WT/DS174/R/Add.3 
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ANNEX C 
 
ARGUMENTS OF THE THIRD PARTIES 
 
 
TABLE OF CONTENTS 
 
A. ARGENTINA .............................................................................................................................C- 1 
B. BRAZIL ............................................................................................................................... .....C-5  
C. CANADA ............................................................................................................................... .C-10  
D. CHINA ............................................................................................................................... .....C-19  
E. COLOMBIA .............................................................................................................................C- 25 
F. INDIA ............................................................................................................................... ......C-26  
G. MEXICO ............................................................................................................................... ..C-27  
H. NEW ZEALAND ......................................................................................................................C-31  
I. SEPARATE CUSTOMS TERRITORY OF  
 T AIWAN , PENGHU , KINMEN AND MATSU .............................................................................C-43  
EXHIBIT NZ-1................................................................................................................... ...............C-49 
EXHIBIT NZ-2................................................................................................................... ...............C-52 
  
1. This Annex reflects the arguments made by third parties.  It has been prepared by the Panel 
based on the written submissions, oral statements and responses to questions received from the third parties. 
A. A
RGENTINA  
1. Introduction 
2. Argentina has a general systemic interest in the proper implementation and interpretation by 
WTO Members of the rights provided for in the TRIPS Agreement.  However, as a major agro-
exporter, Argentina also has a specific interest in  the proper implementation of multilateral rules, to 
ensure that they are not implemented in such a way as to constitute or become obstacles to food trade.  
Firstly, Argentina wishes to make it quite clear th at it does not object to the European Communities 
having, nor does it consider that the European Communities does not have, a legitimate right to 
develop or maintain a unified geographical indi cation registration and protection system in its 
territory.  Neither does Argentina question the sy stem chosen by the Eu ropean Communities to 
establish such protection, given that the TRIPS Agreement itself authorizes Members to implement the Agreement within their own legal system and practice.  Nonetheless, Argentina does agree with 
the complainants' comments on the importance of Members providing protection, in accordance with 
the TRIPS Agreement, for both trademarks and geogr aphical indications, without either one being to 
the detriment of the other. 
2. The EC Regulation in the light of the TRIPS Agreement 
(a) The concept of a geographical indication 
3. The definition given in Article 2 of the EC  Regulation differs from that established in 
Article 22 of the TRIPS Agreement.  Article 2(1) of  the EC Regulation protects designations of origin 
and geographical indications of agricultural produc ts and foodstuffs.  Article 2(2) establishes two 
concepts for ensuring such protection, namely , "designations of origin" and "geographical 
indications".  Argentina believes that there is a s ubstantial difference between the definition laid down 
in Article 22 of the TRIPS Agreement and that est ablished in Article 2.2(a) and (b) of the EC 
Regulation, namely the requirement that production and/or processing and/or preparation take place in WT/DS174/R/Add.3 
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the defined geographical area.  Additionally, the EC  Regulation in turn includes in Article 2(3) a 
sub-classification pursuant to wh ich "[c]ertain traditi onal geographical or non-geographical names 
designating an agricultural product or a foodstuff or iginating in a region or a specific place, which 
fulfil the conditions referred to in the second indent of paragraph 2(a) shall also be considered as 
designations of origin."  In this regard, Argentin a draws attention to the fact that, in the case of 
"traditional names", the EC Regulation affords th e possibility of protection being granted to non-
geographical names, in stark contrast to the practice of WTO Members and the spirit of the TRIPS Agreement.  This tendency of the European Comm unities to provide for protection other than that 
envisaged by the TRIPS Agreement is  reinforced by Article 2(4) of the EC Regulation, according to 
which, under certain circumstances, certain geograp hical designations shall be treated as designations 
of origin where the raw materials of the products  concerned come from a geographical area larger 
than or different from the processing area. 
4. Argentina points out that, under Article 2(2) of  the EC Regulation, protection is extended by 
allowing a degree of independence in the concept of a geographical indication from a geographical 
area (Article 2(3)), and by including certain raw materials from a geographical area larger than or 
different from the processing area, subject to three r estrictions (Article 2(4)).  Argentina is of the 
opinion that this is inconsistent w ith Article 22 of the TRIPS Agreement. 
(b) Coexistence of protection systems 
5. One protection system may not prevail at the expense of or to the detriment of the other, 
given that this would create a conflict of pred ominance between Sections 2 (Trademarks) and 3 
(Geographical indications), both of which are found in Part II of the TRIPS Agreement.  However, the 
obligations set out in these two sections are not mutu ally exclusive:  each category must be granted 
the degree of protection conferred by the provisions  of the Agreement.  In other words, Members 
must ensure that protection is afforded both to trademarks, under Article 16. 1, and to geographical 
indications, under Article 22.2, without, in so do ing, undermining in any way the protection granted 
under the other Article.  By providing for the co existence of a trademark with a geographical 
indication or designation of origin and making su ch coexistence conditional upon a given temporal 
relationship, the EC Regulation violates Article 16. 1 of the TRIPS Agreement (which provides for the 
exclusive right to use a trademark, so the possibility of coexistence restricts the right of the owner of 
the trademark),  Article 22.3 (which neither provid es for coexistence, nor est ablishes a specific cut-off 
date, as is the case of the EC Regulation), and Article 24.4 (which provides for a critical time different from the cut-off date established in the Regulation). 
6. Article 24.5, in addition to establishing a differe nt cut-off date from that laid down in the 
Regulation, prejudices eligibility for and the validity of the registrati on of a trademark, and the right 
to use a trademark, on the basis that such a tradem ark is identical with, or similar to a geographical 
indication.  Moreover, Article 24.5 does not provide for the possibility of restricting the right of a 
trademark owner, as is the case in the Regulation, wh ich provides for coexistence.  Strictly speaking, 
it is Article 24.5 which determines the confines of the alternatives available to WTO Members with 
regard to the application of measures related to the protection of geographical indications and their 
interrelation with trademarks.  
(c) The registration procedure is incons istent with the TRIPS Agreement 
7. Argentina considers it important that particul ar reference be made to the registration 
procedure established in the Regulation in the lig ht of the obligations laid down in the TRIPS 
Agreement.  To this end, there follows an objectiv e description of each of the various steps involved, 
together with comments on their inconsistency with  the TRIPS Agreement, as deemed appropriate.   WT/DS174/R/Add.3 
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(i) Application for registration / Compliance with specifications 
8. Article 4 of the Regulation provides that "to be eligible to use" a protected designation of 
origin (PDO) or a protected geographical indication (PGI), an agricultural product or foodstuff must "comply with a specification ".  In this respect, the Regulation gives rise to great uncertainty, given 
that, while it sets forth a series of nine elements – Articl e 4.2(a), (b), (c), (d), (e), (f), (g), (h) and (i) – 
with which compliance is mandatory, it is precisel y subparagraph (i) which allows for the possibility 
of other requirements being " laid down by Community and/or national provisions ".  Such uncertainty 
is related to the familiarity with or identifi cation of the relevant Community and/or national 
provisions in order to comply with the registrati on requirement, and the means for complying with the 
requirement laid down in subparagraph (i), bear ing in mind the above-mentioned difficulty in 
identifying pertinent legislation.  Knowledge of Community and/or national legislation is obviously 
even more complicated for a foreign applicant.   
9. Furthermore, by mentioning "Community and/or  national provisions" without stating whether 
this refers to regulations specifically related to  the protection of geographical indications, the said 
provision expands yet further the legislative univer se with which a potential applicant must comply 
and could act as a market-access restriction on a pro duct applying for effective protection by means of 
a PGI / PDO.  That is to say th at, while the requirements of subparagraphs (a) to (h) are binding upon 
applicants, this does not mean that the list of requi rements is exhaustive, given that, by virtue of 
subparagraph (i), it can be extended by means of a series of conditions which can be provided for in 
Community and/or national legislation and compliance w ith which is also – in principle – mandatory.   
It should be recalled at this point that, pursuant to Article 12 of the Regulation, the third country shall 
be able to give guarantees identical or equivalent to  those referred to in Article 4, extending it to the 
requirement laid down in Article 10. 
10. Argentina also makes a further comment on re quirements relating to Article 4(h), which 
refers to the inspection structure(s) provided for in Article 10.  The question here is what the criteria 
for identifying these inspection structures would be in  the case of a foreign applicant.   It should be 
noted that, for a foreign applicant and with regard to this stage, Article 12 provides that "the third 
country concerned has inspection arra ngements (...) equivalent to those laid down in this Regulation."  
This creates an obstacle which is altogether immune  to any decision by a foreign natural or legal 
person to "accept" the Article 4 requirement, given that the decision to creat e the inspection bodies 
referred to in Article 10 is restricted to State leve l.  Provision is not made for inspection structures in 
all third countries and, even supposing that they we re provided for, such structures could fail to meet 
the equivalence requirement under Ar ticles 10 and 12 of the Regulation. 
(ii) Application for registration at the national l evel (of a member State) / Transitional protection 
at the national level 
11. Pursuant to Article 5(4) of the Regulation, app lications shall be sent to the member State in 
which the geographical area is located.  The member State is then responsible for checking that the 
application is "justified" and, "if it considers that  it satisfies the requirements of this Regulation", it 
forwards the application, including the product specification and other documents on which it has 
based its decision, to the Commission.  That memb er State may then grant transitional protection at 
the national level. Such protection ceases when protection is granted at Community level.  
Furthermore, it is incumbent on the member State to consult another member State or a third country 
if the application concerns a name designating a border geographical area or a traditional name 
connected to that area, regardless of whether it is situated in another member State or in a third 
country. WT/DS174/R/Add.3 
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(iii) Role of the Commission / Examination of applications / Publication of 
applications/Objections  
12. At this stage, it falls to the Commission to c onduct, within a period of six months, a formal 
investigation to verify whether the registration app lication includes all the particulars provided for in 
Article 4. The Commission shall inform the member  State of its findings and publish the registration 
applications and their filing dates.  The purpose of publication is to permit the notification of 
statements of objection.  Three possibilities exist, (a) No statement of objections is notified and the 
name is entered in the Register of Protected Designations of Origin and Protected Geographical 
Indications, as published in the Official Journal of the European Commun ities;  (b) there are 
objections to the registration – Article 7 – within six months of the date of publication in the Official 
Journal of the European Communities; and (c) the Commission concludes that the geographical 
indication does not qualify for protection and deci des not to proceed with publication.  The 
Commission may in all cases request the opinion of the Committee on Designations of Origin and Geographical Indications – Article  15 – prior to publication.  
(iv) Amendment of a specification 
13. Article 9 authorizes any member State to requ est the amendment of a specification to take 
account of developments in scientific and technical  knowledge or to redefine the geographical area. 
(v) Failure to comply with specifications / Right of complaint / Intervention of the Commission / 
Cancellation of registration 
14. Any member State may submit that a condition la id down in the product specification has not 
been met – pursuant to Article 11 – by making its submission to the member State concerned.  The 
member State concerned shall examine the compla int and inform the other member State of its 
findings and of any measures taken.  The Commission will have to intervene in the event of repeated irregularities.  If the member States concerned fail to come to an agreement and file a duly substantiated application, the Commission will ex amine the application by consulting the member 
States concerned and, where appropriate, having c onsulted the specific committee and considering it 
pertinent, will take the necessary steps, includi ng cancellation of the registration.  Article 11 bis 
establishes the cases in which the registration may be cancelled. 
15. To sum up, Argentina emphasizes the uncertainty with regard to:  (a) the possible 
implementation of these provisions in the case of non-Community countries, and (b) their consistency 
with the characterization of intellectual property ri ghts in the TRIPS Agreement, by requiring that 
States manage the registration of geographical indica tions instead of their legitimate owners, persons 
under private law (not to mention what appears yet more serious: the covert subordination, established 
by the Regulation, of governments of non-member st ates vis-à-vis EC institutions).  Therefore, and 
contrary to the assertions of th e European Communities, the EC Regulation does indeed make a 
distinction on the basis of nationality.  Evidence for this are the provisions under Articles 5, 6, 7 and 10. 
16. In short, the reciprocity and equivalence re quirements laid down in Council Regulation (EEC) 
No. 2081/92 are inconsistent with the national treat ment clause in Article 3 of the TRIPS Agreement. 
(d) Applicability of equivalence and reciprocity criteria to WTO Members 
17. Argentina observes the European Communities' attempt to reduce the entire issue raised by 
the complainants to a mere question of the interpre tation of the relevant Community legislation.  To 
this end, Argentina submits a brief interpretation to demonstrate that the Regulation provides for a 
method inconsistent with the Euro pean Communities' obligations in  the WTO in the light of the 
TRIPS Agreement.  In Argentina's opinion, the expl anation by the European Communities in its first  WT/DS174/R/Add.3 
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written submission of the application of reciprocity and equivalence criteria is not convincing.  Had 
the intention been to make a distinction not only between EC member States and non-Community 
countries but also, as the European Communities maintains, between WTO Members and third 
countries, the distinction could have been made mo re explicitly.  However, even a simple amendment 
to that effect would not resolve the substantive issu es previously raised regarding the application of 
this regulation to non-Community countries, given that the only registration and objection procedures 
provided for are through the intermediary of member States and that the requirements are laid down for the establishment of inspecti on structures which are not binding on any country other than EC 
member States.  The requirements mentioned ab ove clearly deviate from the national treatment 
obligation in Article 3 of the TRIPS Agreement. 
3. Points raised in response to the Panel's questions 
18. Argentina is not aware of any group or person ev er having filed with its authorities either an 
application for or an objection to a registration pur suant to the EC Regulation.  As to the question 
whether Argentina would be willing or able to tr ansmit such applications, without prejudice to its 
willingness to cooperate in any procedural aspect involving the transmission of an application for 
registration, on behalf of any domes tic group or person, that eventually the Government of Argentina 
could hypothetically show at any point in time, Argentina would like the Panel to note that, as a non-
EC member, it has never delegated any sovereign right to the supranational institutions of the 
European Union.  Hence, there would be no legal obligation for the Argentine State to fulfil any requirement imposed by the EC legislation, even  less in a case like the one in question, which 
involves a private right, as established in the prea mble of the TRIPS Agreement.  Argentina's 
legislation allows direct access by GI applicants to the national authority irresp ective of nationality.   
19. Argentina's domestic law establishes the excep tions to trademark rights provided for in 
Article 17 of the TRIPS Agreement, under the cond itions and with the scope provided therein.  
Argentina is not aware of any GIs registered under th e EC Regulation that are identical or confusingly 
similar to Community protected trademarks owned by nationals of Argentina.  It notes, however, that 
this should not be interpreted as saying that this  would never happen, as the EC Regulation provides 
for the possibility of  broadening the applicability of the Regulation, by making products which are not currently included in the list of products covere d by this Regulation, subject to it in the future.  
20. Argentina believes that there is – in principl e – no conflict between Articles 16.1 and 22.3 of 
TRIPS Agreement.  However, given the broad di scretion given by the TRIPS Agreement to the 
Members in implementing its provisions (Article 1.1 of the TRIPS Agreement), such a conflict could 
arise as a consequence of the way a Member chooses to implement it.  In other words, there is no 
contradiction arising from the textual reading of either provision, but for those that could eventually arise during,  or as a consequence of its implementation.  
21. Argentina is of the view that the EC Regulati on is challengeable under the TRIPS Agreement, 
due its mandatory nature. 
B. B
RAZIL  
1. Introduction 
22. Brazil has a systemic interest in the matter subject to this dispute.  Brazil has no geographical 
indications ("GIs") as yet registered in the EC under the procedure set out in the measure at issue, but 
private parties in the country have demonstrated  increasing awareness of the implications stemming 
from the development of a culture fostering the registration of Brazilian GIs, both in Brazil and 
elsewhere.  WT/DS174/R/Add.3 
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2. Reciprocity and equivalence requirements in the registration of, and objection to, a GI 
23. Both Australia and the United States claim that Article 12(1) of the EC Regulation fails to 
comply with the national treatment obligation provid ed for by Article 3 of the TRIPS Agreement and 
Article III:4 of GATT 1994 since, in order to be nefit from the Regulation, it requires that WTO 
Members meet certain conditions, such as recipr ocity and equivalence.  Brazil supports this 
understanding.  In fact, the requirements set forth in Article 12(1) of the EC Regulation, despite 
assertions to the contrary by the European Comm unities, clearly establish "extra hurdles" for WTO 
Members.  The several requirements spread throughout  Article 12 create a bias against third countries 
and violate national treatment obligations.  As a matter of fact, these inconsistent requirements 
pervade most of the Regulation and taint its practical operation to the detriment of other WTO 
Members.  In a nutshell, and as abundantly argued by  the complainants and other third parties, WTO 
Members, before they can apply for protection under Article 12(1), must adopt an internal system for 
GI protection that guarantees equivalence to the EC Regulation and that must also provide reciprocity 
to "corresponding" EC products.  These requirement s, if they do not amount to something close to 
"extra-territoriality", certainly collide with the essen ce of the national treatment obligations enshrined 
in Article III of GATT 1994 and Article  3.1 of the TRIPS Agreement.   
24. As graphically shown by New Zealand in the e xhibits to its submission, nationals from WTO 
Members are at a disadvantage with regard to EC nationals.  The GATT and WTO underlying 
principle of national treatment would be comple tely voided of any meaning if it were made 
conditional on requirements of reciprocity and adop tion of equivalent legislation.  The European 
Communities in its first submission argues that the proviso in Article 12(1) – "without prejudice to 
international agreements" – excludes WTO Members from the scope and requirements of Article 12.  
Brazil welcomes this novel and official interpretation by the European Communiti es to the effect that 
"international agreements" include the WTO agreemen ts and that consequentially Articles 12(1) and 
12(3) of the Regulation do not apply to WTO Member s.  Irrespective, however, of this interpretation 
by the Commission, which would not necessarily with stand scrutiny by a judicial body, it would seem 
unlikely that provisions in the EC Regulation that re fer to "third countries" would have been drafted 
only with a handful of non-WTO Members in mind.  Furthermore, the utilization of the terms "third countries" and "Community" in Article 12(2) suggests that, in this opposition, "third countries" mean 
all those countries which are not EC member States.   If, on any account, one were to accept the EC's 
arguments about the proviso, i.e. that it excludes WTO Members, it could, a contrario senso , indicate 
a recognition by the European Communities that th e reciprocity and equivalence requirements in 
Article 12 violate national treatment obligations in the GATT 1994 and TRIPS Agreement.  Brazil 
takes note, however, of the use in the Regulation of the terms "WTO members" and "third countries" 
in Articles 12b(2)(a) and (b) and 12d(1), somethi ng that could indicate that third countries are 
confined to those non-WTO Members.   Therefore, Brazil is of the view that the language of 
Article 12(1) should clearly specify that WTO Members are exempt from offering reciprocity and 
equivalence in order to be in compliance with the national treatment obligation.   
25. As regards the issue of objection procedures to re gistration of GIs, Brazil is equally concerned 
with the fact that the procedures, set forth in Artic le 12d(1), can be subject to the same inconsistent 
requirements of reciprocity and equivalence applic able to the registration procedure as explained 
above.  
3. Aspects of the registration and objection procedures for GIs  
26. Brazil also calls the attention of the Panel to two specific procedural aspects of both the 
registration and the objection procedures as stated in Articles 12a(1) and (2) and 12d(1), which appear 
to be inconsistent with the agreed multilateral rules. 
27.
 These provisions require that WTO Members "pre-approve" the application for registration of 
geographical areas located in their territories before  they forward it to the European Commission.   WT/DS174/R/Add.3 
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WTO Member national authorities must first analyse and deem that the requirements of the EC Regulation are satisfied. Brazil opines that, if this  requirement applies to WTO Members, it is in 
striking violation of the national treatment oblig ation under Article 3 of the TRIPS Agreement and 
Article III:4 of GATT 1994.  The inconsistencies appear  to be twofold:  first, that an additional 
national procedure is introduced, whereas in the EC, the application sent to an EC member State by an 
EC applicant is tantamount to a mere formality (A rticle 5(5) of the Regulation); second, and most 
disturbing, the analysis by the national authority in the WTO Member must be undertaken according 
to the EC Regulation, and not to its own domestic ru les – Article 12a(2) of the Regulation.  In this 
situation, assuming that the State concerned will lik ely have its own standards to assess the adequacy 
of the application vis-à-vis the EC Regulation, it is only fair to assume that more often than not, the 
Commission, in its turn, will not deem appropriate  the evaluation carried out by the WTO Member, 
which could then lead to further procedural delays .  Thus, a more balanced treatment of the issue 
would be to grant applicants from WTO Member s direct access to the Commission for registration 
purposes. This direct access by the applicant to th e national authority, irrespective of nationality, is 
provided, for example, by the Brazilian legislation.  In sum, even if in formal terms the treatment 
given to applications from EC member States and WTO Members is similar, the effects that are 
produced by such procedure are clearly different and detrimental to interested parties located in the 
latter. 
28. Article 12d(1) of Regulation 2081/92 requires th at, whenever a natural or legal person from a 
WTO Member wishes to object to the registration of a geographical indication submitted by an EC member State, it should do so by sending a duly substantiated statement to the country in which it 
resides.  Brazil is of the opinion that this re quirement establishes an "u nnecessarily complicated or 
costly" procedure concerning the enforcement of inte llectual property rights, in breach of Article 41.2 
of the TRIPS Agreement.  Brazil sees no "necessity " that would justify pr eventing private parties 
from addressing their objections directly to the European Commission. Many  countries, like Brazil, 
have domestic legislations that allow for direct acce ss by foreigners in order to object to registration 
procedures.  The EC has not provided convincing reas ons to deny interested parties direct access to 
the EC bodies.  If, according to its Article 12d( 2), the Regulation already determines that the 
"Commission shall examine the admissibility of objec tions", Brazil fails to see the need for requiring 
prior submission of the objection to the WTO Member in  which the objector resides or is established.   
4. Remarks on the coexistence of trademarks and GIs 
29. While Brazil recognizes that both trademarks and GIs are "signs" that represent products or 
services, one cannot overlook the fact that geographical indications that are identical to trademarks are 
likely to create confusion and, consequently, may aff ect the value of trademarks.  Brazil recalls that 
Article 16.1 of the TRIPS Agreement protects the ow ner of a registered trademark from the use by 
third parties of identical or similar signs for goods or services identical or similar to those in respect of 
which the trademark is registered, where such use would result in a likelihood of confusion. 
Therefore, what seems clear is that the protecti on the TRIPS Agreement mandates countries to offer 
to owners of trademark comprehends the use of any sign (and not only that of a trademark) that might 
cause confusion.  In Brazil's view, Article 16.1 of  the TRIPS Agreement deals with trademarks in 
general, and not only with those referred to in th e narrow terms of Article 14(3) of the Regulation, 
which establishes that a geographical indication shall not be registered where, "in the light of a trademark's reputation and renown a nd the length of time it has been used, registration is liable to 
mislead the consumer as to the true identity of the product". 
30. Despite a theoretical hypothesis of coexiste nce between a trademark and a geographical 
indication in terms of Articles 24.5 and 16.1 of th e TRIPS Agreement, when read in conjunction, 
Brazil believes that without disregarding the peculiar features surrounding the use of a geographical indication and the need to protect it, one must not do so at the expense of both the trademark owners 
and the consumers.  Otherwise, the commercial va lue of a trademark may be undermined, which runs 
contrary to the "exclusive rights" of a trademar k owner provided for in Article 16.1 of the TRIPS WT/DS174/R/Add.3 
Page C-8  
 
Agreement.  It should also be noted that pursuant to  Article 16.1, in cases of the use of an identical 
sign for identical goods or services, "a likelihood of confusion shall be presumed".  Regulation 
2081/92 does not have any provision incorporating such a presumption.  Brazil does not agree with the EC's argument that there was no need to "rep roduce explicitly" this presumption, on the grounds 
that it would suffice that domestic law grants the regi stering authority or to the courts the adequate 
level of discretion to apply this provision.  Brazil submits that even if domestic law incorporated the 
presumption in each EC member State, this woul d not mean automatically that Community-level 
registration, regulated by Regulation 2081/92, would have also provided for its incorporation.  
Therefore, the European measure would still rema in inconsistent with the TRIPS Agreement. 
31. Brazil also highlights another possible imbalan ce between the protection of EC nationals and 
WTO Member nationals as regards the effective us e of the protection mechanism of Article 22.3 of 
the TRIPS Agreement in that, through the use of the EC Regulation, the EC national would much 
more rapidly and efficiently protect a GI to the de triment of a previous registered trademark, than 
would a WTO Member national be in a position to defend trademark owner rights vis-à-vis the 
application for registration of a new GI. 
5. Points raised in response to the Panel's questions 
32. Brazil is not aware of any group or person ever  having filed with its authorities either an 
application for, or an objection to, a registration pur suant to the EC Regulation.  As to the question 
whether Brazil would be willing or able to transmit su ch applications, it states that, the issue here is 
not simply a matter of mechanistic, bureaucratic "tra nsmittal" of applications.  Article 12a(2) of the 
EC Regulation requires from authorities of third countr ies a thorough analysis of the applications in 
light of that Regulation before transmitting them to the Commission.  Brazil also recalls that there is 
no legal provision in Brazilian law establishing th e need for Government intervention in the 
registration of GIs in foreign countries.  Moreover,  the Brazilian authorities would be devoid of legal 
competence to perform the analysis of the applica tion as required by the EC Regulation, especially in 
light of the principle of legality, enshrined in Article 37 of the Brazilian Constitution.   
33. Brazil calls the Panel's attention to the existe nce of the Patent Cooperation Treaty ("PCT").  
This Agreement imposes that requests for internatio nal search and preliminary examination of private 
parties' patent applications be transmitted to the Office of the PCT by national governments.  The 
European Communities, through Regulation 2081/92 – rather than through an internationally agreed 
mechanism – seeks to impose unilaterally its own rules and parameters on all other countries, 
something which would amount to extra-territoria lity.  Harmonization of rules or standards on 
intellectual property rights can only be obtaine d through multilateral or bilateral cooperation 
agreements.  The European Communities' stance, if taken ad absurdum , could allow a situation where 
other countries would also issue their own strict legislation and procedures and would request that all other countries analyse applications for registration in accordance with those un ilaterally-fixed rules.  
34. Brazil understands that the interpretation of "na tionals" as used in Articles 1.3 (including its 
footnote 1), 3.1 and 4 of the TRIPS Agreement and Article 2 of the Paris Convention, depends on how 
a national legal system defines the "nationality" of  a legal person.  Due to particular features 
pertaining to geographical indications – which are n ecessarily bound to a given territorial basis – it is 
reasonable to assume that the legal person holding  the right over their use, will be a group or 
association established in the territory of the Member  in which the GI is located, without prejudice to 
the provision of Article 2(2) of the Paris Convention.  This is tantamount to saying that the 
geographical area from which a geographical indica tion originates determines the nationality of the 
interested parties seeking to register it and that th e parties applying for registration of non-EC GIs will 
most likely be legal persons that are "nationals " of non-EC countries.  The European Communities 
concedes that Regulation 2081/92 provides for differe nt treatment regarding "geographical areas".
1  
                                                      
1 European Communities' first written submission, para. 125.  WT/DS174/R/Add.3 
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Thus, in most cases, discriminating between geogr aphical areas is equivalent to discriminating 
between nationals.  In other words, the area in wh ich a geographical indication is located is actually 
linked to the nationality of the applicant. 
35.    Brazil agrees that the words "country of the Union" in Article 2(1) of the Paris Convention 
(1967), as incorporated in the TRIPS Agreem ent by its Article 2.1, should be read mutatis mutandis  to 
refer to "WTO Member".  This reasoning is in  accordance with the understanding of the Appellate 
Body in US – Section 211 Appropriations Act .2  
36. Brazil's views on the relationship between the national treatment obligation under the TRIPS 
Agreement and GATT 1994 are threefold.  First, Brazil notes that on a theoretical level not all 
"different treatment" amounts to "less favourable treatment".  Second, Brazil understands that a less-
favourable-treatment-situation in violation to na tional treatment obligation arises where a measure 
"modifie[s] the conditions of competition in the market  to the detriment of imported products",  which 
appears to be the case with reference to the EC Regulation at issue.  Third, as the Appellate Body 
stated in US – Section 211 Appropriations Act ,  "[t]he Panel was correct in concluding that, as the 
language of Article 3.1 of the TRIPS Agreement, in particular, is simila r to that of Article III:4 of the 
GATT 1994, the jurisprudence on Article III:4 of th e GATT 1994 may be useful in interpreting the 
national treatment obligation in the TRIPS Agreement".3 
37. Brazil is not aware of any GIs registered unde r the EC Regulation that are identical or 
confusingly similar to Community protected  trademarks owned by  Brazilian nationals. 
38. Brazils recalls that previous WTO panels and Appellate Body reports have considered that 
there is a presumption against conflict in public in ternational law, and it quotes two panel reports in 
this regard.4  If it can be assumed that there is a presumption against conflicts between international 
legal instruments, one can also reasonably expect  that the same presumption applies to apparent 
conflicts within the same agreement.  Therefor e, in addressing the issue of the conflict between 
Articles 16.1 and 22.3 of the TRIPS Agreement, Braz il submits that Article 22.3 imposes two tests in 
order to allow a trademark registration to be refuse d or invalidated.  In turn, Article 16.1 grants the 
trademark owner the exclusive right to prevent thir d parties from using identical or similar signs for 
goods or services which are identical or similar to those in respect of which the trademark is registered, where such use would result in a likelihood of confusion. The protection of the distinctiveness of the trademark is thus contingent  upon the likelihood of conf usion brought about by 
signs which are identical or similar.  One shoul d consider that, without disregarding the peculiar 
features surrounding the use of a geographical indicati on and the need to protect it, this must not be 
done at the expense of both the trademark owners a nd the consumers.  In other words, it means that 
the approach to the issue should be carried out taki ng due account of the fact that:  a) geographical 
indications do not a priori  prevail over registered trademarks;  an d b) other factors must be borne in 
mind when deciding whether to allow either the coexistence between trademarks and geographical 
indications or the predominance of one over the other, such as, for instance, the length of time a given 
trademark has been used. 
39. Brazil's Industrial Property Law (A rticle 132) sets out exceptions to the exclusive right of a 
trademark owner.  Accordingly, a trademark owner cannot:  (a) prohibit retailers or distributors from 
utilizing distinctive signs pertaining to their bus inesses along with a product trademark for marketing 
purposes;  (b) prohibit parts manufacturers from utilizi ng a trademark in order to indicate the product 
destination, provided fair competition practices ar e met;  and  (c) prohibit the mentioning of a 
                                                     
 
2 Appellate Body Report on US – Section 211 Appropriations Act , para. 238.  
3 Ibid., para. 242. 
4 Panel Report on Indonesia – Autos , para. 14.28 and fn. 649;  and Panel Report on Turkey – Textiles , 
para. 9.92. WT/DS174/R/Add.3 
Page C-10  
 
trademark in a speech, scientific or literary work  or in whatever sort of publication, as long as 
deprived of commercial meaning and without  prejudice to its distinctive character. 
40. Brazil notes that in US – Section 211 Appropriations Act , a dispute dealing with the 
interpretation of several TRIPS provisions, the A ppellate Body confirmed the Panel's view in US – 
1916 Act  and stated that "a distinction should be made between legislation that mandates WTO-
inconsistent behaviour, and legislation that gives ri se to executive authority that  can be exercised with 
discretion".
5  On the other hand, the Appellate Body in US – Corrosion-Resistant Steel Sunset Review , 
did not express a view on whether the mandatory/di scretionary distinction is a legally appropriate 
analytical tool for panels to use.  It observed that  "as with any such analytical tool, the import of the 
mandatory/discretionary distinction may vary from case to case.  For this reason, we also wish to 
caution against the application of this distinction in a mechanistic fashion".6  Thus, while the 
distinction can certainly be applied under the TRIP S Agreement, as a jurisprudential construction, it 
must be used with caution ( cum granum salis ).  Brazil also remarks that  the mandatory/discretionary 
distinction is always centred on a specific measure ta ken by a Member.  As to the issue of "omissions" 
or "failures" to take certain required actions, Brazil is  of the opinion, firstly, that an omission can also 
be considered a violation of a provision  and, secondly, that, by definition, the 
"mandatory/discretionary" distinction cannot be applicab le to instances of failure to take action, i.e. an 
omission, for there would be no concrete legisla tion issued by a Member upon which the distinction 
could focus.  
C. CANADA  
1. Introduction 
41. Canada has a systemic interest in the interpre tation of the national treatment obligations of 
WTO Members under the TRIPS Agreement, specifi cally as these apply to the implementation of 
intellectual property rights for the protection of geographical indications.   
42. Canada focuses its views mainly on two issues related to national treatment obligations under 
the TRIPS Agreement as they are interpreted and applied in the present case.  These are: 
– the degree to which Articles 2.1 and 3.1 of the TRIPS Agreement prevent a WTO 
Member from requiring reciprocity and equivalence when protecting the intellectual 
property rights of nationals of other WT O Members, including whether or not such 
reciprocity and equivalence is in fact  required by the EC Regulation; and 
 – the implications of the reference to nationals in Articles 2.1 and 3.1 of the TRIPS 
Agreement, in particular the degree to which such references permit WTO Members 
to discriminate in a manner not directly based on nationality when protecting 
intellectual property rights. 
 
2. Reciprocity and equivalence requirements of the EC Regulation 
43. The national treatment obligations under the TRIPS Agreement  prevent the European 
Communities from requiring reciprocal and equiva lent protection in non-EC WTO Members as a 
condition for protection in the European Communities of geographical indications originating in the 
territory of those WTO Members.  The national tr eatment obligations of WTO Members with regard 
to the protection of intellectual property are cont ained in two separate provisions of the TRIPS 
Agreement.  First, the earlier national treatment ob ligations of the Paris Convention are incorporated 
by reference into Article 2.1 of the TRIPS Agreem ent.  Second, national treatment applies in the 
                                                     
 
5 Appellate Body Report on US – Section 211 Appropriations Act , para. 259. 
6 Appellate Body Report on US – Corrosion-Resistant Steel Sunset Review , para. 93.  WT/DS174/R/Add.3 
 Page C-11 
 
 
TRIPS Agreement more broadly by virtue of the requirement in Article 3.1 that a WTO Member 
"accord to the nationals of other Members treat ment no less favourable than it accords to its own 
nationals with regard to the protection of intell ectual property".  These obligations mean that any 
intellectual property right provided by a WTO Member within its territory must be made available to nationals of all other WTO Members, without rega rd to the conditions of substantive protection 
available in those WTO Members.  Requiring r eciprocal and equivalent treatment – that is, 
conditioning the protection of rights of foreign nati onals in the domestic ju risdiction on equivalent 
protection being afforded to domestic nationals in the foreign jurisdiction – runs precisely counter to 
national treatment obligations. 
44. All parties to the present case substantially agree on the fundamental importance of the 
national treatment obligations under the TRIPS Agreement .  The main issues of contention are:  (i) 
whether the EC Regulation treats geographical i ndications originating outside the European 
Communities less favourably than geographical i ndications originating within the European 
Communities;  (ii) and whether this less favourable treatment applies also to geographical indications 
originating in the territory of other WTO Members. 
45. The European Communities submits that a signifi cant feature of the EC Regulation is the 
provision of separate procedures for the registrati on, and objection to registration, of geographical 
indications originating from an area within the European Communities (in Articles 5, 6 and 7) and the 
parallel procedures set out for the registration, and objection to registration, of geographical 
indications originating from areas outside the European Communities (in Articles 12, 12a, 12b, 12c 
and 12d).  While the two separate procedures in the EC Regulation do exhibit certain similarities, a 
significant difference is that Article 12 provides th at the EC Regulation "may" apply to geographical 
indications originating from the territory of a third c ountry but only if that third country meets certain 
conditions.  One of these conditions is the require ment in Article 12(1) that "the third country 
concerned is prepared to provide protection equivalent to that available in the Community to 
corresponding agricultural products [or] foodstuffs coming from the Community."  Article 12(3) 
further requires the European Commission to examine the national legislation of the third country to 
certify that it satisfies the "equivalence conditions" specified in Article 12(1). 
46. In other words, applicants for intellectual pr operty protection in the European Communities of 
geographical indications originating in third countries that do not meet the conditions in Article 12(1) 
are automatically disqualified from eligibility for such  protection simply on the basis of the absence of 
equivalent protection in their home jurisdiction.  This requirement imposes a condition on applicants 
for geographical indications originating outside the European Communities that does not exist for 
applicants for geographical indications origina ting within the European  Communities.  The EC 
Regulation therefore accords less favourable tr eatment to geographical indications from outside 
European Communities than it acco rds to geographical indications from within the European 
Communities.  The European Communities in fact admits that Article 12 of the EC Regulation 
requires reciprocity and equivalence for registrati on for protection in the European Communities of 
geographical indications originating from outside th e European Communities (see, e.g., recital 9 of 
EC Regulation No. 692/2003, which says that "[t] he protection provided by registration under 
Regulation (EEC) No 2081/92 is open to third count ries' names by reciprocity  and under equivalence 
conditions as provided for in Article 12 of that Regulation").  If these de jure discriminatory 
provisions were to apply to WTO Members, they would violate the European Communities' national 
treatment obligations under the TRIPS Agreement . 
47. The European Communities contends in its firs t written submission that the reciprocity and 
equivalence requirements contained in Articles 12( 1) and (3) simply do not apply to WTO Members 
since these countries already must provide adequate protection for geographical indications by virtue 
of their obligations under the TRIPS Agreement.  To justify this interpretation of Article 12, the 
European Communities points to the reference in Arti cle 12(1) to "[w]ithout prejudice to international 
agreements", arguing that this clause preserv es the rights of WTO Members to access the EC WT/DS174/R/Add.3 
Page C-12  
 
registration system on a national treatment basis.  H eartening as this contention is in principle, when 
read in the context of Articles 12a, 12b and 12d, Article 12 cannot support the interpretation advanced 
by the European Communities.  The ambiguous refere nce to "international agreements" in Article 12 
is simply insufficient to counter the clear wordi ng of Articles 12, 12a, 12b, and 12d, which, when 
taken together suggest an inte rpretation opposite to that offere d by the European Communities. 
48. First, if the European Communities' interpre tation of Article 12(1) and (3) were to be 
accepted, there would not appear to be an alternativ e legal basis for an applicant with a geographical 
indication originating from the territory of a non- EC WTO Member to commence an application for 
registration in the European Communities.  The EC Re gulation is drafted in such a way that the only 
starting point for third countries, WTO Members as well as non-Members, is Article 12 (additionally 
to Canada it remains unclear why the European Co mmunities argues that these sub-articles operate in 
this manner whereas Article 12(2) does not).  The Eu ropean Communities response is that the relevant 
starting point for WTO Members is Article 12a, su ggesting that these countries pass immediately to 
the procedures provided for in that article for re gistration of geographical indications from third 
countries.  While Article 12a is th e operative paragraph governing the transmission of an application 
to the European Communities, this provision does not  appear to operate in the manner suggested by 
the European Communities.  Article 12a(1) of the EC Regulation provides that " [i]n the case provided 
for in Article 12(3) … a group or a natural or legal person … shall send a registration application to 
the authorities in the country in which the geogr aphical area is located" [emphasis added].  The 
underlined portion of that provision suggests that th is procedure is only available in the case of those 
third countries that have already qualified according to the procedure laid out in Article 12(3), which 
requires meeting the conditions specified in Article  12(1).  Even Article 12a(2), which governs the 
actual transmission of the applications from the th ird country to the European Communities, depends 
on the country first being identified by the proced ure in 12a(1).  Therefore, Article 12a does not 
provide an independent basis for a geographical indication originating from a non-EC WTO Member 
to be registered in th e European Communities. 
49. Second, the European Communities refers to di stinctions made in Ar ticles 12b(2)(a) and (b) 
(objections to registrations of geographical indica tions originating from areas outside the European 
Communities) and 12d(1) (objections to registrations  of geographical indications originating within 
the EC).  Those provisions distinguish between a "WTO Member" on the one hand and, respectively, "a third country meeting the equi valence conditions of Article 12(3) " and "a third country recognized 
under the procedure provided for in Article 12(3)".  The European Communities' argument seems to 
be that the distinction in these latter provisions implies the existence of a distinction between WTO 
Members and third countries for the purposes of Ar ticle 12(1) and (3).  However, the European 
Communities' own argument on a separate but related point supports precisely the opposite 
conclusion.  Specifically, with respect to Article  12d(1) the European Co mmunities argues that the 
reference to 12(3) only applies to "third count ries other than WTO Members".  The European 
Communities continues: "[O]therwise, the specific reference to WTO members [in 12d(1)] would be 
meaningless."  Using the European Communities' own logic, if the presence of the reference to "WTO 
Members" in the context of Article 12b and 12d meaningfully suggests differential application of 
those provisions between WTO Members and other third countries, then the absence of a reference to 
"WTO Members" in the context of Article 12 and 12a must meaningfully suggest no differential 
application of those provisions between WTO Members and other third countries. 
50. Thus, notwithstanding the contrary interpretation offered by the European Communities, the 
clear wording of Article 12 and 12a means that those provisions apply equally to WTO Members and other third countries.  The only way for "a group or  a natural or legal person" from a WTO Member to 
apply for registration for a non EC-based geographical indication is for the WTO Member from which the indication originates to qualify according to th e "equivalence conditions" of Article 12(1) and 
12(3).  Moreover, in the September 2002 meeting of the Council for TRIPS , the European 
Communities provided its views on the application of national treatment in the context of registration 
systems for geographical indications saying that  "[t]he EC believes that registration systems should  WT/DS174/R/Add.3 
 Page C-13 
 
 
be primarily aimed at the identification of domestic GIs".7  Later in the same intervention, the 
European Communities continued:  "[I]t seems to us that the logical conclusion is to limit the 
registration system to domestic GIs and protect foreign GIs via other means".  In light of these 
statements, there is no doubt about the European Communities' intention that Article 12 applies to 
WTO Members. 
3. National treatment of "nationals" of  WTO Members under th e TRIPS Agreement 
51. The reference to nationals in the TRIPS Agreement cannot be interpreted so narrowly as to 
render that term meaningless when it comes to nati onal treatment with regard to the protection of 
intellectual property rights.  This is most importa ntly the case in the context of the protection of 
geographical indications, which are tied more closely to the territories from which they originate than 
to the nationality of the rights holders.  The European Communities acknowledges the important, and 
deliberate, emphasis in the TRIPS Agreement on nationals , as opposed to the focus on products under 
the GATT.  Since minimum standards for intellectua l property protection is about conferring rights, it 
necessarily follows that natural and legal persons are the holders of these rights, and that as a result 
WTO non-discrimination obligations generally apply as between the nationals who hold these rights.  
However, having acknowledged these important feat ures of the TRIPS Agreement, the European 
Communities fails to fully appreciate their implications. 
52. Specifically, the European Communities submits th at even if the two parallel procedures in 
the EC Regulation operate differently (which the European Communities does not admit), the separate 
procedures do not distinguish between nationals , but simply distinguish between geographical areas , 
that is, geographic indications originating from ar eas within the European  Communities, as opposed 
to geographic indications originating from areas out side the European Communities.  The European 
Communities claims that "[w]hether  the area to which a geographic indication is related is located 
inside the European Communities or outside is in no way linked to the question of the nationality of 
the producers or the product concerned".  This st atement misinterprets the nature of intellectual 
property rights generally and the nature of protec tion of geographical indications specifically.  The 
European Communities ignores the full meaning of Artic le 3.1 of the TRIPS Agreement, in particular 
by downplaying the de facto effect on nationals of a measure th at the European Communities itself 
admits discriminates on the basis of national te rritories.  The European Communities further 
underestimates the degree to which Article 3.1 appli es to more than just the nationality of a national 
from a WTO Member, but also to the full availability and scope of the rights sought. 
4. De Facto discrimination according to nationality 
53. The European Communiti es claims that Articles 5 and 6 operate without distinction as 
between nationals when it comes to geographical indications originating from within the European 
Communities, and that Articles 12 and 12a operate in a similarly non-discriminatory fashion when it 
comes to geographical indications originating from outside the European Communities.  This claim 
ignores the simple and incontestable reality that EC nationals are likely to register for protection of 
geographical indications originating from with in the European Communities, whereas non-EC 
nationals are likely to register for protection of geographical indications originating from outside of 
the European Communities.  The distinction between ge ographical areas is illusory if the effect of the 
EC Regulation is to de facto  prevent nationals from non-EC WTO Members from registering for 
protection of the geographical indications from their own territories. 
54. As the United States has argued, the principles de veloped in the context of national treatment 
with respect to goods are instructive.  In pa rticular, in assessing whether the EC Regulation de facto  
affords more favourable treatment to EC nationals than it does to non-EC nationals, this Panel needs 
to look beyond the literal provisions of the EC Re gulation, and examine objectively the structure and 
                                                      
7 See the minutes of that meeting in document IP/C/M/37/Add.1, at p. 80. WT/DS174/R/Add.3 
Page C-14  
 
overall application of the Regulation, including the unde rlying criteria used to allow registration of a 
geographical indication.
8  The structure of the EC Regulation clearly provides two different 
procedures for the registration of geographical indica tions.  The sole criterion used in determining 
which procedure an application for registration shall follow is geographical area , with the only 
difference being whether or not the geographical area is within the boundaries of the European 
Communities.  This choice of the boundaries of th e European Communities as the only criterion raises 
significant concerns about the neutrality of the provisi ons as to the nationality of the applicants.  This 
is particularly the case for geographical indications that, by definition, are tied to the production of 
goods originating in the area identified by the geographical indication and, by extension, producers in that area.  Given this explicit requirement that physical production of the associated good take place in 
the same area as indicated by the geographical indi cation, an applicant for a geographical indication 
that refers to an area within the European Communities will, in all probability, be a national of an EC 
member State. Conversely, an a pplicant for a geographical indication referring to an area in a third 
country will, in all probability, be a national of that  third country.  As a result, despite the apparently 
neutral application of the EC Regul ation regarding nationality, it is clear that the procedure set aside 
for geographical indications originating within  the European Communities (Articles 5 and 6) de facto  
serves EC nationals, whereas the procedure set aside for geographical indications originating outside 
the European Communities (Article 12 and 12a) de facto  serves nationals of third countries, including 
nationals of other WTO Members. 
55. The European Communities claims that caution mu st be exercised in finding that the EC 
Regulation provides de facto less favourable support to non-EC na tionals, citing the Panel report in 
Indonesia – Autos .
9  The Panel in that case failed to find discrimination between nationals on the 
grounds that the Indonesian National Car Programme (which forced applicants to the programme to 
choose between the mark of the local programme  and their global marks) applied equally to 
Indonesians and foreigners.  The Panel found no discr imination between nationals on the basis that 
both nationals and non-nationa ls faced the same choice.10  That is not the case here.  The EC 
Regulation does not require all applicants to c hoose between registering a foreign geographical 
indication (or global mark) and an EC-based geogra phical indication.  Rather, the EC Regulation 
requires all applicants to choose between register ing an EC-based geographical indication and not 
registering a geographical indication at all.  Appli cants of non-EC nationality are, by definition, not 
likely to be registering an EC-based geographical indication.  
56. The European Communities further cites with favour the finding of that same Panel regarding 
the application of TRIPS Agreement national treatment  obligations to matters not directly related to 
equal treatment of nationals .  The Panel found that it would be  unreasonable to use the national 
treatment obligations in relation to intellectual pr operty rights to challenge domestic support measures 
not involving intellectual property rights, on the grounds that such measures could have the de facto  
effect of giving an advantage to domestic nationals.11  Once again, that is not the case here.  Invoking 
national treatment concerns against an EC system that de facto  favours EC nationals, as does the EC 
Regulation, is not about challenging a non-intell ectual property support measure to enforce equal 
treatment of nationals with regard to intellectual pr operty rights.  On the contrary, it is precisely about 
challenging the operation of an inte llectual property measure in order to enforce equal treatment of 
nationals with regard to that same  intellectual property measure. The findings of the Panel in 
Indonesia – Autos  have no bearing on this case. 
                                                      
8 Appellate Body Report on Japan – Alcoholic Beverages II , DSR 1996:I, at 120. 
9 Panel Report on Indonesia – Autos, paras. 14.271 and 14.273. 
10 Panel Report on Indonesia – Autos , para. 14.271. 
11 Panel Report on Indonesia – Autos , para. 14.273.  WT/DS174/R/Add.3 
 Page C-15 
 
 
5. De jure discrimination according on nationality 
57. The EC Regulation de facto  discriminates between EC nationa ls and non-EC nationals in a 
manner that violates the national treatment obligations  contained in Articles 2.1 and 3.1 of the TRIPS 
Agreement. 
58. Canada submits that the EC Regulation discrim inates between nationals of WTO Members as 
a matter of legal construction.  C onsider further the example of an inventor seeking patent protection 
for her invention. In all but the rarest of cases, an  invention is also independent of the location of 
production and the location of eventual patent protec tion.  Further, an inventor could be a natural 
person with nationality in her country of origin, or an inventor could be a legal person whose 
nationality, so to speak, will be in the country in which it has such legal personality.  In either case, 
when patent protection is sought in Europe, the nati onality of the inventor is usually retained. It is 
therefore equally important that European patent la w not deny the inventor a patent over the invention 
because of nationality, and of course it cannot. 
59. Contrast those two scenarios with the case of an applicant for protection of a geographical 
indication. First, unlike copyrighted works or pa tented inventions, which are independent of the 
location of their creation, geographical indications ar e by definition tied to the particular location that 
they represent.  Second, determining the nationality of the rights holder of a geographical indication is 
a different matter than it is for the creator of a copyrighted work or a patented invention.  In the specific case of the EC Regulation, the rights hol der will only in exceptional cases be a natural person 
or even an individual producer.  Rather, the rights  holder will generally be a group or association of 
local producers, established for the purpose of market ing their similar products, and it is these groups 
that subsequently authorize individual producers to use the geographical indication. Since these 
groups are the "interested parties" referred to in provisions on geographical indications in the TRIPS 
Agreement, it is the nationality of these groups that is relevant for the purposes of national treatment, 
and not the nationality of individual producers.  The nationality of these groups or associations will 
invariably be in the jurisdiction in which they operate. 
60. Combining these two features of geographical indications – a group of local producers (by 
design) registering a local indication (by definition) – virtually guarantees that the nationality of the 
rights holder will be in the country from which the ge ographical indication originates.  In other words, 
the geographical area from which a geographical indication originates determines the nationality of 
the interested parties seeking to register it.  For example, if a Canadian farmer establishes operations 
in Belgium to produce a product to be marketed wi th a geographical indication from Belgium, that 
farmer's nationality will not alter th e Belgian nationality of the local group that is the registered rights 
holder of the geographical indication.  As a result, d espite the apparently neutral application of the EC 
Regulation regarding nationality, it is clear that th e procedures set aside for geographical indications 
originating within the European Communities de jure  serve EC nationals, whereas the procedures set 
aside for geographical indications originating outside the European Communities de jure  serve 
nationals of third countries.  Therefore, by discr iminating according to geographical area, the parallel 
procedures in the EC Regulation not only discrim inate between nationals of WTO Members as a 
matter of simple probabilities, they discriminate between nationals of WTO Members as a matter of 
legal construction. 
61. This problem is best illustrated with reference to other branches of intellectual property rights. 
Consider, for example, an author claiming protection under copyright for a work such as a book.  The 
book can be written anywhere in the world, so the act  of creation is independent of the location of 
production and the location of eventual copyright prot ection.  Further, the author is likely to be a 
natural person with citizenship in his country of or igin, and if he seeks protection in Europe for the 
book, he is likely to retain his na tionality. It is important then that European copyright law not deny 
him copyright in the book because of his nationality, and of course it cannot. WT/DS174/R/Add.3 
Page C-16  
 
6. National treatment applies to geographical area 
62. While the prohibition on discrimination between nationals in the TRIPS Agreement is 
fundamentally different from the pr ohibition on discrimination between products that is central to 
national treatment under the GATT, it is possible,  as the European Communities has done in its 
submission, to make too much of that distinction.  The reference to nationals in the TRIPS Agreement 
cannot be divorced from its context in a trade agre ement under the WTO.  It cannot, for example, be 
reduced to a source of a general right to be free fro m discrimination on the basis of nationality (in the 
sense of citizenship) in the laws  and practices of domestic instit utions. The European Communities 
appears to be suggesting that as long as nationality is not specifically cited by a WTO Member as the 
reason for refusing the registration of an intellectua l property right, that WTO Member would not be 
in violation of its national treatment obligations.  If Article 3.1 of the TRIPS Agreement referred only 
to nationality, the European Communities argument might have some merit.  However, the TRIPS 
Agreement provides national treatment to nationals "with regard to the protection of intellectual 
property" and not simply their nationality.  "Protec tion" is further defined in footnote 3 to include 
"matters affecting the availability , acquisition, scope , maintenance and enforcement of intellectual 
property rights as well as those matters affecting the use of intellectual property rights specifically 
addressed in this Agreement" [emphasis added] .  The European Communities notes that non-EC 
nationals are eligible to acquire , without discrimination, intellectual property rights under Articles 5 
and 6 of the EC Regulation, as long as the geograp hical indication for which protection is sought 
originates within the European Co mmunities.  However, the protection of intellectual property rights 
in geographical indications involves more than just acquisition ; it also involves, inter alia , the 
availability and scope of those rights.  The full scope of the requirement to provide national treatment 
to nationals of all WTO Members is not restricted to the nationality of the party seeking registration, 
but extends to all facets of the protection of right s.  By the European Co mmunities' own admission, 
Articles 5 and 6 of the EC Regulation limit the availability  and scope  of protection available to a non-
EC national to rights in geographical indications originating in a narrowly defined geographical area 
(i.e. within the European Communities).  To av ail themselves of the full scope of rights over 
geographical indications, non-EC nationals must turn to Articles 12 and 12a, an avenue that is closed 
off for nationals of all but a few WTO Members.  The requirement to provide national treatment 
under the TRIPS Agreement to nationals therefor e extends beyond the mere nationality of the 
applicant, and applies to the availability and scope of the rights for which registration is sought.  By 
providing more favourable treatment to geographical indications from a narrow geographical area, the 
EC Regulation violates Articles 2.1 and 3.1 of the TRIPS Agreement. 
63. Canada requests this Panel to find that EC Regulation 2081/92 violates the European 
Communities' national treatment obligations cont ained in Articles 2.1 and 3.1 of the TRIPS 
Agreement.  In particular this Pa nel should find that the EC Regulation de jure
 accords less 
favourable treatment to geographical indications originating from outside the European Communities 
than it does to those originating within the territo ry of the European Communities, and further that, 
contrary to the European Communities' interpreta tion of its own Regulation, this less favourable 
treatment applies to WTO Members.  This Panel sh ould further find that th e European Communities 
may not rely on an artificial dis tinction between nationality and geogr aphical area to mask what is 
otherwise de facto less favourable treatment in the EC Regul ation of non-EC nationals than EC 
nationals, both with regard to the fact that ge ographical indications originating from outside the 
European Communities are sought by non-EC nationals and vice versa, and with regard to the fact 
that the scope of protection against discrimination in the case of geographical indications extends to 
include geographical area. 
7. The relationship between WTO Members, the EC, EC member States and nationals 
64. The EC Regulation, and the European Commun ities' first written submission in defence of 
that regulation, confuse the respective rights a nd responsibilities of these various actors, and as a 
result improperly imposes burdens on nationals of WTO Members in the name of equal treatment.   WT/DS174/R/Add.3 
 Page C-17 
 
 
The TRIPS Agreement requires  WTO Members  to implement in their domestic laws minimum 
standards concerning the protection of what are ultimately private rights. WTO Members are also required to ensure that these domestic private rights regimes – whether based on the minimum standards or reflecting more extensive protecti on – are equally accessible to nationals from other 
WTO Members. These requirements establish a direct relationship between WTO Members and 
foreign nationals, a relationship th at is independent of any involvement of the government of the 
foreign nationals.  The European Communities disregar ds this point completely when it claims that it 
"finds it remarkable that the United States woul d invoke its own unwillingness to cooperate in the 
registration process in order to demonstrate a nati onal treatment violation on the part of the EC".
12  In 
fact, the United States would be entirely justifie d in invoking any unwillingn ess to cooperate in the 
registration process, because the United States is un der no obligation to facilitate the acquisition of 
private rights by its nationals in the European Co mmunities.  That obligation falls exclusively on the 
European Communities.  The Eur opean Communities cannot then re quire another WTO Member to 
assist it in fulfilling its obligation to protect the righ ts of foreign nationals, regardless of whether or 
not that assistance would be "burdensome". 
65. The European Communities then takes the confus ion a step farther by drawing EC member 
States into the equation.  It is not Canada's pla ce to interpret the internal EC rules governing the 
division of competence between the European Co mmunities and its member States when it comes to 
the implementation of the TRIPS Agreement – and Ca nada will not do so here.  Instead, Canada relies 
on the European Communities' own st atements that: (i) it has adopted  the EC Regulation on the basis 
of its own competence;  (ii) the European Communities is an original Member of the WTO;  (iii) it is 
irrelevant that the EC member States are also Members of the WTO;  and (iv) the subject matter of the 
present dispute falls within the exclusiv e competence of the European Communities.13  On the basis of 
these explanations provided by the European Commun ities, Canada concludes that the EC Regulation 
is the equivalent of a national measure, and that any functions carried out by EC member States for 
the purposes of implementing the EC Regulation are carried out as sub-national units of the European 
Communities.  As a result, Canada is not surprised that the EC Regulation delegates certain functions 
to EC member States that it cannot delegate to th e sovereign governments of third countries.  Of 
particular note, Article 5(6) provides that "EC me mber States shall introduce the laws, regulations and 
administrative provisions necessary to comply with th is Article."  There is no equivalent provision in 
the sections that set out the procedures that apply to third country governments; nor could there be. 
66. However, having established its exclusive co mpetence over the registration of geographical 
indications within the European Communities,  the European Communities then confuses its 
relationship toward sub-national units of the Eu ropean Communities with its relationship toward 
sovereign WTO Members.14  In particular, the European Communities seeks to defend the 
requirement that third country governments, includi ng those of WTO Members, assist applicants to 
comply with the requirements of the EC Regulatio n.  This position by the European Communities 
effectively equates the downward delegation of res ponsibility to sub-national units with the outward 
delegation of responsibility to s overeign WTO Members.  The European Communities apparently 
considers it "equal treatment" to require nationa ls of sovereign WTO Members to depend on the 
action of their governments (over which the European  Communities has no authority) in the same way 
nationals of the European Communities depend on the action of their own governments (in circumstances where European Communities law requir es that action).  This is not equal treatment; it 
is less favourable treatment.   The EC Regulati on therefore imposes on WTO Members a requirement 
for reciprocal and equivalent treatment that is in violation of the national treatment obligations 
contained in Articles 2.1 and 3.1 of the TRIPS Agreement. 
                                                     
 
12 European Communities' first written submission, para. 130. 
13 European Communities' first written submission, paras. 253-255. 
14 European Communities' first written submission, para. 129. WT/DS174/R/Add.3 
Page C-18  
 
8. Points raised in response to Panel's questions 
67. Canada interprets the term "nationals", based on the ordinary meaning of this term as used in 
various provisions of the TRIPS Agreement, to re fer to those natural and legal persons that have 
certain kinds of legal status in a given WTO Member , either through citizenship, in the case of natural 
persons, or through place of incorporation, in th e case of legal persons such as corporations or 
associations.  As such, natural and legal persons wi ll be "nationals" of a WTO Member when they 
acquire such legal status.  Only in the case of sepa rate customs territory Members of the WTO, and in 
the case of nationals of non-WTO-Members residing or operating in the territories of WTO Members, does domicile or commercial establishment become a relevant factor for determining whether a 
natural or legal person is eligible for treatment ot herwise available to nationals of a WTO Member.  
This distinction is clear from the provisions of th e TRIPS Agreement, and from related provisions in 
the Paris Convention (1967) and the Berne Conventio n (1971), incorporated by reference into the 
TRIPS Agreement.  For instance, Article 1.3 of the TRIPS Agreement provid es that nationals "shall 
be understood as those natural or legal persons th at would meet the criteria for eligibility for 
protection provided for in the Paris Convention (196 7) [and the] Rome Convention (1971)".  Article 3 
of the Paris Convention (1967) sets out how to treat nationals from countries that are not members of 
the Union, and in doing so makes an explicit dis tinction between natural or  legal persons who are 
"nationals of countries outside the Union who are do miciled or who have real and effective industrial 
or commercial establishments" in a country of th e Union, on the one hand, and "nationals" of a 
country of the Union on the other.  Similarly, Ar ticle 3(2) of the Berne Convention (1971) makes an 
explicit distinction between authors who are "not na tionals of one of the countries of the Union but 
who have their habitual residence" in a country of  the Union on the one hand, and "nationals" of a 
country of the Union on the other.  In both these cases, as a result of their domicile, habitual residence, or industrial or commercial establishmen t, natural or legal pers ons who are not otherwise 
nationals of a country of the respective Unions are accorded treatment similar  to that accorded 
nationals of a country of one of the Unions.  However, they do not become nationals , for the purposes 
of granting rights, of the country in which they reside.  Therefore, as a result of the explicit reference 
to this distinction, the ordinary  definition of "nationals" does not  "necessarily include" natural persons 
who are domiciled, and legal pers ons who have an industrial or co mmercial establishment in a WTO 
Member. 
68. Canada believes that the words "country of the Union", used in Article 2(1) of the Paris 
Convention (1967) as incorporated in the TRIPS Ag reement by its Article 2.1, should be read mutatis 
mutandis  to refer to "WTO Members".  The TRIPS Ag reement incorporates by reference certain of 
the substantive provisions (Articles 1 through 12, and Article 19) of the Paris Convention (1967) such 
that the obligations contained in those provisions apply to WTO Members as if they were all members 
of the Paris Union.  While WTO Members who are not a "country of the Union" have no rights under 
the Paris Convention per se , the TRIPS Agreement incorporates these provisions of the Paris 
Convention (1967) for all WTO Members such that the Paris Convention (1967) provisions become 
WTO provisions.  Therefore, for the purpose of the operation of the provisions thus incorporated, the words "country of the Union" are the same as "WTO Members".  For example, Article 3 of the Paris 
Convention operates such that it grants national treat ment to certain natural and legal persons for the 
purposes of the operation of the Convention.  As a r esult of incorporation into the TRIPS Agreement, 
that provision should be read as: "Nationals of  Non-WTO Members who are domiciled or who have 
real and effective industrial or commercial establishm ents in the territory of a WTO Member shall be 
treated in the same manner as nationals of WTO Members." 
69. Canada understands that, in traditional trade di sciplines, which are generally prohibitions on 
trade-distorting discriminatory behaviour, a WTO Me mber may have a legal measure that is broad 
enough to be applied by domestic statutory authorities either consistently or inconsistently with that 
Member's international trade obligations.  The ques tion in such a case is whether the fact that the 
measure could be applied in a manner inconsistent with international trade law is sufficient to 
challenge the measure as such.  In the case of in tellectual property rights, the TRIPS Agreement  WT/DS174/R/Add.3 
 Page C-19 
 
 
establishes minimum standards of the protection.  It requires WTO Members to implement domestic 
legislation that grants rights to private rights app licants as long as they meet the minimum criteria for 
eligibility established by the TRIPS Agreement.  While a WTO Member has flexibility in deciding 
how to protect these rights, all Members must protect the same rights according to at least the minimum standards.  Given that it is the specific rights that are prescribed by the TRIPS Agreement, 
once a Member has decided how it intends to gran t those rights, the implementing measure cannot 
authorize the exercise of discretion other than in  a manner consistent with the minimum standards. 
Otherwise, there would be no minimum standards for rights. 
D. C
HINA  
1. Introduction 
70. China submits that a successful resolution of this dispute requires the removal of ambiguity 
in, and proper interpretation of, the following issues: 
– applicability of Article 12 of the EC Regulation to non-EC WTO Members; 
 
– verification and publication affecting non-EC WTO Members;  and 
 
– product specifications and inspection structures affecting non-EC WTO Members. 
 71. The provisions of the EC Regulation of particular concern to China are those relating to 
non-EC WTO Members.  In this respect, ambiguiti es remain in the EC Regulation.  Its frequent 
references to "third countries", "conditions for prot ection", etc., are without any express delineation as 
to whether certain provisions are applicable to a non-EC WTO Member or not.  The interpretations 
and cross-references offered in  the European Communities first written submission fail to remove 
these ambiguities. 
2. Applicability of Article 12 of the EC Regulation 
72. The European Communities' textual interpreta tion of Article 12, including the wording 
"[w]ithout prejudice to international agreements" is not accompanied by any evidentiary support, 
whether in terms of actual implemen tation or of judicial deliberation.  Nor is there any regulatory 
language in the provisions to expressly exclude the applicability of these provisions to non-EC WTO Members.  While paragraph (10) of the recitals sp eaks specifically of a right of objection granted to 
nationals of WTO Member countries on the basis of the "without prejudice" chapeau , the preamble of 
the EC Regulation's amendments  does not expressly exclude WTO Members from the Article 12 
applicability of the reciprocity and equivalence requi rement to third countries.  Had the drafters 
intended that Article 12 would not ap ply to non-EC WTO Members, a clause to that effect sitting next 
to the express reference to the right to object  in the Preamble would have been inserted. 
73. The European Communities itself admits that the EC Regulation does require that conditions 
be met in respect of "specific geographical indicati ons from third countries" which, more likely than 
not, includes WTO Members, where it stated that it does require that the product specifications and 
inspection regimes with regard to specific GI s from third countries meet the conditions of 
Regulation 2081/92.
15 
74. Immediately after that paragraph, the European  Communities continues to argue that, in the 
event that the above equivalence and reciprocity requirements with respect to product specification 
and inspection regime were challenged by the complain ants in this case, it would not be inconsistent 
with Article 3.1 of the TRIPS Agreement a nd Article 2(1) of the Paris Convention. 
                                                      
15 European Communities' first written submission, para. 118. WT/DS174/R/Add.3 
Page C-20  
 
75. The language of Article 12 does not support the European Communities' interpretation that it 
was not applicable to WTO Members.  That interpretation requires steps in reasoning with precise attention to the WTO TRIPS Agreement.  The "without prejudice" chapeau  is too general to reflect 
such reasoning. 
76. Putting aside the legitimacy of such specification and inspection issues, it is worth noting that 
the European Communities' reversion to demanding e quivalence and reciprocity in respect of certain 
components of its GI protection regime  is particularly significant.  It further added complication to the 
proper interpretation of Article 12 as quoted above.  By reintroducing the equivalence and reciprocity 
requirement for specifications and inspections in  relation to specific GIs from WTO Members, the 
European Communities appears to admit that portions of Article 12, particularly in respect of the 
whole first indent and the first portion of the sec ond indent of Article 12(1), apply to WTO Members, 
in contradiction to its earlier argument that the whole Article does not apply. 
77. The language of Article 12 does not suggest a split in the applicability of, for example, the 
registration requirement versus th e overall protection regime.  The leading sentence "this Regulation 
may apply to an agricultural product or foodstuff from a third country provided that" appeared to 
suggest that the overall applicability of the wh ole Regulation would be available or withheld 
depending on whether equivalence would be met.  The European Communities' split interpretation 
could only be understood easily if there were a sepa rate set of provisions regarding applicability of 
this Article to non-EC WTO Members, or if  WTO Members are expressly excluded from the 
definition of third countries in relation to specific indents of this Article. 
3. Verification and publication affecting non-EC WTO Members 
78. Other provisions pertaining to verification a nd publication in the EC Regulation did not 
appear to afford clarity.  As the European Communities describes, verification and publication 
bifurcated to two "parallel" sections of the GI Regulation, Article 6 in relation to GIs from the 
European Communities, and Article 12b in relation to  GIs from third countries.  However, in the same 
portions of its first written submission, the Euro pean Communities avoids setting out in detail the 
different verification and publication procedures as they respectively apply to applications from EC 
member States and those from third countries, incl uding WTO Members.  A closer reading of the two 
articles reveals that, while parallel in form, they ar e not the same in substance.  If no less favourable 
treatment is granted to GIs from WTO Members in comparison to those from EC member States, Article 6 should govern both EC member States and WTO Members, and non-WTO third countries 
should be governed by Article 12b. 
79. Under Article 6, within six months of its receipt of an application transmitted from an EC 
member State, the EC Commission is required to verify and investigate whether the application contained all product specification requirements unde r Article 4.  If the Commission finds "that the 
name qualifies for protection", publication for objec tion and ultimate registration would ensue; if the 
Commission concludes otherwise, the name is not published.  Prior to publication, the Commission 
may request the opinion of a Committee composed of representatives of EC member States; in the 
event that the Commission differs with the Committe e, or if the Committee delivers no opinion, the 
matter is required to be submitted to the EC Counc il for final determination on the basis of qualified 
majority. 
80. Article 12b, on the other hand, requires the EC Commission to verify and investigate 
"whether the registration request sent by the third country [including WTO Members] contains all the 
necessary elements", a wording different from "wheth er the application includes all the particulars 
provided in Article 4" in respect of applications  from the European Communities.  A transmission 
from WTO Members, together with non-WTO third c ountries, is treated as a "registration request" in 
contrast to an "application" from within EC member States.  Such a difference in terminology, albeit slight, is significant as a scrutiny of whether the re quest contains "all the necessary elements" is wider  WT/DS174/R/Add.3 
 Page C-21 
 
 
and more intensive than a verification of whethe r the application includes all the particulars under 
Article 4.  For verification by the Commissi on of requests from third countries, including WTO 
Members, Article 12b does not simply refer to Article 4 particulars.  It appears to suggest that a third 
country, including a WTO Member in transmitting its re quest, has more to satisfy than a EC member 
State in transmitting an application.  The sugges tion is further borne out by the requirement under 
Article 12a(2) that the third country, including a WT O Member must "deem the requirement of this 
Regulation to be satisfied" before transmitting in contrast to the Article 5(5) requirement that a EC 
member State only has to "check th at the application is justified". 
81. Further indication of the difference and likely extra burden is the Article's reference to 
"conditions for protection".  In place of the paralle l requirement that the EC Commission shall make 
the determination of whether to publish or not b ased on whether a EC name "qualifies for protection" 
under Articles 6(2) and 6(5), Article 12b requires that the Commission make the determination of publication by analyzing whether a third country name, including a name from a WTO Member, "satisfies the conditions for protection".   
82. The EC Regulation fails to define what "all th e necessary elements" and what "the conditions 
for protection" are.  Yet these requirements tend to lead WTO Members to look to the direction of the 
prior European Communities' insistence upon reciproc ity and equivalence requirements, at least in 
respect of product specifications and inspection regimes. 
83. Prior to publication of names from all third countries including WTO Members, the 
Commission may request the opinion of a Comm ittee composed only of representatives of EC 
member States.  In the event that the Commissi on differs with the Committee, or if the Committee 
delivers no opinion, the matter is then required to be submitted to the EC Council for final 
determination on the basis of qualified majority.  This resolution of possible disputes on publication 
was again available to names from WTO Members, but the process does not invite WTO Members to participate. 
4. Product specifications and inspection structures affecting non-EC WTO Members 
84. Article 10 contains relatively detailed provisi ons with respect to the obligations on EC 
member States to establish inspection structures to ensure quality of EC GIs; the EC Regulation does 
not contain express parallel provisions for WTO Members in connection with their own GIs.  The European Communities insists that its EC Regulati on does require that the product specifications and 
inspection regimes with regard to specific geogr aphical indications from third countries, presumably 
including WTO Members, meet the conditions of Regulation 2081/92.
16 
85. There is no express definition or cross-reference as to what these conditions are in relation to 
WTO Members.  Article 12a(2) provides that a WTO Member must attach certain documents to its 
transmitted registration request.  The EC Commission,  pursuant to its verification and publication 
powers under Article 12b, determines whether the ab ove attachment transmitted by the WTO Member 
satisfies the conditions of the EC Regulation.  It is not clear that the above requirements are the only 
conditions for WTO Members to satisfy.  Again, in possible cases of doubt, the EC Council would 
have the final power to make sure  a determination, under Article 12b,  without participation from other 
WTO Members. 
86. In contrast, the parallel provision of Article 5(4) does not require EC member States to 
guarantee Article 10 inspection structures, as they ar e obligated to establish the structure pursuant to 
the requirements under the Article; nor are EC memb er States required to describe their domestic GI 
protection system.  Subsequently, EC member States can expect a relatively simple prima facie 
verification process, involving only a review of whether the application contained all the particulars. 
                                                      
16 European Communities' first written submission, para. 118. WT/DS174/R/Add.3 
Page C-22  
 
87. A further example of the European Communities'  ambiguity under Article 10 is the silence on 
whether designated inspection authorities in non-EC  WTO Members can be readily accepted by the 
EC Commission and how that acceptance relates to the particulars of its inspection structure which is 
to be reviewed by the Commission.  Under Article  10(2), EC member States, while obligated to 
establish their respective inspection structures, can  reasonably expect no objection by the Commission 
to accept their designated authorities.  With respect  to "approved inspection bodies" in third countries, 
the EC Regulation specifically requires that "third countries recognized pursuant to Article 12(3)" are 
to comply with "[t]he equivalent standard or the a pplicable version of the e quivalent standard" "to be 
established or amended in accordance with the pr ocedure laid down in Article 15", a procedure 
without representation from other third countries.  Ambiguity exists as to whether WTO Members are 
required to comply with this requirement.  Again,  since the European Communities in its first written 
submission in interpreting Article 12 admits that WTO Members are required to meet the conditions 
of the GI Regulation in respect of product specifi cation and inspection structure, it appears that under 
the GI Regulation, WTO Members are required to  establish "equivalent standard" for private 
inspection bodies and possibly for "designated inspection authorities". 
88. No clarification as to what that equivalent standard is was available until the European 
Communities gave its first written submission.  It provides no guidance as to what constituted 
equivalent standard for WTO Members.  It refers to ISO/IEC Guide 65:1996, but only as "an example"
17, and it is also not clear whether that sta ndard has passed the Commission's Article 15 
procedure, as required under Article 10(3) of the Regulation below. 
89. If the European Communities' interpretation th at "third countries recognized pursuant to 
Article 12(3)" did not include WTO Members for the purpose of awarding right to object18 is to be 
acceptable, the EC Regulation is again silent as to wh at the equivalent standard for private inspection 
bodies is for WTO Members except for the general stat ement made in its first written submission that 
it did require reciprocity and equivalence in respect of inspection structures, or it would be contradicting itself by implying that ISO/IEC Guide 65:1996 applies to WTO Members.  Such a 
contradiction does not assist in the prope r interpretation of the EC Regulation. 
90. Notwithstanding the above inconsistency, the European Communities insists upon reciprocity 
and equivalence conditions, both in  terms of product specifications and in particular inspection 
structure, whether appearing in the form of requi site attachments or the outright requirement for 
equivalence.  WTO Members are required to have  a prior established set of legal rules for the 
protection and inspection of GIs, including GIs from the European Communities, before they can 
expect to transmit registration requests from their nationals to the European Communities for EC GI 
protection.  In making a transmission, no WTO Me mber would ignore the EC Regulation's "all the 
necessary elements" and "the conditions for protection" requirement set out by the European Communities under Article 12b(1) or the European Communities' express insistence upon equivalence in product specifications and inspection st ructures.  The safest approach in order to have 
their respective registration request accepted for pu blication is to meet the European Communities' 
equivalence conditions. 
91. In that respect, China believes that produc t specification and inspection structures are 
quintessential for the value and quality of GIs,  just as the European Communities argued.
19  A n  
overall GI protection system built upon reciprocal and equivalent product specification and inspection 
from WTO Members can hardly be described as reci procity and equivalence, neutral for such WTO 
Members.  In arguing that its reciprocity and equi valence conditioning would only be limited to these 
two components of its GI protection regime and not be applicable to its overall GI regulatory 
protection system, the European Communities is far from convincing.  The essential link between 
                                                      
17 European Communities' first written submission, para. 54. 
18 European Communities' first written submission, para. 74. 
19 European Communities' first written submission, paras. 48-55 and 121.  WT/DS174/R/Add.3 
 Page C-23 
 
 
product specification and inspection structure and the overall GI protection cannot be artificially 
separated. 
5. Other points raised in response to the Panel's questions 
92. China refers to the example of the Patent Cooperation Treaty ("PCT") as an international 
arrangement according to which national governments c ooperate by acting as agents or intermediaries 
in the protection of private rights.  To the best of China's knowledge, there is no other international 
arrangement established under the legislation of one of the parties to that arrangement.  In the case of 
international arrangement establishe d under PCT, application requirem ents and procedures are applied 
universally and equally among members.  If an intern ational arrangement in respect of protection of 
private rights is to be established under the legisla tion of one of the parties to the arrangement, such 
legislation or international arrangements, establishe d thereunder, shall not impose extra burdens with 
respect to availability, acquisition, scope, maintena nce and enforcement of private rights as well as 
those matters affecting the use of such private rights. 
93. China understands that the term "nationals" as us ed in Article 1.3, including footnote 1, and 
Articles 3.1 and 4 of the TRIPS Agreement and Artic le 2 of the Paris Convention (1967) relates to 
national treatment in this dispute.  In the context of protection of intellectual property rights, natural 
persons who were domiciled, or legal persons who had a real and effective industrial and commercial 
establishment in a specific member are required under the TRIPS Agreement and Paris Convention 
(1967) to be treated in the same manner as nationals of that Member.  In this regard, China believes 
that "nationals" as used in Article 1.3, including  footnote 1, and Articles 3.1 and 4 of the TRIPS 
Agreement and Article 2 of the Paris Convention ( 1967) covered both natural or legal persons holding 
the nationality of a certain Member of the TRIP S Agreement as well as natural persons who are 
domiciled, or legal persons who had a real and ef fective industrial and commercial establishment in 
that Member. 
94. China does not consider that the words "country of the Union", in Article 2(1) of the Paris 
Convention (1967), as incorporated in the TRIPS Agreement by its Article 2.1, should be read 
mutatis mutandis to refer to "WTO Member" for the following  reasons.  First, the text of the two 
international agreements does not support such an in ference.  According to Article 1(1) of the Paris 
Convention (1967) the words "country of the Union" refer to a member state of the Paris Convention 
(1967).  In contrast, "WTO Member" means a part y to the Agreement Establishing the World Trade 
Organization.  The Paris Convention and the Agre ement Establishing the World Trade Organization 
are two international agreements among different member states.  The TRIPS Agreement was one of 
the series of WTO agreements.  The member states  of each of these two international agreements 
promised to take on different obligations a nd are entitled to different rights under different 
international agreements of which they are memb er states.  Although certain Articles of the Paris 
Convention are incorporated by Article 2.1 of the TRIPS Agreement, the two agreements still remain 
separate and independent internati onal agreements, and both are in force. The incorporation does not 
affect other existing obligations between other me mber states under TRIPS and the Paris Convention.  
Second, the factual member status does not allow su ch inference.  In fact , there are more member 
states of the Paris Convention than of the WTO; while the Paris Convention has 160 member states, the WTO has 147 Members.   
95. China considers that that different treatmen t of GIs under the EC Regulation would also 
amount to less favourable treatment of like products.  It quotes the view of the Appellate Body in 
Korea – Various Measures on Beef that according "treatment no l ess favourable" means according 
conditions of competition no less favourable to the im ported product than to the like domestic product 
and that this should be assessed by examining whether a measure modified the conditions of 
competition in the relevant market to  the detriment of imported products.20  Therefore, in the current 
                                                      
20 Appellate Body Report on Korea – Various Measures on Beef , para. 135. WT/DS174/R/Add.3 
Page C-24  
 
case, if different treatment accorded to names by the EC Regulation is found to result in modification 
of the conditions of competition under which like products, imported products  and EC like products, 
competed in the EC market to the disadvantage of imported products, then the different treatment 
granted to names would amount to less favourable treatment of like products.  China therefore 
believes that evidence in respect of different treatment  of names is relevant to  a determination of less 
favourable treatment of like products. 
96. China believes that measures that came into fo rce after this Panel was established are within 
the terms of reference of this Panel.  The compla inants had specified the concerned amendments in 
their request for the establishment of a panel, a nd those contents accordi ngly have been properly 
included in the terms of reference of this pane l.  The European Communities claims that only 
measures in force at the time that the Panel was est ablished are within the terms of reference of the 
Panel.  However, there is no requirement in th e DSU or in WTO dispute settlement practice for 
arguments that the Panel's jurisdiction is only limite d to measures that had already come into force 
when the Panel was established.  The European Communities does not provide any legal basis for its 
claim nor could it find support from the functions a nd the objective of the terms of reference, as 
explained by the Appellate Body in Brazil – Desiccated Coconut .  The parties and third parties, 
therefore, were given sufficient information concerni ng the claims at issue in the dispute, and were 
allowed enough opportunity to respond to the complain ant's case.  It is irrelevant in this respect 
whether the concerned amendments came into effect  before or after this Panel was established.  
Furthermore, following the European Communities' lo gic, when a measure was challenged before the 
DSB, once the respondent had replaced the challenge d measure with an amendment before the Panel 
was established, and that new amendment came into  force immediately after the establishment of the 
Panel, then the Panel would not be  able to examine either the old measure or the amendment, because 
the challenged old measure no longer had any effect by the time of the Panel's establishment, while 
the new amendment had not yet come into effect. 
97. China considers that the mandatory/discretionary distinction in GATT and WTO 
jurisprudence fully applies under the TRIPS Agre ement and that the nature of the concerned 
obligations under the TRIPS Agreement therefore shall not  affect the application of the distinction.  It 
is irrelevant whether the nature of some TRIPS oblig ations is to prohibit or to oblige Members to take 
certain actions in respect of the application of the mandatory/discretionary distinction.  The nature of 
the concerned obligations under the TRIPS Agreement th erefore shall not affect the application of the 
distinction.  It is established under WTO law that  a Member could challenge measures of another 
Member on a per se  basis when those measures mandate, in cer tain circumstances, a violation of its 
WTO obligations.  There is a considerable bod y of dispute settlement practice concerning the 
mandatory/discretionary distinction, or per se  violation rule, as it is more commonly referred to.  In 
the relevant panel and Appellate Body reports addressing the mandato ry/discretionary distinction, 
nowhere is it stated that the nature of the concer ned WTO obligations as distinguished by the Panel in 
this question shall affect the application of the dist inction. Furthermore, certain obligations, (e.g. the 
national treatment principle under TRIPS), inter alia , on one hand, that oblige Members to take 
certain actions, are also prohibitions in nature on the other.  The national treatment principle in 
Article 3.1 of the TRIPS Agreement, prohibits a Me mber according to the nationals of other Members 
treatment less favourable than that it accords to its own nationals.  Therefore, from the text of this 
provision, it is clear that the nature of the nati onal treatment principle is an obligation which both 
obliges each Member to accord to the nationals of other Members treatment no less favourable than 
that it accords to its own nationals , and prohibits Member from according to the nationals of other 
Members treatment less favourable than that it accords to its own nationals.   WT/DS174/R/Add.3 
 Page C-25 
 
 
E. COLOMBIA  
1. Introduction 
98. Colombia has a systemic interest in this di spute in that it attaches great importance to 
determining the scope of the obligations assu med by WTO Members under the TRIPS Agreement.  
As a country that has protected one of its main  export products with a trademark, Colombia is 
interested in ensuring that WTO Member countries c ontinue to be entitled to allow their nationals to 
decide whether they must choose one of the inte llectual property protection instruments or whether 
they are in fact entitled to combine those instrume nts according to the specificities of the different 
markets. 
2. Reciprocity and equivalence requirement 
99. In response to the argument made by Australia  and the United States with respect to the 
violation of the national treatment provisions for the registration of, or objection to, a geographical 
indication, the European Communities has stated that the expression "without prejudice to international agreements" included in Article 12(1) and (3) of the EC Regulation ensures that the 
rights of WTO Members are preserved.  Accord ing to the European Communities, the WTO 
membership of the country to which the applicant fo r registration belongs is a sufficient guarantee that 
there is protection of geographical indications.
21  If this is the correct interpretation of the legislation, 
Colombia thinks the Panel should recommend that th e European Communities amend its legislation to 
ensure that the clause in question is given the scope and meaning that the European Communities 
attributes to it in its submission as such an interpre tation cannot be drawn from a simple reading of the 
clause in its current version. 
100. Even if Colombia were to accept, for the sake of di scussion, that this is the scope of the clause 
with respect to international agreements, there is still a point that remains unclear, namely the way in 
which the third country would transmit the registra tion application under Article 12a(2).  Indeed, 
Colombia wonders whether the country of origin of  the applicant, being required in any case to 
describe the legal provisions protecting the said designation and the way in which its inspection 
structures operate, is not subject to a certification or  equivalency process.  In practice, Colombia sees 
this requirement as a condition involving an evaluati on of protection systems in force in the country 
of origin of applicants for geographical indicati ons.  Consequently, Colombia sees protection as being 
clearly contingent on the evaluation of the applicant's system, and this is contra ry to Article 1.1 of the 
TRIPS Agreement. 
101. Colombia does not agree with the Europ ean Communities' argument that drawing a 
distinction between geographical areas or territori es is not a violation of the national treatment 
principle.  Any distinction that in any way iden tifies the geographical indications of the European 
Communities as opposed to the others would clearl y result in a violation of national treatment 
commitments. 
                                                      
21 European Communities' first written submission, para. 66. WT/DS174/R/Add.3 
Page C-26  
 
3. Relationship between trademarks and geographical indications 
102. With respect to the relationship between trad emarks and geographical indications, Colombia 
agrees with the argument that the TRIPS Agre ement does not establish any supremacy of one 
instrument of protection over another.  This do es not mean, however, that the European Communities' 
regulations can simply ignore the right of the trademark owner under Article 16.1 of the TRIPS 
Agreement.  To do so is a clear violation of the European Commun ities' WTO commitments. 
F. I
NDIA  
1. Points raised in response to the Panel's questions 
103. India is not aware of any group or person ever having filed with its authorities either an 
application for, or an objection to, a registration pursuant to the EC Regulation.  If such filing was to 
occur, India would be willing to transmit such an application to the European Communities.  
However, the question whether the Government w ould be able to do so would depend upon what the 
transmission entails, in particular whether it may involve any procedures or need for any 
infrastructure for which there may be capacity constraint s.  India allows direct access by GI applicants 
to its national authority irrespective of nationality.   In respect of applicants who do not have a 
principal place of business in India, it is necessary to  indicate an address for service in India.  In case 
of applicants from other WTO Member countries, it is necessary to include a certificate by the 
Registry or competent authority of the Geographical Indications Office of the WTO Member country in the application for registration and it is necessar y to include the particulars of the geographical 
indication, the country and date of filing of the fi rst application in the WTO Member country and such 
other particulars as may be required by the Registrar. 
104. India understands that the European Communities has stated that it does not provide less 
favourable treatment to geographical indications located in other WTO Members.
22  At the same time, 
it is not very clear to India from the European Communities' statement whether providing no less 
favourable treatment to nationals of other WT O Members along with providing less favourable 
treatment to geographical indications located out side the EC member States would satisfy the 
requirement of national treatment in Article 3.1 of th e TRIPS Agreement.  It is India's view that the 
only valid interpretation of the terms "treatment…with regard to the protection" in Article 3.1 is that 
"no less favourable treatment" to nationals of ot her WTO Members cannot be provided unless "no less 
favourable treatment" is also provided to the geogr aphical indications applied for by them, whether 
located inside the EC member States or located  in other WTO Members.  The only deviations 
permitted are the procedural ones, such as tho se provided in Article 3.2, whereby additional 
requirement for judicial or administrative proce dures can be imposed upon applicants of other WTO 
Member countries. 
105. In India's view, the words "country of the Uni on" in Article 2(1) of the Paris Convention 
(1967) as incorporated in the TRIPS Agreement by its Article 2.1, should be read mutatis mutandis to 
refer to "WTO Member". 
106. India is not aware of any GIs registered under the EC Regulation that are identical (or 
confusingly similar) to Community protected  trademarks owned by Indian nationals. 
107. India sees no apparent conflict between Articles 16.1 and 22.3 of the TRIPS Agreement.  
Article 16.1 deals with rights of a trademark owner against "third parties" in the context of use of identical or similar signs which may cause confusion.  It also provides that these rights shall not prejudice any existing prior rights.  Article 22.3 entitles WTO Members to refuse or invalidate the 
registration of a trademark which c onsists of or contains geographical  indication with respect to the 
                                                     
 
22 European Communities' first written submission, para. 125.  WT/DS174/R/Add.3 
 Page C-27 
 
 
goods not in the territory indicated if such use is of  a nature as to mislead the public as to the true 
place or origin.  Any potential conflict would be a voided in India as provisions of Section 25 of the 
Geographical Indications of Goods  (Registration and Protection) Act, 1999 of India provide for 
refusal or invalidation of registration of trademarks that contain or consist of  geographical indications 
that may cause confusion.  
108. Under Section 12 of India's Trade Marks Ac t of 1999, registration by more than one 
proprietor of trademarks which are identical or similar may be permitted in the case of honest concurrent use.  However, GIs are not covered by that provision.  Section 26 of India's Geographical 
Indications (Registration and Protection) Act of 1999 provides that where a trademark contains or 
consists of a geographical indication and has been ap plied for or registered in good faith under the law 
relating to trademarks or where rights to such tr ademark have been acquired through use in good faith 
either (a) before the commencement of the Act, or (b ) before the date of filing of the application for 
registration of such geographical indication under the Act, nothing contained in the Act will prejudice 
the registrability or the validity of the registration of  such trademark or the ri ght to use such trademark 
on the ground that such trademark is identical w ith, or similar to, such geographical indication.  
India's Geographical Indication Act does not discrim inate between GIs and trademarks of European 
Communities and non-EC countries.  
G. M
EXICO  
1. Introduction 
109. Mexico presents arguments in support of its view that the EC Regulation is inconsistent with 
the TRIPS Agreement.  It addresses the following points which it considers fundamental to this 
dispute: 
 – the national treatment obligation; 
  – the MFN treatment obligation;  
 – the protection of trademark rights under Articles 16.1 and 24.5 of the 
TRIPS Agreement; and 
  – cochineal:  a product of Mexican origin.  
2. National treatment 
110. Like the complaining parties, Mexico submits that Article 12(1) of the Regulation violates the 
principle of national treatment in that it accords less favourable treatment to third countries than it accords to EC member countries.  Under Article 12(1) of the Regulation, foreign countries cannot enjoy the same benefits as EC nationals with resp ect to the registration of geographical indications 
unless they meet certain conditions of reciprocity.  The language of Article 12( 1) of the Regulation is 
precise and unequivocal:  a third country must "give gua rantees identical or equivalent" in order to be 
able to receive the same protection as EC member  countries;  otherwise, nationals of other WTO 
Members cannot enjoy the protection accorded by the Regulation.  This is clearly contrary to the 
principle of national treatment contained in Artic le 3.1 of the TRIPS Agreement.  Moreover, the 
Regulation violates the principle of national treatment by once again imposing conditions of reciprocity and preventing nationals of countries that are not EC members from submitting their 
objections with respect to applications for the regi stration of geographical indications directly to the 
European authorities.  Indeed, Article 12d(1) of the Regulation stipulates that objections from WTO Member countries must be submitted first to the gove rnment of the country in question, which must 
then transmit the objection to the European Commi ssion.  In other words, unlike the EC member 
countries, WTO Member countries that do not belong to the European Communities bear the WT/DS174/R/Add.3 
Page C-28  
 
additional burden of first having to  address themselves to their national authorities, and then having to 
delegate to those authorities the task of following up the objection process. 
3. MFN treatment 
111. The Regulation also represents an infringeme nt of the principle of most-favoured-nation 
treatment established in Article 4 of the TRIPS Agreement.  By limiting intellectual property 
protection exclusively to third countries that  provide equivalent guarantees, the European 
Communities is denying equal treatment to non-EC me mber States.  Article 12(1) of the Regulation 
provides for treatment that discriminates between th ird countries to the detriment of those which fail 
to comply with the reciprocity conditions laid down in the Regulation.  In other words, the 
advantages, favours and privileges of the Regulation are available to certain third countries only, and 
are not accorded immediately and unconditionally to the nationals of all other WTO Members as 
stipulated in Article 4 of the TRIPS Agreement. 
4. Protection of trademark rights under Arti cles 16.1 and 24.5 of the TRIPS Agreement 
112. This dispute touches on the delicate subject of the relationship between trademarks and 
geographical indications.  Indeed, these two forms of  protection of intellectual property rights can 
easily become the subject of conflicts, since they can protect, albeit from different angles, one and the 
same product with the same distinctive sign.  The TRIPS Agreement addresses, and tries to resolve, 
these possible confusions through Articles 16.1 and 24. 5, which establish the rights of trademark and 
geographical indication owners.  In this connection, Mexico notes that the Regulation violates at least 
two provisions of the TRIPS Agreement, namely Articles 24.5 and 16.1. 
113. Article 14(1) of the Regulation clearly viol ates Article 24.5 of the TRIPS Agreement.  
Contrary to what is provided for in the TRIPS Agr eement, this provision of the Regulation gives clear 
preference to geographical indications over trademar ks that were registered subsequently.  This 
priority for GIs takes as a time reference the day of  registration or application of the trademark with 
the EC authorities and rejects the possibility of a tr ademark having previously been registered in a 
non-EC member country.  The deliberate failure to recognize prior registrations in third countries 
violates not only Article 24.5 of the TRIPS Agreement, but also Article 4 of the Paris Convention.  In 
its written submission, the European Communities confirms its position by stating that the only 
relevant date for the purposes of Article 24.5 is the da te of filing of the application before the national 
authorities, in this case before the EC authorities.  This argument clearly does not justify a deviation 
from Article 24.5 of the TRIPS Agreement.   
114. The exclusive right conferred by Article 16.1 is  severely impaired by Article 14(2) of the 
Regulation, which permits coexiste nce between a previously registered trademark and a subsequent 
geographical indication.  This means that in the Eu ropean Communities, the fact that a trademark was 
registered prior to a subsequent geographical indi cation does not constitute an obstacle to invalidating 
the registration of the geographical indication.  In its first written submission, the European 
Communities goes so far as stating that the TRIPS Agreement not only permits the coexistence of 
trademarks and geographical indications, but, in f act, requires such coexis tence.  In the same 
submission, the European Communities admits that co existence of the two types of protection is not 
the perfect solution, but it is preferable to a rigi d application of the "first-in-time" rule.  Mexico 
considers these justifications to be insufficien t.  By acknowledging that the solution implemented 
under the Regulation may not be the perfect solution, the European Communities is recognizing the inconsistency of its legislation.  Similarly, by ignoring the "first-in-time" approach, the European 
Communities is violating not only Article 24.5 of the TRIPS Agreement, but also a recognized 
general principle of law.  WT/DS174/R/Add.3 
 Page C-29 
 
 
5. Cochineal:  a product of Mexican origin 
115. Mexico considers that "cochineal" should be  removed from Annex II of the Regulation.  
Annexes I and II of the Regulation specifically me ntion the products falling within the scope of 
application of the Regulation.  Article 1 of the Regulation establishes the relationship between 
Annexes I and II and the other provisions.  The li st of products in Annex II includes a product of 
Mexican origin, "cochineal" ( Coccus Cacti ), a small insect which lives on the nopal cactus, or 
Mexican cactus, and which produces an intense red co lour used as textile dye and food colouring.  
The use of cochineal in Mexico dates back to the pr e-colonial period.  The Aztecs used this colouring 
matter for centuries before Hernán Cortés arrived in  Mexico from Spain in 1519.  The first export of 
the product to Spain took place in 1523, a few years af ter Cortés's invasion of Mexico.  Subsequently, 
cochineal bugs were cultivated in parts of Spain in  which the climate and c onditions were similar to 
those of Mexico.  Thus, cochineal is now also produ ced in Spain, specifically in the Canary Islands.  
Given that the product exists simultaneously in Me xico and the European Communities, registration 
of cochineal from Mexico in the European Communities would clearly be refused under the 
Regulation. 
116. Mexico submits that, according to the definition of geographical indications in Article 22 of 
the TRIPS Agreement, the product in question must be of a quality, reputation or other characteristic 
essentially attributable to its geographical origin .  In the case of cochineal, a number of its 
characteristics can be attributed essentially to th e territory of Mexico.  The product's history 
demonstrates that, if there is a country to which th e special qualities of cochineal can be attributed for 
the purposes of intellectual property protection, it is  Mexico.  Consequently, it would make no sense 
to register cochineal as a geographical indication in  any territory which is not in Mexico.  Hence, 
Mexico requests that the Panel rule that the in clusion of the product "cochineal" as eligible for 
protection as a geographical indication of the European Communities is illegal. 
117. In response to a question from the Panel, Mexico explains that it considers cochineal a 
product classification which is capable of being regi stered as a geographical indication under the EC 
Regulation.  The categories of "product classification"  and "geographical indication" are not mutually 
exclusive.  The EC Regulation is the "specific meas ure at issue".  Since Annex II is part of such 
Regulation, it is clearly contained in the "specific me asure at issue".  Mexico is fully aware that this 
Panel has standard terms of reference and is, ther efore, limited to examining the claims made by 
Australia and the United States.  As a third part y, Mexico does not intend to submit, and is not 
submitting, claims which are different from those raised by the parties.  In fact, Mexico is only 
addressing some of these claims.  In this respect,  Mexico is providing arguments to support at least 
two of the three claims made by the parties, na mely the violation of the principles of national 
treatment and MFN treatment and the violation of the TRIPS rules regarding the relationship between 
trademarks and geographical indications.  Mexico br ings cochineal as a real-world example of how 
the EC Regulation violates these rules and it simp ly intends to support the United States' and 
Australia's arguments in these respects.  From Mexi co's perspective, it is clear that Mexican producers 
of cochineal are required to go through specific proc edures which EC nationals (national treatment) or 
countries which give equivalent guarantees to nationals of the European Communities (MFN 
treatment) are not.  Furthermore, Mexico would observe that the Panel is fully entitled under 
Article 19.1, second sentence, of the DSU, to sugg est ways in which a Member may implement the 
Panel's own recommendations and rulings.  There is no requirement in the DSU that such a request 
has to be forwarded by a party to the case.  In the past, panels have issued suggestions for Members to 
withdraw their measures which have b een found to be WTO-inconsistent.23  Given that Mexico's 
interest in cochineal is so specific, Mexico does not  request that the Panel suggest that the European 
Communities repeal its legislation as a whole, but me rely to solve Mexico's very specific problem in 
this way.  If the Panel does not deem it appropria te to suggest specifically that the European 
                                                      
23 Panel Report on Guatemala – Cement I , para. 9.6;  and Panel Report on US – Offset Act (Byrd 
Amendment),  para. 8.6. WT/DS174/R/Add.3 
Page C-30  
 
Communities remove the name of cochineal from Anne x II of the Regulation, Mexico would certainly 
obtain the same result if the Panel suggested th at the European Communities comply with its 
recommendations and rulings by withdrawing the Regulation. 
6. Points raised in response to the Panel's questions 
118. Mexico is not aware of any group or person ever  having filed with its authorities either an 
application for or an objection to a registration pur suant to the EC Regulation.  As to the question 
whether Mexico would be willing or able to transm it such applications, according to Article 6.III of 
Mexico's Industrial Property Law (LPI), the Mexi can Institute of Industrial Property (IMPI) is the 
administrative authority in charge of ensuring the protection of appellations of origin.  The IMPI, 
acting through the Ministry of Foreign Affairs, would thus be empowered to request or, where 
appropriate, to transmit an application for registration of an appellation of origin to any international 
agency.  The use of this procedure, including the submission of an application for registration of a 
Mexican appellation of origin unde r the EC Regulation will, howeve r, depend on the findings made 
by this Panel.  Mexico's LPI makes no distinc tion on the basis of nationality.  According to its 
provisions, the owner of appellations of origin is th e Mexican State and authorization to use them is 
issued by the IMPI to any natural person or le gal entity that complies with the requirements and 
procedures in Articles 169-178 of the LPI. 
119. Mexico submits that foreign GIs are protect ed under the TRIPS Agreement, the Lisbon 
Agreement for the Protection of Appellations of Or igin and their International Registration, and 
treaties which Mexico has concluded with other countr ies.  As established in the Paris Convention, the 
principles of national treatment and of assimilation to  nationals imply that, with respect to industrial 
property, each member State is required to afford na tionals of other member States the same treatment 
as that afforded to its own citizens without cond itioning such treatment on reciprocity.  Hence, 
nationals – i.e. both natural persons and legal entiti es – enjoy the industrial property rights granted by 
the member State without any requirement as to domic ile or establishment.  Pursuant to Article 2(3) 
of the Paris Convention, however, member States may apply the domicile requirement for the purpose 
of judicial or administrative procedures.  Additionally, the fact that Article 2(1) of the Paris 
Convention is incorporated by reference in Arti cle 2.1 of the TRIPS Agreement, means that WTO 
Members are required to comply with Articles 1 thr ough 12 and Article 19 of the Paris Convention in 
respect of geographical indications as regulated in Part II of the Agreement. 
120. Mexico is not aware of any GIs registered under the EC Regulation that are identical or 
confusingly similar to trademarks in the Europ ean Communities registered by Mexican nationals.  
Mexico also considers that Articles 16.1 and 22. 3 of the TRIPS Agreement apply to different 
situations.  Article 16.1 of the TRIPS Agreement d eals with trademarks, and more specifically with 
the rights conferred on trademark owners and situat ions relating to existing prior rights and rights 
made available on the basis of use.  Article 22. 3 regulates the protection which WTO Members are 
required to provide for geographical indications a nd specifies the circumstances in which registration 
of a trademark which contains or c onsists of a geographical indication may be invalidated or refused.   
121. Under Mexican law, and specifically the LPI, ther e are two situations in which registration of 
a mark is not effective against third parties, as we ll as exceptions to the use of a mark being classified 
as an administrative infringement.  In the first instan ce, Article 92.I of the LPI specifies that the owner 
of a registered mark may not prevent a third pa rty acting in good faith from using the same or a 
confusingly similar mark for the same or similar pr oducts or services, provided that such use is made 
in good faith and occurred prior to the date of filing th e application for registration, or the date of first 
declared use of the mark.  In the second instance, Ar ticle 213.X of the LPI provides that, in the case of 
comparative advertising, a third party may use a registered mark for the purpose of informing the 
public, provided that the comparison is not tendenti ous, false or exaggerated within the meaning of 
the Federal Consumer Protection Law.  Application of these two scenarios to geographical indications  WT/DS174/R/Add.3 
 Page C-31 
 
 
is governed by the provisions of the TRIPS Agreem ent and other international instruments to which 
Mexico is party. 
122. Mexico does not believe that previous panel decisions constitute binding jurisprudence for 
subsequent panel determ inations, including previous decisi ons on the mandatory/discretionary 
distinction in GATT and WTO.  In this sense, Mexi co agrees with the statement by the Appellate 
Body24 that panel reports bind the parties to the disp ute but do not create definitive interpretations of 
the relevant provisions. 
H. NEW ZEALAND  
1. Introduction 
123. New Zealand has a significant systemic inter est in ensuring that the WTO disciplines 
applicable to intellectual property rights are respected.  These disci plines seek to ensure that such 
rights are adequately and effectively protected wh ile also ensuring that the measures Members adopt 
to enforce these rights do not of themselves become barriers to legitimate trade.  New Zealand has a 
significant interest in maintaining protection for the intellectual property rights of New Zealand 
producers who have invested in innovation and in the promotion of their products, and in ensuring 
that the market access and ability to brand New Zealand products is not precluded.  As a major 
exporter of agricultural products a nd foodstuffs, New Zealand has an interest in ensuring that its 
producers are able to brand and promote their agri cultural products in export markets, including the 
European Communities. 
124. In the present case New Zealand brings forwar d arguments to support the claims of the 
complainants that the EC Regulation violat es the European Communities WTO obligations.  
New Zealand focuses its arguments on the claims rai sed by the complainants under Articles 2.1, 3.1, 
16.1 and 22.2 of the TRIPS Agreement and Article III:4 of GATT 1994.  New Zealand also supports 
the arguments made by Australia that the EC Regula tion is inconsistent with Articles 2.1 and 2.2 of 
the TBT Agreement but, for the sake of brevit y, does not address them in its submissions. 
2. The EC Regulation is inconsistent with national treatment obligations under the TRIPS 
Agreement and GATT 1994 
(a) Introduction 
125. The national treatment obligation is "a cornerstone  of the world trading system that is served 
by the WTO".25  In the TRIPS Agreement, this obligation is  incorporated into the legal framework for 
protection of intellectual property rights by way of Article 2.1 (which requires WTO Members to 
comply with, inter alia , Article 2(1) of the Paris Convention)  and Article 3.1.  By virtue of 
Article 2.1, the European Communities is obliged to provide nationals of other WTO Members with 
"the same protection" as its own nationals.  Under Article 3.1, the European Communities is obliged 
to provide "treatment no less favourable than that it  accords to its own nationals with regard to the 
protection of intellectual property".  The European  Communities is also obliged under Article III:4 of 
GATT 1994 to accord to imported products of the territo ry of any contracting party "treatment no less 
favourable than that accorded to like products of nati onal origin in respect of all laws, regulations and 
requirements affecting their internal sale."  The European Communities does not dispute that these 
national treatment obligations apply to the EC Regulation. 
                                                      
24 Appellate Body Report on Japan – Alcoholic Beverages II, at pp 13-14. 
25 Appellate Body Report on US – Section 211 Appropriations Act , para. 241. WT/DS174/R/Add.3 
Page C-32  
 
(b) Interpretation of the EC Regulation 
126. The European Communities disputes as a factua l matter the complainants' interpretation of 
Article 12(1) of the EC Regulation on which the na tional treatment violation arguments are based.  
The European Communities claims this interpre tation "is based on a misunderstanding" of its 
Regulation.
26  The European Communities argues that Ar ticle 12(1) of Regulation 2081/92 clearly 
applies "without prejudice to international agreements ".  It goes on to state that such international 
agreements include the WTO Agreements, and for th is reason "Article 12(1)  and (3) of Regulation 
2081/92 do not apply to WTO Members".27  Rather, the European Communities continues, WTO 
Members are to follow the procedures set out in Article 12a and 12b of the EC Regulation.  This 
novel interpretation of the European Communities does not withstand close scrutiny.  First, it runs 
counter to the usual meaning of the phrase "without prejudice to international agreements".  Second, it 
is inconsistent with the wording of the EC Regula tion itself.  Third, to New Zealand's knowledge, this 
is the first time that this interpretation has b een raised by the European Communities, despite 
consultations being held on the interpretation of its Regulation. 
127. The European Communities interprets the phrase "without prejudice to international 
agreements" in a manner which acknowledges its obligations under the TRIPS Agreement.28  I t  
appears to New Zealand that the European Co mmunities is effectively admitting that requiring 
nationals of WTO Members to follow the procedures set out in Article 12(1) and 12(3) of the EC 
Regulation would be contrary to its WTO obligatio ns.  However, in New Zealand’s view there are 
sufficient internal inconsistencies between the European Communities' novel interpretation and the 
wording of the EC Regulation to doubt whether any reliance can be placed on this interpretation of the 
EC Regulation in the future.  The European  Communities notes the distinctions made in 
Articles 12(b)(2)(a) and (b) and Article 12d(1) betw een "WTO countries" and "third countries" in 
support of its interpretation.  It also states that the procedure provided for in Article 12(3) does not 
apply to WTO Members.  New Zealand notes, however , that Article 12a is prefaced with the phrase 
"[i]n the case provided for in Article 12(3)".  If Article 12(3) does not apply to WTO Members then, 
based on the European Communities' own argumen ts, Article 12(a) would not apply to WTO 
Members.  Taken to its logical conclusion, ther efore, the European Communities' argument would 
mean that there is in fact no application procedure in the EC Re gulation under which a national of a 
WTO Member could apply for GI protection.  In th at case the Panel must find that the European 
Communities is in breach of its national treatme nt obligations under the TRIPS Agreement and GATT 
1994 by failing to provide a WTO-consistent app lication procedure for GI registration for WTO 
Members.  New Zealand does not believe that th e European Communities would agree with this 
consequence of its interpretation.  New Zealand notes that this is the first time this interpretation has 
been raised, despite numerous consultations on the EC Regulation, including under the DSU.  As the 
Appellate Body has indicated, all parties engaged in dispute settlement under the DSU should be fully 
forthcoming with respect to the facts, and consu ltations "do much to shape the substance and the 
scope of subsequent panel proceedings."29 
128. Essentially, the European Communities' argument that Article 12(1) and 12(3) of the EC 
Regulation do not apply to WTO Members rests on the claim that the Regulation will indeed be interpreted in the manner the European Communities s uggests, that is, in a WTO consistent manner.  
But the European Communities can offer no basis for assuring WTO Members that this will be so.  
The European Communities' position is even less cred ible where the interpreta tion that the European 
Communities puts forward is one that is not suggested by the ordinary meaning of the text of the EC 
Regulation.  The alternative interp retation, and one which is consiste nt with the wording of the EC 
                                                     
 
26 European Communities' first written submission, para. 65. 
27 European Communities' first written submission, para. 66. 
28 European Communities' first written submission, para. 65. 
29 Appellate Body Report on India – Patents (US) , para. 94.  WT/DS174/R/Add.3 
 Page C-33 
 
 
Regulation, is that adopted by the complainants, namely that Article 12(1) and (3) apply to WTO 
Members.   
(c) Article 2.1 of the TRIPS Agreement (incorporatin g Article 2(1) of the Paris Convention) and 
Article 3.1 of the TRIPS Agreement  
(i) The EC is obliged to provide no less favour able treatment to other WTO Member nationals 
than it does to EC nationals 
129. Article 2.1 of the TRIPS Agreement requires WTO members to comply with, inter alia , 
Article 2(1) of the Paris Convention.  The Eur opean Communities is theref ore obliged to provide 
nationals of other WTO Members with "the same pr otection" as provided to foreign nationals.  It is 
also required to accord to nationals of other WTO Me mbers "treatment no less favourable than that it 
accords to its own nationals with regard to the prot ection of intellectual propert y" under Article 3.1 of 
the TRIPS Agreement.  There are three essential components of the national treatment obligation 
under Articles 2.1 and 3.1 of the TRIPS Agreement.  First, it is the treatment received by "nationals" 
that is key.  Second, the standard for comparison with the treatment received by foreign nationals is 
the most favourable treatment received by domestic nationals.  Third, foreign nationals must receive 
no less favourable treatment than that accorded to nationals.  
130. The national treatment obligations in the TRI PS Agreement are owed to nationals, that is, 
natural or legal persons (see Article 1.3).  In th e context of the present case, this means that the 
standard for comparison is simply with EC nationals , since all EC nationals are potentially eligible to 
apply for GI registration under the EC Regulation.   
131. In the present case, the European Communities has raised a creative but nevertheless 
erroneous interpretation of "nationa ls" in an attempt to claim that its conditions for registration and 
objections do not breach its national treatment oblig ations.  In particular, the European Communities 
claims that "the conditions and procedures contai ned in Regulation 2081/92 for the registration of 
geographical indications do not depend on nationality".30  New Zealand submits that this 
interpretation of the national treatment obligation as a pplying to persons of a particular "nationality" 
cannot be correct.  The WTO Agreements are to be interpreted according to the ordinary meaning of 
the words in their context, and in light of their object and purpose (see Article 31(1) of the Vienna 
Convention on the Law of Treaties).  In the cont ext of the TRIPS Agreement the term "nationals" 
clearly has a geographical connotation.  Support fo r this is gleaned from both the TRIPS Agreement 
and the Paris Convention (incorporated by reference into the TRIPS Agreement).  Article 1.3 of the 
TRIPS Agreement provides that "[M]embers sha ll accord the treatment provided for in this 
Agreement to the nationals of other Members.  In respect of the relevant intellectual property rights, 
the nationals of other Members shall be understood as those natural or legal persons that would meet 
the criteria for eligibility for pr otection in the Paris Convention " (emphasis added).  One particular 
category of natural or legal persons that meet th e criteria for eligibility for the same protection as 
nationals under the Paris Convention are those elig ible under Article 3 [Same Treatment for Certain 
Categories of Persons as for Nationals of Countries of the Union] of the Paris Convention.  This 
provides that "[n]ationals of countries outside th e Union who are domiciled or who have real and 
effective industrial or commercial establishments  in the territory of one of the countries of the Union 
shall be treated in the same manner as nationals  of the countries of the Union" (emphasis added).  
The Paris Convention therefore includes not only a "nationality" element to the national treatment 
obligation, but also includes a "geographical" elem ent relating to the person’s place of domicile or 
establishment.  This is further supported by footnot e 1 to Article 1.3 of the TRIPS Agreement which 
also adopts a geographical element to the term "nat ionals" when used in the relation to separate 
customs territories.   
                                                      
30 European Communities' first written submission, para. 123. WT/DS174/R/Add.3 
Page C-34  
 
132. In the geographical context of GIs, therefore, the term "nationals" includes not only natural or 
legal persons of a particular nationality, but also  those who are domiciled or who have a real and 
effective industrial or commercial establishment in a particular WTO Member.  Those legal or natural 
persons who are domiciled or have an establishment in the third country to which the GI relates are 
therefore "non-EC nationals" for the purpose of the national treatment obligation under the TRIPS 
Agreement .  As a consequence of its erroneous interp retation of "nationals", the European 
Communities asserts that it is the area where the GI is located that determines which procedure under 
the EC Regulation applies in a given case, not th e "nationality" of the producers of the product 
concerned.  Therefore, it claims there is no br each of the national treatment obligations.  If this 
argument were correct, it would mean that even if  a Regulation provided that only EC GIs could be 
registered, there would be no violation of the na tional treatment obligati on because in theory the 
nationals of any country could live in the European  Communities and register their GIs.  This would 
gut the TRIPS Agreement of the national treatment ob ligation with respect to GIs.  In any case, the 
EC Regulation as drafted does not support the Eur opean Communities assertion.  In particular, 
New Zealand submits that the plain meaning of the wo rds "a group or a natural or legal person … in a 
third country" in Article 12a of the EC Regulation is  that all persons domiciled or with a real and 
effective industrial or commercial establishment outside of the European Communities are subject to 
the procedure in Article 12a of the EC Regulation (provided that the requirements of Article 12(3) 
have been met
 ).  So a person’s location is indeed relevant  to which application process applies.  The 
EC Regulation, therefore, adopts two different re gistration procedures – one for EC nationals in 
respect of GIs located in the EC; and one for nationals "in a third country".  The European 
Communities is obliged by its national treatment obligations to provide a no less favourable 
application process for nationals "in a thir d country" than it does for EC nationals. 
133. New Zealand supports the complainants argum ents that a WTO Member cannot require 
reciprocity of a higher standard of treatment than  that required by the TRIPS Agreement before the 
right to that higher standard accrues under national tr eatment.  To do otherwise would in effect result 
in a WTO Member being able secure concessions that it was unable achieve at the negotiating table.   
134. In determining whether a particular measure vi olates the national treatment obligation, a first 
line of inquiry is whether there is a difference in treatment in the applicable laws.  A difference in 
applicable law, by itself, is not sufficien t to constitute a breach of national treatment.31  It m ust be 
demonstrated that "less favourable treatment" or so me disadvantage accruing to the foreign national 
as a consequence of the differe nce in treatment has occurred.32  In terms of what may amount to a 
disadvantage, the Appellate Body has found that subjecting foreigners to  additional procedures 
constitutes a breach of national treatment.  The Appellate Body in US – Section 211 Appropriations 
Act concluded that "even the possibility  that non-United States successors -in-interest face two hurdles 
is inherently less favourable  than the undisputed fact that Un ited States successors-in-interest face 
only one".33  Thus an "extra hurdle" faced by forei gners constitutes "less favourable treatment" under 
Article 3.1 of the TRIPS Agreement.  Further, wh ether or not "less favourable treatment" is accorded 
to nationals should be assessed "by exam ining whether a measure modifies the conditions of 
competition  in the relevant market".34  In other words, treatment no less favourable in Article III:4 of 
GATT 1994 calls for "effective equality of opportunities".35 
                                                      
31 See the GATT Panel Report on US – Section 337, cited by the Appellate Body in US – Section 211 
Appropriations Act , at para. 261. 
32 See the Appellate Body Report on Korea – Various Measures on Beef , at para. 135. 
33 Appellate Body Report on US – Section 211 Appropriations Act, para. 265. 
34 Appellate Body Report on Korea – Various Measures on Beef, para. 137. 
35 GATT Panel Report on US – Section 337 , para. 5.11.  WT/DS174/R/Add.3 
 Page C-35 
 
 
(ii) Registration procedure provides less fav ourable treatment to WTO Member nationals 
135. The complainants have demonstrated that nationals from WTO Members are subject to 
different registration procedures from those applyi ng to EC nationals.  New Zealand has summarized 
the differences between the registration processes a pplicable to the European Communities and WTO 
Member applications.36  The particular difference at issue between the two registration procedures is 
the requirements of equivalence and reciprocity in Article 12(1) of the EC Regulation (this argument 
takes as its premise the fact that Article 12(1) and 12(3) of the EC Regulation apply to WTO Members.).  Further, while the requirement to su bmit all applications through government applies 
equally to applications from the European Communi ties and WTO Member nationals, its effect is to 
disadvantage nationals from WTO Members. 
136. New Zealand submits that the effects of the di fferences in registration process mean that, at 
worst, the benefits of registration are entirely unavailable to producers from countries outside the 
European Communities.  Indeed, New Zealand is no t aware of any successful registration applications 
from nationals from WTO Members made under the pr ocess set out in the EC Regulation, whereas 
there have been more than 600 successful applicati ons for registration of EC GIs.  At best, WTO 
Member nationals are subject to "extra hurdles" and are as a consequence,  disadvantaged under the 
EC Regulation when compared to EC nationals.  An  "extra hurdle" exists for WTO Member nationals 
if WTO Members are required to comply with the eq uivalence and reciprocity requirements in the EC 
Regulation.  The complainants have shown that be fore a WTO Member national is eligible to apply 
for protection under Article 12(1) of EC Regulation, th e country of origin of that national must grant 
reciprocal  treatment for EC GIs under an equivalent  system.   
137. Not only are these requirements for reciprocity a nd equivalence a breach in and of themselves 
of the national treatment obligations, but they also  mean that WTO Member nationals do not have the 
same opportunities to protect their GIs through regi stration as do EC nationals.  In such case, an 
individual’s right to apply for registration under the EC Regulation is conditioned on factors over 
which the applicant has no control, in other wo rds, whether the appli cant’s government applies 
reciprocal and equivalent treatment.  New Zealand notes that applications for registration under the 
EC Regulation are to be submitted by governments, rather than by individuals (Articles 5(5) and 
12a(2) of the EC Regulation).  The European Co mmunities claims that the "rules relating to the 
registration of such geographical indications from outside the EC … closely parallel the provisions 
applicable to geographical indications from inside the EC".
37  It is worth recalling, however, that a 
breach of national treatment may arise from the application of formally identical laws.38  New Zealand 
argues that in this case "formally identical legal provisions" (or closely parallel legal provisions) in 
the EC Regulation do indeed result in less favour able treatment for WTO Member nationals.  EC 
nationals have an enforceable right that applications  that satisfy the requirements of the regulation are 
forwarded to the Commission.  This right exists by vi rtue of Article 5(6) of the EC Regulation.  Thus, 
for an EC national, submission vi a their member State government becomes essentially a formality.  
Failure to submit an application may be judiciable according to the member States' applicable national 
laws.  WTO Member nationals have no such enfor ceable right to ensure that submission occurs.  
Thus, WTO Member nationals face significant "extra hurdles" in order to obtain protection for their 
GIs under the EC Regulation and are thus accorded l ess favourable treatment than an EC national.  
Furthermore, the Panel should find that the Eu ropean Communities is in breach of its national 
treatment obligations by conditioning the receipt of intellectual property protection on provision of 
reciprocal equivalent treatment.  
138. For producers able to register a GI under th e EC Regulation, registration grants certain 
advantages, including:  (i) being able to protect GIs from certain conduct set out in Article 13(1) of 
                                                      
36 See Exhibit NZ-1 reproduced at the end of this Annex. 
37 European Communities' first written submission, para. 62. 
38 See the GATT Panel Report on US – Section 337 , para. 5.11. WT/DS174/R/Add.3 
Page C-36  
 
the EC Regulation;  (ii) being able to prevent the GI term from becoming generic under Article 13(3) 
of the EC Regulation;  (iii) being able to obtain such protection of GIs on a Community wide basis;  and (iv) according to the EC Regulation's preamble, being able to secure higher incomes as a result of 
"a growing demand for agricultural products or foodst uffs with an identifiable geographical origin".  
Accordingly, not being able to register GI s under the EC Regulation results in commercial 
disadvantage for WTO Member nationals.  They are una ble to obtain the same level of protection on a 
Community-wide level as EC nationals and are unabl e to "secure higher incomes", as claimed by the 
European Communities to be a consequence of th eir GI protection.  Thus the conditions of 
competition faced by WTO Member nationals are modi fied by the operation of the EC Regulation.  
As a consequence, the EC Regulation eff ectively operates as a barrier to trade. 
(iii) Objections procedure provides less favour able treatment to WTO Member nationals 
139. As stated in its preamble, the EC Regulation also provides an objection procedure to enable 
"any person individually and directly concerned in a member State to exercise his rights by notifying the Commission of his opposition".  The objection pr ocedure can potentially result in an application 
for registration but not for a proceeding.  Consequen tly, not having the right to object is a loss of a 
valuable right in the arsenal of a producer to prot ect his or her commercial interests or intellectual 
property rights.  The complainants have demonstr ated that nationals from WTO countries are subject 
to different objection processes from EC nationals.  New Zealand has summarized and compared the applicable objection procedures.
39  The process for objections from WTO nationals suffers from the 
same shortcomings as the process for registrations: na mely, objections are subject to reciprocity and 
equivalence requirements and must be  submitted through governments.   
140. The European Communities has, however, asserted that the requirements for reciprocity and 
equivalence do not apply to WTO Members and thus  are not preconditions for the admissibility of 
objections from WTO Members.  In particular, the European Communities has argued that "[t]he phrase [in Article 12d(1) 'recognised under the procedur e provided for in Article 12(3)' only refers to 
third countries other than WTO Members".
40  As has been indicated earlier, New Zealand finds the 
above argument unconvincing.  Such an intenti on (to refer to third countries other than WTO 
Members) is not clear from the language of the EC Regulation.  The fact that the rest of the EC 
Regulation and, in particular, the application pr ocedure under Articles 12 and 12a, fail to explicitly 
distinguish between WTO Members and third count ries suggests that there is in fact no such 
distinction.  The distinction could have been ma de clear in Article 12d(1) by inserting a comma or 
words in the phrase to make it apparent that the pr ocedures provided for in Ar ticle 12(3) apply only to 
third countries and not to WTO Members.  However,  no such distinction is apparent from the face of 
the EC Regulation.  Therefore the conclusion must  be drawn that the EC Regulation requires both 
WTO Members and third countries to be recognized under the Article 12(3).  New Zealand submits 
that the complainants' interpretation of Article 12d(1)  is the correct interpretation.  WTO Members are 
required by the EC Regulation to provide equivalent  and reciprocal treatment as a precondition to the 
initiation of the objection procedure by their nationa ls.  Accordingly, the objection procedure breaches 
the European Communities' national treatment obliga tions for the same reasons that the registration 
procedure does.  The effect of the differences  in objection processes means that, at best, WTO 
Member nationals are disadvantaged under the EC Re gulation when compared to EC nationals.  At 
worst, the benefits of the right to object are entirely unavailable to producers from countries outside the European Communities.  As a result, the European Communiti es has in place a system that 
virtually guarantees no objections w ill be received from WTO Member nationals to applications for 
the registration of EC GIs.   
                                                     
 
39 See Exhibit NZ-2 reproduced at the end of this Annex. 
40 European Communities' first written submission para. 74.  WT/DS174/R/Add.3 
 Page C-37 
 
 
(d) GATT 1994 
(i) The EC Regulation is incons istent with Article III:4 
141. New Zealand considers that the complainants have demonstrated that all three elements 
constituting a violation of Article III: 4 of GATT 1994 have been satisfied.41  First, the European 
Communities agrees that the EC Regulation is a m easure affecting the internal sale of products.  
Second, the European Communities appears not to rai se concerns about whether the products at issue 
must be "like products."  New Zealand notes, in any case, that the United States is correct that for 
measures of general application the issue is whethe r the measure makes distinctions between products 
based solely on origin, rather than whether particular traded products are "like".  It follows that the 
only issue under debate is whether the EC Regul ation confers "less favourable treatment" on imported 
products.  As the phrase "less favourable treatment" is  the same as that used in Article 3.1 of the 
TRIPS Agreement, all arguments raised by New Zealand under Artic les 2.1 and 3.1 of the TRIPS 
Agreement apply equally to Article III:4 of GATT 1 994 and demonstrate that the EC Regulation also 
breaches Article III:4 of GATT 1994. 
(ii) The EC Regulation cannot be ju stified under Article XX(d)  
142. The European Communities has also claime d that the measure is justified under 
Article XX(d) of GATT 1994.  In particular, the Eur opean Communities claims that "the requirements 
at issue are necessary  in order to ensure that only those pr oducts which conform to the definition of 
geographical indications contained in Article 2( 2) of Regulation 2081/92, which is itself fully 
consistent with GATT 1994, benefit from the prot ection afforded to geographical indications by 
Regulation 2081/92" (emphasis added).42  New Zealand agrees with the United States that the 
European Communities' claim cannot be sustained.   Whether a measure is "necessary" is assessed 
against the high standard of whether the measure is the "least-trade restrictive" option available to the 
party.  Hence, if another WTO-consistent altern ative can be employed, then a measure will not be 
justified under Article XX(d).   
143. The European Communities claims that it is n ecessary for all applications to be submitted 
through government "to ensure that only those products which confirm to the definition of 
geographical indications contained in Article 2(2) of the EC Regulation … benefit from the protection 
afforded to geographical indications".  Given th at the European Communities itself conducts a six-
month investigation into precisely the issue of whethe r the products conform to the definition of a GI 
(that is, as set out in the product specification required under Article 4 of  the EC Regulation), 
New Zealand submits that it is not necessary for appli cations to be passed through a government filter.  
The European Communities provides no claim with respect to the necessity of reciprocity and 
equivalence requirements imposed on non-EC produc ts.  Further, this claim does not apply to 
objection procedures, which are also transmitted through governments.  New Zealand therefore 
submits that the EC Regulation cannot be justifie d on the basis of Article XX(d) of GATT 1994.  The 
Panel should find that the EC Regulation violates Article III:4 of GATT 1994 as well as Articles 2.1 
and 3.1 of the TRIPS Agreement. 
3. The EC Regulation is inconsistent with Article 22.2 of the TRIPS Agreement 
144. Article 22.2 of the TRIPS Agreement provides a negative right, or a right to prevent certain 
actions, rather than a positive right, such as a right to authorize use.  Consequently, it is an important 
legal right for "interested parties" to ensure appropriate use of geographical indications.  The 
complainants have demonstrated that the European  Communities has failed to provide this right to 
nationals of WTO Members by requiring reciprocity and equivalence as preconditions to admissibility 
                                                      
41 See the Appellate Body Report on Korea – Various Measures on Beef , para. 133. 
42 European Communities' first written submission, para. 226. WT/DS174/R/Add.3 
Page C-38  
 
of registration applications and obj ections, and by requiring that all a pplications be submitted through 
government.  New Zealand raises three points  to support the complainants' views. 
145. First, New Zealand submits that the phrase "legal  means" is used to indicate any laws, rules 
and regulations through which redr ess for misleading uses and acts of unfair competition "in respect 
of geographical indications" can be obtained.  Va rious models of legal m eans are envisaged under 
Article 22.2 of the TRIPS Agreement, consistent with the principle that WTO Members are free to 
determine the most appropriate method of implementa tion within their own legal system and practices 
(see Article 1.1 of the TRIPS Agreement).  For GI  users, registration of their GI under the EC 
Regulation provides the legal means to prevent a ra nge of uses, including misleading uses and acts of 
unfair competition under Article 22.2 (see Article 13(1) of the EC Regulation).  Once a GI has been 
registered under the EC Regulation, persons affected by use of that GI have extremely limited options 
to challenge the use of that registered GI.  Indeed , they have no such options under the EC Regulation 
itself for only repeated failure to comply with the product specification or a request for cancellation 
by the natural or legal person or group authorized  to seek cancellation may result in the registration 
being cancelled.  Thus the right to object to an app lication for registration of a GI prior to registration 
occurring is a crucial aspect of the legal means that the European Communities must provide under 
Article 22.2 of the TRIPS Agreement. 
146. Second, New Zealand submits that "interested parties" is a broad term.  "Interested" is defined 
as meaning "having an interest, share, or co ncern, in something; affected, involved".
43  "Parties" 
encompasses any legal or natural person, or group of legal or natural persons.  In the context of the 
TRIPS Agreement, "interested parties" has a broad meaning and includes persons with an interest in, 
or affected by, a GI.  The term "interested parties" can be contrasted with specific terms used in other 
provisions which confer rights on pa rticular groups of people.  For example, when setting out the 
particular rights accruing to persons that have re gistered a trademark, Article 16.1 of the TRIPS 
Agreement refers specifically to "t he owner of a registered trademark".  Likewise, Section 1 of Part II 
of the TRIPS Agreement refers to "authors" in Article 11, "right holders" in Article 13, and 
"performers" and "producers of phonograms" in Ar ticle 14.  The European Communities claims that 
Article 22.2 "cannot be invoked by  a trademark right holder in order to prevent the use of a 
geographical indication which supposedly infringes its trademark right".44  This assertion reveals the 
European Communities' particular bias toward syst ems of GI protection analogous to its registration 
model.  It fails to acknowledge that WTO Memb ers implement their obligations on GIs under the 
TRIPS Agreement in a variety of ways, including for example through collective and certification 
trademarks.  Some trademark owners clearly do have a concern or are affected by use of geographical 
indications.  A trademark holder can, and should in pa rticular circumstances, be able to defend use of 
a trademark under Article 22.2 of the TRIPS Ag reement.  The European Communities' narrow 
interpretation of the phrase "interested parties" in  Article 22.2 of the TRIPS Agreement cannot be 
justified. 
147. Third, New Zealand submits that the obligation in Article 22.2 to provide a legal means to 
prevent misleading uses or acts of unfair competition mu st be read together with the other provisions 
of the TRIPS Agreement, including in particular th e national treatment obligations in Articles 2.1 and 
3.1 of the TRIPS Agreement.  Thus the European  Communities is obliged to provide "the same 
protection" or "the same legal means" to WTO na tionals as it does to EC nationals.  The European 
Communities has argued that there are other means of  preventing the acts mentioned in Article 22.2 of 
the TRIPS Agreement available in the European Co mmunities.  However, in failing to provide the 
opportunity for WTO nationals to register under the EC Regulation at the centre of the present dispute, the European Communities fails to provide the same legal means to WTO nationals as it has 
to the more than 600 GI users in the European Communities that have had their GIs registered. 
                                                     
 
43 The New Shorter Oxford English Dictionary , (4th edition, 1993), Vol. 1, p.1393. 
44 European Communities' first written submission, para. 412.  WT/DS174/R/Add.3 
 Page C-39 
 
 
4. The EC Regulation is inconsistent with Article 16.1 of the TRIPS Agreement 
148. The European Communities is obliged under Artic le 16.1 of the TRIPS Agreement to give 
owners of registered trademarks the "exclusive right " to prevent confusing uses of similar or identical 
signs by "all third parties".  This right recogni ses the utility of trademarks to their owners as 
marketing tools.  While Article 16.1 of the TR IPS Agreement provides an "exclusive right" to 
registered trademark owners, this is not an absolute right to prevent all use of the sign by other 
parties.  The right is subject to certain limitations  explicitly set out in the TRIPS Agreement in the 
same way that the rights to GI protection in Artic les 22.2 and 22.3 are also explicitly limited by the 
terms of Articles 22 and 24 of the TRIPS Agreement.   In any given case, for example, a registered 
trademark owner bringing an infringement clai m against a GI user might not succeed under the 
requirements of Article 16.1 of the TRIPS Agreement.   The trademark owner may fail to prove that  
the GI is identical or similar to th e trademark; or that the use of the sign is in respect of goods that are 
identical or similar; or that use of the GI would result in a likelihood of confusion.  Alternatively, the 
GI user may successfully argue in defence that th e trademark misleads the public as to the true place 
of origin of the goods and should therefore be  invalidated under the national law implementing 
Article 22.3 of the TRIPS Agreement.  Article 16.1 does, however, guarantee the entitlement of a 
trademark owner, whether a national of the European Communities or another WTO Member, to a "day in court" to argue his or her rights against all third parties. 
(a) Relationship between Articles 16.1 and 22.2 of the TRIPS Agreement 
149. New Zealand agrees with the observations of Au stralia and the United States regarding the 
relationship between Articles 16.1 and 22.2 of th e TRIPS Agreement.  Despite appearances of a 
conflict between the two rights on the face of both provisions due to the "exclusivity" of the rights 
they both accord, there is a presumption of c onsistency between inte rnational obligations.
45  Further, 
any exception to an obligation must be explicit in the text of an Agreement.46  The rights in 
Articles 16.1 and 22.2 of the TRIPS Agreement must ther efore be balanced – each must be read to the 
fullest extent permissible under the text of the re levant provisions without conflicting with the other 
right.  In other words, the protection of one right cannot be enhanced at the expense of the other.  
Where the negotiators intended a conflict between tw o rights to be resolved by compromising this 
exclusivity, they specifically provided for this in  the TRIPS Agreement.  Article 24.5 of the TRIPS 
Agreement is one example of this.  In all other cases, upholding the rights granted in both Article 16.1 
for trademarks and Article 22.2 for geographical indica tions is required.  To the extent that the EC 
Regulation compromises the exclusive rights guaranteed to registered trademark owners in ways not 
foreseen by the TRIPS Agreement, it is inconsiste nt with Article 16.1 of the TRIPS Agreement. 
(b) The EC Regulation is inconsistent with  Article 16.1 of the TRIPS Agreement 
150. New Zealand agrees with the complainants that the EC Regulation violates Article 16.1 of the 
TRIPS Agreement.  New Zealand addresses three aspects of the EC Regulation in particular that violate Article 16.1 of the TRIPS Agreement, na mely Articles 14(2), 14(3) and 7(4) of the EC 
Regulation.   
151. Article 14(2) of the EC Regulation provides that  use of a prior registered trademark that 
engenders one of the situations prevented by Article 13 of the EC Regulation "may continue 
notwithstanding the registration" of a GI.  The effect  of this provision is that under the EC Regulation 
a registered trademark and a registered GI can "c o-exist" despite the exis tence of a likelihood of 
confusion between the two.  The United States is corr ect in pointing out that under Article 14(2) of the 
EC Regulation the best that the owner of a valid pr ior registered trademark can hope for is the ability 
to continue using his or her trademark, but wit hout the ability to exclude all others from using a 
                                                     
 
45 See the Panel Report on Indonesia – Autos,  para. 14.28. 
46 See the Appellate Body Report on EC – Sardines , paras. 201-208.   WT/DS174/R/Add.3 
Page C-40  
 
confusingly identical or similar GI.  In effect, Ar ticle 14(2) of the EC Regulation excludes registered 
GI users from the scope of the group of "all parties" against whom the owner of a prior registered trademark owner should be entitled under Article 16.1 of the TRIPS Agreement to defend the 
trademark.  This is inconsistent with the exclusive rights of the trademark owner under Article 16.1 of 
the TRIPS Agreement. 
152. Article 14(3) of the EC Regulation provides for an exception to the presumption of 
coexistence of prior registered tr ademarks and registered GIs in Ar ticle 14(2) of the EC Regulation, 
taking into account the "reputation, renown and the length of time trademark has been in use".  
However, just as there is no basi s for coexistence under Article 14(3), there is no basis in Article 16.1 
of the TRIPS Agreement for conditioning a prior re gistered trademark owner’s right to prevent 
misleading use on such factors.  New Zealand agrees w ith the United States that the exclusive right in 
Article 16.1 to prevent confusing use is not limited to owners of trademarks that are longstanding, 
renowned or reputable.  Rather, it is an exclusive ri ght that must be provided to all owners of valid 
prior registered trademarks, irrespective of how lo ng the trademark has been  used, or its reputation 
and renown. 
153. Article 7(4) of the EC Regulation provides the criteria by which the admissibility of a 
statement of objection to an application for registrati on of a GI is judged.  The criteria in Article 7(4) 
of the EC Regulation apply to objections from nati onals of the European Communities, as well as 
from nationals of WTO members by virtue of Artic le 12d(2) of the EC Regulation.  One such 
criterion of admissibility is if the objection "shows that the proposed registration of a name would 
jeopardise the existence  of an entirely or partly identical name or of a mark…" (Article 7(4) of the EC 
Regulation).  If the proposed GI registration is iden tical to the prior registered trademark, however, 
under Article 16.1 of the TRIPS Agreement there is  a presumption of confusion and the trademark 
owner should have the right to prevent the use of th e GI.  Consequently, New Zealand agrees with the 
arguments by Australia that the EC Regulation breaches Article 16.1 of the TRIPS Agreement because the owner of the registered trademark may no t be able to successfully object to a proposed GI 
even if its use would constitute use of an identical  or similar sign that would result in a likelihood of 
confusion.   
(i)  Article 24.5 of the TRIPS Agreement does not permit "coexistence" 
154. The European Communities relies on Article 24.5 of the TRIPS Agreement as envisaging 
coexistence of GIs and earlier trademarks.  The European Communities adopts a flawed interpretation 
as the basis for its argument that coexistence of  GIs and earlier trademarks is envisaged under 
Article 24.5 of the TRIPS Agreement.  It argues that  Article 24.5 distinguishes the "right to use" a 
trademark, which may not be prejudiced, from the right to prevent others from using the trademark sign, which may be prejudiced.  New Zealand submits  that this interpretation is incorrect for two 
reasons.   
155. First, the purpose of Article 24.5 is to prevent the implementation of new forms of intellectual 
property resulting from the negotiations of the TRIPS Agreement from prejudicing rights to 
intellectual property legitimately acquired prior to  the entry into force of the TRIPS Agreement. 
Trademark owners who had registered a trademark or acquired rights to a trademark through use had 
the rights both to use and to prevent others from usi ng their trademarks prior to the entry into force of 
the TRIPS Agreement.  New Zealand contends that the TRIPS Agreement was not intended to 
detrimentally affect the private rights of indivi duals by removing trademark owners' entitlement to 
prevent all third parties from using their trad emark where its existence pre-dated the TRIPS 
Agreement.   
156. Second, Article 24.5 covers trademark rights ac quired by registration as well as trademark 
rights acquired by use.  The rights protected under Article 24.5 are dealt with separately.  Thus "where a trademark has been applied for or registered  in good faith" GI protection measures "shall not  WT/DS174/R/Add.3 
 Page C-41 
 
 
prejudice eligibility for or the validity of the registration of a trademark".  And "where rights to a trademark have been acquired through use in good  faith" GI protection measures "shall not prejudice 
the right to use a trademark". 
157. The European Communities' reading of Article 24.5 confuses the two concepts of registration 
and use.  It suggests that registered trademarks reta in the right to use as well as rights to the continued 
eligibility for or validity of registration.  If this r eading were correct, the corollary would also be true, 
namely that trademark rights acquired by use would con tinue to be eligible for registration, despite the 
owner not having submitted an application for registra tion prior to the entry into force of the TRIPS 
Agreement.  As the purpose of Article 24.5 is to protect private rights existing immediately prior to 
the entry into force of the TRI PS Agreement, it is clear that it was not intended that unregistered 
trademark owners would gain the right to registra tion through use, despite having failed to safeguard 
their rights through registration prior to the entry into force of the TRIPS Agreement.  Thus New Zealand agrees with the complainants that Ar ticle 24.5 of the TRIPS Agreement does not permit 
coexistence of "grandfathered" tr ademarks and GI registrations. 
(ii) The EC is not required to ma intain coexistence on the basis of Article 24.3 of the TRIPS 
Agreement 
158. The European Communities goes on to argue that , irrespective of whether coexistence of 
geographical indications is consiste nt with Article 24.5, it is requi red to maintain coexistence under 
Article 24.3 of the TRIPS Agreement.  The purpose of this Article appears to be the same as 
Article 24.5, namely to prevent the entry into force of the TRIPS Agreement from detrimentally 
affecting the private rights of individuals.  Howeve r, despite the EC Regulation having entered into 
force on 14 July 1993, the first registration of a geographical indication under the regulation did not 
occur until after the entry into force of the TRI PS Agreement on 1 January 1995.  So while the EC 
Regulation provided for coexistence prior to the entry into force of the TRIPS Agreement, in fact the 
EC Regulation conferred no rights to individuals at that time.  In any case, New Zealand submits that 
the phrase "[i]n implementing this Section" that prefaces Article 24.3 does not justify a breach of 
other sections of the TRIPS Agreement, including Section 2 on trademarks. 
(iii) Coexistence is not a limited exception under Article 17 of the TRIPS Agreement 
159. The European Communities also argues in the a lternative that coexistence is justified as a 
"limited exception to the rights conferred by a tr ademark" under Article 17 of the TRIPS Agreement.  
In New Zealand’s view the exclusion of an entire group of producers from the parties which a 
registered trademark owner has the right to prev ent from using an identical or similar mark in 
confusing manner is not a " limited exception".  Rather, it is a major exception to the rights granted to 
a registered trademark owner. 
5. Points raised in response to the Panel's questions 
160. New Zealand has not received any registration ap plications or objections to registrations 
pursuant to the EC Regulation from persons or gro ups in its territory.  New Zealand notes that its 
Government and potential New Zealand applicants  and objectors understood the EC Regulation to 
mean that no applications or objections would be accepted or considered by the European 
Communities without New Zealand meeting the reciproc ity and equivalence requirements.  As to the 
question of what would be New Z ealand's position if such filing was to occur, New Zealand notes that 
this is a hypothetical question and it is difficult to answer in the ab stract.  Despite no formal procedure 
for the transmission of applications for registra tion or objections to registration under the EC 
Regulation existing in New Zealand, New Zealan d would consider any registration or objection 
submitted to New Zealand authorities on a case-by-case basi s.  In any event, the issue before the Panel 
is the consistency of the EC Regulation with th e WTO Agreements, not whether other WTO Members 
would comply with the requirements of a WTO-inconsistent measure. WT/DS174/R/Add.3 
Page C-42  
 
161. New Zealand provides the legal means for the protection of geographical indications, as 
required by Article 22 of the TRIPS Agreement, through its trademarks legislation (including 
collective trademarks and certification trademarks ), and through consumer protection law (Fair 
Trading Act, common law tort of passing off).  These legal means are available to all interested 
parties irrespective of nationality.  A geographi cal indication (that meets the requirements for 
registration) may be registered as a trademark thr ough applying, including via the internet, directly to 
the Intellectual Property Office of New Zealand.  An interested party may also apply directly to the 
Intellectual Property Office to oppose or seek invalid ation of the registration of a trademark.  For 
geographical indications other than those registered as trademarks, nationals of any country may take 
action in New Zealand courts to enforce thei r rights under the Fair Trading Act 1986, and the 
common law tort of "passing off".  The New Zealand Parliament has enacted a Geographical 
Indications Act, but this is not in force. 
162. New Zealand submits that, by virtue of Ar ticle 2.1 of the TRIPS Agreement, all WTO 
Members must comply with Article 2(1) of the Paris Convention.  All WTO Members are therefore 
"countries of the Union" for the purposes of that Artic le of the Paris Convention as incorporated in the 
TRIPS Agreement. 
163. New Zealand submits that Article 22.1 of the TRIPS Agreement defines geographical 
indications as indications that "identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality,  reputation or other characteristic of the good is 
essentially attributable to its geographical origin".  By definition, therefore, a geographical indication 
must relate to a particular good.  As a conse quence, the indication and the good are inextricably 
linked.  The EC Regulation claims that commerc ial benefits are confe rred on goods or products 
bearing a registered geographical indication.  In ot her words, it claims that the conditions of sale are 
positively affected by the products bearing registered geographical indications.  As a result of the different treatment accorded to EC nationals and nationals of WTO Members, only products bearing a 
registered EC geographical indication have the oppor tunity to obtain any commercial benefits which 
are claimed by the European Co mmunities to ensue from protection under the EC Regulation.  The 
foreign like product does not have this opportunity a nd therefore receives less favourable treatment.  
New Zealand considers that evidence of disadvant ages accorded to foreigne rs in applying for and 
objecting to protection of particular geographical indications is relevant to whether like products 
receive less favourable treatment. 
164. Under New Zealand's trademark legislation,  a trademark (including a geographical 
indication for which registration as a trademark has been sought) that would otherwise be considered 
identical or similar to a registered trademark may be  registered if:  (i) the owner of the registered 
trademark consents to the registration of the later filed trademark;  or (ii) the Commissioner of Trade 
Marks (or Court) considers that a case of honest conc urrent use exists or other special circumstances 
exist, which makes it proper for the trademark to be registered.  In making such a determination, the 
Commissioner of Trade Marks (or Court) will have regard to, inter alia , whether confusion is likely to 
occur, the degree of that confusion,  and whether any confusion has in fact been proved.  A registered 
trademark may be used for the purpose of comparativ e advertising provided that the mark is used in 
accordance with honest practices in industrial or commercial matters.  Use of a sign (including a 
geographical indication) will not amount to infringeme nt of a registered trademark if, in accordance 
with honest practices in industrial or commerc ial matters, the sign is used to indicate, inter alia , a 
person's name, place of business, or th e kind, quality, geographical origin or other characteristic of the 
goods or services.  If the use of the trademark is misleading or is likely to cause confusion then its use is unlikely to be considered "i n accordance with honest practices" 
165. In New Zealand, the concurrent use of geogra phical indications with prior trademarks would 
not be permitted where this would result in a breach  of the Trade Marks Act, the Fair Trading Act or 
the common law tort of "passing off".  Confusion is relevant to all three causes of action.  
Infringement proceedings may be taken under the Trad e Marks Act (section 89) for use of a sign that  WT/DS174/R/Add.3 
 Page C-43 
 
 
is identical or similar to a registered trademark wh ere such use would be likely to deceive or confuse 
(note, however that there is a presumption of in fringement under the Trade Marks Act where a mark 
that is identical to a registered trademark is used in respect of identical goods).  The Fair Trading Act 
(section 9) prohibits conduct in trade that is decep tive or misleading or likely to deceive or mislead, 
while passing off is aimed at preventing misreprese ntation that can result from use of a confusingly 
similar mark.  A geographical indication could not be protected as a registered trademark if its use 
would be likely to deceive or cause confusion, partic ularly with a prior registered mark (sections 17 
and 25 of the Trade Marks Act).   
166. New Zealand believes that the mandatory/discre tionary distinction has limited application 
under the TRIPS Agreement.  As indicated by the Appellate Body in US – Section 211 Appropriations 
Act, the characterization of legislation as mandatory or  discretionary is not the only relevant inquiry 
for a panel.47  Nor should a finding that the legislation is discretionary be conclusive as to whether a 
State has complied with WTO rules.  In particular, the "extra hurdles" in the EC Regulation that disadvantage foreigners and breach national treatme nt apply regardless of whether or not that 
legislation is deemed "discretionary".  Further,  the granting of intellectual property rights necessarily 
involves the exercise of discretion, as does for exam ple the initiation of anti-dumping investigations.  
The objectives of the TRIPS Agreement would be undermined if the European Communities can be 
excused from its TRIPS obligations on the basis that  its implementing legislation is discretionary.  
New Zealand notes that obligations prohibiting certain  action and obligations requiring certain action, 
whether in the TRIPS Agreement or in other WTO Agreements, are all binding and mandatory 
obligations upon WTO Members.  Accordingly, Ne w Zealand cannot see that WTO jurisprudence on 
the mandatory/discretionary distin ction should apply differently depe nding on whether the obligations 
prohibit certain action, or require certain action. 
I. S
EPARATE CUSTOMS TERRITORY OF TAIWAN , PENGHU , KINMEN AND MATSU  
1. Introduction 
167. The Separate Customs Territory of Taiwan, Pe nghu, Kinmen and Matsu (hereinafter referred 
to as "Chinese Taipei") has a trade and systemic interest in the proper interpretation of the TRIPS 
Agreement, specifically, the national treatment requirements contained in the TRIPS Agreement and Paris Convention, the MFN requirement contained in  the TRIPS Agreement, and in the relationship 
between geographical indications ("GIs") and trademarks.  
2. National treatment 
168. National treatment is a long-standing and funda mental obligation in the multilateral trading 
system.  The European Communities completely ignor es the fact that the protection of intellectual 
property plays a part in the national treatment provisions.  By citing the specific paragraph in the Panel Report of Indonesia – Autos  cautioning against reading extraneous obligations into a provision, 
the European Communities also seems to suggest that the protection of intellectual property rights is 
not in fact an objective of the TRIPS Agreement, and that one should not read the protection of 
intellectual property into Article 3.1 of the TRIPS Agreement.  The drafters of Article 3.1 of the 
TRIPS Agreement and Article 2(1) of the Paris Convention recognize that, in the context of the 
protection of intellectual property, nationals and th e intellectual property rights they hold cannot be 
divorced from each other.  Conceptually, to grant national treatment to nationals who are not holders 
of intellectual property rights would be illogical.  Similarly, intellectual property rights by themselves 
cannot enforce the requirement of national treatment  without their attendant holder-nationals.  The 
two national treatment provisions would simply be in comprehensible if the protection of intellectual 
property were taken out of the equation.  Furthe rmore, Article 3.1 of the TRIPS Agreement and 
Article 2(1) of the Paris Convention do not specify th e origin of the intellectual property being held by 
                                                     
 
47 See the Appellate Body Report on US – Section 211 Appropriations Act, para. 260. WT/DS174/R/Add.3 
Page C-44  
 
the "nationals".  The focus of the national treatme nt provisions is on the nationals who have an 
intellectual property to register or the rights to en force, not on the origin of the actual intellectual 
property.  Be it domestic nationals  holding domestic intellectual pr operty rights, domestic nationals 
holding foreign intellectual property rights, fore ign nationals holding domest ic intellectual property 
rights, or foreign nationals holding foreign intellect ual property rights, national treatment applies in all 
scenarios in the same manner. 
169. In order to demonstrate how the TRIPS Agre ement and Paris Convention national treatment 
obligations apply in this case, Chin ese Taipei presents the following chart: 
GI                          EC 
National                EC 
                                                               1 GI                        Non EC 
National               EC 
 3 
                                                              2 
GI                          EC 
National                Non EC 4 
GI                        Non EC 
National              Non EC 
 
170. The four quadrants represent the four possi ble scenarios.  The European Communities, 
focusing only on nationals in its inte rpretation, is essentially arguing that it can establish a separate set 
of rules for and discriminate against non-EC GI s as it wishes.  To the European Communities, 
quadrants 1 and 2 are completely independent from quadrants 3 and 4.  As long as the national in 
quadrant 2 is treated no less favourably than the nati onal in quadrant 1, and the national in quadrant 4 
is treated no less favourably than the national in  quadrant 3, the national treatment obligation, 
according to the European Commun ities, is satisfied.  However, as already presented above, there 
exists two linked elements in the TRIPS Agre ement and Paris Convention national treatment 
obligations, and the four quadrants need to be examin ed as a whole.  This means that quadrants 2, 3, 
and 4 all cannot be treated less favourably than qua drant 1.  Therefore, the Panel should examine, 
whether the EC Regulation results in any one of the quadrants 2, 3, or 4 being treated less favourably 
than quadrant 1.  If even one of the quadrants is  treated less favourably, the EC Regulation would be 
inconsistent with the national tr eatment obligations.  Chinese Taipei  agrees with the submissions of 
the United States and Australia in their analyses of how Article 12 of EC Regulation results in less 
favourable treatment being afforded to non-EC nati onals.  Since the scenarios in quadrant 2 and 3 in 
practice happen infrequently, it would suffice to exam ine only the consistency of the EC Regulation 
with regard to the scenario under quadrant 4.  By applying the same arguments the two complainants 
made with regard to EC Regulation Article 12, the Panel would be able to see a blatant violation in 
the scenario represented by quadrant 4.   
171. Chinese Taipei also agrees with the United Stat es and Australia that Article 12.1 of the EC 
Regulation constitutes conditions on WTO Members in  exchange for the recognition of GIs from non-
EC sources.  Such conditions violate Article 3.1 of the TRIPS Agreement and Article 2(1) of the Paris 
Convention.  The European Communities conditions the protection of GIs, an explicit obligation 
under Article 22 of the TRIPS Agreement, on recipr ocity and equivalence.  Such requirements do not 
exist in Part II Section 3 of the TRIPS Agreemen t which deals with GIs nor anywhere else in the 
TRIPS Agreement as preconditions to implementi ng an explicit TRIPS Agreement obligation.  
Furthermore, Article 12.3 of the EC Regulation prov ides that, "[t]he Commission shall examine, at the 
request of the country concerned…whether a thir d country satisfies the equivalence conditions and 
offers guarantees within the meaning of paragraph 1 as a result of its national legislation".  Therefore, 
even if a WTO Member deems its GI specifications, inspection arrangements, the right to object and protection of EC GIs to be equivalent, the Europ ean Communities still holds the final say on whether 
the equivalence conditions have been met.  The Eu ropean Communities has yet to give an indication 
as to what it considers to constitute "equivalence" , but the existence of this requirement to gain 
approval from the Commission suggests that the standard for equivalence is high.  WT/DS174/R/Add.3 
 Page C-45 
 
 
172. In essence, the European Communities is requiri ng other WTO Members to adopt a system of 
GI protection substantially similar to, if not the same as, the European Communities and be prepared 
to accept automatically all EC GIs.  By requiri ng the reciprocity and equivalency conditions, the 
European Communities ignores the fact that the second sentence of Article 1.1 of the TRIPS 
Agreement 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", and that 
Article 22 of the TRIPS Agreement does not specify an y particular "legal means" for the protection of 
GIs.  In this connection, Chinese Taipei agrees with the United States that the TRIPS Agreement 
recognizes more than one acceptable GI protection sy stem.  Moreover, reciprocity and equivalency 
may be better addressed in the context of bilatera l or multilateral negotiations, should the European 
Communities wish to do so.  But they cannot co nstitute conditions on the implementation of an 
explicit TRIPS Agreement obligation to  provide national treatment to foreign producers with regard to 
intellectual property.  Additionally, if a Member  such as the European Communities believes that 
another Member is not granting the proper protectio n to GIs as stipulated in the TRIPS Agreement, 
the recourse is the WTO dispute settlement, not the denial of national treatment.  As it is, these 
reciprocity and equivalence conditions are simply extra hurdles to be fulfilled by WTO Members 
before producers with GIs from their territories can gain protection from the European Communities.  
These extra hurdles constitute an additional burde n on non-EC nationals seeking to register, and 
enforce non-EC GIs within the European Commun ities as compared to the requirements on EC 
nationals.  Thus, the EC Regulation violates the nati onal treatment provisions pursuant to Article 3.1 
of the TRIPS Agreement and the Article 2(1) of the Paris Convention. 
3. MFN treatment 
173. Chinese Taipei also shares the view of the Un ited States and Australia that, just as the EC 
Regulation violates the national treatment obligati on under the TRIPS Agreement, the measure also 
violates the TRIPS Agreement MFN obligation.  It should be noted, in light of the arguments presented above on national treatment, that the MFN obligation with regard to nationals should be 
viewed with respect to the protection of intell ectual property, from the perspective of nationals 
holding intellectual property rights.  Similarly,  as with TRIPS and Paris Convention national 
treatment obligations, Article 4 cannot be inte rpreted as an obligation on nationals alone.   
174. The chart presented in the context of national treatment above can be slightly modified to be 
applied here: 
GI                   approved 
National         approved 
 
                                                             1 GI                   not approved 
National         approved 
 
3 
                                                             2 
 GI                   approved 
National         not approved 4 
 GI                  not approved 
National         not approved 
 
175. The above chart sets out how the MFN treatment comparison should be made.  With regard to 
the protection of intellectual property, the MFN treatment in essence requires the Member in question 
to grant equal treatment to the nationals of all othe r Members.  Therefore, the basic premise of this 
quadrant is that both the GI and the national are non-EC in origin (Chinese Taipei takes no position with regard to the issue raised  by the complainants that the individual members of the European 
Communities who are also Members of the WTO should be viewed as separate non-EC Members of 
the WTO under MFN treatment).  The term "national" in the table is used in the same manner as the 
word "nationals" in Article 4 of the TRIPS Agreem ent, but with the above premise in mind.  The 
terms "approved" and "not approved" relate to the approval schem e in Articles 12(1) and 12(3) of the 
EC Regulation under which a third country GI may be protected within the European Communities WT/DS174/R/Add.3 
Page C-46  
 
after determination by the EC Commission that th e "equivalence conditions" have been satisfied.  
"Approved" thus means that the GI or national originated from a WTO Member which has been 
deemed by the EC Commission to have satisfied the c onditions set out in Article 12(1).  On the other 
hand, "not approved" means that the GI or national originated from a WTO Member which has not been deemed by the EC Commission to have satisfied  the conditions set out in the Article 12(1).  The 
GI and the national may have different origins,  hence the existence of quadrants 2 and 3. 
176. Under the MFN treatment, the scenarios under quadrants 2, 3, and 4 must all receive the same 
treatment from European Communities as the treatment received by quadrant 1, or else the European 
Communities has violated the obligation.  Having granted full protection under the EC Regulation to 
the nationals of an approved WTO Member holding GIs originating from the territories of that 
member, the European Communities cannot deny the same "advantage, favour, privilege or 
immunity" to the nationals of other WTO Members holding GIs originating from other territories.  
But this is exactly what EC Regulation does.  On ce again, quadrant 4 shows where the EC Regulation 
most blatantly violates the MFN treatment obligation. 
4. Relationship between GIs and trademarks in the TRIPS Agreement 
177. Unlike other types of intellectual property such as patents and copyrights, which tend to be 
independent concepts and manifest themselves in different forms, trademarks and GIs are closely 
related.  The purpose of both is to inform consumer s about the source and indirectly the quality of the 
product.  Because of this purpose, GIs and trademarks  can and tend to manifest themselves in similar 
forms, i.e., as prominent and distinguishing signs.  The close relationship be tween GIs and trademarks 
and the possible overlap in their physical manifestations and protection are recognized in the TRIPS 
Agreement.  Articles 22.3, 23.2 and 24.5 dir ectly address the relationship between GIs and 
trademarks.  The rights are derived from the need to prevent consumers from being misled about the 
qualities of the product, and thus the provision in Ar ticle 16.1 for trademarks and Article 22.2 for GIs 
spelling out the extent of the rights.   
178. However, the text of these two TRIPS provisions  must be given their full scope in a manner 
that would not cause conflict.  This  is consistent with the established principle of international treaty 
interpretation, which requires that the "interpretation must give meaning and effect to all the terms of 
a treaty".  Furthermore, "[a]n interpreter is not free to adopt a meaning that would result in whole 
clauses or paragraphs of a treaty to redundancy or inutility".
48  An interpretation or implementation of 
these two provisions that creates conflict would inev itably render one of the provisions inutile.  Thus, 
the Panel in Indonesia – Autos concluded that, "in public international law there is a presumption 
against conflict".49  However, the EC Regulation creates precisely such a conflict by allowing a later 
registered GI to be used alongside a prior trademar k, even when such use h as the potential of resulting 
in the likelihood of confusion on the part of the consumer.  Thus, Article 14(2) of the Regulation 
negates the right of trademark owners contained in  Article 16.1 of the TRIPS Agreement.  Likewise, 
under Article 14(3) of the EC Regulation, a potential GI is only prevented from being registered if the 
trademark fulfils the conditions of reputation, renow n, and length of time, the provision negates the 
right granted to trademark owners pursuant to Article 16.1 of the TRIPS Agreement.  The result of the 
EC Regulation is the creation of a hierarchy betw een GIs and trademarks, when the two are equal 
under the TRIPS Agreement.  GIs within the Eur opean Communities have a superior status than 
trademarks, and the protection of GIs is granted at the expense of trademarks.  Such a hierarchy is 
simply not contemplated in the TRIPS Agreement. 
5. Points raised in response to Panel's questions 
179. Chinese Taipei is not aware of any group or pers on ever having filed with its authorities either 
                                                      
48 Appellate Body Report on US – Gasoline , DSR 1996:I, at 21. 
49 Panel Report on Indonesia – Autos , para. 14.28.  WT/DS174/R/Add.3 
 Page C-47 
 
 
an application for, or an objection to, a registrati on pursuant to the EC Regulation.  In any case, it 
does not believe that whether its Government is ab le and/or willing to transmit to the European 
Communities an application from persons interested in  a GI or objection has any bearing on the issues 
in this dispute.  Even if its Government is able  and/or willing, the fact remains, that the TRIPS 
Agreement does not contain any obligation for Members to comply with an internal regulation of the 
European Communities.  The European Communities is free to require its member States to do so, but 
to require WTO Members to transmit applications fo r registration or objections to registration when 
no such obligation exists in the TRIPS Agreement w ould be to create an additional hurdle for non-EC 
nationals who wish to register their GIs within th e European Communities, thus violating Article 3.1 
of the TRIPS Agreement and Article 2 of the Paris Convention. 
180. Chinese Taipei's legislation protects trademarks and collective marks of foreign nationals in 
the same manner as that of domestic nationals, and nothing in its legisl ation prevents foreign nationals 
with a potential GI from applying for the regi stration of a trademark or collective mark.   
181. Chinese Taipei believes that footnote 1 of the TRIPS Agreement is meant to apply the term 
"nationals" to separate customs territory Members of  the WTO.  The first clause of the footnote makes 
the application of the definition to the entire Agre ement clear with the words "in this Agreement".  
The definition therefore applies to  the European Communities, as a separate customs territory, with 
regard to Articles 3.1 and 4 of the TRIPS Agreement.   There is no logical reason to believe that the 
term "nationals" in Article 2 of the Paris Conven tion should be interpreted any differently from the 
TRIPS Agreement, with respect to the European Co mmunities.  It is established jurisprudence that 
Articles 1 through 12 and Article 19 of the Pari s Convention are incorporated into the TRIPS 
Agreement.  Article 3 of the TRIPS Agreement, whic h is the parallel provision to Article 2 of Paris 
Convention, makes explicit reference to the applicab ility of the exceptions in the Paris Convention.  If 
key terms such as "nationals" are interpreted di fferently in the TRIPS Agreement and the Paris 
Convention, incorporation and direct applicability of certain provisions would be difficult, if not 
impossible.  Therefore, unless there is an explicit r eason to believe otherwise, the term "nationals" in 
Article 2 of the Paris Convention should be interpreted in the same manner as in the TRIPS 
Agreement. 
182. Chinese Taipei understands that Articles 16.1 and 22.3 of the TRIPS Agreement do not, and 
should not be, interpreted to conflict.  The establis hed principle of international treaty interpretation 
requires that any interpretation shall give meaning and effect to all terms of a treaty.  An interpretation 
that creates a conflict between two provisions woul d inevitably render one of the provisions inutile.  
The third sentence of Article 16.1 states that, "t he rights described above shall not prejudice any 
existing prior rights".  Therefore, the "exclusive right" granted to trademarks under Article 16.1 is 
dependent upon existing prior rights.  Similarly, a nd in a parallel manner, the rights obtained pursuant 
to GI protection are curtailed by Article 24.5, wher e the right of a prior trademark owner, which is 
exclusive, is guaranteed.  The combination of Articles 16.1, 22.3 and 24.5 establishes a protection 
scheme where a prior existing right, be it under tradem ark or GI, bars any later requests to register 
trademarks or GIs that would confuse or mislead  the public.  The EC Regulation creates a conflict 
between the protection of trademarks and GIs, wh en no such conflict exists, by disregarding the 
exclusive right of prior trademarks owners and favour ing the right of GI owners.  Such a hierarchy is 
not contemplated by the TRIPS Agreement.