EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

The Lisbon Agreement of 1958 for the Protection of Appellations of Origin and their International Registration created a special union (‘the Special Union’) within the framework of the Union for the Protection of Industrial Property which was established by the Convention for the Protection of Industrial Property signed in Paris on 20 March 1883 (‘the Paris Convention’). Its contracting parties are obliged to protect on their territories the appellations of origin of products of the other contracting parties recognised and protected as such in the country of origin and registered at the International Bureau of WIPO, unless they declare within 1 year from the request for registration that they cannot ensure protection.

The Lisbon Agreement was reviewed from 2009 to 2015. The aim was to (i) refine its current framework; (ii) include provisions that specify that the Lisbon system also applies to geographical indications (GIs); and (iii) include the possibility of accession by intergovernmental organisations such as the EU. The WIPO Diplomatic Conference held in Geneva from 11 to 21 May 2015. The conference adopted the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications (hereinafter ‘the Geneva Act’) on 20 May 2015.

On 27 July 2018, the Commission made a proposal for a Council Decision on the accession of the European Union to the Geneva Act (document COM(2018) 350 final), on the basis of Article 207 of the Treaty on the Functioning of the European Union (TFEU) and Article 218(6)(a) TFEU. In view of the European Union’s exclusive competence as regards the negotiation of that act, that proposal provided that the European Union alone would accede thereto.

On 15 March 2019, the Council sent the European Parliament a draft Council decision on the accession of the European Union to the Geneva Act, authorising all Member States which wished to do so to accede to that act alongside the European Union. On 16 April 2019, the Parliament approved the draft decision.

Since the Commission did not support that draft, the Council unanimously adopted Decision (EU) 2019/1754 on 7 October 2019, in accordance with Article 293(1) TFEU.

Article 3 of Decision (EU) 2019/1754 provides:

‘Member States which wish to do so, are hereby authorised to ratify or accede to, as appropriate, alongside the [European] Union, the Geneva Act in the interest of the [European] Union and in full respect of its exclusive competence.’

Article 4(1) of the same decision provides:

‘In the Special Union, the [European] Union and any Member States which ratifies or accedes to the Geneva Act pursuant to Article 3 of this Decision shall be represented by the Commission in accordance with Article 17(1) TEU. The [European] Union shall be responsible for ensuring the exercise of the rights and fulfilment of the obligations of the [European] Union and of the Member States which ratify or accede to the Geneva Act pursuant to Article 3 of this Decision. ’

In a statement entered in the Council minutes relating to the adoption of that decision, the Commission, on the one hand, objected to the possibility for all EU Member States which wish to do so to be authorised to ratify or accede to the Geneva Act alongside the European Union, and, on the other hand, stated that it would have been ready to agree that the seven Member States which had been parties to the Lisbon Agreement for a long time and had extensive intellectual property rights registered under that agreement could have been authorised to accede to the Geneva Act in the interest of the European Union.

The European Union deposited its instrument of accession to the Geneva Act on 26 November 2019, bringing the number of members to the requisite five for entry into force. The Geneva Act entered into force three months later on 26 February 2020.

On 17 January 2020, the Commission brought an action under Article 263 TFEU seeking the partial annulment of Decision (EU) 2019/1754. The Commission challenged the Council Decision before the Court of Justice on the main grounds that the Council had violated the principle of conferral of powers and the Commission’s right of initiative. While the Commission asked the Court of Justice to annul Decision (EU) 2019/1754 in so far that it authorises all Member States to accede to the Geneva Act, it also asked the Court to maintain the effects of the decision for the seven Member States that are already members of the Lisbon Agreement. Those Member States would otherwise lose the priority rights linked to the Appellations of Origin already registered in their names under the Lisbon Agreement.

The Court of Justice delivered its judgment on 22 November 2022. The Court essentially followed the arguments put forward by the Commission and the opinion of the Advocate General of 19 May 2022. The Court notably acknowledged in the findings on substance that preservation of the seniority and continuity of the protection of appellations of origin registered under the Lisbon Agreement in the seven Member States which are already parties to that agreement is necessary, in particular, in accordance with the principle of sincere cooperation between the European Union and the Member States set out in Article 4(3) TEU, in order to protect acquired rights derived from those national registrations.

The Court annulled Article 3, and to the extent that it contains references to the Member States, Article 4 of Decision (EU) 2019/1754 of 7 October 2019 on the accession of the European Union to the Geneva Act.

The Court declared that the effects of the parts of Decision (EU) 2019/1754 which have been annulled are to be maintained only in so far as they relate to Member States which, on the date of delivery of the judgment, have already availed themselves of the authorisation under Article 3 of that decision to ratify or accede to the Geneva Act, alongside the European Union, until the entry into force, within a reasonable period which should not exceed six months from that date, of a new decision of the Council.

Therefore, it is necessary to adopt within six months amendments to Decision (EU) 2019/1754 so that the Member States that are members of the Lisbon Agreement can also be members of the Geneva Act, to ensure that they can preserve the priority rights linked to the Appellations of Origin already registered in their names under the Lisbon Agreement.