WT/DS174/R/Add.2 
Page B-164  
 
 ANNEX B-5 
 
SECOND WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES 
 
(22 July 2004) 
 
 
TABLE OF CONTENTS 
 
GLOSSARY ....................................................................................................................... ...............................169 
I. INTRODUCTION ................................................................................................................... ................170  
II. THE OBJECTIVE ASSESSMENT OF THE CO NTENT OF REGULATION 2081/92...................170  
A. THE PROPER APPROACH TO THE INTERPRETATION OF REGULATION  2081/92  AS A 
MEASURE OF EC DOMESTIC LAW .........................................................................................170  
B. THE IMPORTANCE OF WTO  LAW AND OBLIGATIONS FOR THE INTERPRETATION OF 
REGULATION  2081/92  IN THE EC LEGAL ORDER .................................................................172  
III. REGULATION 2081/92 IS COMPAT IBLE WITH NATIONAL TREATMENT 
OBLIGATIONS, AND DOES NOT IMPOSE A REQUIREMENT OF DOMICILE OR 
ESTABLISH MENT.................................................................................................................. ...............174  
A. NATIONAL TREATMENT UNDER THE TRIPS  AGREEMENT (ARTICLE  3.1 TRIPS  AND 
ARTICLE  2.1 TRIPS  IN CONJUNCTION WITH ARTICLE  2.1 PARIS CONVENTION ).................174  
1. The Meaning and Scope of National Treatment under the TRIPS Agreement................174  
(a) The meaning of  "nati onal"...................................................................................................... ..........174  
(b) The conditions for applications and objec tions do not depend  on nationa lity ..................................176  
2. Claim 1: Non-EC nationals are accord ed less favorable treatment than EC 
nationals with respect to the registratio n of geographical indications through the 
application of a condition of reciprocity and e quivalence .................................................178  
(a) The complainant's interpretation is incompatible with the plain wording of 
Regulation 2081/9 2............................................................................................................. ............178  
(b) The without prejudice clause requires that the WTO Agreements be taken into account.................178  
(c) It is not uncommon for Community legal acts to apply "without prej udice to international 
agreements" .................................................................................................................... ................179  
(d) The "without prejudice" clause was not intended to apply only to bilateral agreements, or to 
agreements which contain "specific rules" on geographi cal indica tions .........................................180  
(e) The evidence adduced by the complainants  is neither pertinen t nor conc lusive...............................182  
(f) The EC is not belated in having correct ed the complainants ' misunders tanding ..............................183  
3. Claim 1bis: Regulation 2081/92 violates the national treatment obligations under 
the TRIPS Agreement by requiring the exis tence of inspection structures with 
respect to the specific product for which protection is requested .....................................184  
(a) The requirement of inspection structures re presents equal, not unequal trea tment...........................185  
(b) The requirement of inspection structures does not require "equivalence by another name".............185  
(c) Regulation 2081/92 does not impose an "EC model" of inspec tion struct ures .................................186  
(d) The existence of inspection structures is necessary for attaining the objectives of 
Regulation 2081/9 2............................................................................................................. ............187  
4. Claim 2: Regulation 2081/92 violates the national treatment obligations under the 
TRIPS and the Paris Convention by requiring that applications must be 
transmitted by the country in which th e geographical area is located .............................189  
(a) The cooperation of the country on whose territory the area is located is  indispensable for the 
implementation of Regulation 2081/92........................................................................................... 189 
(b) The requirement that the application be verified by the country on whose territory the area is 
located is not unreasonable .................................................................................................... .........190  
(c) The requirement that the application be transm itted by the country on w hose territory the area 
is located is not unreas onable................................................................................................. .........192   WT/DS174/R/Add.2 
 Page B-165 
 
 
 5. Claim 3: Non-EC nationals are accord ed less favorable treatment than EC 
nationals with respect to the requirement to indicate th e country of origin for 
homonymous geographica l indicati ons................................................................................193  
6. Claim 4: Regulation 2081/92 accords less favourable treatment to non-EC nationals 
by subjecting the right to ob ject to the registration of  geographical indications to 
conditions of reciprocit y and equivalence ...........................................................................194  
7. Claim 5: Regulation 2081/92 accords less favourable treatment to non-EC nationals 
by requiring their own country to  transmit the objection .................................................194  
(a) The complainants are not required to verify the admissibility of objections, but merely to 
transmit the objection......................................................................................................... .............195  
(b) The transmission of objections is not an unreasonabl e require ment.................................................195  
8. Claim 6: Regulation 2081/92 accords less favourable treatment to non-EC nationals 
by requiring non-EC national  to have a "legitimate in terest" to object to the 
registration of geographical indications ..............................................................................196  
9. Claim 7: Regulation 2081/92 accords less favourable treatment because a non-EC 
rightholder has no "representative" in  the regulatory committee to "speak for 
him"........................................................................................................................... .............196  
10. Claim 8: A right of objection was available to persons resident or established in an 
EC Member State that was not available to other WT O Member nationals in 
respect of the registration of more than  120 geographical indications under the 
normal registration process..................................................................................................19 7 
(a) The legal basis of Australia's cla im is unclear, and keeps shif ting ...................................................197  
(b) Australia's claims regarding old versions of Regulation 2081/92 are outside the terms of 
reference of the Panel......................................................................................................... .............198  
(c) Australia's claims are moot and therefore not wi thin the terms of refe rence of the Panel ................198  
(d) Australia has not shown that the individual registrations are in violation of national treatment 
obligat ions .................................................................................................................... ..................200  
(e) There is no legal basis for the reco mmendations suggested by Austra lia.........................................200  
11. Claim 9: A right of objection was available to persons resident or established in an 
EC Member State that was not available to other WT O Member nationals in 
respect of the registration of more than  480 EC-defined GIs under the simplified 
registration process ........................................................................................................... ....201  
B. PROHIBITED REQUIREMENT OF DOMICILE OR ESTABLISHMENT (ARTICLE  2.1 TRIPS  IN 
CONJUNCTION WITH ARTICLE  2.2 PARIS CONVENTION )......................................................202  
1. Claim 10: Regulation 2081/92 requires non- EC nationals to become established in 
the EC as a condition for registeri ng geographical i ndications.........................................202  
2. Claim 11: Regulation 2081/92 requires non- EC nationals to become established in 
the EC as a condition for objecting......................................................................................202  
C. NATIONAL TREATMENT UNDER ARTICLE  III:4  GATT ........................................................203  
1. The regulation 2081/92 is not incomp atible with Arti cle III:4 GATT...............................203  
(a) Claim 12: Regulation 2081/92 accords less favourable treatment as regards the conditions for 
registration of foreign ge ographical i ndications..............................................................................2 03 
(b) Claim 12bis: Regulation 2081/92 violates the national treatment oblig ations under the GATT 
by requiring the existence of inspection structur es with respect to the specific product for 
which protection is requested.................................................................................................. ........203  
(c) Claim 13: Regulation 2081/92 accords less favourab le treatment as regards the requirement 
that the application must be transmitted by  the government of the third country............................204  
(d) Claim 14: Regulation 2081/92 accords less favourab le treatment as regards the requirement 
to indicate the c ountry of origin.............................................................................................. ........204  
(e) Claim 15: Regulation 2081/92 accords less favourable treatment due to an overall bias in the 
decision-making  process........................................................................................................ .........205  
2. The measure would be justified under Article XX(d) GATT.............................................205  
(a) The requirement of inspection structures is ju stified by Article XX(d ) GATT (Claim 12bis)..........206  
(b) The requirement that the application must be  verified and transmitted by the government 
where the area is located is justifie d by Article XX(d) GATT (Claim  13)......................................207  
(c) The requirement to indicate the country of origin for homonymous ge ographical indications 
is justified by Article XX(d) GATT (C laim 14)..............................................................................207  
IV. REGULATION 2081/92 IS COMPATIBLE WITH THE OBLIGATION TO PROVIDE 
MOST-FAVOURED-NATION TREATMENT....................................................................................208  WT/DS174/R/Add.2 
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 A.
 ARTICLE  4 TRIPS ................................................................................................................208  
1. Claim 16: As among non-EC WTO Members, nationals from WTO Members that 
satisfy the EC's conditions of reciproc ity and equivalency are accorded more 
favourable treatment than nationals from those WTO Members that do not.................208  
2. Claim 17: Under Regulation 2081/92, an EC Member State grants more favourable 
treatment to nationals from other EC Memb er States than it accords to nationals 
from non-EC WTO Members ..............................................................................................210  
B. CLAIM 18: BY SUBJECTING THE REGISTRATION OF THIRD -COUNTRY GEOGRAPHICAL 
INDICATIONS TO CONDITIONS OF RECIPROCITY AND EQUIVALENCE , THE EC MEASURE 
IS INCONSISTENT WITH THE MOST -FAVOURED -NATION OBLIGATION UNDER THE 
ARTICLE  I:1 GATT ..............................................................................................................210  
1. Article I:1 GATT is not violated ...........................................................................................210  
2. The EC measure would be justifie d under Article XX(d) GATT ......................................211  
V. REGULATION 2081/92 DOES NOT DIMI NISH THE LEGAL PROTECTION OF 
TRADEMARKS..................................................................................................................... ..................211  
A. ARTICLE  16.1  OF THE TRIPS  AGREEMENT ..........................................................................211  
1. Claim 19: Article 14(2) of Regulation 2081/92 is inconsistent with Article 16.1 of the 
TRIPS Agreement in that it a llows the co-existence of geographical indications and 
earlier registered trademarks...............................................................................................211  
(a) Article 14(3) of Regulation 2081/92............................................................................................ .....211  
(i) Registrability of geographica l names as tr ademark s ..............................................................211  
(ii) Standard of evidence for establishing the meaning of Article 14(3)........................................212  
(iii) The Complainants have misint erpreted Artic le 14(3)..............................................................213  
(iv) There is no evidence that Article 14(3) has been applied in accordance with the 
complainants' in terpretation................................................................................................... 214 
(v) Article 14(3) confers enforceable rights to the trade mark owners..........................................216  
(vi) EC law provides means to prevent confus ing uses of a registered geographical 
indica tion..................................................................................................................... ...........217  
(b) Article 24.5 of th e TRIPS Agreement ............................................................................................ ..219 
(i) Relationship between Section 3 of  Part II and Ar ticle 16.1.....................................................219  
(ii) The meaning of "the right to use a tr ademark" .......................................................................220  
(c) Article 24.3 of th e TRIPS Agreement ............................................................................................ ..223 
(d) Article 17 of the TRIPS Agreement .............................................................................................. ...223 
(i) The scope of the excep tion is " limited"....................................................................................224  
(ii) The exception "takes account" of the in terests of the tr ademark ow ners ................................225  
(iii) Article 17 applies to non-geographica l names ........................................................................227  
2. Claim 20:  Regulation 2081/92 does not provide for a presumption of a likelihood of 
confusion in the case of use of an id entical sign for id entical goods..................................227  
3. Claim 21:  Article 7(4) of Regulation 2081/92 is inconsistent with Article 16.1 of the 
TRIPS Agreement because it limits the grounds of objection...........................................227  
4. Claim 22: Regulation 2081/92 does not ensure that objections from trademark 
owners will be considered  by the Co mmittee ......................................................................227  
B. CLAIM 23: BY REQUIRING THE CO -EXISTENCE OF A REGISTERED GEOGRAPHICAL 
INDICATION AND AN EARLIER TRADEMARK , ARTICLE  14(2)  ENCUMBERS 
UNJUSTIFIABLY THE USE OF THE TRADEMARK , CONTRARY TO ARTICLE  20 OF THE 
TRIPS  AGREEMENT .............................................................................................................227  
C. CLAIM 24: ARTICLE  14(1)  OF REGULATION  2081/92  IS INCONSISTENT WITH 
ARTICLE  24.5  OF THE TRIPS  AGREEMENT BECAUSE IT DOES NOT AFFORD THE RIGHT 
OF PRIORITY PROVIDED IN ARTICLE  4 OF THE PARIS CONVENTION ....................................228  
D. ARTICLES  41.1,  41.2,  41.3,  41.4,  42, 43, 44.1,  45, 46, 48 AND 49 OF THE TRIPS  
AGREEMENT .........................................................................................................................228  
1. General Cons iderations ......................................................................................................... 228 
2. Claim 25: Regulation 2081/92 is inconsistent with Article 41.1 of the TRIPS 
Agreement...................................................................................................................... ........230  
3. Claim 26: Regulation 2081/92 is inconsistent with Article 41.2 of the TRIPS 
Agreement...................................................................................................................... ........230   WT/DS174/R/Add.2 
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 4. Claim 27: Regulation 2081/92 is inconsistent with Article 41.3 of the TRIPS 
Agreement...................................................................................................................... ........231  
5. Claim 28: Regulation 2081/92 is inconsistent with Article 41.4 of the TRIPS 
Agreement...................................................................................................................... ........231  
6. Claim 29: Regulation 2081/92 is inconsistent with Article 42 of the TRIPS 
Agreement...................................................................................................................... ........231  
E. CLAIM 30: REGULATION  2081/92  IS INCONSISTENT WITH ARTICLE  10BIS (1) AND 
10TER (1) OF THE PARIS CONVENTION .................................................................................231  
F. CONSEQUENTIAL CLAIMS ....................................................................................................231  
1. Claim 31: Regulation 2081/92 is incons istent with Article 2.1 of the TRIPS 
Agreement...................................................................................................................... ........231  
2. Claim 32: Regulation 2081/92 is incons istent with Article 1.1 of the TRIPS 
Agreement...................................................................................................................... ........231  
3. Claim 33: The transitional national protection provided by the Member States is 
inconsistent with Articles 2.1, 16.1, 41.1, 41.2, 41.3 and/or 42 of the TRIPS Agreement...................................................................................................................... ........231
 
VI. THE EC MEASURE IS CONSISTENT WI TH THE OBLIGATION TO PROVIDE 
PROTECTION TO GEOGRAPHICAL INDICA TIONS UNDER ARTICLE 22.2 OF THE 
TRIPS AGREEMENT ................................................................................................................ ............231  
1. Claim 34: Regulation 2081/92 is inconsistent with Article 22.2 of the TRIPS 
Agreement...................................................................................................................... ........231  
2. Claim 35: Regulation 2081/92 is incons istent with Article 1.1 of the TRIPS 
Agreement because it is inconsis tent with Article 22.2 ......................................................234  
3. Claim 36: Regulation 2081/92 is incons istent with Article 22.2 TRIPS.............................234  
VII. REGULATION 2081/92 IS CONSISTE NT WITH OBLIGATIONS UNDER THE 
TBT AGREEM ENT .................................................................................................................. ..............234  
A. REGULATION  2081/92  IS NOT A TECHNICAL REGULATION ..................................................235  
1. Article 12(2) of Regulation 2081/92 is not a technica l regulation.......................................235  
2. Articles 4 and 10 of Regulation 2081 /92 are not a techni cal regulat ion.............................235  
B. CLAIM 37: ARTICLE 12(2)  OF REGULATION  2081/92  IS INCOMPATIBLE WITH 
ARTICLE  2.1 OF THE TBT  AGREEMENT ...............................................................................236  
C. CLAIM 38: ARTICLES  4, 10, AND 12 (1) OF REGULATION  2081/92  ARE INCOMPATIBLE 
WITH ARTICLE  2.2 OF THE TBT  AGREEMENT ......................................................................236  
VIII. CLAIM 39, 40: THE EC MEASURE IS COMP ATIBLE WITH ARTICLE 65.1 TRIPS AND 
ARTICLE XVI:4  WTO.............................................................................................................. .............237  
IX. CONCLUSION ..................................................................................................................... ...................237  
 WT/DS174/R/Add.2 
Page B-168  
 
 Table of WTO cases referred to in this submission 
 
Short Title Full Case Title and Citation of Case 
Canada – Autos  Panel Report, Canada – Certain Measures Affecting the Automotive Industry , 
WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by the Appellate 
Body Report, WT/DS139/AB/R, WT/DS142/AB/R, DSR 2000:VII, 3043 
EC – Sardines  Appellate Body Report, European Communities – Trade Description of Sardines , 
WT/DS231/AB/R, adopted 23 October 2002 
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
Korea – Various Measures on Beef
  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 
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and Conventional 
Gasoline , WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3 
US – Section 301 
Trade Act  Panel Report, United States – Sections 301-310 of the Trade Act of 1974 , 
WT/DS152/R, adopted 27 January 2000, DSR 2000:II, 815 
  WT/DS174/R/Add.2 
 Page B-169 
 
 
 GLOSSARY 
 
Commission, EC Commission  Commission of the European Communities 
Committee  Committee of representatives of  the Member States referred 
to in Article 15 of Council Regulation 2081/92 
Community Trademark Regulation  Council Regulation (EC) No 40/94, of 20 December 1993, 
on the Community Trademark, as amended 
Council, EC Council  Council of the European Union 
Court of Justice, European Court of 
Justice  Court of Justice of the European Communities 
DSU Understanding on Rules and Procedures Governing the 
Settlement of Disputes 
EC European Communities 
GATT General Agreement on Tariffs and Trade 1994 
FOS First Oral Statement 
FWS First Written Submission 
GI Geographical indication 
Member States, EC Member States Member States of the European Union 
Official Journal Official Journal of the European Union 
Paris Convention Stockholm Act of the Paris Convention for the protection of 
Industrial property, of 14 July 1967 
Regulation 2081/92, Regulation Council Regulation (EEC) No 2081/92 of 14 July 1992 on 
the protection of geographical indications and designations of origin for agricultural products and foodstuffs, as amended on the date of establishment of the Panel 
SCM Agreement, SCM Agreement on Subsidies and Countervailing Duties 
Trademarks Directive First Council Directive 89/104, of 20 December, on the 
Community Trademark, as amended 
TBT Agreement, TBT Agreement on Technical Barriers to Trade 
TRIPS Agreement, TRIPS Agreement on Trade-Related Aspects of Intellectual 
Property Rights 
US United States 
WTO Agreement Marrakesh Agreement Establishing the World Trade 
Organization WT/DS174/R/Add.2 
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 I. INTRODUCTION 
1. This submission provides the rebuttal of th e European Communities to the arguments made 
by the complainants at the first meeting with the Panel of 23-24 June 2004, as well as in their 
responses to the questions from the Panel and from  the EC of 8 July 2004. The EC has addressed 
some of those arguments as part of its own res ponses to the Panel's questions. In order to avoid 
unnecessary repetitions, the EC will refer to  those responses where appropriate.  
 2. In the following section, the EC will first discuss some horizontal issues concerning the objective assessment of the content of Regulation 2081/92. In the following sections, the EC will 
comment on the arguments of the complainants clai m by claim, following the structure already used 
in the EC's first written submission. 
 
II. THE OBJECTIVE ASSESSMENT OF TH E CONTENT OF REGULATION 2081/92 
3. The EC has already set out the content of Regulation 2081/92 in its first written submission.
1 
In the present submission, the EC refers to this general presentation. Where the complainants have 
contested the interpretation of particular provisi ons of Regulation 2081/92, the EC will respond to 
these arguments in the discussion of the speci fic claims raised by the complainants.  
 4. In the present section, the EC would like to  address two horizontal issues which are essential 
for the objective assessment of the conten t of Regulation 2081/92 by the Panel: 
 
• the proper approach to the interpretation of Regulation 2081/92 as a measure of EC 
domestic law; 
 
• the importance of WTO law and obligations for the interpretation of Regulation 2081/92 
in the EC legal order. 
 A. T
HE PROPER APPROACH TO THE INTERPRETATION OF REGULATION  2081/92  AS A MEASURE OF 
EC DOMESTIC LAW  
5. In its response to the first question asked by the Panel after the first substantive hearing, the 
EC has set out how it believes the Panel should ap proach the interpretation of Regulation 2081/92.2 
 6. As the EC has already stated, the meaning of Regulation 2081/92 is, for the purposes of the 
present dispute, a question of fact. Accordingly, the burden of proof for establishing that 
Regulation 2081/92 has a particular meaning rests on the complainants. This means that it is the 
complainants, not the EC, who must show that Regul ation 2081/92 has in fact the meaning which they 
allege it has.  7. Since the interpretation of Regulation 2081/92  as a measure of EC domestic law is a question 
of fact, it follows that Panel must not "interpret" the meaning of Regulation 2081/92 as it would 
interpret provisions of the WTO Agreement. Rather , the Panel must, accordance with Article 11 DSU, 
proceed to an objective assessment of the meaning of this Regulation within th e legal order of the EC. 
 8. For the purposes of this objective assessment, it is essential that the Panel take into account 
the legal context of the measure within the legal or der of the Member concerned. For this reason, due 
account must also be taken of the meaning whic h is given to the measure in question by the 
authorities of the Member concerned. As the Panel in US – Section 301  has held, for this reason, 
                                                     
 
1 EC FWS, para. 43 et seq. 
2 EC Response to Panel's Question No. 1, para. 1 et seq.  WT/DS174/R/Add.2 
 Page B-171 
 
 
 considerable deference must be given to the explan ations given by the Member concerned as to the 
meaning of its own measure.3 
 9. In their responses to the questions of the Pane l, the United States and Australia have failed to 
correctly appreciate these principles. First of all, it appears that the United States attempts to shift the 
burden of proof as regards the content of Regulation 2081/92 to the EC.
4 However, this burden of 
proof is on the complainants; and as the EC will set out in its discussion of the individual claims Australia and the United States do not provide suffici ent evidence to demonstrate that the provisions 
of the Regulation do indeed have the meaning which they allege.  
10. More importantly still, the United States and Aust ralia fail to give due weight to the fact that 
Regulation 2081/92 is a measure of EC domestic law. This is illustrated by the incorrect statements of 
the United States and Australia as regards the interpre tation of the Regulation 2081/92 by the Court of 
Justice. As the EC will set out in greater detail in  the next section, these statements entirely fail to 
appreciate the relevance of WTO law and obligations  for the interpretation of Regulation 2081/92 in 
the EC legal order. 
 11. Particularly striking in this context is  the contention of the United States that the 
"Commission's interpretation" before the Panel s hould not be granted "any particular deference".
5 
First of all, the EC would like to stress that th e US is incorrect to refer to the "Commission's" 
statements or interpretations. As the US is well aware, the European Comm unities as a Member of the 
WTO is represented by the European Commission. Accordingly, the statements made by the EC 
representatives before the Panel are made on behalf of the European Communities as a whole, and not 
on behalf of the European Commission or any other institution of the EC.  12. For this reason, the US comments regarding the weight of the Commission's opinions with 
respect to other institutions within the EC legal order
6 are without any relevance for evaluating the 
statements made by the EC before the Panel. In add ition, the US statements in this regard are partially 
incorrect, and give a tilted picture of the institutional system of the EC.   13. For instance, the United States refers to the practice of complaint letters in the field of 
competition law.
7 The EC does not see the relevance of this example for the present dispute. That the 
Commission's comfort letters, which are not inte nded to be binding, are not binding on national 
courts, is not particularly surprising. What the US fail s to mention, in contrast, is that despite their not 
being binding, such letters are usually respected. As one author has put it in a recent publication on 
competition law: "Furthermore, it is likely that a national court, although not formally bound by a 
comfort letter, would be strongly influenced by it".8  
 
14. Similarly, the EC wonders what is the basis for the US statement that before the Court of 
Justice, the Commission's brief "carries no greater weight than a brief submitted by a private party", and that "in many cases, the ECJ does not ev en accept the Commission's interpretation".
9 This 
statement already disregards th at in accordance with Article 211 EC Treaty, the Commission is 
responsible "to ensure that the provision of this  Treaty and the measures taken by the institutions 
                                                      
3 Panel Report, US – Section 301 , para. 7.18. Full quotation cf. EC Response to Panel's Question No. 1, 
para. 3. 
4 US Response to Panel's Question No. 1, para. 1. 
5 US Response to Panel's Question No. 1, para. 18. 
6 US Response to Panel's Question No. 1, para. 8 et seq. 
7 Cf. US Response to Panel's Question No. 1, para. 10. 
8 R. Whish, Competition Law , 5th edition (2003), p. 167 (Exhibit EC-33) . 
9 US Response to Panel's Question No. 1, para. 11. WT/DS174/R/Add.2 
Page B-172  
 
 pursuant thereto are applied". In other words, the EC is not just "any other private party", but is the 
guardian of the EC Treaty.  15. This is also reflected by the fact that unlik e a private party, the Commission may intervene in 
any proceedings pending before  the Court of Justice to which it is not itself a party.
10 Similarly, it may 
present observations with respect to all requests for preliminary rulings.11 The Commission exercises 
this right to intervene and present observations system atically, and in the great majority of cases, its 
observations are followed by the Court.  16. Finally, the complainants fail to accord a reas onable degree of deference to the statements of 
the EC as regards its own measure. In its oral statement in the first hearing, the United States has 
stated that a clarification that the EC does not appl y conditions of reciprocity and equivalence to other 
WTO Members "will be welcome".
12 However, its comments give the opposite impression. Indeed, 
the EC is wondering from whom the US is hoping to receive the desired clarification, if not from the representatives of the European Communities.
13 
 
17. In conclusion, the Panel should, in its appro ach to Regulation 2081/92, take due of account of 
the character of this measure as a measure of EC dom estic law, and give due weight to the explanation 
which are furnished by the Europ ean Communities in this respect. 
 B. T
HE IMPORTANCE OF WTO  LAW AND OBLIGATIONS FOR THE INTERPRETATION OF 
REGULATION  2081/92  IN THE EC LEGAL ORDER  
18. A particular point with respect to which th e United States and Australia fail to appreciate the 
proper legal context of Regulation 2081/92 is th e importance of WTO law and obligations for the 
interpretation of the Regulation. This issue is of particular importance regarding the claims that the 
EC applies conditions of "reciprocity and equivalen ce" to the registration of geographical indications 
from other WTO Members, and the EC will return to it in  this context. However, it is also a horizontal 
question, on which the EC would therefor e offer a number of general observations. 
 19. In its response to Question 15 of the Panel,  the EC has already set out in detail, citing 
concrete examples from the case la w, how the European Court of Justice takes into account the 
obligations arising from international agreements , in particular the WTO Agreements, in the 
interpretation and application of acts of Community law.
14 
 20. The United States and Australia have entirel y ignored this case law, and have rather 
superficially limited themselves to stating that acco rding to the European Court of Justice, the WTO 
Agreements do not have direct effect, and are not in principle among the rules in the light of which 
the Court of Justice is to review the legality of measures adopted by the Community institutions.
15 In 
support of this statement, the complainants have relied on two judgements of the Court of Justice, 
namely the judgements in case C-149/96, Portugal/Council , and in Case C-93/02 P, Biret .16 
 
                                                      
10 Article 40 (1) of the Statute of  the European Court of Justice. 
11 Article 23 (2) of the Statute of  the European Court of Justice. 
12 US FOS, para. 16. 
13 The EC also notes that in its comments on the Pane l's draft letter to WIPO, which it transmitted by e-
mail to the Secretariat on 9 July 2004, Australia warns agai nst "inappropriate interpretative analysis on the part 
of the International Bureau of WIPO of those countries' legislation and intentions". The EC wonders why Australia insists on deference as regards the legislation of WIPO Members, but would not want the Panel to 
afford any deference as regards the interpretation of EC legislation. 
14 EC Response to Panel's Question No. 15, para. 28 et seq. 
15 US Response to Panel's Question No. 1, para. 15–16; Australian response to Question 6. 
16 Exhibits US-31 and US-32.  WT/DS174/R/Add.2 
 Page B-173 
 
 
 21. This presentation of the importance of WTO law within the EC legal order is incorrect. First 
of all, the cases referred to by the complainants are not relevant for the present context. Both 
judgments concerned the conditions under which the legality of a Community measure could be 
challenged under EC law because of incompatibilities with WTO law. This question has nothing to do 
with the present case. In the presen t case, the question is not whet her Regulation 2081/92 could be 
challenged before the European Court of Justice for alleged inconsistenc ies with WTO law; the 
question is how Regulation 2081/ 92 must be interpreted taking into account the international 
obligations of the EC, and given the references to these internati onal obligations wh ich it contains. 
 22. In fact, the complainants fail to appreciate th at WTO law is important in more than one way 
in the EC legal order. As one scholar of Commun ity law has observed, one of the most important 
openings for WTO law in the legal order of the EC is the principle of that EC law must be interpreted 
in line with the EC's international obligations:
17 
 
As a consequence, WTO compliant interpre tation could result in the most effective 
means to judicially enforce, in the abse nce of specific measures of transformation, 
WTO law into the Community legal order. Th is is not the least reinforced by the 
weight the Panel in its Report on Section 301 on the US Trade Act has put on the option of WTO conform interpretation.  
23. In fact, the European Court of Justice consis tently strives to interpret EC legal measures in 
accordance with the EC's international obligations. As the EC has already set out, there are numerous 
examples where the European Court of Justice has taken account of and applied international 
obligations, including the WTO agreemen ts, in the interpretation of EC law.
18 
 24. As one commentator, now a Judge of the European Court of Justice, has observed, the judgement in case C-149/96, Portugal/Council , does not have the effect of rendering WTO law 
irrelevant under Community law:
19 
 
The judgment in Portugal v. Council  does not render the WTO Agreements irrelevant 
under Community law. First of all, they may have what has been called "indirect" 
effect, implying an obligation for domestic courts to interpret  national law in the light 
of WTO law. In Hermès , the Court of Justice made the following finding: 
"It should be stressed at the outset that, although the issue of the 
direct effect of Article 50 of the TRIPs Agreement has been argued, the Court is not required to give a ruling on that question, but only to answer the question of interpretation  submitted to it by the national 
court so as to enable that court to interpret Netherlands procedural  
rules in the light of that article ". (emphasis added) 
Apart from this "indirect" effect, the Court in an infringement case has held that, 
because of the "primacy" of internationa l agreements over provisions of secondary 
Community legislation, such provisions "must" , so far as is possible, be interpreted in 
a manner that is consistent with those ag reements" (the agreement in question was a 
GATT Agreement). In the same case, the Court confirmed that EU Member States are 
called upon to respect the GATT Agreements and can in the interest of uniform 
                                                     
 
17 Stefan Griller, Enforcement and Implementation of WTO Law in the European Union , in 
Breuss/Griller/Vranes (ed.), The Banana Dis pute, p. 247, 270 (2003) (Exhibit EC-34). 
18 EC Response to Panel's Question No. 15, para. 33–38. 
19 Allan Rosas, Case note, 37 CMLR 797, 814 (2000) (Exhibit EC-35). WT/DS174/R/Add.2 
Page B-174  
 
 application of these Agreements throughout the EU be brought before the Court of 
Justice in infringement proceedings. 
25. Accordingly, the misgivings that the comp lainants voice regarding the approach which the 
European Court of Justice, or other institutions of the EC, might take to the interpretation of 
Regulation 2081/92 are misplaced. This is particular ly so where, as in the case of Article 12(1) of 
Regulation 2081/92, the EC measure specifically provides that it applies "without prejudice to 
international agreements".  26. For these reasons, the Panel should not assume that the institutions of the EC, and in 
particular the European Court of Justice, will ignore WTO obligations in the interpretation and 
application of Regulation 2081/92. 
 
III. REGULATION 2081/92 IS COMPAT IBLE WITH NATIONAL TREATMENT 
OBLIGATIONS, AND DOES NOT IMPOSE A REQUIREMENT OF DOMICILE OR ESTABLISHMENT 
27. The EC has already responded in its first wr itten submission to the claims raised by the 
complainants as regards the alleged violation of the national treatment provisions of the TRIPS and 
the GATT, as well as the prohibition on conditions of  residence and domicile in Article 2.2 of the 
Paris Convention.
20 Hereunder, the EC will add a number of further observations on these claims in 
response to the statements made by the complainants  during the first hearing and in their responses to 
the Panel's questions. 
 
A. NATIONAL TREATMENT UNDER THE TRIPS  AGREEMENT (ARTICLE  3.1 TRIPS  AND 
ARTICLE  2.1 TRIPS  IN CONJUNCTION WITH ARTICLE  2.1 PARIS CONVENTION ) 
28. As in its first written submission, the EC will fi rst turn to the claims made in respect of the 
national treatment provisions of the TRIPS and the Paris Convention. 
 
1. The Meaning and Scope of National Treatment under the TRIPS Agreement 
29. Already in its first written submission, the EC has pointed out the importance of giving a 
proper interpretation to the national treatment pr ovisions of Article 3.1 TRIPS Agreement, and 
similarly of Article 2.1 of the Paris Convention. In  particular, the EC has stressed that unlike national 
treatment under the GATT, which concerns produc ts, national treatment under the TRIPS Agreement 
is concerned with the treatment of nationals.21 
 30. In their responses to the questions of the Pa nel, the complainants offer interpretations of 
Article 3.1 TRIPS Agreement which do not correspond to  the wording of the provision. Since this is a 
horizontal question underlying all the claims brought by the complainants under the national treatment 
provisions of the TRIPS and the Paris Convention, th e EC will offer here some  general remarks on the 
interpretations made by the complainants.  (a) The meaning of "national" 
31. In its response to Question 23 of the Panel, the EC has explained that for natural persons, a 
national is any person who holds th e nationality of the State in question in conformity with the 
legislation of such state. As regards legal persons , the question of nationality similarly depends on the 
law of the state in question, which may use criteria such as the law of incorporation, headquarters, or 
                                                     
 
20 EC FWS, para. 101 et seq. 
21 EC FWS, para. 104 et seq.  WT/DS174/R/Add.2 
 Page B-175 
 
 
 other criteria.22 In the view of the EC, nationality is a dis tinct concept from domicile or establishment. 
Accordingly, the EC is of the view that it ca nnot be assumed that a Members State's nationals 
necessarily include natural persons who are domiciled,  or legal persons who have a real and effective 
industrial and commercial establishment, in that Member.  
32. In their responses to the Panel, the United States and Australia have argued the contrary. 
However, the legal grounds on which they base this view are unclear to the EC.  33. In its responses, the United States seems to ha ve relied primarily on footnote 1 to Article 1.3 
of the TRIPS Agreement, which defines the notion of national for the purposes of a "separate customs 
territory". This reliance by the US on footnote 1 is misplaced. 
 34. In its response to Question 52, the United Stat es alleges that "footnote 1 to Article 1.3 of the 
TRIPS Agreement defines 'national' throughout the Agreement not in terms of nationality, but in 
terms of where a person is domiciled or where a person has a real and effective industrial or 
commercial establishment".
23 This statement is misleading. Footnote 1 does not define the term 
"national" for all purposes of the Agreement, but only as regards separate customs territories. As the 
EC has already remarked, this definition in fact demonstrates that for all cases other than separate 
customs territories, nationality does not depend on domicile or establishment.24 
 35. Attempting another variant of its argument, th e United States seems to suggest that the EC is 
a separate customs territory, to which footnote 1 to Article 1.3 of the TRIPS Agreement should 
apply.
25 The EC is not quite sure whether this is a draf ting error, or meant to be a serious argument. In 
the latter case, the EC would be interested to k now from what other customs territory the EC is 
supposed to be "separate".26 It seems that if the EC is a separ ate customs territory, so are the United 
States, Australia, and in fact all WTO Members. Obviously this cannot be the correct meaning of 
"separate customs territory" in footnote 1 to Article 1.3 TRIPS Agreement. 
 36. Australia's responses on this point are no less unclear. In its responses, Australia first states 
that nationals are in the case of natural persons, "persons who possess the natio nality of a State", and 
in regard to legal persons, pe rsons "who are domiciled or established in that WTO Member in 
accordance with the laws of the WTO Member of  which nationality is claimed". However, then 
Australia goes on to conclude  that "nationals normally
 include natural persons who are domiciled or 
legal persons who have a real a nd effective industrial and commercia l establishment in that Member". 
Australia notes further "that these categories of person would not always  qualify as nationals". 
 37. In the view of the EC, these responses obscu re the question. The question is not who is 
"normally" included among nationals, but the question w ho is a national. Contrary to the views of the 
complainants, "nationality" is a distinct concept,  which is different from questions of domicile or 
establishment.  38. This is particularly obvious  in the case of natural persons . National laws do not "normally" 
confer nationality simply on the basis of residen ce or establishment. Similarly, a national does not 
normally lose his or her nationality simply because of residence abroad. 
                                                     
 
22 EC Response to Panel's Question No. 23, para. 56 et seq. 
23 US Response to Panel's Question No. 26, para. 52. 
24 EC Response to Panel's Question No. 23, para. 60. 
25 US Response to Panel's Question No. 23, para. 49 (referring to "a separate customs territory, such as 
the EC"). 
26 In passing, the EC would note that unlike in the case of a a separate customs territory, there is a 
citizenship of the European Union. Cf. 17 of the EC Treaty, which provides that every person holding the 
nationality of a Member State shall be a citizen of the Union. WT/DS174/R/Add.2 
Page B-176  
 
  
39. The situation in this respect is not fundame ntally different for legal persons. Even if the 
criteria which national laws use may vary, typically nationality is not simply attributed on the basis 
that a legal person is established in a particular c ountry. The EC would note that if this criterion were 
sufficient, this could lead to situation where e.g.  multinationals companies would be nationals of a 
very large number of countries. 
 40. In the view of the EC, this would not be a reasonable definition of na tionality. This is why 
other criteria, such as notably the law of incorporation, are used.
27 The EC notes that its views in this 
respect coincide with those expressed by Canada  in its responses to a Question of the Panel.28 
 
41. Accordingly, the Panel should conclude that  the term "national" in Article 3.1 TRIPS 
Agreement and Article 2.1 Paris Convention does not necessarily include persons who are domiciled 
or established in a particular WTO Member.  
(b) The conditions for applications and objections do not depend on nationality 
42. On the basis of this understanding, the EC is of  the view that the clai ms of the complainants 
raised in respect of Regulation 2081/92 do not in volve any difference in treatment on the basis of 
nationality.  43. As the EC has already set out in its fi rst submission, the parallel procedures for the 
registration of geographical indications depend exclus ively on where the area is located to which the 
geographical indication is related. The conditio ns for registration do not therefore depend on 
nationality.
29 Similarly, the procedures for objecting to th e registration of a geographical indication do 
not distinguish between nationals, but depend on where the objecting person is domiciled or 
established.30 The fact that there are different provisions setting out parallel procedures does not entail 
any discrimination, but simply is necessary to take  account of the need to involve the governments of 
the Member States or of the third country, respectively.  44. The EC notes that in their responses to the Panel, the complainants seem to recognise that 
Regulation 2081/92 does not contain any distinc tions on the basis of nationality. Rather, the 
complainants seem to be basing themselves on the notion that US and Australian nationals would 
more "likely" be affected by the a lleged violations than EC nationals.
31 
 45. First of all, the EC would note that the comp lainants do not provide any factual basis for these 
claims. Even though it may be true that persons  producing in a specific geographical area may 
frequently be nationals of the state where the area is located, this is not inevitably so. Indeed, there is 
no reason why a US or Australian national could not produce products in acco rdance with the product 
specifications of an EC GI.   
                                                     
 
27 In this respect, reference can be made to Article 48(1) of the EC Treaty, which provides as follows: 
"Companies or firms formed in accord ance with the law of a Member State and having their registered office, 
central administration or principal pl ace of business within th e Community shall, for the purposes of this 
Chapter, be treated in the same way as natura l persons who are nationals of Member States". 
28 Response of Canada to Panel's Question No. 6 to the third parties, para. 2–5. 
29 EC FWS, para. 123 et seq. 
30 EC FWS, para. 142. 
31 Cf. US Response to Panel's Question No. 27, para. 54-55, where the US refers to the possibility of an 
EC national being prevented by Regulation 2081/92 from registering a US GI in the EC; Australia's Response to 
Question 27.  WT/DS174/R/Add.2 
 Page B-177 
 
 
 46. Indeed, in the area of wines and spirits, investment by foreign nationals in protected 
geographic names is a common phenomenon. By way of example, the EC can refer to the story of Jens-Reidar Larsen, a Norwegian national who is th e founder of the Larsen Cognac House in Cognac, 
France (extract from Exhibit EC-36):  
The Larsen firm was founded in 1926 by Jens-Reidar Larsen, a young Norwegian, 
who arrived in Bordeaux in 1919. He settle d shortly afterwards in Cognac, charmed 
by the inimitable atmosphere of the sma ll Charentes town and there, discovered the 
refinement of its famous eau-de-vie. Havi ng become a fine connoisseur, and driven 
by an innate business insight, he bought the small firm of Cognac Joseph Gautier. He 
then launched his own "Larsen" brand wh ich soon prospered on Scandinavian 
markets, particularly in Norway. Having married a native of Cognac, he had a son who took over the Larsen firm and made the brand prosper around the world.  
47. Similar examples of foreign companies, in cluding from the United States or Japan, investing 
in wine or spirits estates in France, Italy, or German can be seen in E xhibits EC-37 to EC-39. 
 
48. The EC sees no reason why the example of Mr. Larsen could not be followed by a US or Australian national who devotes himself to the maki ng of Roquefort or Stilton cheese, or of other 
agricultural products and foodstuffs protected under Regulation 2081/92.
32 That such examples may 
not yet be as common for agricultural products and foodstuffs covered by Regulation 2081/92 as they 
are for wines and spirits has nothing to do with any r estrictions imposed by that Regulation. Rather, it 
is the result of the fact that wines and spirits ar e high-value products, which have been traded for a 
long time, and where international investment acco rdingly has a long tradition. However, the EC is 
convinced that with the growing appreciation and knowledge of agricultura l products and foodstuffs 
protected by geographical indications, this may ch ange, and foreign nationals  may indeed begin to 
produce such products in accordance with the product specifications. 
 
49. Moreover, as the EC has already explained in its response to Question 29 of the Panel,33 the 
present case is not one which implies a " de facto " discrimination between nationals within the 
meaning of the TRIPS Agreement. As the EC has set out, de facto discrimination is a notion which is 
closely related to preventing circumvent ion of national treatment obligations.34 However, the concerns 
that the complainants have raised, in particular th e application procedure, are linked primarily to the 
origin of the goods. Such issues rega rding the treatment of goods are de alt with more appropriately in 
the context of the GATT, and not of the TRIPS Ag reement. Similarly, conditions of residence and 
requirement are dealt with in Article 2.2 of the Paris Convention, on the basis of which the complainants have made separate claims.  
50. For the reasons set out, the claims do not fa ll under the scope of Article 3.1 TRIPS and 2.1 
Paris Convention.  
                                                     
 
32 As a matter of fact, the EC believes that ther e probably are examples of non-EC nationals who 
produce products in the EC bearing names protected under Regulation 2081/92. However, since nationality of 
the producer is not a relevant criterion for protection under Regulation 2081/92, the EC does not have specific 
information about the nationality of such producers. 
33 EC Response to Panel's Question No. 29, para. 67 et seq. 
34 Cf. EC Response to Panel's Question No. 29, para. 73-74. WT/DS174/R/Add.2 
Page B-178  
 
 2. Claim 1: Non-EC nationals are accorded le ss favorable treatment than EC nationals 
with respect to the registration of geographi cal indications through the application of a 
condition of reciprocity and equivalence  
51. The US and Australia have claimed that by subjecting the registration of geographic 
indications from other WTO members to "cond itions of reciprocity and equivalence", 
Regulation 2081/92 violates the national treatment provisions of Article 3.1 TRIPS and 2.1 Paris 
Convention.  52. In its submissions to the Panel, the EC has repeatedly confirmed that it does not apply such 
conditions to other WTO Members.
35 Accordingly, this claim of the complainants is without factual 
basis. However, the complainants have e xpressed scepticism about the EC's interpretation.36 
Hereunder, the EC will show that such scepticism is unwarranted.  (a) The complainant's interpretation is inco mpatible with the plain wording of 
Regulation 2081/92 
53. First of all, the interpretation given by  the complainants of Regulation 2081/92 is 
incompatible with the plain wording of Regulati on 2081/92. Article 12(1) of the Regulation states 
clearly that it applies only "without prejudice to  international agreements". Accordingly, the 
conditions of reciprocity an d equivalence set out in Article 12(1) are applied only without prejudice to 
international agreements.  
54. The formula "without prejudice to" is a common occurrence in EC legislation. In a drafting 
manual for EC legislation, the meaning of the expression "without prejudice to ... " is defined as 
"without affecting ...", "independently of ...", "leaving intact ...".
37 
 55. In other words, the effect of such "without prejudice" clauses is to isolate and protect the act 
or provision to which reference is made from the effe ct of the act or provision in which the reference 
is contained. In other words, should a conflict betw een the two acts or provisi ons occur, then the act 
or provision to which the "without prejudice" reference is made prevails.  56. According to the submissions of the complainan ts, the application of conditions of reciprocity 
and equivalence to WTO Members conflicts with the national treatment obligations of the TRIPS 
Agreement and the GATT. However, Article 12(1) preci sely prevents such a conflict by stating that it 
applies "without prejudice" to international agreements.   57. Accordingly, on the basis of the plain wording of the Regulation, the conditions of reciprocity 
and equivalence do not apply to WTO Members. Ra ther, as the EC has already explained in its 
response to Question 7 of the Panel, an applicati on for registration of a geographical indication from a 
WTO Member may be made directly under Article 12a of Regulation 2081/92.
38 
 (b) The without prejudice clause requires that the WTO Agreements be taken into account 
58. The EC's interpretation of the plain meaning of Article 12(1) of the Regulation is further 
confirmed by the legal context of the Regul ation in the EC domestic legal order.  
 
                                                     
 
35 EC FWS, para. 65 et seq, 115 et seq.; EC FOS, para. 42. 
36 US FOS, para. 16; Australia's FOS, para. 19. 
37 Manual of Precedents for Acts Established w ithin the Council of the European Communities, 
3rd edition, p. 135 (1990) (Exhibit EC-40). 
38 EC Response to Panel's Question No. 7, para. 16-17.  WT/DS174/R/Add.2 
 Page B-179 
 
 
 59. As the EC has already explained, an important  principle in the jurisprudence of the Court of 
Justice is that the legal acts of the institutions s hould be interpreted in lin e with the international 
obligations of the European Communities.39 On this basis, the EC does not see how the European 
institutions, and in particular the European Court of  Justice, could avoid taking into account the EC's 
obligations under the WTO agreements. The fears and doubts which the complainants have expressed 
in this context as regards the possible approach th at could be taken by the Commission, the Council of 
Ministers, or the European Court of Justice, ar e exaggerated and based an insufficient understanding 
of the relationship between EC law and WTO law.  60. Quite on the contrary, the EC believes that on the basis of the wording of Regulation 2081/92, 
there would be a considerable risk of a successf ul legal challenge if the Community institutions 
rejected an application for the registration of a geographical indication from another WTO member 
with the argument that such WTO Member does not  fulfil the conditions of Article 12(1) of the 
Regulation. The wording "without prejudice to in ternational agreements" clearly requires the 
institutions to take into account and apply intern ational agreements, including the WTO Agreements. 
In such a situation, the Community institutions w ould be violating Community law if they applied 
Regulation 2081/92 in a way that prejudices the WT O Agreements. This is confirmed also by the 
jurisprudence of the Court of Justice, which has he ld that where a Community measure is intended to 
implement a particular obligation, or where the Co mmunity measure refers explicitly to the precise 
provisions of the WTO Agreements, the Court may revi ew the legality of EC measures in the light of 
WTO obligations.
40 In the case of Article 12(1) of Regulation 2081/92, the measure not only 
"implements" or refers" to obligations of WTO la w, but provides that it shall be "without prejudice". 
This is a stronger formulation than the one relied on by the Court in previous cases where it reviewed 
the compatibility of Community measures with WTO law, and therefore requires even more strongly that WTO obligations be taken into account.  
61. The plain wording of the Regulation, in par ticular when interpreted in the light of the 
principles of interpretation of Community law, clear ly confirms the interpretation given by the EC. 
 (c) It is not uncommon for Community legal acts to apply "without prejudice to international 
agreements" 
62. It may also be useful for the Panel to know that there is nothing unusual about the fact that a 
Community legal act would apply "without prejudice to  international agreements". In fact, analogous 
provisions can be found in numerous Community  legislative acts drawn from various sectors. 
 63. For instance, Article 22.4 of Regulation 1784/2003 on the common market organisation in 
cereals provides that it applies "having regard to th e obligations arising from agreements concluded in 
accordance with Article 300 of the Treaty ".41 Similar provisions were introduced into a number of 
Regulations in the agricultural field by Council Regulation EC 3290/94 of 22 December 1994 on the 
adjustments and transitional arrangements require d in the agricultural sector resulting from the 
Uruguay Round agreements.42 
 64. Article 4(2) of Regulation 2407/92 on licensing of air carriers provides as follows:
43 "Without 
prejudice to agreements and conventions to which the Community is a contracting party , the 
                                                      
39 Supra para. 18. Cf. also EC Response to Panel's Question No. 15, para. 32 et seq. 
40 Case C-70/87, Fediol , [1989] ECR 1781, para. 19–22 (Exhibit EC-41); Case C-69/89, Nakajima 
[1991] ECR I-2069, para. 30–32 (Exhibit EC-42); Case C-93/02 P, Biret , Judgment of 30 September 2003, para. 
53 (Exhibit US-31). 
41 Exhibit EC-43  (emphasis added). 
42 Exhibit EC-44. 
43 Exhibit EC-45  (emphasis added). WT/DS174/R/Add.2 
Page B-180  
 
 undertaking shall be owned and continue to be ow ned directly or through majority ownership by 
Member States and/or nationals of Member States."  65. Article 3 of Council Regulation 1356/96 on transport of persons and goods on Community 
rivers reads as follows:
44 "This Regulation shall not affect the rights of third-country operators under 
the Revised Convention for the Navigation of the Rhine (Mannheim Convention), the Convention on 
Navigation on the Danube (Belgrade Convention)  or the rights arising from the European 
Community's international obligations ." 
 66. Article 12(1) of Directive 2003/86 on the right to family reunification reads as follows:
45 
"Without prejudice to international obligations , where family reunification is possible in a third 
country with which the sponsor and/or family me mber has special links, Member States may require 
provision of the evidence referred to in the first subparagraph". (d) The "without prejudice" clause was not intended to  apply only to bilateral agreements, or to 
agreements which contain "specific rules" on geographical indications 
67. In its oral statement, the US has argued that the "without prejudice" clause in Article 12(1) of 
the Regulation applies only to bilatera l, but not to multilateral agreements.
46 In response to the 
questions of the Panel, the complainants now seem to argue that the "without prejudice" clause covers 
certain "specific" agreements concerning the pr otection of geographical indications, but not the 
obligations under the WTO Agreements.47 
 
68. Neither the former nor the la tter distinction has any basis in the wording of Article 12(1) of 
the Regulation. Article 12(1) simply refers to "i nternational agreements". It does not distinguish 
between bilateral and multilateral agreements. Neither does it distinguish between agreements which 
lay down "specific rules" for the protection of ge ographical indications, and others which do not. 
 
69. The EC would note the suggestion that the "without prejudice" clause should only apply to 
agreements which set out specific rules by "either directly specifying GI protection for specific names 
or specifying procedures and requirements for protec ting GIs from the parties to that agreement" is 
not consistent with the wording and context of Ar ticle 12(1). Whereas it is not excluded that such 
specific agreements might be covered by the "wit hout prejudice" clause, there is no reason why only  
such specific agreements should be covered. 
 
70. Similarly, the fact that in the context of the TRIPS Agreement, "there is no specific international registration regime for the Commi ssion to apply", to quote another US argument,
48 does 
not prevent the application of the "without prejudi ce" clause to the WTO Agreements. Moreover, the 
EC does not understand where the US would draw the line between "specific" and "unspecific" 
agreements. After all, the WTO Agreements, and in  particular the TRIPS Agreement, also contain 
rules concerning the protection of geographical indication. To the extent that they contain rules applicable to geographical indications, the EC do es not see why they should not be covered by the 
"without prejudice" clause.  71. The EC would like to point out that the interpretation made by the complainants would 
largely deprive the "without prejudice" clause of its useful value. In order to  counter this argument, 
the United States has attempted to give a number of examples of agreements which it believes fall 
                                                     
 
44 Exhibit EC-46#  (emphasis added). 
45 Exhibit EC-47  (emphasis added). 
46 US FOS, para. 8. 
47 US Response to Panel's Question No. 5, para. 19; Australian response to Question 6. 
48 US Response to Panel's Question No. 5, para. 29.  WT/DS174/R/Add.2 
 Page B-181 
 
 
 under the "without prejudice" clause. However, the United States' examples prove the opposite, since 
not a single of the agreements to which it  refers in fact fall under this clause. 
 72. As a first example, the United States refers to bilateral agreements in the field of wines.
49 
However, it follows clearly from Article 1 (1), sec ond subparagraph, of Regul ation 2081/92, that the 
Regulation does not apply to wine-sector products. Since the Regulation does not apply to wines, 
bilateral agreements concerning geographical indica tions for wines are hardly a pertinent example. 
 73. As a second example, the United States once ag ain refers to the joint declaration to the 
Agreement on Trade in Agriculture between Switzerland and the EC.
50 Similarly, the US refers to 
Article 46 (4) of the Cotonou Agreement, accordi ng to which the Community and the ACP countries 
"may consider the conclusion of agreements ai med at protecting trademarks and geographical 
indications, and to "ongoing negotia tions between the EC and China".51 In all these respects, the EC 
would simply like to remark that no such agreement has so far been negotiated with any of the parties 
mentioned. Political statements of intent or inter est do not constitute examples of application of the 
"without prejudice" clause. 
 74. Finally, the US is also referring to agreements between the EU Member States and third countries as a possible example for the app lication of the "without prejudice" clause.
52 This is wrong. 
The reference to "international agreements" in Article 12(1) of the Regulation applies only to 
international agreements concluded by the Community.  
 
75. This follows simply from the fact that ther e are no bilateral agreements of Member for the 
protection of geographical indica tions which could be covered by  the "without prejudice" clause. 
Agreements concerning the protection of geogr aphical indications fall under the exclusive 
competence of the EC. The only agreements which ma y be legally maintained by Member States in 
this field are such which the Member State concluded before it became an EU member, or before the 
EC competence became exclusive. However, this situ ation is explicitly covered by Article 307 of the 
EC Treaty, which reads as follows:  
The rights and obligations arising from agre ements concluded be fore 1 January 1958 
or, for acceding States, before the date of their accession, between one or more 
Member States on the one hand, and one or more third countries on the other, shall 
not be affected by the provisions of this Treaty. 
To the extent that such agreements are not  compatible with this Treaty, the Member 
State or States concerned shall take all appropriate steps to eliminate the incompatibilities established. Member Stat es shall, where necessary, assist each other 
to this end and shall, where a ppropriate, adopt a common attitude. 
In applying the agreements referred to in  the first paragraph, Member States shall 
take into account the fact that the adva ntages accorded under this Treaty by each 
Member State form an integral part of the establishment of the Community and are thereby inseparably linked with the creati on of common institutions, the conferring of 
powers upon them and the granting of the sa me advantages by all the other Member 
States. 
                                                     
 
49 US Response to Panel's Question No. 5, para. 20. 
50 US Response to Panel's Question No. 5, para. 22. 
51 US Response to Panel's Question No. 5, para. 25. 
52 US Response to Panel's Question No. 5, para. 24. WT/DS174/R/Add.2 
Page B-182  
 
 76. Since the only possible agreements of Memb er States which may still remain in force are 
covered by Article 307 EC Treaty, there is no need to apply the "without prejudice" clause to such agreements. Contrary to the view of the United St ates, the recent judgment of the European Court of 
Justice in Case C-216/01, Budejovicky Budvar , proves this point. In this case, which concerned an 
agreement between Austria and Czec hoslovakia concluded in 1976, i.e.  before either country became 
a Member of the EU, the Court did not base itself on the "without prejudice" clause, but on 
Article 307 EC Treaty:
53 
 
In the light of the foregoing, the answer to the third and fourth questions must be that 
the first paragraph of Article 307 EC is to  be interpreted as permitting a court of a 
Member State, subject to the findings to be made by that court having regard inter 
alia to the criteria set out in this judgment, to apply the provisions of bilateral agreements such as those at issue in the main proceedings, conc luded between that 
State and a non-member country and according protection to a name from the non-member country, even where those provisions prove to be contrary to the Treaty 
rules, on the ground that they concer n an obligation resulting from agreements 
concluded before the date of the accession of the Member State concerned to the European Union. Pending the success of one of  the methods referred to in the second 
paragraph of Article 307 EC in elimin ating any incompatibilities between an 
agreement predating that accession and the Treaty, the first paragraph of that article permits that State to continue to apply su ch an agreement in so far as it contains 
obligations which remain binding on that State under international law. 
77. Accordingly, one is left with the perplexi ng result that the US is unable to quote a single 
example of an agreement to which the "without prej udice" clause would apply, but at the same time 
denies that it applies to the Agreements to which according to its own submissions it should certainly 
apply, namely the WTO agreements. This is hard ly an interpretation which gives its full useful 
meaning to the "without prejudice" clause. 
 (e) The evidence adduced by the complainants is neither pertinent nor conclusive 
78. The complainants have alleged that the inte rpretation made by the EC of Article 12(1) of 
Regulation 2081/92 in the present proceedings is not  in accordance with the interpretation given by 
the EC previously. In support of this argument, the complainants cite a number of presentations and 
other documents made by officials of European Institutions.  
 79. As a general remark, the EC would like to  recall that in principle, the content of 
Regulation 2081/92 must be evaluate d on the face of the measure. Of course, it is not excluded to take 
into account authoritative statements made on beha lf of the European Communities as regards the 
interpretation of Regulation 2081/92. In contrast, statements made by officials of the European 
institutions in the course of presentations or slid e shows cannot be assumed to necessarily reflect the 
opinion of the European Communities, and to co rrectly represent the content of Community law. 
 80. With this caveat, the EC would like to offer the following comments on the "evidence" 
advanced by the complainants: 
 
81. The US has referred to an EC pr ess release concerning Regulation 2081/92.
54 It is true that 
this press release did not refer to the "without prej udice language", and the implications it had for 
WTO countries. However, this was simply due to the fact that this part of Article 12(1) of 
Regulation 2081/92 had not been amended. It shou ld also be kept in mind that press releases are 
                                                      
53 Judgment of 18 November 2003, Case C-216/01, Budejovicky Budvar , para. 173 (Exhibit US-36) . 
54 US FOS, para. 13; Exhibit US-22.  WT/DS174/R/Add.2 
 Page B-183 
 
 
 typically short documents, which are not intended to give a comprehensive explanation of the content 
of a complex legislative measure.  82. In its oral statement, the US has refe rred to a slide show given on 10-12 March 2004.
55 Quite 
apart from the evidentiary value of such a slide s how, the EC would remark that this slide show 
simply seems to contain a literal reproduction of Article 12(1), including the "without prejudice" 
language. The EC does not see what conclusions the US could draw from this slide show. 
 83. In its responses to the Panel, Australia has sim ilarly referred to a slide show given in Beirut in 
March 2003.
56 However, this presentation was made before  and clearly directed at a Lebanese public. 
Since Lebanon is not a WTO Member, the EC does not see what should follow from this presentation 
for the purposes of the present dispute.  84. In its responses to the Panel, the US has referred to a "communication" which it claims to have received from the EC on January 16, 2003.
57 The corresponding exhibit consists of one single 
page of text, apparently taken from a longer document, and indicates neither the date, the title, the 
author nor the addressee of the document. Accordingl y, the EC does not consider that this document 
is attributable to the EC, and will not comment on it any further. 
 85. In its responses to the Panel's questions, the US  has referred to complaints raised on the part 
of certain US industries regarding th e application of Regulation 2081/92.
58 However, these industry 
statements are based on misperceptions of the c ontent of Regulation 2081/92, and are not pertinent 
evidence as to its proper interpretation. Moreover, none of the industries concerned in fact seem to 
have attempted to register a geographical indicatio n under Regulation 2081/92, so that the complaints 
are largely theoretical. Finally, the EC notes that th e concerns expressed on behalf of the Idaho Potato 
Commission seem to be related, to the extent that the EC understands them, more to the protection of 
trademarks in the EC than to the registration of geographical indications.59 
 86. Finally, in its responses to the Panel's qu estions, Australia has also referred to the EC 
responses to the questions of Australia during the consultations.
60 In this regard, the EC would like to 
recall that according to Article 4.6 of the DSU, cons ultations are confidential, and cannot therefore be 
relied on as evidence in subsequent panel proceedi ngs. Moreover, the EC did not give any answers 
during the consultations which are inconsistent  with its submissions before the Panel. 
 87. In conclusion, the complainants have not adduced evidence which contradict the 
interpretation of Regulation 2081/92 set out  by the EC in the present proceedings. 
 
(f) The EC is not belated in having corr ected the complainants' misunderstanding 
88. Finally, Australia has reproached the EC fo r not having corrected Australia's understanding of 
Article 12(1) of Regulation 2081/92 at the DSB m eetings of 29 August or 2 October 2003, at which 
the Panel requests were considered.
61  
 89. The EC considers this argument to be remark able. Quite apart form the fact that there is 
certainly no obligation for a defendant to present its arguments already at the meeting of the DSB, it 
                                                     
 
55 Exhibit US-23. 
56 Australian response to Question 6, and Exhibit 5 thereto. 
57 US Response to Panel's Question No. 12, para. 38, and Exhibit US-40. 
58 US Response to Panel's Question No. 12, para. 36. 
59 Cf. Exhibit US-38, p. 353. 
60 Australia's Response to Panel's Question No. 6. 
61 Australia's Response to Panel's Question No. 6. WT/DS174/R/Add.2 
Page B-184  
 
 should be recalled that the panel requests of both Australia and the United States did not contain any 
reference to Article 12(1) of the Regulation, nor to "conditions of reciproc ity and equivalence". In 
fact, as the EC stated already at the meeting of th e DSB, and as it still believes, the Panel requests did 
not set out in sufficient detail the claims of the complainants, and did therefore not comply with 
Article 6.2 DSU. In its response to the EC's request  for a preliminary ruling on this issue, Australia 
argued that Article 6.2 DSU "does not require Austra lia to set out in its panel establishment request 
precisely how it believes the EC measure violates f undamental national treatment and most favoured 
nation principles".
62  
 90. The EC finds it hard to believe that Austra lia would first deliberately withhold its arguments 
from the EC until its first written submission, and th en reproach the EC for not having responded to 
its arguments already at the meeting of the DSB. It ra ther appears to the EC that this is a consequence 
of the deficient drafting of Australia's panel request, for which it cannot blame the EC.  
3. Claim 1bis: Regulation 2081/92 violates the national treatment obligations under the 
TRIPS Agreement by requiring the existence of inspection structures with respect to the 
specific product for which protection is requested 
91. In its first written submission, the United St ates had broadly criticised the EC for applying 
conditions of "reciprocity and equivalence" to the registration of geographical  indications from other 
WTO Members. As the EC has stated in its firs t written submission, it was not clear whether the 
United States also intended to challenge the conditi ons for the registration of individual geographical 
indications, and notably the requirement that insp ection structures must exist with respect to the 
product concerned.
63 
 92. In its Oral Statement before the Panel, the United States has claimed that the requirement of 
the existence of inspection procedures amounts to a requirement of "equivalence by another name".
64 
Moreover, in its response to Question 58 of the Panel, the United States now claims that the 
requirement that a Member "have a particular inspect ion structure [...] is itself inconsistent with WTO 
obligations".65  
 93. The EC therefore understands that the United St ates is raising a separate claim as regards the 
compatibility of the requirement of inspection structures with national treatment obligations.
66 As the 
EC will show, this claim of the United St ates is unfounded for the following reasons: 
 
• The requirement of inspection structures represents equal, not unequal treatment; 
 
• The requirement of inspection structures does not require "equivalence by another name"; 
 
• Regulation 2081/92 does not impose an "EC model" of inspection structures; 
 
• The existence of inspection structures is necessary for attaining the objectives of 
Regulation 2081/92. 
 
                                                      
62 Comments of Australia on the EC Request, para. 27. 
63 EC FWS, para. 119. 
64 US FOS, para. 17–21. 
65 US Response to Panel's Question No. 58, para. 85. Cf. also US Response to Question 56, para. 83. 
66 The EC recalls that Australia has not raised such  a claim under the national treatment provisions of 
the TRIPS Agreement or of the GATT, but has made a si milar claim under Article 2.2 of the TBT Agreement.  WT/DS174/R/Add.2 
 Page B-185 
 
 
 (a) The requirement of inspection structures represents equal, not unequal treatment 
94. First of all, since the United States is maki ng its claim under the national treatment provisions 
of the TRIPS Agreement and the GATT, the EC would like to recall that the requirement of inspection procedures in Regulation 2081/92 does not involve any less favourable treatment of foreign 
nationals or goods. 
 
95. As the EC has already explained in its firs t written submission, the requirement of inspection 
structures does apply to geographical indications from the EC and from third countries alike.
67 
Accordingly, it does not involve less favourable treat ment of foreign nationals or products, but indeed 
equal treatment. 
 
(b) The requirement of inspection structures does not require "equivalence by another name" 
96. The United States has attempted to cast doubt on this conclusion by arguing that "the EC's 
requirement that the United States establish EC-style  inspection structures to enforce GIs is simply 
equivalence by another name".68 Similarly, in its response to the Question 58 of the Panel, the United 
States has argued that the requirement of inspection structures "is not related to the question of 
whether the product for which GI protection is sought in the EC qualifies for that protection". The US 
goes on to add that "the particular method chosen by  another WTO Member to enforce GI rules in its 
territory is not relevant to such a determination".69 
 97. These statements are simply incorrect. As th e EC has already set out in its first written 
submission, as regards applications for regist ration from other WTO Members, Regulation 2081/92 
requires the existence of inspection structures only with respect to the particular product for which 
protection is sought.
70  
 98. Article 12a(2)(b) of the Regulation requires th at the application for the registration of a 
geographical indication from a third country be accompanied by a declaration that the inspection 
structures provided of in Article 10 of the Regulati on are established on its territory. This requirement 
is part of the application process leading to the re gistration of the individual geographical indication. 
It is clear from the provision that this condition is, like those contained in Article 12a(2)(a) and (c), 
applied on a product-specific basis.  
99. Accordingly, the United States' claim that th rough its requirement of inspection structures, the 
EC is imposing on other WTO Members "the particular  method chosen by them to enforce GI rules in 
their territory" is without foundation. The EC rec ognises the freedom granted by Article 1.1 of the 
TRIPS Agreement to each WTO Member to decide  how to implement protection of geographical 
indications in its legal system.  
 
100. The requirement of inspection structures does not relate to the question of how geographical 
indications are protected in the United States. It ex clusively concerns the question of how a particular 
geographical indication can be protected in the EC
. Accordingly, the United States is wrong to claim 
that the EC's requirement of inspection struct ures some constitutes a condition of "equivalence by 
another name". 
 
                                                      
67 EC FWS, para. 121. 
68 US FOS, para. 21. 
69 US Response to Panel's Question No. 58, para. 85. 
70 EC FWS, para. 118. WT/DS174/R/Add.2 
Page B-186  
 
 (c) Regulation 2081/92 does not impose an "EC model" of inspection structures 
101. The United States has referred to "EC-style inspection structures", and has argued that the 
United States should not be required to adopt "the  same inspection structures as are required of 
Member States".
71 In the same vein, Australia has referred to "the absolute requirement for an EC 
model 'one size fits all'".72 
 
102. These statements have no basis in the te xt of Regulation 2081/ 92. Regulation 2081/92 does 
not prescribe a particular "EC model" of inspectio n structures. The Regulation merely requires that 
inspection structures must exist, and in its Article  10 sets out the general principles with which such 
inspection structures must comply. 
 
103. The EC notes that despite the explicit ques tions of the Panel, both the United States and 
Australia have been unable to identify a single element in the requirements of Article 10 of 
Regulation 2081/92 that would be objectionable.73 In the view of the EC, this is hardly surprising 
given the content of Article 10 of the Regulation. In fact, Article 10 is far from establishing any kind 
of "model" inspection structure. For instance, Artic le 10 (3) sets out general principles such as that 
inspection bodies must offer adequate guarantees of  objectivity and impartia lity, and must have the 
qualified staff and resources at their disposal to carry out their functions. The EC hardly sees what 
could be objectionable about these principles. For the rest, as the EC has already explained in its first 
written submission, Article 10 allows a considerable  flexibility in the design of the actual inspection 
structures.74 In particular, it leaves the choice between public  and private elements in the design of the 
inspection structures. 
 104. This considerable flexibility in the design of  inspection structures is also illustrated by EC 
practice in the application of Article 10. For the in formation of the Panel, the EC attaches a list of 
inspection structures notified by the EC Member  States in accordance with Article 10 (2) of 
Regulation 2081/92 (Exhibit EC-48). As a cursory ex amination of this list will show, the practices 
regarding inspection structures vary considerable from Member State to Member State, and within 
Member States. First of all, inspection structur es are almost evenly divided between public and 
private bodies. Whereas in some Member States, p ublic bodies are more prevalent, other Member 
States seem to prefer private bodies, and some u se both, depending on national traditions and other 
considerations. 
 
105. As regards public bodies, there is also consid erable variety. Inspection bodies can be situated 
at national, regional, or even local level. Freque ntly, they are general public administrations dealing 
with many public policy issues besides inspections  under Regulation 2081/92. In other cases, their 
only task may be such inspections. 
 
106. The same variety of designs can also be observed in respect of private bodies. Frequently, such private bodies may be commercial enterprises;  however, not-for-profit bodies can also be found. 
Private inspection bodies may engage in a larg e number of activities besides inspections under 
Regulation 2081/92; however, in other cases, bodies may be dedicated only to carrying out such activities. 
 
107. As regards commercial enterprises carrying ou t inspections under Regulation 2081/92, the EC 
would like to give the example of two firms whic h are authorised to carry out inspections for a 
                                                     
 
71 US FOS, para. 21; US Response to Panel's Question No. 56, para. 83. 
72 Australia's Response to Panel's Question No. 62. 
73 US Response to Panel's Question No. 58, para. 85; Australia's Responses to Panel's Question No. 58 
and to Panel's Question No. 62. 
74 EC FWS, para. 488 et seq.  WT/DS174/R/Add.2 
 Page B-187 
 
 
 number of geographical indications under Regulati on 2081/92 (Exhibits EC-49 and EC-50). As can be 
seen from the descriptions attached, both firms e ngage, besides inspections  under Regulation 2081/92, 
in a vast number of professional activities in the fiel d of agriculture, food, and sanitation, including 
sanitary inspections, inspections under organic labe lling programmes, or food safety inspections of 
factories, hotels and retail premises. In other word s, an inspection structure may also be a service 
which can be procured commercially. It would appear to the EC that there must be firms which could 
provide comparable services in the United States or Australia, if it was decided to have recourse to 
private firms for the purposes of in spections under Regulation 2081/92. 
 108. Overall, it should have become clear that Article 10 of Regulation 2081/92 in no way imposes 
an "EC model". On the contrary, there are many different ways to satisfy the requirement of 
Regulation 2081/92 that an inspection structure must exist.  (d) The existence of inspection structures is necessary for attaining the objectives of 
Regulation 2081/92 
109. Indeed, it seems to the EC that the real concer n of the complainants, as expressed in particular 
by Australia, is not so much the specific "model"  of inspection structure which Regulation 2081/92 
requires, but rather that no inspection structures should be required at all.
75 
 110. However, the existence of inspection struct ures is inseparably linked with the object and 
purpose of Regulation 2081/92. Removing the require ment of inspection structures would therefore 
undermine the system of protection of geographical  indications established by Regulation 2081/92. 
 111. It should be recalled that in accordance with Ar ticle 4(1), to be eligible to use a protected 
geographical indication, an agricultural product or foodstuff must comply with a product specification. For the information of the Panel, and purely for purposes of illustration, the EC attaches 
to its submission the applications setting out the product specifications for the following products: 
 
• Pruenaux d'Agen (Exhibit EC-51) 
 
• Melons du Haut Poitou (Exhibit EC-52) 
 
• Dorset Blue Cheese (Exhibit EC-53) 
 
• Thüringer Leberwurst (Exhibit EC-54) 
 112. The product specifications are set out in point 4 of each application. As can be seen from the 
applications, which are the basis of the registra tions, for each product, the specifications contain a 
detailed description of the raw materials and of the methods and processes according to which the 
product is obtained. Compliance with these specifica tions is essential since it is these materials, 
methods and processes which will confer on the prod uct in question the specific quality, reputation or 
other characteristics attributable to its geogra phic origin which justify the protection of the 
geographical indication.   113. In accordance with Article 10(1) of Regulati on 2081/92, it is the function of inspection 
structures to ensure that agricultural products and foodstuffs bearing a protected name shall meet the 
requirements laid down in the specifications. Th e inspection structures are based on continuous 
control, and may involve on-site inspections at the place of production. In this way, inspection 
                                                     
 
75 In its Response to the Panel's Question No. 62, Australia for instance speculates about the 
circumstances in which an inspection stru cture might "not be necessary at all". WT/DS174/R/Add.2 
Page B-188  
 
 structures provide a high degree of assurance that  products bearing a protected name do indeed 
comply with the product specifications.  114. Australia has suggested that the same degree of protection might also be achieved through other systems of protection of geographical indi cations, and has in particular referred to the 
application of unfair competition law.
76 Whereas the EC does not contest that unfair competition laws 
may be one way of protecting geographical indications in accordance with Article 22.2 TRIPS 
Agreement, the EC does not believe that such laws  could provide an equiva lent degree of protection 
of geographical indications to th at achieved by Regulation 2081/92. 
 
115. This can be illustrated with the example of a producer of a protected product who wants to 
defend himself against unfair competition from anot her producer marking a similar product using the 
same protected name. Under a system based on unfair competition law, this producer will have to prove in court that his competitor is producing us ing materials, methods or processes which are not 
compatible with the use of the protected name, or is not producin g in the required geographic area. 
This in turn may require knowledge about the ma terials, methods or processes employed by the 
competitor which may be difficult to ascertain.  116. In contrast, Article 10(4) of Regulation 2081/92 provides that where an inspection body 
establishes that a product marketed using a protected name does not comply with the product specifications, it shall take the necessary steps to en sure that the specifications are complied with. 
Accordingly, the producer does not have to investig ate the facts himself, and accept the considerable 
litigation risk in pursuing unfair competitors. Rather, the producer can rely on the controls carried out 
by the inspection body, and be thereby be assured that any competitor using the name will indeed 
comply with the specifications. It is clear that in  this way, the Regulation provides a higher degree of 
protection than the simple application of unfair competition laws. 
 
117. The requirement of inspection structures is equa lly beneficial to consumer. For consumers, it 
will, at least at the time of purchase, be very di fficult to ascertain that product bearing a protected 
name is indeed complying with the required speci fications. The only assurance that a system based on 
the application of unfair competition laws can provide  to the consumer is the possibility that some 
competitor might (or might not) pursue unfair competitors  through the courts. It is clear that this is a 
far lower degree of assurance than th at provided by Regulation 2081/92. This in turn will also affect 
the value of the geographical indication for producers.  118. Accordingly, if a product from third countri es were entitled to benefit from protection under 
Regulation 2081/92 without having to comply with in spection structures, this would effectively allow 
third country a free ride on the EC system. Third countries would be able to use the same designation 
and logo as EC products, and like EC producers would benefit from the possibility of excluding others 
from the use of the geographical indication in accord ance with Article 13 of the Regulation, without 
however at the same time providing the same assu rances as EC geographical indications. This would 
create two classes of protected geographical indica tions, and undermine confidence in the protection 
of geographical indications on the part  of both producers and consumers. 
 
119. The EC would like to remark that the US  itself has variously recognised the need for 
inspection structures. The EC has already pointed out that according to the US authorities' opinion, 
use of certification marks may require some public involvement to insure the proper use of such a 
mark.
77 Another pertinent example in the present context is the US National Organic Program run by 
the US Department of Agriculture. The applicable  US regulations (Exhibit EC-55) provide that a 
person wanting to obtain or maintain organic certif ication must be certified by a "certifying agent", to 
                                                      
76 Australia's Response to Panel's Question No. 62. 
77 EC FWS, para. 496.  WT/DS174/R/Add.2 
 Page B-189 
 
 
 whom he must submit an annual or ganic production plan (Exhibit EC-55,  §205.400). It is also 
provided that the certifying agent must conduct an initial on-site inspection,  and annual inspections 
thereafter (Exhibit EC-55, §205.403). The cond itions for accreditation of certifying agents are 
described in the regulations in terms not dissimilar to those of Article 10 of Regulation 2081/92. In 
particular, it is required that the certifying agent mu st have sufficient experience, adequately trained 
personnel, and must prevent conflicts of interest (Exhibit EC-55 , § 205.501 [a] [1], [4], and [11]). 
 120. The EC assumes that the objective of certif ication and accredited certifying agents under the 
US Organic Production Program is to prevent that  products are marketed as organic which do not 
comply with the requirements of the program, and in this way to protect the expectations of producers 
and consumers. These objectives are comparable to  those underlying the requirement of inspection 
structures in Regulation 2081/92. However, if the l ogic of the complainants were followed, it would 
appear that the conditions of the US National Organic Program are unnecessary, and unduly trade restrictive, because the application of unfair compe tition laws should be sufficient to prevent any such 
abuses. The EC wonders why what is acceptable in the case of the US National Organic Program 
should not be acceptable in the case of Regulation 2081/92. 
 121. In conclusion, the requirement of inspection stru ctures is an integral part of the EC's system 
of protection of geographical indications. With this  system, the EC obtains, in full compliance with 
Article 1.1 TRIPS Agreement, a higher degree of protection of geographical indications than other 
Members may have chosen to do. The requireme nt of inspection structures does not involve 
discrimination between EC and fo reign products, let alone nationals. Accordingly, the US claim 
should be rejected.  
4. Claim 2: Regulation 2081/92 violates the national treatment obligations under the 
TRIPS and the Paris Convention by requiring that applications must be transmitted by 
the country in which the ge ographical area is located 
122. The United States has claimed that Regula tion 2081/92 violates the national treatment 
obligations under the TRIPS and the Paris Conven tion by requiring that applications must be 
transmitted by the country in which the geographical  area is located. Austra lia has made no such 
claim under the TRIPS Agreement, but has rai sed similar claims under Article III:4 GATT. 
 
123. In the view of the EC, these claims are unfoun ded. As the EC has alread y explained in its first 
written submission, the requirement that applications  must be transmitted by the country in which the 
geographical area is located does not constitute  less favourable, but indeed equal treatment.
78 As the 
EC has also set out in its responses to the questions  to the Panel, the cooperation of the country in 
which the geographical area is located is indisp ensable for the protection of the geographical 
indications relating to such an area.79 Moreover, as the EC has also explained, the role of the third 
country government corresponds to the coope ration required from Member States in the 
implementation of Regulation 2081/92.80 
 (a) The cooperation of the country on whose territory the area is located is  indispensable for the 
implementation of Regulation 2081/92 
124. As the EC has already set out in response to  the Panel's Question 33, the cooperation of the 
third country on whose territory the geographical area is located is an indispensable element of the 
registration process. The EC considers it useful to recall here once again the basic need for 
cooperation between the home country of the geographi cal indication and the country of registration. 
                                                     
 
78 EC FWS, para. 87 et seq. 
79 EC Response to Panel's Question No. 33, para. 80 et seq. 
80 EC Response to Panel's Question No. 33, para. 77 et seq. WT/DS174/R/Add.2 
Page B-190  
 
  
125. First, the evaluation of whether a name fulf ils the conditions for protection as a geographical 
indication requires familiarity with a host of geogr aphical, natural, climatic and cultural factors 
specific to the geographical area in question. More over, knowledge of the market conditions in the 
country of origin may also be required, e.g. in order to establish whether the product in question has a 
particular reputation. Like in the case of applica tions from Member States, it is the third country's 
authorities which are best placed to evaluate such factors. In contrast, the European Commission is 
less likely to be familiar with such  factors than in the case of an ar ea in a Member State. Moreover, 
the evaluation may also require knowledge of the lan guage of the third country in question, which the 
authorities of the European Community may not have. 
 
126. Second, the evaluation of the application may require the assessment of legal questions 
arising under the law of the country where the area is located. In particular, Article 12a of the 
Regulation requires the application to be accompanie d by a description of the legal provisions and the 
usage on the basis of which the geographical indicati on is protected or established in the third country. 
This reflects Article 24.9 of the TRIPS Agreement, according to which there shall be no obligation to 
protect geographical indications which are not or cease to be protected in their country of origin, or which have fallen into disuse in that country. Clearly, the Commission cannot unilaterally resolve 
such issues pertaining to the law of a third co untry, which therefore necessarily require the 
implication of the authorities of the third country.  
127. Third, the involvement of the third country government appears called for also out of respect 
for the sovereignty of the third country. The assessment of whether an application meets the 
requirements of the Regulation, in particular con cerning the link with the geographical area, requires 
in-depth knowledge of the conditions related to this  area, as well as the possibility to verify on the 
spot the relevant claims made in the applica tion. It would not be possible for the European 
Commission to carry out such inspections on the territory of the third country without the agreement 
or involvement of the third country.  128. Fourth, the involvement of the third country government also facilitates the cooperation of the 
authorities of the Community and of the third country throughout the registration process. If doubts or questions arise during the registration process, the European Commission may need a contact point in 
the third country to which it can address itself. Moreover, the Regulation foresees that the third 
country which has transmitted the application must be consulted at certain stages of the procedure 
before the Commission can take a decision (cf. Articles 12b [1] [b]; 12b [3]).  129. Fifth, the involvement of the third country authorities should also be beneficial to the 
applicant. Regulation 2081/92 effectively enables th e applicant to discuss, prepare, file, and where 
necessary refine and amend his application directly with the authorities where the geographical area is 
located. Since these authorities are mo re familiar with the area in question, this should help speed up 
the registration process. Moreover, frequently thes e authorities may be geographically closer to the 
applicant and may speak the applicant's language, which may also be a further benefit to the applicant.  
 
(b) The requirement that the application be verified  by the country on whose territory the area is 
located is not unreasonable 
130. On the basis of the considerations above, it appears indispensable that  the country where the 
geographical area is located be involved in the ve rification of applications for the protection of 
geographical indications relating to its territory. Inde pendent of whether the area is located in a third 
country or a Member State, this involvement is  a necessary element of the application process. 
 131. Contrary to the allegations of the complain ants, this has nothing to do with whether the 
United States and Australia are under an obligation to  cooperate with the EC or not. Obviously, the  WT/DS174/R/Add.2 
 Page B-191 
 
 
 EC does not pretend that it could impose obligations  on the United States or Australia by adopting 
internal measures. However, the essential point is not  that the EC wants to impose obligations on third 
countries, but rather that it depends on the coopera tion of those third countries for the protection of 
geographical indications related to their territory.  
132. It should be noted that this cooperation is partially mandated by the TRIPS Agreement itself. 
Article 22.1 TRIPS specifically requires that a good using a geographical i ndication must have a 
given quality, reputation or other characteristics essen tially attributable to its  geographical origin. As 
the EC has already explained, the verification of whether these conditions are fulfilled can be done by 
no one better than by the country of origin of the indication. Accordingly, the need for cooperation is 
not created by the EC, but results directly from the definition of a geographical indication in the 
TRIPS Agreement.  133. Similarly, Article 12a of the Regulation re quires the application to be accompanied by a 
description of the legal provisions and the usage on the basis of which the geographical indication is 
protected or established in the third country. This di rectly reflects the provision of Article 24.9 of the 
TRIPS Agreement, according to which there is no  obligation to protect geographical indications 
which are not protected in their country of origin. Whether this condition is fulfilled clearly depends 
on legal questions under the law of the country of origin of the geographical indication. It is 
unreasonable for the complainants to expect that the EC should resolve such questions of US or 
Australian law. 
 
134. The fact that unlike the EC, the US or Austra lia do not have a specific registration system for 
the protection of geographical indications is no counterargument. The EC appreciates that in the absence of such a dedicated registration system, it may be more difficult to determine whether a geographical protection is protected in its country  of origin. However, the fact remains that 
Article 24.9 TRIPS Agreement requires that it must be protected, and that this is a question of US or 
Australian law. It is simply unreasonable for the co mplainants to argue that because this may be a 
difficult question of Australian or US law, the EC should find the answer by itself. 
 135. As the EC has also shown in its responses to the Panel's Question 37, there are numerous 
examples in international practice where coope ration between governments is necessary for the 
protection of private rights and interests.
81 Contrary to the views of the complainants,82 it is not a 
decisive difference that these examples are drawn from international agreements. First of all, there is 
an agreement between the parties, namely the TRIPS Agreement. As the EC has shown, the 
conditions for applications in Regulation 2081/92 reflect the c onditions for the protection of 
geographical indications in the TRIPS Agreement. 
 
136. Moreover, it is simply a matter of fact that the protection of geographical indications related 
to the territory of the United States or Australia ha s a link to those territories, and that therefore the 
cooperation of those governments is inevitable. In fact, in US – Gasoline , the Appellate Body 
specifically recognised that there may be situa tions were cooperation between WTO Members as 
territorial sovereigns is necessary to facilitate trade:83 
 
There are, as the Panel Report found, established techniques for checking, verification, assessment and enforcemen t of data relating to imported goods, 
techniques which in many contexts are accep ted as adequate to permit international 
trade - trade between territorial sovereigns  - to go on and grow.  The United States 
                                                     
 
81 EC Response to Panel's Question No. 37, para. 89 et seq. 
82 Cf. US Response to Panel's Question No. 37, para . 69, 72; Australia's Response to Panel's Question 
No. 37 (referring to the absence of « express consent »). 
83 Appellate Body Report, US – Gasoline , p. 26. WT/DS174/R/Add.2 
Page B-192  
 
 must have been aware that for these est ablished techniques and procedures to work, 
cooperative arrangements with both foreign refiners and the foreign governments 
concerned would have been necessary and appr opriate.  At the oral hearing, in the 
course of responding to an enquiry as to wh ether the EPA could have adapted, for 
purposes of establishing individual refinery baselines for foreign refiners, procedures 
for verification of information found in US antidumping laws, the United States said 
that "in the absence of refinery cooper ation and the possible absence of foreign 
government cooperation as well", it was unlikel y that the EPA auditors would be able 
to conduct the on-site audit reviews necessar y to establish even the overall quality of 
refineries' 1990 gasoline. From this statement, there arises a strong implication, it 
appears to the Appellate Body, that the United States had not pursued the possibility 
of entering into cooperative arrangements with the governments of Venezuela and 
Brazil or, if it had, not to the point where it encountered governments that were unwilling to cooperate. 
137. In the present case, however, it is the comp lainants who have explicitly declared their 
unwillingness to cooperate in the protection of thei r own geographical indica tions. The EC considers 
that this is not an admissible way of showing that the EC Regulation constitutes less favourable 
treatment for US or Australian nationals. To the extent that Regulation 2081/92 requires cooperation 
from the complainants which is reasonable and n ecessary, it cannot be held to constitute less 
favourable treatment for the nationals of these countries.   
(c) The requirement that the application be tran smitted by the country on whose territory the area 
is located is not unreasonable  
138. Similarly, the requirement that the applica tion must be transmitted by the country on whose 
territory the area is located cannot be regarded  as unreasonable, and does not constitute an extra 
hurdle constituting discrimination of US or Australian nationals. 
 
139. First of all, the requirement that the a pplication be transmitted by the third country 
government simply reflects the important role played  by such governments in the verification process. 
It does not appear that for a government that has ve rified the application conditions, the transmission 
of the application would constitute a significant ex tra burden. Moreover, the transmission by the 
government also ensures that the Commission h as a contact point to which it can address any 
questions it might have regarding the application. 
 140. In fact, in its response to Question 38 of the Panel, the United States has explicitly recognised 
that "it would probably not be difficult to desi gnate an office in the US government to perform a 
purely ministerial act of transmitting registra tion applications and objections to the EC".
84 The EC 
agrees with this statement. Accordingly, the EC understands that the United States claim relates 
essentially to the requirement of cooperation regarding the verification of the conditions for registration, and not to the requirement of transmission by the government.  141. The EC in fact considers that it would be ra ther odd for the United States or Australia to argue 
that they are not able to designate an office to  transmit an application for registration of a 
geographical indication. In order to escape the apparent  difficulty of this argument, the US is arguing 
that even if it were willing and able to transmit such applications, other WTO Members might not be 
similarly willing and able.
85 This argument is unfounded. First of  all, the Panel is dealing with a 
dispute between the US and the EC. The EC does not  understand why it should be of concern to the 
US whether and how other WTO Members cooperate with the EC in the protection of geographical 
                                                      
84 US Response to Panel's Question No. 38, para. 74. 
85 US Response to Panel's Question No. 38, para. 74.  WT/DS174/R/Add.2 
 Page B-193 
 
 
 indications relating to their territory. Moreover, as the US has said itself, the transmission of an 
application as a purely ministerial act is not one of particular difficulty. In fact, any WTO Member with a normally functioning government should be able to carry out such an act.  142. Accordingly, the claim that Regulation 208 1/92 violates the national treatment obligations 
under the TRIPS and the Paris Convention by requiring that applications must be transmitted by the 
country in which the geographical area is located is unfounded.  
5. Claim 3: Non-EC nationals are accorded le ss favorable treatment than EC nationals 
with respect to the requirement to indicate  the country of origin for homonymous 
geographical indications  
 
143. The United States has claimed that the requirement contained in Article 12(2) of 
Regulation 2081/92 to indicate the country of orig in constitutes a violation of national treatment 
provisions under the TRIPS and the Paris Conventio n, whereas Australia has made a similar claim 
only under Article 2.1 TBT Agreement.  
 144. As the EC has set out in its first written submission, this claim is unfounded.
86 First of all, 
contrary to the view that the US still seems to maintain,87 it is clear form the wording of the provision 
that the second subparagraph of Article 12(2) of Regulation 2081/92 does not apply to all geographical indications, or all foreign geographical indications, but only to the names in the specific 
situation of the first subparagraph, i.e. homonymous  geographical indications from the EC and a third 
country.  145. Second, as the EC has also explained, Article 12(2) in fact does not only apply to third country names, but also to Community names. It therefore may require the indication of the country 
of origin for both EC and third country names, depending on which geographical indication has been 
protected earlier. Accordingly, Article 12(2) of Re gulations treats geographical indications from the 
EC and third countries alike.  146. In its oral statement, Australia has contested  the EC's interpretation of Article 12(2) of the 
Regulation, and has relied in particular on a compar ison with Article 6.6 of the Regulation. However, 
the EC believes that such a comparison in fact sh ows that the EC's interpretation is correct. Unlike 
Article 6 (6), the first subparagraph of Article 12(2) of Regulation 2081/ 92 simply refers to "protected 
names" from the EC and a third country, without  specifying which of these names is the one for 
which registration is sought, and which is the one which is already protected. Moreover, Article 12(2), 
second subparagraph, explicitly states that the requireme nt to indicate the country of origin applies to 
"such names". The use of the plural in this provision  clearly indicates that the requirement can relate 
both to the EC name and to the third country name.  147. The EC would also remark that its interpre tation is the only one which is feasible in the 
context of the registration system established by Re gulation 2081/92. In order to be legally binding, 
the requirement to indicate the country of or igin would normally be included in the product 
specifications, which, in accordance with Article 4( 2)(h) of Regulation 2081/92, also include specific 
labelling details.  However, once a geographical i ndication is registered, it not easily possible to 
amend this registration to impose such labelling deta ils.  For this reason, unless registration for two 
homonymous geographical indications is sought simu ltaneously, Article 12(2) will inevitably have to 
apply to the geographical indication which is registered later. 
 
                                                     
 
86 EC FWS, para. 132 et seq. 
87 US Response to Panel's Question No. 48, para. 80. WT/DS174/R/Add.2 
Page B-194  
 
 148. Finally, it should also be recalled that Comm unity law is to be interpreted to the extent 
possible in accordance with the Comm unity's international obligations.
88  
 149. For all these reasons, the claim should be rejected.  6. Claim 4: Regulation 2081/92 accords less favou rable treatment to non-EC nationals by 
subjecting the right to object to the registrat ion of geographical indications to conditions 
of reciprocity and equivalence  
150. The United States and Australia have claimed that only nationals from WTO member 
countries recognised in accordance with Article  12(3) of Regulation 2081/92 as fulfilling the 
conditions of reciprocity and equivalence may object to registrations of geographical indications in 
accordance with Article 12d of the Regulation.  151. As the EC has already set out in its first written submission,
89 and as it has further explained 
in its responses to the questions of the Panel,90 the claim is based on a misunderstanding of the 
Regulation. Article 12d (1) of Regulation 2081/92 gives a right to object to any person that "is from a 
WTO Member or a third country recognised under the procedure provided for in Article 12(3)". It is 
clear from this explicit reference to WTO Members that WTO Members are not subject to the procedure of Article 12(3) applicable to othe r third countries. The same applies also under 
Article 12.b.2 with respect to objections against the registration of geographical indications from 
outside the EC. 
 
152. In fact, since the entry into force of Regulation 692/2003, the publications of all applications for registration of a geographical indication specifically refer to the possibility of residents from WTO countries to object to the application. As an exam ple, the EC can refer to the publication of the 
application for the registration of a geographical  indication for "Lardo di Colonnata", which was 
published in the Official Journal on 6 June 2003. Th e introductory sentence of this publication reads 
as follows (Exhibit EC-56; emphasis added):  
This publication confers the right to object to the application pursuant to Articles 7 
and 12(d) of the abovementioned Regulation. Any objection to this application must 
be submitted via the competent authority in a Member State, in a WTO member 
country  or in a third country recognised in accordance with Article 12(3) within a 
time limit of six months from the date of this publication. The arguments for publication are set out below, in particular under 4.6, and are considered to justify the 
application within the meaning of Regulation (EEC) No 2081/92. 
153. The EC notes that the complainants have not  submitted any detailed arguments on this point 
in response to the EC's submision. Accord ingly, this claim should be dismissed. 
 
7. Claim 5: Regulation 2081/92 accords less favou rable treatment to non-EC nationals by 
requiring their own country to transmit the objection  
154. The United States and Australia have cl aimed that Regulation 2081/92 accords less 
favourable treatment to non-EC nationals by requ iring their own country to transmit the objection. 
This claim is equally unfounded. As the EC has alre ady explained, this require ment applies equally to 
persons resident or established in the EC or in th ird countries. The attempts of the complainants to 
                                                     
 
88 Above Section II.B. 
89 EC FWS, para. 140. 
90 EC Response to Panel's Question No. 8, para. 18, 19.  WT/DS174/R/Add.2 
 Page B-195 
 
 
 show that somehow, this requirement constitutes an "extra hurdle" for third country residents 
amounting to less favourable treatment fail.  (a) The complainants are not required to verify the admissibility of objections, but merely to 
transmit the objection 
155. In its responses to the questions of the Panel,  the United States seems to assume that before 
transmitting a statement of objection, it must verify that the objection is admissible on the basis of the criteria contained in Article  7(4) of the Regulation.
91 As it has already explained in its responses to the 
Panel, the EC would like to confirm that this is not so.92 In fact, the second sentence of Article 12d(2) 
of Regulation 2081/92 states clearly that the condition s of Article 7(4) must be assessed in relation to 
the territory of the Community. This is why, unlike in the case of applications for registration, which 
require an assessment in relation to the territory and law of a third country, the Regulation does not 
require that these conditions be verified by the third country concerned.  156. This having been said, and as the EC alr eady explained in its responses to the Panel's 
questions,
93 some degree of involvement of the third c ountry government remains necessary. First, it 
is necessary to verify whether the person objecting is indeed resident or established in the third 
country, which is only possible for the authorities of th at country. Second, it is not excluded that in the 
further procedure, questions relating to the territory of the third country might arise, in which case it is 
useful for there to be an official contact point in the third country. Third, it should also be beneficial to the person making the objection to be able to deal dir ectly with an authority in the country where it is 
resident or established. Finally, if a statement of  objection is admissible, Article 12d(3) provides that 
the third country which has transmitted the statemen t of objection is to be  consulted before the 
Commission takes its decision.  (b) The transmission of objections is  not an unreasonable requirement 
157. The requirement that statements of objec tion be transmitted by the country where the 
objecting person is resident or established does not  appear to be an unreasonable condition which 
could amount to an "extra hurdle" for third country residents.  158. As the United States has itself acknowledged in  its response to Question 38 of the Panel, "it 
would probably not be difficult to designate an office in the US government to perform a purely 
ministerial act of transmitting registrati on applications and objections to the EC".
94 If this is not 
particularly difficult, then the question arises why the United States would refuse to transmit such 
objections. However, if there is not objective r eason for this refusal to cooperate, then the 
complainants can also not pretend that it is the EC's rules which amount to extra hurdles for their 
residents. Similarly, as the EC has already explai ned in response to the United States claim regarding 
the transmission of applications, the US can not invoke the attitude which other WTO Members might 
or might not take in respect of the requirements of Regulation 2081/92.95 
 159. Accordingly, this claim should be dismissed.  
                                                     
 
91 US Response to Panel's Question No. 38, para. 75. 
92 EC Response to Panel's Question No. 34, para. 86. 
93 EC Response to Panel's Question No. 34, para. 85 et seq. 
94 US Response to Panel's Question No. 38, para. 74. 
95 Above para. 141. WT/DS174/R/Add.2 
Page B-196  
 
 8. Claim 6: Regulation 2081/92 accords less favou rable treatment to non-EC nationals by 
requiring non-EC national to have a "legitimat e interest" to object to the registration of 
geographical indications 
160. The United States (but not Australia) has cl aimed that Article 12d (1) of Regulation 2081/92 
accords less favourable treatment to non-EC nationa ls by requiring non-EC  nationals to have a 
"legitimate interest" to object to the registration of geographical indications. 
 161. In its first written submission,
96 the EC has shown that there is no substantive difference 
between the term "legitimate inte rest" used in Article 12d (1) of Regulation 2081/92 and the term 
"legitimately concerned" in Article 7 (3). Rather , it results from simple consultation of the New 
Shorter Oxford English Dictionary that "legitimat ely concerned" and "legitimately interested" are 
synonymous expressions.  162. In its Oral Statement, the United States has raised the question why, if the standard is the 
same, the Regulation uses different words, and has claimed that the EC has "failed to rebut the 
presumption" that this amounts to less favourable treatment.
97 First of all, the burden of proof for 
showing that there is a difference in standard is on the US, not on the EC. Second, the fact that words 
are different does not yet create a presumption that su ch a difference in wording entails a difference in 
treatment, let alone less favourable treatment. Third, the EC considers that by referring the US to a 
standard dictionary of English, according to wh ich "concerned" and "interested" are synonyms, it 
should have been shown that there is indeed no diffe rence in treatment. As regards finally the question 
why the same language was not chosen, the EC would remark that WTO dispute settlement is 
concerned with the enforcement of rights and oblig ations under the WTO Agreement. Its objective is 
not to criticise the legal drafting of internal measu res of a Member when such drafting question have 
no impact on the WTO rights of any Member.  
163. Accordingly, this claim should also be rejected. 
 
9. Claim 7: Regulation 2081/92 accords l ess favourable treatment because a non-EC 
rightholder has no "representative" in the regulatory committee to "speak for him" 
 
164. Australia has argued that Regulation 2081/92 accords less favourable treatment because a 
non-EC rightholder has no "representative" in the regulatory committee to "speak for him". 
 165. Already in its first written submission, the EC has set out that this claim is patently 
unfounded.
98 The EC notes that Australia has not so far responded to the EC's arguments. 
 
166. However, at this stage the EC would like to a dd that this claim is in remarkable contradiction 
with Australia's claims regarding the requirements of transmission of applications and objections. As 
the EC has explained, these requirements also pe rmit the Commission to take into account the views 
of the third country government concerned. More over, certain provisions of the Regulation require 
that the third country government which has transmitt ed an application or objection must be consulted 
before the Commission decides on such an application or objection.99 However, Australia has argued 
that it does not wish to cooperate at all in the transmission of objections and applications. The EC 
finds it highly contradictory that Australia should on the one hand refuse any cooperation in the protection of its geographical indications in the EC, and then on the other hand complain that it is not 
                                                     
 
96 EC FWS, para. 78, 150-152. 
97 US FOS, para. 34. 
98 EC FWS, para. 153–155. 
99 Above para. 128, 156.  WT/DS174/R/Add.2 
 Page B-197 
 
 
 sufficiently heard and does not have a "representa tive" on a Committee composed of representatives 
of the Member States.  167. Accordingly, not only should this clai m be dismissed, but it also casts doubt on the 
consistency of Australia's argu ments regarding its role in the protection of the geographical 
indications related to its territory. 
 
10. Claim 8: A right of objection was available to persons resident or established in an EC 
Member State that was not available to oth er WTO Member nationals in respect of the 
registration of more than 120 geographical indications under the normal registration 
process 
168. Australia has claimed that there is a violation of national treatment in the fact that a right of 
objection was
 available to persons resident or estab lished in an EC Member State that was  not 
available to other WTO Member nationals in respect of the registration of mo re than 120 geographical 
indications under the nor mal registration process.100 As the EC has set out already in its first written 
submission, this historic claim of Australia must fail. First, it relates to a measure which was no 
longer in force at the time of establishment of the Pa nel, and which is therefore not within the terms of 
reference of the Panel. Second, the individual registra tions, even if considered to be within the Panel's 
terms of reference, are not in viola tion of national treatment obligations.101 
 169. The EC notes that the Panel has posed a numb er of specific questions regarding Australia's 
claims relating to past versions of  Regulation 2081/92 (Questions 88 and 90 to 93). In the view of the 
EC, Australia's responses demonstrate that its claims are unfounded.  (a) The legal basis of Australia's claim is unclear, and keeps shifting 
170. As a preliminary point, the EC would like to reca ll that so far, Australia had raised its claims 
concerning the absence of a right of objection unde r previous versions of  Regulation 2081/92 under 
the national treatment provisions of the TRIPS Agreement and the Paris Convention.
102 
 171. To its astonishment, the EC notes that in its  response to the Panel's question 92, Australia 
alleges that the absence of a right of objecti on under previous versions of Regulation 2081/92 
constitutes a violation not only of national treatment  obligations under the TRIPS Agreement and the 
Paris Convention, but also of Article 16.1 TR IPS, Article 22.2 TRIPS in conjunction with 
Article 10bis of the Paris Convention, Articles 41. 1, 41.2, 41.3, and 42 TRIPS, and Article III:4 
GATT.  172. The EC considers that in its responses, Austra lia is raising new claims, which it did not raise 
in its first written submission. The EC notes also that Australia does not offer any arguments in 
support of its claims. The EC considers therefore that the Panel should not consider these claims.  173. In addition, the EC has already expl ained in its first written submission that inter partes 
procedures such as objection procedures are covered by Article 62.4 TRIPS Agreement, which makes 
it optional whether to provide for such procedures. Accordingly, there is no obligation on Members to 
provide for objection procedures.
103 Already for this reason, the claims under Articles 16.1, 22.2, 41.1, 
41.2, 41.3 and 42 TRIPS are unfounded. Moreover, as regards the reference to Article III:4 GATT, 
                                                      
100 Australia's FWS, para. 184 et seq. 
101 EC FWS, para. 156 et seq. 
102 Australia's FWS, para. 184, para. 190. 
103 EC FWS, para. 327 et seq., para. 357 et seq. WT/DS174/R/Add.2 
Page B-198  
 
 the EC does not see how a provision concerning a right of objection to the registration of a 
geographical indication is relate d to the treatment of products
. 
 (b) Australia's claims regarding old versions of  Regulation 2081/92 are outside the terms of 
reference of the Panel 
174. Australia's claim relates to Regulation 2081/92 as in force until 8 April 2003, when 
Regulation 692/2003 entered into force. In its first written submission, the EC has already pointed out 
that the terms of reference of the Panel include onl y measures which were in existence at the time that 
the Panel was established.
104 
 
175. In its oral statement, Australia has argued th at that the reference in its Panel request to 
Regulation 2081/92 "and any amendments thereto"  should not be read as Regulation 2081/92 "as 
amended by".105 It appears from these statements that Australia maintains that any version of 
Regulation 2081/92 which applied at any point in time, even if no longe r in force at the time the Panel 
was established, is nonetheless within the terms of re ference of the Panel. The EC does not understand 
what could possibly be the justification for such  an approach, which conde mns Panels to examine 
historical facts which may have no relevance for cu rrent legal dispute. In any case, the EC submits 
that Australia's interpretation of its Panel request is so unusual that it would have had to make its 
intention to also attack historical versions of  the Regulation much clearer in its Panel request. 
 176. The EC notes that this also seems to ha ve been the understanding of the Panel. In its 
preliminary ruling issued on 5 April 2004, the Panel argued that "[t]here is no doubt as to which 
specific measure is in issue, as the European Communities has itself demonstrated by annexing a 
consolidated text
 of the regulation to the request for a preliminary ruling".106 By referring to 
"consolidated text", the Panel made it clear that like the EC, it understood Australia's request to refer 
only to Regulation 2081/92 at the time the Panel was established, and not to older versions no longer 
in force. 
 177. The EC notes that Australia does not seem to  be entirely sure of its own interpretation. 
Already in its oral statement, Australia has indicat ed that "it is not seeking to analyse historical 
versions of Regulation 2081/92 in a vacuum".
107 In its response to Question 88 of the Panel, Australia 
indicates that it "seeks rulings and recommendations fro m the Panel in respect of earlier versions of 
Regulation 2081/92 to the degree necessary to estab lish the extent to which the EC's actions in 
registering those EC-defined GIs were in consistent with the EC's obligations".108 The EC considers 
that these ambiguous submissions of Australia create  a total confusion as to whether in Australia's 
view the measures at issue are also the historical versions of Regulation 2081/92 or not.  
178. Overall, the Panel should conclude that the hist orical versions were not identified in the Panel 
request, and already for this reason are not within the Panel's terms of reference. 
 (c) Australia's claims are moot and therefore not within the terms of reference of the Panel 
179. In any event, even if the historical versions ha d been clearly referred to in the Panel request, it 
is not up to Australia to enlarge the Panel's terms of  reference in a way that runs counter to the object 
and purpose of the DSU.  
 
                                                     
 
104 EC FWS, para. 13 et seq., para. 157. 
105 Australia FOS, para. 13. 
106 Preliminary Ruling of 5 April 2004, para. 24. 
107 Australia FOS, para. 14. 
108 Australia's Response to Panel's Question No. 88.  WT/DS174/R/Add.2 
 Page B-199 
 
 
 180. As the EC has already recalled in its fi rst written submission, the object and purpose of 
dispute settlement in accordance with Article 3.3 DSU is the settlement of concrete disputes between 
the parties, and to induce compliance with WTO obligations.109 It does not serve as a mechanism for 
investigating historical violations. This is why according to constant case law under the DSU, Panels 
are competent to consider measures in force at the time of their establishment, and not measures 
which have already ceased to exist.110 
 181. This limitation to actual and current disputes is not unique to the DSU, but is in fact a general 
principle of international dispute settle ment. For instance, in the case concerning Border and 
Transborder Armed Actions (Nicaragua v. Honduras) , the International Court of Justice stated that 
"the critical date for determining the admissibility of  an application is the date on which it is filed".
111 
Similarly, in the Nuclear Tests  Case, the International Court of Justice stated that "[t]he Court, as a 
court of law, is called upon to resolve existing  disputes between States."112  
 182. In the case concerning the Northern Cameroons , the International Court of Justice specifically 
refused to rule on a question regard ing the interpretation of a trust eeship agreement which had expired 
after the application was filed, but before the C ourt rendered its judgment. The Court explained its 
decision as follows:
113 
 
Moreover the Court observes that if in a declaratory judgment it expounds a rule of customary law or interprets a treaty whic h remains in force, its judgment has a 
continuing applicability. But in this case th ere is a dispute about the interpretation and 
application of a treaty – the Trusteeship Agreement – which has now been terminated, is no longer in force, and there can be no opportunity for a future act of interpretation or application of that treat y in accordance with any judgment the Court 
might render. 
183. Interestingly, the International Court of Jus tice in its judgment explicitly noted that this did 
not mean that the trusteeship agreement could no lo nger have any legal effects, for instance as regards 
property rights which might have been obtained  in accordance with the trusteeship agreement:
114 
 
Looking at the situation brought about by the termination of the Trusteeship 
Agreement from the point of view of a Memb er of the United Nations, other than the 
Administering Authority itself, it is clear that any rights which may have been 
granted by the Articles of the Trusteeship Agreement to other Members of the United Nations or their nationals came to an end. This is not to say that, for example, property rights which mi ght have been obtained in acco rdance with certain Articles of 
the Trusteeship Agreement and which might ha ve vested before the termination of the 
Agreement, would have been divested by the termination. 
184. In the present case, the Australian claims did not become moot during the Panel proceedings; 
rather, they were already moot when Australia made its Panel request. The fact that Regulation 2081/92 before its amendment through Regulation 692/2003 did not provide for a right of 
                                                     
 
109 EC FWS, para. 19. 
110 EC FWS, para. 16. 
111 Border and Transborder Armed Actions (Nicaragua v. Honduras), Jurisdiction and Admissibility, 
Judgment of 20 December 1988, I.C.J. Reports 1988, p. 69. 
112 Nuclear Tests (Australia vs. France) , Judgment of 20 September 1974, I.C.J. Reports 1974, 
para. 253 (emphasis added). 
113 Northern Cameroons (Cameroon v. United Kingdom) , Preliminary Objections, Judgment of 
2 December 1963, I.C.J. Reports 1963, p. 37. 
114 Northern Cameroons (Cameroon v. United Kingdom) , Preliminary Objections, Judgment of 
2 December 1963, I.C.J. Reports 1963, p. 34. WT/DS174/R/Add.2 
Page B-200  
 
 objection is a fact entirely in the past. As a situa tion in the past, it is not possible for any dispute 
settlement procedures to undo this historical fact.  185. For this reason also, the Australian claim is outside the Panel's terms of reference. 
 
(d) Australia has not shown that the individual regi strations are in violation of national treatment 
obligations 
186. Presumably aware of these difficulties, Australia  has argued that the measure at issue also 
includes the registrations of the "600 EC-defined GIs" which were carried out until the Panel was 
established. 
 
187. The EC has already indicated that it does not believe that the individual registrations were 
identified in sufficient detail in Australia's Panel request.
115 However, even if the Panel, on the basis 
of its Preliminary Ruling issued on 5 April 2004, shoul d consider that the individual registrations are 
within the Panel's terms of reference, Australia st ill fails to make any case that these individual 
registrations are in violation of the national treat ment obligations under the TRIPS Agreement or the 
Paris Convention.  188. This follows clearly from Australia's response to Question 93 of the Panel, in which Australia 
concedes that it is "not able to say which indivi dual registrations may have  constituted a denial of 
rights to trademark holders". However,  if this is so, then the EC seri ously wonders what is the basis of 
Australia's claim that th ere is a violation not only of nationa l treatment obligations under the TRIPS 
Agreement and the Paris Convention, but also of Article 16.1 TRIPS, Article 22.2 TRIPS in 
conjunction with Article 10bis of the Paris Conventi on, Articles 41.1, 41.2, 41.3, and 42 TRIPS, and 
Article III:4 GATT.   
189. In the same response, Australia  continues with the statement th at "nor can the EC legitimately 
say that its actions have not resulted in a denial of  rights". In this respect, the EC would like to recall 
that the burden of proving its claim is on Australia, not on the EC. In the view of the EC, Australia 
entirely fails in discharging this burden of proof.  190. Finally, the EC would recall that Australia 's claim is based on a violation of national 
treatment obligations. In this respect, as the EC has already said in its first written submission, even if 
an individual registration might conceivable violate trademark rights, it is not clear how an individual registration could violate national treatment principles.
116 Australia forgets that the individual 
registrations and Regulation 2081/92 are separate meas ures. Therefore, even if an older version of 
Regulation 2081/92 had contained a violation of national treatment principles by not providing for a 
right of objection, this does not mean that individual registrations based on such a version also violate 
national treatment principles.  (e) There is no legal basis for the recommendations suggested by Australia 
191. Finally, the EC would also like to comment on the recommendations suggested by Australia. 
 
192. In its response to Question 92 of the Panel, Australia suggests that the EC might implement 
any recommendation e.g. by providi ng persons adversely affected with access to a "civil judicial 
proceeding", through the provision of "just compen sation" for trademark owners whose rights have 
been infringed, or through the revocation of "a few registrations of EC-defined GIs". 
 
                                                     
 
115 EC Request for a Preliminary Ruling, para. 32. 
116 EC FWS, para. 161.  WT/DS174/R/Add.2 
 Page B-201 
 
 
 193. The EC sees no legal basis for these suggesti ons. According to Article 19.1 of the DSU, a 
Panel shall recommend to the Member concerned to bring its measure into conformity with its WTO 
obligations. As the EC has set out in its first wr itten submission, this implies that WTO remedies are 
prospective, not retrospective.117 
 
194. Accordingly, if a Panel had found that Regulation 2081/92 violated national treatment 
obligations by not providing for objection procedures, the way to implement such a finding for the EC would have been to amend Regula tion 2081/92 accordingly. The EC would not have been obliged to 
reopen the registration procedures for already regist ered geographical indications, nor would it have 
been obliged to provide compensation or to cancel such trademarks. Accordingly, the EC cannot be 
under an obligation to do so now. 
 195. In its Response to Question 92, Australia has also indicated that it cannot cite any precedents 
where a Panel has made comparable recommendation because "Australia is not aware of a similar factual situation in another dispute". The EC cons iders that given over 300 disputes which have been 
dealt with by the dispute settlement system to da te, this by itself is already an indication that 
Australia's claim is not in line with WTO law and practice.  196. In conclusion, this claim of  Australia should be rejected. 
 
11. Claim 9: A right of objection was available to persons resident or established in an EC 
Member State that was not available to oth er WTO Member nationals in respect of the 
registration of more than 480 EC-defined G Is under the simplified registration process 
197. Finally, Australia also claims that a right of objection was available to persons resident or 
established in an EC Member State that was not av ailable to other WTO Member nationals in respect 
of the registration of more than 480 EC-defin ed GIs under the simplified registration procedure.
118 In 
this respect, Australia refers to the simplified re gistration procedure provided for in Article 17 of 
Regulation 2082/92 until its amendm ent through Regulation 692/2003. 
 198. With this claim, Australia is once again tryi ng to obtain a retrospective remedy for a measure 
which is not within the terms of reference of the Pa nel, and which it did no challenge while it was still 
in force. All arguments that have been set out in  respect of Claim 8 therefore apply here as well. 
 
199. Moreover, Australia's claim is factually wrong.  As the EC has already set out in its first 
written submission, there was no right of objection for EC residents under the simplified procedure.
119 
The fact that there was no right of objection for th ird-country residents therefore did not constitute a 
violation of national treatment obligations. 
 
200. Finally, Australia's claim also falls outside the temporal scope of application of the TRIPS 
Agreement. In accordance with Article 70.1 of th e TRIPS Agreement, the Agreement does not give 
rise to obligations in respect of acts (or omissions) which occurred before the date of application of 
the Agreement for the Member in question. In acco rdance with Article 65.1 of the TRIPS Agreement, 
the date of application for the EC was 1 January 1996. 
 
201. In accordance with Article 17.1 of Regulati on 2081/92 as originally adopted, Member States 
had to inform the Commission of the names for which protection was sought under this provision within six months of the entry into force of the Regulation. Since the Regulation entered, in 
accordance with its Article 18, into force on 24 July 1993, the Member States had to request 
                                                     
 
117 EC FWS, para. 162 et seq. 
118 Australia's FWS, para. 190 et seq. 
119 EC FWS, para. 91 et seq., para. 172. WT/DS174/R/Add.2 
Page B-202  
 
 protection at the latest by 24 January 1994. If th e Community had been obliged to provide objection 
procedures to the registration of these geographical indi cations, it is at this da te that it should have 
opened them. However, at this date , the TRIPS Agreement was not yet in force, let alone applicable to 
the EC.  
202. In its response to Question 90 of the Panel, Australia has argued that Article 70.1 TRIPS is 
inapplicable since the first registration under Re gulation 2081/92 did not occur until the adoption of 
Regulation 1107/96 of 12 June 1996. This argument is  erroneous. By the time the registration occurs, 
objection procedures are no longer meaningful. A ccordingly, objection procedures have to be 
provided before. The natural date for opening these pro cedures, had there been an  obligation to do so, 
would have been the expiration of the time limit provided for in Article 17.1 of Regulation 2081/92, 
i.e. at the latest on 24 January 1994. However, at this time, the TRIPS Agreement did not yet apply.  203. For all these reasons, Australia's claims must be rejected.  
B. P
ROHIBITED REQUIREMENT OF DOMICILE OR ESTABLISHMENT (ARTICLE  2.1 TRIPS  IN 
CONJUNCTION WITH ARTICLE  2.2 PARIS CONVENTION ) 
204. The complainants have also raised certain claims under Article 2.1 TR IPS in conjunction with 
Article 2.2 Paris Convention. As the EC has set out  in its first written submission, the complainant's 
claims under Article 2.2 Paris Convention are not within the Panel's terms of reference.120 Moreover, 
the EC has shown in its first written s ubmission that these claims are unfounded. 
 
1. Claim 10: Regulation 2081/92 requires non-EC nationals to become established in the 
EC as a condition for registering geographical indications  
205. The United States (but not Australia) has argued that Regulation 2081/92 requires non-EC 
nationals to become established in the EC as a condition for registering geographical indications.121 
As the EC has set out in its first written submissi on, this claim is unfounded for the following reasons: 
 
• Geographical indications relating to an area located in a WTO country can be registered 
under Regulation 2081/92; 
 
• The right to register a geographical indication does not depend on domicile or 
establishment; 
 
• Article 2.2 Paris Convention does not excl ude measures which ensure that a product 
originates in the geographical to which a prot ected geographical indication area is related. 
 206. So far, the United States has not responded in substance to the EC's arguments. Accordingly, the EC can refer to what it has already said in its first written submission.
122 
 2. Claim 11: Regulation 2081/92 requires non-EC nationals to become established in the 
EC as a condition for objecting  
207. The United States has argued that the fact that Regulation 2081/92 requires the home country 
of third country nationals to transmit the statemen t of objection constitutes a requirement of residence 
or domicile contrary to Article 2.2 of the Paris Convention.
123 
                                                      
120 EC FWS, para. 36 et seq. 
121 US FWS, para. 84. 
122 EC FWS, para. 176 et seq.  WT/DS174/R/Add.2 
 Page B-203 
 
 
  
208. As the EC has explained in its first written submission, this claim is manifestly unfounded.124 
Article 12d(1) of Regulation 2081/92 explicitly allows  persons from other WTO countries who are 
resident or established in third countries to object to registrations. Accordingly, this claim must be 
rejected. 
 
C. NATIONAL TREATMENT UNDER ARTICLE  III:4  GATT 
209. The complainants have raised a number of  claims alleging that Regulation 2081/92 is 
incompatible with the national treatment obligati on contained in Article III:4 GATT. As the EC has 
already shown in its first written submission,125 Regulation 2081/92 is fully compatible with 
Article III:4 GATT. In the alternative, the EC submits  that the measure is justified by Article XX(d) 
GATT.  
1. The regulation 2081/92 is not incompatible with Article III:4 GATT 
210. So far, the complainants have not specifi cally responded to the EC's arguments concerning 
the claims under Article III:4 GATT. Accordingly, the EC can generally refer to what it has said in its 
first written submission. In addition, it can also  refer to its remarks in the present submission 
regarding the parallel claims made  under the national treatment provisions of the TRIPS Agreement. 
 (a) Claim 12: Regulation 2081/92 accords less favourable  treatment as regards the conditions for 
registration of foreign geographical indications 
211. The complainants have claimed that Regul ation 2081/92 accords less favourable treatment as 
regards the conditions for registration of foreign geographical indications by imposing conditions of 
reciprocity and equivalence.
126 
 212. As the EC has already stated in its first written submission,
127 and confirmed in the present 
submission,128 Regulation 2081/92 does not impose a conditio n of reciprocity and equivalence for the 
registration of geographical indications from othe r WTO Members. Accordingly, it does not apply 
less favourable treatment to products from other WTO Members.  213. The claim that Regulation 2081/92 accords less favourable treatments as regards the conditions for registration of foreign geographical indications by imposing conditions of reciprocity 
and equivalence must therefore be dismissed. 
 (b) Claim 12bis: Regulation 2081/92 violates the national treatment obligations under the GATT 
by requiring the existence of inspection struct ures with respect to the specific product for 
which protection is requested 
214. As the EC has noted above, the US has now clarified that it considers the requirement of 
inspection structures with respect to specific pr oducts for which protection is sought constitutes a 
                                                                                                                                                                    
 
123 US FWS, para. 91. Australia has raised Article 2.2 Paris Convention in the context of its claims with 
respect to Regulation 2081/92 as applicable before it was amended by Regulation 692/2003 (Australia's FWS, 
para. 189, 194), which are in any event outside the Panel's terms of reference. 
124 EC FWS, paras. 188–189. 
125 EC FWS, para. 190 et seq. 
126 US FWS, para. 104; Australia's FWS, para. 165 et seq. 
127 EC FWS, para. 62 et seq., 202 et seq. 
128 Above para. 51 et seq. WT/DS174/R/Add.2 
Page B-204  
 
 violation of national treatment obligations. The EC assumes that the United States is raising this claim 
also under the national treatment provisions of the GATT.  215. The EC considers that as under the national treat ment obligations of the TRIPS, this claim is 
also unfounded under Article III:4 GATT. In this resp ect, the EC can refer to its arguments regarding 
Claim 1bis under the TRIPS Agreement.
129 
 216. Accordingly, this claim should also be rejected.  (c) Claim 13: Regulation 2081/92 accords less favourable treatment as regards the requirement 
that the application must be transmitted by the government of the third country 
217. The complainants have argued that Regula tion 2081/92 accords less favourable treatment as 
regards the requirement that the application must  be transmitted by the government of the third 
country.
130 
 
218. As the EC has already set out above with r espect to Claim 2, the role of third country 
governments provided for in Article 12a of the Regula tion corresponds exactly to that of EC Member 
States where geographical indications relating to an area located in the EC are concerned. Accordingly, the condition that an application re lating to an area located in a third country is 
transmitted by the government in question does not am ount to "less favourable treatment", but in fact 
ensures equal treatment. Moreover, the EC has al so explained that the cooperation of the home 
country of a geographical indication is indispensable  for the protection of a geographical indication in 
the EC.
131 
 219. Accordingly, this claim is equally unfounded.  
(d) Claim 14: Regulation 2081/92 accords less favourable  treatment as regards the requirement to 
indicate the country of origin 
220. The United States (but not Australia) has argued that Regulation 2081/92 accords less 
favourable treatments as regards the require ment to indicate the country of origin.
132 
 221. As the EC has already set out in its first written submission, this claim is unfounded for the 
following reasons:
133  
 
• Article 12(2) of Regulation 2081/92 does not apply to all geographical indications, but 
only to homonyms;  
 
• The requirement to indicate the country of origin for homonymous geographical 
indications from the EC and third countries does not constitute less favourable treatment; 
 
• Article IX:1 of the GATT is a lex specialis to Article III:4 GATT; national treatment 
obligations therefore do not apply to requir ements to mark the country of origin. 
 
                                                      
129 Above, para. 91. 
130 US FWS, para. 104 (d); Australia's FWS, para. 172 et seq. 
131 Above, para. 122. 
132 US FWS, para. 106. Australia has made a similar claim under Article 2.1 of the TBT Agreement (cf. 
Australia's FWS, para. 234). 
133 EC FWS, para. 209.  WT/DS174/R/Add.2 
 Page B-205 
 
 
 222. To the extent that the complainants have  responded to the first and second of the EC's 
arguments, the EC can refer to what it is  replied above in respect of claim 3.134 
 223. In response to the EC's third argument relati ng to Article IX:1 GATT, the United States in its 
oral statement has argued that Article 12(2) of Regu lation 2081/92 "is not a general country of origin 
requirement as described in Article IX of the GATT 1994".
135 The EC does not consider this objection 
to be justified. Article IX GATT is entitled "Marks of Origin". Article IX:1 GATT establishes a most-
favoured nation rule "with regard to marking re quirements". The article contains no distinction 
between "general requirements", which would appl y to all products, and "specific requirements", 
which would apply only to specific products or groups of products. 
 
224. Accordingly, Article 12(2) of Regulation 2 081/92 is an origin marking requirement falling 
under Article IX:1 GATT. For this reason, nationa l treatment obligations do not apply to this 
requirement.  
225. For all the reasons set out, the EC submits that the United States claim must be rejected. 
 (e) Claim 15: Regulation 2081/92 accords less favourable  treatment due to an overall bias in the 
decision-making process 
226. Australia has argued that Regulation 2081/92 acco rds less favourable treatment in that there is 
an overall bias in the decision-making process.
136 As the EC has already set out in its first submission, 
this claim is confused and insufficiently reasoned.137 So far, Australia has not further substantiated its 
claim.138 Accordingly, the EC sees no need to discuss this claim any further. 
 227. For these reasons, the Australian claim must be rejected.  2. The measure would be justified under Article XX(d) GATT 
228. The EC considers that if the Panel were to find that Regulation 2081/92 does involve less 
favourable treatment of foreign goods by requiri ng the existence of inspection structures, the 
transmission and verification of applications by the third country government, and the indication of 
the country of origin for homonymous geographical indications, this less favourable treatment would 
be justified by Article XX(d) GATT. 
 
229. According to Article XX(d) GATT, a measure otherwise incompatible with the GATT will be 
justified under the following conditions:  
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between 
countries where the same conditions prev ail, or a disguised restriction on 
international trade, nothing in this Agre ement shall be construed to prevent the 
adoption or enforcement by any contracting party of measures: 
                                                     
 
134 Above, para. 143. 
135 US FOS, para. 35. 
136 Australia's FWS, para. 177. 
137 EC FWS, para. 219 et seq. 
138 In para. 24 of its FOS, Australia has argued that the EC's description of the decision-making process 
is "not accurate". The EC does not understand in what resp ect its description is "not accurate". The EC also does 
not understand what is the relevance of the discussion of the Community's comitology procedures for the 
present case. WT/DS174/R/Add.2 
Page B-206  
 
 [...] 
 ( d) necessary to secure compliance with laws or regulations which are 
not inconsistent with the provisions of th is Agreement, including those relating to 
customs enforcement, the enforcement of  monopolies operated under paragraph 4 of 
Article II and Article XVII, the protection of  patents, trade marks and copyrights, and 
the prevention of deceptive practices; 
[...] 
230. In Korea – Various Measures on Beef , the Appellate Body held that paragraph (d) of 
Article XX contained the following two requirements.
139 
 
For a measure, otherwise inconsistent with  GATT 1994, to be justified provisionally 
under paragraph (d) of Article XX, two elemen ts must be shown.  First, the measure 
must be one designed to "secure compliance"  with laws or regulations that are not 
themselves inconsistent with some provision of the GATT 1994.  Second, the measure must be "necessary" to secure su ch compliance.  A Member who invokes 
Article XX(d) as a justification has the burden of demonstrating that these two 
requirements are met.
  
231. The Appellate Body continued to define th e term "necessary" in Article XX(d) as follows:140 
 
We believe that, as used in the context of Article XX(d), the reach of the word 
"necessary" is not limited to that which is  "indispensable" or "of absolute necessity" 
or "inevitable".  Measures which are indispensable or of absolute necessity or 
inevitable to secure compliance certainly fu lfil the requirements of Article XX(d).  
But other measures, too, may fall within the ambit of this exception.  As used in 
Article XX(d), the term "necessary" refers, in our view, to a range of degrees of necessity.  At one end of this continuum lies "necessary" understood as 
"indispensable";  at the other end, is "necessary" taken to mean as "making a 
contribution to."  We consider that a "necessary" measure is, in this continuum, 
located significantly closer to the pole of "i ndispensable" than to the opposite pole of 
simply "making a contribution to". 
(a) The requirement of inspection structures is ju stified by Article XX(d) GATT (Claim 12bis) 
232. The EC has already explained above that the requirement of inspection structures is necessary 
for the attainment of the objectives of Regulation 2081/92.
141 In particular, the EC has explained that 
the requirement of inspection structures provid es a high degree of assurance for producers and 
consumers that a product bearing a protected name  does in fact correspond to the required product 
specifications.  
233. Moreover, the EC has shown that a simila r degree of protection could not be achieved 
through other means. In particular, the EC has explai ned that the application of unfair competition law 
would not result in the same degree of protection of geographical indications.
142 Moreover, the EC has 
also explained that the requirement of inspection structures does not go beyond what is necessary for 
                                                      
139 Appellate Body Report, Korea – Various Measures on Beef , para. 157. 
140 Appellate Body Report, Korea – Various Measures on Beef , para. 161. 
141 Above, para. 109 et seq. 
142 Above, para. 114 et seq.  WT/DS174/R/Add.2 
 Page B-207 
 
 
 the attainment of the objectives of the Regulation, an d in particular leaves considerable flexibility in 
terms of the design of the concrete structures.143 
 234. Accordingly, the requirement of inspection structures is necessary to  secure compliance with 
Regulation 2081/92, which is a measure not incompa tible with the provisions of the GATT. In this 
context, the EC notes that the protection of intellectual property rights and the prevention of deceptive 
practices is an objective explicitly re ferred to in Article XX(d) GATT. 
 235. Moreover, the requirement of inspection stru ctures is not applied in a manner which would 
constitute a means of arbitrary or unjustifiabl e discrimination between countries where the same 
conditions prevail. Similarly, it is not a di sguised restriction on international trade. 
 236. Accordingly, the requirement of inspecti on structures is in any event justified under 
Article XX(d) GATT.  
(b) The requirement that the application must be  verified and transmitted by the government 
where the area is located is justified by Article XX(d) GATT (Claim 13) 
237. As the EC has already set out above, the cooperation of the government of the country where 
the geographical indication is located is indispensable for the implementation of 
Regulation 2081/92.
144 The EC has explained, in particular, that the registration of geographical 
indications requires the evaluation of factual and legal questions which only the home country of the 
geographical indication is in a position to carry out . Moreover, the EC has also explained that the 
requirements for cooperation do not go beyond what is necessary for the implementation of Regulation 2081/92.
145 As regards specifically the requirement that the application be transmitted by 
the government of the home country, the EC has e xplained that this follows naturally from the 
required intergovernmental coopera tion, and is not particularly burdensome for any WTO Member.146 
 
238. Accordingly, the requirement of verificati on and transmission of applications by the 
government of the home country of the geographical  indication is necessary to secure compliance 
with Regulation 2081/92, which is a measure not incompatible with the provisions of the GATT. 
Moreover, the requirement of verification and transm ission of applications by the government of the 
home country of the geographical indication is not  applied in a manner wh ich would constitute a 
means of arbitrary or unjustifiable discrimina tion between countries where the same conditions 
prevail. Similarly, it is not a disguised restriction on international trade.  239. Accordingly, the requirement of verificati on and transmission of applications by the 
government of the home country of the geographi cal indication is in any event justified under 
Article XX(d) GATT. 
 (c) The requirement to indicate the country of orig in for homonymous geogra phical indications is 
justified by Article XX(d) GATT (Claim 14) 
240. Finally, the EC has already indicated that the requirement to indicate the country of origin for 
homonymous geographical indications serves the purpo se of achieving a clear distinction in practice 
between homonymous geographical indications.
147 In this way, it prevents that consumers are 
confused by homonymous geographical indications. As the EC has also explained, Article 12(2) 
                                                      
143 Above, para. 101 et seq. 
144 Above para. 124 et seq. 
145 Above para. 130 et seq 
146 Above para. 138 et seq 
147 EC FWS, para. 479. WT/DS174/R/Add.2 
Page B-208  
 
 achieves this in the least intrusive way by requiring that the indication which is registered later, and 
which is therefore typically the one less known to th e consumer, be the one for which it is required to 
indicate the country of origin.
148 
 241. Accordingly, the requirement to indicate th e country of origin for homonymous geographical 
indications is necessary to secure compliance w ith Regulation 2081/92, which is a measure not 
incompatible with the provisions of the GATT. Mo reover, the requirement to indicate the country of 
origin for homonymous geographical  indications is not applied in a manner which would constitute a 
means of arbitrary or unjustifiable discrimina tion between countries where the same conditions 
prevail. Similarly, it is not a disguised restriction on international trade. 
 
242. Accordingly, the requirement to indicate th e country of origin for homonymous geographical 
indications is in any event justified under Article XX(d) GATT.  
IV. REGULATION 2081/92 IS COMPATIBLE WI TH THE OBLIGATION TO PROVIDE 
MOST-FAVOURED-NATION TREATMENT 
243. The United States (but not Australia) has clai med that Regulation 2081/92 is incompatible 
with the obligation to provide most-favoured-natio n treatment under Article 4 TRIPS and Article I:1 
GATT. As it has done in its first written submissi on, the EC will discuss th e United States claims 
under both provisions separately.  
A. A
RTICLE  4 TRIPS 
244. The United States has made two claims under the most-favoured-nation provision of Article 4 
TRIPS:  
• As among non-EC WTO Members, nationals fro m WTO Members that satisfy the EC's 
conditions of reciprocity and equivalency are accorded more favourable treatment than 
nationals from those WTO Members that do not; 
 
• under Regulation 2081/92, an EC Member Stat e grants more favourable treatment to 
nationals from other EC Member States than  it accords to nationals from non-EC WTO 
Members. 
 1. Claim 16: As among non-EC WTO Member s, nationals from WTO Members that 
satisfy the EC's conditions of reciprocity a nd equivalency are accorded more favourable 
treatment than nationals from those WTO Members that do not  
245. The United States has claimed that nationa ls from WTO Members that satisfy the EC's 
conditions of reciprocity and equivalency are accord ed more favourable treatment than nationals from 
those WTO Members that do not. 
 
246. In its first written submission, the EC has explained that this claim is unfounded for the 
following reasons:
149 
 
• the EC does not apply a condition of reciproc ity and equivalence for the registration of 
geographical indications from other WTO members;  
 
                                                      
148 Above para. 143. 
149 EC FWS, para. 228 et seq.  WT/DS174/R/Add.2 
 Page B-209 
 
 
 • the conditions for the registration of individual geographical indications from third 
countries are not discriminatory; 
 
• Article 12 of Regulation 2081/92 does not gran t any advantage, favour, privilege or 
immunity to any other country; 
 
• the conditions for the registration of geographical indications do not depend on 
nationality. 
 247. The EC notes that the United States has made almost no arguments in de fence of this claim. 
Accordingly, the EC can largely refer to what is has already set out in its first written submission. 
 248. The EC notes, however, that the United States claim appears to be pa rallel to its Claim 1, 
according to which the EC violates its national tr eatment obligations under the TRIPS Agreement by 
applying "conditions of reciprocity an d equivalence" to other WTO Members.
150 A s  t h e  E C  h a s  
already explained in detail in response to Claim 1,  it does not apply such conditions to other WTO 
Members.151 Accordingly, the United States claim must fail already for this reason. 
 
249. In its oral statement, the United States has also claimed that there is a violation of most-
favoured nation treatment because Regulation 2081/92 favours nationals of countries "that have an 
EC-style GI protection system, including inspection structures ".152 The EC would like to underline 
that this is wrong. As the EC has already explaine d in response to Claim 1bis, as regards geographical 
indications from WTO Members, the requirement of in spection structures is evaluated with respect to 
the specific product for which protection is sought.153 Accordingly, Regulation 2081/92 does not 
impose a requirement that a "WTO Member" must ha ve particular inspection structures. Rather, the 
requirement of inspection structures applies purely on  a product-specific basis, and without regard to 
the country of origin of the product. As the Panel in Canada – Autos  has said, such non-
discriminatory conditions are not a viol ation of most-favoured nation treatment.154 
 
250. Finally, the United States has claimed that  Regulation 2081/92 involves the granting of an 
advantage within the meaning of Article 4 TRIPS because Articles 12 (1) and 12a are "designed" to 
favour national from countries that have  an EC-style protection system.155 Even if the United States' 
interpretation of these provisions were correct, whic h it is not, then the Regul ation 2081/92 would not 
involve the granting of an advantage to any specific country. Rather, as the EC has already 
explained,156 Article 12 merely sets out the conditions under which the Regulation may apply to a 
third country which is not a WTO Member. Ac cordingly, in the absence of a decision under 
Article 12(3) of the Regulation, Article 12 does th erefore not confer any a dvantage onto any specific 
third country.  251. For all the reasons set out, the United States claim must be rejected. 
 
                                                     
 
150 Above para. 51. 
151 Above para. 51. 
152 US FOS, para. 36 (emphasis added). 
153 Above, para. 96. 
154 Panel Report, Canada – Autos , para. 10.24 (full quotation in EC FWS, para. 237). 
155 US FOS, para. 36. 
156 EC FWS, para. 239 et seq. WT/DS174/R/Add.2 
Page B-210  
 
 2. Claim 17: Under Regulation 2081/92, an EC Member State grants more favourable 
treatment to nationals from other EC Member  States than it accords to nationals from 
non-EC WTO Members  
252. The United States has claimed that under Re gulation 2081/92, an EC Member State grants 
more favourable treatment to nationals from other EC Member States than it accords to nationals from 
non-EC WTO Members.
157 
 253. In its first written submission, the EC has alr eady explained that this claim is fundamentally 
flawed.
158 The EC is an original member of the WT O. Measures with which the EC harmonises the 
law inside the EC are not measures through which the Member States grant "each other" advantages. 
That Regulation 2081/92 is a measure of the Community, and not of the Member States, is also 
reflected in the fact that the United States has co rrectly brought the present dispute against the EC, 
and not against its Member States. Accordingly, the EC does not comprehend why, in the context of this dispute with the EC concerning an EC measure , the United States is now alleging a violation of 
WTO obligations by the EC Member States. 
 
254. So far, the United States has not been able to provide an explanation for its claim. In its Oral 
Statement, the US has merely argued that each Memb er State is under the obligation to provide MFN, 
and argued "that the fact that they may be acting pursuant to an EC regulation does not excuse them 
from this obligation".  
255. The EC does not understand what the United St ates means when it says that Member States 
are "acting pursuant to an EC Regulation". Undoubtedly, the Member States have certain 
responsibilities in the implementation and execution of Regulation 2081/92. However, the EC does 
not see that these functions give rise to any particular MFN violation, nor has the United States identified any such violations. 
 
256. As regards the real concern of the United Stat es, namely the alleged application of conditions 
of reciprocity and equivalence and the requireme nt of inspection structures, these result –supposing 
that the erroneous interpretations of the United St ates of Regulation 2081/92 were correct - not from 
any actions of the Member States, but from the text  of EC Regulation 2081/92. Accordingly, the claim 
that Member States are granting each other advantag es, or granting other third countries advantages, 
is devoid of all foundation. 
 257. Accordingly, this claim of the United States must be rejected.  B. C
LAIM 18: BY SUBJECTING THE REGISTRATION OF THIRD -COUNTRY GEOGRAPHICAL 
INDICATIONS TO CONDITIONS OF RECIPROCITY AND EQUIVALENCE , THE EC MEASURE IS 
INCONSISTENT WITH THE MOST -FAVOURED -NATION OBLIGATION UNDER THE ARTICLE  I:1 
GATT 
258. The United States has argued that by subjecting the registration of third-country geographical 
indications to conditions of reciproc ity and equivalence, the EC measure  is inconsistent with the most-
favoured-nation obligation under Article I:1 GATT.159 
 
1. Article I:1 GATT is not violated 
259. Contrary to the claim of the United States, there is no violation of Article I:1 GATT.  
                                                      
157 US FWS, para. 121. 
158 EC FWS, para. 249 et seq. 
159 US FWS para. 127 et seq.  WT/DS174/R/Add.2 
 Page B-211 
 
 
  
260. Since the United States has so far not made any specific arguments in response to the EC's 
first written submission, the EC can refer to what it has said in its first written submission.160  
 261. The EC can also refer to its arguments in response to Claim 16, concerning a violation of 
national treatment principles under the TRIPS Agreement,
161 which apply also in the present context. 
In particular, the EC would like to point out once mo re that the requirement of inspection structures 
applies on a product-specific basis, and does in no way involve discrimination on the basis of the origin of the product.   
262. For these reasons, Regulation 2081/92 is not  incompatible with Article I:1 GATT. 
 
2. The EC measure would be justified under Article XX(d) GATT 
263. For the sake of completeness, the EC would like to remark that should the Panel nonetheless 
come to the conclusion that the requirement of inspection structures somehow involves discrimination 
between third countries, the EC would consider that  this requirement is justified under Article XX(d) 
GATT.  264. In relation to the claims regarding a viol ation of Article III:4 GATT, the EC has already 
explained that the requirement of inspection structur es is necessary for the atta inment of the legitimate 
objectives of Regulation 2081/92.
162 These considerations apply not only to the claim under 
Article III:4 GATT, but also to the claim under Article I:1 GATT. 
 265. Accordingly, the requirement of inspection structures is in any event justified by Article XX(d) GATT.  V. REGULATION 2081/92 DOES NOT DIMI NISH THE LEGAL PROTECTION OF 
TRADEMARKS  
A. A
RTICLE  16.1  OF THE TRIPS  AGREEMENT  
1. Claim 19: Article 14(2) of Regulation 2081/92  is inconsistent with Article 16.1 of the 
TRIPS Agreement in that it allows the co -existence of geographical indications and 
earlier registered trademarks 
(a) Article 14(3) of Regulation 2081/92 
266. The United States, but not Australia, addressed the EC's arguments based on Article 14(3) of 
Regulation 2081/92 in its First Oral Statement. The EC has  provided a comprehensive response to the 
US counter-arguments as part of its replies to the Panel's questions Nos. 63 to 71, to which the Panel 
is referred. In this section the EC will elabor ate on those replies and provide comments on the 
responses given by the United States to the Panel's Questions Nos. 14 and 67.   
 
(i) Registrability of geogra phical names as trademarks 
267. In its First Written Submission, the EC expl ained that geographical terms are primarily "non-
distinctive" and, for that reason, their regist ration as trademarks is permitted only exceptionally.163 
                                                      
160 EC FWS, para. 258 et seq. 
161 Above para. 245. 
162 Above para. 232. 
163 EC FWS paras. 278-285. WT/DS174/R/Add.2 
Page B-212  
 
 More specifically, the EC explained that, unde r the Trademark Directive and the Community 
Trademark Regulation, as interpreted by the Eur opean Court of Justice, the registration of a 
geographical term is permitted only in the following circumstances:
164  
 
• where the geographical name is not currently associated, and it can be reasonably 
assumed that it will not be associated in the fu ture, with the product concerned; or   
 
• where the name has acquired distinctiveness through use. 
 268. The United States does not dispute this. Yet it suggests that, in practice, the registration as trademarks of geographical terms which qualif y, or may potentially qualify, as geographical 
indications is a frequent occurrence. As discu ssed below, however, the United States provides no 
evidence of this, other than a few hypothetical examples. 
 269. In addition, the United States seeks to misrep resent the EC position by attributing to the EC 
arguments which the EC has not made. Thus, th e EC has not argued that the criteria for the 
registrability of trademarks are sufficient in themsel ves to prevent the registration of later confusing 
geographical indications. In particular, the EC has ne ver said that "valid registered trademarks cannot 
incorporate certain geographical elements."
165 Indeed, if so, it would have been unnecessary to include 
Article 14(3) in Regulation 2081/92. Nor is it the EC's position that th e violation of Article 16.1 of the 
TRIPS claimed by the complainants should be to lerated because "the number of specific rights 
affected is small".166 The EC is not seeking to "minimize the violation of Article 16.1".167 
 
270. To be clear, the EC's position is that ther e is no violation of Article 16.1, even on the 
complainants' interpretation of that provision. Firs t, the criteria for the registrability of trademarks 
limit a priori  the possibility of conflicts between geogr aphical indications and earlier trademarks. 
Second, to the extent that any such conflict ar ises, Article 14(3) of Regulation 2081/92 provides the 
necessary means to trademark owners in order to prevent or invalidate the registration of any 
confusing geographical indications. Finally, the provis ions of Regulation 2081/92, together with other 
provisions of EC law and the unfair competition laws  of the Member States,  provide the necessary 
means to ensure that, in  practice, registered geogr aphical indications are not misused so as to create 
confusion.   (ii) Standard of evidence for establishing the meaning of Article 14(3) 
271. The United States argues that the EC has made an improper application of the 
"mandatory/discretionary analysis".
168 This criticism is misplaced b ecause the EC is not relying on 
that distinction. The EC is not arguing that Ar ticle 14(3) complies with Article 16.1 of the TRIPS 
Agreement because it gives "discreti on" to the EC authorities in order to decide whether or not to 
refuse the registration of a confusing geographical in dication. Article 14(3) is a "mandatory" provision 
in the sense that it imposes an unqualified obliga tion upon the EC authorities to refuse any proposed 
geographical indication that gives rise to th e situation described in that provision.  
 272. The EC's statement quoted by the United St ates does not relate to the distinction between 
"mandatory" and "discretionary" legislation, but in stead to the issue of what is the appropriate 
standard of evidence in order to establish the meaning of Article 14(3). 
 
                                                     
 
164 Ibid., para. 284. 
165 US FOS, para. 50. 
166 Ibid., para. 49. 
167 US Response to Panel's Question No. 67. 
168 US Response to Panel's Question No. 14.  WT/DS174/R/Add.2 
 Page B-213 
 
 
 273. The complainants' claim is premised on a certa in reading of Article 14(3), which is contested 
by the EC. The interpretation of Article 14(3) is a matter of EC law and must be treated as a factual 
issue by the Panel. The complainants bear the bur den of proving that Article 14(3) has the meaning 
which they have asserted in this dispute. In order to  do so, it is not enough for them to show that their 
reading of Article 14(3) is a reasonable interpretati on of that provision. As explained above, the EC's 
own views on the meaning of Article 14(3) must be given "considerable deference". For that reason, 
the complainants must show not only that their in terpretation is reasonable but , in addition, that the 
EC's interpretation of Article 14(3) is not a reasonable one.  
 274. Furthermore, Article 14(3) must be interp reted in accordance with the relevant rules of 
interpretation of EC law. This means, in particular , that, in accordance with well-established case law 
of the European Court of Justice, the complainan ts must prove that is impossible to interpret 
Article 14(3) in a manner that is consistent with the EC's obligations under Article 16.1 of the TRIPS 
Agreement, as the complainants understand such obligations.   
275. Unless the complainants can show that their reading of Article 14(3) is, on the basis of the 
terms of that provision, the only reasonable interpreta tion, they would have to prove that, as a matter 
of fact, Article 14(3) is being applied in prac tice by the EC authorities in accordance with the 
complainants' interpretation of that provision, as de monstrated, for example, by the decisions of the 
EC authorities that apply Article 14(3) or by a consistent pattern of re gistration of confusing 
geographical indications. 
 
276. As discussed below, the complainants have failed to show that their interpretation of 
Article 14(3) is the only reasonable interpretation of that provision. And they have not even attempted 
to prove that their reading of Article 14(3) is, in practice, the interpretation effectively applied by the 
EC authorities. Therefore, the Panel should conclude  that this claim is unfounded, as a matter of fact, 
even on the complainants' own interpreta tion of Article 16.1 of the TRIPS.   
 
(iii) The Complainants have misinterpreted Article 14(3) 
277. Far from being the only reasonable interpre tation of the terms of Article 14(3), the 
complainants' reading of that provision is unsup ported by the ordinary meaning of its terms. 
Furthermore, the complainants' interpretation is neither workable nor reasonable in practice and 
cannot be reconciled with the obligations imposed  upon the EC authorities by other provisions of 
Regulation 2081/92.  278. The complainants' claim is based on the false premise that Article 14(3) applies only to a special sub-category of trademarks, namely those wh ich have been used "for a long time" and which, 
in addition, are famous. Thus, for example, the United States argues that Article 14(3) "only comes 
into play where there exists a trademark with reputation, renown and history of use".
169 But this is not 
what Article 14(3) says.  279. The length of use and reputation/renown of the trademark are not separate "requirements"
170 
for the application of Article 14(3), distinct fro m, and additional to the likelihood of confusion. 
Rather, they are criteria for assessing the existence of a likelihood of confusion. From the fact that the 
EC Commission must consider those two criteria in order to establish the existence of a likelihood of 
confusion, it does not follow a contrario that any other criteria must be deemed irrelevant for that 
purpose.  
                                                     
 
169 US FOS, para. 52. 
170 US FOS,  para. 53. WT/DS174/R/Add.2 
Page B-214  
 
 280. As explained
171, Article 14(3) directs expressly the regist ering authority to consider the length 
of use and the reputation and renow n of earlier trademarks because those criteria will generally be 
decisive in order to establish the likelihood of conf usion, given that geographical names are primarily 
non-distinctive when used as trademarks.  
281. If Article 14(3) does not mention expressly the similarity of goods and signs, it is simply 
because those criteria are always relevant for a determination of likelih ood of confusion. The 
likelihood of confusion between two signs cannot be  meaningfully established by considering only the 
length of use and the reputation/renown of one of them. The analysis must take into account 
necessarily the similarity of the goods and signs con cerned, which must therefore be deemed implicit 
in Article 14(3). As shown by the EC, an inte rpretation of Article 14(3) which prevented the 
registering authority from considering the similarity  of goods and signs would be neither reasonable, 
nor workable, and cannot be correct.
172  
 282. Moreover, the interpretation of Article 14(3) ma de by the complainants would lead to a result 
which is incompatible with the terms of Ar ticles 7(4) and 7(5)(b) of Regulation 2081/92. 
 283. Article 7(4) provides that a statement of objection shall be admissible, inter alia , if it shows 
that "the registration of the name proposed  would jeopardize the existence of a mark".
173 This 
language encompasses any instance of likelihood of confusion between the proposed geographical 
indication and any earlier trademark. If Article 14(3) required the refusal of a proposed geographical 
indication only where it gives rise to a likelihood of confusion with a trademark which is famous and 
which has been used for a long time, as claimed by the complain ants, the admissible grounds of 
objection would have been limited to the cases where one such trademark is likely to be jeopardized. 
Article 7(4), however, refers to all trademarks, wit hout any distinction or qualification. It would be 
pointless to admit an objection on certain grounds if, in  any event, it were not possible to reject the 
application on such grounds. 
 284. Consistent with Article 7(4) , Article 7(5)(b) provides that where an objection is admissible,  
 
the Commission shall take a decision in accord ance with the procedure laid down in 
Article 15, having regard to traditional fa ir practice and likelihood of confusion.
174 
285. Thus, Article 7(5)(b) requires the Commissi on to adopt a decision having regard to the 
"likelihood of confusion" between th e proposed geographical indication and any trademark, and not 
just with those trademarks which are famous a nd which have been used for a long time.    
 
(iv) There is no evidence that Article 14(3) has been  applied in accordance with the complainants' 
interpretation  
286. Since the complainants have failed to show that  their reading of the terms of Article 14(3) is 
the only reasonable interpretation of that provision, they should prove that, de facto , Article 14(3) is 
being applied by the EC authorities in accordance with  that interpretation. The complainants have not 
even attempted to do so.   
                                                      
171 EC FWS,  paras. 278-291. 
172 EC Response to Panel's Question No. 68. 
173 Articles 12b(3) and 12d(2) provide, respectively, th at the criteria of Article 7(4) shall apply also 
with respect to the admissibility of objections to the registration of foreign geographical indications and of 
objections from outside the EC to EC geographical indications. 
174 Similar language is found in Articles 12b (3) and12d(3) with regard to  the registration of 
geographical indications from other WTO Members and third countries and to the registration of EC 
geographical indications, following an objection from outside the EC, respectively.  WT/DS174/R/Add.2 
 Page B-215 
 
 
  
287. Article 14(3) of Regulation 2081/92 has been applied only once by the EC institutions, in a 
case where it was alleged that the proposed geograp hical indication "Bayerisches Bier" was likely to 
be confused with the existing trad emarks "Bavaria" and "Hoker Bajer".175 The interpretation of 
Article 14(3) made in that case is consistent with the interpretation put forward by the EC in this 
dispute. The EC Council concluded that there was no likelihood of confusion with the trademarks in 
question "in view of the facts and information available". There is no suggestion in the Council 
decision that this conclusion was reached because the trademarks concerne d were not famous enough 
or had not been used for a sufficiently long time.    
288. The United States now suggests that the Council decision to register the geographical 
indication "Bayerisches Bier" was flawed because th at term is likely to be confused with the 
trademarks at issue when used in translation.
176 This criticism is unfounded because the registration 
covers only the term "Bayerisches Bier" and not its tr anslations to other languages. Moreover, even if 
the decision in the "Bayerisches Bier" case had been  based on an erroneous factual assessment, that 
would not contradict the EC's interpretation of Article 14(3).177  
 289. In response to a question from the Panel
178, neither the complaining parties nor any of the 
third parties have been able to identify even one si ngle geographical indication, of the more than 600 
registered under Regulation 2081/92, which gives ri se to a likelihood of confusion with an earlier 
trademark. 
 
290. Instead, the United States refers to purel y hypothetical examples, which have no probative 
value whatsoever with respect to the actual interpretation of Article 14(3) made by the EC authorities.
179  
 
                                                      
175 Council Regulation (EC) 1347/2001, of 28 June 2001 (Exhibit EC-9). 
176 US Response to Panel's Question No. 44. 
177 Furthermore, the US suggestion that any possible use of the term "B ayerisches Bier" would create 
per se  a likelihood of confusion with the trademarks "Bavar ia" and "Bajer Hoker" is difficult to reconcile with 
the US position, as the EC understands it, that the use of geographical indications for wines recognised in the 
United States such as "Rutherford" or  "Santa Rita Hills" does not lead per se  to a likelihood of confusion with 
virtually identical earlier trademarks such as "Rutherford Vintners" or "Santa Rita", respectively, but needs to be 
examined on case-by-case basis with respect to particular uses. See US Response to EC's Question No. 3. 
178 Panel's Question No. 47 to Australia and the United States and Panel's Question No. 9 to third 
parties. 
179 The examples cited by the United States are: 
 1) the hypothetical conflict between the hypo thetical trademark "Luna" for cheese and the 
hypothetical geographical indication "Luna" for a hypothetical cheese produced in a hypothetical 
Spanish small town called "Luna". (US FOS, para. 50).  There is no town in Spain, or in any other 
Spanish speaking country, whether big or small, called "Luna". For Spanish speakers, "Luna" is the 
name of the only satellite of the planet Earth, whic h is as an unlikely place for producing cheese as the 
planet "Mars" for producing chocolate bars. In view of that, EC trademark offi cials would be likely to 
register "Luna" as a purely fanciful name. But, for the same reason, it is unlik ely that such trademark 
would enter into conflict with a subsequent geographical indication. 
2) the hypothetical conflict between the trademar k "Faro" for coffee and tea and a hypothetical 
geographical indication "Faro" for the hypothetical coffee and tea gr own in the Portuguese town of 
Faro. (US Response to Panel's Question No. 47). To the best of the EC's knowledge, no tea or coffee 
has ever been grown in Faro. Indeed, it is doubtful that either coffee or tea can be grown commercially in Faro, given the prevailing climatic conditions. Therefore, the town of Faro is unlikely to be 
associated by consumers with thos e products. Even if, as an effect  of global warming, coffee and tea 
became one day a speciality of the town of Faro, the registration of  the hypothetical geographical 
indication would still have to be refused if it led to confusion with the earlier trademark "Faro" in 
accordance with Artic le 14(3).   WT/DS174/R/Add.2 
Page B-216  
 
 291. The United States also refers to a case pe nding before the Swedish courts, where a a US 
company claims that the use by Czech producers of beer of the names "Budweiser Budwar", "Budweis" and "Budbräu" infringe its trademarks fo r the names "Budweiser", "Bud" and  "Budweiser 
King of Beers".
180 
 
292. The EC understands that the United States is not  raising a claim concerning the registration of 
the geographical indications Budĕjovické pivo, Českobudĕjovické pivo and Bud ĕjovický 
mĕšt'anský  var" at this stage of the proceedings. Were the United States to raise that claim, the EC 
would object that the claim is clearly outside the terms of reference of the Panel, given that the 
process of ratification  of the Treaty of Accession providing for the registration of those names had not been completed yet at the time of  establishment of this Panel.
181 
 
293. In any event, the EC recalls that the regi stration under Regulation 2081/92 only covers the 
terms Budĕjovické pivo, Českobudĕjovické pivo and Bud ĕjovický m ĕšt'anský  and not any alleged 
translations of those terms to other languages. The EC understands that the United States is not 
suggesting that the use of those names is per se  likely to result in a likelihood of confusion with the 
above mentioned trademarks of the US producer concerned.   
(v) Article 14(3) confers enforceable rights to the trademark owners 
294. The United States argues that, even if the EC's  reading of Article 14(3) were correct, that 
provision "merely authorizes the EC to decline registration of a GI"
182, but does not accord rights to 
the trademark owners.  295. The United States is wrong again. The EC authorities are required, and not simply authorized, to refuse the registration of a geographical indication. Article 14(3) provides that the registration 
"shall not be registered" and, therefore, leaves no margin of discretion to the Commission in order to 
register the proposed geographical indication where th e conditions set out in Article 14(3) are met.  
 296. Furthermore, Article 14(3) confers judicially enforceable rights to the owners of trademarks. 
If a trademark owner considers that the EC author ities have registered a geographical indication in 
violation of Article 14(3) it is entitled to challenge the validity of such registration before the courts, 
including in the framework of the infringement proceedings brought against the user of the 
geographical indication under the Community Trad emark Regulation or the trademark law of the 
Member States.   297. The United States argues that some geographical indications have been registered in 
accordance with special procedures that do not provide  for a right of objection, such as the so-called 
"fast track" procedure provided in the former Article 17 of Regulation 2081/92.
183 As explained by the 
EC184, however, neither Article 16.1 nor Article 22.2 of  the TRIPS Agreement requires to grant a right 
of objection with respect to the registration of ge ographical indications. All that is required by the 
TRIPS Agreement is that the final registration decision be subject to judicial review.185 Trademark 
                                                      
180 US Response to Panel's Question 47. 
181 EC FWS, paras. 21-25. 
182 US FOS, para. 54. See also US Responses to Panel's Questions Nos. 14 (at para. 41) and 67 (at 
para. 87). 
183 US Response to Questions No. 6 (at para. 68) and 67 (at para. 87). 
184 EC FWS, paras. 327-333 and para. 427. 
185 Cf. Article 62.5 of the TRIPS Agreement.  WT/DS174/R/Add.2 
 Page B-217 
 
 
 owners have a right to challenge the validity of  the registrations under Regulation 2081/92 also in 
those cases where no right of objection has been provided as part of the registration procedure. 186  
 
(vi) EC law provides means to prevent confusing uses of a registered geographical indication  
298. The United States goes on to argue that, even if Article 14(3) prevents the registration of 
confusing geographical indications, it does not pr ovide means to prevent that a registered 
geographical indication will be used subsequently in a confusing manner. Specifically, the United 
States has argued that187 
 
…even if Article 14(3) accorded rights to trad emark owners rather than just authority 
to the EC, the trademark owner would not necessarily be able to tell, at the time of 
registration of the GI, whether the use of the GI will be confusing. For example, a 
registered GI may unexpectedly be used in translation, or in a manner that 
emphasizes certain aspects or letters of the geographical name, in a way that causes a likelihood of confusion with respect to a registered trademark.  
299. These concerns are largely theoreti cal and, in any event, unfounded. 
 300. First, the product specifications to be subm itted with the application for registration must 
include "the specific labelling details" relating to the geographical indication.
188 Those specifications 
may be subject to objections in accordance with Article 7(4) and are taken into account for the 
purposes of the determination required by Article  14(3) and of the fina l decision provided in 
Article 7(5)(b). Any change of the labelling speci fications must be approved by the EC authorities.189 
Failure to comply with the specifications ma y lead to the cancellation of the registration.190 
 301. Second, the right holders of a geographical indication have a positive right to use the name 
registered as a geographical indication. But that right does not extend to other names or signs which 
have been not been registered. If the use of such unregistered names or signs leads to a likelihood of 
confusion with the same or a similar sign which is the subject of a valid trademark, it can be challenged judicially by the trademark owner under the Community Trademark Regulation or the trademark laws of the Member States, as applicable.  302. Third, in so far as a right holder of a regi stered geographical indication were to present the 
registered name in a mutilated or deformed manne r so as to imitate an earlier trademark, which is 
what the United States appears to  be suggesting, a court would be  entitled to find, depending on the 
                                                     
 
186 The EC notes that, unlike Australia, the United States did not claim in its First Written Submission 
that the lack of an adequate right of objection with respect to the registration of a geographical indication under 
Regulation 2081/92 is inconsistent with Article 16.1 of the TRIPS Agreement. It is unclear to the EC whether 
the United States is raising this claim at this stage. 
In any event, the EC would note that, under US law, trademark owners do not seem to have a right to 
challenge ex post  before the courts the validity of the recognition of a geographical indication for wines on the 
grounds that it infringes their trademark rights, let alone a right to object in advance to such recognition.  See 
Sociedad Anonima Viña Santa Rita v. US Dept. of the Treasury , 193 F. Supp. 2d 6 (D.D.C 2001)  ("The Court 
finds that an entity with a non-geographic interest in a particular name is not empowered, under the Lanham 
Act, to contest the ATF's recognition of a distinct geogra phic region that bears that name".) (Exhibit US–48, at. 
p. 13). In view of this, the United St ates can hardly complain about the fact  that trademark owners have not been 
recognised a right of objection with respect to the registration of some geographical indications under 
Regulation 2081/92.   
187 US FOS, para. 54 
188 Cf. Article 4(2)(h) of Regulation 2081/92. 
189 Cf. Article 9 of Regulation 2081/92. 
190 Cf. Articles 11(4) and 11a of Regulation 2081/92.   WT/DS174/R/Add.2 
Page B-218  
 
 specific circumstances of each case, that the "used sign" is different from the "registered sign" and, 
therefore, not protected under Regulation 2081/92.   303. Furthermore, while the right holders of a ge ographical indication have a positive right to use 
the registered name, this does not mean that they are allowed to use it in any conceivable manner. As 
explained
191, the use of a name registered as a geographi cal indication is subject to the applicable 
provisions of  
• Directive 2000/13 on the labelling, presen tation and advertising of foodstuffs
192, and in 
particular Article 2(1)(a), which provides that  
 
the labelling and methods used must not be such as could mislead to 
the purchaser to a material degree, particularly: 
(i) as to the characteristics of the product and, in particular, as to ... 
its origin or provenance  
[…] 
 For the purposes of this Directive, "labelling" is defined as:  
any words, particulars, trade marks, brand name, pictorial matter or 
symbol relating to a foodstuff and placed on any packaging, document, notice, label, ring or collar accompanying or referring to such foodstuff.  
 Article 2(1)(a) also applies to: 
(a) the presentation of foodstuffs, in particular their shape, 
appearance or packaging, the pack aging materials used, the way in 
which they are arranged and the setting in which they are displayed; 
(b) advertising.
193   
• Directive 84/450 on misleading advertising194, which is defined as:  
 
any advertising which in any way, including presentation, deceives or 
is likely to deceive the person to whom it is addressed or whom it 
reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures 
or is likely to injure a competitor.
195  
• the unfair competition laws of the Member States.196    
 
                                                      
191 EC's First Submission, para. 319. See also the re sponses of the EC and its Member States to the 
review under Article 24.2 of the TRIPS Agreem ent contained in document IP/C/W/117/Add.10 
(Exhibit EC-29). 
192 Exhibit EC–30. 
193 Article 2(3). 
194 Exhibit EC–31. 
195 Article 2(2). 
196 References to the relevant laws of the Member States are found in their responses to the review 
under Article 24.2 of the TRIPS Agreement. (Exhibit EC-32).  WT/DS174/R/Add.2 
 Page B-219 
 
 
 (b) Article 24.5 of the TRIPS Agreement 
304. The EC has addressed the arguments made by th e United States with respect to Article 24.5 in 
its First Oral Statement as part of the EC's r esponses to the Panel's Questions Nos. 76 and 77, to 
which the Panel is referred. Here below, the EC w ill provide its comments with respect to some issues 
raised by the complainants' responses to the Panel's Questions Nos. 75 to 79.   
 
(i) Relationship between Section 3 of Part II and Article 16.1  
305. In response to the Panel's Question No.79, both Australia and the United States argue that 
there is no "conflict" between Articles 16.1 and 22.3 because Members ma y, in accordance with 
Article 15.2, refuse or invalidate the registration of  any trademark that would be misleading as to the 
place of origin of the goods and in practice most Members do so. This is, of course, correct and has 
never been disputed by the EC.  306. It remains, however, that, as matter of la w, neither Article 15.2 nor any other provision of 
Section 2 of Part II requires Members to refuse or invalidate the  trademarks that are misleading as to 
the place of origin of the goods. Su ch obligation arises exclusively fro m Article 22.3. This shows that, 
contrary to what is suggested by the complainants , the provisions of Section 3 of Part II do impose 
restrictions on the protection of trademarks, and not just on the protection of geographical indications, 
and, therefore, that Section 2 of Part III cannot be applied without having regard to Section 3. 
 307. That Section 3 limits the protection of trademar ks is made even clearer by Article 23.2, which 
requires Members to refuse or invalidate trademarks for wines and spirits which could, and in practice 
would, have been validly registered in most Members before the entry into force of the WTO 
Agreement. As a result, both Australia and the Unite d States, like many other Members, had to amend 
their trademark laws in order to implement Article 23.2.  
 
308. While, for the reasons explained, there is no "conflict" between Articles 16.1 and 22.3, there 
is a potential "conflict" between Article 16.1 and Ar ticle 22.2(a), which requires Members to provide 
legal means for interested parties to prevent   
the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true 
place of origin in a manner which misleads th e public as to the geographical  origin of 
the goods. 
309. The "means" referred to in Article 22.2(a) ma y include the use of a geographical indication as 
a trademark, whether registered or established thro ugh use. Thus, Article 22.2 confers to the right 
holders of a geographical indication the right to pr event the use of any trademark which misleads the 
public as to the origin of the goods. This right may c onflict with the right of the owner of a trademark 
under Article 16.1 to prevent the use of any sign th at results in a likelihood of confusion with its 
trademark. The simultaneous exercise of both righ ts would lead to a situation where neither the 
trademark owner nor the right holders of the geogra phical indication could use the sign in question. A 
similar conflict may arise between Articles 16.1 and 23.1.  
310. The above described conflict between Articl es 16.1, on the one hand, and Article 22.2 and 
23.1, on the other hand, was resolved by the drafte rs of the TRIPS Agreement through the application 
of the rules contained din Articles 22.3, 23.2 and 24.5, which together define the boundary between 
the protection that Members must or may provide to trademarks under Section 2 of Part III and the 
protection which Members must or may provide to geographical indications under Section 3 of 
Part III.    
 WT/DS174/R/Add.2 
Page B-220  
 
 311. In response to the Panel's Question No. 75,  the United States makes the unsupported 
assertion that
197  
 
the EC is arguing that Article 24.5 is an a ffirmative defence to the US claims that the 
GI Regulation is inconsistent with the EC 's obligations under Article 16.1 of the 
TRIPS Agreement (that is that Article 24.5 is an exception to Article 16.1).  
312. This is a gross misrepresentation of the EC's position. The EC has never argued that 
Article 24.5 is an "exception" to Article 16. 1, let alone an "affirmative defence".   
 313. Although Article 24.5 is part of Article 24,  which is entitled "International Negotiations: 
Exceptions", it is not an exception in the same sense as, for example, Article XX of the GATT.
198 The 
Appellate Body has cautioned against characterizi ng a measure as an exception simply because it is 
referred as such in the agreement. This caution applies a fortiori  in the present case, given that the 
term "exception" is not used in the text of Artic le 24.5 itself, or in another provision that refers 
specifically to Article 24.5, but only in the title of Article 24, an article consisting of many distinct 
and heterogeneous provisions, not a ll of which can be considered as "exceptions" or concerned with 
"international negotiations". For example, Article 24. 3 is clearly not an exception. To the contrary, it 
imposes additional obligations upon Members.   314. Unlike paragraphs 6 to 9 of Article 24, Ar ticle 24.5 does not provide an exemption from an 
obligation, of which Members may or may not av ail themselves. Instead, Article 24.5 places a limit 
on the measures that Members must or may take in order to protect geographical indications when 
implementing Section 3 of Part II. As explaine d, by doing so, Article 25.4 defines the boundary 
between the protection of trademarks and the pr otection of geographical indications. The EC has 
submitted that the protection provided to geog raphical indications under Article 14(2) of 
Regulation 2081/92 is within the limits defined in Article 24.5. It is for the United States and 
Australia, as the complaining parties, to show that , in fact, such protection goes beyond those limits 
and is inconsistent with Article 16.1.  315. The US position that Article 24.5 is an "excepti on" to the obligations provided in Section 3 of 
Part II, which, therefore, cannot affect the scope  of the obligations imposed by Article 16.1 is 
contradicted by the fact that Article 24.5 confers to  the owners of trademarks established by use rights 
which they do not have under Artic le 16.1. The last sentence of Ar ticle 16.1 reserves "the possibility 
of Members making trademark rights available on the basis of use", but it does not require them to do so. Members are free to decide whether or not to gr ant such rights and, if so, to limit or withdraw 
them at will. Yet, one of the consequences of Ar ticle 24.5 is that, in im plementing protection for 
geographical indications, Members must not prejudice "the right to use" a grandfathered trademark 
acquired through use. Thus, Article 24.5 imposes up on Members an obligation with respect to the 
protection of trademarks which they do not have under Article 16.1.  
 
(ii) The meaning of "the right to use a trademark" 
316. In response to the Panel's Questions Nos. 76 and 77, Australia and the United States have 
provided different and contradictory interpretations  of the phrase "the right to use a trademark". 
 
                                                     
 
197 US Response to Question No. 75, para. 91. 
198 See Appellate Body Report, EC – Hormones , para. 104, where the Appellate Body held that the 
burden of proof with respect to Article 3.3 of the SPS Agreement  was on the complaining party, even though 
that provision was described as an exception in Article 3.1. See also Appellate Body Report, EC – Sardines , 
para. 275, where the Appellate Body ruled that the last part of Article 2.4 of the TBT Agreement  was not an 
affirmative defence even though it is introduced by the term "except".  WT/DS174/R/Add.2 
 Page B-221 
 
 
 317. Australia says that the phrase "the right to use a trademark" applies only to the trademarks 
acquired through use and not to registered trademarks . Australia does not say whether "the right to use 
a trademark" includes also the right to prevent ot hers from using the trademark, as claimed by the 
United States. Instead, Australia suggests th e Panel need not reach that question. 
 
318. Australia's reading of the phrase "the right to use a trademark" raises obvious  problems. First, 
it cannot be reconciled with the ordinary meani ng of the term "trademark", which includes all 
trademarks, whether registered or acquired through use. Moreover, as used throughout the TRIPS Agreement, the term "trademark" includes both typ es of trademarks (for example, in the title of 
Section 2 of Part III). When the drafters intended to distinguish between registered trademarks and 
trademarks acquired through use they did so e xpressly, like in Article 16.1 or in Article 21.
199  
 319. In its First Written Submission, Australia suggested that the phrase "the right to use a 
trademark" is linked to the reference made in the ch apeau of Article 24.5 to the situation where "rights 
to a trademark have been acquired through use". But, as already noted in the EC's First Written 
Submission, in that case it would have been more lo gical to say in the chausette that implementation 
"shall not prejudice … the rights to a trademark acquired through use". Australia's argument confuses the mode of acquisition of the trademark with one of the basic rights attached to any trademark, whether registered or established by use.  320. Furthermore, by arguing that the phrase "the right  to use a trademark" refers exclusively to the 
trademarks acquired through use, and not contestin g that such phrase does not include the right to 
prevent others from using the trademark, Australia appears to be conceding that Article 24.5 provides 
for the co-existence of geographical indications with  earlier trademark acquired through use. Australia 
does not explain why co-existence should be allowed in  that case, but not with respect to registered 
trademarks, given that Article 16.1 reserves the right of Members to grant trademark rights, including 
exclusive rights, on the basis of use.  
 321. For its part, the United States, following a c ontorted reasoning, concludes that the phrase "the 
right to use a trademark" has simultaneously three different meanings:  
• first, it would be a reference to the trad emarks whose rights are acquired through use;
200   
 
• second, it means the "the right to use per se " the trademark;201 
 
• third, it would mean also "the right to exclude others from using similar signs".202  
 322. The EC has already commented upon the firs t meaning and agrees with the second meaning. 
 323. The view that the phrase "the right to use a trademark" includes the right to exclude others 
from using the trademark cannot be reconciled with the meaning of that phrase in ordinary language 
or in the particular context of intellectual property law. 
 
                                                     
 
199 Contradicting Australia's position, the United St ates says that (Response to Question No. 76, 
para. 105): 
"the right to use a trademark" is not specifically linked in the text to trademarks whose rights are 
acquired through use (although it would appear to include such trademarks).   
200 US Response to the Panel's Question No. 76, para. 103. 
201 US Response to the Panel's Question No. 77, para. 106. 
202 US Response to the Panel's Question No. 76, para. 103. WT/DS174/R/Add.2 
Page B-222  
 
 324. For example, WIPO's Trademark Manual says that  the "the registered owner has the exclusive 
right to use the trademark", which encompasses two th ings: "the right to use the trademark" and "the 
right to exclude others from using the mark".
203 
 325. Similarly, to mention but another example,  Section 20 of Australia's Trade Marks Act 1995 
(which is entitled "Rights given by registration of  trade mark") provides in relevant part that 
 
(1) If a trade mark is registered, the registered owner of the trademark has, subject to this Part, the exclusive  rights: 
(a) to use the trade mark; 
(b) to authorise other persons to use the trade mark; 
(2) The registered owner of trade mark has also the right to obtain relief under 
this Act if the trade mark has been infringed. 
[…]
204   
326. By implication, Australia's Trade Marks Ac t 1995 recognises that the right to use a trademark 
is not necessarily "exclusive" and that "the right to use a trademark" is different from the right to 
prevent others from infringing the trademark.205  
 327. The United States itself refers to what it calls "the right to use per se "
206, thus acknowledging 
implicitly that, in its ordinary meaning, the phrase "t he right to use a trademark" does not include the 
right to exclude others from using the trademark. In spite of this, the United States seeks to stretch the 
meaning of the phrase "the right to use the trade ma rk" by resorting to an interpretation based on the 
"purpose" of a trademark.207 It is beyond dispute that, as argued by the United States, the purpose of a 
trademark is to distinguish the goods from a certai n source and that, in order to achieve that purpose, 
the right to use a trademark should  be exclusive. But from this it does not follow logically that "the 
right to use a trademark" is inherently exclusive. In  practice, the right to use a trademark is not always 
exclusive. Indeed, if the "right to use a trademar k" were inherently exclusive, it would have been 
superfluous to provide in Article 16.1 that the owners  of registered trademarks shall have exclusive 
rights. Also, on the US interpretation, any rights gr anted to the owners of unregistered trademarks on 
the basis of use would have to be exclusive. Wh ile this may be generally the case, there is no 
obligation under the TRIPS Agreement to do so.    
 
328. As suggested by the Panel's Question No. 77, if  the drafters had intended to preserve the right 
of the trademark owners to exclude all others, in cluding the right holders of a protected geographical 
indication, from using the trademark, they would have used express language to that effect, such as 
"shall not prejudice … the exclusive right to use the trademark" or "the rights conferred to the trademark owners under Article 16.1" The explanati ons given by the United St ates in its response to 
this question are unconvincing: 
 
                                                     
 
203 WIPO, "Introduction to Trademark Law & Prac tice, The Basic Concepts, A WIPO Training 
Manual", Geneva 1993,  pp. 51–52 (Exhibit EC-57). 
204 Exhibit EC -58.  [Emphasis added]. 
205 The term "exclusive right to use a trademark" is used also in the US Lanham Act. See e.g. Section 
1115, which is entitled "Registration on principal register as evidence of exclusive right to use a mark; 
defenses). (Exhibit EC–6). 
206 US Response to the Panel's Question No. 77, para. 106. 
207 US Response to the Panel's Question No. 76, para. 102.  WT/DS174/R/Add.2 
 Page B-223 
 
 
 • the United States says that reference to "exc lusive right to use" would have been 
"confusing"208, because the "specific exclusive right in  Article 16.1 is the right to exclude, 
not the right to use per se ."209 As shown above, however, the phrase "exclusive right to 
use" is of common usage in the intellectual property law field, including in the trademark 
laws of both Australia and the United States. Moreover, the right to exclude all others 
from using the trademarks is but the corollary of  the exclusivity of the owner's right to use 
it. There is no contradiction or confusion.  
 
• the United States also says that  a reference to "the rights conferred under Article 16.1" 
would have been "confusing" because Article 16.1 describes three sets of rights.210 Yet, 
the US position, as the EC understands it, is that Article 24.5 leaves unaffected each of those three sets of rights. Thus, the suggested  formula would have described accurately 
the result sought by the United States. 
 329. Australia has suggested that the Panel need not  concern itself with the meaning of "the right 
to use a trademark".
211 The EC disagrees. And apparently so  does the United States. The two phrases 
need to be interpreted together because they are part of the same obligation and impart meaning to 
each other. 
 330. If the phrase "right to use the trademark" mean s what it says, rather than the "right- to-use-a-
trademark-and-in-addition-to-exclude-all-others-fro m-using-it", as argued by the United States, it 
would confirm the EC's reading of the phrase "the va lidity of the registration". If the drafters deemed 
necessary to specify that the implementation of protection for geographical indications shall not 
prejudice one of the two basic rights of the owner of a registered trademark (the right to use it), but 
not the other (the right to exclude others from using it), the clear implication is that they did not intend 
to prevent Members from limiting the latter right in or der to allow the use of a geographical indication 
in co-existence with a grandfathered trademark. He nce the US insistence that  the phrase the "right to 
use a trademark" includes also th e right to exclude others. Becau se Australia, apparently, does not 
share this interpretation, it is forced to argue inst ead that the phrase "the right to use a trademark" does 
not apply at all to registered trademarks and need not be considered by the Panel.    
 (c) Article 24.3 of the TRIPS Agreement 
331. The EC has argued that, regardless of whethe r the co-existence of geographical indications 
and earlier trademarks is permitted by Article 24.5, it is required to maintain such co-existence by 
virtue of the stand-still provis ion contained in  Article 24.3.
212  
 332. Australia has not responded to this argument. The United States addressed it in its Oral 
Statement.
213 The EC has responded comprehensively to the US arguments in its reply to the Panel's 
Question No. 74, to which the Panel is referred. 
 
(d) Article 17 of the TRIPS Agreement  
333. The EC has argued in the alternative that , even if Regulation 2081/92 were found to be prima 
facie  inconsistent with Article 16.1 of the TRIPS Agreement in that it allows the co-existence of a 
                                                      
208 US Response to the Panel's Question No. 77, para. 106. 
209 Ibid. 
210 Ibid. 
211 Australia's Response to the Panel's Question No. 77. 
212 EC FWS, paras. 312-314. 
213 US FOS, paras. 69-73. WT/DS174/R/Add.2 
Page B-224  
 
 registered geographical indication with an earlier trademark, such co-existence would be justified 
under Article 17 of the TRIPS Agreement.
214 
 334. Australia has not addressed th is defence. Here below, the EC will respond to the counter-
arguments made by the United States in its Oral Statement
215 and in response to the Panel's Question 
No. 75. 
 
(i) The scope of the exception is "limited" 
335. The United States contends that Regulation 2081/92 does not provide a "limited exception" 
because its scope is too broad:216 
 
Further, with respect to the scope of the so-called "exception", the GI Regulation entirely eliminates the trademark holder's right to prevent confusing uses 
by all others, which is the core of its legitimate interest. 
336. This is plainly wrong as a matter of f act. Regulation 2081/92 does not "eliminate the 
trademark holder's right to prevent confusing uses by all others". Article 14(2) of Regulation 2081/92 
allows the concurrent use as a geographical indicati on of a name registered as a trademark only in 
relation to products which originate in the area d esignated by the registered geographical indication 
and which, in addition, comply with all the rele vant product specifications and other requirements for 
using the registered geographical indication. The trademark owner retains the exclusive right to prevent the confusing use of that name by any person in relation to any products which do not qualify 
for the use of the registered geographical indication.  
 337. Moreover, Article 14(3) of Regulation 2081/92 restricts even further the scope of the 
exception. Even if the complainants ' interpretation of Article 14(3) we re correct and that provision did 
not prevent the registration of all confusing geogr aphical indications, it would nonetheless prevent the 
registration of confusing geographical  indications in those instances where the likelihood of confusion 
is greater, because the trademarks are particularly di stinctive, and may cause a greater prejudice to the 
trademark owners, because of the reput ation and renown of the trademark.
217 
 338. Article 17 mentions expressly as an example of  limited exception "the fair use of descriptive 
terms". The notion of "descriptive terms" includes inter alia  any term used to indicate the place of 
origin of a product.
218 In other words, it includes any term u sed as an "indication of source" in the 
                                                      
214 EC FWS, paras. 315-319. 
215 US FOS, paras. 74-75. 
216 US FOS, para. 75.   
217 This may be contrasted with the situation under US law, where the risk of likelihood with an 
existing trademark is never  considered a relevant ground for not recognising a geographical indication for 
wines. See Sociedad Anonima Viña Santa Rita v. US Dept. of the Treasury , 193 F. Supp. 2d 6 (D.D.C 2001)  
(Exhibit US–48). Hence the recognition of geographical indica tions such as "Rutherford"  or "Santa Rita Hills", 
despite the existence of virtually identical earlier tradem arks such as "Rutherford Vintners" and "Santa Rita", 
respectively. Instead, trademark owners are forced to bring infringement suits against each particular use of the 
geographical indication. Once again, EC law is more prot ective of the rights of tradem ark owners than US law. 
218 In the United States, the courts have considered that recognised geographical indications for wine are 
descriptive terms. See Sociedad Anonima Viña Santa Rita v. US Dept. of the Treasury , 193 F. Supp. 2d 
6 (D.D.C 2001)  (Exhibit US–48): 
As the ATF aptly explains in its opposition, "A VA designations differ from trademark because a 
trademark is used to convey to the consumer the identity  of the manufacturer or producer of the good whereas 
the AVA is used to describe the geographical origin of the good and can be used by many wineries". … Thus, 
by approving the Santa Rita Hills AVA, the ATF has not developed any name or mark of its own. Rather, the  WT/DS174/R/Add.2 
 Page B-225 
 
 
 sense of the Paris Convention. Geographical indications are a subset of the category of indications of 
source. The universe of potential users of a geographical indication registered under Regulation 2081/92 is narrower than that of the uni verse of potential users of an indication of source 
which does not qualify as a geographical indication, because the products bearing a registered geographical indication must comply with certain  product specifications and other requirements, 
while an indication of source may be used by any product of that origin. If "fair use" of an indication 
of source qualifies as as a "limited exception", as th e United States appears to concede, so must be, 
a fortiori , the fair use of a geographical indication registered under Regulation 2081/92.
219 
 
(ii) The exception "takes account" of the interests of the trademark owners 
339. The United States argued in its First Oral Stat ement that Article 14(2) of Regulation 2081 is 
not covered by Article 17 because220  
 
It should be possible to inform consumers about the origin of a product and its characteristics through the use of descriptiv e terms in a non-trademark sense without 
affirmatively confusing  the consumer about the source of the goods.  
340. The United States has repeated again the same argument literally in its response to the Panel's 
Question No. 75.
221  Its precise meaning, however, still remains unclear to the EC. 
 341. This argument suggests that the United States c onsiders that an exception may not be justified 
under Article 17 unless it avoids any likelihood of c onfusion with the trademark. Thus, the United 
States appears to be importing into Article 17 the in terpretation made by the US courts of the "fair 
use" exception provided under US trademark law. Acco rding to that interpretation, as restated in the 
US response to the Panel's Question No. 80:
222  
 
The user invoking fair use must adapt and design his usage of the geographical 
indication so as not to cause a likelihood of consumer confusion. 
                                                                                                                                                                     
ATF has simply taken the step of recognizing its vitic ultural singularity and confirming the boundaries that 
encompass the region. 
219 The EC finds it difficult to understand the explanation provided by Australia in its Response to the 
Panel's Question No. 80 to the effect  that the exception provided under Section 122 of the Australian Trade 
Marks Act (Exhibit EC-7) with respect to the "good faith use" of a sign used "to indicate the geographic origin" 
of a  product does not apply with respect to a "TRIPS-defined GI", because Section 6 (Exhibit EC-59) of that 
Act defines expressly the notion of "geographical indication". In the EC's respectful view, this is an obvious non-sequitur . Section 6 defines a geographical indication as follows: 
in relation to goods origina ting in a particular country or in a regi on or locality of that country, means a 
sign recognised in that country as a sign indicating that the goods: (a)originated in that country, region or locality; and (b)have a quality, reputation or other characteristic attributable to their geographical 
origin.  
 Thus, it is plain that the term "signs used to indicate the geographical origin of goods" used in Section 
122 includes any sign falling within the category of geographical indications as defined in Section 6.  
Although, as noted by Australia, Section 61 (Exhibit EC-60) provides for the rejection of an application 
for the registration of a trademark that contains or consists of a geographical indication, this is subject to exceptions, including one which purports to implement Article 24.5 of the TRIPS Agreement. As a result, 
Australia's reading of Section 6 would have the manifestly absurd consequence that geographical indications, 
which would be entitled in principle to protection under the TRIPS Agreement, could not be used under the "good faith use" exception, while other indications of source, which are not geographical indication and are not 
entitled to protection under Section 3 of Part II of the TRIPS Agreement, would qualify for that exception.   
220 US FOS, para. 75. Emphasis added. 
221 At para. 94. 
222 At para. 120. WT/DS174/R/Add.2 
Page B-226  
 
 342. This interpretation of the US "fair use" ex ception cannot be transposed to Article 17 because 
it would render that provision inoperative and superfl uous. Article 17 is an exception to Article 16.1, 
which does not come into play unless there is a prima facie  violation of the exclusive rights conferred 
by Article 16.1. If the use of a geographical indi cation does not result in a likelihood of confusion 
with an earlier registered trademark, there is no viol ation of Article 16.1 and, therefore, no need to 
invoke Article 17. The application of Article 17 presupposes necessarily that the excepted uses give 
rise to a likelihood of confusion with the trademar k. Requiring as a condition for the application of 
Article 17 that the excepted uses must not result in  a likelihood of confusion with the trademark 
would render that provision wholly redundant.  
343. Alternatively, the US argument could be unders tood as meaning that, in order to be justified 
under Article 17, the likelihood of confusion must be confined to the strictly necessary. However, the 
wording of Article 17 provide no basis for such  narrow interpretation. Article 17 includes no 
"necessity" test, unlike other exceptions in the TRI PS Agreement (for example, Articles 3.2, 27.2, 
39.3 and 73(b)) or in other WTO Agreements (for example, Article XX (a), (b) and (d) of the 
GATT).
223 All that is required by Article 17 is that the exception "takes account" of the legitimate 
interests of the trademark owner and of third parties.  344. The language of Article 17 may be contrasted al so with that of Articles 13, 26.2 and 30 of the 
TRIPS Agreement, which provide that exceptions "shall not unreasonably prejudice" the interests of 
the right holder. This is a more stringent requirement than simply "taking account"
224 of the interests 
of the right holders, which nevertheless falls short of a "necessity" requirement.  
 345. The United States also argu es that the exception invoked by the EC is not justified under 
Article 17 because it fails to
225  
 
take account of the interests of the trademark owners and of third parties on a case-
by-case basis, depending on the manner in which a descriptive term is used. 
346. Once again, the United States is importing in to Article 17 conditions from its own trademark 
law which have no basis in that provision. Article  17 provides that the exception must "take account" 
of the interests of trademark owners and third par ties. It does not prescribe any particular method to 
do so. Members may choose to define an exception in very broad terms and leave to their courts wide 
discretion in order to apply it on a case-by-case basis, as appears to be the US own preference.226 But 
Members may as well choose to define in advan ce with greater precision the conditions for the 
application of an exception in its laws or regulations, in a manner wh ich leaves less discretion to the 
implementing authorities. This method is arguably less flexible than the method advocated by the 
United States. But it has the advantage of providing greater legal certainty to all the parties involved, 
including the trademark owners, and is not incompatible per se  with Article 17.  
                                                      
223 In US – Gasoline , pp. 14-19, the Appellate Body chastised the panel for reading a necessity 
requirement into Article XX(g) which, unlike other ex ceptions included in Article XX, does not use the term 
"necessary". 
224 Articles 26.2 and 30 of the TRIPS Agreement distin guish between the interests of the right holders, 
which must not be "unreasonably prejud iced" and the interests of third parties, which must be simply  "taken 
account of". 
225 US FOS, para. 75 
226 As explained above, under US law, trademark owners may not challenge before the courts the 
validity of the decision recognising a geographical indication for wines on the grounds that it infringes their trademark rights. Instead, they  are forced to bring individual suits agai nst each particular infringing  use. In 
contrast, Article 14(3) of Regulation 2081 /92 allows trademark owners to prevent a priori  the registration of any 
proposed geographical indication that results in a likelihood  of confusion with an ear lier trademark. This limits 
considerably the risk of subsequent infringing uses, since they are limited to the misuse of a name which is not 
confusing per se .  WT/DS174/R/Add.2 
 Page B-227 
 
 
  
347. In any event, as a matter of fact, the US obj ections are unwarranted. As explained above at 
paragraphs 299-303 the concerns expressed by the Un ited States with respect to certain particular 
misuses of a registered geographical indication are largely theoretical and can be addressed appropriately under Regulation 2081/92 and complementary legislation. Even if the remedies against 
those particular misuses available under EC law were  not deemed sufficient in order to comply with 
Article 16.1, they would be sufficient to consider th at the interests of the trademark owners and third 
parties are appropriately taken into account for the purposes of Article 17.   
(iii) Article 17 applies to non-geographical names 
348. Finally, the United States contends that "not hing in the EC's interpretation explains how the 
Article 17 fair use exception applies to non-geographic names".
227 
 349. The EC fails to understand the pertinence of this argument. The reasoning developed by the 
EC applies indistinctly to all geographical indi cations, regardless of whether they consist of a 
geographical or a non-geographical names, because a ll of them serve identical purpose. They identify 
a product as originating in a certain geographical  location to which consumers associate a given 
quality, reputation or other characteristic.
228 
 350. There is nothing in Article 17 which excl udes non-geographical names from its scope. In 
particular, the term "descriptive terms" may include  any term which serves to describe the origin of 
goods, and the product characteristics associated to such origin, regardless of whether it is a 
geographical name.  
2. Claim 20:  Regulation 2081/92 does not provide for a presumption of a likelihood of 
confusion in the case of use of an identical sign for identical goods 
351. Australia has submitted no further arguments.  
 
3. Claim 21:  Article 7(4) of Regulation 2081/92 is inconsistent with Article 16.1 of the 
TRIPS Agreement because it limits the grounds of objection 
352. Australia has submitted no further arguments. 
 
353. The EC notes that, in response to a questi on from the EC, Australia has been unable to 
identify any case where the EC authorities have limite d the grounds of objection under Article 7(4) of 
Regulation 2081/92 in the manner alleged by Australia.
229  This confirms the EC's interpretation of 
that provision.  4. Claim 22: Regulation 2081/92 does not ensure that objections from trademark owners 
will be considered by the Committee 
354. Australia has submitted no further arguments.  
 
                                                     
 
227 US Response to the Panel's Question No. 75, at para. 96. 
228 Cf. Article 22.1 of the TRIPS Agreement. 
229 Australia's Response to the EC's Question No. 1. WT/DS174/R/Add.2 
Page B-228  
 
 B. C
LAIM 23: BY REQUIRING THE CO -EXISTENCE OF A REGISTERED GEOGRAPHICAL INDICATION 
AND AN EARLIER TRADEMARK , ARTICLE  14(2)  ENCUMBERS UNJUSTIFIABLY THE USE OF THE 
TRADEMARK , CONTRARY TO ARTICLE  20 OF THE TRIPS  AGREEMENT  
355. Australia has submitted no further arguments. 
 
C. CLAIM 24: ARTICLE  14(1)  OF REGULATION  2081/92  IS INCONSISTENT WITH ARTICLE  24.5  OF 
THE TRIPS  AGREEMENT BECAUSE IT DOES NOT AFFORD THE RIGHT OF PRIORITY PROVIDED IN 
ARTICLE  4 OF THE PARIS CONVENTION  
356. Australia has submitted no further arguments, even though the EC had requested Australia to 
clarify this claim. 
 
357. The EC notes that, in response to a question from the EC, Australia has not been able to 
identify even one single application for a trademark that falls within the situation that Australia 
alleges under this claim.230  
 
D. ARTICLES  41.1,  41.2,  41.3,  41.4,  42, 43, 44.1,  45, 46, 48 AND 49 OF THE TRIPS  AGREEMENT  
1. General Considerations 
358. In response to the Panel's Question No. 85, Au stralia appears to concede that Parts III and IV 
of the TRIPS Agreement cannot be applied cumulatively to the same procedures:  
In the event that the Panel should consider  that the decision-making process provided 
by Article 15 of Regulation 2081/92 does provide a means for the owner of a 
registered trademark to enforce rights require d to be granted by TRIPS Article 16.1, it 
is Australia's view that the decision- making process constitutes an enforcement 
process in respect of such trademark rights governed by Part III of the TRIPS Agreement: Part IV is not applicable. 
359. The registration procedure laid down in  Regulation 2081/92, including the objection 
procedure, is not a means to "enforce" the rights of the trademark owners. Article 16.1 of the TRIPS 
Agreement confers to the owner of a registered tr ademark the exclusive right to prevent all third 
parties from using  identical or similar signs for identical or similar good where such use would result 
in a likelihood of confusion  
360. The registration of geographical indication does not amount to the use of that geographical 
indication and does not infringe per se  any rights of the trademarks owner.
231 Such infringement may 
result only from the subsequent use of the registered geographical indication by one of the right 
holders. Regulation 2081/92 does not prevent tr ademark owners from bringing infringement 
proceedings under the applicable provisions of tradem ark law against a right holder of a geographical 
indication, if and when it uses the geographical indication, in the context of which trademark owners 
can invoke that the registration is invalid or that the particular use (or misuse) of the geographical 
indication is not covere d by Regulation 2081/92.  
                                                      
230 Australia's Response to the EC's Question No. 2. 
231 The US courts have followed a similar reasoning in  order to deny to trademark owners the right to 
contest judicially the validity of the decision to recognise a geographical indication for wines on the grounds that it infringes their trademark rights. See Sociedad Anonima Viña Santa Rita v. US Dept. of the Treasury , 193 
F. Supp. 2d 6 (D.D.C 2001)  (Exhibit US–48) ("While the Bureau has recognized an AVA under the name 
"Santa Rita Hills" it has not used, imitated, or copied the name at all. Because su ch conduct is a necessary 
element of an infringement claim … the Court finds that the ATF's decision does not, in and of itself, 
contravene Plaintiff's trademark rights").    WT/DS174/R/Add.2 
 Page B-229 
 
 
  
361. The EC notes that, in response to questions posed by the EC, Australia has conceded that 
 
• Australia's Trade Marks Office is not a judicial body;232 
 
• the procedures before Australia's Trade Marks Office are not "judicial procedures" within 
the meaning of Article 42 of the TRIPS Agreement;233 
 
• Australia's Trade Marks Office does not have th e authority to order the remedies provided 
in Articles 44, 45 and 46.234 
 362. Despite the above, Australia maintains that the registration and oppos ition procedures before 
Australia's Trade Marks Office may be characterised as "enforcement procedures" within the meaning 
of Part III of the TRIPS Agreement.
235 However, if so, it would follow that Australia's registration and 
opposition procedures for trademarks are subject to Pa rt III and not to Part IV. Furthermore, it would 
mean that those procedures are in clear violation of Part III, and in particular of Articles 42, 44, 45 
and 46.  
363. Australia appears to consider that there is no such violation because the decisions of the Trade 
Marks Office are reviewable by the Federal Court of Australia.
236 But the requirement to provide for 
such judicial review is contained in Part IV and not in Part III (cf.  Article 62.5). Furthermore, the EC 
has explained repeatedly that the registration d ecisions under Regulation 2081/92 and the decisions of 
the authorities of the Member States with respect to the statements of objections are also subject to 
review by the courts, which can order the remedies pr ovided in Part III.  In view of that, Australia 
should explain why the EC's procedures for the registration of geographical indications are 
inconsistent with Part III, but Au stralia's  own procedures for the registration of trademarks are not. 
 364. The United States does not answ er to the questions whether the USPTO is a judicial body and 
whether the procedures before the USPTO are judici al procedures, although it seem to concede that 
they are not by saying that some of them are "quasi-judicial".
237 The United States also says that 
"certain aspects of the procedures of the USPTO could be regarded as part of the enforcement 
procedures available to US right holders".238 For example, according to the United States, a petitioner 
could take a cancellation decision of the USPTO  to a federal court to get an injunction.239 But the 
same is true of Regulation 2081/92. If a trademark owner objects successfully to the registration of a 
geographical indication, it could take the decision re jecting the registration to a Member State court to 
get an injunction against an infringing use.  365. In its First Written Submission, the EC argued that, for the purposes of Part III, the existence 
of an "infringement" must be determined in rela tion to the domestic law implementing Part II and not 
to Part II itself. Otherwise, Members would be requi red to give "direct effect" to the provisions of 
Part II.  In connection with this argument the EC  asked the following questi on to the complainants:
240 
 
                                                      
232 Australia's Response to the EC's Question No. 6 b).   
233 Australia's Response to the EC's Question No. 6 c). 
234 Australia's Response to the EC's Question No. 6 d). 
235 Australia's Response to the EC's Question No. 6 a). 
236 Australia's Response to the EC's Question No. 6 a). 
237 US Response to the EC's Question No. 7. 
238 Ibid. 
239 Ibid. 
240 EC's Question to the complainants No. 8. WT/DS174/R/Add.2 
Page B-230  
 
 Would it be possible under domestic law for an EC national who owns an 
Australian/US trademark to claim before the Australia/US courts that another trademark has been registered by Australia's Trademark Office/the US PTO in violation of Article 16.1 of the TRIPS Agreement, even where it is not contested that such registration is in conformity with a ll the relevant provisions of your domestic 
trademark law? 
366. The United States has responded evasively: 
 
… any person likely to be damaged by the re gistration or continued registration of a 
mark at the USPTO may request cancellation of  the registration at the USPTO or in a 
federal court and would cite grounds  under US law for such request. 
367. The EC understands that the "grounds under US  law" mentioned in the above response do not 
include the violation of Article 16.1. The EC assum es, therefore, that the United States agrees that 
there is no obligation under Part III to provide "enf orcement procedures" against the infringement of 
Article 16.1 as such, but only against the infringement of those provisions of domestic law that 
purport to implement Article 16.1, irrespective of their consistency with Article 16.1.  
 368. For its part, Australia answered as follows:  
A decision to register a trademark is reviewable de novo  by the Federal Court of 
Australia. Thus, it would be possible for an EC national who owns an Australian 
trademark to claim before that court that another trademark has been registered by the 
Trade Marks Office of IP Australia in violation of the exclusive rights to use a trademark and to authorise other persons to use the trademark granted by section 20 of the Australian Trade Marks Act, whic h implements Australia's obligations 
pursuant to TRIPS Article 16.1, even wh ere it is not contested that the latter 
registration is in conformity with a ll the relevant provisions of the Act. 
369. The EC does not understand this response, whic h appears to be contradictory. How could the 
EC owner of the Australian trademark "A" claim that the registration of the Australian trademark "B" infringes section 20 without contesting that the registra tion of trademark "B" is in conformity "with all 
the relevant provisions of the Act"? In a footnote to this response Australia confirms that "the 
provisions of international agreem ents do not have direct effect in Australian law". Thus, the EC 
understands that the owner of trademark "A" could not claim that, although trademark "B" has been 
registered in conformity with section 20, the registration of trademark "B" should be cancelled 
because it breaches Article 16.1. The EC assumes that, in view of this, Australia would agree that the 
situation described in the question would not give rise per se  to a violation of Part III of the TRIPS 
Agreement, irrespective of the question whether se ction 20 is consistent w ith Article 16.1 of the 
TRIPS Agreement.  
 
2. Claim 25: Regulation 2081/92 is inconsistent  with Article 41.1 of the TRIPS Agreement  
370. Neither Australia nor the United Stat es have submitted any further arguments. 
 
3. Claim 26: Regulation 2081/92 is inconsistent  with Article 41.2 of the TRIPS Agreement  
371. Neither Australia nor the United Stat es have submitted any further arguments. 
  WT/DS174/R/Add.2 
 Page B-231 
 
 
 372. The EC notes, nevertheless, that, in the context of another claim, the United States has 
conceded that:241 
 
in the case of the United States, it would pr obably not be difficult to designate an 
office in the US Government to perform a purely ministerial act of transmitting a 
registration … objections to the EC. 
373. As explained by the EC242, the action described in the US response is all that is required from 
the governments of other WTO Members under the objection procedure. The US admission confirms that, contrary to Australia's allegations
243, the requirement to lodge objections with the governments 
of other WTO Members does not "add unjustifiable complexity and delay".     
 
4. Claim 27: Regulation 2081/92 is inconsistent  with Article 41.3 of the TRIPS Agreement 
374. Australia has submitted no further arguments.  
 
5. Claim 28: Regulation 2081/92 is inconsistent  with Article 41.4 of the TRIPS Agreement 
375. The United States has made no further arguments.  
 
6. Claim 29: Regulation 2081/92 is inconsistent with Article 42 of the TRIPS Agreement 
376. See above the comments under "General Considerations".  
 E. C
LAIM 30: REGULATION  2081/92  IS INCONSISTENT WITH ARTICLE  10BIS (1) AND 10TER (1) OF 
THE PARIS CONVENTION  
377. Australia has submitted no further arguments.  
 F. C
ONSEQUENTIAL CLAIMS  
1. Claim 31: Regulation 2081/92 is inconsistent with Article 2.1 of the TRIPS Agreement 
378. Australia has made no further arguments. 
 
2. Claim 32: Regulation 2081/92 is inconsistent with Article 1.1 of the TRIPS Agreement 
379. Australia has conceded that this cl aim is entirely dependent on other claims .244 
 
3. Claim 33: The transitional national prot ection provided by the Member States is 
inconsistent with Articles 2.1, 16.1, 41.1 , 41.2, 41.3 and/or 42 of the TRIPS Agreement 
380. Australia has made no further arguments. 
 
                                                      
241 US Response to the Panel's Question No. 38, para. 74. 
242 EC Response to the Panel's Question No. 34, para. 86. 
243 Australia's FWS, para. 138. 
244 Australia's Response to the Panel's Question No. 82. WT/DS174/R/Add.2 
Page B-232  
 
 VI. THE EC MEASURE IS CONSISTENT WITH THE OBLIGATION TO PROVIDE 
PROTECTION TO GEOGRAPHICAL INDI CATIONS UNDER ARTICLE 22.2 OF 
THE TRIPS AGREEMENT 
1. Claim 34: Regulation 2081/92 is inconsistent  with Article 22.2 of the TRIPS Agreement 
381. In its First Written Submission, Australia stated this claim as follows:
245 
 
Regulation No. 2081/92 establishes a Community-wide regime for the registration and protection of EC-defined GIs. Howeve r, the EC measure does not provide –as 
concerns those same EC-defined GIs - legal channels for interested parties to prevent 
on a Community-wide basis any use of those EC-defined GIs which would mislead 
the public as to the geographical origin of  a good or any use which would constitute 
an act of unfair competition within the meaning of Paris Article 10 bis.
  
382. The EC noted that this claim was insuffi ciently argued and difficult to understand. As 
discussed below, after one hearing and a round of qu estions and answers, this claim  remains as 
obscure, if not more, as in Australia's First Written Submission.  
 
383. The above quoted passage suggested that the alleged violation would arise from the absence 
of Community-wide system of protection. The EC noted in its First Written Submission that there is no basis in Article 22.2, or anywhere else in the TRIPS Agreement, for the proposition that protection 
must be provided at any particular territorial leve l.  The Panel seemed to share the EC's perplexity 
because it asked Australia to "cite any authority for the proposition that a Member must comply with 
a particular WTO obligation through a single measur e applicable throughout its territory". Australia 
has responded this question as follows:
246 
 
Australia has not contended –and does not contend – that a WTO Member must comply with a particular WTO obligati on though a single measure applicable 
throughout its territory. Rather, Australia c ontends that, while the EC can choose to 
offer more extensive protection of EC-defin ed GIS at the Community level, the EC 
must also ensure that it does not breach its TRIPS obligations in doing so. Given the legal EC system, and the terms of Re gulation No. 2081/92 and of other EC and 
Member States law, the EC has effectively implemented a TRIPS right –at Community level- without also effectively implementing at the same level the 
concurrent TRIPS obligation. 
384. The EC wishes to put on record that it s till fails to understand the grounds for Australia's 
claim. In particular, the EC does not know what ar e the "concurrent TRIPS obligations" that the EC 
should have implemented at Community level, rather th an at Member State level.  In addition, the EC 
notes that Australia does not answer the Panel's ques tion, because it does not cite  any authority for the 
proposition that WTO rights and "conc urrent obligations" should be im plemented at the same level. 
The EC is not aware of any such authority.  385. In its First Written Submission, the EC noted  that it failed to see how the use of a validly 
registered geographical indication, which is otherw ise consistent with the TRIPS Agreement, could 
possibly mislead the public as to the geographical or igin of the goods. The EC also observed that it 
failed to understand how the registration or the use of a geographical indication consistently with the 
EC domestic laws, as well as with all other provisions of the TRIPS Agreement, including 
                                                     
 
245 Ibid., para. 155. 
246 Australia's response to the Panel's Question No. 81.  WT/DS174/R/Add.2 
 Page B-233 
 
 
 Articles 24.5 and 16, could ever constitute an act of unfair competition within the meaning of 
Article 10 bis of the Paris Convention (1967).  
 386. In response to the Panel's Question No. 24 co ncerning the meaning of the term "interested 
parties" in Article 22.2 Australia provides an "example" of the type of "uses" which it has in mind: 
 
For example, it is entirely possible that th ere are products which, while originally 
based on European processes, have s ubsequently come to represent the 
"international" trading standard for that product: to register the original geographic 
name under regulation No. 2081/92 in such circumstances – notwithstanding that the 
product qualify for registration – could we ll constitute misleading use or use which 
constitutes an act of unfair competition within the meaning of TRIPS Article 22.2 even within the EC. This type of action is clearly contemplated by the text of 
Article 22.2. 
387. Later, in response to the Panel's Question No. 82, Australia states what appears to be a 
condensed version of the same "example": 
 
the situations covered by TRIPS Article 22.2 do not necessarily involve trademark 
rights: for example, a term may have become a generic product description in international trade before it was protected in its country of origin. 
388. It is unclear to the EC whether these "examp les" are provided simply in order to illustrate 
Australia's interpretation of the notion of "interested parties" or purport to be claims on their own. The 
EC surmises that Australia does not dare to state them more openly as claims because it realises that 
they are as provocative as ill-founded.   389. First, the EC does not understand, and Australia does not explain, how the use of a term 
which in the territory of Member "A" is not a "generic" product description but a "geographical 
indication" within the meaning of Article 22.1 (i.e. a term which "identifies the origin" of the product) 
could be deemed "misleading" for the purposes of Ar ticle 22.2(a) when used in relation to goods of 
the origin designated by the geographical indica tion, simply because the same term has become 
"generic" in the territory of Member "B".   
390. Second, Article 22.2 is concerned with the protection of geographical indications as defined 
in Articled 22.1. Article 22.2(b) applies to unf air competition acts against the right holders of 
geographical indications and not to supposed unfai r competition acts against other parties arising from 
the legitimate use of geographical indications.  
391. Third, in any event, the conduct described by  Australia cannot be deemed an act of unfair 
competition by any reasonable standard. Australia c ites no authority for its interpretation, except a 
quotation from Bodenhausen's treatise to the effect th at the notion of "honest practice in industrial or 
commercial matters" within the meaning of Article  10bis.2 of the Paris Convention includes "honest 
practices established in international trade".
247 The EC submits that the exercise of a right conferred 
by a WTO Member in order to comply with its obligations under the TRIPS Agreement is not a 
"dishonest practice" in international trade. In particul ar, where such right is exercised in order to avoid 
that the public of that WTO Member be mislead as to  the origin of the products. In other words, in 
order to prevent a genuine act of unfair competition.   392. Moreover, Australia's interpretation would create a conflict between Article 22.2(a), which 
requires Members to provide means to protect the geographical indications of other Members, unless 
                                                     
 
247 Australia's Response to Question No. 24. WT/DS174/R/Add.2 
Page B-234  
 
 they have become "generic" in their  own territory
248, and Article 22.2(b), which, on Australia's 
construction, would require them to  provide means to prevent the use of geographical indications that 
are "generic" in the territory of other  Members.  Indeed, Australia's interpretation would create a 
conflict within  Article 22.2(b) itself, because, as mentione d, the fact of using a term which is a 
geographical indication in the territory of one Memb er in relation to products that do not have that 
origin is an act of unfair competition.  
 393. Finally, Article 22.2(b) applies to "uses". The registration of a geographical indication is not a 
"use" and cannot be per se  an act of unfair competition. Rather the alleged act of unfair competition 
would result from the subsequent use of a geographical indication. Regulation 2081/92 does not 
exclude the application of the laws on unfair competiti on of the Member States. To the extent that the 
conduct described by Australia could ever be consid ered as an act of unfair competition, the use of a 
registered geographical indication would be caught by  those laws, which are all based on the relevant 
provisions of the Paris Convention. Those laws are not  within the terms of reference of the Panel.  
 2. Claim 35: Regulation 2081/92 is inconsistent  with Article 1.1 of the TRIPS Agreement 
because it is inconsistent with Article 22.2 
394. Australia concedes that this claim is entire ly dependent on its claim under Article 22.2 of the 
TRIPS.
249 
 
3. Claim 36: Regulation 2081/92 is inconsistent with Article 22.2 TRIPS 
395. In its response to the Panel's Question No. 84, the United States argues that the fact that 
opposition procedures are regulated specifically in Pa rt IV does not exclude the possibility that the 
lack of adequate objection procedures may be  inconsistent as well with Article 22.2. 
 396. The United States argues that Article 62.1 envi sions that the procedures for the acquisition of 
an intellectual property right can violate both Part IV and other provisions of the TRIPS Agreement, 
including Part II. This is correct. For example, it is beyond question that those procedures may violate Articles 3 and 4. In addition, some provisions of Part II lay down special procedural rules. For example, Article 15.5 provides that "Members may afford an opportunity for the registration of a trademark to be opposed".   
397. Unlike Article 15.5, Article 22.2 does not regul ate expressly the right of opposition. In the 
absence of any such express rules in Article 22.2 or el sewhere in  Section 3 of Part II, it may not be 
assumed that the drafters' intention was to derogate from the generally applicable rules contained in 
Part IV.  
398. Moreover, Article 22.2 requires to provide "m eans" to prevent certain "uses". The registration 
of a geographical indication is not a "use" of a geogr aphical indication. For that reason, in order to 
comply with Article 22.2 it is not necessary to provid e for a right of objection to the registration of a 
geographical indication. Article 22.2 does not even re quire to provide for the possibility to challenge 
directly before the courts the registration decision.  In order to comply with Article 22.2 it may be 
sufficient if a Members provide for the possibilit y to bring infringement proceedings against a 
particular "use" prohibited by Article 22.2, in the context of which the plaintiff may challenge the 
validity of the registration, if necessary. EC law does provide for such possibility. 
 
                                                     
 
248 Cf. Article24.9 of the TRIPS Agreement. 
249 Australia's  Response to the Panel's Question No. 82.  WT/DS174/R/Add.2 
 Page B-235 
 
 
 VII. REGULATION 2081/92 IS CONSISTEN T WITH OBLIGATIONS UNDER THE 
TBT AGREEMENT 
399. Australia (but not the United States) has raised two claims under the TBT Agreement: 
 
• that Article 12(2) of Regulation 2081/92 is incompatible with Article 2.1 of the TBT 
Agreement (Claim 37);250 
 
• that Articles 4 and 10 of Regulation 2081/92 ar e incompatible with Article 2.2 of the TBT 
Agreement (Claim 38).251 
 400. In its first written submission, the EC has shown that the provisions of Regulation 2081/92 
referred to by Australia cannot be regarded as techni cal regulations within the meaning of Articles 2.1 
and 2.2 TBT Agreement.
252 Moreover, the EC has shown that in  any event, Australia's claims under 
Article 2.1 and 2.2 TBT Agreement are unfounded.253 
 A. R
EGULATION  2081/92  IS NOT A TECHNICAL REGULATION  
401. At this stage, Australia has provided very  little in response to the EC's arguments. In 
particular, in the view of the EC, Australia has failed to show that the provisions of 
Regulation 2081/92 which it challenges do indeed constitute a technical regulation falling under 
Article 2 of the TBT Agreement.  
1. Article 12(2) of Regulation 2081/92 is not a technical regulation 
402. Contrary to the view of Australia, Article  12(2) of Regulation 2081/92 is not a technical 
regulation within the meaning of the TBT Agreement.  In its first written submission, the EC has set 
out that Article 12(2) does not apply to identifiable products, does not lay down product 
characteristics, and is not a mandatory requirement.
254 Moreover, in response to Question 50 of the 
Panel, the EC explained that the requirement to indicate the origin of the product is not a "labelling requirement as it applies to a product, process or production method" within the meaning of Annex 1, 
Point 1, to the TBT Agreement.
255 
 403. For all these reasons, Article 12(2) of Regulati on 2081/92 is not a technical regulation within 
the meaning of the TBT Agreement.  2. Articles 4 and 10 of Regulation 2081/92 are not a technical regulation 
404. Contrary to the view of Australia, Articles 4 and 10 of Regulation 208 1/92 are not a technical 
regulation within the meaning of the TBT Agreement.  405. In its first written submission, the EC has explained that by requiring the existence of 
inspection structures, Articles 4 and 10 of  Regulation 2081/92 do not lay down product 
characteristics, and therefore cannot be regarded as a technical regulation within the meaning of 
Point 1 of Annex 1 to the TBT Agreement.
256 The EC stressed that the objective of the requirement of 
                                                      
250 Australia's FWS, para. 234 et seq. 
251 Australia's FWS, para. 249 et seq. 
252 EC FWS, para. 439 et seq. 
253 EC FWS, para. 469 et seq. 
254 EC FWS, para. 443 et seq. 
255 EC Response to Panel's Question No. 50, para. 120. 
256 EC FWS, para. 458 et seq. WT/DS174/R/Add.2 
Page B-236  
 
 inspection structures was to ensure that the produc t specifications are complied with. Accordingly, 
even if, for the sake of argument, it were accepte d that these product specifications are a technical 
regulation or a standard, then the inspection st ructures would constitute a conformity assessment 
procedure within the meaning of Point 3 of Anne x 1 to the TBT Agreement, but not a technical 
regulation. Accordingly the applicable provisions wo uld be Articles 5 to 9 of the TBT Agreement, and 
not Articles 2 to 4 thereof. 
 406. In response to Question 60 of the Panel, Aust ralia has claimed that the dividing line between a 
technical regulation and a conformity assessment proce dure is "difficult to determine in the abstract". 
The EC does not agree. As the EC has set out in its response to the same question,
257 the dividing line 
is perfectly clear, and follows from the definitions c ontained in Points 1 and 3 of Annex 1 to the TBT 
Agreement. According to Point 1 of Annex 1,  a technical regulation "lays down product 
characteristics". According to Point 3, a confor mity assessment procedure ensures that "relevant 
requirements in technical regulations or standards are fulfilled". In application of these definitions, it 
should be clear that the requirement of inspection structures is not a technical regulation. 
 
407. In its response to Question 60, Australia has ra ised the question whether the EC contends that 
the "product specifications requirement set out in Ar ticle 4 of the Regulation" constitutes a technical 
regulation. The EC certainly does not contend that  the requirement that a geographical indication  
must correspond to certain product specifications c onstitutes a technical regulation. This requirement 
is merely a condition for the registration of geograp hical indications, i.e. of an intellectual property 
right, and does not itself constitute a technical regulation. 
 408. A different question would be whether i ndividual product specifications laid down for 
particular geographical indications are technical regulations. The EC does not  believe so. However, 
the Panel does not need to address this issue, since Australia has not raised any specific claims with 
respect to specific product specifications. It is sufficient to note that even if, for the sake of 
hypothesis, Australia's thesis were accepted th at somehow product specifications are technical 
regulations, still the requirement of inspection stru ctures would not constitute a technical regulation. 
 409. For these reasons, the requirement of inspec tion structures set out in Articles 4 and 10 of 
Regulation 2081/92 does not constitute a technical  regulation within the meaning of the TBT 
Agreement. 
 B. C
LAIM 37: ARTICLE 12(2)  OF REGULATION  2081/92  IS INCOMPATIBLE WITH ARTICLE  2.1 OF 
THE TBT  AGREEMENT  
410. Australia has claimed that Article 12(2) of Regulation 2081/92 is incompatible with 
Article 2.1 of the TBT Agreement.258  
 411. As the EC has set out in its first written subm ission, Article 12(2) is fully compatible with 
Article 2.1 of the TBT Agreement.
259 In particular, the EC has explained that Article 12(2) of 
Regulation 2081/92 applies to domestic and forei gn geographical indications in a non-discriminatory 
fashion, since it requires in fact the indication of the country of origin for the homonymous 
geographical indication which is protected later, irr espective of whether this is the EC or the third 
country indication.  412. The EC notes that in its response to Question 53 of the Panel, Australia has indicated that if 
interpreted in this way, Article 12(2) would not be incompatible with Article 2.1 TBT Agreement. 
                                                     
 
257 EC Response to Panel's Question No. 60, para. 132-134. 
258 Australia's FWS, para. 234 et seq. 
259 EC FWS, para. 469 et seq.  WT/DS174/R/Add.2 
 Page B-237 
 
 
 However, Australia voices doubts as to whether the inte rpretation set out by the EC is correct. As the 
EC has already explained above in response to Claim 3, these doubts are unfounded.260  
 413. Accordingly, Article 12(2) of Regulation 2081/92 is not incompatible with Article 2.1 
TBT Agreement. 
 
C. C
LAIM 38: ARTICLES  4, 10, AND 12 (1) OF REGULATION  2081/92  ARE INCOMPATIBLE WITH 
ARTICLE  2.2 OF THE TBT  AGREEMENT  
414. Australia has claimed that Articles 4, 10, a nd 12 (1) of Regulation 2081/92 are incompatible 
with Article 2.2 of the TBT Agreement.261  
 
415. Australia's claims in this r espect are similar to those which the United States now is raising 
under the national treatment provisions of the TRIPS Agreement and the GATT (Claims 1bis and 
12bis). In response to Claim 1bis, the EC has alr eady set out in detail that the requirement of 
inspection structures is necessary fo r the attainment of the objectiv es of Regulation 2081/92, and is 
not more trade-restrictive than necessary for the fulfilment of these purposes. These arguments apply 
also to the Australian claim made under Article 2.2 TBT Agreement. Accordingly, the EC refer to its 
defence to Claim 1bis in this respect.262 
 416. Accordingly, Regulation 2081/92 is fully compatible with Article 2.2 TBT Agreement. 
 VIII.  CLAIM 39, 40: THE EC MEASURE IS COMPATIBLE WITH ARTICLE 65.1 TRIPS 
AND ARTICLE XVI:4 WTO 
417. The United States has claimed that the EC h as not fulfilled its obligations under Article 65.1 
TRIPS.
263 Similarly, Australia has claimed that the EC has not complied with its obligations under 
Article XVI:4 WTO.264 
 
418. Both claims are dependent on substantive claims discussed above. Since these claims are 
unfounded, the consequential claims under Ar ticle 65.1 TRIPS and XVI:4 WTO are equally 
unfounded.  
IX. CONCLUSION 
419. For the above reasons, the EC reiterates the c onclusions stated in its First Written Submission. 
 
                                                     
 
260 Above para. 143. 
261 Australia's FWS, para. 249 et seq. 
262 Above, para. 91. 
263 US FWS, para. 190. 
264 Australia's FWS, para. 267. WT/DS174/R/Add.2 
Page B-238  
 
 ANNEX B-6 
 
ORAL STATEMENT OF THE EUROPEAN COMMUNITIES 
SECOND SUBSTANTIVE MEETING 
 
(12 August 2004) 
  
TABLE OF CONTENTS 
 
I. INTRODUCTION ................................................................................................................... ................244  
II. THE OBJECTIVE ASSESSMENT OF THE CO NTENT OF REGULATION 2081/92...................244  
III. REGULATION 2081/92 IS COMPAT IBLE WITH NATIONAL TREATMENT 
OBLIGATIONS, AND DOES NOT IMPOSE A REQUIREMENT OF DOMICILE OR 
ESTABLISH MENT.................................................................................................................. ...............246  
A. NATIONAL TREATMENT UNDER THE TRIPS  AGREEMENT (ARTICLE  3.1 TRIPS  AND 
ARTICLE  2.1 TRIPS  IN CONJUNCTION WITH ARTICLE  2.1 PARIS CONVENTION ).................246  
1. The Meaning and Scope of National Treatment under the TRIPS Agreement................246  
(a) TRIPS national treatment concerns the treatment of nationals, not of goods , or of residents...........246  
(b) Regulation 2081/92 does not discri minate betwee n nationa ls ..........................................................247  
(c) Regulation 2081/92 does not involve de facto discrimination betw een nationals.............................249  
(d) The fact that different legal provisions apply does not prove that there is less favourable 
treatment ...................................................................................................................... ...................250  
2. Claim 1: Non-EC nationals are accord ed less favorable treatment than EC 
nationals with respect to the registratio n of geographical indications through the 
application of a condition of reciprocity and e quivalence .................................................251  
3. Claim 1bis: Regulation 2081/92 violates the national treatment obligations under 
the TRIPS Agreement by requiring the exis tence of inspection structures with 
respect to the specific product for which protection is requested .....................................252  
(a) The requirement of inspection structures does not require "equivalence by another name".............253  
(b) Regulation 2081/92 does not impose an "EC mode l" of inspection structures, and is not 
unduly prescr iptive ............................................................................................................ .............253  
(c) The existence of inspection structures is necessary for attaining the objectives of 
Regulation 2081/9 2............................................................................................................. ............254  
4. Claim 2: Regulation 2081/92 violates the national treatment obligations under the 
TRIPS and the Paris Convention by requiring that applications must be 
transmitted by the country in which th e geographical area is located .............................256  
5. Claim 3: Non-EC nationals are accord ed less favorable treatment than EC 
nationals with respect to the requirement to indicate th e country of origin for 
homonymous geographica l indicati ons................................................................................257  
6. Claim 4: Regulation 2081/92 accords less favourable treatment to non-EC nationals 
by subjecting the right to ob ject to the registration of  geographical indications to 
conditions of reciprocit y and equivalence ...........................................................................258  
7. Claim 5: Regulation 2081/92 accords less favourable treatment to non-EC nationals 
by requiring their own country to  transmit the objection .................................................258  
8. Claim 6: Regulation 2081/92 accords less favourable treatment to non-EC nationals 
by requiring non-EC national  to have a "legitimate in terest" to object to the 
registration of geographical indications ..............................................................................259  
9. Claim 7: Regulation 2081/92 accords less favourable treatment because a non-EC 
rightholder has no "representative" in  the regulatory committee to "speak for 
him"........................................................................................................................... .............260  
10. Claims 8 and 9: A right of objection was available to persons resident or 
established in an EC Member State that  was not available to other WTO Member 
nationals ...................................................................................................................... ...........260   WT/DS174/R/Add.2 
 Page B-239 
 
 
 B. PROHIBITED REQUIREMENT OF DOMICILE OR ESTABLISHMENT (ARTICLE  2.1 TRIPS  IN 
CONJUNCTION WITH ARTICLE  2.2 PARIS CONVENTION )......................................................262  
1. The claims based on Article 2(2) Paris Co nvention are not within the Panel's terms 
of reference ................................................................................................................... .........262  
2. Claim 10: Regulation 2081/92 requires non- EC nationals to become established in 
the EC as a condition for registeri ng geographical i ndications.........................................263  
3. Claim 11: Regulation 2081/92 requires non- EC nationals to become established in 
the EC as a condition for objecting......................................................................................263  
C. NATIONAL TREATMENT UNDER ARTICLE  III:4  GATT ........................................................264  
1. The Regulation 2081/92 is not incompat ible with Article III:4 GATT (Claims 12–
15) ............................................................................................................................ ...............264  
2. The measure would be justified under Article XX(d) GATT.............................................265  
IV. REGULATION 2081/92 IS COMPATIBLE WITH THE OBLIGATION TO PROVIDE 
MOST-FAVOURED-NATION TREATMENT....................................................................................265  
A. ARTICLE  4 TRIPS ................................................................................................................265  
1. Claim 16: As among non-EC WTO Members, nationals from WTO Members that 
satisfy the EC's conditions of reciproc ity and equivalency are accorded more 
favourable treatment than nationals from those WTO Members that do not.................265  
2. Claim 17: Under Regulation 2081/92, an EC Member State grants more favourable 
treatment to nationals from other EC Memb er States than it accords to nationals 
from non-EC WTO Members ..............................................................................................266  
B. CLAIM 18: BY SUBJECTING THE REGISTRATION OF THIRD -COUNTRY GEOGRAPHICAL 
INDICATIONS TO CONDITIONS OF RECIPROCITY AND EQUIVALENCE , THE EC MEASURE 
IS INCONSISTENT WITH THE MOST -FAVOURED -NATION OBLIGATION UNDER THE 
ARTICLE  I:1 GATT ..............................................................................................................268  
V. REGULATION 2081/92 DOES NOT DIMI NISH THE LEGAL PROTECTION OF 
TRADEMARKS..................................................................................................................... ..................268  
A. CLAIM 19: ARTICLE  14(2)  OF REGULATION  2081/92  IS INCONSISTENT WITH 
ARTICLE  16.1  OF THE TRIPS  IN THAT IT ALLOWS THE CO -EXISTENCE OF 
GEOGRAPHICAL INDICATIONS AND EARLIER TRADEMARKS ................................................268  
1. Article 14(3) of Regu lation 2081/92 ......................................................................................268  
(a) Registrability of geographical  names as tr ademar ks.........................................................................269  
(b) The Complainants have misint erpreted Arti cle 14(3 ).......................................................................269  
(c) Article 14(3) confers enforceable ri ghts to the trad emark ow ners....................................................273  
(d) EC law provides means to prevent confusing uses of a registered geographical indication .............274  
2. Article 24.5 of th e TRIPS Ag reement...................................................................................275  
(a) The relationship between Section 3 of Part II and Article 16.1 ........................................................275  
(b) The meaning of "the righ t to use a tr ademark" .................................................................................2 76 
(c) The validity of the registration ............................................................................................... ..........277  
3. Article 24.3 of th e TRIPS Ag reement...................................................................................278  
4. Article 17 of the TRIPS Agreement......................................................................................279  
(a) The exception is "lim ited" ..................................................................................................... ...........280  
(b) The exception "takes account" of the interests of the trademark owners  and third parties ...............281  
B. CLAIM 20: REGULATION  2081/92  DOES NOT PROVIDE FOR A PRESUMPTION OF A 
LIKELIHOOD OF CONFUSION IN THE CASE OF USE OF AN IDENTICAL SIGN FOR 
IDENTICAL GOODS ................................................................................................................283  
C. CLAIMS 21 AND 22:  ARTICLE  7(4)  OF REGULATION  2081/92  IS INCONSISTENT WITH 
ARTICLE  16.1  OF THE TRIPS  AGREEMENT BECAUSE IT DOE S NOT PROVIDE A RIGHT 
OF OBJECTION .......................................................................................................................283  
VI. THE EC MEASURE IS CONSISTENT WI TH THE OBLIGATION TO PROVIDE 
PROTECTION TO GEOGRAPHICAL INDICA TIONS UNDER ARTICLE 22.2 OF THE 
TRIPS AGREEMENT ................................................................................................................ ............284  WT/DS174/R/Add.2 
Page B-240  
 
 VII. REGULATION 2081/92 IS CONSISTENT  WITH OBLIGATIONS UNDER THE TBT 
AGREEMENT ...................................................................................................................... ...................285  
A. ARTICLE  (12)(2)  OF REGULATION  2081/92  IS NOT A TECHNICAL REGULATION ..................285  
B. ARTICLES 4 AND 10 OF REGULATION  2081/92  ARE NOT A TECHNICAL REGULATION .........286  
VIII. CONCLUSION ..................................................................................................................... ...................287  
 
  WT/DS174/R/Add.2 
 Page B-241 
 
 
 Table of WTO and GATT cases referred to in this statement 
 
Short Title Full Case Title and Citation of Case 
Argentina – 
Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measur es on Imports of Footwear , 
WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515 
EC – Asbestos  Appellate Body Report, European Communities – Measures Affecting Asbestos and 
Asbestos-Containing Products , WT/DS135/AB/R, adopted 5 April 2001 
Indonesia – Autos  Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry , 
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 2, 3, and 4, adopted 
23 July 1998, DSR 1998:VI, 2201 
Korea – Dairy  Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain 
Dairy Products , WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3 
Korea – Various 
Measures on Beef  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 
US – Section 337 Panel Report, US – Section 337 of the Tariff Act of 1930 , Report by the Panel adopted 
on 7 November 1989 (L/6439 – 36S/345) 
US – Taxes on 
Automobiles Panel Report, United State – Taxes on Automobiles , DS31/R, 11 October 1994 
 WT/DS174/R/Add.2 
Page B-242  
 
 GLOSSARY 
 
 
Commission, EC Commission  Commission of the European Communities 
 
Committee  Committee of representatives of the Member States 
referred to in Article 15 of  Council Regulation 2081/92 
 
Community Trademark Regulation  Council Regulation (EC) No 40/94, of 20 December 
1993, on the Community Trademark, as amended 
 
Council, EC Council  Council of the European Union 
 
Court of Justice, European Court 
of Justice 
 Court of Justice of the European Communities 
 
DSU Understanding on Rules and Procedures Governing the 
Settlement of Disputes  
EC European Communities 
 
GATT General Agreement on Tariffs and Trade 1994 
 
FOS First Oral Statement 
 
FWS First Written Submission 
 
GI Geographical indication 
 
Member States, EC Member States Member States of the European Union 
 
Official Journal Official Journal of the European Union 
 
OHIM Office for Harmonization in the Internal Market  
Paris Convention Stockholm Act of the Paris Convention for the 
protection of Industrial property, of 14 July 1967  
Regulation 2081/92, Regulation Council Regulation (EEC) No 2081/92 of 14 July 1992 
on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, as amended on the date of establishment of the Panel 
 
SCM Agreement, SCM Agreement on Subsidies and Countervailing Duties 
 
SWS Second Written Submission 
 
Trademarks Directive First Council Directive 89/104, of 20 December, on the 
Community Trademark, as amended 
 
TBT Agreement, TBT Agreement on Technical Barriers to Trade 
   WT/DS174/R/Add.2 
 Page B-243 
 
 
  
TRIPS Agreement, TRIPS Agreement on Trade-Related Aspects of Intellectual 
Property Rights  
US United States 
 
WTO Agreement Marrakesh Agreement Establishing the World Trade 
Organization 
 WT/DS174/R/Add.2 
Page B-244  
 
 I. INTRODUCTION 
1. The European Communities welcomes this opportu nity to submit its views in this dispute. In 
our statement of this morning we will provide a response to the rebuttal submissions of the complainants. We will follow the same order of claims as in our written submissions. 
 
2. While we have striven to avoid unnecessary re petitions, the large number of claims involved, 
together with the fact that the complainants ofte n make divergent, if not contradictory arguments 
under each claim, have prevented us from being as conc ise as we would have liked at this stage of the 
proceedings. We trust, however, that the pane l will understand that the EC cannot leave without 
response the numerous new arguments, and in some cases new claims, made by the complainants in 
their rebuttal submissions. 
 
II. THE OBJECTIVE ASSESSMENT OF TH E CONTENT OF REGULATION 2081/92 
3. The complainants and the EC disagree about  the interpretation which must be given to a 
number of the provisions of Regulation 2081/92. A cen tral task for the Panel will therefore be to 
establish the proper meaning of Regulation 2081/92 as a measure of EC domestic law. The Panel must 
carry out this task in accordance with Article 11 of the DSU, which requires "an objective assessment 
of the facts of the case".  4. At this stage, the EC does not wish to re peat what it has already said in its previous 
submissions.
1 However, since this is a horizontal issue of  some importance to a number of the claims, 
and since the complainants persist in interpreting sev eral of the provisions of Regulation 2081/92 in a 
way which does not correspond to the meaning of th e measure, the EC would like to offer some 
general observations about the objec tive assessment of Regulation 2081/92. 
 5. First, and maybe most obviously, it must be recalled that since the interpretation of 
Regulation 2081/92 is a question of fact, the burden of proof for establishing that Regulation 2081/92 
has the meaning which the complainants allege is on the complainants. In their submissions, however, 
the complainants have repeatedly attempted to shif t this burden of proof to the EC, and asked the EC 
to disprove their claims.
2 This is not admissible. In order to prove their case, the complainants must 
do more than simply make factual assertions. They  must establish that the interpretation of 
Regulation 2081/92 which they defend is the onl y correct one, taking into account the wording, 
objectives and context of the measure in the EC legal order. 
 6. Second, the assessment of the content of Regulation 2081/92 must be objective. In their 
submissions, the complainants are systemati cally defending those interpretations of 
Regulation 2081/92 which are the least compatible with the EC's WTO obligations. In contrast, the 
complainants systematically discard those interpre tations of Regulation 2081/92 which do not result 
in a violation of WTO obligations, even where thes e interpretations are mandated by the wording, 
objectives and context of the Regulation. It is submitte d that such an approach to the interpretation of 
Regulation 2081/92 does not constitute an  objective assessment of the facts. 
 7. Third, as a measure of EC domestic law,  Regulation 2081/92 must be interpreted in 
accordance with the principles of interpretation a pplicable in the EC domestic legal order. A 
particularly important element for the interp retation of Regulation 2081/92 are therefore the 
international obligations of the European Communi ty, including the WTO Agreements. Contrary to 
what Australia continues to argue, this has nothi ng to do with the question of whether WTO law has 
                                                     
 
1 EC Response to the Panel's Question No. 1, para. 1 et seq.; EC SWS, para. 3 et seq. 
2 US Response to Panel's Question No. 1, para. 1.  WT/DS174/R/Add.2 
 Page B-245 
 
 
 "direct effect" in the EC legal order, and whethe r the European Court of Justice can review the 
legality of EC measures on the basis of their compatibility with WTO obligations.3 
 8. The European Court of Justice has held repeat edly that Community law must be interpreted in 
accordance with the Community's  international obligations.
4 This principle is highly relevant to the 
present case. It seems excluded that when faced with two equally possible interpretations of a 
provision of Community law, the Court of Justi ce would simply chose the one which leads to a 
violation of WTO obligations rather than the one which would not.  9. As one practical example for the way in wh ich the European Court of Justice takes into 
account WTO law in the interpretation of EC law, th e EC has referred to the Court's judgment in the 
Petrotub case.
5 To the EC's surprise, the United States has found this case not only instructive, but 
also "worrisome".6 In the view of the EC, the Petrotub judgment should be reassuring to the 
complainants, not worrisome. In this judgment, the Court gave effect to a provision of the Anti-Dumping Agreement on the basis that the EC Anti-Dumping Regulation was intended to 
implement this agreement. The Court of Justice reached this result despite  the fact that the AD 
Regulation did not contain a specific reference to  the provision applied, let alone a "without 
prejudice" clause similar to that contained in Article 12(1) of Regulation 2081/92.
7 
 10. The US has also referred to the fact that in the Petrotub case, the Commission had defended a 
contrary position in the proceedings before the C ourt of Justice to the one the EC had taken in a 
response to questions in the WTO AD Committee.
8 The EC does not consider this relevant for the 
present case. What is relevant is that despite the contrary position of the Commission and the Council, 
the Court of Justice took account of the interna tional obligations of th e Community, and of the 
statements of the EC in the WTO, a nd applied these international obligations. 
 
11. In the case of Regulation 2081/92, the case for an  interpretation in the light of the EC's WTO 
commitments is even clearer. Regulation 2081/92 contains clear references to international obligations, particularly in Article 12(1). In th e present proceedings, the EC has unambiguously and 
publicly explained the interpretation to be given to  the contentious provisions of the Regulation. On 
the basis of the case law of the European Court of Justice, there should be no doubt that the Court will 
take this into due account in its interpretation of the Regulation. 
 
12. In its second submission, the United States has s uggested that the explanations offered by the 
EC should be disregarded because they "lack legal force". Moreover, the Unite d States has raised the 
concern that the Council, the "25 Member States" or individuals might contest the "Commission's" interpretation. 
 
13. In this respect, the EC would like to recall on ce again that the explanations given before this 
Panel are given on behalf of the European Communiti es, not of any particular Community institution. 
Secondly, the question before the Panel involves the interpretation of an act of domestic law within 
the domestic legal order of the Member concerned.  There is therefore no need to create new legal 
                                                     
 
3 Australia's SWS, para. 42. 
4 EC Response to Panel's Question No. 15, para . 32 et seq.; EC, SWS, para. 18 et seq. 
5 EC Response to the Panel's Question No. 15, para. 36. 
6 US SWS, para. 13. 
7 The US has attempted to cast doubt on this fact by pointing out that in the Petrotub judgment, the 
Court of Justice also referred to Article 253 EC Treaty (former Article 190 EC), which lays down the general 
duty to state reasons for Community legi slative acts (US SWS, para. 17-18). Th e EC fails to see the relevance of 
this distinction. Whether the Court applied the EC Anti- Dumping Regulation or Article 253 EC Treaty, the fact 
is that it interpreted EC law in line with the EC's WTO commitments. The fact that it did this even with respect to a provision of EC primary law should strengthen the confidence of the US, not diminish it. 
8 US SWS, para. 14. WT/DS174/R/Add.2 
Page B-246  
 
 obligations, but to establish the proper meaning of th e EC measure within the EC legal system. It is 
not sufficient for the complainants simply to re fer to the risk that the interpretation of the 
Regulation could be contested. In a system based  on the rule of law, any legal measure can in 
principle be contested. However, the question is wh ether such a challenge would realistically succeed; 
and this the complainants  have failed to show. 
 
14. In its second submission, the United States has also argued that "if a WTO-consistent interpretation is not possible, the ECJ will apply EC law alone".
9 The EC can agree with this 
statement. However, in its submission, the US is not applying its own standard correctly. It is not 
sufficient for the complainants to show that a WTO-in consistent interpretation is possible; rather, they 
must show that a WTO-consistent interpretation is impossible. As the EC will show with respect to 
the individual claims, the complainants do not meet this standard.  
III. REGULATION 2081/92 IS COMPAT IBLE WITH NATIONAL TREATMENT 
OBLIGATIONS, AND DOES NOT IMPOSE A REQUIREMENT OF DOMICILE OR 
ESTABLISHMENT 
15. The EC will now address the claims that Re gulation 2081/92 constitutes a violation of the 
national treatment provisions of the TRIPS and the GATT, as well as the prohibition on conditions of 
domicile and establishment in Article 2.2 of the Paris Convention.  A. N
ATIONAL TREATMENT UNDER THE TRIPS  AGREEMENT (ARTICLE  3.1 TRIPS  AND 
ARTICLE  2.1 TRIPS  IN CONJUNCTION WITH ARTICLE  2.1 PARIS CONVENTION ) 
1. The Meaning and Scope of National Treatment under the TRIPS Agreement 
16. Before addressing the individuals claims of  the complainants under the national treatment 
provisions of the TRIPS Agreement, the EC c onsiders it necessary to comment on the following 
general points: 
 
• TRIPS national treatment concerns the treatment of nationals; 
• Regulation 2081/92 does not discriminate between nationals; 
• Regulation 2081/92 does not involve de facto discrimination between nationals; 
• The fact that different legal provisions appl y does not prove that there is less favourable 
treatment. 
(a) TRIPS national treatment concerns the treatment of nationals, not of goods, or of residents 
17. As the EC has already set out in its prev ious submissions, unlike Article III:4 GATT, the 
national treatment provisions of the TRIPS concern discrimination as between nationals , not between 
goods, or between residents.10  
 18. In their second submission, the complainants  continue to contest this essential difference 
between GATT and TRIPS national treatment.
11 According to the complainan ts, the fact that different 
legal provisions apply depending on the location of th e area to which the geographical indication is 
                                                      
9 US SWS, para. 16. 
10 EC FWS, para. 104 et seq.; EC SWS, para. 28 et seq. 
11 US SWS, para. 25 et seq. ; Australia SWS, para. 182.  WT/DS174/R/Add.2 
 Page B-247 
 
 
 related amounts to discrimin ation between nationals.12 In the view of the EC, this interpretation is 
incompatible with the national treatment provisions of the TRIPS Agreement.  19. Article 3(1) of the TRIPS Agreement – and si milarly Article 2(1) of the Paris Convention – 
requires WTO Members to accord to the nationals
 of other Members treatment no less favourable than 
to their own nationals . This reference to nationals in the TRI PS Agreement is intentional, and must be 
given meaning.   20. In their submissions, the complainants fail to  provide a meaningful interpretation of this 
concept. Their argument is that the Regulation re quires foreign nationals to become resident or 
established in the EC, and that because of this requi rement, foreign nationals are required to become 
"EC nationals".
13 This argument is false in two respect s. First, as the EC will set out, the 
Regulation 2081/92 does not contain any requirement of domicile or establishment. Second, even if a 
foreign national becomes domiciled or established in the EC, this does not mean he becomes an EC 
national. 
 
21. Nationality on the one hand, and domicile and establishmen t on the other, are distinct 
concepts which cannot simply be equated in the wa y the complainants suggest. For a natural person, a 
national is a person who holds the nationality of a co untry in accordance with the laws of that country. 
Neither in the EC, nor in the United States or Au stralia, does a person acquire the nationality simply 
by being a resident. In the same way, the nationalit y of legal persons is defi ned using various criteria 
other than establishment, most importantly the law of incorporation. 
 22. The fact that nationality and domicile are separ ate concepts is also borne out in the TRIPS 
Agreement itself. Several provisions of the TRIPS Agreement, namely Article 24.4, 40.3 and 40.4, 
refer to "nationals and domiciliari es" in the alternative. If the drafters of the TRIPS Agreement had 
wanted to refer to both "nationals and domiciliaries"  in Article 3.1 TRIPS Agreement, they could very 
easily have done so. That they did not indicates th at TRIPS national treatmen t was intended to apply 
as between nationals, not as between domiciliaries.  The same also follows from the specific 
prohibition of conditions of domic ile and establishment in Article 2 (2) of the Paris Convention, 
which otherwise would have been superfluous.  
23. The only text in the TRIPS Agreement to whic h the United States has pointed in support of its 
interpretation is footnote 1 to Article 1.3 of the TRIPS Agreement. In its second submission, the 
United States claims again that this provi sion "would apply to the EC, among other WTO 
Members".
14 This is manifestly wrong. Footnote 1 de fines the term "national" only for separate 
customs territories, which are part of another State,  and which therefore may not have a "nationality". 
Footnote 1 would therefore seem to apply, for instance, to Chinese Taipei, Hong Kong, China, or 
Macao, China. It does not apply to the EC, or to  other WTO Members which are not separate customs 
territories.  24. Accordingly, the Panel should find that Article 3(1) TRIPS Agre ement requires national 
treatment as between nationals
, not as between domiciliaries or as between goods. 
 
(b) Regulation 2081/92 does not discriminate between nationals 
25. Once Article 3(1) TRIPS Agreement is given its proper scope, it is clear that 
Regulation 2081/92 does not discriminate between nationals.  
                                                     
 
12 The complainants have made similar argumen ts also as regards the right of objection. 
13 US SWS, para. 29. 
14 US SWS, para. 27. WT/DS174/R/Add.2 
Page B-248  
 
 26. In support of their claims, the complainants have referred in particular to the fact that 
Regulation 2081/92 contains separate provisions  governing the registration of geographical 
indications, depending on where the geographical area to which the indication is related is located. 
The US has argued that there is "a close relationship between the geographical area that gives rise to the GI right and the nationality of the right holder".
15 Moreover, the US has argued that "any legal 
person producing or obtaining agricultural products a nd foodstuffs in a country will, as a practical and 
perhaps a legal matter , become a juridical person of that Member".16 
 27. The EC submits that these statements are unsupported by fact. Regulation 2081/92 does not 
contain any requirements as regards the nationalit y of producers which produce products bearing a 
protected name. It is not enough for the US to state th at this is "perhaps a legal matter". It should state 
where, in the measure at issue, namely Regulation 2081/92, there is a requirement as to the nationality 
of producers.  28. In this context, it may be important to know  for the Panel that there are cases where non-EC 
companies have become producers of products b earing a protected name under Regulation 2081/92. 
Some examples of which the EC is aware, but which are presumably not exhaustive, are the following:  
• In 1996, Sara Lee, a large US multinational, acquired Al Ponte Prosciutti, which produces 
Prosciutto di Parma (Exhibit EC-61). 
• From 1985 to 2003, Kraft Foods, a large US mu ltinational, owned Invernizzi, an Italian 
company which produces among other pr oducts Gorgonzola and Grana Padano 
(Exhibit EC-62). 
• Until 2000, Nestlé, a large Swiss multinational, used to own Vismara, an Italian company 
which produces among others Prosciutto di Parma (Exhibit EC-63). 
29. These cases show clearly that non-EC compan ies may become producers of products bearing 
a protected name under Regulation 2081/92. In its second submission, the EC has also shown similar 
examples from the area of wines and spirits.
17 Whether and to which extent foreign nationals become 
producers of such products may depend on business inte rests, and to some extent on coincidence. It 
has nothing to do with Regulation 2081/92, which is entirely neutral as to the nationality of producers. 
 30. The complainants might argue that even wh ere a foreign company acquires an EC producer, 
or establishes itself as a producer, it is likely to do this through a European subsidiary. However, even 
if, as a practical matter, this were true in certain cases, it is still not attribut able to Regulation 2081/92, 
which is the measure before this Panel.  31. Accordingly, the Panel should find that Re gulation 2081/92 does not constitute discrimination 
between nationals
. 
 
                                                      
15 US, SWS para. 26. 
16 US, SWS para. 32 (emphasis added). As for Australia, Australia's arguments seem to be limited to 
noting that 10 headlines in the EC's first submission use the word "national" (cf. Australia's SWS, para. 182). 
The EC would comment that this is hardly surprising, given that these headlines restated the claims of the complainants. 
17 EC SWS, para. 46.  WT/DS174/R/Add.2 
 Page B-249 
 
 
 (c) Regulation 2081/92 does not involve de facto discrimination between nationals 
32. The EC would like to emphasize that if Regulation 2081/92 does not involve discrimination 
of nationals de jure , it also does not do so de facto . 
 33. As the EC has set out in its earlier submissions, de facto discrimination is a concept which is 
closely related to preventing circumven tion of national treatment obligations.
18 A good complying 
with the product specifications of a protected geographical indication will originate in the 
geographical area to which the indication is related.  As a consequence, any discrimination on the basis 
of whether the geographical indication is located in the EC or abroad would be discrimination between foreign and domestic products. The EC sees  therefore no reason to extend TRIPS national 
treatment to a situation which by defi nition is covered by Article III:4 GATT. 
 34. In its second submission, the United Stat es has referred to the Panel Report in US – Section 
337, in which the Panel held that procedures in principle applying to persons can still involve a 
discrimination of goods of foreign origin.
19 However, this report hardly su pports the US view. First, in 
the present case, the submission of the complain ants is the reverse of the conclusions in US – Section 
337, namely that even though covered by Article  III:4 GATT, an alleged discrimination between 
products should also be considered di scrimination between nationals. Second, US – Section 337  was 
decided under the GATT 1949 at a time when the TRI PS Agreement did not yet exist. Accordingly, 
the question of how TRIPS and GATT national treatment  relate was not an issue before that Panel. 
 
35. In its submission, as an example for a de facto violation of TRIPS national treatment, the 
United States has constructed a case where all patents first filed abroad are subjected to higher fees.20 
Once again, this example does nothing to support th e US arguments in the present case. In the US 
example, the fees for the registration of patents are not related to the origin of products. Accordingly, 
such a case would not fall under Article III:4 GATT, and a case for a de facto application of TRIPS 
national treatment might possibly be made. This is different from the present case, which clearly falls 
under Article III:4 GATT.  36. The US has attempted to dismiss the EC's ar guments by stating that there is no reason why 
the national treatment obligations of the GATT and the TRIPS should not apply simultaneously.
21 At 
a general level, it is of course tr ue that obligations arising under sev eral covered agreements can apply 
simultaneously. Still, the US argument is too superf icial. In particular, the US overlooks Article II:2 
of the WTO Agreement, according to which both th e TRIPS and the GATT are integral parts of the 
WTO Agreement, i.e. of one single internationa l agreement. As the Appellate Body has stated 
repeatedly, the covered agreements must therefore be  interpreted as a whole, and "in a way that gives 
meaning to all of them, harmoniously".22 For the same reason, the Panel in Indonesia – Autos found 
that there is a presumption against conflict between the covered agreements.23 
                                                      
18 EC Response to Panel's Question No. 29 , para. 67 et seq; EC SWS, para. 49. 
19 US SWS, para. 38-39. 
20 US SWS, para. 40. 
21 US SWS, para. 42. 
22 Appellate Body Report, Argentina – Footwear (EC) , para. 81; Appellate Body Report, Korea – 
Dairy , para. 81. 
23 Panel Report, Indonesia – Autos , para. 14.28. The US has argued that the report of the Panel in 
Indonesia – Autos , which cautioned against an extensive interpretation of TRIPS national treatment, is not 
relevant to the present case because it dealt with measure of support not relating to intellectual property (US 
SWS, para. 43). However, the US overstates the differen ce between this case and the present. The Panel in 
Indonesia – Autos  was concerned with the maintenance of an in tellectual property right , namely a trademark. 
The only difference was that the Panel did not consider specifically the relationship of TRIPS national treatment 
to Article III:4 GATT, but to other disciplines of the c overed agreements. However, in carrying out its analysis, WT/DS174/R/Add.2 
Page B-250  
 
  
37. The interpretation of the complainants is not  in line with these principles. It is not a 
harmonious interpretation to needlessly enlarge the sc ope of TRIPS national treatment to overlap with 
GATT national treatment. In addition, there are important structural differences between the GATT and the TRIPS. For instance, th e TRIPS Agreement does not contai n any provision corresponding to 
Article XX GATT. It would not seem appropriate that a measure discriminating between goods which 
is justified on the basis of Article XX GATT w ould nonetheless be found incompatible with the 
covered agreements on the simple basis of a de facto application of TRIPS national treatment.
24 
 38. Accordingly, the Panel should not find that Regulation 2081/92 involves de facto 
discrimination between nationals. 
 (d) The fact that different legal provisions apply does not prove that there is less favourable 
treatment 
39. Throughout its submission, the United States has argued that because there are different 
provisions governing the registration of ge ographical indications depending on where the 
geographical area is located, the EC is applying "dif ferential treatment", and has called on the EC to 
show that, despite such differences, the no less favourable standard is met.
25 The US has also made 
similar suggestions with respect to the right of objection.26 
 40. The EC strongly contests this attempt by the United States to shift the burden of proof. In 
Korea – Various Measures on Beef , the Appellate Body stated clear ly that a formal difference in 
treatment is not sufficient to show th at there is less favourable treatment.
27 Accordingly, the US must 
do more than just show that the registration of EC and foreign geographical indi cations is dealt with in 
different provisions. It must show that there is a substantive difference between these provisions, and 
that this difference entails less favour able treatment of foreign nationals. 
 
41. In support of its statement, the United States28 has referred to the Panel Report in US – 
Section 337 , where the Panel stated that where "different  provisions" apply, it is incumbent on the 
contracting party applying "differential treatment" to s how that in spite of such differences, the no less 
favourable standard is met.29 However, it does not appear that the Panel in this case meant to say to a 
formal difference in treatment would entail "differen tial treatment", and thus entail a reversal of the 
burden of proof. Moreover, if  this is what it meant, then this is certainly not in line with the case law 
of the Appellate Body, which has not linked such consequences to a formal difference in treatment.30 
 42. It should also be noted that the United States argument is inconsistent with its own 
submissions on other claims. As a matter of fact , the United States does not want formally equal 
treatment for foreign geographical indications, but  differential treatment. For instance, the United 
States argues that unlike EC geographical indicati ons, foreign geographical indications should not 
                                                                                                                                                                    
 
the Panel clearly recognised that the need for a harmonious and coherent interpretation of the covered 
agreements which required caution with respect to a de facto application of Article 3.1 TRIPS. 
24 The EC is not taking a view on the complex le gal issue of whether Article XX GATT may be of 
relevance in connection with the TR IPS Agreement. However, the interp retation of TRIPS national treatment 
put forward by the complainants inevitably would raise this complex systemic question. 
25 US SWS, para. 25, 46, 70, 88. 
26 US SWS, para. 86. 
27 Appellate Body Report, Korea – Various Measures on Beef , para. 137. 
28 US SWS, para. 46. 
29 Panel Report, US – Section 337 , para. 5.11. 
30 It is interesting to note that in Korea – Various Measures on Beef , para. 136, the Appellate Body 
omits from its quotation the last two sentences of para. 5.11 of the Panel Report in US – Section 337 .  It appears 
that this omission is deliberate.  WT/DS174/R/Add.2 
 Page B-251 
 
 
 have to satisfy the requirement of inspection struct ures. Similarly, the United States argues that unlike 
for EC geographical indications, requests for the registration of foreign geographical indications 
should not have to be submitted th rough the government of the country  in which the area is located. 
Accordingly, the submission of the United States woul d appear to be that there is formally equal 
treatment, but that this formally equal treatment  nevertheless involves less favourable treatment. 
 
43. Accordingly, the burden of proof that Regul ation 2081/92 involves less favourable treatment 
is on the US, not on the EC.  
2. Claim 1: Non-EC nationals are accorded le ss favorable treatment than EC nationals 
with respect to the registration of geographi cal indications through the application of a 
condition of reciprocity and equivalence  
44. We will now turn to the individual claims of  the United States and Australia regarding TRIPS 
national treatment. The first claim is that by subj ecting the registration of geographic indications from 
other WTO members to "conditions of reciprocity and equivalence", Regula tion 2081/92 violates the 
national treatment provisions of Article 3.1 TRIPS and 2.1 Paris Convention. 
 45. In its submissions to the Panel, the EC h as already confirmed that it does not apply such 
conditions to the registration of geogra phical indications from other WTO Members.
31 The EC, in 
particular, has explained that the application of th ese conditions to WTO Members is in fact excluded 
by the introductory language of Article 12(1) of Regulation 2081/92, which provides that these 
conditions apply "without prejudice to international agreements". The EC has also explained that this 
reference to international agreements requires in pa rticular that the EC's WTO obligations be taken 
into account. As the EC has said earlier, this is fully  in line with the jurisprudence of the Court of 
Justice, according to which EC law must be in terpreted consistently w ith international law. 
 
46. In their second submissions, the complainants  have not advanced many new arguments which 
have not already been responded to by the EC. The EC can therefore limit itself to a few additional 
remarks.  47. In its second submission, the United States has argued that even if Article 12(1) did not apply to WTO Members, the EC could still not register  geographical indications from other WTO Members 
because Article 12a (1) provides for such a regi stration procedure "in the case provided for in 
Article (12)(3)".
32 The US has claimed that because of this, "there is no registration procedure at all in 
the EC GI Regulation for non-WTO Members".33 
 48. These US arguments do not do justice to th e content and objectives of Regulation 2081/92. 
First of all, the US overlooks that the "without prejudice" clause in Article 12(1) applies to the 
conditions set out in this Article only. It does not exclude the applicability of the registration 
procedures set out in Article 12a. Obviously, if th e conditions of Article 12( 1) do not apply because 
they would prejudice an international agreement, th en the consequence cannot be that the registration 
procedures of Regulation 2081/92 do not apply. This  would be a nonsensical result, which would not 
be in accordance with the requirement to interp ret the EC legislation in accordance with WTO 
obligations. As the EC has already explained in res ponse to the Panel's questions, the reference to the 
procedure of Article (12)(3) is therefore releva nt only where the conditions of Article 12(1) are 
applicable.
34 
 
                                                      
31 Cf. in particular EC SWS, para. 51 et seq. 
32 US SWS, para. 8, 21. 
33 US SWS, para. 21. 
34 EC Response to Panel's Question No. 7, para. 17. WT/DS174/R/Add.2 
Page B-252  
 
 49. In its second submission, Australia has concen trated less on the text of Regulation 2081/92, 
and more on the various statements that the EC is al leged to have made in the past. However, in its 
second written submission, the EC has already discussed  most of these statements, and has shown that 
they are not relevant for the interpreta tion of Article 12(1) of Regulation 2081/92.
35 
 
50. Finally, it is important for the Panel to be aware that the European Commission has issued a 
2nd edition of its Guide to Regulation 2081/92 (Exhibit EC-64).36 This 2nd edition contains also a 
specific section on the interpretation of geographical indications related to areas located outside the 
EC. In this guide, it is explained that the cond itions of Article 12(1) do  not apply to other WTO 
Members.37 
 
51. Accordingly, since the EC does not apply conditions of reciprocity and equivalence to the registration of geographical indications from ot her WTO Members, the claim should be rejected. 
 
3. Claim 1bis: Regulation 2081/92 violates the national treatment obligations under the 
TRIPS Agreement by requiring the existence of inspection structures with respect to the 
specific product for which protection is requested 
52. It has become clear that the United States is also claiming that the requirement that inspection 
structures must exist for each protected name is in  violation of TRIPS nati onal treatment obligations. 
Australia has made no such claim under TRIPS, but has made a similar claim under the GATT. 
 
53. In its second submission, the EC has explained in detail that the requirement of inspection 
structures represents equal, not unequal treatment; that the requirement of inspection structures does not require "equivalence by another name"; that  Regulation 2081/92 does not impose an "EC model" 
of inspection structures; and that existence of in spection structures is necessary for attaining the 
objectives of Regulation 2081/92.
38 In its present statement, the EC will therefore only respond to a 
number of erroneous arguments of the United States, a nd similarly, by Australia in the context of its 
claims under the TBT Agreement. 
                                                      
35 EC SWS, para. 78 et seq. About the only document on which the EC has not yet commented is the 
Opinion of the European Parliament's Agriculture and Rural Development Committee, to which Australia refers 
in its second submission (Australia's SWS, para. 36). In  this respect, it should first be recalled that according to 
the Panel Report in US – Taxes on Automobiles , para. 5.12, the assessment of the aim of a legislative act should 
not be based only on statements of legislators or other preparatory work, but on the wording of the legislation as a whole. Second, the statement in the Committee's report, which concerned Regulation 692/2003, did not 
concern the "without prejudice" language, in Article 12(1), which was not the subject of the amendment. Third, 
Australia fails to quote the opinion of the Committee on Legal Affairs and the Internal Market, contained in the same report, which does recall that the conditions of r eciprocity and equivalence appl y "without prejudice to the 
international agreements in force" (Exhibit COMP-14, p. 23). Finally, it should be generally noted that 
individual committees of the Parliament do not represent the opinion of the European Parliament as a whole, and frequently give divergent opinions. Moreover, particularly where the European Parliament is only 
consulted, they cannot be regarded as giving an auth oritative statement of the intention of the legislator. 
36 This new edition replaces the version refe rred to by the US as Exhibit US-24. 
37 Cf. Exhibit EC-64, p. 18: "However, the conditions in Article 12(1) of Regulation (EEC) no. 2081/92 
are without prejudice to international agreements. Relevant international agreements include the WTO 
Agreements, in particular the TR IPS Agreement. Since under the TR IPS Agreement, WTO Members are 
obliged to provide protection to geographical indications, the conditions set out in Article 12(1) do not apply to 
WTO Members. Accordingly, an appli cation for registration of a PGI or P DO relating to an area located in a 
WTO Member may be made without a prior Commission decision on the basis of Article (12)(3) of Regulation (EEC) no. 2081/92." 
38 EC SWS, para. 91 et seq.  WT/DS174/R/Add.2 
 Page B-253 
 
 
 (a) The requirement of inspection structures does not require "equivalence by another name" 
54. In its submission, the EC has already explaine d that the requirement of inspection structures is 
not "equivalence by another name", but rather is a requirement that is applied on a product-specific 
basis for each product for which protection is sought.39 
 
55. In its second submission, the US continues to submit that the requirement of inspection 
structures is "a requirement for a broad inspection st ructure capable of performing this function for all 
agricultural products and foodstuffs".40 The EC notes that Australia has explicitly not shared this view 
of the US.41 
 
56. In fact, the United States interpretation is  incompatible with both the wording and the 
application in practice of Regulation 2081/92. Nowhere in the Regulation does it say that when transmitting an application for registration of a geographical indication, a WTO Member must show the existence of "a broad inspection structure capab le of performing this function for all agricultural 
products and foodstuffs". Article 12a (2) merely requires the declaration that the inspection structures 
by Article (10)(1) are in place.  
 57. Article 10(1), in turn, requires that the nece ssary inspection structures exist to ensure that 
agricultural products and foodstuffs bearing a protect ed name meet the requirements laid down in the 
specification. Article (10)(1) refers to "structures" in the plural. Nothing in Article (10)(1) therefore 
requires one single structure; it is entirely imaginable  that in one state, several structures might co-
exist. Moreover, Article (10)(1) requires inspecti on structures only for products "bearing a protected 
name", not for "all" agricultural products or foodstuffs as the US suggests.  58. Should there have been any doubt left a bout the interpretation of Regulation 2081/92, the 
practical application of the Regulation should have  dispelled it. The EC has already provided the 
Panel with the latest publication of the inspec tion bodies existing in the Member States of the 
Community.
42 As is obvious from this publication, there is not a single Member State in which one 
single "broad inspection structure" exists. Rather , all Member States have a multitude of inspection 
bodies showing a considerable variety of desi gns, and mixing private and public elements.43 
 59. Accordingly, it is clear that the requirement  of inspection structures is not "equivalence by 
another name", but is applied on a product-specific basis.
44 
 (b) Regulation 2081/92 does not impose an "EC model" of inspection structures, and is not 
unduly prescriptive 
60. Despite their frequent reference to an "EC model" of inspection structures imposed by the 
Regulation, the United States and Australia have so far not been able to id entify clearly what aspects 
of the EC requirements they consider objectionable.  61. In its second submission, the United States now argues that the "pertinent issue" is not which 
aspects of the inspection structures are objectionable, but whether the EC can demand "the 
                                                     
 
39 EC SWS, para. 96 et seq. 
40 US SWS, para. 53. 
41 Australia's SWS, para. 216. 
42 Exhibit EC-48. 
43 This practice has been entirely consistent since the beginning of the implementation of the 
Regulation. For further information of the Panel, the EC also attaches the first publication of inspection bodies dating from 1996 (Exhibit EC-65). 
44 This is also confirmed by the Guide to Regulation 2081/92 (Exhibit EC-64, p. 23). WT/DS174/R/Add.2 
Page B-254  
 
 establishment of the same particular inspection structure
 that the EC has chosen for itself".45 The EC 
must say that it does not understand how the United States can complain about having to adopt "the same" structures if it is not able to say in which way the structures should be different. 
 62. Presumably conscious of this contradiction, the US now attempts to identify certain aspects 
that would be objectionable. In particular, the US  complains about the requirement in Article 10 (3) 
that inspection bodies must permanently "have at their disposal the qualified staff and resources 
necessary to carry out inspections".
46 A similar argument has also been made by Australia in the 
context of its claim under the TBT Agreement.47 Secondly, the US questions why the inspection 
structure must be independent from the producers which it inspects.48  
 
63. As regards the requirement that inspection bodi es must permanently have at their disposal the 
necessary qualified personnel, the EC fails to see what  should be objectionable about this. In fact, the 
EC notes that this requirement corresponds closely to §205.501 of the Regulations of the US Organic 
Program (Exhibit EC-55), which require that cer tifying agents "must use a sufficient number of 
adequately trained personnel". It is obvious that inspections cannot be carried out without qualified 
personnel. Moreover, the Regulation does not specify  how much personnel is necessary, during which 
periods it should be employed, and whether such empl oyment should for instance be full-time or part-
time. All that is required is that the "necessary" pe rsonnel is at the disposal of the inspection body. 
What this means has to be decided for each specific inspection structure in the concrete 
circumstances. The Regulation is thus not overly prescriptive.49 
 
64. As regards the US argument that inspection bodies should not be requi red to be independent 
of producers, the EC finds this wholly unconvinc ing. If inspection structures are to deserve their 
name, they have to be objective and impartial as regards producers. It is  noteworthy that in the context 
of its organic program, the US follows exactly th e same logic by requiring that certifying agents 
should prevent conflicts of interest with respect  to producers and handlers, and should exclude any 
person with a conflict of interest from the certifi cation process (§ 205.501 (a) (10) and (11), Exhibit 
EC-55).  (c) The existence of inspection structures is necessary for attaining the objectives of 
Regulation 2081/92 
65. The real issue before this Panel is therefore not the precise nature of the inspection structures, 
but that the EC requires such inspection structures at all.  
                                                     
 
45 US SWS, para. 49 (emphasis added). 
46 US SWS, para. 53. 
47 Australia's SWS. 
48 US SWS, para. 57. The US also claims that in spection bodies must comply with the European 
standard for inspection bodies (EN 45011 – Exhibit EC-2 ). However, it follows clearly from Article 10 (3) of 
Regulation 2081/92 that compliance with an equivalent in ternational standard is sufficient. In its first written 
submission, the EC has already identified ISO/IEC Guide 65: 1996 as such an equivalent standard (EC FWS, para. 54 and Exhibit EC-3). 
49 Australia has argued that it in certain cases, it may not be necessary for inspection bodies to have 
personnel "permanently" at their dispos al, for instance where there is a partic ular harvest season. Although this 
is certainly not the rule, the EC does not exclude that there might be products for which the entire production 
process is confined to a part of the year, and for which therefore the need for inspectio ns arises only or primarily 
during that time of the year. In this case, the Regulation 2081/92 does not require unnecessary levels of staff to be maintained throughout the year. In fact, since it is pr esumably not economic to establish and wind down an 
inspection body every year, in such a case it would be reasonable to entrust the function of inspections to a body 
which also carries out tasks other than inspections under Regulation 2081/92. In its second submission, the EC has pointed to the existence of private firms whic h can carry out such tasks (EC SWS para. 107 and 
Exhibits EC-49  and EC-50).  WT/DS174/R/Add.2 
 Page B-255 
 
 
 66. In this context, the United States has refe rred to its system of certification marks and 
collective marks, and argued that the owner of the pr ivate rights are in the best position to ensure that 
the marks are used in manner consistent with their specifications.50 This appears somewhat similar to 
the arguments made by Australia, which has argued that the application of unfair competition law 
may be sufficient to prevent the misuse of protected geographical indications.51 
 
67. At the outset, the EC would remark that this  US position contradicts earlier statements made 
by the US according to which "normally, a private individual is not  in the best position" to control the 
use of a certification mark.52 The EC finds it therefore surprising, and contrary to US practice, that the 
United States is now arguing that certification marks and collective marks can be enforced efficiently 
purely at the initiative of the owner of the mark.53 
 68. Moreover, in response to the arguments of Au stralia, the EC has already explained that the 
application of unfair competition law does not provide  the same degree of protection and assurance to 
producers and consumers as the EC system.
54 These arguments apply equally if the United States now 
argues that geographical indications should be prot ected purely through the initiative of the owner of 
the certification mark or collective mark. As in th e case of the application of unfair competition law, 
the enforcement of marks depends on the initiative of the owner of the mark. Accordingly, the control 
and monitoring is by definition intermittent and varying, and will not provide a full degree of 
assurance to producers and consumers.  
69. The United States has put a certain emphasis on the fact that collective marks and certification 
marks are private rights. However, whether the rights are private is not the question. Like 
geographical indications, collective marks and certification marks remain collective rights, and are used by a potentially large number of producers.  It cannot simply be assumed that because these 
collectives rights are "private", their enforcement and protection would necessarily be as efficient as 
the one provided through Regulation 2081/92. 
 70. Once again, the EC would like to emphasize th at it is not contesting the right of the United 
States to protect geographical indications in its territory through a system of certification marks or collective marks. However, it seems that it is not the EC which is trying to "impose" its system on the 
US, but the US and Australia which are trying to impose their system on the EC. By requiring the EC 
to protect US or Australian geographical indications without requiring inspection structures, the EC 
would essentially have to lower its level of protectio n of geographical indications to that of the US 
and Australia. This would be incompatible with Ar ticle 1.1 TRIPS Agreement, which allows the EC 
to provide a higher level of protection to geographi cal indications than that required by the TRIPS 
Agreement. 
 
71. Accordingly, this claim should be rejected.  
                                                     
 
50 US SWS, para. 51. 
51 Australia's SWS, para. 220. 
52 Cf. EC FWS, para. 496. 
53 In this context, the EC would like to recall that it has not ruled out that the owner of a certification 
mark might fulfil the requirements of Article 10 of Regulation 2081/92 (EC Response to Panel's Question 
No. 59, paras. 130-131. However, whet her these requirements are met, and in particular whether the necessary 
objectivity and impartiality with regard to producers is ensured, would have to be evaluated on a case by case basis. 
54 EC SWS, para. 114 et seq. WT/DS174/R/Add.2 
Page B-256  
 
 4. Claim 2: Regulation 2081/92 violates the national treatment obligations under the 
TRIPS and the Paris Convention by requiring that applications must be transmitted by 
the country in which the ge ographical area is located 
72. In its previous submissions, the EC has responded in detail to the claim that 
Regulation 2081/92 violates the national treatment obligations under TRIPS and the Paris Convention 
by requiring that applications must be transmitted by the country in which the geographical area is 
located. In particular, the EC has explained that this  requirement for the involvement of the country to 
whose territory the geographical indication is related constitutes equal, not unequal treatment, that this 
involvement is indispensable for the proper impl ementation of Regulation 2081/92, and that this 
requirement does not impose any undue burden on third country governments.
55 
 
73. In its second submission, the United States56 fails to provide a convincing response to the 
EC's arguments. The United States continues to argue that the EC's requirements are unwarranted because in the United States, geographical indica tions are protected through collective marks and 
certification marks, and because the US government  therefore "does not have any specialized 
knowledge that would render it better qua lified than the rightholder or the EC".
57 
 74. These arguments are remarkable. The EC would like to recall that according to Article 24.9 
TRIPS, the EC is not obliged to protect geographi cal indications which are not protected in their 
country of origin. Now, whether a geographical indication relating to US territory is protected in the US is clearly a question of US law. It is not unr easonable for the EC to request the cooperation of the 
US on such a question of US law. In contrast, it is simply not credible for the United States to pretend 
that it does not have any greater experience on questions  of US law than the EC, and that therefore the 
EC should resolve these questions for itself.  75. The United States has also argued that it is in  no position to make a determination on whether 
a US geographical indication has a reputation in the EC market
.58 With due respect, this is besides the 
point. Obviously, the EC does not expect the US to  make a determination about reputation in the EC 
market. However, first of all, the protection of geogr aphical indications is not just based on reputation, 
but also on whether products have a particular quality  or other characteristics attributable to their 
geographic origin. Since the geographical origin is in the United States, that question should be one 
which the United States is best placed to evaluate. Second, where the protection is based on reputation 
of a geographical indication, that reputation must al so be based on its geographical origin. Since this 
origin is in the US, one would normally expect the geographical indication to have a reputation in the 
US market. This, once again, is a question which the US is best placed to evaluate. 
 76. Finally, the United States has argued that it protects foreign geographical indications in the 
US as collective marks or certification marks without the intercession of foreign governments.
59 This 
argument is without merit. First, whether the Un ited States protects geographical indications as marks 
irrespective of whether they are pr otected in their countr y of origin is a matter for the United States, 
but irrelevant in the present context. Second, it should be noted that even as regards the registration of 
marks, Article 6 (A) (a) quinquies of the Paris Convention explicitly pe rmits the registering country to 
request a certificate of registration issued by the country of origin. Finally, at least as regards 
                                                      
55 EC SWS, para. 122 et seq. 
56 Australia has made no such claim under the TRIPS Agreement, but has raised similar claims under 
Article III:4 GATT. In its second submission, however, Australia has not provided any substantive response to 
the arguments of the EC on this claim (Australia's SWS,  para. 177-181). Accordingly, Australia's corresponding 
claims should also be rejected. 
57 US SWS, para. 73. 
58 US SWS, para. 73. 
59 US SWS, para. 73.  WT/DS174/R/Add.2 
 Page B-257 
 
 
 geographical indications from the EC, which has a specific registration system, the question of 
whether a geographical indication is protected in the EC is fairly easy to ascertain. As the United States has itself acknowledged, this is not as obvi ous for US geographical indications, given the 
absence of a specific system of protection in the US. It is unreasonable for the United States to try to 
devolve these difficulties on other governments. 
 
77. Accordingly, claim 2 should be rejected.  
5. Claim 3: Non-EC nationals are accorded le ss favorable treatment than EC nationals 
with respect to the requirement to indicate  the country of origin for homonymous 
geographical indications  
78. According to the United States, the requireme nt in Article 12(2) of Regulation 2081/92 to 
indicate the country of origin for homonymous ge ographical indications constitutes a violation of 
national treatment provisions under TRIPS and the Paris Convention.
60 
 
79. In its previous submissions, the EC has alread y explained that Article 12(2) does not apply to 
all foreign geographical indications, but only to th e names in the specific situation of the first 
subparagraph, and that it requires the indication of th e country of origin for both EC and third country 
names, depending on which geographical indicati on has been protected earlier. Accordingly, 
Article 12(2) of the Regulation treats geographical indications from the EC and third countries alike.61 
 
80. In its second submission, the United States conti nues to contest even the first premise of the 
EC's arguments, namely that Article 12(2) app lies only to homonymous geographical indications.62 
The EC is unable to understand the basis for th e United States' view. Th e second subparagraph of 
Article 12(2) refers clearly to "such names", i. e. the homonymous names referred to in the first 
subparagraph. There is no ambiguity about this in the Regulation. Indeed, the US view seems to be 
inspired more by a desire to find fault with the EC measure than by the text of the EC measure. 
 81. As regards the second element of the EC's re sponse, the EC's interpretation is clearly borne 
out by the wording of Article 12(2) of Regulation 2081/92, which refers to "protected names" both 
from the EC and from third countries. As its on ly counter-argument, the US has argued that 
Article (12)(2) seems to be "directed at the author isation of third country GIs". However, there is 
nothing in the wording of the provision to prevent it from applying to geographical indications from 
both third countries and from the EC.  82. Interestingly, this point s eems to have been recognised by Australia, which has argued that 
the expression "Community protected name" in Articl e (12)(2) should be read also to include names 
from third countries under the GI regulation.
63 This is not the interpretation of the EC. However, if 
indeed this were the correct interpretation, then  surely the expression "protected name of a third 
country" should similarly be interpreted to include  names protected in a third country regardless of 
whether they are from a third country or the EC. In this case, Article (12)(2) once again would not 
result in any discrimination.64 
                                                      
60 Australia has not made such a claim under TRIPS, but has made a similar claim under Article 2.1 
TBT Agreement. In its second submission, apparently unsure of this legal basis, Autralia has now raised such a 
claim also under Article III:4 GATT, but still not under the TRIPS Agreement (cf. Australia's SWS, para. 179). 
61 EC SWS, para. 143 et seq. This interpretation is also confirmed in the Guide to Regulation 2081/92 
(Exhibit EC-64, p. 21). 
62 US SWS, para. 76. 
63 Australia's SWS, para. 65. 
64 In addition, the complainants have argued that Article 6 (6) of Regulation 2081/92 would be 
applicable to the registration of a geographical indication from the EC which is homonymous with an already WT/DS174/R/Add.2 
Page B-258  
 
  
83. Finally, the EC would remark that it does not  see in which way a requirement to truthfully 
indicate the origin of a product constitutes less favourab le treatment. In this context, the EC also notes 
that the complainants have not yet provided an y response as to how their claims under the TRIPS 
Agreement relate to Article IX:1 of the GATT, wh ich explicitly excludes origin marking requirements 
for imported goods from national treatment obligati ons. The EC will comment on this question in 
more detail in response to the complainants' claims under the GATT.  84. In conclusion, this claim should be rejected.  6. Claim 4: Regulation 2081/92 accords less favou rable treatment to non-EC nationals by 
subjecting the right to object to the registrat ion of geographical indications to conditions 
of reciprocity and equivalence 
85. The United States has claimed that only nati onals from WTO member countries recognised in 
accordance with Article 12(3) of Regulation 2081/92 as fulfilling the conditions of reciprocity and 
equivalence may object to registra tions of geographical indications. 
 86. As the EC has set out in its previous subm issions, it is clear from the explicit reference to 
WTO Members in Article 12d(1) and 12b(2) of the Regulation that WTO Members are not subject to the procedure of Article 12(3) applicable to other third countries.
65 Still, in its second submission, the 
US argues that the Regulation requires persons to re side in the EC "in order to object under Article 7 
objection procedures".66 
 87. This argument is manifestly unfounded. Persons  resident or established in the US can object 
to the registration of EC geographical indications  under the procedures of Article 12d(1) or 12b(2). 
The US has failed to explain in which way this procedure is different from the one available to 
persons resident or established in the EC. As said earlier, the fact that a different legal provision 
applies does not show that there is differential treatment.
67 In fact, it is the US which argues that 
unlike for EC residents, its residents should not be  required to have to transmit objections through the 
US government. Accordingly, it is the US which wa nts differential treatment , while the EC measure 
provides equal treatment.  
88. Claim 4 is unfounded and should be rejected. 
 
7. Claim 5: Regulation 2081/92 accords less favou rable treatment to non-EC nationals by 
requiring their own country to transmit the objection  
89. With claim 5, the complainants have clai med that Regulation 2081/92 accords less favourable 
treatment to non-EC nationals by requiring their own country to transmit the objection.  
 
                                                                                                                                                                    
 
registered geographical indication from a third count ry. The EC does not agree. However, even if the 
complainants were right, the results would be not different. As a precondition for the registration of 
homonymous geographical indications, Article 6(6) requires "a clear distinction in practice". Where two 
homonymous geographical indications are from different countries, this will require the indication of origin. Accordingly, even if Article 6( 6) did apply, there still would be no difference in treatment. 
65 EC FWS, para. 140; EC SWS, para. 150 et seq. 
66 US SWS, para. 86. 
67 In passing, it should be noted that objections to geographical indications from outside the EC are 
covered by Article 12b(2) both for EC and foreign residents.  WT/DS174/R/Add.2 
 Page B-259 
 
 
 90. This claim is equally unfounded. As the EC has already explained, this requirement applies 
both to persons resident or established in the EC or in third countries and is neither unreasonable nor 
unduly burdensome for third countries.68 
 91. In their second submissions, the United Stat es and Australia have offered almost no 
arguments in support of this claim.
69 In particular, they do not acknowledge the difference in the 
requirements for the transmission and verification of applications for registration, on the one hand, 
and the transmission of objections, on the other.  92. In fact, the United States seems to suggest that third country governments must verify the 
admissibility of the statement of objection on the basis of the criteria set out in Article 7(4) of the 
Regulation.
70 This is not true. In its submissions, the EC  has clearly explained that Articles 12b(2) and 
12d(1) do not  require the third country government to  verify the admissibility of the objection.71 
 93. Accordingly, the transmission of object ions is, as the US has itself acknowledged,
72 a "purely 
ministerial act" which should not pose any particular problem to the government of any WTO 
Member, including the United States and Australia. Th e only way in which US or Australian residents 
could be prejudiced would be by the unwillingness of their governments to transmit such objections. 
However, such a problem would not be attributable to the EC, and can therefore not be argued to constitute less favourable treatment by the EC.  
94. Accordingly, claim 5 is equally unfounded. 
 
8. Claim 6: Regulation 2081/92 accords less favou rable treatment to non-EC nationals by 
requiring non-EC national to have a "legitimat e interest" to object to the registration of 
geographical indications 
95. In its second submission, the US continues to  claim that Article 12d(1) of Regulation 2081/92 
accords less favourable treatment to non-EC reside nts by requiring non-EC residents to have a 
"legitimate interest" to object to the registration of geographical indications, whereas as regards EC 
residents, Article 7(3) requires that they be "legitimately concerned".
73 
 96. In its submissions, the EC has already shown that there is no substantive difference between 
the term "legitimate interest" used in Article 12d( 1) of Regulation 2081/92 and the term "legitimately 
concerned" in Article 7(3).
74  The EC would have expected this to be obvious enough, but apparently, 
for the United States it is not. Therefore, the EC will make two additional remarks.  97. First, it is important to note that Article 12b(2) , which concerns objections to registrations of 
third country geographical indicati ons, and which applies for residents of the EC and WTO Members, 
also requires a "legitimate interest". If the United St ates were right, and "legitimate interest" were a 
more demanding standard than "l egitimately concerned", this would mean that EC residents could 
object to the registration of third country geographical  indications under stricter conditions than to the 
registration of EC geographical indications. This would be an odd result. 
                                                     
 
68 EC SWS, para. 154 et seq. 
69 Cf. Australia's SWS, which merely refers to a requirement for the "involvement" of another WTO 
Member without distinguishing between applications and objections, and without answering any of the EC's 
arguments. 
70 US SWS, para. 66. 
71 EC Response to Panel's Question No. 34, para. 86; EC SWS, para. 155. 
72 US Response to Panel's Question No. 38, para. 74. 
73 US SWS, para. 87-88. 
74 EC FWS, para. 78, 150-152; EC SWS, para. 160 et seq. WT/DS174/R/Add.2 
Page B-260  
 
  
98. Second, reference should also be made to the French and Spanish versions of 
Regulation 2081/92, which are equally authentic. In f act, in the French version, Articles 7(3), 12b(2) 
and 12d(1) uniformly use the expression "legitimem ent concerné". The Spanish version in both 
Articles 7(3) and 12d(1) uses the expression "legítim amente interesada", wher eas Article 12b(2) uses, 
without any difference in meaning, the expression "legítimamente afectada". 
 99. In conclusion, the difference between "legitim ately concerned" and "legitimately interested" 
is a mere difference of drafting specific to the En glish text of the Regulation, which does not entail 
any difference in meaning. Accordingly, the Panel should reject the US claim. 
 
9. Claim 7: Regulation 2081/92 accords l ess favourable treatment because a non-EC 
rightholder has no "representative" in the regulatory committee to "speak for him" 
100. Australia has argued that Regulation 2081/92 accords less favourable treatment because a 
non-EC rightholder has no "representative" in the regulatory committee to "speak for him". In its 
second submission, Australia has provided no fu rther arguments to substantiate its claim.
75 
Accordingly, Australia's claim should be dismissed.  
10. Claims 8 and 9: A right of objection was available to persons resident or established in 
an EC Member State that was not ava ilable to other WTO Member nationals 
101. Australia has claimed that there is a violation of national treatment in the fact that a right of 
objection was
 available to persons resident or estab lished in an EC Member State that was  not 
available to other WTO Member nationals in respect of the registration of mo re than 120 geographical 
indications under the normal registration process (Claim  8). Australia has also raised a similar claim 
with respect to the absence of an objection proce dure under the simplified pro cedure which used to be 
provided for in Article 17 of  Regulation 2081/92 (Claim 9).76 
 
102. In its prior submissions, the EC has already explained why these claims must fail.77 First, as 
regards Regulation 2081/92 itself, the claims relate to a measure which was no longer in force at the 
time of establishment of the Panel, and which is th erefore not within the terms of reference of the 
Panel. Second, as regards the individual registrations, even if considered to be within the Panel's terms 
of reference, they are not in violation of national treatment obligations. 
                                                      
75 Instead, Australia has engaged, over a length of two and a half pages, in a discussion of the EC's 
"Article 15 decision making process", which culminates in the statement that the EC "has not disproved the factual premise informing Australia's claims" that the Committee/and or the Council "participate in the decision-
making process under Regulation 2081/92" (Australia's SWS, para. 59). The EC wonders why it should 
"disprove" this "factual premise" given that it never contested that the Council and/or the Committee participate under certain conditions in the decision-making process under the Regulation. What the EC did have to correct 
was the rash statement by Australia that the Committee and/or the Council were somehow the "ultimate 
decision-maker" under the Regulation (E C FWS, para. 79 et seq). Cf. also EC Response to Panel's Question 40, 
para. 105-107, and Exhibit EC-28, which shows that only three geographical indications were ever the subject of 
a Regulation adopted by the Council,  whereas all others were registered through Regulations of the 
Commission. 
76 In its second submission, Australia  has occasionally referred to "600  registrations", and occasionally 
to "120" (Australia's SWS, para. 17, 185). The EC is th erefore uncertain to which ex tent Australia maintains its 
argument that the simplified procedure was incompatible with national treatment obligations. In any event, as 
the EC has set out in its previous submissions (EC FWS, para. 170 et seq.; EC SWS, para. 197 et seq.), Claim 9 
is unfounded also because first, ther e was never any right of objection in th e context of the simplified procedure, 
whether for domestic or for foreign residents; and second , because these claims fall outside the temporal scope 
of the temporal scope of the TRIPS Agreem ent as defined in Article 70.1 thereof. 
77 EC FWS, para 156 et seq.; EC SWS, para. 168 et seq.  WT/DS174/R/Add.2 
 Page B-261 
 
 
  
103. In its second written submission, Australia has not  provided any coherent response to the EC's 
submissions.78 In particular, Australia apparently does not appreciate that Regulation 2081/92, on the 
one hand, and the individual registrations, on the ot her, are separate measures. Accordingly, Australia 
does not clearly state whether its claims relate  to Regulation 2081/92, or to the individual 
registrations. However, such a clear distinction is essential for an appraisal of whether the measures in 
question fall within the terms of reference of the Pa nel, and if they do, whether the measures are in 
violation of national treatment obligations.  104. As regards Regulation 2081/92, the EC has already shown in its previous submission that 
Australia's panel request did not clearly refer to hi storical versions of the Regulation as the "measure 
at issue" in the present dispute.
79 Even more importantly, it is not up to Australia to enlarge the terms 
of reference of the Panel contrary to the object and purpose of the DSU. Dispute settlement under the 
DSU serves the purpose of solving disputes about existing measures. Its purpose is not to provide opinions about historical grievances, in particular where it is not demonstrat ed what relevance such 
grievances are still supposed to have. This is why the present Panel, like all WTO Panel before it, 
should decide on the measure at issue as it existe d at the time of the establishment of the Panel. 
 105. As regards the individual registrations, it is cl ear that these registrations are still in force. On 
the basis of the preliminary ruling issued by  the Panel, and for the purposes of the present 
proceedings, the EC therefore bases itself on the assumption that the individual registrations are 
within the terms of reference of the present Panel.
80  
 106. However, the issue regarding the registrations is whether these registrations are in violation of 
national treatment obligations. So far, Australia has not substantiated its allegations in this respect. 
Indead, it has tried to shift the burden of proof to  the EC by reproaching the EC for having asserted 
that the registrations are compatible with na tional treatment obligations "without any supporting 
argument".
81 In this context, it appears necessary to reca ll that the burden of showing that there is a 
violation is on Australia, not on the EC.  107. The EC submits that Australia has not dem onstrated the existence of such a violation. 
Australia has brought the present claim under the na tional treatment obligations of the TRIPS. 
However, Australia fails to explain how the regist ration of a particular geographical indication can 
constitute a violation of national treatment obligations.   108. Presumably aware of this weakness, Australia has, in its responses to the Panel's questions, 
also referred to other WTO provisions as violated by th e individual registrations, and in particular to 
Article 16.1 of the TRIPS Agreement.
82 However, Australia has not offered a scrap of evidence for 
any such violation. It has acknowledged that it is not able to identify a single Australian trade mark 
that would be infringed by any geographical indication registered under Regulation 2081/92.83 Rather 
it has told the panel that it has "chosen" not to  identify specific commerc ial interests potentially 
affected by the EC measure.84 The EC does not know what the reasons for this choice are, but the 
consequences are clear: Australia has failed to establish its claim, and its claim should be rejected. 
 
                                                      
78 Australia's SWS, para. 15-19, 185. 
79 EC SWS, para. 174. 
80 The EC reserves the right to raise this issue in the context of a possible appeal. 
81 Australia's SWS, para. 185. Cf. also Australia's Response to Panel's Question No. 93. 
82 Australia's Response to Panel's Question No. 92. 
83 Australia's Response to Panel's Question No. 93. 
84 Australia's SWS, para. 10. WT/DS174/R/Add.2 
Page B-262  
 
 109. Australia has also argued that the EC is aski ng the Panel to find that "short-lived statutory 
frameworks" are beyond the reach of WTO dispute settle ment. In this regard, it is worth pointing out 
that 11 years passed between the adoption of Regulation 2081/92 and its amendment by Regulation 692/2003. This can hardly be called a "short lived" statutory framework. The EC does not 
know why Australia did not bring its national treat ment claims when Regulation 2081/92 was still in 
force. However, it cannot now bring these claims ag ainst the individual registrations, when it failed to 
bring them against the measure which allege dly constituted the violation, namely the 
Regulation itself.  110. In conclusion, the Panel should firmly resist Australia's attempt to revive moot claims in 
flagrant disregard for the law and practice of the DSU. 
 B. P
ROHIBITED REQUIREMENT OF DOMICILE OR ESTABLISHMENT (ARTICLE  2.1 TRIPS  IN 
CONJUNCTION WITH ARTICLE  2.2 PARIS CONVENTION ) 
111. The US has also raised certain claims under Article 2.1 TRIPS in conjunction with Article 2.2 
Paris Convention. The EC considers that these claims under Article 2.2 Paris Convention are not 
within the Panel's terms of reference. Subsidiari ly, the EC will show that these claims are unfounded. 
 
1. The claims based on Article 2(2) Paris Conv ention are not within the Panel's terms of 
reference 
112. First, the claims based on Article 2.2 of the Paris Convention are outside the Panel's terms of 
reference. 
 113. Article 2.2 of the Paris Convention contains  a separate prohibition of conditions of domicile 
or establishment, which is independent of Article 2. 1 of the Paris Convention. The complainants have 
argued that this is not so because the word "howev er" at the beginning of Article 2.2 establishes a 
"linkage" between the two provisions.
85 The EC does not agree. The word "however" indicates a 
contradiction between the provisions; rather than link, it separates. The use of the word "however" 
therefore clearly indicates that Article 2.2 contains an obligation going beyond Article 2.1 of the Paris 
Convention.  114. In fact, the US own arguments are based on th e assumption that Article 2.2 is a separate legal 
obligation. In its first written submission, the US argued that conditions of domicile or establishment 
were "directly" prohibited by Article 2.2.
86 Similarly, in its second wr itten submission, the US speaks 
of an obligation "under Article 2 (2) not to impo se any requirement as to domicile or establishment".87 
 115. However, the US and Australian panel request s did not contain any explicit reference to 
Article 2(2) of the Paris Convention. Nor did they  contain any claim about the application of illicit 
conditions of domicile or establishment by the EC.   116. In its submission, the only response of the US has been that "the EC was clearly aware of the 
nature of the US complaint".
88 The EC formally contests this statement. Until the US first written 
submission, the EC was not aware that the US intend ed to claim that the EC measure involved illicit 
conditions of domicile or establishment. Moreover, the EC also notes that the US argument is in 
contradiction with the United Stat es response to the EC's request fo r a preliminary ruling, where the 
                                                      
85 US SWS, para. 80; Australia's SWS, para. 27. 
86 US FWS, para. 85. 
87 US SWS, para. 79. 
88 US SWS, para. 83.  WT/DS174/R/Add.2 
 Page B-263 
 
 
 United States announced that precisely how Re gulation 2081/92 is incompatible with WTO 
obligations would be the subject of future US submissions.89 
 117. Accordingly, the Panel should find that the cl aims under Article 2(2) of the Paris Convention 
are not within its terms of reference. 
 
2. Claim 10: Regulation 2081/92 requires non-EC nationals to become established in the 
EC as a condition for registering geographical indications  
118. The United States has argued that Regulation 2081/92 requires non-EC nationals to become 
established in the EC as a condition for registering ge ographical indications. As the EC has set out in 
previous submissions,
90 this claim is unfounded because first, geographical indications relating to an 
area located in a WTO country can be registered under Regulation 2081/92; second, the right to register a geographical indication does not depend on domicile or establishment; and third, Article 2.2 
Paris Convention cannot exclude measures which ensure  that a product originates in the geographical 
area to which a protected geographical indication is related. 
 
119. In its second submission, the United States has responded that it is arguing merely that the EC cannot require that the geographical area to which an indication relates be in the EC.
91  
 120. However, as the EC has already said earlie r in response to Claim 1, Regulation 2081/92 
contains no such requirement. Geographical indicati ons relating to an area located in another WTO 
Member can be registered under Regulation 2081 /92. Accordingly, already for this reason, 
Regulation 2081/92 cannot be said to establish a requirement of domicile.
92 
 121. Accordingly, the US claim should be rejected.  3. Claim 11: Regulation 2081/92 requires non-EC nationals to become established in the 
EC as a condition for objecting  
122. In its second submission, the United States continues to argue that Regulation 2081/92 
establishes a condition of domicile or establishment because a person "must reside or become established in the EC in order to object under the Article 7 objection procedures".
93 
 
123. As the EC has already said, this claim is manifestly unfounded. The point is not whether a 
person can object "under Article 7 objection proce dures", but whether a person can object at all. 
Persons resident or established in WTO countries can  object according to Article 12d (1) and 12b (2), 
and are therefore in exactly the same position as persons resident or established in the EC.   
124. Accordingly, the US claim should be rejected. 
 
                                                     
 
89 Response of the United States of 15 March 2004, para. 36. 
90 EC FWS, para. 176 et seq. 
91 US SWS, para. 85. 
92 Moreover, the EC would recall that regardless of whether EC or foreign geographical indications are 
concerned, Regulation 2081/92 does not establish any requirements of domicile or establishment. It merely 
requires that product specifications are established which ensure that the products in question in fact have a 
specific quality, reputation or characteristics attributable to their geographical origin  (cf. EC FWS, para. 183). 
93 US SWS, para. 86. WT/DS174/R/Add.2 
Page B-264  
 
 C. N
ATIONAL TREATMENT UNDER ARTICLE  III:4  GATT 
1. The Regulation 2081/92 is not incompatible with Article III:4 GATT (Claims 12–15) 
125. The complainants have raised a number of th eir claims also under Article III:4 GATT, namely 
with respect to the registration of foreign geogra phical indications, the requirement of inspection 
structures, the transmission and verification of applications for registration, the requirement to 
indicate the country of origin for homonymous geographical indications, and finally the alleged 
overall bias in decision making.  126. All of these claims involve allegations of less favourable treatment similar to those also made 
under the TRIPS Agreement. In their second submi ssions, the complainants have not added any 
specific new arguments regarding their claims under Article III:4. Accordingly, the EC can refer to 
what it has said already previously in respect to the complainant's arguments under the TRIPS 
agreement.  127. There is, however, one specific aspect arising under the GATT on which the EC would like to 
comment. It concerns the US claim that the requ irement to indicate the country of origin for 
homonymous geographical indications constitutes a violation of Article III:4 GATT. The EC notes 
that in their second submissions, both the United St ates and Australia recognise that Article IX:1 
GATT exempts country of origin marking requireme nts from the national treatment obligations of 
Article III:4.
94 However, the United States does not offe r any convincing explanation of why this 
exemption would then not also apply to the labelling requirement in Article (12)(2) of 
Regulation 2081/92, assuming that indeed this requi rement was in violation of national treatment 
obligations.  128. As its only argument, the US has advanced that Regulation 2081/92 is not a "general" marking requirement. However, the word "gener al" does not appear in Article IX:1 GATT. 
Article IX:1 simply refers to requirements to mark  the country of origin, regardless of whether they 
apply to all imported products or only to some. Th e EC also does not understand what would be the 
logic of a provision that would permit subjecting all imported products to country of origin marking, 
but not only some of them.  129. The perverse logic of the US claim – and similarly of Australia's corresponding claim under 
the TBT Agreement - is also illustrated by the practi ce of the US and Australia with respect to origin 
marking. Unlike the EC, both the US and Australia re quire the indication of the country of origin for 
all imported products.
95 This is a condition for the importation of any product into the United States or 
Australia, with which compliance is mandatory, and which does not apply to domestic products. 
 
130. It is astonishing that the United States and Australia, while themselves applying 
discriminatory country of origin marking requireme nts of the most sweeping nature, would fault the 
EC for applying a targeted, entirely reasonable and non-discriminatory labelling provision allowing 
the distinction between two homon ymous geographical indications. 
 131. In the view of the EC, the Panel should resi st this attempt to create double standards for WTO 
Members, and accordingly reject the claim. 
 
                                                     
 
94 US SWS, para. 99; Australia's SWS, para. 212. 
95 Cf. for the US 19 CFR 134.11 (Exhibit EC-66); for Australia, cf. the Commerce (Trade Descriptions) 
Act (Exhibit EC-67) and Commerce (Imports) Regula tions, Regulation 8 (c) (i) (Exhibit EC-68).  WT/DS174/R/Add.2 
 Page B-265 
 
 
 2. The measure would be justified under Article XX(d) GATT 
132. At a subsidiary level, the EC considers that if the Panel were to find that Regulation 2081/92 
does involve less favourable treatment of forei gn goods by requiring the existence of inspection 
structures, the transmission and verification of a pplications by the third country government, and the 
indication of the country of origin for homonymous  geographical indications, this less favourable 
treatment would be justified by Article XX(d) GATT. 
 133. In their second submission, the complainants have argued that the EC has not shown that the 
alleged inconsistencies would be justified by Article XX(d) GATT.
96 However, in its second 
submission, the EC has set out in detail why the re quirement of inspection structures, the requirement 
of the transmission and verification of applications by the third country government, and the 
indication of the country of origin for homonymous geographical indications, are necessary to secure compliance with Regulation 2081/92.
97 
 134. The United States and Australia have so fa r not rebutted these arguments of the EC. They 
have also not shown that the EC measure is app lied in a manner which would constitute an arbitrary 
or unjustifiable discrimination between countries wher e the same conditions prevail, or constitute a 
disguised restriction on international trade.   135. Accordingly, the measures in question are justified by Article XX(d) GATT. As a consequence, the corresponding claims should be rejected. 
 
IV. REGULATION 2081/92 IS COMPATIBLE WI TH THE OBLIGATION TO PROVIDE 
MOST-FAVOURED-NATION TREATMENT 
136. The EC will now turn to the US claims th at Regulation 2081/92 is incompatible with the 
obligation to provide most-favoured-nation treatment  under Article 4 TRIPS and Article I:1 GATT.  
 
A. A
RTICLE  4 TRIPS 
1. Claim 16: As among non-EC WTO Member s, nationals from WTO Members that 
satisfy the EC's conditions of reciprocity a nd equivalency are accorded more favourable 
treatment than nationals from those WTO Members that do not  
137. Originally, the United States claimed that Regulation 2081/92 is  incompatible with Article 4 
TRIPS Agreement because nationals from WTO Member s that satisfy conditions of reciprocity and 
equivalence are accorded more favourable treatment  than nationals from those WTO Members that do 
not.  138. In its second submission, the United States has en larged this claim, and is now alleging that 
three separate aspects of Regulation 2081/92 co nstitute a violation of most-favoured nation 
obligations, namely:
98 
 
• the application of conditions of "reciprocity and equivalence" ( claim 16 ); 
• the requirement of inspection structures ( claim 16bis ); 
                                                      
96 US SWS, para. 100; Australia's SWS, para. 181. 
97 EC SWS, para. 228-242 (incorporating by reference the EC arguments in response to the claims 
under the national treatment provision of the TRIPS Agreement). 
98 US SWS, para. 104. WT/DS174/R/Add.2 
Page B-266  
 
 • the requirement of "substantial participati on" in administering and enforcing the EC 
Regulation ( claim 16ter ). 
139. As regards the first claim, the EC has alr eady confirmed that it does not apply conditions of 
reciprocity and equivalence to other WTO Member s. Already for this reason, the US claim is 
unfounded. Moreover, the EC has also explained that  even if Article 12(1) were applicable to WTO 
Members, this provision merely sets out the cond itions under which Regulation 2081/92 may apply, 
but does not confer any advantage within the meani ng of Article 4 TRIPS Agreement. Finally, the EC 
has also explained that Regulation 2081/92 does not discriminate on the basis of nationality.
99 For all 
these reasons, this US claim should be rejected.  140. As regards Claim 16bis, the EC  has already set out in detail th at the requirement of inspection 
structures is not "equivalence by another name", but rather is applied on a product-specific basis.
100 
This means that the question whether appropriate inspection structures exist must be evaluated for 
each specific application separately. There is no ru le which would imply that for certain countries, 
inspection structures are automatically deemed to ex ist, whereas for other countries they are deemed 
not to exist. 
 
141. This is not just so for applications from thir d countries, but also for applications from the EC. 
In fact, each application must contain the indication of the competent inspection body.101 If no 
inspection body is indicated, or if the inspecti on body indicated is not in compliance with the 
requirements of Article 10 of Regulation 2081/92, the geographical indication cannot be registered. 
The requirement of inspection structures is thus app lied in a completely non-discriminatory fashion. It 
involves discrimination neither on the basis of nationality nor on the basis of product origin. 
Accordingly, Claim 16bis should be rejected.  142. As regards Claim 16ter, which is newly rai sed by the United States,  essentially the same 
objections apply. There is no rule in the Re gulation 2081/92 which would define which WTO 
members can transmit and verify applications for registration and which cannot. In fact, the United 
States does not even claim this, but instead argues that some WTO Members "might not be able to 
prosecute" applications for registration, whereas others might be.
102 This argument is without merit. 
The Regulation does not require anything that would be outside the scope of any WTO Member with 
a normally functioning government.   
143. In reality, and certainly as regards the Un ited States itself, the issue is not ability, but 
willingness. The United States has stated clearly that  it is unwilling to cooperate in the registration 
process under Regulation 2081/92. However, this is not  a choice which is attributable to the EC. 
Accordingly, Claim 16ter should equally be rejected.  2. Claim 17: Under Regulation 2081/92, an EC Member State grants more favourable 
treatment to nationals from other EC Member  States than it accords to nationals from 
non-EC WTO Members  
144. The United States has claimed that under Re gulation 2081/92, an EC Member State grants 
more favourable treatment to nationals from other EC Member States than it accords to nationals from 
non-EC WTO Members. 
 
                                                     
 
99 Cf. EC FWS, para. 228 et seq.; EC SWS, para. 245 et seq. 
100 EC SWS, para. 96 et seq.; above, para. 54 et seq. 
101 Cf. as examples the applications in Exhibits EC-51 to EC-54, EC-56. 
102 US SWS, para. 107.  WT/DS174/R/Add.2 
 Page B-267 
 
 
 145. In its written submissions, the EC has al ready explained that this claim is unfounded.103 In 
particular, the EC is an original member of the WTO. Measures with which the EC harmonises the law inside the EC are not measures through which the Member States grant "each other" advantages. 
Since Regulation 2081/92 is a measure of the EC, the United States has therefore correctly brought its claim against the EC, and not against the Member States. 
 
146. Obvious as this seems, in its second submission, the US persists  with its fallacious arguments. 
In particular, the US argues that the terms of reference of the Panel include also "related 
implementation and enforcement measures", including measures taken by the Member States. On this 
basis, the US asks the Panel to "review" whethe r the measures of the EC Member States are in 
accordance with MFN obligations. 
 147. At the outset, the EC would observe that the United States has not indicated what measures of 
the Member States it is talking about, and in which way such measures are supposed to be in violation 
of WTO obligations. Accordingly, the United Stat es has not provided suffici ent evidence to establish 
the existence of a violation. 
 148. Moreover, the EC would remark that the pr esent dispute relates to measures adopted by the 
EC. That, as in many other areas of EC law, the EC  Member States have certain responsibilities in the 
execution of Regulation 2081/92 is irrelevant. Th e EC generally does not execute its laws through 
authorities at the EC level; rather, it has recourse to the authorities of the Member States, which in 
such a situation act de facto as organs of the Community, for which the Community would be 
responsible under WTO law and interna tional law in general. In this c ontext, it is also interesting to 
note that the European Court of Justice upheld EC competence for an agreement falling under the 
common commercial policy while holding that "it w as of little importance that the obligations and 
financial burdens inherent in the execution of th e agreement envisaged are borne directly by the 
Member States".
104 
 149. Accordingly, where EC Member States take  measures for the execution of Community law, 
such measures are derived from Community law, fa ll under the competence of the Community, and it 
is the Community that is responsible for them, not  the Member States. Accordingly, such measures 
cannot be regarded as the granting of an advant age from one WTO Member to another, or as 
"avoiding MFN obligations" towards other WTO Memb ers. Moreover, the fact that MFN obligations 
do not apply does not mean that other WTO oblig ations, and in particular national treatment 
obligations, would become inapplicable.  150. The EC would also remark that this US claim has nothing to do specifically with the 
protection of geographical indications, but is of a horizontal nature. The EC has adopted tens of 
thousands of acts harmonising the law within the EC . If the United States were right, then presumably 
the entire body of EC law should be applied to th e US, and indeed to any other WTO Member. This 
cannot be right, and to the knowledge of the EC, no other Member has ever made a similar claim. 
 151. To conclude this point, this claim is an ill- considered attempt to undermine the integrity of the 
EC legal system, and the Panel should reject it as such. 
 
                                                     
 
103 EC FWS, para. 249 et seq. ; EC SWS, para. 252 et seq. 
104 Opinion 1/75, Local Cost Standard , [1975] ECR 1355 (Exhibit EC-69). WT/DS174/R/Add.2 
Page B-268  
 
 B. C
LAIM 18: BY SUBJECTING THE REGISTRATION OF THIRD -COUNTRY GEOGRAPHICAL 
INDICATIONS TO CONDITIONS OF RECIPROCITY AND EQUIVALENCE , THE EC MEASURE IS 
INCONSISTENT WITH THE MOST -FAVOURED -NATION OBLIGATION UNDER THE ARTICLE  I:1 
GATT 
152. The United States has argued that by subjecting the registration of third-country geographical 
indications to conditions of reciproc ity and equivalence, the EC measure  is inconsistent with the most-
favoured-nation obligation under Article I:1 GATT.  153. As the EC has already set out in its written submission, Regulation 2081/92 is not 
incompatible with Article I:1.
105 In its second submission, the United States has not made any specific 
arguments on Article I:1 GATT, but simply re ferred to its arguments on Article 4 TRIPS.106 
Accordingly, the EC can also refer to the argument s that it has made earlier in response to the United 
States claim under Article 4 TRIPS.107 Accordingly, the claim should be rejected. 
 
V. REGULATION 2081/92 DOES NOT DIMI NISH THE LEGAL PROTECTION OF 
TRADEMARKS  
154. In this section of our statement, we will address the complainants' claims under Article 16.1 
of the TRIPS Agreement and, in particular, their claims concerning the issue of "co-existence". The 
complainants have submitted no new arguments with respect to their other claims in their rebuttal 
submissions. The EC refers, with respect to those claims, to its earlier submissions to the Panel.   
A. C
LAIM 19: ARTICLE  14(2)  OF REGULATION  2081/92  IS INCONSISTENT WITH ARTICLE  16.1  OF 
THE TRIPS  IN THAT IT ALLOWS THE CO -EXISTENCE OF GEOGRAPHICAL INDICATIONS AND 
EARLIER TRADEMARKS  
1. Article 14(3) of Regulation 2081/92 
155. The EC has shown that the co-existence of geographical indications and earlier trademarks 
provided in Article 14(2) of Regul ation 2081/92 would not be incons istent with Article 16.1 of the 
TRIPS Agreement, even if the comp lainants' interpretation of that pr ovision, and of its relationship to 
Section 3 of Part II, were correct:   
• first, the criteria for the registrability of trademarks limit a priori  the possibility of 
conflicts between geographical i ndications and earlier trademarks; 
• second, to the extent that an y such conflict arises, Article 14(3) of Regulation 2081/92 
provides the necessary means to trademark owne rs in order to oppose  or invalidate the 
registration of any confusing geographical indication; 
• finally, the provisions of Regulation 2081/92, together with other provisions of EC law 
and the unfair competition laws of the Memb er States, provide the necessary means to 
                                                     
 
105 EC SWS, para. 259. 
106 US SWS, paras. 114-115. 
107 It is not clear from the US second submission wh ether the United States considers also that the 
requirement of inspection procedures and of transmission and verification of applications by the government of 
the home country of the geographical indication constitutes a violation of Article I:1 GATT. To the extent that 
the US makes such a claim, the EC can refer to its response to the claims under Article 4 TRIPS. Moreover, subsidiarily, the EC would also consider that these meas ures would be justified by Article XX(d) GATT, in line 
with what it has already set out in response to the claims under Article III:4 GATT.  WT/DS174/R/Add.2 
 Page B-269 
 
 
 ensure that, in  practice, registered geogra phical indications are not used in a confusing 
manner. 
(a) Registrability of geographical names as trademarks 
156. The EC has set out in detail the criteria for the registrability of trademarks because they 
define the legal context within which Article 14(3)  must be applied. A pr oper understanding of those 
criteria is, therefore, essential in orde r to interpret correctly Article 14(3). 
 157. Contrary to the complainants' assertions, th e EC has never said that "valid registered 
trademarks cannot incorporate certain geographical elements."
108 Indeed, if so, it would have been 
unnecessary to include Article 14(3) in Regulation 2 081/92. Rather, the EC has explained that, under 
EC trademark law, terms which are, or which may reasonably qualify in the future, as geographical 
indications cannot be validly registered as tradem arks unless they have acquired distinctiveness (a 
"secondary meaning") through use. Hence the express re ference in Article 14(3) to the criteria that are 
relevant for measuring such acquired distinctiveness.  
158. The facts bear out the EC's position. Neither th e complainants nor the third parties have been 
able to identify even one single geographical indication, of the more than 600 registered by the EC, which gives rise to a likelihood of confusion with an  earlier trademark. Instead, the United States cites 
hypothetical examples involving cheese from the Moon and tropical products from Portugal.  159. Australia argues that the registrability criteria of the Trademark Directive did not apply to 
trademarks registered before its adoption.
109 Australia has overlooked that, under the Trademark 
Directive, the grounds for refusing a registration ar e also grounds for invalidating existing trademarks, 
including trademarks pre-dating the Trademark Directive, unless the Member States have provided otherwise. Moreover, the Trademark Directive wa s hardly innovative on this point. Before the 
adoption of the Trademark Directive, the trademark laws of the Member States provided already 
similar registrability criteria, just like the laws  of most other countries, including those of the 
complainants.  160. In turn, the Unites States argues that the EC's reasoning would not apply to registered 
geographical indications which do  not consist of a place name.
110 The United States is wrong. The 
Trademark Directive prohibits the registration of tr ademarks which consist "of signs or indications 
which may serve, in trade, to designate … geographical origin".111 Terms like "Feta" or "Reblochon" 
operate as indirect indications of origin and, theref ore, fit this description even if they are not place 
names. In any event, the Trademark Directive also prohibits the registration of terms which serve to 
designate the "kind", "quality" or "o ther characteristics" of the goods.112  
 
(b) The Complainants have misinterpreted Article 14(3) 
161. The EC has shown that, far from being the onl y reasonable interpretati on of Article 14(3), the 
complainants' reading of that provision is unsup ported by the ordinary meaning of its terms. 
Furthermore, the complainants' interpretation is neither reasonable nor workable in practice and 
cannot be reconciled with the terms of other provisions of Regulation 2081/92. 
 
                                                      
108 US SWS, para. 169. 
109 Australia's SWS, para. 91. 
110 US SWS, para. 168. 
111 Cf. Article 3.1(c) of the Trademark Directive. 
112 Ibid. WT/DS174/R/Add.2 
Page B-270  
 
 162. Australia asserts that "the term misleading establishes a stricter evid entiary standard than 
confusing".
113 At most, this could be considered one po ssible reading of "misleading". But Australia 
has not proved that the EC's own interpretation of  "misleading" is less reasonable, or that it is 
impossible to interpret the term "misleading" cons istently with Article 16.1. In fact, Australia's 
interpretation does not even pass the dictionary test. As acknowledged by Australia, one of the 
ordinary meanings of "misleading" is "confusing".114 The same is true of the other linguistic versions 
of Regulation 2081/92. For example,  the term "mislead" has been re ndered as "inducir a error" in the 
Spanish version. According to the Diccionario de la Real Academia Español a, one of the ordinary 
meanings of  "error" is "equivocación, confusión".115 Furthermore, the EC's reading of "misleading" is 
supported contextually by Article 7 (5) (b) of Regulation 2081/92, which provides that the 
Commission shall decide on the objections havi ng regard to the "likelihood of confusion". 
 163. For its part, the United States persists on its misguided theory that Article 14(3) applies only 
with respect to a certain subset of trademarks. But this is not what Article 14(3) says. Article 14(3) 
does not say that registration shall be refused where it leads to confusion with a trademark provided  
that such trademark has been used for a long time and provided  that it enjoys considerable reputation 
and renown. Instead, Article 14(3) says that regi stration shall be refused where the proposed name 
would be misleading " in the light of  a trademark's reputation and renow n and the length of time it has 
been used". Thus, length of use and reputation/ renown are not "threshold pre-requisites" for the 
application of Article 14(3). They are criteria for assessing whether the geographical indication is misleading. As explained, Article 14(3) menti ons expressly those criteria because they will be 
particularly relevant, given that geographical te rms are inherently non-distinctive as trademarks.  
 164. The United States notes that Article 6 bis of the Paris Convention and Articles 16.2 and 16.3 
of the TRIPS Agreement confer additional protec tion to so-called "well-known" marks and that 
reputation, renown and length of use are "factors" generally used in order to establish whether a 
trademark qualifies as "well known".
116 But from this it does not follow logically that these factors are 
relevant only as "threshold pre-requisites" for the applica tion of the provisions in question. Length of 
use and reputation/renown are relevant criteria in  order to assess the likelihood of confusion with any 
trademark. In particular, regardless of whethe r a trademark has enough reputation/renown to qualify 
as a "well-known" mark under Paris Article 6 bis, its reputation/renown (or the lack thereof) will also 
be relevant for the purposes of establishing the lik elihood of confusion with a sign for similar goods 
under Article 16.1. 
 165. The United States also refers
117 to the so-called "anti-dilution" provisions of the Trademark 
Directive and the Community Trademark Regulation, which confer protection to  a trademark, despite 
the lack of similarity between the goods concerned,  "where the trademark has a reputation". In the 
context of those provisions, "reputation" functions as a "threshold pre-requisite". But, again, this does 
not mean that, under EC trademark law, reputation is  relevant only for that purpose. Nor does it mean 
that the relatively high level of reputation required by the ECJ118 and the OHIM119 when applying 
those provisions can be extrapolated to Article 14( 3). That standard is linked to the far-reaching 
protection afforded by the "anti-dilution" provis ions and would not be justified in a situation 
involving signs for similar goods. 
 
                                                      
113 Australia's SWS, para. 104. 
114 Australia's SWS, para. 104. 
115 Diccionario de la Real Academia Española, 20th Edition, 1984. (Exhibit EC-70). 
116 US SWS, para. 146. 
117 US SWS, para. 150. 
118 US SWS, para. 151. 
119 US SWS, para. 152.  WT/DS174/R/Add.2 
 Page B-271 
 
 
 166. The tenth recital of the Trademark Directive says that the appreciation of likelihood of 
confusion  
depends on numerous elements and, in particular, on the recognition of the trade mark 
on the market, of the association which can be made with the used or registered sign, 
of the degree of similarity between the tr ade mark and the sign and between the goods 
or services identified.  
167. Interpreting Article 4(1)(b) of the Tradem ark Directive, which is the equivalent of 
Article 16.1, the ECJ has said that
120 
 
… the more distinctive the earlier mark, th e greater the risk of confusion … Since 
protection of a trademark depends, in accordance with Article 4.1(b) of the Directive, on there being a  likelihood of confusion, marks with a highly distinctive character, either per se  or because of the reputation  they possess in the market, enjoy broader 
protection than marks with a less distinctive character. 
168. This confirms that reputation, in additi on to being a "threshold pre-requisite" for the 
application of certain provisions providing additional protections to highly reputed marks, is also a 
general criterion for assessing like lihood of confusion with any trademark.  
 169. EC trademark law is by no means unique in this respect.
121 Similar criteria are applied by 
most other Members.122 In the United States, the factors to be  examined in determining likelihood of 
confusion in infringement proceedings  include the so-called "strength" of the trademark.123 
Trademarks consisting of descriptive terms, such as place names, are deemed inherently "weak" and 
                                                      
120 Case C-39/97, Canon Kabushiki Kaisha v Metro Goldwyn-Mayer Inc.  , ECR [1998] I-5507, para. 18  
(Exhibit EC-71). Emphases added. 
121 According to WIPO's Trademark Manual: 
 
If the infringed trademark is being used, the exte nt of use can influence the test of confusing 
similarity. Intensive use increases distinctiveness of the mark, and confusion with well known marks is more likely if the goods on which the infringing mark is used are less similar or if the 
similarity of the marks is less apparent. 
 
WIPO, Introduction to Trademark Law & Practice, Th e Basic Concepts, A WIPO Training Manual , 
Geneva 1993, 2
nd Ed., at point. 6.2.3 in fine (Exhibit EC-72).  
 
WIPO's Manual distinguishes the relevance of intensive use as a factor that influences the test of 
confusing similarity from the protection given to well known marks beyond the scope of confusing similarity. (Ibid., at point 6.2.4).    
122 For example, Section 6(5) of Canada's Trade Marks Act (Exhibit EC-73) provides that (emphases 
added): 
 
In determining whether trade-marks or trade names are confusing, the court or the Registrar, 
as the case may be, shall have regard to all th e surrounding circumstan ces including: (a) the 
inherent distinctiveness of the trade-marks or trade names and the extent to which they have 
become known ; (b) the length of time the trade-marks or trade-names have been in use ; (c) the 
nature of the wares, services or business; (d) the nature of the trade; and (e) the degree of resemblance between the trade-marks or trade na mes in appearance or sound or in the ideas 
suggested by them. 
123 See e.g. Polaroid Corp. v. Polarad Elect. Corp ., 287 F.2d 492 (2d Cir.) cert. denied, 368 U.S. 820 
(1961) (Exhibit EC-74); E.I. DuPont DeNemours & Co. Application of , 476 F.2d 1357 (Cust. & Pat. App.1973), 
261 (Exhibit EC-75). WT/DS174/R/Add.2 
Page B-272  
 
 are protected only to the extent that "secondary meaning" is shown.
124 In turn, secondary meaning is 
measured according to criteria such as reputation, renown and length of use.125 
 170. Even less pertinent are the US re ferences to the EC Wine Regulation.
126 Indeed, the Wine 
Regulation proves the opposite. The differences between Article 14(3) and the corresponding 
provision of the Wine Regulation underscore that th e EC authorities intended to apply a different rule 
in the context of Regulation 2081/92.    171. The United States alleges that the EC's interp retation of Article 14(3) is a novel one which 
contradicts previous positions of the EC. Given the tone in which this accusation is made, one would 
expect that the United States has credible evidence to substantiate it. It does not. 
 172. The United States cites three pieces of "evidence":   
• The first one is a slide included in a pr omotional presentation made by a low level 
Commission official in Tokyo, which,  for pedagogical reasons, describes the 
requirements of Article 14(3) in an oversimplif ied manner. Needless to say, that slide has 
no legal authority whatsoever. 
• The second one is a passage from the EC Commission's Guide to Regulation 2081/92.
127 
The passage in question, however, repeats verb atim the wording of Article 14(3) and, 
therefore, does not support the US interpreta tion. The United States makes much of the 
fact that the passage describes Article 14( 3) as "the only circumstance" in which a 
"conflicting trademark" (i.e. a trademark that e ngenders one of the situations indicated in 
Article 13(1)) prevents the registration of the geographical indication. However, the EC's 
interpretation does not contradict this. Regardl ess of which is the correct interpretation of 
Article 14(3), it is beyond dispute that the situa tion referred to in that Article is the "only 
circumstance" in which the registration of a geographical indication must be refused. The reference to "other cases" in the passage quoted by the United States is an allusion to the 
other situations included in Article 13(1)  in which a trademark "conflicts" with a 
geographical indication.  
• The third one is a statement of "ministerial reasoning" accompanying Section 45 of 
Hungary's Law on the Protection of Trad emarks and Geographical Indications.
128 
Contrary to what is said by the United States, that provision does not implement Regulation 2081/92, which, being a directly a pplicable Regulation, and not a Directive, 
need not, and indeed must not, be implemented by the Member States. The provision in 
question applies to products not covered by Regulation 2081/92, in respect of which the 
Member States remain competent to adopt their own rules. The EC finds it rather curious that the United States considers more au thoritative the interpretation of an EC 
Regulation made by a minister of a Member State in order to explain an amendment to a law of that Member State which, on that point, does not implement EC law, than the 
interpretation made by the EC authorities of an EC Regulation which those authorities 
have drafted and adopted themselves and whic h they have been interpreting and applying 
for more than 15 years prior to Hungary's accession to the EC. But then, of course, one 
                                                     
 
124 See e.g. AMF Inc. v.  Sleekcraft Boats , 5499 F.2d 341 (9th Cir. 1979) (Exhibit EC-76). 
125 See e.g. Zatarian's, Inc. v. Oak Grove Smokehouse , Inc., 698 F.2d 786 (5th Cir. 1983) 
(Exhibit EC-77). 
126 US SWS, para. 152. 
127 US SWS, para. 155, with reference to  Exhibit US-24. 
128 US SWS, para. 148.  WT/DS174/R/Add.2 
 Page B-273 
 
 
 should not forget that the United States speak s from the premise that the EC institutions 
are the only government in the world whic h is entitled to no deference from panels.129 
173. The EC has pointed out that the interpretati on of Article 14(3) made by the United States 
would lead to a result which cannot be reconc iled with the terms of other provisions of 
Regulation 2081/92 and, in particular, with Article 7(4).130 In response, the Unit ed States notes that 
the two provisions apply cumulatively.131 However, this still does not e xplain why Article 7(4) allows 
objections in respect of any trademarks, and not just in respect of "well-known" trademarks. It would 
be pointless to admit an objection on certain grounds if , in any event, it were not possible to reject the 
objection on such grounds. The United States has no answer for this.  
(c) Article 14(3) confers enforceable rights to the trademark owners 
174. The United States argues that, even if the EC's  reading of Article 14(3) were correct, that 
provision "merely authorizes the EC to decline registration of a GI"
132, but does not accord rights to 
the trademark owners.133 
 
175. The United States is wrong again. When appl ying Article 14(3), the EC authorities have a 
margin of appreciation in order to assess the re levant facts. But once they have determined, as a 
factual matter, that a proposed geographical indication would be misleading, they are required, and not simply authorized, to refuse the registration of that geographical indication.    176. Furthermore, Article 14(3) confers judicially enforceable rights to the owners of trademarks.  
 
177. In accordance with Article 230 of the EC Treat y, if a trademark owner can show that it is 
directly and individually concerned by the decision to register a geographical indication, it may bring an action in annulment before the European Court of Justice against that decision on the grounds that 
it is inconsistent with Article  14(3) of Regulation 2081/92.  
 
178. In any event, trademark owners may raise th e invalidity of the registration of a geographical 
indication before the courts of the Member Stat es in accordance with the procedure provided in 
Article 234 of the EC Treaty. For example, a trad emark owner could bring infringement proceedings 
under the Community Trademark Regulation and/or  under the trademark law of a Member State 
against the user of a registered geographical indication and argue that the registration of the 
geographical indication is invalid because it is incons istent with Article 14(3) of Regulation 2081/92. 
The national court would then have to request a pr eliminary ruling on the validity of the registration 
from the European Court of Justice. That ruling would be binding upon the national court. Unlike the 
action in annulment, the possibility to request a pr eliminary ruling is not subject to any time limits.
134   
 
179. Australia has said that the decisions to register a geographical indication under 
Regulation 2081/92 are subject to judicial review only "on points of law".135 This is wrong. The ECJ 
may review not only points of law but also the fact ual assessment made by the registering authorities, 
                                                      
129 US Response to the Panel's Question No. 1, para. 8 and para. 18. 
130 Articles 12b(3) and 12d(2) provide, respectively, that the criteria of Article 7(4) shall apply also 
with respect to the admissibility of objections to the registration of foreign geographical indications and of 
objections from outside the EC to EC geographical indications. 
131 US SWS, para. 161. 
132 US FOS, para. 54. See also US Responses to Panel's Questions Nos. 14 (at para. 41) and 67 (at 
para. 87). 
133 US SWS, para. 136. 
134 US SWS, para. 138. 
135 US SWS, para. 152. WT/DS174/R/Add.2 
Page B-274  
 
 both in annulment proceedings under Article 230 of th e EC Treaty and in the context of a preliminary 
ruling on the validity of the registration under Article 234 of the EC Treaty.   (d) EC law provides means to prevent confusing u ses of a registered geographical indication  
180. The United States goes on to argue that, even if Article 14(3) prevents the registration of 
confusing geographical indications, it does not pr ovide means to prevent that a registered 
geographical indication is used sub sequently in a confusing manner.  
 181. The United States is asking the EC to provide  a remedy against the use of a registered 
geographical indication which is not  required by Article 16.1 and whic h few Members, if any, provide 
against the use of a registered trademark. The regi stration of a trademark confers a right to use that 
sign.
136 For that reason, in most jurisdictions a trad emark owner cannot prevent the owner of another 
registered trademark from using the sign covered by  the registration unless it requests and obtains first 
the cancellation, invalidation or revocation of such registration.137  Under EC law, the relationship 
between trademarks and registered geographical indi cations rests on the same principle. The owner of 
a trademark may not prevent the right holders of a registered geographical indication from using the 
registered name on the grounds that such name is  confusing. As just explained, however, the 
trademark owner is entitled to request a judicial ru ling to the effect that the registration of the 
geographical indication is invalid on those grounds.  182. The United States contends that, in practice,  questions may arise as to what exactly is 
encompassed by the "registered name". The same kind of questions, however, may arise in connection 
with the scope of the registration of a trademark. Whether or not a particular sign falls within the 
scope of a particular registration is a factual ques tion to be resolved by the courts on a case-by-case 
basis. In should not, and indeed cannot possibly be decided in the abstract by this Panel.    
183. The United States also argues that confusion c ould arise if the geographical indication is used 
"in ways that cannot be anticipated, such as in a trademark-like manner".
138 This reflects certain pre-
conceived notions as to how trademarks and geogra phical indications should be used which have no 
basis in the TRIPS Agreement and which the EC do es not share. For example, the EC does not agree 
that the "pictorial depictions" of the packagi ng for four EC cheeses included in Exhibit US-52 
("Esrom", "Bra", "Bitto" and "Tomme de Savoie") de monstrate that the geographical indications are 
used in "trademark-like fashion".139 Rather, they demonstrate simply that trademarks and geographical 
indications can be presented in similar fashion. To characterize that fashion as "trademark-like" 
assumes that trademarks enjoy priority in order to use certain types or styles of presentation. 
                                                      
136 For example, Section 122 of Australia's Trade Marks Act 1995 (Exhibit EC-7) provides that: 
 
In spite of section 120, a person does not infri nge a registered trade mark when: […] (e) the 
person exercises a right to use a trade mark given to the person under this Act.  
 
Section 120 defines when a trademark is deemed infringed (Exhibit EC-78).  Section 23 of Australia's 
Trade Marks Act 1995 (Exhibit EC-79)  further clarifies that: 
 
If trade marks that are substantially identical or  deceptively similar have been registered by 
more than one person (whether in respect of the same or different goods or services), the 
registered owner of any one of those trademarks does not have the right to prevent the 
registered owner of any other of those trade marks from using that trade mark except to the extent that the first mentioned owner is authorised to do so under the registration of his or her 
trade mark.    
137 See e.g. Article 95 of the Community Trademark Regulation. 
138 US SWS, para. 131. 
139 US SWS, para. 133.  WT/DS174/R/Add.2 
 Page B-275 
 
 
  
184. What the United States characterizes as "tradema rk-like" manner is, in fact, a legitimate, 
ordinary and predictable manner of using a geographi cal indication, at least in the EC. EC consumers 
are familiar with the use of geographical indicati ons for foodstuffs. They value them as much as 
trademarks when making their purchasing decisions, if not more, and expect them to be used in what 
the United States calls "trademark-like" fashion. For example, Italian consumers probably care more 
about whether their cheese is genuine "Bra" (rather than, say, "Bitto") than about whether it has been 
produced by the firm "Vittorio" or by another ch eese maker, in particular since the conditions for 
using the geographical indication ensure that al l Bra cheese has homogenous characteristics, 
regardless of the brand. In conducting the assessm ent provided in Article 14(3), the EC authorities 
will assume that the proposed geographical indicati on will be used in what the United States calls 
"trademark-like" manner. Accordingly, if the EC authorities reach the conclusion that a geographical 
indication is not "misleading", it is because they consider that such name is not "misleading" even when used in what the United Stat es calls "trademark-like" fashion. 
 
185. Finally, the EC recalls once again that, while  the right holders of a geographical indication 
have a positive right to use the registered name, this  does not mean that they are allowed to use it in 
any conceivable manner. As explained
140, the use of a name registered as a geographical indication, 
like the use of name registered as a trademark, is subject to the generally applicable provisions of 
Directive 2000/13 on the labelling, presen tation and advertising of foodstuffs141, of Directive 84/450 
on misleading advertising142 and of the unfair competition laws of the Member States.143 
 
2. Article 24.5 of the TRIPS Agreement 
(a) The relationship between Section 3 of Part II and Article 16.1  
186. The United States has argued that "it is not necessary for the Panel to even consider 
Article 24.5 to find a violation of Article 16.1, as Article 24.5 is an exception to GI protection, not 
trademark protection"144. 
 187. As we have shown, this argument is specious . True, Article 24.5 limits "GI protection". But, 
in turn, the measures taken to implement "GI protec tion" under Section 3 of Part II limit "trademark 
protection". Thus, by defining the scope of "GI pr otection" Article 24.5 defines simultaneously the 
scope of "trademark protection". In other words, as conceded by Australia
145, together with other 
provisions of Section 3 of Part II, Article 24.5 defines the boundary between the right to protect 
geographical indications and the obligation to prot ect trademarks. The issue before the Panel is 
whether the co-existence provided in Regulation 2081/92 is within the boundary defined by 
Article 24.5.  
188. Moreover, Article 16.1 must be read together  with Article 15.2. In  accordance with that 
provision, Members have a right to refuse (and by implication to invalidate) the registration of trademarks on a variety of grounds relating to the "form" of the trademark. That right, however, is circumscribed by Article 24.5, which provides th at, in implementing protection for geographical 
indications, Members may not invalidate a grandfathered trademark "on the basis that such a 
                                                     
 
140 EC's FWS, para. 319. See also the responses of the EC and its Member States to the review under 
Article 24.2 of the TRIPS Agreement contained in document IP/C/W/117/Add.10 (Exhibit EC-29). 
141 Exhibit EC–30. 
142 Exhibit EC–31. 
143 References to the relevant laws of the Member States are found in their responses to the review 
under Article 24.2 of the TRIPS Agreement (Exhibit EC-32). 
144 US SWS, para. 173 
145 Australia's SWS, para. 96. WT/DS174/R/Add.2 
Page B-276  
 
 trademark is identical with or similar to a geogra phical indication". Since Article 24.5 limits the right 
of Members under Section 2 of Part III to invalidate the registration of certain trademarks, it may, at 
the same time, limit some of the obligations aris ing from the registration of such trademarks under 
that section.  
(b) The meaning of "the right to use a trademark" 
189. By now it has become clear that the key issu e before the Panel is the interpretation of the 
phrase "the right to use a trademark".  Australia and the United States have advanced different and 
contradictory interpretations of that phrase.  
190. Australia says that the phrase "the right to use a trademark" applies only to the trademarks 
acquired through use.
146 There are, however, obvious problems with  this reading, which Australia has 
failed to address. First, it cannot be  reconciled with the ordinary meaning of the term "trademark", 
which includes all trademarks. Moreover, as used  throughout the TRIPS Agreement, the term 
"trademark" includes both types of trademarks. When  the drafters intended to distinguish between 
registered trademarks and trademarks acquired thro ugh use they did so expressly, like in Article 16.1 
or in Article 21.   191. Australia suggests that the phrase "the right to  use a trademark" is linked to the reference 
made in the chapeau of Article 24.5 to the situati on where "rights to a trademark have been acquired 
through use". But, if so, it would have been more logical to say that the implementation of protection 
for geographical indications "shall not prejudice … the rights to a trademark acquired through use". 
Contradicting expressly Australia's position, the Un ited States has said that "'the right to use a 
trademark' is not specifically linked in the text  to trademarks whose rights are acquired through 
use".
147 
 
192. Furthermore, by arguing that the phrase "the right  to use a trademark" refers exclusively to the 
trademarks acquired through use, and not contestin g that this phrase does not include the right to 
prevent others from using the trademark, Australia  concedes that Article 24.5 provides for the co-
existence of geographical indications with earlier trademark acquired through use. Australia suggests 
that co-existence is justified in the case of non -registered trademarks, because Article 16.1 only 
requires to grant exclusive rights to the owners of registered trademarks.148 However, Article 16.1 
reserves expressly the right of Members to grant right s on the basis of use, including exclusive rights. 
Australia does not explain how Article 24.5, which Australia insists is not  an exception to 
Article 16.1, can nevertheless limit the Members' right to protect non-registered trademarks under 
Article 16.1.     
193. In turn, the United States argues that the phrase "the right to use a trademark" means in fact 
"the right to use a trademark and, in addition, to exclude others from using it". This reading cannot be 
reconciled with the ordinary mean ing of that phrase. Nor with the meaning commonly given to that 
phrase in the context of trademark law, including in  US trademark law. Contradicting expressly the 
US position, Australia agrees with the EC that the phrase "the right to use a trademark" does not mean 
the exclusive  right to use a trademark.
149  
 
194. The United States attempts to stretch the mean ing of the phrase "the right to use the trade 
mark" by resorting to what it calls a "contextual" inte rpretation. It is, of course, true that the purpose 
of a trademark is to distinguish the goods from a certain undertaking. But from this it does not follow 
                                                      
146 Australia's SWS, para. 100. 
147 US Response to the Panel's Question No. 70, para. 105. 
148 Australia's SWS, para. 100. 
149 Australia's SWS, para. 100.  WT/DS174/R/Add.2 
 Page B-277 
 
 
 logically that "the right to use a trademark" is in herently exclusive. In pr actice, the right to use a 
trademark is not always exclusive. Indeed, if so, it would have been superfluous to provide in 
Article 16.1 that registered trademarks must be ex clusive. Also, on the US interpretation, any rights 
granted to the owners of unregistered trademarks on the basis of use would have to be exclusive. Yet, 
while this may be generally the case, there is no ob ligation under the TRIPS Agreement to grant such 
exclusive rights, as emphasised by Australia.150    
 195. The United States confuses the trademark, whic h is a sign, with the rights that the law may 
confer over that sign. That a trademark is a sign, and not a right, is confirmed by the fact that an undertaking may use a sign as a trademark even if it has acquired no rights over it. In most countries, 
including the majority of EC Member States, the rights over a trademark are acquired only upon 
registration. In other words, an undertaking has no rights over a trademark, including the right to use it, unless and until it registers it. But there is nothing that prevents an undertaking from using a non-registered trademark in order to distinguish its good s, even if it has no rights over it, provided that it 
does not infringe the rights of another undertaking. In other countries, including the United States, it is 
possible to acquire rights over a trademark on the b asis of use. But even in those countries it is 
necessary, before any rights over the trademark are ac quired, that the trademark is used for a certain 
period of time.  This confirms that one thing is using a sign as a trademark and another thing having a 
right to use such trademark, let alone an exclusive right.  (c) The validity of the registration 
196. While the two complainants disagree with resp ect to the meaning of the phrase "the right to 
use a trademark", both contend that the phrase "sha ll not prejudice … the validity of the registration" 
means that the implementation of protection for ge ographical indications cannot prejudice the right to 
exclude others from using the trademark.  
197. This reading confuses the registration with  the exercise of one the rights that may be 
conferred by the registration. That the validity of  the registration cannot be "prejudiced" means that 
Members cannot cancel the registration, or limit its scope or its duration. It does not mean that Members are prohibited from adopting any measure that  may affect the exercise of the rights of the 
owner of the registered trademark. Moreover, on the complainants' interpretation, the phrase "the right 
to use a trademark" would become duplicative and superfluous. If the obligation not to prejudice the 
exclusive right to use a trademark were already inhe rent in the obligation not to prejudice the validity 
of the trademark, it would have been pointless to specify that the implementation of protection for 
geographical indications shall not prejudice "the right to use a trademark".   198. The complainants suggest
151 that while the right to exclude others is inherent in the "validity" 
of the registration by virtue of Article 16.1, the "right to use a trademark" is not.  However, the right 
to use a trademark is the most basic right of the owne r of a registered trademark. Indeed, even more so 
than the right to exclude others. Trademarks are ge nerally exclusive, but not inherently so. Hence the 
obligation provided in Article 16.1. On the other hand, a registered trademark which did not confer the right to use the trademark would be meaningl ess. The right to use a trademark is implicit in 
Section 2 of Part III. It is implicit, for example, in  Article 16.1. The right to prevent others from using 
a sign which would result in a likelihood of confus ion with the registered trademark presupposes that 
the owner of the registered trademark can use the trademark himself, since otherwise there could be no possibility of confusion. The right to use a tradem ark is also implicit in Article 19, which provides 
that, in order to maintain a registration, Members may require the use of the trademark. It is also 
implicit in Article 20, which provides that the use of a trademark shall not be unjustifiably 
encumbered. 
                                                     
 
150 Australia's SWS, para. 100. 
151 See e.g. Australia's SWS, para. 99. WT/DS174/R/Add.2 
Page B-278  
 
  
199. If the drafters deemed necessary to specify  in Article 24.5 that the implementation of 
protection for geographical indications shall not prejudice the most basic right of the owner of a registered trademark ("the right to use it"), but not the right to exclude others from using it, the clear 
implication is that they did not intend to prevent Members from limiting the exercise of the latter right 
in order to allow the use of a geographical indicati on in co-existence with a grandfathered trademark. 
 
3. Article 24.3 of the TRIPS Agreement 
200. The EC has argued that, regardless of whethe r the co-existence of geographical indications 
and earlier trademarks is envisaged by Article 24.5, it is required to maintain such co-existence by 
virtue of the stand-still obligation contained in  Article 24.3.
152  
 201. The complainants read Article 24.3 as if it were subject to the proviso that Members are 
exempted from the obligation not to diminish the protection of geographical indications, where such 
protection would not be consistent with th e provisions of Section 2 of Part III.
153 But Article 24.3 
contains no such proviso. The United States suggest s that Article 24.3 is subject to Article 1.1.154 But 
Article 1.1 applies only when a Member decides, vol untarily, to implement more extensive protection. 
Article 24.3, however, does not simply permit  Members to implement more extensive protection. It 
requires  them to do so. This obligation is not subord inated in any manner to the obligation imposed 
by Article 16.1. Both have equal rank. Thus, the co mplainants' reading of Article 24.3 would result in 
a genuine conflict between that provision and Article 16.1.  
 
202. The distinction drawn by the complainants be tween the "implementation" of Section 2 and 
that of Section 3 is fallacious, because the protec tion of geographical indications with respect to 
trademarks is an essential and inseparable compone nt of the protection of geographical indications 
provided in Section 3. Several provisions of Sec tion 3 limit expressly the protection of trademarks 
under Section 2. There is no reason why Article  24.3 cannot impose an additional limitation.  
 203. The United States devotes considerable space to  argue that the EC's reading of Article 24.3 
would have provided "a road map to circumve nt the disciplines of the TRIPS Agreement."
155  The US 
concerns are exaggerated and unconvincing.  
204. In the first place, Article 24.3 is not an ope n ended provision. It applies only with respect to 
measures that were in force prior to the entry into force of the WTO Agreement. Those measures 
should have been known to the negotiators. Even if the disciplines of the TRIPS Agreement "were 
essentially agreed"
156 as of 1991, there was nothing that prev ented the participants from reopening the 
negotiation of Article 24.3, had they considered that  other participants were taking advantage of it in 
order to circumvent their future TRIPS obligatio ns. Furthermore, the conduct described by the United 
States would have been manifestly contrary to the requirements of the principle of good faith. The 
interpretation of Article 24.3 cannot be premised  on the assumption that the participants in the 
negotiations would have  acted in bad faith. 
 205. Moreover, the Unites States exaggerates th e opportunities for circumvention. The EC's 
interpretation of Article 24.3 does not extend to m easures limiting copyright or patent protection. 
Section 3 of Part II does not a ddress the relationship between geogr aphical indications and those 
rights. Therefore, measures limiting those rights can not be considered as "implementing" Section 3. 
                                                     
 
152 EC FWS, paras. 312-314. 
153 See e.g. US SWS, paras. 189-190. 
154 US SWS, para. 191. 
155 US SWS, para. 192. 
156 US SWS, para. 192.  WT/DS174/R/Add.2 
 Page B-279 
 
 
 Moreover, the United States does not explain how a li mitation of patent rights or other intellectual 
property rights could contribute to protect geographical indications. The example provided by the United States with respect to copyrights
157 is so contrived and unrealistic  that it undermines rather 
than supports its argument.  
206. Both complainants argue that, in any event,  Article 24.3 would apply only with respect to 
protection provided to individual geographical indicati ons registered prior to the entry into force of 
the WTO Agreement.
158 The complainants, however, do not address the EC's argument that this 
would have the consequence that Article 24.3 would impose obligations only upon those Members 
that protect geographical indications via a system of registration, or another system involving the 
recognition ex ante  of geographical indications. 
 207. Furthermore, if it were considered that, fo r purposes of Article 24.3, a geographical indication 
is not "protected" unless and until it has been regi stered, the same interpretation should apply to 
Article 24.9. Accordingly, the EC would be entitled  to deny protection to any US or Australian 
geographical indication which has not been register ed or otherwise individually recognised in those 
countries.   208. Finally, the United States makes much of the fact that the French and the Spanish version of 
Article 24.3 use the Article des/las , respectively, before the term "geographical indication.
159 
However, as any French speaker or  Spanish speaker struggling to speak English would attest, French 
and Spanish use liberally determinative articles in contexts where none would be required in English. 
For example, in Spanish it would be grossly ungr ammatical to say "indicaciones geográficas deben 
ser protegidas", which would be the literal translation of "geographical indications must be protected". 
Instead, one would have to say " las indicaciones geográficas deben ser protegidas", even if the phrase 
refers to all and not just to certain geographical indications.  
 
4. Article 17 of the TRIPS Agreement  
209. The EC has submitted in the alternative th at, even if Regulation 2081/92 were found to be 
prima facie  inconsistent with Article 16.1 of the TRI PS Agreement, the co-existence of geographical 
indications and earlier trademarks would be jus tified under Article 17 of the TRIPS Agreement.160 
 
210. At the outset, it is useful to recall the differ ences between the terms of Article 17 and those of 
the exceptions provided in Article 13, with respect to copyrights, in Article 26.2, with respect to 
industrial designs, and in Article 30, with respect to patents. Those three provisions, like Article 17, 
provide for "limited" exceptions. But the similarities end there:  
• unlike Article 13, Article 17 does not require that the exceptions  be "confined" to 
"certain special cases"; 
• unlike Articles 13, 26.2 and 30, Article 17 does not require that the exceptions "do no 
conflict unreasonably with the normal exploitation" of the right; and  
• unlike Articles 13, 26.2 and 30, Article 17 does not require that the exceptions "do not 
unreasonably prejudice the legitimate interests" of the right holder. 
                                                     
 
157 US SWS, para. 193. 
158 US SWS, paras. 196-197. Australia's SWS, para. 115. 
159 US SWS, para. 196. 
160 EC FWS, paras. 315-319. WT/DS174/R/Add.2 
Page B-280  
 
 211. All that is required by Article 17 is that th e exception be "limited" and that it "take account of 
the legitimate interests of the owner of the trademar k and of third parties". The EC has shown that the 
co-existence provided in Regulation 2081/92 fulfils both conditions.   (a) The exception is "limited" 
212. The United States has advanced several arguments  to the effect that the exception claimed by 
the EC is not "limited". All of them are without merit.  213. First, the United States contends that the exception is not "limited" because "there are no 
limits on the number of potential GI right holders for each individual GI".
161 But the same is true of 
other place names which do not qualify as geographical  indications. Yet the United States concedes 
that the use of those place names may be permitted  by Article 17.162    
 214. The United States argues that, unlike ordinary place names, geographical indications are not "descriptive terms" because they indicate not only th e origin of the product but also certain product 
characteristics attributable to that origin.
163 In other words, the United St ates appears to be saying that 
geographical indications are not "descriptive term s" because they are "too descriptive". The United 
States concedes that a place name is a "descriptive term". And we assume that it would not dispute 
that a term which describes a product characteristic is  also a "descriptive term". Yet, inexplicably, the 
United States takes the view that a term which indicates both a place name and a product characteristic linked to that place is not "descriptiv e". The EC does not understand this logic, which 
would have manifestly absurd consequences. For exam ple, it would mean that the wine makers of the 
Santa Rita Hills in California woul d have qualified for an Article 17 exception vis-à-vis the registered 
trademark "Santa Rita", before the place name "S anta Rita Hills" was rec ognised as a geographical 
indication by the US authorities, but would have lo st the entitlement to the exception as a result of 
such recognition. 
 
215. Furthermore, the US reading of the term "descr iptive" in Article 17 is in contradiction with 
the meaning given to that term under US trademark law. The Lanham Act prohibits the registration of 
terms which are "primarily geographically descriptive " except as collective or certification marks.
164 
If geographical indications were not "descriptive" te rms, they would be registrable as ordinary 
trademark marks. Yet, as the Panel is aware, the United States purports to protect geographical 
indications inter alia  through their registration as certification marks.   
 216. The United States also argues that the excep tion is not "limited" because it does not require 
that the geographical indication be  used "otherwise than as mark".
165 However, this is a requirement 
of US trademark law166, which is not provided in the tradem ark laws of many other Members. For 
example, all that is required by Australia's trademark law is that indications of origin be used "in good 
faith".167 
 217. As mentioned before, the requirement that ge ographical indications should not be used "as 
trademarks", as this term is interpreted by the Unite d States, reflects certain pre-conceived notions as 
                                                     
 
161 US SWS, para. 205. 
162 US SWS, note 194. 
163 US SWS, note 194. 
164 15 USC 1052(e) (Exhibit EC-6). 
165 US SWS, para. 199. 
166 15 USC Section 1115(b)(4)  (Exhibit EC-6). 
167 Section 122(1)(a) of Australia's Trade Marks Act 1995 (Exhibit EC-7). To mention but another 
example, Section 95 of New Zealand's Trade Marks Act 2002 (Exhibit EC-80), provides that indications of 
origin must be used "in accordan ce with honest practices in indu strial or commercial matters".  WT/DS174/R/Add.2 
 Page B-281 
 
 
 to how trademarks and geographical indications s hould be used, which have no basis in the TRIPS 
Agreement and which the EC does not  share. When interpreting the no tion of "fair use" it is necessary 
to take account of local factors, such as the cons umers' habits and expectations, business practices or 
even the production and distribution structures prevailing in each country. The United States cannot expect to export its own notions of "fairness" together with its cheese. 
 
218. Furthermore, if geographical i ndications could not be used "as trademarks", as this term is 
understood by the United States, the use of a ge ographical indication could never give rise, by 
definition, to a likelihood of confusion with a tradem ark and, therefore, would not need to be justified 
under Article 17. Indeed, the US courts have constr ued the US "fair use" ex ception as requiring that 
the use of the descriptive term must not cause a likelihood of confusion.
168 As explained in our written 
submission, importing that interpretation into  Article 17 would render it wholly redundant.169 
 (b) The exception "takes account" of the interests of  the trademark owners and third parties 
219. Contrary to the complainants' assertions, EC law does take account of the legitimate interests 
of the trademark owners and third parties. 
 220. First, even if the complainants' interpretation of Article 14(3) were correct and that provision 
did not prevent the registration of all confusing geographical indications, it would nonetheless prevent 
registration in those instances where the likelihood of  confusion is greater, because the trademarks are 
particularly distinctive, and may cause a more si gnificant prejudice to the trademark owner, because 
of the reputation and renown of the trademark. 
 221. This may be contrasted with the situation under US law, where the risk of likelihood of 
confusion with an existing trademark is never  considered a relevant ground for refusing the 
recognition of a geographical indication for wines.
170 Hence the recognition of geographical 
indications such as "Rutherford" or "Santa Rita Hi lls", despite the existen ce of virtually identical 
earlier trademarks such as "Rutherford Vintners" an d "Santa Rita", respectively. Once again, EC law 
is more protective of the rights of trademark owne rs than US law. Indeed, last week the Supreme 
Court of California upheld a California statute that prohibits the use of any trademarks consisting of 
or including a recognised geographical indication for wines of a different origin, including the 
trademarks grandfathered by federal labelling regulations.171  
 
222. The United States has described Article 14(3) as a "narrow"172 exception for "well-known" 173 
trademarks. However, the term "well-known" trademar ks is not used in Article 14(3). Even if the 
length of use and renown/reputation of the trademark were "threshold prerequisites"174 for the 
application of Article 14(3), rather than criteri a for assessing the likelihood of confusion with any 
trademark, there is no reason why those criteria s hould be construed "narrowly". Nor has the United 
States provided any evidence that, in practice, t hose criteria are being interpreted and applied 
"narrowly" by the EC authorities.   
                                                     
 
168 US Response to the Panel's Question No. 80. 
169 EC SWS, para. 342. 
170 See Sociedad Anonima Viña Santa Rita v. U.S. Dept. of the Treasury , 193 F. Supp. 2d 6 
(D.D.C 2001)  (Exhibit US–48). 
171 Exhibit EC-81. 
172 US SWS, para. 208. 
173 US SWS, para. 208. 
174 US SWS, para. 145. WT/DS174/R/Add.2 
Page B-282  
 
 223. Moreover, contrary to the US assertions, it is  not correct that EC law "places no limits on the 
manner in which a geographical indication can be used".
175 
 224. First, the specific concerns with respect to cer tain particular uses raised by the United States 
do not relate to the use of the name registered as a geographical indication, but instead to the use of 
other  signs in place of or in conjunction with  the registered geographical indication. 
Regulation 2081/92 does no confer a positive right to use those other signs.   225. Furthermore, while the right holders of a ge ographical indication have a positive right to use 
the registered name, this does not mean that they are allowed to use that name in any conceivable 
manner. As explained
176, the use of a name registered as a ge ographical indication, like the use of a 
name registered as a trademark, is subject to the requirements of Directive 2000/13 on the labelling, 
presentation and advertising of foodstuffs177, and in particular to Article 2(1)(a), which provides that 
"the labelling and methods used must not be su ch as could mislead the purchaser to a material 
degree". This applies inter alia  with respect to misleading statements concerning the producer or the 
brand of the goods.178 The use of registered geographical indications is subject as well to 
Directive 84/450 on misleading advertising179 and the unfair competition laws of the Member States, 
including both specific legislation and/or case law based on general tort law.180  
 226. The United States has dismissed this legislation as irrelevant
181, but without giving  any 
proper reason. The Directives on labelling and mi sleading advertising and the laws on unfair 
competition limit the use of geographical indications in a manner which protects the interests of 
competitors (including trademark owners) and thir d parties and are, therefore, relevant for the 
purposes of Article 17. The United States appears to be suggesting that only those conditions for the 
use of geographical indications that are provided in Regulation 2081/92 itself or in the EC trademark laws are relevant. But, once again, Article 17 does not prescribe any particular implementation 
method. Whether the conditions for the use of geographical indications are found in 
Regulation 2081/92 or in a separa te legal instrument is totally irrelevant, as long as the legitimate 
interests of the trademark owners and of third pa rties are sufficiently taken into account.      
 
                                                     
 
175 US SWS, para. 203. 
176 EC FWS, para. 319. See also the responses of th e EC and its Member States to the review under 
Article 24.2 of the TRIPS Agreement contained in document IP/C/W/117/Add10 (Exhibit EC-29). 
177 Exhibit EC-30. 
178 See also Article 3(1) of Directive 2000/13, which re quires that labels must state among other things:  
 
(7) the name, or business name and address of the manufacturer or packager, or of a seller established within the Community … 
 
(8) particulars of the place of origin or provenan ce where failure to give such particulars might 
mislead the consumer as to the true or igin or provenance of the foodstuff. 
179 Exhibit EC-31. Article 2(2) defines misleading advertising as:  
 any advertising which in any way,  including presentation, deceive s or is likely to deceive the 
person to whom it is addressed or whom it reaches and which, by reason of its deceptive 
nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor 
180 One of the aspects typically covered by such laws is the imitation of labels and packaging in cases 
where it cannot be addressed as a trademark infringement. See WIPO's  Introduction to Trademark Law & 
Practice, the Basic Concepts, a WIPO Training Manual , Geneva 1993, 2nd Edition, pp. 97-100. (Exhibit EC-82). 
181 US SWS, para. 210.  WT/DS174/R/Add.2 
 Page B-283 
 
 
 B. CLAIM 20: REGULATION  2081/92  DOES NOT PROVIDE FOR A PRESUMPTION OF A LIKELIHOOD 
OF CONFUSION IN THE CASE OF USE OF  AN IDENTICAL SIGN FOR IDENTICAL GOODS  
227. The EC notes that neither Australia nor the Un ited States appear to contest that  Members are 
not required to restate explicitly in their legisl ation the evidentiary presumption that the use of 
identical signs for identical goods w ill result in a likelihood of confusion.182 Furthermore, Australia 
takes the view that such  presumption may be rebutted.183 
 228. The terms of Article 14(3) do not prevent the EC authorities from applying the presumption. As shown by the EC, in applying Article 14(3) th e authorities must take into account not only the 
criteria mentioned expressly therein, but also the si milarity of goods and signs. And the complainants 
have provided no evidence that, in practice, the EC is not applying the presumption. The 
Complainants, therefore, have failed to meet thei r burden of proof with respect to this claim. 
 C. C
LAIMS 21 AND 22:  ARTICLE  7(4)  OF REGULATION  2081/92  IS INCONSISTENT WITH 
ARTICLE  16.1  OF THE TRIPS  AGREEMENT BECAUSE IT DOES NOT PROVIDE A RIGHT OF 
OBJECTION  
229. The EC has shown that Article 16.1 does not require to make available a right of objection 
with respect to the registration of another inte llectual property right an d that, in any event, 
Regulation 2081/92 does not limit the right of objection in the manner alleged by Australia. 
 230. Australia argues that "the terms 'jeopa rdise the existence' used in Article 7(4)
184 establish a far 
more rigorous standard than  a likelihood of confusion".185 Once again, Australia makes an 
unwarrantedly narrow interpretation of the terms of the Regulation. Australia's interpretation is, at 
most, one possible interpretation. But this is not  enough to meet Australia's burden of proof. To 
repeat, Australia must show that the EC's own reading is unreasonable and that it is impossible to read Article 7(4) consistently with Ar ticle 16.1. As usual, Australia om its to consider other linguistic 
versions of the Regulation which shed light on the intention of the EC legislator. For example, in the 
Spanish version the terms "jeopardise the existence" have been rendered as "perjudicar la existencia". 
In order to show this, it is not necessary to show that "the very being of that trademark would be 
threatened".
186 Also, Australia fails to take into account  the relevant context and in particular 
Article 7(5)(b), which provides that objections shal l be decided having regard to the "likelihood of 
confusion".187 In view of this, there would be no good  reason to read Article 7(4) as limiting the 
grounds of objection in the manner asserted by Aust ralia. Furthermore, the EC recalls once again that 
Australia has submitted no evidence that any Member State or the Commission have ever rejected a 
statement of objections for the reasons alleged by Australia.   231. The EC would like to clarify that, when it said in its first submission that the decisions of the 
Member States rejecting a statement of objection are subject to judicial review in accordance with the 
national law of each Member State, it was referring  to the procedural requirements provided by the 
administrative law of each Member State, and not to the substantive grounds that can be raised before 
                                                     
 
182 See e.g. Australia's SWS, para. 137. 
183 Australia's  SWS, para. 137. 
184 Articles 12b(3) and 12d(2) provide, respectively, that the criteria of Article 7(4) shall apply also 
with respect to the admissibility of objections to the registration of foreign geographical indications and of 
objections from outside the EC to EC geographical indications. 
185 Australia's SWS, para. 133. 
186 Australia's SWS, para. 133. 
187 Similar language is found in Articles 12b(3) and 12d(3) with regard to the registration of 
geographical indications from other WTO Members and third countries and to the registration of EC 
geographical indications, following an objection from outside the EC, respectively. WT/DS174/R/Add.2 
Page B-284  
 
 the courts of the Member States, contrary to what appears to be assumed by Australia.
188 
Regulation 2081/92 is directly applicable, like all EC  regulations. This means that if, for example, the 
authorities of a Member States reject a statement be cause they consider that the objecting party has 
failed to show that the proposed name does not meet the definition of geographical indication in Regulation 2081/92, the national courts are require d to apply the relevant provisions of that 
Regulation, if necessary after requesti ng a preliminary ruling from the ECJ. 
 
VI. THE EC MEASURE IS CONSISTENT WITH THE OBLIGATION TO PROVIDE 
PROTECTION TO GEOGRAPHICAL INDICATIONS UNDER ARTICLE 22.2 OF THE TRIPS AGREEMENT 
232. The complainants have not submitted any new arguments with respect to their claims under 
Article 22.2. The EC would like, nevertheless, to correct some incorrect factual assertions by the 
complainants regarding the relationship between  Regulation 2081/92 and the other means of 
protection of geographical indi cations provided in EC law. 
 
233. Australia has argued that the Directives on labelling and misleading advertising "are not 
Community 'law' in the sense of a Regulation with Co mmunity level effect in relation to labelling and 
misleading advertising in any case".
189 Australia goes on to suggest that Regulation 2081/92 would 
prevail over the measures of the Member States im plementing those Directives by virtue of the 
principle of supremacy of Community law. Au stralia's arguments evidence once again a crass 
ignorance of the most basic principles of EC law.  
 
234. First, a Directive is no less "Community law" than a Regulation. Further, there is no hierarchy 
between a Regulation and a Directive. Second, Comm unity law prevails over the law of the Member 
States only where there is a conflict between them. Since the laws of the Member States implement 
the Directives on labelling and mi sleading advertising, which are themselves Community law, they 
cannot be said to "conflict" with EC law. To th e extent that there was a conflict between the 
Directives and Regulation 2081/92, quod non , it could not be resolved by applying the principle of 
primacy of Community law, but instead the us ual principle that the later law prevails. 
 235. Australia also suggests that there is a conflict between Regulation 2081/92 and the unfair 
competition laws of the Member States.
190 But it fails to provide any evidence of such conflict. In the 
EC, like in most countries, unfair competition laws complement the legislation on specific intellectual 
property rights, by providing supplementary protection.191 Thus, for example, the Community 
Trademark Regulation contains a declaratory provis ion clarifying expressly that it applies without 
prejudice to the laws on unfair competition of the Member States.192 The same is true of the 
Trademark Directive and of Regulation 2081/92.   
                                                      
188 Australia's SWS, para. 134. 
189 Australia's SWS, para. 146. 
190 Australia's SWS, para. 171. 
191 See e.g. Article 1(2) of WIPO's Model Provisions on Protection Against Unfair Competition  
(Exhibit AUS-9), which stipulates that those provisions "shall apply independently of, and in addition to, any 
legislative provisions protecting … trademarks … and other intellectual property subject matter".  The comment to this Article reads as follows in pertinent part: 
 
Paragraph (2) makes it clear that the availability of … trademark … protection does not preclude the application of the provisions against unfair competition…. The protection against 
unfair competition then constitutes a kind of supplementary protection, additional to the 
protection of specific intellectual property subject matter… 
192 Cf. Article 14.2: 
  WT/DS174/R/Add.2 
 Page B-285 
 
 
  
236. For its part, the United States suggests that Article 2(1) of Regula tion 2081/92 would exclude 
the application of the Directives on labelling and misleading advertising.193 The United States has 
misunderstood the purpose of Article 2(1), which is to make clear that Members States cannot adopt 
or maintain their own national systems for protecting specifically  geographical indications. For 
example, they cannot create or maintain a register  of geographical indications of their own. The 
Directives on labelling and misleading advertising, however, do not protect geographical indications 
qua geographical indications. They provide protec tion against any misleading trade description, 
including any misleading use of indications of source or provenance, regardless of whether they qualify as geographical indications.  
 
VII. REGULATION 2081/92 IS CONSISTENT WI TH OBLIGATIONS UNDER THE TBT 
AGREEMENT 
237. Australia has raised two claims under the TBT Agreement: 
 
• that Article (12)(2) of Regulation 2081/92 is incompatible with Article 2.1 of the TBT 
Agreement (Claim 37); 
• and that Articles 4 and 10 of Regulation 2081/92 are incompatible with Article 2.2 of the 
TBT Agreement (Claim 38).
194 
238. As to the substance of these claims, the EC  has already shown that Article (12)(2) of 
Regulation 2081/92 does not involve any discrimin ation between goods. As regards the requirement 
of inspection structures, the EC has also shown that  these are indispensable for the attainment of the 
objectives of Regulation 2081/92. Accordingly, th ey cannot be considered as unnecessarily trade-
restrictive. 
 239. However, for these questions even to arise under Article 2 TBT Agreement, Australia has to 
show that the relevant provisions  of Regulation 2081/92 are a technical regulation. Australia's claims 
do not even meet this threshold test. 
 
A. A
RTICLE  (12)(2)  OF REGULATION  2081/92  IS NOT A TECHNICAL REGULATION  
240. First of all, as regards Article (12)(2), the core issue is that this provision does not lay down 
any product characteristics for identifiable products.  
241. Australia has not contested that the require ment in Article (12)(2) does not apply to all 
products covered by the Regulation, but only to  a specific class of protected names, namely 
homonyms.
195 However, Australia argues that it is suffi cient that the product be "identifiable".196 It is 
certainly true that a product need not be explicitly  identified in the document.197 However, the product 
should at least be identifiable on the basis of the do cument itself. This is not the case here: as long as 
no application has been made for the registration of  protected homonymous names, it is simply not 
knowable to which products th is requirement will apply. 
                                                                                                                                                                     
This Regulation shall not prevent actions conc erning a Community trademark being brought 
under the law of the member States relating in particular to civil liability and unfair 
competition. 
193 US SWS, para. 216. 
194 Australia's FWS, para. 249 et seq. 
195 Australia's SWS, para. 191. 
196 Australia's SWS, para. 192. 
197 Appellate Body Report, EC – Asbestos , para. 70. WT/DS174/R/Add.2 
Page B-286  
 
  
242. Second, Article (12)(2) does not lay down
 any product characteristics or labelling 
requirements. It merely provides that as a conditio n for the registration of a geographical indication, 
the indication of the country of origin is necessary.  The specific labelling requirements will then be 
contained, in accordance with Article 4 (2) (h) of the Regulation, in the product specifications. 
Accordingly, Article (12)(2) is not a technical regulation, but simply a condition for the registration 
and acquisition of an intellectual property right.  243. Finally, the requirement to indicate the country of origin is also not a labelling requirement as 
it relates to a "product, process or production method". Contrary to the view of Australia, "origin" is a 
concept different from "product". Even though th e origin can confer certain characteristics on a 
product, origin as such is not a "product charact eristic". For this reason, an origin marking 
requirement does not fall under the definition of a technical regulation.  244. This interpretation is also required by the need for a harmonious interpretation of the WTO 
Agreements, which the Appellate Body has repeated ly recognised, and to which the EC has already 
referred above.
198 Article IX:1 GATT contains specific disciplines on origin marking, which exclude, 
as Australia has recognised, a national treatment  obligation. If origin marking requirements 
nevertheless fell under Article 2.1 TBT Agreement, th e specific rule in Article IX:1 would be devoid 
of its practical scope.  
245. In response to the EC's reference to Artic le IX:1 GATT, Australia has invoked the general 
interpretative note to Annex 1 A to the WTO Agreemen t, and has argued that in case of a conflict, the 
TBT Agreement should prevail over the GATT.
199 However, the EC does not argue that there is a 
conflict. Rather, the EC argues that Article 2. 1 TBT Agreement and Article IX:1 GATT should be 
interpreted in such a way as to give meaning to bot h of them. The natural result of such a harmonious 
interpretation is that, in line with the wording of  the definition of a technical regulation, origin 
marking requirements do not fall under Article 2.1 TBT Agreement. The EC notes that otherwise, 
Australia's and the US's own country of origin marking requirements for imported goods would be in 
violation of Article 2.1 TBT Agreemen t (cf. Exhibits EC-66 to EC-68). 
 B. A
RTICLES 4 AND 10 OF REGULATION  2081/92  ARE NOT A TECHNICAL REGULATION  
246. With respect to the requirement of inspection structures laid down in Articles 4 and 10 of the 
Regulation, the problem is similarly that these do not lay down product characteristics. Already in its previous submissions, the EC has explained that a requirement of inspection structures would, if 
anything, have to be regarded as a conformity assessment procedure.
200 
 
247. In its second submission, Australia has not provided any convincing arguments in response. 
Australia's only new argument has been that inspec tion structures might be regarded as "related 
processes".201 However, this manifestly wrong. Point 1 of  Annex 1 to the TBT Agreement refers to 
"product characteristics or their related processes". A ccordingly, the processes must be "related" to 
the product characteristics, as would be the case for production processes and methods. If Australia's 
interpretation were correct, in contrast, then all conformity assessment procedures would 
automatically also become technical regulations. This  would lead to a systematic overlap between the 
provisions of the TBT Agreement governing technica l regulations and those governing conformity 
assessment procedures.   
                                                     
 
198 Above para. 36. 
199 Australia's SWS, para. 213. 
200 EC SWS, para. 256. 
201 Australia's SWS, para. 202.  WT/DS174/R/Add.2 
 Page B-287 
 
 
 248. Accordingly, none of the provisions attacked  by Australia can be considered a technical 
regulation. Australia's claims under the TBT Agreement should accordingly be rejected. 
 
VIII.  CONCLUSION 
249. For the above reasons, the EC requests the Pane l not to consider any claims not within its 
terms of reference, and to reject all other claims of the complainants. 
 
* 
 
*          * 
 
 
 Thank you for your attention.  This concludes our statement.  We look forward to answering 
any questions that the Panel may wish to ask.  WT/DS174/R/Add.2 
Page B-288  
 
 ANNEX B-7 
 
REPLIES BY THE EUROPEAN COMMUNITIES TO QUESTIONS 
POSED BY THE PANEL FOLLOWING TH E SECOND SUBSTANTIVE MEETING  
 
(26 August 2004) 
  
Table of WTO and GATT Cases Referred to in the Responses 
 
Short Title Full Case Title and Citation 
Canada – Pharmaceutical 
Patents Panel Report, Canada – Patent Protection of Pharmaceutical Products , 
WT/DS114/R, adopted 7 April 2000, DSR 2000;V, 2295. 
EC – Asbestos  Appellate Body Report, European Communities – Measures Affecting 
Asbestos and Asbestos-Containing Products , WT/DS135/AB/R, adopted 
5 April 2001 
EEC – Regulation on Imports of 
Parts and Components EEC – Regulation on Imports of Parts and Components , Report by the Panel 
adopted on 16 May 1990, L/6657 – 37S/132 
Korea – Various Measures on Beef
  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 
US – Section 110(5) Copyright 
Act  Panel Report, United States – Section 110(5) of the US Copyright Act , 
WT/DS160/R,adopted 27 July 2000, DSR 2000;VIII, 3769 
  WT/DS174/R/Add.2 
 Page B-289 
 
 
 GLOSSARY  
 
 
Commission, EC Commission  Commission of the European Communities 
 
Committee  Committee of representatives of  the Member States referred 
to in Article 15 of Council Regulation 2081/92  
Community Trademark Regulation  Council Regulation (EC) No 40/94, of 20 December 1993, 
on the Community Trademark, as amended 
 
Council, EC Council  Council of the European Union 
 
Court of Justice, European Court 
of Justice  Court of Justice of the European Communities 
 
 
DSU Understanding on Rules and Procedures Governing the 
Settlement of Disputes  
EC European Communities 
 
GATT General Agreement on Tariffs and Trade 1994 
 
FOS First Oral Statement 
 
FWS First Written Submission 
 
GI Geographical indication 
 
Member States, EC Member States Member States of the European Union 
 
Official Journal Official Journal of the European Union 
 
Paris Convention Stockholm Act of the Paris Convention for the protection of 
Industrial property, of 14 July 1967  
Regulation 2081/92, Regulation Council Regulation (EEC) No 2081/92 of 14 July 1992 on 
the protection of geographical indications and designations 
of origin for agricultural products and foodstuffs, as amended on the date of establishment of the Panel  
SCM Agreement, SCM Agreement on Subsidies and Countervailing Duties 
 
Trademarks Directive First Council Directive 89/104, of 20 December, on the 
Community Trademark, as amended  
TBT Agreement, TBT Agreement on Technical Barriers to Trade 
 
TRIPS Agreement, TRIPS Agreement on Trade-Related Aspects of Intellectual 
Property Rights    WT/DS174/R/Add.2 
Page B-290  
 
 US United States 
 
WTO Agreement Marrakesh Agreement Establishing the World Trade 
Organization  WT/DS174/R/Add.2 
 Page B-291 
 
 
 Question 94 
 
The Panel takes note that, in the EC's view, the sp ecific conditions containe d in Article 12(1) of 
Regulation (EC) No. 2081/92 do not apply to WTO Members because the introductory phrase "[w]ithout prejudice to international agreements" ensures that the WTO agreements prevail where 
there is a conflict with the Regulation (EC rebuttal,  para. 55).  Which precise EC obligations under 
the WTO agreements would be prejudiced by the a pplication of those specific conditions to other 
WTO Members?  In particular:   (a) would the EC's obligations under Artic le III:4 of GATT 1994 be prejudiced?   
 
1. Yes.  
 (b) would the EC's obligations under Article 3.1 of the TRIPS Agreement be prejudiced?  
If not, please explain the relevance of y our reference to the fact that the TRIPS 
Agreement obliges WTO Members to provide protection to GIs in accordance with 
Section 3 of Part II and the general provis ions and basic principles of the TRIPS 
Agreement (EC first written submission, paras. 65-66). 
 
2. No. As the EC has already explained, Regul ation 2081/92 does not involve any discrimination 
between nationals.
1 
 
3. The fact that WTO Members are obliged under the TRIPS Agreement to provide protection to 
geographical indications is relevant because it means that it is not justified to apply conditions of 
reciprocity and equivalence to other WTO Members as a precondition for the protection of geographical indications. Should another WTO Member not provide adequate protection to 
geographical indications, then the appropriate res ponse, in accordance with Article 23.1 of the DSU, 
would be recourse to dispute settlement under the DSU.  
Question 95 
 
Can the EC provide the Panel with any official statement by the Commission or any other EC 
institution, that the application of conditions of  reciprocity and equivalen ce, such as those under 
Article 12(1) of Regulation (EC) No. 2081/92, would be inconsistent with th e EC's obligations under 
international agreements, in particular, the WTO Agreement?  
 
4. The EC can refer the Panel to the statemen t in the TRIPS Council it made on 16 June 2004, 
and to which it has already referred in response to the Panel's Question No. 16.
2 This EC statement is 
also reflected in the minutes of the TRIPS Council, which are attached as Exhibit EC-83.3 
 5. Second, the EC can refer the Panel to the 2
nd edition of the Guide to Regulation 2081/92, 
which the EC has provided as Exhibit EC-64. Th is guide was prepared by the Commission as 
guidance to the implementation of Regulation 2081/ 92, and is the most detailed and authoritative 
document available. The EC notes that the United Stat es has also variously referred to this guide in 
support of its submissions before the Panel.4 
 
                                                      
1 EC FWS, paras. 110–111; SWS, para. 53 et seq.; EC SOS, para. 17 et seq. 
2 EC Response to Panel's Question 16, para. 39. 
3 IP/C/M/44, 19 July 2004 (para. 62–63). This should alleviate the concerns expressed by Australia 
"that there may not even be an official record of the EC's statement" (Australia's SWS, footnote 29). 
4 US FOS, para. 53; US SWS, para. 155. WT/DS174/R/Add.2 
Page B-292  
 
 6. Finally, the statements made on behalf of th e EC before the Panel in the present proceedings 
are also official statements of the EC, and c onfirm that the EC does not apply conditions of 
reciprocity and equivalence.  
Question 96 
 
The EC has provided a revised Guide to Regulation (EC) No. 2081/92, dated August 2004 
(Exhibit EC-64).  Was this new versi on prepared in connection with th is Panel proceeding?  How is it 
relevant to the Panel's work if the Commission assu mes no liability for its contents (see its cover 
page)?  A new paragraph in the introduction (page 5) indicates that "the Commission reserves the 
right to amend procedures" and indicates the possib ility of further possible revisions.  Does this mean 
that the Guide could be changed back to the old version?   
 
7. The revised edition was prepared in res ponse to the increased interest from other WTO 
Members in the registration of geographical indi cations under Regulation 2081/92. This increased 
interest from other WTO countries has made it desira ble to include a specific section in the guide 
providing guidance to interested governments and applicants. The guide was not prepared in connection with the Panel proceedings. However, th e EC does not exclude that the increased interest 
is partially caused by awareness on the part  of other WTO Members of the ongoing Panel 
proceedings.  
8. The note on the cover page, according to which "the Commission does not assume any 
liability for its contents", is a standard liability disclaimer, which can be found in numerous similar 
publications.
5 The intention of this disclaimer is to ensu re that the extra-contractual liability of the 
Community cannot be invoked as regards the contents of the guide. However, it is clear that the guide, 
like similar such publications, is prepared with utmo st care, and that its contents are highly relevant 
for the application and interpretation of Regulation 2081/92 by all EC institutions. 
 9. In fact, according to the constant case law of the European Court of Justice, where an 
institution has adopted rules which are not legally binding, it may nevertheless  not depart from such 
rules without giving the reasons which have led it to do so. Otherwise, the institution would infringe 
the principles of equality of treatment or the protection of legitimate expectations.
6 
 
10. The final paragraph of the introduction to th e guide merely states that in the light of 
administrative need and experience in managing applications, the Commission may modify certain practical aspects of the guide. Similarly, the Commi ssion may also have to modify the guide if the 
rules contained in the basic legislative texts, and in particular Regulation 2081/92, are amended. In 
contrast, the Commission could not amend the guide in a way contrary to the basic legislative acts 
applicable.   11. There is therefore no conceivable reason wh y the Commission should change the Guide back 
to the old version. Moreover, since Regulation 20 81/92 does in any event allow the registration of 
geographical indications from other WTO Members, su ch a change would not affect the possibility of 
such registrations under Regulation 2081/92. 
 
                                                     
 
5 For examples for such disclaimers, see Exhibit EC-84 and Exhibit EC-85. 
6 Case 148/73, Louwage , [1974] ECR 81, para. 12 (Exhibit EC-86); Case T-15/89, Chemie Linz , [1992] 
ECR II-1275, para. 53 (Exhibit EC-87).   WT/DS174/R/Add.2 
 Page B-293 
 
 
 Question 97 
 
The Panel takes note of the EC's responses to Pane l questions nos. 16 and 17 and the EC's rebuttal, 
paras. 79-86  Please explain in detail how the Co mmission's interpretation that Article 12(1) of 
Regulation (EC) No. 2081/92 does not apply to WTO Members is c onsistent with the statements in the 
EC responses in the TRIPS Council review of legisl ation to question No. 4 posed by New Zealand and 
the follow-up question posed by India on page 24 in IP/Q2/EEC/1 (cited in Australia's rebuttal, 
para. 33, fn. 23).  
 
12. In response to the question posed by New Zeal and, the EC gave the following response in the 
above-mentioned document:7 
 
As for the protection of geographical indi cations of WTO Members, it is necessary to 
distinguish the following situations: 
1. The protection pursuant to Article 22 of the TRIPS Agreement, which is 
guaranteed by the Member States' application of Council Directive 79/112/EEC 
concerning labelling (prohibition to mislead the public).  In the event of a problem relating to a geographical indication of a WTO Member, the EC Member States must also ensure the possibility for the operators  concerned to take legal action in their 
courts. 
2. The ex officio protection pursuant to the above-mentioned 
Regulation 2081/92, for which either: 
– the procedure followed by Community  producers as outlined above must be 
followed, in accordance with the pr inciple of national treatment; or 
– a bilateral agreement should be concl uded as envisaged in Article 12, when 
the system of protection is equivalent to the Community regime. 
13. The EC considers that this response is full y compatible with its submissions in the present 
proceedings. As regards protection under Regula tion 2081/92, the EC's response distinguishes two 
possible alternatives for the protection of geographical indications of WTO Members: either the normal procedure for registration to be followed on a product-specific basis, or the conclusion of a 
bilateral agreement where the system of protectio n is equivalent to the Community regime. The 
reference to a bilateral agreement was clearly men tioned as an alternative, not as the only possibility 
for the protection of geographical indications from WTO Members. 
 14. In response to the Question from India, the EC confirmed essentially the same, namely that bilateral agreements were an alternative, not the only route to protection of geographical indications 
from other WTO Members under Regulation 2081/92:
8 
 
It is important to stress that, in genera l, conditions provided in Article 12 of 
Regulation 2081/92/EEC are only required wh en a bilateral agreement is concluded 
between the EC and a WTO Member.  This means that it only occurs when two parties voluntarily wish higher level of protection ("ex officio") than this provided under the TRIPS Agreement.  So, this is  not a compulsory condition but another 
option that can be used when systems are equivalent, in partic ular conditions under 
Article 4 (specifications) a nd Article 10 (inspection). 
                                                     
 
7 IP/Q2/EEC1, p. 4. 
8 IP/Q2/EEC1, p. 23. WT/DS174/R/Add.2 
Page B-294  
 
 15. In response to the follow-up questions fro m India, which concerned particularly the 
requirement of inspection structures, the EC once again confirmed that there were no conditions of 
equivalence or reciprocity, but that the EC simply applied the conditions for registration contained in 
Regulation 2081/92 on a non-discriminatory basis:
9 
 
(b) The inspection of the conformity for the products whose geographical name 
has been registered as a protected designation of origin (PDO) or a protected geographical indication (PGI) is essential to ensure the credibility of the system for 
the consumers.  This is an essential element of  the Regulation.  In order to obtain the 
same protection (Article 13 of the Regulation), if it must be complied with by the 
producers established in the EC, it must also be complied with by the third country 
nationals, to avoid discrimination. 
(c) Article 12 of Council Regulation 2081/92/EEC provides for the same 
protection in respect of products from thir d countries which meet those requirements.  
Therefore, nationals from other WTO Members are afforded treatment "no less 
favourable" than Community nationals, as required by Article 3 of the TRIPS 
Agreement. 
(d) Under Council Regulation 2081/92/EEC , the advantage of registration is 
available to the nationals of all WTO Member s without any distinction.  Accordingly, 
Council Regulation 2081/92/EEC is fully c onsistent with the requirements of 
Article 4 of the TRIPS Agreement. 
16. In conclusion, the EC considers that the a bove statements are fully consistent with its 
submissions in the present proceedings.  
Question 98 
 
Is it the EC's submission that the conditions in Article 12(1) of Regulation (EC) No. 2081/92 do not 
apply to WTO Members so that:    (a) WTO Member nationals may obtain GIs for areas located in all countries;  or  
 
17. No. The conditions for the registration of ge ographical indications in Regulation 2081/92 do 
not depend on nationality. Inversely, nationality as such does not confer the right to register 
geographical indications in  any particular country. 
 
 (b) persons from all countries may obtain GI s for areas located in all WTO Members?  
 18. Yes. Since the registration of geographical  indications under Regulation 2081/92 does not 
depend on nationality, registration of a geographi cal indication in another WTO Member may be 
obtained by any group or person that complies with the requirements of Article 5 (1) and (2) of Regulation 2081/92,
10 regardless of nationality. Similarly, re gardless of nationality, any person may 
use a geographical indication from another WTO Member protected under Regulation 2081/92, provided that the products are in accordance with the product specifications. 
 
                                                     
 
9 IP/Q2/EEC1, p. 24. 
10 On these requirements, and notably on the fact that they do not involve a requirement of nationality, 
see already EC Response to Panel's Question No. 22.  WT/DS174/R/Add.2 
 Page B-295 
 
 
 Question 99 
 
The EC has referred to other Community legal acts  in relation to the meaning of the phrase "without 
prejudice to international agreements"  (EC re buttal, paras. 62-66).  Please also refer to 
Regulation (EC) No. 2082/92 on certificates of spec ific character for agric ultural products and 
foodstuffs, which was adopted with the Regulation at issue in this dispute.  To what international 
agreements does the phrase "[w]ithout prejudice to international agreements" refer as used in 
Article 16 of that Regulation?  
 
19. As in the case of Article 12(1) of Regulation 2081/92,11 the phrase "without prejudice to 
international agreements" used in  Article 16 of Regulation 2082/92  refers to any international 
agreement concluded by the EC, including both mu ltilateral and bilateral agreements. In the case of 
Regulation 2082/92, such agreements w ould include in particular the GATT. 
 
Question 100 
 
In Regulation (EC) No. 753/2002 on wine (set out in Exhibit US-35), Articles 34-36 refer to "third 
countries", apparently to refer to both WTO and non- WTO Members.  It exp ressly states wherever a 
"third country" is limited to, or excludes, WT O Members.  Why was Regulation (EC) No. 2081/92 
drafted in such a way that the meaning of "third country" in Articles 12 through 12d is not clearer each time it was used?   Does the use of "WTO Member" together with "third country" in certain 
instances in Articles 12 through 12d of Regulation (EC) No. 2081/92 not suggest that the term "third 
country" excludes WTO Members in those articles?  
 
20. Regulation 753/2002 and Regulation 2081/92 ar e separate legal acts and were drafted at 
different times. The fact that there may be di fferences in terminology or legal drafting between 
Community legislative acts is an inevitable resu lt of complex legislative procedures, and is not 
something that is peculiar to the EC.  21. As concerns the drafting of  Regulation 2081/92, it should be recalled that several of its 
provisions were also drafted at different points in ti me. In particular, Articles 12a to 12d were inserted 
only in 2003. The fact that they did not use the "without prejudice language" but instead distinguished 
specifically between WTO Members and other thir d countries may be due to the heightened 
awareness of the concerns of WTO Members at that  time. However, this does not mean that the 
"without prejudice" language which was included in  Article 12(1) in 1992 should be ignored and 
deprived of its useful meaning.
12 
 Question 101 
 
The Panel takes note of the parties' respective vi ews on the meaning of "nationals" under the TRIPS 
Agreement and the Paris Convention.  Without prej udice to those views, please explain in detail 
which nationals should be compared
 for the purposes of the TRIPS national treatment obligations, 
based on the text of the agreement.    
 
Please refer to the quadrant in the third party subm ission of Chinese Taipei (para. 9).  Both the EC 
and the US compare an EC national with rights to a GI located in the EC.  On the US view, that 
national should be compared with a US national with ri ghts to a GI located in the US.   But on the EC 
view, that national should be compared with a US national with rights to a GI located in the EC.  
Would it be appropriate instead to compare all EC nationals  with rights to GIs who might wish to 
register them under Regulation (EC) No. 2081/92, wherever the geographical areas are located, and 
                                                      
11 EC SWS, para. 68. 
12 See also EC Responses to Panel's Questions 8 and 9. WT/DS174/R/Add.2 
Page B-296  
 
 compare them with all US nationals
 with rights to GIs who might wish to register them under the 
Regulation, wherever the geographical areas are located?    More generally, is there a principle in the TRIPS  Agreement that all nationals of one WTO Member 
with rights to a particular category of intellectual pr operty, such as GIs, should be compared with all 
nationals of other WTO Members with  rights to the same category of intellectual property, unless the 
text of the agreement indicates that with respect to particular types of products or other sub-
categories, they require particular treatment?  
 
22. The EC does not consider that the present case requires any
 comparison between nationals. 
 
23. As the EC has already explained, Regulation 2081/92 does not contain any discrimination on the basis of nationality. For this reason, the quadra nt prepared by Chinese Taipei in its third party 
submission is not pertinent. There are no two "col umns" depending on the nationality of the applicant 
or producer. The only relevant element to which the Regulation refers is the location of the area to 
which the geographical indication is related. Acco rdingly, the present case may require a comparison 
in the treatment of goods originating in the EC, in the US, or in Australia. It does not require a comparison between nationals.  
Question 102 
 
Is it safe to assume that persons resident or  established in one country to produce agricultural 
products or foodstuffs will be c onsidered "nationals" of that country for the purposes of TRIPS?  Why 
is it, or is it not, safe to assume that app licants for GIs under Regulation (EC) No. 2081/92 are 
"nationals" of the country where their GI is located, for the purposes of TRIPS?  
 24. It is not safe to assume that persons resi dent or established in one country to produce 
agricultural products or foodstuffs will be considered "nationals" of that country for the purposes of 
TRIPS. As the EC has already set out, the TRIPS Ag reement, and in particular Article 3.1 thereof, 
uses the term "national". It requires nationa l treatment as between nationals, not between 
"domiciliaries", "persons resident  or established", or "products".
13 
 
25. Moreover, the EC sees no basis for the assumption apparently made by the US14 that 
somehow, the definition of "national" might be di fferent when agricultural products are concerned. 
Agricultural products are also products with an identifiable origin, which is not linked to the 
nationality of the producer.15 Like any other product, agricultural products are subject to the 
disciplines of the GATT. The same  also applies for foodstuffs. 
 
26. In contrast, the TRIPS Agreement does not contain any different definition of the term 
"national" for agricultural products. The EC can therefore not agree that different disciplines should apply under the TRIPS Agreement to intellectual prop erty rights depending on whether they relate to 
agricultural products, foodstuffs, or to other products.  Question 103 
 
The Panel takes note that the EC does not exclude  entirely that "under certain circumstances, 
measures which are neutral on their face may noneth eless constitute less fa vourable treatment of 
foreign nationals" and that the EC believes that national treatment under TRIPS should not overlap 
                                                     
 
13 EC FWS, para. 104 et seq.; SWS, para. 28 et seq.; SOS, para. 17 et seq.  
14 US SOS, para. 14. 
15 Cf. also Article 2 of the Agreement on Agriculture , which defines the term "agricultural product" for 
the purposes of th at agreement.  WT/DS174/R/Add.2 
 Page B-297 
 
 
 with GATT 1994 (EC response to Panel questi on No. 29, paras. 71 a nd 74).  What other 
considerations are relevant to th e assessment of de facto discrimination under TRIPS?  What is the 
relevance, if any, of the fact that the TRIPS  Agreement does not contain a general exceptions 
provision analogous to Article XX of GATT 1994?  
 27. So far, Article 3.1 TRIPS Agre ement has never been applied on a de facto basis. In particular, 
unlike under Article III:4 GATT, there is no accepte d definition of what constitutes "less favourable 
treatment" of nationals with regard to th e protection of intellectual property rights. 
 28. Under Article III:4 GATT, it is accepted that "treatment no less favourable" means "according 
conditions of competition
 no less favourable to the imported product than to the like domestic 
product".16 However, in the view of the EC, this defin ition is not easily transposable to Article 3.1 
TRIPS.  29. First, it cannot be assumed that nationals nece ssarily "compete" with respect to the protection 
of intellectual property rights. For instance, Article  3.1 TRIPS would require that the conditions for 
the protection of a patent for a pharmaceutical product of a foreign national are no less favourable than the conditions for the protection of a patent for an appliance to be fitted on a motor vehicle of a 
domestic national. However, it does not appear that  the domestic and the foreign national are in any 
kind of "competitive relationship". Similarly, their products are not "like products", and are therefore 
also not in any relationship of competition. 
 
30. Second, it should be noted that the objective of national treatment under the GATT and the TRIPS Agreement is not identical. According to Article III:1 GATT, the overarching objective of 
GATT national treatment is to prevent that internal measures are applied so as "to afford protection to 
domestic production". As the Appellate Body has stated in EC – Asbestos , this objective also inspires 
the interpretation of Article III:4 GATT.
17  
 31. It cannot be assumed that this same objec tive also underlies Article 3.1 TRIPS Agreement. 
Rather, the objectives of TRIPS national treatment w ould seem to be related to the first paragraph of 
the Preamble to the TRIPS Agreement, which re fers to the desire "to reduce distortions and 
impediments to international trade, and taking into account the need to promote effective and 
adequate protection of intellectual property rights , and to ensure that measures and procedures to 
enforce intellectual property rights do not them selves become barriers to legitimate trade". 
 32. In the view of the EC, the complainants have made no effort to  show in which way 
Regulation 2081/92 discriminate between nationals. Instead, they have simply referred to alleged 
discriminations on the basis of the area to which the geographical area is related, i.e. on the basis of 
the origin of the good.
18 However, whereas the origin of the good may be a relevant starting point for 
examining whether the conditions of competition betw een domestic and foreign goods are altered to 
the detriment of foreign goods, it is not a releva nt starting point for examining whether there is 
discrimination between nationals.  
33. In the view of the EC, the Panel should ther efore not simply transpose the jurisprudence on 
de facto discrimination under Article III:4 GATT to Ar ticle 3.1 TRIPS Agreement. Rather, the 
definition of less favourable treatment of nationals  in the context of Article 3.1 TRIPS Agreement 
would have to be based on the wording and context of  the provision, including the broader objectives 
of the TRIPS Agreement. 
 
                                                     
 
16 Appellate Body Report, Korea – Various Measures on Beef , para. 229 (emphasis original). 
17 Appellate Body Report, EC – Asbestos , para. 94. 
18 Cf. most recently US SOS, para. 7 et seq. WT/DS174/R/Add.2 
Page B-298  
 
 34. In the view of the EC, there is no need for the Panel to address this complex question in the 
present dispute. However, if the Pa nel wishes to address the issue of de facto discrimination under the 
TRIPS Agreement, it should also take into account the fact that both the TRIPS and the GATT are an 
integral part of the WTO Agreements, and the need  for a harmonious interpretation between the two. 
As the EC has already set out, this means that th e Panel should not interpret TRIPS national treatment 
in such a way as to create an unnecessary potential for conflict with the GATT.
19 
 35. This potential for conflict is particularly evid ent with respect to Article XX of the GATT. As 
the EC has already said, it consider that a number of the challenged aspects of Regulation 2081/92, if they were held to constitute less favourable treatment, would nonetheless be justified by 
Article XX(d) GATT. The complainants have contested  the EC's submissions in this respect, but they 
have not contested that Article XX(d) GATT is a possible defense to their claims under the GATT. 
However, they have not indicated what the releva nce of Article XX GATT is with respect to their 
analogous claims under the TRIPS.  
36. In the view of the EC, it would not be in  line with a harmonious interpretation that a de facto 
application of the TRIPS Agreement would render inapplicable defenses which are available to 
otherwise entirely identical claims under the GA TT. Therefore, should the Panel consider that 
Regulation 2081/92 involves de facto  discrimination, the Panel would have to resolve the issue of 
what is the relevance of Article XX(d) GATT with respect to those claims under the TRIPS 
Agreement.
20 
 
Question 104 
 
Please provide your interpretation of the term "se parate customs territory" as used in footnote 1 to 
Article 1.3 of the TRIPS Agreement in accordance with  the customary rules of treaty interpretation.  
What relevance can be drawn from the fact that th e same term is used in Article XXVI of GATT 1994?  
 
37. In accordance with the customary rules of treat y interpretation as reflected in Article 31 of the 
Vienna Convention on the Law of Tr eaties, the term "separate customs territory" in footnote 1 to 
Article 1.3 of the TRIPS Agreement must be interp reted in accordance with the ordinary meaning to 
be given to the terms of the tr eaty in its context and in the light of its object and purpose. 
 
38. The term "customs territory " is defined in Article XXIV.2 of the GATT to mean "any 
territory with respect to which separate tariffs or  other regulation of commerce are maintained for a 
substantial part of the trade of such territory with  other territories". There is no doubt that the EC, like 
the US or Australia, has a "customs territory" with in the meaning of Article XXIV.2 of the GATT. 
 
39. However, footnote 1 to Article 1.3 of the TR IPS Agreement does not just refer to "customs 
territories", but to "separate  customs territories". The term "sep arate" is an essential part of the 
expression used, and must be given meaning. The adjective "separate" is defined as "separated, 
solitary, secluded, detached, set apar t, not incorporated or joined".21 In other words, the "separate 
customs territory" must be "separated" from something else.  
 
40. However, it cannot be sufficient for it simply to  be "separate" from the customs territory of 
other Members, since otherwise, any "customs territo ry" would also be a "separate customs territory". 
Rather, a separate customs territory is only a territo ry which otherwise constitutes part of another 
territory, and in particular another state, or for which another state has international responsibility. 
                                                      
19 See EC SOS, para. 36–37. 
20 See EC SOS, para. 37. 
21 The New Shorter Oxford English Dictionary, vol. 2, 1993, p. 2779.  WT/DS174/R/Add.2 
 Page B-299 
 
 
 Accordingly, the term "separate customs territories"  applies to territories such as Hong Kong, Macao, 
Chinese Taipei, or certain overseas dependencies of a number of WTO Members.22 
 41. This interpretation is also confirmed by the objective of footnote 1. Separate customs 
territories which are a part of another state frequen tly may not have a concept of "nationality" which 
could be applied for the purposes of the TRIPS Ag reement. The definition in footnote 1 therefore 
serves as a substitute for the definition of "national" in such cases. This definition is not relevant to 
the EC, which has a nationality.
23  
 42. The EC's interpretation is also confirmed by the context of the provision, and notably by the 
use of the term "separate customs territory" in the GATT. As the Panel has rightly pointed out, 
Article XXVI (5) (a) GATT refers to "other te rritories for which [a Me mber] has international 
responsibility, except such separate customs territo ries as it shall notify [... ]". In a similar sense, 
Article XXXIII also refers to "a government acti ng on behalf of a separate customs territory". It 
follows clearly that "separate customs territories" are territories for which another State has 
international responsibility, be it because they are pa rt of its territory, or because they are in some 
other way dependent on it.  43. It is clear from these considerations that the EC cannot be considered a "separate customs 
territory". The EC has a customs territory which includes the territory of all its Member States. 
However, there is no other State which is responsible  in international law for the EC, nor is the EC 
part of any other State. Accordingly, the EC cannot be said to be any more of a "separate customs 
territory" than the US or Australia.  
Question 105 
 
The Panel takes note of the EC's view that it is not a separate customs territory Member of the WTO 
within the meaning of footnote 1 to Article 1.3 of the TRIPS Agreement (EC rebuttal, para. 35).   
  (a) Which natural persons
 does the EC consider EC nationals for the purposes of 
TRIPS?  Are they also nationals of EC member States?   
 44. Article 17 (1) of the EC Treaty establishes th e Citizenship of the Union, and provides that 
"every person holding the nationality of a Memb er States shall be a citizen of the Union". 
Accordingly, any person which is a national of  a Member State is a national of the EC. 
 
 (b) Which legal persons
 does the EC consider EC national s for the purposes of TRIPS?  
Are they also nationals of EC member States?  EC 
 
45. The nationality of legal persons  in international law and in domestic law is a highly complex 
question.24 Like the domestic law of most other WTO Members, EC law does not contain a specific 
definition of nationality for legal persons. However, Article 17 (1) of  the EC Treaty is relevant by 
analogy. Accordingly, any legal person which is considered a national under the laws of a Member 
States would also be an EC national. 
 46. However, like the law of most other WTO Me mbers, the law of the Member States may not 
contain a general definition of nationality of lega l persons, but rather define nationality only for 
certain specific purposes. Moreover, the criteria used  by Member States in this context may vary, and 
                                                     
 
22 EC SOS, para. 23. 
23 EC SWS, para. 27; SOS, para. 23. See also  EC response to the following question. 
24 As background on this issue, see A.A. Fatourous, National Legal Persons in International Law , 
Encyclopaedia of Public International, vol. 3, p. 495–501 (1997) (Exhibit EC-88). WT/DS174/R/Add.2 
Page B-300  
 
 include criteria such as the law of incorporation,  or the seat of the company, the nationality of 
shareholders, or a combination of such criteria.
25 
 47. Moreover, it should be noted that where the na tionality of legal persons is relevant for the 
application of Community law, Community law itself may define the relevant criteria. An example for 
this is Article 48 (2) of the EC Treaty, which provides that for the purposes of the freedom of 
establishment "companies and firms formed in acco rdance with the law of a Member States and 
having their registered office, central administ ration or principal place of business within the 
Community shall, for the purposes of  this Chapter, be treated in the same way as natural persons who 
are nationals of Member States". However, no su ch definition exists for the purposes of the 
application of Regulation 2081/92, since nationality is  not a relevant element for the application of 
that Regulation.  48. Moreover, the EC would like to remark that  the difficulty of establishing criteria for the 
nationality of legal persons cannot be an excuse for substituting other definitions, such as residence or 
establishment, for nationality, where nationality is in fact irrelevant for the purposes of the measure in 
question.  
Question 106 
 
What are the nationalities of the applicants for GIs registered under Regulatio n (EC) No. 2081/92?  
Have there been any applicants who were not nationals of the EC member State in which the relevant 
GI was located?  Please supply details of any that were not, and the relevant GIs.  To the extent that you are aware of the nationality of persons other th an the applicants who use a GI in accordance with 
its registration, please supply  the same information.   
 49. At the outset, the EC would like to clarify that the notion of "applicant" is of limited relevance 
in the context of the present dispute. According to  Article 5 (1) of Regula tion 2081/92, a group, or 
under certain conditions a natural person,
26 may apply for the registration of a geographical indication. 
However, the applicant is not identical with th e rightholder. Since a geographical indication is a 
collective right, any person producing in accord ance with the product specifications may use the 
geographical indication. The conditions for applicants  are a procedural modality of the application 
process. They do not imply that the applicant becomes a rightholder. 
 50. As the EC has already said, Regulation 2081/92 does not contain any requirement as to the nationality of the applicant.
27 More importantly still, Regul ation 2081/92 does not contain any 
requirement as regards the nationality of persons who use a protected name. Any person producing in 
accordance with the product specifications, regardl ess of nationality, may use the protected name. 
 51. Since nationality is not a relevant criterion under Regulation 2081/92, the EC does not request 
any information on the nationality of applicants or producers when an application for the registration 
is submitted. Similarly, the EC does not monitor th e nationality of the producers of a product using a 
geographical indication.  
 
52. Moreover, the EC would like to recall that the burden of proof for showing that Regulation 2081/92 involves discrimination on the basi s of nationality is on the complainants, and not 
on the EC.  
                                                     
 
25 Cf. the overview in A.A. Fatourous, National Legal Persons in International Law , Encyclopaedia of 
Public International, vol. 3, p. 495–496 (1997) (Exhibit EC-88). 
26 These conditions are set out in Article 1 of Commission Regulation 2037/93 (Exhibit COMP-2).  
27 See EC Response to Panel's Question No. 22.  WT/DS174/R/Add.2 
 Page B-301 
 
 
 53. For these reasons, the EC is not  able, and should not be expected  to be able, to give detailed 
information about the nationality of producer s of products using names protected under 
Regulation 2081/92. In fact, such information is not any more available to the EC than it is to the United States and Australia.  
54. Without prejudice to these remarks, and beyond the examples of non-EC producers already 
referred to in previous EC submissions,
28 the EC can refer the Panel to at least two examples where a 
producer of a product using a protected name com es from a different Member State than the one 
where the geographical area is located:  
• Lactalis, a French-based dairy group, owns  Locatelli and Invernizzi, which produce 
among others Gorgonzola and Gr ana Padano (Exhibit EC-62). 
 
• Stella Artois, a Belgian Brewery, used to produce "Kölsch" beer, a protected name for 
beer from the Cologne area in Germany (Exhibit EC-89). 
 
Question 107 
 
The Panel takes note of the examples of forei gners and foreign companies which have invested in 
Europe (EC rebuttal, para. 46 and Exhibits EC-36 to  EC-39;  EC second oral statement, para. 28 and 
Exhibits EC-61 to EC-63).  Is the Larsen firm a French company?  Have Suntory Limited, E & J 
Gallo and the Robert Mondavi family formed subs idiaries, joint ventures or  other entities under the 
laws of France and Italy to invest in those wine estates?  Did Sara Lee, Kraft Foods and Nestlé 
purchase companies formed under the law of an EC member State?    
The Panel takes note that the EC argues that the po ssibility that these foreign nationals formed legal 
persons under the laws of an EC member State is not  attributable to Regulation (EC) No. 2081/92 
(EC second oral statement, para. 30).  Is it appropriate to exclude such other factors from an 
examination of the WTO-consistency of the Regulation?  Does the EC submit that the Panel should 
"pierce the corporate veil" and refer to ownership  and control to determine nationality for the 
purposes of TRIPS? 
 
55. It appears from the information available on th e website of Larsen Cognac that today, Larsen 
Cognac is a Société anonyme incorporated under Fr ench law. From the information contained in 
Exhibit EC-61 , it appears that Al Ponte Prosciutti, an It alian limited liability company, was purchased 
by Sara Lee Personal Products S.p.A ., an Italian cooporation. It also appears that Al Ponte Prosciutti 
is controlled by Aoste Holding, SA, a French Coope ration, which in turn was purchased by Sara Lee 
Charcuterie SA, a French cooperation belonging to the Sara Lee Group. The EC does not have 
specific information on the ownership situation in the other cases.  
 
56. In the view of the EC, the measure at issu e is exclusively Regulation 2081/92, which does not 
involve any discrimination on the basis of nationalit y. If, for practical considerations related for 
instance to taxation or labour law, a person produ cing in conformity with a product specification 
chooses to set up a legal entity in the area where th e geographical indication is located, this is not 
related to Regulation 2081/92.  
 57. It is simply a practical consequence of th e fact that products have to be produced in 
accordance with the product specifications, which may require that an important part of the 
production process takes place in the geographical  area concerned. If the submission of the 
complainants were correct, then any discrimina tion on the basis of the origin of goods would de facto 
                                                     
 
28 EC SOS, para. 28. WT/DS174/R/Add.2 
Page B-302  
 
 also always be a discrimination between nationa ls. The EC does not consider that such an 
interpretation would be an appropria te interpretation of the national treatment provisions of the TRIPS 
and the GATT.  58. Finally, the EC does not submit that the Panel should "pierce the corporate veil" and refer to 
ownership and control to determine the nationality fo r the purposes of the TRIPS. In the view of the 
EC, the nationality of the legal person involved, if  and where relevant, should be determined on the 
basis of the municipal law of the Member concerned.
29 
 
Question 110 
 
Does the EC contest that, to the extent that Regulation (EC) No. 2081/92 provides GI protection for 
EC nationals and is a law affecting EC products, GI protection for other WTO Member nationals and imported products solely th rough other laws, such as labelling an d unfair competition, would be less 
favourable treatment?  
 
59. No. However, as regards nationals, rather th an products, the EC would like to recall that 
Regulation 2081/92 does not provide protection on the basis of nationality.  
Question 111 
 
Does the EC contest that national treatment and MFN obligations under TRIPS apply to TRIPS-plus protection, and apply to Regula tion (EC) No. 2081/92 even to the extent that it does not merely 
implement the EC's obligations under Article 22?  
 
60. The EC does not contest that national treatme nt and MFN obligations under TRIPS applies to 
more extensive protection granted in respect to intellectual property rights addressed in the TRIPS 
Agreement. However, the EC contests that Regulati on 2081/92 involves discrimination on the basis of 
nationality.  
Question 112 
 
The Panel takes note that the Commission has not recognized any country under Article 12(3) of Regulation (EC) No. 2081/92 (EC response to Panel question No. 10, para. 22).  Is the Commission obliged to recognize any country that satisfi es the conditions set out in Article 12(1)?  
 
61. If the conditions of Article 12(1) are fulfilled, the Commission will normally recognise the 
country in question. However, Article 12(1) does not  create any legal "obligation" as against the third 
country. This follows from the wording "this Regulation may apply" in Article 12(1) of 
Regulation 2081/92. Moreover, the EC would like to recall that the conditions of Article 12(1) do not 
apply to WTO Members.  
Question 113 
 
The EC argues that there must be a substanti ve difference between two provisions governing the 
registration of GIs in order for one to entail l ess favourable treatment (EC second oral statement, 
para. 40).  What is a "substantive" difference in this sense?  Does the EC allege that there is a 
de minimis standard for less favourable treatment under TRIPS or GATT 1994?  Is a simple 
difference in language insufficient to establish different treatment?  
 
                                                     
 
29 Cf. also EC Response to Panel's Question No. 105.  WT/DS174/R/Add.2 
 Page B-303 
 
 
 62. For the purposes of Article III:4 GATT, it fo llows from the case law of the Appellate Body 
that a "substantive difference of treatment" is a di fference in treatment which modifies the conditions 
of competition to the disadvantage of imported goods.30 
 63. As the EC has also explained, the definition of "less favourable treatment" for the purposes of 
Article 3.1 TRIPS is less clear, and cannot be assu med to be identical with that of Article III:4 
GATT.
31 However, it would appear that in order to constitute a violation of Article 3.1 TRIPS, a 
measure would have to modify the conditions regard ing the protection of intellectual property rights 
within the meaning of the TRIPS to the detriment of foreign nationals.  
64. The EC does not believe that there is a de minimis standard for less favourable treatment 
under the GATT or under the TRIPS Agreement. Howe ver, as the Appellate Body has held, a formal 
difference in language, which does not modify the conditions of competition, cannot be held to 
constitute less favourable treatment under Article III:4 GATT.
32 Similarly, a simple difference in 
language which does not modify the conditions for th e protection of intellectual property could not be 
held to constitute less favourable treatment under Arti cle 3.1 TRIPS. This is not the application of a 
de minimis standard, but simply the application of the requirements of Article III:4 GATT and 
Article 3.1 TRIPS.  
Question 114 
 
With respect to registration applications under Artic le 12a(2) of Regulation (EC) No. 2081/92, a third 
country must verify that the requiremen ts of the Regulation are satisfied  before it transmits the 
application:   (a) to what extent is this designed to conf irm the protection of the GI in its country of 
origin in accordance with Article 24.9 of the TRIPS Agreement, and to what extent 
does it respond to other objectives?  
 
65. The verification envisaged in Article 12a(2) of Regulation is intended to confirm that the 
requirements of the Regulation for the registration of  the geographical indication are fulfilled. This 
means in particular that the application must contain a product specification in accordance with 
Article 4(2) of the Regulation. As can be seen from Article 4(2)(a) to (f), the details contained in the 
product specification permit to confirm that the name  for which protection is sought corresponds to 
the definition of a geographical indication in  Article 2 of Regulation 2081/92. Moreover, 
Article 12a(2)(b) of the Regulation also requires th e third country to verify that the inspection 
structures required by Article 10 are established. 
 
66. In addition, Article 12a(2)(a ) of Regulation 2081/92 requires also "a description of the legal 
provisions and the usage and the usage on the basi s of which the designation of origin or the 
geographical indication is protected or established in the country". Th e purpose of this requirement is 
to ensure, in accordance with Article 24.9 TRIPS Agreement, that the geographical indication for 
which protection is sought in the EC is also protected in its country of origin. 
 
 (b) is this additional to the requirement that  a registration application transmitted to the 
Commission must be accompanied by a description of the matters set out in Article 12a(2)(a)? 
 
                                                     
 
30 Appellate Body Report, Korea – Various Measures on Beef , para. 229. Cf. also above, para. 28. 
31 Cf. above para. 28 et seq. 
32 Appellate Body, Korea – Various Measures on Beef , para. 137; cf. on this also EC SOS, para. 39 
et seq. WT/DS174/R/Add.2 
Page B-304  
 
 67. The protection in the country of origin is a requirement for the registration of geographical 
indications from third countries, which is in accordance with Article 24.9 TRIPS Agreement. As 
regards geographical indications from within the EC, for which protection is obtained in accordance 
with Regulation 2081/92, this require ment can by definition not apply. 
 
68. However, it should also be noted that the requirement that the geographical indication is 
protected in its country of origin, and the other c onditions of the Regulation, are closely related and 
will tend to overlap. If a geographical indication is prot ected in its country of origin, this means that 
according to the country of origin, the geograp hical indication falls under the definition of 
Article 22.1 TRIPS, i.e. identifies goods as originati ng in the territory of a Member, or a region or 
locality in that territory, where a given quality, reputation, or other characteristics are essentially 
attributable to its geographical origin. Accordingly, if a geographical indication is protected in the country of origin, this should normally also facilita te the examination of whet her the name fulfils the 
conditions for protection under Regulation 2081/92.   (c) Does the Commission also examine wheth er the application satisfies the conditions 
for protection under Article 12b(1)(a)?  Ho w is this examination different from the 
verification by the third country?  
 
69. When deciding on the registration of a ge ographical indication from a third country, the 
Commission must verify whether the conditions for the registration set out in Regulation 2081/92 are 
met. However, in making this evaluation, th e Commission will rely on the factual assessment 
provided by the country of origin. In fact, only on the basis of this information can the Commission verify whether the conditions for registration are fulfilled.  70. As regards the requirement that the geographi cal indications must be protected or established 
in its country of origin, this question regard s the law of a third country. The Commission will 
therefore have to rely on the assessment provided by the third country.   
Question 115 
 
With respect to objections under Ar ticle 12b(2)(a) of Regulation (E C) No. 2081/92, what is an 
objection that "comes from a WTO Member"?  With respect to objections under Article 12d(1) of the 
Regulation, what is the meaning of a person who "is from a WTO Member"?  Do they both refer to the place of residence or establishment of the person who wishes to object?  Must objections under 
both provisions be sent to the country in which the person resides or is established?  
 71. In both Article 12b(2)(a) and in Article 12( d)(1), a person that "is from a WTO Member 
country" is a person resident or est ablished in the WTO Member country. 
 72. In both cases, objections must be sent to th e country in which the person resides or is 
established. In the case of Article 12b(2)(a), th is follows from the reference to Article 12d. 
 Question 116 
 
To the extent that certain responsibilities under Ar ticles 12a and 12d(1) of Regulation (EC) 
No. 2081/92 are borne by non-EC WTO Members:  
 (a) how is the EC satisfied that every other WTO Member has the authorization to carry 
them out?  (Please refer to Brazil's response to Panel third party question No. 1) (EC 
second oral statement, paras. 72-77).  
  WT/DS174/R/Add.2 
 Page B-305 
 
 
 73. The EC does not consider that any specific "authorization" is needed to carry out the 
responsibilities in Articles 12a and 12d(1).  74. As regards the confirmation that the geographi cal indication is protected or established in its 
country of origin required by Article 12a(2)(a) of Regulation 2081/92, the EC would like to recall that 
a) all WTO Members are obliged to provide protecti on to geographical indications in accordance with 
Article 22 TRIPS Agreement, and b) that the EC is  not obliged to provide protection to geographical 
indications not protected in their country of orig in, in accordance with Article 24.9 TRIPS Agreement. 
Accordingly, any WTO Member should be able to state whether it protects a geographical indication 
for which protection is sought in the EC. A WTO Member can therefore not argue that it does not 
have "authority" to state whether a geographical indica tion is protected in its territory, and at the same 
time claim that this geographical indication should be protected in the EC.  75. As regards the verification of the further re quirements in Article 12a(2)(a), and notably the 
verification of the product specifications, this is a primarily factual verification carried out at the 
request of the applicant. The EC does not see why a specific "authorization" would be required for 
this purpose. Moreover, the EC would like to remark that the requirements of the product 
specifications closely reflect the requirements of  Article 22.1 TRIPS Agreement. Since any WTO 
Member is obliged protection of geographical indi cations as defined in Article 22.1 TRIPS, it cannot 
be argued that a WTO Member "has no author ity" to carry out such examinations. 
 
76. As regards finally the transmission of the st atement of objections required by Article 12d(1), 
this is, as the US has itself acknowledged,
33 a "purely ministerial act" of a kind routinely carried out 
by governments in many contexts.34 The EC does not see why a specific "authorization" would be 
needed.   (b) if other WTO Member governments lack aut horization to carry them out, can they be 
carried out by the EC instead?   
 
77. No. The EC cannot make findings as to whet her a geographical indication is protected under 
the law of a third country. Second, as regards th e other requirements of Regulation 2081/92, these 
relate to a geographical area located in a third c ountry, and may involve insp ections and verifications 
in the third country. The EC does not consider that it could carry out such inspections verifications in 
a third country without the consent of that count ry. Moreover, as the EC has also explained, the 
verifications require intimate knowledge of the cond itions in the geographical area concerned, which 
the EC does not have.
35 
  (c) to what extent does the EC itself
 accord no less favourable treatment to the nationals 
of other Members, and to what extent do other WTO Members share the implementation of that obligation?  Can a Member delegate the implementation of WTO obligations to other Members with or without their prior consent?   
 
78. As the EC has explained in response to subqu estion (a) and (b), where the registration of a 
geographical indication from another WTO Member is sought in the EC, that WTO Member must 
cooperate with the EC in two respects:  
• it must enable the EC to evaluate whether the geographical indication is in accordance 
with the requirements of the Regulation, which reflect Article 22.1 TRIPS Agreement; 
 
                                                     
 
33 US Response to Panel's Question No. 38, para. 74. 
34 Cf. the examples given in EC Response to Panel's Question No. 37. 
35 See EC Response to Panel's Question No. 33, para. 81. WT/DS174/R/Add.2 
Page B-306  
 
 • it must confirm that the geographical indication is protected or established in its 
territory. 
 79. If the third country does not cooperate with  the EC on these aspects, then the registration 
cannot be carried out. In this case, the failure to regist er would not be attributable to an act of the EC, 
but to the failure of the country of origin of th e geographical indication to assume those tasks which 
fall within its sphere of responsibility. To this exte nt, it can indeed be said that with respect to the 
registration of geographical indications abroad, the country of origin and the country of registration 
share obligations.  80. The EC does not consider that it can delegate  the implementation of WTO obligations to other 
Members without their prior consent. However, the EC considers that it can require the cooperation of 
other WTO Members where this is indispensable fo r the proper implementation of provisions of the 
WTO agreements, such as Article 22.1,  22.2, and 24.9 TRIPS Agreement. 
 
 (d) to what extent has the EC accorded cer tain treatment to the nationals of other WTO 
Members  rather than to the governments of those other WTO Members?  
 
81. Regulation 2081/92 does not accord any treatment  to nationals, but to products. It also does 
not accord any treatment to governments. Rath er, whether a government assumes its responsibilities 
with respect to the registration of a geographical indication relating to its territory can only be ascertained with respect to the speci fic application, not with respect to the third government overall. 
 
Question 117 
 
The Panel takes note of the EC's response to Panel question No. 8 concerning the meaning of "third 
country" and seeks clarification as to whether "thi rd country" as used in Article 12(2) of 
Regulation (EC) No. 2081/92, includes WTO Members.  If so, why does the "without prejudice" 
clause in Article 12(1) form part of the context of Articles 12(1) and (3) but not Article 12(2)?  If not, 
where does the Regulation cover identical GI s from the EC and other WTO Members?   
 
82. The reference to names "of a third country" refers to any name which has been protected 
under the Regulation, or for which protection is sought. Therefore, it can include names both from 
WTO Members and from other third countries recognized in accordance with Article 12(3). 
 83. The "without prejudice" clause in Article 12(1) is relevant for Article 12(3) because 
Article 12(3) sets out the procedure for establishing whether the conditions in Article 12(1) are met. 
Article 12(2) has no such specific link with Article 12(1 ). The fact that it is included in Article 12, and 
not for instance in Article 12a, is simply due to the fact that it was already contained in the original 
version of Regulation 2081/92.  
Question 118 
 
The Panel takes note that, in Australia's view, th e identical GI labelling requirement would not be 
inconsistent with Article 2.1 of the TBT Agreemen t if it was applied to both EC and imported products 
according to date of registration, not origin.  (Aus tralia's response to Panel question No. 53).  Even if 
Article 12(2) does not apply to EC products as  well as imported products, does the Commission have 
the discretion to apply the same requirement accordi ng to the date of registration to EC products 
under Article 6(6) in order to ensure that the identic al labelling requirement is applied to the later GI 
irrespective of the origin of the products?    WT/DS174/R/Add.2 
 Page B-307 
 
 
 84. Yes. As the EC has already set out, where the identical names are from different countries, the 
clear distinction in practice would normally re quire the indication of the country of origin.36 
 
Question 119 
 
What is the difference, if any, in the meaning of th e word "homonymous" as u sed in Article 6(6) of 
Regulation (EC) No. 2081/92 and "identical" as used in Article 12(2)?  Why does the EC consider 
that homonyms are covered by the word "identic al" in Article 12(2) (EC response to Panel question 
No. 43)?  
 85. There is no difference. "Homonym" is defined as "a person or thing having the same name as 
another, a namesake".
37 In other words, "identical name" is a synonymous expression for "homonym". 
 86. Moreover, the French and the Spanish ve rsion of Regulation 2081/92 both use the same 
expression ("dénomination homonyme"/"denominación homónima") in both Articles 6(6) and 12(2) 
of Regulation 2081/92. 
 
Question 120 
 
The Panel takes note of Australia's confirmation that the only less favourable treatment under the 
identical GIs labelling requirement is relabelling costs (Australia's response to Panel question 
No. 52).  Would imported products have to be relabelle d?  Would existing marks of origin satisfy this 
requirement?  What does "clearly and visibly indicated" mean?   
 
87. Imported products would not n ecessarily have to be relabeled. It the country of origin is 
already clearly and visibly indicated on the label, then  this will be sufficient. Existing marks of origin 
may therefore be sufficient to the extent that the country of origin is clearly and visibly indicated. To 
the extent that the country of origin is not indicat ed, the affixation of an additional label clearly and 
visibly indicating the country of origin would also be sufficient.  88. What "clearly and visibly indicated" means must be evaluated in each specific case from the 
point of view of a normal consumer. The country of origin will be clearly and visibly indicated if a 
normally attentive consumer can easily notice the indication, and will therefore not be induced in 
error as to the origin of the product concerned. 
 
Question 122 
 
Please refer to the phrase "labelling requirements as they apply to a product" as used in the definition 
of "technical regulation" in Annex 1.1 of the TBT Agreement.     (a) The EC argues that the "origin of a pr oduct is different from the product itself" (EC 
response to Panel question No. 50).  However, as the EC acknowledges, the origin of 
a product may confer specific characteristics on it.  This is consistent with the 
definitions of designation of origin and geographical indication in Article 2 of 
Regulation (EC) No. 2081/92, which provide t hat "the quality or characteristics of 
the product ... are essentially or exclusivel y due to a particular geographical 
environment ..." and that the product " possesses a specific quality, reputation or 
other characteristics attributable to that geographical origin ...".  How then is the 
origin of a product entitled to bear a regis tered GI different from the product itself?   
 
                                                     
 
36 EC FWS, para. 479. 
37 The New Shorter Oxford English Dictionary, vol. 1, 1993, p. 1254. WT/DS174/R/Add.2 
Page B-308  
 
 89. The origin of a product is the place where the product originates. It can be a country, or a 
region or place in a country. The origin of a product is therefore different from the product itself.  90. Moreover, the origin of a product is also not necessarily linked to product characteristics. 
Where the origin does confer specific characteristi cs, then this may justify the protection of a 
geographical indication, as foreseen in the TR IPS Agreement. However, there are many cases, 
particularly in the case of industrial products , where the origin as such does not confer any 
characteristics on the product.  91. The concept of "origin" of a product is also the subject of regulation outside the TBT 
Agreement. Qualifying the origin of a product as a product characteristic within the meaning of the 
definition of a technical regulation in Point 1 of Annex 1 to the TBT Agreement would therefore risk 
creating unnecessary overlap and conf lict between the TBT Agreement and other covered agreements. 
 92. One example is origin marking, which is already regulated in Article IX GATT. Another 
example are geographical indications, which are dealt with in the TRIPS Agreement. A third example 
would be Article XI:1 of the GATT, which prohib its quantitative restrictions on imports, including 
import bans on foreign products. If or igin were a product characteristic , then an import ban could be 
interpreted as a technical regulation laying down that  products must be of dom estic origin. However, 
the EC sees no justification for applying Article 2. 1 or 2.2 TBT Agreement to import bans, when such 
restrictions are already satisfactorily dealt with in the GATT. 
 
93. Finally, the Agreement on Rules of Origin must  also be mentioned in this context. According 
to Article 1.2 of the Agreement on Rules of Origin, th e Agreement defines rules of origin in particular 
with respect to numerous provisions of the GATT,  including explicitly Article IX GATT on marks of 
origin. In contrast, no mention is made of the TBT Agreement. If the TBT Agreement applied to 
marks of origin, however, then it would be hard to  explain why Article 1.2 of the Agreement on Rules 
of Origin only mentions Article IX of the GATT, but not the TBT Agreement.  
 (b) What is the meaning of the words "as they apply to" as used in this part of the 
definition?  Do they refer to the applic ation of labelling requirements to the 
characteristics of a product, or  to the product itself, or both?  
 
94. The second sentence of Point 1 of Annex 1 to  the TBT Agreement refers to "marking or 
labeling requirements as they apply to a product,  process or production method". The EC would 
remark that a mark or a label cannot be applied to a process or production method as such. Rather, it 
would appear that the process and production me thod would be the content of the labeling 
requirement. Accordingly, it seems to the EC that th e words "as they apply to" are meant to refer to 
the application of labeling requirements to charact eristics of a product, process or production method. 
 
Question 123 
 
Does the requirement to display a country of origin on a label under Article 12(2) of Regulation (EC) 
No. 2081/92 constitute a mark of origin  covered by Article IX of GATT 1994?   
 
95. Yes.
38 
 
                                                      
38 As to the US argument to the contrary, see EC SOS, para. 128 and below para. 98.  WT/DS174/R/Add.2 
 Page B-309 
 
 
 Question 124 
 
The definition of "technical regulation" in Ann ex 1.1 of the TBT Agreemen t expressly encompasses 
"marking or labelling requirements as they apply to  a product, process or production method".  Are 
marks of origin and labels of origin covered by Article IX of GATT 1994 excluded from the scope of 
the TBT Agreement?  Why did the negotiators not exp licitly carve them out of its scope?  Can a line 
be drawn between marks of origin that fall und er the TBT Agreement and those that do not?  What 
are the systemic consequences for marks of origin  if they all fall within the scope of the TBT 
Agreement?  
 96. As the EC has already explained in respon se to the Panel's Question 122, origin marking 
requirements are not a technical regulation within the meaning of the TBT Agreement, and therefore 
do not fall within the scope of the TBT Agreement.  97. There was no need for the drafters of the TB T Agreement to specifically exclude origin marks 
from the scope of the agreement if the negotiators considered that origin marking did not fall under 
the definition of a technical regulation.  98. In the view of the EC, it is not possible to distinguish origin marks which fall under the TBT Agreement and such which do not. The US has s uggested that Article IX:1 GATT might cover only 
"general origin marking requirements", but not origin marking requirements covering only specific 
products.
39 As the EC has already explained, there no textual basis for such a distinction in 
Article IX:1 GATT.40 Similarly, there is also no basis for this distinction in the definition of a 
technical regulation in Point 1 of Annex 1 to th e TBT Agreement, which does not distinguish as to 
whether a technical regulation relates to many products  or only to a few. Moreover, as the EC has also 
said, there is simply no logic to the proposition that  an origin marking maybe imposed on all imported 
products, but not just on some. 
 99. As regards the systemic consequences of the co mplainants' interpretation, if marks of origin 
fell under the TBT Agreement, this would mean th at any such marking requirements which apply 
only to imported products would be  incompatible with Article 2. 1 of the TBT Agreement. As a 
consequence, Article XI:1 GATT, which exempts or igin marking from nationa l treatment obligations 
would be obsolete. Similarly, origin marking re quirements would be subject to Article 2.2 TBT 
Agreement, which would make the specific provi sions of Article IX:2 to IX:6 GATT largely 
redundant.  
Question 125 
 
To what extent would any less favourable treatmen t under Article 2.1 of the TBT Agreement have to 
be determined in light of the regulatory objective a Member is trying to pursue under Article 2.2?   
100. As evidenced by the 6
th paragraph of the Preamble to the TBT Agreement, the TBT 
Agreement does not prejudice the right of WTO Members to pursue legitimate regulatory goals. 
However, frequently, the pursuit of such regulat ory goals may make it necessary to discriminate 
between products even if consumers consider them  as like, for instance on account of environmental 
hazards that they pose.  101. Therefore, the EC considers that the le gitimate regulatory objectives of the Member 
concerned must be taken into account in the appli cation of both Article 2.1 and 2.2 TBT Agreement. 
                                                     
 
39 US SWS, para. 77. 
40 EC SOS, para. 128. WT/DS174/R/Add.2 
Page B-310  
 
 Alternatively, the Panel would have to consider wh ether Article XX of the GATT is applicable within 
the context of the TBT Agreement.  
Question 126 
 
With respect to Article 10(3) of  Regulation (EC) No. 2081/92: 
  (a) the first indent sets out certain requirements for designated inspection authorities 
and/or approved private bodies.  Do these apply to all countries whose GIs are protected under the Regulation, including non-EC member States?   
 
102. Yes.  
 (b) the fifth indent appears to refer only to EC member States and third countries 
recognized pursuant to Article 12(3).  Where does the Regulation refer to the 
applicable standard for WTO Members not recognized pursuant to Article 12(3), 
whose requirements private bodies mu st fulfil for approval purposes?   
 
103. As the EC has set out earlier, the reference to  the procedure in Article 12(3) is relevant only 
where the conditions of Article 12(1) are applicable.
41 Accordingly, the last subparagraph of 
Article 10(3) of Regulation 2081/92 applies also to WTO Members. 
 
 (c) the fifth indent refers to "[t]he equivalent standard or the applicable version of the 
equivalent standard".  What equivalent standard has been established for GIs for 
areas located in WTO Members which do not  satisfy the conditions of equivalence 
and reciprocity in Article 12(1)?  What are the criteria for establishing that 
standard?  Is it a matter of determining what  is "equivalent" to standard EN 45011?  
Or is it a matter of determining what standard would fulfil the objectives of the 
Regulation in the light of each third co untry's own circumstances and conditions?    
 
104. No standard has been established so far. Th erefore, as long as no specific standard has been 
established, compliance with any equivalent standard to standard EN 45011 is sufficient. In its earlier 
submissions, the EC has referred to ISO Standa rd 65:1996 as such an equivalent standard.42 
 105. The EC would like to note that the situation is the same for EC Me mber States. Although the 
fourth subparagraph also provides a legal basis for est ablishing "the standard or the applicable version 
of standard EN 45011", no such standard or version has so far been establishe d. In the absence of any 
decision on the basis of the fourth subparagraph of  Article 10 (3) of Regulation 2081/92, standard 
EN 45011 continues to be applied. 
 
Question 127 
 
Article 12a(2)(b) requires a declaration by a third country government that the structures provided 
for in Article 10 are established on its territory.  Article 10(2) refers to inspection authorities and/or 
private bodies approved for that person by the Member State
 and Article 10(3) provides that where 
they outsource they continue to be resp onsible vis-à-vis the Member State  for all inspections.  What is 
the exact nature of the role that third country go vernments must play in the creation and maintenance 
of the inspection structures that are called for under Article 10?  
 
                                                      
41 EC Response to Panel's Question No. 8; EC SOS, para. 48. 
42 EC FWS, para. 54 and Exhibit EC-3.  WT/DS174/R/Add.2 
 Page B-311 
 
 
 106. When a Member State or a third country approve  an inspection structure, they must ascertain 
that the inspection structure is cap able of fulfilling its functions in accordance with Article 10 (1), and 
that it meets the requirements of Article 10 (3) of the Regulation. Moreover, the Member State or the 
third country is also responsible for ensuring that  the inspection body, as long as it is approved to 
carry out inspections, continues to comply with th e requirements of Article 10 of the Regulation. How 
exactly the Member State or th ird country carries out this continued monitoring, i.e. through 
occasional on-the-spot checks, audits, or reporting requirements, is for each Member State or third country to decide. 
 
Question 131 
 
Which EC Directives govern conformity assessment to EC technical regulations in the goods area?  
To what extent do those Directives require  foreign governmental involvement in the 
designation/approval of conform ity assessment bodies, when mut ual recognition agreements in the 
conformity assessment area do not already exist?  
 
107. EC Directives governing conformity assessment to  EC technical regulations in the goods area 
are extremely numerous, so that no exhaustive list can be given.  108. However, Council Decision 93/465/EEC concer ning the modules for the various phases of the 
conformity assessment procedures and the rules for the affixing and use of the CE conformity 
marking, which are intended to be used in the technical harmonization directives (Exhibit EC-90) 
defines certain general principles for EC conformity  assessment relevant in the present context. In 
particular, Point A (k) of the Annex to Decision 93/465 provides as follows:  
for the purposes of operating the modules, Member States must notify on their own 
responsibility bodies under their jurisdiction
 which they have chosen from the 
technically competent bodies complying with the requirements of the directives. This responsibility involves the obligation for th e Member States to ensure that the 
notified bodies permanently have the tec hnical qualifications required by the 
directives and that the latter keep their co mpetent national authorities informed of the 
performance of their tasks. Where a Member State withdraws its notification of a 
body, it must take appropriate steps to en sure that the dossiers are processed by 
another notified body to ensure continuity; 
109. Since conformity assessment bodies must be under the jurisdiction of the Member State, they 
must be located on the territory of that Member State.  The reason for this rule is that only with respect 
to bodies under its jurisdiction can the Member States effectively ensure that the body properly 
exercises its functions. In principle, a Member State can therefore not designate a conformity 
assessment body located in a third country. Accord ingly, the question of third country governmental 
involvement does not pose itself.  110. It should also be noted that the TBT Agre ement explicitly foresees the possibility of Members 
to apply conformity assessment procedures to im ported products. No provision of the TBT Agreement 
obliges Members to simply accept conformity assessment carried out by bodies of another Member. 
In fact, Article 6.1 TBT Agreement obliges Memb er to accept conformity assessment in other 
Members only under specific conditions, in particular if they are satisfied that procedures offer an 
assurance of conformity with applicable technical regulations or standards equivalent to their own 
procedures. Article 6.1 TBT Agreement moreove r recognises that prior consultations may be 
necessary to arrive at a mutually satisfactory un derstanding, and Article 6.2 encourages Members to 
enter into negotiations for the mutual rec ognition of conformity assessment procedures.  
 WT/DS174/R/Add.2 
Page B-312  
 
 111. In addition, Article 6.4 TBT Agreement "e ncourages" Members to permit participation of 
conformity assessment bodies located in the terr itories of other Members in their conformity 
assessment procedures. However, it is clear from the word "encourage" that there is no legal 
obligation in the TBT Agreement to permit such pa rticipation. The reason for this is that the 
participation of a conformity assessment requires th at certain guarantees for the technical competence 
and capacity of the conformity assessment to be fulf illed, and that fulfilment of these criteria may be 
difficult to guarantee for a body located in a third co untry, in particular in the absence of cooperation 
of the government of that country.  112. The EC notes that its practice in this resp ect is not unique. For instance, United States 
regulations foresee that the United States Federal Communications commission may designate 
telecommunication certification bodies to approve telecommunications equipment. According to 
47 CFR 68.160 (b), the Federal Communications Commission shall designate such bodies located in 
the United States  (Exhibit EC-91).43 According to 47 CFR 68.160 (c), bodies outside the United States 
shall be permitted to authorize equipment only "in ac cordance with the terms of an effective bilateral 
or multilateral recognition agreemen t or arrangement to which the United States is a party" 
(Exhibit EC-91).  113. It is before this background that the EC, the US and Australia have concluded mutual 
recognition agreements under which they agree to  recognize the results of conformity assessment 
carried out by bodies designated by the other party.
44 On this basis, numerous conformity assessment 
bodies have been recognized under the Sectoral A nnexes to the EC-US  and EC-Australia MRAs.45 
 114. As a consequence, bodies designated by the United States and Australia can carry out conformity assessment with respect to the EC's stan dards, and vice versa. Accordingly, such bodies 
are in exactly the same situation as inspection bodi es approved by the United States or Australia to 
carry out inspections under Regulation 2081/92. The EC considers it odd that the complainants 
consider themselves disadvantaged by the possibility to approve insp ection structures for the purposes 
of Regulation 2081/92, when this possibility to di rectly designate conformity assessment bodies for 
the covered sectors was in fact the main objective of the mutual recognition agreements between the 
parties.  Question 132 
 
The Panel takes note of the EC's examples of flexib ility in the design of inspections structures (EC 
rebuttal, para. 104 and Exhibit EC-48).  Do these ex amples all relate to the nature of the inspecting 
authority?  Who determines what constitutes an appropr iate inspection for each product, and on the 
basis of what criteria?  
 
115. The examples given relate to the nature of th e inspection body, i.e. whether this body is public 
or private, local, regional, or national, focusi ng only on geographical indications or not, commercial 
or non-profit.  
116. Regulation 2081/92 does not define what constitutes an appropriate inspection for each 
product. Accordingly, it is in principle for each desi gnated inspection structure to define the concrete 
modalities of inspections for the products in questio n, for instance with resp ect to the place, time, 
                                                     
 
43 It appears that indeed all telecommunication certification bodies designated under this provision are 
located in the US (Exhibit EC-92). 
44 Cf. Exhibits EC-23 and EC-24. Telecommunications terminal equipment is one of the sectors 
covered by these agreements. 
45 Lists of approved conformity a ssessment bodies are available under 
http://europa.eu.int/comm/enterprise/international/indexb1.htm#listsapprovedcabs.  WT/DS174/R/Add.2 
 Page B-313 
 
 
 frequency, and other modalities of the inspections. In  accordance with Article 10(1) of the Regulation, 
the basic criterion is that the inspections must effe ctively ensure that product bearing a protected name 
comply with the products specifications.  
Question 133 
 
The Panel takes note that Australia argues that the product specification requirements set out in 
Article 4(2) of Regulation (EC) No. 2081/92 include  "product characteristics", in particular 
subparagraphs (b) and (e).  (Australia's rebuttal, par as. 197 and 204)  If the inspection structures are 
designed to ensure that the product specifications un der Article 4 of the Regulation are fulfilled, how 
can they be a technical regulation and no t a conformity assessment procedure?   
 
117. In the view of the EC, they cannot be both  a technical regulation and a conformity assessment 
procedure.
46 
 
Question 134  
The Panel takes note of the EC's response to P anel question No. 61, in particular regarding the 
Panel's terms of reference.  However, does the EC c ontest that a "conformity assessment procedure" 
within the meaning of the TBT Agreement assesses c onformity with a "tec hnical regulation" or 
"standard" within the meaning of the TBT Agreement?   If not, then can the EC complete its analysis 
and explain whether the inspection structures of Re gulation (EC) No. 2081/92 assess conformity with 
each individual product specification referred to in Article 4 of the Regulation for a registered name, 
and that those specifications th erefore would constitute a "technica l regulation" within the meaning 
of the TBT Agreement?  
 118. The EC does not contest that a conformity assessment procedure assesses conformity with a 
technical regulation or a standard as defined in  Point 3 of Annex 1 to the TBT Agreement. 
 119. However, since Australia has not made any claim under the provision of the TBT Agreement concerning inspection structures, the EC does not cons ider that the Panel needs to decide whether the 
inspection structures are indeed conformity assessment  procedures or not. Since Australia has brought 
its claims exclusively under Article 2 TBT Agreemen t, the essential question which the Panel needs to 
decide is whether these structures by themselves are a technical regulation. According to Point 1 of 
Annex 1 to the TBT Agreement, this in turn  depends on whether they lay down product 
characteristics. The EC has raised the aspect of conformity assessment merely to illustrate its 
argument that structures which "ensure conf ormity" with requirements regarding product 
characteristics (whatever their legal quality may be) are not "laying down product characteristics". 
 120. For this reason, the EC also does not consider  that this Panel should examine the question of 
whether the product specifications are a technical regu lation, a standard, or something else. Australia 
has not formulated any claim regarding the specificat ions for any particular product or name under the 
TBT Agreement. Accordingly, the question whether the product specifications can be considered a 
technical regulation, or a standard, is outside the scope of the present Panel. 
 121. In addition, the EC would note that this qu estion is highly complicated and involves complex 
issues regarding the relationship between the TRI PS Agreement and the TBT Agreement. Moreover, 
such issues could arise not just in respect to geogr aphical indications, but also to patents, designs, 
copyrights, plant variety rights, or other intellect ual property rights which involve the definition of 
product characteristics.  
                                                     
 
46 EC SWS, para. 404 et seq.; EC SOS, para. 246 et seq. WT/DS174/R/Add.2 
Page B-314  
 
 Question 135 
 
The EC invokes Article XX(d) of GATT 1994 as a de fence to the national treatment and MFN claims 
with respect to third country govern ments' verification and transmittal of applications, the identical 
GIs labelling requirement and inspection structu res requirement.  The EC alleges that these 
requirements are "necessary" to secu re compliance with Regulation (EC) No. 2081/92 or to attain the 
legitimate objectives of the Regulation (EC rebutta l, paras. 228-242, paras. 263-265;  EC second oral 
statement, paras. 132-135):   (a) what is the "measure" necessary to secu re compliance with laws or regulations 
within the meaning of Article XX(d) in each  case?  What are the laws and regulations 
with which each one secures compliance?  Are the "measures" separate from the laws 
or regulations?  
 
122. The "measure necessary to secu re compliance with laws and regulations" are the provisions of 
Regulation 2081/92 which foresee the requirements of inspection structures, the verification and 
transmission of applications for the registration of  geographical indications by the government of the 
country of origin, and the indication of the country of origin for homonymous geographical 
indications. The "laws and regulations" with whic h compliance is secured within the meaning of 
Article XX(d) of GATT are equally provisions of  Regulation 2081/92. It should be noted that 
Article XX(d) does not exclude that the "measures necessary to secure compliance" and the "laws and 
regulations" may be part of the same legal act. 
 
 (b) can a measure that secures compliance with the "objectives" of a regulation, rather 
than a regulation itself, satisfy Article XX(d)? 
 123. Article XX(d) GATT refers to measures n ecessary to "secure compliance with laws and 
regulations". Accordingly, the measure to be justif ied must secure compliance with the provisions of 
the law or regulation in question.
47 However, the objectives of a regulation may be relevant for 
establishing the meaning of the provisions with which compliance is secured.  
 (c) in what sense does each of these meas ures "secure compliance" with laws or 
regulations?  Are they enforcement mechanisms?   
 
124. According to Article 4(1) of Regulation 2081/92,  to be eligible to use a protected designation 
of origin or a protected geographical indication, an  agricultural product or foodstuff must comply with 
a product specification . Article 8 of Regulation 2081/92 provides that the indications "protected 
designation of origin", "protected geographical indi cation" or equivalent indications may appear only 
on agricultural products and foodstuffs that comply with the Regulation . Accordingly, both provisions 
contain clear obligations with wh ich compliance must be secured. 
 125. According to Article 4(2)(g), the product speci fications must contain de tails of the inspection 
structures foreseen in Article 10 of the Regulation. In accordance with Article 10 (3), the function of 
inspection structures is to ensure that "agricultu ral products and foodstuffs bearing a protected name 
meet the requirements laid down in the specificat ions". Accordingly, the function of inspection 
structures is to secure compliance with the requirement in Article 4(1) that products bearing a 
protected name must comply with a product specification. Similarly, the requirement of inspections structures also secures compliance with the require ment in Article 8 of the Regulation that the 
indications "protected designation of origin", "p rotected geographical indication" or equivalent 
indications may appear only on agricultural products and foodstuffs that comply with the Regulation. 
 
                                                     
 
47 Cf. GATT Panel Report, EEC – Regulation on Imports of Parts and Components , paras. 5.17-5.18.  WT/DS174/R/Add.2 
 Page B-315 
 
 
 126. In accordance with Article 12a(2) of the Regula tion, the verification (and incidentally also the 
transmission) of the application by the government  of the country of origin of the geographical 
indication serves the purpose of establishing whethe r the requirements of the Regulation for the 
registration of geographical indications are satisfied. Among these requirements are that the indication in question corresponds to the definition of a geogr aphical indication in Article 2 of the Regulation, 
that the product specifications comply with Article  4(2) of the Regulation, that the geographical 
indication is protected or established in its count ry of origin, and that the required inspection 
structures are established. Accordingly, the verifi cation of the application by the government of 
country of origin of the geographical indication secures compliance with the requirement in Article 8 of the Regulation that the indications "protected  designation of origin", "protected geographical 
indication" or equivalent indications may appear only on agricultural products and foodstuffs that 
comply with the Regulation.  127. According to the first subparagraph of Article 12(2), if a protected name of a third country is 
identical to a Community protected name, registrati on shall be granted with due regard for local and 
traditional usage and the practical risks of confus ion. According to the second subparagraph, use of 
such names shall only be authorised if the country  of origin of the product is clearly and visibly 
indicated on the label. In this way, the second subpa ragraph secures compliance with the first. At the 
same time, the second subparagraph of Article 12(2)  also secures compliance with the requirement in 
Article 8 of the Regulation that the indications "protected designation of origin", "protected 
geographical indication" or equiva lent indications may appear only on agricultural products and 
foodstuffs that comply with the Regulation. 
 128. The EC is not entirely sure what is underst ood by "enforcement mechanisms". If enforcement 
mechanisms are understood as mechanisms whic h secure compliance with the regulation ex post , i.e. 
after the registration of a particular geographical  indication has taken place, then the inspection 
structures would qualify as "enforcement mechan isms", but possibly not the verification and 
transmission of applications for the registration of  geographical indications by the government of the 
country of origin, and the indication of the country of origin for homonymous geographical 
indications.   129. However, the EC notes that Article XX(d) GATT does not speak of "enforcement 
mechanisms", but of "measures necessary to ensu re compliance", including those relating to "the 
protection of patents, trade marks and copyrights, and the prevention of deceptive practices". There is 
no indication in Article XX(d) GATT that only " ex post " enforcement could qualify under 
Article XX(d) GATT. Rather, measures which secure  compliance at other stages, for instance through 
appropriate safeguards in the registration process, may also be regarded as measures to "secure 
compliance". Accordingly, the verification and tran smission of applications for the registration of 
geographical indications by the government of the c ountry of origin, and the indication of the country 
of origin for homonymous geographical indications should also be regarded as "measures necessary to 
secure compliance" within the meaning of Article XX(d) GATT.  
 (d) how are the laws and regulations with  which each measure secures compliance not 
inconsistent with the GATT 1994?  
 
130. Regulation 2081/92 is a measure which provi des protection to geographical indications. It 
implements Section 3 of Part II of the TRIPS Agreement, which obliges WTO Members to provide 
protection to geographical indications. It does so in  providing, in accordance with Article 1.1 of the 
TRIPS Agreement, a higher degree of protection than  that required by Article 22 TRIPS Agreement. 
Accordingly, Regulation 2081/29 is a measure which is not inconsiste nt with the GATT 1994. 
 WT/DS174/R/Add.2 
Page B-316  
 
 Question 136 
 
With respect to the issue whet her the measures are necessary to  secure compliance, and without 
prejudice to the WTO-consistency of any alternative measures:    
 (a) is the requirement that a third country government verify applications "necessary" to 
secure compliance in cases where an applicant itself is able to prove that a GI is 
protected in its country of origin, for exam ple, by submitting an authenticated copy of 
a registration certificate?  
 131. As the EC has set out above in Response to the Panel's Question 114, the verification to be 
carried out by the third country government does not only concern the question whether the geographical indication is protected in its country of origin, but also whether the other requirements 
for the registration of the geographical indication are fulfilled, namely whether the name complies with the definition of a geographical indication, wh ether the product specifications are in accordance 
with Article 4 (2) of the Regulation, and whethe r the necessary inspection st ructures are established. 
 132. As the EC has said in its previous submissions,
48 the verification of these conditions requires 
knowledge of local factors specific to the territory  of the country of origin of the geographical 
indication, which typically only the country of orig in will have. Moreover, the verification may also 
require on-site checks and verifications in the territory of the country of origin, which the EC could 
not carry out without the express consent of the country of origin. Accordingly, the verification of 
applications by the country of origin is necessar y to secure compliance with the Regulation already 
for these aspects.  133. As regards the requirement that the geographi cal indication is protected in the country of 
origin, a certificate of registration of the geographical indication authenticated by the country of origin 
of the indication would normally provide sufficient evidence that the indication is protected in its 
country of origin. However, the EC considers that this question is hypothetical in the context of the present case. Many WTO Members, and in particul ar the United States and Australia, do not have 
specific registration systems for the protection of ge ographical indications. Therefore, the submission 
of an authenticated certificate of registration does no t appear to be an option for a US or Australian 
geographical indication. 
 134. The EC would also like to recall that accord ing to the Appellate Body, the evaluation of 
whether a measure is "necessary" within the mean ing of Article XX(d) GATT requires "a process of 
weighing and balancing a series of factors which prominently include the contribution made by the 
compliance measure to the enforcement of the law or regulation at issue, the importance of the 
common interests or values protected by that law or regulation, and the accompanying impact of the law or regulation on imports or exports".
49 In the case of a country which does have a dedicated 
registration system for the protection of geographical indications, the preparation of an authenticated certificate would not pose any difficulties. Similarly, the transmission of this certificate together with 
the other documents required by Ar ticle 12a(2) would not seem burdensome. Accordingly, the impact 
on exports of this requirement in Artic le 12a(2) should be extremely small. 
 
 (b) is the requirement that a third country government verify applications "necessary" to 
secure compliance in cases wh ere the third country has no registration system for GIs 
or where determinations that a GI is protected under unfair competition laws are 
only made by the judicial branch of government after litigation? 
 
                                                     
 
48 EC Response to Panel's Question No. 33; EC SWS, para. 124 et seq. 
49 Appellate Body Report, Korea – Various Measures on Beef , para. 164.  WT/DS174/R/Add.2 
 Page B-317 
 
 
 135. Yes. In fact, the requirement of verification by  the country of origin is particularly necessary 
in this case. The EC appreciates that in the absence  of a specific registration system, the evaluation of 
whether a geographical indication is protected in its country of origin may be more difficult. 
However, this does not create an exemption from Ar ticle 24.9 TRIPS, according to which there is no 
obligation to protect geographical indications which are not protected in their country of origin. 
Moreover, the question whether the geographical indi cation is protected in the country of origin 
remains a question of the law of the third country. Accordingly, the absence of  a specific registration 
system makes the involvement of the coun try of origin more necessary, not less. 
 136. The United States has claimed that "the US government does not have any specialized 
knowledge or expertise that would render it better qualified than the right holder, or indeed, the EC".
50 
As the EC has already explained, the EC does not find this argument credible.51 The United States and 
Australia cannot claim protection of geographical indi cations which are not protected in their country.  
 137. The question which branch of government in th e United States or Australia is responsible for 
the protection of geographical indications is not relevant. Under Article 24. 9 TRIPS Agreement, the 
United States and Australia as WTO Members cannot claim protection for geographical indications which are not protected in their country. This is entirely independent of which branch of government 
assures this protection in the US and Australia. It is for the United States and Australia to decide 
which branch of government will be entitled to  establish whether a geographical indication is 
protected in their country in accordance with Article 24.9 TRIPS Agreement. 
 
138. The EC would also remark that if the US  or Australian executive branch did not have 
authority, within the US or Australian legal system , to make such findings, the EC hardly sees how 
the EU institutions could be expected to make them. 
 
 (c) is the requirement that a third coun try government transmit applications "necessary" 
to secure compliance in cases where an applicant itself is able to send an application 
to the Commission?  
 
139. The transmission of the application is an in tegral part of the application process, which 
reflects the necessary involvement of the government of the country of origin in the verification of the 
application. By transmitting the application, the gove rnment of the country of origin certifies that it 
deems the requirements of Article 12a(2) to be fulf illed. For this reason, the EC submits that the 
requirement that the application should be transm itted by the country of origin should not be 
considered in isolation, but in the contex t of the application and verification process. 
 
140. The United States has also indicated that it cons idered that the transmission of applications or 
objections was a "purely ministerial act" which as such would not pose particular difficulties.
52 In the 
process of weighing and balancing as required by the Appellate Body in the context of Article XX(d) 
GATT, it therefore would not appear that the require ment that the application be transmitted by the 
country of origin could be regarded as having a significant impact on imports.  
141. The EC also notes that in its second oral statem ent, Australia has indicated that the EC could 
"ask for the cooperation of another WTO Member af ter an application has been lodged should such 
cooperation be necessary to assess an application".
53 As the EC has set out above, cooperation 
between the country of origin and the country of registration is  necessary. What remains therefore of 
the Australian submission seems to be that rath er than asking for the cooperation before the 
                                                      
50 US SWS, para. 73. 
51 EC SWS, para. 134; EC SOS, para. 76. 
52 US Response to Panel's Question No. 38, para. 74. 
53 Australia's SOS, para. 68. WT/DS174/R/Add.2 
Page B-318  
 
 application is filed, the EC should ask for it after
 it is filed. However, this is purely an issue of timing 
and sequencing of the applicati on process. The EC does not see w hy it should make a difference 
whether the necessary cooperation occurs befo re the application is filed, or after. 
 
 (d) why does a third country government need to verify whether the person objecting is 
resident or established in the third coun try?  Why does the Commission need consult 
with the third country if the statement of objection is admissible? (EC response to Panel question No. 34).   
 
142. First, the EC would like to note that the comp lainants have formulated their claims regarding 
the right of objection only under the TRIPS Agreement, not under the GATT.  
 143. Second, as the United States has indicated, the tr ansmission of applications or objections is a 
"purely ministerial act" which as such would not pose particular difficulties.
54 This is why the EC has 
submitted that the transmission of applications by the government of the country of origin cannot be 
regarded as constituting less favorable treatment.55 
 144. Finally, as the EC has also indicated in response to subquestion c) above, in a process of 
weighing and balancing as require d by Article XX(d) GATT, the pure transmission of an objection 
does not have any significant impact on trade in go ods. Accordingly, should the Panel consider that 
Article XX(d) GATT is available as a defense to th e complainants' claims under the TRIPS, it should 
find that the measure is necessary within the meaning of Article XX(d) GATT. 
 
 (e) is the identical GIs labelling requirem ent "necessary" to secure compliance in cases 
where there is already a clear distinction in  practice in the usual presentation of the 
relevant products without clearly and visibly displaying the country of origin? 
 
145. Article 12(2) is based on the assumption that the protected names are homonyms. In such a 
situation, if the two homonyms are from different c ountries, the indication of the country appears as 
the most obvious distinguishing element. Accordingly,  the EC considers it unlikely that an equivalent 
clear distinction could be achieved without the indication of the country of origin. 
  (f) is the requirement that a third country government designate inspection authorities 
"necessary" to secure compli ance in cases where the Commission could designate 
them in third countries (see US second oral statement, para. 53)?  
 
146. The EC could not simply designate an inspection body in a third country. As the EC has 
explained, the designation of an inspection body may require on-site inspections  and audits. Similarly, 
such on-site inspections and audits are also necessary at periodic intervals for the continued 
monitoring of the inspection body. The EC does not c onsider that it could carry out such inspections 
and audits without the agreement of the country in which the body is located.  147. In this context, the EC would like to note th at certain provisions in the covered agreements 
give WTO Members under certain conditions the right to carry out inspections in the territory of 
another WTO Member. This is the case for instan ce for Article 6.7 AD Agreement and Article 12.6 
CVD Agreement. Even here, the inspection may only be carried out, however , in accordance with the 
provisions of the annexes to these agreements, and if the importing Member does not object. Similar provisions implying a right to conduct investigations  in another WTO Member can also be found in 
Article 6.3 of the SPS Agreement and in Point 2 of Annex C to the SPS Agreement. 
 
                                                     
 
54 US Response to Panel's Question No. 38, para. 74. 
55 EC SWS, para. 158.  WT/DS174/R/Add.2 
 Page B-319 
 
 
 148. However, similar provisions do not apply in  the present case. The EC can therefore not 
simply assume that it may carry out such inspections  in respect of inspection bodies for geographical 
indications in a third country. The designation by the third country is therefore necessary also out of respect for the territorial sovereignty of the third country.  
149. This is also fully compatible with the prac tice of the parties in the field of conformity 
assessment, as explained by the EC in response to  the Panel's Question No. 127. Accordingly, the 
designation of the inspection body by the country of origin is necessary within the meaning of 
Article XX(d) GATT.   (g) is the requirement that a third country go vernment declare that inspection structures 
are established on its territory "necessary" to secure compliance in cases where an 
applicant could arrange for independent insp ection structures to be put in place in 
respect of a specific product (see US second oral statement, para. 53)? 
 150. As the EC has explained, inspection bodies can be public or private.
56 However, as the EC has 
also explained, inspection bodies are required by Article 10 (3) to offer adequate guarantees of 
objectivity and impartiality with r espect to producers or processors.57 
 151. This reflects the fact that independently of  whether they are public or private, inspection 
bodies fulfill a function both towards producer s and to consumers. This is why the 
Regulation requires that inspection bodies, even if  private, must be responsible to the public 
authorities of the territory in which they are locate d. Only through some form of public oversight can 
it be ensured that the inspection body will at all time s carry out its functions duly and appropriately in 
accordance with the requirements of the Regulation. This is also necessary to secure equal treatment 
between EC and third country geographical indica tions, which have to comply with the same 
requirements. 
 152. Accordingly, the declaration by the governme nt in which the inspection body is located is 
necessary to secure compliance with the Regulation.  
 (h) how is the requirement that a private insp ection body continues to be responsible vis-
à-vis a third country government "necessary"  to secure compliance in cases where 
the EC could conduct its own inspections  of foreign GIs (see US second oral 
statement, para. 53)?   
 
153. The EC cannot itself conduct inspections of fore ign geographical indications. First of all, the 
EC does not itself have inspection bodies. Rather, for EC geographical indications, inspections bodies 
are carried out through a multitude of public or private bodies in the individual Member States.
58 
Second, the carrying out of inspections typically re quires a presence in or near the geographical area 
to which the indication is related. Finally, the EC  would remark that according to Article 10(7) of 
Regulation 2081/92, the cost of inspections must be  borne by the producers using the protected name. 
Accordingly, if the EC carried out such inspecti ons for foreign geographical  indications, this would 
result in less favourable treatment for EC geographical indications. 
 
 (f) how is the requirement that the inspection authorities and/or private bodies have 
permanently  at their disposal staff and resources necessary to ensure that all  
products bearing GIs comply with the produc t specifications in their registrations? 
(see Australia's rebuttal submission, para. 217).  
                                                      
56 EC SWS, para. 103. 
57 EC SOS, para. 64. 
58 Cf. EC SWS, para. 104 and Exhibit EC-48. WT/DS174/R/Add.2 
Page B-320  
 
  
154. At the outset, the EC would like to clarify that this requirement does not apply to "all
 products 
bearing GIs". First, a particular inspection structure is only responsible, and its staff need must be determined with regard to, the specific product for which it has been designated. Second, there is no 
requirements that an inspection structure must examin e "all" products in a physical sense. Rather, it is 
up to the inspection structure to decide the place, time and frequency of insp ections. Obviously, such 
inspections may involve sampling or random checks.
59 
 155. As regards the requirement to an inspec tion body must "permanently" have staff and 
resources at its disposal, Australia has argued that  this may not be necessary in certain cases, for 
instance where there is a particular harvest season. Although this is not the rule for most protected 
products, the EC does not exclude that there mi ght be products for which the entire production 
process is confined to a part of the year, and for which therefore the need for inspections arises only 
or primarily during that time of the year. In  this case, Regulation 2081/92 does not require 
unnecessary levels of staff to be maintained through out the year. In fact, since it is presumably not 
economic to establish and wind down an inspection body every year, in such a case it would be 
reasonable to entrust the function of inspections to a body which also carries out tasks other than inspections under Regulation 2081/92.  In its second submission, the EC has pointed to the existence 
of private firms which can carry out such tasks.
60 
 
Question 137 
 
The Panel takes note of the EC's view that Article  14(3) of Regulation (EC) No. 2081/92 allows its 
authorities to refuse or invalidate the registration  of any confusing GIs (EC first written submission, 
para. 286; EC rebuttal, para. 270).  The comp lainants do not agree (US second written submission, 
para. 166 and Australia's second written submission, para. 109).  The following examples have been 
referred to in this proceeding:  
  (a)  BAYERISCHES BIER and BAVARIA and HØKER BAJER?   (b) BUDEJOVICKÉ PIVO and BUDWEISER?  
 (c) GORGONZOLA and CAMBOZOLA?   
 Could these GIs be used in accordance with their regis trations in a way that results in a likelihood of 
confusion with the respective trademark(s)?  
 156. At the outset, the EC would note that, of the three "examples", only the first one is relevant to 
this dispute.   
157. The EC would recall, once again, that the names "
Budĕjovické pivo", " Českobudĕjovické 
pivo" and "Bud ĕjovický m ĕšt'anský  var" were registered several months after the date of the 
requests for the establishment of this Panel and are, therefore, outside the Panel's terms of reference.61 
In any event, the EC understands that the United St ates does not argue that any of those names gives 
rise to a likelihood of confusion with the name "Budwe iser". The US concerns appear to be limited to 
the use of some translations of those names to other languages.  
                                                     
 
59 Cf. above Response to Panels' Question No. 132. 
60 EC SWS para. 107 and Exhibits EC-49  and EC-50. 
61 EC FWS, paras. 21-25.  WT/DS174/R/Add.2 
 Page B-321 
 
 
 158. In the Cambozola case62, the right holders of the geogr aphical indication "Gorgonzola" 
alleged that the use of the trademark "Cambozola"  engendered one of the si tuations mentioned in 
Article 13(1) of Regulation 2081/92.63 To the best of the EC's knowledge, the owner of the trademark 
"Cambozola" never claimed that the use of the ge ographical indication "Gorgonzola" gave rise to a 
likelihood of confusion with its trademark or th at the registration of the geographical indication 
Gorgonzola should have been refused in accordance  with Article 14(3) of Regulation 2081/92. The 
two issues are different and should not be confused.  159. In principle, a name which has been found not to be confusing per se  following the 
assessment required by Article 14(3) should not give  rise to confusion when used subsequently.  The 
EC would submit that, in practice, this may happen only where the registered name is used together 
with other signs (whether verbal or figurative), or  as part of a combination of signs. If those other 
signs, or the combination thereof, are themselves the subject of trademark rights, the trademark owner retains the right to prevent their use in a confusing manner. Even if they are not covered by trademark 
rights, the confusing use of those other signs, or of the combination including the geographical 
indication, could still be prevented under the laws  on unfair competition or on misleading labelling or 
advertising.  160. The United States has argued that, in practice, a name registered as a geographical indication, even if not confusing per se , could be confusing when used in translation.
64 But, as already explained 
by the EC, the registration does no cover translations. 
 
161. The United States also has argued that a name registered as a geographical indication which is not confusing per se  may be confusing when used "as a trademark".
65 By this, apparently, the United 
States means that the use of a geographical indicati on may be confusing if displayed in a prominent 
way, or at least more prominently than the trademark. As explained by the EC, this reflects  pre-
conceived notions regarding the respective uses of  trademarks and geographical indications which 
assume a priority of trademarks over geographical indications. The EC does not share those notions, which have no basis in the TRIPS Agreement. In making the assessment required by Article 14(3) of Regulation 2081/92, the EC authorities will assume that the geographical indication will be used in what the United States calls "trademark-like" fash ion. Accordingly, the EC authorities will refuse a 
proposed geographical indication it if is anticipated that, when used in what the United States calls 
"trademark-like fashion", it will result in a like lihood of confusion with an earlier trademark. 
 162. Finally, the United States has argued that th e use of a registered geographical indication may 
be confusing when the registered name is defo rmed, mutilated or otherwise manipulated so as to 
imitate a trademark.
66 However, as already explained by the EC, a court could consider that, in such 
case, the used sign is different from the registered name.67 
 163. As noted by the EC, the complainants are re questing the EC to provide a remedy against the 
confusing use of a registered geographical indi cations which many Members do not provide with 
respect to the infringement of a registered tradem ark by a latter registered trademark. Indeed, as 
discussed below, in many Members the use of registered trademark is deemed not to be an 
infringement of an earlier trademark, subject to th e possibility to invalidate the registration of the 
latter trademark on the grounds that it is confus ing. (See below the response to Question 139). 
                                                     
 
62 Case C-87/97, Consorzio per la tutela del frommagio Gorgonzola v Käserai Champignon Hofmeister 
GmbH & Co Kg,  [1999] ECR  I-1301  (Exhibit EC-32). 
63 EC Response to the Panel's Question No. 66. 
64 US SWS, para. 134. 
65 US SWS, para. 133. 
66 US FOS, para. 54. 
67 EC SWS, para. 302. WT/DS174/R/Add.2 
Page B-322  
 
 Upholding the complainants' claims would have nece ssarily the implication that the trademark laws of 
those Members are also in violation of Article 16.1 TRIPS.   
Question 138 
 
What is the meaning of the phrase "[w]ith due re gard to Community law" in Article 14(2) of 
Regulation (EC) No. 2081/92?  Which aspects of "Community law" are relevant? 
 
164. The phrase "with due regard to Community law" clarifies that the right to use the trademark 
conferred by Article 14(2) of Regulation 2081/92 is not unqualified, but must be exercised in 
accordance with all other applicable provisions of  EC law. Those provisions include not only the 
Community Trademark Regulation and the Trademark Directive but also, for example, the laws on 
labeling and unfair competition or the antitrust laws.     
 
What is the meaning of the phrase "shall not affect [Regulation No. 2081/92] ... and in particular 
Article 14 thereof" in Article 142 of Regulation (E C) No. 40/94 on the Community trade mark?  
 
165. It means that the relationship between Comm unity trademarks and geographical indications 
registered under Regulation 2081/92 is controlled by the latter, and in particular by Article 14.  
 
Question 139 
 
The Panel takes note of the EC's view that the own er of a trademark may not prevent the right holders 
of a registered GI from using the registered name on the grounds that such name is confusing (EC 
second oral statement, para. 181).  Please confirm that  as long as a GI remain s registered and is used 
in accordance with its registration, a trademark owner may not enforce his trademark rights against 
that use either under the Regulation on the Communi ty trademark or the national trademark laws of 
the member States. 
 
166. The EC can confirm that a trademark owne r cannot prevent the holders of a registered 
geographical indication from using the name or  names registered under Regulation 2081/92 on the 
grounds that the use of such name or names is confusing per se with an earlier trademark. 
 
167. As explained, however, this does not mean that the right holders of a geographical indication have an unqualified right to use the registered name in any conceivable manner. First, the right to use 
the registered name does not confer a right to use other names not covered by the registration, or to 
use the registered name together with other signs or as part of a combination of signs. Furthermore, 
the registered name must be used  in accordance with other generally  applicable laws, including in 
particular with the laws on labeling, misl eading advertising and unfair competition. 
 
What legal provisions prevent the trademark ow ners exercising their rights against persons using a 
GI in accordance with its registration?   
 168. Regulation 2081/92 does not contain any provision which prohibits expressly the trademark 
owners from exercising their rights with respect to a registered geographical indication. However, the 
protection provided by Regulati on 2081/92 would become meaningless if a trademark owner could 
prevent the use of the registered name by the right  holders of a geographical indication on the grounds 
that the use of such name is confusing per se with an earlier trademark. 
 
169. The registration of a name under Regulation 2081/92 establishes a legal presumption that the 
use of that name as a geographical indication does not give rise per se  to a likelihood of confusion 
with an earlier trademark, because otherwise the re gistration should have been refused in accordance  WT/DS174/R/Add.2 
 Page B-323 
 
 
 with Article 14(3). In order to be able to exercise  its trademark rights, the trademark owner must rebut 
first that legal presumption by invalidating th e registration of the geographical indication. 
 170. The EC would note that, by the same token, unde r the trademarks laws of many Members, the 
use of a registered trademark is deemed not to constitute an infringement of an earlier trademark, 
subject to the possibility to invalidat e the latter trademark on those grounds.
68 
 
                                                      
68 For example, Section 19 of Canada 's Trade Marks Law (Exhibit EC-93) provides that: 
 
the registration of a trade-mark in respect of any wares or services, unless shown to be invalid, gives to the owner of the trade-mark the exclusive right to the use throughout Canada of the 
trade-mark in respect of those wares or services. 
 
 Section 20 (1) (Exhibit EC-93) goes on to provide that the right of the owner of a registered trade-mark 
to its exclusive use is not deemed to be infringed by a person "entitled to its use under this Act". 
 
Section 19(2) of Hong Kong
's Trade Marks Ordinance (Exhibit EC-94) provides that:  
 A registered trademark is not infringed by the use of another registered trademark in relation 
to goods or services for which the latter is regist ered (but see section 53 (9) for the effect of a 
declaration of invalidity of registration).  
 
Section 30(2) of India
's Trade Marks Act (Exhibit EC-95) provides that: 
 A registered trademark is not infringed where--…  (e) the use of a registered trade mark, being 
one of two or more registered  under this Act which are iden tical or nearly resemble each 
other, in exercise of the right to use that trade mark given by registration under this Act. 
 
Section 93 of New Zealand
's Trade Marks Act 2002 (Exhibit EC-96) provides that: 
 A registered trade mark is not infringed by the use of another registered trademark in relation to any goods or services for which that other trademark is registered . 
 
Section 28 of Singapore
's Trade Marks Act (Exhibit EC-97) provides that: 
 
… a registered trademark is not infringed by the use of another registered trademark in 
relation to goods or services for which the latter is registered.  
Section 34(2) of South Africa
's Trade Marks Act (Exhibit EC-98) provides that: 
 A registered trade mark is not infringed by - …. (g) the use of any identical or confusingly or 
deceptively similar trade mark  which is registered.  
 Section 11(1) of the United Kingdom
's Trade Marks Act 1994 (Exh ibit US-50) provides that: 
 
A trademark is not infringed by the use of another registered trademark in relation to goods or services for which the latter is registered (but  see section 47(6))(effect of declaration of 
invalidity of registration). 
 Finally, Section 122 of Australia
's Trade Marks Act 1995 (Exhibit EC-7) provides that: 
 
In spite of section 120, a person does not infri nge a registered trade mark when: […] (e) the 
person exercises a right to use a trade mark given to the person under this Act.  
 WT/DS174/R/Add.2 
Page B-324  
 
 Question 140 
 
Under what provision of Regulation (EC) No. 2081/ 92 does the registration of a GI give the right 
holder a positive right to use the GI? 
 171. Regulation 2081/92 does not include any provi sion which confers expressly a positive right to 
use the registered name. But that right is implicit in several provisions, for example:  
 
• Article 4(1), which provides that: 
 
… to be eligible to use a protected designation (PDO) or a protected 
geographical indication (PGI) an agricultural product or foodstuff 
must comply with a specification. 
• Article 8, which provides that: 
 
The indications PDO, PGI or equivalent traditional national indications may appear only on ag ricultural products and foodstuffs 
that comply with this Regulation.  
• Article 13(1)(a), which states that registered names shall be protected against 
 
any direct or indirect commercial use of a name registered in respect of products not covered by the registration … 
172. Moreover, once again, if the right holders of  a geographical indication did not have a positive 
right to use the name, the protection provided under the Regulation against other uses would be 
meaningless.   
 
How is that right delimited?  Does it incl ude translations of the protected term? 
 
173. The positive right to use a registered geogra phical indication extends to the name or names 
that have been entered into the "Register of protected designations of origin and protected 
geographical indications". The registered name or names are specified in the annex to the regulation 
providing for the registration of each name and are added to the annex to Regulation 2400/96
69, in the 
case of applications under Article 6, or the annex to Regulation 1107/9670, in the case of applications 
under former Article 17. 
 
174. The registered name must be used in acco rdance with the approved specifications, including 
the labeling details.   175. Subject to any restrictions provided in the specifications, the registered name may be used 
together with other signs (verbal or figurative)  or as part of a combination of signs. But the 
registration under Regulation 2081/92 does not confer a positive right to  use any such other signs or 
combination of signs. To the extent that those sign s or combinations of signs are the same as, or 
confusingly similar to, a sign covered by a trademar k right, the trademark owner is entitled to prevent 
their use. Even when they are not covered by trad emarks rights, their use may be prevented under the 
laws on labeling, advertising or unfair competition.   
                                                     
 
69 Exhibit COMP-4 a. 
70 Exhibit COMP-3 a.  WT/DS174/R/Add.2 
 Page B-325 
 
 
 176. The positive right extends only to the linguistic  versions that have been entered into the 
register. Thus, for example, Commission Regulation (EC) No 865/2003 provided for the registration of both the Spanish name "Cítric os Valencianos" and the Catala n name  "Citrics Valencians".
71   
 
For example, what uses do the registrations of th e four cheese GIs referred to in Exhibit US-52 
permit?  
177. The EC is providing herewith the approved specifications for the four products concerned 
(Exhibits EC-99, EC-100, EC-101, EC-102).  
178. As regards labeling details, the specifications provide the following: 
 
• Bitto:
 the product must be marketed with a distinguishing mark consisting of the 
designation of origin with the accompanyi ng logo. The trademark and the logo are 
reproduced in an annex to the Italian d ecree recognizing the geographical indication. 
 
• Tomme de Savoie:  the specifications state the following: 
 
L'identification du produit, conformément aux Réglements Techniques « Tomme de Savoie" 78 RA 01 et 89 RA 01 est realisé : 
– Par un étiquetage en conformité avec la réglementation générale 
francaise et européenne. 
– Par un étiquetage propre au "Label Regional Savoie" 
* soit une vignette reproduisant le  sigle de la Marque Savoie 
[reproduced in the specifications] + sigle I.G.P 
* soit sur l'étiquette commerciale de l'enterprise 
– impression rouge sur fond blanc de l'appellation « TOMME DE 
SAVOIE » 
– % de MG 
– le logo de la "Marque Collective Savoie" + sigle I.G.P. – la mention de l'Organisme Certificateur. 
o Esrom:
  the label must  contain the mention "Esrom (45 + or 60 +)" followed by the 
mention "Beskyttet Oprindelses-Betignese" or "BOB" [PDO in Danish] in all Community 
official languages. 
 
• Bra: the product must be marketed with the label of the relevant manufacturers' 
consortium.   
 
                                                      
71 Exhibit COMP-4bi. WT/DS174/R/Add.2 
Page B-326  
 
 How far does that positive right extend before it can be challenged under labelling and misleading 
advertising laws? 
 
179. It is difficult to define a priori  which particular uses of a re gistered geographical indication 
may violate the provisions of the Directives on labe lling and misleading advertising and/or the laws 
on unfair competition. This question requires n ecessarily a case-by-case analysis and cannot be 
responded in the abstract. Nevertheless, the EC will attempt to set out here below some indications. 
 180. The use of a geographical indication in what the United States calls "t rademark- like fashion" 
is not sufficient to consider that it is inconsistent  with those laws. Indeed, the United States appears to 
consider that a geographical indication is used "as a trademark" whenever it is displayed prominently, 
or at least more prominently than the trademark. The EC does not share this view, which assumes that 
trademarks enjoy priority over geographical indicat ions. As explained, EC consumers are familiar 
with the use of geographical indications for foods tuffs, value them as much as trademarks, if not 
more, and expect them to be used in ways which the United States would like to reserve for 
trademarks. EC consumers are unlikely to mist ake a geographical indication for foodstuff for a 
trademark simply because it is displayed in the labe l in relatively big sized letters or in attractive 
colours or typography.  181. On the other hand, if the holder of a geographi cal indication which has a right to use a certain 
name (say "Bayerisches Bier") were to use it in a manner which imitates the label or the packaging of 
the products of a trademark ("Bavaria"), this could be considered as a breach of the laws on labelling 
and unfair competition, even if the constituent elements  of the label or the packaging, other than the 
trademark itself, were not covered by any intellectual property rights. 
 182. To mention but another example, the laws on labelling and unfair competition could  be 
violated if the name of the geographical indication we re used together with other signs or statements 
that suggested or indicated that the geographical indication is in fact the trademark of a producer, 
rather than a geographical indication. For example, if the geographical indication were used under, or 
close to, the terms "produced by". Or if it were used  together with a sign (e.g. a Dutch flag or emblem, 
a map of The Netherlands, or a Dutch windmill) whic h suggested that the product is of the origin 
generally associated with the products of a co-existi ng trademark, rather than with that indicated by 
the geographical indication.    
 
Question 141 
 
What is the legal basis for an action to invali date a registration under Regulation (EC) No. 2081/92 
on the grounds of confusion with a trademark?  
183. Article 14(3) of Regulation 2081/92.  
Is there any basis for an action to invalidate a GI  registration in Regulation (EC) No. 40/94 on the 
Community trade mark?  
 
184. No.   WT/DS174/R/Add.2 
 Page B-327 
 
 
 Question 142 
 
The Panel takes note of the EC's view that the owner of a concurrent tr ademark could challenge a 
decision to register a GI inconsistently with Artic le 14(3) of Regulation (EC) No. 2081/92 even after 
the GI has been formally registered (EC response to Panel question No. 67;  EC rebuttal paras. 270 
and 296).   If a trademark owner applied to invalidate a GI registration under Article 14(3): 
  (a) is this a precondition to a trademark infringement action?  
 
185. As explained
72, the trademark owner may raise the invalidity of the registration of the 
geographical indication in accordance with the proced ure laid down in Article 234 of the EC Treaty in 
the context of a trademark infringement action br ought before a court of a Member State.  
 
 (b) is there any time-limit on such an invalidation action?    
186. Applications in annulment under Article 230 of  the EC Treaty must be filed within a two-
month time limit. The possibility to raise the invalidity of the registration of the geographical indication under Article 234 of the EC Treaty is not subject to any time limit.  
 
 (c) is this possibility available where the GI is registered pursuant to an Act of Accession 
or otherwise without the normal application procedures? 
 
187. So-called "fast track" regist rations made pursuant to a request under former Article 17 of 
Regulation 2081/92 can be annulled pursuant to an action brought in accordance with Article 230 of 
the EC Treaty or invalidated in accordance with  Article 234 of the EC Treaty under the same 
conditions as the registrations made pursuant to  an ordinary application under Article 6 of 
Regulation 2081/92.    
 188. Contrary to what has been suggested by the United States, the registration of a geographical indication pursuant to an Act of Accession is not a frequent occurrence. In fact, of the more than 600 
registrations, only one has been made pursuant to an Act of Accession: that of the names 
"
Budĕjovické pivo", " Českobudĕjovické pivo" and "Bud ĕjovický m ĕšt'anský  var". As explained, 
this registration is not within the terms of reference of the Panel.73 This registration is unique also in 
that it provides that it applies "without prejudice to any beer trademark or other rights existing in the European Union on the date of accession". 
 
 (d) how would such an application for invalidation relate to the cancellation procedure 
in Article 11a of the Regulation?  Are th e grounds for cancellation in Article 11a 
exhaustive?   
 189. The cancellation procedure presupposes that the registration is valid and produces effects 
ex nunc . The grounds for cancellation mentioned in Articles11 and 11a are exhaustive. 
 
Question 143 
 
The Panel takes note that the Council Decision to register BAYERISCHES BIER as a GI states that 
"[i]n view of the facts and inform ation available, it was, however,  considered that registration of 
[that name] was not liable to mislead the cons umer as to the true identity of the product" 
(Exhibit EC-9, para. (3), cited in EC rebuttal, para. 287).  Please detail what were the facts and 
                                                     
 
72 EC SOS, para. 178. 
73 EC FWS, paras. 21-25. WT/DS174/R/Add.2 
Page B-328  
 
 information to which the Council referred in that Decision and how they were evaluated so that the 
Panel can see how the criteria in Article  14(3) were applied in that case.   
 
190. The Council's decision took account of the submissions made by the interested parties and by some Member States, as well as of the discu ssions which took place within the Committee. 
 
191. The main facts taken into consideration were: th e similarity of the signs; the similarity of the 
products, having regard to the produc tion methods and organoleptic proper ties; the date of registration 
of the trademark; the recognition of the trademark in the different Member States, having regard in 
particular to the level of exports; and the labe ling practices of the trademark and the proposed 
geographical indication. 
 192. In essence, it was concluded that, although th e products were similar, the signs were not 
sufficiently similar to mislead the public, having rega rd to the degree of recognition of the trademark 
in the different Member States.  
 
Question 144 
 
The Panel takes note that Commission Regulation (EC)  No. 1107/96 (set out in Exhibit COMP-3a), 
which effected the registration of many indi vidual GIs, recites Article 14(2) and (3) of 
Regulation (EC) No. 2081/92.  How were Article 14(2) and (3) taken in to account in the registration 
of those GIs?  
 
193. As already explained, Article 14(2) is not  applied by the registering authority (see EC 
response to Question 66). It is for the courts to d ecide whether a trademark falls within one of the 
situations mentioned in Article 13(1) and, if so , whether the trademark is entitled to co-exist in 
accordance with Article 14(2) or should be invalidat ed or revoked in accordance with the Trademark 
Directive and the Community Trademark Directive.  194. Regulation 1107/96 provides for the registration of names notified by the Member States in accordance under former Article 17 of Regulation 2081/ 92. In the context of that procedure, the EC 
authorities conducted the assessment provided in Article  14(3) where, because of the concerns raised 
directly by interested parties or by the Member States, they became aware of the existence of a 
potentially conflicting trademark.  195. The recital mentioned in the question is an implicit reference to the Bayerische Bier case. 
Because of the concerns raised by the owners of th e trademarks at issue and by some Member States, 
the EC institutions could not reach a decision with resp ect to that name as of the time of the adoption 
of Regulation 1107/96. Therefore, that name continue d to be protected at national level in accordance 
with the second paragraph of Ar ticle 1 of Regulation 1107/96.  
 
Question 145 
 
Please refer to Article 24.5 of the TRIPS Ag reement and comment on the suggestion that:  
  (a) the phrase "shall not prejudice eligibility for or the validity of the registration of a 
trademark" merely creates an exception to the obligations in Articles 22.3 and 23.2 to 
refuse or invalidate the registration of trademarks;  and  
 
 (b) the phrase "shall not prejudice ... the ri ght to use a trademark" merely creates an 
exception to the obligations in Articles 22.2 and 23.1 to provide the legal means to 
prevent certain uses and does not create any positive right.   
  WT/DS174/R/Add.2 
 Page B-329 
 
 
 196. Article 24.5 is not a "mere exception" to th e obligations stipulated in the provisions of 
Section 3 of Part II of the TRIPS Agreement menti oned in the question. The suggestion made in the 
question is mistaken in two fundamental respects.  197. First
, Article 24.5 applies with respect to "any measures adopted to implement this section", 
and not just with respect to the provisions cited in  the question. In accordance with Article 1.1 TRIPS, 
Members may implement more extensive protection of  geographical indications than is required by 
the provisions of Section 3 of Part II cited in the question, provided that such protection does not contravene other provisions of the TRIPS Agreement.  Any such additional protection is subject to the 
rule contained in Article 24.5, just like the minimum protection required by the provisions of 
Section 3 of Part II cited in the question 
 198. Second
, Article 24.5 is drafted in mandatory terms, unlike the genuine exceptions in 
Articles 24.4, 24.6, 24.7 and 24.8. As a result, by  limiting the obligations to protect geographical 
indications in Articles 22 and 23, Article 24.5 imposes simultaneously upon Members correlative 
obligations with respect to the protection of trademarks that go beyond those provided in Section 2 of 
Part II.   199. The following two examples may illustrate this:  
• assume that a Member's trademark law provides that a trademark including or consisting 
of a geographical indication shall not be regist ered or, if registered, shall be invalidated.
74 
This goes beyond the obligation stipulated in Ar ticle 22.3. Nevertheless, there is nothing 
in Section 2 of Part II and, more specifi cally, in Article 15.2, which would prevent a 
Member from enacting such additional pr otection of geographical indications. Yet, if a 
trademark has been registered, or applied for, before either of the two dates mentioned in 
Article 24.5, the Member in question would be  prohibited by virtue of Article 24.5 from 
invalidating that trademark on the ground that such trademark is identical or similar to a 
geographical indication. This obligation not to invalidate certain trademarks does not result from Section 2 of Part II, or from Artic le 22.3, but exclusively from Article 24.5. 
 
• assume that a Member's trademark law prohibits the use of any trademark acquired by 
use which is identical or similar to a sub sequently recognized geographical indication. 
This prohibition goes beyond the obligation provi ded in Article 22.2. Nevertheless, it 
would be fully consistent with Section 2 of  Part II, which provides for the "possibility"
75 
to grant trademark rights on the basis of use, but imposes no obligation to do so. 
Therefore, Members are free to grant, limit or  withdraw such rights at will. Yet, if the 
rights to the trademark in question had been ac quired before either of the dates mentioned 
in Article 24.5, the Member concerned woul d be prevented from prohibiting the use of 
that trademark by virtue of Article 24.5. Again, this obligation does no result from 
Section 2 of Part II, or from Article 22.2, but exclusively from Article 24.5. 
 200. As shown by the above two examples, Article 24.5 imposes self-standing obligations with 
respect to the protection of trademarks that go beyond  the obligations provided in Section 2 of Part II. 
Therefore, it would be manifestly incorrect to ch aracterize Article 24.5 as a "mere exception" to the 
                                                     
 
74 The example is not hypothetical. In practice, many  Members prohibit the registration of trademarks 
including or consisting of geographical indications. For example, Section 61 of Australia's Trade Marks Act 
1995 (Exhibit EC-103) allows to oppose the registration of a sign that contains or consists of a geographical indication.  
75 Cf. Article 16.1 of the TRIPS Agreement. WT/DS174/R/Add.2 
Page B-330  
 
 obligations provided in other provisions of Sec tion 3. "Exceptions" exempt from an obligation 
stipulated in another provision.
76 They do not impose positive obligations by themselves.  
 201. For the above reasons, Article 24.5 is not an  "exception". Rather, Article 24.5 lays down a 
positive rule which defines in a comprehensive manner the boundary between the protection that 
Members must  (in accordance with Articles 22 and 23) or may (in accordance with Article 1.1) afford 
to geographical indications and the protection which Members must  (in accordance with Section 2 of 
Part II) or may (in accordance with Article 1.1) provide  to the sub-category of "grandfathered" 
trademarks, as defined in Article 24.5. That rule stipulates rights and obligations which are different 
from, and apply in place of, those provided in Secti on 2, including in Article  16.1, and elsewhere in 
Section 3, with respect to other trademarks.  
 202. The special rule for grandfathered trademarks  established in Article 24.5 purports to establish 
a compromise between the protection of trademarks  and the protection of geographical indications 
and must be interpreted in the light of that ob jective. On the one hand, Article 24.5 limits the 
Members' right under Section 2 of Part II to refuse and invalidate the registration of a trademark on 
the grounds that it is identical or similar to a geographical indication. At the same time, however, 
Article 24.5 limits the obligations that would nor mally follow from the registration of one such 
trademark under Article 16.1, by providing that the tr ademark owner shall have "the right to use the 
trademark", but not the right to prevent the use of the trademark by the right holders of the geographical indication. This limitation, however , does not represent a real restriction of the 
protection of trademarks provided in Article 16.1,  because it applies only within the limits of the 
additional protection provided in Article 24.5 with respect to "grandfathered" trademarks, which goes 
beyond that required by Section 2 of Part II.   
Question 146 
 
The Panel takes note of the respective views of the EC and US on simultaneous exercise of rights with 
respect to use (EC rebuttal, para. 309 and US rebuttal, para. 119).  Without prejudice to the EC's 
views on Article 24.5, would there be any practical
 conflict between the right s to prevent certain uses 
conferred under Articles 16.1 and 22.2 of TRIPS?  U nder what circumstances is it impossible for, 
simultaneously: 
 
 (a) a trademark owner to prevent uses  of a sign where such use would result in a 
likelihood of confusion (under Article 16.1), and  
  (b) a right holder in a GI to prevent uses
 of an indication that are misleading with 
respect to the geographical origin of the product or which constitute unfair 
competition (under Article 22.2) except on the basis that the trademark is identical with, or similar to, the GI (under Article 24.5)?  
 
203. The EC has not argued that there is a "conflic t" between the rights conferred by Article 16.1 
and by Article 22.2 (or 23.1) because it is "impossible" to exercise both of them simultaneously.   
 
204. Rather, the EC has noted that the simultaneous  exercise of those two rights would lead to a 
situation where neither the trademark owner nor th e right holders of the geographical indications 
could use the sign which is the subject matter of their respective right.  
205. Although neither Article 16.1 nor Article 22.2 (or Article 23.1) confer expressly a positive 
right to use a trademark or to use a geographical indi cation, respectively, that right is implicit in the 
protection conferred by those provisions. The right to exclude others from using a sign, whether as a 
                                                     
 
76 See US SWS, para. 171.  WT/DS174/R/Add.2 
 Page B-331 
 
 
 trademark or as a geographical indication, would be  meaningless unless the holders of that right were 
entitled to use the sign themselves.  206. The simultaneous exercise of the rights conf erred by Articles 16.1 and 22.2 (and 23.1) would 
prevent both rights from fulfilling the purpose for whic h they are granted and deprive them of their 
raison d'être , which is to ensure that the right holder can  enjoy the right to use the sign exclusively. 
By doing so, the simultaneous exercise of Articles 16.1 and 22.2 gives rise to a genuine "conflict" in 
substance, if not in the form. That "conflict" is resolved by Article 22.3 (and 23.2), which provides for 
the invalidation of the trademark, thereby effectivel y giving priority to the geographical indication. 
This "rule of conflict", however, does not apply to "grandfathered trademarks", as defined in 
Article 24.5, which are subject to a different ru le, as explained in the response to the preceding 
question.     
Question 147 
 
Article 24.5 as finally agreed contains the phrase "measures adopted to implement this Section shall 
not prejudice eligibility for or the validity of the reg istration of a trademark, or the right to use a 
trademark".  Please comment on the suggestion th at during the Uruguay Round negotiations there 
was a disagreement as to whether the predecessor to this provision in the Brussels Draft should be 
made permissive rather than mandatory, and that the choice of this language was part of an effort to 
reach agreement on the issue of the mandato ry / permissive nature of the provision.  
 
207. As suggested in the question, some participan ts in the negotiations were of the view that 
Article 24.5, like the other exceptions included in  Article 24, should be pe rmissive, rather than 
mandatory. Among other reasons, because a "mandatory exception" would have the anomalous result of imposing upon Members obligations with respect to the protection of trademarks that go beyond 
those agreed as part of Section 2 of Part II. 
 208. Also, as suggested in the question, the wording of Article 24.5 embodies a compromise. The EC and other participants agreed to make the "e xception" mandatory on the understanding that the 
trademark owners would have "the right to use th e trademark", as specified expressly in Article 24.5, 
but not the right to exclude the use of the trademark by the right holders of the geographical 
indication.  
 
Question 148 
 
What is the meaning of the phrase "where such use would result in a likelihood of confusion" as used 
in Article 16.1 of the TRIPS Agreement?  
209. The phrase "where such use would result in a likelihood of confusion" must be read in the 
context of Article 15.1. The purpose of a tradem ark is to distinguish the products of a given 
undertaking from those of other undertakings. Accordi ngly, there is a "likelihood of confusion" where 
the use of a sign gives rise to a like lihood that the public will not be ab le to distinguish the products of 
the owner of the registered trademark from the pr oducts of other undertakings bearing the sign in 
question.  
How should such likelihood of confusion be assessed? 
 210. The TRIPS Agreement does not provide a ny specific guidance to assess the likelihood of 
confusion. In practice, most Members use similar criteria.  WT/DS174/R/Add.2 
Page B-332  
 
 211. Canada's trademark law, whic h is one of the few to specify the criteria to assess the likelihood 
of confusion, provides that
77   
 
In determining whether trade-marks or trad e names are confusing, the court or the 
Registrar, as the case may be, shall have regard to all the surrounding circumstances 
including 
(a) the inherent distinctiveness of the trade-marks or trade names and the extent 
to which they have become known ; 
(b) the length of time the trade-marks or trade-names have been in use ; 
(c) the nature of the wares, services or business; 
(d) the nature of the trade; and 
(e) the degree of resemblance between the trade-marks or trade names in 
appearance or sound or in the ideas suggested by them. 
212. The tenth recital of the EC's Trademark Dir ective says that the appreciation of likelihood of 
confusion 
 
depends on numerous elements and, in particular, on the recognition of the trade mark 
on the market, of the association which can be made with the used or registered sign, 
of the degree of similarity between the tr ade mark and the sign and between the goods 
or services identified.  
213. Interpreting Article 4(1)(b) of the Tradem ark Directive, which is the equivalent of 
Article 16.1, the ECJ has held that78 
 
The likelihood of confusion on the part of the public … must be appreciated globally, 
taking into account all factors relevant to the circumstances of the case … 
A global assessment of the likelihood of confusion implies some interdependence 
between the relevant factors, and in particular a similarity between the trademarks 
and between these goods or services. Accord ingly, a lesser degree of similarity 
between these goods or services may be offset by a greater degree of similarity between the marks, and vice-versa … 
Furthermore, … the more distinctive the earlier mark, the greater the risk of 
confusion … Since protection of a trademark depends, in accordance with 
Article 4.1(b) of the Directive, on there be ing a  likelihood of confusion, marks with a 
highly distinctive character, either per se  or because of the reputation  they possess in 
the market, enjoy broader protection than marks with a less distinctive character. 
214. In the United States, the courts have considered  that the following factors may be relevant for 
a determination of likelihood of confusion:
79 
                                                      
77 Section 6(5) of Canada's Trade-marks Act (Exhibit EC-73). Emphases added. 
78 Case  C-39/97, Canon Kabushiki Kaisha v Metro Goldwyn-Mayer Inc. , [1998] ECR I-5507, para. 16 
et seq .  (Exhibit EC-71). Emphases added.  
79 E.I. Du Pont De Nemours & Co., Application of , 476 F. 2d 1357 (Cust. & Pat. App. 1973), 26 
(Exhibit EC-73). Emphases added.   WT/DS174/R/Add.2 
 Page B-333 
 
 
  
(1) The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotati on and commercial impression.  
(2) The similarity or dissimilarity of and nature of the goods or services as 
described in an application or registration or  in connection with which a prior mark is 
in use.  
(3) The similarity or dissimilarity of established, likely-to-continue trade 
channels.  
(4) The conditions under which and buyers to whom sales are made, i.e. 
"impulse" vs. careful, sophisticated purchasing.  
(5) The fame of the prior mark (sales, advertising, length of use) .  
(6) The number and nature of similar marks in use on similar goods.  (7) The nature and extent of any actual confusion.  (8) The length of time during and conditions under which there has been 
concurrent use without evidence of actual confusion.   
(9) The variety of goods on which a mark is  or is not used (house mark, "family" 
mark, product mark).  
(10) The market interface between applicant and the owner of a prior mark:  
(a) a mere "consent" to register or use.  (b) agreement provisions designed to preclude confusion, i.e. 
limitations on continued use of the marks by each party.  
(c) assignment of mark, application, registration and good will 
of the related business.  
(d) laches and estoppel attributable to owner of prior mark and 
indicative of lack of confusion.  
(11) The extent to which applicant has a right to exclude others from use of its 
mark on its goods.  
(12) The extent of potential confusion, i.e., whether de minimis  or substantial.  
(13) Any other established fact probative of the effect of use.  
How does the assessment differ from that under Article 14(3) of Regulation (EC) No. 2081/92?   
 
215. The assessment made by the EC authoriti es under Article 14(3) is analogous to the 
assessment carried out by the EC trademark authoriti es in order to establish whether the use of a later 
trademark will give rise to likelihood of conf usion with an earlier trademark. When applying 
Article 14(3), the registering authorities, or the courts, as applicable, must take into account all 
relevant factors, including in particular the similar ity of goods and signs. As explained, length of use, WT/DS174/R/Add.2 
Page B-334  
 
 reputation and renown are mentioned expressly in Article 14(3) because geographical indications, 
when used as trademarks, are primarily descriptive and non-distinctive.   
In particular: 
 
 (a) how should the likelihood of confusion, and the liability to mislead the consumer, be 
assessed with respect to a mark to which ri ghts have not been acquired on the basis 
of use?   
 
216. In principle, the criteria for assessing likelihood of confusion/liability to mislead are the same 
irrespective of whether the earlier trademark has b een acquired through registration or through use.  
 
 (b) as of what time should the likelihood of  confusion, and the liability to mislead the 
consumer, be assessed?   
 217. The "likelihood of confusion" is assessed as of the time of registration of the later trademark 
and/or at the time of the infringement, depending on th e type of procedure in the framework of which 
it is alleged and of the peculiarities of each le gal system for the protection of trademarks. 
 218. The "liability to mislead" for purposes of Ar ticle 14(3) is assessed as of the time of the 
registration of the geographical indication. But if  a trademark owner raises the invalidity of the 
registration subsequently, it could rely on any re levant intervening circumstances, such as, for 
example, cases of actual confusion, in order to show that the initia l assessment was flawed. 
 
 (c) are the trademark's reputation and renown and the length of time it has been used 
necessarily relevant to both analyses?  
 
219. Yes, these criteria are relevant in all cases. Ho wever, this is not saying that they will have the 
same weight in all cases. As emphasized by the Eur opean Court of Justice, the criteria for assessing 
the likelihood of confusion are "interdependent".
 80 In general, the more similar the signs, the less 
important will be these criteria. On the other hand, th e "weaker" (i.e. the less inherently distinctive)  
the trademark, the more important will become th ese criteria. Terms which qualify, or which may 
reasonably qualify as geographical indications, are primarily descriptive and non-distinctive as 
trademarks. Indeed, the registration of those te rms as trademarks should be permitted only to the 
extent that they have acquired distinctiveness thr ough use. For that reason, the public is unlikely to 
confuse a geographical indication with a trademark consisting of that geographical indication if the 
trademark has never been used and enjoys no recognition. 
 
220. For example, assume that the name Australia, which Austra lia claims is a geographical 
indication for wine, had been registered in the EC  as a trademark for wine, but that such trademark 
had never been used. The EC public would be unli kely to mistake wine bearing the geographical 
indication "Australia" for wine of the totally unkno wn trademark "Australia", despite the identity of 
the names.   
 
Question 149 
 
What are the differences between "confusion" and "mis leads" as used in Articles 16.1 and 22.2 of the 
TRIPS Agreement, respectively?  Do they have any bearing on the misleading standard under 
Article 14(3) of Regulation (EC) No. 2081/92?   
 
                                                      
80 Case C-39/97, Canon Kabushiki Kaisha v Metro Goldwyn-Mayer Inc. , [1998] ECR I-5507, para. 16 
et seq .  (Exhibit EC-71).   WT/DS174/R/Add.2 
 Page B-335 
 
 
 221. The meaning of the term "mislead" in TRI PS Article 22.2 (and 22.3) does not prejudge of the 
meaning of the term "misleading" in Article 14(3) in Regulation 2081/92.  
 222. In the first place, Article 14(3) must be in terpreted in the contex t of Regulation 2081/92, 
including in particular Articles 7(4) and 7(5)(b),  and in accordance with the rules and principles of 
interpretation of EC law. 
 223. Moreover, Article 14(3) of Regulation 2081/92 and Article 22.2 (and 22.3) TRIPS is 
concerned each with a different issue. The purpo se of Article 14(3) is to prevent the use of a 
geographical indication where it may cause an error w ith respect to the "identity of the product". In 
other words, to avoid that the public confuses th e products bearing the geographical indication with 
the products of a given undertaking bearing an earlie r trademark. This is the same type of error 
addressed by Article 16.1 TRIPS. In contrast, Artic les 22.2 and 22.3 address the situation where the 
use of a sign in connection with a product may cause an  error as to the geographical origin of that 
product.    
 
224. Even assuming that Article 22.2 TRIPS were re levant for the interpretation of Article 14(3), 
from the mere fact that TRIPS Article 16.1 and Article  22.2  (and 22.3) use different terminology, it 
does not follow that they purport to establish su bstantially different standards, let alone that 
Article 22.2 (and 22.3) imposes a more rigorous standa rd, contrary to what is asserted by Australia. 
 
225. As acknowledged by Australia, one of the ordinary meanings of "misleading" is 
"confusing".
81 That the two terms may be used intercha ngeably in ordinary speech, as well as in the 
specific context of trademark law is illustrated, for example, by the following passage of WIPO's 
Trademark Manual, which explains the notion of  "likelihood of confusion" by saying that82  
 
A trademark is confusingly similar to a prio r trademark if it is used for similar goods 
and so closely resembles the prior mark that there is a likelihood of consumers being misled  as to the origin of the goods.  
226. Australia argues that a misleading use is a use "which positively  provokes an error".
83 
However, Australia does not explain what it mean s by "positively". Articles 22.2 and 22.3 do not 
require an "intent" to mislead on the part of the in fringer. As made clear by Article 22.3, all that is 
required is that the use be "of such a nature as to" mislead, i.e. objectively capable of causing an error.  
 227. The use of different terms in Article 16.1 and in Article 22.2 (and 22.3) reflects the fact that 
they are concerned each with a different type of error. Article 16.1 addresses the situation where the 
use of two
 similar signs for similar goods by two  different undertakings has the consequence that the 
public cannot distinguish between the two  signs and makes the error of mistaking the goods of one of 
the undertakings for those of the other. In contr ast, Articles 22.2 and 22.3 address the situation where 
the use of one  sign in connection with one  product leads the public to make an error with respect to 
the geographical origin of that product. The term "confusion" woul d not be appropriate to describe the 
type of error addressed in Articles 22.2 and 22.3, because that error does not involve the impossibility 
of distinguishing between two signs fo r goods of two different undertakings.  
 
                                                      
81 Australia's SWS, para. 104. 
82 WIPO, Introduction to Trademark Law and Practice, The Basic Concepts, a WIPO Training 
Manual , Geneva 1993, para. 6.2.2 (Exhibit EC-108). Emphasis added. 
83 Australia's SWS, para. 104. WT/DS174/R/Add.2 
Page B-336  
 
 Question 151 
 
Please comment on the suggestion that Article 24.3 of the TRIPS Agreement wa s inserted in the draft 
text in November 1991 to make it cl ear that the exceptions provisions
 in Section 3 of Part II  could not 
be used as a justification for diminishing a Member's pre-existing protection of GIs.   
 228. Assuming that the suggestion made in the qu estion were correct, and assuming further that the 
complainants' interpretation of Article 24.5 were also correct, Article 24.5 would be one of the 
"exceptions provisions in Section 3".  Accordi ngly, Members could not rely upon Article 24.5 as a 
"justification" to diminish the re-exis ting protection of geographical indications. 
 
Question 152 
 
If a Member is obliged to diminish the pre-exis ting protection of GIs in order to allow trademark 
owners to exercise their rights under Article 16.1 as against GIs, does that obligation not arise under 
Article 16.1 rather than "[i]n implementing this  Section", as used in Article 24.3?  
 
229. No. On the complainants' own interpretation of Article 24.5, the obligation to diminish protection would arise from the obligation imposed by  Article 24.5 and not from Article 16.1. But for 
Article 24.5, Members would be entitled to inva lidate and prohibit the use of "grandfathered" 
trademarks, as defined in Article 24.5, on the basis th at they are identical or similar to a geographical 
indication, just like they are entitled to refuse or invalidate other trademarks on those grounds. 
 
Question 153 
 
Without prejudice to the EC's view that a GI conf usingly similar to a trademark will not be registered, 
if one were registered nevertheless, in what way would this exception be "limited"? In particular, 
could the rights of the GI owner be limited in such  a way as to minimize the likelihood of confusion?   
 
230. The exception is "limited" because it allows the use of the registered name only in relation to 
goods that originate in the area designated by the geographical indication and which, furthermore, 
comply will all the relevant requirements provide d in the approved speci fications. The trademark 
owner retains the right to prevent the use of the name by any person in relation to any goods which 
originate in a different geographical area or which do not comply with the specifications. 
 231. As explained by the EC
84, the potential universe of uses covered by the exception claimed by 
the EC is narrower than the potential universe of u ses of other descriptive terms, such as an indication 
of source which does not qualify as a geographical indication or a term used to describe a product 
characteristic. Yet, both Australia and the United Stat es appear to concede that  the use of those terms 
would qualify for an exception under Article 17.     232. Article 17 contains no requirement to the effect  that the "likelihood of confusion" must be 
"minimized". Indeed, such a requirement would pre-empt the balancing of conflicting interests 
required by the second condition of Article 17. If the term "limited" required to confine the likelihood 
of confusion to the strictly necessary, it w ould be unnecessary to "take account", as a separate 
condition, of the interests of  the tr ademark owner and of third parties. 
 233. In any event, the exception claimed by the EC limits the likelihood of confusion in  two 
different ways. 
 
                                                     
 
84 EC SWS, para. 338. EC SOS, paras. 213-218.  WT/DS174/R/Add.2 
 Page B-337 
 
 
 234. First, even if the complainants' reading of Article 14(3) were correct and that provision did 
not prevent the registration of all geographical indica tions that give rise to a likelihood of confusion 
with an earlier trademark, it would remain that Artic le 14(3) would prevent registration in those cases 
where the likelihood of confusion would be great er, because of the recognition enjoyed by the 
trademark. 
 
235. Second, the use of the geographical indication is subject to the requirements of Directive 2000/13 on the labelling, presen tation and advertising of foodstuffs
85, and in particular to 
Article 2(1)(a), which provides that "the labelli ng and methods used must not be such as could 
mislead the purchaser to a material degree". This applies inter alia  with respect to any misleading 
statements concerning the producer or the brand of the goods. 
 236. Moreover, Article 3(1) of Directive 2000/13  requires that labels must state among other 
things:   
(7) the name, or business name and address of the manufacturer or packager, or 
of a seller established within the Community … 
(8) particulars of the place of origin or provenance where failure to give such 
particulars might mislead the consumer as to the true origin or provenance of the foodstuff. 
237. The requirement to state these particulars in the label limits the risk that the geographical 
indication may be mistaken for the brand name of the products.
86   
 238. In addition, the use of registered geographi cal indications is subject to Directive 84/450 on 
misleading advertising.
87 
 
239. Finally, the use of registered geographical i ndications is subject to the unfair competition laws 
of the Member States, including both specific legisl ation and/or case law based on general tort law. 
One of the aspects typically covered by such laws  is the imitation of labels and packaging in cases 
where it cannot be addressed as a trademark infringement.88        
 240. The requirement to use the registered ge ographical indications in accordance with the 
Directives on labeling and on misleading advertisin g and with the laws on unfair competition is 
equivalent to and, in practice, achieves the same e ffect as the requirements usually stipulated in the 
                                                     
 
85 Exhibit EC-30. 
86 In  Sociedad Anónima Viña  Santa Rita v. U.S. Dept. of the Treasury , 193 F. Supp. 2d 6 
(D.D.C 2001) (Exhib it EC-48), the ATF argued, and the court accepted, that: 
 
… the fact that domestic products are required to indicate name and address of the bottler or 
packer minimizes the likelihood of confusion between a "Santa Rita Hills" wine and a product of Santa Rita in Chile or any other place. 
 
87 Exhibit EC-31. Article 2(2) defines misleading advertising as:  
 
any advertising which in any way,  including presentation, deceive s or is likely to deceive the 
person to whom it is addressed or whom it reaches and which, by reason of its deceptive 
nature, is likely to affect their economic behaviour or which, for those reasons, injures or is 
likely to injure a competitor. 
 
88 See WIPO's  Introduction to Trademark Law & Practice, the Basic Concepts, a WIPO Training 
Manual , Geneva 1993, 2nd Edition, pp. 97-100. (Exhibit EC-82).  WT/DS174/R/Add.2 
Page B-338  
 
 exceptions provided in the trademark laws of many  Members with respect to the use of descriptive 
terms, including those used to indicat e geographical origin. For example: 
 
• Section 122(1)(b)(i) of Australia
's Trade Marks Act 199589 provides that a person does 
not infringe a registered trademark when  
 
The person uses a sign in good faith to indicate the … geographical origin … of the goods … 
• Section 19(3) of Hong Kong
's Trade Marks Ordinance90 provides that:  
 
A registered trade mark is not infri nged by - ….(c) the use of signs 
which serve to designate the … geographical origin … of goods … 
provided the use is in accordance with honest practices in industrial 
or commercial matters. 
• Section 95 of New Zealand 's Trade Marks Act 200291  provides that  
 
A person does not infringe a registered trademark if, in accordance with honest practices in industrial or commercial matters, the persons 
uses -…. c) a sign to indicate – (i) … the geographical origin… 
• Section 28 of Singapore
's Trade Marks Act92  provides that: 
 
… a person does not infringe a registered trade mark when: …(b) he 
uses a sign to indicate (i) the … geographical origin … of goods or 
services … and such use is in accordance with honest practices in 
industrial or commercial matters.  
• Section 34(1) of South Africa 's Trade Marks Act93  provides that: 
 
A registered trade mark is not infringed by … (b) the use by any person of any bona fide  description or indication of the … 
geographical origin … of his goods … [p]rovided that the use 
contemplated in paragraph (b)…. is  consistent with fair practice. 
• Section 30(2) of India
's Trade Marks Act 199994 provides that: 
 
A registered trademark is not infringed where – (a) the use in relation to goods … indicates the … geographical origin …. 
• Section 26(1) of Japan
's Trademark Law95 provides that:  
 
                                                      
89 Exhibit EC-7. 
90 Exhibit EC-94. 
91 Exhibit EC-80. 
92 Exhibit EC-97. 
93 Exhibit EC-98. 
94 Exhibit EC-95. 
95 Exhibit EC-104.  WT/DS174/R/Add.2 
 Page B-339 
 
 
 The effects of the trademark right shall not extend to the following 
trademarks … (i) trademarks indicating, in a common way, the … origin [of] of the designated goods or goods similar thereto …  
• Section 38 of Romania
's Trade Marks Act96 provides that: 
 
The owner of a mark may not request  that other persons be prohibited 
from using in the course of trade … (b) indications concerning … geographical origin …. with the proviso that [they] are used in accordance with honest practice.  
• Section 6 of Iceland
's Trade Marks Act97 provides that: 
 
Provided that the use is in accordan ce with honest business practice, 
the proprietor of a trade mark may not prohibit others from using in 
trade or business; …. 2. descriptions of  … [the] … origin … of the goods or services. 
241. The above exceptions provide no requirements  for using an indication of origin in co-
existence with a registered trademark other than that such use must be "in good faith" or in 
accordance with "honest", "fair" or "proper" busin ess or trade practices  or "in a common way" and, 
therefore, would have to be deemed inconsistent with Article 17 if the complainants' narrow reading 
of that provision were upheld by the Panel.   242. The EC's own Trademark Directive
98 provides that: 
 
The trademark shall not entitle the proprietor  to prohibit a third party from using, in 
the course of trade, … (b) indications concerning the… geographical origin…of goods … provided he uses them in accordan ce with honest practices in industrial or 
commercial matters.  
243. Similarly, Article 12(b) of the Community Trademark Regulation provides that: 
 
The trademark shall not entitle the proprietor  to prohibit a third party from using, in 
the course of trade, … (b) indications concerning the … geographical origin … of goods … provided he uses them in accordan ce with honest practices in industrial or 
commercial matters.
99 
244. It follows that, even if trademark owners  were permitted to enforce their rights under the 
Trademark Directive or the Community Trademark Di rective with respect to the confusing use of a 
registered geographical indication, as demanded by the complainants, the trademark owners could still 
not prevent such use if it is "in accordance with honest  practices in industrial or commercial matters".  
 
                                                      
96 Exhibit EC-105. 
97 Exhibit EC-106.  
98 Cf. Article 6.1(b). 
99 See the Judgement of the ECJ of 7 January 2004 in the Case C-100/02, Gerolsteiner Brunnen GmbH 
& Co. v. Putsch GmbH , which illustrates the application of Article 6(1)(b) of the Trademark Direcxtive with 
respect to geographical indications (Exhibit EC-107). WT/DS174/R/Add.2 
Page B-340  
 
 Question 154 
 
What, specifically, are "the legitimate interests of  the owner of the trademark and of third parties" 
within the meaning of Article 17?   
 245. Trademark owners have an interest in preserving the economic "value" of their rights.
100 That 
value is a function of the recognition enjoyed by the trademark, which in turn is related to the length 
of use and the reputation/renown acquired as a resu lt. A trademark which has never been used or 
which is virtually unknown has little intrinsic value and could be easily replaced without significant 
prejudice to the owner.  
 
246. The "legitimate interest" of the trademark owne r must not be equated with the full enjoyment 
of the exclusivity rights granted by Article 16.1. There are circumstances in which the exercise of 
those rights may not be "legitimate", having regard  to the purposes for which trademark rights are 
granted and/or having regard to the le gitimate interests of other parties. 
 
247. Thus, in Canada – Pharmaceutical Patents , the Panel rejected an argument to the effect that 
the patent owner had a "legitimate interest" in "the full enjoyment of its patent rights".  The Panel 
noted, among other things that101 
 
… a definition equating "legitimate interests"  with legal interests makes no sense at 
all when applied to the final phrase of Article 30 referring to the "legitimate interests" 
of third parties. Third parties are by definitio n parties who have no legal right at all in 
being able to perform the tasks excluded by  Article 28 patent rights. An exceptions 
clause permitting them to take account of su ch third party legal interests would be 
permitting them to take account of nothing. And third, reading the third condition as 
further protection of legal rights would rende r it essentially redundant in light of the 
very similar protection of legal rights in the first condition of Article 30 ("limited 
exception"). 
248. The panel went on to conclude that:102 
 
To make sense of the term legitimate inte rests in this context, the term must be 
defined in the way that is often used in legal discourse – as a normative claim calling 
for protection of interests that are justifia ble in the sense that they are supported by 
relevant public policies or other social norms. 
249. The "legitimate interests of th ird parties" include the commercial interest of other parties that 
produce or sell goods originating in a certain area to  which a given reputation or characteristic is 
associated in using the term which designates that  area in order to describe their products. As 
explained in the US Restatement of Unfair Competition103  
 
That a watch is Swiss, that a wine is from California, that maple syrup is from Vermont, or that a dress has been designed in  New York or Paris, are facts in which 
consumers are interested and which sellers therefore wish to disclose in a prominent 
manner.  
                                                     
 
100 Panel Report, United States – Section 110(5) , para. 6.227. 
101 Panel Report, Canada – Pharmaceutical Products , para. 7.68. 
102 Panel Report, Canada – Pharmaceutical Products , para. 7.69. 
103 Restatement (Third) of Unfair Competition , para. 14 cmt. D (1995). Cited in  In  Sociedad Anónima 
Viña Santa Rita v. U.S. Dept. of the Treasury , 193 F. Supp. 2d 6 (D.D.C 2001) (Exhibit EC-48).  WT/DS174/R/Add.2 
 Page B-341 
 
 
 250. The "legitimate interests of third parties" in clude also the interest of consumers in being 
informed about the geographical origin and the prod uct characteristics associat ed to that origin. As 
noted by WIPO,104 
 
The legal recognition and protection of i ndications of source and appellations of 
origin are in the general interest. They convey very important information to 
consumers on the geographical origin of goo ds and services and, indirectly, on their 
inherent quality and characteristics. Therefore, if properly used, geographical indications can help the public in its pu rchasing decisions and frequently exercise a 
strong influence thereon.  
251. The fact that the use of a geographical indication may give rise to some degree of likelihood  
of confusion does not necessarily mean that it is in capable of performing this important informative 
function. In particular, where the finding of lik elihood of confusion is based on the presumption 
provided in Article 16.1, or where the geographi cal indication enjoys more recognition than the 
trademark.    How can legitimate interests be taken into acc ount under Article 17 where they conflict with other 
relevant interests? 
 
252. Article 17 calls for a balancing of the differe nt interests in conflict. Members enjoy a wide 
margin of discretion in making such a balancing. I ndeed, all that is required by Article 17 is that 
Members "take account of" the different interests at issue. Furthermore, Article 17 puts on an equal 
level all the interests involved. In contrast, Artic les 26.2 and 30 distinguish between the interests of 
the right holder, which must not be "unreasonably prej udiced", and the interests of third parties, which 
must simply be "taken into account".   
253. In balancing the interests of the trademark owners and other parties in the case at hand, the 
following considerations are relevant and ha ve been taken into account by the EC:  
 
• trademarks are much easier to create than geographical indications. Trademarks can be 
acquired almost instantaneously, simply by an "intent to use" or by the mere lodging of an application with a registration system. In  contrast, the creation of a geographical 
indication requires to establish first a "link" between the name and certain product 
characteristics, which may require years. Ind eed, as is often the case in the EC, such link 
is the result of centuries of tradition. For this reason, the strict application of the first-in-
time rule would privilege trademark owners and be inequitable to the holders of a 
geographical indication; 
 
• trademarks are arbitrary, with the consequen ce that there is a virtually unlimited choice of 
trademarks. By choosing deliberately a geogra phical name as a trademark, an undertaking 
accepts the risk that the same sign may be u sed concurrently as a geographical indication. 
In contrast, geographical indications are "neces sary" in the sense that the range of names 
used to designate a certain geographical is limited a priori  by well established usage. 
Right holders of geographical indications ma y not easily change the name given by the 
public to the geographical area where they ar e located. For that reason, it is much more 
difficult to find an alternative geographical i ndication than it is to find an alternative 
trademark; 
 
                                                     
 
104 WIPO (Ed.) Introduction to Intellectual Property, Theory and Practice , Geneva 1997, para. 1.55. 
(Exhibit EC-109). WT/DS174/R/Add.2 
Page B-342  
 
 • geographical indications are collective rights, the use of which is available to any person 
who produces or sells goods which have th e origin designated by the geographical 
indication and meet the relevant specifications . It would be inequitable to deprive that 
collectivity from the right to use a geographical indication for the exclusive benefit of an individual trademark owner, who may or may not  have contributed to the development of 
the geographical indication, simply because he happened to register that name first as a 
trademark; 
 
• geographical indications serve to inform cons umers that the product originates in a certain 
area and has certain characteristics linked to that origin. In contrast, trademarks only 
guarantee the identity of the undertaking that markets the product. Thus, in addition to 
having a commercial function, geographical i ndications serve a public interest, which 
deserves additional protection. 
 254. Having regard to the above considerations, EC law allows in principle the use of a 
geographical indication in co-existence with earlier tr ademarks. Nevertheless, in order to take account 
of the legitimate interests of the trademark owners, such use is subject to the following restrictions: 
 
• first, even on the complainants' interpretation of Article 14(3) of Regulation 2081/92, that 
provision would prevent the registration of geographical indications in those circumstances where the trademark owner would suffer a more significant economic 
prejudice, because of the reputation acquired by the trademark. As mentioned, a trademark which has not been used, or which is hardly known, has little intrinsic value 
and could be easily replaced with a more di stinctive sign. In those circumstances, co-
existence does not cause an unreasonable prejudice to the trademark owner;  
 
• second, again, even if the complainants' read ing of Article 14(3) were correct and that 
provision did not prevent the registration of all geographical indications that give rise to a 
likelihood of confusion with an earlier trad emark, it would remain that Article 14(3) 
would prevent the registration in those cases where the likelihood of confusion would be 
greater, because of the recognition enjoyed by the trademark; 
 
• third, as explained above, the Directives on labelling and misleading advertising and the 
laws on unfair competition ensure that geographical indications are used in a fair and honest manner, thereby reducing the likelihood of confusion and the ensuing prejudice to the interests of the trademark owner. 
 
Question 156 
 
Why do the requirements in Article 17 differ from those in Articles 13, 26.2 and 30 of the TRIPS 
Agreement?  How should their interp retation reflect those differences?   
 
255. The differences between the conditions of Article  17 and those of the other provisions cited in 
the question reflect, among other things, the differe nt function of each type of intellectual property 
right, the nature and the extent of the obligations  imposed by the TRIPS Agreement with respect to 
each of them, and the previous practice of Members in granting exceptions.  
256. More specifically, and without purporting to be exhaustive, the EC would point to the 
following differences:   WT/DS174/R/Add.2 
 Page B-343 
 
 
 • unlike patents, copyrights or the rights over industrial designs, trademark rights do not 
reward an invention or a creative effort. Rather, they are an instrument of fair 
competition;105 
 
• unlike inventions, artistic works or industrial  designs, trademarks do not have to be novel 
or original, but merely distinctive. Tradem arks are relatively easy to conceive and to 
register. For the same reason, trademarks have  little intrinsic value. Whatever value they 
may have is a function of their recognition by  the public and is acquired through use; 
 
• unlike patents, copyrights or industrial d esigns, which all have a limited duration, 
trademarks may have an indefinite validity,  or at least may be renewed without any 
limitation. This makes it more necessar y to allow for exceptions, so as to avoid 
permanent monopolies; 
 
• the WIPO conventions do not guarantee the exclusivity of trademarks. The TRIPS 
Agreement is the first multilateral agreement to recognize such right. It is only natural 
that the participants wished to reserve for themselves a wider discretion in granting 
exceptions with respect to trademarks than with respect to other intellectual property 
rights where international harmonization was more advanced;  
 
• prior to the TRIPS Agreement, the trademar k laws of most Members provided relatively 
broad exceptions, including in particular w ith respect to the use of descriptive terms.106 
The wording used in other exceptions clauses would not have accommodated many of the existing "descriptive terms" exceptions. 
 
257. Irrespective of the reasons, it is beyond disput e that the requirements of Article 17 are 
substantially less stringent than those of the othe r provisions cited in the question. Alone among all 
the exceptions clauses, Article 17 does not require that the exceptions "do not prejudice unreasonably" 
the legitimate interests of the right holder, but merely that those interests be taken into account. Likewise, alone among all the exceptions provisions, Article 17 does not require that the exceptions "do not unreasonably conflict with a normal exploitation of the patent".
107 These differences must be 
given meaning. It would be contrary to the drafters ' intention and to basic rules of treaty interpretation 
if these differences were ignored and Article 17 were  interpreted as imposing, in practice, the same 
requirements as the other exceptions clauses.  
                                                     
 
105 WIPO has noted that, in the case of trademarks, 
 
… the aspect of intellectual creations –although existent- is less prominent, but what counts here is that the object of industrial property ty pically consists of signs transmitting information 
to consumers, in particular as regards products and services offered on the market, and that 
protection is directed against unauthorized use of such sign s which is likely to mislead 
consumers, and misleading practices in general.  
 
WIPO (Ed.) Introduction to Intellectual Property, Theory and Practice , Geneva 1997, para. 1.9. 
(Exhibit EC-110). 
106 See the examples cited above in the response to Question No. 155.  
107 At the second meeting with the Panel, Australia s eemed to argue that tradem arks are not "exploited" 
but "used". Even so, this would not explain why Article 17 does not prescribe that the exceptions shall  not 
"unreasonably conflict with the normal use of the trademark". WT/DS174/R/Add.2 
Page B-344  
 
 Question 159 
 
May protection for designations of origin and geogr aphical indications now be afforded in the EC 
only
 within the framework laid down by Regulation (EC) No. 2081/92? 
 258. No. Regulation 2081/92 and the other measures mentioned by the EC in its first submission 
apply cumulatively. The other measu res afford protection to any indication of source, including those 
that qualify as designations of origin or geographi cal indications under Regulation 2081/92.      
 
To what extent does the EC implement its obligat ions under Article 22.2 of the TRIPS Agreement 
through Regulation (EC) No. 2081/92 and to what ext ent through other measures  (see EC first written 
submission, paras. 433 and 434)? 
 
259. As explained, Regulation 2081/92 and the ot her measures apply cumulatively.  The other 
measures afford protection to all indications of  source, including all geographical indications as 
defined in Article 22.1 of the TR IPS Agreement. Regulation 2081/92 provides additional protection to 
those geographical indications that qualify as designati ons of origin or geographical indications within 
the meaning of that Regulation.     
 
Are the other measures cited by the EC alone suffic ient to fulfil its obligat ions under Article 22.2? 
 260. Yes. The EC refers to the responses provided by  the EC and its Member States, as part of the 
review under Article 24.2 of the TRIPS Agreement, which have been submitted by the EC as 
Exhibit EC-29.  261. The EC understands that the complainants do no t contest that the other measures cited by the 
EC are sufficient to fulfill the EC's obligations unde r Article 22.2. Indeed, they could hardly do so 
since the complainants purport to implement their obligations under Article 22.2 through the application of similar measures.  262. Instead, the United States appears to argue, mistakenly, that Regulation 2081/92 excludes the 
application of the other measures to designations of origin and geographical indications as defined in 
that Regulation.
108 
 263. In turn, as far as the EC understands, Australia's  claim under Article 22.2 is that the additional 
protection afforded to the registered geogr aphical indications under Article 13(1) of 
Regulation 2081/92 (or the subsequent use thereof ma de by the holders of a geographical indication) 
could be an "act of unfair competition" within th e meaning of Article 22.2, against which EC law 
provides no remedy, and not that the other measur es cited by the EC are not sufficient to protect 
geographical indications that have not been registered under Regulation 2081/92. 
 
Question 160 
 
To what extent does the EC implement its obligat ions under Article 22.2 of the TRIPS Agreement 
through Regulation (EC) No. 2081/92 and to what extent through other measures? 
 
264. See above the response to Question 159.  Does the EC believe that the complainants should pr ove a negative, i.e. that no legal means required 
under Article 22.2 are available?  Can a respondent simply argue that other measures, outside the 
                                                     
 
108 See EC SOS, para. 236.  WT/DS174/R/Add.2 
 Page B-345 
 
 
 Panel's terms of reference, fulfil an obligation, with out proof of how those other measures fulfil that 
obligation?  
 
265. The complainants were well aware of the exis tence of the other measures cited by the EC in 
its first submission. Indeed, those measures had b een identified in the response of the EC and its 
Member States in the review under Article 24.2 TR IPS among the means provided by them to comply 
with Article 22.2 TRIPS. Had the complainants been  of the view that those measures are not sufficient 
to comply with Article 22.2, they could and shoul d have mentioned them in their panel requests. A 
complaining party should not be allowed to shift the burden of proof to the respondent simply by 
asserting that the respondent provides no means to co mply with Article 22.2, or by deliberately 
omitting to mention some of the means which th e respondent has previously identified under the 
relevant WTO procedures among those implem enting its obligations under Article 22.2. 
 266. In any event, assuming that the other measures in question were within the Panel's terms of 
reference, and assuming further that the complainants' mere assertion that the EC does not provide the 
necessary means to comply with Article 22.2 were sufficient to establish a prima facie  case, the EC 
submits that the explanations provided by the EC in  its previous submissions to the Panel, as well as 
in the responses of the EC and its Member States to the review under Article 24.2, which are part of 
the EC's submissions, would be sufficient to rebut that prima facie  case. 
 267. It would then be for the complainants to make  specific claims (or argum ents) in order to show 
why the other measures identified by the EC are not consistent with Article 22.2, despite the 
explanations provided by the EC. The complainan ts, however, have not made any such claim or 
argument. The EC cannot be reasonably expected  to identify and formulate each and every 
conceivable claim and arguments to the effect that its own measures fail to comply with Article 22.2 and then rebut them.    
 
Question 163 
 
The Panel takes note of Australia's and the EC's res pective views on the applicability of Article 70.1 
of the TRIPS Agreement to individual GI registrations  (Australia's response to Panel question No. 90;  
EC rebuttal, para. 202).  On 31 December 1995, at  what stage of the procedure under the former 
Article 15 were the GIs later registered under Artic le 17?  Did any individual GIs registered under 
Article 6 have an objection period that expired prior to 1 January 1996?  
 
268. The draft regulation to register a first list of names under the simplified procedure under 
Article 17 was distributed to the Member States in the 7
th meeting of the regulatory committee on 
22 September 1995 and was discussed at every meeting until the end of 1995, the last of which was 
the 11th meeting ( 22 November 1995). The vote took place on 19 January 1996 and the matter was 
transferred to the Council later on.  269. Logically, if an objection procedure is provided for, then the decision-making process regarding the registration, including the consultatio n of the regulatory committee, cannot take place 
before the period for objections has expired. This is also the case under the normal procedure 
provided for in Article 6 and 7 of Regulation 2081/92. Accordingly, by the time the file was referred 
to the regulatory committee, the time at which an objection procedure should have been foreseen, had 
it indeed been necessary, had passed.  
270. The EC notes that in its second oral statement, Australia continues to insist that the relevant 
point in time is the registration of the geogra phical indications under the simplified procedure.
109 
However, Australia forgets that it has brought a claim under the national treatment provisions of the 
                                                      
109 Australia's SOS, para. 78. WT/DS174/R/Add.2 
Page B-346  
 
 TRIPS Agreement. In Australia's submission, the EC has violated its national treatment obligations by 
not providing 
for a possibility for objections. Accordingly, the alleged violation stems not from the act  
of registering the indications in question, but from the omission  to provide a right of objection. 
However, this omission clearly occurred before 1 Ja nuary 1996, i.e. the date of application of the 
TRIPS Agreement to the EC. 
 
271. Moreover, the EC would like to recall that as  a matter of fact, no objection procedure applied 
under the simplified procedure regardless of whet her EC residents or foreign residents were 
involved.110 There was therefore no violation of national treatment. Accordingly, the question "at 
which time" the national treatment violation may ha ve occurred has a rather speculative character. 
 
272. No application under Article 6 of Regul ation 2081/92 had a period of objections which 
expired prior to 1 January 1996.  
Question 164 
 
In what way are the objectives and principles set out in Articles 7 and 8 of the TRIPS Agreement, and 
the considerations recited in the first paragraph of its preamble, relevant to the interpretation of the 
provisions of that agreement at issue in this dispute? 
 
273. Regulation 2081/92 protects products which have a special quality, reputation, or other 
characteristics attributable to their geographical origin. As can be seen from Article 2 of the 
Regulation 2081/29, these characteristics must be due  to a particular geographical environment with 
its inherent natural and human facts, which also  may include traditional knowledge, processes, and 
working methods. Whereas Regulation 2081/92 does not  primarily focus on technological innovation 
as referred to in Article 7 of the TRIPS Agreem ent, the human factor may include some such 
elements. Overall, however, Article 7 seems to be of limited relevance for the present case. 
 274. As stated in the Preamble to Regulation 208 1/92, the production of agricultural products and 
foodstuffs has a vital role for the Community econo my. The protection of geographical indications in 
Regulation 2081/92 is important for the development of  this sector by encouraging diversification into 
high-value production. Accordingly, Regulation 20 81/92 is a measure which promotes the public 
interest in a sector of vital importance to the EC 's socio-economic and technological development as 
referred to in Article 8.1 TRIPS Agreement, and which is consistent with the provisions of the 
Agreement.  275. The considerations recited in the first paragr aph of the Preamble to the TRIPS Agreement are 
relevant for interpreting the provisions of the TR IPS Agreement in accordance with the customary 
rules of interpretation of international law.
111 
                                                      
110 EC FWS, para. 91 et seq. 
111 Cf. also above, Response to Panel's Question No. 103, para. 31.  WT/DS174/R/Add.2 
 Page B-347 
 
 
 ANNEX B-8 
 
REPLIES BY THE EUROPEAN COMMUNITIES TO QUESTIONS 
POSED BY AUSTRALIA FOLLOWING TH E SECOND SUBSTANTIVE MEETING  
  
Question 1 
 Can the EC provide any official statement predati ng its first written submission that expressly states 
that names of geographical areas located in WTO Members could be registered under regulation 
2081?92 without satisfying its equi valence and reciprocity conditions? 
 
1. The EC refers Australia to the EC's resp onses to the Panel's questions Nos. 16 and 95.  
 
Question 2 
 
The decision of the Court of First Instance in the "Canard" judgement held that Regulation 2081/92 
"does not establish specific procedural safeguards fo r individuals", and for that reason a person who 
has made an objection against a proposed regulation "is not individually concerned by the contested 
[registration] within the meaning of the fourth paragraph of Article  230  of the EC Treaty. 
 
In this light, can the EC say that a trademark holder will certainly be able to commence procedures 
under Article 230 of the EC Treaty to contest the registration of a GI under Regulation 2081/92 . 
 
2. The fourth paragraph of Article 230 of the EC treaty provides that  
Any natural or legal person may, under th e same conditions, institute proceedings 
against a decision addressed to that pers on or against a decision which, although in 
the form of a regulation or a decision addr essed to another person, is of direct and 
individual concern to the former 
3. The decision to register a geographical indi cation under Regulation 2081/92 takes the form of 
a Council or Commission regulation. Accordingly, a trademark holder will be able to bring an action 
in annulment under Article 230 against the registrati on of a geographical indication if he can show 
that the registration, although in the form of a regula tion, is of direct and individual concern to him. 
 4. According to well-established case law of the European Court of Justice
1,  
 
a provision which by virtue of its nature and scope is of legislative nature, may be of 
individual concern to natural or legal pe rsons where it affects them by reason of 
certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of those factors distinguishes them individually just as in the case of the addressee of a decision … 
5. One
 of the situations in which regulations have been found to be of individual concern to an 
economic operator is where the regulation has been adopted pursuant to a procedure that affords 
certain procedural safeguards specifically to that operator.2 For example, the ECJ held in the Timex  
case that regulations imposing anti-dumping measur es may be challenged under Article 230 by the 
                                                      
1 See e.g. Case T-215/00, SCEA La Conqueste v. Commission , [2001] ECR II-181, para. 34 
(Exhibit COMP-12). 
2 This case law originated in Case 191/82 EEC Seed Crushers' and Oil Processors' Federation (Fediol) 
v. Commission  [1983] ECR 2913, which concerned a complaint under the EC Basic Anti-subsidy Regulation. WT/DS174/R/Add.2 
Page B-348  
 
 person who filed the complaint.
3 Subsequently, the ECJ has recognised standing to the investigated 
producers or exporters4 and to their related importers5, but not, in principle, to the independent 
importers.6 
 6. However, contrary to what appears to be Au stralia's understanding, the situation described in 
the above paragraph is not the only situation where an economic operator may be found to be 
individually concerned for the purposes of Article 230. In particular, the ECJ has held that a regulation may be of individual concern to an op erator where it adversely affects that operator's 
specific  rights. Thus, in the Codorniu case
7, the ECJ held that the applicant had standing to challenge 
a regulation concerning the use of a designation for sparkling wine ("crémant"), because as a result it 
was prevented from using a graphic mark which it ha d registered and used for a long time before the 
adoption of the contested regulation, so that it was distinguished from all the other economic 
operators.     7. In the La Conqueste case
8, the applicant was a producer of canard à foie gras  of the area 
designated by the geographical indication who had objected to the specifications approved by the 
Commission. The applicant argued that the application was admissible on two  different grounds: first, 
referring to the Codorniu  judgement, because the measures affect ed adversely his specific rights; and 
second, referring to the Timex case law, because Regulation 2081/92 afforded him certain procedural 
guarantees.  
8. The Court of First Instance rejected both ar guments and held the application inadmissible. 
First, the court distinguished, on the facts, the s ituation of the applicant from the situation in 
Codorniu .
9 Second, the court held that, unlike the EC Basic Anti-dumping Regulation, 
Regulation 2081/92 does not establish specific pro cedural safeguards, at Community level, for 
individuals.10 
 
9. The court's finding that Regulation 2081/92 does not establish specific procedural  safeguards, 
at Community level, for individuals would prevent a trademark holder from invoking the Timex  case 
law in order to establish that it is individually c oncerned. However, this does not mean necessarily 
that a trademark holder will never be able to show that it is individually concerned. In particular, a 
trademark holder could seek to rely on the Codorniu case law. Whether or not a trademark holder will 
be able to show that the registration of a give ge ographical indication affects adversely its "specific" 
substantive  trademark rights will depend upon the factual circumstances of each case.  
 
Question 3 
 
Will a trademark holder, even if he or she can not show direct and individual concern and/or even if 
he or she does not commence proceedings within 2 months of the decision being made, certainly be 
able to take advantage of the procedure for obtaini ng a preliminary opinion under Article 234 of the 
EC Treaty to have the ECJ review the validity of the registration of a GI under regulation 2081/92. 
 
                                                      
3 Case 264/82, Timex v. Council and Commission  [1985] ECR 849 (Exhibit EC-112). 
4 See e.g. Case C-156/87 Gestetner Holdings plc v. Council and Commission [1990] ECR I-781. 
5 See e.g. Case T-164/94 Ferchimex SA v. Council  [1995] ECR II-2681. 
6 See e.g. Case 205/87 Nuova Cream Srl v. Commission  [1987] ECR 4427. 
7 Case C-309/89, Codorniu v. Council  [1194] ECR I-1853 (Exhibit EC-111). 
8 Case T-215/00, SCEA La Conqueste v. Commission , [2001] ECR II-181 (Exhibit COMP-12). 
9 Ibid., para. 28. 
10 Ibid., para. 47. Australia's question misquotes the paragraph of the judgement which it cites by 
omitting the crucial words "at Community level".  WT/DS174/R/Add.2 
 Page B-349 
 
 
 10. The fact that an operator is not individually and directly concerned by a Community 
regulation is never  an obstacle for raising the invalidity of  that measure in accordance with the 
procedure provided in Article 234 of the EC Treaty.    11. Contrary to what has been said by the United States
11, there is no general rule to the effect 
that if a person could have brought a direct action under Article 230, but fails to do so within the two 
month time limit, it is precluded from raising the invalidity of the measure under Article 234. 
 12. The case law cited by the United States
12 applies only in very specific situations where the 
applicant is "fully aware of [the me asure] and of the fact that it could without any doubt  have 
challenged it under Article [230]".13  
 13. So far, the ECJ has found that these conditi ons were present in a case involving  the 
beneficiary of a state aid
14 and a in a case concerning a related importer in an anti-dumping 
investigation.15 In both cases, there was well-established and clear case law recognising generally the 
standing of any individual in the same procedural position as the applicant to bring a direct action 
under Article 230.16  
 14. In contrast, as explained in the response to the previous question, wh ether or not a trademark 
holder will have standing to brin g an action under Article 230 ag ainst a regulation registering a 
geographical indication will depend on the appreciati on of the particular circumstances of each case 
by the court, something which cannot be predicted in advance "without any doubt"
   by the trademark 
holder.  15. Moreover, the concern expressed by the Unite d States is that a registered geographical 
indication which is not confusing per se  may be used in a confusing manner after the two month time 
limit.
17 However, since in that case the circumstanc es that could, arguably, justify a finding of 
individual concern for the purposes of Article 230 w ould not have been present during the two month 
                                                      
11 US SOS, para. 78. 
12 Ibid. 
13 Case C-188/92, TWD Textielwerke Deggendorf v. Bundesrepublik Deutschland [1994], ECR, I-833, 
point 24 [emphasis added] (Exhibit US-78).   
14 Case C-188/92, TWD Textielwerke Deggendorf v. Bundesrepublik Deutschland [1994], ECR, I-833 
(Exhibit US-78). 
 
 The ECJ took pains to distinguish this case from a previous case (Case 216/82, Universität Hamburg v. 
Hauptzollamt Hamburg-Kehrwieder , [1983] ECR 2771). The ECJ noted that  in that case the ECJ had declared 
the request for a preliminary ruling admissible on the grounds that (Id. at para. 23, emphasis added): 
 
the rejection of the application by national authority was the only measure directly addressed 
to the person concerned of which it had been necessarily informed in good time and which it 
could challenge in the courts without encountering any difficulty in demonstrating its interest in bringing proceedings . 
 
15 Case C-239/99, Nachi Europe GmbH v. Hauptzollamt Krefeld  [2001] ECR I-1197, para. 37 
(Exhibit US-78).   
 
The court emphasised that  the applicant "could undoubtedly  have sought its annulment under 
Article 230 of the EC Treaty" (Id., para. 370) [emphasis added]. 
16 As regards the standing of a complainant in an  anti-dumping proceeding, see above the Timex case. 
As regards the standing of the benefici ary of a state aid, see Case C-730/79 Philip Morris v. Commission  [1980] 
ECR 2671. 
17 US SOS, para. 78. WT/DS174/R/Add.2 
Page B-350  
 
 period, the applicant could not have been "fully aware" during that period that it could "without any 
doubt" bring a direct action.   16. As a final remark, it should be noted that th e Court of Justice has stressed repeatedly  the 
principle that all Community legal acts must be subject to effective judicial review:
18  
 
29. … individuals are entitled to effective judicial protection of the rights they derive from the Community legal order, and th e right to such protection is one of the 
general principles of law stemming from th e constitutional traditions of the member 
States. That right has also been enshri ned in Articles 6 and 13 of the [European 
Convention on Human Rights] … 
30. By Articles 230 EC and 241 EC, on the one hand, and by Articles 234, on the 
other, the Treaty has established a complete system of legal remedies and procedures designed to ensure review of the legality of  acts of the institutions and has entrusted 
such review to the Community Courts. U nder that system, where natural or legal 
persons cannot, by reason of the conditions for admissibility laid down in the fourth 
paragraph of Article 230 EC, directly ch allenge Community measures of general 
application, they are able, depending on the case, either indirectly to plead the invalidity of such acts before the Community  Courts under Article 241 EC or to do so 
before the national courts and ask them, si nce they have no jurisdiction themselves to 
declare those measures invalid, to make a reference to the Court of Justice for a 
preliminary ruling on validity…. 
31. Thus it is for the Member States to establish a system of legal remedies and 
procedures which ensure respect for the ri ght to effective judicial protection …. 
32. In that context, in accordance with the principle of sincere cooperation laid 
down in Article 10 EC, national courts are re quired, so far as possible, to interpret 
and apply national procedural rules governing the exercise of rights of action in a way 
that enables natural and legal persons to ch allenge before the courts the legality of 
any decision or other national measure re lative to the application to them of a 
Community act of general application, by pleading the invalidity of such an act. 
                                                     
 
18 Judgement of the European Court of Justice of 1 April 2004, Case C-263/02, Commission v. Jégo-
Quéré & Cie. SA  [not published yet in the ECR] (Exhibit EC-113).  WT/DS174/R/Add.2 
 Page B-351 
 
 
 ANNEX B-9 
 
COMMENTS OF THE EUROPEAN COMMUNITIES TO AUSTRALIA'S 
AND THE UNITED STATES' REPLIES TO QUESTIONS POSED BY THE PANEL  
FOLLOWING THE SECOND SUBSTANTIVE MEETING 
 
(2 September 2004) 
  1. In its present submission, the EC provides its  comments on the responses of the complainants 
to the Questions of the Panel after the second substa ntive meeting.  Given the advanced stage of the 
proceedings, the EC will, in the present submission,  focus on arguments which are made for the first 
time in the responses of the complainants.  The f act that the EC does not comment on a particular 
response does not imply that the EC agrees with the response.  To the extent  that the complainants 
reiterate arguments to which the EC has already r esponded in earlier submissions, the EC refers to its 
earlier submissions. 
 
Question 101 
 
2. As the EC has already stat ed in its response to Question 101, the EC considers that the 
quadrant provided in the third party submission  of Chinese Taipei is not pertinent, since 
Regulation 2081/92 does not involve any discrimination on the basis of nationality. 
 3. In their responses, the complainants are rely ing on this quadrant to demonstrate that the EC 
measure involves discrimination between nationals. Ho wever, the arguments of the complainants have 
no basis in the text of Regulation 2081/92, and in  addition are logically inconsistent. For ease of 
reference, the table in question is reproduced below: 
 
 
GI: EC 
National: EC 
                                    1  
GI: Non-EC 
National: EC 
3 
 
                                    2 
GI: EC National: Non-EC  
4 
GI: Non-EC National: Non-EC
 
4. An examination of whether the EC measure  violates the national treatment obligation of 
Article 3.1 TRIPS would require a comparison of the treatment it accords to domestic nationals and to 
foreign nationals. Logically, the comparison of treatment should therefore take place between 
quadrants 1 and 2, and between quadrants 3 a nd 4. In the case of Regulation 2081/92, this 
examination would confirm that there is no differen ce in treatment on the grounds of nationality. This 
is why the EC has submitted that the only relevant  comparison is between the treatment accorded to 
domestic geographical indications, and to foreign geographical indications.1 
 
5. Interestingly, in their responses, the compla inants do not allege any difference in treatment 
between quadrants 1 and 2, or between quadrants 3 and 4. The complainants do not attempt to show, 
either, that there is any difference between quadrants  1 and 3, or between quadrants 2 and 4. Rather, 
                                                      
1 EC Response to Panel's Question No. 101, para. 23. WT/DS174/R/Add.2 
Page B-352  
 
 they argue that the comparison should take place between quadrants 1 and 4
.2 In support of this view, 
the United States claims that quadrant 1 is the sole "benchmark", against which both  quadrants 2 and 
4 should be measured. As for quadrant 3, the US argues that "it does not matter whether some EC 
nationals (...) are also treated less favourab ly than the EC nationals in quadrant 1".3 
 
6. In the view of the EC, these arguments simply disregard the content of Regulation 2081/92. 
The EC has pointed out repeatedly that Regula tion 2081/92 treats EC and foreign nationals exactly 
alike as regards the protection of geographical indicat ions relating to areas in the EC. Similarly, the 
EC has pointed out that Regulation 2081/92 treats EC  and foreign nationals ex actly alike as regards 
the registration of geographical indications relating to areas outside the EC. The complainants cannot 
respond to this by arguing that the treatment acco rded by Regulation 2081/92 in quadrants 2 and 3 
should simply be ignored. Such an approach to the interpretation of Regulation 2081/92 would clearly 
be incompatible with Article 11 of the DSU, wh ich requires an objective assessment of the facts. 
 7. The EC also finds the complainants' argumen ts logically inconsistent. If the complainants 
accept that the quadrant prepared by Chinese Taipei constitutes a co rrect description of the possible 
constellations for comparison of favourable tr eatment of nationals and goods in respect of 
geographical indications, then the complainants must accept this analytical tool in its entirety. They 
cannot simply ignore half of the possible cons tellations and base their argument purely on a 
comparison of those constellations which suit them. Such a selective reasoning does not do justice to 
the national treatment obligations of the TRIPS Agreement. 
 
Question 102 
 
8. In its response to Question No. 102, the Unite d States argues that "it is not critical for the 
Panel to make a factual assumpti on that all persons producing GI pr oducts in a country are nationals 
of that country". The United States goes on to argue  that "[i]ndeed, it is undisputed that the EC GI 
Regulation on its face provides for different treatment  of persons depending on  which quadrant set out 
in response to question 101 they fall in".
4 
 9. Already these premises are false. The EC does not see how the US can submit that the Panel 
should make a finding that Regulation 2081/92 involv es discrimination between nationals and at the 
same time claim that the Panel need not come to an y conclusion on whether in fact there is any link 
between nationality and the protection of geogr aphical indications under Regulation 2081/92. 
 10. The EC is also astonished that the US would claim that "it is undisputed" that 
Regulation 2081/92 provides for different treatment  of persons "depending on which quadrant set out 
in response to question 101 they fall in". As the EC has repeatedly confirmed, Regulation 2081/92 
treats EC and foreign nationals exactly alike as re gards the protection of geographical indications 
relating to areas in the EC. Similarly, the EC has pointed out that Regulation 2081/92 treats EC and 
foreign nationals exactly alike as regards the regist ration of geographical indications relating to areas 
outside the EC. Accordingly, the treatment accorded  by quadrant 1 is the same as that accorded by 
quadrant 2, and the treatment accorded by quadrant 3 is the same as that accorded by quadrant 4. 
 
11. In its further attempts to show that there is discrimination on the basis of nationality, the 
United states argues that "in order to produce agri cultural foodstuffs in accordance with the product 
specifications for a protected name, persons "will be established in that area" and "will have to set up 
                                                     
 
2 US Response to Panel's Question No. 101, para. 2;  Australia's Response to Panel's Question No. 101, 
para. 2. 
3 US Response to Panel's Question No. 101, para. 4. 
4 US Response to Panel's Question No. 102, para. 9.  WT/DS174/R/Add.2 
 Page B-353 
 
 
 a legal person under the laws of the country in which they are established".5 The US goes on to argue 
that "it will generally follow that those established [...] are nationals of that Member" and that this 
"also generally follows as a practical matter".6 
 12. In the view of the EC, these US argument s are mere speculation without any supporting 
proof. Regulation 2081/92 does not require any form  of establishment, nor does it require the setting 
up of legal persons. Similarly, even where a natura l or legal person is resident or established in a 
particular country, this does not mean it becomes a national of that country.   13. The EC notes also that the United States has not provided the Panel with any information as 
to what legal persons it considers to be its nationals. In this cont ext, the EC would refer to the 
definition of "enterprises of a Party" in the No rth American Free Trade Agreement (NAFTA), which 
reads as follows: "enterprise of a Party means an enterprise constituted or organized under the law of 
a Party".
7 It is interesting to note that NAFTA, to which the US is a party, does not in fact define the 
nationality of enterprises on the basis of establishment.8 
 
14. It seems to the EC that the complainants are attempting to impose a definition of nationality 
on the EC which has no basis in the EC measure in  question, does not reflect the national treatment 
provisions of the TRIPS Agreement, and r uns counter to international practice. 
 15. The EC notes that the United States also point s out that "US agricultural land is held almost 
exclusively by US nationals".
9 The EC does not consider this statement relevant for the present case, 
nor does it wish to speculate on why the percentage of  foreign ownership in the US might be so low. 
The EC notes also that the United States has not shown that the same is also true for EC agricultural 
land. Finally, the United States has not shown that there is no foreign ownership in the food-producing sector, which is equally concerned by Regulation 2081/92. 
 
Question 103 
 
16. In its response to the Panel's questions, the EC has emphasized that Article 3.1 TRIPS 
requires that the conditions for the acquisition of intellectual property rights are modified to the 
detriment of foreign nationals.
10 The EC has also shown that the interpretation of TRIPS national 
treatment is a complex question, which cannot simply  be resolved by transposing the jurisprudence 
under Article III:4 GATT to the TRIPS Agreement.11 
 17. In their response, the compla inants make very little effort to interpret the specific terms of 
Article 3.1 TRIPS Agreement. Rather, the United States repeats its argument according to which 
"there is a close connection between geographical  indications, geographic regions, and the persons 
established in those regions".
12 The EC is unsure what exactly the United States means by "close 
connection", and what is the relevance of this "c lose connection" for the purposes of TRIPS national 
treatment.   
                                                     
 
5 US Response to Panel's Question No. 102, para. 10. 
6 US Response to Panel's Question No. 102, para. 12. 
7 NAFTA Article 201.1 (Exhibit EC-111). 
8 Another relevant example would be Article XXVIII (m) (i) of the GATT, which defines a "juridical 
person of another Member "as a juridical person which is "constituted or otherwise organized under the law of 
that other Member, and is engaged in substantive business operations in the territory of that Member or any other Member". 
9 US Response to Panel's Question No. 102, para. 12. 
10 EC Response to Panel's Question No. 113, para. 63. 
11 EC Response to Panel's Question No. 103, para. 27. 
12 US Response to Panel's Question No. 103, para. 16 (3). WT/DS174/R/Add.2 
Page B-354  
 
 18. Whatever the precise meaning the US attaches to  these terms, it seems to the EC that with the 
same justification it could be argued that there is a "close connection" between the place where any 
product is produced and the persons who produce it. However, the EC does not think that this can 
mean that any person producing a product must therefore necessarily have the nationality of the place 
where the product is produced. Otherwise, any discr imination on the basis of the origin of a product 
would also be discrimination on the basis of nationality. 
 19. In its response, the Unit ed States has attempted to dismiss the examples of foreign 
involvement by characterizing them as examples of  "EC nationals with some non-EC connections". 
This response misses the point of the EC's exampl es. First, the EC's examples show clearly that 
Regulation 2081/92 contains no legal obstacle to  foreign nationals taking advantage of EC 
geographical indications. Second, that they may do so, "as a practical matter" and for reasons unrelated to Regulation 2081/92, by setting up a lega l entity under EC law or by acquiring such an 
entity, does not show that Regulation 2081/92 involves discrimination on the basis of nationality. Finally, the EC finds it misleading to characterize cases where a US multinational acquires 100% of 
an EC producer of protected products as a case of  an EC national with "some non-EC connections". 
 20. As regards the relevance of Article XX GATT, the complainants argue that this provision is 
not applicable in the context of the TRIPS Agre ement, and that the non-inclusion of a similar 
provision in the TRIPS Agreement is deliberate.
13 However, the complainants fail to acknowledge 
that the limitation of TRIPS national treatment to nationals  is equally deliberate. Moreover, the fact 
that the TRIPS Agreement contains not provision  corresponding to Article XX GATT must be seen 
before the background that the TRIPS Agreement, and TRIPS national treatment in particular, is 
concerned primarily with nationals, not with th e treatment of goods. The complainant's expansive 
interpretation of TRIPS national treatment has th e effect of rendering ineffective defenses which 
would otherwise be available under Article XX GA TT. The EC considers such an interpretation 
incompatible with the principles of a harm onious interpretation of the WTO Agreements. 
 
Question 104 
 
21. In its response to Question No 104, the Unite d States persists in arguing that the EC is a 
"separate customs territory" within the meaning of f ootnote 1 to Article 1.3 of the TRIPS Agreement.  
 
22. In support of its argument, the US is re ferring to Article XII:1 of the WTO Agreement, 
according to which "any State or separate cust oms territory possessing full autonomy in the conduct 
of its external commercial relations" may accede to this Agreement. In the submission of the United 
States, this provision proves that there are two categories of WTO Members, namely States and 
separate customs territories; therefore, in the view of  the United States, since the EC is not a State, it 
must be a separate customs territory.14 
 23. This view is incorrect. Article XII:1 WTO Ag reement does not apply to the EC. Rather, as the 
United States notes itself, the EC became an Orig inal Member of the WTO under Article XI:1 WTO 
Agreement, which provides for the Membership of the "contracting parties to the GATT 1947 [...] and 
the European Communities".
15 In other words, the WTO Agreement refers to the EC neither as a state 
nor as a separate customs territory, but instead refers to it individually as a specific case. 
 
                                                      
13 US Response to Panel's Question No. 103, para. 18; Australia's Response to Panel's Question No. 
103, paras. 13-14. 
14 US Response to Panels' Question No. 104, paras. 24-27. 
15 US Response to Panel's Question No. 104, para. 28.  WT/DS174/R/Add.2 
 Page B-355 
 
 
 24. The US has attempted to explain this drafting by arguing that "the EC could be identified by 
name as the sole original WTO Member that was not a GATT contracting party".16 However, the US 
fails to explain why such a specific reference to the EC was then not made in footnote 1 to Article 1.3 
of the TRIPS Agreement, if indeed the intention ha d been that this footnote should apply to the EC. 
 
25. In fact, it is noted that there are also other provisions which refer specifically to the EC. For 
instance, Article IX:1 WTO Agreement defines the voting rights of the European Communities. This 
shows that where a specific provision  was necessary to take account of the specific nature of the EC, a 
specific provision was included. The fact that no su ch provision concerning the EC was included in 
the TRIPS Agreement means that the general provisi ons applicable to all Members should apply to 
the EC. 
 26. It should also be noted that the US interpretation would deprive the word "separate" in the expression "separate customs territory" of its u seful purpose. As the US has acknowledged, 
"separateness" is an intrinsic feature of a "customs territory".
17 However, by arguing that the EC is a 
"separate customs territory Member of the WTO", th e US is effectively removing the word "separate" 
from the definition in footnote 1. In fact, if the US interpretation were co rrect, the United States, 
Australia, or in fact all other WTO would also have  to be considered a "separate customs territory 
Member of the WTO".  27. The US has also argued that footnote 1 should apply to the EC because the EC "has no 
nationals".
18 As the EC has already explained in response to Panel's Question No. 105, this is patently 
wrong. Moreover, as the EC has also explained, the fact that the definition of nationality for legal 
persons is a complex question does not mean that the EC  "has no nationals". In this context, it is also 
useful to refer to Brownlie's Internationa l Law, which fully confirms the EC's view:19 
 
The attribution of legal persons (personnes morales) to a particular state for the 
purpose of applying a rule of domestic or international law is commonly based upon 
the concept of nationality. The borrowing of a concept developed in relation to 
individuals as awkward in some respects but is now well established. A major point 
of distinction is the absence of legislative provisions in municipal law systems which 
create a national status for corporations : domestic nationality laws do not concern 
themselves with corporations. The conseque nces of this are twofold. First, the 
nationality must be derived either from the fact of incorporation , i.e. creation as a 
legal person, within the given system of domestic law, or from various links including 
the centre of administration (siège social) and the national basis of ownership and 
control . Secondly, the content of the nationality tends to depend on the context of the 
particular rule of law involved : nationality appears more as a functional attribution or 
tracing and less as a formal and general stat us of the kind rela ting to individuals. 
28. The US has also referred to the drafting hist ory of the TRIPS Agreement. In particular, the 
United States has noted that an earlier version of  footnote one referred specifically to Hong Kong.20 
This footnote, which was contained in the Brussel s draft of the TRIPS Agreement, read as follows:21 
 
                                                      
16 EC Response to Panel's Question No. 104, para. 28. 
17 US Response to Panel's Question No. 104, para. 23. 
18 US Response to Panel's Question No. 104, para. 33. 
19 Ian Brownlie, Principles of Public International Law , 5th edition (1998), p. 425–426 
(Exhibit EC-112). Emphases added. 
20 US Response to Panel's Question No. 104, para 34. 
21 Cf. Daniel Gervais, The TRIPS Agreement: Drafting History and Analysis , 2nd edition (2003), 
para. 2.15. WT/DS174/R/Add.2 
Page B-356  
 
 When the term "national" is used in this Agreement, it shall be deemed, in the case of 
Hong Kong, to mean persons, natural or lega l, who are domiciled or who have a real 
and effective industrial or commerc ial establishment in Hong Kong. 
29. The only significant different between this vers ion and the final version of footnote 1 is that 
the reference to "Hong Kong" has been replaced by a reference to a "separate customs territory 
Member of the WTO". In other words, the specifi c reference to Hong Kong was replaced by a generic 
reference to the category of Member to which Hong Kong belongs. The drafting history therefore 
confirms the EC's submission that footnote 1 w as intended to cover cases of territories such as for 
instance Hong Kong or Macao, but not the EC.  
30. In addition, the US also refers to an "Inf ormal Note by the Secretariat" dated 7 December 
1992. Unfortunately, the US does not provide a copy of this "Informal Note", which is not available to 
the EC, as an Exhibit. Accordingly, the EC cannot comment on the US arguments in this respect. The EC requests the United States to provide a copy of th e informal note to the Panel and the other Parties. 
Moreover, the EC should be given an occasion to comment on the note once it has been provided by 
the United States. As long as the EC has not had an occasion to comment, the Panel should not take 
into account the arguments made by the US in r espect of the informal note of 7 December 1992. 
 31. Australia, for its part, has referred to the fact  that competence for the matters covered by the 
TRIPS Agreement is shared between the EC and its Member States, and has argued that for this reason, "there may be occasions in relation to ma tters covered by the TRIPS Agreement when the 
customs territories of its Member States may be distinct from the customs territory of the EC itself".
22 
This is entirely wrong. The fact that competen ce for matters falling under the TRIPS Agreement is 
shared between the EC and its Member States is due to the fact that the TRIPS Agreement also 
concerns the harmonisation of intellectual property law.23 The fact that certain areas of intellectual 
property law may not be harmonised within the EC h as nothing to do with the customs territory of the 
EC. The EC has exclusive competence for trade in goods, and it has only one customs territory; this 
also applies for the purposes of the TRIPS Agreement.24 
 
Question 108 
 
32. The EC fails to see the relevance of the discussion of the ECJ's case law concerning 
Article 13(1) of Regulation 2081/92 included in Au stralia's response to this question, given that 
Australia confirms that it is not making any cl aim under GATT Article III: 4 to the effect that 
Article 13(1) provides less favourable treatment to imported products.25    
 33. In view of the above, the EC does not consid er it necessary to address all the errors made in 
Australia's response. The EC would like, nevertheless , to correct Australia's mistaken reading of the 
findings of the ECJ in the Case C-66/00, Dante Bigi
26 (which Australia calls the "Parmesan 
judgement").  
                                                     
 
22 Australia's Response to Panel's Question No. 104, para. 16. 
23 See Opinion 1/94, Accession to the WTO , [1994] ECR I-5389, para. 58 (Exhibit Aus-13). 
24 This is confirmed in Opinion 1/94, Accession to the WTO , [1994] ECR I-5389, para. 55 (Exhibit 
Aus-13), where the Court of Justice confirmed that the provisions of the TRIPS Agreement on the enforcement 
of intellectual property rights at th e border, which are carried out by the customs authorities, fall under exclusive 
Community competence for the commercial policy. 
25 Australia's Response to Panel's Question No. 18, para. 27.  
26 Exhibit AUS-16.  WT/DS174/R/Add.2 
 Page B-357 
 
 
 34. Australia says that the use of the word "parme san" is banned in the EC "on the basis that the 
ECJ found   ‘it is far from clear that the designation ‘Parmesan' has become generic'" in that case.27 
This is incorrect. The question whether the term "p armesan" is generic was not before the ECJ and 
was not decided in that case. The Italian court had raised a number of questions regarding the 
interpretation of Regulation 2081/92, but not the question whether "parmesan" was a generic term. 
The German Government, which intervened as a third party, raised the preliminary objection that the 
reference was not admissible because the questions put by the Italian court were not relevant, given that in any event "parmesan" was a generi c term which could not be protected under 
Regulation 2081/92.  
35. The ECJ first recalled that, in principle, it is  for the national courts to decide whether the 
reference to the ECJ is necessary:
28 
 
It is settled case-law that, in the context of the cooperation between the Court of Justice and the national courts established by Article 234 EC, it is solely for the 
national court before which the dispute has been brought, and which must assume 
responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to 
enable it to deliver judgment and the releva nce of the questions which it submits to 
the Court. Consequently, where the questions submitted by the national court concern the interpretation of Community law, the Court of Justice is, in principle, bound to 
give a ruling (see, for example, Case C-415/93 Bosman [1995] ECR I-4921, 
paragraph 59). 
36. The ECJ then went on to recall that, in exceptional cases, the ECJ ma y refuse to rule on a 
question referred by a national court where it is obvi ous that the question is unrelated to the dispute 
before that court:
29 
 
However, the Court has also stated that, in exceptional circumstances, it can examine 
the conditions in which the case was referred to  it by the national court, in order to 
assess whether it has jurisdiction. The Court may refuse to rule on a question referred 
for a preliminary ruling by a national cour t only where it is quite obvious that the 
interpretation of Community law that is sought bears no relation to the actual facts of 
the main action or its purpose, where the problem is hypothetical, or where the Court 
does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, fo r example, Case C-390/99 Canal Satélite 
Digital [2002] I-607, paragraph 19). 
37. The German Government had argued that the questions raised by the Italian court were 
irrelevant because "parmesan" was in any event generic, with the consequence that 
Regulation 2081/92 was inapplicable. The ECJ, nevert heless, concluded that it was far from clear that 
"parmesan" was generic and, therefore, the questions raised by the Italian court were not so obviously 
irrelevant as to be inadmissible:
30 
 
However, in the present case it is far from clear that the designation parmesan has 
become generic. It is contended by all the governments which have submitted written 
observations in this case, apart from the Germ an Government and, to a certain extent, 
                                                      
27 Australia's Response to Panel's Question No. 18, para. 26. 
28 Exhibit AUS-16, para. 18. 
29 Exhibit AUS-16, para. 19. 
30 Exhibit AUS-16, paras. 20-21. WT/DS174/R/Add.2 
Page B-358  
 
 the Austrian Government, and by the Commission that the French designation 
parmesan is the correct translation of the PDO Parmigiano Reggiano. 
Against that background it cannot be argued th at it is clear that the questions raised 
by the referring court are covered by one of the situations listed in the case-law cited at paragraph 19 of this judgment. It follows  that the reference for a preliminary ruling 
is admissible. 
38. In sum, in the Dante Bigi  Case, the ECJ was not asked to rule, and did not rule, on the 
question whether the term "parmesan" is generic. Th e ECJ considered that question only in order to 
resolve a preliminary procedural objection to the effect that other  questions raised by the Italian court 
were obviously irrelevant and inadmissible. 
 
39. As noted by Australia
31, the EC Commission is of the view that "parmesan" is not a generic 
term. Germany, however, takes a different view. For that reason, the EC Commission has brought 
infringement proceedings under Article 226 of the EC Treaty against Germany. It will be for the ECJ, in the context of those proceedings, to decide whet her or not "parmesan" is a generic term. The EC 
fails to see what is so intrinsically objectionable abou t the fact that the application of Article 13(1) of 
Regulation 2081/92 to a particular set of facts ma y give rise to doubts and that different interested 
parties may take different views, with the consequen ce that it is necessary for th e courts to resolve the 
disagreement. Or is it that in Australia the federa l government and the states never disagree about the 
interpretation of federal law?    
40. Contrary to what Australia says at paragra ph 23, Article 13(1) of Regulation 2081/92 does not 
prejudge the question of whether "the owner of a registered trademark would be able to prevent 
confusingly similar or identical use of a sign for similar or identical goods". Australia confuses two 
different issues: the scope of the negative  right of the holders of a registered geographical indication 
to prevent certain uses, which is defined in Article 13(1), and the scope of the positive  right to use a 
registered geographical indication, which is circ umscribed to the registered sign (see below the 
comments to Australia's response to Question 137).  41. Australia concludes this response by saying that:   
the uncertainties created by the practical operation of Article 13.1 of Regulation 
No. 2081/92 and its application in situations  involving generic terms partially inform 
Australia's claims concerning Articles 22.2 and Paris Articles 10 bis(1) and 10 ter(1) in 
respect of the registration of an EC-defined GI. Australia has not been able to identify 
any means within the EC's legal order w hy which a legitimately interested person –
whether natural or legal, or a national of  the EC or of another WTO Member – is 
assured of access to a court empowered to consider substantively an act of unfair 
competition contrary to honest practices in industrial or commercial matters, including in international trade, in respect  of the registration of an EC-defined GI. 
42. The EC would note, first of all, that the above passage appears to contradict Australia's 
response to Question No. 161, where Australia explains  that the "EC measure" is inconsistent with 
Paris Article 10 bis(1), because it "diminishes the legal protection of trademarks". The EC fails to see 
the connection between Australia's concerns about the use of generic terms and the protection of 
trademarks.     43. Second, the EC has provided a thorough rebuttal to  Australia's suggestion to the effect that the 
registration of a name which is not generic in the EC but may be generic in "international trade" may 
                                                     
 
31 Australia's Response to Panel's Question No. 108, para. 21.  WT/DS174/R/Add.2 
 Page B-359 
 
 
 be an "act of unfair competition".32 Australia has not responded to the EC's arguments. Instead, at the 
second meeting with the Panel, Australia denied that it was making such a claim 33 
 
Australia has not said that registration of a term as an EC-defined GI in territory A 
could be deemed misleading simply because the term has become generic in 
territory B  
44. Australia then reformulated its claim as follows:34 
 
What is clear, however, is that the EC has an obligation to provide the legal means by 
which interested parties can seek to test such  issues in relation to the registration of an 
EC-defined GI. 
45. This amounts to saying that a Member may not adopt any legislation or regulations that 
specify which types of uses may or may not be de emed an "act of unfair competition", but instead 
must leave exclusively  to the courts to define what constitutes an "act of unfair competition". The EC 
disagrees with that proposition, which is manifestly contrary to the fundamental principle enshrined in 
the last sentence of Article 1.1 TRIPS. Article 22. 2 does not impose an obligation to provide means to 
"test" any conceivable allegations of "unfai r competition", no matter how frivolous. Rather, 
Article 22.2 requires to provide the means to prev ent uses that constitute genuine "acts of unfair 
competition". If a use is not an "act of unfair co mpetition", there is no obligation to provide any 
means to prevent it. Accordingly, in order to estab lish a violation of Article 22.2, the plaintiff must 
establish, first, that a certain type of use would constitute an "act of unfair competition" within the 
meaning of Paris Article 10 bis(1) and, second, that the respond ent does not provide the necessary 
means to prevent that type of uses.   46. Finally, the EC has clarified repeatedly that, in any event, Regulation 2081/92 does not 
exclude the application of the Directives on labe lling and misleading advertising and of the laws on 
unfair competition of the Member States with respect to the use of registered geographical indications. 
Australia seems to concede that those Directives  and laws are sufficient to comply with TRIPS 
Article 22.2 and Paris Articles 10 bis(1) and 10 ter(1) with respect to the use of non-registered 
geographical indications. At the very least, Austra lia has submitted no argument or evidence to the 
effect that the provisions of those Directiv es and laws in questio n are not sufficient per se  to comply 
with those provisions. Since, contrary to Australia 's mistaken assumption, the same Directives and 
laws apply also with respect to the use of register ed geographical indications, Australia's concerns are 
unfounded. Yet, apparently, Australia takes the vi ew that, in respect of registered geographical 
indications, the EC should replace those Directives a nd laws by an EC Regulation. However, there is 
no obligation under the TRIPS Agreement to provide the required protection at any given territorial level. Australia's claims represent an unfounded and unacceptable attempt to interfere with the 
constitutional allocation of powers between the EC and its Member States.    
 
Question 112 
 
47. The EC notes that in its response to the Pane l's Question, the United States appears to argue 
that Article 12(3) contains a legal oblig ation towards the third country concerned.
35 As the EC has 
                                                      
32 EC SWS, paras. 381-393. 
33 Australia's SOS, para. 82. 
34 Australia's SOS, para. 85. 
35 US Response to Panel's Question No. 112, para. 45. WT/DS174/R/Add.2 
Page B-360  
 
 explained in its response, this is not the case.
36 The EC notes that its view is shared by Australia, 
which offers an interpretation contrary to that of the United States.37 
 
Question 120 
 48. In its response to the Panel's Question No. 120, the United States argues that the requirement 
to indicate the country of origin for homonymous geographical indications "is not simply a labelling cost issue", but that the labelling requirement "is in the nature of a qualifier that detracts from the value of the GI", implying that the foreign GI "is something other than a ‘true' GI".
38 
 
49. At the outset, the EC notes that these arguments of the United States are contradictory with 
those of Australia, which has clearly stated that it does not allege that Article 12(2) of Regulation 2081/92 entails less favourable treatment  other than with regard to labelling costs.
39 
 50. In addition, the US response is without any basis in Regulation 2081/92. Article 12(2) of the 
Regulation requires simply that in the case of tw o homonymous names from the EC and from a third 
country, the country of origin be indicated for the name which is registered later. As the EC has 
already explained, the objective of this rule is to inform the consumer about the true origin of the 
product concerned.
40 In the case of two homonymous geographical indications, this is an entirely 
legitimate policy objective. The truthful indication of  the country of origin does not in any way detract 
from the value of the geographical indication, nor is there any implication in the requirement of 
Article 12(2) that the geographical indication to wh ich the requirement is applied is somehow "of a 
different stature" or "something other than a true GI".  51. Finally, the US is also incorrect to argue "the EC-based GI will be known purely by that GI, 
while the non-EC product's homonymous GI w ill be qualified by a country of origin".
41 As the EC has 
already explained repeatedly, the labelling requirement  of Article 12(2) will apply to whichever of the 
names is registered later, regardless of wh ether this is the EC or the foreign name.42 
 
Question 123 
 
52. In its response to Question No. 123, the United States persists in its argument that 
Article 12(2) of Regulation 2081/92 is "not a genera l country of origin marking requirement", but is 
"above and beyond any other general country of orig in marking requirement that may apply to all 
agricultural products and foodstuffs".43 
 53. As the EC has already explained in its res ponses, there is simply no basis for arguing that 
Article IX GATT applies only to "general" origin marking requirements, but not to an origin marking 
requirement such as the one contained in Article 12(2).
44 
 54. The full absurdity of the US argument beco mes apparent when considering once again the 
United States' own practice as regards origin marking. Under US law, "every article of foreign origin 
[...] imported into the United States shall be mark ed in a conspicuous place as legibly, indelibly, and 
                                                     
 
36 EC Response to Panel's Question No. 112, para. 61. 
37 Australia's Response to Panel's Question No. 112, para. 33 – 34. 
38 US Response to Panel's Question No. 120, para. 47. 
39 Australia's Response to Panel's Question No. 52. 
40 See EC Response to Panel's Question No. 54, para. 126. 
41 US Response to Panel's Question No. 120, para. 47. 
42 See most recently EC SOS, para. 145. 
43 US Response to Panel's Question No. 123, para. 48. 
44 EC Response to Panel's Question No. 124, para. 98.  WT/DS174/R/Add.2 
 Page B-361 
 
 
 permanently as the nature of the article will permit  in such manner as to indicated to an ultimate 
purchaser in the United States the English name of the country of origin of the article".45 
 55. It is fair to say that this origin marking requirement of the United States for imported products 
is, if anything, more restrictive and burdensome than  the EC requirement contai ned in Article 12(2) of 
Regulation 2081/92. The fact that the United States, like Australia, applies this discriminatory country 
of origin marking to all
 products rather then just to some can hardly be a mitigating factor. It seems 
therefore that if the United States were right, a nd Article 12(2) constituted a violation of national 
treatment obligations, then the origin marking requi rements of the United States and Australia are also 
in violation of national treatment obligations. 
 
56. The United States has also claimed that the EC has not argued that "any existing origin marking requirements in the EC" would meet  the requirement of Article 12(2) of 
Regulation 2081/92.
46 This argument is besides the point. Since the EC does not have country of 
origin marking requirements, requirements "in the EC" are obviously not relevant. However, as the 
EC has already said, it is very well possible that ma rks of origin affixed pursuant to the requirements 
of other countries, such as the United States, might  fulfil the requirements of Article 12(2) of the 
Regulation.47 
 57. In any event, the main point of the EC is that the United States has for many years, 
presumably because it considered that national treatment  obligations do not apply to country of origin 
marking requirements, applied discriminatory marki ng requirements. The US claim is therefore in 
stark contrast with the United States' own practice,  and the Panel should not disregard this fact in 
evaluating the US claim.  58. In addition, the EC would also draw the atten tion of the Panel to the logical conclusion of the 
United States argument: if really Article IX:1 GA TT covered only "general", but not product-specific 
marking requirements, the EC could easily remedy an y eventual finding of a violation by introducing 
a general origin marking requirement similar to th e one of the United States and Australia. In other 
words, Article IX:1 GATT would encourage the a doption of more rather than less restrictive 
requirements. This is hardly an interpreta tion in line with the objectives of the GATT. 
 Question 124 
 
59. In its Response to Question No. 124, the Un ited States argues that the US claim "does not 
present the systemic questions posed in the Panel's qu estion". As the EC has just explained, this US 
view is based on a highly artificial and self-serving interpretation of Article IX:1 GATT. Accordingly, 
the United States' attempts to is olate its claim regarding Article 12(2) of Regulation 2081/92 from the 
general question of origin marking must fail.  60. In addition, the United States argues that the requirement of Article 12(2) to indicate the country of origin "is all the more confusing sin ce geographical indications by their very nature 
concern indicating the particular geographical orig in of products". The truthful indication of the 
country of origin gives the consumer more informat ion, rather than less. The EC does therefore not 
see how the truthful indication of the country of origin, in which the geographical area is located, 
could be confusing for the consumer. Moreover, if the US arguments were correct, then the 
                                                     
 
45 19 US 1304 (a) (Exhibit EC-113). Exhibit EC-66, which the EC provided earlier, contains only an 
indirect reference to this provision; for ease of reference of the Panel, the EC also provides the immediate 
source. 
46 US Response to Panel's Question No. 122, para. 47; US Response to Panel's Question No. 123, 
para. 48. 
47 EC Response to Panel's Question No. 120, para. 87. WT/DS174/R/Add.2 
Page B-362  
 
 application of the US country or origin marki ng requirements to EC products bearing a name 
protected under Regulation 2081/92 would equally have to be regarded as confusing for the consumer, 
and as detracting from the value of the geographical indication.  
Question 128 
 
61. In their responses to the Panel's Question No. 128, both the United States and Australia fail to 
explain why they consider the requirement of gove rnment involvement in the approval of inspection 
structures problematic. Since they have no satisfactory answer to this question,  they instead choose to 
mischaracterise the requirements of Regulation 208 1/92 by arguing that the Regulation imposes "a 
requirement on sovereign WTO Members to put in place certain inspection structures dictated by the 
EC",
48 or involves the "imposition of EC-mandate inspection structures on other WTO Members".49 
 62. As the EC has already explained a number of  times, the requirement of inspection structures 
is applied and evaluated purely with respect to the specific product for which protection is sought.
50 
Accordingly, contrary to the arguments of the Un ited States and Australia, it is not "equivalence by 
another name". Regulation 2081/92 does not concern the question of how the complainants protect 
geographical indications within their own territory , and in particular whether they require the 
existence of inspection structures for this purpose or not. The objective of the Regulation is purely to ensure that in order to be protected in the EC, geographical indications from third countries fulfil the 
same conditions as geographical indications from the EC. 
 
63. As the EC has explained, since the inspecti on bodies will be located on the territory of the 
country of origin of the geographical indicati on, an involvement of the home country of the 
geographical indication is indispensable for the designation and continued monitoring of such 
inspection structures.
51 As the EC has also said, this possib ility to have inspection bodies approved by 
their home country should in fact constitute an ad vantage rather than a di sadvantage for applicants 
and producers from the US or Australia.52 
 64. In its response, the United States is contesti ng this argument by claiming that the EC "does 
not allow the United States to make its own determ ination as to the sufficiency of the inspection 
structures".
53 This is misleading. Article 12a (2) (b) of Regulation 2081/92 requires a declaration by 
the country of origin "that the structures provided for in Article 10 are established on its territory". 
Obviously, the Community institutio n responsible for deciding on an application for protection under 
Regulation 2081/92 must make sure that all the re quirements of the Regulation are met. However, as 
the EC has already said, in doing so, the Community institutions will have to rely to a considerable 
extent on the information provided by the country of origin.54 Contrary to the US' suggestion, the 
declaration of the country of origin is therefore of considerable importan ce, and will be given due 
weight by the Community instituti ons in the registration process. 
 
Question 130 
 65. The EC notes that in their responses, the US and Australia fail to identify any aspect of the 
requirement of inspection structures beyond the involv ement of their governments that they consider 
                                                     
 
48 US Response to Panel's Question No. 128, para. 53. 
49 Australia's Response to Panel's Question No. 128, para. 51. 
50 EC SOS, para. 54 et seq.; EC SWS, para. 96 et seq. 
51 EC Response to Panel's Question No. 136, para. 146. 
52 EC Response to Panel's Question No. 131, para. 114. 
53 US Response to Panel's Question No. 128, para. 57. 
54 EC Response to Panel's Question No. 114, para. 69.  WT/DS174/R/Add.2 
 Page B-363 
 
 
 objectionable.55 Accordingly, the EC understands that the claims of the United States and Australia 
are therefore now limited to the requirement of  government involvement in the designation of 
inspection structures.  
Question 137 
 
US Response
 
 66. The United States complains that it "does not have access to the product specifications for any 
of the GIs cited by the Panel". This complaint is unwarranted.
56 The specifications of any registered 
geographical indication, including those mentioned in  the question, can be obtained upon request from 
the EC Commission or from the competent authorities of the Member States.  
 67. With respect to the argument made at paragra ph 67, the terms used by the EC are "not very 
qualified". The EC used those terms in order to make  clear that whether a "used" sign is the same or 
different from the sign covered by the registrati on can only be decided on a case-by-case basis. The 
EC does not see how the complainants could disagree with this.    68. With respect to the issue of translations
57, the EC has explained repeatedly that the 
registration confers a positive right to use the regist ered name, to the exclusion of any other sign. A 
"translation" is not necessarily a different sign, something which appears to be overlooked by the 
United States. For example, the translation of th e name "Gorgonzola" into Spanish, English and 
French is in all cases "Gorgonzola". For that reas on, it would be not be correct to say that the 
registered term cannot be used in "translation". Moreover, in some cases a registration may cover 
different linguistic versions (e.g. "Cítrico s  Valencianos" and "Citrics Valencians").58  For those 
reasons, the relevant issue is not whether the registra tion allows the use of a name "in translation", but 
rather whether it gives a positive right to use a diffe rent sign, a question which has been answered by 
the EC in an unequivocal manner.  69. As explained by the EC in its response to  Questions 2 and 3 from Australia, the assertion 
made by the United States in footnote 38 is based  on a misunderstanding of the relevant EC law. 
 
70. At paragraph 69 the United States asserts that: 
 
Under Article 16.1, rather than seeking rej ection or cancellation of a GI registration 
on an EC wide basis, the owner of an identical or similar valid trademark registered in the EC is entitled to prevent particular "uses" of the GI that confuse consumers in 
that state.  
71. The EC submits that, in accord ance with the last sentence of Article 1.1 TRIPS,  it is for each 
Member to decide whether or not the sign should be invalidated first. As explained by the EC
59, in 
many Members the owner of a registered trademar k cannot be prevented from using it, even where it 
results in a likelihood of confusion with an earlie r trademark, unless the registration is invalidated 
first. The interpretation advanced by the United St ates would imply that the trademark laws of all 
those Members are inconsistent with Article 16.1 TRIPS.  
 
                                                      
55 US Response to Panel's Question No. 130, para . 62; Australia's Response to Panel's Question 
No. 130, para. 53. 
56 US Response to Panel's Question No. 137, para 65. 
57 US Response to Panel's Question No. 137, para. 68. 
58 See EC Response to Panel's Question No. 140, para. 176. 
59 See EC Response to Panel's Question No. 138, para. 170. WT/DS174/R/Add.2 
Page B-364  
 
 72. At paragraph 70, the United States refers to a decision of a South African court, according to 
which the use of the trademark "Bud ĕjovické Budvar" would give rise to a likelihood of confusion 
with the trademarks "Budweiser" and "Bud".  In the first  place, the EC recalls, once again, that the registration of the names "Bud ĕjovické pivo", " Českobudĕjovické pivo" and "Bud ĕjovický 
mĕšt'anský" is not before this Panel
60, as well as the fact that such registration is unique in that it is the 
only registration under Regulation 2081/92 which is subject to the proviso that it applies "without 
prejudice to any beer trademark or other rights existing in the Eureopean Union as of the date of accession". Moreover, the names  "Bud ĕjovické Budvar" and "Bud" are not among the names 
registered under Regulation 2081/92.  In any event,  as stressed by the Unite d States elsewhere, a 
determination of likelihood of conf usion must take account of "the consumers' perception in a given 
territory".
61 
 
73. The United States also refers62 to a decision of an Italian court enjoining a Czech producer of 
beer from using the names "Bud" and "Budweiser" be cause they give rise to a likelihood of confusion 
with the trademarks "Budweiser" and "Bud". Howeve r, once again, the names "Bud" and "Budweiser" 
are not among those registered under Regulation 2081/92. 
 
74. Moreover, the EC understands that the decisi on of the South African court was adopted in 
response to an application for the registration of a trademark by the Czech producer and not in the 
context of infringement proceedings involving two registered trademarks. Therefore, it is totally 
irrelevant in connection with the issue raised in  the Panel's question, wh ich is whether a validly 
registered sign which is not confusing per se  may, nevertheless, be used subsequently in a confusing 
manner. Similarly, the EC understands that the Ita lian case involves the infringement of a registered 
trademark by a non-registered trademark and is, therefore, irrelevant for the same reasons.    75. Finally, the EC would note the United States is misleadingly selective when citing examples 
of "likelihood of confusion" involving the trad emarks "Bud" and "Budweiser". The Panel should be 
aware that the courts of other countries, including , for example, Australia and New Zealand, have 
found that there was no likelihood of confusion be tween the names which it cites in its response.
63  
 Australia's Response
 
 76. Australia says that
64 
 
Even within the Member States where the trademarks "Bavaria", "Hoker Bajer" and 
"Budweiser" are registered, the protection afforded by Regulation No. 2081 – in particular Article 13.1 – makes clear that the owner of a registered trademark would not be able to prevent confusingly similar or identical use of a sign or identical goods 
… 
77. Australia is confusing two different issues. Article 13(1) of Regulation 2081/92 defines the 
scope of the negative  right of the right holders of a registered geographical indication to prevent 
certain uses, including as trademarks. It does not pr ejudice the answer to the distinct and previous 
question of whether the registrati on of a geographical indication must be refused in accordance with 
Article 14(3). Nor does it prejudge the answer to the distinct question of what is the scope of the 
                                                     
 
60 EC FWS, paras. 21-25. 
61 US Response to Panel's Question No. 137, para. 64. 
62 US Response to Panel's Question No. 137, para.  70. 
63 See Exhibit EC-114 and Exhibit EC-115. 
64 Australia's Response to Panel's Question No. 137, para. 59.  WT/DS174/R/Add.2 
 Page B-365 
 
 
 positive  right to use a geographical indication65, and more specifically of whether that right includes 
the right to use a geographical indication in a manner that is contrary to the labelling Directive and the 
laws on unfair competition.  78. Australia also says that:
66 
 
Even where those trademarks are not regi stered in other EC Member States, each 
could still enjoy a reputation in the territori es of those other States –particularly in 
adjoining States- which the EC-defined GI right holders could exploit through confusingly similar use of translations of the EC-defined GIs. The EC has not 
explained how, in such situations, the ow ners of those trademarks would be assured 
of the rights of a registered trademark owne r to initiate infringement action, or of the 
standing to initiate legal action under othe r legal provisions, such as labelling, 
misleading advertising or unfair competition laws. 
79. The relevance of this argument in the context of Australia's claims is unclear to the EC. As 
emphasised by Australia throughout these proceedings, trademark rights are territorial. The 
registration of a trademark in Member State A confers no exclusive rights in Member State B, just like the registration of a trademark in the United States confers no exclusive rights in  Australia 
(subject to what is provided in Article 16.2 TRIPS,  which Australia has not invoked in this dispute). 
Indeed, it is precisely for that reason that the EC  institutions adopted the Regulation creating the 
Community Trademark. 
 
80. On the other hand, the EC can confirm, once again, that there is nothing that prevents the 
owner of a trademark registered in Member State A from bringing an action in Member State B against the use of a geographical indication in a ma nner which is contrary to the Directive on labelling 
or to the unfair competition laws of Member State B, even if the trademark concerned is not registered 
in Member State B.  
 
Question 145 
 
81. The EC notes that the responses of the Un ited States and Australia are contradictory and 
irreconcilable. While the United States persists in  the mistaken theory that Article 24.5 is an 
"exception" to Articles 22 and 23
67, Australia agrees with the EC that Article 24.5 is not a "mere 
exception"68 and that it creates "positive rights".69 Further, Australia agrees with the EC that 
Article 24.5 "defines the boundary between a Memb er's right to implement measures relating to 
TRIPS-defined GIs and its obligation to affo rd protection to pre-existing trademarks".70 Nevertheless, 
Australia, fails to draw the appropriate conclusion from this. 
 
82. If, as Australia and the EC agree, Article 24. 5 is not an "exception" but rather defines the 
"boundary" between the right to implement protecti on for geographical indications and the obligation 
to protect grandfathered trademarks, it would follow that a Member which acts consistently with its 
rights and obligations under Article 24.5 could not violate Article 16.1. Yet, both Australia and the 
United States have made a point of not raising any cl aim, even in the alterna tive, to the effect that 
                                                      
65 By the same token, the fact that  a registered trademark confers the negative  right to prevent the use 
of confusingly similar signs does not mean that the owner of the trademark has a positive  right to use the 
confusingly similar signs himself. 
66 Australia's Response to Panel's Question No. 137, para. 59. 
67 US Response to Panel's Question No. 145, para. 72. 
68 Australia's Response to Panel's Question No. 145, para. 61. 
69 Ibid. 
70 Australia's Response to Panel's Question No. 145, para. 61. WT/DS174/R/Add.2 
Page B-366  
 
 Article 14(2) of Regulation 2081/92 is  inconsistent with Article 24. 5. Their claims concerning the 
issue of co-existence are based on Article 16.1 exclusively.  83. The EC, therefore, submits that, if the Pane l agrees with the definition of the relationship 
between Articles 24.5 and Article 16.1 put forward by Australia and the EC, it should reject the 
complainants' claim under Article 16.1 with respect to the issue of co-existence, without it being 
necessary for the Panel to consider whether Article 14(2) of Regulati on 2081/92 is inconsistent with 
Article 24.5, given that the complainants ha ve not submitted any claim to that effect. 
 84. The United States takes advantage of the respon se to this question in order to elaborate upon 
its interpretation of the phr ase "shall not prejudice … the validity of the registration".
71 As explained 
by the EC, the United States fails to distinguish between the "validity" of the registration and the exercise of the rights conferred by the registrati on. Moreover, the US in terpretation would render 
duplicative and superfluous the reference to "the right  to use a trademark". That right is the most 
fundamental right of the owner of any trademark, wh ether or not it is registered. If the drafters of 
Article 24.5 specified that the measures to implemen t protection of geographical  indications shall not 
prejudice the right to use a trademark, but not the ri ght to exclude others from using the trademark, it 
is because they did not intend to limit the Members' right to do so. The US interpretation reads an obligation to preserve the right to exclude others, where Article 24.5 provides none.  
 85. Furthermore, the US interpretation is clearly  contradicted by the Spanish and the French 
versions of Article 24.5, which read as follows:
72 
 
Cuando una marca de fábrica o de comercio  haya sido solicitada o registrada de 
buena fe, o cuando los derechos a una ma rca de fábrica o de comercio se hayan 
adquirido mediante su uso de buena fe: 
 a) antes de la fecha de aplicación de estas disposiciones en ese 
Miembro, según lo establecido en la Parte VI;  o  
 b) antes de que la indicación geográfica estuviera protegida en su país 
de origen; 
las medidas adoptadas para aplicar esta Sección no prejuzgarán  la posibilidad de 
registro ni la validez del registro de una ma rca de fábrica o de comercio, ni el derecho 
a hacer uso de dicha marca, por el motivo de que ésta es idéntica o similar a una 
indicación geográfica. 
Dans les cas où une marque de fabrique ou de commerce a été déposée ou enregistrée 
de bonne foi, ou dans les cas où les droits à une marque de fabrique ou de commerce 
ont été acquis par un usage de bonne foi: 
a) avant la date d'application des pr ésentes dispositions dans ce Membre telle 
qu'elle est définie da ns la Partie VI, ou 
b) avant que l'indication géographique ne soit protégée dans son pays d'origine, 
les mesures adoptées pour mettre en oeuvre la présente section ne préjugeront  pas la 
recevabilité ou la validité de l'enregistre ment d'une marque de fabrique ou de 
                                                      
71 US Response to Panel's Question No. 145, para. 74.  
72 Emphases added.   WT/DS174/R/Add.2 
 Page B-367 
 
 
 commerce, ou le droit de faire usage d'une marque de fabrique ou de commerce, au 
motif que cette marque est identique ou similaire à une indication géographique. 
86. The Spanish term "prejuzgarán" and the French  term "préjugeront" do not have the ordinary 
meaning which the United States attributes to the E nglish word "prejudice", i.e. to cause "injury, 
damage, harm".73  The dictionary definition of "prejuzg ar"is "juzgar de las cosas antes del tiempo 
oportuno, o sin tener de ellas cabal conocimiento". 74 
 87. In turn, the dictionary  definition of "préjuger"
75 is 
 
I. 1. Vx ou littér.  porter un jugement prématuré sur (qqch.). Je ne veux point préjuger 
la question . – Prévoir au moyen des indices dont on dispose. Autant qu'on peut le 
préjuger; a ce qu'on peut préjuger . 2  Dr. prendre un décision provisoire sur (qqch.) 
en laissant prévoir le jugement définitif.   
88. The above definitions are similar to one of  the ordinary meanings of the English term 
"prejudice", which is to "judge beforehand".76  
 
89. Article 24.5 may be contrasted with other provisions of the TRIPS Agreement, such as 
Articles 13, 16.1, 26.2 or 30 where the English term  "prejudice" has been rendered as "perjuicio" in 
the Spanish version and as "préjudice" in the French  one. Unlike the terms "prejuzgar" and "préjuger" 
those terms mean "harm, injury, damage". This di fference confirms that the terms "prejuzgarán" and 
"préjugeront" were chosen deliberately in order to convey a different meaning from that which the 
United States attributes to the English term "prejudice". 
 90. The French and the Spanish versions of Artic le 24.5 make it clear that, contrary to the US 
view, the phrase "shall not prejudice … the validity of the registration" does not mean that a Member 
is prevented from taking any measure that may affect  negatively the exercise of the rights conferred 
by the registration. Instead, it means that Members cannot invalidate the trademark merely on the 
basis that it is identical or similar to a geographical indication, without prejudice  to the possibility to 
invalidate it on other grounds, such as that the trademar k is not distinctive or is deemed misleading for 
other reasons. By the same token, the phrase "shall not prejudice … the right to use the trademark" means that Members may not deny the right to use a trademark on the basis that it is the same or 
similar as a geographical indication, without prejud ice to the possibility to do so on other grounds 
(e.g. because it would result in a likelihood of confusion with an earlier trademark).  
 
Question 148 
 
91. The United States persists in obfuscating unnecessarily the discussion by confusing two 
issues which are clearly distinct under the TRIPS Agreement and under the trademark laws of both 
the United States and the EC.  92. The fact that Article 16.3 TRIPS and the anti-dilution provisions of the EC Trademark Directive and the Community Trademark Regulation a fford additional protection to trademarks which 
enjoy reputation does not mean that reputation is irrelevant in order to establish a likelihood of 
confusion between signs for similar goods. The EC  has shown that this is an uncontroversial 
proposition under both EC law and US law.
77 
                                                      
73 US Response to Panel's Question No. 76, para. 99.  
74 Diccionario de la Real Academia Española, 20th Edition, 1984 . 
75 Le Nouveau Petit Robert, 1993. 
76 The New Shorter Oxford English Dictionary, Ed. Lesley Brown, Clarendon Press, Oxford 1993. 
77 EC SOS, paras. 166-169. WT/DS174/R/Add.2 
Page B-368  
 
  
93. The United States mischaracterizes the EC position. The EC has not said that a finding of likelihood of confusion for the pur poses of Article 16.1 TRIPS requires always  a finding that the 
earlier trademark enjoys reputation, regardless of the inherent "strength" (distinctiveness) of the 
trademark. Rather the EC has noted the following: 
 
• first, terms which are, or which may reasona bly qualify, as geographical indications for a 
certain product are "descriptive" terms and, hence, primarily "non-distinctive". As such, 
they may be validly registered only to the ex tent that they have acquired distinctiveness 
(secondary meaning). 
 
• second, the "strength" or degree of distinctiv eness of a trademark (whether inherent or 
acquired) is a relevant criterion for assessing the "likelihood of confusion"; 
 
• third, length of use, reputation and renown  are the basic criteria for measuring the degree 
of acquired distinctiveness of a trademark.  Therefore, those criteria are particularly relevant when assessing the likelihood of conf usion with trademarks which are primarily 
non-distinctive because they consist of d escriptive terms, such as a geographical 
indication. 
 94. For the above reasons, Article 14(3) of Regul ation 2081/92 directs expressly the authorities to 
consider length of use, reputation and renown. But this does not mean that other criteria are irrelevant. 
Nor that the criteria mentioned in Article 14(3) are necessarily dispositive. As explained by the EC
78, 
if Article 14(3) does not mention the similarity of signs and goods is because such criteria are 
necessarily relevant for any determination of likeliho od of confusion. Indeed, as also explained by the 
EC79, the criteria mentioned in Article 14(3) could not  be meaningfully applied without taken into 
account the similarity of goods and signs.      95. For the above reasons, the decisions of the OHIM, of the ECJ and of Member State courts 
cited by the United States
80 are irrelevant. Indeed, as far as the EC can see, none of them concerns a 
situation involving a situation whic h can be considered as similar to that addressed by Article 14(3) of 
Regulation 2081/92, i.e. a situation requiring the ass essment of the likelihood of confusion between a 
geographical indication or another descriptive sign and a registered trademark which consists of such 
sign.   Question 149 
 
96. The EC notes that the United States appears to concede
81 that Article 22.2 TRIPS is not 
relevant for the interpretation of Article 14(3) of  Regulation 2081/92, given that Article 14(3) does 
not purport to implement that provision, but instead Article 16.1 TRIPS. 
 
97. The United States, nevertheless,  goes on to argue that:82 
 
The word "mislead" appears to be used th roughout the EC GI Regulation in the sense 
of affirmatively leading the public to believe  something about the product that this is 
not true … 
                                                      
78 EC Response to Panel's Question No. 68. 
79 Ibid. 
80 US Response to Panel's Question No. 148, para. 98. 
81 US Response to Panel's Question No. 149, para. 102. 
82 Australia's Response to Panel's Question No. 149, para. 104.  WT/DS174/R/Add.2 
 Page B-369 
 
 
  
98. Similarly, Australia contends that:83 
 
the word "misleading" is used throughout the Regulation – in Articles 3.2, 6.6, 13.1(c), 13.1(d) and 14.3 – in the sense of an action which positively provokes an 
error on the part of the consumer. 
99. However, neither Australia nor the United St ates explain what they mean by "positively" or 
"affirmatively", respectively. Nor do they explain how the text of the provisions which they cite 
support that conclusion.  
100. Both Australia and the United States contend th at the French version of the provisions which 
they cite would confirm their reading. But they lim it themselves to copy the text of those provisions, 
without explaining how it supports their interpretation.
84 As explained by the EC85, one of the 
ordinary meanings of the Spanish term "error", and of its equivalents in other romance languages (e.g. 
"erreur", "errore")  is "confusión" ("confusion", "confusione"). The complainants do not address this 
argument.  
 101. The complainants' assertions fall short of a proper contextual interpretation. They limit 
themselves to note the obvious fact that different te rms are used in different provisions, but make not 
attempt to read them in a coherent manner.   
102. As explained by the EC, Article 14(3) of Re gulation 2081/912 must be read together with 
Articles 7(4) and 7(5)(b)
86. Article 7(4) allows trademark owners  to object to the registration of a 
proposed name inter alia  on the grounds that the registration woul d give rise to the situation described 
in Article 14(3). Article 7(5)(b) then provides that  the authorities must resolve that objection having 
regard to the "likelihood of confusion". It would give rise to an internal contradiction within the 
Regulation if the standard for deciding an objec tion under Article 7(5)(b) were different from and 
more rigorous than the standard of Article 14(3).  103. Additional guidance is provided by Article 13( 1)(d), which provides that registered names 
shall be protected against "any other practice liable to mislead the public as to the true origin of the 
product". The term "other" implies that the practices previously described in letters a) b) and c) are 
also "liable to mislead". Yet, those letters do not provide for a more rigorous standard than that of 
"likelihood of confusion" within the meaning of Article 16.1 TRIPS, but rather the opposite.  
 
Question 150 
 104. In answering this question the United States concedes that the exceptions provided in 
Article 6.1(b) of the Trademark Directive and Ar ticle 12(b) of the Community Trademark Directive 
are consistent with Article 17 TRIPS. Indeed, the United States could hardly contest this given that 
many other Members have similar exceptions in their statute books.
87 
 105. Yet, as explained by the EC
88, the requirement to use a registered geographical indication in 
accordance with the Directives on labelling and misl eading advertising and with the laws on unfair 
                                                      
83 Australia's Response to Panel's Question No. 149,  para. 77. 
84 US Response to Panel's Question No. 149, para. 104 and  Australia's Response to Panel's Question 
No. 149, para. 78. 
85 EC SOS, para. 162. 
86 See also the equivalent provisions in Articles  12b(3), 12d(2) and 12d(3). 
87 See EC Response to Panel's Question No. 153, para. 240.   
88 EC Response to Panel's Question No. 153, paras.  242-244.   WT/DS174/R/Add.2 
Page B-370  
 
 competition is equivalent to the condition that they  must be used "in accordance with honest practices 
in industrial or commercial matters".  106. Thus, in definitive, what the United States app ears to consider objectionable is the mere fact 
that the limitations on the use of a registered ge ographical indication are not provided in the EC's 
trademarks laws but instead in different legal in struments. However, neither Article 16.1 TRIPS nor 
any other provision of the TRIPS Agreement contains any requirement to that effect. To the contrary, 
Article 1.1 provides that "Members shall be free to  determine the appropriate method of implementing 
the provisions of this Agreement within their own legal system and practice".  Question 151 
 
107. The United States says that it agrees with  the proposition made in the question that 
"Article 24.3 is an exception to Part II, Section 3".
89 
 
108. The EC does not read the suggestion made in the question as meaning that Article 24.3 is an 
"exception", but rather the opposite. As the EC unde rstands it, the suggestion made in the question is 
that the obligation provided in Article 24.3 applies only with respect to the "exceptions" provided in 
other  paragraphs of Article 24. If Article 24.3 we re also an "exception", it could not impose upon 
Members the obligation not to rely upon those exceptions as a justification for diminishing pre-existing protection. 
 
Question 154 
 
109. The EC takes issue with the US suggestion
90 that the "legitimate interests" of consumers are 
necessarily the same as those of the trademark owner. Consumers, and in particular the EC consumers 
of foodstuffs, are often more interested in being informed about the origin of the products, and the 
characteristics associated thereto, th an about the identity of the undertaking which is the source of the 
goods, in particular where that undertaking has no special reputation.91 
 110. In this connection, it is important to recall th at, even if the complainants' narrow interpretation 
of Article 14(3) of Regulation 2081/92 were correct, that provision would prevent the registration of a 
geographical indication where it leads to confusion wi th a trademark that has been used for a certain 
period of time and enjoys some reputation or renow n. Thus, on the complainants' own interpretation 
of Article 14(3), Article 14(2) would provide for the co-existence of geographical indications only 
with trademarks that have been used for a short period of time and/or enjoy little reputation/renown, if 
at all.   
 
111. Both complainants attempt to read into th e conditions of Article 17 a narrow "necessity" test, 
whereby the use of indications of origin would be  permitted only to the extent strictly necessary to 
inform consumers about the origin of the products.
92 
                                                      
89 US Response to Panel's Question No. 151, para. 108. 
90 US Response to Panel's Question 154, paras. 113 and  119.  
91 While US consumers may not be as familiar yet with geographical indications, there is a growing 
awareness. For example, as explained by the EC, the St ate of California has enacted legislation which prohibits 
the use of any trademark including or consisting of a recognised geographical indication for wine, including 
earlier trademarks grandfathered by Article 25.4, and regardless of whether they are subject to invalidation as 
being misleading. This statute, which has been recently upheld by California's Supreme Court (Exhibit EC-81) purports to protect not only the interests of the wine makers concerned but also those of the Californian 
consumers. This suggests that the St ate of California does not agree with the views expressed by the USTR in 
this dispute.    
92 See e.g. US Response to Panel's Question No. 154, paras 119-120; Australia's Response to Panel's 
Question No. 154, para. 84.   WT/DS174/R/Add.2 
 Page B-371 
 
 
  
112. This interpretation is not supported by the text of Article 17. All that is required by Article 17 
is that the exception be "limited" and that the inter ests of the trademark owner and of third parties be 
"taken into account". Reading the condition that th e exception must be "limited" as imposing a strict 
"necessity" test would pre-empt the balancing of  interests provided in the second condition of 
Article 17. In turn, the condition to "take account of  the legitimate interests of the trademark owner 
and third parties" does not establish any hierarchy be tween the relevant interests and affords a margin 
of discretion to Members in order to fi nd a proper balance between them.    
 113. Moreover, the "necessity" test advanced by the complainants would render irrelevant the 
exception provided in Article 17 with respect to the fair use of descriptive terms. The holders of a 
geographical indication have a legitimate interest in informing consumers about the origin of their 
products, and the characteristi cs associated thereto, in  a manner which can be easily recognised by the 
public. One could, of course, argue that all that is  "necessary" in order to inform consumers that a 
product is of a certain geographical indication is to mention it in small print at the bottom of a back 
label, somewhere between the ingredients list and the expiry date. That use, however, would not give 
rise to a "likelihood of confusion" and would not need to be justified under Article 17. The exception 
provided in Article 17 with respect to the "fair use" of descriptive terms only becomes necessary to 
extent that geographical indications are used in what the United States calls misleadingly "trademark-
like" fashion.  
114. Finally, as shown by the EC, the "necessity" test devised by the complainants cannot be 
reconciled with the terms of the exceptions clauses included in the trademark laws of a large number 
of Members, which do not require that the use be "ne cessary", but instead that it be "in good faith", or 
in accordance with "honest", "fair" or  "proper" business or trade practices.
93   
 
115. By way of conclusion, the Unites States asserts that:94 
 
Under the EC's interpretation of TRIPS Artic le 17, all uses of a registered GI are 
automatically entitled to the "fair use" exception, no matter what the facts of 
particular case at hand (i.e. whether the use is fair, the term is descriptive, or the 
legitimate interests of the trademark owner are considered) by simple virtue of 
registration alone. 
116. This is a gross mischaracterization of the EC's position: 
 
• first, the EC does not claim an exception with  respect to terms that are not "descriptive". 
The EC argues that geographical indications, like all other indications of source, are per se  descriptive terms; 
 
• second, the EC has explained that the interest s of the trademark owners are taken into 
account in several ways.
95 The United States does not address the EC's arguments in its 
response. 
 
• third, the EC has explained that registered  geographical indications must be used in 
accordance with the requirements of th e Directives on labelling and misleading 
advertising and the laws on unfair competiti on. This reduces the likelihood of confusion 
                                                      
93 EC Response to Panel's Question  No. 153, para. 240. 
94 EC Response to Panel's Question No. 154, para. 120. 
95 EC Response to Panel's Question No. 154, para. 254. WT/DS174/R/Add.2 
Page B-372  
 
 and ensures that the use of the geographical indications is "fair".
96  Again, the US does 
not address this argument in its response.     
 
Question 155 
 117. The EC agrees with both complainants that "trademarks are not merely descriptive and cannot 
be considered ‘descriptive terms' within the meaning of Article 17."
97  
 118. As pointed out by Australia
98, the reason why trademarks are not "descriptive" is that, in 
accordance with Article 15.1 TRIPS, they must be "distinctive", i.e. they must be capable of 
distinguishing the products of one undertaking from those of other undertakings. A "descriptive" term 
is inherently not "distinctive" and, therefore, in capable of being a trademark. A geographical term 
(except where it is fanciful because it cannot be r easonably associated to the products concerned) is 
primarily descriptive of the origin of the products and, hence, non-distinctive. For that reason, 
geographical terms are generally  not registrable as trademarks, unless they have acquired 
distinctiveness through use. 
 119. Having explained correctly that trademarks ar e not "descriptive" terms because they must be 
"distinctive" within the meaning of Articl e 15.1 TRIPS, Australia goes on to assert that
99  
 
In the same way, and for th e same reasons, use of a GI cannot be said to be merely 
use of an indication of source within the m eaning of the Paris Convention or to be use 
of a descriptive term within the meaning of TRIPS Article 17. 
120. This is incorrect. The analysis made by Au stralia with respect to trademarks cannot be 
extrapolated to geographical indications. Australia disregards that there is a fundamental difference 
between trademarks and geographical  indications. Unlike trademarks, geographical indications are not 
"distinctive" within the meaning of Article 15.1, b ecause they do not serve to distinguish the products 
of one undertaking from those of other undertakings. Rather, the purpose of a geographical indication 
is to identify the geographical area in which a pr oduct originates, where certain characteristics are 
associated to that origin, regardless of the unde rtaking which produces or markets that product. 
 121. Australia is also wrong when it says that geographical indications are not indications of 
source within the meaning of the Paris Convention.
100 Geographical indications are a subset of 
indications of source. The name "Australia" is always  an indication of source, regardless of whether it 
may qualify as well as a geographical indication with  respect to certain products, as claimed by 
Australia outside these proceedings. Commenting upon Article 1(2) of the Paris Convention, 
Bodenhausen says that101 
 
Appellations of origin are now considered to be a species  of the genus  ‘indications of 
source', characterized by their relationship with quality or characteristics derived from 
the source. 
                                                      
96 See e.g. EC Response to Panel's Question No. 153, paras. 234-244. 
97 See e.g. US Response to Panel's Question No. 155, para. 123; US Response to Panel's Question No. 
156, para. 130; and Australia's Response to Panel's Question No. 155, para. 92. 
98 Australia's Response to Panel's Question No. 155, para. 89.  
99 Australia's Response to Panel's Question No. 155, para. 92. 
100 Australia's Response to Panel's Question No. 157, para. 92. 
101 G.H.C. Bodenhausen, Guide to the Application of the Paris Convention for the Protection of 
Industrial Property , BIRPI Geneva 1968, p. 23.  WT/DS174/R/Add.2 
 Page B-373 
 
 
 122. Geographical indications differ from simple i ndications of source in that, in addition to 
describing the origin of the products, they describe certain product characteristics that are attributable 
to that origin. But this does not make them "dis tinctive" within the meaning of Article 15.1.  
 123. Australia also says that "if geographical i ndications were purely descriptive there would not 
be any need –or indeed any basis- for an intellectual property right".
102 The EC does not understand 
this argument, which appears to be  based on the erroneous notion that intellectual property rights must 
necessarily be owned by individuals. As explaine d, descriptive terms cannot be the subject of 
trademark rights because trademarks must be "dis tinctive". On the other hand, there is no reason why 
a descriptive term cannot be the subject of other in tellectual property rights owned collectively by all 
the producers of goods conforming to the relevant description. Indeed, Article 1(2) of the Paris 
Convention provides expressly that "the protection of industrial property has as its object", among 
other things, "indications of source", which Aust ralia does not dispute are "purely descriptive". 
 124. Finally, even if geographical indications we re not "descriptive terms" within the meaning of 
Article 17, the complainants have not given any g ood reason why fair use of a geographical indication 
should not qualify for an exception under Article 17.  The exception provided in Article 17 with 
respect to the fair use of descrip tive terms is just an example. Th e potential universe of uses of an 
indication of source is not more "limited" than that  of a geographical indication. And the interest in 
using a geographical indication is no less "legitimate " than the interest in using an indication of 
source. Nor is there any reason why the use of a geographical indication should be more confusing 
per se  or more prejudicial to the interests of the trademark owner. Australia has said that it is 
"reasonable and fair for people to be able to say … ‘made in Australia'".
103 The EC agrees. The EC 
would add, however, that it is reasonable and fair fo r people to be able to say that their products are 
made in Australia, irrespective of whether "Austra lia" is an indication of source or a geographical 
indication for the goods concerned (as Australia clai ms with respect to wine, for example). It would 
be absurd if only the producers of goods origin ating in an area which qualifies as a geographical 
indication were prevented from indicating the origin of their goods.    
Question 156 
 
125. The United States makes a remarkable argument to the effect that th e exception provided in 
Article 17 is narrower than the exceptions in Articles 13, 26.3 and 30 because it is subject to less 
conditions.  126. Even more remarkable is the US argument to the effect that the "take account" standard of 
Article 17 is in fact more protective of the inte rests of the right holder than the "unreasonably 
prejudice" standard of Articles 13, 26.3 and 30,  even though Articles 26.3 and 30 distinguish 
expressly between the two standards and reserve the "t ake account" standard for the interests of third 
parties.  127. In essence, the United States argues that Article  17 does not include the "normal exploitation" 
and the "unreasonable prejudice" conditions because any limitation of the exclusive rights of the 
trademark owner would necessarily fail to meet those conditions.
104 However, from the fact that 
Article 17 does not include those conditions it cannot  be inferred that it purports to provide even 
stricter standards which are not reflected in the wo rding of the text. Rather, the logical inference is 
that the drafters mean to provide for more lenient standards.    
                                                     
 
102 Australia's Response to Panel's Question No. 157. 
103 Australia's Response to Panel's Question No. 154, para. 86. 
104 US Response to Panel's Question No. 156, para. 130. WT/DS174/R/Add.2 
Page B-374  
 
 128. The United States confuses the "legitimate intere sts" of the trademark owner with the full 
enjoyment of its legal rights, despite the clear distinction drawn by the Panel in Canada – 
Pharmaceutical  Patents .
105 
 129. Moreover, even where legal rights rather than  legitimate interests are taken into account, the 
co-existence of a trademark with another trademar k or with a geographical indication is far from 
being so "abnormal" or "unreasonable" as the Unite d States pretends. It is envisaged by several 
provisions of Sections 2 and 3 of Part III, even wh ere it may lead to some confusion. For example: 
 
• Article 16.1 provides for the co-existence of registered trademarks with existing prior 
rights; 
 
• Article 23.2 allows co-existence of a geogra phical indication for wines or spirits and a 
trademark consisting or including such geographical indication if used for wines and spirits originating in the area to which the geographical indication relates. A priori , the 
risk that consumers may confuse that geogra phical indication with the trademark may be 
the same as when the products covered by th e trademark do not originate in that area. 
Nevertheless, co-existence is allowed because it does not mislead consumers as to the true 
geographical origin of the products;   
 
• co-existence may arise as well from Article 24.3, when the protection of geographical 
indications existing before the date of entr y into force of the WTO Agreement provided 
for such co-existence; 
 
• co-existence is envisaged also by Article 24. 4, which provides that a Member may allow 
"continued and similar" use of a geographical indication
106 for wines or spirits of another 
Member by its nationals or domiciliaries w ho have used it before 1 April 1994 in good 
faith or for at least 10 years preceding that da te, regardless of whether this gives rise to 
confusion with the products of the other Memb er that are entitled to use that geographical 
indication.  
 
130. Finally, there is nothing in the TRIPS Agreement that prevents Members from providing for the co-existence of non-registered trademarks and other trademarks, including latter registered trademarks, or geographical indica tions. In particular, as conceded by Australia, Article 24.5 allows 
co-existence with respect to non-registered gra ndfathered trademarks even on the complainants' 
reading of that provision. 
 
Question 157 
 
131. Contrary to the US assertions,
107 it is simply not true that th e EC has left "unspecified" the 
other measures which it applies in order to comply with Article 22.2 TRIPS, in addition to Regulation 
2081/92. The EC mentioned those meas ures in its first written submission.108 Furthermore, the EC 
referred the Panel and the other parties to the res ponses of the EC and of its Member States to the 
review under Article 24.2 TRIPS, where those measur es were further specified and explained. The EC 
has provided as Exhibit EC-22 copies of those responses, which must therefore be deemed part of the EC's submissions to the Panel. 
                                                     
 
105 Panel Report, Canada – Pharmaceutical Patents , paras. 7-68-7.69. 
106 The EC recalls that the United States has argued that  Article 24.4 applies also with respect to the use 
of geographical indications as trademarks, including trademarks which are not grandfathered by virtue of 
Article 24.5.   
107 US Response to Panel's Question No. 157, para. 134. 
108 See EC FWS, para. 434.   WT/DS174/R/Add.2 
 Page B-375 
 
 
  
132. The EC noted in its first written submission that the complainants were well aware of the 
existence of those other measures, as well as of the EC's position that those measures implement its 
obligations under Article 22.2. The co mplainants have not denied this. Yet, neither of them mentioned 
those measures in their panel requests. Furthermore,  even after the EC confirmed in the course of 
these proceedings that, as explained in its responses to the review under Article 24.2 TRIPS, it applies 
other measures in order to implement Article 22.2,  the United States and Australia failed to submit 
any argument or evidence in order to show that, cont rary to what is explained in the responses, those 
measures are not sufficient to comply with Article 22.2.  
133. The US suggestion
109 that the EC declined to provide information requested by the Panel is 
also untrue. At the first meeting with the Pane l, the EC confirmed its willingness to provide any 
information requested by the Panel. The EC, neverthe less, pointed out that in makings its requests for 
information the Panel should be careful not to shif t the burden on proof from the complainants to the 
EC. This was a legitimate concern which the EC be lieves the Panel has properly taken into account in 
formulating its questions to the parties. 
 
                                                      
109 US Response to Panel's Question No. 157, para. 134. WT/DS174/R/Add.2 
Page B-376  
 
 ANNEX B-10 
 
COMMENTS OF THE EUROPEAN COMMUNITIES ON THE REPLY 
OF THE INTERNATIONAL BUREAU OF WIPO 
TO THE PANEL'S LETTER OF 9 JULY 2004  
 
(28 September 2004) 
  The EC is referring to your letter of 14 Septembe r 2004, in which you are requesting comments on the 
factual information provided by the International Bureau of WIPO. 
 The EC notes that in its letter to WIPO, the Panel requested information in particular as regards the 
meaning of the term "national" in Article 2 of the Paris Convention. 
 
In the view of the EC, the drafting materials of the Paris Convention provided by the International 
Bureau of WIPO confirm the view which the EC  has expressed throughout the proceedings, namely 
that the word "national" is a distinct term wh ich cannot be equated with  persons "domiciled or 
established" in the territory of a particular member.
1 
 In particular, the EC notes that until the Act of  the Hague, 1925, Article 2 of the Paris Convention 
referred to "subjects or citizens", instead of nationals. The terms "subject or citizen" clearly refer to a 
specific status conferred on persons under the law of  the State in question. The terms "subjects or 
citizens" were subsequently replaced by the single expression "nationals" (French: ressortissants) for 
reasons of simplification.
2 There was clearly no intention to enla rge the meaning of "nationals" to all 
persons domiciled or established in the territory of a party. 
 
The same is also demonstrated by the drafting history of Article 3 of the Paris Convention. In the Materials of the Paris Conference of 1880, it is cl arified « que la Convention sera applicable, non pas 
à tous les étrangers , sans distinction, mais à ceux qui seraien t domiciliés ou établis dans l'un des Etats 
de l'Union ». It follows clearly from this that  a person which does not possess the nationality of a 
Member is not a "national" of that Member only because it is domiciled or established on the territory 
of the Member. 
 Accordingly, the drafting history of Articles 2 and 3 of the Paris Convention illustrate that contrary to the views of the complainants, "nationality" is a di fferent concept from domicile or establishment. In 
the view of the EC, the same also applies for the similarly worded provision of Article 3(1) of the 
TRIPS Agreement. 
 The EC would like to thank the Panel for this o ccasion to comment on the information provided by 
WIPO.   
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1 Cf. EC Second Oral Statement, paras. 20–21. 
2 Cf. for instance the discussions in the Actes de la conférence de Paris de 1880, neuvième séance, 
p. 125.