WORLD TRADE  
ORGANIZATION  WT/DS174/R 
15 March 2005 
 (05-0955) 
 Original:   English 
  
 
     
EUROPEAN COMMUNITIES – PROTECTION OF 
TRADEMARKS AND GEOGRAPH ICAL INDICATIONS FOR 
AGRICULTURAL PRODUCTS AND FOODSTUFFS 
 
Complaint by the United States  
 
 
Report of the Panel 
 
  WT/DS174/R 
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 TABLE OF CONTENTS  
 
I. INTRODUCTION ................................................................................................................... .1 
II. FACTUAL ASPECTS ..............................................................................................................2  
A. MEASURES AT ISSUE ...................................................................................................................2  
B. PROCEDURAL HISTORY ...............................................................................................................2  
1. Preliminary ruling prior to the first written submissions .....................................................2  
2. Request for exte nsion of time.................................................................................................. .3 
3. Request for sep arate reports................................................................................................... .3 
4. Request for factual information from the International Bureau of WIPO .........................4  
III. PARTIES' REQUESTS FOR FIND INGS AND RECOMMENDATIONS.........................4  
A. UNITED STATES ...........................................................................................................................4  
B. EUROPEAN COMMUNITIES ..........................................................................................................4  
IV. ARGUMENTS OF THE PARTIES ........................................................................................4  
V. ARGUMENTS OF THE THIRD PARTIES ..........................................................................5  
VI. INTERIM REVIEW................................................................................................................. 5 
VII. FINDINGS....................................................................................................................... ........12  
A. PRELIMINARY ISSUES ................................................................................................................12  
1. Consistency of panel requests with Article 6.2 of the DSU .................................................12  
2. Measures adopted after the date of  establishment of the Panel..........................................20  
3. Claims under Article 2(2) of the Paris Convention (1967), as incorporated by 
Article 2.1 of the TRIPS Agreement......................................................................................21  
4. Claim regarding objection procedures under GATT 1994.................................................23  
5. Request by a third party for a suggestion on ways to implement a 
recommendation................................................................................................................. .....23  
6. Order of analysis of claims.................................................................................................... .24 
B. NATIONAL TREATMENT CLAIMS ..............................................................................................24  
1. Availability of protection..................................................................................................... ...24 
(a) Do the conditions in Article 12(1) of the Regulation apply to WTO Members?......................24  
(b) National treatment under th e TRIPS Agreement ......................................................................38  
(c) National treatment under GATT 1994......................................................................................61  
2. Application procedures ......................................................................................................... .65 
(a) Description of application procedures under Articles 5 and 12a of the Regulation .................65  
(b) National treatment under th e TRIPS Agreement ......................................................................66  
(c) National treatment under GATT 1994......................................................................................73  
3. Objection pr ocedures........................................................................................................... ...78 
(a) Description of objection procedures under Ar ticles 7, 12b and 12d of the Regulation ............78  WT/DS174/R 
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 (b)
 National treatment under th e TRIPS Agreement ......................................................................79  
(c) National treatment under GATT 1994......................................................................................87  
4. Inspection structures .......................................................................................................... ....88  
(a) Description of inspection structures (Artic les 4, 10 and 12a of the Regulation) ......................88  
(b) National treatment under th e TRIPS Agreement ......................................................................91  
(c) National treatment under GATT 1994......................................................................................98  
5. Labelling requirement.......................................................................................................... 106 
(a) Factual aspects of the labelling requirement in Article 12(2) of the Regulation ....................106  
(b) National treatment under th e TRIPS Agreement ....................................................................110  
(c) National treatment under GATT 1994....................................................................................112  
C. TRADEMARK CLAIM ...............................................................................................................115  
1. The relationship between G Is and prior trademarks ........................................................115  
(a) Introduction................................................................................................................... ..........115  
(b) Description of Article 14(2) of the Regulation .......................................................................115  
(c) Article 14(3) of the Regulation...............................................................................................1 18 
(d) Relationship between protection of GIs and prior trademarks under the TRIPS 
Agreement...................................................................................................................... .........129  
(e) Article 24.3 of the TRIPS Agreement.....................................................................................139  
(f) Article 17 of the TRIPS Agreement........................................................................................141  
D. OTHER CLAIMS .......................................................................................................................150  
1. MFN treatmen t claims..........................................................................................................1 50 
(a) Availability of protection:  MFN treat ment under the TRIPS Agreement..............................150  
(b) Availability of protection:  MF N treatment under GATT 1994 .............................................154  
(c) Application and objection procedures.....................................................................................155  
(d) Execution of the Regulation by authorities of EC member States..........................................156  
2. Minimum standards of GI protection .................................................................................157  
3. Claims under Part III of the TRIPS Agreement................................................................163  
4. Claim under Article 1.1 of the TRIPS Agreement.............................................................164  
5. Claim under Article 65.1 of  the TRIPS Agreement...........................................................165  
VIII.  CONCLUSIONS AND RECOMMENDATION ................................................................165  
  WT/DS174/R 
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 LIST OF ANNEXES  
 
ANNEX A 
 
SUBMISSIONS BY THE UNITED STATES 
 
Contents Page 
Annex A-1 United States' Response to th e European Communities' Request for a 
Preliminary Ruling (15 March 2004) A-2 
Annex A-2 First Written Submission of the United States (23 April 2004) A-14 
Annex A-3 Oral Statement of the United States – First Substantive Meeting 
(23 June 2004) A-60 
Annex A-4 Replies by the United States to  Questions posed by the Panel and the 
European Communities to the Complaining Parties following the First Substantive Meeting (8 July 2004) A-73 
Annex A-5 Second Written Submission of the United States (22 July 2004) A-113 
Annex A-6 Opening Statement of the Unite d States – Second Substantive Meeting 
(11 August 2004) A-167 
Annex A-7 Closing Statement of the Unite d States – Second Substantive Meeting 
(12 August 2004) A-192 
Annex A-8 Replies by the United States to  Questions posed by the Panel following 
the Second Substantive Meeting (26 August 2004) A-197 
Annex A-9 Comments of the United States on the European Communities' Replies 
to Questions posed by the Panel and to Questions posed by Australia following the Second Substantive Meeting (2 September 2004) A-245 
Annex A-10 Comments of the United States on the Reply of the International Bureau 
of WIPO to the Panel's Letter of 9 July 2004 (28 September 2004) A-288 
 
 WT/DS174/R 
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 ANNEX B 
 
SUBMISSIONS BY THE EU ROPEAN COMMUNITIES 
 
Contents Page 
Annex B-1 European Communities' Request for a Preliminary Ruling 
(24 February 2004) B-2 
Annex B-2 First Written Submission of the European Communities (25 May 2004) B-20 
Annex B-3 Oral Statement of the European Communities – First Substantive 
Meeting (23 June 2004) B-107 
Annex B-4 Replies by the European Comm unities to Questions posed by the Panel 
following the First Substantive Meeting (8 July 2004) B-121 
Annex B-5 Second Written Submission of the European Communities 
(22 July 2004) B-164 
Annex B-6 Oral Statement of the Eur opean Communities – Second Substantive 
Meeting (11 August 2004) B-238 
Annex B-7 Replies by the European Comm unities to Questions posed by the Panel 
following the Second Substantive Meeting (26 August 2004) B-288 
Annex B-8 Replies by the European Comm unities to Questions posed by Australia 
following the Second Substantive Meeting (26 August 2004) B-347 
Annex B-9 Comments of the European Communities on Australia's and the 
United States' Replies to Questions posed by the Panel following the 
Second Substantive Meeting (2 September 2004) B-351 
Annex B-10 Comments of the European Communities on the Reply of the 
International Bureau of WIPO to the Panel's Letter of 9 July 2004 (28 September 2004) B-376 
 
  WT/DS174/R 
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 ANNEX C 
 
ARGUMENTS OF THE THIRD PARTIES 
 
  Page 
ARGENTINA C-1 
BRAZIL C-5 
CANADA C-10 
CHINA C-19 
COLOMBIA C-25 
INDIA C-26 
MEXICO C-27 
NEW ZEALAND C-31 
SEPARATE CUSTOMS TERRITORY OF 
TAIWAN, PENGHU, KINMEN AND MATSU C-44 
EXHIBIT NZ-1 C-49 
EXHIBIT NZ-2 C-52 
 
 
ANNEX D  
 
MISCELLANEOUS 
 
Contents Page 
Annex D-1 Request for the Establishment of a Panel by the United States D-2 
Annex D-2 Letter dated 9 July 2004 from th e Panel to the International Bureau of 
WIPO D-4 
Annex D-3 Reply from the International Bu reau of WIPO to the Panel's Letter 
dated 9 July 2004, received by the Panel and the WTO Secretariat on 14 September 2004 D-5 
 
 WT/DS174/R 
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 TABLE OF CASES CITED IN THIS REPORT 
 
Short Title  Full Case Title and Citation  
Argentina – Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515 
Australia – Salmon  Appellate Body Report, Australia – Measures Affecting Importation of 
Salmon , WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327 
Belgium – Family Allowances GATT Panel Report, Income Tax Practices Maintained by Belgium , adopted 
7 December 1981, BISD 23S/127 and 28S/114  
Brazil – Aircraft  Appellate Body Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 
Canada – Patent Term  Appellate Body Report, Canada – Term of Patent Protection , 
WT/DS170/AB/R, adopted 12 October 2000, DSR 2000:X, 5093 
Canada – Periodicals  Appellate Body Report, Canada – Certain Measures Concerning Periodicals , 
WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, 449 
Canada – Pharmaceutical 
Patents  Panel Report, Canada – Patent Protection of Pharmaceutical Products , 
WT/DS114/R, adopted 7 April 2000, DSR 2000:V, 2289 
EC – Asbestos  Appellate Body Report, European Communities – Measures Affecting 
Asbestos and Asbestos-Containing Products , WT/DS135/AB/R, adopted 
5 April 2001, DSR 2001:VII, 3243 
EC – Bananas III  Appellate Body Report, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 
25 September 1997, DSR 1997:II, 591 
EC – Bananas III (US)  Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Complaint by the United States , WT/DS27/R/USA, 
adopted 25 September 1997, as modified by the Appellate Body Report, 
WT/DS27/AB/R, DSR 1997:II, 943 
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
EC – Sardines  Appellate Body Report, European Communities – Trade Description of 
Sardines , WT/DS231/AB/R, adopted 23 October 2002 
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the 
Granting of Tariff Preferences  to Developing Countries , WT/DS246/AB/R, 
adopted 20 April 2004. 
EEC – Parts and Components GATT Panel Report, European Economic Community – Regulation on 
Imports of Parts and Components , adopted 16 May 1990, BISD 37S/132 
India – Patents (US)  Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
India – Patents (US)  Panel Report, India – Patent Protection for Pharmaceutical and Agricultural 
Chemical Products – Complaint by the United States , WT/DS50/R, adopted 
16 January 1998, as modified by the Appellate Body Report, 
WT/DS50/AB/R, DSR 1998:I, 41 
India – Patents (EC)  Panel Report, India – Patent Protection for Pharmaceutical and Agricultural 
Chemical Products – Complaint by the European Communities , WT/DS79/R, 
adopted 22 September 1998, DSR 1998:VI, 2661 
Indonesia – Autos  Panel Report, Indonesia – Certain Measures Affecting the Automobile 
Industry , WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 
2, 3, and 4, adopted 23 July 1998, DSR 1998:VI, 2201 
Japan – Alcoholic Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97  
Korea – Dairy  Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R, adopted 12 January 2000, 
DSR 2000:I, 3  WT/DS174/R 
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 Short Title  Full Case Title and Citation  
Korea – Various Measures on 
Beef  Appellate Body Report, Korea – Measures Affecting Imports of Fresh, 
Chilled and Frozen Beef , WT/DS161/AB/R, WT/DS169/AB/R, adopted 
10 January 2001, DSR 2001:I, 5 
Korea – Various Measures on 
Beef  Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and 
Frozen Beef , WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as 
modified by the Appellate Body Report, WT/DS161/AB/R, 
WT/DS169/AB/R, DSR 2001:I, 59 
Thailand – H-Beams  Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes 
and Sections of Iron or Non-Alloy Steel and H-Beams from Poland , 
WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, 2701 
Turkey – Textiles  Panel Report, Turkey – Restrictions on Impor ts of Textile and Clothing 
Products , WT/DS34/R, adopted 19 November 1999, as modified by the 
Appellate Body Report, WT/DS34/AB/R, DSR 1999:VI, 2363 
US – 1916 Act  Appellate Body Report, United States – Anti-Dumping Act of 1916 , 
WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, 
DSR 2000:X, 4793 
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002 
US – Certain EC Products  Appellate Body Report, United States – Import Measures on Certain 
Products from the European Communities , WT/DS165/AB/R, adopted 
10 January 2001, DSR 2001:I, 373 
US – Corrosion-Resistant Steel Sunset Review
  Appellate Body Report, United States – Sunset Review of Anti-Dumping 
Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004  
US – FSC  
(Article 21.5 – EC)  Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/AB/RW, adopted 29 January 2002 
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R, adopted 20 May 1996, 
DSR 1996:I, 3 
US – Section 110(5) Copyright 
Act Panel Report, United States – Section 110(5) of the US Copyright Act , 
WT/DS160/R, adopted 27 July 2000, DSR 2000:VIII, 3769 
US – Section 211 
Appropriations Act  Appellate Body Report, United States – Section 211 Omnibus 
Appropriations Act of 1998 , WT/DS176/AB/R, adopted 1 February 2002 
US – Section 301 Trade Act  Panel Report, United States – Sections 301-310 of the Trade Act of 1974 , 
WT/DS152/R, adopted 27 January 2000, DSR 2000:II, 815 
US – Section 337 GATT Panel Report, United States Section 337 of the Tariff Act of 1930 , 
adopted 7 November 1989, BISD 36S/345 
US – Tobacco GATT Panel Report, United States Measures Affecting the Importation, 
Internal Sale and Use of Tobacco , adopted 4 October 1994, BISD 41S/I/131 
 
  WT/DS174/R 
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 I. INTRODUCTION 
1.1 On 1 June 1999, the United States requested consultations1 with the European Communities 
pursuant to Article 4 of the Understanding on Ru les and Procedures Governing the Settlement of 
Disputes ("DSU") and Article 64 of the Agreement on Trade-Related Aspects of Intellectual Property 
Rights ("TRIPS Agreement") (to the extent that it  incorporates by reference Article XXIII of the 
General Agreement on Tariffs and Trade 1994 ("GATT 1994") regarding EC Council Regulation 
(EEC) No. 2081/92 of 14 July 1992 on the protecti on of geographical indicati ons and designations of 
origin for agricultural products and foodstuffs, as amended.  The United States and the European 
Communities held consultations on 9 July 1999, a nd thereafter, but these consultations failed to 
resolve the dispute. 
1.2 On 4 April 2003, the United States supplemente d its earlier request with a request for 
additional consultations2 with the European Comm unities pursuant to Article 4 of the DSU, Article 64 
of the TRIPS Agreement and Article XXII of the GATT 1994, regarding the protection of trademarks 
and geographical indications for agricultural produc ts and foodstuffs in the European Communities 
pursuant to Regulation 2081/92, as amended, and its  related implementing a nd enforcement measures 
("Regulation 2081/92").  The United States and the European Communities held consultations 
pursuant to this supplemental request on 27 May 2003,  but these consultations also failed to resolve 
the dispute. 
1.3 On 18 August 2003, the United States requested  the Dispute Settlement Body ("DSB") to 
establish a panel with standard terms of reference as set out in Article 7.1 of the DSU.3  At its meeting 
on 2 October 2003, the DSB established a single Panel pursuant to the requests of the United States in 
document WT/DS174/20 and Australia in document WT/DS290/18, in accordance with Article 9 of 
the DSU (WT/DSB/M/156)4.  At that meeting, the parties to th e dispute also agreed that the Panel 
should have standard terms of re ference.  The terms of reference are, therefore, the following: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by the United States in document WT/DS174/20 and Australia in document 
WT/DS290/18, the matter referred to the DSB by the United States and Australia in 
those documents, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements." 
1.4 On 13 February 2004, the United States and Australia requested the Director-General to 
determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU.   
1.5 On 23 February 2004, the Director-General accordingly composed the Panel as follows: 
 Chair:  Mr Miguel Rodríguez Mendoza 
  Members: Prof. Seung Wha Chang    Mr Peter Kam-fai Cheung  
1.6 Argentina, Australia (in respect of the Unite d States' complaint), Brazil, Canada, China, 
Colombia, Guatemala, India, Mexico, New Zeala nd, the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu (hereinafter referre d to as "Chinese Taipei"), Turkey and the 
                                                     
 
1 WT/DS174/1. 
2.WT/DS174/1/Add.1. 
3 WT/DS174/20. 
4 WT/DS174/21 and Corr.1. WT/DS174/R 
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 United States (in respect of Australia's complaint)  reserved their rights to participate in the Panel 
proceedings as third parties. 
1.7 The Panel met with the parties on 23-24 June 20 04 and on 11-12 August 2004.  It met with 
the third parties on 24 June 2004. 
1.8 The Panel submitted its interim report to th e parties on 16 November 2004.  The Panel 
submitted its final report to th e parties on 21 December 2004. 
II. FACTUAL ASPECTS 
A. M
EASURES AT ISSUE  
2.1 The measures at issue in this dispute are identified in the United States' request for 
establishment of a panel as Council Regulation ( EEC) No. 2081/92 of 14 July 1992 on the protection 
of geographical indications and d esignations of origin for agricultu ral products and foodstuffs, as 
amended, and its rela ted implementing and enforcement measures. 
B. PROCEDURAL HISTORY  
1. Preliminary ruling prior to the first written submissions 
2.2 On 24 February 2004, the day after the Panel was composed and prior to the organizational 
meeting, the European Communities requested that  the Panel issue a preliminary ruling that the 
United States' and Australia's respective requests for establishment of a panel were inconsistent with 
the requirements of Article 6.2 of the DSU.  Th e European Communities considered it appropriate 
that the Panel issue a preliminary ruling before th e first written submissions of the parties were due. 
2.3 At the organizational meeting, the Panel sought the parties' views on a ppropriate procedures 
to deal with this request.  The complainants did not  object to filing written r esponses to the request for 
a preliminary ruling prior to their first written subm issions but requested additional time for the filing 
of their first written submissions. 
2.4 On 8 March 2004, the Panel adopted its working procedures and timetable, which indicated a 
date for the United States and Australia to file  written responses to the European Communities' 
request for a preliminary ruling.  They submitted their responses accordingly. 
2.5 On 5 April 2004, the Panel issued a preliminary ruling, which is set out in full in 
Section VII:A of this report. 
2.6 On 20 April 2004, the European Communities sent a letter to the Panel expressing its regret at  
the Panel's ruling and "reserving its right to rai se issues of law regarding the interpretation of 
Article 6.2 of the DSU before the Appellate Body".  In its letter, the European Communities asked the 
Panel to clarify the status of its preliminary ruling of 5 April 2004, in particular whether such ruling 
would be incorporated into the Panel's final repor ts and whether the findings contained in the ruling 
would be an integral part of the final reports. 
2.7 On 23 April 2004, the Panel responded to the European Communities, advising that its 
preliminary ruling would be reflected in th e Panel's final reports, as appropriate.   
2.8 On 26 April 2004, the European Communities sent a second letter to the Panel indicating that 
it had understood from the Panel's previous response that the findings contained in the preliminary  WT/DS174/R 
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 ruling of 5 April 2004 would be incorporated into th e Panel's final reports and could, therefore, be 
appealed in the same way as any legal in terpretation contained in these reports.   
2.9 On 28 April 2004, the Panel responded again to the European Communities, advising that it 
had taken note of the European Communities' letter of 26 April 2004 and reiterating that its 
preliminary ruling would be reflected in its final reports, as appropriate. 
2. Request for extension of time 
2.10 On 9 March 2004, the European Communities reque sted that the Panel extend the period for it 
to submit its first written submission in view of the circumstances that (a) there were two cases 
brought by two complainants; (b) these cases did not appear to contain identical claims; and (c) these 
cases raised new and complex issues and involved a larg e number of claims.  It also alleged that the 
timetable was unbalanced in favour of the complainants. 
2.11 On 16 March 2004, the United States and Au stralia each responded to the European 
Communities' request, disagreeing with its assertions but not objecting to an extension of the period 
for the European Communities to submit its first written submission, provided that such extension 
would not affect the timeframe structure of the remainder of the timetable. 
2.12 On 22 March 2004, the Panel revised its timeta ble, extending the time for the submission of 
the respondent's first written submission, without affecting the time between any of the subsequent 
steps as established in the original timetable. 
3. Request for separate reports 
2.13 On 3 March 2004, after the conclusion of the Pa nel's organizational meeting, the European 
Communities filed a request pursuant to Article 9.2 of  the DSU that the Panel submit separate reports 
on the present dispute.  On 8 March 2004 the Pane l acknowledged receipt of such request.  The 
complainants did not comment on this request. 
2.14 On 23 April 2004, the Panel informed the parties that it would submit sepa rate reports on this 
dispute, as requested by the European Communities.   
2.15 At the second substantive meeting with the parties on 11-12 August 2004, the Panel invited 
the parties to comment on the way in which the Pane l should submit separate reports.  The Panel took 
note of the parties' views and confirmed the following facts:  (a) the complainants have made similar, 
but not identical claims in this dispute; (b) the complainants have made separate written submissions 
and separate oral statements and submitted separat e responses to questions, although they did submit 
16 common exhibits with their respective first writte n submissions;  (c) the complainants have not 
collectively endorsed the arguments made in one anot her's submissions although Australia, in its first 
oral statement, expressly endorsed certain  comments made by the United States5, and the 
United States, on occasions, cited information and ar guments submitted by Aust ralia in support of its 
arguments;  and (d) although each complainant r eserved its right to participate in the Panel 
proceedings as a third party in respect of the other' s complaint, they did not exercise these rights.  
They both declined the opportunity given to them by  the Panel to make a statement as a third party 
during the session with the third parties. 
                                                      
5 Australia also purported to endorse all arguments  put forward by the United States in its closing 
statement at the second substantive meeting.  This is co nsidered in Section VII:A of the report on Australia's 
complaint (WT/DS290/R). WT/DS174/R 
Page 4  
 
 4. Request for factual information from the International Bureau of WIPO 
2.16 On 9 July 2004, the Panel sent a letter to the International Bureau of WIPO requesting its 
assistance in the form of any factual information availa ble to it relevant to the interpretation of certain 
provisions of the Paris Convention for the Protection of Industrial Property.
6  The parties were given 
the opportunity to comment.   
2.17 The International Bureau's reply was received by the Panel and the WTO Secretariat on 
14 September 2004.  The Panel gave the parties an opportunity to submit comments on the reply by 
28 September 2004.  The parties submitted their comments accordingly.7 
2.18 The factual information provided by the Interna tional Bureau consists of a note it prepared 
and five annexes containing excerpts from the O fficial Records of the various Diplomatic 
Conferences which adopted, amended or revised the pr ovisions currently contained in Articles 2 and 3 
of the Paris Convention (Stockholm Act of 1967)8.   
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS 
A. UNITED STATES  
3.1 The United States requests that the Panel find that  the measures at issue are inconsistent with 
the European Communities' obligations under: 
(a) Articles 1.1, 3.1, 4, 16.1, 22.2, 41.1, 41.2, 41.4, 42, 44.1 and 65.1 of the TRIPS 
Agreement and, through its incorporation by Article 2.1 of the TRIPS Agreement, 
Article 2 of the Paris Convention (1967); and  
(b) Articles I:1 and III:4 of GATT 1994.   
3.2 The United States requests that the Panel reco mmend that the European Communities bring 
its measures into conformity with its obligati ons under the TRIPS Agreement and GATT 1994.   
B. EUROPEAN COMMUNITIES  
3.3 The European Communities requests that the Panel: 
(a) find that certain measures not yet adopted at the time the Panel was established, and 
the United States' claim under Article 2(2) of the Paris Convention (incorporated by 
Article 2.1 of the TRIPS Agreement), are outsi de the Panel's terms of reference;  and 
(b) reject all claims within the Panel's terms of reference. 
IV. ARGUMENTS OF THE PARTIES 
4.1 The arguments of the European Communities an d the United States, as set out in their 
respective submissions (European Communities' requ est for a preliminary ruling, United States 
response to the European Communities' request fo r a preliminary ruling, first written submissions, 
written rebuttals, oral statements, responses to questions; comments on each other's responses; and 
comments on the factual information from the Intern ational Bureau of WIPO), are attached as 
Annexes A and B. 
                                                      
6 Attached as Annex D-2 to this report. 
7 The submissions are attached to this report as Annexes A-10 and B-10. 
8 The International Bureau's Note, but not its anne xes, are attached as Annex D-3 to this report.  WT/DS174/R 
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 V. ARGUMENTS OF THE THIRD PARTIES 
5.1 The arguments of those third parties that made submissions to the Panel (first written 
submissions, oral statements and/or responses to questions) are summarized and attached as Annex C. 
VI. INTERIM REVIEW 
6.1 On 16 November 2004, the Panel s ubmitted its interim report to th e parties.  On 30 November 
2004, the United States and the European Commun ities submitted written requests for review of 
precise aspects of the interim report.  On 7 D ecember 2004, the United States and the European 
Communities submitted written comments on each other's request for interim review. 
6.2 The Panel has modified aspects of its report in  light of the parties' comments where it 
considered appropriate, as explained below.  The Pa nel has also made certain revisions and technical 
corrections for the purposes of clarity and accuracy.  References to paragra ph numbers and footnotes 
in this Section VI refer to those in th e interim report, except as otherwise noted. 
Incorporation of arguments by co-complainant  
6.3 The United States requests that the interim report reflect  the fact that the United States 
incorporated information and arguments put forward by Australia with respect  to the issue whether 
the conditions of equivalence and reciprocity appl y to WTO Members, citing two references in its 
submissions and paragraph 2.15. 
6.4 The Panel has noted these two particular references in footnote 73 and also corrected 
paragraph 2.15 of the final report. 
Further comments on preliminary ruling  
6.5 The European Communities requests the deletion of paragraphs 7.3 to 7.8 as the conformity 
of a panel request with Article 6.2 of the DSU must  be evaluated on the face of the panel request.  In 
its view, references to discussions that take place in  other fora, like those in the Council for TRIPS,  
are irrelevant for this purpose.  The same reasoning  applies to the letter from Commissioner Lamy to 
the USTR, which was only provided by the United St ates at the second substantive meeting.  If it 
were of any relevance to Article 6.2, it could have  been expected that the United States would have 
referred to it in its response to the request for a pr eliminary ruling, but it did not.  Moreover, the letter 
is irrelevant for this question as it did not form part of the dispute settlement process. 
6.6 The United States opposes this request.  It believes that the preliminary ruling of 
5 April 2004 stands on its own merits.  But it also fails to see on what basis the European 
Communities objects to the Panel's description of f acts confirming that, at the time of the panel 
request, the European Communities was aware of the legal basis for the panel request and that the 
summary of the legal basis of the compliant in that request was sufficient to present the problem 
clearly. 
6.7 The Panel recalls that the European Communiti es made a request for a preliminary ruling the 
day after the Panel was composed in which it alleged defects in the panel request and submitted that it 
was appropriate that the Panel issue a preliminary ruling before the first written submissions of the 
parties were due.  The Panel issued a preliminar y ruling accordingly, in wh ich it found that those 
allegations were unfounded on the face of the panel request and on the b asis of the facts available to it 
at that time.  That preliminary ruling sets out part  of the basic rationale for the Panel's findings and 
recommendation in this dispute.  Accordingly, in  the course of making an objective assessment of the 
facts, the Panel does not disregard probative eviden ce relevant to that ruling submitted later in the WT/DS174/R 
Page 6  
 
 course of the proceeding, other than the referenc es to what took place during the consultations, which 
were without prejudice to the rights of the Eu ropean Communities and other parties in these 
proceedings, in accordance with Article 4.6 of th e DSU.  The Panel has modified the relevant 
paragraphs, numbered 7.3 to 7.13 of the final report, to elaborate on the reasons for their inclusion.  
The relevance of the letter from Commissioner Lamy is discussed below.   
Letter from Commissioner Lamy
 
6.8 The European Communities requests the deletion of paragraph 7.79 as the letter from 
Commissioner Lamy to the USTR was provided on ly at the second substantive meeting and "the 
European Communities has had very little occasion so  far to comment on this letter".  Moreover, it 
was written in the context of the Doha Round negoti ations and largely addresses questions relating to 
those negotiations.  Even to the extent that it pronou nces itself on certain aspects of the Regulation, it 
does not constitute an authoritative explanation of EC law and therefore does not form a sufficient 
basis for the Panel's findings regarding the content of the Regulation. 
6.9 The United States opposes this request.  Part of the issue before the Panel was the 
Commission's interpretation of whether the Re gulation imposes equivalence and reciprocity 
conditions on WTO Members.  A direct commun ication that it does, sent from the EC Trade 
Commissioner to the US Trade Representative, is plainl y relevant.  This is particularly true given that 
the European Communities had denied  that its position on the issue had changed from that which it 
held prior to the dispute.  In addition, the Pa nel cites the letter in a single sentence as further 
corroboration of a thorough Panel analysis.  Th e United States recalls the European Communities' 
response to Panel question No. 15 that its own stat ements to the Panel regarding EC law are not 
authoritative explanations either so, under the Eu ropean Communities' reasoning in its request for 
interim review, the Panel should also consid er such statements to be irrelevant. 
6.10 The Panel observes that the European Communities has taken the opportunity to comment on 
the letter in its request for interim review, and the Panel takes note of those comments.  A full copy of 
the letter and its attachment was provided at the second substantive meeting.  The European 
Communities had an opportunity to comment on the le tter at that meeting and in its response to 
question No. 95, which specifically related to "any official statement by the Commission" as well as 
in its responses to six other questions relevant to the applicability of the e quivalence and reciprocity 
conditions.   
6.11 The Panel has already noted in the relevant  paragraph that the letter provides further 
corroboration of the Panel's interpretation, so that it does not form the basis of any findings on its 
own.  The letter is relevant for the following r easons:  (a) it is from a member of the European 
Commission responsible for trade matters to the Un ited States Trade Representative;  (b) it states that 
the attachment contains a detailed anal ysis that covers certification marks vis-à-vis  Doha Round issues 
"as well as a reply to [the USTR's] comments on EC Regulation 2081/92";  (c) the attachment specifically responds to the national treatment claim th at is the subject of the Panel's examination in 
Section VII:B.1 of this report; and  (d) it is recent.  Therefore, the Panel has retained the paragraph, 
numbered 7.82 in the final report. 
6.12 The Panel has also referred to Commissioner Lamy 's letter in paragraph 7.733, as evidence in 
support of the European Communities' position unde r Article 22.2 of the TRIPS Agreement.  The 
European Communities did not request review of that  paragraph, which is num bered 7.750 in the final 
report, and the Panel has retained it also.  WT/DS174/R 
 Page 7 
 
 
 The phrase "[w]ithout prejudice to international agreements"  
6.13 The European Communities requests the deletion of paragraphs 7.85 to 7.90 because it did 
not argue that the application of Article 12 of th e Regulation would prejudice "the EC's obligations 
under the TRIPS Agreement ".  It quotes paragraph 66 of its fi rst written submission and paragraph 43 
of its first oral statement and asserts that "[t]hese statements do not contain any indication that the EC 
consider that its obligations under the TRIPS Agr eement would be prejudiced by the application of 
Article 12 of Regulation 2081/92.  Rather, the refere nce to the obligation to provide protection for 
geographical indications was clearly intended as a re ference to the obligation of other WTO Members  
to provide protection.  This is also what the EC explained in response to the Panel's 
Question No. 94(b)."   The European Communities agre es that it is true that it did not provide an 
explicit response to Panel question No. 20 but it asser ts that it did, however, address this point in 
response to Panel question No. 94, in which it cl arified that whereas the application of these 
conditions would not prejudice the European Comm unities' national treatment obligations under the 
TRIPS Agreement, it would prejudice its national tr eatment obligations under the GATT.  Given this 
context, it comments that the Panel is wrong to re ad into the European Communities' submission a 
statement which the European Communities clearly did not make, and which contradicts the entire 
logic of the European Communities' submissions.  In  its view, by attempting to read admissions into 
the European Communities' submissi ons, the Panel effectively distorts  these submissions.  This is not 
compatible with the task of the Panel under Article  11 of the DSU, which is to make an objective 
assessment of the facts.  The European Communiti es also requests the deletion of paragraph 7.200 for 
the same reason and because it is unnecessary to  the legal analysis which precedes it. 
6.14 The United States expresses surprise and disappointmen t that the European Communities 
would suggest that the Panel's ass essment of the facts is non-objec tive, simply because the Panel has 
noted accurately the inconsistencies in the positi ons taken by the European Communities over the 
course of this dispute.  The European Communities' sole basis for the deletion of six full paragraphs 
of Panel analysis is its disagreement with one pa rt of one sentence in paragraph 7.86.  The Panel's 
summary on this point is accurate, objective and fair and therefore the paragraphs should be retained.  
The United States notes that the European Communities admits th at it avoided answering Panel 
question No. 20 but apparently seeks credit for answ ering Panel question No. 94.  The United States 
recalls that the Panel has already made note of this response in paragraph 7.88. 
6.15 The Panel takes note of the parties' comment s and has carefully reviewed the European 
Communities' submissions, statements and responses to  questions in this dispute, and confirms the 
following facts:  (a) the interim report is consis tent with the European Communities' own detailed 
analysis of the phrase "[w]ithout prejudice to intern ational agreements" in its rebuttal submission; and 
(b) the European Communities repeat edly emphasized the importance of its own obligations in the 
interpretation of the equivalence and reciprocity co nditions but there is no clear explanation on the 
record of this dispute as to how the obligations of other WTO Members would render the equivalence 
and reciprocity conditions under the European Co mmunities' own Regulation inapplicable and the 
Panel declines to speculate.  Therefore, the Panel has expanded and revised, rather than deleted, the 
relevant paragraphs, numbe red 7.89 to 7.96 in the final report, and deleted paragraph 7.200 without 
affecting the preceding legal analysis.   
6.16 The Panel takes note that, although the Eu ropean Communities has now requested the 
deletion of most consideration of its own argum ents concerning the phrase "[w]ithout prejudice to 
international agreements", this poi nt is important to its defence and those arguments have not been 
withdrawn.  Therefore, the Panel considers it im portant to address them as part of its objective 
assessment of the matter before it, in accordance with its function under Article 11 of the DSU. WT/DS174/R 
Page 8  
 
 Examination of applications for registration
 
6.17 The European Communities requests the amendment of para graph 7.262(b) to take account 
of the requirement in Article 12a(2)(a) of the Regul ation that a third country must also transmit "a 
description of the legal provisions and the usage on the basis of which the designation of origin or the 
geographical indication is protected or established in  the country", which is a question of the law of 
the third country, not Community law.  It also comments that paragraph 7.272 should explain how the 
European Communities can implement Article 24.9 of  the TRIPS Agreement with respect to such 
questions of foreign law, taking into account that the complainants have stated that such questions can 
be of high complexity and have indicated their unwillingness or inability to cooperate on such issues. 
6.18 The United States considers that paragraph 7.262 should not be amended.  The requirement 
that the European Communities wants to add is already described in the third step in that paragraph,  
which sets out the different requirements for third countries.  The United States considers that the 
Panel's logical description would become "muddied" and confusing if part of the third step were collapsed into the second step.  The United States also  considers that the Panel should decline to offer 
further recommendations as to how the European Communities should implement Article 24.9 of the 
TRIPS Agreement as the Panel's task is not to reco mmend how to implement provi sions not part of its 
terms of reference.  The United States also disag rees that it has indicated its unwillingness or inability 
to cooperate:  it has challenged mandatory unilate ral requirements, which is not a request for co-
operation. 
6.19 The Panel takes note of the European Communitie s' request and notes that the description of 
protection in the country of origin is already incl uded in paragraph 7.262, numbered 7.268 in the final 
report, which is the logical place for it.  The Panel considers it inappropriate to make further findings 
in this paragraph.  The Panel's findings on tr ansmission of applications already apply to all 
accompanying documents, including the description of protection in the country of origin.  Further, 
this is an "as such" claim but Article 12a(2)(a) of the Regulation does not specify what form of 
description of protection in the country of origin  would be acceptable, nor is there conclusive 
evidence on this point.  In any event, Article 62 of the TRIPS Agreement would appear to be 
important in framing any recommendation on implemen tation, but it lies outside the Panel's terms of 
reference, as explained in paragra ph 7.279 of the final report.   
6.20 The Panel has also replaced the word "verificati on" in relation to applications for registration 
later in the report in order to be consistent with  the use of the word "examination" used in the 
description of the application procedures and the c onsideration of the national treatment claim under 
the TRIPS Agreement.  This does not imply that verification in the course of examination of 
applications is not covered by the Panel's conclusions with respect to examination. 
Article XX(d) of GATT 1994
 
6.21 The United States suggested amendments to paragraphs  7.289 and 7.431 for clarity and 
accuracy concerning the alleged "laws and regulations not inconsistent with this Agreement" within 
the meaning of Article XX(d) of GATT 1994.  
6.22 The European Communities responds that part of the drafting suggestion does not correctly 
represent its arguments and refers to its response to  question No. 135(c) from the Panel.  It requests 
that this argument be fully reflected in paragraph 7.289. 
6.23 The Panel partly modified the paragraphs, num bered 7.297 and 7.446 in the final report, and 
reflected the arguments in the Eu ropean Communities' responses to Pa nel questions Nos. 135(a), (b), 
(c) and (d) and addressed those arguments.    WT/DS174/R 
 Page 9 
 
 
 Standard for private inspection bodies  
6.24 The United States suggests the deletion from paragraph 7. 405 of the phrase "the standard 
specified in the Regulation is based on an interna tional standard" because this  is a legal conclusion 
that must be based on a thorough analysis and wh ich can have significant legal consequences, for 
instance, under Article 2.4 of the TBT Agreement and Article 3.1 of the SPS Agreement. 
6.25 The European Communities opposes this suggestion because it was entirely appropriate for 
the Panel to consider whether th e Regulation's requirements were b ased on an international standard, 
the United States did not make any claim under th e TBT Agreement, and the United States never 
indicated prior to interim review that the ISO/IE C Guide at issue was not a relevant international 
standard, or that it saw any problems of substance with the content of this Guide. 
6.26 The Panel does not take any view on whether the relevant ISO/IEC Guide is an international 
standard for the purposes of the TBT Agreement or  the SPS Agreement and, for the avoidance of 
doubt, has amended paragra ph 7.417 of the final report, based on its factual observations earlier in 
that sub-section.  
Marks of origin  
6.27 The European Communities requests the deletion of point (b) of paragraph 7.496, with 
which it does not agree.  The use of the words "mad e in" is not a specific requirement for a mark of 
origin in Article IX:1 of GATT 1994.  It comments that it does not understand what is meant by indication in a pictorial manner nor by indication alo ngside the GI nor how this is relevant.  Given the 
Panel's findings, it considers it unnecessary to reach a conclusion on this issue. 
6.28 The United States suggests that paragraph 7.496(b) be retained as it is helpful to the 
resolution of the dispute for the Panel to summa rize why, as a factual matter, an analysis of 
Article III:4, not Article IX, of GATT 1994 was appropriate. 
6.29 The Panel has retained the paragraph, numbe red 7.510 in the final report, because it is 
appropriate to explain why the European Communities'  defence concerning marks of origin appears to 
be irrelevant to the preceding legal analysis.  However, it has modified the point.   
Right to prevent the use of translations of registered GIs
 
6.30 The European Communities considers that it would be useful  to recall in paragraph 7.504, 
for the sake of completeness, that under Article 13( 1)(b) of the Regulation, GI holders do have a 
negative right to prevent the use of the regi stered name or names in translation.  
6.31 The United States opposes this suggestion because paragr aph 7.504 addresses the scope of 
the positive right of the GI holder under the Regulation, not what the GI holder can stop others from 
doing.  Further, the negative right may cover a broad range of activities and is not limited to the use of 
so-called translations of GIs.  With respect to th e trademark claim in this dispute, the scope of the 
third party uses that the GI holder can prevent w as never at issue because the European Communities 
concedes that, under Article 14(2) of the Regulati on, the GI holder cannot stop trademark owners 
from using their valid trademarks in commerce. 
6.32 The Panel has added a footnote to the paragraph,  numbered 7.518 to clarify the scope of the 
positive right to use a GI with respect to translations  and has also clarified the importance of the fact 
that a trademark may continue to be used under Artic le 14(2) of the Regulation.  However, the Panel 
declines to amend the referenced paragraph as reque sted because the protection granted by Article 13 WT/DS174/R 
Page 10  
 
 of the Regulation is already addressed elsewhere and it has not been shown to what extent 
Article 13(1)(b) covers translations.     
Exceptions in trademark legislation with respect to the use of GIs
 
6.33 The European Communities comments that the assertion in paragraph 7.545 to the effect 
that its trademark legislation provides no excepti ons with respect to the use of geographical 
indications is factually incorrect, and refers to its  response to Panel question No. 153 and, specifically, 
to Article 6.1(b) of the First Trademark Direc tive and Article 12(b) of the Community Trademark 
Regulation.  Therefore, even where a trademark ow ner is allowed under the GI Regulation to enforce 
his rights under the First Trademark Directive or the Community Trademark Regulation with respect 
to the confusing use of a registered GI, he cannot prevent such use if it is "in accordance with honest 
practices in industrial or commercial matters". 
6.34 The United States responds that the Panel's point is that the exception in the trademark 
legislation may be narrower than that in the GI Regu lation.  It considers that the Panel's meaning is 
clear and that any possible ambiguity might be re moved by adding the word "unqualified" before 
exception.  It also comments that the Europ ean Communities asserted before the Panel that the 
trademark owners cannot prevent GI holders from usi ng a registered GI on the grounds that the use of 
the name is confusing per se . 
6.35 The Panel takes note of the factual correc tion and has deleted the paragraph.   
Scope of a limited exception for GIs in translation  
6.36 The European Communities suggests a redraft of paragraph 7.645 for the following reasons: 
(a) lest it imply that the European Communities agr ees with the last sentence of paragraph 7.643;  
(b) in order to include all the relevant limitations  to the exception in Article 14(2) of the Regulation 
relied upon by the Panel including "what is undoubt edly the most crucial one, namely that the 
trademark owner maintains the right to prevent an y confusing uses by all parties except the GI 
holders"; and (c) because a registration under the Regulation may specify more than one linguistic 
version of the geographical indication and the last part of the second sentence of paragraph 7.645 may 
suggest otherwise.  
6.37 The United States opposes the suggestion which it considers a significant redrafting of the 
Panel's factual conclusions as to the meaning of Ar ticle 14(2) of the Regulation.  In its view, the 
European Communities' arguments are baseless and a ppear to represent an attempt to back away from 
factual findings that the European Communities itsel f repeatedly encouraged the Panel to make, as it 
asks the Panel to purge all referenc es from paragraph 7.645 regarding tr anslations of registered GIs.  
The United States provides some illustrative references  of the European Communities' representations 
during the panel proceeding and suggests that the Pane l consider repeating citations to them to avoid 
any misunderstandings.  The United States considers that (a) paragraph 7.645 does not imply that the 
European Communities agrees with paragraph 7.643 ; (b) there is no legitimate purpose served by 
replacing a summary of the issue of curtailment of the right against all signs (removing references to 
translations) with a summary of the issue of curtailm ent of the right against all third parties, which has 
already been summarized at paragraph 7.642; and (c ) it is clear that paragraph 7.645 addresses names  
"rendered differently in anothe r language" from the name registered, and not names in other 
languages that are registered. 
6.38 The Panel has taken careful note of the partie s' comments and has amended the paragraph, 
numbered 7.659 in the final report, to track more closely the wording of the explanations in the 
European Communities' own submissions, and then ma de a finding on the basis of the terms of the 
legislation and those explanations.  It has also added references in the succeeding paragraph and  WT/DS174/R 
 Page 11 
 
 
 elsewhere to the limitation provided by certain di rectives which the European Communities explained 
during the proceeding. 
Conclusions  
6.39 The European Communities requests that the Panel reflect in its conclusions its rejection of 
the US claim that the requirement of inspection structures as such constitutes a violation of national 
treatment obligations under the TRIPS Agreement and GATT 1994. 
6.40 The United States opposes this request as the report does not contain a separate finding 
rejecting any claim that an inspection structure requirement "as such" violates national treatment obligations.  No purpose is served by repeating reasoning that the Panel did not find persuasive. 
6.41 The Panel has clarified that its findings that the United States did not make a prima facie case 
with respect to certain aspects of the inspection stru ctures and has reflected this in its conclusions in 
paragraph 8.1.  The Panel has also explained its r easons for exercising judicial economy in relation to 
Article 2(1) of the Paris Convention (1967), as incor porated by Article 2.1 of the TRIPS Agreement, 
reflected this in its conclusions in paragraph 8.1,  and reflected all conclusions under that provision.  
The Panel has also added its conclusions from S ection A of the findings to paragraph 8.1. 
Suggestion by the Panel on a way to implement its recommendation
 
6.42 The United States suggests that the Panel refrain from making a suggestion in paragraph 8.5 
as to a way to implement the recommendation becau se (a) the European Communities is in a better 
position than either the Panel or the United Stat es to determine the most appropriate way to 
implement the recommendations in the report;  and (b) the simple clarification suggested by the Panel is not enough because, as the Panel correctly found (at paragraphs numbered 7.84 to 7.86 in the final 
report), the Regulation does not appear to have an y procedures for the registration of GIs from WTO 
Members that do not satisfy the equiva lence and reciprocity conditions.  
6.43 The European Communities is surprised by the United States' suggestion as the 
United States had informed the Panel that it "would welcome any objective clarification" that these 
conditions do not apply, (as noted at paragraph 7.39 in the final report).  The European Communities 
remarks that if the Regulation is clarified in the sense suggested by the Panel, this would necessarily 
also include a clarification that the appropriate  procedures are available for the registration of 
geographical indications from other WTO Members.   For these reasons, the European Communities 
requests that paragraph 8.5 not be deleted. 
6.44 The Panel has modified its suggestion in para graph 8.5 but, on the basis of the European 
Communities' remarks on interim review, c onsiders it helpful to retain it.   
Other requests for review
 
6.45 The United States also requests modifications to paragr aphs 7.28, 7.71, 7.72, 7.125, 7.400, 
7.559 and 7.596 and footnotes 100 and 479 and makes some clerical observations.  It suggests the addition of a general statement that where a party elaborates on a statement in later submission or answers to questions that citations to a submissi on are meant to be illustrative and not exhaustive.  
The Panel has modified its report accordingly. 
6.46 The European Communities also requests the modification of paragraphs 7.407, 7.712 
and 8.1.  The Panel has modified those paragr aphs and paragraphs 7. 696 and 7.697 accordingly. WT/DS174/R 
Page 12  
 
 VII. FINDINGS 
A. P
RELIMINARY ISSUES  
1. Consistency of panel requests with Article 6.2 of the DSU 
7.1 On 24 February 2004, the day after the Panel was composed and prior to the organizational 
meeting, the European Communities submitted a deta iled request that the Panel issue a preliminary 
ruling that the United States' and Australia's resp ective requests for establishment of a panel were 
inconsistent with the requirements of Article 6. 2 of the DSU.  In accordance with the Panel's 
timetable, the United States and Australia submitte d responses to the European Communities' request 
for a preliminary ruling. 
7.2 On 5 April 2004, the Panel issued the following preliminary ruling.9 
 (a) Introduction 
  1. The European Communities is of the vi ew that the requests for establishment of a 
panel in this matter do not meet the requirements of Article 6.2 of the DSU.  It has requested 
that the Panel issue a preliminary ruling regarding this question.
10 
 
 2. The United States is of the view that the European Communities' arguments in 
support of its request for a preliminary ruling that the United States' panel request does not meet the requirements of Article 6.2 of the DSU are without merit.  It submits that the Panel 
should reject that request.
11 
 
 (...)12 
  4. Article 6.2 of the DSU provides as follows:  
"2.   The request for the establishment of  a panel shall be made in writing.  
It shall indicate whether consultatio ns were held, identify the specific 
measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the probl em clearly.  In case the applicant 
requests the establishment of a panel with other than standard terms of reference, the written request shall include  the proposed text of special terms 
of reference." 
 5. The European Communities alleges that the requests for establishment of a panel are 
inconsistent with the following requirements in Article 6.2:  
 
(a) they fail to identify the specific measure at issue; and  
(b) they do not provide a brief summary of the legal basis of the complaint 
sufficient to present the problem clearly. 
                                                     
 
9 The preliminary ruling is reproduced  with minor editorial changes. 
10 (footnote original) European Communities' request for a preliminary ruling dated 24 February 2004 
("EC request"), paras. 1, 2, 3 and 5.  [Note:  that  request is attached as An nex B-1 to this final report]  
11 (footnote original) United States' response to EC request, dated 15 March 2004 ("US response"), 
para. 47.  [Note:  that response is attached as Annex A-1 to this final report] 
12 Note:  paragraph 3 of the preliminary ruling dealt with Australia's request for establishment of a 
panel.  WT/DS174/R 
 Page 13 
 
 
  6. The Panel will examine each of the requests for establishment of a panel as a whole 
on its face in the light of the parties' respec tive communications to the Panel to date and the 
relevant provisions of the c overed agreements to assess its compliance with each of these 
requirements in the sections below.13 
 
 (b) United States' request for establishment of a panel14 
 
 (i). Identification of the specific measure at issue 
 
 7. The United States' request, in its first paragraph, refers to the following measure: 
 
"EC Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications  and designations of origin for 
agricultural products and foodstuffs, as amended".  
 8. The United States' request, in its sec ond paragraph, identifies the following measures 
at issue:   
 
"Regulation 2081/92, as amended, a nd its related implementing and 
enforcement measures ('Regulation 2081/92')". 
  Council Regulation (EEC) No. 2081/92, as amended
 
 
 9. The United States' request identifies a particular regulation by the name of the 
authority which adopted it, by its number, by its date of adoption and by its full title.  It 
includes amendments of this regulation.  This is a specific measure,15 and the request has 
identified it.  There is no doubt as to which sp ecific measure is in i ssue, as the European 
Communities has itself demonstrated by annexing a consolidated text of the regulation to the 
request for a preliminary ruling.16 
  10. The European Communities argues that:  
"The unspecific reference to Regulation 2081/92 made in the Panel requests does not permit the EC to understand which specific aspects 
among those covered by Regulation 2081/92 the complainants intend 
to raise in the context of the present proceedings." (italics added) 
 11. The Panel considers the ordinary meaning of  the terms of the text in Article 6.2 of the 
DSU, read in their context and in the light of the object and purpose of the provision, to be quite clear.  They require that a request for establishment of a panel "identify the specific 
                                                     
 
13 (footnote original) This is consistent with the approach of the Appellate Body in US – Carbon Steel  
at para. 127 of its report. 
14 (footnote original) Document WT/DS174/20. 
15 (footnote original) In this respect, the Panel notes that the Appellate Body in EC – Bananas III (at 
para. 140 of its report) agreed with the Panel in that case that similar language in the following extract from a 
panel request sufficiently identified the specific measure at issue in accordan ce with Article 6.2 of the DSU:  "a 
regime for the importation, sale and distribution of bananas established by Regulation 404/93 [...], and subsequent EC legislation, regulations and administrative measures, including those reflecting the provisions of 
the Framework Agreement on bananas, which impl ement, supplement and amend that regime". 
16 (footnote original) Exhibit EC-1 annexed to EC request, supra  at 10.  A list containing the names, 
numbers and dates of the amendments  reflected in the consolidated text of the regulation can be found on 
page 1 of that document. WT/DS174/R 
Page 14  
 
 measures at issue".  They do not require the id entification of the "specific aspects" of these 
"specific measures."  
   "its related implementing and enforcement measures
"   
 
 12. The United States' request identifies, in  addition to the regulation as amended, "its 
related implementing and enforcement measures" .  The European Communities asserts that 
this phrase does not appear in the United States' request.17  The Panel draws the European 
Communities' attention to the definition of "R egulation 2081/92" in the second paragraph of 
the request.18  This phrase, as used in the United States' request, expressly refers to measures 
which implement and enforce Regulation ( EEC) No. 2081/92, as amended.  The word 
"related" is not used in isolation in the request.   
  13. The Regulation as amended itself expressly provides for the taking of particular types 
of decisions and actions and the adoption of rul es of procedure for applying the Regulation.  
For example, Article 6 provides for the Commissi on to verify that registration applications 
include all the requisite particulars and, if it concludes that the name qualifies for protection, 
to publish certain details and, if no objection is notif ied, the name is entered in a register or, if 
the Commission concludes that the name does not qualify for protection, to decide not to proceed with the publication. Article 11a provides that the Commission may cancel the 
registration of a name.  Article 12 provides fo r decisions by the Commission as to whether a 
third country satisfies the equivalence conditio ns and offers the requisite guarantees.  
Article 12b provides for the Commission, if it concludes that a name the subject of a 
registration request sent by a third country satisfies the conditions for protection, to publish certain details or, if it concludes that the name  does not satisfy the conditions for protection, 
to decide not to proceed with publication.  Ar ticle 16 provides for deta iled rules for applying 
the Regulation to be adopted.
19  Those decisions, actions and rules, among others, implement 
the Regulation.  The European Communities has indicated that the competent judicial and 
executive authorities enforce the Regulation.20  In the Panel's view, this does not imply that 
there is any uncertainty as to which measur es taken by those authorities implement and 
enforce the Regulation and which do not.  All of the Regulation's implementing and 
enforcement measures form a group of specific measures which, although they may be a large 
group, are identified by the United States' request for establishment of a panel.21 
  14. For these reasons, on the basis of the fact s available to us, the Panel rules that the 
United States' request for establishment of a panel did not fail to identify the specific 
measures at issue in accordance with Article 6.2 of the DSU. 
 
 (ii) A brief summary of the legal basis of th e complaint sufficient to present the problem 
clearly 
 
  Preliminary remarks
 
 
 15. The United States' request, in its third paragraph, sets out in narrative form alleged 
inconsistencies with the covere d agreements, by quoting or pa raphrasing the text of certain 
provisions of the covered agreements.  The fourth paragraph begins with the words 
"Regulation 2081/92 appears to be inconsistent with:" and then sets out provisions of the 
                                                      
17 (footnote original) EC request, supra  at 10, para. 24, fn. 10.   
18 (footnote original) Quoted above at para. 8. 
19 (footnote original) Exhibit EC-1. 
20 (footnote original) EC request, supra  at 10, para. 30. 
21 (footnote original) See supra  at 15.  WT/DS174/R 
 Page 15 
 
 
 covered agreements by number with which th e United States alleges that the measures at 
issue are inconsistent. 
  16. It is clear on a plain reading of the request that the series of numbered provisions is 
not to be limited to what appears in the narrative text.  The narrative text quotes or 
paraphrases some of these provisions which, in the Panel's view, illustrates and clarifies the 
alleged violations.  In this regard, the Pa nel notes that the European Communities has 
conceded that it recognizes in the narrative text the treaty language of Articles 3 and 4 of the 
TRIPS Agreement and Articles I:1 and III:4 of the GATT 1994.
22 
 
 17. The series of numbered provisions identifi es every article of every covered agreement 
at issue and, where there are paragraphs with in an article, it identifies every paragraph by 
number (with the exception of Article 2 of the Paris Convention, as incorporated by Article 2.1 of the TRIPS Agreement, and Article I of the GATT 1994). 
 
  Individual analyses
 
  18. The Panel considers that the mere lis ting of provisions of the relevant covered 
agreements may not satisfy the standard of Ar ticle 6.2 of the DSU, for instance, where the 
listed provisions establish multiple obligations ra ther than one single, distinct obligation.
23  
However, where the multiple obligations are clo sely related and interli nked, a reference to a 
common obligation in the specific listed provisions should be sufficient to meet the standard 
of Article 6.2 of the DSU under certain circumstances in a particular case.24 
  19. With these considerations in mind, the Panel now examines individual claims related 
to each provision listed by the United States in its  request for establishment of a panel.  The 
Panel notes that Articles 1.1, 2.1 (incorporating by reference Article 2 of the Paris Convention 
(1967)), 3.1, 4, 16.1, 20, 24.5, 41.4, 44.1, 63.1, 63.3 and 65.1 of the TRIPS Agreement and Article III:4 of the GATT 1994, which were enum erated in the United States' request, each 
contains either a single obligation or very clo sely related obligations.  In addition, the Panel 
notes the following: 
 
 (a) Article 22.1 of the TRIPS Agreement does not set out an obligation but rather a 
definition of a term which is used in ot her provisions set out in the United States' 
request. The reference to Article 22.1 and the corresponding narrative text in the request actually presents the problem more, rather than less, clearly because they 
explain that the United States will challenge the measures at issue under the relevant 
obligations on the basis of an allege d inconsistency with this definition; 
  (b) Article 22.2 of the TRIPS Agreement cont ains an obligation regarding the use of a 
geographical indication in two circumstan ces, but the narrative text paraphrases the 
first one from Article 22.2(a).  This clarifies that the obligation in this circumstance is the subject of a claim; 
 
 (c) Article 41.1 of the TRIPS Agreement cont ains a general obligation which relates, on 
its face, to "enforcement procedures as specified in [Part III]".  Several of those enforcement procedures are ra ised in the United States' request, namely those under 
Articles 41.2, 41.4, 42 and 44.1.  This clarifies that the general obligation is the 
                                                     
 
22 (footnote original) EC request, supra  at 10, paras. 44 and 45. 
23 (footnote original) See the Appellate Body report on Korea – Dairy , para. 124. 
24 (footnote original) See the Appellate Body report on Thailand – H-Beams , para. 93. WT/DS174/R 
Page 16  
 
 subject of a claim in relation to these proce dures.  The narrative text also states that 
the regulation at issue "does not prov ide adequate enforcement procedures"; 
  (d) Article 41.2 of the TRIPS Agreement contai ns general obligations which relate to the 
operation of procedures concerning the enforc ement of intellectual property rights.  
The requirements of each sentence of Article 41.2 are distinct but they are all closely 
related;   
  (e) Article 42 of the TRIPS Agreement cont ains closely related obligations concerning 
fair and equitable procedures.  The requirements of each sentence in Article 42 are 
distinct but they all set out specific features of fair and equitable civil judicial 
procedures concerning the enforcement of intellectual property rights;   
  (f) the focus of the claims under Articles 41. 1, 41.2 and 42 of the TRIPS Agreement is 
further clarified by the fact that the measu res at issue deal with the subject of the 
protection of geographical indications a nd designations of origin, which does not 
impact all intellectual property rights cove red by the Agreement, and the narrative 
text also refers to the protection of tr ademarks and geographical indications; and 
  (g) Article I of the GATT 1994 contains f our paragraphs, but the narrative text quotes 
only the first paragraph.  This clarifies that the obligation in Article I:1 is the subject 
of a claim.  The European Communities recognizes this treaty text.
25 
  20. The European Communities further c ontends that it is entitled to know which 
provision or aspect of Regulation No. 2081/92 is supposed to violate certain obligations and in which way such a violation is deemed to occur.  In the Panel's view, the European 
Communities is seeking the arguments, rather th an just the claims, of the United States.
26  
That being said, the Panel wishes to assure th e European Communities that it is fully entitled 
to know the arguments of the United States during the course of the proceedings .  Those 
arguments must be set out and may be cl arified in the United States' submissions.27  However, 
Article 6.2 of the DSU does not require those arguments to be set out in the request for establishment of a panel.
28 
 
 21. The Panel notes that Article 6.2 of the DS U calls for sufficient clarity with respect to 
the legal basis of the complaint so as to en able a defending party to begin preparing its 
defence.29  Our examination of the United States ' request for establishment of a panel as a 
whole, in the light of the United States' and the European Communities' respective 
communications to the Panel to date and the re levant provisions of the covered agreements, 
leads us to believe that the request for establis hment of a panel was sufficiently clear for the 
European Communities to begin preparing its defence. 
  22. For these reasons, on the basis of the fact s available to us, the Panel rules that the 
United States' request for establishment of a panel did not fail to provide a brief summary of 
the legal basis of the complaint sufficient to present the problem clearly in accordance with 
Article 6.2 of the DSU. 
 
                                                     
 
25 (footnote original) EC request, supra  at 10, para. 45. 
26 (footnote original) See the Appellate Body report on EC – Bananas III ,  para. 141;  Korea – Dairy ,  
para. 139; and US  – Carbon Steel ,  para. 173. 
27 (footnote original) Ibid . 
28 (footnote original) See the Appellate Body report on Korea – Dairy ,  para. 123. 
29 (footnote original) See the Appellate Body report on Thailand – H-Beams , para. 88.  WT/DS174/R 
 Page 17 
 
 
  (...)30 
  (d) Due process   43. The European Communities is also of the view that the "deficiencies" of the requests 
for establishment of a panel seriously prejudi ce its due process rights as a defending party, 
notably, to know the case it has to answer.
31   
  44. The Panel recalls once again that Article  6.2 of the DSU calls for sufficient clarity 
with respect to the legal basis of the complain t so as to enable a defending party to begin 
preparing its defence.
32   In this respect, the Panel has found that the complainants' requests 
for establishment of a panel were sufficiently  clear for the European  Communities to begin 
preparing its defence.33  Therefore, the Panel considers that it is not necessary to make a 
separate ruling on this issue, as presented by  the European Commun ities in its request.34 
 
 45. The Panel is mindful of the due process rights of all parties in this proceeding.  In this 
regard, it notes that the European Communities had a period of over four months after the establishment of the Panel prior to its constituti on plus a period of over seven weeks prior to 
receipt of the complainants' first written submis sions to begin preparing its case, and will have 
an additional period of four and a half weeks from receipt of the complainants' first written 
submissions to continue preparation of its own first written submission, which is in excess of 
the maximum period proposed in Appendix 3 to the DSU. 
  (e) Timeliness   46. The European Communities submitted its request for a preliminary ruling two days 
after the composition of the Panel.  It also rai sed its concerns at the DSB meetings at which 
the requests for establishment of a panel were considered.
35   
  47. The Panel therefore considers that the European Communities has raised its concerns 
in a timely manner.
36 
 
 (f) Conclusion 
  48. In light of the foregoing, on the basis of the facts available to us, the Panel rules that 
the measures and claims in Australia's a nd the United States' respective requests for 
establishment of a panel did not fail to meet the requirements of Article 6.2 of the DSU that 
they identify the specific measures at issue and provide a brief summary of the legal basis of 
the complaint sufficient to present the problem clearly.  [End of 5 April 2004 ruling]  
                                                     
 
30 Note:  paragraphs 23-42 of the preliminary ruling dealt with Australia's request for establishment of a 
panel. 
31 (footnote original) EC request, supra  at 10, para. 4.   
32 (footnote original) See supra  at 29. 
33 (footnote original) See para. 21. 
34 (footnote original) The Panel takes note that the European Communities stated that it does not take a 
position as to whether "the requirement of prejudice in Article 6.2 DSU" constitutes an  additional requirement to 
those set out in Article 6.2 of the DSU:  EC request, supra  at 10, para. 66, fn. 25 
35 (footnote original) See the minutes of those meetings in documents WT/DSB/M/155, para. 75, and 
WT/DSB/M/156, para. 32, reproduced in Exhibits EC-2 a nd EC-3, respectively.  The Panel takes note that the 
European Communities did not clearly raise any problem concerning the alleged failure of Australia's request to 
identify the specific measures at issue on those occasions. 
36 (corrected footnote original) This does not imply that these issues could not be raised later in the 
proceedings. WT/DS174/R 
Page 18  
 
  
7.3 The Panel stated expressly that its 5 April 2004 preliminary ruling was based on the facts 
available to it at that time.
37  In this final report, the Panel mak es further findings on the sufficiency of 
the panel request, in light of submissions made later during the course of the panel proceeding.  These submissions confirm the Panel's ruling as to the mean ing of the words used in  the panel request and 
the Panel's assessment that the ability of the respondent to defend itself was not prejudiced.
38   
7.4 First, the Panel recalls that the European Comm unities argued, in its request for a preliminary 
ruling, that:   
"The unspecific reference to Regulation 2081/92 made in the Panel requests does not 
permit the EC to understand which specific aspects among those covered by 
Regulation 2081/92 the complainants intend to raise in the context of the present 
proceedings."39 
7.5 The Panel ruled that Article 6.2 did not require the identification of the "specific aspects" of 
the specific measures at issue.40  In any event, after consulting the parties' first written submissions, it 
is clear that the reference to "Regulation No. 2081/ 92, as amended" in the request for establishment of 
a panel did identify certain specific aspects among those covered by the Regulation that the 
complainant later raised, as follows: 
(a) the United States' claims concerning national treatment (considered in Section VII:B 
of this report) are based on the differences between the two sets of registration and objection procedures set out in Regulation (EEC) No. 2081/92 (the "Regulation") in Articles 5 through 7 and 12 through 12d, respectively.
41  This is one of the principal 
features of the Regulation.  It was clear from the request for establishment of a panel 
that the complainant intended to raise these aspects of the Regulation;  and  
(b) the United States' claim concerning the legal protection for trademarks (considered in 
Section VII:C of this report) is based on Ar ticle 14 of the Regulation.  This provision 
is specifically devoted to that issue.  It was clear from the request for establishment of 
a panel that the complainant intended to rai se this article of the Regulation, as the 
European Communities itself confirmed in  its request for a preliminary ruling42. 
7.6 Second, the Panel recalls that the European  Communities submitted in its February 2004 
request for a preliminary ruling that:    
"In the present case, the ambiguity of the Panel request is such that the EC is, to this 
date, not sure of the case which the United States and Australia are bringing before 
                                                      
37 See paras. 6, 14 and 48 of the preliminary ruling set out above. 
38 This is consistent with the approach of the Appellate Body in US – Carbon Steel , para. 127. 
39 Quoted at para. 10 of the preliminary ruling set out above. 
40 See para. 11 of the preliminary ruling set out above. 
41 To the extent that the claims concern the actions of EC member State authorities in the examination, 
verification and transmission of applications and objections, the European Communities expressly referred to these actions at para. 31 of its request for a preliminary ruling, attached as Annex B-1 to this report.  It also 
informed the Panel during this pro ceeding that Community laws are genera lly not executed through authorities 
at Community level but rather through recourse to the authorities of its member States: see para. 7.98 below. 
42 The claim concerned coexistence under Article 14 (2), subject to Article 14(3).  The European 
Communities expressly referred to both, as well as Article 7(4), to which it referred in its defence, at paras. 47 
and 61 of its request for a preliminary ruling, attached as Annex B-1 to this report.  The only aspect of the Regulation which it raised in this respect in its request fo r a preliminary ruling, that it did not later raise in its 
defence, was Article 14(1):  see Section VII:C of this report.   WT/DS174/R 
 Page 19 
 
 
 the Panel.  As a consequence, the EC has been seriously hampered in its efforts to 
prepare its defence."43 
7.7 Specifically, with respect to the national treatment claims, it submitted as follows:  
"[T]he US claim is limited to a paraphrasi ng of the treaty language of [Article 3 
TRIPS and Article III:4 GATT].  The US claim does not permit to understand which 
provision or aspect of Regulation 2081/92 is supposed to violate the national 
treatment principle, and in which way such a violation is deemed to occur."44   
7.8 The Panel's assessment was that the request for establishment of a panel was sufficiently clear 
for the European Communities to begin preparing its defence.45  After consulting the European 
Communities' first written submission, and informa tion submitted by the United States, the Panel is 
now aware that the European Communities had al ready presented in the Council for TRIPS in 
September 2002 a statement that responded specifica lly to the United States' argument that national 
treatment under the TRIPS Agreement applied to ge ographical indications.  In that statement, the 
European Communities quoted the texts of Article  3 of the TRIPS Agreement and Article III:4 of 
GATT 1994 and argued that "[t]hose entitled to rights under TRIPS are nationals".   
7.9 Further, in an attachment to a letter sent in January 2003 by Commissioner Lamy to the 
United States Trade Representative, under the he ading "national treatment", the Commissioner 
referred inter alia  to the equivalence and reciprocity cond itions, the notion of "nationals" under the 
TRIPS Agreement, and the availability to U.S. nationa ls of protection for GIs located in the European 
Communities.46  These arguments are also an important de fence set out in the European Communities' 
first written submission, in which it is argued that "[ t]he conditions for the registration of geographical 
indications do not depend on nationality".47     
7.10 With respect to the claim concerning minimum standards of GI protection, the European 
Communities had submitted in its reque st for a preliminary ruling that: 
"The United States alleges that Regulation 2081/92 'does not provide legal means for 
interested parties to prevent the misleadi ng use of a geographical indication'.  This 
claim is not comprehensible to the EC.  In  its Article 13, Regulation 2081/92 contains 
detailed provisions regarding the protecti on of geographical indications.  These 
provisions provide interested parties with the legal means to prevent the misleading 
use of a geographical indication.  In the ab sence of further explanations, the EC fails 
to comprehend what is the claim that th e United States is intending to establish."48 
                                                      
43 European Communities' request, para. 68, supra  at 10. 
44 Ibid., para. 44. 
45 See para. 21 of the preliminary ruling set out above. 
46 Exhibit US-73, attachment, page 1.  The Panel notes that this letter did not form part of the 
consultations under Article 4 of the DSU on the national treatment and MFN claims in this dispute, which the 
United States requested in April 2003 (WT/DS174/1/Add.1).  The United States first submitted only a relevant page of the attachment to this letter, identifying it as  a "Communication from the EC to the United States of 
January 16, 2003".  The European Communities replied that it did not consider that "this document is 
attributable to the EC, and will not comment on it any further", (EC rebuttal, para. 84).  The United States therefore submitted the full text of the letter and its attachment, which includes other matters relevant to 
geographical indications, including the issue of prio r trademarks, on which the United States requested 
consultations in 1999 (WT/DS174/1). 
47 European Communities' first written submission, paras. 114 and 123-126. 
48 European Communities' request, para. 49, attached as Annex B- 1 to this report. WT/DS174/R 
Page 20  
 
 7.11 The Panel is now aware that, in the same lette r, Commissioner Lamy had earlier confirmed to 
the United States Trade Representative that "US GIs ca nnot be registered in the EU" but argued that 
alternative measures besides the Regula tion provided protection for U.S. GIs.
49  In light of these 
attendant circumstances, the allegation that "Re gulation 2081/92 'does not provide legal means for 
interested parties to prevent the misleading use of a geographical indication'" should have been readily 
comprehensible to the European Communities.   
7.12 These statements support the Panel's assessment th at the relevant wording of the request for 
establishment of a panel was sufficiently clear for the European Communities to begin preparing its 
defence of the first national treatment claim and the claim under Article 22.2 of the TRIPS 
Agreement.50 
7.13 Third, the Panel notes that, in any event, th e United States' other claims (considered in 
Section VII:D of this report), brought under the pr ovisions discussed in subparagraphs (a) through (g) 
of paragraph 19 of the preliminary ruling, were not  pursued in such detail.  The Panel has found no 
prima facie case or exercised judicial economy in respect of all these claims.  This confirms the 
Panel's assessment that no prejudice has been caused to  the rights of the respondent by these claims.   
2. Measures adopted after the date of establishment of the Panel 
(a) Main arguments of the parties 
7.14 The United States and Australia submitted, as an exhibit, a copy of Commission Regulation 
(EC) No. 2400/9651, which is effectively the register unde r Article 6 of Council Regulation (EEC) 
No. 2081/92.  Individual designations of origin and geographical indications are added to the register 
by amending this Commission Regulation.  The e xhibit includes amendments made up until the time 
of the first written submissions in this proceeding,  nine of which were adopted after the date of 
establishment of the Panel.  Those nine amendmen ts effected the registrations of 15 individual 
designations of origin and geographical indications.52  
7.15 The United States and Australia also submitted, as an exhibit, an unofficial consolidated 
version of Council Regulation (EEC) No. 2081/92, which included amendments published in the 
Official Journal of the European Communities up until the date of establishment of the Panel.53  The 
latest of these amendments is the Act of Accession  of ten new EC member States.  They also 
submitted, as an exhibit, an extract from that Ac t of Accession which provides for the registration of 
three Czech beer GIs under Article 17 of the Regulation.54 
7.16 The United States  indicates that it does not raise claims against the three Czech beer GIs but 
provides them as examples relevant to issues in dispute.  Nevertheless, it submits that the Panel's 
                                                      
49 Exhibit US-73, attachment, page 1, supra  at 46.  The relevant passage is quoted at para. 7.83 below. 
50 See also para. 6.7 above. 
51 Exhibit COMP-4b. 
52 Exhibit COMP-4b.viii to xvi.  The 15 GIs are "Westlandse druif"; "Alcach ofa de Benicarló" or 
"Carxofa de Benicarló"; "Marrone di San Zeno"; "Mantequilla de l'Alt Urgell y la Cerdanya" or "Mantega de 
l'Alt Urgell i la Cerdanya"; "Thüringer Leberwurst", "T hüringer Rotwurst", "Thüringer Rostbratwurst"; "Spressa 
delle Giudicarie"; "Fraise du Périgord";  "Queso de Valdeón"; "Ensaimada de Mallorca" or "Ensaimada mallorquina"; "Arbroath Smokies"; "C arciofo di Paestum"; "Farina di Neccio della Garfagnana"; "Agneau de 
Pauillac" and "Agneau du Poitou-Charentes".   
53 Exhibit COMP-1a. 
54 Exhibit COMP-3c.  The Czech beer GIs are "Bud ĕjovické pivo", " Českobudĕjovické pivo" and 
"Budĕjovický m ĕšt’anský var".    WT/DS174/R 
 Page 21 
 
 
 findings could affect trademark rights in future di sputes regarding allegedly infringing uses of these 
three GIs.55 
7.17 The European Communities responds that these measures did not yet exist at the time the 
Panel was established and are therefore outside the term s of reference.  In particular, it submits that 
the Act of Accession was subject to ratificatio n, which was not completed on the date of 
establishment of the Panel, and did not enter into force until 1 May 2004.56  However, it understands 
that the United States does not raise a claim concer ning the registration of the three Czech beer GIs.57 
(b) Main arguments of third parties 
7.18 China argues that the wording of the request for establishment of a panel specified 
amendments to the Regulation and that, therefore, they are properly included in the Panel's terms of 
reference.  The respondent received notice of the inclusion of amendments and had enough 
opportunity to respond to the complainant's case.  It  is irrelevant whether the amendments came into 
effect before or after the Panel was established.58 
(c) Consideration by the Panel 
7.19 The Panel begins by noting that Council Regul ation (EEC) No. 2081/92 (referred to in this 
report as the "Regulation") has not been amended in any relevant respec ts during this panel 
proceeding.  It was last amended in April 2003, prio r to the date of the request for establishment of a 
panel.   However, certain individual registrations were effected under the Regulation after the date of 
establishment of the Panel and prior to the date of  the complainant's first written submission, and 
registrations continue to be  made after that date.   
7.20 The Panel notes that the United States does not challenge any individual registrations in this 
dispute.  It is therefore unnecessary to rule on th ese measures.  It suffices to note that individual 
registrations made after the date of the request for establishment of a panel can be among the best 
evidence of the way in which certain provisions of  the Regulation itself, which are at issue, are 
interpreted and applied.59  The Panel may therefore refer to them , as factual evidence, in the course of 
its assessment of the matter before it.60   
3. Claims under Article 2(2) of the Paris Conven tion (1967), as incorporated by Article 2.1 
of the TRIPS Agreement 
(a) Main arguments of the parties 
7.21 The United States claims that the Regulation imposes a requirement as to domicile or 
establishment in the European Communities on the ava ilability of registration and the right to object 
to registrations contrary to Article  2(2) of the Paris Convention (1967) as incorporated by Article 2.1 
of the TRIPS Agreement.61  In its view, the requirement of co mmercial establishment in the European 
Union under the Regulation at issue is simply an other aspect of the alleged denial of national 
                                                      
55 United States' comments on EC response to Panel question No. 137. 
56 European Communities' first written submission, paras. 21-25. 
57 United States' rebuttal submission, paras. 291-292. 
58 Annex C, paras. 70-71. 
59 In fact, the European Communities itself has included one of these GIs in its exhibits:  the 2002 
publication of the application to register "Thüringer Leberwurst" is Exhibit EC-54. 
60 The Panel refers to the registration of the thr ee Czech beer GIs submitte d in an exhibit by the 
complainants (see para. 7.15 above)  as evidence of the operation of Article 14(3) of the Regulation in 
paras. 7.573 and 7.669 below.   
61 United States' first written submission, paras. 84-85 and 91.  WT/DS174/R 
Page 22  
 
 treatment and the requirement in Article 2(2) of th e Paris Convention (1967) is connected to and part 
of the obligation in Article 2(1).  Its request fo r establishment of a pane l referred to "national 
treatment" and "Article 2" of the Paris Conventio n (1967), which include both paragraphs 1 and 2.
 62   
7.22 The European Communities  responds that these claims are outside the Panel's terms of 
reference because they relate to Article 2(2) of the Paris Convention (1967) which was not explicitly 
mentioned in the request for estab lishment of a panel.  Article 2( 2) prohibits the imposition of 
requirements as to domicile or establishment and is therefore different from, and additional to, the 
obligations resulting from the national treatment provision of Article 2(1).63   
(b) Consideration by the Panel 
7.23 The Panel notes that the United States' request fo r establishment of a panel refers in narrative 
form to the treatment of other nationals and pr oducts originating outside the European Communities 
and that provided to the European Communities'  own nationals and products, and cites by number 
Article 2.1 of the TRIPS Agreement "incorporating by reference Article 2 of the Paris Convention" 
(1967).  In its submissions to the Panel, the United States claims that certain aspects of the Regulation 
are inconsistent with both Article 2(1) and 2(2) of the Paris Convention (1967) as incorporated by 
Article 2.1 of the TRIPS Agreement.   
7.24 The issue for the Panel is whether the reference to national treatment and to Article 2 of the 
Paris Convention (1967) is sufficient to present th e legal basis of the complaint under Articles 2(1) 
and 2(2), or only Article 2(1). 
7.25 The Panel considers that the mere listing of pr ovisions of the relevant covered agreements 
may not satisfy the standard of Article 6.2 of the DSU, for instance, where the listed provisions 
establish multiple obligations rather than one single, distinct obligation.64  However, where the 
multiple obligations are closely related and inter linked, a reference to a common obligation in the 
specific listed provisions should be sufficient to me et the standard of Article 6.2 of the DSU under 
certain circumstances in a particular case.65 
7.26 Paragraph 1 of Article 2 of the Paris C onvention (1967) expresses a national treatment 
obligation.  Paragraph 2 prohibits local domicile or establishment requirements as a condition for the 
enjoyment of any industrial property rights.  The text s of paragraphs 1 and 2 are linked by the use of 
the conjunction "[h]owever" which indicates that para graph 2 restricts the rule of paragraph 1.  
Paragraph 2 in effect provides that certain conditions  may not be imposed on foreign nationals, even if 
they are imposed on a country's own nationals.66  Paragraph 3 also reserves or excepts certain 
conditions from the national treatment obligation, but by stating certain conditions which may be 
imposed on foreign nationals, even if they are not  imposed on a country's own nationals.  Read in 
context, all three paragraphs either establish a single obligation or are very closely related:  
                                                      
62 United States' first oral statement, para. 27; rebuttal submission, paras. 80-83. 
63 European Communities' first written submission, paras. 36-42;  second oral statement, 
paras. 112-117. 
64 See the Appellate Body report on Korea – Dairy , para. 124. 
65 See the Appellate Body report on Thailand – H-Beams , para. 93. 
66 A leading commentator explains the addition of the word "however" as follows: "Even when the 
conditions imposed upon nationals of a country include the stipulation that those nationals can claim protection 
of certain industrial property rights only if they are domi ciled or established in the country, this same stipulation 
cannot be imposed upon nationals of other countries of the Union." in Bodenhausen, Professor G.H.C., Guide to 
the Application of the Paris Convention for the Protection of Industrial Property , United International Bureaux 
for the Protection of Intellectual Property (BIRPI) (1969) (reprinted 1991) ("Bodenhausen"), p. 31.  [Emphasis 
in the original]  WT/DS174/R 
 Page 23 
 
 
 paragraph 1 sets out an obligation to provide nati onal treatment and paragra phs 2 and 3 limit that 
obligation. 
7.27 Therefore, in the Panel's view, the references in the request for establishment of a panel to 
national treatment and to Article 2 of the Paris Co nvention (1967), which does not specify particular 
paragraphs, as incorporated by Article 2.1 of the TR IPS Agreement, is sufficient to explain the legal 
basis of the complaints under both pa ragraphs 1 and 2 of Article 2.  Accordingly, the Panel rules that 
the claims under Article 2(2) of the Paris Conven tion (1967), as incorporated by Article 2.1 of the 
TRIPS Agreement, are within the Panel's terms of reference. 
4. Claim regarding objection procedures under GATT 1994 
7.28 The European Communities indicates in its responses to questions after the second 
substantive meeting that, in its view, the United St ates has made a claim in relation to the objection 
procedures under the TRIPS Agreement but not under GATT 1994.67  It does not indicate the reasons 
for its view. 
7.29 The United States replies that it makes its claim in relation to the objection procedures under 
GATT 1994 as well, and refers to p assages in its rebuttal submission.68 
7.30  The parties do not dispute that the United States' claim with respect to objection procedures 
under GATT 1994 is within the Panel's te rms of reference.  Nor do they dispute that the United States'  
rebuttal submission clearly raises a claim in resp ect of the objection procedures under "the national 
treatment obligations of GATT 1994".  However, the presentation of this claim after the first 
substantive meeting raises an issue of due process.   The United States chose not to pursue this claim 
in its first written submission but later expected th e European Communities to defend itself against an 
additional claim.     
7.31 Normally, this would prejudice a respondent's  ability to defend itself.  However, the 
overlapping nature of the United States' claims w ith respect to different aspects of the same measure 
and the same type of obligation unde r different covered agreements is a feature of this dispute.  The 
facts and arguments submitted in support of this cl aim in respect of the objection procedures under the 
national treatment obligations of GATT 1994 completely  overlap with those in support of claims in 
respect of the objection procedures under the nationa l treatment obligations in the TRIPS Agreement, 
and the application procedures under the national tr eatment obligation in Article III:4 of GATT 1994.  
This also serves to clarify that this claim is made under Article III:4. 
7.32 The requirements of due process have been observed.  The European Communities has 
responded to all the relevant facts and argument s in detail, as well as a question from the Panel 
concerning the justification of the objection pr ocedures under Article XX(d) of GATT 1994, although 
it did not otherwise respond to this claim.    
7.33 For all these reasons, the Panel will consider this claim.69 
5. Request by a third party for a suggestion on ways to implement a recommendation 
7.34 Mexico considers that "cochineal" should be remove d from the list of products covered by the 
Regulation set out in its Annex II.  As a third pa rty, Mexico does not submit this as a claim, but 
requests that the Panel make a suggestion to this effect pursuant to the second sentence of Article 19.1 
                                                      
67 See European Communities' response to Panel question No. 136(d).   
68 United States' comments on EC response to Panel question No. 136(d). 
69 See paras. 7.367 to 7.373 below. WT/DS174/R 
Page 24  
 
 of the DSU.  Mexico argues that there is no require ment that a request for such a suggestion must be 
forwarded by one of the parties and, if the Panel do es not deem it appropriate to make such a specific 
suggestion, the same result would be achieved by a suggestion that the European Communities 
withdraw the Regulation.
70 
7.35 The Panel takes note of Mexico's request.  The issue of the product coverage of the 
Regulation is not challenged by the claims in this di spute and is therefore outsi de the Panel's terms of 
reference.  However, Mexico's attenti on is drawn to Article 10.4 of the DSU. 
6. Order of analysis of claims 
7.36 The claims in this dispute are made under the TRIPS Agreement and GATT 1994 and certain 
claims under each agreement relate to the same aspect s of the measure at issue.   There is no hierarchy 
between these two agreements which appear in separ ate annexes to the WTO Agreement.  The parties 
have addressed claims under the TRIPS Agreement fi rst in their submissions, which appears logical.  
Therefore,  the Panel will follow that order of analysis in this report. 
7.37 The Panel will consider the claims relevant to each aspect of the m easure in turn.  The 
following sections of the findings are organized as follows:   
 – Section B National treatment claims 
  – Section C Trademark claim    – Section D Other claims  
B. N
ATIONAL TREATMENT CLAIMS  
1. Availability of protection 
(a) Do the conditions in Article 12(1) of the Regulation apply to WTO Members? 
(i) Main arguments of the parties71 
7.38 The United States  claims that GIs located in the territory of a WTO Member outside the 
European Union can only be registered under the Regul ation if that Member sa tisfies the conditions in 
Article 12(1), which require it to adopt a system for GI protection that is equivalent to that in the 
European Communities and provide reciprocal  protection to products from the European 
Communities.72   
7.39 The United States argues that these conditions are clearly set out as requirements for 
registration of GIs in all third countries, incl uding WTO Members, in Articles 12 and 12a of the 
Regulation.  Article 12(1) does not suggest that  WTO Members are excluded from its conditions and 
Article 12a sets out the sole process under the Regul ation for the registration of non-EC GIs.  If the 
conditions in Article 12(1) do not apply to WTO Members, then they may not be recognized under 
Article 12(3) and the Article 12a pr ocedure is still not available for them.  It argues that the European 
Communities had maintained in its public statemen ts up until the time of its first written submission 
                                                      
70 Annex C, paras. 115 and 117. 
71 The Panel's citations of parties' submissions in this report are not exhaustive.  At times, parties' 
positions are elaborated in other submissions and response s to questions which are attached in full in Annexes A 
and B to this report. 
72 United States' first written submission, para. 22.  WT/DS174/R 
 Page 25 
 
 
 that the conditions did apply to WTO Members.  It did not amend the conditions so that they would 
not apply to WTO Members when it amended the Re gulation in April 2003.  The United States would 
welcome any objective clarification that the conditi ons do not apply, but the clear language of the 
Regulation shows that they do.  The introductory phrase "[w]ithout prejudice to international agreements" reserves flexibility to protect sp ecific non-EC GIs through bilateral agreements.
73   
7.40 The United States argues that the Panel is not bound by the European Communities' 
interpretation of its own measure.  It is not based on  any published official no tice, it runs counter to 
the terms of the Regulation and it does not appear to be  authoritative or binding as a matter of EC law.  
It is a statement by the European Commission whic h does not prevent the European Council, the EC 
member States or individuals from contesting th at interpretation before the Community courts.74   
7.41 The European Communities  responds that the conditions in Article 12(1) of the Regulation 
do not apply to geographical areas located in  WTO Members.  The introductory phrase of 
Article 12(1) provides that it applies "[w]ithout prejudice to international agreements" – which 
include the WTO agreements.  This is made clear by the eighth recital of the April 2003 amending 
Regulation which took specific account of the pr ovision of the TRIPS Agreement.  WTO Members 
are obliged to provide protection to geographical i ndications in accordance with Section 3 of Part II 
and the general provisions and basic principles of the TRIPS Agreement.  For this reason, 
Article 12(1) and 12(3) do not apply to WTO Members.  Accordingly, the registration of GIs from other WTO Members is subject to exactly the same conditions as the registration of GIs from the European Communities.
75 
7.42 The European Communities argues that the procedure under Article 12a of the Regulation is 
not limited to the cases covered by Article 12(3).  Th e term "third country" in Articles 12 through 12d 
does or does not include WTO Members depending on the wording, context and objectives of each 
specific provision.  The evidence of prior statements  by Community officials does not contradict the 
EC's interpretation in this Panel proceeding and mo re recent statements support it.  The statements 
made by the agents of the European Commission before the Panel commit and engage the European 
Communities but their intention is not to create new legal obligations in pub lic international or in 
Community law.  They are made on behalf of th e European Communities as a whole and not only the 
Commission.  Community legislation must, so far as possible, be interpreted in a manner that is 
consistent with international law, in particular where its provisions are intended specifically to give 
effect to an international agreement conclude d by the Community, as indicated by the phrase 
"[w]ithout prejudice to international agreements".  An interpretation that limited that phrase to 
bilateral agreements would largel y deprive it of its useful value.76 
7.43 The European Communities does not consider that the Panel is "bound" by the EC's 
interpretation of its own measure.  However, it s ubmits that the Panel must take due account of the 
fact that the Regulation is a measure of EC domestic law and establish its meaning as a factual element.  This means that: (1) the burden of proof  is on the complainant to establish the meaning of 
the measure.  Given that the claim in th e present dispute is based on the measure per se and not as 
applied, the complainant must establish "beyond doubt " that the measure entails a violation; (2) in 
                                                     
 
73 United States' first oral statement, paras. 7-16; rebuttal submission, paras. 8 and 20-21; second oral 
statement, paras. 18-22.  In this regard, the United St ates also makes a reference to Australia's first written 
submission and responses to Panel questions in a footnote to para. 8 of its rebuttal submission, and states that 
the United States "and Australia" have documented numerous cases of EC explanations of its views, in its 
comment on the EC response to Panel question No. 97. 
74 United States' response to Panel question No. 1 and rebuttal submission, para. 12. 
75 European Communities' first written submission, para s. 62-67; first oral statement, paras. 41-44; 
rebuttal submission, para. 52. 
76 European Communities' responses to Panel question Nos. 7, 8, 15 and 16; rebuttal submission, 
paras. 11, 58-60 and 71-87;  second oral statement, paras. 45 and 50.   WT/DS174/R 
Page 26  
 
 making an objective assessment of the facts and the in terpretation of the measure, the Panel should be 
guided by the rules of interpretation customary in th e EC's domestic legal order; and (3) it is the EC's 
authorities who must interpret and apply the measure  and therefore its explanations must be given 
considerable deference.
77   
(ii) Main arguments of third parties 
7.44 Argentina asserts that the conditions of equivalence and reciprocity apply to GIs located in 
all third countries.  It is unconvinced by the Europ ean Communities' explanation of its measure.  If its 
intention had been to distinguish between WTO Members and other third countries, it could have done so more explicitly.
78 
7.45 Brazil asserts that the conditions of equivalence and reciprocity apply to GIs located in all 
third countries.  It considers that the European Commission's interpretation of the phrase "without 
prejudice to international agreements" would not necessarily withstand scrutiny by a judicial body and is unlikely given that the provisions that refer to "t hird countries" would have been drafted with only a 
handful of non-WTO Members in mind.  The referen ce in Article 12(2) indicates that third countries 
means all third countries outside the European Co mmunities, although in Articles 12a(2) and 12d(1) it 
could mean non-WTO Members.  The EC's interpretation could a contrario indicate a recognition that 
the equivalence and reciprocity conditions violat e national treatment obligations in GATT 1994 and 
TRIPS.
79 
7.46 Canada considers that Article 12 of the Regulation, read in context with Articles 12a, 12b 
and 12d, cannot support the interp retation advanced by the European Communities.  The ambiguous 
reference to "international agreements" is insufficien t to counter their clear wording.  There would not 
appear to be an alternative le gal basis for filing applications for countries outside the European 
Communities besides Article 12 due to the wording of  Article 12a(1).  Artic les 12b and 12d refer to 
"WTO Members" and "third countries" which suggest s no differential application to "third countries" 
in Articles 12 and 12a.  The European Communities indicated that Article 12 applied to all WTO 
Members in a statement in September 2002 to the Council for TRIPS.80 
7.47 China argues that the European Communities' in terpretation is not accompanied by any 
supporting evidence and that there is no regulatory la nguage in the provisions to exclude expressly the 
application of these provisions to WTO Members.  The preamble to the April 2003 amending Regulation refers specifically to WTO Members in relation to the right of objection, but does not 
exclude WTO Members from the equivalence and r eciprocity conditions.  Had the drafters intended 
that it should not apply, they would have inserted a clause to that effect in the preamble.  The 
European Communities appears to have admitted that portions of Article 12, regarding product 
specifications and inspection,  do apply to WTO Members.
81  
7.48 Colombia submits that, if the European Communities'  interpretation of "without prejudice to 
international agreements" is correct , the Panel should recommend that it modify its legislation in such 
a way that that phrase acquires the scope and meaning that are assigned to it in the EC's first written 
submission.82 
                                                      
77 European Communities' response to Panel questio n No. 1; second oral statement, paras. 5-7. 
78 Annex C, para. 17. 
79 Annex C, paras. 23-24. 
80 Annex C, paras. 47-50. 
81 Annex C, para. 72. 
82 Annex C, para. 99.   WT/DS174/R 
 Page 27 
 
 
 7.49 Mexico submits that the language of Article 12( 1) of the Regulation is precise and 
unequivocal.  Third countries must satisfy conditions  of equivalence and reciprocity in order to 
receive the same protection as EC member States.83   
7.50 New Zealand submits that the European Communities' interpretation of Article 12(1) and (3) 
and the phrase "without prejudice to international agreements" is novel and does not withstand close 
scrutiny.  It runs counter to the usual meaning of that phrase and effectively admits that requiring 
nationals of WTO Members to satisfy the procedures in Article 12(1) and (3) would be contrary to 
WTO obligations.  It is inconsistent with the word ing of the Regulation itself and, if Article 12(3) 
does not apply to WTO Members, then the applica tion procedure in Article 12a would not either.  
This is the first time that this interpretation h as been raised by the Eu ropean Communities.  The 
alternative interpretation adopted by the complain ant is consistent with the wording of the 
Regulation.84 
7.51 Chinese Taipei  asserts that the conditions of equivalence and reciprocity apply to GIs located 
in all third countries.85   
(iii) Consideration by the Panel  
7.52 The first issue in this claim concerns th e conditions for registration of GIs under the 
Regulation.  It is not disputed that a GI locat ed outside the European Communities has never been 
registered nor the subject of an application made under the Regulation.86  Therefore, the provisions 
concerning the protection of such GIs have never been  applied in a particular instance.  However, the 
United States challenges this aspect  of the Regulation "as such". 
7.53 The parties agree that the conditions set out in Article 12(1) of the Regulation do not apply to 
the protection of GIs located within the territory of  the European Communities.  They disagree as to 
whether they apply to the protection of GIs locat ed in other WTO Members.  The United States 
claims that they do so apply, and it is not disput ed that the European Comm unities never made a clear 
statement that these conditions did not so apply prior to this panel proceeding.  However, the 
European Communities responds in its  submissions to the Panel that the conditions only apply to third 
countries that are not WTO Members.  
7.54 The European Communities' position, as expressed in its submissions to the Panel, has been 
welcomed in principle by the complainants and by two third parties87.  If the United States were 
satisfied with this position, it would provide a pos itive solution to many of the national treatment 
claims in this dispute.  However, the United St ates is not persuaded that the European Communities 
would be able to implement the position that it has pr esented to the Panel in light of the terms of the 
Regulation on its face, allegedly prior inconsiste nt statements by the European Communities to the 
Council for TRIPS, the Commission's Guide to th e Regulation and elsewhe re, and inconsistent 
statements made during this Panel pr oceeding by the European Communities.88  Therefore, although 
the European Communities submits that the Regulation already is in conformity with its obligations, 
the Panel is obliged to proceed with its assessm ent of the national treatment claims based on 
Article 12(1) of the Regulation. 
                                                      
83 Annex C, para. 110. 
84 Annex C, paras. 126-128. 
85 Annex C, paras. 171-172. 
86 See the parties' respective responses to Panel question Nos. 11 and 12 and third parties' comments in 
Annex C.  For the sake of brevity, the Panel refers to a name that refers to a geographical area located in a 
Member as a GI located in that Member. 
87 See para. 7 of the United States' first oral statem ent, endorsed by Australia, first oral statement, 
para. 33, and summaries of arguments of Brazil and Canada, Annex C, paras. 24 and 47. 
88 United States' first oral statement, para. 8;  rebuttal submission, para. 5. WT/DS174/R 
Page 28  
 
 7.55 The fact that this is an "as such" challenge, and that the parties disagree sharply on whether 
the European Communities' interpretation of its ow n measure is correct, requires the Panel to conduct 
a detailed examination of the Regulation.  In do ing so, it examines the Regulation solely for the 
purpose of determining its conformity with relevant obligations under the WTO covered 
agreements.
89  Although the Regulation is part of the European Communities' domestic law, the 
parties agree that the Panel is not bound by th e European Communities' interpretation of its 
provisions.90  Rather, the Panel is obliged, in accordan ce with its mandate, to make an objective 
assessment of the meaning of the relevant provisions of  the Regulation.  In this context, the Panel is 
mindful that, objectively, a Member is normally well placed to explain the meaning of its own law.  To the extent that either party advances a particular  interpretation of a provision of the Regulation at 
issue, it bears the burden of proof that its interpretation is correct.   
7.56 Turning to the Regulation, the Panel notes that it applies to the registration of "designations of 
origin" and "geographical indications", as defined.
91  For ease of reference, and without prejudice to 
their consistency with the definition of a geogr aphical indication in Article 22.1 of the TRIPS 
Agreement, we shall refer to them both as "GIs" in this report, except where the context requires 
otherwise. 
7.57 Certain facts are agreed.  The parties agree that the Regulation contains two sets of detailed 
procedures for the registration of GIs for agricultura l products and foodstuffs.  The first procedure, in 
Articles 5 through 7, applies to the names of  geographical areas located in the European 
Communities.92  It has been part of the Regulation since its adoption in 1992, although it has been 
amended subsequently in certain respects.  The second procedure, principally found in Articles 12a 
and 12b, applies to the names of geographical areas located in third countries outside the European 
Communities.93  It was inserted in the Regulation in April 2003.  A third procedure for registration of 
GIs protected under the national law of EC member States was formerly available under Article 17, but was deleted in April 2003.  A fourth possibility  is registration by means of an international 
agreement, discussed below. 
7.58 The parties disagree as to whether the second of  these procedures is subject to additional 
conditions found in Article 12(1) of the Regulati on that do not apply to the first procedure.  
Article 12(1) provides as follows: 
"1. Without prejudice to international ag reements, this Regulation may apply to 
an agricultural product or foodstuff from a third country provided that: 
- the third country is able to give gua rantees identical or equivalent to those 
referred to in Article 4, 
                                                     
 
89 This was the approach of the Appellate Body in India – Patents (US) , paras. 65-68.  
90 Parties' respective responses to Panel question No. 1. 
91 The terms "designation of origin" and "geographical indication" are defined in Article 2(2) of the 
Regulation and they and the abbreviations "PDO" and "PGI" are found in Article 4 of the Regulation 
(Exhibits COMP-1b and EC-1).  Detailed rules of application of the Regulation are found in Commission 
Regulation (EEC) No. 2037/93 (Exhibit COMP-2).  
92 This is apparent from Article 5(4) of the Regula tion which provides that "[t]he application shall be 
sent to the Member State in which the geographical area is located", and was confirmed by the European 
Communities in its response to Panel question No. 2.  The European Communities also notes that Articles 12a and 12b refer to certain provisions in Articles 5 to 7 as well. 
93 This is apparent from Article 12a(1) of the Regulation which provides that "if a group of a natural or 
legal person ... in a third country wishes to have a name registered under this Regulation it shall send a registration application to the authorities in the country  in which the geographical area is located", and was 
confirmed by the European Communities in its response to Panel question No. 2.  WT/DS174/R 
 Page 29 
 
 
 - the third country concerned has inspection arrangements and a right to 
objection equivalent to those laid down in this Regulation, 
- 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."   
7.59 Article 12 has been part of the Regulation sin ce its adoption in 1992, although it was amended 
in April 2003 by the insertion of the requirement of a right of objection equivalent to those laid down 
in the Regulation, when Article 12(3) and Articl es 12a through 12d, including the second procedure 
described above, among other provisions, were inserted.  It is not in dispute that many WTO Members, including the United States, do not satisfy the conditions set out in Article 12(1). 
7.60 The factual issue for the Panel to decide is whether the conditions set out in Article 12(1) 
apply to the availability of protection for GIs locate d in WTO Members.  In other words, the factual 
issue is whether the registration procedure in Artic les 12a and 12b is available for GIs located in 
WTO Members that do not satisfy the conditions in Article 12(1).   
7.61 The United States presents two types of evidence.  The first is the text of the Regulation and 
the second consists of the European Communities' own statements concerning the Regulation prior to, 
and during, this Panel proceeding.   
7.62 The Panel begins its analysis by reviewing the measure on its face.
94  The procedure in 
Articles 12a and 12b of the Regulati on begins with the filing of an application under paragraph 1 of 
Article 12a and continues with its initial examina tion under paragraph 2.  The text of paragraph 1 
begins "[i]n the case provided for in  Article 12(3)", which immediatel y limits the availability of the 
procedure according to the terms of Article 12(3).  Th e text of paragraph 2 of Article 12a begins "[i]f 
the third country referred to in paragraph 1 deems ..." which confirms that this aspect of the procedure 
is limited in the same way as paragraph 1.  Paragr aph 1 of Article 12b sets out the next step in the 
same procedure and refers to the registration request  sent by "the third country", which is the third 
country described in Article 12b(2). 
7.63 Article 12(3) of the Regulation provides as follows: 
"3. The Commission shall examine, at the request of the country concerned, and 
in accordance with the procedure laid dow n in Article 15 whether a third country 
satisfies the equivalence conditions and offers guarantees within the meaning of 
paragraph 1 as a result of its national legislation.  Where the Commission decision is in the affirmative, the procedure set out in Article 12a shall apply." 
7.64 The case provided for in this paragraph is clear:  it refers to a third country which satisfies the 
conditions in Article 12(1).  The initial clause of Article 12a, as confirmed by the chain of cross-
references in Articles 12a(2) and 12b(1), therefore limits the procedure in Articles 12a and 12b to 
such third countries.  No other provision in Ar ticle 12a or 12b indicates that that procedure is 
available for the registration of GIs located in a th ird country which does not satisfy the conditions in 
Article 12(1), even if it is a WTO Member.  This is  consistent with Article 12b(2), which provides for 
objections in the same procedure, and expressly distinguishes between a "Member State of the 
European Union or a WTO member" and "a third country meeting the equivalence conditions of 
                                                     
 
94 This was the Appellate Body's approach to an "as such" claim in its report on US – Corrosion-
Resistant Steel Sunset Review , at para. 168. WT/DS174/R 
Page 30  
 
 Article 12(3)".  The implication is that a WTO Member is not necessarily a third country meeting 
those conditions.
95   
7.65 The only other provision in the Regulation whic h could indicate the possibility of registration 
of GIs located in a third country which does not satisfy the conditions in Article 12(1) is the 
introductory phrase of Article 12(1) itself, which prefaces the conditions with the clause "[w]ithout 
prejudice to international agreements".  The Eur opean Communities concedes that the application of 
the conditions in Article 12(1) of the Regulation would prejudice its obligations under Article III:4 of 
GATT 1994 and submits to the Panel that, as a conse quence, it would not apply those conditions to 
GIs located in WTO Members.  Nevertheless, it does not follow that the procedure in Articles 12a and 
12b is available for the registration of GIs located in WTO Members.  That procedure is limited to 
third countries which satisfy the conditions in Artic le 12(1) and there is no other procedure in the 
Regulation available for WTO Members that do not satisfy those conditions.  There is the possibility of protection pursuant to an international agreemen t, but no existing international agreement either 
incorporates the procedure under Articles 12a and 12b of the Regulation or contains an application 
and registration procedure for GIs located in all WTO Members.  In particular, neither GATT 1994 
nor the TRIPS Agreement contains any such procedure. 
7.66 Other provisions in the Regulation may also shed  light on this issue.  Article 12d(1), which 
provides a right of objection to registration of GI s located in the European  Communities, distinguishes 
twice between persons from "a WTO Member co untry or a third country recognized under the 
procedure provided for in Article 12(3)".
96  This expressly grants a right of objection to persons from 
WTO Members and is a further indication that wh ere the Regulation refers to "a third country 
recognized under the procedure provided for in Article 12(3)" it does not include a WTO Member 
unless it has been recognized under that procedure.   
7.67 Four other provisions also refer to "a third country recognized under the procedure provided 
for in Article 12(3)" (or analogous terms) without  referring to a WTO Member:  Article 5(5) on 
registration of GIs that straddle the external border of the European Communities, Article 6(6) on 
homonymous GIs, Article 10(3) on inspection stru ctures and Article 13(5) on the coexistence of 
registered and unregistered GIs.  The European Comm unities' view of Article 10(3) is that it includes 
WTO Members97, and there seems to be no reason why th e other three provisions should exclude 
WTO Members.  These provisions seem to confirm that WTO Members are included in the term "third countries" and therefore require recognition under the procedure provided for in Article 12(3). 
7.68 The preamble of the Regulation, which has cont ained the conditions in Article 12(1) more or 
less in their current form since the original version was adopted in 1992, sets out its justification.  The 
19
th recital reads as follows: 
"Whereas provision should be made for trad e with third countries offering equivalent 
guarantees for the issue and inspection of ge ographical indications or designations of 
origin granted on their territory;"98 
                                                      
95 The second sentence of Article 12(3) provides that the procedure in Article 12a shall apply to third 
countries which the Commission decides satisfy the conditi ons in Article 12(1).  This sentence alone does not 
exclude the possibility that the procedure might apply to other third countries which do not satisfy those 
conditions, but there is no other provision in the Regulation to that effect.  
96 This is considered in detail in para.7.349 below. 
97 European Communities' responses to Panel question Nos. 126(a) and (b). 
98 Exhibits COMP-1b and EC-1.  WT/DS174/R 
 Page 31 
 
 
 7.69 The phrase "equivalent guarantees for the issue and inspection" of GIs is a clear reference to 
the conditions in Article 12(1).  There is no recita l referring to the possibility of GIs located in any 
other third countries which do not satisfy these conditions.   
7.70 The preamble to the April 2003 amending Regula tion, which modified Article 12 and inserted 
a detailed procedure for applications and objections from third countries in Articles 12a through 12d, 
sets out the justification for the amendments as follows:   
"(8) The Agreement on Trade-Related Aspects of Intellectual Property Rights 
(TRIPS Agreement 1994, contained in Annex 1C to the Agreement 
establishing the World Trade Organisati on contains detailed provisions on the 
existence, acquisition, scope, maintena nce and enforcement of intellectual 
property rights. 
(9) The protection provided by regist ration under Regulation (EEC) No 2081/92 
is open to third countries' names by reciprocity and under equivalence 
conditions as provided for in Article  12 of that Regulation.  That 
Article should be supplemented so as to guarantee that the Community 
registration procedure is available to  the countries meeting those conditions. 
(10) Article 7 of Regulation (EEC) No 2081/92 specifies how objections are to be 
made and dealt with.  To satisfy the obligation resulting from Article 22 of the TRIPS Agreement it should be made cl ear that in this matter nationals of 
WTO member countries are covered by these arrangements and that the provisions in question apply without prej udice to international agreements, as 
provided for in Article 12 of the said Regulation.  (...)"
99 
7.71 Paragraph 8 recalls the subject-matter of th e TRIPS Agreement without elaborating on its 
relevance to the Regulation.  This clarifies the reference to Article 22 of the TRIPS Agreement in 
paragraph 10 but it is not clear whether it also relate s to paragraph 9.  In any event, on the European 
Communities' later interpretation, the TRIPS Agreem ent is not relevant to the WTO-consistency of 
the conditions provided for in Article 12, as referre d to in paragraph 9.  Rather, the European 
Communities submits that GATT 1994 ensures their WT O-consistency.  GATT 1994 is not recited in 
the preamble. 
7.72 Paragraph 9 contains no qualifie r referring to WTO Members, which appears to confirm the 
position that the conditions in Article 12(1) apply to the availability of protection of GIs located in all 
third countries and that the registration procedure in Articles 12a and 12b is not available for GIs 
located in WTO Members that do not satisfy those conditions.   
7.73 Paragraph 10 includes the phrase "without prejudi ce to international agreements, as provided 
for in Article 12", but it only relates to the right  of objection granted to WTO Members' nationals.  
This is a clear reference to Articles 12b(2) a nd 12d(1), which were inserted by the amending 
Regulation.  It can be noted that they are the only two provisions in the current version of the 
Regulation that expressly refer to a "WTO Member ", where they also distinguish a WTO Member 
from a third country recognized under Article 12(3). 
7.74 In the Panel's view, the meaning and content of  these aspects of the Regulation, together with 
the amending Regulation, are sufficiently clear on thei r face for the United States to have discharged 
its burden of proof of establishing that, under the Re gulation "as such", the availability of protection 
                                                      
99 Exhibit COMP-1h. WT/DS174/R 
Page 32  
 
 for GIs located in WTO Members is contingent upon satisfaction of the conditions set out in 
Article 12(1) and recognition by th e Commission under Article 12(3).
100   
7.75 There is no supporting evidence of the meaning of  these aspects of the Regulation in the form 
of an interpretation of the relevant provisions by the European Court of Justice or any other domestic 
court.101  This is partly explained by the facts that no requests for registration of foreign GIs have been 
made under the Regulation and that Articles 12a through 12d were inserted only recently, in April 
2003.   
7.76 The United States also presents evidence cons isting of various statements by executive 
authorities of the European Communities which contai n interpretations of the Regulation.  The Panel 
considers that such statements can be useful as, objectively, a WTO Member is normally well placed 
to explain the meaning of its own domestic law.102  However, the usefulness of any particular 
statement will depend on its contents and the ci rcumstances in which it was made.  The Panel has 
weighed the evidence and considers that one statement in particular, in light of the clarity of its contents and the official capacity in which it was de livered, is highly relevant to the issue at hand. 
7.77 In a lengthy statement to the Council for TRI PS in September 2002 (prior to the insertion of 
Articles 12a through 12d), the European Commun ities specifically responded to the following view 
expressed by a group of Members, including the United States: 
"[U]nder the current EC regulations, the EC does not appear to provide protection for 
non-EC geographical indications (i.e., place names of other WTO Members), except on the basis of bilateral agreements, or if the EC has determined that a country has a 
system for geographical indications that is equivalent to the detailed system of the 
EC."
103   
7.78 The European Communities introduced the re levant part of its response as follows: 
"(...) I would like to address one issue that is  raised regarding the fact that the EU 
register for GIs on foodstuffs does not allow the registration of foreign GI unless it is determined that a third country has an e quivalent or reciprocal system of GI 
protection."
104 
7.79 The Panel notes that the Eur opean Communities was emphatic at that time that registration 
systems should primarily be aimed at domestic GIs and it quoted the legislation of several other WTO 
Members which allegedly do not register fore ign GIs without an international agreement.105  This 
statement by the European Communities in Sept ember 2002 to the Council for TRIPS therefore 
appears to support the United States' interpre tation of the Regulation on its face.   
7.80 The European Communities argues that the interpretation set forth in its September 2002 
statement to the Council for TRIPS "is not incompa tible with the text of Regulation 2081/92 as in 
force at the time it was made or with the statements  of the EC in the present case".  In its view, its 
                                                      
100 The European Commission has not recognized any other country under this procedure:  see 
European Communities' response to Panel question No. 10.  It is not contested that the Commission cannot 
recognize a third country under Article 12(3) that does not satisfy the equivalence and reciprocity conditions. 
101 European Communities' response to Panel question No. 19. 
102 See para. 7.55  above. 
103 Communication from Australia, Canada, Guatemala,  New Zealand, Paraguay, the Philippines and 
the United States (IP/ C/W/360), para. 4. 
104 See the statement in the Annex to the minutes of that meeting in document IP/C/M/37/Add.1. 
105 Ibid.  WT/DS174/R 
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 intention at that time was not primarily to explain the EC system for the protection of geographical 
indications and its statement did not take acc ount of amendments made in April 2003.   
7.81 In the Panel's view, the European Communities'  September 2002 statement was very clear in 
its interpretation of the relevant point of the Regul ation.  Further, nothing in the April 2003 amending 
Regulation appears to render that statement incompatib le with the current version of the Regulation.  
In fact, the Panel's examination of the inserti on of Article 12(3) and Articles 12a through 12d 
confirms that the conditions in Article 12(1)  remain applicable on the same terms.   
7.82 The United States also refers to the explanati on of the amendments given by the European 
Commission at the time it proposed them, in March 2002.  The Panel considers that this evidence 
corroborates the previous statement b ecause of the clarity of its conten ts and the capacity in which it 
was made. In a press release, the Commission explained that, in order to comply with the TRIPS 
Agreement, it proposed to extend the right of objection to certain other WTO Member country 
nationals and further stated: 
"Beyond mere TRIPS consistency, the Commission proposes important amendments 
designed to promote the EU system of denominations of origin as a model to the rest 
of the world.  The driving idea behind is the wish to improve protection of European 
quality products also outside the EU.  As  the EU cannot force non-EU countries to do 
so, they would be invited to do so on a 'reciprocal basis'.  If a non-EU country introduced an 'equivalent system' including the right of objection for the EU and the commitment to protect EU names on their territory, the EU would offer a specific protection to register their products for the EU market."
106 
The references to a reciprocal basis and an equivalent  system are clear references to the conditions in 
Article 12(1) of the Regulation.107   
7.83 The Panel notes that this interpretation is fu rther corroborated by a letter from Commissioner 
Lamy to the United States Trade Repre sentative in January 2003, as follows:   
"While it is true that US GIs cannot be regi stered in the EU, this does not mean that 
they are not protected!  Any US GI can: 
(1) be registered as a certification trademark (...) (2)  get protection without registration by  invoking before any tribunal in the EU 
Article 2(1) of Directive 2000/13 on labelling (...) 
(3) invoke the unfair competition rules of the Member States (...)"
108   
7.84 In its submissions to the Panel, the Europ ean Communities rejects that interpretation and 
submits that, due to the introductory phrase of Article 12(1) of the Regulation, "[w]ithout prejudice to 
international agreements", the cond itions in Article 12(1) do not apply to the availability of protection 
for GIs located in WTO Members.  It refers to a statement it made to the Council for TRIPS in June 
                                                      
106 European Commission:  "Food quality:  Commission proposes better protection for geographical 
names" (Press Release Reference: IP/02/422), Brussels, 15 March 2002 set out in Exhibit US-22. 
107 The amendments effected are identical in this respect to those proposed. The Commission's 
explanatory memorandum to its Proposal for the amending Regulation also stated that "Article 12 applies the 
Regulation by reciprocity and under equivalence conditions to agricultural products or foodstuffs originating in 
a third country, without prejudice to  international agreements", Brussels, 15 March 2002 set out in Exhibit 
US-20 at page 3. 
108  Exhibit US-73, attachment, page 1, supra  at note 46.   WT/DS174/R 
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 2004 in the days before the first s ubstantive meeting of this Panel
109 and a second edition of the 
Commission's Guide to the Regulation published in  August 2004 in the days prior to the second 
substantive meeting of this Panel.110  It advises that "[t]he guide w as not prepared in connection with 
the Panel proceedings".111 
7.85 The Panel recalls its reasoning in  paragraph 7.65 above, and reit erates its view that, even if 
the phrase "[w]ithout prejudice to international agreem ents" had the effect of subjecting the conditions 
in Article 12(1) to the terms of GATT 1994 or the TRIPS Agreement, those agreements do not 
contain a procedure for applications and registra tion for GIs located in all WTO Members.  WTO 
Members would still have to satisfy the conditions in  Article 12(1) in order for their GIs to gain 
access to the procedure in Articles 12a and 12b.   
7.86 The European Communities admits that this would be a "nonsensical result".112  However, it 
is unable to provide a satisfactory explanation as to how this result could be avoided in light of the 
wording of Article 12a, which begi ns "[i]n the case provided for in Article 12(3)".  The European 
Communities points out that Article 12(3) refers to the conditions in Article 12(1) and since, in its 
view, those conditions do not apply to WTO Memb ers, the procedure in Article 12(3) and the 
reference in Article 12a do not apply to them either.113   
7.87 The Panel agrees that Article 12(3) provid es for a Commission decision on whether a third 
country satisfies the conditions in Article 12(1) and accepts that, if those conditions do not apply to a 
third country, there would be no relevant decision un der Article 12(3).  Yet this does not alter the text 
of Article 12a which applies "[i]n the case provided for in Article 12(3)".  Article 12a does not appear, 
on its face, to apply to the registration of a GI lo cated in a third country, including a WTO Member,  
which is not recognized under Article 12(3).  For th ese reasons, the Panel is not persuaded that the 
European Communities' interpretation is correct. 
7.88 It is not necessary for the purposes of this dispute to determine which are the precise 
international agreements covered by the phrase "[w]it hout prejudice to international agreements".  It 
suffices to note that there is a plausi ble alternative interpretation that it refers to bilateral agreements 
under which the European Commun ities would protect specific GIs.114  The European Communities 
does not exclude this, but argues that there is no reason why only such specific agreements should be 
covered.115 There are currently no such bilateral agreemen ts for agricultural products and foodstuffs, 
although one has been foreshadowed in a joint declaration with Switzerland.116   
7.89 In any event, the Panel is not persuaded by the European Communities' explanations during 
this Panel proceeding of the phrase "[w]ithout prej udice to international agreements" as used in 
                                                      
109 See the minutes of that meeting in IP/C/M/44, paras. 62-63, quoted in the European Communities' 
response to Panel question No. 16 prior to circulation and also set out in Exhibit EC-83.  Responses given by the 
European Communities to questions posed by two othe r WTO Members in the TRIPS Council review of its 
legislation in 1996-1997, before the inse rtion of Articles 12a through 12d, are inconclusive on this issue as they 
contain no clear statement that equiva lence and reciprocity conditions do not apply to the registration of GIs 
located outside the European Communities in countries without a bilateral agreement:  see European 
Communities' response to Panel question No. 97.  
110 Exhibit EC-64. 
111 European Communities' response to Panel question No. 96. 
112 European Communities' second oral statement, para. 48. 
113 European Communities' response to Panel question No. 7. 
114 United States' first oral statement, para. 8. 
115 European Communities' rebuttal submission, para. 69. 
116 European Communities' response to Panel question No. 21, and see the European Community – 
Switzerland Joint Declaration on the protection of geographical indications and designations of origin of 
agricultural products and foodstuffs, 21 June 1999, OJ L 144/350 at 366 set out in Exhibit US-6.    WT/DS174/R 
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 Article 12(1) of the Regulation.  At the first substa ntive meeting, in support of its first defence, it 
provided the following explanation of that phrase: 
"(...) Such international agreements include  the WTO Agreements. This is made clear 
by the 8th recital of Regulation 692/2003, wh ich amended the procedures for the 
registration of non-EC geographical indicati ons, and in this context took specific 
account of the provisions of the TRIPS. 
"WTO Members are obliged to provide protection to geographical indications in 
accordance with Section 3 of Part II and the general provisions and basic principles of the TRIPS Agreement. For this reason, Ar ticle 12 (1) and (3) of Regulation 2081/92 
do not apply to WTO Members. (...)"
117 
7.90 This explanation was also reflected in a June  2004 statement that the European Communities 
made to the Council for TRIPS118 and the August 2004 edition of the Commission's Guide to the 
Regulation119.   
7.91 At the same time, the European Communities'  second defence was that the conditions in 
Article 12(1) of the Regulation were  not inconsistent with the nati onal treatment obligations in the 
TRIPS Agreement, essentially because they discrimin ate according to the location of GIs and not 
according to the nationality of persons  with rights in relation to GIs.120   
7.92 It was not clear how these two de fences could be reconciled.  If the first defence implied that 
the conditions did not apply because they woul d prejudice the European Communities' national 
treatment obligations under the TRIPS Agreement, it would have contradicted the second defence that 
these conditions were not inconsistent with th e national treatment obligations in the TRIPS 
Agreement.  The Panel sought clarification from the European Communities by posing the question 
"does the EC contest that equivalence and reciprocity  conditions such as those under Article 12(1) and 
(3) of Regulation (EC) No. 2081/92, if applied to other WTO Members, would be inconsistent with 
the national treatment obligations in the TRIPS Ag reement and/or Article III:4 of the GATT 1994?".  
The European Communities declined to give a specif ic answer to the Panel's question and concluded 
as follows: 
"As regards the specific conditions containe d in Article 12 (1) of Regulation 2081/92, 
the EC has already confirmed that it does not  apply these to WTO Members.  For this 
reason, the EC considers that the questi on whether these conditions are inconsistent 
with the national treatment obligations of the TRIPS Agreement and the GATT does 
not arise."121 
                                                      
117 European Communities' first written submission, paras.  65-66.  It reiterated this in its first oral 
statement, at para. 43, and confirmed it in its response to Panel question No. 3 adding as follows:  
"At the time that Regulation 2081/92 was adopte d, the GATT was one of the agreements to 
which the 'without prejudice' clause applied. Moreover, at the time that Regulation 2081/92 
was adopted, the TRIPS Agreement was in the final phases of its negotiation. It was therefore the objective that the 'without prejudice' clause should also apply to the TRIPS and other 
WTO agreements resulting from the Uruguay Round." 
118 See the minutes of that meeting in document IP/C/M/44, paras. 62-63, cited in response to Panel 
question Nos. 16 and 95 and set out in Exhibit EC-83. 
119 Set out in Exhibit EC-64. 
120 European Communities' first written submission, paras.  123-126;  first oral statement, paras. 46-47; 
rebuttal submission, para. 43. 
121 European Communities' response to Panel question No. 20. WT/DS174/R 
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 7.93 The United States then submitted that the Eur opean Communities had decided not to defend 
the conditions in Article 12(1) of the Regulation an d that it had apparently conceded that any such 
requirement was contrary to nati onal treatment and MFN obligations.
122   
7.94 The Panel again sought clarification at the second substantive meeting, by asking which 
precise obligations under an intern ational agreement would be prejudiced by the application of the 
specific conditions in Article 12(1) of the Regula tion to WTO Members.  The European Communities 
responded that it was its obligations under Article  III:4 of GATT 1994, but not Article 3.1 of the 
TRIPS Agreement, because the Regulation did not i nvolve any discrimination between nationals.  It 
later confirmed this in writing.123  Therefore, to the extent that the European Communities' 
explanation of the phrase "[w]ithout prejudice to inte rnational agreements" as used in Article 12(1) of 
the Regulation relies on the TRIPS Agreement, the European Communities has expressly denied that 
the phrase refers to its own obligations and the Pa nel does not consider that possible explanation 
further.124     
7.95 At this time, the European Communities' explanation of the phrase "[w]ithout prejudice to 
international agreements" as used in Article 12(1) of the Regulation relies on GATT 1994.  In light of 
the European Communities' analysis that this phr ase ensures that "should a conflict between the two 
acts or provisions occur, then the act or provision to which the 'without prejudice' reference is made prevails"
125, it is clear that this explanation depends on the view that the equivalence and reciprocity 
conditions are inconsistent with  the European Communities' obligations under Article III:4 of GATT 
1994.  However, this is difficult to reconcile with  the European Communities' earlier view that the 
question whether these conditions are inconsistent with the national treatment obligations of GATT 
does not arise, quoted at paragraph 7.92 above.  It was also omitted from the earlier explanation that 
the conditions did not apply because of obliga tions under the TRIPS Agreement, quoted at 
paragraph 7.89 above.  Further, the evidence su bmitted by the European Communities provides no 
additional support for this explanation, as the am ending Regulation recites the TRIPS Agreement but 
not GATT 1994, and the evidence identified at paragraph 7.90 above also reflects the explanation 
quoted at paragraph 7.89 above.126   
7.96 For all these reasons, the Panel is not persuade d by the European Communities' explanations 
of the phrase "[w]ithout prejudice to international agreements" as used in Article 12(1) of the 
Regulation.   
7.97 The Panel takes note that there are vari ous executive authorities involved in the 
implementation of the Regulation, including represent atives of EC member States.  Article 15 of the 
Regulation provides for a regulatory procedure under  which the Commission shall be assisted by a 
regulatory committee composed of the representatives of the EC member States and chaired by the 
representative of the Commission, who does not vot e.  The representative of the Commission shall 
submit to the committee a draft of the measures to be  taken.  The committee shall deliver its opinion 
on the draft within a time-limit by qualified ma jority voting.  The Commission shall adopt the 
measures envisaged if they are in accordance with the opinion of the committee.  If the measures are 
not in accordance with the opinion of the committee, or if no opinion is delivered, the Commission 
                                                      
122 United States' rebuttal submission, paras. 3 and 9. 
123 European Communities' response to Panel question No. 94. 
124 In the same question, the Panel also sought clar ification of the relevance of the reference to the 
TRIPS Agreement in the European Communities' first writte n submission, quoted at paragraph 7.89 above.  The 
European Communities' response does not provide a clear explanation of the relationship between the 
obligations of WTO Members under the TRIPS Agreement and the applicability of the equivalence and 
reciprocity conditions under the EC's GI Regulation:  see its response to question No. 94(b), second paragraph. 
125 European Communities' rebuttal submission, para. 55. 
126 The United States drew attention to the problems in reconciling the European Communities' 
submissions on this point in its comment on the EC response to Panel question No. 94.  WT/DS174/R 
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 shall, without delay, submit to the Council a propo sal relating to the measures to be taken and shall 
inform the European Parliament.  The Council may act  by qualified majority on the proposal within 
three months.  If the Council indicates by qualified majority that it opposes the proposal, the Commission shall re-examine it.  If the Council neith er adopts the proposed measure nor indicates its 
opposition within three months, the Commission shall adopt the proposed measure.
127 
7.98 The European Communities' delegation to this pa nel proceeding confirms that the statements 
made by agents of the European Commission be fore the Panel commit and engage the European 
Communities.128  It indicates that Community laws are generally not executed through authorities at 
Community level but rather through recourse to the authorities of its member States which, in such a 
situation, "act de facto  as organs of the Community, for which the Community would be responsible 
under WTO law and international law in general".129  The Panel accepts this explanation of what 
amounts to the European Communities' domestic c onstitutional arrangements and accepts that the 
submissions of the European Communities' delegation to this panel proceeding are made on behalf of 
all the executive authorities of  the European Communities.130  
7.99 The parties have presented evidence with respect to the approach that would be taken by the 
European Court of Justice if the executive authoriti es registered a GI that was not the subject of an 
international agreement and that was located in a th ird country that did not satisfy the conditions in 
Article 12(1) of the Regulation.  The European Communities submits that, according to the settled 
case law of the European Court of Justice: 
"Community legislation must, so far as possi ble, be interpreted in a manner that is 
consistent with international law, in pa rticular where its provisions are intended 
specifically to give effect to an in ternational agreement concluded by the 
Community."131 
7.100  The Panel is not persuaded that it is possible to  interpret the relevant aspects of the Regulation 
in the manner advanced by the European Commun ities in these proceedings, for the reasons already 
given.  The Panel also notes that the basic Regula tion does not indicate that its provisions are intended 
specifically to give effect to an international agreement concluded by the Community.  Whilst the 
April 2003 amending Regulation recites the TRIPS Agre ement, it would only seem to do so to justify 
extending the right of objection to nationals of WTO Members.  In any case, the European 
Communities' later explanation is that the interp retation must take account of GATT 1994, which is 
not mentioned at all.   
                                                      
127 Article 15 of the Regulation, set out in Exhib its COMP-1b and EC-1, Artic le 5 of Council Decision 
(EC) No. 1999/468 set out in Exhibit COMP-8 and the European Communities' first written submission, 
paras. 81-82.  There have been instances where the Co mmission's draft measures have not been in accordance 
with the opinion of the Committee and where the Council of Ministers has adopted measures under the 
Regulation: see Exhibit EC-28.  
128 European Communities' responses to Panel questions Nos. 15 and 18. 
129 European Communities' second oral statement, para. 148. 
130 The delegation of the European Communities to the meetings with the Panel was composed of 
officials of the European Commission and delegates of certain EC member States.  The European Communities 
indicated that its statements to the Panel "commit and engage the European Communities": see response to 
Panel question No. 15.  The Panel accepts that explanation,  for the same reasons as those explained by the Panel 
in US – Section 301 Trade Act , at para. 7.123.  See also, in this regard, paras. 7.269, 7.339, 7.450 and 7.725 of 
the present report. 
131 European Communities' response to Panel question No. 15 quoting Case C-341/95, Bettati , [1998] 
ECR I-4355, para. 20;  which cited Case C-61/94, Commission/Germany [1996] ECR I-4006, para. 52, set out in 
Exhibits EC-13 and EC-14.   WT/DS174/R 
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 7.101  Article 11 of the DSU requires that "a pane l should make an objective assessment of the 
matter before it, including an objective assessment of  the facts of the case ...".  In our view, our duty 
to make an objective assessment prohibits us from accepting the interpretation of th e applicability of 
the conditions in Article 12(1) of the Regulati on presented by the European Communities in this 
proceeding, for the reasons set out above.   
7.102  Therefore, the Panel concludes that the Unite d States has made a prima facie case that the 
equivalence and reciprocity conditions in Article 12( 1) of the Regulation apply to the availability of 
protection for GIs located in third countries, including WTO Members.  In other words, the registration procedure in Articles 12a and 12b is no t available for GIs located in third countries, 
including WTO Members, that do not satisfy th e conditions in Article 12(1).  The European 
Communities has not succeeded in rebutting that case.     
7.103  The Panel has evaluated the European Communitie s' interpretation of the applicability of the 
equivalence and reciprocity conditions and not found it reflected in the text of the Regulation.  Had 
this interpretation been reflected in the text of th e Regulation, the Panel could have reached a different 
conclusion which would have rendered it unnecessary to continue with an examination of the 
consistency of those conditions with th e provisions of the covered agreements. 
(b) National treatment under the TRIPS Agreement 
(i) Main arguments of the parties 
7.104  The United States claims that the Regulation is inconsis tent with Article 3.1 of the TRIPS 
Agreement and Article 2(1) of the Paris Conventio n (1967), as incorporated by Article 2.1 of the 
TRIPS Agreement, because it imposes conditions of reciprocity and equivalence  on the availability of 
protection.  National treatment requires protection of the intellectual property of other Members' 
nationals regardless of how those other Members tr eat their own nationals.  National treatment does 
not allow a Member to require that other Members a dopt particular standards or procedural rules as a 
condition for protecting their nationals ' intellectual property.  This is underscored by Article 1.1 of the 
TRIPS Agreement which provides that Members are not  obligated to select any particular means of 
implementation over another.  There is a wide va riety of mechanisms used to implement the GI 
obligations and one Member cannot  require a particular method of implementation as a condition for 
protecting the GI rights of other Members' nationals.
132  
7.105  The United States argues that the conditions in  Article 12(1) of the Regulation apply to 
nationals because EC nationals are permitted to register their home-based EC GIs but U.S. nationals 
(and nationals of most other WTO Members) are currently not able to register their home-based U.S.  
GIs.133  The distinction between the location of a geographical area and the nationality of the right 
holder is not meaningful as right holders are ove rwhelmingly nationals of the place where their 
respective GIs are lo cated.  There is an obvious link and close relationship between the nationality of 
the persons who would seek GI protect ion for agricultural products a nd foodstuffs and the territory of 
the Member in which they are growing or producin g such products, which is supported by data on the 
applicants for certification marks in the United States.134  The European Communities is a "separate 
customs territory" within the meaning of footnot e 1 to the TRIPS Agreement and, as such, its 
                                                      
132 United States' first written submission, paras. 35, 42, 46, 48 and 49. 
133 United States' first written submission, paras. 59, 65  and 76.  The United States also cites the GATT 
Panel report on US – Malt Beverages in support of an argument that it is not relevant that certain EC nationals 
with GIs based outside the EC might  be faced with the same conditions because nationals of other WTO 
Members are entitled to the treatment accord ed to the most-favoured EC nationals. 
134 United States' first oral statement, paras. 22-27;  response to Panel question No. 27;  rebuttal 
submission, para. 26.  WT/DS174/R 
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 "nationals" are persons domiciled in its territory or legal persons who have  a real and effective 
industrial and commercial establishment in its territory.135  As a practical matter, any commercial 
entity growing agricultural products or processing f oodstuffs in an EC member State will set up a 
legal entity under the laws of that EC member State for that purpose.136  The Regulation protects 
indications of source, for which th e relevant persons are "interested parties" defined in Article 10 of 
the Paris Convention (1967) to include any local ly established producer, regardless of nationality.137 
The April 2003 amending Regulation itself equates nati onals with persons resi dent and established in 
a Member with respect to the right of objection.138 
7.106  The United States argues that the conditions in Ar ticle 12(1) of the Regulation accord neither 
the same protection nor no less favourable treatment to non-EC nationals because they are currently 
unable to register their home-based GIs.  The only wa y that they might be able to register home-based 
GIs in the European Communities is for their countries to grant reciprocal GI protection for 
agricultural products and foodstuffs from the Europ ean Communities and adopt an equivalent system 
of GI protection.  The explicit purpose of the Re gulation is to bestow significant commercial and 
competitive advantages through the registration of GI s, including higher profits, the right to use a 
label, rights to prevent uses by third parties, enforcement and guarantees against the GI becoming 
generic.139  This amounts to a denial of "effective eq uality of opportunities" with respect to the 
protection of GIs.140 
7.107  The United States argues that jurisprudence on Article III:4 of GATT 1994 offers useful 
guidance in the interpretation of Article 3.1 of the TRIPS Agreement.  The broad and fundamental 
purpose of Article III is to avoid protectionism in th e application of tax and regulatory measures.  This 
is easily extrapolated to the TRIPS Agreement in which the national treatment obligation is intended 
to avoid protectionism with respect to the protecti on of intellectual property ri ghts.  Like the measures 
considered in previous disputes under Article III, th e Regulation at issue in this dispute has a plain 
protective structure in that it systematically denies advantages to nationals producing in their country 
of nationality where that country does not satisfy  the conditions of reciprocity and equivalence.141 
7.108  The United States argues that the obligations in Article III:4 of GATT 1994 are separate from 
those in Article 3.1 of the TRIPS Agreement and Arti cle 2 of the Paris Convention (1967) and that the 
European Communities must satisfy both sets of obligations.142  The lack of a general exception like 
Article XX of GATT 1994 is not re levant to whether there is de facto  discrimination under the TRIPS 
Agreement or to the interpretation of  Article 3 of the TRIPS Agreement.143 
7.109  The United States also claims that the Regula tion imposes a requirement of establishment in 
the European Communities which is inconsistent w ith Article 2(2) of the Paris Convention (1967) 
because a foreign national can only register a GI for a product if he is producing or processing it in the 
European Communities.144   
7.110  The European Communities responds that this claim must fail .  Its first defence is that it 
does not, in fact, apply the conditions in Article 12( 1) of the Regulation to geographical areas located 
in WTO Members.  That defence has been c onsidered in the previous sub-section.   
                                                      
135 United States' response to Panel question No. 23;  rebuttal submission, paras. 27-31. 
136 United States' response to Panel question No. 22;  rebuttal submission, para. 32. 
137 United States' first written submission, para s. 38-39;  rebuttal submission, para. 33. 
138 United States' second oral statement, para. 9. 
139 United States' first written submission, paras. 58, 61 and 62;  response to Panel question No. 31. 
140 United States' response to Panel question No. 101. 
141 United States' first written submission, paras. 69-75. 
142 United States' rebuttal submission, para. 42. 
143 United States' response to Panel question No. 103. 
144 United States' first written submission, paras.  84-85;  rebuttal submission, paras. 84-86. WT/DS174/R 
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 7.111  The European Communities does not contest that national treatment under the TRIPS 
Agreement applies to more extensive protection gr anted in respect of intellectual property rights 
addressed in the TRIPS Agreement.
145   
7.112  The European Communities argues that the conditio ns in Article 12(1) of the Regulation do 
not depend on nationality .  The Regulation sets out two procedures for registration:  one for 
geographical areas located within the European Communities and one for those located outside the 
European Communities.  Whether the geographical ar ea is located within or outside the European 
Communities is in no way linked to the question of the nationality of the producers concerned.146  
This may concern the origin of the product but has nothing to do with the nationality of the producer, 
which is simply of no relevance for the registration of the GI.147  There are no legal requirements 
which ensure that applicants for GIs for geogra phical areas located in the European Communities are 
always, or usually, EC nationals.148  There is no reason why a foreign national cannot produce 
products in accordance with a product specification in  a GI registration located in the European 
Communities, and there are examples of foreign co mpanies which have invested in the European 
Communities in this way.149  If an applicant or user sets up a lega l entity in the geographical area, that 
is simply a practical consequence of the fact that products must be produced in accordance with 
product specifications.150  Nationality is determined by the laws  of each State and is not simply a 
matter of domicile or establishment, which is highlighted by the specific rules in Article 3 of the Paris 
Convention (1967) and footnote 1 to the TRIPS Agreement which would otherwise be unnecessary.151  
The European Communities is not a "separate custom s territory" within the meaning of footnote 1 to 
the TRIPS Agreement.152  The meaning of "interested parties" in Article 10(2) of the Paris Convention 
(1967) is inapplicable in Article 22 of the TRIPS Agreement.153  Nationality is not linked to the points 
of attachment but must be given a uniform meaning for all intellectual property rights.154  T h e  
Regulation does not require any comparison of  nationals because it does not contain any 
discrimination on the basis of nationality.155 
7.113  The European Communities argues that the exis tence of different procedures which apply 
according to location of geographical areas is not sufficient to show less favourable treatment but 
rather there must be a substantive difference be tween those provisions which entails less favourable 
treatment.  A measure would have to modify the conditions regarding the pr otection of intellectual 
property rights within the meaning of the TRIPS Agreement to the detrimen t of foreign nationals.156 
7.114  The European Communities argues that the ju risprudence on Article III:2 of GATT 1994 is 
not relevant to the present dispute because of diffe rences between paragraphs 2 and 4 of Article III 
and between Article III and Article 3.1 of the TRI PS Agreement.  There is no general concept of 
discrimination common to all WTO agreements.  There has never been a de facto  application of 
Article 3.1 and the  concept of conditions of co mpetition is not easily transposable to the TRIPS 
Agreement. Whilst it may be possible under certain circumstances that measures which are neutral on 
their face accord less favourable treatment to nationals, the Panel shoul d take account of the 
                                                      
145 European Communities' response to Panel question No. 111. 
146 European Communities' first written submission, paras. 123-126. 
147 European Communities' first oral statement, para s. 46-47;  response to Panel question No. 106. 
148 European Communities' response to Panel question No. 22. 
149 European Communities' rebuttal submission, paras. 45-48; second oral statement, paras. 28-30; 
response to Panel question No. 106. 
150 European Communities' response to Panel question No. 107;  second oral statement, paras. 29-30.   
151 European Communities' response to Panel question No. 23;  rebuttal submission, paras. 37-40. 
152 European Communities' rebuttal submission, para. 35. 
153 European Communities' response to Panel question No. 24. 
154 European Communities' response to Panel question No. 26. 
155 European Communities' response to Panel question No. 101 and comments on that response.   
156 European Communities' second oral statement, pa ras. 39-41;  response to Panel question No. 113.  WT/DS174/R 
 Page 41 
 
 
 following:  (1)  the present case relates primarily to the origin of goods which is already dealt with 
more appropriately in the context of Article  III:4 of GATT 1994, not the TRIPS Agreement; (2) 
de facto  discrimination is a notion closely related to preventing circumvention of national treatment 
obligations, which does not exist wh en the specific issue is dealt with in other national treatment 
provisions, such as those of GATT; and (3) the na tional treatment provisions of GATT and the TRIPS 
Agreement should not systematically overlap.  In  addition, the TRIPS Agreement does not contain 
any provision corresponding to Article XX of GA TT 1994 and it would not seem appropriate for a 
measure justified on the basis of Article XX to be found incompatible with the covered agreements on 
the basis of a de facto  application of TRIPS national treatment.157     
(ii) Main arguments of third parties 
7.115  Brazil submits that the equivalence and recipr ocity conditions in the Regulation are 
inconsistent with national treatme nt under Article 3.1 of the TRIPS Agreement.  In most cases under 
the Regulation, discrimination according to geograp hical areas is discrimination between nationals.158  
7.116  Canada submits that the equivalence and recipr ocity conditions in the Regulation are 
inconsistent with national treatment under Artic les 2.1 and 3.1 of the TRIPS Agreement.  
Discrimination on the basis of geographical area di scriminates on the basis of nationality because of 
the "simple and incontestable" reality that EC nati onals are likely to register for protection of GIs 
located in the European Communities and non-EC nationals are likely to register for protection of GIs located outside the European Communities.  The exp licit requirement that the physical production of a 
good that qualifies for a GI take place in the area i ndicated by the GI, means that an applicant for a GI 
located in the European Communities will, in all pr obability be a national of an EC member State.  
The treatment of "nationals" unde r the TRIPS Agreement extends de jure  to geographical area.
159 
7.117  China considers that "nationals" within the meaning of the TRIPS Agreement includes 
natural persons who are domiciled, or legal persons who have a r eal and effective industrial and 
commercial establishment, in that Member.160 
7.118  Colombia considers that any distinction that in an y way identifies the GIs of the European 
Communities clearly entails a violati on of national treatment obligations.161 
7.119  India considers that the only valid interpretation of "treatment with regard to the protection " 
in Article 3.1 of the TRIPS Agreement is that no less favourable treatment to  nationals of other WTO 
Members cannot be provided unless no less favourable tr eatment is also provided to the GIs for which 
they apply, whether located in  the European Communities or in other WTO Members.  The only 
available exceptions are found in Article 3.2.162 
7.120  Mexico considers that the equivalence and reciproc ity conditions prevent nationals of other 
WTO Members enjoying the protection afforded by th e Regulation, which is contrary to the national 
treatment principle in Article 3.1 of the TRIPS Agreement.163 
7.121  New Zealand submits that the term "nationals" clear ly has a geographical connotation in the 
context of the TRIPS Agreement.  Article 3 of the Paris Convention (1967) sets out a criterion for 
                                                      
157 European Communities' response to Panel question No. 29;  rebuttal submission, para. 49; second 
oral statement, paras. 33-37;  response to Panel question No. 103.   
158 Annex C, paras. 23 and 34. 
159 Annex C, paras. 57-63. 
160 Annex C, para. 93. 
161 Annex C, para. 101. 
162 Annex C, para. 104. 
163 Annex C, para. 110. WT/DS174/R 
Page 42  
 
 eligibility for protection to which the definition of "nationals" in Article 1. 3 of the TRIPS Agreement 
refers.  Footnote 1 to Article 1.3 of the TRIPS Ag reement provides further support.  The definition of 
an applicant in the Regulation includes persons acco rding to their location.  The most favourable 
treatment accorded to EC nationals should be compared with that received by WTO Member 
nationals.  "Less favourable treatment" requires not only a difference in applicable laws but some 
disadvantage as a result of that difference.  At wo rst, the difference means that the benefits of 
registration are entirely unavailable.  At best, it means that other WTO Member nationals are subject to "extra hurdles" and disadvantaged.  As a result,  they do not have the same opportunities to protect 
their GIs through registration as do EC nationals.  The individual's right to apply for protection is 
conditioned on factors over which the applicant has no control.  The advantages granted by 
registration include those under Article 13 a nd, according to the preamble, higher incomes.
164   
7.122  Chinese Taipei submits that the equivalence and reci procity conditions violate the national 
treatment obligation in Article 3.1 of the TRIPS Ag reement and Article 2(1) of the Paris Convention 
(1967).  It recalls that national treatment under the TRIPS Agreement applies to "nationals" and that 
the European Communities compares EC nationals and non-EC nationals with GIs located in the 
European Communities.  It treats them complete ly independently of EC  nationals and non-EC 
nationals with GIs located outside the European Co mmunities.  This essentially is an argument that 
the European Communities can establis h a separate set of rules for, and discriminate against, non-EC 
GIs as it wishes.  Chinese Taipei submits that the Panel should examine whether any person, whether 
an European Communities or a non-EC national, with a GI, whether located in the European 
Communities or outside the European Communities, receives treatment less favourable than that 
accorded to an EC national with a GI located in the European Comm unities.  Footnote 1 to the TRIPS 
Agreement applies to the European Comm unities as a separate customs territory.165 
(iii) Consideration by the Panel 
National treatment obligations in the TRIPS Agreement  
7.123  These claims are made under two national treatment  obligations: one found in Article 3 of the 
TRIPS Agreement, which forms part of the text of th at agreement, and the other found in Article 2 of 
the Paris Convention (1967) as incorporated by Article 2.1 of th e TRIPS Agreement.  The Panel will 
first consider the claim under Article 3.1 of the TRIPS Agreement. 
7.124  Article 3.1 of the TRIPS Agreement provides as follows: 
"1. Each Member shall accord to the nationals of other Members treatment no 
less favourable than that it accords to its ow n nationals with regard to the protection 
of intellectual property, subject to the exceptions already provided in, respectively, 
the Paris Convention (1967), the Berne C onvention (1971), the Rome Convention or 
the Treaty on Intellectual Property in Respect  of Integrated Circuits.  ..." [footnote 3 
omitted] 
7.125  Two elements must be satisfied to establish an inconsistency with this obligation:  (1) the 
measure at issue must apply with regard to the protection of intellectual property;  and (2) the 
nationals of other Members must be accorded "l ess favourable" treatment than the Member's own 
nationals.  The Panel will address each of these elem ents in turn.  The parties do not agree on the 
meaning of "nationals" for the purposes of this clai m.  The Panel will therefore address that issue in 
the course of its consideration of the second element of this claim.  
                                                      
164 Annex C, paras. 130-132. 
165 Annex C, paras. 168-172.  WT/DS174/R 
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 Protection of intellectual property  
7.126  The national treatment obligation in Article 3 of  the TRIPS Agreement applies "with regard to 
the protection of intellectual property".  Footnote 3 provides an inclusive definition of the term "protection" as used in Articles 3 and 4.  It reads as follows: 
"For the purposes of Articles 3 and 4, 'protection' shall 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." 
7.127  Article 1.2 explains the term "intellectual property": 
"2. For the purposes of this Ag reement, the term 'intellectual property' refers to 
all categories of intellectual property that ar e the subject of Sections 1 through 7 of 
Part II."   
7.128  Turning to the Regulation, Article 12(1) refers to how the Regulation "may apply", which is a 
reference to the availability of intellectual property rights in relation to "designations of origin" and 
"geographical indications", as defined in the Regula tion.  It is not disputed that "designations of 
origin" and "geographical indications", as defined in the Regulation, fall within the category of 
"geographical indications", the subject of Section 3 of Part II, and therefore part of a category of 
intellectual property within the meaning of  Article 1.2 of the TRIPS Agreement. 
7.129  Therefore, this claim concerns the "protecti on" of intellectual property, as clarified in 
footnote 3 to the TRIPS Agreement, within the scope  of the national treatment obligation in Article 3 
of that Agreement.     
7.130  It is not necessary to show that the Regulation implements the minimum standards in Part II 
of the TRIPS Agreement for the purposes of these claims.  National treatment is required with regard to the protection of intellectual property, even wher e measures provide a higher level of protection.   
Less favourable treatment accorded to the nationals of other Members
 
Less favourable treatment 
7.131  The Panel now examines the second element of th is claim which is whether the nationals of 
other Members are accorded less favourable tr eatment than the Eur opean Communities' own 
nationals.  It is useful to recall that Article 3.1 of the TRIPS Agreement combines elements of national 
treatment both from pre-existing intellect ual property agreements and GATT 1994.166  Like the pre-
existing intellectual property conven tions, Article 3.1 applies to "na tionals", not products.  Like 
GATT 1994, Article 3.1 refers to " no less favourable" treatment, not th e advantages or rights that laws 
now grant or may hereafter grant, but it does not refe r to likeness.  This combination of elements is 
reflected in the preamble to the TRIPS Agre ement which explains the purpose of the "basic 
principles" in Articles 3 and 4 (a term highlighted in the title of Part I) as follows: 
                                                      
166 Three of these national treatment obligations ar e incorporated in the TRIPS Agreement itself: 
Article 2 of the Paris Convention (1967) (considered belo w at paras. 7.214 and following), Article 5 of the 
Berne Convention (1971) and Article 5 of the IPIC Treaty, which are incorporated by Articles 2.1, 9.1 and 35 of 
the TRIPS Agreement, respectively. WT/DS174/R 
Page 44  
 
 "Recognizing , to this end, the need for new rules and disciplines concerning:  
(a) the applicability of the basic principles of GATT 1994 and of relevant 
international intellectual propert y agreements or conventions;" 
7.132  The "no less favourable" treatment standard set out  in the first sentence of Article 3.1 of the 
TRIPS Agreement is subject to certain specific ex ceptions, some of them found in the pre-existing 
intellectual property conventions.  None of the excepti ons in Article 3.1 and 3.2 are relevant to this 
dispute.
167  Where these exceptions and limitations do not apply, the language of the basic obligation 
in the first sentence of Article 3.1 is very broad, referring to treatment that is "no less favourable". 
7.133  We recall that the Panel in US – Section 211 Appropriations Act , in a finding with which the 
Appellate Body agreed168, found that the appropriate standard of  examination under Article 3.1 of the 
TRIPS Agreement is that enunc iated by the GATT Panel in US – Section 337 .  That GATT Panel 
made the following findings on the "no less favour able" treatment standard under Article III:4 of 
GATT 1947: 
"The words 'treatment no less favourable' in paragraph 4 call for effective equality of 
opportunities for imported products in respect of the application of laws, regulations 
and requirements affecting the internal  sale, offering for sale, purchase, 
transportation, distribution or use of products.  This clearly sets a minimum permissible standard as a basis."
169   
7.134  Therefore, the Panel will examine whether the difference in treatment affects the "effective 
equality of opportunities" between the nationals of other Members and the European Communities' 
own nationals with regard to the "protection" of  intellectual property rights, to the detriment of 
nationals of other Members.   
7.135  The interpretation of the "no less favourable " treatment standard under other covered 
agreements may be relevant in interpreting Article 3.1 of the TRIPS Agreement, taking account of its 
context in each agreement including, in particular, any differences arising from its application to like 
products or like services and service s uppliers, rather than to nationals.170 
7.136  Under Article III:4 of GATT 1994, the Appellate Body in US – FSC (Article 21.5 – EC)  has 
explained its approach to the examination of whether measures affecting the internal sale of products 
accord "treatment no less favourable" as follows: 
"The examination of whether a measure involves 'less favourable treatment' of 
imported products within the meaning of  Article III:4 of the GATT 1994 must be 
grounded in close scrutiny of the 'fundamental thrust and effect of the measure itself'.  
This examination cannot rest on simple assertion, but must be founded on a careful 
analysis of the contested measure and of its implications in the marketplace.  At the 
                                                      
167 Article 24.9 also provides that there shall be no obligation under this Agreement to protect GIs 
which are not or cease to be protected in  their country of origin or which have  fallen into disuse in that country. 
168 See the Panel report on US – Section 211 Appropriations Act , at paras. 8.131-8.133 and the 
Appellate Body report, at para. 258.   
169 GATT panel report in US – Section 337 , at para. 5.11.   
170 In US – Section 211 Appropriations Act , the Panel considered that the jurisprudence on Article III:4 
of GATT 1994 may be useful in interpreting Article 3.1 of the TRIPS Agreement due to the similarity of their 
language: see the Panel report at para. 8.129;  Appellate Body report at para. 242.    WT/DS174/R 
 Page 45 
 
 
 same time, however, the examination need not be based on the  actual  effects  of the 
contested measure in the marketplace."171 
7.137  Similarly, in the present dispute, the Panel c onsiders it appropriate to base its examination 
under Article 3.1 of the TRIPS Agreement on the funda mental thrust and effect of the Regulation, 
including an analysis of its terms and its prac tical implications.  However, as far as the TRIPS 
Agreement is concerned, the relevant practical impl ications are those on opportunities with regard to 
the protection of intellectual property.  The imp lications in the marketplace for the agricultural 
products and foodstuffs in respect of which GIs ma y be protected are relevant to the examination 
under Article III:4 of GATT 1994, consid ered later in this report.   
7.138  The parties disagree on whether the equivalence a nd reciprocity conditions in Article 12(1) of 
the Regulation apply to GIs located in other WTO Members outside the European Communities.  The 
Panel recalls its finding at paragraph 7.102 that they do so apply.   
7.139  Although the parties disagree on whether the e quivalence and reciprocity conditions in 
Article 12(1) of the Regulation discriminate in a ma nner inconsistent with the covered agreements, it 
is not disputed that those conditions accord less favour able treatment to persons with interests in the 
GIs to which those conditions apply.172  The Panel considers that those conditions modify the 
effective equality of opportunities to obtain protect ion with respect to intellectual property in two 
ways.  First, GI protection is not available under the Regulation in respect of geographical areas located in third countries which the Commission has not recognized under Article 12(3).  The European Communities confirms that the Commission has not rec ognized any third countries.  
Second, GI protection under the Regulation may become  available if the third country in which the GI 
is located enters into an international agreement or  satisfies the conditions in Article 12(1).  Both of 
those requirements represent a significant "extra hurdl e" in obtaining GI protection that does not apply 
to geographical areas located in the European Communities.
173  The significance of the hurdle is 
reflected in the fact that currently no third country  has entered into such an  agreement or satisfied 
those conditions. 
7.140  Accordingly, the Panel finds that the equiva lence and reciprocity conditions modify the 
effective equality of opportunities with respect to th e availability of protection to persons who wish to 
obtain GI protection under the Regulation, to the detr iment of those who wish to obtain protection in 
respect of geographical areas located in third co untries, including WTO Members. This is less 
favourable treatment. 
Nationals of other Members 
7.141  The issue for the Panel is how the less favour able treatment accorded under the Regulation 
with respect to the availability of protection affect s the treatment accorded to the nationals of other 
Members and that accorded to the European Communities' own nationals for the purposes of 
                                                      
171Appellate Body Report, US – FSC (Article 21.5 – EC) , para. 215, quoting reports in Korea – Various 
Measures on Beef , para. 142, and Japan – Alcoholic Beverages II , at 110. 
172 United States' first written submission, paras. 57-6 0.  Note that the European Communities asserts 
only that the product specifications and inspection regimes for individual GIs do not constitute less favourable treatment.  With respect to the equivalence and reciprocity conditions, it asserts that it does not apply them and 
that they do not depend on nationality, but not that they do not accord less fa vourable treatment where they 
apply:  see its first written submission, paras. 113-126, an d paras. 62-69.  It also concedes that they constitute 
less favourable treatment for the purposes of Article III: 4 of GATT 1994, but does not consider that the meaning 
of the phrase is necessarily the same as in Article 3.1 of the TRIPS Agreement:  see its responses to Panel 
question Nos. 94(a) and 113. 
173 This was also the approach of the Appellate Body in US – Section 211 Appropriations Act  to an 
"extra hurdle" imposed only on foreign nationals:  see para. 268 of its report.  WT/DS174/R 
Page 46  
 
 Article 3.1 of the TRIPS Agreement.  Article 1.3 de fines "nationals of other Members" in order to 
determine the persons to whom Members shall ac cord treatment, which includes national treatment.
174  
It provides as follows: 
"3. Members shall accord the treatment pr ovided for in this Agreement to the 
nationals of other Members.  In respect of the relevant intellectual property right, the 
nationals of other Members shall be unders tood as those natural or legal persons that 
would meet the criteria for eligibility for protection provided for in the Paris Convention (1967), the Berne Convention (1971), the Rome Convention and the 
Treaty on Intellectual Property in Respect of Integrated Circuits, were all Members of 
the WTO members of those conventions. (...)" [footnote 1 omitted] 
7.142  In respect of the intellectual property rights relevant  to this dispute, it is not disputed that the 
criteria for eligibility for protection that apply ar e those found in the Paris Convention (1967).  
Articles 2 and 3 of the Paris Convention (1967) pr ovide how nationals and persons assimilated to 
nationals are to be treated.  In the Panel's view, th ese are "criteria for eligibility for protection" for the 
purposes of the TRIPS Agreement.
175    
7.143  Articles 2 and 3 of the Paris Convention (1967)  refer to "nationals" without defining that 
term.  Article 3 of the Paris Convention (1967) provides for the assimilation of certain persons to 
nationals as follows: 
"Nationals of countries outside the Union who are domiciled or who have real and 
effective industrial or commercial establis hments 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."176 
7.144  The rule in Article 3 of the Paris Convention (1967) only applies to nationals of countries 
outside the Paris Union.  According to Article 1.3 of the TRIPS Agreement, these criteria shall be 
understood as if "all Members of the WTO" were me mbers of that Convention.  Therefore, for the 
purposes of the TRIPS Agreement, that rule of assimi lation only applies to persons that are nationals 
of a country that is not a WTO Member .  It does not apply to nationals of other WTO Members, such 
as the United States. Therefore, it does not mean that  all persons who have a domicile or a real and 
effective industrial and commercial establishment in  a WTO Member are necessarily nationals of that 
WTO Member for the purposes of the TRIPS Agreement. 
7.145  Otherwise, the Paris Convention (1967) contains no common rules on the meaning of 
"nationals".  It can be noted that the original  Paris Convention of 1883 appeared to use the term 
"subjects and citizens" and "natio nals" interchangeably.  The phrase "subjects and citizens" was 
                                                      
174 This can be contrasted with the detailed definitions in Article XXVIII of GATS of "natural person 
of another Member", "juridical person of another Member", "juridical person" and a juridical person "owned" or "controlled" by persons of a Member or "affiliated" with another person. 
175 Article 1.3 of the TRIPS Agreement also refers to the criteria for eligibility for protection in the 
Berne Convention (1971).  It can be observed that the title inserted to facilitate identif ication of Article 3 of the 
Berne Convention (1971), which concerns authors who are na tionals or assimilated to nationals, also refers to 
"Criteria of Eligibility for Protection".  This is consiste nt with the Panel's view of the criteria in the Paris 
Convention (1967) for the purposes of the TRIPS Agreement. 
176 These are the same criteria at those used in footnote 1 to the TRIPS Agreement, set out at 
para. 7.154 below.  WT/DS174/R 
 Page 47 
 
 
 replaced with "nationals" in Articles 2 and 3 in th e Hague Act of 1925 without , apparently, changing 
the scope of the Convention.177   
7.146  A leading commentator on the Paris Conventio n (1967) explains the practice under that 
Convention as follows: 
"With respect to natural  persons, nationality is a qua lity accorded or withdrawn by 
the legislation of the State whose nationality is claimed.  Therefore, it is only the 
legislation of that State which can defi ne the said nationality and which must be 
applied also in other countries where it is invoked. 
"With respect to legal  persons, the question is more complicated because generally no 
'nationality' as such is granted to legal pe rsons by existing legislations.  Where these 
legal persons are the State themselves, or State enterprises, or other bodies of public 
status , it would be logical to accord to them the nationality of their country.  With 
regard to corporate bodies of private status , such as companies and associations, the 
authorities of the countries where application of the Convention is sought will have to 
decide on the criterion of 'nationality' which they will employ.  This 'nationality' can 
be made dependent upon the law according to which these legal persons have been 
constituted, or upon the law of their actual headquarters, or even on other criteria.  
Such law will also decide whether a legal person or entity really exists." [original 
footnote omitted]178   
7.147  This is consistent with the pos ition under public international law.179  With respect to the 
meaning of "nationals of other Members" for the purposes of the TRIPS Agreement, WTO Members 
have, through Article 1.3 of the TRIPS Agreement, incorporated the meaning of "nationals" as it was 
understood in the Paris Convention (1967) and under pub lic international law.  With respect to natural 
persons, they refer first to the law of th e Member of which nationality is claimed.180  With respect to 
legal persons, each Member first applies its  own criteria to determine nationality.  
7.148  The meaning of "nationals" under public internati onal law is also relevant to the meaning of a 
Member's "own nationals".  Whilst the TRIPS Agre ement does not create obligations for a Member to 
accord treatment to its own nationals, it does refer to the treatment that each Member accords to its 
own nationals as the benchmark for its obligation to accord national treatment under Article 3.1, as 
well as under the other national treatment obligations in corporated by reference, including Article 2 of 
the Paris Convention (1967).  To that extent, the way in which a Member defines its own nationals 
                                                      
177 Article 2 originally provided that "subjects a nd citizens" will enjoy the advantages granted to 
"nationals".  As early as 1897, the Chair of the Brussels  Diplomatic Conference commented that, in practice, the 
rights conferred on physical persons must belong equally to juridical persons and it seemed to be unanimously 
recognized that this was the scope of the Convention, see Actes de Paris , 1897, 3rd session, p. 196. "Subjects and 
citizens" was replaced with the word "nationals" at th e 1925 Hague Diplomatic Conference because, in its 
brevity, it was considered more comprehensive, and was c onsistent with the terminology of the Convention:  see 
Actes de Paris , 1925, report of drafting committee, p. 538.   
178 See Bodenhausen, supra  at note 66, pp. 27-28. 
179 See, for example, A.A. Fatouros, "National Lega l Persons in Internationa l Law" in R. Bernhardt 
(ed.), Encyclopedia of Public  International Law, Volume III (1997) pp. 495-501;  and I. Brownlie, Principles of 
Public International Law (5th edition, Oxford, 1998), p.426, submitted to the Panel by the European 
Communities in Exhibits EC-88 and EC-115, respectively.   
180 With respect to natural persons, the Panel also notes that a State may not be bound to recognize a 
grant of nationality if it does not represent a genuine connection between the natural person and the State granting the nationality:  see the judgement of the International Court of Justice in the Nottenbohm case 
(Liechtenstein v Guatemala)  (second phase), ICJ Reports (1955), 4. WT/DS174/R 
Page 48  
 
 can also be subject to review for the purposes of determining conformity with its national treatment 
obligations under the TRIPS Agreement.     
7.149  The European Communities has explained to the Panel that, with respect to natural persons, 
under the domestic law of the European Communities,  any person who is a national of an EC member 
State is a citizen of the European Union and, accordingly, an EC national.
181  It has explained that, 
with respect to legal persons, the domestic law of the European Communities does not contain a 
specific definition of nationality, but nor does the domestic law of many other WTO Members.182  
However, the European Communities informs the Pane l that any legal person  considered a national 
under the laws of an EC member State would also be an EC national.  The criteria used by the EC 
member States to determine the nationality of a le gal person may vary and include criteria such as the 
place of incorporation and the place of the seat of the company or a combination of such criteria.183   
7.150  The United States has not challenged the crite ria used by the European Communities to 
determine nationality.  The Panel notes that these criteri a appear to be the same as those used in public 
international law.184  Therefore, the Panel can use them to  determine which pers ons are "nationals" 
under Article 3.1 of the TRIPS Agreement. 
7.151  Turning to the Regulation, it is agreed that it do es not, on its face, refer to "nationals".   It 
refers to the location of geographical areas, or GI s.  In theory, there may be foreign citizens or 
corporations who are entitled to use GIs located in  the European Communities and obtain protection  
under the Regulation.  The issue for the Panel is to determine the treatment accorded to the nationals 
of other Members and that accorded to the Eu ropean Communities' own nationals, when such 
treatment depends on the location of GIs.  
Specific definitions of "nationals" 
7.152  The United States argues that there are specific de finitions of "nationals" applicable in this 
dispute, either of which would identify the nationalit y of persons with the location of GIs.  The first 
specific definition would apply to the European Communities and the other would apply to GIs.  The Panel finds that the following graphic, based on one set out in Chinese Taipei's third party submission, 
provides a useful framework for its analysis of this issue.   
1. 3. 
EC national with 
GI located in the EC EC national with 
GI located outside the EC 
2. 4. 
Non-EC national with 
GI located in the EC Non-EC national with 
GI located outside the EC 
 
Graphic 1 
 
                                                      
181 Article 8 of the EC Treaty.   
182 Article 58 of the EC Treaty prov ides that companies or firms form ed in accordance with the law of 
an EC member State and having thei r registered office, central administ ration or principal place of business 
within the European Community shall, for the purposes of Chapter 2 of the EC Treaty on the right of establishment, be treated in the same way as natu ral persons who are nationals of EC member States. 
183 European Communities' response to Panel question No. 105.  It also referred to a criterion based on 
the nationality of controlling shareholders, but the evidence submitted in support does not appear to indicate that this is of relevance to corporate nationality under the TRIPS Agreement. 
184 See supra  at note 179.    WT/DS174/R 
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 7.153  The graphic depicts the four relevant possible combinations of nationality of persons and the 
location of a GI, each in a separate numbered quad rant.  In terms of this  graphic, the Panel's 
conclusion at paragraph 7.102 is that  the conditions of reciprocity and equivalence in Article 12(1) of 
the Regulation apply to the persons in quadrants 3 and 4 only.  There is therefore discrimination 
between the persons in quadrants 1 and 2, on the one hand, and those in quadrants 3 and 4, on the 
other hand. 
7.154  The United States argues that a special regime to  determine nationals applies to the European 
Communities as a separate customs territory Member of  the WTO within the meaning of footnote 1 to 
Article 1.3 of the TRIPS Agreement.  Footnote 1 provides as follows:  
"Footnote 1:  When 'nationals' are referre d to in this Agreement, they shall be 
deemed, in the case of a separate customs territory Member of the WTO, to mean 
persons, natural or legal, who are domiciled or who ha ve a real and effective 
industrial or commercial establishm ent in that customs territory."185 
7.155  If the European Communities is a "separate customs territory Member of the WTO" within 
the meaning of footnote 1, references to its "n ationals" in the TRIPS Agreement mean all persons, 
natural or legal, who are domicil ed or who have a real and e ffective industrial or commercial 
establishment in the European Comm unities, irrespective of the citizenship of an individual or the 
nationality of a corporation under pu blic international law.  Persons  who are entitled to a GI in a 
particular geographical area within the territory of  the European Communities, may correspond to this 
definition of nationals, even if they are foreign citizens or corporations.  This would conflate 
quadrants 1 and 2, to which conditions of reciproc ity and equivalence do not apply, and require any 
comparison of treatment for the purposes of the nationa l treatment obligation to be made with persons 
in either or both of quadrants 3 and 4, to  whom those additional conditions do apply. 
7.156  The European Communities submits that it is not a separate customs territory Member of the 
WTO. 
7.157  The Panel notes that the term "separate customs te rritory" in the text of footnote 1 is qualified 
by the term "Member of the WTO".  The parties re fer us to certain interpretative guidance in the 
WTO Agreement as to the meaning of these terms.   
7.158  The original Members of the WTO are described  in Article XI:1 of the WTO Agreement as 
"[t]he contracting parties to GATT 1947 as of [1  January 1995], and the European Communities".  
This simply reflects the fact that the European Co mmunities is the only original Member that was not 
a Contracting Party to GATT 1947, but does not address the issue whether or not it is a separate 
customs territory Member of the WTO.  The votin g rules in Article IX:1 of the WTO Agreement 
reflect the sui generis  character of the European Communiti es among the Members of the WTO.   
7.159  Accession of new Members to the WTO is possible under Article XII of the WTO 
Agreement, paragraph 1 of which refers to "[a]ny State or separate customs territory possessing full 
autonomy in the conduct of its external commercial re lations and of the other matters provided for in 
this Agreement and the Multilateral Trade Agreements ".  It is not disputed that the European 
Communities is not a State, but it did not accede to  the WTO under the terms of Article XII and the 
terms of that Article are therefore inapplicable to it.   
                                                      
185 These are the same criteria as those used in Ar ticle 3 of the Paris Convention (1967), set out at 
paragraph 7.143 above. WT/DS174/R 
Page 50  
 
 7.160  The first explanatory note to the WTO Agre ement only refers to countries and separate 
customs territories Members of the WTO.
186  The European Communities is not a country, but this 
note might not be relevant if all re ferences to a "country" in the releva nt agreements can be adequately 
understood in relation to the European Communities.187 
7.161  The second explanatory note to the WTO Agreem ent provides guidance where an expression 
in that agreement and the multilateral trade agreements  is qualified by the term "national" in the case 
of a "separate customs territory Member of the WTO".188  Footnote 1 to the TRIPS Agreement is not 
within the scope of this explanatory note becau se it uses the word "national" as a noun and not as a 
qualifying expression.  In any case, the explanat ory note does not indicate if the European 
Communities is a separate customs territory Member of the WTO.   
7.162  The Panel considers these provisions inconclusive  as regards the question before it and must 
therefore interpret the term "separate customs territo ry Member of the WTO" according to the general 
rule of treaty interpretation.  It is not dis puted that the European Communities is a customs 
territory.189    The key word appears to be "sep arate", which can be defined as follows: 
"Put apart, disunite, part, (two or more  persons or things, or one from another); 
detach, disconnect, treat as distinct, (one thing) ; make a division between (two 
things)." [emphasis added]190 
7.163  We highlight the definition "treat as distinct, (one thing)", given that a "separate customs 
territory Member of the WTO" is one thing, and th e word "distinct" corresponds to the term used in 
that phrase in the French and Spanish versions, which are equally authentic.191  It is not disputed that 
all Members of the WTO are separate, or distinct, from one another.  Most Members that are not part 
of a customs union are a customs territory separ ate from other customs territories.  The word 
"separate" would be redundant if this is all it mean t.  Logically, it must indicate a customs territory 
that is separate from another Member in some other way.   
7.164  The context elsewhere in the WTO Agreement bears this out. The term "separate customs 
territory" is used in Article XXVI:5 of GATT 1994192, which treats a separate customs territory as a 
                                                      
186 The first explanatory note provides as follows: 
"The terms 'country' or 'countries' as used in this Agreement a nd the Multilateral Trade 
Agreements are to be understood to include any separate customs territory Member of the 
WTO." 
187 For example, references in the covered agreem ents to "developing countries", "least-developed 
countries", "importing country", "exporting country", "third country" and "country of origin".   
188 The second explanatory not e provides as follows: 
"In the case of a separate customs territory Memb er of the WTO, where an  expression in this 
Agreement and the Multilateral Trade Agreements is qualified by the term 'national', such 
expression shall be read as pertaining to that  customs territory, unless otherwise specified." 
189 This is consistent with the definition of a "customs territory" for the purposes of GATT 1994 in 
Article XXIV:2.   
190 The New Shorter Oxford English Dictionary (1993).  
191 See the final clause of the WTO Agreement. 
192 Article XXVI:5 provides as follows: 
"(a) Each government accepting this Ag reement does so in respect of  its metropolitan territory and 
of the other territories for which it has international responsibility, except such separate customs territories as it shall notify to the Executive Secr etary to the CONTRACTING PARTIES at the time of 
its own acceptance. 
"(b) Any government, which has so notified the Ex ecutive Secretary unde r the exceptions in 
subparagraph ( a) of this paragraph, may at any time give notice to the Executiv e Secretary that its 
acceptance shall be effective in respect of any separate  customs territory or territories so excepted and  WT/DS174/R 
 Page 51 
 
 
 territory for which a GATT Contr acting Party, now a WTO Member193, has international 
responsibility, and is distinguished from a metropolitan te rritory.  It is also found in Article XXXIII of 
GATT 1994.194   
7.165  The object and purpose of the TRIPS Agreemen t includes the conferral of intellectual 
property protection on the nationals of WTO Member s.  Footnote 1 is a deeming provision for the 
purposes of nationality.  This confirms that the reason for the inclusion of footnote 1 was that separate 
customs territories do not confer nationality and, he nce, a supplementary definition was required.   
7.166  The European Communities does not  form a separate part of the territory of a country.  
Rather, the territory of the Eur opean Communities is made up primar ily of the territories in Europe, 
that is, where relevant, the metropolitan territori es, of a group of countries, the number of which 
increased to 25 during this Panel proceeding.195  It is neither a territory part of another country, nor a 
separate territory for which other WTO Members ha ve international responsibility.  The European 
Communities has informed the Panel that it has a citizenship for natural persons, and, generally 
speaking, treats legal persons organized under the laws  of an EC member State as EC nationals under 
its domestic law, as described above.196   
7.167  Therefore, the Panel accepts the European Comm unities' submission that it is not a "separate 
customs territory Member of the WTO" within th e meaning of footnote 1 to the TRIPS Agreement, 
and finds that its nationals, for the purposes of the TR IPS Agreement, are not defined by that footnote.  
The Panel would like to stress that its finding is lim ited solely to footnote 1 of the TRIPS Agreement 
and is not intended to be a finding of gene ral application for othe r covered agreements. 
7.168  The United States also argues that the criteri a for eligibility for protection in the Paris 
Convention (1967), as incorporated by Article 1.3 of  the TRIPS Agreement, include Article 10(2) of 
the Paris Convention (1967).  It argues that Article 10(2) sets out a specific criterion of eligibility of protection in respect of designations of origin  and geographical indications, which defines the 
"nationals of other Members" in respect of those industrial property rights for the purposes of the TRIPS Agreement.  Persons entitled to use a GI in  a geographical area in a WTO Member outside the 
territory of the European Communities may corres pond to this definition of  nationals of other 
Members.  This argument would c onflate quadrants 3 and 4 in the graphic set out earlier, to which the 
conditions of reciprocity and equi valence apply, and require any comparison of treatment for the 
                                                                                                                                                                    
 
such notice shall take effect on  the thirtieth day following the da y on which it is received by the 
Executive Secretary. "(c) If any of the customs territories, in respect of which a contracting party has accepted this 
Agreement, possesses or acquires full autonomy in the conduct of its external commercial relations and 
of the other matters provided for in this Agreement, such territory shall, upon sponsorship through a declaration by the responsible contracting party establishing the above-mentioned fact, be deemed to be 
a contracting party." [footnotes omitted] 
193 Read in accordance with explan atory note 2(a) to GATT 1994. 
194 Article XXXIII provides as follows: 
"A government not party to this Agreement, or a government acting on behalf of a separate customs 
territory possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agr eement, may accede to this  Agreement, on its own behalf or on behalf 
of that territory, on terms to be agreed between such government and the CONTRACTING PARTIES.  
Decisions of the CONTRACTING PARTIES under this paragraph shall be taken by a two-thirds majority." 
195 Under Article 182 of the EC Treaty, the EC memb er States agree to asso ciate with the Community 
the non-European countries and territories which have sp ecial relations with Denmar k, France, the Netherlands 
and the United Kingdom listed in Annex II to the Treaty. 
196 European Communities' response to Panel question No. 105.  WT/DS174/R 
Page 52  
 
 purposes of the national treatment obligation to be made  with persons in either or both of quadrants 1 
and 2, to whom those additional conditions do not apply.  
7.169  The United States observes that the GI obligations in Articles 22 and 23 of the TRIPS 
Agreement refer to the persons entitled to protection as "interested parties" and that Article 10(2) of 
the Paris Convention (1967) sets out persons who shall be deemed an "interested party" for the 
purposes of an obligation related to certain false indications.  Article 10(2) refers inter alia  to 
establishment in the locality or country falsely indi cated.  The United States argues that this provides 
guidance as to the persons who shall be deemed an "interested party" for the purposes of Articles 22 
and 23 of the TRIPS Agreement and, hence, the na tional treatment obligation in Article 3.1.   
7.170  The Panel accepts that an "interested party" is  a person who is entitled to receive protection 
under Articles 22 and 23 of the TRIPS Agreement.  Howe ver, in the Panel's view, Article 10(2) of the 
Paris Convention (1967) does not set out a criterion fo r eligibility for protection.  Article 10(2) is a 
deeming provision for the term "interested party" u sed in Article 9(3) of the Paris Convention (1967), 
as made applicable under Article 10(1).  Once a pe rson has qualified as a national, Article 10(2) may 
provide guidance on whether that person may be treat ed as an interested pa rty for the purposes of 
Articles 22 and 23 of the TRIPS Agreement.  However, Article 10(2) does not set out a criterion for 
eligibility for protection under the Paris Conventio n (1967) for the purposes of Article 1.3 of the 
TRIPS Agreement. 
7.171  Therefore, the Panel rejects the specific definitions of "nationals" advanced by the 
United States and confirms its finding at paragra ph 7.150 as to the criteria that can be used to 
determine which persons are "nationals" for the pur poses of Article 3.1 of the TRIPS Agreement, for 
the purposes of this dispute. 
Formally identical provisions 
7.172  The issue for the Panel remains that of determin ing the treatment accorded to the nationals of 
other Members and to the European Communities'  own nationals.  On its face, the Regulation 
contains formally identical provisions vis-à-vis the na tionals of different Members, with respect to the 
availability of GI protection. 
7.173  It is well recognized that the concept of " no less favourable" treatment under Article III:4 of 
GATT 1994 is sufficiently broad to include situations where the application of formally identical legal 
provisions would in practice accord less favourable treatment.  The GATT Panel in US – Section 337 , 
which considered an intellectual property enforcem ent measure prior to the conclusion of the TRIPS 
Agreement, interpreted the "no less favourab le" standard under Article III:4 as follows:   
"On the one hand, contracting parties ma y apply to imported products different 
formal legal requirements if doing so  would accord imported products more 
favourable treatment.  On the other hand, it also has to be recognised that there may 
be cases where application of formally identical legal provisions would in practice accord less favourable treatment to imported products and a contracting party might 
thus have to apply different legal provisions to imported products to ensure that the 
treatment accorded them is in fact no less favourable."
197 
7.174  The Appellate Body in Korea – Various Measures on Beef , in a dispute concerning formally 
different treatment, quoted this passage and drew the conclusion that "[a] formal difference in 
                                                      
197 GATT panel report in US – Section 337 , para. 5.11.    WT/DS174/R 
 Page 53 
 
 
 treatment between imported and like domestic products is thus neither necessary, nor sufficient, to 
show a violation of Article III:4".198  It then proceeded to apply the relevant standard of examination. 
7.175  The Panel in Canada – Pharmaceutical Patents  also considered that claims against both 
formal and practical discrimination are possible under the TRIPS Agreement, although that dispute 
concerned minimum standards of protection in Part II and not the basic principles in Part I.199 
7.176  We consider that this reasoning applies with equal force to the no less favourable treatment 
standard in Article 3.1 of the TRIPS Agreement.  In  our view, even if the provisions of the Regulation 
are formally identical in the treatment that they accord to the nationals of other Members and to the 
European Communities' own nationals, this is not su fficient to demonstrate that there is no violation 
of Article 3.1 of the TRIPS Agreement.  Whether or not the Regulation accords less favourable 
treatment to the nationals of other Members th an it accords to the European Communities' own 
nationals should be examined instead according to th e standard we set out at paragraph 7.134, namely, 
the "effective equality of opportunities"  with regard to the protection of intellectual property rights.  In 
this examination, we will follow the approach th at we set out at paragraph 7.137, which focuses on 
the "fundamental thrust and effect" of the Regulation. 
Which nationals to compare? 
7.177  The text of Article 3.1 expressly calls for a comparison when it provides that "[e]ach Member 
shall accord to the nationals of other Members treatment no less favourable than that it accords to its 
own nationals" (emphasis added).  Th e question arises as to which nationals  it is appropriate to 
compare.   
7.178  The United States submits that the Panel shoul d compare the treatment of a hypothetical EC 
national with a GI located in the European Communities, and the treatment of a hypothetical 
U.S. national with a GI located in the United States.   This is a comparison of a person in quadrant 1 
with a person in quadrant 4 in the graphic set out earlier. 
7.179  The Panel recalls that the Regulation contains  formally identical provisions vis-à-vis the 
nationals of different Members.  In the absen ce of less favourable treatment based on a formal 
criterion of nationality, or a criterion that fully corre sponds with nationality, the Panel is reluctant to 
compare a hypothetical national of one Member with a national of another Member simply because they both claim rights to the same category of intell ectual property.  This is a very low threshold with 
possibly unforeseen systemic implications for all in tellectual property rights covered by the TRIPS 
Agreement.   
7.180  The United States also submits that there is  discrimination according to nationality on the 
basis of a comparison of the group of the European  Communities' own nationals who wish to obtain 
GI protection under the Regulation, with the group of nationals of other WTO Members who wish to obtain GI protection under the Regulation.  This is  a comparison of the persons in both quadrants 1 
and 3 with the persons in both quadrants 2 and 4 in the graphic set out earlier.   
7.181  The Panel recalls that the standard of ex amination is based on "effective equality of 
opportunities".  It follows that the nationals that ar e relevant to an examin ation under Article 3.1 of 
the TRIPS Agreement should be those who seek oppor tunities with respect to the same type of 
                                                     
 
198 Appellate Body report on Korea – Various Measures on Beef , para. 137.  This view is also 
consistent with the findings of the Appellate Body in its report on EC – Bananas III with respect to the phrase 
"treatment no less favourable" as used in the MFN obligation in relation to trade in services in Article II of 
GATS, at para. 233. 
199 Panel report on Canada – Pharmaceutical Patents , at paras. 7.100-7.105. WT/DS174/R 
Page 54  
 
 intellectual property in comparable situations.
200  On the one hand, this excludes a comparison of 
opportunities for nationals with respec t to different categories of intellectual property, such as GIs and 
copyright.  On the other hand, no reason has been advanced as to why the equality of opportunities 
should be limited a priori to rights with a territorial link to a particular Member.201   
7.182  The Panel therefore considers it appropriate for the purposes of this claim to compare the 
effective equality of opportunities for the group of nationals of other Members who may wish to seek 
GI protection under the Regulation and the group of  the European Communities' own nationals who 
may wish to seek GI protection under the Regulation.  On this approach, there is no need to make a 
factual assumption that every person who wishes to obtain protection for a GI in a particular Member is a national of that Member.
202 
7.183  The European Communities disagrees with this approach.  It argues that the concept of 
de facto discrimination should be limited to cases of  circumvention of obligations, which is 
unnecessary in this dispute because of the applicab ility of the national treat ment obligation under 
GATT 1994.203   
7.184  The Panel is mindful of the need to ensure  a harmonious interpre tation of the national 
treatment obligation within the TRIPS Agreement it self as applied to different intellectual property 
rights.  The fact that circumvention of that obligation may be prevented, uniquely, under GATT 1994 in certain cases concerning geographical indications, does not justify a different interpretation of 
Article 3.1 of the TRIPS Agreement from that whic h would be applicable to all other intellectual 
property rights, which do not have an  inherent link to the territorial origin of a product.  The Panel's 
interpretation preserves internal coherence in the interpretation of national treatment under the TRIPS 
Agreement. 
Comparison of treatment accorded to the nationals of other Members and that 
accorded to the European Communities' own nationals 
7.185  Articles 5 through 7 of the Regulation set out a registration procedure for GIs that refer to a 
geographical area located within the te rritory of the European Communities.
204  Articles 12a and 12b 
                                                      
200 The Appellate Body in EC – Asbestos adopted an analogous approach to the term "like" products in 
Article III:4 of GATT 1994, which it interpreted in terms of the competitive relationship between products:  see 
its report at para. 99. 
201 See the European Communities' responses to Panel question Nos. 25, 101 and 103. 
202 The Panel notes that its approach based on the re spective treatment accorded to groups (of nationals) 
is consistent with an approach based on the respective treatment accorded to groups (of products) contemplated 
by the Appellate Body in EC – Asbestos , in the context of the national treatment obligation in Article III:4 of 
GATT 1994:   
"(...) A complaining Member must still establish th at the measure accords to the group of 'like' 
 imported  products "less favourable treatment" than it accords to the group of 'like'  domestic  
products.  The term 'less favourable treatment' expr esses the general principle, in Article III:1, 
that internal regulations 'should not be applied … so as to afford protection to domestic production'.  If there is 'less favourable treatment' of the group of 'like' imported products, 
there is, conversely, 'protection' of the group of  'like' domestic products.  However, a Member 
may draw distinctions between products which have been found to be 'like', without, for this reason alone, according to  the group of 'like'  imported   products 'less favourable treatment' 
than that accorded to the group of 'like'  domestic   products.  (...)"  at para. 100.   
203 European Communities' rebuttal submission, para. 49;  response to Panel question No. 29. 
204 This is reflected in the fact that under Article 5(4) an application under the procedures set out in 
Articles 5 through 7 shall be sent to the EC member St ate in which the geographical area is located but under 
Article 12a(1) an application under the procedures set ou t in Articles 12a and 12b shall be sent to the authorities 
in the country in which the geographical area is located.  This was confirmed by the European Communities in 
its response to Panel question No. 2.  WT/DS174/R 
 Page 55 
 
 
 set out a registration procedure for GIs that refers  to geographical areas located in third countries, 
including WTO Members.  The conditions in Article  12(1) only apply to the latter procedures and, 
hence, only to GIs that refer to geographical areas located in third countries.   
7.186  There is a link between the location of a geogra phical area to which a GI refers and certain 
persons. Article 5(1) and 5(2) provides that the fo llowing persons may apply for registration of a GI: 
1. Only a group or, subject to certain conditions to be laid down in accordance 
with the procedure provided for in Article 15205, a natural or legal person, shall be 
entitled to apply for registration. 
For the purposes of this Article, 'Group' me ans any association, irrespective of its 
legal form or composition, of producers a nd/or processors working with the same 
agricultural product or foodstuff.  Other interested parties may participate in the 
group. 
2. A group or a natural or legal person ma y apply for registration only in respect 
of agricultural products or foodstuffs whic h it produces or obtains within the meaning 
of Article 2(2)(a) or (b).   
7.187  These definitions of applicants cross-refer to the definitions of designations of origin and 
geographical indications in the Regulation in Ar ticle 2(2)(a) and (b), which provide as follows: 
"2. For the purposes of this Regulation: 
(a) designation of origin : means the name of a region, a specific 
place or, in exceptional cases, a country, used to describe an 
agricultural product or a foodstuff: 
– originating in that region, specific place or country, and 
– the quality or characteristics of which are essentially or 
exclusively due to a particular geographical environment with its inhe rent natural and human 
factors, and the production,  processing and preparation 
of which take place in the defined geographical area; 
(b) geographical indication : means the name of a region, a 
specific place or, in excepti onal cases, a country, used to 
describe an agricultural product or a foodstuff: 
– originating in that region, specific place or country, and – which possesses a specific quality, reputation or other 
characteristics attributable to that geographical origin 
and the production and/or processing and/or preparation of which take place in the defined geographical area."  
                                                     
 
205 The European Commission has laid down in Article 1 of Commission Regulation (EEC) 
No. 2037/93 that applications for registration pursuant to Article 5 of Regulation (EEC) No. 2081/92 may be 
submitted by a natural or legal person not complying with the definition in the second subparagraph of Article 5(1) in exceptional, duly substantiated cases wh ere the person concerned is the only producer in the 
geographical area defined at the time the application is submitted.   WT/DS174/R 
Page 56  
 
 7.188  Registration confers certain protection, but on ly agricultural products or foodstuffs that 
comply with a specification are eligible to "use" a registered GI.  Article 4(2) sets out the minimum 
requirements which must be included in a product specification, which include inter alia  "evidence 
that the agricultural product or the foodstuff origin ates in the geographical area", "a description of the 
method of obtaining the agricultural product or f oodstuff and, if appropriate, the authentic and 
unvarying local methods" and "the details bearing out  the link with the geographical environment or 
the geographical origin" (from items (d), (e) and (f),  respectively).  Any person, and not merely the 
applicant, that produces or obtains the products in accordance with the specification in the registration 
is entitled to use the GI.   
7.189  These provisions create a link between persons, the territory of a particular Member, and the 
availability of protection.  The definition of a "d esignation of origin" requires that the applicant and 
users must produce, process and prepare the produc ts covered by a registration in the relevant 
geographical area, whilst the definition of a "geograp hical indication" requires that the applicant and 
users must carry out at least one, or some combin ation, of these three activities in the geographical 
area, and must do so in accordance with a specification. 
7.190  Accordingly, insofar as the Regulation discrim inates with respect to the availability of 
protection between GIs located in the European Co mmunities, on the one hand, and those located in 
third countries, including WTO Members, on the othe r hand, it formally discriminates between those 
persons who produce, process and/or prepare a pr oduct in accordance with a specification, in the 
European Communities, on the one hand, and tho se persons who produce, process and/or prepare a 
product in accordance with a specification, in thir d countries, including WTO Members, on the other 
hand.   
7.191  The Panel recalls its finding in paragraph 7.182 that it is appropriate for the purposes of this 
dispute to compare the treatment accorded to the group of nationals of other Members who may wish 
to seek GI protection under the Regulation and the group of the European Communities' own 
nationals, who may wish to seek GI protection under the Regulation.   
7.192  The United States argues that there is an extrem ely close fit between a distinction based on 
where a legal person is established and producin g agricultural products and foodstuffs, and a 
distinction based on nationality.
206 
7.193  The European Communities does not deny this.  It  relies on the fact that the Regulation itself 
contains no legal obstacle to foreign nationals ta king advantage of EC geographical indications and 
disputes that any person who is producing a product must necessarily have the nationality of the place 
where the product is produced.207  However, in the Panel's view, that is not dispositive of the issue. 
7.194  The Panel agrees that the vast majority of natural and legal persons who produce, process 
and/or prepare products according to a GI specification within the territory of a WTO Member party to this dispute will be nationals of that Member.  The fact that there may be  cases where such a person 
does not qualify as a national – and none has been brought to its attention – does not alter the fact that 
the distinction made by the Regulation on the basis of  the location of a GI will operate in practice to 
discriminate between the group of nationals of othe r Members who wish to obtain GI protection, and 
the group of the European Communities' own nationa ls who wish to obtain GI protection, to the 
detriment of the nationals of other Members.  This  will not occur as a random outcome in a particular 
case but as a feature of the design and structure of  the system.  This design is evident in the 
Regulation's objective characteristics, in particular , the definitions of "designation of origin" and 
                                                     
 
206 United States' response to Panel question No. 102.  Brazil and Canada expressed the same view:  see 
Annex C, paras. 24 and 47. 
207 European Communities' comment on US responses to Panel question Nos. 102 and 103.    WT/DS174/R 
 Page 57 
 
 
 "geographical indication" and the requirements of th e product specifications.  The structure is evident 
in the different registration procedures.   
7.195  Complete data on the persons who have actua lly availed themselves of protection under the 
Regulation is not available.  Any person who produces, processes and/or prepares a product according 
to the specification in a GI registration is entitled to  use the GI.  Data on the persons who have applied 
for, and obtained, protection under the Regulation an d their respective addresses is available but their 
nationality is not recorded.  However, there is no clear evidence that even a single person who has 
applied for or is entitled to use a registered GI  is not one of the European Communities' own 
nationals. 
7.196  Whilst certain of the European Communities' own nationals may wish to obtain protection for 
GIs located outside the European Communities as well, it cannot seriously be contested that the GIs 
for which nationals of other WTO Members would wish to obtain protection are overwhelmingly 
located outside the European Communities.  Th is is supported by evidence presented by the 
United States showing that the nationality of certa in French, German, Italian, Spanish and U.S. 
holders of certification marks for principally place names registered in the United States is that of the 
country in which the relevant geographical area is located.208   
7.197  The European Communities presen ted evidence intended to sh ow that certain foreign 
nationals have actually obtained protection unde r the Regulation.  The Panel notes that all its 
examples consist of a foreign national, or a corpora tion incorporated under the laws of an EC member 
State, that acquired another corporation incorporat ed under the laws of an EC member State, which 
produces products entitled to GI protection.209  Those subsidiary corpora tions obtaining the benefit of 
protection appear to be the European Communities' own nationals, according to a place of 
incorporation test.  Evidence is not available on th e place of their company seat but such cases appear 
to be rare.  This evidence confirms, rather than c ontradicts, the link between the treatment accorded to 
GIs located in the European Communities and EC nationality.  
7.198  The text of the TRIPS Agreement contains a recognition that discrimination according to 
residence and establishment will be a close substitute for nationality.  The criteria set out in footnote 1 
to the TRIPS Agreement are clearly intended to provide close substitute criteria to determine 
nationality where criteria to determine nationality as  such are not available in a Member's domestic 
law.  These criteria are "domicile" and "real and effective industrial or commercial establishment".  They are taken from the criteria used for the assim ilation of nationals in Article 3 of the Paris 
Convention (1967).  It is clear that, in using these terms, the drafters of footnote 1 of the TRIPS 
Agreement chose terms that were already unders tood in this pre-existing intellectual property 
convention.  Under Article 3 of the Paris Convention (1967), "domic ile" is not generally understood 
to indicate a legal situation, but rather a more or less permanent residence of a natural person, and an 
                                                     
 
208 Set out in Exhibit US-43.  Some of these marks relate to wines which are not a product covered by  
the Regulation at issue. This does not imply any view as  to whether certification marks are an adequate means 
of protecting GIs.   
209 The evidence is as follows:  Mr. Jens-Reidar Larsen, a Norwegian national, acquired a French 
cognac firm in 1928.  Cognac is not a product covered by the Regulation at issue;  Sara Lee Personal Products 
SpA, an Italian corporation under common control wi th Sara Lee Charcuterie SA, a French corporation 
belonging to the Sara Lee group, acquired Al Ponte Prosciutto SRL, an Italian corporation;  Kraft Foods Group, 
which has an Italian subsidiary, acquired the business of Giovanni Invernizzi, an Italian, and partly sold it to 
Lactalis, a French dairy compan y with an Italian subsidiary;  Nestlé sold Vismara, a salami firm, to an Italian 
company.  The persons who acquired GI protection in  these three examples may all be the European 
Communities' own nationals.  The European Communities also refers to the website of a private beer label 
collector who disclaims accuracy but suggests that a Be lgian company used to produ ce a beer with a German 
GI, possibly before the Regulation entered into force.  The Panel considers this example unreliable.  See 
Exhibits EC-36, EC-61, EC-62, EC-63 and EC-89 and the United States' response to Panel question No. 102. WT/DS174/R 
Page 58  
 
 actual headquarters of a legal person.  A "real and effective industrial and co mmercial establishment" 
is intended to refer to all but a sham or ephemeral establishment.
210 
7.199  The object and purpose of the TRIPS Agreement depends on the obligation in Article 1.3 to 
accord the treatment provided for in the Agreement to the nationals of other Members, including national treatment under Article 3.1.  That object  and purpose would be severely undermined if a 
Member could avoid its obligations by simply accord ing treatment to its own nationals on the basis of 
close substitute criteria, such as place of producti on, or establishment, and denying treatment to the 
nationals of other WTO Members who produce or are established in their own countries. 
7.200  Further, the Panel recalls its finding at paragra ph 7.182 and considers that Article 3.1 calls for 
a comparison of the effective equality of opportuni ties for the group of nationals of other Members 
who may wish to seek GI protection under th e Regulation and the group of the European 
Communities' own nationals who may wish to seek GI  protection under the Regulation.  An objective 
assessment of that comparison cannot ignore the di fference in treatment between quadrants 1 and 2 
and quadrants 3 and 4 in the graphic set out earlier. 
7.201  The Panel also notes that the close link between nationality, on the one hand, and residence 
and establishment, on the other, appears to be rec ognized in the Regulation itself.  Article 12d of the 
Regulation accords a right of objection to persons, which the European Communities confirms is a 
reference to persons resident or established outsi de the European Communities, regardless of their 
nationality.
211  Yet the April 2003 amending Regulation, which inserted Article 12d, explained that it 
granted the right of objection to the nationals of other WTO Members.212   
7.202  The European Communities argues that any differe nce in treatment of the nationals of other 
Members is not attributable to the Regulation.  In its view, if a person sets up a legal entity in the area 
where the GI is located, "[i]t is si mply a practical consequence of the fact that products have to be 
produced in accordance with the product specification,  which may require that an important part of 
the production process takes place in the geographical ar ea concerned."  It argues that if, for practical 
considerations related for instance to taxation or la bour law, a person producing in conformity with a 
product specification chooses to set up a legal entity in the area where the geographical area is 
located, this is not related to the Regulation.213     
7.203  The Panel considers that this constitutes part of the fundamental thrust and effect of the 
Regulation, including its practical implications, and that therefore it must be taken into account in 
assessing whether the Regulation accords less favourab le treatment.  Whilst the Regulation does not 
prevent a foreign national from producing goods with in the territory of the European Communities 
which would be entitled to use a GI, the implicati ons of its design and structure on the opportunities 
for protection are such that its different procedur es will operate to accord different treatment to the 
European Communities' own nationals and to the nati onals of other Members, to the detriment of the 
nationals of other Members.214 
                                                      
210 Bodenhausen, supra  at note 66, p. 33, citing Ladas, The International Protection of Industrial 
Property , pp. 187-188, and Roubier, Le Droit de la propriété industrielle  I, pp. 268-269.   This is confirmed by 
the Official Records of the Paris Convention provided to  the Panel by the International Bureau of WIPO and 
quoted in Bodenhausen, ibid., p. 34.  
211 European Communities' first written submission, para. 142. 
212 See paragraph 10 of the recitals to the April 2003 amending Regulation, set out in para. 7.70 above.  
213 European Communities' second oral statement, pa ras. 29-30;  response to Panel question No. 107. 
214 Article 8a of the EC Treaty provid es that every citizen of the Europe an Union shall have the right to 
move and reside freely within the territory of the EC me mber States.  Article 52 (in conjunction with Article 58) 
provides for the progressive abolition of restrictions on the freedom of establishment of nationals of an EC 
member State.  These provisions remove obstacles to persons who wish to produce products according to a GI  WT/DS174/R 
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 7.204  Accordingly, the Panel's preliminary conclusion is that, with respect to the availability of 
protection, the treatment accorded to the group of nationals of other Members is different from, and 
less favourable than, that accorded to the European Communities' own nationals.    
Defences based on systemic considerations 
7.205  The European Communities argues th at the interpretation of the national treatment obligations 
in the TRIPS Agreement and GATT 1994 should not lead to "systematic overlap" between them.   
7.206  The Panel notes that the demonstration of less favourable treatment under each agreement 
remains a distinct exercise since national treatment  under Article 3.1 of the TRIPS Agreement ensures 
effective equality of opportunities fo r nationals with regard to the protection of intellectual property 
rights, whereas national treatment under GATT 1994 ensures equality of conditions of competition 
between products.215  
7.207  The European Communities also argues that one  must take account of the absence in the 
TRIPS Agreement of a general exceptions provisi on analogous to Article XX of GATT 1994.   
7.208  The Panel notes that there is no hierarch y between the TRIPS Agreement and GATT 1994, 
which appear in separate annexes to the WTO Agreem ent.  The ordinary meaning of the texts of the 
TRIPS Agreement and GATT 1994, as well as Article II:2 of the WT O Agreement, taken together, 
indicates that obligations under the TRIPS Agreem ent and GATT 1994 can co-exist and that one does 
not override the other.  This is analogous to the finding of the Panel in Canada – Periodicals, with 
which the Appellate Bo dy agreed, concerning the respecti ve scopes of GATS and GATT 1994.216  
Further, a "harmonious interpretation" does not re quire an interpretation of one that shadows the 
contours of the other.  It is well established that the covered agreements apply cumulatively and that 
consistency with one does not necessaril y imply consistency with them all.217 
7.209  More specifically, the Panel notes that Article 8 of the TRIPS Agreement sets out the 
principles of that agreement.  Article 8.1 provides as follows: 
"1. Members may, in formulating or amending their laws and regulations, adopt 
measures necessary to protect public health and nutrition, and to promote the public 
interest in sectors of vital importance to their socio-economic and technological 
development, provided that such measures ar e consistent with the provisions of this 
Agreement."   
7.210  These principles reflect the fact that the TRI PS Agreement does not generally provide for the 
grant of positive rights to exploit or use certain s ubject matter, but rather provides for the grant of 
negative rights to prevent certain acts.  This fu ndamental feature of intellectual property protection 
inherently grants Members freedom to pursu e legitimate public policy objectives since many 
measures to attain those public policy objectives lie outside the scope of intellectual property rights 
and do not require an exception under the TRIPS Agreement.   
                                                                                                                                                                     
specification within the territory of the European Communities, but apply to the European Communities' own 
nationals only. 
215 See the Appellate Body report on Korea – Various Measures on Beef , paras. 137 and 144  and the 
GATT Panel report on US – Section 337 , para. 5.11.  
216 Panel report on Canada – Periodicals , at para. 5.17; Appellate Body report on Canada – 
Periodicals,  DSR 1997:I, 449, at 465. 
217 See, for example, the Appellate Body report on Argentina – Footwear (EC) , para. 81;  the Appellate 
Body report on Korea – Dairy, para. 74;  and the Panel reports in EC – Bananas III , para. 7.160. WT/DS174/R 
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 7.211  The scope of the national treatment obligation in Article 3.1 of the TRIPS Agreement also 
differs from that of the national treatment obligatio n in Article III:4 of GATT 1994, as it is subject to 
certain exceptions in Articles 3.1, 3.2 and 5, one of which is inspired by the language of Article XX of 
GATT 1994.
218  There is also a series of specific exceptions  in the provisions relating to the minimum 
standards in Part II of the TRIPS Agreement and Pa rt VII contains a provision on security exceptions 
analogous to Article XXI of GATT 1994, but none on general exceptions.   
7.212  For all these reasons, in the Panel's view, th e fact that a general exceptions provision 
analogous to Article XX of GATT 1994 was not incl uded in the TRIPS Agreement has no impact on 
its analysis of Article 3.1.  
Conclusion with respect to Article 3.1 of the TRIPS Agreement  
7.213  Therefore, the Panel concludes that, with respect to the equivalence and reciprocity 
conditions, as applicable to the availability of GI  protection, the Regulation accords treatment to the 
nationals of other Members less favourable than that it accords to the Eu ropean Communities' own 
nationals, inconsistently with Artic le 3.1 of the TRIPS Agreement.  
Article 2 of the Paris Convention (1967)  
7.214  The United States also makes claims under the national treatment obligation set out in 
Article 2 of the Paris Convention (1967).  These cl aims are made under paragraphs 1 and 2 of that 
article, which provide as follows:  
(1) Nationals of any country of the Union shall, as regards the protection of 
industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may he reafter grant, to nationals;  all without 
prejudice to the rights specially provided for by this Convention.  Consequently, they 
shall have the same protection as the latter,  and the same legal remedy against any 
infringement of their rights, provided th at the conditions and formalities imposed 
upon nationals are complied with. 
(2) However, no requirement as to domicile or establishment in the country 
where protection is claimed may be imposed  upon nationals of countries of the Union 
for the enjoyment of any industrial property rights. 
7.215  The text refers to the "countries of the Uni on" for the purposes of identifying States which 
bear the obligation to accord national treatment unde r that provision.  Howe ver, Article 2.1 of the 
TRIPS Agreement obliges WTO Members to comply w ith Articles 1 through 12, and Article 19, of 
that Convention.
219  Therefore, as a WTO Member, the European Communities owes obligations 
under Article 2 of the Paris Convention (1967), as incorporated by Article 2.1 of the TRIPS 
Agreement.   
7.216  With respect to the claim under paragraph 1 of Article 2 of the Paris Convention (1967), as 
incorporated by Article 2.1 of the TRIPS Agreement,  the Panel observes that, unlike Article 3.1 of the 
TRIPS Agreement, Article 2(1) of the Paris Conventi on (1967) refers to "the advantages that ... laws 
now grant, or may hereafter grant" and not to "no less favourable" treatment.  Therefore, the Panel has 
                                                      
218 Article 24.9 of the TRIPS Agreement also provides that there shall be no obligation under the 
TRIPS Agreement to protect geographical indications which are not or cease to be prot ected in their country of 
origin, or which have fallen into disuse in that country. 
219 The Appellate Body report on US – Section 211 Appropriations Act also notes that the obligations 
of countries of the Paris Union under the Paris Convention (1967) are also obligations of WTO Members by 
virtue of Article 2.1 of the TRIPS Agreement, para. 125.    WT/DS174/R 
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 not actually reached a conclusion on this claim.  Ho wever, further findings on this claim would not 
provide any additional contribution to a positive soluti on to this dispute and are therefore unnecessary.   
7.217  With respect to the claim under paragraph 2 of Article 2 of the Paris Convention (1967), as 
incorporated by Article 2.1 of the TRIPS Agreemen t, the Panel does not consider that the Regulation 
contains a requirement of domicile or establishment.220  We have found that the design and structure 
of the Regulation will operate to ensure that persons  who use a protected GI, located in the European 
Communities, will have a domicile or establishm ent within the territory of the European 
Communities.  We have also found that the avai lability of protection for GIs located in third 
countries, including WTO Members, is dependent on whether the third country in which the GI is located satisfies the conditions of equivalence or reci procity or enters into an international agreement 
with the European Communities.  It is irrelevant to  the protection of a GI located in a third country 
whether or not the person who seeks protection h as a domicile or establishment in the European 
Communities.   
7.218  Therefore, the Panel concludes that, with r espect to the availability of protection, the 
Regulation does not impose a requirement as to dom icile or establishment inconsistently with 
Article 2(2) of the Paris Convention (1967), as inco rporated by Article 2.1 of the TRIPS Agreement. 
(c) National treatment under GATT 1994 
(i) Main arguments of the parties 
7.219  The United States claims that the Regulation is incons istent with Article III:4 of GATT 1994 
because it imposes conditions of reciprocity and equivalence on the benefits of registration.  It argues 
that the Regulation applies to products from the European Communities and third countries which are 
like products because the only difference between produc ts that do, and do not, benefit from 
registration without conditions of reciprocity and equivalence, is their origin in the European 
Communities or a third country.
221  It argues that the Regulation is a measure affecting the internal 
sale, offering for sale, purchase, distribution or use   of the imported product because it governs the 
manner in which registered names can be used on products which are sold, offered for sale, 
purchased, distributed or used, it governs use of  the logo which allegedly provides competitive 
advantages and it provides protection for products th at qualify for registered GIs broad protections 
against competitive and disparaging uses a nd against their names becoming generic.222   
7.220  The United States argues that the Regulation accords less favourable treatment to imported 
products because it does not permit registration of GIs on the same conditions as those for products 
from the European Communities but imposes subs tantial and often insurmountable additional 
conditions.223  The Regulation is motivated by the Europ ean Communities' belief that producers of 
products with GI protection fare much better in the marketplace than those whose products do not 
have such protection.224  Registration permits use of the GI and the logo and provides broad protection 
against competing and disparaging uses and against their names becoming generic.225  The effects of 
registration, listed in Article 13(1) of the Regula tion, authorize judicial and administrative authorities 
to issue orders preventing all other products from being promoted or sold accompanied by names or 
labels that fall within the scope of the registrati on.  These include removal of terms that evoke the 
                                                      
220 The Panel recalls its findings at para. 7.198 above on the meaning of those terms as understood 
under Article 3 of the Paris Convention (1967).  
221 United States' first written submission, paras. 99-100. 
222 United States' first written submission, paras. 101-102. 
223 United States' response to Panel question No. 109. 
224 United States' first written submission, para. 97. 
225 United States' first written submission, paras. 103-105. WT/DS174/R 
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 protected GI, which may be an important selling po int for the imported product.  Another effect of 
registration, mentioned in Article 13(3) of the Regulation, prevents names becoming generic and 
thereby losing their status as an identifier of source.
226  The Regulation itself indicates that both the 
intent and the effect of the Regulation is to provi de competitive benefits to products that satisfy the 
registration criteria.227 
7.221  The European Communities  responds that the Regulation is fully compatible with 
Article III:4 of GATT 1994.  It does not contest that products from the European Communities and 
from third countries falling under the scope of the Regulation may be like products , although it 
stresses that this alone does not preclude the Eu ropean Communities from applying the conditions for 
registration to individual GIs.228  It does not contest that the Regulation is a measure affecting the 
internal sale of products.229 
7.222  The European Communities argues th at the Regulation does not accord less favourable 
treatment to imported products because it does not apply the conditions in Article 12(1) to the 
registration of GIs from other WTO Members.230  It concedes that the app lication of those conditions 
would prejudice its obligations  under Article III:4 of GATT 1994.231   
(ii) Main arguments of third parties 
7.223  Brazil argues the GATT– and WTO– underlying principle of national treatment would be 
completely voided of any meaning if it were ma de conditional on requirements of reciprocity and 
adoption of equivalent legislation.232 
7.224  China argues that the different treatment accorded to GIs by the Regulation will amount to 
less favourable treatment if it is found to modi fy the conditions of competition under which like 
imported and EC products compete in the EC ma rket to the disadvantage of imported products.233 
7.225  New Zealand  considers that the complainants have demonstrated all three elements 
constituting a violation of Article III:4 of GATT 1994.   The only issue under debate is whether the 
Regulation confers "less favourable treatment" on imported products.  As the same phrase is used in Article 3.1 of the TRIPS Agreement, all argumen ts raised under that claim apply equally here.
234 
(iii) Consideration by the Panel 
7.226  The Panel notes that the European Communities concedes that the conditions of equivalence 
and reciprocity in Article 12(1) of the Regulation, if applied to WTO Members, are inconsistent with 
Article III:4 of GATT 1994.235  Given that the Panel has found that the Regulation "as such" imposes 
those conditions on the registration of GIs located in other WTO Members, there is no longer any defence before the Panel to the claim that, in th is respect, the Regulation is inconsistent with 
Article III:4 of GATT 1994.  It suffices to recall below that the essential elemen ts of an inconsistency 
with Article III:4 are all met in this claim.  These  elements are the following:  that the imported and 
domestic products at issue are "like products";  that the measure at issue is a "law, regulation, or 
                                                     
 
226 United States' response to Panel question No. 108. 
227 United States' response to Panel question No. 32. 
228 European Communities' first written submission, paras. 195-197. 
229 European Communities' first written submission, para. 194. 
230 European Communities' first written submission, para. 203;  rebuttal submission, para. 212. 
231 European Communities' response to Panel question No. 94. 
232 Annex C, para. 25. 
233 Annex C, para. 95. 
234 Annex C, para. 141. 
235 European Communities' response to Panel question No. 94(a).  WT/DS174/R 
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 requirement affecting their internal sale, offering for sale, purchase, transportation, distribution, or 
use";  and that the imported products are accorded "less favourable" treatment than that accorded to 
like domestic products.236   
7.227  The Regulation sets down requirements concerning the use of certain names in the 
presentation for sale of agricultural products and foodstuffs.237  It is therefore a law or regulation 
affecting the internal sale and offering for sale of  products within the meaning of Article III:4 of 
GATT 1994.  This is not altered by the fact that  the Regulation is also an intellectual property 
measure covered by the TRIPS Agreement sin ce GATT 1994 and the TRIPS Agreement apply 
cumulatively.238   
7.228  The Regulation links the protection of the name of a product to the territory of a particular 
country.239  In the case of "designations of origin", as define d in Article 2 of the Regulation, this is the 
place of production, processing and preparation of the product and, in the case of "geographical indications", as defined in Article 2 of the Regul ation, this is the place of production, processing 
and/or preparation.  It is not disputed that in most  cases these criteria are sufficient to confer origin on 
the products.  Given that the Panel has found that  the protection of names of products from other 
WTO Members is contingent on satisfaction of certain  conditions of equivalence and reciprocity that 
do not apply to the names of products from the European Communities, the Regulation formally 
discriminates between imported prod ucts and products of European Communities origin within the 
meaning of Article III:4 of GATT 1994.   
7.229  The Regulation applies to the names of a wide class of products described in Article 1(1), 
which refers to the large number of agricultural products intended for human consumption referred to 
in Annex 1 to the EC Treaty as well as 13 additio nal types of agricultural products and foodstuffs 
listed in the annexes to the Regulation.  The Eur opean Communities does not contest that there are, 
among this group, "like products" among the im ported products and products of European 
Communities origin.  The European Communities and other WTO Members produce the same types 
of covered agricultural products a nd foodstuffs with GIs that may be eligible for protection.  
Article 13(1)(a) of the Regulation provides that protec tion is provided against use of a name in respect 
of products "comparable to the products registered under that name".  It is axiomatic that one must 
compare apples with apples and oranges with oranges.   In this dispute, it is not contested that 
Tasmanian apples may be like pommes de Savoie
240 and Florida citrus may be like cítricos 
valencianos241 for the purposes of Article III:4 of GATT 1994.   
                                                      
236 These three elements are also set out in the Appellate Body report on Korea – Various Measures on 
Beef at para. 133. 
237 Article 1(1) of the Regulation provides that it "lays down rules on the protection of designations of 
origin and geographical indications of agricultural products ... and of ... foodstuffs ..." and Commission 
Regulation (EEC) No. 2037/93 sets out detailed rules on the application of the Regulation, including use of the 
PDO and PGI logos in the promotion of products (see Exhibit COMP-2).  Article 13(1) of the Regulation sets out uses against which registered names are protected. 
238 The Panel recalls its comment on the order of analysis in para. 7.36 and its findings in para. 7.208, 
that there is no hierarchy between GA TT 1994 and the TRIPS Agreement, which appear in separate annexes to 
the WTO Agreement.  Further, an intellectual property measure was the subject of conclusions under 
Article III:4 of GATT 1947 in  the GATT Panel report on US – Section 337 .  The Panel does not consider that 
the conclusion of the TRIPS Agreement reduced the scope of application of GATT:  see, on the same point with 
respect to GATS, the Appellate Body report on Canada – Periodicals , DSR 1997:I, 449, at 465.  
239 Exceptionally, it may extend across a border of more than one country, see Articles 5(5) and 12a(1) 
of the Regulation. 
240 Registered by Commission Regulation (EC) No. 1107/96, p. 13, Exhibit COMP-3a. 
241 Registered by Commission Regulation (EC) No. 865/2003, Exhibit COMP-4b.i. WT/DS174/R 
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 7.230  In our analysis of the question of "less favourab le treatment", we follow the approach of the 
Appellate Body in Korea – Various Measures on Beef  and US – FSC (Article 21.5 – EC) that this 
standard should be assessed under Article III:4 of  GATT 1994 by examining whether the measures at 
issue modify the conditions of competition between  domestic and imported pr oducts in the relevant 
market to the detriment of imported products.  This examination must closely scrutinize the 
"fundamental thrust and effect of the measure itself" founded on a careful analysis of the contested 
measure and of its implications in the marketplace.
242   
7.231  The Regulation provides in Article 13 that regist ered GIs shall be protected against certain 
commercial uses and other practices.  Registration provides the legal means to prevent the sale and 
offering for sale of products, including competitive products, where they use, imitate or evoke a 
registered GI, which is a substantive advantage conferred on products that comply with the GI 
registration.  Registration does not grant a right to exclude competition, or deny the possibility of sale without a registered GI but, where products, includi ng competitive products, bear an indication that 
falls within the protection granted by registration,  they may be removed from sale.  This is a 
substantive advantage that affects the conditio ns of competition of the relevant products.    
7.232  The declared purposes of the Regulation set out in its preamble include the following, which 
links GIs to demand for products: 
"Whereas, moreover, it has been observed in  recent years that consumers are tending 
to attach greater importance to the quality of foodstuffs rather than to quantity;  
whereas this quest for specific products generates a growing de mand for agricultural 
products or foodstuffs with an identifiable geographical origin;" 
7.233  Agricultural products and foodstuffs from the European Communities may obtain this 
advantage where they satisfy the eligibility criteri a in the Regulation. Like products imported from 
WTO Members that the Commission has not decided me et the equivalence and reciprocity conditions 
in Article 12(1) of the Regulation – which is all of them – are not able to obtain that advantage and, 
hence, are accorded less favourable treatment.  Products from WTO Members which can satisfy the 
equivalence and reciprocity conditions in Article 12(1) still face an "extra hurdle" in obtaining the 
advantage of registration since the Commission must d ecide that their country of origin meets those 
conditions – a step which is not required of like products from the European Communities.  This is 
also less favourable treatment.    
7.234  The United States cites other alleged advantages c onferred by registration.  It refers to the 
entitlement to use the indications "PDO" and "PGI " and a Community symbol or logo with products 
that comply with a registration.
243  The graphic manual annexed to the rules under the Regulation 
states inter alia  that "[t]he logo will allow producers of fo od products to increase awareness of their 
products among consumers in the European Union"; that the logo provides producers with "a 
marketing tool"; and that, because of the l ogo, "products will inspire more confidence".244  T h e  
United States also cites the preamble to the Regul ation which refers to higher incomes for producers 
from the promotion of their products as one of  the justifications for protection.   
                                                      
242 See the Appellate Body report on Korea – Various Measures on Beef , paras. 137 and 142; and also 
US – FSC (Article 21.5 – EC) , para. 215, quoted at para. 7.136 above.   
243 Under Article 8 of the Regulation and the detailed rules of application of the Regulation in 
Exhibit COMP-2.  
244 Exhibit COMP-2.  WT/DS174/R 
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 7.235  The European Communities does not contest that these are benefits of protection under the 
Regulation, and also refers to the right to u se the designation and logo under Article 8 and the 
possibility of excluding others from use of the GI under Article 13.245 
7.236  The United States submits a powerpoint presenta tion prepared by the European Commission 
which lists some random facts on the prices of certain products with pr otected names, the results of an 
opinion poll on consumer perceptions conducted by a group of nougat producers, and economic data 
contrasting cheese production in Franche-Comté and Emmental.246 It is not clear to what extent the 
advantages illustrated in this data flow from the prot ection of the indications or from better marketing, 
increased advertising and superior product quality.  In any event, in view of the significant competitive advantage conferred under Article 13 of the Regulation, it is unnecessary to determine the 
weight to be given to this evidence.   
7.237  Lastly, the Panel notes that there is the possibility that a WTO Member could conclude an 
international agreement with th e European Communities for the pr otection of specific GIs for its 
agricultural products and foodstuffs.  It is not in  dispute that this possibility would provide less 
favourable treatment to imported agricultural prod ucts and foodstuffs than the procedure for the 
registration of GIs provides for agricultural produc ts and foodstuffs from the European Communities. 
7.238  Therefore, the Panel concludes that, with respect to the equivalence and reciprocity 
conditions, as applicable to the availability of pr otection, the Regulation accords less favourable 
treatment to imported products, inconsis tently with Article III:4 of GATT 1994.
247   
7.239  The European Communities has not asserted that , with respect to the availability of 
protection, the Regulation is justif ied by Article XX(d) of GATT 1994.248 
2. Application procedures 
(a) Description of application procedures under Articles 5 and 12a of the Regulation 
7.240  The parties agree on the features of the application procedures under the Regulation.  There 
are separate provisions setting out the procedures for applications for registration of GIs which apply 
according to the location of the GI.249  Article 5 applies where the GI is located in an EC member 
State.  Article 12a applies where the GI is located in a third country. 
7.241  Article 5(4) and 5(5) provide, relevantly, as follows: 
"4. The application shall be sent to th e Member State in which the geographical 
area is located. 
                                                      
245 European Communities' rebuttal submission, para. 118. 
246 Exhibit US-44 cited in the United States' response to Panel question No. 32. 
247 This conclusion is without prejudice to the Panel' s examination of the inspection structures required 
for registration, considered later in this report. 
248 See the European Communities' first written su bmission, paras. 224-225, in which it asserts 
Article XX(d) as a defence only in relation to Article 12a, in conjunction with Articles 4 and 10, of the 
Regulation.  See also its rebuttal submission, paras. 22 8-242, and its second oral statement, paras. 132 and 135, 
in which it asserts Article XX(d) as a defence only with respect to inspec tions, application procedures and the 
labelling requirement.  Despite broader references to th e Regulation in its first written submission, para. 190, 
and first oral statement, para. 73, the European Communities did not prov ide any specific arguments in defence 
of the equivalence and reciprocity conditions under Article XX(d). 
249 For the sake of brevity, the Panel refers to a name  that refers to a geogra phical area located in a 
Member as a GI located in that Member. WT/DS174/R 
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 5. The Member State shall check that the application is justified and shall 
forward the application, including the produc t specification referred to in Article 4 
and other documents on which it has based its decision, to the Commission, if it considers that it satisfies the requirements of this Regulation.  [...]" 
7.242  Article 12a(1) and 12a(2) provide, relevantly, as follows: 
"1. In the case provided for in Article 12(3), if a group or a natural or legal 
person as referred to in Article 5(1) and (2) in a third country wishes to have a name 
registered under this Regulation it shall send a registration application to the 
authorities in the country in which the geographical area is located.  [...] 
2. If the third country referred to in paragraph 1 deems the requirements of this 
Regulation to be satisfied it shall tran smit the registration application to the 
Commission accompanied by: 
(a) a description of the legal provisions an d the usage on the basis of which the 
designation of origin or the geographical indication is protected or established in the country, 
(b) a declaration that the structures provided for in Article 10 are established on 
its territory, and 
(c) other documents on which it has based its assessment." 
7.243  After an application is forwarded by an EC member State or a third country, Articles 6(1) and 
12b(1) of the Regulation oblige the Commission to verify whether the registration application includes all the requisite particulars and satisfies th e conditions for protection.  There are differences 
in the drafting of Articles 6(1) and 12b(1) which rela te, respectively, to applications forwarded by EC 
member States and those transmitted by third countries,  which the United States has not put in issue.   
(b) National treatment under the TRIPS Agreement 
(i) Main arguments of the parties 
7.244  The United States  claims that the Regulation is incons istent with Article 3.1 of the TRIPS 
Agreement and Article 2(1) of the Paris Conventio n (1967), as incorporated by Article 2.1 of the 
TRIPS Agreement, because application procedures do not allow applications for registration in 
respect of geographical areas located in third count ries to be filed directly with the competent 
authorities in Europe.  This is less favourable treatment because the Regulation provides the direct 
means for EC nationals to apply through their EC  member States to the Commission, whilst non-EC 
nationals who wish to file an application for regi stration of a GI located in their own country must 
petition their government to apply on their behalf.
250  The Regulation does not accord equal treatment 
because third country governments only comply vol untarily whereas EC member States have a legal 
obligation to do so.251   
7.245  The United States argues that it is irrelevant whether the Regulation accords equal treatment 
to other WTO Members and EC member States because the TRIPS Agreement requires that no less 
                                                      
250 United States' first written submission, paras. 81-82; rebuttal submission, paras. 68 and 71. 
251 United States' rebuttal submission, para. 70.  WT/DS174/R 
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 favourable treatment be accorded  to nationals of WTO Members.252  Intellectual property rights are 
private rights.253   
7.246  The United States argues that whilst it would probably not be too difficult to designate an 
office in the U.S. government to perform a purely ministerial act of transmitting documents to the 
Commission, it might be difficult for some Members and, in any event, the Regulation requires more 
than mere transmission of documents .  Third country governments must inter alia  determine that the 
application meets the Regulation's requirements a nd demonstrate how the GI  is protected in its 
country of origin.254  This is a substantial burden and invol ves an active role in the registration 
procedure in which the third country government must administer and enforce the Regulation on its own territory.
255  This is neither appropriate nor necessar y and results in less favourable treatment.256  
Article 22.1 of the TRIPS Agreement does not require this.257  Article 24.9 of the TRIPS Agreement 
does not justify this, because other systems of GI protection do not put the government in a better position than the right holder to provide inform ation on protection in the country of origin.
258  This is 
a unilateral requirement that foreign governments verify compliance with the Regulation and not an 
example of international cooperation.259 
7.247  The European Communities  responds that this claim must fail.  Its first defence is that the 
application procedures do not apply to nationality but according to the location of geographical areas.  
That defence has been considered above. 
7.248  The European Communities argues that th e application procedures do not accord less 
favourable treatment because the role of third country govern ments corresponds exactly to that of EC 
member States.  The transmission of applications  by governments in fact ensures equal treatment.260  
The authorities of third countries and EC member St ates are best placed to evaluate whether a GI 
fulfils the conditions for protection, which requires familiarity with a host of factors and may require 
knowledge of the market conditions in the country of origin.  The evaluation of whether a GI is 
protected in the country of origin requires the implication of the authorities of the third country.  Verification in a third country calls for respect fo r its sovereignty.  Involvement of third country 
authorities facilitates cooperation durin g the registration process and should be of practical benefit to 
the applicant.
261 
7.249  The European Communities argues that the verification and transmission of an application are 
not overly burdensome for another WTO Member.  Another WTO Member cannot invoke its own 
unwillingness to cooperate in the registration process in order to demonstrate a national treatment 
violation on the part of the European Communities.262  There are many examples of international 
cooperation between governments in the protection of private rights including, in the field of 
intellectual property protection, such as the Madrid Protocol, the Lisbon Agreement and 
Article 6 quinquies A(1) of the Paris Convention, and in the fields of certificates of origin, technical 
standards, conformity assessment, transport, fish eries and judicial cooperation.  These examples 
                                                      
252 United States' first oral statement, paras. 30-31. 
253 United States' first oral statement, para. 37. 
254 United States' first oral statement, para. 28 and response to Panel question No. 38.  The third 
country government must also declare that the inspection structures are established on its territory.  This is 
discussed in a later section of this report. 
255 United States' rebuttal submission, paras. 64-67. 
256 United States' rebuttal submission, para. 74. 
257 United States' second oral statement, para. 34. 
258 United States' second closing oral statement, para. 11-12. 
259 United States' second oral statement, para. 36 ;  second closing oral statement, para. 13. 
260 European Communities' first written submission, para. 130. 
261 European Communities' response to Panel question No. 33;  rebuttal submission, paras. 124-129. 
262 European Communities' first written submission, para. 131. WT/DS174/R 
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 illustrate that in an increasingly in terdependent world, the effective protection of individual rights in 
cross-border situations inevitably engend ers a need for cross-border cooperation.
263 
7.250  The European Communities does not want to im pose obligations on third countries, but the 
protection of GIs located in the territory of thir d countries depends on their cooperation.  This is 
partially mandated by the definition of a GI in Article 22.1 of the TRIPS Agreement, which requires 
verification of whether certain characteristics of a good are essentially attributable to its geographical 
origin.  This is an obligation for all Members and should normally facilitate the examination of 
whether the name fulfils the criteria in the Regulation.  The description of how a GI is protected in its country of origin reflects the provision in Article 24. 9 of the TRIPS Agreement.  Even where there is 
no specific registration system in the country of origin, that is still a TRIPS requirement for the 
European Communities and a matter of foreign law.
264  The transmission of the application by the 
same government is not a significant extra burden.265   
(ii) Main arguments of third parties 
7.251  Argentina , Brazil , India , Mexico , New Zealand and Chinese Taipei all inform the Panel 
that they are not aware of any person ever having a ttempted to file with thei r respective authorities an 
application for registration under the Regulation.266  
7.252  Argentina expresses uncertainty regarding the consiste ncy of the application procedures with 
the characterization of intellectual property rights under the TRIPS Agreement, in that they require 
States to manage the registration of a GI instead of right holders who are private persons.267  
7.253  Brazil argues that the application procedures require WTO Members to "pre-approve" 
applications before they forward them to the Eu ropean Commission, which is a striking violation of 
the national treatment obligation in Article 3.1 of th e TRIPS Agreement for two reasons:  (1) this is an 
additional procedure for other WTO Members;  and (2) the approval process must be conducted 
according to EC law, not the law of the other WTO Member. 268 
7.254  China argues that the provisions on verification and publication do not afford clarity.  The 
procedures for EC member States and third countries are in parallel but are not th e same in substance.  
The provisions on verification by, and transmission to, the Commission differ between the procedures 
which suggests that third countries must sa tisfy more than an EC member State. 
7.255  Colombia expresses uncertainty as to whether the country of origin must in all cases provide 
a declaration under Article 12a(2) with a descripti on of the legal provisions under which the GI is 
protected.  This is, in practice, a condition which en tails an evaluation of the system of GI protection 
in the country of origin contrary to Article 1.1 of the TRIPS Agreement.269 
7.256  Mexico refers to cochineal as a practical exampl e of the way in which Mexican producers 
would be required to go through specifi c procedures which EC nationals are not.270  
7.257  New Zealand submits that, although the requirement  to submit all applications through 
government applies equally to applications from EC member States and other WTO Member 
                                                      
263 European Communities' response to Panel question No. 37. 
264 European Communities' rebuttal submission, paras. 131-134;  response to Panel question No. 114. 
265 European Communities' rebuttal submission, para. 139.   
266 See their respective comments in Annex C at paras. 18, 32, 103, 118, 160 and 179. 
267 Annex C, paras. 2-15. 
268 Annex C, para. 27. 
269 Annex C, para. 99. 
270 Annex C, paras. 115-117.  WT/DS174/R 
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 nationals, its effect is to disadvantage nationals from other WTO Members.  EC nationals have an 
enforceable right that applications that satisfy the requirements of the Regulation are forwarded to the 
Commission.  Submission of an application via an EC member State is essentially a formality.  Other 
WTO Member nationals have no such enforceable right.271 
(iii) Consideration by the Panel 
7.258  These claims are made under Article 3.1 of the TRIPS Agreement and Article 2 of the Paris 
Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement.  The Panel will first 
consider the claim under Article 3.1 of the TRIPS Agreement. 
7.259  The Panel recalls that two elements must be sa tisfied to establish an inconsistency with this 
obligation:  (1) the measure at issue must apply with  regard to the protection of intellectual property;  
and (2) the nationals of other Members must be  accorded "less favourable " treatment than the 
Member's own nationals.  The Panel will a ddress each of these elements in turn.  
Protection of intellectual property  
7.260  This claim concerns procedures for filing and ex amination of applications for registration of 
"designations of origin and "geographical indicati ons", as defined in the Regulation.  They are 
referred to in this report, for the sake of brevity, as "application procedures". 
7.261  The Panel recalls that the national treatment ob ligation in Article 3 of the TRIPS Agreement 
applies to the treatment accorded by a Member "with regard to the protection of intellectual property".  
Footnote 3 provides an inclusive definition of  the te rm "protection" as used in Articles 3 and 4.  It 
reads as follows: 
"For the purposes of Articles 3 and 4, 'protection' shall 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." 
7.262  Turning to the Regulation, procedures for the filing and examination of applications for 
registration are matters affecting the acquisition of intellectual property rights in relation to 
"designations of origin" and "geographical indi cations", as defined in the Regulation.   
7.263  It is not disputed that "designations of orig in" and "geographical indications", as defined in 
the Regulation, are a subset of "geographical indica tions", the subject of Section 3 of Part II, and 
therefore part of a category of intellectual propert y within the meaning of Article 1.2 of the TRIPS 
Agreement.   
7.264  Therefore, this claim concerns the "protecti on" of intellectual property, as clarified in 
footnote 3 to the TRIPS Agreement, within the scope of the national treatment obligation in 
Article 3.1 of that Agreement. 
Less favourable treatment accorded to the nationals of other Members
 
7.265  The Panel recalls its findings: 
(a) at paragraphs 7.185 to 7.190 as to the treatme nt accorded to the "nationals of other 
Members" under the Regulation by its treatment according to the location of GIs; and 
                                                      
271 Annex C, paras. 136-137. WT/DS174/R 
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 (b) at paragraph 7.134 that under Article 3.1 of the TRIPS Agreement we must examine 
the "effective equality of opportunities" with regard to the protection of intellectual 
property rights and at paragr aph 7.137 that in this exam ination we will focus on the 
"fundamental thrust and effect" of the Regulation. 
7.266  The parties and third parties who responded to the Panel's question on this point all reported 
that they were not aware of any application for the registration of a name of an area located in a third 
country outside the European Communities ever ha ving been filed with the authorities of a third 
country.
272  However, the United States challenges the Re gulation, in this respect, "as such".    
7.267  The United States claims that the treatment accorded under th e application procedures in 
Article 12a(1) and (2) is less favourable than that  accorded under the applications procedures in 
Article 5(4) and (5).  There is an apparent equi valence in the drafting of these provisions but the 
question is whether this would imply a modificatio n of the effective equality of opportunities with 
regard to the protection of intellectual property.  
7.268  The Panel notes that the initial steps in the application procedures can be broken down as 
follows. 
(a) as a first step, all applicants are required to submit their application to the authorities 
in the country in which the geographical ar ea is located.  These will be authorities of 
an EC member State or a third country, depending on the case;   
(b) as a second step, the authorities who receive  an application consider whether the 
application is justified or satisfies the requi rements of the Regulation.  This involves a 
detailed examination of the application in  accordance with the criteria in the EC 
Regulation, not the domestic law of the count ry where the application is filed;  and 
(c) as a third step, if the authorities who receive an application consider that the 
application is justified or satisfies the requirements of the Regulation, they forward or transmit it to the Commission.  If the appli cation concerns a geographical area located 
outside the European Communities, the aut horities must also transmit a description of 
the protection of the GI in its country of origin, as well as a declaration concerning 
inspection structures.
273   
7.269  We recall the European Communities' e xplanation of its domestic constitutional 
arrangements, set out at paragraph 7.98, that Community laws are generally not executed through 
authorities at Community level but rather through r ecourse to the authorities of its member States 
which, in such a situation, "act de facto  as organs of the Community, for which the Community would 
be responsible under WTO law and international law in general".274  It follows that any application 
relating to a geographical area located in an EC member State is filed directly with a " de facto  organ 
                                                      
272 However, the United States provided evidence from the Idaho Potato Commission that it could not 
obtain protection for its U.S. certification mark in the Euro pean Union.  Its attorneys in three EC member States 
had advised that there were no steps it could take to stop use of the term "Idaho" by other companies in Europe:  
see testimony to the Committee on Agriculture in the U.S. House of Representatives of 22 July 2003, in response to Panel question No. 12, and reproduced in Exhibit US-38.  The European Communities responds that 
this is based on a misperception of th e content of the Regulation, that it does not contain evidence of an attempt 
to register a GI under the Regulation, and that it seems to relate more to the protection of trademarks than GIs:  
see its rebuttal submission, para. 85. 
273 For the purposes of this report, references to examination and transmission of "applications" include 
examination and transmission of these supporting documen ts.  The declaration concer ning inspection structures 
is considered later in this report.   
274 European Communities' second oral statement, para. 148.  WT/DS174/R 
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 of the Community" which also carries out the initia l examination.  An application relating to a 
geographical area located in a third country cannot be filed directly, but must be filed with a foreign 
government.  This is a formal difference in treatment. 
7.270  Further, Article 5 of the Regulation provides fo r application procedures for GIs located in the 
European Communities.  Paragraph 6 provides as follows: 
"6. Member States shall introduce the laws, regulations and administrative 
provisions necessary to comply with this Article." 
7.271  An EC member State has an obligation to est ablish application procedures for the purposes of 
the Regulation.  Under Community law, an EC member State has an obligation to examine an 
application and decide whether it is justified and, if it is justified, to forward it to the Commission.  A 
group or person who submits an application in an  EC member State may enforce these obligations 
through recourse to judicial procedures based on the Regulation.  In contrast, a third country 
government has no obligation under Community law or any other law to examine an application or to 
transmit it or any other document to the Commission.   A group or person who submits an application 
in a third country has no ri ght to such treatment.   
7.272  Therefore, applicants for GIs that refer to geographical areas located in third countries do not 
have a right in the application procedures that is  provided to applicants for GIs that refer to 
geographical areas located in the Eu ropean Communities.  Applicants in third countries face an "extra 
hurdle" in ensuring that the authorities in those countries carry out the functions reserved to them 
under the Regulation, which applicants in EC me mber States do not face.  Consequently, certain 
applications and requisite supportin g documents may not be examined or transmitted.  Each of these 
considerations significantly reduces the opportuniti es available to the nationals of other WTO 
Members in the acquisition of rights under the Re gulation below those available to the European 
Communities' own nationals.  
7.273  The European Communities submits that that "[t] he Regulation does not require anything that 
would be outside the scope of any WTO Member with a normally functioning government".275  The 
Panel notes that, whilst a normally functioning government might have the capacity to carry out the 
first and third steps, it cannot be assumed that it would have the capacity to carry out the examination 
according to EC law required by the second step.  WTO Members have no obligation to implement a system of protection for geographical indications comparable to that of the European Communities 
and there is no reason to believe that they w ould nevertheless have the capacity to carry out 
examinations of technical issues that involve interpreta tions of EC law.   In this regard, we note that 
one third party in this Panel proceeding indicates  that its authorities w ould be devoid of legal 
competence to perform this analysis.
276  Whilst a WTO Member that provided equivalent protection 
under its domestic law might presumably have the tec hnical capacity, if not the legal competence, to 
perform this analysis, the provision of such equiva lent protection forms part  of the conditions under 
Article 12(1) of the Regulation. We have found that  requirement, as a precondition to the availability 
of GI protection, to be inconsistent with the na tional treatment obligations in the TRIPS Agreement 
and GATT 1994. 
7.274  In any event, even if any normally functioni ng government could perform these three steps, 
that would not alter the Panel's conclusion.  The obligation to accord national treatment with respect 
to a measure of the European Communities is the ob ligation of the European Communities.  This is 
highlighted in the text of Article 3.1 of the TRIPS Agreement under which "[e]ach Member"  shall 
accord to the nationals of other Members no less favourable treatment. 
                                                      
275 European Communities' rebuttal submission, para . 141;  second oral statement, para. 142.  
276 See comments by Brazil in Annex C, para. 32. WT/DS174/R 
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 7.275  In accordance with its domestic law, the Europ ean Communities is entitled to delegate certain 
functions under its measure to the authorities of EC  member States.  However, under the Regulation, 
the European Communities has purported to delegate part of this obligation to other WTO Members, 
who must carry out these three steps in the appli cation procedures in order to ensure that no less 
favourable treatment is accorded to their respective nationals.  To that extent, the European 
Communities fails to accord no less favourable treatment itself  to the nationals of other Members.
277   
7.276  The Panel notes that the European Commission doe s not have the discretion to ensure that 
applications for GIs that refer to geographical areas located in third countries receive no less favourable treatment than those located in the Eu ropean Communities because it has structured the 
Regulation in such a way that certain func tions are completely outside its control. 
7.277  The European Communities drew the Panel's a ttention to many examples of international 
cooperation in the protection of private rights, including in the field of intellectual property protection.
278   The Panel notes that under two of them, the Patent Cooperation Treaty and the Madrid 
Protocol, the possibility of filing an application with  an office in the applicant's own country does not 
prevent the applicant filing an application directly  in the another country.  The Panel certainly does 
not intend to discourage interna tional cooperation.  However, in each of these examples, cooperation 
is provided in the framework of treaties in whic h contracting parties have voluntarily agreed to 
participate.  In contrast, the Regulation is a domestic law adopted by one Member. 
7.278  The Panel also confirms that nothing in these findings purports to diminish the rights of 
Members under Article 24.9 of the TRIPS Agreemen t, which provides, in essence, that there is no 
obligation under this Agreement to protect geographi cal indications which are not protected in their 
country of origin279.  
7.279  The Panel further confirms that the European  Communities is entitled, under Article 62.1 of 
the TRIPS Agreement, to require that applicants  comply with reasonable procedures and formalities 
that are consistent with the Agreement in order to prove that they meet the conditions of protection.  
However, Article 62 is outside th e Panel's terms of reference. 
7.280  The Panel recalls its finding at paragraph 7. 212 that the fact that a general exceptions 
provision analogous to Article XX of GATT 1994 was not included in the TRIPS Agreement has no impact on its analysis of Article 3.1. 
7.281  For the above reasons, the Panel concludes that, with respect to the application procedures, 
insofar as they require examination and transmission of applications by governments, the Regulation 
accords other WTO Member nationals less favourab le treatment than it accords the European 
Communities' own nationals, inconsistently w ith Article 3.1 of the TRIPS Agreement.  
7.282  In view of that conclusion, it is unnecessary to  consider the consiste ncy of the Regulation, 
with respect to the application procedures, with  Article 2(1) of the Paris Convention (1967), as 
incorporated by Article 2.1 of the TRIPS Agreement. 
                                                     
 
277 See further paras. 7.741 to 7.743 below. 
278 See European Communities' response to Panel question No. 37, and Exhibits EC-20 through EC-27. 
279 Nothing in these findings purports to diminish the rights of Members under Article 5 of the TRIPS 
Agreement either.  WT/DS174/R 
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 (c) National treatment under GATT 1994 
(i) Main arguments of the parties 
7.283  The United States claims that the Regulation is incons istent with Article III:4 of GATT 1994 
because an application for registration must be subm itted by a WTO Member on be half of its national.  
It reiterates its arguments in relation to the conditi ons of equivalence and reciprocity and Article III:4 
of GATT 1994, it reiterates its arguments in relation to the application procedures and Article 3.1 of 
the TRIPS Agreement, and it adds that the applicat ion procedures deny the benefits of registration 
which accords less favourable treatment to imported products.280  Products imported from Members, 
like the United States, which l ack a mechanism to assess complian ce under the Regulation, will be 
denied these benefits for reasons unrelated to the ch aracteristics of the product itself, but for reasons 
related to the products' origin.281 
7.284  The United States argues that the relevant aspects of the application procedures are not 
justified under Article XX(d) of GATT 1994.  They do not satisfy paragraph (d) because they do not 
"secure compliance".  At best, they solicit other Members' views but the decision on registration is 
made by the European Communities.  Whether a product satisfies the Regulation's requirements is a 
legal judgement and has nothing to do with complia nce with the Regulation.  These aspects shift the 
burden for assessing compliance from the European Communities onto other Members.  The Regulation itself is not a law consistent with GAT T 1994, which is the fundamental issue in this 
dispute.  These aspects are not "necessary" to secu re compliance because another Member's views or 
on-site checks will not always be required, by the EC's own admission. There is no reason why 
alternative measures are not reasonably available, such as allowing nationals to file applications 
directly with the European Communities, or establish  by other means that a GI is protected in its 
country of origin.
282  These aspects do not satisfy the chapeau  of Article XX because the European 
Communities favours countries that protect GIs the way it does, which arbitrarily and unjustifiably 
discriminates between countries where the same conditions apply.283  
7.285  The European Communities responds that this claim must fail.  It reiterates its arguments 
that the application procedures provide equal treatment, not less favourable treatment.284 
7.286  The European Communities asserts that verifica tion and transmission of applications by the 
government of the home country of the GI is justified by Article XX(d) of GATT 1994.285  It argues 
that this is necessary to secure co mpliance with the Regulation itself, in particular, the definition of a 
GI, the product specifications, protection in the c ountry of origin, establishment of the inspection 
structures and the requirement that only products th at comply with a specification bear the PDO and 
PGI indications.  It argues that the cooperation of the home government is indispensable for the 
implementation of the Regulation which, in partic ular, requires the evaluation of factual and legal 
questions which only the home country of the GI is  in a position to carry out.  These requirements for 
cooperation do not go beyond what is necessary for the implementation of the Regulation.  The 
requirement of transmission follows naturally from the required intergovernmental cooperation and is 
not particularly burdensome for WTO Members.  Ar ticle XX(d) does not exclude that the measures 
and the laws and regulations with which they secure compliance may be part of the same legal act.  In 
addition, there is nothing which limits measures which secure compliance to ex post enforcement and 
                                                      
280 United States' first written submission, paras. 104(d) and 105;  rebuttal submission, para. 95. 
281 United States' second oral statement, para. 45. 
282 United States' second oral statement, para. 55. 
283 United States' second oral statement, para. 57 and comments on EC responses to Panel question 
Nos. 135 and 136. 
284 European Communities' first written submission, para. 207;  rebuttal submission, para. 218. 
285 European Communities' rebuttal submission, paras. 237-239.   WT/DS174/R 
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 excludes safeguards in the registration process.  Th e Regulation is not inconsistent with GATT 1994 
because it implements an obligation under Article 22 of the TRIPS Agreement and a higher level of 
protection permitted by Article 1.1.  It is applie d in a manner consistent with the chapeau of 
Article XX.
286  
7.287  The European Communities argues that , with respect to verification that the GI is protected in 
its country of origin, verification requires knowledge of local factors that typically only the country of 
origin will have and which may also require on-site  checks.   Submission of a registration certificate 
authenticated by the country of origin would norma lly provide sufficient evidence that the indication 
is protected in the country of origin.  However,  it is not an option for those Members which do not 
have a specific register, such as the United States.   Verification by third country governments is 
particularly necessary where they do not have a specific register as evaluation of protection in the 
country of origin may be more difficult.  It is not credible that the United States government would 
not be better qualified than the right holder or  the European Communities.  Transmission of 
applications by third country governments is an inte gral part of the application procedure and should 
not be viewed in isolation.  It has no significan t impact on trade in goods.  It makes no difference 
whether the European Communities asks for coopera tion from a third country government before or 
after an application is filed.287   
(ii) Main arguments by third parties 
7.288  Argentina , Brazil , India , Mexico and Chinese Taipei inform the Panel that direct 
applications to register GIs located in third countries are possible under their respective national 
legislation.288 
7.289  Brazil argues that the application procedures require WTO Members to "pre-approve" 
applications before they forward them to the Eu ropean Commission, which is a striking violation of 
the national treatment obligation in Article 3.1 of the TRIPS Agreement.289 
7.290  New Zealand considers that, as the same phrase "l ess favourable treatment" is used in 
Article III:4 as in Article 3.1 of the TRIPS Agreemen t, all arguments raised under that claim apply 
equally here.  New Zealand does not consider that the measure can be justified as "necessary" within 
the meaning of Article XX(d) of GATT 1994.  The Commission conducts its own six-month investigation of an application so that it is not n ecessary for applications to be passed through a third 
country government filter.
290   
(iii) Consideration by the Panel 
7.291  This claim concerns procedures for applications for registration under the Regulation.  The 
Panel recalls its findings: 
(a) at paragraph 7.227, that the Regulation is a law or regulation affecting the internal 
sale and offering for sale of products within the meaning of Article III:4 of GATT 1994;   
(b) at paragraph 7.228 that the Regulation links the protection of the name of a product to 
the territory of a particular country a nd formally discriminat es between imported 
                                                     
 
286 European Communities' rebuttal submission, paras. 237-239; responses to Panel question 
No. 135(a), (b) and (c) and 136(a). 
287 European Communities' response to Panel question No. 136(b), (c) and (d). 
288 See their respective comments in Annex C at paras. 18, 27, 103, 118 and 180. 
289 Annex C, para. 27. 
290 Annex C, paras. 141-143.  WT/DS174/R 
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 products and products of European Comm unities origin within the meaning of 
Article III:4 of GATT 1994; 
(c) at paragraph 7.229 that the European Communities does not contest that there are, 
among the group of products covered by the Regulation, "like products" among the 
imported products and products of European Communities origin;  
(d) at paragraph 7.230, that under Article III:4 of GATT 1994 we must examine whether 
the measure modifies the conditions of co mpetition between domestic and imported 
products and that in this examination we will focus on the "fundamental thrust and 
effect of the measure itself"; 
(e) at paragraph 7.231 to 7.235 on the substa ntive advantage provided under Article 13 of 
the Regulation that affects the conditions of competition of the relevant products; 
(f) at paragraphs 7.268 to 7. 272 concerning the differences between the application 
procedures for GIs that refer to geographical areas located in EC member States and those located in third countries.  These di fferences can result in  some applications 
from third countries, including WTO Members, not being examined and transmitted 
to the Commission; and 
(g) at paragraph 7.276 that the European Communities has no discretion in the 
implementation of the Regulation to ensure that all applications from third countries 
are transmitted to the Commission.   
7.292  A failure to transmit an application would entail non-registration of GIs, which would lead to 
failure of the products from those third countries to  obtain the benefits of registration set out in 
Article 13 of the Regulation.  Therefore, the Pane l concludes that, with respect to the application 
procedures, insofar as they require examination and transmission of applications by governments, the 
Regulation accords less favourable treatment to imported products th an domestic products, 
inconsistently with Article III:4 of GATT 1994. 
7.293  The European Communities asserts that these pr ocedures are justified by Article XX(d) of 
GATT 1994.  As the party invoking th is affirmative defence, the European Communities bears the 
burden of proof that the conditions of the defence are met. 
7.294  Article XX provides exceptions for certain measu res.  The "measures" which the European 
Communities needs to justify at this point are th e requirements of examination and transmission of 
applications for registration by governments under the Regulation.  These apply to applications from 
both EC member States and third countries.   Howe ver, it does not need to justify the less favourable 
treatment which denies applicants for GIs located in  third countries the opportunity to file direct 
applications.
291 
7.295  Paragraph (d) of Article XX refers to "measu res" falling within the following description: 
"(d) necessary to secure compliance with laws or regulations which are not 
inconsistent with the provisions of th is Agreement, including those relating to 
customs enforcement, the enforcement of monopolies operated under 
                                                      
291 This is consistent with the approach of the Appellate Body in US – Gasoline , according to which 
one must examine whether the relevant "measure", rather  than the legal finding of less favourable treatment, 
falls within a paragraph of Article XX:  see DSR 1996:I, 3, at 15.   WT/DS174/R 
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 paragraph 4 of Article II and Article XV II, the protection of patents, trade 
marks and copyrights, and the prevention of deceptive practices;" 
7.296  The Panel takes note that paragraph (d) refers to laws or regulations, including those relating 
to "the protection of patents, trade marks and co pyrights, and the preventi on of deceptive practices".  
The Regulation provides for the protection of GIs and is an analogous law or regulation, as the 
European Communities points out.
292  However, the term "laws or regulations" is qualified by the 
phrase "not inconsistent with the pr ovisions of this Agreement".   
7.297  The European Communities argues that the requi rements of examination and transmission of 
applications by governments secure compliance with the Regulation.293  The Panel has found that the 
Regulation is inconsistent with th e provisions of GATT 1994 for the reasons set out in this report.  
Therefore, the Regulation is not a law or regulation within the meaning of paragraph (d).  In response 
to questions, the European Communities argued th at these requirements secure compliance with a 
provision within the Regulation.  However, if that provision could itself be a law or regulation within 
the meaning of paragraph (d), the European Co mmunities did not demonstrate that it was "not 
inconsistent" with GATT 1994.294   
7.298  The Panel also notes the use of the term "nece ssary" in paragraph (d).  We recall the 
clarification of that term provided by the Appellate Body in Korea – Various Measures on Beef , as 
follows: 
"We believe that, as used in the context of Article XX(d), the reach of the word 
'necessary' is not limited to that which is 'i ndispensable' or 'of absolute necessity' or 
'inevitable'.  Measures which are indispensable  or of absolute necessity or inevitable 
to secure compliance certainly fulfil the requirements of Article XX(d).  But other 
measures, too, may fall within the ambit of this exception.  As used in Article XX(d), the term 'necessary' refers, in our view, to a range of degrees of necessity.  At one end of this continuum lies 'necessary' understood as 'indispensable';  at the other end, is 
'necessary' taken to mean as 'making a contri bution to'.  We consider that a 'necessary' 
measure is, in this continuum, located significantly closer to the pole of 
'indispensable' than to the opposite pole of simply 'making a contribution to'." [footnote omitted]
295   
7.299  The Appellate Body summed up its approach to  the determination of whether a measure 
which is not "indispensable" may nevertheless be "ne cessary" within the meaning of Article XX(d) as 
a process of weighing and balancing a series of factors.  It approved the approach of the GATT Panel 
in US – Section 337   as a way in which to apply this process as follows:   
"In our view, the weighing and balancing process we have outlined is comprehended 
in the determination of whether a WTO-c onsistent alternative measure which the 
                                                      
292 European Communities' rebuttal submission, para. 234. 
293 European Communities' first written submission, pa ra. 226;  rebuttal submission, para. 238.   
294 The European Communities argued that verification (and incidentally also the transmission) of 
applications by the government of the country of origin served the purpose of establishing whether the requirements of the Regulation for registration of GIs are satisfied and, accordingl y, secured compliance with 
the requirement in Article 8 that the PDO, PGI and equi valent indications may appear only on products that 
comply with the Regulation.  However, it only expl ained how the Regulation itself was, in its view, not 
inconsistent with GATT 1994:  see its response s to Panel questions No. 135(a), (c) and (d). 
295 Appellate Body report on Korea – Various Measures on Beef , para. 161.  WT/DS174/R 
 Page 77 
 
 
 Member concerned could 'reasonably be expect ed to employ' is available, or whether 
a less WTO-inconsistent measure is 'reasonably available'."296   
7.300  The Panel will follow this approach. 
7.301  The United States argues that the European Co mmunities could reasonably be expected to 
allow applicants to file applications directly w ith its authorities without prior examination by third 
country governments, and that this is WTO-cons istent.  Many other WTO Members employ such a 
procedure.297  It is not disputed that such a procedure would be WTO-consistent.   
7.302  The European Communities submits that the cooperation of the government of the country 
where the GI is located is indi spensable because the registration of GIs requires the evaluation of 
factual and legal questions which "only the home co untry of the GI is in a position to carry out".298 
7.303  The Panel observes that Articles 6(2) and 12b(1) of the Regulation provide that the 
Commission makes the decision on whether the conditions  are satisfied so as to warrant publication.  
It is not clear why an additional examination of th e conditions by other governments is also required.  
Nor is it clear that a third country government is even able to conduct an examination according to the 
requirements, not of its own law, but of an EC Regulation.  The European Communities has not 
explained why physical proximity or potential knowledge  of certain questions in the country of origin 
implies a capacity to assess matters of EC law.  Ther efore, it is not clear to what extent examination 
by governments, including third country governments, contributes to securing compliance with the conditions for registration. 
7.304  With respect to factual and legal questions that can , as part of the examination, be verified in 
the country of origin, the European Communitie s does not explain why the Regulation does not 
permit applicants to provide objec tive and impartial evidence that may verify their applications nor 
does it explain why the Commission cannot seek consent to carry out its own verifications.  In its responses to the Panel's questions, the European  Communities indicates that "typically" only the 
country of origin has the required knowledge of lo cal factors and that verification "may" require on-
site checks which the Commission cannot carry out  in third countries without express consent.
299  The 
Panel considers that these responses constitute an admi ssion that, in some cases, verification by third 
country governments is not necessary and that, if it sought and obtained consent, the Commission 
could conduct verifications itself.  The Europ ean Communities has not demonstrated the factual 
premise of its defence that only th e government of the country of origin is in a position to carry out 
the evaluation of these factual and legal questions.  Therefore, the Panel does not need to consider 
further the requirement of examination by governments.   
7.305  With respect to the transmission of applica tions, the European Communities is unable to 
explain why a procedure permitting applicants to f ile applications directly with its competent 
authorities would not permit an examination of wh ether an application for a GI in another WTO 
Member complies with the conditions in the Regulation.  It submitted that transmission of applications by governments should not be viewed in isolation.  Given that it has not established that 
examination by governments, including third count ry governments, is necessary, it has not established 
that transmission by them is necessary either.  
                                                     
 
296 Ibid. para. 166.  The Appellate Body also followed this  approach to the word "necessary" as used in 
paragraph (b) of Article XX in EC – Asbestos , para. 172.   
297 See comments of Argentina, Brazil,  India, Mexico, New Zealand and Chinese Taipei as third parties 
in Annex C, paras. 18, 28, 103, 118, 161 and 180.  
298 European Communities' rebuttal submission, para. 237. 
299 European Communities' response to Panel question No. 136(a). WT/DS174/R 
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 7.306  Therefore, the Panel considers that the Eur opean Communities has not discharged its burden 
of proving that the requirements of examination an d transmission of applications by governments is 
covered by paragraph (d) of Article XX.  It is  therefore unnecessary to consider the chapeau of 
Article XX.    
7.307  For these reasons, the Panel concludes that, with respect to the application procedures, insofar 
as they require examination and transmission of a pplications by governments, the Regulation accords 
less favourable treatment to imported products inco nsistently with Article III:4 of GATT 1994, and 
these requirements are not justified by Article XX(d). 
3. Objection procedures 
(a) Description of objection procedures under Articles 7, 12b and 12d of the Regulation 
7.308  The parties agree on most features of the objec tion procedures under the Regulation.  There 
are separate provisions setting out the procedures for obj ections to applications for registration of GIs 
which apply according to the location of the geog raphical area and the location of the person who 
wishes to file an objection.  Article 7 applies wh ere the geographical area and the person who wishes 
to file an objection are both located in EC member  States.  Article 12b applies where the geographical 
area is located in a third country.  Article 12d appli es where the geographical area is located in an EC 
member State and the person who wishes to file an objection is located in a third country. 
7.309  Article 7(1) and 7(3) provide as follows: 
"1. Within six months of the date of publication in the Official Journal of the 
European Communities  referred to in Article 6(2), any Member State may object to 
the registration. 
3. Any legitimately concerned natura l or legal person may object to the 
proposed registration by sending a duly substantiated statement to the competent authority of the Member State in which he resides or is established.  The competent 
authority shall take the necessary measures to consider these comments or objection within the deadline laid down." 
7.310  Article 12b(2) provides, relevantly, as follows: 
"2. Within six months of the date of publication as provided for in 
paragraph 1(a), any natural or legal person w ith a legitimate interest may object to the 
application published in accordance with paragraph 1(a) on the following terms: 
(a) where the objection comes from a Member State of the European Union or a 
WTO Member, Article 7(1), (2) and (3) or  Article 12d respectively shall apply; 
(b) where the objection comes from a th ird country meeting the equivalence 
conditions of Article 12(3), a duly substantiated statement of objection shall be 
addressed to the country in which the above mentioned natural or legal person resides 
or is established, which shall forward it to the Commission."   
7.311  Article 12d(1) provides, relevantly, as follows: 
"1. Within six months of the date of the notice in the Official Journal of the 
European Union  specified in Article 6(2) relating to a registration application 
submitted by a Member State, any natural or legal person that has a legitimate interest  WT/DS174/R 
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 and is from a WTO member country or a third country recognised under the 
procedure provided for in Article 12(3) ma y object to the proposed registration by 
sending a duly substantiated statement to the country in which it resides or is established, which shall transmit it, made out or translated into a Community language, to the Commission." 
7.312  Article 7(4) sets out the grounds for admissi on of objections.  Artic les 12b(3) and 12d(2) 
provide that the Commission shall examine the admi ssibility of objections in accordance with the 
criteria laid down in Article 7(4). 
(b) National treatment under the TRIPS Agreement 
(i) Main arguments of the parties 
7.313  The United States claims that the Regulation is inconsis tent with Article 3.1 of the TRIPS 
Agreement and Article 2 of the Paris Convention ( 1967), as incorporated in Article 2.1 of the TRIPS 
Agreement, because the objection pr ocedures accord less favourable treatment to non-EC nationals.  It 
argues that the right of to object to registration of a GI is part of the protection of industrial property 
and of intellectual property because it is part of the ability to prevent others from using indications in 
a way that is misleading as to source.
300 
7.314  The United States argues that EC nationals have a direct means to object to registrations but 
non-EC nationals do not.  Objections  must be filed with the authorities of the third country or EC 
member State in which the objector resides or is established.  The competent authority of an EC 
member State has an obligation under Article 7(3) of the Regulation to take the necessary measures.  
The authorities in the third country do not.  They are responsible for verification and transmission of 
the objection.  This represents an extra hurdle for non-EC nationals and less fa vourable treatment.  It 
also constitutes a requirement of domicile or establishm ent inconsistent with Article 2(2) of the Paris 
Convention (1967).301 
7.315  The United States argues that Article 12d of th e Regulation limits the persons who may file 
objections to those resident or established in  a country that satisfies the conditions of equivalence and 
reciprocity .302 
7.316  The United States argues that Article 12d of the Regulation provides standing to object to 
non-EC nationals who have a "legitimate interest".  Non-EC nationals are at a disadvantage because 
they are less likely to have a product on the EC  market with a competing name due to the 
discrimination in availability of protection.  Article  7(3) provides standing to object to EC nationals 
who are "legitimately concerned" which is a lo wer standard that makes it easier to object.303  It cites 
dictionary definitions which show that "concern" is  broader than "interest".  Article 12d was inserted 
by the April 2003 amending Regulation – if the standard  were the same it would have been logical to 
use the same word.304 
7.317  The European Communities  responds that these claims must fail.  The verification and 
transmission of an objection by a third country should not be particularly burdensome and does not 
amount to an "extra hurdle" for third country reside nts.  A third country is not required to conduct a 
substantive verification under Article 7(4) the Re gulation – which is clear from the wording of 
                                                      
300 United States' first written submission, para. 87. 
301 United States' first written submission, paras. 89-91 ;  second oral statement, paras. 40 and 43. 
302 United States' first written submission, para. 92;  second oral statement, para. 39. 
303 United States' first written submission, paras.  93-94;  first oral statement, para. 34. 
304 United States' rebuttal submission, paras. 87-88;  second oral statement, para. 42. WT/DS174/R 
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 Article12d(2) that indicates that the criteria must be assessed in relation to the territory of the 
Community.  Rather, the third country verifies wh ether the person objecting is indeed resident or 
established there.  It could also be useful to have an  official contact point if questions arise concerning 
the territory of the third country, it should be benefici al to the person objecting to deal directly with an 
authority in the third country and, if the objection is admissible, the third country is to be consulted 
before the Commission takes its decision on registration.
305  
7.318  The European Communities argues that Article 12d grants a right of objection to persons 
from WTO Members because the phrase "recognised  under the procedure provided for in 
Article 12(3)" only applies to other third countries.  The conditions of equivalence and reciprocity do 
not apply to WTO Members' right to object.  Otherwise, the specific reference to "WTO Members" 
would be meaningless.  This is also clear in Article 12b(2).306  It also argues that Article 12d does not 
discriminate according to nationality but according to r esidence or establishment.  It cannot simply be 
assumed that the reference to "nationals" in Article  3.1 of the TRIPS Agreement and Article 2 of the 
Paris Convention (1967) also applies to persons who are domiciled or established abroad, regardless 
of their nationality.307 
7.319  The European Communities argues that the requirements for standing to object by persons 
from within the European Communities do not di ffer from those for persons from outside the 
European Communities.  There is  no substantive difference between  the two expressions "legitimately 
concerned" and "legitimately interested".  It c ites a dictionary definition of "concerned" which 
includes "interested".308 
(ii) Main arguments of third parties 
7.320  Argentina , India , Mexico , New Zealand and Chinese Taipei all inform the Panel that they 
are not aware of any person ever having attempted to  file with their respectiv e authorities an objection 
to registration under the Regulation.309 
7.321  Brazil  considers that the requirement to file objec tions with the country in which the objector 
resides or is established is an "unnecessarily co mplicated or costly" procedure in breach of 
Article 41.2 of the TRIPS Agreement.  Brazil sees no necessity that would justify preventing private 
parties forwarding objections directly to the Eu ropean Commission as many countries, including 
Brazil, allow for direct access for foreigners to object.310 
7.322  Mexico  argues that the Regulation is inconsistent  with national treatment because it imposes 
conditions of reciprocity and preven ts third country nationals filing obj ections directly with European 
authorities.  Non-EC WTO Member nationals have  an additional burden to involve their national 
authorities and delegate to them the objection pro cess.  Mexico refers to cochineal as a practical 
example of the way in which Mexican producers woul d be required to go through specific procedures 
which EC nationals are not.311  
                                                      
305 European Communities' response to Panel question No. 34;  rebuttal submission, paras. 155-159;  
second oral statement, paras. 89-94. 
306 European Communities' first written submission, para s. 73-75;  first oral statement, para. 50;  
second oral statement, paras. 86-88. 
307 European Communities' first written submission, para. 142;  first oral statement, para. 51. 
308 European Communities' first written submission, paras. 76-78 and 151;  rebuttal submission, 
paras. 160-163. 
309 See their respective comments in Annex C at paras. 18, 103, 118, 160 and 179. 
310 Annex C, para. 28. 
311 Annex C, para. 110.  WT/DS174/R 
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 7.323  New Zealand argues that the objection procedure can pot entially result in an application for 
registration not proceeding.  Not having the right to obj ect is a loss of a valuable right of a producer to 
protect its intellectual property rights.  Objections  under the Regulation are subject to equivalence and 
reciprocity requirements:  the distinction betw een WTO Members and other third countries in 
Article 12d(1) could have been made clear by inser ting a comma or other words.  Objections must 
also be submitted through governments.  At worst, the benefits of the right to object are entirely 
unavailable to third country producers.  As a result,  the system virtually guarantees that no objections 
will be received from WTO Member nationals to applications for registration of GIs.312   
(iii) Consideration by the Panel 
7.324  These claims concern procedures for filing and exam ination of objections to applications for 
registration of "designations of origin and "geograp hical indications", as defined in the Regulation.  
They are referred to in this report, for the sake of brevity, as "objection procedures". 
7.325  The claims relate to three separate issues:  (1) regarding verification and transmission;  
(2) regarding equivalence and reciprocity conditions;  and (3) regarding standi ng requirements to raise 
an objection.  The Panel will address these issues in turn. 
7.326  These claims are made under Article 3.1 of the TRIPS Agreement and Article 2 of the Paris 
Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement.  The Panel will first 
consider the claims under Article 3.1 of the TRIPS Agreement. 
7.327  The Panel recalls that two elements must be sa tisfied to establish an inconsistency with this 
obligation:  (1) the measure at issue must apply with  regard to the protection of intellectual property;  
and (2) the nationals of other Members must be  accorded "less favourable " treatment than the 
Member's own nationals.  The Panel will a ddress each of these elements in turn.  
Verification and transmission  
Protection of intellectual property 
7.328  The Panel recalls that the national treatment ob ligation in Article 3 of the TRIPS Agreement 
applies to the treatment accorded by a Member "with regard to the protection of intellectual property".  
Footnote 3 provides an inclusive definition of the term "protection" as used in Articles 3 and 4: 
"For the purposes of Articles 3 and 4, 'protection' shall 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." 
7.329  The Panel recalls its finding at paragraph 7.262 that procedures for the filing and examination 
of applications for registration are matters affecting the acquisition of intellectual property rights, 
within the scope of "protection" of intellectua l property as clarified in footnote 3 of the TRIPS 
Agreement.  Procedures for objections to such applications are related to the procedures for 
acquisition, as recognized in the fourth paragra ph of Article 62 (which uses the word "opposition") 
and the title of that article.  Hence, opposition pro cedures are also matters "affecting" the acquisition 
of intellectual property rights which concern the "pro tection" of intellectual property, as clarified in 
footnote 3 to the TRIPS Agreement.   
                                                     
 
312 Annex C, paras. 139-140. WT/DS174/R 
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 7.330  It is not disputed that "designations of orig in" and "geographical indications", as defined in 
the Regulation, are a subset of geographical indica tions, the subject of Section 3 of Part II, and 
therefore part of a category of intellectual propert y within the meaning of Article 1.2 of the TRIPS 
Agreement.  
7.331  Therefore, this claim concerns the "protecti on" of intellectual property, as clarified in 
footnote 3 to the TRIPS Agreement, within the scope of the national treatment obligation in 
Article 3.1 of that Agreement.  
Less favourable treatment accorded to the nationals of other Members 
7.332  The United States claims that the procedures relating to verification and transmission of 
objections are inconsistent with the national treat ment obligations under the TRIPS Agreement.   
7.333  The Panel notes that, unlike the application procedures, the objection procedures do not 
concern the location of the geographical area to whic h the GI refers.  Rather, they refer to the place 
where the objector resides or is established.  The Panel recalls its findings at paragraphs 7.185 to 
7.203 and considers, for the same reasons a fortiori , that the treatment accorded by the Regulation to 
persons resident or established in certain countries w ill, objectively, translate into treatment of persons 
with the nationality of those countries.    
7.334  The Panel notes once again that the close link between nationality, on the one hand, and 
residence and establishment, on the other, appear s to be recognized in the Regulation itself.  
Articles 12b(2)(a) and 12d(1) of the Regulation acco rd a right of objection to persons, which the 
European Communities confirms refers to persons  resident or established outside the European 
Communities regardless of their nationality.
313  Yet the April 2003 amending Regulation, which 
inserted these provisions, explained that Article 12d granted the right of objection to the nationals of 
other WTO Members.314   
7.335  The Panel recalls its finding at paragraph 7.134 that under Article 3.1 of the TRIPS 
Agreement we must examine the "e ffective equality of opportunities" with regard to the protection of 
intellectual property rights and at paragraph 7.137 that in this examination we will focus on the 
"fundamental thrust and effect" of the Regulation. 
7.336  The parties and third parties who responded to the Panel's question on this point all reported 
that they were not aware of any objections to registration of GIs under the Regulation ever having 
been filed with the authorities of a third country.315  However, the United States challenges the 
Regulation, in this respect, "as such". 
7.337  The United States claims that the treatment  accorded under the objection procedures in 
Articles 12b(2) and 12d(1) is less  favourable than that accorded under the objection procedure in 
Article 7(3).  There is an apparent equivalence in  the drafting of these provisions but the question is 
whether this would imply a modification of the effe ctive equality of opportunities with regard to the 
protection of intellectual property.   
                                                      
313 European Communities' first written submission, para. 142. 
314 See paragraph 10 of the recitals to the April 2003 amending Regulation, set out in para. 7.70 above. 
315 However, the United States provided evidence from the U.S. Dairy Export Council and the National 
Milk Producers Federation that U.S. dairy producers and pr ocessors had been unable to prevent the registration 
as protected GIs in the European Un ion of a number of cheese types that  they considered generic prior to 
registration:  see letter dated 26 March 2004 to the Office of the United States Trade Representative, in response to Panel question No. 36, reproduced in Exhibit US-39.  The European Communities responds that this is based 
on a misperception of the content of the Regulation:  see its rebuttal submission, para. 85.  WT/DS174/R 
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 7.338  The Panel notes that the initial steps in the procedures for objections by private persons can 
be broken down as follows: 
(a) as a first step, all objectors are required to submit their objection to the authorities in 
the country in which they reside or are established.  These will be authorities of an EC member State or a third country, depending on the case;   and 
(b) as a second step, the authorities who receive  an objection verify certain formal 
matters
316 and forward or transmit it to the Commission.   
7.339  We recall the European Communities' expl anation of what amounts to its domestic 
constitutional arrangements, set out at paragraph 7.98, that Community laws are generally not 
executed through authorities at Community level but ra ther through recourse to the authorities of its 
member States which, in such a situation, "act de facto  as organs of the Community, for which the 
Community would be responsible under WTO law and international law in general".317  It follows that 
any objection from a person in an EC memb er State is filed directly with a " de facto  organ of the 
Community".  An objection from a person in a third country cannot be filed directly, but must be filed with a foreign government.  This is  a formal difference in treatment. 
7.340  An EC member State has an obligation under Community law to verify an objection and 
forward it to the Commission.  A group or person who submits an objection in an EC member State 
may enforce these obligations through recourse to j udicial procedures based on the Regulation.  In 
contrast, a third country government has no oblig ation under Community law or any other law to 
receive an objection or to transmit it to the Commi ssion.  A group or person who submits an objection 
in a third country has no ri ght to such treatment.   
7.341  Therefore, persons resident or established in third countries, including other WTO Members, 
who wish to object to applications for registrati on under the Regulation do not have a right in the 
objection procedures that is provide d to persons in the European Communities.  Objectors in third 
countries face an "extra hurdle" in ensuring that the authorities in those countries carry out the functions reserved to them under the Regulation, wh ich objectors in EC member States do not face.  
Consequently, certain objections may not be verified  or transmitted.  Each of these considerations 
significantly reduces the opportunities available to ot her WTO Member nationals in matters affecting 
the acquisition of rights under the Regulation compared with those available to EC nationals.  For this 
reason, the Regulation accords nationals of othe r WTO Members "less favourable treatment" within 
the meaning of Article 3.1 of the TRIPS Agreement.  
7.342  The European Communities submits that the re quirement that statements of objection be 
transmitted by the country where the person is reside nt or established is not an unreasonable condition 
and that, if there is no objective reason for the thir d country government to refuse to cooperate, it is 
not the European Communities' rules which create an extra hurdle for third country residents.
318  The 
Panel recalls its finding at paragraph 7.274 that  the obligation to accord national treatment with 
respect to a measure of the European Communities is the obligation of the European Communities.  
For the reason set out in paragra ph 7.275 in relation to applicatio n procedures, the Panel considers 
                                                      
316 The Panel takes note of the European Communities' position that it does not require third country 
governments to verify whether the objections are admissible, but it agrees that it does require them to verify 
certain formal matters:  see European Communities' rebuttal submission, paras. 155-156. 
317 European Communities' second oral statement, para. 148. 
318 European Communities' rebuttal submission, para. 157.  WT/DS174/R 
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 that the European Communities has failed  to accord no less favourable treatment itself to the nationals 
of other Members.
319 
7.343  The Panel confirms that the European Comm unities is entitled, under Article 62.4 of the 
TRIPS Agreement, to provide for procedures for objec tions that comply with the general principles in 
paragraphs 2 and 3 of Article 41.  However, Article 62 is outside the Panel's terms of reference. 
7.344  The Panel recalls its finding at paragraph 7. 212 that the fact that a general exceptions 
provision analogous to Article XX of GATT 1994 was not included in the TRIPS Agreement has no impact on its analysis of Article 3.1. 
7.345  Therefore, the Panel concludes that, with respect  to the objection procedures, insofar as they 
require the verification and transmission of objecti ons by governments, the Regulation accords less 
favourable treatment to the nationals of other Member s, inconsistently with Article 3.1 of the TRIPS 
Agreement. 
Article 2 of the Paris Convention (1967) 
7.346  In view of the conclusion at paragraph 7.345 w ith respect to the objection procedures, insofar 
as they require the verification and transmission of objections by governments, it is unnecessary to 
consider their consistency with Article 2(1) of the Paris Convention (1967), as incorporated by 
Article 2.1 of the TRIPS Agreement.   
7.347  The Panel recalls its finding at paragraph 7.2 17 and, for the same reasons, concludes that, 
with respect to the opposition procedures, the Re gulation does not impose a requirement of domicile 
or establishment inconsistently with Article 2(2) of the Paris Convention (1967), as incorporated by 
Article 2.1 of the TRIPS Agreement. 
Equivalence and reciprocity conditions 
 
7.348  The United States claims that the right to file an objection under Article 12d(1) of the 
Regulation is limited to countries that satisfy the equivalence and reci procity conditions in 
Article 12(1), based on a reading of the phrase "a WTO member country or a third country recognised under the procedure provided for in Article 12(3)" as if it read "a WTO member country recognised 
under the procedure provided for in Article 12(3) or a third country recognised under the procedure 
provided for in Article 12(3)".  It is necessary for the Panel to make an objective assessment of the meaning of that phrase in this provision, although so lely for the purpose of determining the European 
Communities' compliance with its WTO obligations.
320 
7.349  The Panel observes that this claim is based entir ely on the absence of a comma.  A reading of 
the text of Article 12d(1), set out in full at paragra ph 7.311, shows that if there were a comma after the 
words "a WTO member country", it would be clear  that it was separate from the following words "or 
a third country recognised under the procedure provided for in Article 12(3)".  However, in the Panel's 
view, even without a comma, it is unlikely that the phrase "recognised under the procedure provided for in Article 12(3)" refers to both a "WTO member country" and a "third country" in this context.  If 
that were the correct reading, then there woul d be no need to specify a "WTO member country" 
separately because, outside the European Communi ties, a "WTO member country" is necessarily a 
third country.  There would be no need to refer specifically to a "WTO member country" if it was not distinguished in some way from any other third country.  The difference must be that a third country is only included if it is recognized under the pr ocedure provided for in Article 12(3) so that, 
                                                     
 
319 See further paras. 7.741 to 7.743 below. 
320 In this regard, the Panel recalls its comments at para. 7.55 above.  WT/DS174/R 
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 consequently, this phrase would not apply to a "WTO member country".  Indeed, the fact that there is 
no need for a WTO Member to obtain recognition unde r Article 12(3) for its residents to object seems 
to be precisely the reason that it is included.  Theref ore, the Panel's interpretation of Article 12d of the 
Regulation is that it does not apply conditions of equi valence and reciprocity to the right of objection 
for nationals of other WTO Members. 
7.350  This is consistent with the fact that Article 12b(2), in which the format is clearer, creates a 
right of objection for WTO Member and other th ird country nationals but clearly indicates that 
recognition under the procedure in Article 12(3) do es not apply to WTO Members in this respect.  
Further confirmation is provided by the recitals  to the April 2003 amending Regulation.  Those 
recitals explained the justification for the insertion of the right of objection in Articles 12b and 12d in 
terms of WTO Members, but limited the explanation of the equivalence and reciprocity conditions to 
the issue of protection provided by registration to foreign names.321   
7.351  The European Communities confirms that the Pa nel's interpretation of this aspect of the 
Regulation is correct and submits undisputed evidence that since the entry into force of 
Article 12d(1), the publications of all applicati ons for registration of a geographical indication 
specifically refer to the possibility for resident s from WTO countries to object to the application.322   
7.352  Therefore, based on this interpretation of Article 12d(1) of the Regulation, the Panel 
concludes that, with respect to the equivalence a nd reciprocity conditions, as allegedly applicable to 
objections, the United States has not made a prima faci e case in support of its claims under Article 3.1 
of the TRIPS Agreement or Article 2(1) of the Pa ris Convention (1967) as incorporated by Article 2.1 
of the TRIPS Agreement. 
Standing requirements  
7.353  The United States also claims that there is a difference in the requirements for standing to 
object under the Regulation, based on the difference between the words: 
(a) "[a]ny legitimately concerned natural or  legal person may object" in Article 7(3); 
(b) "any natural or legal person with a legitim ate interest may object" in Article 12b(2); 
and 
(c) "any natural or legal person that has a legitimate interest ... may object", in 
Article 12d(1). 
7.354  The requirement in Article 7(3) of the Regul ation applies to persons who wish to file 
objections who reside or are established in the European Communities, wh ilst the requirements in 
Articles 12b(2) and 12d(1) apply to persons who wish to file objections who reside or are established 
in other WTO Members and third countries.   
7.355  The United States' claims are based on the pr emise that a "legitimate interest" is a higher 
standard than "legitimately concerned".   
                                                      
321 Paragraphs 9 and 10 of the recitals to Counc il Regulation (EC) No. 692/2003 set out in Exhibit 
COMP-1h. 
322 European Communities' rebuttal submission, para. 152, attaching as an example the publication of  
the application to register "Lardo di Colonnata" dated 5 June 2003, set out in Exhibit EC-56.  WT/DS174/R 
Page 86  
 
 7.356  The Panel notes that the Regulation, on its face, uses two different words in the standing 
requirements applicable to persons resident a nd established within or outside the European 
Communities.  The word "interest" can be defined as follows:  
"The fact or relation of having a share or concern in, or a right to, something, esp. by 
law; a right or title, esp. to (a share in) property or a use or benefit relating to 
property; (a) share in something." 
7.357  The word "concern" can be defined as follows: 
"Reference, respect, relation.  Now spec. important relation, importance, interest 
(chiefly in of concern (to) )."
323 
7.358  The difference between these two words is appare ntly minor, particularly since each appears 
in the definition of the other quoted above.   
7.359  The Regulation uses the same term "legitimate inte rest" in a related context where it refers to 
persons who may have access to applic ations filed with an EC member State in Article 7(2).  It uses 
the more specific term "legitimate economic interest " where it refers to pers ons who may consult an 
application in Articles 7(2) and 12d(1), and contra sts it with "legitimate interest" in Article 7(2), 
which confirms that they have different meanings .  However, there is nothing in the context that 
would suggest that there is a difference between  a person with a "legitimate interest" and a 
"legitimately concerned" person. 
7.360  It is pertinent to note that in many places th e Regulation uses slightly different words or 
formulations to refer to an identical concept.  Fo r instance, it refers variously to "a third country 
recognised in accordance with the procedure in  Article 12(3)", "[i]n the case provided for in 
Article 12(3)";  "a third country meeting the equi valence conditions of Article 12(3)";  "a third 
country recognised under the procedure provided for in Article 12(3)" in Articles 6(6), 12a(1), 12b(2)(b), 12d(1) and 13(5), respectively.  There is no suggestion that these mean different things.   
7.361  It is also pertinent to recall that Article 7(3) was adopted in 1992, but Articles 12b and 12d 
were drafted separately and inserted in April 2003.   This may explain minor differences between 
them.   
7.362  Even if the meaning of these provisions is  different, it appears that the European 
Communities can apply them in the same manner.  Indeed, the European Communities indicates to the 
Panel that it considers that these two terms have the same meaning and it confirms that the Commission would implement them in the same way.   Further, if the Commission's interpretation was 
ever challenged, the institution with ultimate author ity to interpret the measure is the European Court 
of Justice. We recall the European Communities'  explanation of its domestic law set out at 
paragraph 7.99 that: 
"Community legislation must, so far as possi ble, be interpreted in a manner that is 
consistent with international law, in particular where its provision are intended 
specifically to give effect to an in ternational agreement concluded by the 
Community."
324 
7.363  We note that paragraph 10 of the recitals to  the amending Regulation expressly states as 
follows: 
                                                      
323 The New Shorter Oxford English Dictionary (1993). 
324 See s upra  at note 131 .     WT/DS174/R 
 Page 87 
 
 
 "(10) (...) The right of objection should be granted to WTO member countries' 
nationals with a legitimate interest on the same terms as laid down in Article 7(4) of the said Regulation.  (...)."
325 
7.364  This confirms that the difference in the wording of the standing requirements is not intended 
to create a lower standard for objectors resident or established in WTO Members outside the 
European Communities but rather that a person that  has a "legitimate interest" and a "legitimately 
concerned" person should be in terpreted in the same way.  
7.365  Therefore, the Panel concludes that, with respect to the standing requirements for objections, 
the United States has not made a prima facie case in  support of its claims under Article 3.1 of the 
TRIPS Agreement and Article 2(1) of the Paris Convention (1967), as incorporated by Article 2.1 of 
the TRIPS Agreement.  
Summary of conclusions regarding objec tion procedures and the TRIPS Agreement  
7.366  In summary: 
(a) with respect to the objection procedures, in sofar as they require the verification and 
transmission of objections by governments,  the Regulation accords the nationals of 
other Members less favourable treatment  than the European Communities' own 
nationals inconsistently with Ar ticle 3.1 of the TRIPS Agreement; 
(b) with respect to the objection procedures, the Regulation does not impose a 
requirement of domicile or establishment incons istently with Article 2(2) of the Paris 
Convention (1967) as incorporated by Article 2.1 of the TRIPS Agreement;   
(c) with respect to the equivalence and reciproc ity conditions, as allegedly applicable to 
the objection procedures, the United States h as not made a prima facie case in support 
of its claims;  and 
(d) with respect to the standing requirements for objections, the United States has not 
made a prima facie case in support of its claims.   
(c) National treatment under GATT 1994 
(i) Main arguments of the parties 
7.367  The United States claims that the Regulation is incons istent with the national treatment 
obligations under GATT 1994 because it applies conditions of equivalen ce and reciprocity to the right 
of objection.326   
7.368  The United States also claims that the requi rement that WTO Members themselves become 
active participants and advocates for their nationa ls in analyzing and submitting GI registration 
applications and objections also amounts to less favourable treatment of non-EC products.  This 
requirement is imposed unilaterally and is both burdensome and unnecessary and acts as an additional 
barrier to market access for non-EC goods.327 
                                                      
325 Exhibit COMP-1h. 
326 United States' rebuttal submission, paras. 89-94. 
327 United States' rebuttal submission, para. 95. WT/DS174/R 
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 7.369  The European Communities does not respond to this claim, although it does submit that the 
right of objection does not affect the treatment of products under GATT 1994.
328  However, in 
response to a question from the Panel, it indicated that transmission of objections is necessary within the meaning of Article XX(d) of GATT 1994 because it has no significant impact on trade in goods and is a purely ministerial act which would not pose particular difficulties.
329   
(ii) Consideration by the Panel 
7.370  The Panel recalls its findings in  paragraphs 7.30 to 7.33 that the United States presented this 
claim after the first substantive meeting but that, in  the circumstances of this dispute, this had not 
prejudiced the European Communities'  ability to defend itself.  For that reason, the Panel decided to 
consider this claim. 
7.371  The Panel recalls its finding at paragraph 7.3 49 that Article 12d of the Regulation does not 
apply conditions of equivalence and reciprocity to the right of objection for nationals of other WTO 
Members.  
7.372  The Panel recalls its findings at  paragraph 7.338 to 7.341 on the verification and transmission 
of objections under the Regulation.  In the single pa ragraph of its rebuttal s ubmission devoted to this 
aspect of the objection procedures and GATT 1994, the United States asserts, but does not 
demonstrate, that this treatment accorded to nationals amounts to less favourable treatment of 
products.  The arguments concerning verification and tr ansmission in earlier submissions relate to the 
application procedures only.  The rebuttal submissi on does refer to the procedures for protection of 
GIs for "products", but that also apparently relat es to application procedures only, not the objection 
procedures which are the subject of this claim.   
7.373  The United States has not explained the link betw een the interests of a person who wishes to 
file an objection, and the conditions of competiti on between a product for which GI registration is 
granted and other products.  The Panel declines to embark on an examination of the grounds for 
objection and speculate on the possible link between t hose and trade in goods, as it is unable to relieve 
the United States of the burden of proving all elements of its claim.  Accordingly, the Panel considers 
that the United States has not made a prima facie cas e in support of its claim with respect to objection 
procedures under Article III:4 of GATT 1994. 
4. Inspection structures 
(a) Description of inspection structures (Articles 4, 10 and 12a of the Regulation)330 
7.374  The condition in Article 12(1) of the Regulati on that a "third country ... has inspection 
arrangements ... equivalent to those laid down in this Regulation" w as considered earlier as one of the 
equivalence and reciprocity conditions.  That is a per-country condition.  The condition at issue here 
concerns the inspection structures required by Artic le 10 of the Regulation under the procedures for 
registration of individual GIs.  This is , allegedly, a per-product requirement.   
7.375  The Panel continues its examination in respect of  this particular requirement, bearing in mind 
the aim of the dispute settlement mechanism, whic h is to secure a positive solution to a dispute331, and 
the views of the Appellate Body in Australia – Salmon on the principle of judicial economy.332  Were 
                                                      
328 European Communities' rebuttal submission, para. 173 (in response to Australia's claim concerning 
individual registrations under the simplified procedur e in the former Article 17 of the Regulation). 
329 European Communities' response to Panel question No. 136(d). 
330 European Communities' first written submission, para s. 50-55;  rebuttal submission, paras. 96-100. 
331 Article 3.7 of the DSU. 
332 Appellate Body report on Australia – Salmon, para. 223.  WT/DS174/R 
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 the Panel not to examine the claim with respect to  the inspection structures requirements within the 
application procedures, its conclusion on the insp ection structures condition in Article 12(1) would 
not enable the DSB to make sufficiently precise recommendations and rulings so as to allow for 
prompt compliance in order to ensure effective resolution of this dispute.   
7.376  The Regulation provides that an application for registration of a GI must be accompanied by 
certain documents.  The first is the product specifi cation.  Article 5(3) provides as follows with 
respect to an application to register a GI  located within the European Communities: 
"3. The application for registration shall include the product specification 
referred to in Article 4." 
7.377  Article 12a(1) of the Regulation provides as follows  with respect to applications to register 
GIs located in third countries:  
"1. Applications must be accompanied by the specification referred to in 
Article 4 for each name." 
7.378  With respect to the specification,  Article 4 provides as follows:  
"1. To be eligible to use a protected designation of origin (PDO) or a protected 
geographical indication (PGI) an agricultura l product or foodstuff must comply with a 
specification. 
2. The product specification shall include at least: (...) (g) details of the inspection structures provided for in Article 10;" 
7.379  A specification refers to a particular product a nd the list of items that must be included in a 
product specification all appear to be product-specific.   
7.380  Applications to register GIs located in th ird countries must also be accompanied by a 
declaration by a third country government.  Article  12a(2)(b) of the Regulation provides for a third 
country to transmit to the Commission an application to register a GI located in its territory accompanied by: 
"(b) a declaration that the structures provided for in Article 10 are established on 
its territory." 
7.381  This declaration is not required of an EC me mber State when it transmits to the Commission 
an application to register a GI located within the European Communities.  However, EC member 
States have an obligation under Article 10 itself to en sure that inspection structures are in place.  The 
European Communities confirms that the requirement s are the same for EC member States and third 
countries.
333 
7.382  Article 10(1) explains that the function of insp ection structures is "to ensure that agricultural 
products and foodstuffs bearing a protected name  meet the requirements laid down in the 
specifications".  Article 10(2) provides that an "inspection structure" may comprise one or more "designated inspection authorities and/or private bodi es approved for that purpose" by the EC member 
State.  Article 10(3) lays down requirements regard ing the characteristics and duties of the inspection 
authorities and/or private bodies but not the product-specific requirements which appear in product 
                                                     
 
333 European Communities' response to Panel question No. 126(a). WT/DS174/R 
Page 90  
 
 specifications.  We highlight the requirements for inspection authorities under Article 10(3) which are 
relevant to the claims below. 
7.383  The characteristics of the inspection authoriti es and/or private bodies include the following: 
"Designated inspection authorities and/or approved private bodies must offer 
adequate guarantees of objectivity and impar tiality with regard to all producers or 
processors subject to their control and have permanently at their disposal the qualified 
staff and resources necessary to carry out inspection of agricultural products and 
foodstuffs bearing a protected name." 
7.384  The inspection authorities and/or private bodies may outsource certain functions as follows: 
"If an inspection structure uses the services of  another body for some inspections, that 
body must offer the same guarantees.  In  that event, the designated inspection 
authorities and/or approved private bodies sh all, however, continue to be responsible 
vis-à-vis the Member State for all inspections." 
7.385  The applicable standards for priv ate bodies are described as follows: 
"As from 1 January 1998, in order to be approved by the Member States for the 
purpose of this Regulation, private bodies must fulfil the requirements laid down in 
standard EN 45011 of 26 June 1989. 
The standard or the applicable version of standard EN 45011, whose requirements 
private bodies must fulfil for approval purpo ses, shall be established or amended in 
accordance with the procedure laid down in Article 15. 
The equivalent standard or the applicable version of the equivalent standard in the 
case of third countries recognised pursuant to Article 12(3), whose requirements 
private bodies must fulfil for approval purpo ses, shall be established or amended in 
accordance with the procedure laid down in Article 15." 
7.386  Standard EN 45011 sets out "General require ments for bodies operating product certification 
systems".  It specifies general requirements that a third party operating a product certification system 
shall meet if it is to be recognized as competent and reliable.  These include requirements relating to 
the certification body itself and its personnel; chang es in the certification requirements; applications 
for, evaluation of, and decisions on, certification; surveillance;  use of licences, certificates and marks 
of conformity; and complaints to suppliers.  It applies for EC member States although the European 
Communities has not yet established the standard or the applicable version of that standard on the 
basis of Article 10(3) of the Regulation.  
7.387  Standard EN 45011 is a European standard that  takes over the text of ISO/IEC Guide 65:1996 
prepared by the ISO Committee on Conformity A ssessment (CASCO).  The European Communities 
has not established an equivalent standard in the case of third countries, but the European 
Communities informs the Panel that ISO/IEC Guide 65:1996 is an example of such an equivalent 
international standard.
334       
                                                      
334 The European Communities supplied copies of EN 45011 and ISO/IEC Guide 65:1996 to the Panel 
in Exhibits EC-2 and EC-3, respectiv ely.  See European Communities' response to Panel question No. 126(c).  WT/DS174/R 
 Page 91 
 
 
 7.388  The responsibilities of governments with respect  to inspection structures are set out in 
Article 10(1) and (2).335  Governments must ensure that inspection structures are in place by 
designating a public inspection authority and/or approving a private inspection body and then notify them to the Commission.  Where the government d esignates a public inspection authority, it carries 
out inspections itself.  Where the government a pproves a private inspection body, it must ascertain 
that the private body is capable of fulfilling its functions in accordance with Article 10(1) and meets 
the requirements of Article 10(3), set out above.  Th e basic criterion for the approval process is that 
the private body can effectively ensure that products  comply with a specification.  After designation 
and/or approval, the government is responsible fo r continued monitoring that an approved private 
body continues to meet the requirements.
336 
(b) National treatment under the TRIPS Agreement 
(i) Main arguments of the parties 
7.389  The United States claims that the inspection structures requirement is contrary to the national 
treatment obligations in the TRIPS Agreement, in cluding that in the Paris Convention (1967).  The 
United States submits that it is important to a resolu tion of this dispute that the Panel make a finding 
on this particular requirement, as otherwise the Eu ropean Communities could remove Article 12(1) of 
the Regulation but impose equivalence by an other name through the requirement under 
Article 12a(2)(b) that another WTO Member provide a declaration that inspection structures are established on its territory.
337   
7.390  The United States argues that the government participation by another WTO Member is 
inconsistent with national treatment under the TRIPS Agreement because a foreign applicant must 
petition its government to  provide a declaration under Article 12a(2)(b).338  Even though the European 
Communities argues that the requirement for specifi c inspection structures accords equal treatment,  
in cases of formally different legal provisions, th e respondent bears the burden of showing that, in 
spite of such differences, the less favourable treatment  standard is met.  The inspection structures do 
not accord equal treatment to EC and other WTO Member nationals because EC member States have 
an obligation to establish specific structures under the Regulation so that the EC national 
automatically has a qualifying inspection structur e which other WTO Member nationals do not.  
Many WTO Members have no such inspection structures.  Therefore, all EC nationals are in a position to satisfy the inspection structures requireme nt but nationals of other Members cannot satisfy 
this condition, at least where the WTO Member concerned has not established the EC inspection 
structures.
339  It is not clear on what basis a U.S. government authority would be in a position to assess 
that inspection structures are in place in its terr itory which would meet the requirements of the 
Regulation.340   
7.391  The United States argues that the inspection structure requirements are highly prescriptive 
and go beyond simply assuring that products meet the product specifications.  The issue is not which particular aspects of the inspection structures are objectionable.  The issue is that, if a Member 
demands that other WTO Members establish the sa me particular inspection structures that it has 
chosen for itself as a precondition for granting TRIPS rights to nationals of other Members, it accords 
less favourable treatment.  The United States does not disagree that the European Communities can 
                                                     
 
335 Article 10(1) and (2) refers to EC member States  but, in conjunction with Article 12a(2)(a), they 
also apply to the governments of third countries. 
336 Uncontested information provided by the European Communities in its responses to Panel question 
Nos. 127 and 132.  See the United States' comments on those EC responses.  
337 United States' rebuttal submission, para. 48;  response to Panel question No. 56. 
338 United States' first written submission, para. 81;  response to Panel question No. 56. 
339 United States' rebuttal submission, paras. 47-48;  second oral statement, para. 25. 
340 United States' rebuttal submission, para. 64. WT/DS174/R 
Page 92  
 
 require, as a condition of registration, that the applic ant itself be in a position to control use of the GI 
and ensure that products bearing the GI are entitled to  it.  Intellectual property rights are private rights, 
so the applicant must be in a position to satisfy th e requirements for protection and not have to depend 
on actions of government outside its control.  The European Communities has overstated the 
flexibility in its requirements.  Article 12a(2) refers  to the structures provided for in Article 10, which 
refers to a "structure" under whic h particular bodies may be authori zed to conduct inspections.  This 
requires a broad inspection structure capable of in specting all agricultural products and foodstuffs, not 
just the one which the applicant seeks to register.  It imposes specific requirements that go far beyond 
what is necessary to ensure the integrity of a GI.  The inspection authority must have staff 
"permanently at its disposal" and, if it is a privat e body, fulfil the requirements of a European standard 
and continue to be responsible vis-à-vis the EC member State for all inspections.
341  It is not possible 
to separate the requirement that the government es tablish particular inspection systems from other 
aspects of those systems.342 
7.392  The United States also argues that, even if certain certification mark holders might qualify as 
inspection authorities, the Regulation still accords less favourable treatment to the nationals of other 
Members because (1) the governments of other Members must ensure compliance by providing the 
declaration under Article 12a(2)(b) and monitoring priv ate inspection bodies;  and (2) some other GI 
right holders who are able to assure the integrity of their GI, such as collective mark owners and 
common law GI owners, would be excluded.  The United States is not challenging the European 
Communities' basic standard for wh at constitutes a GI, but it does asser t that if a product meets that 
standard, the non-EC national should be able to regi ster it under the Regulation, regardless of whether 
its home government has established the same inspection structures as the EC member States.343   
7.393  The United States argues that the issue of what is necessary  does not arise under the national 
treatment obligations in the TRIPS Agreement a nd the Paris Convention (1967).  In any case, the 
inspection structures required by the Regulation are not necessary.  There is no reason to assume that 
only the government, as opposed to the right holder,  can sufficiently assure that products qualify for 
protection.  It is not clear why the government, not the right holder, has to approve or authorize 
inspection structures.344 
7.394  The European Communities responds that the requirement of inspection structures does not 
involve any less favourable treatment of foreign nationals.  Indeed, it represents equal treatment.345   
7.395  The European Communities denies that the Regul ation imposes equivalence by another name 
because it requires inspection structures only for pr oducts for which protection is sought and on a 
product-specific basis.346  It does not impose an EC-model becau se it merely requires that inspection 
structures must exist according to the general pr inciples set out in Article 10.  This leaves 
considerable flexibility in the design of the actual structures.  In particular, it provides a choice 
between public and private elements.  This flexibility is illustrated by the variety of structures notified 
by EC member States under Article 10(2).  Public b odies are situated at the national, regional and 
local levels of government;  frequently they are general public administrations dealing with many 
other policy issues besides inspections under the Regulation;  private bodies may be commercial 
                                                      
341 United States' rebuttal submission, paras. 51- 54; second closing oral statement, para. 10. 
342 United States' response to Panel question No. 130. 
343 United States' rebuttal submission, paras. 55-61. 
344 United States' second oral statement, paras. 27-29;  comment on EC response to Panel question 
No. 127. 
345 European Communities' rebuttal submission, paras. 94-95. 
346 European Communities' rebuttal submission, paras. 96-98.  WT/DS174/R 
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 enterprises or not-for-profit and may engage in ot her activities besides inspections.  The European 
Communities provides examples of two firms which provide inspections as a commercial service.347   
7.396  The European Communities submits that a GI is less reliable and informative for consumers if 
its proper use is not ensured by an effective inspec tion regime.  The function of inspection structures 
is to ensure that products bearing a protected name  comply with the product specifications.  They are 
inseparably linked with the object and purpose of the Regulation and their removal would undermine 
the EC's system of GI protection.  In response to  the suggested alternative of unfair competition laws, 
the European Communities does not contest that they  may be one way of protecting GIs, but they 
could not provide an equivalent degree of GI pr otection as that achieved by the Regulation.  For 
example, a producer would have to have recourse to legal action and could not rely on controls carried 
out by an inspection body.  A consumer would onl y have the assurance that a competitor might take 
legal action against non-conforming products.  This would also affect the value of the GI for 
producers and undermine confidence in the EC system.  There would be a "free rider" problem if producers from third countries were able to benefit from the EC system without complying with inspection structures.
348 
(ii) Main arguments of third parties 
7.397  Argentina submits that the inspection structures requirements in the Regulation are 
inconsistent with the TRIPS Agreement.  It notes that  Article 4(h) [sic] of the Regulation refers to the 
inspection structures provided for in Article 10, which does not state what is the applicable criterion to 
identify these structures when the applicant is from a third country.  Article 12 requires that a third 
country must have inspection arra ngements equivalent to those laid down in the Regulation.  This 
creates an obstacle which completely escapes the decision of a natural or legal person to accept the 
requirements of Article 4, given that the decision to create inspection structures is restricted to government and is not foreseen in all third countri es.  Even in those third countries which do have 
inspection structures, their structures might not satis fy the requirement of equivalence in Articles 10 
and 12 of the Regulation.
349 
7.398  China notes that Article 10 of the Regulation sets out detailed provisions on inspection 
structures in EC member States but not for othe r WTO Members.  Article 12a(2) requires a third 
country to transmit with an application a declarati on that the structures provided for in Article 10 are 
established on its territory.  The Commission de termines whether the declaration satisfies the 
conditions of the Regulation.  EC member States are obliged to establish the Article 10 inspection 
structures and, hence, they are not  obliged to guarantee them when they transmit an application and 
can reasonably expect no objection from the Commission to their designated authorities.  It appears 
that WTO Members are required to establish an "e quivalent standard" for private inspection bodies 
and possibly also for "designated inspection auth orities" but there is no guidance as to what 
constitutes an equivalent standard as th e European Communities has submitted ISO/IEC 
Guide 65:1996 only by way of example.  China agrees with the European Communities that product 
specifications and inspection structures are essential to  the value and quality of GIs, but does not find 
its argument that equivalence and reciprocity cond itions apply only in these two respects and not as an 
outright requirement of a third country 's overall system of GI protection.350 
                                                      
347 European Communities' rebuttal submission, paras. 101-107. 
348 European Communities' rebuttal submission, paras. 109-121. 
349 Annex C, paras. 9-10. 
350 Annex C, paras. 84-91. WT/DS174/R 
Page 94  
 
 (iii) Consideration by the Panel 
7.399  These claims are brought under Article 3.1 of the TRIPS Agreement and Article 2 of the Paris 
Convention (1967) as incorporated by Article 2.1 of  the TRIPS Agreement.  The Panel will consider 
the claim under Article 3.1 of the TRIPS Agreement first.   
7.400  The Panel recalls that two elements must be sa tisfied to establish an inconsistency with this 
obligation:  (1) the measure at issue must apply with  regard to the protection of intellectual property;  
and (2) the nationals of other Members must be  accorded "less favourable " treatment than the 
Member's own nationals.  The Panel will address each of these elements in turn. 
Protection of intellectual property
 
7.401  This claim concerns the inspec tion structures required in respect of particular products for 
which individual GIs are registered under the Regulation.   
7.402  The Panel recalls that the national treatment ob ligation in Article 3 of the TRIPS Agreement 
applies to the treatment accorded by a Member "with regard to the protection of intellectual property".  
Footnote 3 provides an inclusive definition of  the te rm "protection" as used in Articles 3 and 4.  It 
reads as follows: 
"For the purposes of Articles 3 and 4, "prot ection" shall 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." 
7.403  Turning to the Regulation, insp ection structures ensure that products meet the requirements in 
the specifications.  Whatever else may be the legal character of those structures, it is clear that the 
specifications include details of the inspection structures and these must be included in, or 
accompany, all applications for registration.  The declaration under Article 12a(2)(b) must also 
accompany applications to register GIs located in third countries.  Therefore, under this Regulation, 
the inspection structures are a matter affecting the availability and acquisition of protection for GIs.   
7.404  It is not disputed that "designations of orig in" and "geographical indications", as defined in 
the Regulation, are a subset of "geographical indica tions", the subject of Section 3 of Part II, and 
therefore part of a category of intellectual propert y within the meaning of Article 1.2 of the TRIPS 
Agreement.   
7.405  Therefore, this claim concerns the "protecti on" of intellectual property, as clarified in 
footnote 3 to the TRIPS Agreement, within the scope of the national treatment obligation in 
Article 3.1 of that Agreement. 
Less favourable treatment accorded to the nationals of other Members
 
7.406  The Panel recalls its findings: 
(a) at paragraphs 7.185 to 7.203 as to the treatme nt accorded to the "nationals of other 
Members" in this dispute; and 
(b) at paragraph 7.134 that under Article 3.1 of the TRIPS Agreement we must examine 
the "effective equality of opportunities" with regard to the protection of intellectual 
property rights and at paragr aph 7.137 that in this exam ination we will focus on the 
"fundamental thrust and effect" of the Regulation.  WT/DS174/R 
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 7.407  No application for registration of a GI located in a third country has ever been filed under the 
Regulation.  However, the United States challenges th e Regulation, in this respect, "as such".    
7.408  The United States claims that the treatment  accorded under the inspection structures 
requirements for GIs located in third countries is  less favourable than that accorded under the 
inspection structures requirements for GIs located within the European Communities, based on two 
main aspects:  the first relates to the allegedly prescriptive nature of the requirements and the second 
to the issue of government participation.  We will take them up in that order.   
Allegedly prescriptive requirements for inspection structures 
7.409  The Panel notes that the text of Article 10 cont ains virtually no formal difference between the 
requirements that apply to GIs located within th e European Communities an d those located in the 
territory of third countries.  The same substantiv e requirements for the design of inspection structures 
apply to the protection of all GIs registered unde r the Regulation.  There is a choice of public 
inspection authorities, private inspection bodies or both.351  All authorities and bodies must offer 
adequate guarantees of objectivity and impartiality and all must have permanently at their disposal the 
qualified staff and resources necessary to carry out inspections.  These requirements apply both to GIs 
located within the European Communities and to those located in third countries.   
7.410  There is one formal difference in Article 10.352  Paragraph 3 provides that private inspection 
bodies located in EC member States must fulfil the requirements laid down in standard EN 45011 and 
those located in third countries must fulfil the requ irements laid down in an "equivalent" standard.  
The Panel notes that standard EN 45011 and ISO/IEC Guide 65:1996, which the European 
Communities informs us is an example of an equivale nt international standard, have the same text and 
are basically identical. Therefore, this does not app ear to amount to a substantive formal difference in 
Article 10(3).  The provisions on public inspection authorities are identical. 
7.411  The Panel recalls its finding at paragraph 7.176 that, even if the provisions of the Regulation 
are formally identical in the treatment that they accord to the nationals of other Members and to the 
European Communities' own nationals, this is not su fficient to demonstrate that there is no violation 
of Article 3.1 of the TRIPS Agreement.  The ques tion is whether this would imply a modification of 
the effective equality of opportunities with rega rd to the protection of intellectual property. 
7.412  The United States argues that these provisions, in practice, accord less favourable treatment to 
the nationals of other Members who enjoy GI protection without inspection structures, or without inspection structures that would satisfy Article 10 of  the Regulation, in the territory of other WTO 
Members.  Specifically, it asserts that certain hol ders of certification marks, collective marks and 
common law rights would not satisfy the requirement s of Article 10(3) and standard EN45011, for 
instance, with respect to the independence of the inspection body from the producers. 
7.413  The Panel recalls that the European Communitie s' obligation under Article 3.1 of the TRIPS 
Agreement is to accord no less favourable treatment to the nationals of other Members than it accords 
to its own nationals.  The benchmark for the obligation is the treatment accorded by the European 
Communities to the European Communities' own na tionals.  The treatment accorded by other 
Members to their own respective nationals is not relevant to this claim.  The level of protection in the 
country of origin does not affect GI protection in the country where GI protection is sought under the 
                                                     
 
351 The European Communities provided a copy of a list published by the Commission of inspection 
structures notified by EC member States in accordan ce with Article 10(2) of th e Regulation in OJ C 69, 
18.3.2002, p.1, reproduced in Exhibit EC-48. 
352 Article 12a(2)(b), which contains a formal differen ce applicable to third countries only, is dealt with 
below.   WT/DS174/R 
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 TRIPS Agreement, except to the extent that a lack of GI protection in the country of origin provides a 
ground to deny GI protection in accordance with Article 24.9.
353 
7.414  The Panel agrees with the European Communiti es that WTO Members are entitled to aim for 
objective assessment of product conformity, provided  that they implement this objective in a WTO-
consistent manner.  The implication of the United States' argument would be to oblige the European 
Communities to recognize forms of protection granted by the United States.  This would be a kind of 
reverse equivalence condition.   
7.415  It is not contested that the European Communities would apply the same criteria for 
protection in Article 2, the same requirements fo r product specifications in Article 4 and the same 
inspection structures requirements in Article 10 to  all applications for registration under the 
Regulation, both those in respect of GIs located within the European Comm unities, and those located 
outside the European Communities.  It therefore appe ars to accord equal treatment.  In any event, the 
Panel notes that Article 10 of the Regulation permit s a certain degree of flexibility.  Both public 
inspection authorities and private inspection bodies may be used.354  The European Communities has 
also confirmed to the Panel that inspection bodies need not be established for the sole purpose of 
conducting inspections under Article 10 of the Re gulation – public inspection authorities may be 
general public administrations dealing with pub lic policy issues besides inspection under this 
Regulation whilst private inspection bodies ma y engage in a number of other activities.355   
7.416  The United States objects, in particular, to the requirement in Article 10(3) of the Regulation 
that inspection bodies must have qualif ied staff permanently at their disposal.  However, the European 
Communities responds that this may be interpreted flex ibly.  It submits that this requirement does not 
exclude the possibility of products for which the enti re production process is confined to part of the 
year, and for which the need for inspection arises only or primarily during that time of the year.  In 
such a case, it submits that the Regulation would not require unnecessary levels of staff to be 
maintained throughout the year.356 
7.417  The Panel also notes that the standard specified  in the Regulation has the same text and is 
basically identical to a guide emanating from the International Organization for Standardization and 
the International Electrotechnical Commission.  Furt her, Article 10(3) permits  an "equivalent", and 
not necessarily identical, standard for GIs located  outside the European Communities, which may 
provide certain flexibility for GIs located outside the European Communities.   
7.418  The United States has not referred to an alte rnative model of independent, objective and 
impartial assessment of product conformity whic h would clearly be refused recognition by the 
European Communities for reasons other than th e requirements of government participation, 
discussed below.   
7.419  The United States also argues that the inspection structures requirements go beyond simply 
assuring that products meet the product specificati ons.  This does not disclose a lack of national 
treatment.    
                                                      
353 See also the consideration of the United States' claim under Article 1.1 of the TRIPS Agreement at 
paras. 7.762 to 7.767 below. 
354 The European Communities has provided a list of inspection structures notified by EC member 
States in accordance with Article 10 (2) of the Regulation which shows a wide range of public inspection 
authorities and private inspection bodies.  This list is reproduced in Exhibit EC-48.   
355 European Communities' rebuttal submission; paras. 105-106. 
356 European Communities' response to Panel question No. 136(f).  WT/DS174/R 
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 7.420  Therefore, in view of the lack of evidence of  different treatment, the Panel concludes that, 
with respect to the allegedly prescriptive requireme nts for inspection structures, the United States has 
not made a prima facie case in support of its cl aim under Article 3.1 of the TRIPS Agreement.   
Government participation in inspection structures 
7.421  The Panel notes that the text of Article 10 of the Regulation, when read in conjunction with 
Article 12a(2)(b), contains a formal difference be tween the requirements that apply to GIs located 
within the European Communities and t hose located in third countries.   
7.422  Article 10 obliges EC member States to ensure th at inspection structures are in place.  These 
require that the EC member States designate insp ection authorities and/or approve private bodies for 
that purpose, and monitor them.  Third country go vernments do not have th ese obligations under the 
Regulation.  However, Article 12a(2)(b) require s that a third country government provide a 
declaration that the inspection structures are establishe d on its territory together with an application to 
register a GI located in that territory.  This  is a condition in the application procedures.  
7.423  The parties do not agree as to the content of this  declaration.  The United States alleges that it 
relates to the existence of inspecti on structures in respect of the full range of agricultural products and 
foodstuffs covered by the Regulation.  The Europe an Communities responds that it only applies with 
respect to particular products.   
7.424  The Panel observes that the second equivalence re quirement in Article 12(1) appears to relate 
to inspection structures for the full range of produc ts, whilst the declaration in Article 12a(2)(a) is 
forwarded with an application for a particular produc t.  Therefore, it appears that this declaration 
relates only to the inspection structures for a particular product.  In any event, it is not disputed that it 
is only required to accompany applications to regist er GIs located outside th e European Communities.  
This is a formal difference in treatment. 
7.425  The requirement for a third country government to provide a declaration under 
Article 12a(2)(b) that the inspection structures are esta blished on its territory and the obligation for an 
EC member State to establish inspection structures complement one another.  Both are expressly 
intended to serve the same purpose of ensuring th at agricultural products and foodstuffs bearing a 
protected name meet the requirements laid dow n in the specifications.  Both depend on the 
government designating and/or approving, and monitoring, inspection structures.   
7.426  An EC member State has an ob ligation to designate and/or approve, and monitor, inspection 
structures under the Regulation.  In contrast, a third country government has no obligation under Community law to do so nor to provide the declar ation under Article 12a(2)(a ).  Although the TRIPS 
Agreement contains obligations to protect GIs, it is not asserted that WTO Members have any 
obligation under that agreement to establish in spection structures such as those required under 
Article 10 of the Regulation.   
7.427  A group or person who submits an application in a third country has no right to have 
inspection structures designated and/or approved, an d monitored, by its own government, and has no 
right to the requisite declaration by its own govern ment.  Moreover, a group or person who submits an 
application in a third country cannot nominate in spection structures notified under the Regulation by 
an EC member State and dispense w ith the declaration by its own government.  This is apparent from 
the terms of the declaration requi red under Article 12a(2)(b).  It h as also been confirmed by the 
European Communities.
357  A group or person who submits an appl ication in a third country must use 
an inspection authority or private body notified by its own governme nt.  As a result, if the third 
                                                      
357 European Communities' responses to Panel question Nos. 131 and 136(f). WT/DS174/R 
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 country government does not designate and/or ap prove, and monitor, inspection structures and 
provide the declaration, the group or person cannot  obtain protection under the Regulation.   
7.428  Therefore, applicants for GIs that refer to geographical areas located in third countries do not 
have a right in the availability of protection and a pplication procedures that is provided to applicants 
for GIs that refer to geographical areas located within  the European Communities.   Applicants in third 
countries face an "extra hurdle" in ensuring that the authorities in those countries carry out the 
functions reserved to them under the Regulation, whic h applicants in EC member States do not face.  
Consequently, certain applications may be rej ected.  This significantly reduces the opportunities 
available to the nationals of other WTO Members in the availability and acquisition of rights under 
the Regulation below those availabl e to the European Communities' own nationals. For this reason, 
the Regulation accords nationals of other WTO Me mbers "less favourable treatment" within the 
meaning of Article 3.1 of the TRIPS Agreemen t than it accords the European Communities' own 
nationals.  
7.429  The Panel confirms that the European Comm unities is entitled, under Article 62.1 of the 
TRIPS Agreement, to require that applicants comp ly with reasonable procedures and formalities that 
are consistent with the Agreement in order to prove that they meet the conditions of protection.  These 
might include requirements for applicants to demonstr ate that they comply with standards of objective 
and impartial assessment of conformity.  However,  Article 62 lies outside the Panel's terms of 
reference. 
7.430  The Panel recalls its finding at paragraph 7. 212 that the fact that a general exceptions 
provision analogous to Article XX of GATT 1994 was not included in the TRIPS Agreement has no 
impact on its analysis of Article 3.1. 
7.431  For these reasons, the Panel concludes that, w ith respect to the government participation 
required in the inspection structures under Article 10, and the provision of the declaration by governments under Article 12a(2)(b), the Regulation accords less favourable treatment to the nationals of other Members than to the European  Communities' own nationals , inconsistently with 
Article 3.1 of the TRIPS Agreement.   
7.432  The United States has not separately argued its claim under Article 2(1) of the Paris 
Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement with respect to the 
inspection structures requirements.
358  Accordingly, the Panel concludes that, in this respect, it has not 
made a prima facie case in support of its claim under that provision.      
(c) National treatment under GATT 1994 
(i) Main arguments of the parties 
7.433  The United States claims that the inspection structures requirement is contrary to Article III:4 
of GATT 1994.  It argues that the Regulation does not accord equal treatment because it conditions 
the granting of national treatment on another WTO Member adopting the same compliance structure 
as the European Communities.  This is precisely the reciprocity and equivalence conditionality that 
the national treatment obligation was designed to a void.  An imported product from the U.S. that 
satisfies the definitions of a GI in the Regulation should receive no less favourable treatment than the 
domestic product that meets those definitions.  Howeve r, the product imported from the U.S. is denied 
protection for reasons unrelated to the characteristics of the product.359  They are like products.360  The 
                                                      
358 See United States' rebuttal submission, paras. 49 and 60, which refer to no less favourable treatment.   
359 United States' rebuttal submission, paras. 89-94. 
360 United States' second oral statement, paras. 47-48.  WT/DS174/R 
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 additional requirements that the European Comm unities imposes on other WTO Members, notably to 
establish specific inspection structures, are simply equivalence by another name and are designed to 
discourage the registration and protection of foreign GIs.361 
7.434  The United States argues that the Regulation accords imported products less favourable 
treatment than domestic products because it requires substantial government participation by another 
WTO Member in the registration process.  The government must make a declaration under 
Article 12a(2).  It must establish particular in spection structures, approve inspection bodies, remain 
responsible for those bodies and satisfy all of the requirements for those bodies and structures as set 
forth in Article 10 of the Regulation.362  It appears that the Regulation's approach is unprecedented as 
the European Communities declined to indicat e any other area in which it requires foreign 
involvement in the designation/approval of c onformity assessment bodies where mutual recognition 
agreements do not already exist.363 
7.435  The United States argues that this less favourable treatment for imported products cannot be 
justified under Article XX of GATT 1994.364  The European Communities has not discharged its 
burden of proof to show that the in spection structures are so justified.365  The inspection structures do 
not appear to have any relationship to any of the product specification requireme nts in Article 4(2) of 
the Regulation and therefore do not "secure complia nce" with them.  The European Communities has 
not shown how the product specifications are not inconsistent with GATT 1994.  The European 
Communities has not shown that the inspection stru ctures are "necessary" and that there are no WTO-
consistent alternatives.  It is not clear at all th at approval of, and responsibility for, inspection bodies 
by government rather than the right holde r is even preferable, let alone necessary.366  The European 
Communities argues that on-site checks "may also" be required which suggests that they are not 
necessary, and that government involvement is not n ecessary either.  It is untrue that the European 
Communities cannot provide for on-site inspections outside the European Communities in the absence 
of a WTO agreement.367  The inspection structures favour countr ies that protect GIs in the way that 
the European Communities does, wh ich arbitrarily and unjustifiably discriminates between countries 
where the same conditions prevail, c ontrary to the chapeau of Article XX.368 
7.436  The European Communities responds that this claim should be rejected.  The Regulation is 
fully compatible with Article III:4 of GATT 1994 b ecause the requirements imposed by Article 12a of 
the Regulation, in conjunction with Articles 4 and 10, do not provide less favourable treatment to 
imported like products.  The European Communities must ensure that GIs from third countries 
comply with the conditions set out in the Regulation.369  The European Communities refers to its 
arguments concerning inspection structures in re lation to national treatment under the TRIPS 
Agreement:  they represent equal, not unequal, treat ment;  they are not equivalence by another name;  
they do not impose an EC model of inspection struct ures and their existence is necessary for attaining 
the objectives of the Regulation.370 
7.437  The European Communities submits, in the alte rnative, that the requirements imposed by 
Article 12a, in conjunction with Ar ticles 4 and 10, with respect to individual GIs, are justified by 
Article XX(d) of GATT 1994.  In particular, they ar e necessary to ensure that products which use a GI 
                                                      
361 United States' second oral statement, para. 49;  co mment on EC response to Panel question No. 136.   
362 United States' first written submission, paras. 104(d) and 107;  response to Panel question No. 129. 
363 United States' comment on EC response to Panel question No. 131. 
364 United States' first written submission, para. 107;  first oral statement, para. 38. 
365 United States' rebuttal submission, paras. 100-103. 
366 United States' second oral statement, paras. 53-57. 
367 United States' comment on EC response to Panel question No. 136. 
368 United States' second oral statement, para. 60. 
369 European Communities' first written submission, para. 204. 
370 European Communities' rebuttal submission, paras. 109-121 and 214-215. WT/DS174/R 
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 and benefit from GI protection conform to the defini tions in Article 2(2) of the Regulation, which is 
itself fully consistent with GATT 1994.
371  Later, it argues that th e inspection structures secure 
compliance with Articles 4(1) and 8 of the Regul ation that a product must comply with a product 
specification and can only bear the PDO and PGI indi cations if they do so.  Article XX(d) does not 
exclude that "measures necessary to secure complia nce" and the "laws and regulations" with which 
they secure compliance may be part of the same legal act.  The objectives of the Regulation may be 
relevant for establishing the meaning of the provisions with which compliance is secured.372 
7.438  The European Communities refers to its ar guments concerning inspection structures in 
relation to national treatment under the TRIPS Agreem ent:  they are necessary for the attainment of 
the objectives of the Regulation by providing a high  degree of assurance for producers and consumers 
that a product bearing a registered GI does, in fa ct, correspond to the required product specifications;  
a similar degree of protection could not be achie ved through other means such as unfair competition 
laws;  they do not go beyond what is necessary to attain the objectives of the Regulation but leave 
considerable flexibility in the design of the concrete  structures.  Moreover, they are not applied in a 
manner inconsistent with the ch apeau of Article XX of GATT 1994.373  It is necessary for the third 
country government to designate the inspection authority because the European Communities cannot 
designate them itself.  Designation may require on -site inspections and audits outside the EC's 
territory.  Inspections typically require a presence in or near the area where the GI is located. It is 
necessary for the bodies to remain re sponsible to the third country government as some form of public 
oversight is required to ensu re objectivity and impartiality.374  
7.439  The European Communities refers to the c onformity assessment procedures foreseen in 
Article 6 of the TBT Agreement.  Nothing in that agreement obliges Members simply to accept 
conformity assessment carried out by bodies of anot her Member.  Article 6.1 of the TBT Agreement 
obliges Members to accept conform ity assessment in other Members only under specific conditions, 
and recognizes that prior consultations may be n ecessary.  Article 6.2 (sic) encourages Members to 
enter into negotiations for the mutual recognition of  conformity assessment procedures.  Article 6.4 
encourages Members to permit participation of co nformity assessment bodies located in the territories 
of other Members in their conformity assessment procedures but it is not a legal obligation to permit such participation.  The United States has concl uded a mutual recognition agreement which permits 
bodies designated by those countries to carry out conf ormity assessment with respect to EC standards 
and vice versa.
375  The United States has failed to explain why government involvement in 
designation of inspection bodies is problematic.376 
(ii) Consideration by the Panel 
7.440  This claim concerns the inspection structures re quirements for particular  products.  The Panel 
recalls its findings: 
(a) at paragraph 7.227, that the Regulation is a law or regulation affecting the internal 
sale and offering for sale of products within the meaning of Article III:4 of GATT 
1994;   
(b) at paragraph 7.228 that the Regulation links the protection of the name of a product to 
the territory of a particular country a nd formally discriminat es between imported 
                                                      
371 European Communities' first written submission, paras. 225-226. 
372 European Communities' response to Panel question No. 135. 
373 European Communities' rebuttal submission, paras. 232-236. 
374 European Communities' response to Panel question No. 136. 
375 European Communities' response to Panel question No. 131. 
376 European Communities' comment on United States' response to Panel question No. 128.  WT/DS174/R 
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 products and products of European Comm unities origin within the meaning of 
Article III:4 of GATT 1994; 
(c) at paragraph 7.229 that the European Communities does not contest that there are, 
among the group of products covered by the Regulation, "like products" among the 
imported products and products of European Communities origin;  
(d) at paragraph 7.230, that under Article III:4 of GATT 1994 we must examine whether 
the measure modifies the conditions of co mpetition between domestic and imported 
products and that in this examination we will focus on the "fundamental thrust and 
effect of the measure itself"; 
(e) at paragraph 7.231 to 7.235 on the substa ntive advantage provided under Article 13 of 
the Regulation that affects the conditions of competition of the relevant products; 
(f) at paragraphs 7.409 and 7.410 on the lack of  a substantive formal difference between 
the allegedly prescriptive requirements and at paragraphs 7.414 to 7.419 on the lack 
of evidence of different treatment accorded by those requirements; 
(g) at paragraphs 7.426 and 7.427 concerni ng the differences between government 
participation in the inspection structur e requirements which can result in some 
applications for registration of GIs located in third countries, but not those in EC member States, being rejected;  and 
(h) at paragraph 7.428 that rejection of an application would entail non-registration of 
GIs.  
7.441  Non-registration of GIs would lead to a failure  of the products from those third countries to 
obtain the benefits of registration set out in Artic le 13 of the Regulation.  Therefore, the Panel 
concludes that: 
(a) with respect to the allegedly prescriptive requirements for inspection structures, the 
United States has not made a prima facie case in support of its claim under Article III:4 of GATT 1994; but 
(b) with respect to the requirements of gove rnment participation in the inspection 
structures under Article 10, and the provi sion of the declaration by governments 
under Article 12a(2)(b), the Regulation accord s less favourable treatment to imported 
products than domestic produc ts, inconsistently with Article III:4 of GATT 1994. 
7.442  The European Communities asserts  that the inspection structures requirements are justified by 
Article XX(d) of GATT 1994. As the party invoki ng this affirmative defence, the European 
Communities bears the burden of proof that the conditions of the defence are met. 
7.443  At this point, the measures that the Europ ean Communities needs to justify are only the 
requirements for government participation in the designation and/or approval, and monitoring, of 
inspection structures, and the declaration by governments under Article 12a2(b).
377 
                                                      
377 The United States submits that the measures rele vant to Article XX(d) are the measures that it 
alleges are inconsistent with GATT 1994 (United States ' comments on EC responses to Panel question No. 135).  
However, the Panel has not found that the allegedly pr escriptive requirements are inconsistent with GATT 1994 
and, consequently, it only examines whether the government participation required in the inspection structures is 
justified under Article XX (d).  The Panel does not examine whether the less favour able treatment that those WT/DS174/R 
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 7.444  The Panel notes, once again, that paragraph (d ) of Article XX refers to "measures" falling 
within the following description: 
"(d) necessary to secure compliance with laws or regulations which are not 
inconsistent with the provisions of th is Agreement, including those relating to 
customs enforcement, the enforcement of monopolies operated under 
paragraph 4 of Article II and Article XV II, the protection of patents, trade 
marks and copyrights, and the prevention of deceptive practices;" 
7.445  The Panel observes that paragraph (d) refers to  measures necessary to "secure compliance".  
The Regulation states expressly in Article 10(1) that  the function of the inspection structures is "to 
ensure that agricultural products and foodstuffs bear ing a protected name meet the requirements laid 
down in the specifications".  On its face, this appear s to be an express confirmation that the inspection 
structures are intended to "secure compli ance" with the product specifications.
378 
7.446  The Panel takes note that paragraph (d) refers to measures that secure compliance with laws 
or regulations, including those relating to "the prot ection of patents, trade marks and copyrights, and 
the prevention of deceptive practices".  The Regula tion provides for the protection of GIs and is an 
analogous law or regulation, as the European Communities points out.379  However, the term "laws or 
regulations" is qualified by the phrase "not inconsistent with the prov isions of this Agreement".   
7.447  The European Communities submitted that the requirement of inspection structures is 
"necessary for the attainment of the objectives" of the Regulation.380  The Panel agrees with previous 
panels that measures that merely secure compliance with the objectives of a law or regulation, rather 
than with the laws or regulations themselves, do not fall within the purview of Article XX(d) of 
GATT 1994 for the reasons explained by the GATT Panel in EEC – Parts and Components .381   
                                                                                                                                                                     
requirements accord is justified under Article XX(d), consisten tly with the approach of the Appellate Body in 
US – Gasoline , DSR 1996:I, 3, at 15.   
378 See further note 383 below.  It is not clear to  what extent the inspection structures secure 
compliance with the requirement in Artic le 4(1) of the Regulation, which refers to eligibility.  Nor is it clear to 
what extent they cover use of the PDO, PGI and equivalent indications and, hence, secure compliance with Article 8 of the Regulation.   
379 European Communities' rebuttal submission, para. 234. 
380 European Communities' rebuttal submission, para. 232, citing paras 109-121.  The European 
Communities agrees that the measure to be justified must  secure compliance with the provisions of the law or 
regulation in question but that "the objectives of a regulation may be relevant for establishing the meaning of the provisions with which compliance is secured":  see its response to Panel question No. 135(b). 
381  See the Panel report on Canada – Periodicals , paras. 5.8-5.10;  and Panel report on Korea – 
Various Measures on Beef, at para. 658; both citing  the GATT Panel report on EEC – Parts and Components 
which included the following finding at para. 5.17:   
"If the qualification 'to secure compliance with la ws and regulations' is interpreted to mean 'to 
ensure the attainment of the objectives of the laws and regulations', the function of Article XX(d) 
would be substantially broader.  Whenever the objective of a law consistent with the General 
Agreement cannot be attained by enforcing the obligations under that law, the imposition of further obligations inconsistent with the General Agreemen t could then be justified under Article XX(d) on 
the grounds that this secures compliance with the objectives of that law.  This cannot, in the view of the Panel, be the purpose of Article XX(d):  each of the exceptions in the General Agreement – such as Articles VI, XII or XIX –  recognizes the legitimacy of a policy objective but at the same time sets out conditions as to the obligations which may be imposed to secure the attainment of that 
objective.  These conditions would no longer be effective if it were possible to justify under Article XX(d) the enforcement of obligations that may not be imposed consistently with these exceptions on the grounds that the objective recognized to be legitimate by the exception cannot be 
attained within the framework of the conditions set out in the exception.
"  WT/DS174/R 
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 7.448  The European Communities submits that the requi rement of inspection structures is necessary 
to secure compliance with requirements in the Regulation.382  The Panel has found that the Regulation 
is inconsistent with the provisions  of GATT 1994 for the reasons set out in this report.  Therefore, the 
Regulation is not a law or regulation within the mean ing of paragraph (d).  In response to questions, 
the European Communities argued th at these requirements secure comp liance with provisions within 
the Regulation.  However, if those provisions coul d themselves be "laws or regulations" within the 
meaning of paragraph (d), the European Communities did not demonstrate that they were "not inconsistent" with GATT 1994.
383    
7.449    The Panel notes, once again, the use of the term "necessary" in paragraph (d) of Article XX 
and recalls the views of the Appellate Body in Korea – Various Measures on Beef set out at paragraph 
7.298 above that, in this context, a necessary measur e is "located significantly closer to the pole of 
'indispensable' than to the opposite pole of simply 'making a contribution to'".384  The Appellate Body 
summed up its approach to the determination of wh ether a measure which is not "indispensable" may 
nevertheless be "necessary" within the meaning of Article XX(d) as a process of weighing and balancing a series of factors.  It appr oved the approach of the GATT Panel in  US – Section 337  that 
this process is "comprehended" in the determinati on of whether a WTO-consistent alternative measure 
which the Member concerned could "reasonably be e xpected to employ" is available, or whether a 
less WTO-inconsistent measure is "reasonably available".
385  The Panel will once again follow this 
approach. 
7.450  We recall the European Communities' e xplanation of its domestic constitutional 
arrangements, set out at paragraph 7.98, that Community laws are generally not executed through 
authorities at Community level but rather through r ecourse to the authorities of its member States 
which, in such a situation, "act de facto  as organs of the Community, for which the Community would 
be responsible under WTO law and international law in general".386  In accordance with its domestic 
law, the European Communities is entitled to delegate certain func tions under its measure to the 
authorities of EC member States.  However, it is unable to explain adequately why it is necessary for 
all governments, including third country government s, to designate inspection authorities, approve 
private inspection bodies, and monitor them, and for third country governments to provide a declaration that they do so, for the purposes of securing compliance with an EC Regulation.   
7.451  The European Communities is entitled under GA TT 1994 to pursue the objectives set out in 
Article 10(3) of the Regulation of ensuring that in spection structures are objective and impartial with 
regard to all producers or processors subject to th eir control, which might require assessment by a 
neutral entity.  It is not obliged to accept a producer's or supplier's declaration of conformity.   
7.452  The European Communities may also be correct, in many cases, that it cannot designate or 
approve bodies located outside its territory itself because it is unable to ascertain and continuously 
monitor whether those bodies are capable of fulfillin g their functions and meeting the requirements in 
Article 10(1) and (3), set out above.
387  It is not obliged to enter in to mutual recognition agreements, 
                                                      
382 European Communities' rebuttal submission, para. 234. 
383 The European Communities argued that the function of inspection structures is to secure compliance 
with the requirement in Article 4(1) of the Regulation that products bearing a protected name must comply with 
a product specification.  Similarly, the requirement of  inspection structures also secures compliance with the 
requirement in Article 8 of the Regulation that the PDO, PGI and equivalent indications may appear only on 
products that comply with the Regulation.  However, it only explained how the Regulation itself was, in its 
view, not inconsistent with GATT 19 94:  see its responses to Panel questions No. 135(a), (c) and (d). 
384 Appellate Body report on Korea – Various Measures on Beef , para. 161. 
385 Ibid., para. 166.  The Appellate Body also followed this approach to the word "necessary" as used in 
paragraph (b) of Article XX in EC – Asbestos , para. 172.   
386 European Communities' second oral statement, para. 148. 
387 European Communities' responses to Panel question Nos. 131 and 136(f). WT/DS174/R 
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 although we note that it has recognized numerous c onformity assessment bodies designated by other 
countries, including the United States, in other sectors.
388 
7.453  However, at the same time, the European Co mmunities does not allow the products of other 
WTO Members to be inspected by its own designated authorities and approved bodies.  A group or person who submits an application in a third country  must use an inspection structure located in the 
territory of that country.  Such a group or person cannot use an inspection structure notified by an EC 
member State.  The European Communities requir es that each government, including third country 
governments, participate in the inspection structures for products originating in its own territory.  Yet 
we note that, in other areas such as technical re gulations, its own designate d authorities and approved 
bodies are open to exporters for assessment of  conformity with technical regulations.
389   
7.454  The United States has indicated that the normal practice in conformity assessment is that an  
importing country imposes its own inspection requirements in its own territory, as necessary, to ensure that imported products meet applicable requi rements.  It submits that it is unusual that the 
conformity assessment bodies of the European Comm unities, as the importing country, cannot be used 
for imported products under the Regulation.
390  The United States has also explained that, even in 
those instances in which inspection of manufacturing facilities is required, for instance, with respect 
to pharmaceutical manufacturing facilities, such inspections are primarily carried out by the administering authorities of the importing country.  The exporting country government itself is not 
required to establish and be responsible for inspection systems.
391 
7.455  The combination of the absence of recognized in spection structures in third countries, and the 
fact that notified bodies in the European Communities are not available to applicants for GIs located 
in third countries, effectively excludes the products of third countries from the benefits of protection 
granted under the Regulation.  This is a conseque nce of the requisite government participation in 
inspection structures under the Regulation. 
7.456  The European Communities has not explained why the conditions of protection and the 
general  requirement that a product beari ng a registered GI must comply with a product specification, 
for which it requires every government to designate  its own bodies, distinguish the GI Regulation 
from other areas, such as technical regulations, where it permits exporters to use notified bodies 
within the European Communities, where it seeks permission to conduct inspections in exporting 
countries or where it sometimes recognizes bodies located outside its territory, through mutual recognition agreements or accreditation.   
7.457  The European Communities has referred to the contents of a product specification required 
under Article 4(1) of the Regulation, in particular , the detailed description of the raw materials and 
methods and processes according to  which a product is obtained.
392  On the basis of these items, it 
                                                      
388 See European Communities' response to Panel question No. 131.   
389 The European Communities has explained its conformity assessment system to the TBT Committee 
as follows:  "In respect of the Global  Approach, which was relevant to conformity assessment, the fundamental 
point was that the manufacturer (or his authorised representative in the case of imported goods) was responsible 
for conformity.  There was an effort to limit the number of different types of conformity assessment procedures 
to a reasonably small range (these were referred to as "m odules" in the Global Approa ch).  In most cases, the 
manufacturer was aided by a Notified Body (a certifi cation body – or conformity assessment body) and there 
was an element of choice in that  the manufacturer could chose any Notified Body."  See document 
G/TBT/M/33/Add.1, para. 117. 
390 See the European Communities' comment on responses to Panel question No. 128, in which it 
confirms that the inspection bodies will be located on  the territory of the country of origin of the GI. 
391 United States' comments on EC responses to Panel question No. 136(f). 
392 The European Communities provides examples of product specifications for "Pruneaux d'Agen", 
"Melons du Haut Poitou", "Dorset Blue Cheese" and "Thüringer Leberwurst" in Exhibits EC-51 through EC-54.  WT/DS174/R 
 Page 105 
 
 
 argues that "inspection structures ... may involve on-site inspections at the place of production".393  
The United States argues that there is little or no re lationship between the product specifications and 
the inspection structures.394  
7.458  The Panel notes that the Regulation requires th at the product specifications for each product 
include the items to which th e European Communities refers.395  However, the European 
Communities has not explained how and to what ex tent compliance with th em cannot be assessed 
through reporting requirements or through an inspect ion of the physical characteristics of products on 
import by designated bodies located within the Europ ean Communities.  The Panel accepts that there 
might be a reason why compliance with these specifi c requirements must be assessed in the place of 
production outside the European Communities' territo ry and that, in these cases, it may be reasonable 
for the European Communities, as an importing count ry, to expect certain cooperation from exporting 
country governments, in particular  with respect to information rela ted to the production methods of an 
agricultural product or foodstuff, in accordance with the provisions of covered agreements.  
7.459  However, the European Communities has not e xplained why the cooperation that it requires 
from third country governments must take the form  of establishing a mandatory inspection structure 
in which the government plays a central role.  It confirms that governments, including third country 
governments, must carry out inspec tions to ensure compliance with product specifications in an EC 
GI registration, or ascertain that a private inspecti on body can effectively ensure that products comply 
with the specification and remain responsible for continued monitoring that the private body meets the 
requirements of the Regulation and, where they ar e third country governments, provide declarations 
that they have done so.396  It asserts, but has not demonstrated, that "[o]nly through some form of 
public oversight can it be ensured that the inspecti on body will at all times carry out its functions duly 
and appropriately in accordance with the requirements of the Regulation".397  However, in response to 
a question from the Panel, it was unable to id entify any EC Directives governing assessment of 
conformity to EC technical regulations in the goods area that require third country government 
participation in the designation and a pproval of conformity assessment bodies.398  It has not explained 
what aspect of GI protection distinguishes it from th ese other areas and makes it necessary to require 
government participation, including third country gove rnment participation, to the extent that it does. 
7.460  The European Communities argues that it does not  itself have the inspection bodies that are 
needed to conduct inspection outside its territory.  It  also notes that the costs of inspection must be 
borne by the producer as stipulated in Article 10(7) of the Regulation.  It argues that if it were to carry 
out inspections of imported products bearing a GI, th is would result in less favourable treatment for 
products of domestic origin.399  The Panel's findings do not imply that the European Communities 
must establish inspection bodies outside its territory nor  that it cannot continue to require producers to 
bear the costs.  The Panel sees th ese issues as separate from the extent of government participation in 
inspections required by the Regulation.  
7.461  For these reasons, the Panel considers that ther e are alternative measures available to the 
European Communities which it could reasonably be expected to employ and which are not 
                                                      
393 European Communities' rebuttal submission, paras 112-113 in relation to the same aspect of the 
Regulation with respect to national treatment under th e TRIPS Agreement.  See also its response to Panel 
question No. 136(f). 
394 United States' comment on EC response to Panel question No. 135. 
395 Article 4(2)(b), (d) and (e) of  the Regulation, respectively. 
396 This information was provided by the European Communities in its responses to Panel question 
Nos. 127 and 132 and not contested.  See the United States' comments on EC responses.  
397 European Communities' response to Panel question No. 136(g). 
398 European Communities' response to Panel question No. 131. 
399 European Communities' response to Panel question No. 136(h). WT/DS174/R 
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 inconsistent with GATT 1994 to ensure that produc ts using a registered GI comply with their 
specifications.  
7.462  Therefore, the Panel considers that the Eur opean Communities has not discharged its burden 
of proving that government participation in the designation, approval and monitoring of inspection 
structures, and the provision of a declaration by governments concerning these matters, is covered by 
paragraph (d) of Article XX.  It is therefore unn ecessary to consider the chapeau of Article XX.   
7.463  For these reasons, the Panel concludes that, with  respect to the requirements of government 
participation in the inspection structures under Artic le 10, and the provision of the declaration by 
governments under Article 12a(2)(b), but in no other respects related to the inspection structures, the 
Regulation accords less favourable treatment to imported products th an domestic products, 
inconsistently with Article III:4 of GATT 1994,  and these requirements are not justified by 
Article XX(d). 
5. Labelling requirement 
(a) Factual aspects of the labelling requirement  in Article 12(2) of the Regulation 
(i) Text of Article 12(2) of the Regulation 
7.464  This claim concerns a labelling requirement in  the second indent of Article 12(2) of the 
Regulation.  The parties disagree sharply on the me aning and scope of this provision, read in its 
context.  Therefore, the Panel will begin by quoting Article 12(2) in full before turning to the factual 
arguments of the parties. 
"2. If a protected name of a third country is identical to a Community protected 
name, registration shall be granted with due  regard for local and traditional usage and 
the practical risks of confusion. 
Use of such names shall be authorized only if the country of origin of the product is 
clearly and visibly indicated on the label." 
(ii) Main arguments of the parties 
7.465  The United States claims that this labelling requirement  applies to any use of a GI in 
connection with products from other WTO Members.  It notes that this requirement appears as an 
unlabelled paragraph within Article  12, which addresses GIs located in third countries in general, and 
not just those that are identical to GIs located in  the European Communities.  However, it pursues this 
claim even if it applies only to GIs identical to a GI located in th e European Communities.
400   
7.466    The United States claims that this labelling requirement only applies to third country GIs, 
not the GI located in the European  Communities with which they are identical.  It argues that this 
requirement does not address the conditions of re gistration of GIs located in the European 
Communities.  There is simply no basis for readi ng this as applying also to GIs located in the 
European Communities.401   
7.467  The United States argues that there is nothing in  Article 6(6) of the Regulation that would 
permit the Commission to import the requirement of Ar ticle 12(2) into the registration of a GI located 
                                                      
400 United States' first written submission, para. 25;  rebuttal submission, paras. 76 and 97. 
401 United States' first oral statemen t, para. 35; response to Panel question No. 48;  rebuttal submission, 
paras. 77 and 98;  second oral statement, para. 38.    WT/DS174/R 
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 in the European Communities.  Under Article 6(6), an EC GI that gives rise to a "clear distinction in 
practice" with a homonymous prior registered GI woul d have to be registered without indicating the 
country of origin on the label of products.  Un der Article 12(2), a third country GI must be 
accompanied by the country of origin.402 
7.468  The European Communities responds that the second subparagraph of Article 12(2) only 
applies to the GIs in the situation referred to in its  first subparagraph.  It only applies in cases of  
identical or homonymous names and not to third country names in general.403  It confirms that there 
have been no cases in which this prov ision has been applied in practice.404 
7.469  The European Communities argues that "such na mes" in the second subparagraph refers to 
both "a protected name of a third country" and a "Community protected name", so that the 
requirement to indicate the country of origin can apply to both the third country name and the 
Community name.  In practice, this would mean that whichever indication is registered later would normally be required to indicate the country of origin.
405  In both these terms, "protected" means, in 
principle, "protected under Regulation 2081/92" but "the provision also applies where protection is 
sought for a protected name from a third country".  "Community protected name" covers only 
protected names of geographical areas located in the European Communities.406  Article 12(2) covers 
both a situation where a third country GI is a homonym  of an EC GI already on the register, as well as 
an EC GI which is a homonym of a third country GI already on the register.407  "Such names" is 
written in the plural which clearly indicates that the requirement can relate to both the EC and third country GIs.
408  Nothing in the wording of the provision prevents it applying to GIs from both third 
countries and the European Communities.409  Even if "Community protected name" referred to EC 
and third country names already on the register, "protected name of a third country" should be 
interpreted to include names protected in a th ird country, whether or not from the European 
Communities or a third country.410  In the European Communities' view, Article 12(2) has no specific 
link with Article 12(1).411 
7.470  The European Communities argues that, in cases of homonymous GIs from the European 
Communities, the last indent of Article 6(6) also requires a clear distinction in practice between them 
which would normally, in practice, require the indication of the country of origin.412  The only reason 
why the last indent of Article 6(6) does not explicitl y require the indication of the country of origin is 
that this provision deals with a wide r set of conflicts than Article 12(2).413  There is no difference 
between the word "homonymous" in Article 6(6) and "identical" in Article 12(2) as the English 
definitions of those words are synonymous and the Fr ench and Spanish versions use the same term in 
both provisions.414  Article 6(6) deals with a wider set of  conflicts than Article 12(2), such as 
homonyms from within the European Communities, homonyms from within the same third country or 
                                                      
402 United States' response to Panel question No. 118. 
403 European Communities' first written submission, para s. 88 and 133; rebuttal submission, para. 144;  
second oral statement, para. 80.  
404 European Communities' response to Panel question No. 44. 
405 European Communities' first written submission, paras. 88, 134-135 and 211; rebuttal submission, 
para. 145. 
406 European Communities' response to Panel question No. 41. 
407 European Communities' response to Panel question No. 43. 
408 European Communities' rebuttal submission, para. 147. 
409 European Communities' second oral statement, para. 81. 
410 European Communities' second oral statement, para. 82. 
411 European Communities' response to Panel question No. 117. 
412 European Communities' first written submission, para. 89;  response to Panel question No. 118. 
413 European Communities' first written submission, para. 479.   
414 European Communities' response to Panel question No. 119. WT/DS174/R 
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 different third countries.
415  Article 6(6) simply refers to "p rotected names" from the European 
Communities and a third country, without specifying which of these is the one the subject of an 
application and which is already on the register.416 
7.471  The European Communities argues that "clearly an d visibly indicated" must be evaluated in 
each specific case from the point of view of what a normally attentive consumer can easily notice and 
not be induced in error as to the origin of the product.417 
(iii) Consideration by the Panel 
7.472  The Panel begins by noting that the second indent  of Article 12(2) of the Regulation expressly 
sets out a requirement that concerns what is indicated on "the label" of a product.  Therefore, for the sake of brevity, the Panel refers to it as "the labelling requirement".
418  The labelling requirement has 
not been applied in practice.  However, the Un ited States challenges this aspect of the Regulation 
"as such". 
7.473  The meaning of the various terms in the second indent of Article 12(2) is essential to a 
resolution of this claim.  Therefore, it is necessar y for the Panel to make an objective assessment of 
the meaning of this provision, although solely for the purpose of determining the European 
Communities' compliance with WTO obligations.419 
7.474  The parties disagree on the scope of the labelli ng requirement.  The United States argues that 
it applies to all GIs from third countries, like the wi der context in Article 12, which applies to all GIs 
from third countries that satisfy the conditions in paragraph 1 and are recognized as equivalent under 
paragraph 3.  The European Communities responds that it applies only to identical or homonymous 
GIs, consistent with the immediate context in paragraph 2 of Article 12.  
7.475  The Panel observes that the scope of the labelli ng requirement is indicated by its subject:  
"[u]se of such names".  "Such" is a demonstrativ e adjective that refers to something previously 
specified, which expressly requires an examination of  the context.  The context indicates that "such 
names" refers to the subject of the previous indent , which is eligible GIs from third countries that are 
identical to a Community protected name.  This is confirmed by the content of the two indents:  the 
first refers to practical risks of confusion, and the second imposes a requirement that a detail be 
clearly and visibly indicated, which appears to be a specific requirement that addresses the more 
general consideration in the first.  Whilst it is possi ble to look back further in the context and read the 
phrase "[u]se of such names" as referring to the na mes or GIs in the preceding paragraph 1, such a 
reading is, in our view, constrained.  We note th at the position of paragraph 2 near the beginning of 
Articles 12 through 12d might suggest that it is a more general provision, but its position can perhaps 
be explained by the fact that it is one of the tw o original provisions on GIs from third countries that 
predate the insertion of Articles 12(3) and 12a  through 12d.  The European Communities has 
confirmed that "such names" refers to the previous  indent, which covers only identical GIs.  On the 
basis of the text of the provision, whic h has not been applied, the Panel agrees. 
7.476  The parties disagree on the meaning of "such na mes" even if it only refers to "identical" 
GIs.420  The United States argues that it refers to the subject of the previous indent, which is "a 
                                                      
415 European Communities' response to Panel question No. 42. 
416 European Communities' rebuttal submission, para. 146. 
417 European Communities' response to Panel question No. 120. 
418 The use of this term does not prejudge whether this is a "labelling requirement" as used in 
Annex 1.1 of the TBT Agreement.   
419 In this regard, the Panel recal ls its comments at para. 7.55. 
420 The Panel notes that, whilst the English version of the Regulation uses the word "identical" in 
Article 12(2), two other official versions of the Regulation use words corresponding to the English word  WT/DS174/R 
 Page 109 
 
 
 protected name of a third country" that is identi cal to a Community protected name.  The European 
Communities responds that it refers not only to "a  protected name of a third country" which is 
identical, but also to the "Community pr otected name" with which it is identical. 
7.477  The Panel considers, once again, that, "such na mes" refers to the subject of the previous 
indent, which is eligible GIs from third countries th at are identical to a Community protected name.  
Although the term "a Community protected name" also appears in the previous indent, its registration 
is not in issue.  It appears that the first indent  relates only to the registration of GIs from a third 
country.  The second indent attaches a condition to that  registration which, logically, only applies to 
the use of GIs from a third country.   
7.478  This reading is confirmed by the wider cont ext in Articles 12 through 12b which relates only 
to the registration of GIs from third countries.  Th e registration of GIs located within the European 
Communities is dealt with in Articles 5 through 7.  A provision permitting objections to such 
registrations from persons in third countries was inser ted in Article 12d in April 2003.  It would be a 
very special reading if the second indent of Article  12(2) were the sole provision in the scheme of 
Articles 12 through 12b that attached  a condition to registration of GIs located within the European 
Communities, which is unlikely, given that context.  The Panel takes note that the term "such names" 
is in the plural, unlike "a protected name of a th ird country" which is in the singular.  However, the 
qualifier "such names" is linked to "t he product" which is in the singular, so that the plural form is not 
determinative of the issue before us.   
7.479  Therefore, the Panel concludes that Article 12(2), including the labelling requirement in the 
second indent, refers only to the registration and use of a GI from a third country that is identical to a 
"Community protected name."  It appears that this refers to a GI that is already registered under the 
Regulation, as no party has suggested a reason w hy it would matter for this requirement where the 
prior GI was located, as long as it was identical. 
7.480  The Panel also notes that the first indent of Artic le 12(2) contains language almost identical to 
that found in Article 6(6) of the Regulation.  Both refer to registration of na mes "with due regard for 
local and traditional usage and the actual risk [or practi cal risks] of confusion".  However, Article 6(6) 
applies to an application to register a GI located within the European Communities which "concerns a 
homonym of an already registered name from the European Union or a third country recognised in accordance with the procedure in Article 12(3)".  Unlike the second indent of Article 12(2), the last 
tiret of Article 6(6) sets out the following requirement: 
"[T]he use of a registered homonymous name  shall be subject to there being a clear 
distinction in practice between the homonym registered subsequently and the name 
already on the register, having regard to th e need to treat the producers concerned in 
an equitable manner and not to mislead consumers". 
7.481  The Panel will revert to the parallel in the c onstruction of the requirements in Articles 12(2) 
and 6(6) in its consideration of this claim. 
                                                                                                                                                                    
 
"homonymous":  these are homonyme  in the French version and homónima in the Spanish version.  The Panel 
assumes that the meaning of the different versions of the text can be reconciled, and uses the word "identical" in 
relation to Article 12(2) in the English version of this report in such a sense.  See further para. 7.492 below.  WT/DS174/R 
Page 110  
 
 (b) National treatment under the TRIPS Agreement 
(i) Main arguments of the parties 
7.482  The United States  claims that the Regulation accords less favourable treatment to third 
country nationals than to EC nationals because Ar ticle 12(2) imposes a requirement on the registration 
of GIs located in third countries that does not a pply to GIs located in the European Communities, 
inconsistently with the national treatme nt obligations in the TRIPS Agreement.
421  It provides that the 
third country GI must be burdened by a clear and visible indication of the country of origin on the label, which is a violation of national treatment oblig ations.  This is in the nature of a qualifier that 
detracts from the value of the GI by implying that it is something other than the "true" GI.  There is 
also the issue of labelling costs, although that will depend on how particul ar imported products are 
labelled in the first place.  This remains an additi onal burden on foreign nationals that is not faced by 
EC nationals.  The United States does not believe th at existing marks of origin requirements in the 
European Communities would satisfy this requirement.
422   
7.483  The European Communities argues that Article 12(2) of the Regulation does not 
discriminate between nationals because it applies acc ording to the location of geographical areas, not 
nationality.423  It can relate to both EC and third country GIs.  Application of the requirement to 
indicate the country of origin to the later regist ered GI is the only feasible option because, according 
to Article 4(2)(h), the specifications of the GI already on the register will include specific labelling 
details which it is not easy to amend.424  The European Communities does not see in which way a 
requirement to indicate truthfully the origin of a product constitutes less favourable treatment.425 
(ii) Consideration by the Panel 
7.484  This claim is brought under Article 3.1 of the TRIPS Agreement.  The Panel recalls that two 
elements must be satisfied to establish an inconsiste ncy with this obligation:  (1) the measure at issue 
must apply with regard to the protection of inte llectual property;  and (2) the nationals of other 
Members must be accorded "less favourable" treat ment than the Member's own nationals.   
Protection of intellectual property  
7.485  This claim concerns the labelling requirement in  respect of a limited subset of GIs that may 
be registered under the Regulation.  Footnote 3 provides an inclusive definition of  the term 
"protection" as used in Articles 3 and 4.  It reads as follows: 
"For the purposes of Articles 3 and 4, 'protection' shall 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." 
7.486  Turning to the Regulation, the labelling requirement  relates to the "use" of an identical GI on 
a product.  Whatever else may be the legal character of this requirement, through its inclusion in the 
provisions of Article 12, which sets out the cond itions on which the Regulation may apply to GIs 
located in third countries, it attaches a specific cond ition to registration of certain GIs.  Therefore, 
                                                      
421 United States' first written submission, para. 68. 
422 United States' response to Panel question No. 120. 
423 European Communities' first written submission, paras. 137-138. 
424 European Communities' rebuttal submission, para. 147. 
425 European Communities' second oral statement, para. 83.  WT/DS174/R 
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 under this Regulation, the labelling requirement is a matter affecting the acquisition of protection for 
GIs.426   
7.487  It is not disputed that "designations of orig in" and "geographical indications", as defined in 
the Regulation, are a subset of "geographical indica tions", the subject of Section 3 of Part II, and 
therefore part of a category of intellectual propert y within the meaning of Article 1.2 of the TRIPS 
Agreement.   
7.488  Therefore, this claim concerns the "protecti on" of intellectual property, as clarified in 
footnote 3 to the TRIPS Agreement, within the scope  of the national treatment obligation in Article 3 
of that Agreement. 
Less favourable treatment accorded to the nationals of other Members  
7.489  The Panel recalls its findings: 
(a) at paragraphs 7.185 to 7.203 as to the treatme nt accorded to the "nationals of other 
Members" in this dispute; and 
(b) at paragraph 7.134 that under Article 3.1 of the TRIPS Agreement we must examine 
the "effective equality of opportunities" with regard to the protection of intellectual 
property rights and at paragr aph 7.137 that in this exam ination we will focus on the 
"fundamental thrust and effect" of the Regulation. 
7.490  The United States claims that the treatment a ccorded under the labelling requirement for GIs 
located in third countries, including WTO Members, is less favourable than that accorded to GIs 
located within the Euro pean Communities.   
7.491  The Panel has found at paragraph 7.479 that the labelling requirement only applies to GIs 
from third countries that are identical to a Co mmunity protected name.  This is a narrow 
circumstance.   
7.492  The Panel notes that Articles 12(2) and 6(6) share almost identical language that indicates that 
the purpose of each provision is to minimize actual, or practical, risks of confusion between the use of two registered identical or homonymous GIs.  An obvious difference in the English version is that 
Article 12(2) uses the word "identical" and Article  6(6) uses the word "homonymous".  However, two 
other official versions of the Regulation use the same word in both provisions ( homonyme  in French 
and homónima  in Spanish).  The Panel assumes that the mean ing of the different ve rsions of the text 
can be reconciled, and that, therefore, the words in  Articles 12(2) and 6(6) can have the same meaning 
in English as well.  
7.493  Both requirements are mandatory, providing that us e "shall" be authorized only if a particular 
condition is met or "shall" be subject to a particular  condition.  However, there is a formal difference 
in that Article 12(2) states the condition expressly that  "the country of origin of the product is clearly 
and visibly indicated on the label".  In contrast, Ar ticle 6(6) states the condition in terms of factors 
that "a clear distinction in practice between th e homonym registered subsequently and the name 
already on the register, having regard to the need to treat the producers concerned in an equitable 
manner and not to mislead consumers".     
                                                     
 
426 It can be noted that the second indent of Article 12(2) is not the only provision of the Regulation 
which refers to "use".  Article 4 of  the Regulation refers to "use" of a GI by a product in  accordance with a 
specification, which includes labelling under Article 4(h) and which, according to Articles 5(3) and 12a(1), is 
part of the application for registration. WT/DS174/R 
Page 112  
 
 7.494  In light of the applicable standard of examination set out at 7.489(b), the Panel does not 
consider that the mere fact that nationals of  other Members and the European Communities' own 
nationals are subject to different legal provisi ons is in itself conclusive in establishing an 
inconsistency with Article 3.1 of the TRIPS Agreement.
427 
7.495  The European Communities explains that this di fference between the wording of the relevant 
provisions is due to the fact that Article 6(6) applies to a wider class of GIs.  For example, it could 
apply to identical GIs located in different EC memb er States, as well as to a GI within the European 
Communities identical to a GI located in a third country, which Article 12(2) cannot.   
7.496  The essential point is that nothing in the text  appears to prevent th e European Communities 
implementing the two requirements in the same manner where an application is made to register a GI, 
whether located within the European Communities or in a third country, that is identical to a prior 
registered GI.  It appears that the wording of Ar ticle 6(6) permits the European Communities to apply 
the same condition found in the text of Article 12(2) so that both requirements would be applied 
according to which GI was registered later in time, irrespective of the nationality of the applicant or 
user or the location of the GI.  The European Co mmunities has confirmed to the Panel that the clear 
distinction in practice would normally require  the indication of the country of origin.428   
7.497  The United States has not provided any evidence th at the formal difference in the wording of 
the two requirements leads to any difference in treat ment nor that it accords any different treatment to 
the nationals of other Members.  It has not pr ovided evidence that, where the European Commission 
applies the same condition under the labelling requir ement in Article 12(2) and the last tiret of 
Article 6(6), that such a practice would not surviv e a legal challenge before the European Court of 
Justice.   
7.498  The Panel recalls the European Communities' submission that, according to the settled case 
law of the European Court of Justice, "Community legislation must, so far as possible, be interpreted in a manner that is consiste nt with international law".
429  
7.499  Therefore, for the above reasons, in particular  the confirmation by the European Communities 
that the clear distinction in practice under Article 6(6) would normally require the indication of the 
country of origin, the Panel concludes that, with r espect to the labelling requirement, the United States 
has not made a prima facie case in support of its claim under Article 3.1 of the TRIPS Agreement.  
(c) National treatment under GATT 1994 
(i) Main arguments of the parties 
7.500  The United States claims that the Regulation accords l ess favourable treatment to imported 
products than to EC products because Article 12(2)  imposes a requirement on the registration of GIs 
located outside the European Communities that do es not apply to GIs locat ed in the European 
Communities, inconsistently w ith Article III:4 of GATT 1994.430   
7.501  The United States argues that this requirement provides that the third country GI must be 
burdened by a clear and visible indication of the country  of origin on the label, which is a violation of 
national treatment obligations.  This is in the natu re of a qualifier that detracts from the value of the 
                                                      
427 See also the GATT Panel report on US – Section 337, at para. 5.11, regarding the no less favourable 
treatment standard, cited with approval by the Appellate Body in US – Section 211 Appropriations Act, 
para. 264. 
428 European Communities' first written submission, para. 479;  response to Panel question No. 118. 
429 See supra  at note 131.    
430 United States' first written submission, para. 106.  WT/DS174/R 
 Page 113 
 
 
 GI by implying that it is something other than the "tru e" GI.  There is also the issue of labelling costs, 
although that will depend on how partic ular imported products are labelle d in the first place.  This 
remains an additional burden on imported produc ts that is not faced by EC products.  The 
United States does not believe that existing ma rks of origin requirements in the European 
Communities would satisfy this requirement.431   
7.502  The United States does not consider that this is  a general country of origin requirement as 
described in Article IX of GATT 1994 but rather is a special rule triggered by the fact that a third 
country product is characterized as a GI and is intend ed to encumber the third country GI itself.  There 
is nothing in Article IX that exempts such a requirement from the obligation to provide no less favourable treatment to imported products.
432   
7.503  The United States argues that the European Communities has not made a prima facie case 
under Article XX(d) of GATT 1994 and has failed to make any showing that the requirement that 
third country GIs be identified with a country of origin is necessary to ensure compliance with a 
WTO-consistent law or regulation.  In any case,  the less favourable treatment under the Regulation 
cannot be justified under that provision.433  The fact that the requirement is not mandatory for EC GIs 
under Article 6(6) of the Regulation is an ad mission that the requirement is not "necessary".434 
7.504  The European Communities responds that this claim is unf ounded.  Article 12(2) of the 
Regulation does not accord less favourable treatment but rather treats EC and imported products alike.
435   
7.505  The European Communities argues that Article III: 4 is not applicable.  Marks of origin are 
dealt with in Article IX of GATT 1994, which contains an MFN obligation but not a national 
treatment obligation.  This omission implies that  Members are free to impose country of origin 
marking requirements only with respect to imported products and not domestic products.436 
7.506  The European Communities argues, in the altern ative, that the requirement to indicate the 
country of origin is justified by Article XX(d) of GATT 1994.  It serves the purpose of achieving a clear distinction in practice between homonymous  GIs and prevents consumer confusion.  
Article 12(2) achieves this in the least intrusive way by  requiring that the GI registered later, which is 
typically the one less known to the consumer, be th e one for which the country of origin must be 
indicated.  This complies with paragraph (d) and the chapeau of Article XX.
437 
(ii) Consideration by the Panel 
7.507  This claim concerns the labelling requirement in  Article 12(2) of the Regulation "as such".  
The Panel recalls its findings: 
(a) at paragraph 7.227, that the Regulation is a law or regulation affecting the internal 
sale and offering for sale of products within the meaning of Article III:4 of GATT 1994;   
                                                     
 
431 United States' response to Panel question No. 120. 
432 United States' first oral statement, para. 35;  rebuttal submission, para. 99;  response to Panel 
question No. 122. 
433 United States' first oral statement, para . 38;  second oral statement, para. 59. 
434 United States' comment on EC response to Panel question No. 136. 
435 European Communities' first written submission, para. 212. 
436 European Communities' first written submission, paras. 213-217. 
437 European Communities' first oral statement, pa ra. 73;  rebuttal submission, paras. 240-242. WT/DS174/R 
Page 114  
 
 (b) at paragraph 7.228 that the Regulation links the protection of the name of a product to 
the territory of a particular country a nd formally discriminat es between imported 
products and products of European Comm unities origin within the meaning of 
Article III:4 of GATT 1994;  
(c) at paragraph 7.229 that the European Communities does not contest that there are, 
among the group of products covered by the Regulation, "like products" among the 
imported products and products of European Communities origin;  
(d) at paragraph 7.230, that under Article III:4 of GATT 1994 we must examine whether 
the measure modifies the conditions of co mpetition between domestic and imported 
products and that in this examination we will focus on the "fundamental thrust and 
effect of the measure itself"; and 
(e) at paragraph 7.479 that the labelling requirement only applies to identical GIs. 
7.508  In light of the applicable standard of examination set out at 7.507(d), the Panel does not 
consider that the mere fact that imported products are subject to legal provisions that are different 
from those applying to products of national origin is in itself conclusive in establishing inconsistency 
with Article III:4.
438
   However, the Panel recalls its findings:  
(a) at paragraph 7.496 concerning the differen ces in the wording of Articles 12(2) and 
6(6) of the Regulation;  and 
(b) at paragraph 7.497 that the United States has not provided any evidence that the 
formal difference in the wording of th e requirements in the second indent of 
Article 12(2) and the last tiret of Article 6(6) leads to any difference in treatment. 
7.509  Therefore, for the above reasons, in particular  the confirmation by the European Communities 
that the clear distinction in practice under Article 6(6) would normally require the indication of the 
country of origin, the Panel concludes that, with r espect to the labelling requirement, the United States 
has not made a prima facie case in support of its claim under Article III:4 of GATT 1994.  
7.510  As for the European Communities' argument that  this labelling requirement cannot be subject 
to the national treatment obligation in Article III:4 of GATT 1994 due to the terms of Article IX of 
GATT 1994 on marks of origin, it suffices to note th at the labelling requirement is part of the 
Regulation, which is a law or regulation affecting the internal sale and offering for sale of products 
within the meaning of Article III:4 of GATT 1994.  In an y event, it has not been shown that this is, in 
fact, a requirement to display a mark of origin.439   
7.511  However, in view of our finding at paragraph 7.509 that the United States has not made a 
prima facie case in support of this claim, it is unne cessary for the purposes of this dispute to reach a 
definitive view on these questions, and the Panel's vi ews do not imply any view on the relationship of 
Articles III:4 and IX:1 of GATT 1994. 
                                                      
438 See also the GATT Panel report on US – Section 337, at para. 5.11. 
439 For example, the GATT CONTRACTING PARTIES Recommendation of 21 November 1958 on 
marks of origin, para. 5, "Countries should accept as a satisfactory marking the indication of the name of the 
country of origin in the English language introduced by  the words 'made in'": BISD 7S/30.  That example shows 
that a mark of origin can be different  from the labelling requirement at issue.   WT/DS174/R 
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 C. TRADEMARK CLAIM  
1. The relationship between GIs and prior trademarks  
(a) Introduction  
7.512  The United States claims that the Regulation is inconsis tent with Article 16.1 of the TRIPS 
Agreement because it does not ensure that a trad emark owner may prevent uses of GIs which would 
result in a likelihood of confusion with a prior trademark.440  Its claim only concerns valid prior 
trademarks, not trademarks liable to invalidati on because they lack dis tinctiveness or mislead 
consumers as to the origin of goods.441  It does not dispute that GIs th at are identical or similar to 
trademarks may be used, but only to the extent that  they do not result in a likelihood of confusion with 
respect to prior trademarks.442   
7.513  The European Communities responds that this claim is unfounded for several reasons:  
(1) Article 14(3) of the Regulation, in fact, prevents  the registration of GIs, use of which would result 
in a likelihood of confusion with a prior trademark; (2) Article 24. 5 of the TRIPS Agreement provides 
for the "coexistence" of GIs and prior trademarks ; (3) Article 24.3 of the TRIPS Agreement requires 
the European Communities to mainta in "coexistence"; and (4) in any event, Article 14(2) of the 
Regulation would be justified as a limited excep tion under Article 17 of the TRIPS Agreement.443   
7.514  For the sake of brevity, the Panel uses the term "coexistence" in this report to refer to a legal 
regime under which a GI and a trademark can both be used concurrently to some extent even though 
the use of one  or both of them would otherwise in fringe the rights conferred by the other.  The use of 
this term does not imply any view on whether such a regime is justified. 
7.515  The Panel will begin its examination of this  claim by describing Article 14(2) of the 
Regulation and how the Regulation can, in principl e, limit the rights of the owner of a trademark 
subject to Article 14(2) against the use of a GI.  We will then assess whether Article 14(3) of the 
Regulation prevents a situation from occurring in which a trademark would be subject to 
Article 14(2).  If Article 14(3) cannot prevent that  situation from occurring, we will proceed to 
examine whether Article 16.1 of the TRIPS Agreement requires Members to make available to 
trademark owners the right to prevent confusing uses of signs, even where the signs are used as GIs.  
If it does, we will consider whether Article 24.5 pr ovides authority to limit that right and, if 
Article 24.5 does not, conclude our examination by  assessing whether Article 17 or Article 24.3 of the 
TRIPS Agreement permits or requires the European Communities to limit that right with respect to 
uses of signs used as GIs. 
(b) Description of Article 14(2) of the Regulation  
7.516  Article 13 of the Regulation sets out the protecti on conferred by registration of a GI under the 
Regulation.  Paragraph 1 provides for the prevention of certain uses of the GI and other practices.  
These are negative rights to prevent, essentially, u ses which are misleading as to the origin of a 
product or otherwise unfair.   
7.517  Under the European Communities' domestic la w, it is considered that the Regulation 
impliedly grants the positive right to use the GI in accordance with the product specification and other 
terms of its registration to the exclusion of any other sign.  The European Communities explains, and 
                                                      
440 United States' first written submission, para. 170. 
441 United States' first oral statement, paras. 42-43. 
442 United States' rebuttal submission, para. 183. 
443 European Communities' first written submission, paras. 268-273. WT/DS174/R 
Page 116  
 
 the United States does not contest, that under the Eu ropean Communities' domestic law, this positive 
right is implicit in several provisions, including Ar ticle 4(1), which refers to eligibility to use a 
protected designation of origin or a protected geogra phical indication;  Article 8, which provides that 
the indications PDO and PGI and equivalent natio nal indications may appear only on agricultural 
products and foodstuffs that comply with the Regulation; and Article 13(1)(a) which provides 
protection for registered names against direct or indirect commercial use on certain conditions.  
Without this positive right, in the European Commun ities' view, the protection granted by Article 13 
would be "meaningless".  Accordingly, under the Eu ropean Communities' domestic law, that positive 
right prevails over the rights of trademark owne rs to prevent the use of a sign that infringes 
trademarks.
444     
7.518  A registered GI may be used together with other signs or as part of a combination of signs but 
the registration does not confer a positive right to use any such other signs or combination of signs or to use the name in any linguistic versions not entered in the register.
445  Therefore, the registration 
does not affect the right of trademark owners to  exercise their rights with  respect to such uses.446   
7.519  Article 14 of the Regulation governs the relationship of GIs and trademarks under 
Community law.  Paragraph 1 deals with later trad emarks.  It provides for the refusal of trademark 
applications where use of the trademark would infri nge the rights in a GI already registered under the 
Regulation.  This, in effect, ensures that a registered GI prevails over a later trademark .   
7.520  Paragraph 2 of Article 14 deals with pr ior trademarks.  It provides as follows: 
"2. With due regard to Community law, a trademark the use of which engenders 
one of the situations indicated in Artic le 13 and which has been applied for, 
registered, or established by use, if that possibility is provided for by the legislation 
concerned, in good faith within the territory  of the Community, before either the date 
of protection in the country of origin or the date of submissi on to the Commission of 
the application for registration of the designa tion of origin or geographical indication, 
may continue to be used notwithstanding th e registration of a designation of origin or 
geographical indication, provided that no gr ounds for its invalidity or revocation exist 
as specified by Council Directive 89/194/EEC  of 21 December 1998 to approximate 
the laws of the Member States relating to trade marks and/or Council Regulation (EC) 
No 40/94 of 20 December 1993 on the Community trade mark."  [footnotes omitted] 
7.521  This is an exception to Article 13, as it provid es for the continued use of a prior trademark 
even though use of that trademark would conflict w ith the rights conferred by registration of a GI 
under the Regulation.  It prevents the exercise of rights conferred by registration of a GI against the 
continued use of that particular prior trademark and is an express recognition that, in principle, a GI 
                                                      
444 Confirmed in the European Communities' response to Panel question No. 139.   
445 The European Communities explains that "[t]he positive right extends only to the linguistic versions 
that have been entered into the register" in its response to Panel question No. 140; see also its rebuttal 
submission, paras. 288 and 293; response to Panel question No. 137 and comment on US response to that 
question.  A different "linguistic version" means a translation which renders the name differently.  Some GIs are registered in more than one linguistic version:  see, for example, the second, four th and eleventh GIs set out 
supra  at note 52. 
446 Under Community law, those rights would become meaningless if there was no positive right to use 
the registered GI.  See European Communities' rebuttal su bmission, para. 301;  responses to Panel question Nos. 
139 and 140 (but contrast its comment on Australia's response to Panel question No. 137).    WT/DS174/R 
 Page 117 
 
 
 and a trademark can coexist under Community law.  It is intended to implement Article 24.5 of the 
TRIPS Agreement.447   
7.522  Article 14(2) only applies: 
(a) with respect to the GI, where a particul ar indication satisfies the conditions for 
protection, including the definitions of a "designation of origin" or a "geographical 
indication", and is not subject to refusal on any grounds, including those in 
paragraph 3 of Article 14 (discussed below);  
(b) with respect to the trademark, where a par ticular sign has already been applied for, 
registered, or established by use in good faith and there are no grounds for its invalidity or revocation; and 
(c) where use of that trademark would infringe the GI registration. 
7.523  The scope of Article 14(2) is confined temporally  to those trademarks applied for, registered 
or established by use either before the GI is protected  in its country of origin or before the date of 
submission to the Commission of an application for GI registration.   
7.524  The text of Article 14(2) begins with the introductory phrase "[w]ith due regard to 
Community law".  This refers, among other things , to the Community Trademark Regulation and the 
First Trademark Directive
448, both of which provide that trademark registration confers the right to 
prevent "all third parties" from certain uses of "any sign", including uses where there exists a 
likelihood of confusion.449  This corresponds to the right provided for in Article 16.1 of the TRIPS 
Agreement.   
7.525  However, Article 159 of the Community  Trademark Regulation, as amended450, provides as 
follows: 
"This Regulation shall not affect Counc il Regulation (EEC) No. 2081/92 on the 
protection of geographical indications and designations of origin for agricultural 
products and foodstuffs of 14 July 1992, a nd in particular Article 14 thereof."  
[original footnote omitted] 
7.526  This ensures that the rights conferred by a tr ademark registration against "all third parties" 
and uses of "any sign" do not prevail over a third party using a registered GI in accordance with its 
registration.  It does not limit the rights conferred by a trademark registration against any other third 
                                                      
447 Paragraph 11 of the recitals to the April 2003 amending Regulation explained that the dates referred 
to in Article 14(2) should be amended in line with Ar ticle 24.5 of the TRIPS Agreement:  see Exhibit COMP-
1h.  Article 14(2) has been interpreted once by the European Court of Justice, in Case C-87/97, Consorzio per la 
tutela del frommagio Gorgonzola v Käserai Champignon Hofmeister GmbH & Co Kg [1999] ECR I-1301, 
concerning the trademark CAMBOZOLA for cheese and the GI "Gorgonzola".  The opinion of the Advocate-
General was submitted by the United States in Exhibit US -17 and the judgement of the Court was submitted by 
the European Communities in Exhibit EC-32. 
448 European Communities' response to Panel question No. 138.  The "Community Trademark 
Regulation" refers to Council Regulation (EC) No. 40/9 4 on the Community trade ma rk, as amended by Council 
Regulation (EC) No. 1992/2003 and Council Regulation (EC) No. 422/2004, set out in Exhibit COMP-7.  The "First Trademark Directive" refers to the First Counc il Directive 89/104/EEC to approximate the laws of the 
member States relating to trade marks, set out in Exhibit COMP-6. 
449 Article 9 of the Community Trademark Regulation and Article 5 of the First Trademark Directive. 
450 Article 142 of the original Council Regulation (EC) No. 40/94 was renumbered Article 159 by 
Article 156(5) of Council Regulation (EC) No. 1992/2003. WT/DS174/R 
Page 118  
 
 party.
451  The same applies to trademarks protected unde r the national laws of the EC member States:  
due to the principle of the primacy of Community legislation, a trademark owner's rights cannot prevail over a third party using a GI register ed under the Regulation in accordance with its 
registration.  The rights conferred by a trademark registration against other third parties are not 
affected.   
7.527  Accordingly, the trademark owner's right pr ovided by trademark legislation in the 
implementation of Article 16.1 of the TRIPS Agreement, in principle, cannot be exercised against a 
person who uses a registered GI in accordance with its registration where the trademark is subject to 
Article 14(2) of the Regulation. 
7.528  The phrase "[w]ith due regard to Community law" also refers to other legislation, such as 
labelling and misleading advertising le gislation, which qualify the right to continue use of a trademark 
under Article 14(2).  Conversely, the same legislatio n allows persons, including trademark owners, to 
take action against certain uses of a registered GI which are not covered by the GI registration.
452 
7.529  Paragraph 3 of Article 14 provides as follows: 
"3. A designation of origin or geographi cal indication shall not be registered 
where, in the light of a trade mark's reputation and renown and the length of time it 
has been used, registration is liable to mislea d the consumer as to the true identity of 
the product." 
7.530  This is a condition for the registration of a GI, as it provides for the refusal of registration of a 
GI that is liable to mislead the consumer as to the tr ue identity of the product in light of certain factors 
relevant to a prior trademark.  This, in effect, provides that a prior trademark may prevail over a later 
application for GI registration under certain conditions. 
7.531  The European Communities argues that Article 14(3) of the Regulation, together with the 
criteria for registrability of trademarks applied under EC law, prevent the registration of a GI, use of 
which would result in a likelihood of confusion with a prior trademark.  The United States disagrees.  
The Panel will consider this factual issue below. 
(c) Article 14(3) of the Regulation  
(i) Main arguments of the parties 
7.532  The United States submits that the Panel's task is to make an objective assessment of the 
facts, including with respect to the meaning of Artic le 14(3) of the Regulation.  It argues that the 
European Communities' interpretati on is irreconcilable with the way in which the terms included in 
this provision have been interpreted in other provisions. 
7.533  The United States argues that it is no defence that  the number of trademarks deprived of the 
right provided for in Article 16.1 of the TRIPS Ag reement may be small (a fact that it does not 
concede).  Trademarks can incorporate certain geographical elements.  If that geographical name subsequently qualifies for GI protection under th e Regulation, it will inhibit the ability of the 
trademark owner from preventing confusing uses.  Non-geographical names can be registered as GIs 
                                                     
 
451 European Communities' first written submission, para. 317;  response to Panel question No. 76;  
rebuttal submission, para. 336. 
452 European Communities' response to Panel question No. 140.  WT/DS174/R 
 Page 119 
 
 
 under the Regulation.  There are actual examples of geographical names registered as trademarks in 
the European Communities without di stinctiveness acquired through use.453 
7.534  The United States argues that Article 14(3) is  the sole provision in the Regulation that 
addresses the confusing use of registered GIs vis-à-vis trademarks and it does not satisfy the obligations under Article 16.1 of the TRIPS Agreem ent.  Article 16.1 provides a right owed to the 
owner of any valid registered trademark but Article 14(3) of the Regulation is limited to a subset of 
trademarks by its reference to "a trade mark's reput ation and renown and the length of time it has been 
used".  There is no guidance in the Regul ation with respect to this standard.
454  A seminar presentation 
by an EC official in March 2004 characterized this as a requirement of "long use" and the Commission Guide to the Regulation also explai ns Article 14 without referring to likelihood of 
confusion.
455  The criteria in Article 14(3) are different  from, and more restrictive than, those in 
Article 16.1.  Had the Regulation been intended to  implement Article 16.1, why did it use language 
not found in Article 16.1 that was plainly more restrictive?456  The United States refers to the opinion 
of the Committee on Legal Affairs and the Internal  Market of the European Parliament on the 
Commission's proposal to insert the current text of  Article 14(2).  That Committee had proposed an 
addition to Article 14(2) which would have subjected  the Regulation to the ri ght to bring proceedings 
for trademark infringement but this was not accepted by the Commission.457 
7.535  The United States argues that the threshold prere quisites of reputation, renown, and length of 
time used are factors generally used to determine the scope of protection given to "well-known" or 
"famous" trademarks under Article 6 bis of the Paris Convention (1967) and Articles 16.2 and 16.3 of 
the TRIPS Agreement.  They correspond to the factors used for this purpose in the Joint 
Recommendation Concerning Provisions on the Prot ection of Well-Known Marks adopted by the 
Assembly of the Paris Union and th e General Assembly of WIPO in 1999.458  A statement of 
Ministerial reasoning in Hungary indicated that its rule on the protection of a prior well-known mark 
corresponds to the ground for refusal of a GI regi stration in Article 14(3) of the Regulation.  The 
Community Trademark Regulation and Trademark Direc tive refer to "reputation" in their provisions 
on rights to prevent confusing uses of signs on dissim ilar goods.  The interpretation of that factor by 
the European Court of Justice and the practice of the Office for Harmonization in the Internal Market 
indicate at the very least uninterrupted use for a considerable number of years.459  "Reputation" is not 
relevant in assessing likelihood of confusion in all cases, such as identical si gns for identical goods.  
A trademark registered in only one EC member State without reputation, renown,  or length of time of 
use would also fail the standard in Article 14(3) of the Regulation.460 
7.536  The United States argues that Article 14(3) do es not provide a right to the "owner of a 
trademark", as required by Article 16.1, but merely authorizes the EC authorities to decline 
                                                      
453 United States' rebuttal submission, paras. 167-170;  second oral statement, paras. 74-75. 
454 The United States' first written submission refers to a trademark that has been used for a "long" time 
and has "considerable" reputation and renown: see paras. 1 58-159.  Its first oral statement refers to trademarks 
of a "certain" reputation or "particular" renown, and used for "any" length of time: see para. 52. 
455 Exhibits US-23 and US-24. 
456 United States' rebuttal submission, paras. 143-144. 
457 United States' first written submission, paras. 166-169.  The Opinion (document 2002/0066(CNS) 
dated 10 September 2002) is reproduced in Exhibit US-21 and attached to the Report of the Committee on 
Agriculture and Rural Development (document A5-0375/2002 dated 6 November 2002) reproduced in 
Exhibit COMP-14.  The United States also cites certain  statements by the Advocate-General of the European 
Court of Justice and the European Commission that Article 14(2) envisages "coexistence" of  registered GIs 
with a valid prior trademark.  This issue has been considered at para. 7.521.   
458 The Joint Recommendation is reproduced in Exhibit US-58. 
459 United States' rebuttal submission, paras. 146-152.   
460 United States' second oral statement, para. 85. WT/DS174/R 
Page 120  
 
 registration of a GI in limited circumstances.   Intellectual property rights are private rights.
461  
Article 14(3) does not afford a right to prevent uses  as the trademark owner cannot necessarily tell, at 
the time of registration of the GI, whether its subse quent use will be confusing.  For example, a GI 
may be used in a "trademark like manner", in transl ation or in a manner that emphasizes certain of its 
aspects or letters in a way that causes a likelihood of confusion.462  The product specifications do not 
always limit the way in which GIs are used so that it is not always evident what use will be protected 
by registration.463  In litigation pending in an EC member State, a Czech brewer has argued that 
registration grants the right to use the disputed name s in translations.  In other proceedings in an EC 
member State and outside the European Communities,  one of the Czech beer GIs registered under the 
Regulation was considered confusingly similar to the trademark BUDWEISER.464  The Czech beer 
GIs also show that registration is also possible out side the established procedures in the Regulation, 
such as through an accession treaty, in a manner that precludes objections based on Article 14(3) or any other provision.
465   
7.537  The United States argues that if an action can be brought under Article 230 of the EC Treaty 
for annulment of a registration, EC rules require it to be brought within two-months of the publication 
of the registration.  Actual confusing uses of a re gistered GI may not become apparent within two-
months and Article 16.1 of the TRIPS Agreement does not permit an y such expiration.  Referrals 
under the preliminary ruling procedure in Article 234 of the EC Treaty are also subject to the two-month deadline if the trademark owner could ha ve challenged the registration under Article 230.
466  
Even the European Communities does not assert that all trademark owners would have the 
opportunity to challenge a registration after the tw o-month deadline under Article 230.  Registrations 
pursuant to accession protocols do not appear  to be subject to challenge at all. 
7.538  The United States argues that Articles 7(4) a nd 14(3) of the Regulation must be read 
cumulatively.  If Articles 7(4) and 14(3) were bot h applied to all trademarks, the phrase "reputation 
and renown and length of time used" would be read out of Article 14(3).  Articles 7(5)(b) and 14(3) 
must also be read cumulatively.  If Article 14(3) is  interpreted in the light of Article 7(5)(b), it still 
only applies to trademarks that sa tisfy the factors in Article 14(3).  In any case, Article 7(5)(b) only 
applies where EC member States are unable to agree.467  Article 7(4) is insufficient to implement 
Article 16.1 of the TRIPS Agreement in the registration procedure because the European 
Communities does not consider that Article 16.1 confer s a right of objection.  In any case, there is no 
right of objection under the Article 17 procedure or  where GIs are registered through an act of 
accession.  The United States also argues that it is  insufficient because it is not available on a non-
discriminatory basis.  This argument has been considered earlier.468 
7.539  The United States argues that Community law on labelling, advertising and unfair 
competition do not offer trademark owners the standa rd of protection required by Article 16.1 of the 
                                                      
461 United States' first written submission, para. 54; rebuttal submission, para. 136. 
462 United States' first oral statement, para s. 54-55; rebuttal submission, para. 131. 
463 United States' second oral statement,  para. 78.  The United States prov ides copies of the applications 
for the following registered GIs:  "Timoleague Brown Pudding", "Lausitzer Leinöl", "Kanterkaas", 
"Kanternagelkass", "Kanterkomijnekass"  and "Newcastle Brown Ale".  The summaries of product specifications 
show labelling requirements that are e ither "PGI" or the protected terms th emselves.  These are reproduced in 
Exhibit US-77.  
464 United States' response to Panel question No. 137. 
465 United States' response to Panel question No. 67. 
466 United States' rebuttal submission, paras. 138-140;  second oral statement, para. 83. 
467 United States' rebuttal submission, paras. 160-164. 
468 United States' rebuttal submission, para. 137.  WT/DS174/R 
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 TRIPS Agreement.  For example, a right to prev ent injurious, deceptive advertising is no substitute 
for the right to prevent confusing u ses of an identical or similar sign.469 
7.540  The European Communities argues that, as a factual matter, the risk of registration of a GI 
confusingly similar to a prior tr ademark is very limited due to the criteria for registrability of 
trademarks applied under EC law.  Moreover, Article  14(3) of the Regulation, if properly interpreted, 
is sufficient to prevent the registration of any confusing GIs.470  The complainant bears the burden of 
proving that its interpretation of Article 14(3) is the only reasonable one and that the European 
Communities' interpretation is not reasonable or that  the provision is being applied in a manner which 
results in the registration of confusing GIs.471    
7.541  The European Communities argues that the criteria  for the registrability of trademarks limit 
a priori the possibility of conflicts between GIs and earlier trademarks.  Geographical names are 
primarily non-distinctive and, as such, are not apt for registration as trademarks.  Their use may also 
be deceptive insofar as they are used for goods that do not originate in the location that they designate.  
Under EC law, they may only be registered as a trademark where the geographical name is not 
currently associated, and it can reasonably be assumed th at it will not be associated in the future, with 
the product concerned; or where the na me has acquired distinctiveness through use.472 
7.542  The European Commission considers that the crite ria listed in Article 14(3) of the Regulation 
are not exhaustive, so that other relevant criteria may be taken into account in order to assess whether 
the registration of the GI will result in a likelihood of  confusion, such as the similarity between the 
signs or between the goods concerned.  The likeli hood of confusion will depend to a large extent on 
the degree of distinctiveness which the trademark has acquired through use.  A trademark consisting 
of a GI, which has never been used or has no reputa tion or renown, should not have been registered in 
the first place because it would lack  the required distinctiveness.473  The length of time a trademark 
has been used does not limit Article 14(3) to cases wh ere the trademark has been used for a long time 
as it is conceivable that a trademark which has been used for a relatively short period of time may have become strongly distinctive through other means, e.g. publicity.
474   
7.543  The European Communities submits that reputati on, renown, and length of time of use are not 
threshold prerequisites under Article 14(3) of the Regulation but are criteria for assessing whether the 
GI is misleading.  They are relevant for the purposes of establishing likelihood of confusion even 
where a trademark is not a "well-known" mark.  Re putation functions as a thre shold pre-requisite in 
the context of the "anti-dilution" provisions in the Community Trademark Regulation and the 
Trademark Directive but that would not be justifie d in a situation involving signs for similar goods.  
There is no credible evidence that it functions this  way under Article 14(3):  the presentation cited by 
the United States is oversimplified and has no lega l authority;  the Commission's Guide to the 
Regulation repeats verbatim the working of Article 14(3) and alludes to other cases of conflicts in 
Article 13(1);  and the provision of Hungary's la w cited by the United States does not implement the 
Regulation.475   
7.544  The European Communities informs the Panel th at the only instance in which Article 14(3) 
has been applied was the registration of "Bayerisches Bier" as a GI.  There was no suggestion that this 
decision was based on the fact that the trademarks concerned were not famous enough or had not been 
                                                      
469 United States' second oral statement, para. 81. 
470 European Communities' first written submission, paras. 275-277. 
471 European Communities' first written submission, pa ra. 292;  rebuttal submission, paras. 271-276. 
472 European Communities' first written submission, pa ras. 278-285;  rebuttal submission, para. 270. 
473 European Communities' first written submission, paras. 286-291. 
474 European Communities' response to Panel question No. 68. 
475 European Communities' second oral statement, paras. 163-172.   WT/DS174/R 
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 used for long enough.  The complainants have not identified an example of a GI which gives rise to a 
likelihood of confusion with an earlier trademark.   Registration covers only the term in the 
specification and not its translations  into other languages unless the term is the same in translation.  
The three Czech beer GIs also contain a unique endor sement that they apply "without prejudice to any 
beer trademark or other rights existing in the European Union on the date of accession".
476 
7.545  The European Communities argues that Article 14(3) requires the EC authorities to refuse 
registrations and does not allow for a margin of discr etion.  It can be invoked before the courts after 
registration of a GI, including in trademark infringeme nt proceedings brought against a user of a GI.  
This applies to registrations under the ordinary pro cedure in Article 6 or the "fast-track" procedure in 
Article 17.  A trademark owner may raise the inva lidity of the measure before the courts under the 
preliminary ruling procedure in Article 234 of  the EC Treaty.  Depending on the factual 
circumstances of each case, a trademark owner may also have standing to bring an action in annulment under Article 230 of the EC Treaty, if a GI registration were considered to affect adversely 
specific substantive trademark rights.  A two-month ti me limit applies to the action in annulment and, 
in specific circumstances, may also a pply to the preliminary ruling procedure.
477  Under both 
procedures, judicial review is available on points of fact and law.  The cancellation procedure is set 
out in Article 11a of the Regulation and the grounds mentioned in Articles 11 and 11a are 
exhaustive.478   
7.546  The European Communities notes that Article 7(4) of the Regulation provides that an 
objection is admissible if it "shows that the regi stration of the name proposed would jeopardize the 
existence ... of a mark".  It argues that this language is broad enough to encompass any instance of 
likelihood of confusion with any mark.  Logically, Ar ticle 14(3) must permit re gistration to be refused 
in such cases.  Article 7(5)(b) refers expressly to  a decision having regard to the "likelihood of 
confusion".479   
7.547  The European Communities argues th at, in principle, a GI which has been found not to be 
confusing per se  following the assessment required by Article 14(3) should not subsequently give rise 
to confusion.480  In its view, GIs and trademarks can be presented in a similar fashion.  Whether or not 
a particular sign falls within the scope of a particular GI registration is a factual question to be resolved by the courts on a case-by-case basis.
481   
7.548  The European Communities argues that Community law provides th e means to prevent use of 
a registered GI in a confusing manner.  Failure to comply with the product specifications in the 
registration may lead to cancellation.  The right co nferred by registration does not extend to other 
names or signs not in the registration.  Registration does not cover translations.  A presentation of a 
GI in a mutilated or deformed manner may be deemed different from the registered sign and not 
protected.  Use of a GI is subject to the Community directives on labelling, presentation and advertising of foodstuffs and on mi sleading advertising and the EC member States' unfair competition 
laws.
482   
                                                      
476 European Communities' rebuttal submission, paras. 286-293;  response to Panel question No. 142. 
477 European Communities' responses to Australia's question Nos. 2 and 3 after the second substantive 
meeting. 
478 European Communities' responses to Panel question Nos. 67 and 142;  rebuttal submission, 
paras. 294-297; second oral statement, paras. 174-179. 
479 European Communities' first written submission, para. 336;  response to Panel question No. 68;  
rebuttal submission, paras. 282-285. 
480 European Communities' response to Panel question No. 137. 
481 European Communities' second oral statement, paras. 182-184. 
482 European Communities' rebuttal submission, paras.  298-303;  response to Panel question No. 63.  WT/DS174/R 
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 7.549  The European Communities argues that few, if any, Members provide a remedy to prevent 
confusing use of a registered trademark without fi rst obtaining cancellation, invalidation or revocation 
of the trademark registration.  In the same way, Community law does not provide a remedy to prevent 
use of a registered GI on the grounds that it is c onfusing, although the trademark owner may request a 
judicial ruling that the GI registration is invalid on those grounds.483   
(ii) Main arguments of third parties 
7.550  Argentina , Brazil , India and Mexico indicated, in response to a question from the Panel, that 
they were not aware of any GIs registered under th e Regulation that were identical or confusingly 
similar to a trademark owned by their respec tive nationals and protected in the European 
Communities.484 
7.551  Brazil  argues that Article 16.1 of the TRIPS Agreem ent deals with trademarks in general and 
not only with those referred to in the narrow terms of  Article 14(3) of the Regulation, which refers to 
the trademark's reputation, renown, and the length of time it has been used, and its liability to mislead 
the consumer as to the true identity of the product.485 
7.552  New Zealand argues that Article 14(3) conditions the rights of a prior registered trademark 
owner on certain factors, such as reputation, renown and length of time of use, for which there is no 
basis in Article 16.1 of the TRIPS Agreement.486 
7.553  Chinese Taipei argues that Article 14(3) of the Regulation only prevents the registration of a 
trademark if it fulfils the conditions of reputation, renown and length of time of use.  This provision 
negates the right granted to trademark owners pur suant to Article 16.1 of the TRIPS Agreement.487 
(iii) Consideration by the Panel 
7.554  The United States does not take issue in this dis pute with trademarks protected later in time 
than a GI.  Therefore, there is no need to consider  Article 14(1) of the Regulation.  Moreover, it does 
not take issue in this dispute with the dates for establishing which trademarks are considered earlier 
than a GI under Article 14(2) of the Regulation.  Th erefore, there is no need to consider that issue 
either.  
7.555  The United States challenges coexistence under the Regulation "as such".  It relies on the fact 
that Article 14(2) of the Regulation, on its face, can apply to certain trademarks and, when it does, 
the Regulation will limit the right of the owner of such a trademark against the use of a GI.488 
7.556  The parties largely agree on the factual implications, in principle, of the application of 
Article 14(2).  It allows the continued use of a tr ademark on certain conditions but, at the same time, 
the Regulation confers a positive right to use a GI  which prevents the owner of a trademark from 
exercising the right conferred by that trademar k against a person who uses a registered GI in 
accordance with its registration.  The particular right of a trademark owner at issue is the right to 
                                                      
483 European Communities' second oral statement, para. 181; response to Panel question No. 139. 
484 See their comments in Annex C at paras. 19, 37, 106 and 120.   
485 Annex C, para. 29. 
486 Annex C, paras. 148-152. 
487 Annex C, para. 178. 
488 Although Article 14(2) of the Regulation is drafted as an exception to GI protection in Article 13, it 
is not disputed that in most of the situations described in Article 13, in which Article 14(2) applies, the use of 
the GI would otherwise constitute infringement of the trad emark.  If Article 14(3) were able to prevent the 
registration of any GI, use of which could otherwise co nstitute a trademark infringement, Article 14(2) would be 
redundant in all of these situations. WT/DS174/R 
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 prevent uses of a sign that would result in a likeliho od of confusion, which is discussed in paragraphs 
7.598 to 7.603 below.   
7.557  The European Communities' first defence is that  Article 14(3) can prevent the registration of 
any GI which would subject a prior trademark to Article 14(2), where the GI could be used in a 
manner that would result in a likelihood of confusion.  This is a factual issue for the Panel to decide.  
This involves matters of interpretation of an EC  Regulation which forms part of the European 
Communities' domestic law.  It is necessary for th e Panel to make an objective assessment of the 
meaning of this provision, although solely for the purpose of determining the European Communities' 
compliance with its WTO obligations.
489   
7.558  As a preliminary remark, the Panel does not consider that this defence is necessarily 
contradicted by the European Communities' other de fences that it is fully entitled and even required 
under the TRIPS Agreement to apply its coexiste nce regime, regardless of whether a GI would 
otherwise infringe the rights in a prior trademark.   However, given that this is the European 
Communities' view of its rights and obligatio ns under the TRIPS Agreement, it would seem 
coincidental if Article 14(3) of the Regulation could operate in a way that a GI would never, in fact, 
otherwise infringe the rights in a prior trademark. 
7.559  Turning to the text of Article 14(3) of the Regul ation, the Panel's first observation is that it 
requires GI registration to be refused where it would be  "liable to mislead the consumer as to the true 
identity of the product".  This is limited to liability to mislead as to a single issue, and not with respect 
to anything else.   
7.560  The Panel's second observation is that Article 14( 3) specifically prohibits GI registration "in 
light of a trade mark's reputation and renown and the length of time it has been used".  It is clear that 
these factors must all be taken into account in the a pplication of Article 14(3).  It is difficult to 
imagine how Article 14(3) could be applied without some consideration of the similarity of the signs 
and goods as well.490  However, even if these factors are not  exhaustive, and even if they do not 
require strong reputation, wide renown and long use, they indicate that the scope of Article 14(3) is 
limited to a subset of trademarks which, as a minimum, excludes trademarks with no reputation, 
renown or use.  Article 14(3) does not prevent the registration of a GI on the basis that its use would affect any prior trademark outside that subset.   
7.561  The Panel's third observation on the text of Article  14(3) is that it does not refer to use (of the 
GI) or to likelihood or to confusion, when other provisions of the Regulation do.  Articles 7(5)(b), 
12b(3) and 12d(3) permit refusal of a GI registrati on "having regard to" or "taking account of" factors 
including the "actual likelihood of confusi on" and the "actual risk of confusion".
491  This indicates that 
the standard in Article 14(3) that registration woul d "mislead the consumer as to the true identity of 
the product" is intended to apply in a narrower set of circumstances than th e trademark owner's right 
to prevent use that would result in a likelihood of confusion.492     
                                                      
489 In this regard, the Panel recal ls its comments at para. 7.55. 
490 Article 14(3) presupposes the applicability of Ar ticle 13, which requires a consideration of the 
similarity of the goods and signs. 
491 Articles 7(5)(b) and 12d(3) do not apply to GIs located  in third countries.  To the extent that they 
apply to GIs located in the European Communities, they only apply in limited circumstances where there is an 
admissible objection from an EC member State, other than the one which transmitted the application, or a third 
country, and they do not provide that the actual likelihood or risk of confusion is an absolute ground for refusal. 
492 The TRIPS Agreement does not define the terms "likelihood of confusion" and "mislead the public 
as to the geographical origin".  These terms define the scope of protection provided for in Articles 16.1 and 22.2 
of the TRIPS Agreement and apply in a very wide range of factual situations.  Therefore, the Panel considers it  WT/DS174/R 
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 7.562  For these reasons, the Panel considers that the United States has made a prima facie case that 
Article 14(3) of the Regulation cannot prevent all situations from occurring in which Article 14(2) 
would, in fact, limit the rights of a trademark owner.   
7.563  Consistent with this view, it can be noted th at the European Communities specifically rejected 
a proposal by a Committee of the European Parliament  to amend Article 14(2) so as to subject it to the 
trademark owners' rights when Article 14 was amended in April 2003.493  This at least suggests that 
Article 14(3) was considered different from a blanket protection of trademark rights. 
7.564  The European Communities has submitted that  the United States' interpretation of 
Article 14(3) would conflict with Article 7(4), whic h provides that a statement of objection shall be 
admissible inter alia  if it shows that the proposed GI registration would jeopardize the existence of a 
mark.  It asserts that this langua ge encompasses any instance of likelihood of confusion between the 
proposed GI and a prior trademark.494  It has not explained why the text does not set forth the 
likelihood of confusion standard, when the followin g provision of the Regulation in Article 7(5)(b) 
does.  The contrast is marked.  Article 7(5)(b) set s out a procedure to reach agreement in cases where 
an objection is admissible, which appears to indicate that it contains a lower standard than the ground 
for objection in Article 7(4). 
7.565  The European Communities has submitted that th e criteria for registrability of a trademark 
limit a priori the risk of GIs being confused with a prio r trademark, but it does not submit that they 
completely eliminate that risk.  The evidence show s that signs eligible for protection as GIs can and 
have been registered as trademarks in the Community.495  The European Communities has not shown 
that the criteria for registrability of trademarks ca n anticipate adequately a situation in which a GI 
could be used in a way that results in a like lihood of confusion with a trademark, wherever 
Article 14(3) of the Regulation does not provide for re fusal of registration of a GI.  Those criteria and 
Article 14(3) would have to offset each other in every case.  However, Article 14(2) and (3) apply to 
trademarks that are already protected.  They cannot  apply to signs which do not satisfy the trademark 
registrability criteria, either because they are ge ographical names or for whatever other reason, and 
have been refused registration, are subject to i nvalidation or are otherwise unprotected.  These signs 
are filtered out before Article 14 of the GI Regulation comes into play.  Given that Article 14(3) applies to a subset of protected trademarks, those to which it does not apply have by definition already 
satisfied the trademark registrability criteria.   
7.566  There is also the question of how Article 14( 3) can protect a trademark owner's right to 
prevent uses which occur subsequent to GI registratio n.  In response to a question from the Panel as to 
whether Article 14(3) could be invoked if use of  the GI would otherwise infringe the trademark 
subsequent to GI registration, the European Communities submitted that it could.
496  The parties then 
made various submissions on this point, based on wh ich the Panel makes the following observations:   
(a) the Regulation does not refer to invalida tion under Article 14(3).  It sets out 
cancellation procedures in Articles 11 and 11a, the grounds for which do not appear 
                                                                                                                                                                     
inappropriate to embark on a detailed interpretation of these or similar terms unless necessary for the purposes 
of the resolution of the dispute, which is not the case here.    
493 The Committee proposal is set out in Exhibits COMP-14 and US-21. 
494 European Communities' response to Panel question No. 68;  rebuttal submission, paras. 282-285. 
495 For example, the following are registered Co mmunity trademarks: CALABRIA for pasta;  DERBY 
for milk and chocolate based products; WIENERWALD for prepared meals, condiments and other goods and services.  Extracts of registrations are reproduced in Exhibits US-74, US-75 and US-76, respectively.   
496 European Communities' response to Panel question No. 67; see also its rebuttal submission, 
paras. 270 and 296.  The Panel's findings do not imply any view on whether a requirement to seek GI invalidation as a condition precedent to  obtaining relief against trademark infringement would be consistent 
with the enforcement obligations under the TRIPS Agreement. WT/DS174/R 
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 to relate to the improper application of Ar ticle 14(3).  If invalidation procedures are 
possible, it would be as a matter of general Community law under the EC Treaty; 
(b) Article 230 of the EC Treaty provides a pr ocedure for a direct challenge to the 
validity of a Community measure before the Court of First Instance of the European Communities on the condition that the app licant "is directly and individually 
concerned" by the measure.  It is not submitted by any party that all trademark 
owners can satisfy that condition.  Further,  this procedure is subject to a two-month 
time limit which could rende r it unavailable to certain trademark owners who did 
satisfy that condition
497;  
(c) Article 234 of the EC Treaty provides a procedure for an indirect challenge to a 
Community measure under which a court of an EC member State can refer a question 
to the European Court of Justice for a preliminary ruling.  This procedure could be invoked in a trademark infringement proceeding to obtain invalidation of a GI registration.  It is not clear in what circ umstances this procedure is available to a 
trademark owner who could have invoked th e Article 230 procedure.  The procedure 
under Article 234 would only be available where the court of the EC member State 
considered the question of validity of th e GI necessary to resolve the trademark 
infringement action.  In any case, the decision not to refuse a registration under Article 14(3) of the Regulation would be in terpreted in the preliminary ruling as at 
the time of that decision, and not at the ti me of the subsequent allegedly infringing 
use
498; and  
(d) Article 14(3) may not be applicable in all cases as it is not clear whether GIs 
registered in accordance with the terms of an Act of Accession to the European Union 
(there are three such GIs) can be i nvalidated on the basis of that provision.499 
7.567  In light of these observations, the Panel considers that there is no evidence to show that it is 
possible to seek invalidation of a GI registration under Article 14(3) in all cases in which use of a GI 
would otherwise be found to infringe a prior trademark.  In those cases where it is not possible, it 
would be necessary for the owner of a prior trademark to be able to anticipate, at the time of the 
proposed GI registration, all subsequent uses of th e proposed GI that would result in a likelihood of 
confusion.  There is no reason to believe that this  is possible.  The evidence submitted to the Panel 
shows that GI registrations under the Regulation si mply refer to names without limiting the way in 
which they are used.  Indeed, it became apparent in  the course of the proceedings that what the United 
States regards as "trademark-like use" is, in the European Communities, considered perfectly 
legitimate use as a GI.500 
7.568  The European Communities has submitted that the food labelling and mi sleading advertising 
directives and unfair competition laws of the EC me mber States also prevent confusing uses.  We 
understand, and the European Communities does not deny , that this is only possible where the use is 
not in accordance with the GI registration.  In any ev ent, the scope of the directives is narrower than 
                                                      
497 United States' comment on EC response to Panel question No. 142  and Exhibits US-99 and 
US-100;  European Communities' sec ond oral statement, para. 177.   
498 United States' comment on EC response to Panel question No. 142 and Exhibits US-100 and 
US-101;  European Communities' s econd oral statement, para. 178.   
499 See European Communities' response to Panel qu estion No. 142(c) and cont rast the United States' 
comment on that response and Exhibit US-101. 
500 The United States submitted copies of the packag ing of cheeses bearing the GIs "Esrom", "Bitto", 
"Bra" and "Tomme de Savoie" in Exhibit US-52.  The European Communities submitted the approved specifications for these GIs in Exhibits EC-99 through EC-102.  See the European Communities' response to 
Panel question No. 140 and the United States' comment on that response.  WT/DS174/R 
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 that of the GI Regulation and the standards whic h they apply are different from the right of a 
trademark owner to prevent use which would result in a likelihood of confusion, for the following reasons: 
(a) the food labelling directive only applies to th e labelling of foodstu ffs to be delivered 
as such to the ultimate consumer and cert ain aspects relating to the presentation and 
advertising thereof.  It provides that "labe lling and methods used must not be such as 
could mislead the purchaser to a material degree, particularly ... as to the characteristics of the foodstuff and, in particul ar, as to its nature, identity, properties, 
composition, quantity, durability, origin or provenance, method of manufacture or production"
501;  and   
(b) the misleading advertising directive applies to "any advertising which in any way, 
including presentation, deceives or is likel y to deceive the persons to whom it is 
addressed or whom it reaches and which, by reason of its deceptive nature is likely to 
affect their economic behaviour or which, for those reasons, injures or is likely to 
injure a competitor".502   
7.569  The unfair competition laws of the EC member States apply subject to the terms of 
registration under the Regulation, due to  the primacy of Community law.  It is not clear to what extent 
these laws apply in addition to the Regulation but, to the extent that they do, they use various 
standards, some of which require deception, which is narrower than confusion, and some of which 
appear only to apply the misleading standard which is embodied in the Regulation itself.503 
7.570  The United States also refers to specific cases in which the Regulation has been applied in 
support of its claim, as set out in the following paragraphs.   
7.571  Article 14(3) of the Regulation has only b een applied once.  This was the case of 
"Bayerisches Bier", which was registered as a prot ected geographical indication in 2001 subject to the 
proviso that the use of certain prior trademar ks, for example, BAVARIA and HØKER BAJER, was 
permitted to continue under Article 14(2).  The GI refers to a beer  and the trademarks are registered in 
respect of beer.  The GI and the trademarks are, respectively, the words "Bavaria" or "Bavarian Beer" 
rendered in the German, English and Danish langu ages.  Upon its registration, the EC Council 
concluded that the GI would not mislead the public as to the identity of the product, which is the standard embodied in Article 14(3) of the Regulation.
 504   
7.572  The United States alleges that the GI "Bayeri sches Bier" could be used in a manner that 
would result in a likelihood of confusion with these prior trademarks.505  In response to a direct 
question from the Panel, the European Communities di d not deny this specific allegation.  It only 
                                                      
501 Articles 1 and 2(1)(a)(i) of Directive 2000/13/EC of the European Parliament and of the Council on 
the approximation of the laws of the Member States re lating to the labelling, presentation and advertising of 
foodstuffs, referred to in the European Communities' resp onses to Panel question No. 63, fn 38;  United States' 
comments on EC response to Panel question No. 140, fn. 74, and reproduced in Exhibit EC-30. 
502 Article 2(2) of Council Directive 84/450/EEC rela ting to the approximation of the laws, regulations 
and administrative provisions of the Me mber States concerning misleading adve rtising, referred to in European 
Communities' responses to Panel question No. 63, fn 39, United States' comments on EC response to Panel 
question No. 140, fn. 74, and reproduced in Exhibit EC-31. 
503 See information supplied by the European Communities and some of its member States to the 
Council for TRIPS in the review under Article 24.2 of  the TRIPS Agreement, document IP/C/W/117/Add.10, 
reproduced in Exhibit EC-29.  The European Communities did not supply information on the unfair competition 
laws of its ten new member States. 
504 Council Regulation (EC) No. 1347/2001 reproduced in Exhibits US-41 and EC-9. 
505 See the United States' response to Panel question No. 137. WT/DS174/R 
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 responded that "in principle" a name registered following the assessment required by Article 14(3) 
"should not give rise to confusion when used subse quently" and submitted that "in practice" this may 
happen only when the registered name is used togeth er with other signs or as part of a combination of 
signs.  This was a conspicuous choice of words because in the same respon se it commented in detail 
on two other specific cases which it considered irrelevant to the dispute.
506   
7.573  The United States also alleges th at three Czech beer GIs, "Bud ĕjovické pivo", 
"Českobudĕjovické pivo" and "Bud ĕjovický m ĕšt’anský var" could be used in a manner that would 
result in a likelihood of confusion with the prior trademarks BUDWEISER and BUD, registered in respect of beer.
507  The evidence shows that a court in a non-EC WTO Member found a reasonable 
probability that a substantial num ber of persons would be confused if the marks BUDEJOVICKY 
BUDVAR depicted in a special script, and BUDWEISER and BUD, were used together in relation to 
beer in a normal and fair manner and in the ordina ry course of business, particularly the mark BUD.508  
However, courts in two other non-EC WTO Members found that the use of "Budìjovický Budvar" on specific beer labels did not give rise to a likeli hood of confusion with the trademarks BUDWEISER 
and BUD, registered in respect of beer.
509  In response to a direct question from the Panel, the 
European Communities did not deny that these GIs c ould be used in a manner that would result in a 
likelihood of confusion with these prior trademarks .  Instead, it pointed to an endorsement on the 
three GI registrations that they apply "without prejudice to any beer trademark or other rights existing in the European Union on the date of accession".
510  This might imply that it accepts a likelihood of 
confusion, but considers that there are other means b esides Article 14(3) to deal with that.  It also 
argued that these GIs were outside the terms of reference but the United States expressly clarified that 
it referred to them only as evidence in support of its claim and did not challenge these individual 
registrations in this panel proceeding.511   
7.574  There appears to be an inconsistency betw een the European Communities' position that 
Article 14(3) of the Regulation, in practice, prevents  the registration of GIs, use of which would result 
in a likelihood of confusion with a prior trademark,  and its decision to avoid contesting that there may 
be circumstances in which the four specific GIs re ferred to above could be used which would not 
result in a likelihood of confusion with these specific prior trademarks.   
7.575  For the above reasons, the Panel considers th at the European Communities has not rebutted 
the United States' prima facie case that Article 14(3)  of the Regulation cannot prevent all situations 
                                                      
506 The European Communities submitted twice that the EC Council had concluded that the registration 
of this GI would not lead to a likelihood of confusion w ith these prior trademarks but this is different from the 
EC Council's conclusion as stated in the decision on re gistration.  The European Communities later indicated in 
response to a question from the Panel that the EC Council's conclusion was that the signs were not sufficiently similar to mislead the public, which is closer to the wording of the conclusion as stated in the decision, but not 
necessarily a likelihood of confusion:  see European Co mmunities' first written submission, para. 288, fn. 140; 
rebuttal submission, para. 287; and responses to Panel questions Nos. 137 and 143 and compare Council Regulation (EC) No. 1347/2001 reproduced in Exhibits US-41 and EC-9 and the Commission Guide to the 
Regulation (August 2004 edition, p. 12) in Exhibit EC-64. 
507 The evidence indicates that thes e trademarks are registered in at  least two EC member States and 
rights to them appear to have been acquired through use in another EC member State: see Exhibits US-53, 
Section 3.6;  US-51, para. 26; and US-82.  
508 Judgement of the High Court of South Africa in Budweiser Budvar National Corporation v 
Anheuser-Busch Corporation , dated 3 December 2003, reproduced in Exhibit US-82. 
509 Judgement of the Federal Court of Australia in Anheuser-Busch, Inc. v Budìjovický  Budvar, Národní 
Podnik, [2002] FCA 390 (dated 5 April 2002);  judgement of the Court of Appeal of New Zealand in Anheuser 
Busch Incorporated v Budweiser Budwar National Corporation & Ors [2002] NZCA 264 (dated 19 September 
2002)  reproduced in Exhibits EC-117 and EC-118, respectively. 
510 European Communities' rebuttal submission, paras. 286-293;  response to Panel question No. 142. 
511 United States' response to Panel question No. 137 and European Communities' comment on that 
response.  See the Panel's comments on individual registrations at para. 7.20.  WT/DS174/R 
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 from occurring in which a trademark would be subject  to Article 14(2) and, hence, in which the 
Regulation would limit the rights of the owner of such a trademark.   
7.576  The Panel will now proceed to examine whether the TRIPS Agreement requires Members to 
make available to trademark owners rights against the use of GIs. 
(d) Relationship between protection of GIs and prior trademarks under the TRIPS Agreement 
(i) Main arguments of the parties 
7.577  The United States argues that the ordinary meaning of the terms used in Article 16.1 show 
that the rights to prevent certain  uses are exclusive, are valid against all third parties and cover 
identical or similar signs, including GIs.512 
7.578  The United States argues that the context shows that the TRIPS Agreement explicitly clarifies 
the relationship among individual rights in GIs and tr ademarks, where there is a need.  For instance, 
Article 22.3 explicitly provides for the refusal or in validation of trademark registrations that contain 
or consist of a GI, in certain circumstances.  In contrast, Article 24.5 does not explicitly set out an 
exception to trademark rights but only creates an exception to GI protection.513  Compromises 
between rights to exclude, including simultaneous u ses of identical place names, are spelt out in the 
text.  For instance, Article 23.3 provides for hom onymous GIs for wines.  There is no explicit 
provision for simultaneous use of a GI and a pr ior trademark where use of the GI would be 
inconsistent with the rights under Article 16.1.514  
7.579  The United States submits that Article 24.5 is cl early titled as an exception to GI protection.  
It protects certain grandfathered trademarks but  is not an exception to trademark protection.515   I t  
does not create any positive rights.516  The phrase "validity of the registration of a trademark" must be 
read in connection with the legal authority accorded  by trademark registration, which is the right 
provided under Article 16.1, in addition to rights under domestic law.  Trademark registration is 
virtually meaningless without the associated rights under Article 16.1.  The drafting history shows that the predecessor of Article 24.5 in the Brussel s Draft set out a simple prohibition against 
invalidation of registration.  This became a re quirement that Members not even "prejudice" the 
validity of the registration which is a more stringent requirement.
517  The obligations not to prejudice 
the "right to use a trademark" would include an obl igation with respect to both registered trademarks 
and trademarks to which rights are acquired through use.  If the owner cannot exclude confusing uses 
of identical or similar signs, the owner's ability to use the trademark for its purpose is severely 
prejudiced.  The corresponding provision in the Brussels Draft did not refer to the right to use.518   
7.580  The United States emphasizes the exclusivity of the rights provided for in Article 16.1.  
Exclusivity has been recognized as the core of a trad emark right by the European Court of Justice and 
the United States Supreme Court.519  A trademark can only fulfil its role of identifying an undertaking 
or the quality of goods if it is exclusive.520  This is confirmed by Article 15.1.521 
                                                      
512 United States' first written submission, paras. 137-140. 
513 United States' first written submission, paras.  141-142;  first oral statement, para. 58. 
514 United States' first written submission, para. 143. 
515 United States' first oral statement, para. 59;  second oral statement, para. 88.  
516 United States' response to Panel question No. 145. 
517 United States' first oral statement, para. 65;  response to Panel question Nos. 76, 145 and 147. 
518 United States' response to Panel question No. 76. 
519 United States' first written submission, paras. 145-150. 
520 United States' first oral statement, para. 67. 
521 United States' rebuttal submission, para. 174;  response to Panel question No. 76.  WT/DS174/R 
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 7.581  The United States argues that there is no conflict between Articles 16.1 and 22.  It is possible 
to comply simultaneously with both.
522  A conflict may occur between right holders in an individual 
trademark and an individual GI, but this is not a conflict between obligations in the TRIPS 
Agreement.523  If a trademark misleads consumers as to the origin of goods, its registration should be 
refused or invalidated.524  Articles 16.1 and 22.3 can both be im plemented in a way that gives each its 
full scope.  They should be interpreted in a way th at does not presume a conflict.  If a trademark is 
misleading, its registration may be refused or invalid ated.  As long as the registration remains valid, it 
must provide the owner with the right to exclude others from confusing uses.525 
7.582  The United States argues that the European Comm unities bears the burden of proof in relation 
to Article 24.5 because it asserts that provisi on as an affirmative defence to the claim under 
Article 16.1.526   
7.583  The European Communities responds that this claim is unfounded.527  The TRIPS 
Agreement recognizes trademarks and GIs as intell ectual property rights on the same level, and 
confers no superiority to trademarks over GIs.  The provisions of Section 3 of Part II on GI protection 
are not "exceptions" to the provision of Article 16.1 on  trademark rights.  The criteria for registrability 
of trademarks limit a priori the possibility of conflicts between GI s and trademarks but conflicts may 
arise.  Article 16.1 does not address this issue.  Rather, the boundary between  GIs and trademarks is 
defined by Article 24.5 which provides for coexisten ce with earlier trademarks.  Article 24.5 must be 
read with Article 22.3 and Article 23.2 which also  provide protection to GIs vis-à-vis trademarks.528  
Section 2 of Part II cannot be applied without having regard to Section 3.529 
7.584  The European Communities argues that Article 24.5 has two implications:  (1) with respect to 
grandfathered trademarks (or app lications): (a) Members are not allowed to prejudice the validity of 
the registration (or the eligibility of the application or the right to use the trademark), but (b) Members 
may prejudice other rights of the trademark owner, in cluding in particular the right to prevent others 
from using the sign of which the trademark consists ; and (2) with respect to other trademarks (or 
applications), Members may prejudice any right.530   
7.585  The European Communities argues that the ordinary  meaning of the word "prejudice" used in 
all three official versions includes the notion of "j udge beforehand" but only the word in the English 
version includes the notion of "cause injury, damage or harm".531  The phrase "validity of the 
registration" does not necessarily imply that the registration must confer exclusive rights vis-à-vis all third parties.  The fact that the owner cannot preven t use of the same or a similar sign by the GI right 
holder does not mean that the registration is set aside .  The phrase "the right to use a trademark" refers 
to the basic right of the trademark owner to use the trademark, whether it has been acquired through 
registration or use.
532  It is the right to use a sign, which is different from the right to prevent others 
from using the same or a similar sign.  If that ri ght were inherent in the term "validity of the 
registration", it would have been supe rfluous to refer to the "right to use a trademark" as well.  If that 
right had been intended, the drafters would have refe rred to the "exclusive right to use a trademark".  
If that right were inherently exclusive, it would ha ve been superfluous to provide in Article 16.1 that 
                                                      
522 United States' response to Panel question No. 146. 
523 United States' second oral statement, para. 71. 
524 United States' response to Panel question No. 146. 
525 United States' response to Panel question No. 79. 
526 United States' response to Panel question No. 75(a); rebuttal submission, para. 173. 
527 European Communities' first written submission, para. 269-273. 
528 European Communities' first written submission, paras. 294-300. 
529 European Communities' rebuttal submission, paras. 306-307. 
530 European Communities' first written submission, para. 301. 
531 European Communities' comment on US response to Panel question No. 145. 
532 European Communities' first written submission, pa ra. 305; response to Panel question No. 76.   WT/DS174/R 
 Page 131 
 
 
 the owners of trademarks shall have exclusive ri ghts.  The drafting history shows that the Brussels 
Draft referred to the continued use of a GI as a tr ademark, which envisaged co existence, in a separate 
provision from the predecessor to Article 24.5.  Its tr ansfer to Article 24.5 in the final version did not 
alter its meaning or purpose.533   
7.586  The European Communities argues that Article 24.5 is drafted in mandatory terms and 
imposes self-standing obligations which go beyond t hose in Section 2 of Part II.  This may be 
illustrated by the case of a Member which provides for the refusal or invalidati on of registration of a 
trademark in terms broader than those in Article 22.3, or which prohibits the use of any trademark 
acquired by use in terms broader than those in Article  22.2.  Both would be consistent with Section 2 
of Part II but Article 24.5 would prevent either ap plying to prior trademarks.  This would be an 
obligation arising exclusively under Article 24.5.534   
7.587  The European Communities argues that if Ar ticle 24.5 did not allow coexistence, the 
protection of GIs provided under S ection 3 of Part II would become pointless whenever there is a 
grandfathered trademark.  The phrase "measures ad opted to implement this Section" assumes that 
Members will continue to protect GIs notwithstandi ng the existence of grandfathered trademarks.  
Coexistence may not be a perfect solution to resolv e conflicts between different types of intellectual 
property rights but there is no such perfect solution.535  It is not an unusual solution, since coexistence 
is envisaged in Articles 23.2 (with respect to a GI and a trademark that is not misleading), 23.3, 24.3 (where pre-existing protection provided for coex istence) 24.4 and 16.1 (vis-à-vis existing prior 
rights).
536  Article 24.5 embodies a compromise.  The Eu ropean Communities and other participants 
agreed to make it mandatory on the understanding th at the trademark owners would have the right to 
use the trademark but not the right to exclude use by GI right holders.537 
7.588  There is no "conflict" between Articles 16.1 a nd 22.3 but there is a potential "conflict" 
between Articles 16.1 and 22.2(a), and possibly 23.1.  Article 22.2 confers on GI right holders the 
right to prevent certain uses of trademarks, which may conflict with the right of the trademark owner 
under Article 16.1 to prevent certain uses of signs.  The simultaneous exercise of both rights would 
lead to a situation where neither the trademark ow ner nor the GI right holders could use the sign in 
question.  Neither would be able to fulfil its purpose.   This conflict is resolved by Articles 22.3, 23.2 
and 24.5.538   
7.589  The European Communities argues that only the object and purpose of the treaty as a whole is 
relevant to the general rule of treaty interpretation.  To the extent that the exclusivity of a trademark is 
an object and purpose of the TRIPS Agreement, it subm its that exclusivity is as essential to a GI or 
even more essential, because the choice of a GI is not arbitrary, unlike a trademark, and the 
establishment of a GI takes longer than a trademark.539 
7.590  The European Communities argues that the complainant bears the burden of proof that a 
measure falls within the scope of the obligations provided in Article 16.1.  Article 24.5 is not an 
exception but defines the boundary between the obliga tions in Article 16.1 and a Member's right to 
implement GI protection.  It does not provide an exemption from an obligation but places a limit on 
the measures that Members must or may take when  implementing GI protection under Section 3 of 
Part II.  It confers a right to use a trademark, a right which owners of trad emarks acquired through use 
                                                      
533 European Communities' response to Panel questio n No. 76; rebuttal submission, paras. 327-328.  
534 European Communities' response to Panel question No. 145. 
535 European Communities' first written submission, pa ra. 307;  response to Panel question No. 77. 
536 European Communities' first written submission, pa ra. 308;  response to Panel question No. 76. 
537 European Communities' response to Panel question No. 147. 
538 European Communities' rebuttal submission, paras. 308-310; response to Panel question No. 146. 
539 European Communities' response to Panel question No. 76. WT/DS174/R 
Page 132  
 
 do not have under Article 16.1 because rights the basis of use are optional under Article 16.1.  It notes 
that the United States stated a claim under Article 24.5 in its request for establishment of a panel.
540   
(ii) Main arguments of third parties 
7.591  Argentina argues that coexistence is inconsistent wi th Articles 16.1 and 22.3 of the TRIPS 
Agreement.  Article 24.5 sets out a cut-off date di fferent from the one in the Regulation and does not 
provide for the possibility of limiting the trademark owner's right as the Regulation does.  Article 24.4 
determines the boundaries for alternatives available to Members in the implementation of measures 
relating to GI protection and its link to trademarks.541 
7.592  Brazil argues GIs which are identical to trademarks are likely to create confusion and, 
consequently, may affect the value of trademarks.  Article 16.1 of the TRIPS Agreement provides for 
a right that covers the use of any sign, and not only that of a trademark, which might cause confusion. 
The possibility of coexistence between a tradem ark and a GI is only acceptable in terms of 
Articles 24.5 and 16.1, read in conjunction, which mean  that the use of a GI and the need to protect it 
must not be at the expense of both trademark owne rs and consumers, which may undermine the value 
of a trademark contrary to the "exclusive rights" of a trademark owner under Article 16.1.542   
7.593  Colombia argues that, under the TRIPS Agreement, no form of protection is superior to 
another.  Therefore, the Regulation cannot deny th e right of the trademark owner under Article 16.1 of 
the TRIPS Agreement.  Such denial constitu tes a clear violation of WTO obligations.543 
7.594  Mexico argues that the exclusive right in Article  16.1 of the TRIPS Agreement is severely 
nullified by Article 14(2) of the Regulation as it permits coexistence between a prior registered 
trademark and a later GI.  The European Communities'  explanation that coexistence is not the perfect 
solution is an inadequate justification but a recogni tion of inconsistency.  By ignoring the "first in 
time, first in right" rule, the Regulation not only c ontravenes Article 24.5 of the TRIPS Agreement but 
also a recognized general principle of law.544  
7.595  New Zealand argues that Article 16.1 of the TRIPS Agreement provides for a right against 
"all third parties".  Despite an appearance of conf lict between the rights in Articles 16.1 and 22.2, 
each must be read to the fullest extent permissible without conflicting with the other.  Article 24.5 is a 
provision that resolves conflict by compromising this  exclusivity, but in all other cases, the rights 
provided for in Articles 16.1 and 22.2 must both be upheld.  Article 14(2) of the Regulation excludes 
users of a registered GI from the scope of "all third parties" against whom a trademark owner should be able to exercise rights, and is inconsistent with Article 16.1.
545 
7.596  Chinese Taipei argues that Articles 16.1 and 22.2 of  the TRIPS Agreement must be given 
their full scope in a manner that would not cause conflict.  The Regulation creates precisely such a 
conflict, rendering Article 16.1 inu tile, as the right of trademark owne rs under that article is negated 
by coexistence under Article 14(2) of the Regulation.   The result is the creation of a hierarchy in 
which GIs have a superior status than tradem arks, which is not contemplated by the TRIPS 
Agreement.546   
                                                      
540 European Communities' response to Panel question No. 75;  rebuttal submission, paras. 312-315. 
541 Annex C, para. 5. 
542 Annex C, para. 30. 
543 Annex C, para. 102. 
544 Annex C, para. 114. 
545 Annex C, paras. 148-151. 
546 Annex C, para. 178.  WT/DS174/R 
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 (iii) Consideration by the Panel 
7.597  The Panel will now proceed to examine whether the TRIPS Agreement requires Members to 
make available to trademark owners rights against the use of GIs.  This involves two steps:  first, we 
examine the right of trademark owners provided for in Article 16.1 of the TRIPS Agreement and then 
we continue by examining whether Article 24.5 provides authority to limit that right. 
Article 16.1 of the TRIPS Agreement  
7.598  Part II of the TRIPS Agreement contains mi nimum standards concerning the availability, 
scope and use of intellectual property rights.  The first seven Sections of Part II contain standards 
relating to categories of intellectual property righ ts.  Each Section sets out, as a minimum, the subject 
matter which is eligible for protection, the scope of the rights conferred by the relevant category of 
intellectual property and permitted exceptions to those rights.   
7.599  Although each of the Sections in Part II provides for a different category of intellectual 
property, at times they refer to one another547, as certain subject matter may be eligible for protection 
by more than one category of intellectual property.   This is particularly apparent in the case of 
trademarks and GIs, both of which are, in general terms, forms of distinctive signs.  The potential for 
overlap is expressly confirmed by Articles 22.3 and 23 .2, which provide for the refusal or invalidation 
of the registration of a trademark which contains or consists of a GI.548   
7.600  Section 2 of Part II provides for the categor y of trademarks.  Article 15.1 sets out the 
definition of the subject matter which is capable of constituting a trademark.  These are signs that 
satisfy certain criteria.  Article 16.1 sets out a right which must be conferred on the owner of a 
registered trademark, and which may also be acquired on the basis of use, as follows:  
"1. The owner of a registered trademark sh all have the exclusive right to prevent 
all third parties not having the owner's consent from using in the course of trade identical or similar signs for goods or services  which are identical or similar to those 
in respect of which the trademark is regi stered where such use would result in a 
likelihood of confusion.  In case of the use of an identical sign for identical goods or 
services, a likelihood of confusion shall be presumed.  The rights described above 
shall not prejudice any existing prior rights, nor shall they affect the possibility of 
Members making rights available on the basis of use." 
7.601  The right which must be conferred on the owner of a registered trademark is set out in the 
first sentence of the text.  There are certain limitations  on that right which relate to use in the course of 
trade, the signs, the goods or services for which the signs are used and those with respect to which 
they are registered and the likelihood of confusion.  The ordinary meaning of the text indicates that, 
basically, this right applies to use in the course of  trade of identical or similar signs, on identical or 
similar goods, where such use would result in a lik elihood of confusion.  It does not specifically 
exclude use of signs protected as GIs.   
7.602  The text of Article 16.1 stipulates that the right  for which it provides is an "exclusive" right.  
This must signify more than the fact that it is a ri ght to "exclude" others, since that notion is already 
captured in the use of the word "prevent".  Rather, it indicates that this right belongs to the owner of 
the registered trademark alone, who may exercise it to  prevent certain uses by "all third parties" not 
                                                     
 
547 For instance, Article 25.2 of the TRIPS Agreement refers to more than one category of intellectual 
property, as does Article 4 of the IPIC Treaty, as inco rporated by Article 35 of the TRIPS Agreement.   
548 Articles 22.3 and 23.2, respectively.   WT/DS174/R 
Page 134  
 
 having the owner's consent.  The last sentence provid es for an exception to that right, which is that it 
shall not prejudice any existing prior rights.  Othe rwise, the text of Article 16.1 is unqualified. 
7.603  Other exceptions to the right under Article 16. 1 are provided for in Article 17 and possibly 
elsewhere in the TRIPS Agreement.  However, ther e is no implied limitation vis-à-vis GIs in the text 
of Article 16.1 on the exclusive right which Me mbers must make available to the owner of a 
registered trademark.  That right may be exercised  against a third party not having the owner's consent 
on the same terms, whether or not the third part y uses the sign in accordance with GI protection, 
subject to any applicable exception.   
Article 24.5 of the TRIPS Agreement
 
7.604  The parties have referred to Article 24.5 of the TRIPS Agreement.  This appears in Section 3 
of Part II, which provides for the category of GIs.549  Article 24.5 provides as follows: 
"5. Where a trademark has been applied for or registered in good faith, or where 
rights to a trademark have been acquired through use in good faith either: 
(a) before the date of application of these provisions in that 
Member as defined in Part VI;  or 
(b) before the geographical indication is protected in its country 
of origin;   
measures adopted to implement this Secti on shall not prejudice eligibility for or the 
validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication." 
7.605  The Panel must interpret this provision, like a ll other provisions of the covered agreements 
relevant to this dispute, in accordance with the customary rules of interpretation of public 
international law, as required by Article 3.2 of th e DSU.  For present purposes, this means the general 
rule of treaty interpretation contained in Article 31 of the Vienna Convention on the Law of Treaties.  
This requires an interpretation in good faith in acco rdance with the ordinary meaning to be given to 
the terms in their context and in the light of th e object and purpose of the agreement.  Recourse may 
be had to supplementary means of interpretation in accordance with Article 32 of that Convention.
550   
7.606  Commencing with the terms of the provision, we observe that Article 24.5 consists of a single 
sentence, of which the subject is "measures adopted to implement this Section".  Article 24.5 appears 
in Section 3 of Part II of the TRIPS Agreement.  Therefore, the reference to "this Section" is a 
reference to Section 3.551   
                                                      
549 Section 3 of Part II consists of three articles:  Articles 22, 23 and 24.  Article 23 concerns only GIs 
for wines and spirits, which are not covered by the Regulation.  Nevertheless, the meaning of that article is 
important in understanding Section 3 in general and Article 24 in particular.  The Panel therefore refers to it in 
its examination, where that is helpful. 
550 See, for example, the Appellate Body report on US – Gasoline , DSR 1996:I, 3, at 16; Appellate 
Body report on Japan – Alcoholic Beverages II ,  DSR 1996:I, 97, at 104; and Appellate Body report on India – 
Patents (US) , paras. 45-46. 
551 The parties referred to th e text above and below subparagraphs (a) and (b) as a chapeau and a 
chaussette .  The Panel attaches no importance to the allegedly sartorial format of the paragraph.  WT/DS174/R 
 Page 135 
 
 
 7.607  The principal verb in Article 24. 5 is "shall not prejudice".  Ther e are various definitions of the 
verb "prejudice" used in the three authentic  language versions of  the TRIPS Agreement.552  The 
ordinary meaning of the verb "prejudice" in E nglish can be defined as "affect adversely or 
unfavourably;  injure or impair the validity of (a righ t, claim, etc.)".  The latter part of this definition 
appears particularly apposite in this context since it  refers to a right or claim, and the objects of the 
verb in Article 24.5 are legal rights.  However, the European Communities emphasizes that the verbs 
used in the French and Spanish versions, préjuger and prejuzgar  respectively, correspond to the 
modern English verb "prejudge".  The Panel notes that  this is an archaic sense of the English verb 
"prejudice" now analogous to its use in the phrase "w ithout prejudice".  Other usages of the English 
verb "prejudice" in the TRIPS Agreement outside Ar ticle 24 have been rendered differently in the 
French and Spanish versions , which are equally authentic553, to capture the sense of adverse effect or 
injury, so that that sense should not be read into Article 24.5.  Nevertheless, the essence of all these 
definitions is that the provision does not affect certain other rights.  The Panel's task in this dispute is to determine the applicability of Article 24.5.  For that purpose, it suffices to note that the verb "shall 
not prejudice" denotes that the measures that are the subject of that provision shall not affect certain 
other rights.   
7.608  The United States argues that the word "p rejudice" connotes additional protection for 
trademark rights under Article 24.5.  However, the Panel notes that the word "prejudice" is relatively common in all three versions of the TRIPS Agreemen t and the phrase "shall not prejudice" or "shall in 
no way prejudice" occurs three other times in the E nglish version, including once in another exception 
in Article 24, and once in relation to prior rights in Article 16.1 itself.
554  Read in context, "prejudice" 
simply appears to be a word which the drafters us ed to indicate that a particular measure shall not 
affect certain other rights, including prior rights. 
7.609  The objects of the principal verb in Article 24.5 are "the eligibility for or the validity of the 
registration of a trademark" and "the right to use a trademark".  The context indicates the relevance of these rights in Article 24.5.  The choice of words "the  eligibility for or the validity of the registration 
of a trademark" reflects the fact that these are the aspects of trademark protection which might 
otherwise be prejudiced by the obligations to "refu se or invalidate the registration of a trademark" and 
that "registration of a trademark ... shall be refused or invalidated" in Articles 22.3 and 23.2.  In the 
same way, the choice of the words "the right to use a trademark" reflects the fact that this is the aspect 
of trademark protection which would otherwise be pr ejudiced by the obligations to provide the legal 
means to prevent certain uses in Articles 22.2 and 23.1.
 555 
                                                      
552 The New Shorter Oxford English Dictionary (1993);  Le Nouveau Petit Robert: Dictionnaire de la 
langue française (June 2000) and Diccionario de la Lengua Española , 21st edition, (1992). 
553 See the final clause of the WTO Agreement. 
554 The phrase "shall in no way prejudice" appears in all three versions in Article 24.8, and "shall not 
prejudice" appears in Articles 16.1 and 53.2 in the English version.  The phrase "without prejudice" appears in 
Articles 10.2, 40.3, 50.6, 57 and 59, and the word "prejudice" appears in the exception clauses in Articles 13, 
26.2 and 30 (and Article 27.2 in the English version), and also in Article 63.4. 
555 The order of these two exceptions in Article 24.5  reverses the order of the types of protection in 
relation to uses and in relation to registration of a trademark in Article 22.2 and 22.3 and in Article 23.1 and 
23.2.  However, it can be observed that the exceptions fo llowed the same order as th e corresponding rights in 
paragraphs 1 and 2 of the GI exceptions provision in the Brussels Draft, which were the predecessors of 
Article 24.4 and 24.5 in the final version.  Draft paragraph 1 referred to a GI that had been "used", "including 
use as a trademark", and draft paragraph 2 only referred to "action to refuse or invalidate registration of a trademark":  see document MTN.TNC/W/35/Rev.1 dated 3 December 1990 entitled "Draft Final Act 
Embodying the Results of the Uruguay Round of Multilat eral Trade Negotiations – Revision", the so-called 
"Brussels Draft".  The phrase "including use as a trademark" was later deleted from paragraph 1, and prior trademark issues, including the right to use a trademark, we re dealt with in Article 24.5 in the final version, in 
that order.   WT/DS174/R 
Page 136  
 
 7.610  The European Communities asserts that the words "the right to use a trademark" provide for 
an additional positive right to use a trademark.  Ho wever, in the Panel's view, the verb "shall not 
prejudice" is not capable of supporting this interpreta tion.  It does not provide for the conferral of new 
rights on trademark owners or GI holders, but provides that the specifically mentioned rights shall not be affected by the measures that are the subject of the provision.  If the drafters had intended to grant 
a positive right, they would have used positive lang uage.  Indeed, Article 14(2) of the Regulation 
(which was adopted prior to the end of the TRI PS negotiations) expressly provides that "a trademark 
... may continue to be used"  under certain conditions.  In contrast, th ere is no language in Article 24.5 
of the TRIPS Agreement which would provide for the c onferral of a right to use a trademark.  Instead, 
it is a saving provision which ensures that "the right to use a trademark" is not prejudiced, or affected, 
by measures adopted to implement Section 3 of Pa rt II.  Irrespective of how the right to use a 
trademark arises, there is no obligation under Article 24.5 to confer it.
556   
7.611  Even if the TRIPS Agreement does not expressly provide for a "right to use a trademark" 
elsewhere, this does not mean that a provision that measures "shall not prejudice" that right provides for it instead.  The right to use a trademark is a right that Members may provide under national law.
557  
This is the right saved by Article 24.5 where it provides that certain measures "shall not prejudice ... 
the right to use a trademark".558   
7.612  The context in other paragraphs of Article 24 confirms the Panel's interpretation of "the 
eligibility for or the validity of the registration of a trademark" and "the right to use a trademark", as used in paragraph 5.  Other exceptions in that artic le also refer to the implications of these two types 
of protection.  Paragraph 4 re fers to "continued and similar use of a particular [GI] ... identifying 
wines and spirits";  paragraph 7 refers to "any re quest made under this Section in connection with the 
use or registration of a trademark ";  and paragraph 8 refers to  "the right of any person to use, in the 
course of trade, that person's name".  
7.613  There is no reason to limit the "right to use a trademark" to tradem arks acquired through use 
due to the optical symmetry between, on the one hand, the passive subjects of the first relative clause:  
"a trademark applied for ... in good faith", "a trad emark ... registered in good faith" and "rights to a 
trademark ... acquired through use in good faith" a nd, on the other hand, the active objects of the 
principal verb: "eligibility for ... the registration of a trademark", "the validity of the registration of a 
                                                     
 
556 The European Communities raises the issue of a Member that provides additional GI protection 
beyond that which is required by Article 22, in suppor t of its view that Article 24.5 imposes self-standing 
obligations.  It argues that in this situation Article 24.5, not Article 22 nor Section 2, would prohibit that 
Member from invalidating or denying protection to prior tr ademarks inconsistent with that additional protection.  
In the Panel's view, this overlooks the subject of Ar ticle 24.5 which is "measures adopted to implement ... 
Section [3]".  To the extent that measures implement GI protection beyond that which is required by Article 22 for products other than wines and spirits they are, by definition, not measures adopted to implement Section 3 
and Article 24.5 is irrelevant to them.  It has not been argued by any party that the Regulation is not such a 
measure.  See European Communities' response to Panel question No. 145 and United States' comment on that response.  
557 This is confirmed in WIPO publications, including Introduction to Trademark Law & Practice, The 
Basic Concepts, A WIPO Training Manual (1993), pp. 51-52, and WIPO Intellectual Property Handbook:  
Policy, Law and Use , (June 2001) at p. 82, cited by the European Communities in its rebuttal submission, 
para. 324 and its response to Panel question No. 76.  See, for example, Australia's Trade Marks Act 1995, 
Section 20(1)(a), reproduced in Exhibit EC-58.  
558 Article 16.1 of the TRIPS Agreement only provides  for a negative right to prevent all third parties 
from using signs in certain circumstances.  Article 15.3 permits Members to make registrability depend on use 
and Article 19.1 permits Members to require use in order to maintain a registration, which might imply a right to use the trademark, but any su ch right is subject to the general law.  Article 20 does not preclude a requirement 
prescribing the use of a trademark in a certain way.    WT/DS174/R 
 Page 137 
 
 
 trademark" and "the right to use a trademark".  The operative parallel is between the rights which 
shall not be prejudiced and the types of GI prot ection which would otherwise prejudice them.    
7.614  Therefore, according to their ordinary mean ing read in context, the terms "shall not 
prejudice", "the eligibility for or the validity of the registration of a trademark" and "the right to use a trademark", as used in paragraph 5 of Article 24, i ndicate the creation of exceptions to the obligations 
to provide two types of GI protection in Section 3.  Both these types of protection could otherwise 
affect the rights identified in paragraph 5.   Indeed , the refusal or invalidation of the registration of a 
trademark has no other function but to extinguish the eligibility for or the validity of the registration 
of a trademark.  Paragraph 5 ensures that each of these  types of protection shall not affect those rights.  
7.615  Accordingly, the Panel considers that Article 24. 5 creates an exception to GI protection - as 
reflected in the title of Article 24. 
7.616  Both parties submit that Article 24.5 implies cer tain things.  The United States argues that the 
term "validity of the registration" impliedly refers  to all the rights which flow from registration, 
including the right to prevent uses that would result in a likelihood of confusion.  In contrast, the European Communities argues that the use of the more specific language in Article 24.5 in fact 
implies a limitation on the trademark owner's right to exclude use.
559   
7.617  As to the United States' argument, the Panel not es the contrast between the use of the specific 
terms "eligibility for or the validity of the registrati on" in Article 24.5, rather than simply "existing 
prior rights", which is the language used in the last sentence of Article 16.1.  The use of language such 
as "existing prior rights" would have clearly preserved the right to prevent certain uses without any need for implication.  The more specific language  used in Article 24.5 does not, which suggests that 
Article 24.5 does not impliedly preserve that right.  However, this does not mean that Article 24.5 
authorizes Members to prejudice that right.  Members may prejudice that right if there is another provision that obliges or permits them to do so.   
7.618  As to the European Communities' argument, the Panel considers that it is difficult to sustain 
an argument that a limitation which is allegedly implied can prevail over an obligation in a WTO 
covered agreement which is express.  It is ev idently the position under the European Communities' 
domestic law that an implied positive right to use a re gistered GI prevails over the negative right of a 
prior trademark holder to prevent confusing uses.
560  However, such an interpretation of the TRIPS 
Agreement is not possible without a suitable basis in the treaty text.  The text of Article 24.5 expressly 
preserves the right to use a trademark - which is not expressly provided for in the TRIPS Agreement – 
and is silent as to any limitation on the trademark ow ner's exclusive right to prevent confusing uses of 
signs - which is expressly provided for in the TRIPS Agreemen t – when the sign is used as a GI.   
7.619  Accordingly, the Panel's preliminary conclusi on is that it is inappropriate to imply in 
Article 24.5 either the right to prevent confusing uses or a limitation on the right to prevent confusing 
uses.  
7.620  The ordinary meaning of the terms in their context must also be interpreted in light of the 
object and purpose of the agreement.  The object an d purpose of the TRIPS Agreement, as indicated 
by Articles 9 through 62 and 70 and reflected in the preamble, includes the provision of adequate standards and principles concerning the availability , scope, use and enforcement of trade-related 
                                                     
 
559 European Communities' first written submission, para. 301;  response to Panel question No. 147. 
560 That position may be evidenced by, among other things, the express provision in Article 159 of the 
Community Trademark Regulation that it sh all not affect the GI Regulation and in  particular Article 14 thereof.  
There is no such provision in Section 2 of Part II of th e TRIPS Agreement on trademarks that refers to Section 3 
of Part II on GIs. WT/DS174/R 
Page 138  
 
 intellectual property rights.  This confirms that a limitation on the standards for trademark or GI 
protection should not be implied unless it is supported by the text.   
7.621  The standards of protection in Part II of the Agreement and, hence, the procedures for their 
enforcement under Part III, could be undermined by systematic conflicts between the standards for 
different categories of intellectual property availabl e to different parties but applied to the same 
subject matter.  This is particularly apparent in th e case of trademarks and GIs due to the similarity of 
the subject matter eligible for protection by those two categories of intellectual property and the fact 
that the rights in respect of uses are indifferent as to whether the infringing subject matter is protected 
by another category of intellectual property.  The subject matter eligible for protection overlaps whilst 
the rights conferred by each category intersect. 
7.622  The European Communities submits that this is  a conflict resolved by Article 22.3 (and 
Article 23.2) by effectively giving priority to the GI.
561  The Panel agrees that Articles 22.3 and 23.2 
can resolve conflicts with later trademarks but they do not resolve c onflicts with prior trademarks that 
meet the conditions set out in Article 24.5. 
7.623  Both the United States and the European Comm unities agree that the simultaneous exercise of 
two negative rights to prevent uses provided for in  Articles 16.1 and 22.2 (and  23.1) can lead to a 
conflict between different private parties who wish  to use an individual sign as a trademark and as a 
GI.  The European Communities sees this potential fo r conflict as a matter which should be avoided in 
the interpretation of the TRIPS Agreement.  The United States distinguishes this from a conflict 
between Members' obligations under the Agreemen t, and argues that the need for a harmonious 
interpretation of the Agreement does not require th e treaty interpreter to resolve potential conflicts 
between private parties.   
7.624  The Panel notes that the parties do not dispute that Members may comply simultaneously with 
both obligations in the TRIPS Agreement.  They do not  allege that there are conflicting provisions in 
the treaty itself.562  The general rule of treaty interpretati on requires us to interpret the treaty in 
accordance with the ordinary meaning to be given to its  terms in their context in the light of its object 
and purpose.  The Panel has had recourse to supplemen tary means of interpretation, in particular a 
draft text, in order to confirm the meaning resulting from the application of the general rule of treaty 
interpretation, which has not left the meaning ambi guous or obscure or led to a result which is 
manifestly absurd or unreasonable.  We would not  adopt an approach in treaty interpretation that 
produced a result that might, on one view, further the object and purpose of the Agreement, but which is not supported by the ordinary meaning to be gi ven to its terms in their context.  The following 
statement by the Appellate Body in EC – Hormones  appears apposite:   
"The fundamental rule of treaty interpretati on requires a treaty interpreter to read and 
interpret the words actually used by the ag reement under examination, not words the 
interpreter may feel should have been used."
563 
7.625  Therefore, the Panel concludes that, under Ar ticle 16.1 of the TRIPS Agreement, Members 
are required to make available to trademark owners a right against certain uses, including uses as a GI.  
The Regulation limits the availability of that right fo r the owners of trademarks which are subject to 
Article 14(2).  Article 24.5 of the TRIPS Agreement is inapplicable and does not provide authority to 
limit that right.   
                                                      
561 European Communities' response to Panel question No. 146. 
562 In this respect, the Panel recalls the findings in the Panel reports on Indonesia – Autos  at para 14.28;  
Turkey – Textiles at paras. 9.92-9.95; and EC – Bananas III at paras. 7.151-7.163.  
563 Appellate Body report on EC – Hormones , para. 181.    WT/DS174/R 
 Page 139 
 
 
 7.626  The European Communities raises two other defen ces that, in this respect, the Regulation is 
justified by exceptions found in Articles 24.3 an d 17 of the TRIPS Agreement.  The Panel will 
consider each of these in turn. 
(e) Article 24.3 of the TRIPS Agreement 
(i) Main arguments of the parties 
7.627  The United States argues that Article 24.3 of the TRIPS Agreement is an exception with 
respect to the implementation of the GI Section of the Agreement and does not impose any exception 
to the obligation to provide trademark rights under Ar ticle 16.1.  The EC's interpretation would create 
a major and permanent exception to the trademar k Section of the TRIPS Agreement which would 
require a Member to apply all aspects of its pre-TRIPS GI regime to all GIs – including those 
registered after 1 January 1996 – so that the Memb er would never fully implement the rights granted 
to trademark owners by Article 16.1.564  The "protection" of GIs, within the meaning of Article 24.3, 
could just as easily mean protection as it relates to individual GIs as it could mean the general scope or level of protection overall.
565 
7.628  The European Communities argues that it is required to maintain coexistence of GIs and 
earlier trademarks by Article 24.3 of the TRIPS Ag reement, which is a standstill obligation that 
prohibits Members from diminishing the level of GI protection that existed at the time of entry into force of the WTO Agreement.  The Regulation provid ed for coexistence in Article 14(2) immediately 
prior to the entry into force of the WTO Agre ement.  If the European Communities allowed the 
owners of prior registered trademarks to preven t the use of later GIs, this would diminish the 
protection of GIs contrary to Article 24.3.
566  The standstill obligation applies to the general level of 
protection of GIs available in a Member on 1 Janua ry 1995 rather than the protection of individual 
GIs registered or applied for on that date.  The rele vant verb, "existed", appears in the singular in the 
French and Spanish versions, which indicates that  it refers to the whole phrase "protection of 
geographical indications" rather than the plural noun "geographical indications".  It is an additional 
obligation, not an exception.  It refers to GI pr otection, which expressly includes protection vis-à-vis 
trademark rights in Articles 22.3, 23.2 and 24.5.  Those provisions limit the trademark obligations 
under Article 16.1, as does Article 24.3.567  Article 24.3 applies "[i]n im plementing this Section".  The 
Section includes Article 24.5, which prevents Me mbers from invalidating and prohibiting the use of 
grandfathered trademarks.568   
(ii) Main arguments of third parties 
7.629  New Zealand informs the Panel that no GIs were registered under the Regulation prior to the 
entry into force of the TRIPS Agreement.  In an y case, Article 24.3 is qualified by the phrase "[i]n 
implementing this Section" and does not jus tify a breach of the Section on trademarks.569   
(iii) Consideration by the Panel 
7.630  The Panel now considers the European Communitie s' argument that it is required to maintain 
coexistence of GIs and earlier trademarks by Article  24.3 of the TRIPS Agreement.  That provision 
reads as follows: 
                                                      
564 United States' first oral statement, paras. 70-73. 
565 United States' rebuttal submission, para. 197. 
566 European Communities' first written submission, paras. 272, 312-314. 
567 European Communities' response to Panel question No. 74. 
568 European Communities' response to Panel question No. 152. 
569 Annex C, para. 158. WT/DS174/R 
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 "3. In implementing this Section, a Member shall not diminish the protection of 
geographical indications that existed in that  Member immediately prior to the date of 
entry into force of the WTO Agreement." 
7.631  Article 24.3 appears in Section 3 of Part II of the TRIPS Agreement.  The reference to "this 
Section" is therefore a reference to Section 3, whic h sets out standards for the protection of GIs.  The 
"date of entry into force of the WTO Agreement" was 1 January 1995. 
7.632  The scope of Article 24.3 is limited by the introductory phrase "[i]n implementing this 
Section".  It does not apply to measures adopted  to implement provisions outside Section 3.  
Trademark owners' rights, which Members must  make available in the implementation of 
Article 16.1, are found in Section 2.  Therefore, Article 24.3 is inapplicable. 
7.633  Turning to the ordinary meaning of the terms u sed in the rest of the provision, the principal 
verb is "shall not diminish".  This indicates that th is is a standstill provision, and that it is mandatory.  
The parties do not agree on the meaning of the object of that verb, which is the phrase "the protection of geographical indications" as qualified by the final relative clause.  In the English version of the 
text, that phrase could refer either to "the protectio n of GIs" as a whole, or to "the protection" of 
individual GIs.  In the French and Span ish versions, which are equally authentic
570, the verb "existed" 
in the relative clause is in the singular, whic h indicates that the "protection of geographical 
indications" must be interpreted as a whole.  It is uncl ear in all three versions whether this refers to the 
legal framework or system of protection in a Memb er that existed immediately prior to 1 January 
1995, or to the state of GI protection in a Member th at existed at that time in terms of the individual 
rights which were protected. 
7.634  If Article 24.3 referred to a system of protecti on in a Member, this w ould have two important 
consequences.  First, as a mandatory provision, it would prevent a Member which had a system that 
granted a higher level of protection than th at provided for in the TRIPS Agreement from 
implementing the same minimum standards of protection as other Members, even if it wished to do so.  For example, in the European Communities, Ar ticle 14 of the Regulation entered into force in 
1993 but was amended in April 2003 in respect of trademark rights acquired through use.
571  To the 
extent that those amendments diminished the gene ral level of protection of GIs under the European 
Communities' system, they would be incons istent with Article 24.3 on its own view. 
7.635  Second, a standstill provision for a system of  protection would exclude from the scope of 
Section 3 not only individual rights already in force unde r that system as at the date of entry into force 
of the WTO Agreement, but also ri ghts subsequently granted under that system in perpetuity.  This 
would be a sweeping exclusion which would grow, rather than diminish, in importance, as an 
increasing number of GIs were protected under the pr ior legislation.  The Panel is reluctant to find 
such an exclusion in the absence of any clear language  to that effect, and none has been drawn to its 
attention.  In this respect, it can be noted that the TRIPS Agreement does contain an exclusion for a 
type of system (in respect of phonograms) in Artic le 14.4 but it is optional, it clearly refers to a 
"system" and it is subject to a proviso against a buse.  Article 24.3 contains none of these features. 
7.636  For these reasons, the Panel interprets the phrase "the protection of geographical indications 
that existed in that Member immediately prior to th e date of entry into force of the WTO Agreement" 
to mean the state of protection of GIs immediately prior to 1 January 1995, in terms of the individual GIs which were protected at that point in time.  In the present dispute, the parties agree that no GIs 
were registered under the Regulation prior to 1 January  1995.  Therefore, Article 24.3 is inapplicable. 
                                                     
 
570 See the final clause of the WTO Agreement. 
571 See Council Regulation (EC) No. 692/2003, Article 13 and paragraph 11 of the recitals, set out in 
Exhibit COMP-1h.  WT/DS174/R 
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 7.637  For all the reasons set out above, the Panel c oncludes that Article 24.3 is inapplicable. 
(f) Article 17 of the TRIPS Agreement 
(i) Main arguments of the parties 
7.638  The United States argues that the European Communities has not shown that Article 14(2) 
constitutes a limited exception within the meaning of  Article 17 of the TRIPS Agreement.  The United 
States interprets a "limited exception" to connot e an exception which makes only a small diminution 
of the rights in question.  The blanket inability of trademark owners to prevent confusing uses is not 
"limited" because it does not involve a small diminuti on of rights and there is no limit on the number 
of potential users of a registered GI.  United States trademark law, to which the European 
Communities referred, allows fair use of descriptive terms otherwise than as a mark , i.e. in a non-
distinctive sense, and calls for a case-by-case analysis .  The EC GI Regulation does neither.  Even if 
geographical names are descriptive terms, the Regulation allows registration of some non-geographical names.  Even if Article 14(3) of the Regulation prevents registration of well-known 
marks, these are a narrow subset of all trademarks and, in any case, the analysis must be conducted for 
each trademark individually.  Article 17 presupposes a certain degree of likelihood of confusion for a 
particular trademark but not the unlim ited degree permitted by the Regulation.
572 
7.639  The United States argues that the "legitimate inter ests of the owner of the trademark" could be 
the owner's interest in the economic value of the ri ghts the trademark confers.  The Regulation places 
no limits on the manner in which a GI can be used which could, in most cases, destroy the economic 
value of the trademark.  It is not tailored in any way to the legitimate interests of a particular 
trademark owner.  The largest set of "third parties" are consumers, and also trademark licensees.  It 
should be possible to inform consumers about the or igin of a product and its characteristics through 
the use of descriptive terms in a non-trademark se nse without confusing the consumer about the 
source of the goods.  Allowing confusing use of a GI  harms the interests of consumers.  Labelling, 
misleading advertising and unfair competition laws are irrelevant because they simply add prohibitions and do not affect whether a pa rticular use is a trademark infringement.
573 
7.640  The European Communities argues that, in the alternative, the coexistence of GIs and earlier 
trademarks would be justified under Article 17 of the TRIPS Agreement.  It considers that Article 17 
is an exception to the obligations in Article 16 and that previous panels have  taken the view that the 
burden of invoking similar exceptions was on the r espondent.  It accepts that it bears the burden of 
proof.  Article 14(2) of the Regulation is a "limit ed exception" because it only allows use by those 
producers who are established in the geographical area on products that comply with the specification.  
The trademark owner retains the exclusive right to  prevent use by any other persons.  Coexistence 
falls within the example of "fair use of descriptiv e terms" because GIs are descriptive terms, even 
where they consist of a non-geographical name, and th eir use to indicate the true origin of goods and 
the characteristic associated with that origin is "fair".574   
7.641  The European Communities argues th at the legitimate interests of the trademark owner and of 
third parties are taken into account because Article 14(3) of the Regulation would prevent the most 
significant cases of confusion, and legislation on  labelling, misleading advertising and unfair 
competition still applies.  The legitimate interests of the trademark owner are less than full enjoyment 
                                                      
572 United States' rebuttal submission, paras. 198-201, 205-207;  second oral statement, paras. 100 and 
102; responses to Panel question Nos. 154 and 155;  co mments on EC responses to Panel question Nos. 153 and 
156. 
573 United States' rebuttal submission, paras. 202-205 and 209-210. 
574 European Communities' first written submission, paras. 315-318;  rebuttal submission, 
paras. 333-338, 348-350;  responses to Panel question No. 75(b). WT/DS174/R 
Page 142  
 
 of all exclusive rights under Article 16.1 of the TRI PS Agreement.  The legitimate interests of third 
parties include the interests of producers who use GIs as well as consumers.  GIs inform consumers about the origin of products  and take account of the interests of thir d parties in that way.  Article 17 of 
the TRIPS Agreement does not require the avoidan ce of all likelihood of confusion, otherwise it 
would be superfluous, nor does it require  confusion to be confined to that which is strictly necessary, 
which would render the example of "fair use of descr iptive term" irrelevant.   Article 17 calls for a 
balancing of different interests which, in the presen t dispute, requires that account should be taken of 
the fact that trademarks are arbitrary and much e asier to create than GIs and GIs are collective rights 
and also serve a public interest of informing consumers.
575 
(ii) Main arguments of third parties 
7.642  Argentina , Brazil , India , Mexico  and New Zealand indicated, in response to a question 
from the Panel, that they provide certain exceptions  to exclusive trademark rights.  Examples included 
honest concurrent use, prior use in good faith, co mparative advertising, uses for spare parts and 
certain non-commercial fair uses.576 
7.643  New Zealand also argues that coexistence is not a " limited" exception within the meaning of 
Article 17 of the TRIPS Agreement because it ex cludes an entire group of producers from the 
trademark owner's right to prevent confusing uses, which is a major exception.577 
(iii) Consideration by the Panel 
Introduction  
7.644  The Panel will now consider the European Commun ities' argument that its particular regime 
of coexistence between GIs and prior trademar ks is justified under Ar ticle 17 of the TRIPS 
Agreement.  The European Communities defends its re gime of coexistence "as such", not as applied.  
Therefore, our consideration of this defence focu ses almost entirely on the terms of the measure and 
its potential effects, rather than any actual effects.  Nevertheless, we will refer to the few examples of 
how the GI Regulation has been applied with respect to prior trademarks, where that is instructive. 
7.645  The United States submits that the European  Communities, as the party asserting that its 
measure is covered by the exception in Article 17,  bears the burden of proving that assertion.  The 
European Communities does not contest this position.578  Therefore, the Panel will follow this 
approach in the present dispute. 
                                                      
575 European Communities' first written submission, pa ra. 319;  rebuttal submission, paras. 339-347; 
responses to Panel question Nos. 153 and 154;  comment on US response to Panel question No. 154. 
576 See Annex C. 
577 Annex C, para. 159. 
578 All parties note that it was the approach of two prev ious panels to exceptions provisions in Part II of 
the TRIPS Agreement: see Panel reports on  US – Section 110(5) Copyright Act , para. 6.239; and Canada – 
Pharmaceutical Patents , para. 7.16.  This approach was not contested in those disputes and was adopted without 
discussion, although the Panel in Canada – Pharmaceutical Patents  observed that a respondent cannot 
demonstrate that no legitimate interest of a patent ow ner has been prejudiced until it knows what claims of 
legitimate interests can be made by the complainant.  Similarly, the weight of legitimate third party interests 
cannot be fully appraised until the legitimacy of the patent owner's legitimate interests, if any, are defined:  see 
para. 7.60 of its report.  These practical problems also apply in disputes under Article 17.  In this regard, the 
Panel recalls the distinction between the rights and obligations owed by WTO Members to one another under the covered agreements, and the rights conferred by Members on nationals by individual intellectual property 
rights under the TRIPS Agreement.  The burden of proof in WTO dispute settlement between Members relates  WT/DS174/R 
 Page 143 
 
 
 7.646  Article 17 provides as follows:  
"Exceptions 
Members may provide limited exceptions to th e rights conferred by a trademark, such 
as fair use of descriptive terms, provided that such exceptions take account of the 
legitimate interests of the owner of the trademark and of third parties." 
7.647  Article 17 expressly permits Members to provide limited exceptions to th e rights conferred by 
a trademark, which include the right provided for in  Article 16.1 of the TRIPS Agreement.  The Panel 
has already found that the Regulation limits the availability of the right  provided for in Article 16.1.  
Therefore, to the extent that it satisfies the conditio ns in Article 17, this limitation will be permitted 
under the TRIPS Agreement.  
7.648  Article 17 permits "limited exceptions ".  It provides an example of a limited exception, and is 
subject to a proviso that "such exceptions take accoun t of the legitimate interests of the owner of the 
trademark and of third parties".  The ordinary mean ing of the terms indicates that an exception must 
not only be "limited" but must also comply with the proviso in order to satisfy Article 17.  The 
example of "fair use of descriptive terms" is illustrative only, but it can provide interpretative 
guidance because, a priori , it falls within the meaning of a "limit ed" exception and must be capable of 
satisfying the proviso in some circumstances.  Any interpretation of the term "limited" or of the proviso which excluded the example would be manifestly incorrect.   
7.649  The structure of Article 17 differs from that of other exceptions provisions to which the 
parties refer.  It can be noted that Articles 13,  26.2 and 30 of the TRIPS Agreement, as well as 
Article 9(2) of the Berne Convention (1971) as incor porated by Article 9.1 of the TRIPS Agreement, 
also permit exceptions to intellectual property right s and all contain, to varying degrees, similar 
language to Article 17.  However, unlike these othe r provisions, Article 17 c ontains no reference to 
"conflict with a [or the] normal exploitation", no  reference to "unreasonabl[e] prejudice" to the 
legitimate interests" of the right holder or owner, and it not only refers to the legitimate interests of 
third parties but treats them on par with those of the right holder.  It is also the only one of these 
provisions which contains an example.  Further, Article 17 permits exceptions to trademark rights, 
which differ from each of the intellectual propert y rights to which these other exceptions apply.  
Therefore, whilst it is instructive to refer to the inte rpretation by two previous panels of certain shared 
elements found in Articles 13 and 30, it is important to interpret Article 17 according to its own terms. 
Limited exceptions
 
7.650  The first issue to decide is the meaning of the term "limited exceptions" as used in Article 17.  
The United States interprets this in terms of a sm all diminution of rights.  The European Communities 
does not disagree with this approach.  The Pa nel agrees with the views of the Panel in Canada – 
Pharmaceutical Patents , which interpreted the identical term in Article 30, that "[t]he word 
'exception' by itself connotes a limited derogation, one that does not undercut the body of rules from 
which it is made".579  The addition of the word "limited" emphasizes that the exception must be 
narrow and permit only a small diminution of rights.  The limited exceptions apply "to the rights 
conferred by a trademark".  They do not apply to th e set of all trademarks or all trademark owners.  
Accordingly, the fact that it may affect only few tr ademarks or few trademark owners is irrelevant to 
the question whether an exception is limited.  The issue is whether the exception to the rights 
conferred by a trademark is narrow.   
                                                                                                                                                                     
to the first set of rights and obligations and not to the f act that a provision creates exceptions to the rights to be 
conferred by Members on the nationals of other Members.   
579 Panel report on Canada – Pharmaceutical Patents, para. 7.30. WT/DS174/R 
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 7.651  There is only one right conferred by a trademark at issue in this dispute, namely the exclusive 
right to prevent certain uses of a sign, provided fo r in Article 16.1.  Therefore, it is necessary to 
examine the exception on an individua l "per right" basis.  This is a legal assessment of the extent to 
which the exception curtails that right.  There is no indication in the text of Article 17 that this 
involves an economic assessment, although economic imp act can be taken into account in the proviso.  
In this regard, we note the absence of any referen ce to a "normal exploitation" of the trademark in 
Article 17, and the absence of any reference in S ection 2, to which Article 17 permits exceptions, to 
rights to exclude legitimate competition.  Rather, they confer, inter alia , the right to prevent uses that 
would result in a likelihood of confusion, which can  lead to the removal of products from sale where 
they are marketed using particular signs, but without otherwise restraining the manufacture, sale or 
importation of competing goods or services. 
7.652  The right provided for in Article 16.1 contains  several elements and an exception could, in 
principle, curtail the right in respect of any of th em.  We recall these elements in the text of that 
provision as follows: 
"The owner of a registered trademark shall have the exclusive right to prevent all 
third parties not having the owner's consent from using in the course of trade 
identical or similar signs for goods or services which are identical or similar to those 
in respect of which the trademark is re gistered where such use would result in a 
likelihood of confusion ."  [emphasis added] 
7.653  In principle, an exception could curtail the right  of the owner in respect of the third parties 
concerned, or with respect to th e identity or the similarity of the signs or the goods or services 
concerned or with respect to the degree of likeliho od of confusion, or some combination of these.  
There may be other possibilities as well.  The overri ding requirement is that the exception must be 
"limited" and it must also satisfy the proviso, cons idered below.  These elements provide a useful 
framework for an assessment of the extent to which an exception curt ails the right provided for in 
Article 16.1. 
7.654  The example in the text, "fair use of descrip tive terms", provides guidance as to what is 
considered a "limited exception", although it is illu strative only.  Fair use of descriptive terms is 
inherently limited in terms of the sign which may be used and the degree of likelihood of confusion 
which may result from its use, as a purely descriptive  term on its own is not distinctive and is not 
protectable as a trademark.  Fair use of descriptive terms is not limited in terms of the number of third 
parties who may benefit, nor in terms of the quantit y of goods or services with respect to which they 
use the descriptive terms, although implicitly it only applies to those third parties who would use 
those terms in the course of trade and to those g oods or services which those terms describe.  The 
number of trademarks or trademar k owners affected is irrelevant , although implicitly it would only 
affect those marks which can consist of, or include, signs that can be used in a descriptive manner.  
According to the text, this is a "limite d" exception for the purposes of Article 17. 
7.655  Turning to the Regulation, it curtails the trad emark owner's right in respect of certain goods 
but not all goods identical or similar to those in re spect of which the trademark is registered.  It 
prevents the trademark owner from exercising the ri ght to prevent confusing uses of a sign for the 
agricultural product or foodstuff produced in accord ance with the product specification in the GI 
registration.  We recall that, according to Article 2(2) of the Regulation, which is set out above at 
paragraph 7.187, those goods must all be produced, processed and/or prepared in the region, specific 
place or, in exceptional cases, country, the name of wh ich is used to describe them.  Goods that are 
not from that geographical area may not use the GI.  Further, according to Article 4 of the Regulation, all products using a GI must comply with a product specification.  Products that do not so comply may not use the GI even if they are from the geogr aphical area.  The trademark owner's right against 
all other goods is not curtailed.  We note that ther e is no limit in terms of the quantity of goods which  WT/DS174/R 
 Page 145 
 
 
 may benefit from the exception, as long as they conf orm to the product specification.  However, this 
cannot prevent the limitation on rights of owners of trademarks subject to Article 14(2) from 
constituting a limited exception for the purposes of Artic le 17, as fair use of descriptive terms implies 
no limit in terms of quantity either, and the text indi cates that it is a limited exception for the purposes 
of Article 17.  The quantity of goods which be nefits from an exception may be related to the 
curtailment of the rights to prevent the acts of making, selling or importing a product, but these are 
not rights conferred by a trademark. 
7.656  The Regulation curtails the trademark owner's ri ght against certain third parties, but not "all 
third parties".  It prevents the trademark owner from exercising the right to prevent confusing uses 
against persons using a registered GI on a good in accor dance with its registration.  This is a limitation 
on the third parties who may benefit from the exception.   The trademark owner's right is not curtailed 
with respect to any other third parties.580   
7.657  The Regulation curtails the trademark owner's right  in respect of certain signs but not all signs 
identical or similar to the one protected as a tr ademark.  It prevents the trademark owner from 
exercising its right to prevent use of an indica tion registered as a GI in accordance with its 
registration.  We recall our finding in paragraph 7.518 that the GI registration does not confer a 
positive right to use any other signs or combination of signs nor to use the name in any linguistic 
versions not entered in the register .  The tradem ark owner's right is not curtailed against any such 
uses.  If the GI registration prevented the trad emark owner from exercising its rights against these 
signs, combinations of signs or  linguistic versions, which do not appear expressly in the GI 
registration, it would seriously expand the excep tion and undermine the limitations on its scope. 
7.658  Under the Regulation, once a GI has been regi stered and a trademark is subject to the 
coexistence regime under Article 14(2), set out above at  paragraph 7.520, the GI may, in principle, be 
used without regard to the likelihood of confusion that it may cause.   However, the Regulation refers 
to the likelihood or risk of confusion, with a gi ven mark, which would result from use as a GI of an 
identical or similar sign, in Articles 7(5)(b), 12b(3)  and 12d(3), in relation to the decision on whether 
to register a GI where an objection is admissible.  Article 7(4) and, hence, Article 12b(3), provide a 
ground for objection where registration would jeopard ize the existence of a mark, and Article 14(3) 
provides a ground for refusal of registration which refers to the trademark's reputation and renown 
and the length of time it has been used.  These fa ctors are relevant to the likelihood of confusion 
which could result from subsequent use of the GI .  We recall our finding in paragraph 7.521 that 
Article 14(2) is an exception to Article 13, which presupposes a consideration of the similarity of the 
signs and goods as well.  They are essential to an  analysis of a likelihood of confusion.  Whilst 
Articles 7(4), 12b(3) and 14(3) do not specifically refer to the concept of likelihood of confusion 
between a GI and a trademark subject to the ex ception in Article 14(2), they, together with 
Articles 7(5)(b), 12b(3) and 12d(3) can ensure that, in cases where the likelihood of confusion is relatively high, the exception simply does not apply.   
7.659  The United States submitted that Article 14(2) eliminates the trademark owner's right, 
granting the owner only the right to continue to use the trademark.  However, the European Communities has emphasized that the trademark owner retains the right to prevent the use of a name 
registered as a GI by any person in relation to an y goods which originate in a different geographical 
                                                     
 
580 The United States refers to a case of trademark infringement in which the German Federal Supreme 
Court held that the concurrent use by Fiat of the SL trademark owned by Mercedes-Benz could put at risk the very existence of that trademark.  note that, in coming to its decision, the Court observed that "it could be 
expected that other vehicle manufacturers might soon follow the defendant's example."  See United States' 
rebuttal submission, para. 173, fn. 167 and Exhibit US-67.  The opportunity for all other potential competitors to use a trademark does not arise under the GI Regulation as it only permits use of a GI in accordance with its 
registration, including the product specifications. WT/DS174/R 
Page 146  
 
 area or which do not comply with the specifications
581, and that the positive right to use the GI 
extends only to the linguistic versions that have been  entered in the register and not to other names or 
signs which have not been registered582.  Accordingly, on the basis of the terms of the GI Regulation 
and of the Community Trademark Regulation, and th e explanation of them provided by the European 
Communities, the Panel finds that not only may the trademark continue to be used, but that the 
trademark owner's right to prevent confusing uses, is  unaffected except with respect to the use of a GI 
as entered in the GI register in accordance with its re gistration.  In view of these limitations, the scope 
of the exception in Article 14(2) falls far short of that which the United States initially claimed.583  
7.660  Furthermore, the European Communities has explai ned that the use of a name registered as a 
GI is subject to the applicable provisions of the food labelling and misleading advertising directives so 
that the ways in which it may be used are not unlimited.584 
7.661  For the above reasons, the Panel finds that the Regulation creates a "limited exception" within 
the meaning of Article 17 of the TRIPS Agreement.   
The proviso to Article 17  
7.662  Limited exceptions must satisfy the proviso  that "such exceptions take account of the 
legitimate interests of the owner of the trademark and of third parties" in order to benefit from 
Article 17.  We must first establish what are "legi timate interests".  Read in context, the "legitimate 
interests" of the trademark owner are contrasted with the "rights conferred by a trademark", which 
also belong to the trademark owner.  Given that Ar ticle 17 creates an exception to the rights conferred 
by a trademark, the "legitimate interests" of th e trademark owner must be something different from 
full enjoyment of those legal rights.  The "legitim ate interests" of the trademark owner are also 
compared with those of "third parties", who have no rights conferred by the trademark.  Therefore, the 
"legitimate interests", at least of third parties, ar e something different from simply the enjoyment of 
their legal rights.  This is confirmed by the use of the verb "take account of", which is less than 
"protect".   
7.663  We agree with the following view of the Panel in Canada – Pharmaceutical Patents , which 
interpreted the term "legitimate interests" of a pa tent owner and third parties in the context of 
Article 30 as follows:  
"To make sense of the term 'legitimate inter ests' in this context, that term must be 
defined in the way that it is often used  in legal discourse – as a normative claim 
calling for protection of interests that are 'justifiable' in the sense that they are 
supported by relevant public policies or other social norms."585   
In our view, this is also true of the term "legitimat e interests" of a trademark owner and third parties in 
the context of Article 17.  
                                                      
581 European Communities' first written submission,  para. 317;  rebuttal submission, para. 336; 
responses to Panel question Nos. 76 and 153. 
582 European Communities' rebuttal submission, paras. 288, 293 and 301; responses to Panel question 
Nos. 63, 137 and 140; and comment on US response to Panel question No. 137. 
583 See United States' first oral statement, para. 75.  The United States appears to acknowledge that the 
GI registration does not extinguish the trademark owner's rights against other third parties, although it alleges 
that use of the GI will affect the distinctiveness of th e trademark:  see United States' second oral statement, 
para. 101.  The Panel considers that issue in relation to the proviso to Article 17. 
584 European Communities' first written submission, para. 319;  response to Panel question No. 153. 
585 Panel report on Canada – Pharmaceutical Patents , para. 7.69.  WT/DS174/R 
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 7.664  The legitimacy of some interest of the tradem ark owner is assumed because the owner of the 
trademark is specifically identified in Article 17.  The TRIPS Agreement itself sets out a statement of what all WTO Members consider adequate standard s and principles concerning trademark protection.  
Although it sets out standards for legal rights, it also provides guidance as to WTO Members' shared understandings of the policies and norms relevant to  trademarks and, hence, what might be the 
legitimate interests of trademark owners.  The func tion of trademarks can be  understood by reference 
to Article 15.1 as distinguishing goods and services of undertakings in the course of trade.  Every 
trademark owner has a legitimate interest in preserving  the distinctiveness, or capacity to distinguish, 
of its trademark so that it can perform that functio n.  This includes its interest in using its own 
trademark in connection with the relevant goods a nd services of its own and authorized undertakings.  
Taking account of that legitimate interest will also take account of the trademark owner's interest in 
the economic value of its mark arising from the reputati on that it enjoys and the quality that it denotes.   
7.665  Turning to the Regulation, th e evidence shows that the owne r's legitimate interest in 
preserving the distinctiveness, or capacity to distinguis h, of its trademark can be taken into account in 
various ways.  Article 7(4) of the Regulation provid es that a statement of objection shall be admissible 
inter alia  if it shows that the registration of the propo sed GI would "jeopardize the existence ... of a 
mark".  This requires GI registration to be refused. 
7.666  Article 14(3) also requires the refusal of GI re gistration in light of a trademark's reputation 
and renown and the length of time it has been used , if a particular condition is fulfilled.  This 
addresses the distinctiveness, or capacity to distingui sh, of prior trademarks and can ensure that, in 
cases where trademark owners' legitimate interests w ould be most likely to be affected, the exception 
in Article 14(2) simply does not apply.   
7.667  In the one instance in which Article 14(3) has been applied, th e European Communities 
informs the Panel that its authorities:  
"[T]ook account of the submissions made by  the interested parties and by some 
Member States, as well as of the discussions  which took place within the Committee.  
The main facts taken into consideration were the similarity of the signs;  the 
similarity of the products, having regard to the production methods and organoleptic 
properties;  the date of registration of the trademark;  the recognition of the trademark 
in the different EC member States, having rega rd in particular to the level of exports;  
and the labeling practices of the trademark and the proposed geographical indication."
586   
7.668  This indicates to the Panel that Article 14(3) of  the Regulation was, in fact, applied to take 
account inter alia  of the legitimate interest of the trademar k owners to protect the distinctiveness of 
their respective marks.   
7.669  In the other instance to which the parties refer,  the registration of the three Czech beer GIs 
contains an endorsement that they apply "without prejudice to any beer trademark or other rights 
existing in the European Union on the date of accession".587  Although the European Communities has 
confirmed that such an endorsement is unique and it has not explained in what other circumstances 
such an endorsement might be possible, this exampl e does show that, at least in this case, not only the 
legitimate interests of trademark owners, but al so their rights, have been taken into account. 
                                                      
586 European Communities' response to Panel question No. 143.  Although there is no supporting 
evidence, all of the considerations cited by the Eu ropean Communities correspond to factors set out in 
Articles 13 and 14(3) of the Regulation. 
587 European Communities' rebuttal submission, paras. 286-293;  response to Panel question No. 142. WT/DS174/R 
Page 148  
 
 7.670  Where Articles 7(4) and 14(3) of the Regulation are unavailable, and a trademark is subject to 
Article 14(2), there remains the possibility that its di stinctiveness will be affected  by the use of the GI.  
We do not consider this fatal to the applicability of  Article 17 given that, as a provision permitting an 
exception to the exclusive right to prevent uses th at would result in a likelihood of confusion, it 
presupposes that a certain degree of likelihood of conf usion can be permitted.  In the light of the 
provisions of Articles 7(4) and 14(3), we are satis fied that where the likelihood of confusion is 
relatively high, the exception in Article 14(2) will not  apply.  In any event, even where the exception 
does apply, Article 14(2) expressly provides that th e trademark may continue to be used, on certain 
conditions. 
7.671  We also note that the proviso to Article 17 requires only that exceptions "take account" of the 
legitimate interests of the owner of the trademark,  and does not refer to "unreasonabl[e] prejudice" to 
those interests, unlike the provisos in Articl es 13, 26.2 and 30 of the TRIPS Agreement and 
Article 9(2) of the Berne Convention (1971) as incor porated by Article 9.1 of the TRIPS Agreement.  
This suggests that a lesser standard of regard for the legitimate interests of the owner of the trademark 
is required.   
7.672  The United States submits that Article 17 of the TRIPS Agreement requires a case-by-case 
analysis and that a blanket exception a priori does not take into account the legitimate interests of 
trademark owners.  The Panel observes that Articl es 7(4) and 14(3) of the Regulation do require a 
case-by-case analysis at the time of a decision on GI registration and, even though they do not require a case-by-case analysis at the time of subsequent use, nothing in the text of Article 17 indicates that a case-by-case analysis is a requirement under the TRIPS Agreement.  Whilst it may be true that in the 
United States the doctrine of "fair use" is app lied by courts on a case-by-case basis, we do not 
consider that this is necessarily implied in the use of those words in the TRIPS Agreement.
588 
7.673  The Panel notes that there may be situations wh ere, in order to take account of the legitimate 
interests of the owner of a trademark and third parties, practical conditions may be required to 
distinguish the goods with the trademark from those using the GI and to distinguish the respective 
undertakings.   
7.674  For these reasons, the Panel considers that th e exception created by the Regulation takes 
account of the legitimate interests of the owner of the trademark within the meaning of Article 17.  
This finding is confirmed by responses to a questi on from the Panel which revealed that, of over 600 
GIs registered under the Regulation over a period of ei ght years, the complainants and third parties are 
unable to identify any that, in their view, could be used in a way that would result in a likelihood of 
confusion with a prior trademark, with four excep tions.  Three of these are the Czech beer GIs, the 
registration of which is subject to the endorsemen t set out above.  The only remaining example is 
"Bayerisches Bier", in respect of which the co mplainants have not shown an example of actual 
likelihood of confusion with a prior trademark.   
7.675  We will now consider whether the exception cr eated by the Regulation takes account of the 
legitimate interests of third parties. 
7.676  The parties to this dispute agree that "third  parties" for the purposes of Article 17 include 
consumers.  The function of a trademark is to di stinguish goods and services of undertakings in the 
                                                      
588 If there were any doubt on this point, can observe that this language in Article 17 was proposed in 
the TRIPS negotiations by the European Communities and Austria, and was not apparently intended to reflect 
the United States' practice:   see "Synoptic tables setting out existing international standards and proposed 
standards and principles", prepared by the GATT Secretariat at the request of the Negotiating Group on Trade-related Aspects of Intellectual Property Rights, including trade in counterfeit goods, (document 
MTN.GNG/NG11/W/32/Rev.2 dated 2 February 1990, p. 51)  WT/DS174/R 
 Page 149 
 
 
 course of trade.  That function is served not only fo r the owner, but also for consumers.  Accordingly, 
the relevant third parties include consumers.589  Consumers have a legitimate interest in being able to 
distinguish the goods and services of one undertaking from those of another, and to avoid confusion. 
7.677  Turning to the Regulation, Article 14(3) expr essly addresses consumers, by providing for the 
refusal of GI registration where "registration is liabl e to mislead the consumer as to the true identity of 
the product".  In the one instance in which Article  14(3) has been applied,  the European Communities 
informs the Panel that: 
"In essence, it was concluded that, although th e products were similar, the signs were 
not sufficiently similar to mislead the public, having regard to the degree of recognition of the trademark in the different Member States."
590   
7.678  This indicates to the Panel that Article 14(3) of  the Regulation was, in fact, applied to take 
account inter alia  of the legitimate interests of consumers.   
7.679  The Panel also observes, once again, that a na me can only be registered as a GI where it is 
used to describe an agricultural product or a foodstuff.  It is a precondition to GI registration that some 
consumers do, in fact, understand that the GI refe rs to the product from that geographical area with 
particular qualities or characteristics, which means that they do not consider that it indicates the 
trademark owner's goods. 
7.680  The United States submits that the "third pa rties" for the purposes of Article 17 include 
trademark licensees.  This may be correct, but the le gitimate interests of trademark licensees are, to a 
large extent, identified with those of the trademark owner, and can be taken into account at the same 
time.  It is not clear how their interests c ould be taken into account as a separate issue. 
7.681  The European Communities submits that "third pa rties" for the purposes of Article 17 include 
persons using a GI in accordance with a GI registration.  The Panel agrees.  Article 17 permits an exception to the rights conferred by a trademark whic h include, according to Article 16.1, a right to 
prevent "all third parties" from using certain signs.  The basis of the complainant's claim is that those 
third parties include GI users.  It is logical that, if  GI users are included in the third parties subject to 
the trademark owner's right, they are also included in  the third parties taken into account in assessing 
the availability of an exception to that right.   
7.682  The legitimacy of the interests of GI users is  reflected in the TRIPS Agreement itself, to 
which all WTO Members have subscribed.  Under Section 3 of Part II, all WTO Members agree to provide certain protection to GIs, although they re main free to determine the appropriate method of 
implementing those provisions in accordance with Articl e 1.1.  The definition of a GI in Article 22.1 
reflects a legitimate interest that a person may have  in identifying the source and other characteristics 
of a good by the name of the place where it is from, if the name would serve that purpose.  Nevertheless, as "legitimate interests", the interests of GI users as third parties within the meaning of 
Article 17 would be different from the legal pr otection provided for in Articles 22 and 23.   
7.683  The Panel recalls that the example contained in Article 17 itself of "fair use of descriptive 
terms" provides some guidance as to what may satisfy its proviso.  Its use of the word "fair" and the 
nature of descriptive terms illustrate a public policy concern that certain terms should be available for 
use under certain conditions.  Although GIs are intellectual property rights, and not purely descriptive terms, the function of the terms in the example is analogous to a descriptive function of GIs and 
                                                     
 
589 This is confirmed by the reference in Article 16.2 to "the relevant sector of the public", in relation to 
well-known trademarks.   
590 European Communities' response to Panel question No. 143. WT/DS174/R 
Page 150  
 
 provides contextual support for the notion that the interest of GIs users in using a place name to 
indicate their products is "legitimate".   
7.684  Turning to the Regulation, Article 2(2) provides that a "designation of origin" or a 
"geographical indication" "means the name of a region, a specific place or, in exceptional cases, a country, used to describe an agricultural product or a foodstuff ..." (emphasis added).  There are 
additional conditions relevant to th e origin and quality, reputation or characteristics of the product.  
Further, the European Communities has confirme d that use of a GI remains subject to the 
requirements of the food labelling and misleading advertising directives which prohibit certain 
misleading and deceptive uses.
591  These considerations support the view that the interests of GI users 
of which the Regulation takes account are "legitimate". 
7.685  Article 13 of the Regulation sets out the protection conferred by GI registration.  In providing 
such protection, the Regulation not only "takes acc ount" of this legitimate interest, it also provides 
legally enforceable rights.   
7.686  For these reasons, the Panel considers that th e exception created by the Regulation takes 
account of the legitimate interests of third parties within the meaning of Article 17. 
7.687  On the basis of the evidence pr esented to the Panel, which is necessarily limited given that 
Article 14(3) of the Regulation has only been applie d once, and for all of the above reasons, the Panel 
concludes that the European Comm unities has succeeded in raising a presumption that the exception 
created by the Regulation to the trademark owner' s right provided for in Article 16.1 of the TRIPS 
Agreement is justified by Article 17 of the TRI PS Agreement.  The United States has not succeeded 
in rebutting that presumption.   
7.688  Therefore, the Panel concludes that, with r espect to the coexistence of GIs with prior 
trademarks, the Regulation is inconsistent with Ar ticle 16.1 of the TRIPS Agreement but, on the basis 
of the evidence presented to the Pa nel, this is justified by Artic le 17 of the TRIPS Agreement.  
Article 24.3 and Article 24.5 of the TRIPS Agreement are inapplicable.  
D. OTHER CLAIMS  
1. MFN treatment claims 
(a) Availability of protection:  MFN treatment under the TRIPS Agreement 
(i) Main arguments of the parties 
7.689  The United States claims that the Regulation is incons istent with the most-favoured-nation 
obligations in Article 4 of the TRIPS Agreem ent "and the Paris Convention" because it imposes 
conditions of reciprocity and equivalence  on the availability of protection.  None of the exceptions in 
Article 4 permit reciprocity in relation to the prot ection of geographical indications.  It cites the 
GATT panel report in Belgium – Family Allowances in which entitlement to an advantage for 
imported goods made conditional upon the system of family allowances in the exporting Member was 
found inconsistent with the MFN treatment ob ligation in GATT.  The Regulation does not 
immediately and unconditionally  accord the same advantages with r espect to availability of protection 
that it accords to EC nationals.  Nationals of WTO Members that satisfy those conditions are accorded 
                                                      
591 See supra at note 482 and European Communities' first written submission, para. 319;  response to 
Panel question No. 153.  WT/DS174/R 
 Page 151 
 
 
 more favourable treatment than nationals of WTO Members that do not.  The conditions are placed on 
third country governments but deny rights to third country nationals.592   
7.690  The United States draws attention to a joint declaration by the European Community and 
Switzerland for the mutual protection of GIs to be in corporated in a bilateral agreement.  However, it 
challenges the Regulation "as such".  The terms of the Regulation prevent the European Commission 
from determining that all WTO Members satisfy the conditions in Article 12(1):  some may satisfy 
those conditions but others do not.  The Regulation cannot be administered in such a way that will 
treat nationals of all WTO Members as favourably  as each other and as favourably as EC nationals.  
The availability of registration is conditioned on a country-by-country basis.  If the Commission 
refused to apply the Regulation to all third countries,  this would theoretically ensure equal treatment 
but would be inconsistent  with the national treatment obligation.   In any case, the Regulation does not 
appear to permit the Commission to refuse to apply it to all third countries.593 
7.691  The European Communities responds that this claim must fail.  It argues that it does not, in 
fact, apply the conditions in Article 12(1) of th e Regulation to geographical areas located in WTO 
Members.594  It also argues that the conditions on availa bility of protection do not apply to nationality 
but according to the location of geographical areas.595  These defences were considered in paragraphs 
7.52 to 7.103 above.   
7.692  The European Communities argues that the joint declaration of  the European Community and 
Switzerland is irrelevant to this dispute because it is  merely a political declaration stating the intention 
of the parties to incorporate, at a later stage, provisions on the protection of GIs in an agreement on 
trade in agricultural products, which has not ye t occurred.  It argues that the conditions in 
Article 12(1) of the Regulation are the same for a ll third countries which fall under that provision.   
7.693  In the absence of a decision under Article 12(3)  of the Regulation, Article 12 does not confer 
any advantage on a third country.  It no tes that, in GATT panel reports in both Belgium - Family 
Allowances and EEC – Imports of Beef from Canada , violations were found after the respondents had 
actually granted advantages to certain third countrie s.  In response to a question from the Panel, it 
indicated that if the conditions in Article 12(1) are fulfilled, the Commission will normally recognize 
the country in question but Article 12(1) creates no legal "obligation" as against the third country.  This follows from the wording in Article 12(1) that "this Regulation may apply".
596 
7.694  The European Communities does not contest  that MFN treatment under the TRIPS 
Agreement applies to more extensive protection gr anted in respect of intellectual property rights 
addressed in the TRIPS Agreement.597 
                                                      
592 United States' first written submission, paras. 117-1 22;  rebuttal submission, para. 104;  second oral 
statement, para. 60.   
593 United States' rebuttal submission, paras. 107-108;  first oral statement, para. 36;  second oral 
statement, para. 64. 
594 European Communities' first written submission, pa ras. 231-234.  From an abundance of caution, 
the European Communities also stated its view that the product-specific conditions for the registration of 
individual GIs are examined for each product individually and do not disc riminate according to nationality or 
product origin:  see its first written submission, paras. 235-238. 
595 European Communities' first written submission, paras. 241-247. 
596 European Communities' first written submission, pa ras. 239-245; first oral statement, para. 79; 
second oral statement, para. 139;  response to Panel question No. 112. 
597 European Communities' response to Panel question No. 111. WT/DS174/R 
Page 152  
 
 (ii) Main arguments of third parties 
7.695  Mexico submits that the Regulation violates the MFN treatment obligation in Article 4 of the 
TRIPS Agreement.  Article 12(1) of the Regulation prescribes treatment which discriminates among third countries to the detriment of those whic h do not satisfy the conditions of reciprocity.
598    
7.696  Chinese Taipei submits that the Regulation violates the MFN treatment obligation in 
Article 4 of the TRIPS Agreement.  Having grante d protection to the nationals of a WTO Member 
who hold GIs located in the territory of that Memb er, the Regulation denies the same advantage to the 
nationals of other Members who hold GIs located in other territories.599  
(iii) Consideration by the Panel 
7.697  This claim is made under the MFN treatment oblig ation in Article 4 of the TRIPS Agreement, 
which provides, relevantly, as follows: 
"With regard to the protection of inte llectual property, any advantage, favour, 
privilege or immunity granted by a Member  to the nationals of any other country 
shall be accorded immediately and uncondi tionally to the nationals of all other 
Members." 
7.698  The following two elements must be satisfied  to establish an inconsistency with this 
obligation:  (1) the measure at issue must apply with  regard to the protection of intellectual property;  
and (2) the nationals of other Members are not  "immediately and unconditionally" accorded any 
advantage, favour, privilege or imm unity granted by a Member to the nationals of any other country.  
The Panel will consider each of these elements in turn. 
Protection of intellectual property  
7.699  The MFN treatment obligation in Article 4 of the TRIPS Agreement applies "with regard to 
the protection of intellectual property".  Footnote 3 provides an inclusive definition of the term "protection" as used in Articles 3 and 4, wh ich is quoted at paragraphs 7.126 above.   
7.700  The Panel recalls its findings at  paragraphs 7.128 and 7.129 of this report that the conditions 
of reciprocity and equivalence in Article 12(1) of the Regulation are matters affecting the availability 
of intellectual property rights, in relation to "designa tions of origin" and "geographical indications", as 
defined in the Regulation, which are part of a cate gory of intellectual property within the meaning of 
Article 1.2 of the TRIPS Agreement.   
7.701  Therefore, this claim concerns the "protecti on" of intellectual property, as clarified in 
footnote 3 to the TRIPS Agreement, within the scope  of the MFN treatment obligation in Article 4 of 
that Agreement.     
7.702  It is not necessary to show that the Regulation implements the minimum standards in Part II 
of the TRIPS Agreement for the purposes of these clai ms.  MFN treatment applies to the protection of 
intellectual property, even where measures provide  a higher level of protection.  Indeed, MFN 
treatment under the TRIPS Agreement generally only has an independent application where a 
Member grants to the nationals of any other country a level of protection that is higher than it grants 
to its own nationals and higher than the minimum standards laid down in the TRIPS Agreement. 
                                                     
 
598 Annex C, para. 111. 
599 Annex C, paras. 173-176.  WT/DS174/R 
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 Any advantage, favour, privilege or immunity gr anted by a Member to the nationals of any 
other country  
7.703  The Panel recalls its conclusion at paragr aph 7.102 that the United States has made a 
prima facie case that the registration procedure in  Articles 12a and 12b of  the Regulation is not 
available for GIs located in third countries, in cluding WTO Members, that do not satisfy the 
conditions in Article 12(1).  As a result, the Pane l found that GI protection is not available under the 
Regulation in respect of geographical areas located in third countries which the Commission has not 
recognized under Article 12(3), although GI protec tion under the Regulation may become available if 
the third country in which the GI is located enters  into an international agreement or satisfies the 
conditions in Article 12(1). 
7.704  This constitutes an "advantage, favour, privile ge or immunity" granted by the European 
Communities with regard to the protection of intellectua l property.  It is subject to the satisfaction of 
the equivalence and reciprocity conditions, or the c onclusion of an international agreement, or both, 
which indicates that it is not accorded "immediately and unconditionally".   
7.705  However, that is not sufficient to demonstrate an inconsistency with Article 4 of the TRIPS 
Agreement, as it must be shown that the advantage,  favour, privilege or immunity is granted by a 
Member "to the nationals of any other country".  It is unnecessary for the purposes of this claim to re-
examine the issue of how the Regulation discrimin ates according to nationality, considered in 
Section VII:B of this report, because the European Commission has not recognized any other country 
as satisfying the conditions under Article 12(1) under the procedure in Article 12(3).  However, the 
United States challenges the Regulation "as such".   
7.706  The Panel notes that various GATT and WT O panels have applied the so-called 
"mandatory/discretionary distinction" as an anal ytical tool for evaluating claims brought against 
legislation "as such".600  Although the Appellate Body has not yet pronounced generally upon its 
continuing relevance or significance, it has observed that its importance may vary from case to case 
and it has cautioned against the application of this distinction in a mechanistic fashion.601   
7.707  Turning to the Regulation at issue in this dis pute, the United States accepts that, theoretically, 
a refusal to apply the Regulation to any third country would ensure that no advantage, favour, 
privilege or immunity would be granted to the natio nals of any third country within the meaning of 
Article 4 of the TRIPS Agreement, although it would be inconsistent with the European Communities' 
national treatment obligations under Article 3.602  However, the United States submits that, where the 
conditions in Article 12(1) of the Regulation are satisfied, "it appears that the Commission would 
have to make an affirmative decision to that effect".603   
7.708  The European Communities does not indicate that the Commission would exercise any 
discretion in an MFN-consistent manner by refu sing to recognize any third country but expressly 
states that if the conditions in Article 12(1)  of the Regulation are fulfilled the Commission will 
normally recognize the country in question.  Its prim ary defence is that the conditions in paragraph 1 
and the recognition procedure in paragraph 3 do not apply to WTO Members, which we have found in 
Section VII:B of this report is not the case. 
                                                      
600 Appellate Body report on US – 1916 Act , paras. 61 and 88, citing the GATT Panel report on US – 
Tobacco  at para. 118. 
601 US – Corrosion-Resistant Steel Sunset Review, para. 93. 
602 United States' rebuttal submission, para. 108.  It is also clear that the applic ation of the Regulation to 
all third countries would also be consistent with MFN treatm ent.  However, it is not disputed that, to the extent 
that the conditions apply, the Commission cannot recognize all third countries. 
603 United States' response to Panel question No. 112. WT/DS174/R 
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 7.709  In these circumstances, the Panel considers it appropriate to recall that, in view of its 
conclusion at paragraph 7.213 above, even if the Commission can refuse to recognize all third countries under the procedure in Article 12(3), this would necessarily be inconsistent with its national 
treatment obligation under Article 3.1 of the TRIPS Agreement.  Given that the Panel has already 
found that the Regulation is inconsistent with that obligation, a further conclusion on the MFN 
obligation would provide no additional positive contribution to a solu tion to this dispute.  Therefore, 
the Panel exercises judicial economy with respect to this claim. 
(b) Availability of protection:  MFN treatment under GATT 1994 
(i) Main arguments of the parties 
7.710  The United States claims that the Regulation is incons istent with Article I:1 of GATT 1994 
because it applies conditions of equivalence and reciprocity to the benefits of registration.  It reiterates 
its arguments from its national tr eatment claim under Article III:4 that the Regulation applies to like 
products and is a measure affecting internal sale etc. and argues that, therefore, it is a matter referred 
to in paragraph 4 of Article III within the meaning of Article I:1 of GATT 1994.  It reiterates its 
arguments concerning less favourable treatment of imported products and argues that these are 
significant advantages granted to products imported from a third country that are not immediately and 
unconditionally accorded to the products of all other Members.
604 
7.711  The European Communities responds that there is no violation of Article I:1 of GATT 1994.  
It reiterates its arguments in relation to MFN treatme nt under TRIPS that it does not, in fact, apply the 
conditions in Article 12(1) of the Regulation to geographical areas located in WTO Members;  and 
that the conditions in Article 12(1) of the Regula tion are the same for all third countries which fall 
under that provision.605   
(ii) Consideration by the Panel 
7.712  The Panel notes that Article I:1 of GATT 1994 provides, relevantly, as follows: 
"... with respect to all matters referred to  in paragraphs 2 and 4 of Article III,* any 
advantage, favour, privilege or immunity granted by any contracting party to any 
product originating in or destined for any other country shall be accorded 
immediately and unconditionally to the like pr oduct originating in or destined for the 
territories of all other contracting parties." 
7.713  The Panel recalls its finding at paragraph 7.22 7 that the Regulation is a law or regulation 
affecting the internal sale and offering for sale of  products within the meaning of Article III:4 of 
GATT 1994.  It therefore falls within the "matters re ferred to in paragraphs 2 and 4 of Article III" as 
that phrase is used in Article I:1. 
7.714  The Panel also recalls its finding at paragra ph 7.229 that the Regulation discriminates on its 
face among products and that the European Communities does not contest that there are, among this group, "like products" among the impor ted products and pr oducts of European Communities origin, 
for the purposes of Article III:4 of GATT 1994.  Pr otection under the Regulation is provided against 
use of a name in respect of products "comparable to  the products registered under that name".  In the 
                                                     
 
604 United States' first written submission, paras. 123-127. 
605 European Communities' first written submission, paras. 261 and 263.  From an abundance of 
caution, the European Communities also stated its view that the product-specific conditions for the registration 
of individual GIs are examined for each product individually and do not discriminate according to nationality or product origin.  As such, there is no violation of Article  I:1 of GATT 1994 and, in the alternative, they are 
justified under Article XX(d):  see its first written submission, paras. 262, 265-266.  WT/DS174/R 
 Page 155 
 
 
 Panel's view, this is sufficient basis to concl ude that there are "like products" among the imported 
products of other countries including WTO Member s for the purposes of Article I:1 of GATT 1994. 
7.715  The Panel also recalls its finding at paragraph 7.704, that the advantage of availability of 
protection is not accorded "immediately and unconditionally". 
7.716  However, in view of the Panel's conclusion at paragraph 7.238 above, even if the Commission 
can refuse to recognize all third countries under the procedure in Article 12(3), this would necessarily 
be inconsistent with the national treatment obliga tion in Article III:4 of GATT 1994.  Given that the 
Panel has already found that, in this respect, the Re gulation is inconsistent with that obligation, a 
further conclusion with respect to the Europ ean Communities' MFN treatment obligation would 
provide no additional positive  contribution to a soluti on to this dispute.  Therefore, the Panel chooses 
to exercise judicial economy with respect to this claim. 
(c) Application and objection procedures 
(i) Main arguments of the parties 
7.717  The United States submits that the Regulation "is inconsistent with the most-favoured nation 
obligation of the TRIPS Agreement for the same reas ons that it is inconsistent with the national 
treatment obligation of the TRIPS Agreement".606  It argues that nationals of other WTO Members 
can register their home-based GIs if they are from a country which agrees to substantial participation 
in administering and enforcing the Re gulation on behalf of its nationals.607  There is no room for the 
Commission to determine that all WTO Members sa tisfy the conditions of the Regulation.  Some 
Members might be able to prosecute applications su ccessfully on behalf of their nationals but others 
cannot.608  The United States also argues that the right to object is subject to WTO Members' 
satisfaction of conditions of equivalence and reciprocity .609  For these reasons, the Regulation does 
not immediately and unconditionally accord to nationals of all WTO Members the advantages 
accorded to EC nationals.610   
7.718  The European Communities does not respond specifically to this claim in relation to the 
right to object.611  However, in its description of the Regulation it argues that Article 12d grants a 
right of objection to persons from WTO Members because the phrase "recognised under the procedure 
provided for in Article 12(3)" only applies to  other third countries.  The conditions of equivalence and 
reciprocity do not apply to WTO Members to the right to object.  Otherwise, the specific reference to 
"WTO Members" would be meaningless.  This is also clear in Article 12b(2).612    
(ii) Consideration by the Panel 
7.719  The Panel recalls its findings at  paragraphs 7.262 and 7.329 th at the application and objection 
procedures under the Regulation are matters affecting the acquisition of intellectual property rights, in 
relation to "designations of origin" and "geographi cal indications", as defined in the Regulation, 
which are part of a category of intellectual propert y within the meaning of Article 1.2 of the TRIPS 
Agreement.  Therefore, these claims  concern the "protection" of inte llectual property, as clarified in 
                                                      
606 United States' first written submission, para. 118. 
607 United States' rebuttal submission, para. 104. 
608 United States' first written submission, para. 117, fn. 102;  rebuttal submission, para. 107. 
609 United States' rebuttal submission, para. 104. 
610 United States' rebuttal submission, para. 104. 
611 European Communities' first written submission, paras. 227-256.   
612 European Communities' first written submission, para s. 73-75;  first oral statement, para. 50;  
second oral statement, paras. 86-88. WT/DS174/R 
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 footnote 3 to the TRIPS Agreement, within the scope of the MFN treatment obligation in Article 4 of 
that Agreement.     
7.720  The Panel recalls its finding at paragraph 7.352  that the procedure for recognition of third 
countries under Article 12(3) of the Regulation does not apply to WTO Members with respect to objection procedures.   
7.721  The Panel has not found that there is any difference in the application and objection 
procedures under Articles 12b and 12d of the Regula tion regarding the nationals of different WTO 
Members.  Any differences that arise in practice would appear to depend on the actions of various other WTO Member governments.  However, the MFN obligation in Article 4 of the TRIPS Agreement applies only to any advantage, favour, priv ilege or immunity "granted by a Member", in 
this case, the European Communities.  The United States has not shown how the differences in the 
treatment accorded to nationals of different Me mbers are granted by th e European Communities. 
Therefore, the Panel concludes that the United Stat es has not made a prima facie case in support of 
this claim.   
(d) Execution of the Regulation by authorities of EC member States 
(i) Main arguments of the parties 
7.722  The United States argues that nationals of EC member States – which are WTO Members in 
their own right – are accorded more favourable treat ment than nationals of WTO Members outside the 
European Communities.  EC member States are not ex cused from this obligation by the fact that they 
are acting pursuant to an EC Regulation.  Measures of EC member States are within the terms of 
reference because the request for establishment of a panel specifies not only the Regulation but also 
"its related implementation and enforcement measures".
613 
7.723  The European Communities argues that EC member States do not grant "advantages" within 
the meaning of the MFN treatment obligation because the Regulation is a Community measure 
adopted to harmonize Community law and the Europ ean Communities is an original Member of the 
WTO in its own right.  The European Communities is the respondent in this Panel proceeding and 
claims of violations by EC member States cannot be  raised.  In any event, the United States has not 
identified any measures of EC member States.614 
(ii) Consideration by the Panel 
7.724  The Panel observes that in this claim the United States asserts, in effect, that nationals of EC 
member States are "nationals of any other country " within the meaning of Article 4 of the TRIPS 
Agreement, quoted at paragraph 7. 697 above.  This, in turn, depends  on the interpretation that each 
EC member State constitutes "any other country" w ithin the meaning of Article 4 of the TRIPS 
Agreement.   
7.725  The Panel recalls its finding at paragraph 7.150 as to which persons are the European 
Communities' own nationals.  The Panel also recalls its findings at paragraph 7.98 that it has accepted 
the European Communities' explanation of what amount to its sui generis  domestic constitutional 
arrangements that Community laws are generally  not executed through authorities at Community 
level but rather through recourse to the authorities of its  member States which, in such a situation, "act 
                                                      
613 United States' first written submission, para. 121;  fi rst oral statement, para. 37;  rebuttal submission, 
paras. 110-113;  second oral statement, para. 65. 
614 European Communities' first written submission, paras. 249-255;  rebuttal submission, paras. 
252-256;  second oral statement, paras. 145-149.    WT/DS174/R 
 Page 157 
 
 
 de facto  as organs of the Community, for which the Community would be responsible under WTO 
law and international law in general".615  Therefore, to the extent that advantages are granted under the 
Regulation, by the Community and EC member  State authorities exercising powers under the 
Regulation, to the European Communities' own nati onals, those advantages are not granted to "the 
nationals of any other country", within the m eaning of Article 4 of the TRIPS Agreement. 
7.726  Therefore, the Panel rejects this claim, to th e extent that it is based on the execution of the 
Regulation by the authorities of EC member States. 
7.727  The Panel wishes to confirm that it has accepted the European Communities' explanation as to 
the way in which Community laws are executed not only for this MFN claim but also for the national 
treatment claims616.  This has repercussions for the Europ ean Communities' defences to those other 
claims, in particular concerning the application and objection procedures, as noted at paragraphs 
7.269 and 7.339 of this report.  The Panel has applied this explanation of the way in which 
Community laws are executed in a consistent ma nner to all relevant claims in this dispute. 
7.728  Finally, the Panel notes that the United States has also referred to the Paris Convention 
(1967), which does not contain a MFN treatment obligation.  There is no need to consider this further. 
7.729  In summary, with respect to the MFN treatment claims: 
(a) under Article 4 of the TRIPS Agreement: 
(i) with respect to the availability of pr otection, the Panel exercises judicial 
economy;    
(ii) with respect to the application and objection procedures, the United States 
has not made a prima facie case in support of its claim; and 
(iii) with respect to the execution of th e Regulation by the authorities of 
EC member States, the Panel rejects the claim;  and  
(b) under Article I:1 of GATT 1994, the Panel exercises judicial economy.   
2. Minimum standards of GI protection  
(a) Main arguments of the parties 
7.730  The United States claims that the Regulation is inconsis tent with Article 22.2 of the TRIPS 
Agreement because it does not provide interested pa rties in other WTO Members which do not satisfy 
the equivalence and reciprocity conditions , including inspection structures, the legal means to protect 
their GIs on a uniform basis throughout the territory of the European Communities.  Article 2 of the 
Regulation provides that GIs for certain produc ts "shall be obtained" in accordance with the 
Regulation and does not appear to pe rmit GI protection through other means.617  Once a complainant 
presents a prima facie case that a measure is inconsis tent with a WTO obligation, the respondent then 
bears the burden to rebut that case by showing that there is no in consistency, which may include 
demonstrating that other domestic measures eliminat e the alleged inconsistency.  If there were other 
measures somewhere in the legal system of the European Communities or its member States that 
                                                      
615 European Communities' second oral statement, para. 148. 
616 See para. 7.98 above. 
617 United States' first written submission, paras. 171 -176;  rebuttal submission, paras. 212 and 216. WT/DS174/R 
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 compensated for the inconsistencies in the Regula tion, the United States submits that the European 
Communities would have and should have come forw ard with them, but that it has failed to do so.
618 
7.731  The United States also claims that the Regulati on is inconsistent with Article 22.2 of the 
TRIPS Agreement because interested parties in ot her WTO Members must depend on their respective 
governments to intercede on their behalf in the verification and transmission of applications .619   
7.732  The United States also claims that the Regulati on is inconsistent with Article 22.2 of the 
TRIPS Agreement with respect to objections because (1) persons who wish to object to the 
registration of a GI cannot do so directly620;  (2) the Regulation does not permit persons in other WTO 
Members which do not satisfy the equivalence and reciprocity conditions the right to object621;  
(3) persons who wish to object to the registration of a GI must have a legitimate interest or a 
legitimate economic interest in the European Co mmunities, but an interested party can be any 
producer or seller established in the region fal sely indicated as the source in a given territory622;  and 
(4) the grounds for objection based on a prior tradem ark in Article 7(4) of the Regulation are narrower 
than the rights required to be made available under Article 22.2 of the TRIPS Agreement.  A 
registered GI could be misleading.  Registration gr ants an affirmative right to use, which cannot be 
prevented after registration, so that the right of objection to registration must be available to all 
interested parties.623  The United States confirms that it do es not make any claim under Part IV of the 
TRIPS Agreement but that a measure can violate both Parts II and IV.624  
7.733  The European Communities responds that the conditions of equivalence and reciprocity do 
not apply to WTO Members.625  In any event, even if all the United States' arguments were correct, 
the European Communities would still comply with Article 22.2 of the TRIPS Agreement because the 
Regulation is not the only means made available by  the European Communities and its member States 
in order to prevent the acts mentioned in Article 22. 2.  Specifically, additional means of protection are 
provided in the foodstuffs labelling,  misleading advertising and trademar ks directives, and the 
implementing legislation of the EC member States, the Community Trademark Regulation and the unfair competition laws of the EC member States. These laws have been notified under the TRIPS 
Agreement and identified in responses to questions in the TRIPS Council review under Article 24.2 of 
the TRIPS Agreement.  These various measures and the Regulation apply cumulatively.  They are 
sufficient to implement the European Communitie s' obligation under Article 22.2 of the TRIPS 
Agreement and are outside the Panel's terms of reference.
 626 The complainants were well aware of the 
existence of these other measures.  Had they been of  the view that they were insufficient to comply 
with Article 22.2 they could and should have menti oned them in their panel requests.  They cannot 
shift the burden of proof to the respondent simply by asserting that the respondent provides no means 
of implementation.627 
7.734  The European Communities submits that the transmission of applications is a modality of the 
registration process.  The United States has not s hown that it is unreasonable and inconsistent with 
                                                      
618 United States' response to Panel question No. 158. 
619 United States' first written submission, paras.  177-178;  rebuttal submission, para. 213. 
620 United States' first written submission, para. 179; rebuttal submission, para. 213. 
621 United States' first written submission, para. 180. 
622 United States' first written submission, para. 181; rebuttal submission, para. 214. 
623 United States' first written submission, para. 182; re buttal submission, paras. 215-216;  second oral 
statement, para. 69. 
624 United States' response to Panel question No. 84. 
625 European Communities' first written submission, paras. 422-423. 
626 European Communities' first written submission, para s. 421, 433-436;  response to Panel question 
No. 159. 
627 European Communities' response to Panel question No. 162.  WT/DS174/R 
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 Article 62.1 of the TRIPS Agreement.  Such a claim would be outside the Panel's terms of 
reference.628 
7.735  The European Communities submits th at Article 22.2 does not confer a right to object to the 
registration of a GI.  Even if it did, (1) the right s conferred under Article 22.2 can be made subject to 
compliance with reasonable procedures and forma lities, and transmission through governments is 
neither excessive nor unreasonable;  (2) the conditi ons of reciprocity and equivalence do not apply to 
the right of objection;  (3) although persons who wish  to object must have an economic interest in the 
European Communities, this does not require them  to establish or do business within the European 
Communities; (4) there are grounds for objection un der Article 7(4) and it does not see what other 
acts of unfair competition could arise from the valid registration of a GI.629  The European 
Communities agrees that a procedure for the acquisiti on of an intellectual property right may violate 
both Parts I and IV, and both Parts II and IV, of the TRIPS Agreement, but Article 22.2 does not 
regulate expressly the right of opposition and it may not be assumed that this derogates from the 
generally applicable rules under Part IV.630  Further, registration of a GI is not a "use" covered by 
Article 22.2.631 
(b) Consideration by the Panel  
(i) Introduction 
7.736  The Panel begins by recalling that the United States, in its request for establishment of a 
panel, cited Article 22.2 of the TRIPS Agreement in the series of numbered provisions and, in the 
narrative text, paraphrased the text of  subparagraph (a) of Article 22.2.  It was clear on a plain reading 
of the request that the series of numbered provisions was not to be limited to what appeared in the 
narrative text, even though it did not pa raphrase subparagraph (b) of Article 22.2.632  It is unnecessary 
for the purposes of this report to distinguish furthe r between subparagraphs (a) and (b) as our findings 
apply with equal force to both. 
7.737  Article 22.2 of the TRIPS Agreement provides as follows: 
"2. In respect of geographical indica tions, Members shall provide the legal 
means for interested parties to prevent:   
(a) the use of any means in the designation or presentation of a 
good that indicates or suggests that the good in question originates in a geographical area other than the true place of origin in a manner which misleads the public as to the geographical origin of the good; 
(b) any use which constitutes an act of unfair competition within 
the meaning of Article 10 bis of the Paris Convention (1967)." 
7.738  The term "geographical indications " is defined in Article 22.1 of the TRIPS Agreement.  It is 
not disputed that registered "designations of orig in" and registered "geographical indications", as 
defined in the Article 2(2) of the Regulation, are a subset of "geographical indications" as defined in 
Article 22.1 and therefore relevant to the European  Communities' implementati on of Article 22.2.   
                                                     
 
628 European Communities' first written submission, paras. 424-426. 
629 European Communities' first written submission, paras. 427-432. 
630 European Communities' rebuttal submission, paras. 395-397. 
631 European Communities' rebuttal submission, para. 398. 
632 See paras. 15-19 of the Panel's preliminary ruling set out in para. 7.2 above. WT/DS174/R 
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 (ii) Equivalence and reciprocity conditions;  exami nation and transmission of applications 
7.739  The Panel recalls its conclusion in paragr aphs 7.213, 7.238, 7.281 and 7.307 that the 
equivalence and reciprocity conditio ns in Article 12(1) of the Regulation, and the procedures for 
examination and transmission of applications, ar e inconsistent with the European Communities' 
national treatment obligations.  Now we must consid er whether they also deny the legal means that 
Article 22.2 of the TRIPS Agreement requires the European Communities to provide for interested 
parties who are nationals of other Members. 
7.740  The Panel recalls its findings: 
(a) at paragraph 7.102 that the United States has made a prima facie case that, due to the 
applicability of the equivalence and recipr ocity conditions in Article 12(1) of the 
Regulation, the registration procedure in Ar ticles 12a and 12b is not available for GIs 
located in third countries, including WTO Members, that do not satisfy those conditions; and 
(b) at paragraph 7.272 that a group or pers on who submits an application in a third 
country has no right to have its appli cation examined or transmitted to the 
Commission where its Member government does not examine and transmit the 
application.   
7.741  Article 22.2 of the TRIPS Agreement imposes an obligation on Members.  The obligation is 
owed to other Members, as the TRIPS Agreement creates rights and obligations between WTO Members.  In this regard, it can be noted that the dispute settlement system of the WTO serves, 
inter alia  to preserve the rights and obligations of Members under the covered agre ements (emphasis 
added).
633  However, a particularity of the TRIPS Agre ement is that the assessment of the conformity 
of measures with Members' obligations generally re quires an assessment of the manner in which they 
confer rights or protection on private parties. 
7.742  Article 1.3 provides that "Members shall accord the treatment provided for in this Agreement 
to the nationals of other Members".  That includ es the protection provided for in Article 22.2, which 
obliges Members to provide legal means for "interested  parties".  The interested parties must qualify 
as "nationals of other Members" in accordance with  the criteria referred to in Article 1.3.  These 
persons can be private parties, which is reflected  in the fourth recital of the preamble to the 
agreement, which reads " [r]ecognizing  that intellectual property rights are private rights".   
7.743  Therefore, in order to determine whether the European Communities has implemented its 
obligation owed to other Members in Article 22.2,  the Panel must examine whether it has provided 
the legal means required by that provision for interest ed parties who are nationals of other Members.   
7.744  Naturally, the treatment that Members are oblig ed to accord under the TRIPS Agreement is 
not limited to the bundle of rights conferred on indi viduals by the grant of an intellectual property 
right.  Whilst Article 22.2 sets out protection conferred by a GI, Article 16.1 sets out rights conferred by a trademark and other provisions in each of the Sections of Part II set out the rights conferred by 
other categories of intellectual property, these repr esent a subset of the treatment that Members are 
obliged to accord under the TRIPS Agreement.  All of  the obligations of Members considered in this 
report, including the obligations to accord national treatment and MFN treatment, form part of the 
treatment to be accorded under the TRIPS Agreement,  but only the exclusive rights provided for the 
                                                     
 
633 See Article 3.2 of the DSU.  WT/DS174/R 
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 owner of a trademark and the legal means for interest ed parties considered in Sections VII:C and D:2 
of this report constitute rights or protection conf erred on a person by an intellectual property right.634      
7.745  Turning to the Regulation, we note that it make s protection available, in the sense that it 
provides legal means to protect GIs.  However, those legal means have not been provided to interested 
parties with respect to GIs located  in a third country, including a WTO Member, that does not satisfy 
the equivalence and reciprocit y conditions, and the government of which does not examine and 
transmit an application.  These interested partie s include persons who are "nationals of other 
Members" within the meaning of Article 1.3 of the TR IPS Agreement.  Further, to the extent that the 
legal means may be provided to interested parties wi th respect to such GIs, the Regulation alone does 
not provide them, because protection is continge nt on satisfaction of conditions and execution of 
certain functions by governments of third countries.   Therefore, the Panel concludes that the United 
States has made a prima facie case  in support of its claim that the Regulation does not make available 
the legal means to interested parties in accord ance with Article 22.2 of the TRIPS Agreement. 
7.746  However, the obligation under Article 22.2 is placed on the European Communities , not on 
the Regulation.  The TRIPS Agreement creates positive obligations in Parts II and III to accord 
protection according to certain minimum standa rds, in addition to the prohibitions against 
discrimination found in the basic principles under Part I.  In accordance with Article 1.1, the European 
Communities is free to determine the appropriate  method of implementing the provisions of the 
Agreement within its own legal system and practice.  It is not obliged to ensure that this particular 
Regulation implements Article 22.2 wher e it has other measures that do so.   
7.747  The United States has challenged the Regulation only, and not other means by which the 
European Communities may have implemented Arti cle 22.2.  In doing so, the United States has 
complied with the requirement of Article 6.2 of th e DSU that it "identify the specific measures at 
issue" and has not challenged any and all unsp ecified measures which th e European Communities 
might have.  Yet proof of the treatment accorded by that one specific measure may be inadequate to demonstrate that a Member has not implemented a positive obligation to accord certain treatment. 
7.748  The United States submits that the Regulation is an exclusive means of implementation of 
Article 22.2, at least for agricultural products and foodstuffs, due to the terms of its Article 2(1), 
which provides as follows:   
"Community protection of designations of or igin and of geographical indications of 
agricultural products and foodstuffs sha ll be obtained in accordance with this 
Regulation." 
7.749  This provision ensures that "designations of or igin" and "geographical indications", as defined 
in Article 2(2) of the Regulation, which are regi stered for agricultural products and foodstuffs under 
the Regulation, are protected under the Regulation at the Community level.  However, it is not clear that this provision ensures that protection is ex clusively available under the Regulation.  It may 
simply reflect the matters set out in the eleventh recital in the preamble which refers to the pre-
existing "diversity in the national practices for im plementing registered designations of origin and 
geographical indications" and states that "a Community  approach should be envisaged".    This does 
not indicate that the Regulation is exclusive, particul arly for GIs that are not registered under it, which 
presently appears to include all GIs of the nationals of other Members.  
                                                     
 
634 The Panel is aware of the Appellate Body's comments in Canada – Patent Term , at para. 56, but 
confirms the distinction between national treatment and MFN treatment, which must be accorded to the 
nationals of other Members, and the rights or protection which must be conferred on interested parties in respect 
of GIs, as intellectual property rights, for the reasons explained in this report. WT/DS174/R 
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 7.750  The European Communities submits that it impl ements Article 22.2 through other measures 
besides the Regulation, including the foodstuffs labelling and misleading advertising directives and 
implementing legislation of the EC member States.  It identified the foodstu ffs labelling directive and 
other measures prior to the Panel proceeding as part  of the Community's implementation of the GI 
provisions of the TRIPS Agreement in a review in the Council for TRIPS and in a letter from 
Commissioner Lamy to the United Stat es Trade Representative in January 2003
635 and it also listed 
them in its first written submission and first oral stat ement. It also referred to unfair competition laws 
of EC member States.636  These other means of protection, while not specifically providing for the 
protection of GIs, prohibit business practices which can involve the misuse of GIs.  A broad range of 
laws of this nature have been referred to by  many Members, including the United States, in their 
implementation of the provisions of Section 3 in  the review conducted in the Council for TRIPS under 
Article 24.2 of the TRIPS Agreement.637 
7.751  Nevertheless, the United States chose to challe nge only the Regulation, as amended, "and its 
related implementing and enforcement measures".  It has not demonstrated that these alternative 
measures, which lie outside the Panel's terms of refe rence, are inadequate to provide GI protection to 
for interested parties nationals of other Memb ers as required under Article 22.2 of the TRIPS 
Agreement.  Therefore, it has not presented suffi cient evidence to raise a presumption that the 
European Communities (as opposed to the Regulat ion) does not implement its obligations under 
Article 22.2.  Accordingly, the Panel concludes that , with respect to the equivalence and reciprocity 
conditions and the examination and transmission of  applications under the Regulation, the United 
States has not made a prima facie case that the European Communities has failed to implement its 
obligation under Article 22.2 of the TRIPS Agreement.638 
(iii) Objections 
7.752  The United States also bases its claim under Ar ticle 22.2 of the TRIPS Agreement on four 
arguments that relate to the rights of persons who wi sh to object to a GI registration, the fourth of 
which concerns the grounds for objectio n available to trademark owners.   
7.753  The Panel notes that Article 22.2 is found in Pa rt II of the TRIPS Agreement, which sets out 
minimum standards concerning the availability, scope and use of intellectual property rights.  The first 
seven Sections of Part II contain standards relating to categories of intellectual property rights.  Each 
Section provides for a different category of intellect ual property, although at times they refer to one 
another, setting out, as a minimum, the subject matter which is eligible for protection, the scope of the 
rights conferred by the relevant category of inte llectual property and perm itted exceptions to those 
rights.  Section 2 provides for trademarks.  Article 22.2 is located in Section 3, which provides for the 
category of GIs.  Whilst the provisions on protection of GIs affect the protection of trademarks, as 
expressly recognized in Articles 22.3 and 23.2, Sec tion 3 does not provide for trademark protection, 
except to the extent that trademark systems are used to protect GIs.  
                                                      
635 Exhibit US-73, attachment, page 1, supra  at note 46. 
636 Responses to the Checklist of  questions received from the Eu ropean Communitie s in the TRIPS 
Council "Review under Article 24.2 of the application of the provisions of the section of the TRIPS Agreement 
on geographical indications", document IP/C/W/117/Add.10, dated 26 November 1998, set out in Exhibit 
EC-29.  European Communities' first written submissi on, para. 434; first oral statement, para. 35. 
637 See document IP/C/W/253/Rev.1, pp. 6-8. 
638 The Panel's findings are limited to the circumstances of this particular dispute and do not imply that 
a respondent can avoid a finding of inconsistency with an  affirmative obligation to implement protection simply by asserting that alternative measures outside the Panel's terms of reference implement its obligations.  It can be 
noted that in previous disputes which also involved an obligation to provide particular "means" under the TRIPS 
Agreement, the Panels and the Appellate Body referred  to alternative measures which allegedly implemented 
the obligation, but it was not contested that the alternativ e measures lay outside the terms of reference:  see the 
reports in India – Patents (US) and (EC) (documents WT/DS50/R;  WT/DS50/AB/R and WT/DS79/R).   WT/DS174/R 
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 7.754  Article 22.2 does not provide for a right of objection to the registration of a GI.  
Although Article 15.5 provides for a right of objecti on to registration of a trademark, no provision in 
Part II of the TRIPS Agreement provides for objections to the registration of a GI.   
7.755  Therefore, the Panel rejects the United States' arguments in support of this claim insofar as 
they relate to objections to GI registration, including objections by trademark owners.   
7.756  There are provisions on the acquisition and maintenance of intellectual property rights, 
including GIs, in Article 62.  These specifically refer to related inter partes procedures such as 
opposition, revocation and cancellation, in paragraph 4, which is cro ss-referenced in paragraph 5, 
where a Member's law provides for su ch procedures.  The opportunity or right to object forms part of 
an opposition procedure.  However, Article 62 li es outside the Panel's terms of reference.   
7.757  The Panel also recalls its finding at paragra ph 7.352 that the equivalence and reciprocity 
conditions do not apply to the right of objection by  persons resident or established in WTO Members.  
The United States' second argument relating to objecti ons in support of its claim under Article 22.2 is 
unfounded for this reason as well.   
(iv) Conclusion with respect to Article 22.2 of the TRIPS Agreement  
7.758  In view of the findings at paragraphs 7.751, 7. 755 and 7.757, with respect to this claim, the 
Panel concludes that the United States has not made a prima facie case that the European 
Communities has failed to implement its obligation under Article 22.2 of the TRIPS Agreement.  
3. Claims under Part III of the TRIPS Agreement  
(a) Main arguments of the parties 
7.759  The United States  claims that the Regulation is inconsistent with Articles 41.1, 41.2, 41.4, 42 
and 44.1 of the TRIPS Agreement because it denies the owner of a registered trademark the right 
provided for in Article 16.1 of the TRIPS Agreemen t, and because it does not, with respect to a GI, 
provide the rights provided for in Ar ticle 22.2 of the TRIPS Agreement.639  It requests a finding that 
the enforcement obligations of the TRIPS Agreemen t apply to the Regulation to the extent that it 
makes unavailable to right holders the re quisite enforcement procedures and remedies.640 
7.760  The European Communities responds that these claims are unfounded because Part III of 
the TRIPS Agreement does not apply to the Regulation.  The Regulation lays down an administrative procedure for the acquisition of GIs via a system of registration and does not purport to regulate enforcement procedures, which are the subject of Part III of the TRIPS Agreement.
641 
(b) Consideration by the Panel 
7.761  These claims are made under the obligations with  respect to enforcement procedures found in 
Part III of the TRIPS Agreement.  The obligations in Part III are applicable to acts of infringement of 
geographical indications by virtue of the use of th e term "intellectual property" in Part III and the 
definition of "intellectual property" in Article 1.2.   However, the United Stat es' claims are dependent 
on its claims concerning the minimum standards in Pa rt II of the Agreement, specifically Articles 16.1 
and 22.2.  Given that the Panel has ruled on the claims under Articles 16.1 and 22.2, further findings 
                                                      
639 United States' first written submission, paras.  184-188;  rebuttal submission, para. 218. 
640 United States' rebuttal submission, para. 219. 
641 European Communities' first written submission, paras. 357-386, 390-397. WT/DS174/R 
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 on the claims under Part III would not provide any ad ditional contribution to a positive solution to this 
dispute.  Therefore, the Panel exercises j udicial economy with respect to these claims.
642 
4. Claim under Article 1.1 of the TRIPS Agreement 
(a) Main arguments of the parties 
7.762  The United States claims that the inspection structures  requirements force Members to adopt 
a particular set of rules to implement the TRIPS Ag reement, contrary to Article 1.1.  Protection is 
conditioned on the existence of inspection struct ures that the European Communities unilaterally 
decides are equivalent to those in the European Communities.643  The United States does not 
challenge the EC inspection system itself, it challenges whether the Eu ropean Communities can 
unilaterally require that other WTO Members adopt its system.644 
7.763  The European Communities responds that the requirement of inspection structures is 
consistent with Article 1.1 of the TRIPS Agreemen t because it exclusively concerns GI protection in 
the European Communities and not other Members' systems of protection.645 
(b) Consideration by the Panel 
7.764  Article 1.1 of the TRIPS Agreement provides as follows: 
"1. Members shall give effect to the provisions of this Agreement.  Members 
may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement.  Members shall be free to determine the appropriate 
method of implementing the provisions of this Agreement within their own legal 
system and practice." 
7.765  To the extent that this claim concerns th e equivalence and reciprocity conditions in 
Article 12(1) of the Regulation, which condition th e treatment accorded to the nationals of other 
Members on the system of protection in those othe r Members, the Panel has made abundant findings 
in Section VII:B of this report.  
7.766  To the extent that this claim concerns the inspection structures requirement for particular 
products, the Panel recognizes that these requirement s may require inspections to take place not only 
within the European Communities but also within th e territory of other WTO Members, for example, 
where the specifications concern production processes or other matters not related to the physical 
characteristics of the product itself.  The eviden ce before the Panel does not disclose that these 
inspections concern other WTO Members' system of  protection but, rather, only compliance with the 
product specifications, which are a feature of the Eu ropean Communities' system of protection.   
7.767  Therefore, the evidence does not suggest that th ey are inconsistent with the freedom granted 
under the third sentence of Article 1.1.  For this reason, the Panel rejects this claim.
646 
                                                      
642 In this respect, see the United States' resp onses to Panel question Nos. 82 and 83.  
643 United States' first written submission, paras. 59, 64. 
644 United States' second oral statement, para. 30.   
645 European Communities' rebuttal submission, para. 100. 
646 This conclusion refers only to the United States' claim under Article 1.1 of the TRIPS Agreement 
and is without prejudice to the Panel's conclusion at paragraph 7.431 that certain aspects of the inspection 
structures requirements are inconsistent with Article 3.1 of the TRIPS Agreement.  Those aspects contravene the 
provisions of the Agreement within the meaning of th e proviso in the second sentence of Article 1.1.    WT/DS174/R 
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 5. Claim under Article 65.1 of the TRIPS Agreement 
(a) Main arguments of the parties 
7.768  The United States claims that the Regulation is inconsis tent with Article 65.1 of the TRIPS 
Agreement, which obliged the European Communities to apply the provisions of the TRIPS 
Agreement by 1 January 1996, because it is still in consistent with several provisions of the 
Agreement.647  
7.769  The European Communities  responds that this claim is de pendent on the substantive claims 
and is equally unfounded.648 
(b) Consideration by the Panel 
7.770  The Panel notes that this is a consequential cl aim and considers that a finding on it would not 
provide any additional contribution to a positive solution to this di spute.  Therefore, the Panel 
exercises judicial economy with respect to this claim.  
VIII.  CONCLUSIONS AND RECOMMENDATION 
8.1 In light of the findings set out in this  report, the Panel concludes as follows: 
From Section A of the findings: 
(a) the measures and claims in the United States ' request for establishment of a panel did 
not fail to meet the requirements of Article 6.2 of the DSU that it identify the specific 
measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly;  
(b) the claims under Article 2(2) of the Paris Convention (1967) are within the Panel's 
terms of reference; 
From Section B of the findings: 
(c) the United States has made a prima facie case that the equivalence and reciprocity 
conditions in Article 12(1) of the Regulation apply to the availability of protection for 
GIs that refer to geographical areas located  in third countries outside the European 
Communities, including WTO Members, and the European Communities has not 
succeeded in rebutting that case; 
(d) the Regulation is inconsistent with Article 3.1 of the TRIPS Agreement: 
(i) with respect to the equivalence and re ciprocity conditions, as applicable to 
the availability of protection for GIs; 
(ii) with respect to the application pr ocedures, insofar as they require 
examination and transmission of applications by governments; 
(iii) with respect to the objection procedur es, insofar as they require verification 
and transmission of objecti ons by governments; and 
                                                     
 
647 United States' first written submission, paras. 189-190. 
648 European Communities' first written submission, paras. 502-503. WT/DS174/R 
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 (iv) with respect to the requirements of gov ernment participation in the inspection 
structures under Article 10, and the provision of the declaration by governments under Article 12a(2)(b);  
(e) the United States has not made a prima faci e case in support of its claim that the 
Regulation is inconsistent with Ar ticle 3.1 of the TRIPS Agreement: 
(i) with respect to the equivalence a nd reciprocity conditions, as allegedly 
applicable to objections;  
(ii) with respect to the standing requirements for objections;  
(iii) with respect to the allegedly pr escriptive requirements for inspection 
structures; or 
(iv) with respect to the labelling requirement;  
(f) the United States has not made a prima faci e case in support of its claim that the 
Regulation is inconsistent with Article 2(1)  of the Paris Convention, as incorporated 
by Article 2.1 of the TRIPS Agreement: 
(i) with respect to the equivalence a nd reciprocity conditions, as allegedly 
applicable to objections;  
(ii) with respect to the standing requirements for objections;  or 
(iii) with respect to the inspection structures; 
(g) the Regulation does not impose a requirement of domicile or establishment 
inconsistently with Article 2(2) of the Paris Convention (1967) as incorporated by 
Article 2.1 of the TRIPS Agreement: 
(i) with respect to the availability of protection for GIs;  or 
(ii) with respect to the objection procedures; 
(h) the Regulation is inconsistent with Article III:4 of GATT 1994: 
(i) with respect to the reciprocity and eq uivalence conditions, as applicable to 
the availability of protection for GIs; 
(ii) with respect to the application pr ocedures, insofar as they require 
examination and transmission of appli cations by governments, and these 
requirements are not justified by Article XX(d) of GATT 1994; and 
(iii) with respect to the requirements of gov ernment participation in the inspection 
structures under Article 10, and the provision of the declaration by governments under Article 12a(2)(b), and these requirements are not justified 
by Article XX(d) of GATT 1994; 
(i) the United States has not made a prima facie case in support of its claims that the 
Regulation is inconsistent with  Article III:4 of GATT 1994:  WT/DS174/R 
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 (i) with respect to the equivalence a nd reciprocity conditions, as allegedly 
applicable to objections;  
(ii) with respect to the objection procedur es, insofar as they require verification 
and transmission of objections by governments;  
(iii) with respect to the allegedly pr escriptive requirements for inspection 
structures; or 
(iv) with respect to the labelling requirement; 
From Section C of the findings: 
(j) the Regulation is inconsistent with Articl e 16.1 of the TRIPS Agreement with respect 
to the coexistence of GIs with prior trademar ks but this is justified by Article 17 of 
the TRIPS Agreement.  In this respect: 
(i) Article 24.3 of the TRIPS Agreement is inapplicable; and 
(ii) Article 24.5 of the TRIPS Agreement is inapplicable; 
From Section D of the findings: 
(k) the United States has not made a prima facie case in support of its claim under 
Article 4 of the TRIPS Agreement, with respect to the application and objection 
procedures; 
(l) the Panel rejects the United States' claim under Article 4 of the TRIPS Agreement , 
with respect to the execution of the Regul ation by the authorities of EC member 
States; 
(m) the United States has not made a prima faci e case that the European Communities has 
failed to implement its obligation under Ar ticle 22.2 of the TRIPS Agreement; and  
(n) the Panel rejects the United States' claim that the Regulation is inconsistent with 
Article 1.1 of the TRIPS Agreement. 
8.2 The Panel exercises judicial economy with r espect to the United States' claims under: 
(a) Article 2(1) of the Paris Convention (1967), as incorporated by Article 2.1 of the 
TRIPS Agreement (except as noted at paragraph 8.1(f));  
(b) Article 4 of the TRIPS Agreement, (except as noted at paragraph 8.1(k) and (l));  
(c) Articles 41.1, 41.2, 41.4, 42, 44.1 and 65.1 of the TRIPS Agreement;  and 
(d) Article I:1 of GATT 1994.  
8.3 Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie to constitute a case of 
nullification or impairment.  The Panel concludes th at, to the extent that the Regulation as such is 
inconsistent with the covered agre ements, it has nullified or impaired  benefits accruing to the United 
States under these agreements. WT/DS174/R 
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 8.4 In light of these conclusions, the Panel recomme nds pursuant to Article 19.1 of the DSU that 
the European Communities bring the Regulation in to conformity with the TRIPS Agreement and 
GATT 1994. 
8.5 The Panel suggests, pursuant to Article 19.1 of the DSU, that one way in which the European 
Communities could implement the above recommenda tion with respect to the equivalence and 
reciprocity conditions, would be to amend the Regulat ion so as for those conditions not to apply to the 
procedures for registration of GIs located in other WTO Members which, it subm itted to the Panel, is 
already the case.  This suggestion is not inte nded to diminish the importance of the above 
recommendation with respect to any of the Panel's other conclusions. 
 
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