WRITTEN QUESTION E-1225/00

by John Bowis (PPE-DE) to the Commission

(14 April 2000)

Subject: Trademark ownership

Is the Commission aware of the WTO panel versus USA on Section 211 of the US Omnibus Appropriation Act 1998 on a possible conflict with the TRIPs Agreement concerning the issue of claims filed by the joint venture between Pernod Ricard and the Cuban government with regard to the ownership in the United States of America of a trademark confiscated in Cuba without compensation?

Will the Commission explain the benefits to the European Union of a referral of the matter to the WTO panel and the negative consequences that might accrue?

What will be the costs for the European Union's taxpayers of a referral of the matter to the WTO panel and does the Commission confirm its previously stated principle that a confiscation without payment of compensation is not deemed legitimate?

Answer given by Mr Lamy on behalf of the Commission

(12 May 2000)

The Honourable Member refers to the dispute with the United States concerning the compatibility of Section 211 of the United States Omnibus Appropriations Act 1998 with the provisions of the trade-related aspects of intellectual property rights (TRIPs) Agreement of the World Trade Organisation (WTO). So far, WTO consultations took place with the United States, but no panel was established on this matter. The Commission would like to draw the Honourable Member's attention to the replies given in this matter to Written Questions P-0740/00 by Mrs Peijs(1), E-0820/00 by Mrs Angelilli(2), and E-0858/00 by Mr Gasòliba i Böhm(3).

The WTO dispute relates to the treatment of trademarks in the United States which are identical or similar to trademarks which previously belonged to Cuban owners who failed to renew their trademarks before United States authorities. As a consequence of this failure by the previous Cuban owners, which is independent from the expropriation of their assets in Cuba by the Cuban Government, the respective trademarks fell into the public domain and no longer belonged to their Cuban owners. Such trademarks can be registered, renewed and enforced in the United States by new owners, however, only under certain conditions. These conditions are contained in Section 211 which was adopted by the United States almost 40 years after the Cuban revolution.

The dispute, therefore, does not concern the question whether or not foreign uncompensated expropriations have to be recognised. In fact, United States trademarks were not and could not be expropriated by the Cuban Government. Individuals and companies expropriated by the Cuban Government remained the owners of property outside Cuba. In particular, their rights in trademarks registered in the United States were unaffected by the Cuban revolution.

After a detailed analysis of Section 211, the Commission came to the conclusion that Section 211 violates certain provisions of the TRIPs Agreement. The Community and its Member States raised the incompatibility of Section 211 with the TRIPs Agreement with the United States on various occasions in order to find an amicable solution to the matter. Given the constant refusal by the United States to engage into any substantive discussion, the Community and its Member States requested consultations under the WTO dispute settlement understanding in July 1999. Two rounds of consultations were held in September 1999 and December 1999, but the United States maintain the view that Section 211 is compatible with the United States international obligations. The Commission and the Member States are currently examining the next steps to be taken in this matter.

The main aim of the Commission remains the proper implementation and application by the United States of the TRIPs Agreement bearing in mind that Section 211 can potentially affect all European companies dealing with Cuba. It should be in the interest of the Community and its Member States to ensure that the provisions of the TRIPs Agreement are respected by all WTO members.

(1) OJ C 374 E, 28.12.2000, p. 145.

(2) OJ C 46 E, 13.2.2001, p. 50.

(3) See page 32.