fair procedure for the opposition of registrations and
the solution of possible disagreements over them (hereinafter opposition procedure) is anindispensable element of the multilateral system of notification and registration for GIs.  Such a
system is necessary to ensure that the register does not contain misleading GIs and effectively and
genuinely facilitates the protection of geographical indications, as set out in Article 23.4 of the TRIPS
Agreement.
4. In Hungary's view, the opposition procedure should be simple and should comfortably fit into
the WTO framework.  At the same time, it is questionable whether possible disagreements over the
multilateral registration of individual geographical indications can be solved under the Dispute
Settlement Understanding (DSU).  Therefore, ther e seems to be a need for a system operating outside
of the dispute settlement mechanism of the WTO to adequately handle these cases.
5. Hungary suggests that this system should combine direct bilateral consultations, as proposed
by the European Communities and their members States in the proposal referred to above, with a
multilateral procedure for cases where direct discussions between the parties do not yield a bilateral
settlement.  Hungary hopes that bilateral consultations about a challenged notification will result inIP/C/W/234
Page 2
mutually acceptable solutions in the vast majority of cases.  However, in Hungary's view, in the case
of disagreement about a challenge, the possibility to seek a solution of a multilateral character is
absolutely necessary to ensure that smaller WT O Members, which obviously have limited bilateral
bargaining power, enjoy the same opportunities for representing their legitimate commercial interests
as bigger ones.  Another compelling reason for having a multilateral mechanism is the need to ensurethe prevention of abuse.  In Hungary's view, it s hould be up to a multilateral mechanism (and should
not be left to individual Members) to decide whether a challenge is justified or not, i.e. if it meets the
conditions to be laid out by the Members on the basis of Section 3 of the TRIPS Agreement.
6. Regarding the form of the multilateral procedur e for settling disagreements concerning the
registration of a notified GI, Hungary would like to  suggest that the Council for TRIPS explores the
possibility of establishing a specific arbitration sy stem.  Hungary notes that such an approach would
not be alien to the settlement of disputes in the WTO.  Final and binding arbitration, as a means forsettling disputes in specific cases as well as in general, is explicitly recognized in Article 22.7 of the
DSU and Article 8.5
1 of the Agreement on Subsidies and Countervailing Measures, as well as in
Article 25 of the DSU respectively.
7. Accordingly, the decision of the arbitrators with respect to a challenge should be final and
binding upon the parties.  In addition, this decision should have an erga omnes  effect, i.e. as a result
of a successful challenge the notified geographical indication should not be entered in the register (or
should be deleted from it) and thereby neither the challenging Member nor any third party should be
under obligation to provide protection for it.  In Hung ary's view, this is essential to ensure that the
effect of the system is in line with the intent in Article 23.4 and that the system efficiently serves the
commercial interests of the "owners" of GIs.  The lack of an erga omnes  effect could easily lead to a
situation where a misleading (successfully challe nged) GI would have to be protected in third
Members by virtue of its multilateral registration.  This would clearly hurt, on all third markets, the
legitimate commercial interests of the Member which successfully challenged it.
8. The arbitration body would notify the Council for TRIPS and the WTO Secretariat of its
award.  The WTO Secretariat, on the basis of the notification of the arbitration body, would beresponsible for entering the decision in the multilateral register of GIs and it would publish the
decision.
9. Hungary believes that detailed procedures should be worked out by the Council for TRIPS
and should be clearly laid down in the Agreement on the establishment of the multilateral system of
notification and registration of geographical indications for the process of bilateral consultations and
arbitration.  When developing these procedures, in  Hungary's view, Members should, to the fullest
extent possible, build upon existing WTO procedures and principles, including those set out in theDSU.
10. Hungary would like to propose that the Coun cil for TRIPS examines, in a thorough manner,
the establishment of a multilateral mechanism for settling disagreements concerning the notification
and registration of GIs in the framework of the system to be set up under Article 23.4 of the TRIPS
Agreement.  In Hungary's view, the special arbitration mechanism outlined above could be aneffective and viable way of providing for this.  Nevertheless, Hungary is open to discuss any other
solution that would be effective, simple and would take care of the two most important
preoccupations elaborated above, i.e. that there should be a multilateral possibility to challenge the
registration of a notified GI and that the result of a challenge should apply on an erga omnes  basis.
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1 This Article was provisionally applied until the end of 1999.