WORLD TRADE
ORGANIZATIONWT/DS176/AB/R
2 January 2002
(02-0001)
Original:  English
UNITED STATES – SECTION 211 OMNIBUS
APPROPRIATIONS ACT OF 1998
AB-2001-7
Report of the Appellate BodyWT/DS176/AB/R
Page i
I. Introduc tion................................................................................................................. ................1
II. Arguments of th e Participants............................................................................................... ......8
A. Claims of Error by the European Communities – Appellant.........................................8
1. Article 6 quinquies   of the Paris Convention (1967) .........................................8
2. Article 15 of the  TRIPS Agreement .................................................................9
3. Article 16 of the  TRIPS Agreement ...............................................................11
4. Article 42 of the  TRIPS Agreement ...............................................................13
5. Article 2 of the Paris Convention (1967) and Article 3 of the
TRIPS Agreement ............................................................................................13
6. Article 4 of the  TRIPS Agreement .................................................................15
7. Article 8 of the Paris Conven tion (1967) – Trade Names...............................16
B. Arguments of the United States – Appellee.................................................................. 17
1. Article 6 quinquies   of the Paris Convention (1967) .......................................17
2. Article 15 of the  TRIPS Agreement ...............................................................18
3. Article 16 of the  TRIPS Agreement ...............................................................19
4. Article 42 of the  TRIPS Agreement ...............................................................20
5. Article 2 of the Paris Convention (1967) and Article 3 of the
TRIPS Agreement ............................................................................................21
6. Article 4 of the  TRIPS Agreement .................................................................22
7. Article 8 of the Paris Conven tion (1967) – Trade Names...............................22
C. Claims of Error by the United States – Appellant ....................................................... 23
1. Article 42 of the  TRIPS Agreement ...............................................................23
D. Arguments of the European Communities – Appellee ................................................. 23
1. Article 42 of the  TRIPS Agreement ...............................................................23
III. Issues Raised in this Appeal ............................................................................................... ......24
IV. Prelimina ry Ma tters ......................................................................................................... .........28
A. The Scope of A ppellate Review.................................................................................... 28
B. The Nature of the Measure .......................................................................................... 31
V. Article 6 quinquies   of the Paris Convention (1967) .................................................................36
VI. Article 15 of the  TRIPS Agreement .........................................................................................44
VII. Article 16 of the  TRIPS Agreement .........................................................................................52
VIII. Article 42 of the  TRIPS Agreement .........................................................................................58
IX. Article 2(1) of the Paris Convention (1967) and Article 3.1 of the  TRIPS Agreement ............67WT/DS176/AB/R
Page ii
X. Article 4 of the  TRIPS Agreement ...........................................................................................85
XI. Article 8 of the Paris Conv ention (1967) – Trade Names.........................................................90
XII. Findings and Conclusions................................................................................................... ....101
XIII. Concluding  Remarks........................................................................................................ .......103WT/DS176/AB/R
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WORLD TRADE ORGANIZATION
APPELLATE BODY
United States – Section 211 Omnibus
Appropriations Act of 1998
European Communities,  Appellant/Appellee
United States,  Appellant/AppelleeAB-2001-7
Present:Ehlermann, Presiding Member
Bacchus, Member
Lacarte-Muró, Member
I. Introduction
1. The European Communities and the United States appeal from certain issues of law and legal
interpretations in the Panel Report,  United States – Section 211 Omnibus Appropriations Act of 1998
(the "Panel Report").  1  The Panel was established on 26 September 2000 to consider a complaint by
the European Communities with respect to Secti on 211 of the United States Omnibus Appropriations
Act of 1998 ("Section 211").  2  The European Communities alleged that Section 211 is inconsistent
with certain obligations of the United States under the Agreement on Trade-Related Aspects of
Intellectual Property Rights  (the " TRIPS Agreement "), as read with the relevant provisions of the
Paris Convention for the Protection of Industrial Property ,  as amended by the Stockholm Act
of 1967 (the "Paris Convention (1967)"), which are incorporated by reference into the  TRIPS
Agreement .
2. The background to this dispute and the measure at issue are described in detail in the Panel
Report.  3  Here, we set out those aspects of the measure that are relevant to this appeal.
3. The complaint by the European Communities re lates to Section 211, which was signed into
law on 21 October 1998. Section 211 states as follows:
                                                     
1WT/DS176/R, 6 August 2001.
2Section 211 of the Department of Commerce Appropriations Act, 1999, as included in the Omnibus
Consolidated and Emergency Supplemental Appropriations Act 1999, Public Law 105-277, 112 Stat. 2681,which became law in the United States on 21 October 1998, referred to in this dispute as "Section 211".
3Panel Report, paras. 1.1-2.13.WT/DS176/AB/R
Page 2
(a) (1) Notwithstanding any other provision of law, no transaction or
payment shall be authorized or approved pursuant to section 515.527
of title 31, Code of Federal Regulations, as in effect on September 9,
1998, with respect to a mark, trade name, or commercial name that is
the same as or substantially similar to a mark, trade name, orcommercial name that was used in connection with a business or
assets that were confiscated unless the original owner of the mark,
trade name, or commercial name, or the bona fide successor-in-
interest has expressly consented.
[a] (2) No U.S. court shall recognize, enforce or otherwise validate
any assertion of rights by a designated national based on common lawrights or registration obtained under such section 515.527 of such a
confiscated mark, trade name, or commercial name.
(b) No U.S. court shall recognize, enforce or otherwise validate
any assertion of treaty rights by a designated national or its successor-in-interest under sections 44 (b) or (e) of the Trademark Act of 1946
(15 U.S.C. 1126 (b) or (e)) for a mark, trade name, or commercial
name that is the same as or substantially similar to a mark, trade
name, or commercial name that was used in connection with a
business or assets that were confiscated unless the original owner ofsuch mark, trade name, or commercial name, or the bona fide
successor-in-interest has expressly consented.
(c) The Secretary of the Treasury shall promulgate such rules and
regulations as are necessary to carry out the provisions of this section.
(d) In this section:
(1) The term "designated national" has the meaning given
such term in section 515.305 of title 31, Code of Federal
Regulations, as in effect on September 9, 1998, and includes a
national of any foreign country who is a successor-in-interestto a designated national.
(2) The term "confiscated" has the meaning given such
term in section 515.336 of title 31, Code of Federal
Regulations, as in effect on September 9, 1998.
4. Section 211 applies to a defined category of trademarks, trade names and commercial
names, specifically to those trademarks, trade names and commercial names that are "the same as orsubstantially similar to a mark, trade name, or commercial name that was used in connection with abusiness or assets that were confiscated" by the Cuban Government on or after 1 January 1959.
 4
Section 211(d) states that the term "designated national" as used in Section 211 has the meaning givento that term in Section 515.305 of Title 31, Code of Federal Regulations ("CFR"), and that it includes"a national of any foreign country who is a successo r-in-interest to a designated national."  The term
                                                     
4Before the Panel, the United States submitted that "trade names" and "commercial names" are
synonymous under its principal federal statute on trademark protection.  As in the Panel Report, a reference inthis Report to trade names should be read to include commercial names.  See Panel Report, para. 8.21.WT/DS176/AB/R
Page 3
"confiscated" is defined as having the meaning given that term in Section 515.336 of Title 31 CFR.
Part 515 of Title 31 CFR sets out the Cuban Assets Control Regulations (the "CACR"), which wereenacted on 8 July 1963 under the Trading with the Enemy Act of 1917.
 5  Under these regulations,
"designated national" is defined as Cuba, a national of Cuba or a specially  designated national.6
"Confiscated" is defined as nationalized or expropriated by the Cuban Government on or after 1January 1959 without payment of adequate and effective compensation.
 7
                                                     
550 U.S.C. App. 1 ff.
6See 31 CFR 515.305, which defines the term "designated national" as follows:
§515.305  Designated national.
For the purposes of this part, the term  designated national   shall mean Cuba
and any national thereof including any person who is a specially designated
national.
See also, 31 CFR 515.306, which defines the term "specially designated national" as follows:
(a) The term specially designated national  shall mean:
(1) Any person who is determined by the Secretary of Treasury to be a
specially designated national,
(2) Any person who on or since the "effective date" has acted for or on
behalf of the Government or authorities exercising control over adesignated foreign country, or
(3) Any partnership, association, corporation or other organization
which on or since the "effective date" has been owned or controlleddirectly or indirectly by the Government or authorities exercisingcontrol over a designated foreign country or by any speciallydesignated national.
7See 31 CFR 515.336, which defines the term "confiscated" as follows:
§515.336  Confiscated.
As used in §515.208, the term  confiscated   refers to:
(a) The nationalization, expropriation, or other seizure by the Cuban
Government of ownership or control of property, on or after
January 1, 1959:
(1) Without the property having been returned or adequate and effective
compensation provided; or
(2) Without the claim to the property having been settled pursuant to an
international claims settlement agreement or other mutually
accepted settlement procedure; and
(b) The repudiation by the Cuban Government of, the default by the
Cuban Government on, or the failure of the Cuban Government to
pay, on or after January 1, 1959:
(1) A debt of any enterprise which has been nationalized, expropriated,
or otherwise taken by the Cuban Government;
(2) A debt which is a charge on property nationalized, expropriated, or
otherwise taken by the Cuban Government; or
(3) A debt which was incurred by the Cuban Government in satisfaction
or settlement of a confiscated property claim.WT/DS176/AB/R
Page 4
5. Section 211(a)(1) relates to licensing regulations contained in the CACR.  The CACR are
administered by the Office of Foreign Assets Control ("OFAC"), an agency of the United StatesDepartment of the Treasury.  Under United States law, all transactions involving property underUnited States jurisdiction, in which a Cuban national has an interest, require a licence from OFAC.
 8
OFAC has the authority to grant either of two categories of licences, namely general licences andspecific licences.  A general licence is a general authorization for certain types of transactions set outin OFAC regulations.
 9  Such a licence is, in effect, a standing authorization for the types of
transactions that are specified in the CACR.  A specific licence, by contrast, is one whose preciseterms are not set out in the regulations, so that a person wishing to engage in a transaction for which ageneral licence is not available must apply to OFAC for a specific licence.
 10
6. Section 211 refers to Section 515.527 of Title 31 CFR.  Prior to the entry into force of
Section 211, a general licence was available under Section 515.527 for the registration and renewal oftrademarks previously owned by Cuban nationals irrespective of whether such trademarks had been
confiscated by the Cuban Government.  Before the enactment of Section 211, Section 515.527 read as
follows:
                                                     
8See 31 CFR 515.201, which provides:
§515.201 Transactions involving designated foreign countries or
their nationals;  effective date.
(a) All of the following transactions are prohibited, except as
specifically authorized by the Secretary of the Treasury (or any person,agency, or instrumentality designated by him) by means of regulations,rulings, instructions, licenses, or otherwise, if either such transactions are by,or on behalf of, or pursuant to the direction of a foreign country designated
under this part, or any national thereof, or such transactions involve property
in which a foreign country designated under this part, or any national thereof,has at any time on or since the effective date of this section had any interestof any nature whatsoever, direct or indirect:
…
(b) All of the following transactions are prohibited, except as
specifically authorized by the Secretary of the Treasury (or any person,
agency, or instrumentality designated by him) by means of regulations,rulings, instructions, licenses, or otherwise, if such transactions involveproperty in which any foreign country designated under this part, or anynational thereof, has at any time on or since the effective date of this sectionhad any interest of any nature whatsoever, direct or indirect:
…
(2) All transfers outside the United States with regard to any property or
property interest subject to the jurisdiction of the United States.
9See 31 CFR 515.317, which provides:
A general license is any license or authorization the terms of which are set
forth in this part.
1031 CFR 515.318.WT/DS176/AB/R
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Section 515.527  Certain transactions with respect to United States
intellectual property.
(a) Transactions related to the registration and renewal in the
United States Patent and Trademark Office or the United
States Copyright Office of patents, trademarks, andcopyrights in which the Government of Cuba or a Cuban
national has an interest are authorized.
7. On 10 May 1999, some six months after the entry into force of Section 211, the CACR were
amended by adding a new subparagraph (a)(2) to Section 515.527, which effectively prohibitsregistration and renewal of trademarks and trade names used in connection with a business or assetsthat were confiscated without the consent of the original owner or  bona fide   successor-in-interest.
This provision reads:
(a) (2) No transaction or payment is authorized or approved pursuant
to paragraph (a)(1) of this section with respect to a mark,
trade name, or commercial name that is the same as or
substantially similar to a mark, trade name, or commercialname that was used in connection with a business or assets
that were confiscated, as that term is defined in
section 515.336, unless the original owner of the mark, trade
name, or commercial name, or the bona fide successor-in-
interest has expressly consented .
8. The effect of Section 211, as read with the relevant provisions of the CACR, is to make
inapplicable to a defined category of trademarks and trade names certain aspects of trademark andtrade name protection that are otherwise guaranteed in the trademark and trade name law of the
United States.  In the United States, trademark and trade name protection is effected through the
common law as well as through statutes.  The common law provides for trademark and trade namecreation through use.  The Trademark Act of 1946 (the "Lanham Act")
 11  stipulates substantive and
                                                     
1115 U.S.C. §1051 ff.  The Lanham Act also defines the scope of a trademark, the process by which a
federal registration for a trademark can be obtained from the United States Patent and Trademark Office(the "USPTO"), and prescribes penalties for trademark infringement.  Under the law of the United States, tradenames do not need to be registered.WT/DS176/AB/R
Page 6
procedural rights in trademarks as well as trade names and governs unfair competition.
Section 211(b) refers to Sections 44(b) and (e) of the Lanham Act.  12
9. Before the Panel, the European Communities argu ed that:  Section 211(a)(1) is inconsistent
with Article 2.1 of the  TRIPS Agreement   in conjunction with Article 6 quinquies  A(1) of the Paris
Convention (1967) and Article 15.1 of the  TRIPS Agreement ;  Section 211(a)(2) is inconsistent with
Article 2.1 of the  TRIPS Agreement   in conjunction with Articles 2(1), 6 bis (1) and 8 of the Paris
Convention (1967), and Articles 3.1, 4, 16.1 and 42 of the  TRIPS Agreement ;  and Section 211(b) is
inconsistent with Article 2.1 of the  TRIPS Agreement   in conjunction with Articles 2(1), 6 bis (1)
and 8 of the Paris Convention (1967), and Articles 3.1, 4, 16.1 and 42 of the  TRIPS Agreement .
10. In the Panel Report circulated on 6 August 2001, the Panel found that:
(a) Section 211(a)(1) is not inconsistent with Article 15.1 of the
TRIPS Agreement;
(b) Section 211(a)(1) is not inconsistent with Article 2.1 of the
TRIPS Agreement in conjunction with Article 6 quinquies A(1)
of the Paris Convention (1967);
(c) it has not been proved that Section 211(a)(2) is inconsistent
with Article 16.1 of the TRIPS Agreement;
(d) Section 211(a)(2) is inconsistent with Article 42 of the TRIPS
Agreement;
(e) Section 211(a)(2) is not inconsistent with Article 2.1 of the
TRIPS Agreement in conjunction with Article 6 bis of the
Paris Convention (1967);
                                                     
12Section 44 of the Lanham Act (15 U.S.C. §1126) states, in relevant part:
(b) Any person whose country of origin is a party to any convention or
treaty relating to trademarks, trade or co mmercial names, or the repression of
unfair competition, to which the United  States is also a party, or extends
reciprocal rights to nationals of the United States by law, shall be entitled tothe benefits of this section under the conditions expressed herein to the extentnecessary to give effect to any provision of such convention, treaty or
reciprocal law, in addition to the rights to which any owner of a mark is
otherwise entitled by this chapter.
…
(e) A mark duly registered in the country of origin of the foreign
applicant may be registered on the principal register if eligible, otherwise onthe supplemental register in this chapter provided.  Such applicant shall
submit, within such time period as may be prescribed by the Director, a
certification or a certified copy of the registration in the country of origin ofthe applicant.  The application must state the applicant's bona fide intentionto use the mark in commerce, but use in commerce shall not be required priorto registration.WT/DS176/AB/R
Page 7
(f) Section 211(a)(2) is not inconsistent with Article 2.1 of the
TRIPS Agreement in conjunction with Article 8 of the Paris
Convention (1967);
(g) Section 211(a)(2) is not inconsistent with Article 3.1 of the
TRIPS Agreement and Article 2.1 of the TRIPS Agreement inconjunction with Article 2(1) of the Paris Convention (1967);
(h) Section 211(a)(2) is not inconsistent with Article 4 of the
TRIPS Agreement;
(i) it has not been proved that Section 211(b) is inconsistent with
Article 16.1 of the TRIPS Agreement;
(j) it has not been proved that Section 211(b) is inconsistent with
Article 42 of the TRIPS Agreement;
(k) it has not been proved that Section 211(b) is inconsistent with
Article 2.1 of the TRIPS Agreement in conjunction with
Article 6 bis of the Paris Convention (1967);
(l) Section 211(b) is not inconsistent with Article 2.1 of the
TRIPS Agreement in conjunction with Article 8 of the ParisConvention (1967);
(m) Section 211(b) is not inconsistent with Article 3.1 of the
TRIPS Agreement and Article 2.1 of the TRIPS Agreement in
conjunction with Article 2(1) of the Paris Convention (1967);
and
(n) Section 211(b) is not inconsistent with Article 4 of the TRIPS
Agreement.
 13
11. The Panel ruled that trade names are not a category of intellectual property covered by the
TRIPS  Agreement .  Consequently, the Panel limited its review to an examination of Section 211 as it
relates to trademarks.  14  The Panel recommended that the Dispute Settlement Body (the "DSB")
request the United States to bring its measures into conformity with its obligations under the  TRIPS
Agreement . 15
12. On 4 October 2001, the European Communities notified the DSB of its intention to appeal
certain issues of law covered in the Panel Report and certain legal interpretations developed by thePanel, pursuant to paragraph 4 of Article 16 of the  Understanding on Rules and Procedures
Governing the Settlement of Disputes   (the "DSU"), and filed a Notice of Appeal pursuant to Rule 20
of the  Working Procedures for Appellate Review  (the " Working Procedures ").  On 15 October 2001,
                                                     
13Panel Report, para. 9.1.
14Ibid., para. 8.41.
15Ibid., para. 9.3.WT/DS176/AB/R
Page 8
the European Communities filed its appellant's submission.  16  On 19 October 2001, the United States
filed an other appellant's submission.  17  On 26 October 2001, the European Communities and the
United States each filed an appellee's submission.  18
13. On 2 November 2001, pursuant to Rule 28(1) of the  Working Procedure s,  the Division
hearing the appeal requested that the participants submit additional written memoranda on the
interpretation by domestic courts of Article 6 quinquies   of the Paris Convention (1967), or the
interpretation by domestic courts of legislation incorporating Article 6 quinquies .  Both participants
filed the additional written memoranda on 6 November 2001, and served these memoranda on eachother.  Pursuant to Rule 28(2) of the  Working Procedure s, the Division gave the participants an
opportunity to respond to these memoranda at the oral hearing in this appeal.
14. The oral hearing in this appeal was held on 7, 8 and 9 November 2001.  The participants
presented oral arguments and responded to questions  put to them by the Members of the Division.
II. Arguments of the Participants
A. Claims of Error by the European Communities – Appellant
1. Article 6 quinquies   of the Paris Convention (1967)
15. The European Communities argues that the Pane l erred in finding that Section 211(a)(1)
is  not inconsistent with Article 2.1 of the  TRIPS Agreement   in conjunction with
Article  6 quinquies   A(1) of the Paris Convention (1967).  Contrary to the Panel's conclusion,
Article 6 quinquies  A(1) does not address solely the form of the trademark.  According to the
European Communities, Article 6 quinquies  A(1) addresses all features of a trademark.
16. The European Communities submits that the Pa nel correctly found that the term "as is"
(or "telle  quelle " in the French version of Article 6 quinquies  A(1)) refers to the trademark.  This
term encompasses all the features of a trademark, and under no circumstances can the term beunderstood as being limited to the form of a trademark.  This is confirmed by the context ofArticle 6 quinquies A(1).
17. The European Communities argues that Article 6 quinquies   of the Paris Convention (1967)
facilitates the obtaining of trademark protection in a Paris Union country when a trademark is already
                                                     
16Pursuant to Rule 21 of the  Working Procedures .
17Pursuant to Rule 23(1) of the  Working Procedures .
18Pursuant to Rules 22 and 23(3) of the  Working Procedures .WT/DS176/AB/R
Page 9
registered in the country of origin.  19  This facilitation is limited to the registration stage of the
trademark.  Trademarks created by registration in different countries will afterwards be "fullyindependent".
 20  Therefore, Article 6 quinquies   limits the discretion of WTO Members with respect to
the imposition of conditions for trademark registration.  There is thus no apparent conflict between
Articles 6 and 6 quinquies ,  contrary to what the Panel suggests in paragraph 8.79, second sentence.
18. The European Communities submits that Article 6 quinquies  B provides important contextual
guidance.  This provision enumerates an exclusive list of exceptions to Article 6 quinquies  A that refer
to elements going well beyond form.  Article 6 quinquies  B(3) provides, for example, an exception
when trademarks are "contrary to morality and public order", requiring an assessment of all theelements of the trademark including, but not limited to, its form.
19. In the view of the European Communities, the Panel's recourse to preparatory work is an
erroneous invocation of the supplementary means of interpretation in Article 32 of the Vienna
Convention on the Law of Treaties ("Vienna Convention ").
 21  According to the European
Communities, none of the conditions which justify recourse to supplementary means of interpretation
is present in this dispute.  Moreover, the documents related to the history of the ParisConvention (1967) used by the Panel in its analysis, fail to provide a clear indication of the intentionsof the negotiators.
20. The European Communities infers, given that Article 6 quinquies  A(1) of the Paris
Convention (1967) is not limited to form, the consent of a third party required for registration of atrademark by Section 211(a)(1) must be analyz ed with respect to the exceptions provided in
Article 6 quinquies  B.  As Section 211(a)(1) is not covered by any of the exceptions in
Article 6 quinquies  B, it is inconsistent with Article 2.1 the  TRIPS Agreement   together with
Article 6 quinquies  A(1) of the Paris Convention (1967).
2. Article 15 of the  TRIPS Agreement
21. The European Communities claims that the Pane l erred in finding that Section 211(a)(1) is
not inconsistent with Article 15.1 of the  TRIPS Agreement .  The Panel was incorrect in considering
that Section 211(a)(1) is domestic legislation within the meaning of Article 6(1) of the ParisConvention (1967), and that it is covered under "other grounds" as set out in Article 15.2 of the
TRIPS  Agreement .
                                                     
19The term "Paris Union" refers to the countries to which the Paris Convention (1967) applies.  See
Article 1(1) of the Paris Convention (1967).
20European Communities' appellant's submission, para. 53.
21Done at Vienna, 23 May 1969, 1155 U.N.T.S. 331;  8 International Legal Materials 679.WT/DS176/AB/R
Page 10
22. In the view of the European Communities, Section 211(a)(1) is not a measure related to
ownership but a measure that establishes a particular condition, or an additional procedural step, forthe registration or renewal of registration of certain trademarks.  It is unrelated to the transfer orcessation of an asset.  Furthermore, when the provision is applied in the context of a renewal, the
registered trademark ceases to exist in the hands of any owner and the signs or combinations of signs
that constitute the trademark fall into the p ublic domain.  The European Communities notes that
Article 18 of the  TRIPS Agreement   provides that trademarks are renewable indefinitely.  In sum, the
consent for the registration or renewal of trademarks required under Section 211(a)(1) creates acurtailment on the continued enjoyment of an existing trademark and prevents new registrations frombeing granted.
23. According to the European Communities, the Panel began its assessment by looking at
paragraph 1 of Article 15 and then concluded that it had to be considered "in tandem" withparagraph 2.  While not precisely clear on the basis for this approach, the European Communities
understands that the Panel found Section 211(a)(1) to be inconsistent with Article 15.1 of the
TRIPS Agreement ,  but nevertheless not WTO-inconsistent because it is covered by Article 15.2.
24. The European Communities argues that, contrary to the Panel's position, Article 15.2 should
be interpreted as allowing only those exceptions that are expressly foreseen in the ParisConvention (1967).  This is consistent with the general recognition that exceptions must be interpretednarrowly.  There is a relatively small number of express exceptions to Article 15.1 of the  TRIPS
Agreement   that are contained in the Paris Convention (1967) or the  TRIPS Agreement .
 22  T h e s e
would make little sense if Article 15.2 of the  TRIPS Agreement   were to allow any exception not
expressly prohibited.  The broader interpretation given by the Panel to Article 15.2 would also render
obsolete the disciplines established by Article 15.1.  The Panel recognized this danger but, instead ofrevisiting its conclusions, it referred to the doctrine of " abus de droit ", without drawing any
conclusions from it for the interpretation of Article 15.
25. The European Communities maintains that no provision exists, either in the  TRIPS
Agreement   or in the Paris Convention (1967), that allows WTO Members to require the consent of
third parties for the registration or renewal of registration of a trademark.  Section 211(a)(1) istherefore incompatible with Article 15 of the  TRIPS Agreement .
                                                     
22The European Communities cites the following provisions as express exceptions to Article 15.1 of the
TRIPS Agreement   contained in the Paris Convention (1967) or the  TRIPS Agreement : Articles 22.3, 23.2, 24.5,
and 62.1 of the TRIPS Agreement  and Articles 6(2), 6 ter, 6quinquies  (B), C(2) and D of the Paris
Convention (1967).  (European Communities' appellant's submission, para. 73;  European Communities'responses to questioning at the oral hearing.)WT/DS176/AB/R
Page 11
26. The European Communities adds that, even under the Panel's interpretation of Article 15.2,
Section 211(a)(1) would still be inconsistent with Article 15 of the  TRIPS Agreement   with respect to
trademarks registered under Article 6 quinquies   of the Paris Convention (1967), because it is not
covered by any of the exceptions enumerated in subparagraph B's exclusive list.
3. Article 16 of the  TRIPS Agreement
(a) Section 211(a)(2)
27. The European Communities argues that the Panel erred in finding that it had not proved that
Section 211(a)(2) is inconsistent with Article 16.1 of the  TRIPS Agreement .  The Panel incorrectly
applied the rules on burden of proof established by the Appellate Body.
28. The European Communities submits that it pr ovided ample evidence on how to interpret
Section 211(a)(2), and demonstrated how this provision conflicts with the obligations of theUnited States under Article 16.1 of the  TRIPS Agreement .  That there has not yet been litigation in
the United States giving rise to final judgments interpreting Section 211(a)(2), and that there is nolegislative history with respect to this measure,  cannot be used against the European Communities.
29. The European Communities submits that the Panel erroneously distinguished between the
owner of the registered trademark and the trademark itself, when both are intricately intertwined.
Although disputes may arise with respect to who is the lawful owner of a registered trademark, the
existence of a registered trademark necessarily implies that there is an owner.
30. According to the European Communities, the Panel did not provide support for its conclusion
that "[u]nder the exceptional circumstances dealt with under Section 211(a)(2), there may be asuccessful challenge concerning the prima facie  ownership rights in relation to the registration".
23
Section 211(a)(2) does not address the fate of the registered trademark in terms of its status in the
register.  Nor does the Panel explain the relevance of Section 211(a)(2) for purposes of determiningwho is the owner of a registered trademark under the relevant provisions of the Lanham Act.
31. The European Communities asserts that Section 211(a)(2) does not address the ownership
issue.  This is particularly the case when it is invoked by an infringer other than the original owner,
when the trademark has been abandoned by the or iginal owner, or when no original owner exists
because no United States trademark existed at the time of confiscation or the original owner is nolonger alive.
                                                     
23Panel Report, para. 8.111;  European Commu nities' appellant's submission, para. 107.WT/DS176/AB/R
Page 12
32. The European Communities concludes, therefore,  that the owner of a registered trademark
under Article 16.1 of the  TRIPS Agreement   is the holder of the registration until such time as it
ceases to hold the registration.  Further, it makes no sense to consider an original owner who is not inthe register as the lawful owner.  This conclusion is supported by the fact that under
Section 211(a)(2), this original owner has no ex clusive rights to prevent others from using the
registered trademark.
(b) Section 211(b)
33. The European Communities argues that the Panel erred in finding that it has not been proven
that Section 211(b) is inconsistent with Article 16.1 of the  TRIPS Agreement .  The Panel completely
disregarded the partial agreement between the parties as to the proper reading of Section 211(b).  The
burden of proof is relevant only for the elements on which the parties disagree.
34. According to the European Communities, the United States argued that Section 211(b) is
limited to situations covered by Section 44(e) of the Lanham Act, namely, situations where aregistered United States trademark is obtained on the basis of a trademark registered in a foreigncountry or where registration is applied for in a foreign country.  The European Communities agreeswith the United States that Section 211(b) covers such situations and that it prohibits United States
courts from recognizing, enforcing or otherwise validating any rights asserted by a designatednational flowing from a United States trademark obtained under Section 44(e) of the Lanham Act,provided that such a trademark was used in connection with a business or assets confiscated in Cuba.
35. However, the European Communities submits that Section 211(b) covers other situations as
well.  According to the European Communities, Sec tion 211(b) covers all cases in which foreigners,
who are nationals of a WTO Member, hold registered trademarks or trade names in the United States.This is because Section 211(b) refers also to Section 44(b) of the Lanham Act, in which no mention ismade of a registration or application for a trademark in the country of origin.  It refers to benefits topersons whose country of origin is a party to any "convention or treaty relating to trademarks, trade orcommercial names", which obviously includes the  TRIPS Agreement .  In addition, the reading
suggested by the United States would render the reference to trade names in Section 44(b) redundantbecause registration is not necessary for such rights.
36. To further support its view, the European Communities cites a decision issued by a
United States court in  Havana Club Holding, S.A. v. Galleon S.A.  ("Havana Club Holding ").
 24  The
European Communities emphasizes that the court decision stems from a final judgment in a case that
                                                     
24Havana Club Holding, S.A. v. Galleon S.A.,  62 F.Supp.2d 1085 (S.D.N.Y. 1999);  See also Havana
Club Holding, S.A. v. Galleon S.A.,  203 F.3d 116 (2d Cir. 2000).WT/DS176/AB/R
Page 13
went through the entire United States court system, up to the United States Supreme Court that denied
certiorari .
37. Given these elements, the European Communities considers that it has met its burden of proof
with respect to that part of Section 211(b) for which the parties have a divergent reading.  The
evidence presented clearly demonstrates that Section 211(b) applies to all United States trademarks
and trade names held by foreigners who are nationals of a WTO Member.
38. Finally, as the denial and curtailment of trademark and trade name rights under
Section 211(b) is the same as under Section 211(a)(2), the European Communities submits that itsarguments about the inconsistency between the latter provision and Article 16.1 of theTRIPS Agreement  apply also to Section 211(b).  This refers both to the proper reading and to the
scope of Section 211(b), that is, the narrower reading on which the parties agree as a minimum, aswell as the wider reading as to its scope put forward by the European Communities.
4. Article 42 of the  TRIPS Agreement
39. The European Communities argues that the Panel erred in finding that it has not been proven
that Section 211(b) is inconsistent with Article 42 of the  TRIPS Agreement .  The Panel did not carry
out an objective assessment of the evidence before it.
40. The European Communities submits that throughout the proceedings, both parties suggested
that Section 211(a)(2), which was found to be inconsistent with Article 42, and Section 211(b) have tobe read together.  Moreover, there was partial agreement between the parties as to the scope of
Section 211(b).  Furthermore, the Panel did not consider the final ruling in the  Havana Club Holding
decision, a case that made its course through the entire United States federal court system up to theSupreme Court, and which provides unequivocal proof of the denial of judicial enforceability of tradenames effected by Section 211(b).  That Section  211(b) is inconsistent with Article 42 of the  TRIPS
Agreement  is evident irrespective of whether a broader or narrower reading is given to its scope.
5. Article 2 of the Paris Convention (1967) and Article 3 of the  TRIPS
Agreement
41. The European Communities submits that the Panel erred in finding that Section 211(a)(2) is
not inconsistent with Article 3.1 of the  TRIPS Agreement  and Article 2.1 of the  TRIPS Agreement
together with Article 2(1) of the Paris Convention (1967).
42. The European Communities argues that Section 211(a)(2) is discriminatory on its face
because it applies exclusively to "designated nationals", which is defined in Section 515.305 of the
CACR as Cuba or Cuban nationals, and was extended by Section 211(d)(1) to include foreign (that is,WT/DS176/AB/R
Page 14
non-United States) successors-in-interest.  According to the European Communities, under no
circumstances can a United States national be considered a "designated" national.  Furthermore, it islogically inconsistent, according to the European Communities, to argue that the CACR regulations asadministered by OFAC could counterbalance this discrimination.
43. The European Communities argues that the Panel considered only the discriminatory
treatment between United States nationals and foreign nationals at the level of successors-in-interest.It did not consider the discriminatory treatment at the level of original registrants.  According to theEuropean Communities, Section 211(a)(2) discriminates at the level of original registrants betweenCuban nationals on the one hand, and United States and non-Cuban foreign nationals on the other.
44. The European Communities notes that Section 211(a)(2) applies to registered United States
trademarks for which registration has been  obtained under Section 515.527 of the CACR.
Section 515.527 is relevant only if the right-holder is a Cuban national.  It does not apply if theoriginal registrant is a United States national or non-Cuban foreign national.  According to the
European Communities, this means that a United States trademark in the hands of a United States
national or non-Cuban foreign national, even if it is the same as or substantially similar to a trademark
used in connection with a business or assets that were confiscated in Cuba, is not covered bySection 211(a)(2).
45. The European Communities notes that the CACR as administered by OFAC have no role in
such cases because they apply only to United States assets owned by Cuba or Cuban nationals.Therefore, it is logically inconsistent to argue that the CACR and OFAC could, even theoretically, doanything to counterbalance the discrimination on the face of Section 211(a)(2) between Cuba and
Cuban nationals on the one hand, and other nationals on the other.
46. The European Communities argues that the Pa nel was also incorrect with respect to its
conclusions regarding discrimination at the level of successors-in-interest.  The EuropeanCommunities acknowledges that if a United States trademark or trade name is acquired from a Cubanseller, the transaction would have to be author ized by OFAC and such authorization would be
necessary regardless of the nationality of the buyer (the buyer may be a Cuban, United States or otherforeign national) or the origin of the trademark or trade name (that is, whether it has any relationshipwith a confiscated asset). However, the European Communities argues that the burden was on theUnited States to demonstrate that the operation of Section 515.201 of the CACR would, in each and
every factual situation, necessarily and fully compensate the discrimination created by
Section 211(a)(2) between United States successors-i n-interest and Cuban or other foreign successors-
in-interest.WT/DS176/AB/R
Page 15
47. The European Communities argues further that ev en if the United States were to meet that
burden, there would nevertheless continue to be discriminatory treatment between United Statesnationals and foreigners because the United States nationals would have only to clear one hurdle (theOFAC process), while a foreign successor-in-interest would have to clear that hurdle as well as the
constraints imposed by Section 211(a)(2).
48. The European Communities is of the view that the situation in that case would be similar to
that found to be discriminatory treatment prohibited under Article III of GATT 1947 inUnited States – Section 337 of the Tariff Act of 1930  ("US – Section 337 "), where foreign goods were
subject to two cumulative enforcement measures for alleged infringements of intellectual property
rights, while United States goods were subject to only one such measure.
 25
49. The European Communities alleges that the Panel also erred in finding that Section 211(b) is
not inconsistent with Article 3.1 of the  TRIPS Agreement , and Article 2.1 of the  TRIPS Agreement
together with Article 2(1) of the Paris Convention (1967).  It argues that this finding is erroneous in
the light of its arguments presented earlier as to the scope of Section 211(b) and the burden of proof.
Given that both provisions operate in exactly the same manner, the arguments submitted with respectto the different levels of discrimination that result from Section 211(a)(2) also apply toSection 211(b).
6. Article 4 of the  TRIPS Agreement
50. The European Communities argues that the Pane l erred in finding that Section 211(a)(2) is
not inconsistent with Article 4 of the  TRIPS Agreement .
51. The European Communities is of the view that, as regards original owners of trademarks and
trade names, the discrimination is obvious as Section 211(a)(2) "targets" only Cuba and Cubannationals.  Therefore, United States and foreign nationals, other than Cubans, who are originalowners, are unaffected by Section 211(a)(2).  The European Communities argues further that theCACR and OFAC could not offset this discrimination because they do not play a role in relation tonon-Cuban original owners.
52. The European Communities also submits that the Panel erred in finding that Section 211(b) is
not inconsistent with Article 4 of the  TRIPS Agreement .  Given that Section 211(a)(2) has identical
coverage to that of Section 211(b), the European Communities alleges that its arguments with respect
to the former provision apply equally to the latter.  This result is independent of the scope given to
                                                     
25Panel Report, adopted 7 November 1989, BISD 36S/345.WT/DS176/AB/R
Page 16
Section 211(b), whether it be the broader scope advanced by the European Communities or the
narrower one on which the parties at a minimum agree.
7. Article 8 of the Paris Convention (1967) – Trade Names
53. The European Communities argues that the Panel erred in finding that trade names are not
covered in the  TRIPS Agreement .  The Panel's finding comes "as a surprise"  26  because both the
European Communities and the United States had agreed that trade names were included in the scopeof the  TRIPS Agreement .  The issue of coverage of trade names was not raised specifically before the
Panel until the interim review stage, when the participants commented on the Panel's finding thattrade names were not covered.
54. The European Communities maintains that the Pane l erred in its analysis by considering that
Article 1.2 of the  TRIPS Agreement   contains an exhaustive definition of intellectual property.  The
European Communities considers that Article 1.2 is illustrative and is no more than a very generaldefinition of intellectual property rights covered by the  TRIPS Agreement .  Article 1.2 does not
define the details of such intellectual property rights with conclusive precision.
55. In the view of the European Communities, a proper analysis should begin with Article 2.1 of
the  TRIPS Agreement .  The Panel's interpretation reduces the express inclusion in Article 2.1 of
Article 8 of the Paris Convention (1967) to inutility.   The Panel's interpretation also suggests that the
negotiators of the  TRIPS Agreement   committed a blatant error.  The European Communities supports
its argument by referring to several matters that are included within the disciplines of the
TRIPS Agreement , but that are not specifically referenced in Article 1.2.  Finally, the European
Communities disagrees with the Panel that the negotiating history of the  TRIPS Agreement   supports
the Panel's finding that trade names are not covered.
56. The European Communities argues that the Panel did not undertake any analysis in relation to
Article 8 of the Paris Convention (1967), and simply concluded that Sections 211(a)(2) and (b) are notinconsistent with Article 2(1) of the  TRIPS Agreement   together with Article 8 of the Paris
Convention (1967).  Thus, the European Communities maintains that the Appellate Body shouldcomplete the analysis with respect to other provisions of the  TRIPS Agreement   that it claims are
violated by Section 211.
57. The European Communities argues that Sections 211(a)(2) and (b) deny court enforcement
for trade names.  This denial of court enforcement is tantamount to denying protection altogether,because trade names can only be effectively enforced with the help of the court system. The European
                                                     
26European Communities' appellant's submission, para. 22.WT/DS176/AB/R
Page 17
Communities submits, therefore, that Sections 211(a)(2) and (b) are inconsistent with Article 8 of the
Paris Convention (1967).
58. The European Communities submits that, given that trade names are covered by the
TRIPS  Agreement ,  Article 42 applies equally to trade names.  As Sections 211(a)(2) and (b) deny
judicial enforceability to registered trademarks and also to trade names, the Panel's finding of
inconsistency of Section 211(a)(2) with Article 42 of the  TRIPS Agreement   applies equally to trade
names in respect of Sections 211(a)(2) and (b).
59. Finally, the European Communities submits that, as Sections 211(a)(2) and (b) address trade
names in the same manner as trademarks, its arguments with respect to the inconsistency ofSections 211(a)(2) and (b) with Articles 2.1, 3.1 and 4 of the  TRIPS Agreement   apply in respect of
both trademarks and trade names.
B. Arguments of the United States – Appellee
1. Article 6 quinquies   of the Paris Convention (1967)
60. The United States argues that the Panel correctly found that Article  6quinquies A(1) does not
require Members to accept for filing and protect without question  all  trademarks duly registered in
their country of origin.  Rather, Article  6quinquies A(1) prevents Members from denying such
registration on the basis of the  form  of the trademark.  As Section 211(a)(1) does not deal with the
form of the trademark, it is not inconsistent with Article 2.1 of the  TRIPS Agreement ,  in conjunction
with Article  6quinquies   of the Paris Convention (1967) .
61. The United States submits that the European Communities' arguments with respect to the
Panel's sound interpretation of Article  6quinquies A(1) are incorrect.  The European Communities
makes no serious attempt at a textual analysis to support its position, inaccurately criticizes part ofthe Panel's analysis of the context of the provision , improperly tries to interpret the exceptions
to Article 6 quinquies  A(1) as overriding the ordinary meaning of Article  6quinquies A(1), and
incorrectly argues that the need to resort to supportive historical documents somehow undercuts the
Panel's analysis.
62. According to the United States, even if Article 6 quinquies  A(1) were read to require WTO
Members to accept for filing and protect any trademarks duly registered abroad in the country oforigin, regardless of whether the registrant is the proper owner under domestic law,Article 6 quinquies B would provide exceptions to these obligations.  Contrary to the European
Communities' arguments, two of these exceptions would cover the situations represented bySection 211.WT/DS176/AB/R
Page 18
63. The United States notes that, according to Article 6 quinquies  B(1), registration of trademarks
may be denied or invalidated when the trademarks are of such a nature as to infringe rights acquiredby third parties in the country where protection is claimed.  To the extent that the original owner of aconfiscated asset, who used a trademark in connection with that asset, has rights that would be
impaired if the entity which confiscated the asset could acquire ownership of the mark in the
United States, it is consistent with Article 6 quinquies  B of the Paris Convention (1967) to deny
registration by the confiscating entity, unless the original owner consents.
64. The United States also notes that, according to Article 6 quinquies  B(3), registration may be
denied if the trademarks are contrary to  ordre public .  Courts have found that giving domestic effect
to foreign confiscation with respect to domestic assets is contrary to  ordre public .  Therefore, even if
Article 6 quinquies  A(1) could be read to extend beyond matters of trademark form, then, in the case
of foreign confiscation, the United States is justified in denying registration in the situations coveredby Section 211 for reasons of  ordre public .
2. Article 15 of the  TRIPS Agreement
65. The United States argues that the questions raised by the European Communities with respect
to Section 211(a)(1) are questions of fact, not law, and are therefore outside the scope of appellatereview.  Further, neither in its notice of appeal nor in its appellant's submission does the EuropeanCommunities claim that the Panel did not fulfill its obligation under Article 11 of the DSU.
66. Even assuming that the European Communities had properly raised this issue on appeal, the
United States is of the view that such an appeal should fail.  Section 211(a)(1) is no less about
"ownership" of the trademark simply because it identifies who is  not  the owner, without legally
assigning another.  Further, the European Communities is effectively asking the Appellate Body toreweigh the evidence as to the ownership elements in Section 211.  This, however, is properly within
the scope of the Panel's discretion, and may not be reversed unless the Panel exceeded the bounds ofits discretion under Article 11 of the DSU.
67. The United States submits that the Appellate Body should also uphold the Panel's legal
conclusion that Article 15 of the  TRIPS Agreement   does not prevent Members from denying
registration to those who do not own the trademark.  The European Communities appears to concede
that the Panel's textual analysis is sound, but argues that the provision's context and object and
purpose lead to the conclusion that Article 15 permits Members to deny trademark registrations onlyif specifically authorized by a particular provision of the  TRIPS Agreement   or the Paris
Convention (1967).  In the view of the United States, the European Communities' interpretation,WT/DS176/AB/R
Page 19
however, is at odds with the ordinary meaning of Article 15, and creates conflicts with other
provisions of the  TRIPS Agreement .
68. The United States further submits that the Eu ropean Communities' reading of the context of
this provision is inaccurate because paragraph 2 of Article 15 providing for denial on "other grounds"
is not an exception, as alleged by the European Communities, and, if it were, there would still be no
justification for interpreting it narrowly.  The United States also argues that the object and purpose ofthe  TRIPS Agreement   is not frustrated by reserving registration to those that own the trademarks.  In
addition, the European Communities failed to acknowledge the Panel's finding that there are TRIPS  Agreement   disciplines in place to prevent such frustration.
69. The United States maintains that the Appellate Body should reject the European
Communities' contention that, even if Article 15 does not prohibit Members from denying registrationon ownership grounds, Article 6 quinquies  A(1) does.  First, the Panel was correct to find that
Article 6 quinquies  A(1) is limited to matters of the  form  of the trademark.  Second, even assuming
that it were not, the exceptions in Article 6 quinquies  B would cover the situations represented by
Section 211.
3. Article 16 of the  TRIPS Agreement
(a) Section 211(a)(2)
70. According to the United States, the European Communities' only substantive argument
depends on the false assumption that a trademark registrant is necessarily the owner of the trademark,either under United States law or under the  TRIPS Agreement .  The Panel correctly noted that under a
system in which trademark registration is not the same as trademark ownership, but only gives rise toa presumption of trademark ownership, the status of the trademark registration itself is not dispositiveof the issue of ownership.  Under such a system, if  a defendant successfully overcomes the registrant's
presumption of ownership, it may or may not d ecide to seek cancellation of the registration.
Declining to seek cancellation does not make the defendant any less an owner of the trademark, or the
registrant any more of one.
71. The United States contends that, based on the Panel's analysis, it is clear that, whether or not
the European Communities failed to present specific evidence, there is no basis for finding thatSection 211(a)(2) denies Article 16.1 rights to pe rsons who are "owners of registered trademarks".
Even if there were, however, the United States submits, as it did before the Panel, thatSection 211(a)(2) would be covered by the exceptions from Article 16 in Article 17 of theTRIPS Agreement .WT/DS176/AB/R
Page 20
(b) Section 211(b)
72. The United States argues that Section 211(b) is not inconsistent with Article 16.1 of the
TRIPS Agreement .  In support of its appeal with respect to Section 211(b) and Article 16.1, the
European Communities simply cross-references its argument made in relation to Section 211(a)(2).With respect to Section 211(b), the Panel correctly found that the European Communities had notsubmitted sufficient evidence of a breach of Article 16.1 of the  TRIPS Agreement .
73. The United States maintains that, even if the European Communities had sustained its burden
of proof with respect to the meaning of Section 211(b), the Appellate Body should nevertheless findthat the European Communities did not sustain its evidentiary burden with respect to the allegedbreach of Article 16.1.  Further, if the Appellate Body finds that the European Communities did
sustain its burden in both instances, it should nevertheless find that Section 211(b) is not inconsistent
with Article 16.1, for the reasons stated above in connection with Section 211(a)(2).
4. Article 42 of the  TRIPS Agreement
74. The United States submits that Section 211(b) is not inconsistent with Article 42 of the
TRIPS  Agreement .  Although the European Communities argues that the Panel undertook a selective
consideration of the evidence, the European Communities does not refer to or make any allegations
concerning Article 11 of the DSU.  To support its claim, the European Communities incorrectly
suggests that the Panel seemed doubtful about its ow n finding by suggesting that Section 211(b) might
raise concerns similar to those arising in respect of  Section 211(a)(2).  However, the Panel was merely
reiterating that the European Communities had failed to present evidence that Section 211(b) wasinconsistent with obligations  of the  TRIPS  Agreement .
75. The United States notes the submission of the European Communities that both the European
Communities and the United States agree on the scope of Section 211(b).  In response to thissubmission, the United States argues that in its submissions on this issue, it was only responding "inkind" to the European Communities' vague arguments.  The United States submits further that the
European Communities incorrectly suggests that the Panel ignored a court decision interpreting
Section 211(b), when, in fact, the Panel specifically found that the language from the court decisiondid not explain what the Panel needed to know for the purposes of this dispute.
76. Even assuming that Section 211(a)(2) and Section 211(b) are sufficiently "parallel" such that
there are sufficient uncontested facts for the Appellate Body to complete the analysis not undertakenby the Panel, the United States argues that the Appellate Body should conclude that Section 211(b) isconsistent with Article 42 of the  TRIPS Agreement .  Even if there were an inconsistency with respect
to trademarks, there is no factual basis for finding an inconsistency with respect to trade names.WT/DS176/AB/R
Page 21
5. Article 2 of the Paris Convention (1967) and Article 3 of the  TRIPS
Agreement
77. The United States argues that the Panel correctly found that Section 211(a)(2) does not
provide more favourable treatment to United States nationals than it does to non-United Statesnationals, and, therefore, is not inconsistent with the national treatment provisions of theTRIPS Agreement  and the Paris Convention (1967).  The European Communities claims that the
Panel erred in its assessment of the facts.  As the European Communities has not alleged any
violations of Article 11 of the DSU, in the view of the United States this claim is outside the scope of
appellate review.
78. According to the United States, the European Communities' claim is based on its assumption
that OFAC regulations impose a licensing requirement only with respect to United States assetsowned by Cuban nationals, such that United States or other nationals are unaffected.  This is incorrect.OFAC regulations are very broad, and generally prohi bit any transactions involving property in which
a designated national has had any interest of any na ture whatsoever, direct or indirect.  This includes
transactions by persons of any nationality with respect to trademarks that are identical or similar totrademarks in which a designated national has had an interest.  Moreover, in claiming that there is
discrimination with respect to original registrants, the European Communities disregards the fact that,
as to original owners, there is no distinction made according to nationality.
79. The United States notes the European Communities' argument that, as the Panel's finding was
based on OFAC's discretionary licensing authority, the United States has the burden of demonstratingthat this authority would be exercised in an even-h anded fashion.  In the view of the United States,
this is incorrect.  It is the European Communities' burden to demonstrate that Section 211(a)(2), on itsface, mandates WTO-inconsistent action.
80. The United States argues that Section 211(b) is not inconsistent with the national treatment
obligation in the  TRIPS Agreement   and the Paris Convention (1967).  The European Communities'
sole argument with respect to Section 211(b) and the national treatment obligation is to refer to its
arguments under Section 211(a)(2), because the two sections operate in the same manner.  However,the European Communities' argument with respect to Section 211(a)(2) is based in significant part onits observation that Section 211(a)(2) does not specifically mention  United States nationals assuccessors-in-interest.  Section 211(b), by contrast, specifically includes United States nationals assuccessors-in-interest.  This difference alone undermines the European Communities' assertion that itsarguments by cross-reference are supportable and meaningful.  In the view of the United States, theEuropean Communities' Section 211(a)(2) argument is largely irrelevant to Section 211(b).WT/DS176/AB/R
Page 22
81. If the Appellate Body concludes that the European Communities' arguments regarding
Section 211(a)(2) are germane to the analysis of Section 211(b), the United States submits that its ownarguments with regard to Section 211(a)(2) demons trate that Section 211(b) is not inconsistent with
the national treatment obligation in the  TRIPS Agreement   and the Paris Convention (1967).
6. Article 4 of the  TRIPS Agreement
82. In the view of the United States, the Panel correctly found that Section 211(a)(2) is not
inconsistent with the most-favoured-nation obligation of the  TRIPS Agreement .  The European
Communities' sole argument is that there is discrimination at the level of original owners.  This isincorrect.  The original owner, of whatever nationality, consents to his own registration, so
Section 211(a)(2) creates no differential treatment according to the nationality of the original owner.
Further, there is no discrimination with respect to the nationality of the entity confiscating assets in
Cuba.  Entities of other nationalities were not in a position to confiscate the original properties inCuba;  they become relevant only if they become successors-in-interest to the confiscating entity.  As
the Panel correctly found, Section 211(a)(2) treats all foreign successors-in-interest in the samemanner.
83. The United States also argues that Section 211(b) is not inconsistent with the most-favoured-
nation obligation of the  TRIPS Agreement .  The European Communities has failed to make specific
arguments with respect to the most-favoured-nation obligation under Section 211(b).  However, if the
Appellate Body concludes that the European Communities' arguments with respect to
Section 211(a)(2) are germane to its analysis of Section 211(b), the United States refers the Appellate
Body to its own arguments in respect of Section 211(a)(2).
7. Article 8 of the Paris Convention (1967) – Trade Names
84. The United States agrees with the European Communities that the Panel erred in finding that
the  TRIPS Agreement   contains no obligations with respect to trade names.  Article 2.1 of the  TRIPS
Agreement   identifies trade names, which are protected under Article 8 of the Paris
Convention (1967), as a category of intellectual property covered "in respect of Parts II, III and IV" of
the  TRIPS Agreement .  The United States is of the view that if upheld, the Panel's finding would
render this specific identification of trade names in Article 8 of the Paris Convention (1967) a nullity.
85. However, the United States does not agree with the European Communities that the Appellate
Body should complete the Panel's analysis with respect to whether Section 211 is inconsistent withthe obligations under the  TRIPS Agreement  and the Paris Convention (1967) regarding the protection
of trade names.  According to the United States, th ere are insufficient factual findings with respect to
trade name protection in the United States so that the Appellate Body should decline to complete theWT/DS176/AB/R
Page 23
analysis not undertaken by the Panel.  In particular, the United States submits that the Panel examined
thoroughly United States law with respect to trademarks and trademark registrations, but made nofindings on how trade name ownership is established, or whether the issue of registration or non-registration of trade names affects the rights of the person asserting ownership of a trade name.
86. However, if the Appellate Body decides nevertheless to complete the analysis, the United
States submits that the Appellate Body should find th at Section 211(a)(2) is not inconsistent with any
trade name obligations of the  TRIPS Agreement  and the Paris Convention (1967).
C. Claims of Error by the United States – Appellant
1. Article 42 of the  TRIPS Agreement
87. The United States argues that the Panel erred in finding that Section 211(a)(2) breaches the
requirements for fair and equitable procedures detailed in Article 42 of the  TRIPS Agreement .
88. The Panel found that, inconsistently with this Article, "Section 211(a)(2) limits, under certain
circumstances, right holders' effective access to and, hence, the availability of civil judicialprocedures".
27  However, the United States submits that the Panel erred by overlooking the fact that
under Section 211, the "certain circumstances" under which a court will not recognize, enforce, orotherwise validate the assertion of ownership rights are no more than the very "circumstances" in
which the claimant is not the legitimate owner (or right holder) according to United States law.
89. The United States contends further that the Panel erroneously concluded that
Section 211(a)(2) prevents persons who claim ownership of a trademark on the basis of registrationfrom having the ability to substantiate their claims  in a trademark infringement action.  According to
the United States, the Panel found nothing in Section 211(a)(2) that prevents parties, includingtrademark registrants, from initiating a judicial proceeding, from presenting all relevant evidence insupport of their claims, and, if they are trademark registrants, from enjoying the presumption ofvalidity that registration confers.
D. Arguments of the European Communities – Appellee
1. Article 42 of the  TRIPS Agreement
90. The European Communities argues that the Panel did not err in finding that Section 211(a)(2)
is inconsistent with Article 42 of the  TRIPS Agreement .  According to the European Communities,
Article 42 requires that, in a civil judicial procedure, a plaintiff must be able to pursue all issues
                                                     
27Panel Report, para. 8.102.WT/DS176/AB/R
Page 24
relevant for the enforcement of an intellectual property right covered by the  TRIPS Agreement   and
not just the plaintiff  's entitlement to enforce the right conferred by the intellectual property right.
91. The European Communities contends further that the United States argument is based on a
mis-characterization of Section 211(a)(2) as an ownership rule.  Accordingly, the European
Communities argues that the United States' circular reasoning that if somebody is not the rightful
owner of a registered trademark, there is nothing this person can enforce in civil judicial procedures,has to be rejected.  Even assuming that Section 211(a)(2) contains an element that can be of relevanceto the issue of ownership, the European Communities contends that the owner of record of aregistered United States trademark must benefit fully from the protection offered by Article 42 untilsuch moment that the trademark is definitively removed from the register.
92. The European Communities argues that Sect ion 211(a)(2) limits the issues subject to
litigation and thus excludes issues that are typically relevant in trademark-related litigation, such asuse of the trademark, identity or similarity of signs, class of products or services covered by the
trademark, existence and scope of a licence, among others.
III. Issues Raised in this Appeal
93. The measure at issue in this dispute is Section 211 of the United States Omnibus
Appropriations Act, 1999, ("Section 211")
 28, which became law in the United States on
21 October 1998.  Section 211 consists of four subsections.  In its request for the establishment of a
panel, the European Communities indicated that it was challenging only subsections (a)(1), (a)(2)
and (b).  29  At the oral hearing in this appeal, the Eu ropean Communities confirmed this by stating that
the measure "includes 211(a)(1), 211(a)(2), and 211(b)" and that "[t]he other provisions aredefinitions and are auxiliary".
 30  The United States agreed.  31
94. With this in mind, we confine our rulings in this appeal to subsections (a)(1), (a)(2) and (b) of
Section 211.  We address subsections (c) and (d) only to the extent that the definitions they containare relevant to our examination of the consistency of subsections (a) and (b) with the provisions of theTRIPS Agreement   and of the Paris Convention (1967) that have been invoked by the European
Communities.
                                                     
28See  supra , footnote 2.
29WT/DS176/2.
30European Communities' responses to questioning at the oral hearing.
31United States' responses to questioning at the oral hearing.WT/DS176/AB/R
Page 25
95. Section 211 makes reference to Section 515.527 of the Cuban Assets Control Regulations (the
"CACR").  32  The CACR were enacted on 8 July 1963 pursu ant to the Trading with the Enemy Act, a
statute enacted by the United States Congress on 6 October 1917.  33  After the entry into force of
Section 211, the CACR were amended by adding a new subparagraph (a)(2) to Section 515.527 of
Title 31 CFR.  34  Both parties to this dispute agree that neither the CACR nor the Trading with the
Enemy Act is part of the measure at issue in this appeal.  Thus, we refer to the CACR and to theTrading with the Enemy Act only to the extent th at they are relevant for the interpretation of
Section 211 and have been addressed by the participants in their arguments in this dispute.
96. This dispute focuses on the protection of trademarks.
35  In the legal regimes of most WTO
Members, the ownership of a trademark is established exclusively through registration.  The Panelestablished that this is not so under United States law.
36  Before the Panel, the United States submitted
that, under United States law, "'use' in connection with a business or assets may create ownershiprights in the trademark".
37  The Panel established, further, that, in the United States, "the registration
of a trademark confers a  prima facie   presumption of the registrant's ownership of the registered
trademark."38  The European Communities agreed with the submission of the United States that "if the
                                                     
3231 CFR §§515.101 – 515.901 (1999).
33See  supra , footnote 5.
34After this, paragraph (a) of Section 515.527 became subparagraph (a)(1).  The amendment entered
into force on 10 May 1999.  The text of Sections 515.527(a)(1) and (a)(2) are set out in paragraphs 6 and 7 of
this Report.
35Before the Panel, the European Communities also made claims in relation to trade names, and, on
appeal, the European Communities challenges the Panel' s finding that trade names are not covered in the
TRIPS Agreement .  In Sections V-X of this Report, we address the European Communities' appeal as it relates to
trademarks.  We address the issue of trade names, and the Panel's findings with respect to this issue, inSection XI below.
36See Panel Report, paras. 8.62-8.64, where the Panel stated that:
[W]e are obliged to examine first how the United States determines
trademark ownership under its laws.
…
According to the United States, tr ademark ownership is generally
established through use and thus the owner of a trademark is generally theparty who controls the nature and quality of the goods sold or servicesrendered under the trademark.
We note that trademark ownership is generally determined by use under US
law.
37Ibid., para. 4.215.
38Panel Report, para. 8.99.WT/DS176/AB/R
Page 26
person registering a trademark in the United Stat es is not the true owner of the trademark under
[United States] law, the registration may be cancelled."  39 
97. Both the European Communities and the United States agree that, in the United States, the
principal federal statute on trademark and trade name protection is the Trademark Act of 1946 (which
is commonly referred to as the "Lanham Act").  40  Both parties to this dispute have also agreed that the
Lanham Act also is not part of the measure at issue in this appeal.  Thus, we refer to the Lanham Actonly to the extent that it is relevant for the interpretation of Section 211.
98. On appeal, the United States submits that the European Communities has not challenged the
application   of Section 211.
 41  At the oral hearing in this appeal, the European Communities
confirmed that it has not challenged the application of the statute, and clarified that, instead, it ischallenging the statute on its face.
 42  The European Communities confirmed as well that, in this
dispute, the European Communities is not challenging the WTO-consistency of the decisions in
Havana Club Holding, S.A. v. Galleon S.A . (the " Havana Club Holding   decisions").  43  L i k e  t h e
Panel, the only applications of Section 211 we are aware of are the two United States court decisions
relating to Section 211(b) in 1999 and in 2000 in  Havana Club Holding, S.A. v. Galleon S.A .  The
request by the European Communities for the establishment of a panel does not contain any referenceto the  Havana Club Holding   decisions.  Thus, in this appeal, we examine the WTO-consistency of
Section 211 on its face.  The question of the WTO-consistency of the  Havana Club Holding
decisions is not before us.  However, as the European Communities has argued and as theUnited States has agreed, the  Havana Club Holding   decisions are relevant as evidence of how
Section 211(b), as the European Communities has put it, "operates in practice".
 44  We agree.
                                                     
39Panel Report, para. 4.240.  United States' othe r appellant's submission, para. 24.  European
Communities' responses to questioning at the oral hearing.  See also McCarthy, J. Thomas, McCarthy on
Trademarks and Unfair Competition  (West Publishing Group, 2000), Vol. I, p. 19-13.
40See  supra , footnote 11.
41United States' other appellant's submission, para. 19.
42European Communities' responses to questioning at the oral hearing.
43Havana Club Holding, S.A. v. Galleon S.A ., 203 F.3d 116 (2d Cir. 2000);   Havana Club Holding, S.A.
v. Galleon S.A ., 62 F.Supp.2d 1085 (S.D.N.Y. 1999 ).  These two decisions followed three decisions issued
earlier in the same dispute, before Section 211was enacted:  Havana Club Holding, S.A. v. Galleon , S.A., 961
F.Supp. 498 (S.D.N.Y. 1997);  Havana Club Holding, S.A. v. Galleon S.A. , 974 F.Supp. 302 (S.D.N.Y. 1997);
Havana Club Holding, S.A. v. Galleon S.A ., 1998 WL 150983 (S.D.N.Y.).  Because they were issued before
Section 211 was enacted, these three earlier decisions are not relevant.
44European Communities' appellant's submission, para. 145.WT/DS176/AB/R
Page 27
99. Therefore, the measure at issue in this dispute consists of subsections (a)(1), (a)(2) and (b) of
Section 211.  With respect to this measure, the following issues are raised in this appeal:
(a) whether the Panel erred in finding that Section 211(a)(1) is not inconsistent with
Article 2.1 of the  TRIPS Agreement   in conjunction with Article 6 quinquies  A(1) of
the Paris Convention (1967);
(b) whether the Panel erred in finding that Section 211(a)(1) is not inconsistent with
Article 15.1 of the  TRIPS Agreement ;
(c) whether the Panel erred in finding that the European Communities has not proved that
Sections 211(a)(2) and (b) are inconsistent with Article 16.1 of the  TRIPS
Agreement ;
(d) whether the Panel erred in finding that:
(i) Section 211(a)(2) is inconsistent with Article 42 of the  TRIPS Agreement  
with respect to the protection of trademarks;  and
(ii) the European Communities has not proved that Section 211(b) is inconsistent
with Article 42 of the  TRIPS Agreement   with respect to the protection of
trademarks;
(e) whether the Panel erred in finding that Sections 211(a)(2) and (b) are not inconsistent
with Article 2.1 of the  TRIPS Agreement   in conjunction with Article 2(1) of the
Paris Convention (1967) and Article 3.1 of the  TRIPS Agreement   in respect of the
protection of trademarks;
(f) whether the Panel erred in finding that Sections 211(a)(2) and (b) are not inconsistent
with Article 4 of the  TRIPS Agreement   in respect of the protection of trademarks;
and
(g) whether the Panel erred in finding that trade names are not covered by the  TRIPS
Agreement   and, consequently:
(i) erred in not finding that Sections 211(a)(2) and (b) are inconsistent with
Article 2.1 of the  TRIPS Agreement   in conjunction with Article 2(1) of the
Paris Convention (1967) and Article 3.1 of the  TRIPS Agreement   in respect
of the protection of trade names;WT/DS176/AB/R
Page 28
(ii) erred in not finding that Sections 211(a)(2) and (b) are inconsistent with
Article 4 of the  TRIPS Agreement   in respect of the protection of trade
names;
(iii) erred in not finding that Sections 211(a)(2) and (b) are inconsistent with
Article 42 of the  TRIPS Agreement  in respect of the protection of trade
names;  and
(iv) erred in finding that Sections 211(a)(2) and (b) are not inconsistent with
Article 2.1 of the  TRIPS Agreement   in conjunction with Article 8 of the
Paris Convention (1967).
IV. Preliminary Matters
A. The Scope of Appellate Review
100. We begin by addressing a preliminary question that is central to our disposition of the specific
issues raised in this appeal.  This question is the scope of appellate review in this appeal.
101. With respect to the scope of appellate review, the United States argues that we are bound on
appeal by the Panel's conclusions about the meaning of the measure at issue.  The United Statessubmits that a panel's review of a Member's domestic law is, in any dispute, a question of fact
 45, and
that, therefore, the European Communities' allegations, in this dispute, about the Panel's appreciationof the meaning of the terms of Section 211 are questions of fact.  The United States points to ourmandate under Article 17.6 of the DSU, which limits appeals to "issues of law covered in the panelreport and legal interpretations developed by the panel."  The United States reminds us of ourobservation in our Report in  EC Measures Concerning Meat  and Meat Products (Hormones)
("EC – Hormones ") that "[f]indings of fact, as distinguished from legal interpretations or legal
conclusions, by a panel are, in principle, not subject to review by the Appellate Body."
 46  The United
States reminds us as well of Article 11 of the DSU, which obliges a panel to "make an objectiveassessment of the matter before it, including an objective assessment of the facts of the case".Although the United States acknowledges that the question whether a panel has made such anobjective assessment of the facts is indeed a legal question, the United States insists that, for such aquestion to fall within the scope of appellate review, it must be properly raised on appeal.  The UnitedStates emphasizes that the European Communities has not made a claim under Article 11 of the DSU
                                                     
45United States' appellee's submission, paras. 19 and 20.
46Appellate Body Report, WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:1,
135, para. 132.WT/DS176/AB/R
Page 29
in this appeal.  From this, the United States concludes that the findings of the Panel on the meaning of
Section 211 are not within the scope of this appeal.
102. The European Communities argues that we are in no way bound on appeal by the Panel's
characterization of the meaning of Section 211.  The European Communities sees this as a "question
of law"  47 that is fully within the scope of appellate review under the DSU.  The European
Communities contends that the findings of the Panel in relation to Section 211 are based,  inter alia ,
on an erroneous reading of Section 211 itself.  The European Communities argues further that theseerroneous findings are based on erroneous interpretations of the relevant provisions of theTRIPS Agreement   and of the relevant provisions of the Paris Convention (1967) that have been
incorporated by reference into the  TRIPS Agreement .
 48  The European Communities insists that the
Appellate Body is empowered to review the result of a panel's examination of a WTO Member'sdomestic law for the purpose of ascertaining its consistency with the Marrakesh Agreement
Establishing the World Trade Organization (the " WTO Agreement ").  At the oral hearing, the
European Communities explained that understanding what is the measure that is the subject of the
dispute is a question of law and, if the subject of a dispute is simply a provision of a domestic lawwhich is being attacked as such, then understanding that measure correctly is a question of law.
103. In addressing the scope of appellate review in this case, we begin by recalling our ruling in
EC – Hormones   that:
The consistency or inconsistency of a given fact or set of facts with
the requirements of a given treaty provision is … a legal
characterization issue.  It is a legal question.
 49
104. We believe that our ruling in  India – Patent Protection for Pharmaceutical and Agricultural
Chemical Products ("India – Patents (US) ") is of even greater relevance.  We stated there, in relevant
part, that:
In public international law, an international tribunal may treat
municipal law in several ways.  Municipal law may serve as evidence
of facts and may provide evidence of state practice.  However,
municipal law may also constitute evidence of compliance or non-
compliance with international obligations. … (footnote omitted)
                                                     
47European Communities' responses to questioning at the oral hearing.
48European Communities' appellant's submission, paras. 80-81.
49Appellate Body Report, EC – Hormones, supra , footnote 46, para. 132.WT/DS176/AB/R
Page 30
It is clear that an examination of the relevant aspects of Indian
municipal law and, in particular, the relevant provisions of the
Patents Act as they relate to the "administrative instructions", is
essential to determining whether India has complied with its
obligations under Article 70.8(a).  There was simply no way for thePanel to make this determination without engaging in an examination
of Indian law.  But, as in the case cited above before the Permanent
Court of International Justice, in this case, the Panel was not
interpreting Indian law "as such";  rather, the Panel was examining
Indian law solely for the purpose of determining whether India had
met its obligations under the  TRIPS Agreement . …
And, just as it was necessary for the Panel in this case to seek a
detailed understanding of the operation of the Patents Act as it relates
to the "administrative instructions" in order to assess whether India had
complied with Article 70.8(a), so, too, is it necessary for us in this
appeal to review the Panel's exam ination of the same Indian domestic
law.
 50 (emphasis added)
105. Our rulings in these previous appeals are clear:  the municipal law of WTO Members may
serve not only as evidence of facts, but also as evidence of compliance or non-compliance withinternational obligations.  Under the DSU, a panel may examine the municipal law of a WTOMember for the purpose of determining whether that Member has complied with its obligations under
the  WTO Agreement .  Such an assessment is a legal characterization by a panel.  And, therefore, a
panel's assessment of municipal law as to its consistency with WTO obligations is subject to appellatereview under Article 17.6 of the DSU.
106. To address the legal issues raised in this appe al, we must, therefore, necessarily examine the
Panel's interpretation of the meaning of Section 211 under United States law.  An assessment of theconsistency of Section 211 with the Articles of the TRIPS Agreement  and of the Paris
Convention (1967) that have been invoked by the European Communities necessarily requires areview of the Panel's examination of the meaning of Section 211.  Likewise, that assessmentnecessarily requires a review also of the Panel's examination of the meaning of both the CACR and
the Lanham Act, to the extent that they are relevant for assessing the meaning of Section 211.  This is
an interpretation of the meaning of Section 211 solely for the purpose of determining whether theUnited States has fulfilled its obligations under the  TRIPS Agreement .  The meaning given by the
Panel to Section 211 is, thus, clearly within the scope of our review as set out in Article 17.6 of theDSU.
                                                     
50Appellate Body Report, WT/DS50/AB/R, adopted  16 January 1998, DSR 1998:I, 9, paras. 65-66
and 68.WT/DS176/AB/R
Page 31
B. The Nature of the Measure
107. Having determined that it is appropriate for us to review the Panel's conclusions about the
meaning of the measure at issue in this appeal, we turn now to that task.  A number of the legal issues
raised in this appeal turn on the meaning or nature of Section 211.  We begin our consideration of thispivotal issue by noting that Section 211(a)(1) provides:
Notwithstanding any other provision of law, no transaction or
payment shall be authorized or approved pursuant to section 515.527
of title 31, Code of Federal Regulations, as in effect on September 9,
1998, with respect to a mark, trade name, or commercial name that is
the same as or substantially similar to a mark, trade name, orcommercial name that was used in connection with a business or
assets that were confiscated  unless the original owner of the mark,
trade name, or commercial name, or the bona fide successor-in-
interest has expressly consented.  (emphasis added)
108. Before the Panel, the United States submitted that Section 211 concerns ownership.  The
European Communities argued that it does not.  The Panel concluded that "the language ofSection 211(a)(1) indicates that it is a measure that  deals   with ownership of trademarks used in
connection with confiscated assets."
 51 (emphasis added)   The Panel concluded also that
Section 211(a)(1) "regulates ownership".  52  The Panel explained these conclusions as follows:
                                                     
51Panel Report, para. 8.59.
52Ibid., para. 8.83.WT/DS176/AB/R
Page 32
The language of Section 211(a)(1)  addresses   the rights of a person
registering a trademark to assert an ownership interest  in the
trademark concerned.  Section 211(a)(1), together with OFAC
regulations, creates an additional procedural step that relates to the
registration of a trademark or the renewal of a trademark registrationin the United States, namely the requirement that an applicant obtain
a licence—a general or a specific licence—in order to be able to pay
the registration or renewal fee.  In the absence of such a licence, the
applicant is not able to pay the required fee and this, in turn, results
in the rejection of the application.  As a part of this procedure, the US
authorities examine, in the case where the trademark in question is
one that was used in connection with confiscated assets, whether theapplicant is the  proper owner   of that trademark in accordance with
US law or has the consent of the original owner or the latter's
successor-in-interest.  If a trademark was used in connection with
confiscated assets, the failure to obtain the required consent or to
meet the condition of being the  proper owner   as defined under US
law has the practical effect of denying trademark registration.
However, if the applicant is the  original owner   under US law or has
the consent of such  original owner   or its bona fide successor-in-
interest, the licence will be granted and, hence, the trademark will be
registered or the registration will be renewed.
 53 (emphasis added).
109. Relying on this view of Section 211(a)(1), the Panel found:
We find that Section 211(a)(1) is not inconsistent with Article 15.1 of
the TRIPS Agreement because the term "other grounds" as used inArticle 15.2 of the TRIPS Agreement may include a measure that
denies trademark registration on the basis that the applicant is  not
the owner   under national, in this case, US law and Section 211(a)(1)
is a measure that deals with the ownership of trademarks used in
connection with confiscated assets.
 54 (emphasis added)
110. On appeal, the participants continue to disagree about the nature of Section 211.  Unlike the
Panel, the European Communities does not see Section 211 as a measure that "deals with" or"regulates" ownership.  Rather, the European Communities maintains that the purpose of Section 211"consists in curtailing the enjoyment and existence of certain trademarks and trade names in the hands
of certain categories of rightholders."
 55  The European Communities explains that the Panel assumed
erroneously that Section 211(a)(1) "has as its function to  allocate   ownership to a litigious
trademark"  56 (emphasis added)  because, as the Panel itself observed, Section 211(a)(1), together with
the OFAC regulations, merely "creates an additional procedural step that  relates   to the registration of
a trademark or the renewal of a trademark registration in the United States".  57 (emphasis added)  On
                                                     
53Panel Report, para. 8.60.
54Ibid., para. 8.70.
55European Communities' appellant's submission, para. 2.
56Ibid., para. 83.
57Panel Report, para. 8.60.WT/DS176/AB/R
Page 33
this basis, the European Communities argues that Section 211 does not in any way establish
ownership of trademarks and that, therefore, Section 211 is not, by nature, an ownership measure.  58
111. The United States sees Section 211 differently.  The United States, like the Panel, sees
Section 211 as a measure that "deals with" and "regulates" ownership.  The United States explains
that Section 211 "deals with" and "regulates" ownership in a limited and specific set of circumstances
– those that are described in the measure relating to confiscation.  59  The United States contends that
Section 211 is an expression of the longstanding doctrine  60 of the United States that those whose
claim to ownership of a trademark is based on an uncompensated confiscation of assets cannot claimrights of ownership in the United States, abse nt the consent of the owners whose assets were
confiscated.
 61  The United States asserts that whether Section 211 affirmatively attributes ownership
of the trademark to someone else is irrelevant.  62  As the United States sees it, the measure is no less
an ownership measure because it identifies only who is  not  the owner and does not establish who  is
the owner of a particular trademark in the circumstances in which Section 211 applies.  63
112. With these arguments of the parties in mind, we examine the measure at issue in this appeal.
In doing so, we observe, like the European Communities, that Section 211(a)(1) does not positively"allocate" – that is, it does not attribute or establish – trademark ownership for one person or another.Yet, we disagree with the European Communities that the "consent requirement introduced bySection 211(a)(1) has nothing to do with an ownership related measure such as a transfer or cessationof an asset."
 64
113. In our view, a measure such as the one before us that conditions rights on obtaining the
express consent of the original owner  is,  unquestionably, a measure that deals with ownership.  We
do not agree with the European Communities that a measure must  establish   ownership in order to be
one that is, in its nature, an ownership measure.   A measure need not deal exhaustively with a
particular subject in order to be consider ed as a measure dealing with that subject.
                                                     
58European Communities' responses to questioning at the oral hearing.  At the oral hearing, in response
to one question, the European Communities confirmed that, by "allocate", in this context, the EuropeanCommunities means "attribute".
 
59We refer here and throughout this Report to the term "confiscated" as it is defined in Section 515.336
of Title 31 CFR.  See  supra , footnote 7.
60United States' appellee's submission, para. 1.
61Ibid., para. 16;  Panel Report, para. 4.14.
62United States' appellee's submission, para. 23.
63Ibid.
64European Communities' appellant's submission, para. 64.WT/DS176/AB/R
Page 34
114. Therefore, we agree instead with the United States that the mere fact that Section 211(a)(1)
does  not  affirmatively establish ownership  65 does not, in and of itself, render that measure one that
does not deal with ownership.  Further, we agree with the United States that, althoughSection 211(a)(1) does not determine who does own a trademark, it can, in the particular
circumstances in which it applies, determine who  does not .  To us, this alone is sufficient to make
Section 211(a)(1) a measure that, in its nature, relates to the  ownership  of trademarks and trade
names.
115. The text of the measure supports this interpretation.  As we have observed, the text of
Section 211(a)(1) contains a phrase that specifically refers to ownership, namely:  "a mark, tradename, or commercial name that was used in connection with a business or assets that were confiscatedunless the original owner of the mark, trade name or commercial name, or the  bona  fide  successor-
in-interest has expressly consented."
 66  Section 211(a)(2) does not contain this phrase.  Rather,
Section 211(a)(2) reads:
No U.S. court shall recognize, enforce or otherwise validate any
assertion of rights by a designated national based on common law
rights or registration obtained under such section 515.527 of  such  a
confiscated mark, trade name, or commercial name. (emphasis
added)
116. This raises the issue of the import of the word "such" in the phrase "such a confiscated mark,
trade name, or commercial name."  Although it is clear that the "such" in Section 211(a)(2) refersback to Section 211(a)(1), the question is:  to what part of paragraph (a)(1) does paragraph (a)(2)refer?  On the one hand, "such a confiscated mark, trade name, or commercial name" couldconceivably refer only  to the phrase "mark, trade name, or commercial name that is the same as or
substantially similar to a mark, trade name, or commercial name that was used in connection with abusiness or assets that were confiscated".  On the other hand, it could refer – in addition  – to the
phrase immediately following, that is, to "unle ss the original owner of the mark, trade name, or
commercial name, or the bona fide successor-in-interest has expressly consented."
                                                     
65United States' appellee's submission, para. 23.
66Section 211(a)(1) reads:
Notwithstanding any other provision of law, no transaction or payment shall
be authorized or approved pursuant  to section 515.527 of  title 31, Code of
Federal Regulations, as in effect on September 9, 1998, with respect to a
mark, trade name, or commercial name that is the same as or substantiallysimilar to a mark, trade name, or commercial name that was used inconnection with a business or assets that were confiscated unless the
original owner of the mark, trade name, or commercial name, or the bona
fide successor-in-interest has expressly consented. (emphasis and
underlining added)WT/DS176/AB/R
Page 35
117. The Panel interpreted Section 211(a)(2) to refer back to both phrases;  that is, the Panel
determined that Section 211(a)(2) includes the consent requirement found in Section 211(a)(1), whenit stated that:
Under the exceptional circumstances dealt with under
Section  211(a)(2), there may be a successful challenge concerning
the prima facie   ownership rights in relation to the registration,
obtained by a designated national pursuant to a general OFAClicence without the consent of the original owner, of a trademark
used in connection with confiscated assets.
 67
118. We agree with the Panel on the import of the second "such" in Section 211(a)(2).  Moreover,
in response to questions posed at the oral hearing, both the European Communities and theUnited States responded that, likewise, in their view, the second "such" in Section 211(a)(2) refers toboth parts of the phrase in Section 211(a)(1) that is omitted from Section 211(a)(2), including therequirement to obtain express consent.
 68
119. We turn next to the text of Section 211(b), which reads:
No U.S. court shall recognize, enforce or otherwise validate any
assertion of treaty rights by a designated national or its successor-in-
interest under sections 44 (b) or (e) of the Trademark Act of 1946 (15
U.S.C. 1126 (b) or (e)) for a mark, trade name, or commercial name
that is the same as or substantially similar to a mark, trade name, or
commercial name that was used in connection with a business orassets that were confiscated unless the original owner of such mark,
trade name, or commercial name, or the bona fide successor-in-
interest has expressly consented.  (emphasis added)
Here we note that the wording of Section 211(b) specifically includes the express consent
requirement.
120. Thus, the consent requirement is present alike in each of Sections 211(a)(1), 211(a)(2)
and 211(b), and, as a consequence, so too is the element of the measure that "deals with" and"regulates" ownership.
121. Accordingly, we will address each of the le gal issues raised in this appeal with the
understanding that the measure before us, in the particular circumstances in which it applies, is, in itsnature, one that relates to the ownership of a defined category of trademarks and trade names.
                                                     
67Panel Report, para. 8.111.
68European Communities' responses to questioning at the oral hearing; United States' responses to
questioning at the oral hearing.  The United States sugg ested that this omission may merely be an instance of
legislative "shorthand"  as there is no reason to think that the framers of the measure would have wanted to omit
from Section 211(a)(2) what is required in Section 211(a)(1).WT/DS176/AB/R
Page 36
V. Article 6 quinquies   of the Paris Convention (1967)
122. We turn now to the claims of the European Communities as they relate to Article 6 quinquie s
of the Paris Convention (1967).  Article 6 quinquies A(1) reads:
Every trademark duly registered in the country of origin shall be
accepted for filing and protected  as is   in the other countries of the
Union, subject to the reservations indicated in this Article.  Such
countries may, before proceeding to final registration, require the
production of a certificate of registration in the country of origin,
issued by the competent authority.  No authentication shall be
required for this certificate. (emphasis added)
123. Article 6 quinquies  forms part of the Stockholm Act of the Paris Convention, dated
14 July 1967.  The Stockholm Act is a revision of the original  Paris Convention for the Protection of
Industrial Property ,  which entered into force on 7 July 1884.  69  The parties to the Paris Convention,
who are commonly described as the "countries of the Paris Union", are obliged to implement theprovisions of that Convention.
124. Article 2.1 of the  TRIPS Agreement   provides that:  "[i]n respect of Parts II, III and IV of this
Agreement, Members shall comply with Articles 1 through 12, and Article 19, of the ParisConvention (1967)."  Thus, Article 6 quinquies  of the Paris Convention (1967), as well as certain
other specified provisions of the Paris Convention (1967), have been incorporated by reference intothe  TRIPS Agreement   and, thus, the  WTO Agreement .
125. Consequently, WTO Members, whether they ar e countries of the Paris Union or not, are
obliged, under the  WTO Agreement , to implement those provisions of the Paris Convention (1967)
that are incorporated into the  TRIPS Agreement .  As we have already stated, Article 6 quinquies  of
the Paris Convention (1967) is one such provision.
126. Before the Panel, the European Communities claimed that Section 211(a)(1) is inconsistent
with Article 2.1 of the  TRIPS Agreement   in conjunction with Article 6 quinquies  A(1) of the
Paris Convention (1967), an allegation contested by the United States.
 70
                                                     
69The original Paris Convention was concluded in 1883.
70Panel Report, paras. 8.71-8.73.WT/DS176/AB/R
Page 37
127. The Panel found:
The ordinary meaning of the term "a s is" and read in its context and
as confirmed by the negotiating history indicates thatArticle 6 quinquies  A(1) addresses the form of the trademark; that is,
those trademarks duly registered in one country, even when they do
not comply with the provisions of domestic law of a Member
concerning the permissible form of trademarks, have nevertheless to
be accepted for filing and protection in another country.  Therefore,we do not agree with the EC's assertion that the Member in which
registration is sought does not have any right to question the
existence of a trademark in the hands of an owner as defined by the
laws of the country of origin. However, as we noted above in our
examination of Section 211(a)(1) in relation to Article 15.1 of theTRIPS Agreement, Section 211(a)(1) is a measure that regulates
ownership and does not deal with the form of the signs of which the
trademark is composed.  For these reasons, Section 211(a)(1) is not
inconsistent with Article 6 quinquies  A(1) of the Paris
Convention (1967). (footnote omitted)
…
We conclude that Article 6 quinquies A(1) addresses the form of the
trademark and therefore find that Section 211(a)(1) is not
inconsistent with Article 6 quinquies  A(1) of the Paris Convention
(1967) as incorporated into the TRIPS Agreement by means of a
reference in its Article 2.1.
 71
128. The European Communities appeals this finding and argues on appeal, as before the Panel,
that Article 6 quinquies  A(1) requires that a trademark duly registered in a country of origin that is a
country of the Paris Union must be accepted for registration and protected "as is" in every respect inother countries of the Paris Union, subject only to the specific exceptions set forth in that Article.Thus, the European Communities sees Article 6 quinquies  A(1) as applying to more than merely the
form   of a trademark.  According to the European Communities, Section 211(a)(1) violates
Article 6 quinquies  A(1) because it does not permit the filing and protection of the trademark "as is".
Rather, it prevents the owner of a trademark registered in another country from acquiring or
maintaining a trademark registration in the United States by preventing the payment of the required
fees necessary for registration and renewal in the United States, unless the original owner or thebona fide   successor-in-interest has expressly consented.
129. The United States views Article 6 quinquies  A(1) differently and, thus, the United States
views its obligation under Article 6 quinquies  A(1) as it relates to Section 211(a)(1) differently as well.
The United States agrees with the Panel that the obligation in Article 6 quinquies  A ( 1 )  t o  r e g i s t e r  a
foreign trademark "as is" concerns only the form of the trademark.  Given this, the United Statesconcludes that Section 211(a)(1) is not inconsistent with Article 6 quinquies  A(1) because
                                                     
71Panel Report, paras. 8.83 and 8.89.WT/DS176/AB/R
Page 38
Section 211(a)(1) does not address the form of the trademark.  As the United States sees it, nothing in
Article 6 quinquies   obliges the United States to accept the registration or renewal of a trademark if the
person registering or renewing it is not the true owner of the trademark under United States law.  TheUnited States portrays Section 211(a)(1) as dealing w ith ownership of trademarks.  The United States
does not see anything in Article 6 quinquies   or in any other provision of the Paris Convention (1967)
that specifies how trademark ownership is to be determined.  Instead, the United States interprets theParis Convention (1967) and, now, the  TRIPS Agreement , as leaving the determination of trademark
ownership to the national laws of each WTO Member, subject only to the requirements againstdiscrimination that are found in that Convention and in that Agreement.
130. Before examining the text of Article 6 quinquies , we note that the Paris Convention (1967)
provides two ways in which a national of a countr y of the Paris Union may obtain registration of a
trademark in a country of that Union other than the country of the applicant's origin:  one way is byregistration under Article 6 of the Paris Convention (1967);  the other is by registration under
Article 6 quinquies   of that same Convention.
131. Article 6(1) of the Paris Convention (1967) provides:
The conditions for the filing and registration of trademarks shall be
determined in each country of the Union by its domestic legislation.
132. Article 6(1) states the general rule, namely, that each country of the Paris Union has the right
to determine the  conditions   for filing and registration of trademarks in its domestic legislation.  This
is a reservation of considerable discretion to the countries of the Paris Union – and now, byincorporation, the Members of the WTO – to continue, in principle, to determine for themselves theconditions for filing and registration of trademarks.  Thus, in our view, the general rule under theParis Convention (1967) is that national laws apply w ith respect to trademark registrations within the
territory   of each country of the Paris Union, subject to the requirements of other provisions of that
Convention.
 72  And, likewise, through incorporation, this  is also now the general rule for all WTO
Members under the  TRIPS Agreement .
133. Therefore, an applicant who chooses to seek registration of a trademark in a particular foreign
country under Article 6 must comply with the conditions for filing and registration specified in thatcountry's legislation.  Such an applicant is  not  obliged to register a trademark first in its country of
                                                     
72The discretion of countries of the Paris Union to legislate conditions for filing and registration is not
unlimited.  It is subject to the international minimum standard of trademark disciplines provided for in other
Articles of the Paris Convention (1967).  These include, for example, national treatment, as well asinternationally agreed reasons for denying trademark registration, such as those provided for in Article 6 ter.
The Paris Convention (1967) limits also the legislative discretion of countries of the Union under Article 6(1) bysetting out reasons that countries cannot invoke to deny  trademark registration, for example in Article 6(2).WT/DS176/AB/R
Page 39
origin in order to register that trademark in another country of the Paris Union.  73  However, that
applicant must comply with the conditions of that other country where registration is sought.  74
134. As we have stated, Article 6 is not the only way to register a trademark in another country.  If
an applicant  has  duly registered a trademark in its country of origin, Article 6 quinquies  A(1)
provides an alternative way of obtaining protection of that trademark in other countries of the Paris
Union.
135. This alternative way of seeking acceptance in another country of the Paris Union of a
trademark registered in the applicant's country of origin, afforded by Article 6 quinquies  A(1),  is
subject to two prerequisites.  First, that trademark must be  duly registered   according to the domestic
legislation of the country of origin, and, second, it must be registered in the applicant's  country of
origin , as defined in Article 6 quinquies  A(2).  75  Article 6 quinquies  D confirms that the recognition of
a trademark in another country of the Paris Union under Article 6 quinquies  is dependent on
registration in the country of origin.  76  These two prerequisites though are not at issue in this appeal.
The issue in this appeal relates to the extent  of the obligations established by Article 6 quinquies  A(1),
assuming that these two prerequisites have been met.
136. By virtue of Article 6 quinquies  A(1), WTO Members are obliged to confer an exceptional
right on an applicant in a Paris Union country other than its country of origin, one that is over andabove whatever rights the other country grants to its own nationals in its domestic law.  A nationalwho files for registration of a trademark in his own country must comply  fully  with the conditions for
filing and registration as determined by the national legislation of that country.  But, if that country isa Member of the Paris Union – and, now, of th e WTO – then an applicant from another WTO
                                                     
73Article 6(2) of the Paris Convention (1967) provides:
However, an application for the registration of a mark filed by a national of
a country of the Union in any country of the Union may not be refused, nor
may a registration be invalidated, on the ground that filing, registration, or
renewal, has not been effected in the [national’s] country of origin.
74Article 6(3) of the Paris Convention (1967) further states:
A mark duly registered in a country of the Union shall be regarded as
independent   of marks registered in the other countries of the Union,
including the country of origin. (emphasis added)
75Article 6 quinquies  A(2) of the Paris Convention (1967) reads:
Shall be considered the country of orig in the country of the Union where the
applicant has a real and effective industr ial or commercial establishment, or,
if he has no such establishment within the Union, the country of the Union
where he has his domicile, or, if he has no domicile within the Union but is a
national of a country of the Union, the country of which he is a national.
76Article 6 quinquies  D of the Paris Convention (1967) states:
No person may benefit from the provisions of this Article if the mark for
which he claims protection is not registered in the country of origin.WT/DS176/AB/R
Page 40
Member who seeks registration in that country of a trademark duly registered in its country of origin
has the additional rights   that WTO Members are obliged to confer on that applicant under
Article 6 quinquies  A(1).
137. The participants to this dispute disagree on the scope of the requirement imposed by
Article 6 quinquies  A(1) to accept for filing and protect trademarks duly registered in the country of
origin "as is".  Looking first to the text of Article 6 quinquies  A(1), we see that the words "as is" (or, in
French, "telle quelle"  77) relate to the trademark to be "accepted for filing and protected" in another
country based on registration in the applicant's country of origin.  The ordinary meaning of the words"as is" is "in the existing state".
 78  The French term "telle quelle" can be defined as "sans arrangement,
sans modification."  79  This suggests to us that the requirement of Article 6 quinquies  A(1) to accept for
filing and protect a trademark duly registered in the applicant's country of origin relates at least to theform   of the trademark as registered in the applicant’s country of origin.
 80
   The question before us is
whether the scope of this requirement also encompasses other features and aspects of that trademark
as registered in the country of origin.
138. According to one expert:
… whenever a trademark is duly registered in the country of origin,
the other countries of the Union are obliged to accept and protect it,
even if, as regards its form, that is, with regard to the signs of whichit is composed, such trademark does not comply with the
requirements of the domestic legislation, subject to the additional
rules, particularly the grounds for refusal or invalidation of any mark,
considered on its individual merits, established in the Article.  This
rule will therefore apply to trademarks consisting of numbers, letters,surnames, geographical names, words written or not written in a
certain language or script, and other signs of which the trademark is
composed.
 81 (italics and footnotes omitted)
139. However, this view is not determinative of the question before us.  To resolve this question,
we look to the context of Article 6 quinquies A(1).  We find that there is considerable contextual
support for the view that the requirement to register a trademark "as is" under
                                                     
77Article 29(1)(c) of the Paris Convention (1967) provides:  "In case of differences of opinion on the
interpretation of the various texts, the French text shall prevail."
78The New Shorter Oxford English Dictionary , L. Brown (ed.), (Clarendon Press, 1993), Vol. I, p. 123.
79Le Petit Robert Dictionnaire de la Langue Française  (1995), p. 2220.  Or in English, as it stands;
without adjustments;  without modification.
80The participants agree that the requirement of Article 6 quinquies  A(1)  at the very least   relates to the
form of the trademark, but they disagree on what else beyond form, if anything at all, that requirement includes.
81See, Bodenhausen, G.H.C,  Guide to the Application of the Paris Convention for the Protection of
Industrial Property as revised at Stockholm in 1967 , (hereinafter " Guide to the Pa ris Convention "),  United
International Bureaux for the Protection of Intellectual Property, (1968, reprinted 1991), pp. 110-111.WT/DS176/AB/R
Page 41
Article 6 quinquies A(1)  does  not  encompass all the features and aspects of that trademark.  As we
have stressed, Article 6(1) of the Paris Convention (1967) reserves to the countries of the Paris Unionthe right to determine the  conditions   for filing and registration of trademarks by their domestic
legislation.
 82  Article 6(1) confirms that the countries of the Paris Union did not relinquish their right
to determine the conditions for filing and registration of trademarks by entering into the Paris
Convention (1967) – subject, of course, to the other obligations of Paris Union countries under theParis Convention (1967).
 83  C l e a r l y ,  i f  A r t i c l e  6 quinquies  A(1) were interpreted too broadly, the
legislative discretion reserved for Members under Article 6(1) would be significantly undermined.
140. To illustrate this point, we will assume for the moment, and solely for the sake of argument,
that, as the European Communities argues, Article 6 quinquies  A(1) does require other countries to
accept for filing and to protect duly registered trademarks in respect of  all their aspects , including
those other than the form of a trademark.  If this were so, an applicant who is a national of a countryof the Paris Union would have two choices:  that applicant could request trademark registration under
Article 6 in another country of the Paris Union – in which case, that registration would be subject to
the trademark law of that other country.  Or, that applicant could register the trademark in its countryof origin and then invoke the right, pursuant to Article 6 quinquies  A(1), to request acceptance of that
trademark for filing and protection in another country.  In the latter case, that registration would begoverned by the trademark law, not of the countr y in which the applicant sought registration under
Article 6 quinquies  A(1), but of the applicant's country of origin.  The "conditions" for registration
imposed in the law of the other country of the Paris Union where registration was sought underArticle 6 quinquies  A(1) would be irrelevant.  If this were so, any such applicant would be able to
choose between trademark registration under Article 6 and trademark registration under
Article 6 quinquies , depending on which conditions  for filing and registration were viewed by the
applicant as more favourable to the applicant's interests.
 84  Consequently, within the territory of any
country of the Paris Union other than the applicant's country of origin, a national of a country of thatUnion could ensure that it would be subject to  either   the domestic trademark registration
requirements of the country of origin (through recourse to Article 6 quinquies )  or the domestic
trademark registration requirements of the other country where trademark registration is sought(through recourse to Article 6) – whichever it preferred .  In other words, a national of a Paris Union
                                                     
82We note that prior to the Revision Conference of Lisbon (1958), the requirements now found in
Articles 6 and 6 quinquies   were contained in a single (original) Article 6.   At the Revision Conference, it was
decided to split the original Article in order to make clear the difference between the two alternative ways to
obtain trademark registration explained above.
83See  supra , footnote 72.
84As far as trademark protection within the territory of the Paris Union national's country of origin is
concerned, such national could not avoid being subject to national trademark law.WT/DS176/AB/R
Page 42
country could circumvent the "use" requirements of a particular regime by registering in the
jurisdiction that does not impose "use" requirements.
141. We are persuaded that the drafters of the Paris Convention did not intend such a result.  If,
even today, WTO Members have – as the European Communities concedes – reserved the right under
the  TRIPS Agreement  to maintain domestic regimes of trademark ownership based on use, then it
does not seem credible to us to contend – as the European Communities does – that many of thosevery same countries intended more than a century  ago, in concluding the Paris Convention, or on the
occasion of one of the subsequent Revision Conferences of the Paris Convention, to establish a globalsystem for determining trademark ownership th at could circumvent, and thereby undermine, a
domestic regime of trademark ownership based on use.
142. We note that Article 6 quinquies  B provides that registration of a trademark covered by this
Article may be neither denied nor invalidated, except for the reasons listed in subparagraphs B(1)through (3).
 85  These exceptions refer,  inter alia ,  to acquired rights of third parties;  to
distinctiveness of character;  and to morality, public order (" ordre public ") and deceptiveness.
143. The European Communities maintains that these exceptions contemplated by
Article 6 quinquies  B(1) through (3) refer to various elements going well beyond the form of a
trademark.  The European Communities argues that this gives contextual support to the EuropeanCommunities' notion that the obligation of a Paris Union country, under Article 6 quinquies A(1),
to accept a trademark duly registered in the applicant' s country of origin "as is" includes matters going
                                                     
85Article 6 quinquies  B provides:
Trademarks covered by this Article may be neither denied registration nor
invalidated except in the following cases:
1. when they are of such a nature as to infringe rights acquired by third
parties in the country where protection is claimed;
2. when they are devoid of any distinctive character, or consist
exclusively of signs or indications which may serve, in trade, todesignate the kind, quality, quantity, intended purpose, value, place
of origin, of the goods, or the time of production, or have become
customary in the current language or in the bona fide andestablished practices of the trade of the country where protection isclaimed;
3. when they are contrary to morality or public order and, in particular,
of such a nature as to deceive the public. It is understood that a markmay not be considered contrary to public order for the sole reasonthat it does not conform to a provision of the legislation on marks,except if such provision itself relates to public order.
This provision is subject, however, to the application of
Article 10 bis.WT/DS176/AB/R
Page 43
beyond form.  86  In contrast, the United States contends that these exceptions relate only to the form of
the trademark.  87
144. We note that the  form   of a trademark may be of such a nature as to infringe rights acquired
by third parties within the meaning of paragraph 1 of Article 6 quinquies B.  The form  of a
trademark may be devoid of distinctive character within the meaning of paragraph 2 of that Article.
Equally, the form   of a trademark may be contrary to morality or public order, or of such a nature as to
deceive the public, within the meaning of paragraph 3 of Article 6 quinquies  B.  Therefore, in our
view, if the requirements of Article 6 quinquies  A(1) are interpreted as covering  only  the  form  of a
trademark, all the exceptions in Article 6 quinquies  B(1) through (3) can be given full meaning and
effect.
145. Finally, we look to an agreed interpretation adopted at the conclusion of the original Paris
Convention in 1883.  The Final Protocol of the Paris Convention (1883) was considered to form anintegral part of that Convention.
 88  Paragraph 4 of that Final Protocol in 1883 explained that the
provision, which later became Article 6 quinquies  A(1)  89:
… should be understood in the sense that no trademark may be
excluded from protection in one of the States of the Union for the
sole reason that it does not comply, with regard to the signs of which
it is composed, with the conditions of the laws of that State, provided
it complies on this point with the laws of the country of origin and
that it has been properly filed there.  Subject to this exception, which
only concerns the form of the mark , and subject to the provision of
the other Articles of the Convention, each State shall apply its
domestic law.  90 (emphasis added)
146. As the European Communities has observed, this agreed interpretation was omitted at the
Washington Revision Conference of 1911.  Yet, like the Panel, we note that no delegation to that
conference expressed the view at that time that this omission should change the meaning of theprovision.
 91  Indeed, as one WIPO publication states, "it is generally believed that such omission did
                                                     
86European Communities' appellant's submission, para. 54.
87United States' appellee's submission, para. 9.
88Final Protocol of the Paris Convention (1883), para. 7.
89See  supra , footnote 82.
90Final Protocol of the Paris Convention (1883), para. 4.
91"[I]t is not possible to conclude from this decision [at the Washington Conference of 1911] that
agreement was reached regarding a different scope of application of the provision."  Bodenhausen, Guide to the
Paris Convention , supra , footnote 81, p. 110.  Panel Report, para. 8.82.WT/DS176/AB/R
Page 44
not alter the intended sense of 'telle  quelle' as it was made explicit in 1883."  92  On this, we simply
observe that our interpretation of Article 6 quinquies A(1) is not inconsistent with this interpretation.
147. We have already stated that we agree with the Panel that Section 211(a)(1) is a measure
dealing, in the particular circumstances in which it applies, with the ownership of a defined category
of trademarks.  93  We also agree that the obligation of countries of the Paris Union under
Article 6 quinquies  A(1) to accept for filing and protect a trademark duly registered in the country of
origin "as is" does not encompass matters related to ownership.  94
148. For these reasons, we uphold the finding of the Panel in paragraph 8.89 of the Panel Report
that Section 211(a)(1) is not inconsistent with Article 2.1 of the  TRIPS Agreement  in conjunction
with Article 6 quinquies  A(1) of the Paris Convention (1967).
VI. Article 15 of the  TRIPS Agreement
149. Article 15.1 of the  TRIPS Agreement   defines "protectable subject matter" eligible for
registration as trademarks.  Before the Panel, the European Communities claimed thatSection 211(a)(1) is inconsistent with Article 15.1 because Section 211(a)(1) prohibits registration oftrademarks that are "protectable".  In contrast, the United States contended that Section 211(a)(1) does
not concern "protectable subject matter" and thus does not violate Article 15.1.  In the alternative, the
United States submitted that, even if Section 211(a)(1) did concern "protectable subject matter", thereis no violation of Article 15.1 because Section 211(a )(1) falls within the exception in Article 15.2,
which permits denial of registration on "other grounds" provided they do not derogate from theprovisions of the Paris Convention (1967).  The European Communities argued in turn thatArticle 15.2 would apply only if Section 211(a)(1) fell  within an exception "expressly foreseen" under
the Paris Convention (1967).
 95  In the view of the European Communities, Section 211(a)(1) does not
do so and, therefore, violates Article 15.1.
150. The Panel found that :
                                                     
92Paris Centenary, 1983, WIPO Publication No. 875.  Panel Report, footnote 124 to para. 8.82.
93See  supra , para. 121.
94Panel Report, para. 8.83.
95European Communities' appellant's submission, para. 72.WT/DS176/AB/R
Page 45
… Section 211(a)(1) is not inconsistent with Article 15.1 of the
TRIPS Agreement because the term "other grounds" as used in
Article 15.2 of the TRIPS Agreement may include a measure that
denies trademark registration on the basis that the applicant is not the
owner under national, in this case, US law and Section 211(a)(1) is ameasure that deals with the ownership of trademarks used in
connection with confiscated assets.
 96
151. The European Communities appeals this findin g.  According to the European Communities,
WTO Members must register trademarks that m eet the requirements of Article 15.1.  The European
Communities argues that Section 211(a)(1) violates Article 15.1 by creating, in the form of a consentrequirement, a "curtailment" that prevents both the continued enjoyment of existing trademarks andthe registration of new trademarks.
 97
152. In reply, the United States submits that Article 15.1 is a more limited provision than
envisioned by the European Communities.  The United States sees Article 15.1 as simply describingwhat "subject matter" is "protectable" as a trademark.  As the United States sees it, Article 15.1 doesnot establish an affirmative obligation to register  every   trademark that is "eligible for registration".
Accordingly, the United States concludes that Section 211(a)(1) is not inconsistent with Article 15.1because Section 211(a)(1) has nothing to do with whether certain signs are capable of constituting atrademark.
  98
153. Article 15.1 of the  TRIPS Agreement   provides:
Protectable Subject Matter
Any sign, or any combination of signs, capable of distinguishing the
goods or services of one undertaking from those of otherundertakings, shall be capable of constituting a trademark .  Such
signs, in particular words including personal names, letters, numerals,
figurative elements and combinations of colours as well as any
combination of such signs, shall be eligible for registration as
trademarks .  Where signs are not inherently capable of distinguishing
the relevant goods or services, Members may make registrability
depend on distinctiveness acquired through use.  Members may
require, as a condition of registration, that signs be visually
perceptible. (emphasis added)
154. Article 15.1 defines which signs or combinations of signs are  capable of constituting a
trademark.  These signs include words such as personal names, letters, numerals, figurative elementsand combinations of colours, as well as any combination of such signs.  This definition is based on the
                                                     
96Panel Report, para. 8.70.
97European Communities' appellant's submission, para. 67.
98United States' opening statement at the oral hearing.WT/DS176/AB/R
Page 46
distinctiveness of signs as such, or on their distinctiveness as acquired through use.  If such signs are
capable of distinguishing the goods or services of one undertaking from those of other undertakings,then they become  eligible for  registration as trademarks.
 99  To us, the title of Article 15.1 –
"Protectable Subject Matter" – indicates that Article 15.1 embodies a  definition  of what can
constitute a trademark.  WTO Members are obliged under Article 15.1 to ensure that those signs or
combinations of signs that meet the distinctiveness criteria set forth in Article 15.1 – and are, thus,capable of constituting a trademark  – are  eligible for registration   as trademarks within their
domestic legislation.
155. Thus, in our view, the European Communities sees an obligation in Article 15.1 that is not
there.  Identifying certain signs that are  capable of   registration and imposing on WTO Members an
obligation to make those signs  eligible for   registration in their domestic legislation is not the same as
imposing on those Members an obligation to register  automatically   each and every sign or
combination of signs that are capable of   and  eligible for   registration under Article 15.1.  This
Article describes which trademarks are "capable of
 " registration.  It does not say that all trademarks
that are capable of registration "shall be registered".  This Article states that such signs orcombinations of signs "shall be  eligible   for registration" as trademarks.  It does not say that they
"shall be registered".  To us, these are distinctions with a difference.  And, as we have said, supportingthese distinctions is the fact that the title of this  Article speaks of subject matter as "protectable", and
not of subject matter "to be protected".  In this way, the title of Article 15 expresses the notion that thesubject matter covered by the provision is subject matter that  qualifies   for, but is not necessarily
entitled to , protection.
156. It follows that the wording of Article 15.1 allows WTO Members to set forth in their domestic
legislation conditions for the registration of trademarks that do  not  address the definition of either
"protectable subject matter" or of what constitutes a trademark.
157. This interpretation is supported by the context of Article 15.1.  We look first to Article 15.2 of
the  TRIPS Agreement ,  which provides:
Paragraph 1 shall not be understood to prevent a Member from
denying registration of a trademark on  other grounds , provided that
they do not derogate from  the provisions of the Paris
Convention (1967). (emphasis added)
                                                     
99According to Article 15.1, in respect of signs not inherently capable of distinguishing goods or
services, registrability may be made dependent on distinctiveness acquired through use.  In addition, Membersmay require, as a condition for registration, that signs be visually perceptible.WT/DS176/AB/R
Page 47
158. To us, the reference in Article 15.2 to Article 15.1 makes it clear that "other grounds" for
denial of trademark registration are grounds  different from   those already mentioned in Article 15.1,
such as lack of inherent distinctiveness of signs, lack of distinctiveness acquired through use, or lackof visual perceptibility.  We agree with the Panel that:
Such interpretation is borne out contextually by Article 15.2 of the
TRIPS Agreement which provides that "paragraph 1 shall not be
understood to prevent a Member from denying registration on other
grounds".
 100
159. The right of Members under Article 15.2 to deny registration of trademarks on grounds other
than the failure to meet the distinctiveness requirem ents set forth in Article 15.1 implies that Members
are not obliged to register any and every sign or combination of signs that meet those distinctiveness
requirements.
160. Additionally, Article 15.4 of the  TRIPS Agreement   states:
The nature of the goods or services to which a trademark is to be
applied shall in no case form an obstacle to registration of the
trademark.
161. If Article 15.1 were to be interpreted to  require   registration of all signs or combinations of
signs meeting the distinctiveness criteria set forth in  that Article, it would not have been necessary to
establish  positively   in the  TRIPS Agreement   that "[t]he nature of the goods or services to which a
trademark is to be applied shall in no case form an obstacle to registration of the trademark".  101  Such
an interpretation of Article 15.1 would reduce Article 15.4 to redundancy and inutility.  102
162. Furthermore, we note that Article 15.3 of the  TRIPS Agreement   provides:
                                                     
100Panel Report, para. 8.49.  We address the meaning of the latter part of Article 15.2 below, when we
discuss the relevant provisions of the Paris Convention (1967).
101Article 7 of the Paris Convention (1967) provides for a similar obligation, which is limited, however,
to the nature of  goods .  Article 7 states:
The nature of the goods to which a trademark is to be applied shall in no
case form an obstacle to the registration of the mark.
Our considerations with respect to Article 15.4 of the  TRIPS Agreement   apply  mutatis mutandis   to
Article 7 of the Paris Convention (1967).
102Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline  ("US –
Gasoline "), WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3, at 21.  See also, Appellate Body Report, Japan
– Taxes on Alcoholic Beverages ("Japan – Alcoholic Beverages II "), WT/DS8/AB/R, WT/DS10/AB/R,
WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97, at 106.WT/DS176/AB/R
Page 48
Members may make registrability depend on use.  However, actual
use of a trademark shall not be a condition for filing an application
for registration.  An application shall not be refused solely on the
ground that intended use has not taken place before the expiry of a
period of three years from the date of application.
163. In establishing explicitly that Members may make registrability depend on use, Article 15.3,
first sentence, addresses an element of registration ot her than "protectable subject matter".  In other
words, Article 15.1 refers to "use" as a basis for signs which are not inherently distinctive to acquire
distinctiveness and thus qualifying as "protectable subject matter".  Article 15.3 relates to "use" as a
basis for registrability of a trademark by a particular applicant.  At first sight, Article 15.3, firstsentence, might seem to suggest that, implicitly, Article 15.1 goes beyond the definition of whatconstitutes a trademark.  However, we do not believe that the presence of Article 15.3, first sentence,obliges us to interpret Article 15.1 as having a meaning inconsistent with its actual wording.
164. Article 15.3, first sentence, makes explicit one of the "other grounds" mentioned generally in
Article 15.2, and the two sentences that follow lim it this one ground.  In other words, we see the
significance of Article 15.3 less in its first senten ce than in the two sentences that follow that
circumscribe, in other respects, the condition of use for registrability.
165. As with our interpretation of Article 6quinquies , here, too, we recall that Article 6(1) of the
Paris Convention (1967), which has become a WTO provision by incorporation through Article 2.1 ofthe  TRIPS Agreement , reserves to each country of the Paris Union the right to determine the
"conditions" for filing and registration of trademarks in its domestic legislation.
 103  If Article 15.1
required the registration of any and every sign or combination of signs that meets the distinctivenesscriteria specified in that Article, then WTO Members would be deprived of the legislative discretionthey enjoy under Article 6(1) of the Paris Convention (1967).  In our view, Article 15.1 of the  TRIPS
Agreement   limits the right of Members to determine the "conditions" for filing and registration of
trademarks under their domestic legislation pursuant to Article 6(1) only as it relates to the
distinctiveness requirements enunciated in Article 15.1.
166. With all this in mind, we consider the consistency of Section 211(a)(1) with the requirements
of Article 15.1.  Section 211(a)(1) prohibits any transaction or payment with respect to a definedcategory of marks, trade names or commercial names unless the original owner of the mark, tradename or commercial name (or the  bona fide   successor-in-interest) has expressly consented.  We have
                                                     
103The reservation of legislative discretion to Pari s Union countries that are also WTO Members is
limited by commonly agreed grounds for denying trademark registration (for example, Article 6 ter), commonly
agreed grounds for not denying trademark registration (for example Article 6(2)) and subject to, inter alia , the
national treatment obligation under the Paris Convention (1967), as well as other relevant provisions of theTRIPS Agreement.  See  supra , footnote 72.WT/DS176/AB/R
Page 49
concluded already that Section 211(a)(1) is a measure that relates to ownership in that, in certain
circumstances, it determines who is  not  the owner of a defined category of trademarks and trade
names under United States trademark law.  104  Therefore, Section 211(a)(1) does not in any way
concern those issues that are addressed by Article 15.1, such as the inherent distinctiveness of signs,
distinctiveness acquired through use and visual perceptibility.  Section 211(a)(1) does not in any way
prevent or preclude the registration of signs or combinations of signs that meet the requirements ofArticle 15.1, so long as the application for registration as a trademark is not made by a person who isnot the legitimate owner of the sign or combin ation of signs according to United States law.
Therefore, Section 211(a)(1) is not inconsistent with the requirements of Article 15.1 concerning"protectable subject matter".
167. As far as we are concerned, this conclusion is dispositive of the European Communities'
challenge to Section 211(a)(1) under Article 15.  However, the European Communities also appeals alegal interpretation, within the meaning of Article 17.6 of the DSU, developed by the Panel in respect
of Article 15.2.  So we look next at Article 15.2.
168. The Panel found:
Article 15.2 states that Members are not prevented from denying
registration of trademarks on "other grounds" so long as such
grounds do not "derogate" from the provisions of the ParisConvention (1967).  Thus, if a measure comes within the scope of
"other grounds", a Member may deny trademark registration to signs
that meet the requirements of Article 15.1.  It is in this context that
we assess the consistency of Section 211(a)(1) with Article 15.1 of
the TRIPS Agreement.
 105
169. In addition to arguing that Section 211(a)(1) violates Article 15.1, the European Communities
submits that Section 211(a)(1) could not in any event be justified on the "other grounds" contemplatedby the exception found in Article 15.2 because, as the European Communities sees it, underArticle 15.2, "only those  exceptions which are expressly foreseen  in the Paris Convention are
                                                     
104See  supra , para. 121.
105Panel Report, para. 8.51.WT/DS176/AB/R
Page 50
permissible."  106  The European Communities argues that none of the exceptions contained in the
TRIPS Agreement ,  nor any of the exceptions provided for in the Paris Convention (1967), expressly
permit the requirement in Section 211(a)(1) that consent must be obtained from the original owner orits  bona fide   successor-in-interest before registration will be allowed under United States law.
170. The United States argues, in reply, that, even if Section 211(a)(1) were in violation of
Article 15.1, the denial of registration on the ground that the applicant is no t the true owner would
nevertheless be justified under Article 15.2.  The United States sees nothing in Article 15.2 thatrequires that such "other grounds" be "expressly provided" in the Paris Convention (1967).  Instead,the United States contends that it is sufficient that the Paris Convention (1967) not forbid such "othergrounds".
171. The specific reference to Article 15.1 in Article 15.2 makes it clear that the "other grounds"
for denial of registration to which Article 15.2 refers are different from those mentioned inArticle 15.1.  Given this, the key phrase relating to the issue before us is the limitation found in the
final phrase of Article 15.2, which requires that those grounds "do not derogate from the provisions of
the Paris Convention (1967)."
172. As always, we consider first the ordinary meaning of the treaty text.  The ordinary meaning of
"derogate" is "to detract from" or "to take away [] so as to lessen or impair".
 107  With this meaning in
mind, we consider the circumstances in which grounds for the denial of trademark registrationdetermined by a Member in its domestic legislation may "derogate from" the ParisConvention (1967).
173. The participants do not dispute that "other grounds" that are  expressly  provided for in the
exceptions contained in the Paris Convention (1967) do  not  derogate from that Convention, within
                                                     
106European Communities' appellant's submission, para. 72.  In this respect, the European Communities
refers to,  inter alia ,  Article 6(2), Article 6 ter, Article 6 quinquies  B(1) through (3), C, D and E, and
Article 10 bis.
Article 6(2) of the Paris Convention prohibits a Paris Union country from refusing an application for
registration or invalidating registration of a mark filed by a Paris Union national in any Paris Union countryother than its country of origin on the ground that filing, registration, or renewal, has not been effected in thecountry of origin.
Article 6 ter prohibits, inter alia , trademarks concerning state emblems, official hallmarks and emblems
of intergovernmental organizations without authorization of competent authorities.
For the text of Article 6 quinquies  B(1) through (3), see  supra , footnote 85.
Article 10 bis(1):  "Unfair Competition" provides:  "The countries of the Union are bound to assure to
nationals of such countries effective protection against unfair competition.  …".
See, inter alia , European Communities' appellant's submission, para. 72, and European Communities'
responses to questioning at the oral hearing.
107The New Shorter Oxford English Dictionary , supra , footnote 78, Vol. I, p. 642.WT/DS176/AB/R
Page 51
the meaning of Article 15.2 of the  TRIPS Agreement . 108  The participants agree, for example, that the
exceptions stated in Article 6 quinquies  B(1) through (3) of the Paris Convention (1967) qualify as
such "other grounds", within the meaning of Article 15.2.  What is more, we note that the EuropeanCommunities does not question that exceptions explicitly mentioned in the  TRIPS Agreement   may be
"other grounds" for the denial of trademark registration which "do not derogate from" the Paris
Convention (1967).
 109
174. Rather, the question before us with respect to Article 15.2 is the extent to which, if at all,
Members are permitted to deny trademark registration on grounds  other than those expressly
provided for   in the TRIPS Agreement   and the Paris Convention (1967).
175. In this respect, we recall, once again, that Article 6(1) of the Paris Convention (1967) reserves
to each country of the Paris Union the right to determine  conditions  for the filing and registration
of trademarks by its domestic legislation.  The authority to determine such conditions by domesticlegislation must, however, be exercised consistently with the obligations that countries of the Paris
Union have under the Paris Convention (1967).  These obligations include internationally agreed
grounds for  refusing  registration, as stipulated in the Paris Convention (1967).
 110
176. The right of each country of the Paris Union to determine conditions for filing and registration
of trademarks by its domestic legislation is also constrained by internationally agreed grounds for  not
denying trademark registration.  111  This means, by implication, that the right reserved to each country
of the Paris Union to determine, under Article 6(1), conditions for the filing and registration oftrademarks includes the right to determine by domestic legislation conditions to  refuse  acceptance of
                                                     
108European Communities' and United States' responses to questioning at the oral hearing.
109The European Communities refers, inter alia , to Articles 22.3 and 23.2 of the TRIPS Agreement ,
which ensure that the protection of geographical indications is not undermined through the use of trademarks
that contain or consist of geographical indications.  The European Communities also mentions Article 24.5 ofthe TRIPS Agreement   (concerning rights to trademarks – acquired through registration or use in good faith –
which are identical or similar to geographical indications) and Article 62.1 of the TRIPS Agreement   (concerning
compliance with reasonable procedures and formalities as a condition for acquisition and maintenance of
intellectual property rights and related inter partes  procedures).  European Communities' appellant's submission,
para. 73.
110For example, Article 6 bis  (denial of registration of well-known marks) and Article 6 ter (prohibition
of trademarks including state emblems) contain expre ss exceptions from the regulatory discretion conferred on
Members by virtue of Article 6(1).
111For example, Article 6(2) limits the legislative discretion of countries of the Paris Union by
providing that an application for registration by a national of a country of the Paris Union may not be refused on
the ground that the national has not filed for registration or renewal in its country of origin.  This exception doesnot concern a particular ground for  refusing  trademark registration.  Rather, it stipulates when – despite the
legislative discretion granted to countries of the Union by Article 6(1) – trademark registration must  not  be
refused.WT/DS176/AB/R
Page 52
filing and registration on grounds other than those explicitly prohibited by the Paris
Convention (1967).  112
177. Therefore, a condition need not be expressly mentioned in the Paris Convention (1967) in
order not to "derogate" from it.  Denial of registration on "other grounds" would derogate from the
Paris Convention (1967) only if the denial were on grounds that are inconsistent with the provisions
of that Convention.
178. For all these reasons, we conclude that Section 211(a)(1) is not inconsistent with the
definition of "protectable subject matter" in Article 15.1 of the  TRIPS Agreement , and conclude also
that "other grounds" for the denial of registration within the meaning of Article 15.2 of theTRIPS Agreement  are not limited to grounds expressly provided for in the exceptions contained in the
Paris Convention (1967) or the  TRIPS Agreement .  Hence, we uphold the Panel's finding in
paragraph 8.70 of the Panel Report.
VII. Article 16 of the  TRIPS Agreement
179. Before the Panel, the European Communities claimed that the denial of access to
United States courts for designated nationals (or their successors-in-interest) under Sections 211(a)(2)
and (b) deprives certain trademark owners of the exclusive rights conferred by Article 16.1 of the
TRIPS Agreement .  The United States contended that Sections 211(a)(2) and (b) do not violate
Article 16.1 because only those persons who are not owners of a trademark under United States laware denied rights under Sections 211(a)(2) and (b).
180. With respect to the alleged inconsistency of Section 211(a)(2) with Article 16.1, the Panel
found that:
[t]he European Communities has not provided any evidence to us
that would enable us to conclude that US courts would interpretSection 211(a)(2) in a manner that would deprive a person, who has
been determined by the court to be the owner of a registered
trademark, of its exclusive rights.
 113
… the European Communities has not proved that Section 211(a)(2)is inconsistent with Article 16.1 of the TRIPS Agreement.
 114
                                                     
112See  supra , footnote 72.
113Panel Report, para. 8.111.
114Ibid., para. 8.112.WT/DS176/AB/R
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181. Similarly, with respect to the alleged inconsistency of Section 211(b) with Article 16.1, the
Panel found that:
… the European Communities, as the complaining party, has not
presented evidence and legal arguments sufficient to demonstrate theviolation it alleges.  Therefore, it has not been proved that
Section 211(b) is inconsistent with Article 16.1 of the TRIPS
Agreement.
 115
182. According to the Panel, "[n]either Article 16.1 nor other provisions contained in the
TRIPS Agreement define how the owner of a trademark is determined."  116  The Panel reasoned,
instead, that "[t]o determine who the owner of a registered trademark is, it is necessary to haverecourse to the national law of the Members. … the TRIPS Agreement  does not contain a regime ofownership of trademarks that is valid for and applicable to all Members."
 117
183. The European Communities appeals these findings and alleges that the Panel erroneously
distinguished between the owner of a registered trademark and the trademark itself, which are inreality "intertwined".
 118  The European Communities maintains that, although disputes may arise with
respect to who is the lawful owner of a registered trademark, the very existence of a registeredtrademark implies that there must be an owner.  And, in the view of the European Communities, the
holder of a registration must, under Article 16.1, be considered the owner of the trademark until such
time as it ceases to hold the registration.
 119
184. The United States asks us to uphold the findings of the Panel and argues that the Panel
correctly concluded that, under a system such as that of the United States in which trademarkregistration does not confer trademark ownership, the status of the trademark registration itself is notdispositive of the issue of ownership.
 120  The United States submits that Article 16.1 specifically
anticipates that the owner of a trademark – the person in a position to assert exclusive rights underdomestic law – may be someone other than the person who has registered the trademark.  The UnitedStates emphasizes that, under the federal trademark law of the United States, if a person other than the
registrant can show a superior claim to the trademark based, for example, on previous use, then that
person can be adjudged the true "owner" of the trademark.
 121  The United States stresses that such a
                                                     
115Panel Report, para. 8.159.
116Ibid., para. 8.108.
117Ibid.
118European Communities' appellant's submission, para. 106.
119Ibid., para. 109.
120Panel Report, footnote 116 to para. 8.64 and para. 8.109.
121Ibid., para. 8.104;  United States' appellee's submission, para. 60.WT/DS176/AB/R
Page 54
system of making trademark rights available "on the basis of use" is specifically permitted under the
last sentence of Article 16.1.
185. Article 16 of the  TRIPS Agreement   is entitled "Rights Conferred".  Article 16.1 provides:
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 thetrademark 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 thebasis of use.
186. As we read it, Article 16 confers on the  owner   of a registered trademark an internationally
agreed minimum level of "exclusive rights" that all WTO Members must guarantee in their domesticlegislation.  These exclusive rights protect the owner against infringement of the registered trademarkby unauthorized third parties.
 122
187. We underscore that Article 16.1 confers these exclusive rights on the "owner" of a registered
trademark.  As used in this treaty provision, the ordinary meaning of "owner" can be defined as theproprietor or the person who holds the title or dominion of the property constituted by thetrademark.
 123  We agree with the Panel that this ordinary meaning does not clarify how the ownership
of a trademark is to be determined.  124  Also, we agree with the Panel that Article 16.1 does not, in
express terms, define how ownership of a registered trademark is to be determined.  Article 16.1
confers exclusive rights on the "owner", but Article 16.1 does not tell us who the "owner"  is.
188. As the United States reminds us, and as the European Communities concedes, the last
sentence of Article 16.1 acknowledges that WTO Members may make the rights available "on thebasis of use" of the trademark.  We read this to permit WTO Members to make the "exclusive rights"contemplated by Article 16.1 available within their respective jurisdictions on the basis of registrationor use.  The Panel concluded that Article 16.1 contemplates that different forms of entitlement may
                                                     
122We note that, prior to the entry into force of the TRIPS Agreement , only Article 10 bis(3) of the Paris
Convention (1967) provided for a prohibition of "all acts of  such a nature as to create confusion by any means
whatever with the establishment, the goods, or the industrial or commercial activities of a competitor."
See, Gervais, D., The TRIPS Agreement – Drafting History and Analysis ,  Sweet & Maxwell, London (1998),
pp. 109-110.
123The New Shorter Oxford English Dictionary , supra , footnote 78, Vol. II, p. 2059;  Black's Law
Dictionary , 7th ed., B.A. Garner (ed.), (West Group, 1999), p. 1130.
124Panel Report, para. 8.108.WT/DS176/AB/R
Page 55
exist under the laws of different Members, and we agree.  125  However, the  TRIPS Agreement   does
not establish or prescribe a regime of ownership of trademarks.
189. In the absence of any  explicit   provisions defining ownership in the  TRIPS Agreement , it is
useful to look also at whether the  TRIPS Agreement   – including the Articles of the Paris
Convention (1967) incorporated into it – contains an  implicit   definition of ownership.  Turning first
to the Paris Convention (1967), we see that, in response to a request for information by the Panel  126,
the Director-General of the International Bureau of the World Intellectual Property Organization("WIPO") stated that "no provision [of the Paris Convention (1967)] addresses the question how theowner of a trademark has to be determined under the domestic law of States party to the ParisConvention."
 127  The Panel did not discuss this.  However, the Panel seems to have taken the view
that the definition of the conditions of ownership has been left to the legislative discretion ofindividual countries of the Paris Union by Articl e 6(1) of the Paris Convention (1967).  We agree.
190. The European Communities suggests that there are several direct or indirect references to
ownership in the TRIPS Agreement   that give guidance to WTO Members on how to determine
ownership.
 128  Specifically, the European Communities points to Articles 15.1, 16.1 and 19.1 as
giving such guidance.
191. The European Communities argues that Article 15.1 of the TRIPS  Agreement   creates a link
between the trademark, on the one hand, and the goods or services emanating from an "undertaking",on the other.  This implies, in the view of the Eu ropean Communities, that only an "undertaking" can
be the owner of a trademark.  We express no view on the validity of this assertion.  In any event,assuming  arguendo   that this argument is correct, the fact remains that Article 15.1 nevertheless
does not define  which   "undertaking" would be the owner.  Thus, this argument does not make the
European Communities' case.
                                                     
125Panel Report, para. 8.108.
126Pursuant to Article 13 of the DSU.
127The letter from the Director-General of the International Bureau of WIPO, dated 2 March 2001,
states:
Even though some provisions of the Paris Convention refer to the concept of
trademark ownership (Article 5C(2) and (3), and Article 6 septies :
"proprietor", Article 6 ter(1)(c):  "owner", Article 6 bis(1) "being already the
mark of a person entitled to the benefits of this Convention"), no provision
addresses the question how the owner of a trademark has to be determined
under the domestic law of States party to the Paris Convention.  (emphasis
added)
Reproduced in relevant part in para. 6.41 of the Panel Report.
128European Communities' response to question 50 from the Panel.  The European Communities also
repeated this argument before us at the oral hearing.WT/DS176/AB/R
Page 56
192. The European Communities likewise submits that there is an equation in Article 16.1 of the
TRIPS Agreement   between the owner of the trademark and the "undertakings" whose goods or
services are distinguished by the trademark.  On this, we note only that Article 16.1 of theTRIPS Agreement   refers to the "owner of a registered trademark" and to the "goods  or services" in
respect of which trademarks are used.  Unlike Article 15.1, Article 16.1 does not include the word
"undertakings".  Nor does it mention the owner of the goods or services for which the trademark is
used.  So, unlike the European Communities, we fail to see any basis in Article 16.1 for the assertionthat this provision equates the owner of a trademar k with the undertaking whose goods or services are
distinguished by the trademark.
193. Lastly, the European Communities argues that Article 19.1 of the  TRIPS Agreement   seems
also to equate the owner of the trademark with the undertaking using the trademark for its goods or
services.  Here, we note that Article 19.1 addresses the situation where a Member's domesticlegislation requires use of the trademark for the purposes of maintaining its registration and those
circumstances when use by a person other than the owner of the trademark is recognized as use for the
purposes of maintaining a registration.  Here, as well, there is no mention of the "undertaking" thatuses the trademark for its goods or services.  Thus, here, too, unlike the European Communities, wefind no basis for viewing this provision as relevant to the argument the European Communities ismaking.
194. Accordingly, we do not agree with the argument of the European Communities that, under the
TRIPS Agreement , the "undertaking" that uses the trademark to distinguish its goods or services must
be regarded as the owner of the trademark.
195. For all these reasons, we conclude that neither Article 16.1 of the  TRIPS Agreement , nor any
other provision of either the  TRIPS Agreement   and  the Paris Convention (1967), determines who
owns or who does not own a trademark.
196. With this conclusion in mind, we consider next whether Sections 211(a)(2) and (b) are
inconsistent with Article 16.1.
197. The Panel stated that:WT/DS176/AB/R
Page 57
[u]nder the exceptional circumstances dealt with under
Section 211(a)(2), there may be a successful challenge concerning the
prima facie  ownership rights in relation to the registration, obtained
by a designated national pursuant to a general OFAC licence without
the consent of the original owner, of a trademark used in connectionwith confiscated assets.  In circumstances where the presumptive
ownership would be successfully challenged within effective civil
judicial procedures, the provisions of Section 211(a)(2) would not
stand in the way of the person whom the court would deem to be the
proper owner of the trademark under US law from asserting its rights.
In this way, Section 211(a)(2) allows for the person whom the court
considers to be the proper owner of the registered trademark under USlaw to be granted exclusive rights.
 129
198. Based on this view of Section 211(a)(2), the Panel concluded that the European Communities
had not provided "any evidence" for concluding that United States courts would interpret
Section 211(a)(2) in a manner that would deprive a person who had been determined by the court tobe the owner of a registered trademark of that person's exclusive rights.
 130
199. We recall that the European Communities contends that the Panel created an artificial
distinction between the owner of a registered trademark and the trademark itself.  131  We disagree with
the apparent equation by the European Communities of trademark registration with trademarkownership.
 132  Here, again, the European Communities appears to us to overlook the necessary legal
distinction between a trademark system in which ownership is based on registration and a trademarksystem in which ownership is based on use.  As we have noted more than once, United States law
confers exclusive trademark rights, not on the basis of registration, but on the basis of use.  There is
nothing in Article 16.1 that compels the United Stat es to base the protection of exclusive rights on
registration.  Indeed, as we have also observed more than once, the last sentence of Article 16.1confirms that WTO Members may make such rights available on the basis of use.  The United Stateshas done so.  Therefore, it necessarily follows that, under United States law, registration is  not 
conclusive of ownership of a trademark.  Granted, under United States law, the registration of atrademark does confer a  prima facie   presumption of the registrant's ownership of the registered
trademark and of the registrant's exclusive right to use that trademark in commerce.
 133  But, while we
                                                     
129Panel Report, para. 8.111.
130Ibid.
131European Communities' appellant's submission, para. 106.
132"Common sense would suggest that a registered trademark can only exist if there is a registration.  In
turn a registration must be for the benefit of an owner.  Therefore the owner of the registered trademark underArticle 16(1) is the holder of the registration until such time as when he ceases to hold the registration .  It would
make no sense to consider an ill-defined 'original owner' who is not in the register to be the lawful owner of theregistered trademark in the sense of Article 16(1) [of the] TRIPS [Agreement]." European Communities'appellant's submission, para. 109.
133Panel Report, para. 8.109.WT/DS176/AB/R
Page 58
agree with the Panel that the presumptive owner of the  registered   trademark must be entitled, under
United States law, to the exclusive rights flowing from Article 16.1 unless and until the presumptionarising from registration is successfully challenged through court or administrative proceedings, wedo not agree with the European Communities' evident equation of registration with ownership.
 134
200. As we have concluded earlier, Section 211(a)(2) is related to ownership of a defined category
of trademarks.  135  As such, Section 211(a)(2) can be invoked against the presumptive ownership of a
registered trademark.  If successfully invoked, Section 211(a)(2) will eviscerate the presumption ofownership flowing under United States' law from registration of a trademark.  But Section 211(a)(2) isnot inconsistent with Article 16.1.  For neither Article 16 nor any other Article of the  TRIPS
Agreement   determines who owns or does not own a trademark.
201. Turning to the alleged inconsistency of Section 211(b) with Article 16.1, we recall that we
concluded earlier that, like Section 211(a)(2), Section 211(b) is related to ownership of a definedcategory of trademarks.
 136  Like Section 211(a)(2), Section 211(b) can be invoked against the
presumptive ownership of a registered trademark.  Like Section 211(a)(2), Section 211(b), if
successfully invoked, will eviscerate the presumption of ownership flowing under United States' lawfrom registration of a trademark.  Therefore, we conclude that, like Section 211(a)(2), Section 211(b)is not inconsistent with Article 16, as neither this Article nor any other Article of the  TRIPS
Agreement   determines who owns or does not own a tr ademark.  Therefore, in our view, it has not
only "not been proved that Section 211(b) is inconsistent with Article 16.1"
 137, but, we conclude also
that Section 211(b) is not inconsistent with that Article.
202. For all these reasons, we find that Sections 211(a)(2) and (b) are not inconsistent with
Article 16.1 of the TRIPS Agreement .
VIII.  Article 42 of the  TRIPS Agreement
203. Both the United States and the European Communities appeal the Panel's findings on
Article 42 of the  TRIPS Agreement .  The United States appeals the conclusion of the Panel that
Section 211(a)(2) violates Article 42 of the  TRIPS Agreement . 138  The European Communities
                                                     
134Panel Report, para. 8.110.
135See  supra , paras. 118 and 121.
136See  supra , paras. 119 and 121.
137Panel Report, para. 8.159.
138Ibid., para. 8.102.WT/DS176/AB/R
Page 59
appeals the Panel's finding that "it has not been proved that Section 211(b) is inconsistent with
Article 42 of the TRIPS Agreement".  139
204. We begin our analysis with the text of Article 42 of the  TRIPS Agreement , which provides:
Fair and Equitable Procedures
Members shall make available to the right holders [footnote 11] 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.  The procedure shall provide a means to identify and
protect confidential information, unless this would be contrary to
existing constitutional requirements. (emphasis added)
Footnote 11:  For the purpose of this Part, the term "right holder" includes
federations and associations having legal standing to assert such rights.
205. Article 42 forms part of Part III on "Enforcement of Intellectual Property Rights".  Part III has
broad coverage.  It applies to all intellectual property rights covered by the TRIPS Agreement .
According to Article 1.2 of the  TRIPS Agreement ,  the term "intellectual property" refers to "all
categories of intellectual property that are the subject of Sections 1 through 7 of Part II" of thatAgreement.
206. Section 1 of Part III lays out "General Obliga tions" of Members.  According to Article 41.1 of
Section 1, Members are required to ensure that enforcement procedures as specified in Part III areavailable under their domestic law "so as to permit effective action against any act of infringement ofintellectual property rights covered by [the TRIPS] Agreement".  These enforcement procedures must
include expeditious remedies to prevent infringements and remedies which constitute a deterrent to
further infringements.  At the same time, these pr ocedures must be applied in such a manner as to
avoid the creation of barriers to legitimate trade and to provide safeguards against their abuse.  Theseprocedures provide for an internationally-agreed minimum standard which Members are bound toimplement in their domestic legislation.
207. Section 2 of Part III is entitled "Civil and Administrative Procedures and Remedies".
Article 42 deals with enforcement action in judicial proceedings, and contains detailed requirementswhich ensure that "civil judicial procedures" are "fair and equitable".  Like Section 1 of Part III,                                                     
139Panel Report, para. 8.162.WT/DS176/AB/R
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Section 2 introduces an international minimum standard which Members are bound to implement in
their domestic legislation.
208. Before the Panel, the European Communities claimed that Sections 211(a)(2) and (b) are
inconsistent with Article 42 of the  TRIPS Agreement  because they "expressly deny[] the availability
of [United States] courts to enforce the rights targeted" by Section 211.  140
209. The United States contended before the Panel that Sections 211(a)(2) and (b) do not violate
Article 42 because nothing in the measure precludes a person asserting ownership rights in thetrademark from having access to civil judicial procedures and a full opportunity "to substantiate [its]claim" to ownership and "to present all relevant evidence."
 141
210. On Section 211(a)(2), the Panel found:
We note the US argument that Section 211(a)(2) does not affect the
availability of judicial procedures to any party to assert a right to atrademark.  However, given the clear wording of Section 211(a)(2)
which provides that "[n]o U.S. court shall recognize, enforce or
otherwise validate any assertion of rights" in certain circumstances,
we fail to see how a right holder would be able effectively to assert
its rights under these circumstances.  While Section 211(a)(2) wouldnot appear to prevent a right holder from initiating civil judicial
procedures, its wording indicates that the right holder is not entitled
to effective procedures as the court is ab initio not permitted to
recognize its assertion of rights if the conditions of Section 211(a)(2)
are met.  In other words, the right holder is effectively preventedfrom having a chance to substantiate its claim, a chance to which a
right holder is clearly entitled under Article 42, because effective
civil judicial procedures mean procedures with the possibility of an
outcome which is not pre-empted  a priori   by legislation.
 142
(footnote omitted)
…
[G]iven that Section 211(a)(2) limits, under certain circumstances,
right holders' effective access to an d, hence, the avai lability of civil
judicial procedures, we find that Section 211(a)(2) is inconsistent
with Article 42 of the TRIPS Agreement.  143
211. On  Section 211(b), the Panel concluded:
                                                     
140Panel Report, paras. 4.91 and 4.147.
141Ibid., paras. 8.93 and 8.161.
142Ibid., para. 8.100.
143Ibid., para. 8.102.WT/DS176/AB/R
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We note that it is plausible that similar concerns mentioned in respect
of Section 211(a)(2) might arise in connection with Section 211(b).
However, as we noted above, the European Communities did not
explain the meaning of various terms contained in Sections 44(b)
and (e) even though Article 211(b) explicitly refers to "treatyrights…under sections 44(b) or (e)".  Therefore, for the reasons set
out in paragraphs 8.157 and 8.158, it has not been proved that
Section 211(b) is inconsistent with Article 42 of the TRIPS
Agreement.
 144
212. On appeal, the United States submits that a court would refuse to recognize, enforce or
otherwise validate a designated national's assertion of rights under Sections 211(a)(2) or (b) onlyafter   making a number of findings.
 145  According to the United States, these provisions do not
constitute legislation that  a priori   pre-empts a positive outcome of an assertion of rights by a
designated national.  Rather, the United States maintains that it is only  after   effective civil judicial
procedures have been made available that a court would refuse to recognize, enforce or validate anassertion of rights by a designated national.  The United States emphasizes that, in any event,
Article 42 does not create obligations with respect to a person who is not the holder of an intellectual
property right covered by the  TRIPS Agreement .  On this basis, the United States argues that
Article 42 does not require judicial authorities to provide enforcement procedures once a finding ismade that the claimant does not hold any intellectua l property right to enforce.  Accordingly, the
United States concludes that Sections 211(a)(2) and (b) cannot possibly deny enforcement rightsguaranteed under Article 42 to a person who is no t the legitimate owner of a trademark under United
States law.
 146
213. In contrast, the European Communities emphasizes on appeal that Article 42 entitles parties
to more than mere access to civil judicial procedures, which it concedes the United States courts
would provide when applying Sections 211(a)(2) and (b).  For the European Communities, Article 42is violated unless domestic civil judicial procedures enable a plaintiff to pursue  all  issues or claims
that arise and to present  all  relevant evidence in the context of the enforcement of an intellectual
property right covered by the  TRIPS Agreement .  In the view of the European Communities,
Sections 211(a)(2) and (b) each limit the issues of possible litigation to the elements referred to in
                                                     
144Panel Report, para. 8.162.
145The United States mentions, for example, the following:  whether the trademark at issue was used in
connection with a certain business or assets;  whether th e business or assets were confiscated;  whether adequate
and effective compensation was paid to the original owner;  whether the person claiming ownership is adesignated national or a successor-in-interest;  whether the original owner expressly consents to the use of thattrademark by the claimant.  See United States' other appellant's submission, para. 18.
146United States' other appellant's submission, para. 13.WT/DS176/AB/R
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those Sections  147, while excluding from judicial inquiry other issues that are typically relevant in
trademark-related litigation and regulated by,  inter alia ,  the Lanham Act.  148  On this reasoning, the
European Communities alleges that both Sections 211(a)(2) and (b) are inconsistent with Article 42.
214. In making their respective arguments about the consistency or inconsistency of
Sections 211(a)(2) and (b) with Article 42, the part icipants referred mainly to the first and fourth
sentences of that provision.  The first sentence of Article 42 requires "Members [to] make available toright holders civil judicial procedures concerning the enforcement of any intellectual property rightcovered by [the TRIPS] Agreement."  The fourth sentence of Article 42 provides that "[a]ll parties tosuch procedures shall be duly entitled to substantiate their claims and to present all relevantevidence."
215. The first sentence of Article 42 requires Members to make certain civil judicial procedures
"available" to right holders.  Making something  available   means making it "obtainable", putting it
"within one's reach" and "at one's disposal" in a way that has sufficient force or efficacy.
 149  We agree
with the Panel that the ordinary meaning of the term "make available" suggests that "right holders" are
entitled under Article 42 to have  access   to civil judicial procedures that are effective in bringing
about the enforcement of their rights covered by the Agreement.  150
216. Article 42, first sentence, does not define what the term "civil judicial procedures" in that
sentence encompasses.  The  TRIPS Agreement   thus reserves, subject to the procedural minimum
standards set out in that Agreement, a degree of discretion to Members on this, taking into account"differences in national legal systems".
 151  Indeed, no Member's national system of civil judicial
procedures will be identical to that of another Member.
217. Pursuant to the first sentence of Article 42, civil judicial procedures must be made available
to "right holders" of intellectual property rights covered by the  TRIPS  Agreement   s o  a s  t o  e n a b l e
them to protect those rights against infringement.  The United States seems to suggest that access tothose rights may be limited to the  owner   of a trademark under United States law.
 152  T h e  P a n e l
                                                     
147These issues include: whether the original owner or  bona fide   successor-in-interest has expressly
consented;  whether a trademark which is composed of the same or substantially similar signs as a trademark
which was used in connection with a business or assets that were confiscated;  whether an uncompensatedconfiscation of a business or asset took place in Cuba .  United States' other appellant's submission, para. 18.
148These are issues such as use of the trademark;  alleged deficiency of a registration;  identity or
similarity of signs in general;  class of goods or services covered by the trademark;  existence and scope of alicence.  European Communities' appellee's submission, para. 22.
149The New Shorter Oxford English Dictionary , supra , footnote 78, Vol. I, p. 154.
150Panel Report, para. 8.95.
151Recital 2(c) of the Preamble to the TRIPS Agreement.
152United States' other appellant's submission, para. 4.WT/DS176/AB/R
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defined the term "right holders" as persons who have the legal capacity to assert rights.  153  We agree
with the Panel that the term "right holders" as used in Article 42 is not limited to persons who havebeen established as owners of trademarks.  Where the  TRIPS Agreement   confers rights exclusively
on "owners" of a right, it does so in express terms, such as in Article 16.1, which refers to the "owner
of a registered trademark".  By contrast, the term "right holders" within the meaning of Article 42 also
includes persons who claim to have legal standing to assert rights.  This interpretation is also borneout by the fourth sentence of Article 42, which refers to "parties".  Civil judicial procedures would notbe fair and equitable if access to courts were not given to both complainants and defendants whopurport to be owners of an intellectual property right.
218. In this respect, the Panel stated:
As we have already noted, in the United States, the registration of a
trademark confers a prima facie  presumption of the registrant's
ownership of the registered trademark.  This means that, in the
United States, the holder of a registration is deemed to be the owner
unless otherwise proven.  A person who enjoys the presumption of
being the owner of a trademark under US law must be entitled to a
level of protection of its rights that meets the US obligations underthe TRIPS Agreement, including Article 42.  Consequently, in our
interpretation, this presumptive owner must have access to civil
judicial procedures that are effective in terms of bringing about the
enforcement of its rights  until the moment that there is a
determination by the court that it is, in fact, not the owner of the
trademark that it has registered   or that there is some other
disqualifying ground which is compatible with international
obligations.
 154 (emphasis added)
For the reasons we have stated, we agree with the Panel that the "right holders" to whom Members
must make the procedural rights of Article 42 available include trademark registrants who are
presumptive owners under United States law.  In our view, these procedural rights extend as well toall other "right holders".
219. WTO Members must also guarantee to all "parties " the right to "substantiate their claims", as
required by the fourth sentence of Article 42.  The use of the words "their claims" suggests that, underArticle 42, the choice of which claims or how many issu es to raise in civil judicial procedures is left
to each party.  The use of the word "substantiate" implies that litigants have the right to do more than
simply initiate claims;  Members must duly entitle all litigants to "give substance" to, or "give good                                                     
153Panel Report, para. 8.98.  In its reasoning, the Panel relied on footnote 11 to Article 42.  The
footnote states that "the term 'right holder' includes fe derations and associations having legal standing to assert
such rights."  At the oral hearing, both participants submitted that footnote 11 does not resolve the issue onwhich they disagree in respect of Article 42, and submitted further that, in their view, that footnote wasirrelevant to this dispute.
154Panel Report, para. 8.99.WT/DS176/AB/R
Page 64
grounds" for, their claims in order to prove the truth of a charge, and to demonstrate or verify it by
evidence.  155
220. Litigants are also entitled under the fourth sentence of Article 42 to "present all relevant
evidence" in such procedures.  These words indicate that parties have the right to file "all relevant
evidence" in support of their claims with the courts.
221. From all this, we understand that the rights which Article 42 obliges Members to make
available to right holders are  procedural   in nature.  These procedural rights guarantee an
international minimum standard for nationals of other Members within the meaning of Article 1.3 ofthe  TRIPS Agreement .
222. With this understanding, we turn now to the measure before us and examine whether
Sections 211(a)(2) and (b) are consistent with the procedural requirements set out in the first andfourth sentences of Article 42.  In doing so, we first recall our conclusion that, in the circumstances inwhich they apply, Sections 211(a)(2) and (b) deal with the  substantive   requirements of ownership in
a defined category of trademarks.
 156  Thus, while not affirmatively establishing ownership,
Sections 211(a)(2) and (b) determine who does  not  own those trademarks.  We also recall our
conclusion that neither the  TRIPS  Agreement ,  nor the provisions of the Paris Convention (1967) that
are incorporated into the  TRIPS Agreement , determines who owns or does not own a trademark.  157
Accordingly, the regulation of such ownership is, in principle, reserved to the legislative discretion of
Members pursuant to Article 6(1) of the Paris Convention (1967).
223. The United States submitted at the oral hearing that the procedural provisions of the
Lanham Act and of the United States Federal Rules of Civil Procedure  158 apply and guarantee "fair
and equitable … civil judicial procedures" in respect of Section 211.  The European Communities
agreed.  Accordingly, the participants agree that designated nationals and successors-in-interest haveaccess to civil judicial procedures.  At the oral hearing, the European Communities also agreed thatthe Federal Rules of Evidence are applicable in such proceedings.
 159  It is, therefore, our
understanding that both participants agree that designated nationals and successors-in-interest have –to the same extent, and in the same way, as any claimant and defendant – the rights provided underthe Federal Rules of Civil Procedure and the Federal Rules of Evidence.  These rights are the rights to"substantiate their claims" and "present all relevant evidence" with respect to all elements mentioned
                                                     
155The New Shorter Oxford English Dictionary , supra , footnote 78, Vol. II, p. 3124.
156See  supra , para. 121.
157See  supra , para. 195.
158FED. R. C IV.
159FED. R. E VID.WT/DS176/AB/R
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in Sections 211(a)(2) and (b).  We also understand both participants to agree that Sections 211(a)(2)
and (b) do not require or authorize a United States court to reject a claim by a designated national orsuccessor-in-interest as inadmissible or unfounded without having applied fully the Federal Rules ofCivil Procedure and the Federal Rules of Evidence.   The European Communities has not claimed that
either the Federal Rules of Civil Procedure or the Federal Rules of Evidence do not comply with the
obligation in Article 42.
224. We further understand the European Communities to acknowledge that, in a situation where
the recognition of an intellectual property right depends on the fulfilment of cumulative substantiveconditions, the failure to meet a single one of those substantive conditions (such as ownership of adisputed trademark) would prevent a court from reco gnizing that right.  At the oral hearing, the
European Communities also conceded that a court may, in such a situation, abstain from ruling on allthe other substantive conditions that may be relevant (for example, on the distinctiveness of thetrademark, or on the existence of an infringement).
225. However, unlike the United States, the European Communities believes that, under
Article 42, the decision whether or not to abstain from ruling on substantive conditions orrequirements other than those mentioned in Sections 211(a)(2) and (b) must be left to the discretion ofthe courts.  According to the European Communitie s, a statute must not limit the discretion of the
courts by directing the courts to examine certain substantive requirements before, and to the exclusionof, other substantive requirements.
 160  As we understand it, the European Communities argues that, in
requiring the courts to examine the circumstances they address as a matter of priority, and to the
exclusion of other issues typically arising in trademark-related litigation, Sections 211(a)(2) and (b)
interfere with the discretion of the courts.
226. In our view, a conclusion by a court on the basis of Section 211, after applying the Federal
Rules of Civil Procedure and the Federal Rules of Evidence, that an enforcement proceeding hasfailed to establish ownership – a requirement of substantive law – with the result that it is impossiblefor the court to rule in favour of that claimant's or that defendant's claim to a trademark right, does notconstitute a violation of Article 42.  There is nothing in the  procedural  obligations of Article 42 that
prevents a Member, in such a situation, from legislating whether or not its courts must examine  each
and every  requirement of substantive law at issue before making a ruling.
227. With this in mind, we turn to the alleged inconsistency of Section 211(a)(2) with Article 42.
Section 211(a)(2) does not prohibit courts from giving right holders access to fair and equitable civil
judicial procedures and the opportunity to substantiate their claims and to present all relevant
                                                     
160European Communities' responses to questioning at the oral hearing.WT/DS176/AB/R
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evidence.  Rather, Section 211(a)(2) only requires the United States courts not recognize, enforce or
otherwise validate any assertion of rights by desi gnated nationals or successors-in-interest who have
been determined, after applying United States Federal Rules of Civil Procedure and Federal Rules ofEvidence, not to own the trademarks referred to  in Section 211(a)(2).  As we have said,
Section 211(a)(2) deals with the substance of ownership.  Therefore, we do not believe that
Section 211(a)(2) denies the  procedural   rights that are guaranteed by Article 42.
228. For this reason, we conclude that Section 211(a)(2) on its face  is not inconsistent with the
requirements of Article 42 of the  TRIPS Agreement.
229. Turning next to Section 211(b), we recall that the Panel concluded that "it has not been
proved that Section 211(b) is inconsistent with Article 42."
 161  We further recall our conclusion that,
like Section 211(a)(2), Section 211(b) is related to ownership of a defined category of trademarks.  162
Like Section 211(a)(2), Section 211(b) can be invoked against the presumptive ownership of a
registered trademark.  Like Section 211(a)(2), Section 211(b), if successfully invoked, will eviscerate
the presumption of ownership flowing under United St ates' law from registration of a trademark.  Like
Section 211(a)(2), Section 211(b) does not prohibit courts from giving right holders access to civil
judicial procedures and the opportunity to substantiate their claims and to present all relevantevidence.  Like Section 211(a)(2), Section 211(b) only requires the United States courts not recognize,enforce or otherwise validate any assertion of rights by designated nationals or successors-in-interestwho have been determined, after applying United States Federal Rules of Civil Procedure and FederalRules of Evidence, not to own the trademarks referred to in Section 211.  As we have said,Section 211(b) deals with the substance of ownership.  Therefore, we do not believe that
Section 211(b) denies the procedural   rights that are guaranteed by Article 42.
230. For this reason, we conclude that Section 211(b) on its face  is not inconsistent with the
requirements of Article 42 of the  TRIPS Agreement.
231. And, for all these reasons, we find that Sections 211(a)(2) and (b)  on their face  are not
inconsistent with the requirements of Article 42 of the  TRIPS Agreement .  Therefore, we reverse the
Panel's finding on Section 211(a)(2) in paragraph 8.102 of the Panel Report and uphold its finding onSection 211(b) in paragraph 8.162 of the Panel Report.
232. Finally, we emphasize that the European Communities has challenged Sections 211(a)(2)
and (b) on their face .  The European Communities has not challenged the application of
Sections 211(a)(2) and (b) in particular instances by United States courts.  Accordingly, our
                                                     
161Panel Report, para. 8.162.
162See  supra , para. 121.WT/DS176/AB/R
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conclusions that Sections 211(a)(2) and (b) are not inconsistent with Article 42 relate to that measure
on its face .  We do not rule on whether a particular United States court has, or has not, violated the
requirements of Article 42 in applying Sections 211(a)(2) and (b) in any particular case.
IX. Article 2(1) of the Paris Conventi on (1967) and Article 3.1 of the  TRIPS Agreement
233. We turn now to the issue of national treatment.  In this appeal we have been asked to address,
for the first time, this fundamental principle of th e world trading system as it relates to intellectual
property.  There are two separate national treatment provisions that cover trademarks as well as other
intellectual property rights covered by the  TRIPS Agreement .  The European Communities claims, on
appeal, that Sections 211(a)(2) and (b) violate both.
234. One national treatment provision at issue in this appeal is Article 2(1) of the Paris
Convention (1967), which states:
Nationals of any country of the Union shall, as regards the protection
of industrial property, enjoy in all the other countries of the Union
the advantages that their respective laws now grant, or may hereafter
grant, to nationals; all without prejudice to the rights specially
provided for by this Convention.  Consequently, they shall have thesame protection as the latter, and the same legal remedy against any
infringement of their rights, provided that the conditions and
formalities imposed upon nationals are complied with.
235. As we have already explained, the Stockholm Act of the Paris Convention, dated
14 July 1967, is but the most recent version of that important international intellectual property
convention.
 163  Article 2(1) was part of the Paris Convention in 1883.  Since that time, it has remained
a treaty obligation of all the countries that have been party to the Paris Convention.
236. The parties to this dispute are not unacquain ted with the national treatment obligation and
other protections for trademarks and other forms of industrial property provided by the ParisConvention.  Every one of the fifteen Member States  of the European Union has long been a country
of the Paris Union.  Most of the current Member States of the European Union became party to theParis Convention in the 1880's.
 164  The most recent did so in 1925 – seventy-seven years ago.
                                                     
163See  supra , para. 123.
164The dates on which adhesion of the current Member States of the European Union to the Paris Union
took effect, are as follows:  Austria, 1 January 1909;  Belgium, 7 July 1884;  Denmark, 1 October 1894;Finland, 20 September 1921;  France, 7 July 1884;  Ge rmany, 1 May 1903;  Greece, 2 October 1924;  Ireland,
4 December 1925;  Italy, 7 July 1884;  Luxembourg, 30 June 1922;  the Netherlands, 7 July 1884;  Portugal,7 July 1884;  Spain, 7 July 1884;  Sweden, 1 July 1885;  and, the United Kingdom, 7 July 1884.WT/DS176/AB/R
Page 68
Likewise, the United States has, from almost the very beginning, been a country of the Paris Union.
The United States became a country of the Paris Union on 30 May 1887 – one hundred and fifteenyears ago.
237. Thus, the national treatment obligation is a longstanding obligation under international law
for all the countries directly involved in this dispute, as well as for many more countries of the Paris
Union that, like the parties to this dispute, are also Members of the WTO.  If there were no  TRIPS
Agreement ,  if there were no WTO, the parties to this dispute would be bound, nevertheless, under
Article 2(1) of the Paris Convention (1967), to accord national treatment to other countries of theParis Union.
238. As we have explained, what  is  new is that, as a consequence of the Uruguay Round,
Article 2(1) of the Paris Convention (1967) was made part of the  WTO Agreement .
 165  And, as we
have previously explained, by virtue of Article 2.1 of the  TRIPS Agreement , Article 2(1) of the Paris
Convention (1967), as well as certain other specified provisions of the Paris Convention (1 967), have
been incorporated into the  TRIPS Agreement   and, thus, the  WTO Agreement . 166  Consequently,
these obligations of countries of the Paris Union under the Paris Convention (1967) are also nowobligations of all WTO Members, whether they are countries of the Paris Union or not, under theWTO Agreement ,  and, thus, are enforceable under the DSU.
167
239. In addition to Article 2(1) of the Paris Convention (1967), there is also another national
treatment provision in the  TRIPS Agreement .  The other national treatment provision at issue in this
appeal is Article 3.1 of the  TRIPS Agreement ,  which states in relevant part:
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 [footnote 3] of intellectual property,
subject to the exceptions already provided in, respectively, the ParisConvention (1967), the Berne Convention (1971), the Rome
Convention or the Treaty on Intellectual Property in Respect of
Integrated Circuits.
Footnote 3:  For the purposes of Articles 3 and 4, "protection" shall include
matters affecting the availability, acquisition, scope, maintenance andenforcement of intellectual property rights as well as those matters affectingthe use of intellectual property rights specifically addressed in this
Agreement.
                                                     
165See  supra , para. 124.
166Ibid.
167See  supra , para. 125.WT/DS176/AB/R
Page 69
240. Thus, in drafting the  TRIPS Agreement ,  the framers of the  WTO Agreement   saw fit to
include an additional provision on national treatment.  Clearly, this emphasizes the fundamentalsignificance of the obligation of national treatment to their purposes in the  TRIPS Agreement .
241. Indeed, the significance of the national treatment obligation can hardly be overstated.  Not
only has the national treatment obligation long been a cornerstone of the Paris Convention and other
international intellectual property conventions.
 168  So, too, has the national treatment obligation long
been a cornerstone of the world trading system that is served by the WTO.
242. As we see it, the national treatment obligation is a fundamental principle underlying the
TRIPS Agreement ,  just as it has been in what is now the GATT 1994.  The Panel was correct in
concluding that, as the language of Article 3.1 of the  TRIPS Agreement ,  in particular, is similar to
that of Article III:4 of the GATT 1994, the jurisprudence on Article III:4 of the GATT 1994 may beuseful in interpreting the national treatment obligation in the  TRIPS Agreement .
243. As articulated in Article 3.1 of the  TRIPS Agreement ,  the national treatment principle calls
on WTO Members to accord no less favourable treatment to non-nationals than to nationals in the
"protection" of trade-related intellectual property rights.  The footnote to Article 3.1 clarifies that this"protection" extends to "matters affecting the availability, acquisition, scope, maintenance andenforcement of intellectual property rights as well as those matters affecting the use of intellectualproperty rights specifically addressed" in the  TRIPS Agreement .  As we have previously concluded,
neither the  TRIPS Agreement  nor the Paris Convention (1967) requires WTO Members to adopt any
particular "ownership regime".
 169
244. The European Communities claims that Sections 211(a)(2) and (b) violate the national
treatment obligation in both Article 2(1) of the Paris Convention (1967) and Article 3.1 of the
TRIPS Agreement   by treating non-United States nationals less favourably than United States
nationals in two different situations to which the measure applies:  first, that of successors-in-interestor  bona fide   successors-in-interest to original owners;  and, second, that of original owners.  The
European Communities contends that this discrimination occurs in different ways in these twodifferent situations, but, in each situation, they see a violation of the fundamental obligation ofnational treatment.
                                                     
168For example, see Article 2 of the International Convention for the Protection of Performers,
Producers of Phonograms and Broadcasting Organizations ("Rome Convention (1961)"), adopted at Rome on26 October 1961;  and also Article 5 of the Treaty on Intellectual Property in Respect of Integrated Circuits("IPIC Treaty"), adopted at Washington on 26 May 1989.
169See  supra , para. 195.WT/DS176/AB/R
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245. We examine first the European Communities' claims relating to the alleged discrimination
among successors-in-interest under Sections 211(a)(2) and (b).
246. Before the Panel, the European Communities argued that Section 211(a)(2) applies only to
Cuban nationals and to other foreign (that is, non-United States) successors-in-interest.  The European
Communities argued that this violates the national treatment obligation in Article 2(1) of the Paris
Convention (1967) and Article 3.1 of the TRIPS Agreement   because it imposes restrictions on Cubans
and other foreign nationals that it does not impose on United States nationals.
247. In response to the claim by the European Communities that Section 211(a)(2) violates the
national treatment obligation of the United States with respect to successors-in-interest, the Panelreasoned as follows:
Section 211(a)(2) provides that no US courts are to recognize,
enforce or validate any rights by a "designated national" based onregistration of trademarks obtained through a licence from OFAC.
We note that the term "designated national" is defined in
Section 211(d)(1) to include (1) Cuba, (2) any Cuban national, (3) "a
specially designated national" or (4) "a national of any foreign
country who is a successor-in-interest to a designated national."  Weconsider that the term "designated national" must be read as a whole
and cannot be segregated into two tiers.  We note that "designated
national" is defined to include "[a] national of any foreign country
who is a successor-in-interest to a designated national" and does not
include US nationals.  Thus, it is plausible that while a foreign
national who is a successor-in-interest to a designated national may
not have its rights to the underlying mark recognized, enforced or
validated, a US national who is a successor-in-interest to a
designated national can have US courts recognize, enforce or
validate rights in respect of the underlying mark that was registered
pursuant to a specific licence granted by OFAC.  Such differential
treatment in respect of intellectual property right protection could beconsidered to provide a less favourable treatment to nationals of
other Members as it denies effective equality of opportunities to non-
US nationals in the United States .
 170 (emphasis added)
248. Thus, with respect to successors-in-interest, the Panel stated that Section 211(a)(2),  in and of
itself ,  "could be considered" to provide less favourable treatment to non-United States nationals than
to United States nationals.  Yet, the Panel refrained from making, at that stage, findings with respect
                                                     
170Panel Report, para. 8.133.  Like the Panel, we note that Section 211(d)(1) broadened the definition of
"designated national" to include, in addition to Cuba and any Cuban national, nationals of any foreign country(that is, non-United States nationals) who are successors-in-interest to a designated national.  Section 211(d)(1)provides:
The term "designated national" has the meaning given such term in
section 515.305 of title 31, Code of Federal Regulations, as in effect onSeptember 9, 1998, and includes a national of any foreign country who is asuccessor-in-interest to a designated national.WT/DS176/AB/R
Page 71
to Article 2(1) of the Paris Convention (1967) and Article 3.1 of the  TRIPS Agreement.    Instead, the
Panel went on to examine the argument of the United States that any more favourable treatment thatmight arise under Section 211(a)(2) for United States nationals was offset
 171 by OFAC's practice
under Section 515.201 of the CACR of not issuing specific licences to United States nationals to
become successors-in-interest to "designated nationals".  As the Panel summarized it, the
United States argued that:
… Section 211(a)(2) is not inconsistent with Article 3.1 on the basis
that US nationals, although not specifically set out in the measure,
cannot become successors-in-interest to designated nationals becauseSection 515.201 of 31 CFR prohibits US nationals from becoming
successors-in-interest without obtaining a specific licence from
OFAC.  The United States submitted that OFAC has never issued a
specific licence to a US national for the purpose of becoming a
successor-in-interest to trademarks that were used in connection withconfiscated assets.  The United States asserted that a law is only
WTO-inconsistent on its face if it mandates WTO-inconsistent
actions and that if the law allows the national authority to act in [ sic]
manner consistent with the WTO Agreement, panels should not
assume that a Member will use its discretion in a manner contrary toits international obligations.
 172
249. Thus, before the Panel, the United States argued that Section 211(a)(2) does not apply to
United States nationals because, under the CACR, Un ited States nationals are prohibited from owning
or having an interest in property that was confiscated by the Cuban Government and, therefore, cannotbecome successors-in-interest.  The United States acknowledged that OFAC has the discretionadministratively to authorize specific licences with respect to certain transactions that would enable
United States nationals to deal with such property.  The United States asserted, however, that thisdiscretion has little practical effect because OFAC has never issued such a licence to a United Statesnational for purposes of becoming a successor-in-interest to a confiscating entity.
 173  The
United States submitted further to the Panel that there is no reason to believe that OFAC would ever
issue such a licence, and that, therefore, as a matter of law, the Panel should not assume that OFAC,
an agency of the executive branch, would take an action that might put the United States in violationof its international obligations.
 174  For these reasons, the United States maintained that it does not
provide more favourable treatment to United States nationals than to Cubans and other non-nationals.
                                                     
171For purposes of this appeal, we use the term "offset" to describe a situation in which an action
counterbalances, counteracts or neutralizes the effect of a contrary action.  See  infra , paras. 259-269 .
172Panel Report, para. 8.134.
173Ibid.
174Ibid., para. 4.126.WT/DS176/AB/R
Page 72
250. The Panel accepted this argument by the United States with respect to successors-in-interest
and went on to state that:
Although the term "designated national" is defined to include a
national of any foreign country who is a successor-in-interest, wenote that Section 515.201 of 31 CFR imposes a general prohibition
on US nationals from becoming successors-in-interest unless OFAC
grants a specific licence.  The question that needs to be addressed in
determining the consistency of Section 211(a)(2) with the national
treatment principle is whether OFAC accords a more favourable
treatment to US nationals in considering whether to grant licences to
US nationals to become successors-in-interest.
 175
251. As regards the treatment of successors-in-interest, the Panel focused on the discretionary
authority enjoyed by OFAC.  In so doing, the Panel relied on the report of the panel in  United States
Measures Affecting the Importation, Internal Sale and Use of Tobacco  ("US – Tobacco ") 176, and on
our Report in  United States – Anti-Dumping Act of 1916 ("US – 1916 Act ") 177  concerning the issue of
discretionary authority.  Based on those previous Reports, the Panel concluded that, where
discretionary authority is vested in the executive branch of a WTO Member, it cannot be assumed that
that Member will exercise that authority in violation of its obligations under any of the coveredagreements.
252. The Panel found, as a matter of fact, that OFAC has never granted a specific licence to allow
any United States national to become a successor-in-interest to a "designated national".
 178  Further,
the Panel found that the European Communities had not demonstrated that, in exercising itsdiscretionary authority, OFAC had acted in a manner that was inconsistent with the national treatmentobligation in Article 2(1) of the Paris Convention (1967) and Article 3.1 of the  TRIPS Agreement .
 179
253. In view of this, the Panel concluded that:
                                                     
175Panel Report, para. 8.135.
176Panel Report, adopted 4 October 1994, BISD 41S/I/131, para. 118.
177Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, para. 88.
178Panel Report, para. 8.140.
179Ibid., para. 8.138.WT/DS176/AB/R
Page 73
Because US nationals are unable to obtain licences so as to become a
successor-in-interest and OFAC has not granted any such licence for
such purpose and in light of our conclusion that Section 211(a)(2)
does not accord a treatment less favourable to foreign original owners
than it accords to original owners who are US nationals, we find thatSection 211(a)(2) is not inconsistent with Article 3.1 of the TRIPS
Agreement and Article 2.1 of the TRIPS Agreement in conjunction
with Article 2(1) of the Paris Convention (1967).
 180
254. The European Communities appeals these findings.  The European Communities does not
dispute that OFAC can deny United States nationa ls the specific licences required under the CACR to
become successors-in-interest to "designated nationals".  Nor does the European Communities disputethat, to date, OFAC has never granted such a specific licence to United States nationals.  Rather, theEuropean Communities argues that the offsetting effect of this admittedly longstanding OFACpractice does not cure the discrimination in Section 211(a)(2) with respect to successors-in-interestwho are  not  United States nationals.
255. According to the European Communities, th e discriminatory treatment in favour of
successors-in-interest who are United States nationals and against successors-in-interest who are  not 
United States nationals continues to exist because of what the European Communities sees as an
"extra hurdle" that non-United States nationals face procedurally under United States law.
256. That "extra hurdle" is this.  United States nationals who are successors-in-interest must go
successfully only through the OFAC procedure.  In  the circumstances addressed by Section 211, they
are not subject to the constraints imposed by Section 211(a)(2).
 181  In contrast, non-United States
successors-in-interest not only must go successfully through the OFAC procedure, but also findthemselves  additionally  exposed to the "extra hurdle" of an additional proceeding under
Section 211(a)(2).
 182  In sum, United States nationals face only  one  proceeding, while non-United
States nationals face  two.  It is on this basis that the European Communities claims on appeal that
Section 211(a)(2), as it relates to successors-in-interest, violates the national treatment obligation in
the  TRIPS Agreement   and the Paris Convention (1967).
257. At the oral hearing in this appeal, the United States reiterated that it is very unlikely that a
United States national would ever be licensed to become a successor-in-interest to a "designatednational";  therefore, the United States argues that it does not matter "what happens to such asuccessor-in-interest when he gets to the enforcement level".
 183  In any event, the United States
                                                     
180Panel Report, para. 8.140.
181European Communities' appellant's submission, para. 124.
182Ibid.
183United States' responses to questioning at the oral hearing.WT/DS176/AB/R
Page 74
continues, if a United States national were ever granted a specific licence, the United States courts
would apply the "longstanding principle agains t the recognition of foreign confiscations."  184
258. In considering the European Communities' appeal, we look first at the reasoning and the
conclusions of the Panel.  As we have noted, initially, the Panel concluded, on a plain reading of the
statute, that Section 211(a)(2) affords "differential treatment" between United States and non-United
States nationals, and that such treatment "could be considered to provide a less favourable treatmentto nationals of other Members as it denies effective equality of opportunities" to non-United Statesnationals in the United States.
 185  We agree.
259. Next, the Panel considered the supposed offsetting effect of the consistent practice of OFAC.
Here, as we have also noted, the Panel relied on previous rulings addressing the issue of legislationthat gives discretionary authority to the executive branch of a Member's government.  As the Panelrightly noted, in  US – 1916 Act ,  we stated that a distinction should be made between legislation that
mandates WTO-inconsistent behaviour, and legislation that gives rise to executive authority that can
be exercised with discretion.  We quoted with approval there the following statement of the panel in
US – Tobacco :
… panels had consistently ruled that legislation which mandated
action inconsistent with the General Agreement could be challenged
as such, whereas legislation which merely gave the discretion to theexecutive authority  of a contracting party to act inconsistently with
the General Agreement could not be challenged as such;  only the
actual application of such legislation inconsistent with the General
Agreement could be subject to challenge.
 186
Thus, where discretionary authority is vested in the executive branch of a WTO Member, it cannot be
assumed that the WTO Member will fail to implement its obligations under the  WTO Agreement   in
good faith.  187  Relying on these rulings, and interpreting them correctly, the Panel concluded that it
                                                     
184United States' responses to questioning at the oral hearing.
185Panel Report, para. 8.133.
186Appellate Body Report, US – 1916 Act , supra , footnote 177, para. 88, quoting from Panel Report,
US – Tobacco , supra , footnote 176, para. 118.
187We made a similar observation in a somewhat different context in  Chile – Taxes on Alcoholic
Beverages , where we stated:
[M]embers of the WTO should not be assumed, in any way, to have
continued  previous protection or discrimination through the adoption of a
new measure. This would come close to a presumption of bad faith.Accordingly, we hold that the Panel committed legal error in taking thisfactor into account in examining the issue of "so as to afford protection".(footnote omitted)
See, Appellate Body Report, WT/DS87/AB/R, WT/DS110/AB/R, adopted 12 January 2000, para. 74.WT/DS176/AB/R
Page 75
could not assume that OFAC would exercise its discretionary executive authority inconsistently with
the obligations of the United States under the  WTO Agreement .  Here, too, we agree.
260. But here, the Panel stopped.  We are of the view that, having reached the conclusion it did
with respect to the offsetting effect of OFAC pr actice, the Panel should not have stopped but should
have gone on and considered the argument made by the European Communities about the "extra
hurdle" faced by non-United States successors-in-interest.  For this reason, we do so now.
261. We note, as did the Panel, the report of the panel in  US – Section 337 . 188  That panel
reasoned that "the mere fact that imported products are subject under Section 337 to legal provisionsthat are different from those applying to products of national origin is in itself not conclusive inestablishing inconsistency with Article III:4."
 189
262. That panel  stated further that:
[I]t would follow … that any unfav ourable elements of treatment of
imported products could be offset by more favourable elements oftreatment, provided that the results, as shown in past cases, have not
been less favourable.  [E]lements of less and more favourable
treatment could thus only be offset against each other to the extent
that they always would arise in the same cases and necessarily would
have an offsetting influence on the other .
 190 (emphasis added)
263. And that panel, importantly for our purposes, concluded that:
… while the likelihood of having to defend imported products in two
fora is small, the existence of the possibility is inherently lessfavourable than being faced with having to conduct a defence in only
one of those fora .
 191 (emphasis added)
264. We agree with this approach and consider it to be particularly relevant to this appeal.  It is not
disputed that Section 515.201 of the CACR imposes a limitation – a "hurdle" – on both successors-in-interest who are United States nationals and successo rs-in-interest who are not.  It is also not disputed
that Section 211(a)(2) applies only to successors-in-interest who are  not  United States nationals.  It is
likewise not disputed that, under Section 211(a)(2), in  every individual situation  where a non-United
States successor-in-interest seeks to assert its rights without the express consent of the original owner
                                                     
188Panel Report, US – Section 337 , supra , footnote 25.  Central to that dispute was a situation where the
proceedings that were applicable to imported products alleged to infringe United States patents were different in
a number of respects from those applicable before a fede ral district court when a product of foreign origin was
challenged on the grounds of patent infringement.
189Panel Report, US – Section 337 , supra , footnote 25, para. 5.11.
190Ibid., para. 5.12.
191Ibid., para. 5.19.WT/DS176/AB/R
Page 76
or its  bona fide   successor-in-interest, the United States co urts are required not to recognize, enforce
or otherwise validate any assertion of rights.  We emphasize that this situation exists under the statute on its face , and that, therefore, unlike the situation with respect to the granting of a special licence to
United States successors-in-interest by OFAC, this situation assumes no action by OFAC or by any
other agency of the United States Government.
265. The United States may be right that the likelihood of having to overcome the hurdles of both
Section 515.201 of Title 31 CFR and Section 211(a)(2) may, echoing the panel in  US – Section 337 ,
be  small .  But, again echoing that panel, even the  possibility   that non-United States successors-in-
interest face two hurdles is inherently less favourable  than the undisputed fact that United States
successors-in-interest face only one.
266. Both before the Panel and before us, the United States has submitted that Section 211 is a
statutory articulation of the longstanding doctrine of non-recognition of foreign confiscation
 192 that is
recognized in "virtually every jurisdiction".  193  Thus, the United States argues that, in the unlikely  194
event that a United States national did somehow succeed in getting a specific licence from OFAC, thislongstanding doctrine would be applied by United States courts to prevent such a national fromenforcing its rights as a successor-in-interest.  The United States argues, therefore, that the prohibition
imposed by Section 211(a)(2) with respect to non-United States successors-in-interest would also beapplied to United States successors-in-interest.  We are not persuaded by this argument.
267. The United States has not shown, as required under the national treatment obligation, that, in
every individual case, the courts of the United States would not validate the assertion of rights by aUnited States successor-in-interest.  Moreover, even if there is, as the United States argues, a
likelihood   that United States courts would not enforce rights asserted by a United States successor-in-
interest, the fact remains, nevertheless, that non-Un ited States successors-in-interest are placed by the
measure, on its face , in an inherently less favourable situation than that faced by United States
successors-in-interest.  And, even if we were to acc ept the United States argument about the doctrine
of non-recognition of foreign confiscation, presumably  that doctrine would apply to those who are not
nationals of the United States as well as to those who are.  Any application of this doctrine wouldtherefore not offset the discrimination in Section 211(a)(2), because it would constitute yet another,separate obstacle faced by nationals and non-nationals alike.  Hence, it would not offset the effect ofSection 211(a)(2), which applies only to successors-in-interest who are not United States nationals.
                                                     
192We recall that the term "confiscated" is defined in the CACR.  See  supra , footnote 7.
193United States' appellee's submission, para. 16.
194United States' responses to questioning at the oral hearing.WT/DS176/AB/R
Page 77
268. Accordingly, we conclude that Section 211(a)(2) imposes an additional obstacle on
successors-in-interest who are not nationals of the United States that is not faced by United Statessuccessors-in-interest.  And, therefore, we conclude that, by applying the "extra hurdle" imposed bySection 211(a)(2) only to non-United States successors-in-interest, the United States violates the
national treatment obligation in Article 2(1) of the Paris Convention (1967) and Article 3.1 of the
TRIPS Agreement  .
269. For this reason, we reverse the Panel's conclusion in paragraph 8.140 of the Panel Report that
"[b]ecause US nationals are unable to obtain licences so as to become a successor-in-interest andOFAC has not granted any such licence for such pu rpose … Section 211(a)(2) is not inconsistent with
Article 3.1 of the TRIPS Agreement and Article 2.1 of the TRIPS Agreement in conjunction withArticle 2(1) of the Paris Convention (1967)."
270. The European Communities also raised claims at  the level of successors-in-interest against
Section 211(b).
 195  With respect to these claims, the Panel concluded that:
Section 211(b) states that US courts shall not recognize, enforce or
validate any assertion of treaty rights by a "designated national or
its successor-in-interest ".  The difference between Section 211(a)(2)
and Section 211(b) is that the latter contains the additional term "its
successor-in-interest" whereas the former just refers to "a designated
national".  Moreover, the term "its successor-in-interest" as set out inSection 211(b) is not limited to foreign nationals which means that it
includes US nationals.  This would mean that any transfer of
trademarks used in connection with confiscated assets to any
national, including US nationals, would be subject to Section 211(b).
For these reasons, Section 211(b) does not accord a treatment lessfavourable to nationals of other Members than it accords to US
nationals.
 196 (emphasis in original)
271. We agree with the Panel that Section 211(b) applies to successors-in-interest of  any origin ,
including United States nationals and that, consequently, Section 211(b) does not accord lessfavourable treatment to non-United States nationals than to United States nationals.
272. Therefore, we uphold the Panel's conclusion in paragraph 8.173 of the Panel Report that – at
the level of successors-in-interest – Section 211(b) is not inconsistent with Article 2.1 of the  TRIPS
Agreement   in conjunction with Article 2(1) of the Paris Convention (1967) and Article 3.1 of the
TRIPS Agreement .
                                                     
195European Communities' appellant's submission, para. 157.
196Panel Report, para. 8.171.WT/DS176/AB/R
Page 78
273. We turn now to the European Communities' claims relating to Sections 211(a)(2) and (b) with
respect to the other form of discrimination alleged by the European Communities – that ofdiscrimination among  original owners .
274. On this, the Panel found with respect to Sections 211(a)(2) and (b):
In respect of original owners, Section 211(a)(2) does not accord a
treatment less favourable to foreign original owners than it accords to
original owners who are US nationals with respect to protection of
intellectual property rights.
 197
…
Similarly, in respect of original owners, Section 211(b) does not
accord a treatment less favourable to foreign original owners than it
accords to original owners who are US nationals.  198
In contrast to its reasoned explanation on alleged discrimination relating to successors-in-interest, the
Panel gave no further explanation for its conclusion on alleged discrimination among original owners.
275. On appeal, the European Communities argues that the Panel erred in its conclusion about
discrimination among original owners.  The European Communities maintains that, on their face, bothSections 211(a)(2) and 211(b) violate the national treatment obligation under the  TRIPS Agreement
and the Paris Convention (1967) because they provide less favourable treatment to Cuban nationals
who are original owners than to United States nationals who are original owners.  The European
Communities supports this position by relying on a particular set of circumstances that exists underthe statute that, according to the European Communities, illustrates how Sections 211(a)(2) and (b),on their face, discriminate in favour of United St ates nationals who are original owners and against
Cuban nationals who are original owners.  The European Communities believes this situation
demonstrates the discriminatory treatment implicit in Sections 211(a)(2) and (b).
 199
276. Specifically, the European Communities asks us to consider the following particular set of
circumstances that exists under the statute.  There are two separate owners who acquired rights, eitherat common law or based on registration, in two separate United States trademarks, before the Cuban
confiscation occurred.  Each of these two United States trademarks is the same, or substantially
similar to, the signs or combination of signs of which a trademark registered in Cuba is composed.That same or similar Cuban trademark was used in connection with a business or assets that wereconfiscated in Cuba.  Neither of the two original owners of the two United States trademarks was the                                                     
197Panel Report, para. 8.139.
198Ibid., para. 8.172.
199European Communities' appellant's submission, paras. 115 and 157;  European Communities'
opening statement at the oral hearing;  European Communities' responses to questioning at the oral hearing.WT/DS176/AB/R
Page 79
owner of that same or similar trademark that was registered in Cuba.  Those two original owners each
seek to assert rights in the United States in their two respective United States trademarks.  Thesituation of these two original owners of these two United States trademarks is identical in everyrelevant respect, but one.  That one difference is this:  one original owner is a national of Cuba, and
the other original owner is a national of the United States.
277. The European Communities asks us to consider this specific situation involving these two
original owners, one from Cuba and one from the United States.  The European Communities arguesthat, on the face of the statute, in this situation, the original owner who is a Cuban national is subject
to Sections 211(a)(2) and (b), and the original owner who is a United States national is not.  Thisalone, as the European Communities sees it, is sufficient for us to find that Sections 211(a)(2) and (b)violate the national treatment obligation of the United States.
278. Like the European Communities, we see this situation as critical to our determination of
whether the treatment of original owners under Section 211 is consistent with the national treatment
obligation of the United States under Article 2(1) of the Paris Convention (1967) and Article 3.1 of
the  TRIPS Agreement .
279. The situation highlighted by the European Communities on appeal exists because
Sections 211(a)(2) and (b) apply to "designated nationals".  A "designated national" is defined inSection 515.305 of Title 31 CFR as "Cuba and any national thereof including any person who is aspecially designated national."
 200  Thus, Sections 211(a)(2) and (b) apply to original owners that are
Cuban nationals.  Original owners that are United States nationals are not covered by the definition of"designated national" and, thus, are not subject to the limitations of Sections 211(a)(2) and (b).
280. Thus, in our view, the European Communities is correct on this issue.  Sections 211(a)(2)
and (b) are discriminatory  on their face .
281. We conclude, therefore, that the European Communities has established a  prima facie   case
that Sections 211(a)(2) and (b) discriminate between Cuban nationals and United States nationals,both of whom are original owners of trademarks registered in the United States which are composedof the same or substantially similar signs as a Cuban trademark used in connection with a business orassets that were confiscated in Cuba.
                                                     
200The definition also includes successors-in-interest, but the situation discussed here does not involve
successors-in-interest.  Nor does it involve "specially designated nationals", given that there is no claim that aperson is acting for or on behalf of the Cuban government.  The term "specially designated national" is definedin Section 515.306 of 31 CFR, see  supra ,  footnote 6.WT/DS176/AB/R
Page 80
282. The United States attempts to rebut this argument by the European Communities by
maintaining that Sections 211(a)(2) and (b) are not applicable to original owners, regardless of theirnationality, because original owners are always in a position to consent expressly to their ownassertion of rights under Sections 211(a)(2) and (b).
 201  Section 211(a)(2), when read together with
Section 211(a)(1), and Section 211(b) do indeed provide an exception for designated nationals who
have the express consent of "the original owner of the mark, trade name, or commercial name, or thebona fide successor-in-interest".
 202  However, the United States erroneously assumes in its argument
on this issue that the Cuban original owner of the United States trademark is necessarily the sameperson as the original owner of the same or subs tantially similar Cuban trademark used in connection
with a business or assets that were confiscated.  This is by no means necessarily the case, as isdemonstrated in the specific situation posed by the European Communities.  In that situation, theCuban national who holds the trademark rights in th e United States would be unable to use its own
consent to avoid the court's denial of any assertion of rights under Sections 211(a)(2) and (b) because
it was not the original owner of the same or similar Cuban trademark.
283. The United States also argues in rebuttal that Section 211(a)(2) does not apply to Cuban
nationals in the situation posed by the European Communities because Section 515.527 of the CACRwas not in effect when the original owners in this  situation obtained their trademark rights in the
United States.
 203  We note that Section 211(a)(2) refers to the assertion of rights "based on common
law rights or registration obtained under such section 515.527".  Thus, it is clear from the text ofSection 211(a)(2) that the reference to Section 515.527 relates to rights based on registration, and notto common law rights.  Indeed, the United States con ceded as much in response to our questions at the
oral hearing.  Thus, this argument may address the discrimination against Cuban nationals who are
original owners of trademark rights in the United States  based on registration .  But it does not
address the discrimination against Cuban nationals who are original owners of trademark rights in the
United States  based on common law .
284. For trademark rights based on registration, it is true that, in the situation posed by the
European Communities, Section 515.527 of the CACR would not have been in effect when the Cubanoriginal owner obtained its trademark rights in the United States, namely before the Cubanconfiscation.
  However, we recall that Section 515.527 of the CACR applies not only to the
                                                     
201United States' appellee's submission, para. 71.
202See  supra , para. 120.
203United States' responses to questioning at the oral hearing.WT/DS176/AB/R
Page 81
registration, but also to the  renewal   of registered trademarks.  204  Although the Cuban national's
initial registration, carried out before the Cuban confiscation, would not have been obtained pursuantto Section 515.527, a renewal of such registration w ould come within the purview of that provision.
Hence, Section 211(a)(2) could apply to a Cuban national who registered a United States trademark
before confiscation  and renewed it after that date .
285. For trademark rights based on common law, the United States contends that the Cuban
original owner could not have maintained its rights in the United States trademark because it wouldnot have been able to import the trademarked goods  from Cuba and, thus, would not have been able to
continue using the trademark "in commerce".
 205  Yet, this argument assumes that the Cuban national
who owns the trademark in the United States  could have imported the trademarked goods  only from
Cuba .  We understand that from the European Communities' responses to questioning at the oral
hearing, the Cuban holder of common law trademark rights in the United States could import thetrademarked goods from a country other than Cuba.  The United States did not deny this at the oral
hearing.
 206  We are, therefore, not persuaded by this argument.
286. On this point, the United States replied as well that the Cuban original owner could be
"unblocked" under the OFAC regulations, an argument that the United States did not make before the
Panel or in its written submissions in this appeal.  The relevant regulation is Section 515.505 of theCACR, which lists those persons that are "licensed as unblocked nationals" or who may apply to be
                                                     
204Section 515.527(a)(1) of 31 CFR provides:
Transactions related to the registration and renewal in the United States
Patent and Trademark Office or the United States Copyright Office ofpatents, trademarks, and copyrights in which the Government of Cuba or aCuban national has an interest are authorized. (emphasis added)
205Section 1 of the Lanham Act, 15 U.S.C. §1051.  United States' responses to questioning at the oral
hearing.
206European Communities' responses to questioning at the oral hearing.  We note also the following
excerpt from a judgment by the United States District Court, Southern District New York:
In 1995, Bacardi-Martini began to distribute rum in the United States which
was produced in the Bahamas under the authority of Galleon, Bacardi &
Co.'s predecessor-in-interest, bear ing the trademark Havana Club.
Havana Club Holding, S.A. v. Galleon S.A., 62 F.Supp.2d 1085, 1090.
United States' responses to questioning at the oral hearing.WT/DS176/AB/R
Page 82
"unblocked".  207  According to the United States, as an "unblocked national"  208, such a Cuban original
owner would have the same status as a United States national.  209  Yet, to fulfill the national treatment
obligation, less favourable treatment must be offset, and thereby eliminated, in  every   individual
situation that exists under a measure.  Therefore, for this argument by the United States to succeed, it
must hold true for  all  Cuban original owners of United States trademarks, and not merely for  some
of them.
287. Accordingly, we examine three possible situatio ns to determine whether the discrimination is
eliminated in every individual instance that might arise under Section 515.505.  The first exampleinvolves a Cuban original owner re siding in the United States.  The second involves a Cuban original
owner residing in a country other than the United States or Cuba.
 210  The third involves a Cuban
original owner residing in Cuba.
288. According to the United States, a Cuban original owner residing in the United States is, in
fact, "unblocked" by Section 515.505(a)(2) of the CACR.  211  We agree with this reading of
                                                     
207Section 515.505 of 31 CFR provides:
(a) The following persons are hereby licensed as unblocked nationals.
(1) Any person resident in, or organized under the laws of a
jurisdiction in, the United States or the authorized trade territory who or
which has never been a designated national;
(2) Any individual resident in the United States who is not a specially
designated national; and
(3) Any corporation, partnership or association that would be a
designated national solely because of the interest therein of an individuallicensed in paragraph (a) or (b) of this section as an unblocked national.
(b) Individual nationals of a designated country who have taken up
residence in the authorized trade territo ry may apply to the Office of Foreign
Assets Control to be specifically licensed as unblocked nationals.
(c) The licensing of any person as an unblocked national shall not
suspend the requirements of any section of this chapter relating to themaintenance or production of records.
208An "unblocked national" is defined in Section 515.307 of 31 CFR as:
Any person licensed pursuant to §515.505 licensed as an unblocked national
shall, while so licensed, be regarded as a person within the United Stateswho is not a national of any designated foreign country:  Provided, however ,
That the licensing of any person as an unblocked national  shall not be
deemed to suspend in any way the requirements of any section of thischapter relating to reports, or the production of books, documents, andrecords specified therein.
209United States' responses to questioning at the oral hearing.
210We are referring here to a country which is within  the "authorized trade territory", as defined in
Section 515.322 of 31 CFR.  See  infra , footnote 212.
211United States' responses to questioning at the oral hearing.WT/DS176/AB/R
Page 83
Section 515.505(a)(2).  This eliminates the less favourable treatment of this Cuban original owner.
The other examples, however, yield a different result.
289. A Cuban original owner residing in a country other than the United States or Cuba, for
example, in the European Communities, could appl y to OFAC to be "specifically licensed as [an]
unblocked national[]."  This is pursuant to Section 515.505(b) of the CACR, because the United
States does not impose sanctions on the European Communities and, therefore, the EuropeanCommunities would be considered part of the "authorized trade territory" described inSection 515.322 of the CACR.
 212  This could eliminate less favourable treatment  in practice .  Yet,
the very existence of the additional "hurdle" that is imposed by requiring application to OFAC is, initself, inherently less favourable.  Sections 211(a)(2) and (b) do not apply to United States originalowners;  no application to OFAC is required.  But Cuban original owners residing in the "authorized
trade territory" must apply to OFAC.  Thus, su ch Cuban original owners  must comply with an
administrative requirement that does not apply to United States original owners.
 213  By virtue alone of
having to apply to OFAC, even Cuban original owne rs that reside in the "authorized trade territory"
described in Section 515.332 are treated less favourably than United States original owners.  So, inthis second situation, the discrimination remains.
290. A Cuban original owner residing in Cuba is discriminated against as well.  Cuba is not part of
the "authorized trade territory" because it is subject to sanctions administered by OFAC under theCACR.  From our reading of the regulations, it seems to us that a Cuban national who resides in Cubacould not, under any circumstances, be "unblocked" under Sections 515.505(a) or (b) of Title 31 CFR.
Nor has the United States suggested otherwise.  Thus, in this third situation, the discrimination
remains as well.
291. We turn now to the United States' argument that Section 515.201 of the CACR offsets  any
discrimination implicit in Sections 211(a)(2) and (b).  Section 515.201 of the CACR sets out a list oftransactions that are prohibited, except as specifically authorized by the Secretary of the Treasury:
                                                     
212Section 515.322 of 31 CFR provides:
§515.322 Authorized  trade  territory; member of the authorized  trade
territory.
(a) The term  authorized  trade  territory   includes all countries, including
any colony, territory, possession, or protectorate, except those countries
subject to sanctions pursuant to this chapter. The term does not include theUnited States.
(b) The term member of the  authorized  trade  territory   shall mean any of
the foreign countries or political subdivisions comprising the authorizedtrade  territory.
213See Panel Report, US – Section 337 , supra , footnote 25, paras. 5.11-5.14.WT/DS176/AB/R
Page 84
§515.201  Transactions involving designated foreign countries or
their nationals;  effective date.
(a) All of the following transactions are prohibited, except as
specifically authorized by the Secretary of the Treasury (or any
person, agency, or instrumentality designated by him) by means ofregulations, rulings, instructions, licenses, or otherwise, if either such
transactions are by, or on behalf of, or pursuant to the direction of a
foreign country designated under this part, or any national thereof, or
such transactions involve property in which a foreign country
designated under this part, or any national thereof, has at any time on
or since the effective date of this section had any interest of any
nature whatsoever, direct or indirect …
(b) All of the following transactions are prohibited, except as
specifically authorized by the Secretary of the Treasury (or any
person, agency, or instrumentality designated by him) by means of
regulations, rulings, instructions, licenses, or otherwise, if such
transactions involve property in which any foreign countrydesignated under this part, or any national thereof, has at any time on
or since the effective date of this section had any interest of any
nature whatsoever, direct or indirect …
292. The United States argues that Section 515.201 of the CACR could apply to a United States
original owner in the situation described above, thereby offsetting the less favourable treatment of the
Cuban national that otherwise occurs under Sections 211(a)(2) and (b).
 214  The United States asserts
that, in this way, the United States original owner would be barred from asserting rights in thetrademark pursuant to Section 515.201 of the CACR, ju st as a Cuban original owner would be barred
from doing so under Sections 211(a)(2) and (b).
293. In making this argument, the United States maintains that Section 515.201 of the CACR has a
very broad reach – so far that it reaches United States nationals who are pre-confiscation originalowners of a United States trademark that is the same or substantially similar to a Cuban trademarkused in connection with a Cuban business or assets that were confiscated.  We understand theUnited States to argue that, because the United States trademark is the same or similar to a trademark
used in connection with a business or assets confiscated in Cuba, it would be considered as
"involv[ing] property in which a foreign country designated under this part, or any national thereof,has at any time on or since the effective date of this section had any interest of any nature whatsoever,direct or indirect", and hence a transaction th at is prohibited under Section 515.201 of the CACR.
 215
294. We disagree.  We do not believe that Section 515.201 of the CACR would  in every case
offset the discriminatory treatment imposed by Sections 211(a)(2) and (b).  For this argument by the
                                                     
214United States' responses to questioning at the oral hearing.
215United States' appellee's submission, para. 72.WT/DS176/AB/R
Page 85
United States to hold true in each and every situatio n, the scope of the phrase "having an interest in"
in Section 515.201 would necessarily have to overlap in coverage with the scope of the phrase "usedin connection with" in Sections 211(a)(2) and (b).  However, the United States was unable to point to
evidence substantiating that the different standards used in Section 515.201 and in Sections 211(a)(2)
and (b) overlap completely.
 216  We are, therefore, not satisfied that Section 515.201 would offset the
inherently less favourable treatment present in Sections 211(a)(2) and (b) in each and every case.And, because it has not been shown by the United States that it would do so in each and every case,the less favourable treatment that exists under the measure cannot be said to have been offset and,thus, eliminated.
295. Finally, the United States referred to its longstanding doctrine of non-recognition of foreign
confiscations.
 217  However, this policy could not possibly apply to  trademarks that existed  in the
United States   when a business or assets connected with a trademark composed of the same or
substantially similar signs were confiscated  in Cuba .
296. Thus, we conclude that Sections 211(a)(2) and (b) are inconsistent with the national treatment
obligation of the United States under the Paris Convention (1967) and the  TRIPS Agreement   at the
level of original owners.  And, therefore, we reverse the Panel's findings in paragraphs 8.140
and 8.173 of the Panel Report that Section 211(a)(2) and Section 211(b) are "not inconsistent withArticle 3.1 of the TRIPS Agreement and Article 2.1 of the TRIPS Agreement in conjunction withArticle 2(1) of the Paris Convention (1967)" to the extent that they concern the treatment of originalowners.
X. Article 4 of the  TRIPS Agreement
297. Like the national treatment obligation, the obligation to provide most-favoured-nation
treatment has long been one of the cornerstones of the world trading system.  For more than fiftyyears, the obligation to provide most-favoured-nation treatment in Article I of the GATT 1994 has
been both central and essential to assuring the success of a global rules-based system for trade in
goods.  Unlike the national treatment principle, there is no provision in the Paris Convention (1967)that establishes a most-favoured-nation obligation with respect to rights in trademarks or otherindustrial property.  However, the framers of the  TRIPS Agreement   decided to extend the most-
favoured-nation obligation to the protection of intellectual property rights covered by that Agreement.As a cornerstone of the world trading system, th e most-favoured-nation obligation must be accorded
                                                     
216United States' responses to questioning at the oral hearing.
217United States' appellee's submission, paras. 16 and 76;  United States' responses to questioning at the
oral hearing.WT/DS176/AB/R
Page 86
the same significance with respect to intellectual property rights under the TRIPS Agreement   that it
has long been accorded with respect to trade in goods under the GATT.  It is, in a word, fundamental.
298. Article 4 of the  TRIPS Agreement   provides, in relevant part:
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. [footnote 3]
Footnote 3:  For the purposes of Articles 3 and 4, 'protection' shall include
matters affecting the availability, acquisition, scope, maintenance andenforcement of intellectual property rights as well as those matters affecting
the use of intellectual property rights specifically addressed in this
Agreement."
299. The European Communities claimed before the Panel that Sections 211(a)(2) and (b) are
inconsistent with Article 4 of the  TRIPS Agreement .
300. The Panel found that:
Section 211(a)(2) does not deny Cuban nationals any advantage,
favour, privilege or immunity that it accords to other foreign
nationals.  We therefore find that Section 211(a)(2) is not
inconsistent with Article 4 of the TRIPS Agreement.  218
301. With respect to Section 211(b), the Panel stated that the issue was the same as that examined
in connection with Section 211(a)(2), and concluded:
As we are faced with the same issue that was examined in connection
with Section 211(a)(2), we refer to our reasons set out in
paragraphs 8.145 to 8.147 and find that Section 211(b) is not
inconsistent with Article 4 of the TRIPS Agreement.  219
302. The European Communities appeals these findings of the Panel on both Section 211(a)(2) and
Section 211(b).
303. Before proceeding with our analysis, we find it necessary to address the scope of our
examination of this issue.  In the light of the claim raised by the European Communities, the Panel
                                                     
218Panel Report, para. 8.148.
219Ibid., para. 8.176.WT/DS176/AB/R
Page 87
limited its examination and findings to the particular situation of Cuban confiscations.  220  Neither
the European Communities nor the United States has disputed this point on appeal.  Therefore, wealso restrict our analysis to that particular situation.
304. We note also that, with respect to the most-favoured-nation obligation, the European
Communities has not presented arguments on appeal addressing the Panel's findings with respect to
the level of successors-in-interest.  Thus, we do not consider this to be before us on appeal, and,therefore, we will limit our discussion to the Panel's findings with respect to the allegeddiscrimination involving  original owners .
305. The allegations submitted by the European Communities on most-favoured-nation treatment
of original owners are similar to those described in the previous section on national treatment.  As itdid with respect to national treatment, the European Communities supports its claim under Article 4of the  TRIPS Agreement   by focusing on a particular set of circumstances that exists under the statute,
on its face ,  involving original owners.
 221
306. Like the situation posed by the European Communities earlier, the one set forth in the most-
favoured-nation treatment involves two separate ow ners who acquired rights, either at common law or
based on registration, in two separate United States trademarks, before the Cuban confiscationoccurred.  Each of these two United States trademar ks is the same, or substantially similar to, signs or
a combination of signs of which a trademark registered in Cuba is composed.  That same or similarCuban trademark was used in connection with a business or assets that were confiscated in Cuba.Neither of the two original owners of the two United States trademarks was the owner of that same orsimilar trademark that was registered in Cuba.  Those two original owners each now seek to assert
rights in the United States in their two respective United States trademarks.  The situation of these two
original owners of these two United States trademarks is identical in every relevant respect, but one.
                                                     
220In para. 8.143, the Panel explained the parties' position on this issue as follows:
In response to the question as to whether Article 4 of the TRIPS Agreement
allows a Member to have a certain policy applicable to confiscations of
trademarks in one Member on the condition that all WTO Member nationals
are treated similarly or whether Article 4 requires that a similar policy beapplied to confiscations of trademarks in all other Members, the EuropeanCommunities states that the most-favoured-nation treatment flowing fromArticle 4 attaches to persons and not to situations.  The European
Communities argues, therefore, that Artic le 4 requires that all nationals of
other Members be treated similarly in respect of a certain event.  In responseto the same question, the United States submitted that because the EuropeanCommunities is alleging a violation of the most-favoured-nation principlebased on the first situation described by the Panel, there is no need toexamine the question of whether Article 4 applies to the second situation.
221See  supra , para. 276.  We also note that the European Communities confirmed this in its responses
to questioning at the oral hearing.WT/DS176/AB/R
Page 88
That one difference is this:  one original owner is a national of Cuba, and the other original owner is a
national of a country other than Cuba or the United States.  We will refer, for the sake of convenience,to this other original owner as "a non-Cuban foreign national".
307. Pointing to this particular situation, the European Communities argues that, on the face of the
statute, the original owner who is a Cuban national is subject to Sections 211(a)(2) and (b), and the
original owner who is a non-Cuban foreign national is not.  This alone, as the European Communitiessees it, is sufficient for us to find that Sections 211(a)(2) and (b) violate the most-favoured-nationobligation of the United States.
308. We agree with the European Communities that the situation it describes on appeal is within
the scope of the statute  on its face .  As we explained earlier, the term "designated national" as defined
in Section 515.305 of 31 CFR and Section 211(d)(1) includes non-Cuban foreign nationals only whenthey are successors-in-interest to Cuba or a Cuban national.
 222  Non-Cuban foreign nationals who are
original owners are not covered by the definition of "designated national"  223 and are thereby not
subject to Sections 211(a)(2) and (b).
309. Therefore, here too, as with national treatment, the European Communities has established a
prima facie   case that Sections 211(a)(2) and (b) are discriminatory on their face, as between a Cuban
national and a non-Cuban foreign national both of whom are original owners of United States
trademarks composed of the same or substantially similar signs as a trademark used in connectionwith a business or assets that were confiscated in Cuba.
310. As it did in respect of the national treatment claim, the United States attempts to rebut the
European Communities' most-favoured-nation claim with arguments intended to demonstrate that
Sections 211(a)(2) and (b) do not apply to a Cuba n national who is an original owner of a United
States trademark.  The United States arguments on this claim are the same as their arguments onnational treatment.  We have already addressed these arguments.  And, as these United Statesarguments have not changed, our conclusions have not changed either.  We will, nevertheless, recall,briefly, the arguments submitted by the United States and will also restate our conclusions withrespect to each.
311. The United States submits that Sections 211(a)(2) and (b) do not apply to Cuban nationals
that are original owners because they have their own consent.  We explained earlier that this is not
                                                     
222The situation discussed here does not involve successors-in-interest.  See  supra , para. 279.
223The term "designated national" also includes persons that are "specially designated nationals".
However, as we noted earlier, the situation posed by the European Communities does not involve a "speciallydesignated national".  See  supra , footnote 200.WT/DS176/AB/R
Page 89
necessarily the case where a Cuban original owner of a trademark in the United States is not the same
person as the original owner of the same  or substantially similar Cuban trademark.  224
312. The United States also argues that Section 211(a)(2) does not apply to the Cuban nationals in
the situation posed by the European Communities because Section 515.527 of Title 31 CFR was not
in effect when the original owners in this situ ation obtained their trademark rights in the United
States.  Previously, we explained that this argu ment does not apply to common law rights and that
registered trademarks eventually would become subject to the application of Section 515.527 ofTitle 31 CFR upon renewal of the registration after entry into force of that Section.
 225
313. In addition, the United States alleges that the Cuban original owner could not have maintained
its common law rights in the United States trademark because it would have been unable to import thetrademarked goods from Cuba.  Previously, we stated that this argument is not persuasive because theCuban holder of common law trademark rights in the United States could import the trademarkedgoods from a country other than Cuba.
 226
314. The United States further asserts that the Cuban original owner could be "unblocked" by
OFAC under Section 515.505.  As we explained in our analysis of the national treatment claim, usingthree distinct situations as examples, only Cuban nationals that reside in the United States areautomatically licensed as "unblocked".
227  Cuban nationals that reside in a country that is part of the
"authorized trade territory"  228, such as the Members States of the European Communities, can apply
to OFAC to be "unblocked".  This implies that Cu ban nationals that reside in the "authorized trade
territory" face an additional administrative procedure that does not apply to non-Cuban foreignnationals who are original owners, because the latter are not "designated nationals".
229  Therefore, as
we stated earlier, treatment that is inherently less favourable persists.  Those Cuban nationals that
reside in countries not part of the "authorized trade territory", such as Cuba, are not licensed as"unblocked" nor can they apply to be "unblocked ".  Thus, discrimination remains in this third
situation as well.
 230
315. The United States also argues that any discrimination found in Sections 211(a)(2) and (b)
would be offset by Section 515.201 of Title 31 CFR.  In the context of the national treatment claim,
                                                     
224See  supra , para. 282.
225See  supra , paras. 283 and 284.
226See  supra , para. 285 and footnote 206.
227See  supra , para. 288.
228The term "authorized trade territory" essentially includes countries that are not subject to OFAC
sanctions.  See  supra , footnote 212.
229See  supra , para. 289.
230See  supra , para. 290.WT/DS176/AB/R
Page 90
we analyzed this argument in relation to United States nationals.  In the context of the claim under
Article 4 at issue here, we must examine whethe r Section 515.201 of Title 31 CFR also applies to
non-Cuban foreign nationals.
316. Section 515.201 of Title 31 CFR essentially applies to transactions carried out by persons in
the United States or subject to United States jurisdiction.  In this regard, Section 515.201 of Title 31
CFR does not apply exclusively to United States nationals.  It could apply to a non-Cuban foreignnational as well.
317. The fact that Section 515.201 of Title 31 CFR  could   also apply to a non-Cuban foreign
national does not mean, however, that it would offset  in each and every case   the discriminatory
treatment imposed by Sections 211(a)(2) and (b) on Cuban original owners.  As we explained before,for the United States argument to hold true in each and every situation, the scope of "having aninterest in" that is found in Section 515.201 would necessarily have to overlap in coverage with thescope of the "used in connection with" criterion found in Sections 211(a)(2) and (b).  The United
States was unable to point to evidence substantiating that these two standards overlap completely.
 231
We are, therefore, not satisfied that Section 515.201 would offset the inherently less favourable
treatment present in Sections 211(a)(2) and (b) in each and every case.  232
318. Finally, the United States referred to its longstanding doctrine of non-recognition of foreign
confiscations.  233  Earlier, we concluded that this policy  could not possibly apply to trademarks that
existed  in the United States   at the time when a business or assets were confiscated  in Cuba   in
connection with which a trademark composed of the same or substantially similar signs was used.  234
319. We, therefore, reverse the Panel's findings in paragraphs 8.148 and 8.176 of the Panel Report,
to the extent that they concern the treatment of original owners, and find, in this respect, that
Section 211(a)(2) and Section 211(b) are inconsistent with Article 4 of the  TRIPS Agreement .
XI. Article 8 of the Paris Convention (1967) – Trade Names
320. We turn, lastly, to the issue of whether trade names are covered by the  TRIPS Agreement .
321. Article 8 of the Paris Convention (1967) provides:
                                                     
231United States' responses to questioning at the oral hearing.
232See  supra , para. 294.
233United States' appellee's submission, para. 16.
234See  supra , para. 295.WT/DS176/AB/R
Page 91
A trade name shall be protected in all the countries of the Union
without the obligation of filing or registration, whether or not it
forms part of a trademark.
322. There is no question that trade names are covered by the Paris Convention (1967).  The
question before us is whether trade names are also covered by the  TRIPS Agreement .  On this, the
Panel found:
[W]e conclude that the categories of intellectual property covered by
the TRIPS Agreement are those referred to in Article 1.2.   Article 8
of the Paris Convention (1967) is relevant as part of the TRIPS
Agreement to the extent that it may affect the protection of the
categories of intellectual property covered by the Agreement.  As
trade names are not a category of intellectual property covered bythe TRIPS Agreement , Members do not have obligations under the
TRIPS Agreement to provide protection to trade names.
 235 (emphasis
added)
323. As a consequence of this conclusion, the Panel limited its finding on the inconsistency of
Section 211(a)(2) with Article 42 of the  TRIPS Agreement   to trademarks.  236 Also as a consequence
of this conclusion, the Panel found that Sections 211(a)(2) and (b) are not inconsistent with Article 2.1
of the  TRIPS Agreement   in conjunction with Article 8 of the Paris Convention (1967).  237  However,
we do not find a similarly clear limitation in the Panel's findings with respect to Articles 3.1 and 4 ofthe  TRIPS Agreement .
324. The European Communities asks us to reverse the Panel's finding that trade names are not
covered in the  TRIPS Agreement .  In addition, the European Communities asks us to:
(a) reverse the Panel's findings that Sections 211(a)(2) and (b) are not inconsistent with
Article 2.1 of the  TRIPS Agreement   in conjunction with Article 8 of the Paris
Convention (1967);
(b) find that Sections 211(a)(2) and (b) are inconsistent with Article 42 of the  TRIPS
Agreement  with respect of trade names;
(c) find that Sections 211(a)(2) and (b) are inconsistent with Article 2.1 of the TRIPS
Agreement   in conjunction with Article 2(1) of the Paris Convention (1967) and with
Article 3.1 of the TRIPS Agreement   with regard to trade names;  and
                                                     
235Panel Report, para. 8.41.
236Ibid., paras. 8.102 and 9.1(d).
237Ibid., paras. 8.122 and 9.1(f) and paras. 8.165 and 9.1(l).WT/DS176/AB/R
Page 92
(d) find that Sections 211(a)(2) and (b) are inconsistent with Article 4 of the  TRIPS
Agreement   with regard to trade names.
325. The United States agrees with the European Communities that the Panel erred in finding that
the  TRIPS Agreement   contains no obligations with respect to trade names.
326. On this issue, we begin with a review of the Panel's analysis of whether trade names are
covered by the  TRIPS Agreement .  The Panel looked first to Article 1.2 of the  TRIPS Agreement ,
which provides:
For the purposes of this Agreement, the term "intellectual property"
refers to all categories of intellectual property that are the subject of
Sections 1 through 7 of Part II.
327. The Panel reasoned that:
Sections 1 through 7 of Part II of the TRIPS Agreement deal with
the following categories of intellectual property :  copyright and
related rights; trademarks; geographical indications; industrial
designs; patents; layout-designs (topographies) of integrated circuits;
and protection of undisclosed information.  The categories of related
rights covered by Article 14 are protection of performers, producers
of phonograms and broadcasting organizations.  238 (emphasis added)
328. The Panel assumed that "[c]ategories of protectable subject matters not dealt within
Sections 1 to 7 of Part II of the TRIPS Agreement are not included in the definition of 'intellectualproperty' in Article 1.2" and observed that "Sections 1 to 7 of Part II do not contain any reference totrade names".
 239  The Panel referred to the interpretive principles found in Article 31 of the  Vienna
Convention ,  and drew the following conclusion:
We interpret the terms "intellectual property" and "intellectual
property rights" with reference to the definition of "intellectual
property" in Article 1.2 of the TRIPS Agreement.  The textual
reading of Article 1.2 is that it establishes an inclusive definition and
this is confirmed by the words "all categories"; the word "all"
indicates that this is an exhaustive list . 240
329. Having thus determined provisionally that trade names are not covered in the
TRIPS Agreement , the Panel then addressed the meaning to be given to Article 2.1 of the
TRIPS Agreement , which provides as follows:
                                                     
238Panel Report, para. 8.24.
239Ibid., para. 8.25.
240Ibid., para. 8.26.WT/DS176/AB/R
Page 93
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).
330. As we pointed out earlier, Article 8 of the Paris Convention (1967) specifically requires trade
name protection.
331. However, the Panel interpreted the words "in respect of  " in Article 2.1 as limiting the
incorporation of the provisions of the Paris Convention (1967), including Article 8, to Parts II, IIIand IV of the  TRIPS Agreement .  The Panel reasoned  as follows:
The second subclause of Article 2.1 obliges Members to comply with
the provisions of the Paris Convention (1967) which are identified in
that provision.  However, the second subclause is conditioned by thefirst subclause:  Members shall comply with the obligations " [i]n
respect of  Parts II, III and IV of this Agreement".  As the ordinary
meaning of the term "in respect of" is in "relation [to], connection
[with], reference [to]" and it refers to Parts II, III and IV explicitly,
we consider that Members have to comply with Articles 1 through 12
and 19 of the Paris Convention (1967) "in respect" of what is covered
by those parts of the TRIPS Agreement identified therein, namely
copyright and related rights; trademarks; geographical indications;
industrial designs; patents; layout-designs (topographies) of
integrated circuits; and protection of undisclosed information.  241
(underlining added, footnotes omitted)
332. Relying on Article 32 of the  Vienna Convention ,  the Panel also reviewed the negotiating
history of Articles 1.2 and 2.1 of the  TRIPS Agreement   and concluded that this history confirmed its
interpretation of the scope of the  TRIPS Agreement . 242
333. We disagree with the Panel's reasoning and with the Panel's conclusion on the scope of the
TRIPS Agreement   as it relates to trade names.
334. To explain, we turn first to the Panel's interpretation of Article 1.2 of the  TRIPS Agreement ,
which, we recall, provides:
For the purposes of this Agreement, the term "intellectual property"
refers to all categories of intellectual property that are the subject of
Sections 1 through 7 of Part II.
335. The Panel interpreted the phrase "'intellectual property' refers to all categories of intellectual
property that are the  subject   of Sections 1 through 7 of Part II" (emphasis added) as if that phrase
read "intellectual property means those categories of intellectual property appearing in the  titles   of
                                                     
241Panel Report, para. 8.30.
242Ibid., paras. 8.31-8.40.WT/DS176/AB/R
Page 94
Sections 1 through 7 of Part II."  To our mind, the Panel's interpretation ignores the plain words of
Article 1.2, for it fails to take into account that the phrase "the subject of Sections 1 through 7 ofPart II" deals not only with the categories of intellectual property indicated in each section  title,  but
with other  subjects   as well.  For example, in Section 5 of Part II, entitled "Patents", Article 27(3)(b)
provides that Members have the option of protecting inventions of plant varieties by  sui generis
rights (such as breeder's rights) instead of through patents.
 243  Under the Panel's theory, such
sui generis   rights would not be covered by the  TRIPS Agreement .  The option provided by
Article 27(3)(b) would be read out of the  TRIPS Agreement .
336. Moreover, we do not believe that the Panel's interpretation of Article 1.2 can be reconciled
with the plain words of Article 2.1.  Article 2.1 explicitly incorporates Article 8 of theParis Convention (1967) into the  TRIPS Agreement .
337. The Panel was of the view that the words "in respect of
 " in Article 2.1 have the effect of
"conditioning" Members' obligations under the Articles of the Paris Convention (1967) incorporated
into the  TRIPS Agreement ,  with the result that trade names are not covered.  We disagree.
338. Article 8 of the Paris Convention (1967) covers only the protection of trade names;  Article 8
has no other subject.  If the intention of the negotiators had been to exclude trade names fromprotection, there would have been no purpose whatsoev er in including Article 8 in the list of Paris
Convention (1967) provisions that were specifically incorporated into the  TRIPS Agreement .  To
adopt the Panel's approach would be to deprive Article 8 of the Paris Convention (1967), asincorporated into the  TRIPS Agreement   by virtue of Article 2.1 of that Agreement, of any and all
meaning and effect.  As we have stated previously:
                                                     
243Article 27.3(b) of the  TRIPS Agreement   provides:
Members may also exclude from patentability:
…
(b) plants and animals other than micro-organisms, and essentially
biological processes for the production of plants or animals other
than non-biological and microbiological processes.  However,
Members shall provide for the protection of plant varieties either bypatents or by an effective sui generis  system or by any combination
thereof.  The provisions of this subparagraph shall be reviewed fouryears after the date of entry into force of the WTO Agreement.WT/DS176/AB/R
Page 95
One of the corollaries of the "general rule of interpretation" in the
Vienna Convention  is that interpretation must give meaning and
effect to all the terms of a treaty.  An interpreter is not free to adopt a
reading that would result in reducing whole clauses or paragraphs of
a treaty to redundancy or inutility.  244
339. As for the import of the negotiating history, we do not see it as in any way decisive to the
issue before us.  The documents on which the Panel relied are not conclusive of whether the  TRIPS
Agreement   covers trade names.  The passages quoted by the Panel from the negotiating history of
Article 1.2 do not even refer to trade names.  There is nothing at all in those passages to suggest that
Members were either for or against their inclusion.  Indeed, the only reference to a debate about thecategories for coverage in the  TRIPS Agreement   relates, not to trade names, but to trade secrets.
 245
The Panel itself acknowledged that "[t]he records do not contain information on the purpose of the
addition"  246 of the words "in respect of  " at the beginning of Article 2.1.  Therefore, we do not
consider that any conclusions may be drawn from these records about the interpretation of the words"in respect of
 " in Article 2.1 as regards trade names.
340. Thus, in our view, the Panel's interpretation of Articles 1.2 and 2.1 of the  TRIPS Agreement  
is contrary to the ordinary meaning of the terms of those provisions and is, therefore, not in
accordance with the customary rules of interpretation prescribed in Article 31 of the  Vienna
Convention . 247  Moreover, we do not believe that the negotiating history confirms, within the meaning
of Article 32 of the  Vienna Convention ,  the Panel's interpretation of Articles 1.2 and 2.1.
341. For all these reasons, we reverse the Panel's finding in paragraph 8.41 of the Panel Report that
trade names are not covered under the  TRIPS Agreement   and find that WTO Members do have an
obligation under the TRIPS Agreement   to provide protection to trade names.
342. Having reversed the Panel's finding, we consider next whether we should complete the legal
analysis with respect to the application of Section 211 to trade names and to the consistency ofSection 211 with Article 2.1 of the  TRIPS Agreement   in conjunction with Article 8 of the Paris
Convention (1967), with Article 2.1 of the  TRIPS Agreement   in conjunction with Article 2(1) of the
Paris Convention (1967) and Article 3.1 of the  TRIPS Agreement , with Article 4 of the  TRIPS
Agreement , and with Article 42 of the  TRIPS Agreement.
                                                     
244Appellate Body Report, US – Gasoline , supra , footnote 102, at 21.  See also, Appellate Body Report,
Japan – Alcoholic Beverages II , supra , footnote 102, at 106.
245Panel Report, para. 8.34.
246Ibid., para. 8.39.
247See Article 3.2 of the DSU.WT/DS176/AB/R
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343. In the past, we have completed the analysis where there were sufficient factual findings in the
panel report or undisputed facts in the panel record to enable us to do so  248, and we have not
completed the analysis where there were not.  249  In one instance, we declined to complete the analysis
with respect to a "novel" issue that had not been  argued in sufficient detail before the panel.  250
344. In this appeal, the European Communities argues that we should complete the analysis, while
the United States contends that we should not do so  because, in its view, there are insufficient factual
findings by the Panel about trade name protection under United States law for us to do so.   TheUnited States argues further that should we decide  to complete the analysis, we should find that
Sections 211(a)(2) and (b) are not inconsistent with any trade name obligations under either theTRIPS Agreement   or the Paris Convention (1967).
345. We believe that there are sufficient undisputed facts in the Panel record regarding trade name
protection to enable us to complete the analysis dealing with the alleged inconsistency ofSections 211(a)(2) and (b) with Articles 3.1, 4, and 42 of the  TRIPS Agreement , and with Article 2.1
of that Agreement in conjunction with Articles 2(1) and 8 of the Paris Convention (1967).
                                                     
248See Appellate Body Report, US – Gasoline , supra , footnote 102, at 18 ff;  Appellate Body Report,
Canada – Certain Measures Concerning Periodicals , WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, 449,
at 469 ff;   Appellate Body Report,  EC – Hormones , supra , footnote 46, paras. 222 ff;  Appellate Body Report,
European Communities – Measures Affecting the Importation of Certain Poultry Products , WT/DS69/AB/R,
adopted 23 July 1998,  paras. 156 ff;  Appellate Body Report, Australia – Measures Affecting Importation of
Salmon  ("Australia – Salmon "), WT/DS18/AB/R, adopted 6 November 1998, paras. 117 ff, 193 ff and 227 ff;
Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products ,
WT/DS58/AB/R, adopted 6 November 1998, paras. 123 ff;  Appellate Body Report, Japan – Measures Affecting
Agricultural Products , WT/DS76/AB/R (" Japan – Agricultural Products II "), supra , footnote 102, paras. 112 ff;
Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" , WT/DS108/AB/R,
adopted 20 March 2000, paras. 133 ff;  Appellate Body Report, Canada – Measures Affecting the Export of
Civilian Aircraft , Recourse by Brazil to Article 21.5 of the DSU , WT/DS70/AB/RW, adopted 4 August 2000,
paras. 43 ff;  Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Wheat
Gluten from the European Communities , WT/DS166/AB/R, adopted 19 January 2001, paras. 80 ff and 127 ff,
Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products
("EC – Asbestos "), WT/DS135/AB/R, adopted 5 April 2001, paras. 133 ff,  Appellate Body Report, United States
– Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia ,
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, paras. 150 ff and 172 ff.
249See Appellate Body Report, Australia – Salmon , supra , footnote 248, paras. 209 ff, 241 ff and 255;
Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products ,
WT/DS98/AB/R, adopted 12 January 2000, paras. 91 ff and 102 ff;  Appellate Body Report, Canada – Certain
Measures Affecting the Automotive Industry , WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000,
paras. 133 ff and 144 ff;  Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and
Frozen Beef , WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, paras. 128 ff;  Appellate Body
Report, EC – Asbestos , supra , footnote 248, paras. 78 ff;  Appellate Body Report, Canada – Measures Affecting
the Importation of Milk and the Exportation of Dairy Products, Recourse to Article 21.5 of the DSU by NewZealand and the United States , WT/DS103/AB/RW, WT/DS113/AB/RW, adopted 18 December 2001, paras.
98 ff.
250Appellate Body Report, EC – Asbestos , supra , footnote 248, para. 84.WT/DS176/AB/R
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346. In this respect, we note that Sections 211(a)(2) and (b) do not distinguish on their face
between trademarks and trade names.  Both types of intellectual property are subject toSections 211(a)(2) and (b).  We note also that both participants agree that the Panel's finding withrespect to coverage of trade names under the  TRIPS Agreement   was in error.  Both participants
referred to protection of trade names as well as trademarks throughout their submissions before the
Panel, often interchangeably, both "accepting as a given that trade names are within the scope of [the]TRIPS [Agreement]".
 251  The result is that there is sufficient information about trade names in the
Panel record.
347. The Panel inquired specifically into the protection of trade names under United States law.
The United States gave the following response regarding trade name protection to a question posed bythe Panel, suggesting that trade name protecti on is identical to that afforded common law
trademarks:
 252
Section 43 of the Trademark Act, 15 U.S.C. 1125, provides the legal
basis for pursuing unfair competition claims with respect to
trademarks, trade names and commercial names.  The owner of any
of these types of property may assert rights as a plaintiff.
…
A "trade name" and a "commercial name" (hereinafter collectively:
"trade name") are synonymous under the Lanham Act and are
defined as "any name used by a person to identify his or her business
or vocation".  See Sec. 45 of the Lanham Act (Definitions), 15 U.S.C.
§1127 (Exhibit US-28).  Trade names are not entitled to federal
registration under the Lanham Act.  Trade names are protectable
under the common law, upon a showing of secondary meaning.  A
party claiming a trade name infringement may bring a suit in state
court or initiate a federal suit under §43(a) of the Lanham Act, 13
U.S.C. §1125(a), in the same manner as a party claiming common-
law-rights in an unregistered trademark.  No presumptions ofvalidity or ownership are accorded to a trade-name or common law
trademark owner . (emphasis added)
348. Regarding the protection afforded trade names under Article 2.1 of the  TRIPS Agreement   in
conjunction with Article 8 of the Paris Convention (1967), the position of the United States before thePanel was as follows:
                                                     
251European Communities' appellant's submission, footnote 7 to para. 21, quoting the United States'
request to the Panel to review precise aspects of the interim report.
252Question 9 from the Panel to the United States reads:  "Please explain how common law rights in
relation to trademarks, trade names and comme rcial names are protected under US law."WT/DS176/AB/R
Page 98
The obligations of Article 8 are straightforward. A Member has to
offer some protection to trade names, without the requirement of
filing or registration and regardless of whether it forms part of a
trademark
…
Article 8 does not impose any requirements on the scope of
protection, other than, through Article 2 [of the Paris Convention],
the requirement of national treatment.253
349. The European Communities also submitted that the scope of protection under Article 8 was
not precise.  It said:
The European Communities argues that Article 8 of the Paris
Convention (1967) requires that WTO Members extend protection to
trade names independently from whether they form part of a
trademark.  While Article 8 does not precisely stipulate the way in
which this protection for trade/commercial names has to be granted,
one of the leading commentators writes that "[t]he protection willgenerally be given against unlawful acts of third parties consisting,
for example, of use of the same or a confusingly similar trade name
[...], if such use is liable to cause confusion among the public".
 254
(footnote and underlining omitted)
350. Moreover, in their submissions before the Panel on the consistency of Sections 211(a)(2)
and (b) with Article 2.1 of the  TRIPS Agreement   in conjunction with Article 2(1) of the Paris
Convention (1967), Articles 3.1, 4 and 42 of the  TRIPS Agreement , both participants put forward the
same arguments on trade names that they did with respect to trademarks.  The United States alsoargued before the Panel that:
… it cannot be asserted that the protections given trade names must
be more stringent than those given trademarks.  Therefore, forreasons asserted throughout this submission with respect to
trademarks, sections 211(a)(2) and 211(b) are not inconsistent with
Article 8 of the Paris Convention.
 255
351. We note further that, in its request pursuant to Article 15 of the DSU for interim review of
certain aspects of the Panel Report, the United States argued that "the analysis of the [European
Communities'] claims with request [ sic] to trade names would not differ from that relating to
                                                     
253United States' first submission to the Panel, para. 94.  See also Panel Report, para. 4.105.
254Panel Report, para. 4.102.
255United States' first submission to the Panel, para. 95.  See also Panel Report, para. 4.106.WT/DS176/AB/R
Page 99
trademarks."  256  This argument by the United States was quoted in this appeal by the European
Communities without objection by the United States.
352. On the basis of:
⎯the fact that Sections 211(a)(2) and (b) do not distinguish on their face between trade
marks and trade names;
⎯the participants' approach in submitting the same arguments and using the same analyses
regarding trade name and trademark protection, suggesting that the obligations regarding
protection of one are no different from those regarding protection of the other;
⎯the information in the Panel record about th e participants' interpretation of Article 8 of
the Paris Convention (1967);  and
⎯the information in the Panel record about trade name protection under United States law;
we conclude that the Panel record contains sufficient factual findings and facts undisputed between
the participants to permit us to complete the analysis regarding the consistency of Sections 211(a)(2)
and (b) – in respect of trade names – with Article 2.1 of the  TRIPS Agreement   in conjunction with
Article 2(1) of the Paris Convention (1967) and Article 3.1 of the  TRIPS Agreement,   with Article 4
of the TRIPS Agreement , with Article 42 of the  TRIPS Agreement,   and with Article 2.1 of that
Agreement in conjunction with Article 8 of the Paris Convention (1967).
353. In respect of the alleged inconsistency of Sections 211(a)(2) and (b) with Article 2.1 of the
TRIPS Agreement  in conjunction with Article 2(1) of the Paris Convention (1967) and Article 3.1 of
the  TRIPS Agreement ,  and with Article 4 of the  TRIPS Agreement , we recall our conclusions above
that these Sections impose on designated nationals and their successors-in-interest the requirement toobtain the express consent of the original owners or their  bona fide  successors-in-interest.
257  W e
note that the requirement to obtain express consent applies not only to the defined category oftrademarks   referred to in those Sections.  It applies also to the defined category of  trade names
referred to in those Sections.
 258  We also recall that Section 211(a)(2), read in conjunction with
                                                     
256European Communities' appellant's submission, footnote 7 to para. 21, quoting the United States'
request to the Panel to review precise aspects of the interim report.
257See  supra , paras. 120 and 121.
258See  supra , para. 2.WT/DS176/AB/R
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Section 211(d), applies only to successors-in-interest of non-United States origin, whereas
Section 211(b) applies to successors-in-interest of any origin.259
354. Therefore, we find that our conclusion in paragraph 268 above that, by applying the "extra
hurdle" imposed by Section 211(a)(2) only to non-United States successors-in-interest to trademark
rights referred to in that Section, the United States violates the national treatment obligation in
Article 2.1 of the  TRIPS Agreement  in conjunction with Article 2(1) of the Paris Convention (1967)
and Article 3.1 of the  TRIPS Agreement , applies also to successors-in-interest in trade names referred
to in that Section.
355. We find further that our conclusion in paragraph 272 above that, at the level of successors-in-
interest to trademark rights referred to in that Section, Section 211(b) is not inconsistent withArticle 2.1 of the  TRIPS Agreement   in conjunction with Article 2(1) of the Paris Convention (1967)
and Article 3.1 of the  TRIPS Agreement , applies also to successors-in-interest to trade names referred
to in that Section.
356. We find also that our conclusion in paragraph 296 above that Sections 211(a)(2) and (b) are
inconsistent with Article 2.1 of the  TRIPS Agreement  in conjunction with Article 2(1) of the Paris
Convention (1967) and Article 3.1 of the  TRIPS Agreement,  to the extent that they concern the
treatment of original owners of trademarks referred to in those Sections, applies also to originalowners of trade names referred to in Sections 211(a)(2) and (b).
357. We find as well that our conclusion in paragraph 319 above that Sections 211(a)(2) and (b)
are inconsistent with Article 4 of the  TRIPS Agreement , to the extent that they concern the treatment
of original owners of trademarks referred to in thos e Sections, applies also to original owners of trade
names referred to in Sections 211(a)(2) and (b).
358. We recall our conclusion in paragraph 231 above that Sections 211(a)(2) and (b) are  not
inconsistent with Article 42 of the  TRIPS Agreement   as far as holders of rights in trademarks
referred to in those Sections are concerned.  We note that, as with right holders in trademarks, thoseSections only require the United States courts not to recognize, enforce or otherwise validate anyassertion of rights by designated nationals or successors-in-interest who have been determined, afterapplying United States Federal Rules of Civil Procedure and Federal Rules of Evidence, not to ownthe trade names referred to in Sections 211(a)(2) and (b).  Therefore, we find that Sections 211(a)(2)and (b) are not inconsistent with Article 42 of the  TRIPS Agreement   as regards holders of rights in
trade names referred to in those Sections.
                                                     
259See  supra , paras. 268 and 271.WT/DS176/AB/R
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359. We recall further our conclusion in paragraph 195 above of the section addressing
Article 16.1 of the  TRIPS Agreement   that neither the Paris Convention (1967) nor the
TRIPS  Agreement   determines who owns or who does not own a trademark.  We believe that the Paris
Convention (1967) and the  TRIPS Agreement   also do not determine who owns or does not own a
trade name.  Given our view that Sections 211(a)(2) and (b) relate to ownership  260, we conclude that
these Sections are not inconsistent with Article 2.1 of the  TRIPS Agreement   in conjunction with
Article 8 of the Paris Convention (1967).
XII. Findings and Conclusions
360. For the reasons set out in this Report, the Appellate Body:
(a) upholds the Panel's finding in paragraph 8.89 of the Panel Report that
Section 211(a)(1) is not inconsistent with Article 2.1 of the  TRIPS Agreement  in
conjunction with Article 6 quinquies  A(1) of the Paris Convention (1967);
(b) upholds the Panel's finding in paragraph 8.70 of the Panel Report that
Section 211(a)(1) is not inconsistent with Article 15.1 of the  TRIPS Agreement ;
(c) upholds the Panel's findings in paragraphs 8.112 and 8.159 of the Panel Report and
finds that Sections 211(a)(2) and (b) are not inconsistent with Article 16.1 of the
TRIPS Agreement ;
(d) with respect to Article 42 of the  TRIPS Agreement , and in relation to trademarks:
(i) reverses the Panel's finding in paragraph 8.102 of the Panel Report and finds
that Section 211(a)(2) is not inconsistent with this Article;  and
(ii) upholds the Panel's finding in paragraph 8.162 of the Panel Report and finds
that Section 211(b) is not inconsistent with this Article;
(e) with respect to Article 2.1 of the  TRIPS  Agreement   in conjunction with Article 2(1)
of the Paris Convention (1967) and Article 3.1 of the  TRIPS Agreement , and in
relation to trademarks:
(i) regarding successors-in-interest:
                                                     
260See  supra , para. 121.WT/DS176/AB/R
Page 102
(a) reverses the Panel's finding in paragraph 8.140 of the Panel Report
and finds that Section 211(a)(2) is inconsistent with these Articles;
(b) upholds the Panel's finding in paragraph 8.173 of the Panel Report
and finds that Section  211(b) is not inconsistent with these Articles;
(ii) regarding original owners, reverses the Panel's findings in paragraphs 8.140
and 8.173 of the Panel Report and finds that Section 211(a)(2) andSection 211(b) are inconsistent with these Articles;
(f) reverses the Panel's findings in paragraphs 8.148 and 8.176 of the Panel Report
regarding original owners and finds that, in this respect, and in relation to trademarks,
Sections 211(a)(2) and (b) are inconsistent with Article 4 of the  TRIPS Agreement .
(g) reverses the Panel's finding in paragraph 8.41 of the Panel Report that trade names are
not covered under the  TRIPS Agreement , and finds that WTO Members do have an
obligation under the TRIPS Agreement   to provide protection to trade names, and
accordingly:
(i) with respect to Article 2.1 of the TRIPS  Agreement   in conjunction with
Article 2(1) of the Paris Convention (1967) and Article 3.1 of the  TRIPS
Agreement,   and in relation to trade names:
(a) regarding successors-in-interest, finds that Section 211(a)(2) is
inconsistent with these Articles;
(b) regarding successors-in-interest, finds that Section  211(b) is not
inconsistent with these Articles;
(c) regarding original owners, finds that Section 211(a)(2) and
Section 211(b) are inconsistent with these Articles;
(ii) finds that, in relation to trade names, Sections 211(a)(2) and (b) are
inconsistent with Article 4 of the  TRIPS Agreement ;
(iii) finds that, in relation to trade names, Sections 211(a)(2) and (b) are not
inconsistent with Article 42 of the  TRIPS Agreement ;  andWT/DS176/AB/R
Page 103
(iv) finds that Sections 211(a)(2) and (b) are not inconsistent with Article 2.1 of
the  TRIPS Agreement   in conjunction with Article 8 of the Paris
Convention (1967).
361. The Appellate Body  recommends   that the DSB request the United States to bring its
measure, found in this Report and in the Panel Report as modified by this Report to be inconsistent
with the  TRIPS Agreement ,  into conformity with its obligations under that Agreement.
XIII.  Concluding Remarks
362. We wish to emphasize that this ruling is not a judgment on confiscation as that term is defined
in Section 211.  261  The validity of the expropriation of in tellectual or any other property rights without
compensation by a WTO Member within its own territory is not before us.  Nor do we express anyview, nor are we required to express any view in this appeal, on whether a Member of the WTOshould, or should not, recognize in its own territory trademarks, trade names, or any other rightsrelating to any intellectual or other property righ ts that may have been expropriated or otherwise
confiscated in other territories.
363. However, where a WTO Member chooses not to recognize intellectual property rights in its
own territory relating to a confiscation of rights in another territory, a measure resulting from and
implementing that choice must, if it affect s other WTO Members, comply with the  TRIPS
Agreement ,  by which all WTO Members are voluntarily bound.  In such a measure, that WTO
Member must accord "no less favourable treatment" to the nationals of all other WTO Members thanit accords to its own nationals, and must grant to the nationals of all other WTO Members "anyadvantage, favour, privilege or immunity" granted to any other WTO Member.  In such a measure, aWTO Member may not discriminate in a way that does not respect the obligations of nationaltreatment and most-favoured-nation treatment that are fundamental to the  TRIPS Agreement .
                                                     
261See  supra , footnote 7.WT/DS176/AB/R
Page 104
Signed in the original at Geneva this 19th day of December 2001 by:
_________________________
Claus-Dieter Ehlermann
Presiding Member
_________________________ _________________________
James Bacchus Julio Lacarte-Muró
Member Member