EUROPEAN COMMUNITIES – PROTECTION OF TRADEMARKS AND GEOGRAPHICAL INDICATIONS FOR AGRICULTURAL PRODUCTS AND FOODSTUFFS
Document: Complaint by Australia Report of the Panel
Date: 15 March 2005
Document codes: WT/DS290/R
Complainant: Australia
Respondent: EU
Third parties: Argentina, Brazil, Canada, China, Taiwan, Colombia, Guatemala, India, Mexico, New Zealand, Turkey, U.S.
Dispute stage: Panel
Agreements cited: Art. 1, 2, 10, 16, 20, 24.5, 41, 42, 3, 4, 22.2, 63.1, 63.3, 65.1  Intellectual Property (TRIPS)Art. I:1, III:4  GATT 1994Art. 2.1, 2.2, Annex 1  Technical Barriers to Trade (TBT)Art. XVI:4  Agreement Establishing the World Trade Organization

EUROPEAN COMMUNITIES – PROTECTION OF
TRADEMARKS AND GEOGRAPHICAL INDICATIONS FOR
AGRICULTURAL PRODUCTS AND FOODSTUFFS

Complaint by Australia

Report of the Panel

I. INTRODUCTION
1.1 On 17 April 2003, Australia requested consultations 1 with the European Communities
pursuant to Article 4 of the Understanding on Ru les and Procedures Governing the Settlement of
Disputes ("DSU"), Article XXII of the Ge neral Agreement on Tariffs and Trade 1994
("GATT 1994"), Article 64 of the Agreement on Tr ade-Related Aspects of Intellectual Property
Rights ("TRIPS Agreement") and Article 14 of th e Agreement on Technical Barriers to Trade
("TBT Agreement") concerning the protection of tr ademarks and the registration and protection of
geographical indications for foodstuffs and agricultu ral products in the European Communities. The
request was circulated to Members on 23 April 200 3 in document Consultations were
held on 27 May 2003 but did not lead to a resolution of the dispute.
1.2 On 18 August 2003, Australia requested the Dispute Settlement Body ("DSB") to establish a
panel pursuant to Articles 4.7 and 6 of the DSU, Article XXIII:2 of GATT 1994, Article 64 of the
TRIPS Agreement and Article 14 of the TBT Agreement. 2 At its meeting on 2 October 2003, the
DSB established a single Panel pursuant to th e requests of the United States in document
 and Australia in document WT/DS290/ 18, in accordance with Article 9 of the DSU
(WT/DSB/M/156)3. At that meeting, the parties to the dis pute also agreed that the Panel should have
standard terms of reference. 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 and Australia in document
, 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."
1.3 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.
1.4 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

1.5 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
United States (in respect of Australia's complaint) reserved their rights to participate in the Panel
proceedings as third parties.
1.6 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.
1.7 The Panel submitted its interim report to th e parties on 16 November 2004. The Panel
submitted its final report to the parties on 21 December 2004.

1 WT/DS290/1.
2 WT/DS290/18.
3 WT/DS290/19 and Corr.1.

II. FACTUAL ASPECTS
A. M
EASURE AT ISSUE
2.1 The measure at issue in this dispute is identif ied in Australia's request for establishment of a
panel as Council Regulation (EEC) No. 2081/92 of 14 July 1992 on the protection of geographical
indications and designations of origin for agricu ltural products and foodstuffs, any amendments
thereto (including Council Regulation (EC) No. 692/ 2003 of 8 April 2003, published in the Official
Journal of the European Union No. L99 of 17 Apr il 2003), and related 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 the 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 responses 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 the 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
ruling of 5 April 2004 would be incorporated into the Panel's final reports, and could, therefore, be
appealed in the same way as any legal interpretation 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 requested 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 separate 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 States 4, 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.
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. 5 The parties were given
the opportunity to comment.

4 Australia also stated that it endorsed all arguments put forward by the United States in its closing
statement at the second substantive meeting. This is considered in paragraphs 7.69-7.82, below.
5 Attached as Annex D-2 to this report.

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.
6
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 provisions currently contained in Articles 2 and 3
of the Paris Convention (Stockholm Act of 1967)7.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
A. AUSTRALIA
3.1 Australia requests that the Panel find that the measures at issue are inconsistent with the
European Communities' obligations under:
(a) Articles 1.1, 1.3, 3.1, 16.1, 22.2, 24.5, 41.1, 41.2, 41.3, 42, and 65.1 of the TRIPS
Agreement and Article 2.1 of the TRIPS Ag reement, incorporating Articles 2(1) and
2(2), 10bis(1) and 10ter(1) of the Paris Convention (1967);8
(b) Article III:4 of GATT 1994;
(c) Articles 2.1 and 2.2 of the TBT Agreement; and
(d) Article XVI:4 of the WTO Agreement.
3.2 Australia requests that the Panel recommend that the European Communities bring its
measures into conformity with its obligations unde r the WTO Agreement, including in respect of the
TRIPS Agreement, GATT 1994 and the TBT Agreement.
B. EUROPEAN COMMUNITIES
3.3 The European Communities requests that the Panel:
(a) find that certain measures no longer in force or not yet adopted at the time the Panel
was established, and Australia's claims "under Articles 43, 44, 45, 46, 47, 48, 49 of
the TRIPS Agreement", under Article 2(2) of the Paris Convention (1967) and "under
Article 4 of the Paris Convention (1967)" as incorporated by Article 2.1 of the TRIPS
Agreement, are outside 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 a nd Australia, as set out in their submissions
(European Communities' request for a preliminary ruling; Australia's r esponse to the European
Communities' request for a preliminary ruling, first written submissions, written rebuttals, oral
statements, responses to questions; comments on eac h other's responses; and comments on the factual
information from the International Bureau of WIPO), are attached as Annexes A and B.

6 The submissions are attached to this report as Annexes A-10 and B-10.
7 The International Bureau's Note, but not its annexes, are attached as Annex D-3 to this report.
8 Australia withdrew a claim made under Article 20 of the TRIPS Agreement as described in
paragraph 7.53 below.

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 responses to questions) are summarized and attached as Annex C.
VI. INTERIM REVIEW
6.1 On 16 November 2004, the Panel submitted its interim report to the parties. On 30 November
2004, Australia and the European Communities subm itted written requests for review of precise
aspects of the interim report. On 7 December 2004, Australia 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 the interim report, except as otherwise noted.
Further comments on 5 April 2004 preliminary ruling
6.3 The European Communities requests the deletion of paragraphs 7.3 to 7.7 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, the references to discussions that take pla ce in other fora, such as the Council for TRIPS, are
irrelevant for this purpose.
6.4 Australia responds that nothing in the DSU precludes the Panel noting that subsequent events
confirmed the correctness of a particular conclusion.
6.5 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 basis 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
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 7.9 of the final report, to elaborate on the reasons for their inclusion.
Other preliminary rulings
6.6 Australia requests that the Panel elaborate its reasoni ng in paragraphs 7.35 to 7.39 and 7.42
to 7.45 with a view to reconciling it with that of the Appellate Body in Korea – Various Measures on
Beef. Australia asserts that at paragraph 88 of its re port on that dispute, the Appellate Body held that
a panel could validly examine a WTO provision not sp ecified in the panel request for the purposes of
determining the consistency of a measure with a provision that was specified in the panel request.
6.7 As a general comment, the European Communities considers that the interim review stage
should not serve as an occasion to restate major parts of a party's arguments, nor to relitigate
substantial parts of the interim report. Accord ingly, the European Co mmunities indicates that it
refrains from commenting on all but two of the numerous issues raised by Australia without implying

its agreement to the others. Specifically, the Eu ropean Communities asks the Panel to include the
preliminary rulings in these paragraphs in its conclusions at paragraph 8.1.
6.8 The Panel notes that paragraph 7.38, numbered 7. 42 in the final report, already explains why
the assertion of an inconsistency with Article 4 of the Paris Convention (1967) amounts to a claim,
rather than an argument. That distinction is re ferred to in the passage which Australia cites in its
interim review comments. The Panel has added further detail and quotations of language where
Australia in effect asserted its claim and made consequential amendments. The Panel notes that
paragraph 39 of the Panel's preliminary ruling set ou t at paragraph 7.2 of the report already explains
the basis on which the Panel accepted that the cl aim under Article 41 of the TRIPS Agreement was
within its terms of reference. The Panel did not ru le that Article 41 was within the terms of reference
in all respects. This situation is quite different from that of the claims and arguments in the case to
which Australia refers.
Claims regarding the "EC measure as a whole"

6.9 Australia comments that, apart from one limited aspect relating to the regulatory committee,
the Panel has not addressed its claim that the EC measure as a whole accords less favourable
treatment to imported products bearing an EC-defin ed GI than to like domestic products bearing an
EC-defined GI, contrary to Article III:4 of GATT 1 994. It requests that the Panel address the claim
and reflect its finding on the "EC measure as a whole" in the conclusions.
6.10 The Panel notes that Australia made claims regarding the "E C measure as a whole" under
both the TRIPS Agreement and GATT 1994. With respect to the claims under the TRIPS Agreement,
Australia referred in paragraphs 195 to 205 of its first written submission to five aspects of the
Regulation which the Panel dealt with separately in sub-sections B.2, B.1, E.5, B.3 and E.3 of the
findings, respectively. With respect to the claims under Article III:4 of GATT 1994, Australia listed
eight bullet points at paragraph 177 of its firs t written submission and referred to their cumulative
effect at paragraph 178. The Panel dealt with th e third to sixth points in sub-section B.1 of the
findings, the seventh point in sub-section B.2 and the eighth point in sub-section B.4. The Panel has
added paragraphs 7.274 and 7.275 of the final report to explai n why it is unnecessary to consider
further the first and second points or the cumulativ e effect, and revised paragraph 7.66, numbered
7.68 in the final report, with respect to the labelling requirement, which was not mentioned in the first
written submission in support of this claim. As fo r the conclusions, the Panel specifically sought the
parties' views on whether they sought separate rulings on the procedural aspects of the Regulation or a
ruling on the Regulation as a whole, in Panel questi on No. 49. In its response, Australia requested
"that the Panel's findings be sufficiently detailed so as to facilitate a positive solution to the current
dispute". The Panel has identified specific aspects of the Regulation in its conclusions which it has
found inconsistent with a covere d agreement in order to enable the European Communities to
implement the recommendation. The Panel has not added a separate conclusion on the measure as a
whole as this would not facilitate a positive solution to this dispute.
Endorsement of arguments by co-complainant

6.11 Australia requests that the Panel amend paragraphs 7.67 to 7.75. It comments that it did
endorse generally all U.S. arguments, and did not ju st purport or attempt to endorse the arguments.
This is a separate issue from whether the Panel cons idered any arguments that arose from this general
endorsement. Australia recalls that a panel is not bound to accept the arguments of any party and is
free to develop its own legal reasoning. Where ther e is a single panel, but multiple complainants and
multiple reports, a panel can use arguments put to it by either party in assessing common claims. In
this context, Australia has the right – either on grou nds of efficiency or by way of endorsing either
similar or alternative arguments – to endorse, in ge neral terms, arguments by the other complainant in
this dispute.

6.12 With respect to the timing of the general endor sement, Australia recalls the Appellate Body's
comment in India – Patents (US) (at para. 88) that arguments – as distinct from claims – "are set out
and progressively clarified in the first written s ubmissions, the rebuttal submission and the first and
second Panel meetings with the parties as a case proceeds" and asserts that, in this dispute, the timing
of the general endorsement can be readily explained when the appropriate context is recalled. At the
time of the first opening statement, Australia en dorsed U.S. arguments relating to the European
Communities' obligations concerning the overlapping claims that Australia and the United States had
made with regard to national treatment (under the TRIPS Agreement and GATT 1994) and trademark
rights. The rest of Australia's first opening statem ent covered mainly claims that had not been made
by the United States, namely, cl aims under Article 22.2 of the TR IPS Agreement and under the TBT
Agreement. Australia repeated this endorsement at the opening of the second panel hearing. During
the second hearing, however, the European Communiti es sought to make much of the fact that the
United States and Australia did not have exactly th e same arguments and that this meant that the
European Communities' arguments were correct. It was in seeking to reject the European
Communities' attempt to make more of the different arguments by the complainants that Australia
responded by clarifying that it endorsed all of the United States' arguments.
6.13 Australia accepts that it could have made clearer that its general endorsement was on the basis
of endorsing the United States' arguments as alterna tive arguments wherever these were inconsistent
with Australian arguments. However, Austra lia maintains that any differences between the
United States' and Australian arguments are not materi al to the matter before the Panel. For example,
regardless of the interpretation of Article 24.5 of the TRIPS Agreement, both Australia and the
United States agree that it does not provide the European Communities with an excuse for its breach
of Article 16.1 of the TRIPS Agreement.
6.14 Australia refers to the statement in para graph 7.72 that the Panel (or the European
Communities) should not have to sift through th e United States or Australian arguments looking for
any inconsistency in order to understand the Australian case (where it intersects with the general
endorsement of the United States' arguments). The Panel's comments may indicate that it does not
consider a careful sifting of all of the arguments put to it, including Australia 's, to be a necessary and
integral part of its role. As such a view would be clearly contrary to Article 11 of the DSU, Australia
requests that the statement be amended or withdrawn.
6.15 Australia refers to the statement at paragra ph 7.74 and asserts that the Panel attributes,
without evidence, certain motives to Australia a nd, as a consequence, impugns Australia's conduct.
However, it asserts that the Panel's assessment of Australia's motives is wrong and requests that the
statement be withdrawn. While the Panel is right to ensure that a respondent's due process rights are
protected, Australia comments that it is also incumbent on the Panel to respect the rights of a
complainant and to ensure a fair hearing for all pa rties to a dispute. Th e European Communities did
not object to a single panel being established by the DSB. Further, the European Communities was
given extra time to prepare its first written submission, notwithstanding the largely overlapping nature
of the claims by both complainants. In the hearings, the European Communities was allowed to speak
as long as it wished, to introduce irrelevant material late in the process, to continuously reiterate
immaterial points, and to waste time by asking the complainants a large number of irrelevant
questions. This hardly suggests that the Europ ean Communities has suffer ed in any way from the
single panel considering, for both reports, all the argum ents put to it by either of the complainants.
Further, as the European Communities had ample opportunity to counter the United States' arguments,
Australia's general endorsement of the United St ates' arguments did not increase the "case" the
European Communities had to answer or that the Panel had to consider.
6.16 The European Communities expresses regret that Australia, in its comments on
paragraphs 7.72, 7.74 and 7.75, summarily dismi sses arguments made by the European Communities
as irrelevant or immaterial.

6.17 The Panel agrees that a complainant can endorse a co-complainant's arguments. However, the
Panel does not consider that Australia's comment in its closing statement at the second substantive
meeting that "Australia endorses all of the argum ents put forward by the United States" was a
sufficient basis for the Panel to consider that Australia's arguments as presented earlier were modified,
given that there were material differences betw een those arguments and no information was provided
as to how they should be reconcile d. Paragraphs 7.71 and 7.72 alr eady explained this point but the
Panel has expanded them into paragraphs 7.73 to 7.79 in the final report to illustrate the problem. The
Panel has examined the parties' arguments in the course of its objective assessment under Article 11
of the DSU but it does not undertake tasks inconsiste nt with that function. The Panel has expanded
paragraph 7.72, numbered 7.79 in the final report, for the avoidance of doubt.
6.18 The Panel has been mindful of the due process rights of all parties in these proceedings. The
European Communities' consent to the establishment of a single panel did not relieve Australia of its
burden of making a prima facie case in support of all its claims.
6.19 The Panel takes note of Australia's explana tion of the surrounding circumstances.
Paragraph 7.74 reflected the oral interventions at the second substantive meeting. If Australia
intended to respond to the European Communities' em phasis of differences between the complainants'
respective arguments, then the mere assertion that t hose differences were not material was ineffective,
and the endorsement would have transformed di fferences between the complainants' cases into
contradictions within Australia's own case. Au stralia's interim review comments do not present any
circumstances that would justify the Panel taki ng a different approach but, rather, point out
differences between the arguments Australia pres ented itself and those of the United States.
Therefore, the Panel has retained the first and second sentences of paragraph 7.74, numbered 7.81 in
the final report, but deleted the following discussion. The Panel has also corrected paragraph 2.15.
The phrase "[w]ithout prejudice to international agreements"

6.20 The European Communities requests the deletion of paragraphs 7.132 to 7.137 because it
did not argue that the application of Article 12 of the Regulation would prejudice "the EC's
obligations under the TRIPS Agreement ". It quotes paragraph 66 of its first written submission and
paragraph 43 of its first oral statement and asser ts that "[t]hese statements do not contain any
indication that the EC consider that its obligati ons under the TRIPS Agreement would be prejudiced
by the application of Article 12 of Regulation 2081 /92. Rather, the reference to the obligation to
provide protection for geographical indications was clearly intended as a reference 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 Communiti es agrees that it is true that it did not provide
an explicit response to Panel question No. 20 but it asserts 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' submissions, 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 7.247 for
the same reason and because it is unnecessary to the legal analysis which precedes it.
6.21 Australia responds that, in its view, the Panel's summation of the arguments put forward by
the European Communities is accurate . Australia notes that the stat ements quoted by the European
Communities from its first written submission, first or al statement and response to question No. 94,
in fact concern what Australia has referred to in this dispute as "TRIPS-defined GIs" of which the

"EC-defined GIs" covered by the Regulation are ge nerally a subset. However, the dispute has not
concerned the European Communities' implementati on of its obligations under the TRIPS Agreement
and GATT 1994 concerning TRIPS-defined GIs more generally, it has concerned the European
Communities' implementation of its obligations in relation to EC-defined GIs. Australia suggests that
the relevance of the European Communities' argume nts might be better understood if the Panel were
to recall the relevance of the distinction between a "TRIPS-defined GI" and an "EC-defined GI". At
the same time, however, Australia is of the view that the Panel's analysis of the arguments put forward
by the European Communities is entirely correct. Since the allegedly incorrect nature of the
statements was the only basis on which the European Communities requested that paragraphs 7.132 to
7.137 be deleted and paragraph 7.247 be amended, Australia suggests that the paragraphs be retained.
6.22 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 7.139 to 7.145 in the final repor t, and deleted the other paragraph
without affecting the preceding legal analysis.
6.23 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.
Specific definitions of "nationals"

6.24 Australia comments that, in view of the Panel's ruli ng that it cannot be considered to have
endorsed all of the United States' arguments in its closing statement at the second substantive meeting,
Australia has not argued that the European Commun ities is a separate customs territory Member of
the WTO within the meaning of footnote 1 to Arti cle 1.3 of the TRIPS Agreement or that, as a
consequence, a special regime to determine nationa ls applies. Notwithstanding that Australia has
pointed to some seeming anomalies in the Europ ean Communities' responses to the United States'
arguments on the issue in Australia's response to Panel question No. 104, Australia's views on the
meaning of the term "national" are as set out in its response to Panel ques tion No. 23 (and referred to
in paragraph 7.146). It is not contested by Austra lia that the determination of which persons are EC
nationals is generally a matter for determination by the European Communities under its own law.
6.25 The Panel had observed that Australia's views on the meaning of "national", as reflected in
the interim report, include references to persons w ho are domiciled or who have a real and effective
industrial or commercial establishment in a separ ate customs territory Member of the WTO.
Consequently, the Panel considered it necessary to ad dress the applicability of that specific definition.
However, in light of Australia's confirmation in its interim review comments that it did not argue that
the European Communities is a separate customs terri tory Member of the WTO, the Panel has revised
paragraph 7.194, numbered 7.201 in the final report, and deleted the reasoning regarding that issue.

Examination of applications for registration

6.26 The European Communities requests the amendment of para graph 7.307(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 co mments that paragraph 7.307 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.
6.27 Australia believes that the Panel's statement at paragraph 7.307 is accurate. It does not
preclude information concerning the domestic law of the country of origin being one of the criteria
referred to in Article 12a(2)(a) of the Regulation. Consequently, Australia suggests that there is no
need for any change to paragraph 7.317. While the Panel may choose to elaborate its reasoning in
respect of the consequences of Article 24.9 of the TRIPS Agreement, Australia does not believe such
elaboration is necessary to the resolution of the dispute.
6.28 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 7.307, numbered 7.303 in the final
report, which is the logical place for it. The Panel considers it inappropriate to make further findings
in the paragraph. The Panel's findings on tran smission 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 paragraph 7.314 of the final report.
6.29 The Panel has also replaced, where appropriate, the word "verification" 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 appl ication procedures and th e consideration of the
national treatment claim under the TRIPS Agreement.
Article 2.1 of the TBT Agreement
6.30 Australia requests that the Panel review the reasoni ng set out in paragraphs 7.475 to 7.484,
and elaborate its reasoning for the first sentence of paragraph 7.469 and the last sentence of paragraph
7.471. It comments that the Panel's analysis of the "less favourable treatment" elements of this claim
seems premised on a misunderstanding of the basis of Australia's claim, which is the fact that
Article 12(2) of the Regulation mandates – in the specified circumstances – a labelling requirement
for an imported product bearing a GI that is no t similarly mandated for a domestically produced
product bearing a GI. Further, that mandated di fferential treatment results in less favourable
treatment for an imported product bearing a GI. Au stralia comments that, as the Panel noted, the
challenge is made to the relevant provision "as such ". Thus, the fact that the European Communities
may have the discretion to impose the same labelling requirement on a domestically produced product
in the specified circumstances does not overcome th e inconsistency of the labelling requirement set
out in Article 12(2) of the Regulation with the European Communities' national treatment obligation
under the TBT Agreement. If the Panel concludes th at some revisions are necessary, it requests that
the Panel complete its analysis of this claim. On the issue of "like products", it requests the insertion
in paragraph 7.471 of an example from its arguments.

6.31 The European Communities opposes Australia's request regarding "like products". The
example given is one on which no discussion has taken place, and this is an issue on which Australia
has made no claims or arguments.
6.32 Regarding marks of origin, the European Comm unities requests the deletion of point (b) of
paragraph 7.469, with which it does not agree. Th e use of the words "made 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 the references in that pa ragraph to indication "in pictorial matter" nor by
indication "alongside the GI" nor how this is rele vant. Given the Panel's findings, it considers it
unnecessary to reach a conclusion on this issue.
6.33 The Panel notes that the interim report alread y explains why Australia's argument does not
demonstrate any difference in treatment but has ma de an addition to paragraph 7.469 in the final
report. The reasoning in the paragraphs identified by Australia forms the basis for the statements it
references in paragraphs 7.465 and 7.467 and the Panel sees no need to elaborate. The Panel has also
retained the factual point in the paragraph, numbered 7.461 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
6.34 The European Communities considers that it would be useful to recall in paragraph 7.530,
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 registered name or names in translation.
6.35 The Panel has added a footnote to clarify the scope of the positive right to use a GI with
respect to translations and has also clarified the im portance of the fact that a trademark may continue
to be used under Article 14(2) of the Regulatio n. However, the Panel declines to amend the
referenced paragraph as requested because the prot ection granted by Article 13 of the Regulation is
already addressed elsewhere and it has not been s hown to what extent Article 13(1)(b) covers
translations.
Exceptions in trademark legislation with respect to the use of GIs
6.36 The European Communities comments that the assertion in paragraph 7.569 to the effect
that the its trademark legislation provides no excep tions 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".
6.37 Australia notes that the European Communities' comme nt is premised on the basis that an
"indication concerning the ... geographical origin ... of goods" necessarily includes a GI, which is not
always the case. In any case, the European Communities' comment intersects with the issue raised by
Australia concerning whether a TRIPS-defined GI – a nd thus an EC-defined GI – can be analogous to
"a descriptive term" within the meaning of Article 17 of the TRIPS Agreement.
6.38 The Panel takes note of the European Commun ities' factual correction and has deleted the
paragraph.

Scope of a limited exception for GIs in translation

6.39 The European Communities suggests a redraft of paragraph 7.668 for the following reasons:
(a) lest it imply that the European Communities agr ees with the last sentence of paragraph 7.666;
(b) to include all the relevant limitations to the exception in Article 14(2) of the Regulation relied
upon by the Panel including "what is undoubtedly the most crucial one, namely that the trademark
owner maintains the right to prevent any confusi ng uses by all parties except the GI holders"; and
(c) because a registration under the Regulation may sp ecify more than one linguistic version of the
geographical indication and the last part of the second sentence of paragraph 7.668 may suggest
otherwise.
6.40 Australia requests that the argument attributed to it in the first sentence of paragraph 7.668
should be referenced or deleted. Should the Pane l retain the paragraph, Australia notes that the
suggested re-draft by the European Communities eliminates the final point of the second sentence that
registration "does not cover the name where rendered differently in another language". In Australia's
view, the Panel's finding on this point is an accurate summation of the Eu ropean Communities' own
description of the effect of registration of a term as a GI, and it cites various statements in the
European Communities' submissions. Australia su ggests that any redraft of the existing second
sentence of the paragraph retain the point, give n the arguments actually made by the European
Communities.
6.41 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 dele ted the reference to Australia, and added references
in the succeeding paragraph and elsewhere to the lim itation provided by certain directives which the
European Communities explained during the proceeding.
Descriptive terms
6.42 Australia requests that the Panel elaborate its r easoning at paragraph 7.689 which assumes
that a GI is analogous to a descriptive term within the meaning of the example in Article 17, taking
account of the arguments put forward by the parties, including those made by Australia in relation to
the design and architecture of the TRIPS Agreement.
6.43 The Panel has revised this and the preceding pa ragraph for clarity and added a reference to
certain directives which the European Communitie s explained during the proceeding that provide
further explanation of the legitimacy of certain interests. However, further elaboration on
descriptiveness is unnecessary given that the Panel h as expressly recognized that GIs are intellectual
property rights, has not found that GIs are purely descriptive terms, and has noted the express
requirements in Article 2(2) of the Regulation that GIs registered under the Regulation must describe
certain matters.
Comparison of exceptions provisions

6.44 Australia requests that paragraph 7.679 be substa ntially revised as it is not possible to
consider differences in the language of the vari ous provisos in isolation from the nature of the
minimum standards for the intellectual property rights concerned.
6.45 The Panel has interpreted Article 17 in light of the minimum standard s of which it forms a
part, and has noted differences from rights granted by other forms of intell ectual property protection
where appropriate elsewhere. The Panel consid ers an observation of how the text differs from
analogous texts in the same agreement to be re levant and does not base its reasoning on that

observation alone. The Panel has modified the para graph, numbered 7.671, in light of the comment
received.
Articles 10bis and 10ter of the Paris Convention (1967)
6.46 Australia comments that the reasoning as currently expressed in paragra phs 7.729 to 7.733
seems to indicate that a responding party's assertion that it does not understand a claim is of itself a
sufficient defence to a claim. Australia requests th at the Panel review the content of these paragraphs
and make appropriate amendments. In Australia's view, the key issue is whether the Panel understood
Australia's claim and arguments and, if it did not, the steps it took to undertake an objective
assessment. Moreover, it asserts that when the European Communities said it could not understand
the claim because it could not see how a situation could arise where there would be an act of unfair
competition, that this indicated that the European Communities did understand the claim, but did not
agree that a relevant circumstance could arise. This does not affect the relevant obligation under the
TRIPS Agreement.
6.47 The Panel takes note of Australia's comments and has expanded and revised the paragraphs,
numbered 7.721 to 7.726 in the final report, to remove this impression and to clarify the full extent of
the argumentation in support of this claim on which the Panel was called upon to make its assessment.
Individual registrations
6.48 Australia requests that the Panel elaborate its reasoning in paragraph 7.753. It seeks
clarification whether Australia's failure to specify any individual registrations in respect of which it
requires relief affected the Panel's conclusion, and whether the Panel exercises judicial economy
concerning ongoing registrations.
6.49 The Panel has reworded its existing reasoning in the paragraph numbered 7.750 in the final
report. Australia's failure to specify any particular individual registration effected after the date of
establishment of the Panel was relevant to the exer cise of judicial economy on the preliminary ruling
but not the conclusion on the claim, and this has been clarified in paragraph 7.26 for the avoidance of
doubt.
Conclusions
6.50 Australia asks whether the Panel exercises judicial economy on the claims under Article 2(1)
of the Paris Convention (1967), as incorporated by Article 2.1 of the TRIPS Agreement.
6.51 The Panel has revised paragraph 7.252 to state its reasons for exercising judicial economy in
relation to this provision, and reflected this in its conclusions in paragraph 8.1.
Suggestion by the Panel on a way to implement its recommendation
6.52 Australia comments that it may assist the resolution of the dispute if the Panel were not to
make any recommendation on how the European Communities could bring its measure into
conformity. In Australia's view, amending the Regu lation to accord with the interpretation that the
European Communities submitted to the Panel w ould not necessarily bring the measure into
conformity, even with respect to the reciprocity and equivalence conditions. This is because the
European Communities consistently argued that th e reciprocity and equivalence conditions of the
Regulation were not inconsistent with the Eur opean Communities' national treatment obligations
under the TRIPS Agreement. In addition, Australia is concerned that a recommendation by the Panel
in respect of just one fi nding could be seen to suggest that the Pa nel's other findings of inconsistency
are of lesser importance.

6.53 The European Communities expresses surprise at Australia's suggestion as it would appear
that a clarification that the European Commun ities does not apply conditions of reciprocity and
equivalence would remove the concern expressed by Australia regarding the protection of its GIs
under the Regulation. As regards Australia's argumen t that "the EC consistently argued that the
reciprocity and equivalence conditions of the Regulat ion were not inconsistent with the EC's national
treatment obligations under the TRIPS Agreemen t", the European Communities recalls that it
conceded that the application of such conditio ns would be incompatible with the GATT.
Furthermore, the European Communities fails to se e the relevance of Australia's comment in the
context of the discussion of paragraph 8.5, which con cerns an issue of implementation. Finally, as
regards Australia's concern that certain of the Pa nel's findings should not be regarded as being of
lesser importance than others, the European Comm unities fails to see why a suggestion made by a
Panel in respect of one of its findings would indicat e that this finding is more or less important than
other findings. For these reasons, the European Communities requests that paragraph 8.5 not be
deleted.
6.54 The Panel has modified its suggestion in para graph 8.5 but, on the basis of the European
Communities' remarks on interim review, considers it helpful to retain it. This suggestion does not
imply that the Panel's other findings of inconsistency are of lesser importance.
Other requests for review

6.55 Australia also requested deletion of paragraphs 7. 64, 7.65 and 7.357 and footnote 526, and
modifications to paragraphs 7.194, 7.214, 7.439, 7.473, 7.515 to 7.523, 7.589, 7.621, 7.700 and 8.2
and footnotes 565 and 591. It also makes some clerical observations. The Panel has modified its
report in light of those comments.
6.56 The European Communities also requested modification of paragraphs 8.1 and 8.2. The
Panel has modified those paragraphs and paragraph 7.758 in light of those comments.
VII. FINDINGS
A. PRELIMINARY 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

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 Annex B-1 to this final report.]

 (...) 11

 3. Australia is of the view that its requ est for establishment of a panel fully complies
with the requirements of Article 6.2 of the DSU. It submits that the substantive basis of the
European Communities' request for a preliminary ruling should be denied in full.
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.
 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

 (...) 14

 (c) Australia's request for establishment of a panel
15

 (i) Identification of the sp ecific measure at issue

 23. Australia's request, in its fourth paragra ph, identifies the following measures at issue:

"The measure at issue is Council Re gulation (EEC) No. 2081/92 of 14 July
1992 on the protection of geographical indications and designations of origin
for agricultural products and foodstuffs , any amendments thereto (including
Council Regulation (EC) No. 692/2003 of 8 April 2003, published in the
Official Journal of the European Union No. L99 of 17 April 2003), and
related implementing and enforcement measures ('the EC measure'). The EC

11 Note: paragraph 2 of the preliminary ruling dealt with the United States' request for establishment of
a panel.
12 ( footnote original) Australia's comments on EC request, dated 15 March 2004 ("Australia's
response"), paras. 1 and 48. [Note: those comments are attached as Annex A-1 to this final report.]
13 (footnote original) This is consistent with the approach of the Appellate Body in US – Carbon Steel.
14 Note: paragraphs 7-22 of the preliminary ruling dealt with the United States' request for
establishment of a panel.
15 (footnote original) Document WT/DS290/18.

measure lays down and implements rules on the protection of designations of
origin and geographical indications fo r agricultural products and foodstuffs,
excluding wines and spirits."
 Council Regulation (EEC) No. 2081/92 and any amendments thereto

 24. Australia's request identifies a particul ar 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, including one amendment which is identified by the name of
the authority which adopted it, by its number, by its date of adoption, by its full title and by
the date and place of its publication. This is a specific measure, 16 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.17

 25. 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)
26. 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
measures at issue". They do not require the id entification of the "specific aspects" of these
"specific measures."
 "related implementing and enforcement measures"

 27. Australia's request identifies, in a ddition to the regulation and any amendments
thereto, "related implementing and enforcement measures". This phrase expressly refers to
measures which implement and enforce Regul ation (EEC) No. 2081/92, as amended. The
word "related" is not used in isolation in the request.

 28. 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

16 (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 implement, supplement and amend that regime".
17 (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.

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.
18 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. 19 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 Australia's request for establishment of a panel.20

 29. For these reasons, on the basis of the f acts available to us, the Panel rules that
Australia's 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 the complaint sufficient to present the problem
clearly

 30. Australia's request, in its fifth paragr aph, sets out in eight bullet points alleged
inconsistencies with the cove red agreements, by providing narrative text quoting or
paraphrasing treaty text accompanied by provisions of the covered agreements identified by
number. The numbered provisions identify every article of every covered agreement at issue
and, in most cases where there are paragraphs within an article, such paragraphs are
identified.

 31. The European Communities takes issue with Australia's reference to whether
Regulation No. 2081/92 is a "technical regulation" within the meaning of Annex 1 to the TBT
Agreement because the definition does not impos e any obligations which could have been
violated.
21

 32. The Panel notes that the definition of "technical regulation" per se is not an obligation
but rather defines a term used in other provisi ons of the TBT Agreement set out in Australia's
request. The reference to the definition actually presents the problem more, rather than less,
clearly because it explains why Australia consider s that the measures at issue are subject to
the relevant obligations.

 33. The European Communities also takes issu e with the reference to Article 2 of the
TRIPS Agreement (incorporating by reference Articles 10, 10 bis and 10 ter of the Paris
Convention). It argues that Articles 10, 10 bis and 10 ter are "complex provisions" divided
into various paragraphs, and imposing numerous distinct obligations.

 34. Australia replies that, irrespective of the accuracy of the European Communities'
portrayal of these provisions, its claim is that the measures at issue diminish the legal
protection for trademarks under the TRIPS Agreement, contrary to all aspects of these cited
provisions.
22

18 (footnote original) Exhibit EC-1.
19 (footnote original) EC request, supra at 10, para. 30.
20 (footnote original) See supra at 16.
21 (footnote original) EC request, supra at 10, para. 63.
22 (footnote original) Australia's response, supra at 12, para. 25.

 35. 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 may be sufficient to meet the standard of
Article 6.2 of the DSU under certain circumstances in a particular case.24

 36. With these considerations in mind, the Panel now examines the articles to which the
European Communities has referred in Australia's request for establishment of a panel. The
Panel notes that, on their face, the provisions w ithin each of these articles are interlinked and
very closely related, and that the separate paragraphs do not necessarily create distinct
obligations. In particular:

 (a) Article 10 of the Paris Convention (1967) extends the application of the provisions of
Article 9, which relates to seizure of goods , to false indications of source. The
second paragraph of Article 10 sets out a deeming provision for the purposes of the
first paragraph;

 (b) Article 10 bis of the Paris Convention (1967) sets out a single obligation in
paragraph (1) regarding unfair competition which is clarified in, and therefore closely
related to, paragraphs (2) and (3); and

 (c) Article 10 ter of the Paris Convention (1967) sets out in paragraph (1) an obligation
regarding legal remedies to repress all the acts referred to in Articles 9, 10 and 10 bis,
and in paragraph (2) an obligation regard ing action to repress the same acts by
particular types of legal person.

 37. The European Communities al so takes issue with the reference to "Articles 41 and/or
42 of the TRIPS Agreement". It submits that Ar ticle 41 is a "complex provision" subdivided
into a number of paragraphs, which contain a num ber of different obligations; that Article 42
comprises several sentences establishing distinct obligations; and that it "does not understand
the 'and/or' which seems to indicate that Ar ticles 41 and 42 of the TRIPS Agreement are
somehow alternative obligations".
25

 38. Australia replies that its reference to the essential elements of the relevant provisions
is sufficient in this dispute to shed light on the nature of the obligations at issue in relation to
the specific measures at issue. It also stat es that, in accordance with common usage, the
expression "and/or" applies to all of the provisions cited.
26

 39. The Panel makes the following observations:

 (a) Article 41 of the TRIPS Agreement contai ns general obligations which relate to acts
of infringement of intellectual property rights covered by this Agreement. The
accompanying narrative text of Australia's re quest clarifies that this claim is made
because the measure at issue allegedly "diminishes the legal protection for trademarks
under the TRIPS Agreement". The general obligations in Article 41 relate to
"enforcement procedures as specified in [P art III]". Certain of those enforcement

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.
25 (footnote original) EC request, supra at 10, para. 57.
26 (footnote original) Australia's response, supra at 12, paras. 23 and 24.

procedures, namely under Article 42, are also raised which clarifies that the general
obligations are the subject of a claim in re lation to these procedures. In particular,
Article 42 is entitled "fair and equitable pr ocedures" which is the subject of an
obligation in Article 41.2;

 (b) Article 42 of the TRIPS Agreement cont ains closely related obligations concerning
fair and equitable procedures. The accompanying narrative text clarifies that this
claim is made in relation to "the lega l protection for trademarks under the TRIPS
Agreement". The requirements of each senten ce 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; and

 (c) the use of the term "and/or" at the end of a series or list of items connected by
commas is a standard means of indicating that all items in that series or list may apply
cumulatively or separately.
27 There is nothing in the context of Australia's request for
the establishment of a panel that would indi cate that it refers only to the last two
items in the series. There is nothing which prevents a complainant making claims in
the alternative. This puts the respondent on notice that the co mplainant effectively
makes all these claims.

 40. 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, rath er than just the claims, of Australia.
28 That being
said, the Panel wishes to assure the European Communities that it is fully entitled to know the
arguments of Australia during the course of the proceedings . Those arguments must be set
out and may be clarified in Australia's submissions. 29 However, Article 6.2 of the DSU does
not require those arguments to be set out in the request for establishment of a panel.30

 41. 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.
31 Our examination of Australia's request fo r establishment of a panel as a whole, in
the light of Australia's and the European Communities' respective communications to the
Panel to date and the relevant provisions of th e covered agreements, leads us to believe that
the request for establishment of a panel was su fficiently clear for the European Communities
to begin preparing its defence.

 42. For these reasons, on the basis of the f acts available to us, the Panel rules that
Australia's request for establishment of a panel did not fail to provide a brief summary of the
legal basis of the complaint sufficient to pr esent the problem clearly in accordance with
Article 6.2 of the DSU.

27 (footnote original) The Oxford English Dictionary defines "and/or" as "a formula denoting that the
items joined by it can be taken either together or as alternatives". ( A Supplement to the Oxford English
Dictionary, R.W. Burchfield (ed.) (Clarendon Press, 1972, reprinted, with corrections, 1980, Vol. I).
28 (footnote original) See the Appellate Body reports in EC – Bananas III , para. 141; Korea – Dairy,
29 (footnote original) See supra at 24.
30 (footnote original) See the Appellate Body report on Korea – Dairy, para. 123.
31 (footnote original) See Appellate Body report on Thailand – H-Beams, para. 88.

 (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.
32

 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.33 In this respect, the Panel has found that the complainants' requests for
establishment of a panel were sufficiently cl ear for the European Communities to begin
preparing its defence. 34 Therefore, the Panel considers that it is not necessary to make a
separate ruling on this issue, as presented by the European Communities in its request.35

 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 submissions 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.
36

 47. The Panel therefore considers that the European Communities has raised its concerns
in a timely manner.37

 (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]

7.3 The Panel stated expressly that its 5 April 2004 preliminary ruling was based on the facts
available to it at that time.
38 In this final report, the Panel makes further findings on the sufficiency of

32 (footnote original) EC request, supra at 10, para. 4.
33 (footnote original) See supra at 31.
34 (footnote original) See para. 41.
35 (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.
36 (footnote original) See the minutes of those meetings in documents WT/DSB/M/155, para. 75 and
M/156, para. 32, reproduced in Exhibits EC-2 and 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.
37 (corrected footnote original) This does not imply that these issues could not be raised later in the
proceedings.
38 See paras. 6, 29 and 48 of the preliminary ruling set out above.

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.39
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."
40
7.5 The Panel ruled that Article 6.2 did not require the identification of the "specific aspects" of
the specific measures at issue. 41 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) Australia's principal 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.
42 This is one
of the principal features of the Regulation. It was clear from the request for
establishment of a panel that the complain ant intended to raise these aspects of the
Regulation; and
(b) Australia's principal claim concerning the le gal protection for trademarks (considered
in Section VII:D of this report) is based on Article 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 complainan t intended to raise this article of the
Regulation, as the European Communities itself confirmed in its request for a
preliminary ruling.
43
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

39 This is consistent with the approach of the Appellate Body in US – Carbon Steel, para. 127.
40 Quoted at para. 25 of the preliminary ruling set out above.
41 See para. 11 of the preliminary ruling set out above.
42 To the extent that the claims concern the actions of EC member State authorities in the verification
and transmission of applications and objections, the European Communities expressly referred to these actions
in its request for a preliminary ruling, supra at 10, para. 31. It also inform ed the Panel during this proceeding
that Community laws are generally not executed through authorities at Community level but rather through
recourse to the authorities of its member States: see para. 7.148 below.
43 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, in its request
for a preliminary ruling, supra at 10, paras. 47 and 61. The only aspect of the Regulation which it raised in this
respect in its request for a preliminary ruling, that it did not later raise in its defence, was Article 14(1): see
Section VII:D of this report.

the Panel. As a consequence, the EC has been seriously hampered in its efforts to
prepare its defence."
44
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"; and
"Like the US claims, Australia's claims [regarding inter alia national treatment under
Article 3.1 TRIPS and Article III:4 GATT] are limited to the restatement of language
already contained in treaty provisions, and therefore encounter the same objections."
45
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. 46 After consulting the European
Communities' first written submission, and inform ation submitted by Australia, the Panel is now
aware that prior to the date of the request for establishment of a panel, the European Communities had
already presented in the Council for TRIPS in September 2002 a statement that responded specifically
to the argument that national treatment under the TRIPS Agreement applied to geographical
indications. In that statement, the European Co mmunities quoted the texts of Article 3 of the TRIPS
Agreement and Article III:4 of GATT 1994 and argu ed that "[t]hose entitled to rights under TRIPS
are nationals". This is also an important defen ce set out in the European Communities' first written
submission, in which it is argued that "[t]he conditi ons for the registration of geographical indications
do not depend on nationality".47 This supports the Panel's assessment that the relevant wording of the
request for establishment of a panel was sufficien tly clear for the European Communities to begin
preparing its defence of the first national treatment claim.48
7.9 Third, the Panel notes that, in any event, Austra lia's other claims (considered in Section VII:E
of this report), brought under the provisions discuss ed in paragraphs 36 and 39 of the preliminary
ruling, were not pursued in such detail. The Pane l has found no prima facie case or rejected 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 no longer in force at the date of establishment of the Panel
(a) Main arguments of the parties
7.10 Australia challenges Council Regulation (EEC) No. 2081/9249, including not only the current
version of that Regulation as in force as at the date of establishment of the Panel 50 but also two prior
versions of the Regulation as originally adopted in 1992 and as amended in 1997.51 Australia's claims
refer variously to the current version and these two prior versions of the Regulation.
7.11 The European Communities responds that Australia's request for establishment of a panel
does not make it clear that Australia intends to challenge several versions of the same measure

44 European Communities' request, supra at 10, para. 68.
45 Ibid,, paras. 44 and 61.
46 See para. 41 of the preliminary ruling set out above.
47 European Communities' first written submission, paras. 114 and 123-126.
48 See also para. 6.5 above.
49 Australia's first written submission, para. 20.
50 Amendment effected by Council Regulation (EC) No. 692/2003, set out in Exhibit COMP-1h.
51 Australia's first written submission, para. 18, defines "Regulation No. 2081/92" "#1", "#2" and "#3".

resulting from subsequent amendments made over time. It also submits that the measure at issue is
the Regulation as in force at the time the Panel was established and that an analysis of historical
versions is not useful for the purposes of settling the present dispute.52
(b) Consideration by the Panel
7.12 The Panel notes that Australia's request for establishment of a panel specifies the Regulation
as well as "any amendments thereto, (including C ouncil Regulation (EC) No. 692/2003 ...)". Whilst
this wording can be read to en compass the original version of the Regulation, and a subsequent
amended version, which are no longer in force, it is unnecessary to rule on whether those measures
are within the Panel's terms of reference, for the reasons given below.
7.13 In its submissions, Australia seeks relief in respect of these prior versions of the Regulation.
For example, it claims that registration procedures under versions of Articles 7(4) and 14(1) of the
Regulation, which were deleted and replaced in April 2003, were inconsistent with the TRIPS
Agreement.53 Australia expressly seeks "rulings and r ecommendations" from the Panel in respect of
prior versions of the Regulation to the degree nece ssary to establish the extent to which individual
registrations were inconsistent w ith the covered agreements, and therefore the extent to which those
registrations continued the alleged violations. It cites Articles 3.7, 11, 12.7 and 19.1 of the DSU in
support of its request.54
7.14 The Panel notes the distinction between provi sions of the Regulation which established
procedures, but are no longer in force, and individua l registrations effected under them. With respect
to the former, the Panel recalls th at its mandate to make recommendati ons in this dispute is found in
Article 19.1 of the DSU, which foresees only one type of recommendation, namely, that a Member
bring a measure into conformity with a covered ag reement. It is obvious that versions of the
Regulation cannot be brought into conform ity if they have already ceased to exist. 55 Therefore, the
Panel will not make any recommendation with respect to prior versions of the Regulation that are no
longer in force.
7.15 However, individual GI registrations effected under prior versions of the Regulation remain in
force. There is, in principle, no reason why it should not be possible to challenge them under the
TRIPS Agreement. They are measures which may aff ect the operation of that agreement. Australia's
request for establishment of a panel specifically identified "[the Regulation and any amendments
thereto] and related implementing ... measures" as pa rt of the measure at issue. Registrations under
Articles 6 and 12b of the Regulation, and under the former Article 17, constitute such implementing
measures. Therefore, they are within the Panel's terms of reference. 56 Given that they remain in
force, the Panel can make a recommendation that th e respondent Member bring them into conformity
with a covered agreement. Therefore, the Panel ma y examine these individual registrations as part of
the matter before it.
7.16 The Panel wishes to note that, in certain respects, Australia's description of provisions of prior
versions of the Regulation assists it in understand ing provisions of the current version of the
Regulation. For example, the description of Articl es 12 and following of the Regulation prior to its
amendment in April 2003 assists the Panel in understanding the European Commission's

52 European Communities' first written submission, paras. 13-20. The European Communities
addressed the individual registrations on the basis of the preliminary ruling by the Panel but reserved its right to
raise this issue in the context of a possible appeal: see its second oral statement, para. 105 and fn. 80.
53 Australia's first written submission, paras. 89 and 86, respectively.
54 Australia's first oral statement, paras. 13-14 and its response to Panel question No. 88.
55 This was also the approach of the Appellate Body in US – Certain EC Products, at para. 81.
56 This is subject to comments in para. 7.26 concerning individual registrations adopted after the date of
establishment of the Panel. See also the Panel's conclusion at para. 7.751 below.

contemporaneous explanations of the Regulation, as discussed in Section VII:B of this report.
57
Moreover, a description of the Regulation as it stood prior to 1 January 1995 would be essential in
applying Article 24.3 of the TRIPS Agreement, which refers to a state of affairs "immediately prior to
the date of entry into force of the WTO Agre ement", according to the European Communities'
interpretation of that provision, as discussed in Section VII:D of this report. 58 Further, a description
of the simplified registration procedure under the form er Article 17 of the Regulation, which has been
repealed, demonstrates that there is no evidence that individual registrations effected under that
procedure involved a denial of national treatment to persons who wished to object, as discussed in
Section VII:E of this report.59
7.17 Therefore, in the course of its assessment of th e matter before it, the Panel will make findings
with respect to prior versions of the Regulation where they serve some useful purpose in reaching
conclusions with respect to measure s within its terms of reference, including individual registrations,
that are currently in force. References in this re port to the "Regulation" refer to the current version,
unless the context indicates otherwise.
3. Measures adopted after the date of establishment of the Panel
(a) Main arguments of the parties
7.18 Australia and the United States submitted, as an exhibit, a copy of Commission Regulation
(EC) No. 2400/96 60, 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 the Commission Regulation. The exhi bit 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.61
7.19 Australia and the United States 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. 62 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.63
7.20 Australia challenges individual registrations eff ected under the Regulation and notes that
registrations are "ongoing".64

57 Exhibit AUS-4 and documents IP/Q2/EEC/1 and IP/C/M/37/Add.1, para. 142 and Annex.
58 See para. 7.628.
59 See paras. 7.746 and 7.747.
60 Exhibit COMP-4.
61 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", "Thüringer 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".
62 Exhibit COMP-1a.
63 Exhibit COMP-3c. The Czech beer GIs are "Bud ĕjovické pivo", " Českobudĕjovické pivo" and
"Budĕjovický mĕšt’anský var".
64 Australia's first written submission, paras. 20 and 33.

7.21 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 2004.65
(b) Main arguments of third parties
7.22 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.66
(c) Consideration by the Panel
7.23 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.
7.24 The Panel's terms of reference include not only the Regulation, but also its "related
implementing and enforcement measures". The Pane l considers that this phrase in the request for
establishment of a panel is broad enough to include individual registrations, for the reasons given in
paragraph 28 of its preliminary ruling of 5 April 2004, and in paragraph 7.15 above. The individual
GIs which are entered in the Register under Artic les 6 and 17 of the Regulation are set out in
Commission Regulations (EC) No. 2400/96 and No. 1107/96. 67 New registrations take the form of
amendments to these Commission Regulations. Certain individual registrations were effected after
the date of establishment of the Panel and prior to the date of the complainants' first written
submissions68, and registrations continue to be made after that date.
7.25 Australia's challenge of the individual registrati ons includes those effected after the date of
establishment of the Panel. Each of the individual re gistrations applies to a different GI, is used by
different producers and/or processors and may, in turn , affect rights in different trademarks. They are
distinct measures. Those effected after the date of establishment of the Panel have added to the
implementing measures as they stood at that date, a lthough they have not affected the essence of the
implementing measures vis-à-vis other registrations as they stood at that date.
69
7.26 However, Australia has not sought particular re lief in respect of individual registrations
effected after the date of establishment of the Panel 70, as opposed to those effected earlier, and the
Panel has found no prima facie case in support of the claims in respect of individual registrations
effected at any time. 71 Therefore, the Panel does not consider it necessary to rule on whether the
individual registrations effected after the date of establishment of the Panel fall within the terms of
reference in order to secure a positive solution to this dispute.

65 European Communities' first written submission, paras. 21-25.
66 Annex C, para. 96.
67 Set out in Exhibits COMP-4a and 3a, respectively.
68 See supra at 61 and 63 .
69 This is consistent with the approach of the Appellate Body in Brazil – Aircraft, para. 132 and Chile –
Price Band System at paras. 135-144.
70 Australia's responses to Panel questions Nos. 91 and 93.
71 See para. 7.751 below.

7.27 The Panel wishes to note that individual registrati ons effected 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.
72 The Panel therefore refers to them,
as factual evidence, in the course of its assessment of the matter before it. 73 References in this report
to the "Regulation" refer to the basic Regulati on rather than related a nd implementing measures,
unless the context indicates otherwise.
4. 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
7.28 Australia claims that the Regulation imposes on other WTO Member nationals a requirement
as to domicile or establishment in the European Communities for the enjoyment of rights contrary to
Article 2(1) and 2(2) of the Paris Convention (196 7) as incorporated by Article 2.1 of the TRIPS
Agreement.74 In its view, Article 2(2) is an integral aspect of the national treatment obligation under
Article 2(1).75
7.29 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).76
(b) Consideration by the Panel
7.30 The Panel notes that Australia's request for estab lishment of a panel adapts the text of the
national treatment obligations in Article 3.1 of the TRIPS Agreement and Article III:4 of GATT 1994.
Australia's request then cites by number both th ose articles as well as Article 2 of the TRIPS
Agreement "incorporating by reference Article 2 of the Paris Convention (1967)".
7.31 In its submissions to the Panel, Australia 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. The issue fo r the Panel is whether the reference to national
treatment and to Article 2 of the Paris Convention (1 967) is sufficient to present the legal basis of the
complaint under Article 2(1) and 2(2), or only Article 2(1).
7.32 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. 77 However, where the
multiple obligations are closely related and inter linked, a reference to a common obligation in the

72 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.
73 The Panel refers to the registration of the Czech beer GIs submitted in an exhibit by the complainants
(see para. 7.18 above) as evidence of the operation of Article 14(3) of the Regulation in paras.7.574 and 7.669.
74 Australia's first written submission, paras. 189 and 194.
75 Australia's first oral statement, para. 16.
76 European Communities' first written submission, paras. 36-42; second oral statement,
paras. 112-117.
77 See the Appellate Body report on Korea – Dairy, para. 124.

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.78
7.33 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. 79 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:
paragraph 1 sets out an obligation to provide nati onal treatment and paragra phs 2 and 3 limit that
obligation.
7.34 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.
5. Claim under Article 4 of the Paris Convention (1967), as incorporated by Article 2.1 of
the TRIPS Agreement and, consequently, under Article 24.5 of the TRIPS Agreement
(a) Main arguments of the parties
7.35 Australia claims that Article 14(1) of the Regulation does not afford the right of priority in
respect of trademark applications required to be gr anted by Article 4 of the Paris Convention (1967),
contrary to Article 24.5 of the TRIPS Agreement. 80 In its view, the reference to Article 24.5 of the
TRIPS Agreement in its request for establishment of a panel permits the Panel to examine the
consistency of the Regulation with Article 4 of the Paris Convention (1967) and, indeed, that
examination is necessary for such a determination. 81 It argues that the obligation not to prejudice
eligibility for the registration of a trademark is plain on a reading of Article 24.5 and, given the
express obligation on the European Communities to comply with Article 4 of the Paris Convention
(1967), it was clear that non-compliance with that provision would constitute prejudice to the
eligibility for registration of a trademark. Artic le 6.2 of the DSU should not be interpreted and
applied in such a way as to require that a co mplaining party must have fully developed its
argumentation for a dispute before presenting its request for establishment of a panel. 82

78 See the Appellate Body report on Thailand – H-Beams, para. 93.
79 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 domiciled 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]
80 Australia's first written submission, paras. 81-87.
81 Australia's first oral statement, para. 15.
82 Australia's response to Panel question No. 162; rebuttal submission, para. 25.

7.36 The European Communities responds that this claim is outside the Panel's terms of
reference because Australia's request for establishment of a panel did not refer to Article 4 of the Paris
Convention (1967).
83
(b) Consideration by the Panel
7.37 The Panel recalls that Australia's request fo r establishment of a panel includes the following
passage:
"Australia is of the view that the EC measure:
• diminishes the legal protection for trademarks under the TRIPS Agreement,
contrary to Articles 1, 2 (incorporating by reference Articles 6 quinques(B),
10, 10bis and 10 ter of the Paris Convention (1967)), 16, 20, 24.5, 41 and/or
42 of the TRIPS Agreement;"
7.38 It is not disputed that the Panel's terms of reference include the general issue whether the
Regulation diminishes protection for trademarks cont rary to Article 16.1 of the TRIPS Agreement,
since that is expressly set out in Australia's request for establishment of a panel. The parties' evidence
and arguments address in detail the extent to wh ich Article 24.5 prohibits Members from diminishing
the protection of trademarks in the course of prot ecting geographical indications, and the Panel makes
detailed findings on this issue in this report. The reference to Article 24.5 in Australia's request for
establishment of a panel appears to relate to this issue.
7.39 It is not disputed that Article 24.5 refers to three aspects of the protection of trademarks, one
of which is the eligibility of a trademark for regist ration. This concerns trademark applications.
However, in the Panel's view, the reference to protection of trademarks and Article 24.5 does not
necessarily concern each and every possible aspect of trademark application procedures. Article 15 of
the TRIPS Agreement and numerous distinct obligations under the Paris Convention (1967), including
Articles 4, 6, 6 bis, 6 quinquies and 7 relate to trademark applica tions and procedures. If a mere
allegation of diminished protection of trademarks contrary to Article 24.5 of the TRIPS Agreement
could include the specific obligation to accord priority filing dates for trademark applications, it could
conceivably relate to all of these other distinct obligations as well.
7.40 The Panel recalls that Article 6.2 of the DSU requires that a request for establishment of a
panel shall "provide a brief summary of the lega l basis of the complaint sufficient to present the
problem clearly". This calls for sufficient clarity with respect to the legal basis of the complaint so as
to enable a defending party to begin preparing its defence. 84 Australia's request for establishment of a
panel makes no mention of the right of priority , or Article 4 of the Paris Convention (1967) as
incorporated by Article 2.1 of the TRIPS Agreement, or their relationship with prejudice to trademark
applications under Article 24.5 of the TRIPS Agre ement. In that request, the obligation under
Article 4 of the Paris Convention (1967) is not "express" or implied. There was simply no way for the
European Communities to know that the right of priority under Article 4 of the Paris Convention
(1967) was at issue.
7.41 In its first written submission, Australia describ ed why, in its view, Article 14(1) of the
Regulation covered a situation within the meaning of Article 24.5. In order to explain the alleged

83 European Communities' first written submission, paras. 28-30; first oral statement, para. 6. The
European Communities also submits that Australia has not clarified this claim, despite a request to do so, and
that Australia has not identified a single application for a trademark that falls within the situation that Australia
alleges in this claim: see European Communities' rebuttal submission, paras. 356-357.
84 See the Appellate Body report on Thailand – H-Beams, para. 88.

inconsistency, it addressed Article 4 of the Paris Conve ntion (1967), "and in particular paragraph B of
that provision, incorporated by TRIPS Article 2.1" and concluded as follows:
"Article 14.1 of Regulation No. 2081/93#3 does not afford the right of priority in
respect of an application for registration of a trademark previously filed in another
WTO Member required to be granted by Pa ris Article 4 where that trademark is
identical with or similar to an EC-defined GI which is later registered. By not doing
so, Article 14.1 of Regulation No. 2081/93#3 continues to prejudice, or adversely
affect, the eligibility for registration of a tr ademark for which an application has been
made in good faith, contrary to TRIPS Article 24.5."
7.42 Australia was not required to disclose its argu ments until its first written submission, but its
assertion of an inconsistency with Article 4 of the Paris Convention (1967), as incorporated by
Article 2.1 of the TRIPS Agreement and, conseq uently, Article 24.5 of the TRIPS Agreement,
amounts to a claim under Article 4, which should have been disclosed in the request for establishment
of a panel. The inclusion of this claim for the first time in the first written submission took the
European Communities by surprise and deprived it of the right to begin preparing its defence to this
claim earlier.
7.43 Therefore, in this respect, the request for establishment of a panel does not satisfy the
requirement of Article 6.2 to "provide a brief summary of the legal basis of the complaint sufficient to
present the problem clearly". Accordingly, this claim is outside the Panel's terms of reference.
6. Claim under Article 41 in conjunction with Articles 43, 44, 45, 46, 48 and 49 of the
TRIPS Agreement
(a) Main arguments of the parties
7.44 Australia argues in its first written submission th at the European Communities has not
ensured that enforcement procedures as specified in Part III of the TRIPS Agreement are available
under its law, contrary to Article 41.1 of the TRIPS Agreement, as a consequence of inter alia the fact
that the Regulation does not grant the Consultativ e Committee the authority required by Articles 43,
44, 45, 46 and 48 of the TRIPS Agreement, and does not provide judicial authorities with the
authority required by Articles 43, 44, 45, 46, 48 and 49.
85 Australia submits that the reference to
Article 41 of the TRIPS Agreement in its request for establishment of a panel permits the Panel to
examine the consistency of the Regulation with Arti cles 43 to 49 respectively and, indeed, that such
an examination is necessary for such a determination.86
7.45 The European Communities responds that this amounts to a claim under Articles 43 to 49 of
the TRIPS Agreement not mentioned in the request for establishment of a panel and is therefore
outside the Panel's terms of reference. The refere nce to Article 41 in the request for establishment of
a panel is not sufficient to specify Articles 43 to 49 and, more specifically, Article 41.1 is a purely
introductory provision which does not create separate legal obligations.
87
(b) Consideration by the Panel
7.46 The Panel recalls that Article 6.2 of the DSU requires that a request for establishment of a
panel shall "provide a brief summary of the lega l basis of the complaint sufficient to present the

85 Australia's first written submission, para. 148.
86 Australia's first oral statement, para. 15.
87 European Communities' first written submission, paras. 31-35.

problem clearly". This calls for sufficient clarity with respect to the legal basis of the complaint so as
to enable a defending party to begin preparing its defence.
88
7.47 The Panel recalls that in its preliminary ruling dated 5 April 2004, reproduced above, it
considered the relationship between Article 41, wh ich is specifically identified in the request for
establishment of a panel, and the enforcement pro cedures in Part III of the TRIPS Agreement, in
particular, in Article 42, which is also specifically identified in that request. The Panel did not rule
that Article 41 was clearly within the terms of refere nce in all respects. After consulting the parties'
first written submissions, it is clear that the releva nt references in the request for establishment of a
panel did not identify all the claims that Australi a subsequently raised. Australia's request for
establishment of a panel does not refer to Articles 43 , 44, 45, 46, 48 or 49 or the other provisions of
Part III. The textual link in the TRIPS Agreement between Article 41 and the other articles of Part III
is found in paragraph 1 of Article 41, which provides that "Members shall ensure that enforcement
procedures as specified in this Part are availa ble under their law ...". Australia's request for
establishment of a panel does not indicate which of these other enforcement procedures are at issue,
does not cite this text, nor does it refer specifically to paragraph 1 of Article 41.
7.48 The Panel considers that Article 41.1 imposes an obligation. The language of that provision
is expressed in terms of what Members "shall" ensu re and is not hortatory. The substance of the
provision adds qualitative elements to the procedures specified in Part III through use of terms such as
"effective", "expeditious" and "dete rrent" and is not redundant. Howe ver, it was not possible for the
European Communities to know from the request fo r establishment of a panel that the claim under
Article 41 put in issue the procedures required under any of Articles 43 through 49. The inclusion of
a claim in Australia's first written submission under Article 41 of the TRIPS Agreement in
conjunction with Articles 43, 44, 45, 46, 48 and 49 took the European Communities by surprise and
deprived it of the right to begin preparing its defence of this claim earlier.
7.49 Therefore, in this respect, the request for establishment of a panel does not satisfy the
requirement of Article 6.2 to "provide a brief summary of the legal basis of the complaint sufficient to
present the problem clearly". Accordingly, the claim under Article 41 of the TRIPS Agreement in
conjunction with Articles 43, 44, 45, 46, 48 and 49 is outside the Panel's terms of reference.
7.50 In any event, the Panel rejects all of Austra lia's claims under Articles 41 and 42 of the TRIPS
Agreement, for the reason given in paragraph 7.731 of this report, which applies with equal force to
all grounds on which these claims were purportedly made.
7. Claim under Article 20 of the TRIPS Agreement
7.51 Australia includes in its request for establishment of a panel a claim that the Regulation
diminishes the legal protection of trademarks cont rary to Article 20 of the TRIPS Agreement. It
presents arguments in support of that claim in its first written submission.89
7.52 The European Communities responds that the Regulation is not inconsistent with Article 20
of the TRIPS Agreement.90
7.53 In its second oral statement, Australia wit hdrew its claim under Article 20 of the TRIPS
Agreement.91 Therefore, the Panel does not consider this claim any further.

88 See the Appellate Body report on Thailand – H-Beams, para. 88.
89 Australia's first written submission, paras. 108-112.
90 European Communities' first written submission, paras. 345-351.
91 Australia's second oral statement, para. 99.

8. Claims under Article 4 of the TRIPS Ag reement, Article I:1 of GATT 1994 and
Article 2.1 of the TBT Agreement
7.54 Australia includes in its request for establishment of a panel claims that the Regulation is
inconsistent with the MFN treatment obligations in Article 4 of the TRIPS Agreement, Article I:1 of
GATT 1994 and Article 2.1 of the TBT Agreement.
7.55 In its first written submission, Australia "reser ves the right" to pursue these claims in the
event that the European Communities is applying protection under the Regulation to GIs from another
WTO Member or begins to do so. 92 Australia did not pursue these claims. Therefore, the Panel does
not consider them any further.
9. Claim under Articles 1, 63.1 and 63.3 of the TRIPS Agreement
7.56 Australia includes in its request for establishment of a panel a claim that the Regulation is
not applied in a transparent manner contrary to Articles 1, 63.1 and 63.3 of the TRIPS Agreement.
7.57 In its first written submission, Australia "r eserves the right" to pursue the claim under
Articles 63.1 and 63.3 in the event that the European Communities should in fact have in place criteria
and/or guidelines for the purposes of making assessm ents and/or determinations under "various
provisions" of the Regulation. 93 Australia did not pursue the claim regarding transparency under
Articles 1, 63.1 or 63.3 of the TRIPS Agreement. Therefore, the Panel does not consider it any
further.
10. Claim regarding application procedures under the TRIPS Agreement
7.58 The European Communities submits that Australia has not made a claim concerning the
application procedures under the TRIPS Agreement but only under GATT 1994.94 It does not indicate
the reasons for its view.
7.59 Australia replies that it makes its claim in relati on to the application procedures under the
TRIPS Agreement as well and refers to passages in its first written submission.95
7.60 The Panel has reviewed the passages in Australia's first written submission, to which it refers.
They appear under a heading which refers expressl y to "national treatment" and specific national
treatment provisions of the TRIPS Agreement. They include the following statements:
"198. However, non-EC nationals seeking to register, and thus protect, an EC-
defined GI in respect of a geographical location in the territory of another WTO
Member pursuant to Regulation No. 2081/92 ar e not able to apply directly to the EC
(whether to the Commission or another Co mmunity level body) to register an EC-
defined GI.

"205. Moreover, notwithstanding any outward appearance of symmetry of
treatment, the EC measure accords non-EC nationals less favourable treatment than
that accorded to EC nationals in respect of the registration of an EC-defined GI from

92 Australia's first written submission, para. 65; noted by the European Communities in its first written
93 Australia's first written submission, para. 66.
94 European Communities' first written submission, para. 127; and its rebuttal submission, para. 122.
95 Australia's first oral statement, para. 34, citing its first written submission, paras. 198-199 and 205.

another WTO Member and in respect of the enforcement of trademark rights
concerning the proposed registration of an EC -defined GI. The fact that the EC and
its Member States have legally defined right s and obligations in relation to each other
and to EC Member State nationals makes the registration and objection processes for
EC nationals fundamentally different to those for non-EC nationals. Few other WTO
Member governments have such legally defined relationships affecting the
maintenance and enforcement of an inte llectual property right, a right expressly
recognised as a private right by the TRIPS Agreement."
7.61 The Panel considers that the cl aim in respect of the application procedures under the TRIPS
Agreement, whilst it could have been expressed more clearly, does appear in these passages in
Australia's first written submission. The referenc es to persons seeking to register a GI, or the
proposed registration of a GI, include the applicatio n procedures. The submission refers expressly to
the lack of direct applications for non-EC nationals and the obligations of EC member States in the
registration process, which are the basis for this claim. Any doubts which the European Communities
had in this respect should have been dispelled by Australia's express confirmation in its first oral
statement that it had made this argument in support of its claim that the measure as a whole does not
accord national treatment to non-EC nationals. A respondent that chooses not to respond to a claim
does so at its own risk.
7.62 The European Communities has suffered no prejudice to its ability to defend itself, because it
has responded to overlapping claims presented by Australia based on the same aspects of the
application procedures under GATT 1994 and the opposition procedures based on the same obligation
under the TRIPS Agreement, as well as the same cl aim as made by the United States based on the
same aspects of the application procedures under GATT 1994.
7.63 For these reasons, the Panel will consider this claim.
96
11. Claim regarding the labelling requirement under GATT 1994
7.64 Australia claimed in its first written submission that the labelling requirement in
Article 12(2) of the Regulation was inconsistent with Article 2.1 of the TBT Agreement, but it did not
claim at that time that it was inconsistent with Article III:4 of GATT 1994.97
7.65 The European Communities responded to Australia's claim in its first written submission,
arguing that Article 12(2) of the Regulation did not constitute a technical regulation within the
meaning of Annex 1.1 of the TBT Agreement and was not otherwise incompatible with Article 2.1 of
the TBT Agreement. It responded to the United States ' claim that Article 12(2) was inconsistent with
Article III:4 of GATT 1994 and noted that Australia did not make such a claim in this regard.98
7.66 In its rebuttal, Australia submitted that, should the Panel cons ider that Article 12(2) of the
Regulation did not constitute a t echnical regulation within the m eaning of Annex 1.1 of the TBT
Agreement, it nevertheless accorded treatment less favourable to imported pr oducts inconsistently
with Article III:4 of GATT 1994.99

96 See paras. 7.276 and following below.
97 Australia's first written submission, paras. 157-180 and 264.
98 European Communities' first written submission, paras. 437-457, 469-482, 209 and fn. 100.

7.67 In its second oral statement, the European Communities maintained that Australia had
challenged Article 12(2) of the Regulation under Article 2.1 of the TBT Agreement and that the
United States had challenged it under Article III:4 of GATT 1994.100
7.68 The Panel notes that Australia only asks the Panel to address Article 12(2) of the Regulation
under Article III:4 of GATT 1994 should the Panel c onsider that Article 12(2) does not constitute a
technical regulation within the meaning of Annex 1.1 of the TBT Agreement. This premise has not
been met and further consideration is therefore unnecessary.101
12. Endorsement of arguments by another complainant
7.69 Australia, in its opening statement at the first subs tantive meeting with the Panel, formally
endorsed certain comments made by the United Stat es. These were "those comments concerning the
rights required to be granted in respect of trademar ks" and "the comments made by the United States
concerning the EC's national treatment obligatio ns under the TRIPS Agreement and GATT 1994".
Australia also offered "additional comments" in its first oral statement.102
7.70 The Panel understands that these endorsements re fer to comments made by the United States
in its first opening oral statement. By virtue of these endorsements, the refe renced comments of the
United States form part of Australia's case. This was confirmed in Australia's opening statement at
the second substantive meeting as follows:
"Our case in total would include of course all the material we have submitted to the
Panel directly, or via endorsement of arguments made by the US in this dispute."103
7.71 However, the next day, in its closing stat ement, the representative of Australia said the
following:
"Australia endorses all of the arguments put forward by the United States. Where
there are differences between the compla inants, these are a result of different
understandings of the flawed measure at issue in this dispute and, in any case, are not
material differences."104
7.72 The European Communities objected orally during the same meeting. It informed the Panel
that it did not know which particular argumen ts Australia was endorsing because at times the
United States' arguments contradicted Australia's ar guments. Further, an ove rall endorsement did not
respect its rights of defence.
7.73 The Panel notes, by way of illustration, the following examples provided by the European
Communities of differences between the arguments presented by Australia and the United States.
First, Australia had argued as follows with respect to the interpretation of Article 24.5 of the TRIPS
Agreement:

100 European Communities' second oral statement, para. 129.
101 See para. 7.459 below.
102 Australia's first oral statement, paras. 30 and 33.
103 Australia's opening statement at the second substantive meeting, para. 2.
104 Australia's closing statement at the second substan tive meeting, second paragraph. In its comments
on the descriptive part of this report, it requested that paragraph 2.15 be elaborated to make clear that Australia
made this endorsement.

"[T]he right to use a trademark refers to the ongoing ability to use a trademark where
rights to a trademark have been acquired through use in good faith."
105
7.74 In its closing statement, Australia said that it endorsed arguments which include the
following:
"'[T]he right to use a trademark' is not speci fically limited in the text to trademarks
whose rights are acquired through use (although it would appear to include such
trademarks). Rather the obligation not to prejudice the right to use a trademark – to
harm or damage the permitted or forbidden activity associat ed with application of a
trademark to its purpose – would include an obligation with respect both to registered
and non-registered trademarks (...)"
106
7.75 Australia's endorsement in its closing statement does not enable the Panel to ascertain the case
that Australia asks it to consider on this key point (considered in Section VII:D of this report).
7.76 Second, when the Panel asked Australia whet her it alleged that Article 12(2) of the
Regulation provides any less favourable treatment to imported products besides labelling costs,
Australia replied "No." 107 In its closing statement, Australia said that it endorsed arguments which
included the following:
"The requirement of Article 12(2) that GIs for imported products, but not for
domestic products, must be accompanied by a clear and visible indication of country
of origin on the label is not simply a labe ling cost issue. This requirement provides
less favorable treatment to non-EC nationals and products in part because the non-EC
GI, unlike the EC GI, is being burdened by an additional labeling requirement that is
in the nature of a qualifier that detracts from the value of the GI (...)"
108
7.77 Australia's endorsement in its closing statement does not enable the Panel to ascertain the case
that Australia asks it to consider on this point (consid ered in Section VII:B of this report). By way of
further illustration, the Panel notes that the United States has presented arguments in support of its
MFN claims which Australia chose not to pursue af ter the establishment of the Panel (mentioned in
Section VII:A of this report).
7.78 Therefore, the Panel does not agree with Australia that there are no material differences
between the complainants' respec tive cases. Australia's endorsement in its closing statement was
sweeping and unlimited. More information was require d in order to explain how it related to parts of
Australia's case as presented prior to the end of the second substantive meeting with the Panel.
7.79 The Panel has examined the parties' arguments in the course of its assessment of the matter
before it. However, it is not part of the Panel's f unction to participate in making a party's case, as this
would compromise its duty to make an objective a ssessment. The Panel should not have to sift
Australia's and the United States' respective argumen ts and make an assessment of where there are
possible contradictions, where there is possible support for a claim and where the United States'
arguments are irrelevant to Australia's claims, simp ly in order to establish what case Australia wished
to bring. Further, the European Communities, as the respondent, is entitled to know the case that it
has to answer from each complainant. It is una ble to know with certainty what Australia's case
actually is in the final analysis, as regards the endo rsement in the closing statement. Australia bore

105 Australia's response to Panel question No. 76.
106 United States' response to Panel question No. 76.
107 Australia's response to Panel question No. 52.
108 United States' response to Panel question No. 120.

the responsibility to make its own case clear a nd, as regards the arguments covered by this
endorsement, it has failed to discharge that responsibility.
7.80 The lateness of this endorsement also raises an issue of due process. Whilst the overlapping
nature of the claims presented by the two complain ants is a particular feature of this dispute, a
respondent may choose to defend certa in arguments in support of one cl aim, but not others. After the
enlargement of one complainant's case at the end of the second substantive meeting, the respondent
may understandably wish to respond to certain arguments for the first time . However, at that stage, it
only has the opportunity to respond to written questi ons and comment on the ot her parties' responses,
which may provide insufficient opportunity to respond to those arguments. This could compromise
the respondent's ability to defend itself against each complainant.
7.81 There are no relevant specific circumstances in this proceeding to take into account. Australia
had ample opportunity to make its case. It did not endorse all the United States' arguments earlier
when it endorsed specific comments, either at the firs t substantive meeting or in its opening statement
at the second substantive meeting.
7.82 Accordingly, the Panel does not consider that Au stralia's statement that it endorsed all of the
United States' arguments was a suffici ent basis for the Panel to consider that Australia's arguments as
presented earlier were modified. Nevertheless, the Panel accepts Australia's earlier endorsements of
certain comments of the United St ates, as described in paragraphs 7.69-7.70above, and takes note of
the referenced comments.
13. Exhibits containing legislation of other Members
7.83 Australia requests that the Panel reject six exhibits submitted by the European Communities
which consist of extracts of legislation of Australia and two third parties. This request is made on the
grounds that the exhibits are allegedly not relevant.
109
7.84 The Panel does not consider it appropriate to remove these exhibits from the record. They
form part of the respondent's submission. To the ex tent that they lack evidentiary worth, they will
suffer from that defect and the Panel will disregard them.
14. Request by a third party for a suggestion on ways to implement a recommendation
7.85 Mexico considers that "cochineal" should be removed 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
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. If the Panel does 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.110
7.86 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 attention is drawn to Article 10.4 of the DSU.

109 Australia's second oral statement, para. 104. Australia also requests that the Panel exclude these and
other exhibits submitted by the European Communities cons isting of extracts of legislation of other Members,
on the grounds that it has failed to establish the meaning of the legal provisions within the legal order of those
Members: see Australia's comments on the EC's responses to questions, paras. 2-4. This does not concern the
record of the proceedings and can be dealt with, if necessary, in the consideration of the relevant claim.
110 Annex C, para. 117.

15. Order of analysis of claims
7.87 The claims in this dispute are made under the TRIPS Agreement, GATT 1994 and the TBT
Agreement. Certain claims under the TRIPS Agreement and GATT 1994 relate to the same aspects of
the measure at issue.
111 There is no hierarchy between these two agreements, which appear in
separate annexes to the WTO Agreement. One logi cal approach would be to begin in each instance
with the TRIPS Agreement. The Panel will follow that order of analysis in this report.
7.88 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 Trade-restrictiveness claim

 – Section D Trademark claims

 – Section E 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 parties112
7.89 Australia claims that GIs (as defined in the Regulation) located in the territory of a WTO
Members outside the European Union can only be registered under the Regulation if the Member
government in whose territory the GI is located is able and willing to meet 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.113 It specifically endorses comments made by the United States in its first oral
statement concerning the European Communities' national treatment obligations under the TRIPS
Agreement and GATT 1994.114
7.90 Australia argues that the European Communities had consistently led other WTO Members to
believe that Article 12(1) of the Regulation ap plied to them. It argues that the European
Communities' interpretation of the Regulation doe s not invalidate the meaning of the provisions
submitted by Australia, and is not supported by the text of Articles 12 to 12d, which only distinguish
between nationals of WTO Members and other third countries where the express language so
provides. The Regulation would not be interpreted by the European Court of Justice in light of the

111 In its rebuttal, Australia also referred to a claim under GATT 1994 as an alternative to one of its
claims under the TBT Agreement. The Panel's approach to this issue is discussed in paras. 7.64-7.68.
112 The Panel's citations of parties' submissions in th is report are not exhaustive. At times, parties'
positions are elaborated in other submissions and responses to questions which are attached in full in Annexes A
and B to this report.
113 Australia's first written submission, paras. 165-168, 172-173 and 199.
114 Australia's first oral statemen t, para. 33. The United States' first oral statement included inter alia
comments that Article 12(1) does not suggest that WTO Members are excluded from its conditions and
Article 12a sets out the sole process under the Regulation 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 procedure is still not available for them.

European Communities' internati onal obligations because it does not state that it is intended to
implement a particular GATT 1947 or WTO obligation.115 Australia understands that the introductory
phrase "[w]ithout prejudice to international agreemen ts" was intended to allow for an international
agreement – whether bilateral or plurilateral – to incorporate different conditions but it does not, and
was not intended to, incorporate the Europ ean Communities' oblig ations under the WTO
Agreement.116
7.91 Australia argues that the Panel is not bound by the European Communities' interpretation of
its own measure to any extent. The Panel's obligat ion is to appraise whether that interpretation is
supported by the text of the Regulation, having regard to all relevant factors including the plain text of
the relevant provisions, the European Communities' previous explanations of their meaning, its failure
to explain inconsistencies in its new interpreta tion and the fact that the statements of EC
representatives to the Panel do not create new legal obligations in Community law.117
7.92 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.
118
7.93 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
European Communities' interpretation in this Panel proceeding and mo re recent statements support it.
The statements made by the agents of the Eur opean Commission before the Panel commit and engage
the European Communities but their intention is not to create new legal obligations in public
international or in Community law. They are made on behalf of the 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 la w, in particular where its provisions are intended
specifically to give effect to an international ag reement concluded by the Community, as indicated by
the phrase "[w]ithout prejudice to international agreements". An interpretation that limited that phrase
to bilateral agreements would largely deprive it of its useful value.119
7.94 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

115 Australia's first oral statement, paras. 18-23; rebuttal submission, paras. 33-49; second oral
statement, paras. 3-9.
116 Australia's response to Panel question No. 6.
117 Australia's response to Panel question No. 1; rebuttal submission, paras. 69-71.
118 European Communities' first written submission, para s. 62-67; first oral statement, paras. 41-44;
rebuttal submission, para. 52.
119 European Communities' responses to Panel questions Nos. 7, 8, 15 and 16; rebuttal submission,
paras. 11, 58-60 and 71-87; second oral statement, paras. 45 and 50.

applied, the complainant must establish "beyond doubt " that the measure entails a violation; (2) in
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.
120
(ii) Main arguments of third parties
7.95 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.
121
7.96 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 "third 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 Communities, 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.
122
7.97 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 the 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.123
7.98 China argues that the European Communities' in terpretation is not accompanied by any
supporting evidence and that there is no regulatory language 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.
124
7.99 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.125

120 European Communities' response to Panel question No. 1; second oral statement, paras. 5-7.
121 Annex C, para. 17.
122 Annex C, paras. 23-24.
123 Annex C, paras. 47-50.
124 Annex C, para. 72.
125 Annex C, para. 99.

7.100 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.126
7.101 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.127
7.102 Chinese Taipei asserts that the conditions of equivalence and reciprocity apply to GIs located
in all third countries.128
(iii) Consideration by the Panel
7.103 The first issue in this dispute 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, and that no attempt has ever
been made to file an application to register such a GI under the Regulation. 129 Therefore, the
provisions concerning the protection of such GIs have never been applied in a particular instance.
However, Australia challenges this aspect of the Regulation "as such".
7.104 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 located in other WTO Members. Australia claims that
they do so apply, and it is not disputed that th e European Communities 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 Pane l that the conditions only apply to third countries
that are not WTO Members.
7.105 The European Communities' position, as expressed in its submissions to the Panel, has been
welcomed in principle by the complainants and by two third parties. 130 If Australia were satisfied
with this position, it would provide a positive solution to many of the national treatment claims in this
dispute. However, Australia is not persuaded that the European Communities would be able to
implement the position that it has presented to the Pane l in light of the terms of the Regulation on its
face, allegedly prior inconsistent statements by the European Communities in the Council for TRIPS,
the Commission's Guide to the Regulation and elsewhe re, and inconsistent st atements made during
this Panel proceeding by the European Communities. 131 Australia submits that only formal
amendments of the provisions of the Regulati on could ensure their interpretation in a manner

126 Annex C, para. 110.
127 Annex C, paras. 126-128.
128 Annex C, paras. 171-172.
129 See the parties' respective responses to Panel ques tions Nos. 11 and 12 and third party 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.
130 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.
131 Australia's first oral statement, para. 19; rebuttal submission, paras. 32-49.

consistent with the Europ ean Communities' obligations.
132 Therefore, although the European
Communities submits that the Regulation already is in conformity with its ob ligations, the Panel is
obliged to proceed with its assessment of the natio nal treatment claims based on Article 12(1) of the
Regulation.
7.106 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 doi ng so, the Panel examines the Regulation solely for
the purpose of determining its conformity with relevant obligations under the WTO covered
agreements.133 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.134 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.
7.107 Turning to the Regulation, the Panel notes that it applies to the registration of "designations of
origin" and "geographical indications", as defined.
135 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.
7.108 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 locat ed in the European
Communities.136 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.137 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.
7.109 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:

133 This was the approach of the Appellate Body in India – Patents (US), paras. 65-68.
134 Parties' respective responses to Panel question No. 1.
135 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).
136 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 noted that Articles 12a
and 12b refer to certain provisions in Articles 5 to 7 as well.
137 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.

"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,
- 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."
7.110 Article 12 has been part of the Regulation since 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, were inserted. It is not in disp ute that many WTO Members, including Australia, do
not satisfy the conditions set out in Article 12(1).
7.111 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 Articles 12a and 12b is available for GIs located in
WTO Members that do not satisfy the conditions in Article 12(1).
7.112 Australia presents two types of evidence. Th e 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.
7.113 The Panel begins its analysis by reviewing the measure on its face.
138 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).
7.114 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."
7.115 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

138 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.

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
Article 12(3)". The implication is that a WTO Member is not necessarily a third country meeting
those conditions.
139
7.116 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.
7.117 Other provisions in the Regulation may also shed light on this issue. Article 12d(1), which
provides a right of objection to registration of GIs 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)".
140 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.
7.118 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 Members
141, and there seems to be no reason why the 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).
7.119 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:

139 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.
140 This is considered in detail in para. 7.382 below.
141 European Communities' responses to Panel question Nos. 126(a) and (b).

"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;"142
7.120 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.
7.121 The preamble to the April 2003 amending Regulation, 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 Organisation 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 prejudice to international agreements, as
provided for in Article 12 of the said Regulation. (...)"
143
7.122 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.
7.123 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
third countries and that the registration procedur e in Articles 12a and 12b is not available for GIs
located in WTO Members that do not satisfy those conditions.
7.124 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) and 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).

142 Exhibits COMP-1b and EC-1.
143 Exhibit COMP-1h.

7.125 In the Panel's view, the meaning and content of these aspects of the Regulation, together with
the amending Regulation, are sufficiently clear on their face for Australia to have discharged its
burden of proof of establishing that, under the Regula tion "as such", the availability of protection for
GIs located in WTO Members is contingent upon satisfaction of the conditions set out in Article 12(1)
and recognition by the Commission under Article 12(3).
144
7.126 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.145 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 th rough 12d were inserted only recently, in April
2003.
7.127 Australia also presents evidence consisting of various statements by executive authorities of
the European Communities which contain 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.
146 However, the usefulness of any particular statement will depend
on its contents and the circumstances 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 delivered, is highly relevant to the issue at hand.
7.128 In a lengthy statement to the Council for TRI PS in September 2002 (prior to the insertion of
Articles 12a through 12d), the European Communities specifically responded to the following view
expressed by a group of Members, including Australia:
"[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."
147
7.129 The European Communities introduced the relevant 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."
148
7.130 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. 149 This
statement by the European Communities in Sept ember 2002 to the Council for TRIPS therefore
appears to support Australia's interpretation of the Regulation on its face.

144 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.
145 European Communities' response to Panel question No. 19.
146 See para. 7.106 above.
147 Communication from Australia, Canada, Guatemala, New Zealand, Paraguay, the Philippines and
the United States (IP/C/W/360) para. 4.
148 See the statement in the Annex to the minutes of that meeting in document IP/C/M/37/Add.1.
149 Ibid.

7.131 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
intention at that time was not primarily to explain the EC system for the protection of geographical
indications and its statement did not take account of amendments made in April 2003.
7.132 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.
7.133 Australia also refers to the explanation 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."
150
The references to a reciprocal basis and an equivalent system are clear references to the conditions in
Article 12(1) of the Regulation.
7.134 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 conditions 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
2004 in the days before the first s ubstantive meeting of this Panel
151 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. 152 It advises that "[t]he guide w as not prepared in connection with
the Panel proceedings".153
7.135 The Panel recalls its reasoning in paragraph 7.116 above , and reiterates its view that, even if
the phrase "[w]ithout prejudice to international agreements" had the effect of subjecting the conditions

150 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 AUS-4.
151 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 insertion 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.
152 Exhibit EC-64.
153 European Communities' response to Panel question No. 96.

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.
7.136 The European Communities admits that this would be a "nonsensical result".
154 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.155
7.137 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.
7.138 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. 156 The European Communities
does not exclude this, but argues that there is no reason why only such specific agreements should be
covered.157 There are currently no such bilateral agreemen ts for agricultural products and foodstuffs,
although one has been foreshadowed in a joint declaration with Switzerland.158
7.139 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
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 8 th 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. (...)"
159

154 European Communities' second oral statement, para. 48.
155 European Communities' response to Panel question No. 7.
156 Australia's response to Panel question No. 6.
158 European Communities' response to Panel question No. 21.
159 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

7.140 This explanation was also reflected in a June 2004 statement that the European Communities
made to the Council for TRIPS 160 and the August 2004 edition of the Commission's Guide to the
Regulation161.
7.141 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.162
7.142 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 contained 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."163
7.143 Australia then submitted that the European Communities had impliedly admitted that the
conditions in Article 12(1) of the Regulation were contrary to WTO obligations.164
7.144 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. 165 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.166

the objective that the 'without prejudice' clause should also apply to the TRIPS and other
WTO agreements resulting from the Uruguay Round."
160 See the minutes of that meeting in document IP/C/M/44, paras. 62-63, cited in response to Panel
questions Nos. 16 and 95 and set out in Exhibit EC-83.
161 Set out in Exhibit EC-64.
162 European Communities' first written submission, paras. 123-126; first oral statement, paras. 46-47;
rebuttal submission, para. 43.
163 European Communities' response to Panel question No. 20.
164 Australia's first oral statement, para. 23; rebuttal submission, para. 177; second oral statement,
para. 61.
165 European Communities' response to Panel question No. 94.
166 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 wr itten submission, quoted at paragraph 7.139 above.

7.145 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"
167, 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 7.142 above. It was also omitted from the earlier explanation that
the conditions did not apply because of obligations under the TRIPS Agreement, quoted at paragraph
7.139 above. Further, the evidence submitted by the European Communities provides no additional
support for this explanation, as the amending Regul ation recites the TRIPS Agreement but not GATT
1994, and the evidence identified at paragraph 7.140 above also reflects the explanation quoted at
paragraph 7.139 above.
7.146 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.
7.147 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 vote.168
7.148 The European Communities' delegation to this panel proceeding confirms that the
submissions made by agents of the European Commission before the Panel commit and engage the
European Communities.169 It also indicates 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". 170 The Panel accepts this
explanation of what amounts to the European Co mmunities' domestic constitutional arrangements and
accepts that the submissions of the European Comm unities' delegation to this panel proceeding are
made on behalf of all the executive authorities of the European Communities.171
7.149 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:

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.
168 This procedure is described in detail in paras. 7.388 to 7.389 below.
169 European Communities' responses to Panel questions Nos. 15 and 18.
170 European Communities' second oral statement, para. 148.
171 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. 7.304, 7.372 and 7.399 of the
present report.

"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."172
7.150 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 Regulation does not indicate that its provisions are intended
specifically to give effect to any 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, rather than the TRIPS Agreement.
7.151 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.
7.152 Therefore, the Panel concludes that Australia has made a prima facie case that the equivalence
and reciprocity conditions in Article 12(1) of the Re gulation 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 not available for GIs located in third countries, including WTO Members, that
do not satisfy the conditions in Article 12(1). The European Communities has not succeeded in
rebutting that case.
7.153 The Panel wishes to note that it has evaluated the European Communities' 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 reflect ed in the text of the 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 the provisions of the covered agreements.
(b) National treatment under the TRIPS Agreement
(i) Main arguments of the parties
7.154 Australia claims that the Regulation is inconsistent with 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, because it imposes conditions of reciprocity and equivalence on the availability of
protection. Unless the WTO Member government in whose territory the geographical location at
issue is situated is able and willing to meet the equivalence and reci procity conditions, non-EC
nationals are not able to access the rights availa ble to EC nationals, including the advantages of
registration.173 Australia, at the first substantive mee ting, expressly endorsed the comments made by
the United States concerning the EC's national treatment obligations under the TRIPS Agreement.174

172 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.
173 Australia's first written submission, para. 199.
174 Australia's first oral statemen t, para. 33. The United States' first oral statement included inter alia
comments that the distinction between the location of a geographical area and the nationality of the right holder
is not meaningful as right holders are overwhelmingl y nationals of the place wher e their respective GIs are

7.155 Australia argues that at least one right at issue in this dispute is the right to obtain registration.
Under the Regulation, a non-EC national seeking to register a GI for an area located outside the EU is
treated less favourably than an EC national seeking to register a GI for an area located within the EU.
It is not necessary to make assumptions about the population of other categor ies of nationals and the
location of their rights.
175 In its view, a national for the purposes of the TRIPS Agreement, in the case
of a natural person, is a person who possesses the nati onality of a state in accordance with that state's
laws or a person who is domiciled or who has a real and effective industrial or commercial
establishment in a separate customs te rritory, as a proxy for the ordinary notion of nationality. In the
case of a legal person, it is a person who is dom iciled or who is established in the Member in
accordance with whose laws nationality is claimed.176
7.156 Australia considers that less favourable treatment under Article 3.1 of the TRIPS Agreement
does not preclude formally different treatment, a nd could include disadvantages or costs, whereas
Article 2(1) of the Paris Convention (1967) requires the granting of the same advantages.177 It argues
that the perceived advantages of registration under the Regulation include protection against a
registered name becoming generic, broad-ranging pr otection, including even against evocation of a
registered GI, as well as ex officio Community-wide protection.178
7.157 Australia refers to the jurisprudence on Article III:4 of GATT 1994 and considers that
"treatment no less favourable" in Article 3.1 of the TRIPS Agreement could be examined in terms of
whether the effect of a measure is to modify the conditions of competition in the EC market to the
detriment of nationals of other WTO Members with regard to the protection of intellectual property.179
The effect of the Regulation at issue in this dis pute is to accord less favourable treatment to non-EC
nationals because the additional requirements for GIs located outside the EC overwhelmingly apply to
non-EC nationals, given the reality that persons with an interest in securing the registration of the
name of a geographical area will almost always be nationals of the Member in which that
geographical area is located.180
7.158 Australia considers that an overarching exceptions provision analogous to Article XX of
GATT 1994 was unnecessary in the TRIPS Agreemen t and is irrelevant to the assessment of de facto
discrimination under that agreement because there were pre-existing multilateral intellectual property
conventions already in place; Members may take account of legitimate public policy objectives as
recognized in Articles 7 and 8 but then must appl y them in accordance with national treatment and
MFN treatment; specific exceptions exist in th e TRIPS Agreement for separate categories of
intellectual property rights.181
7.159 Australia also claims that the Regulation im poses a requirement of establishment in the EC
inconsistently with Article 2(2) of the Paris Convention (1967).182

located and that there is an obvious link and close relationship between the nationality of the persons who would
seek GI protection for agricultural products and foodstuf fs and the territory of the Member in which they are
growing or producing such products, which is supported by data on the applicants for certification marks in the
United States.
175 Australia's response to Panel question No. 101.
176 Australia's response to Panel question No. 23.
177 Australia's response to Panel question No. 31.
178 Australia's first written submission, para. 197.
179 Australia's second oral statement, para. 74; response to Panel question No. 103.
180 Australia's responses to Panel questions Nos. 22, 27 and 102; rebuttal submission, para. 184.
181 Australia's response to Panel question No. 103.
182 Australia's first written submission, paras. 199 and 206.

7.160 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 considered in the previous sub-section.
7.161 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.183
7.162 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 Co mmunities 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. 184
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. 185 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. 186 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.187 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. 188 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.189
The European Communities is not a "separate custom s territory" within the meaning of footnote 1 to
the TRIPS Agreement.190 The meaning of "interested parties" in Article 10(2) of the Paris Convention
(1967) is inapplicable in Article 22 of the TRIPS Agreement. 191 Nationality is not linked to the points
of attachment but must be given a uniform meaning for all intellectual property rights. 192 T h e
Regulation does not require any comparison of nationals because it does not contain any
discrimination on the basis of nationality.193
7.163 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 detriment of foreign nationals.194
7.164 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

183 European Communities' response to Panel question No. 111.
184 European Communities' first written submission, paras. 123-126.
185 European Communities' first oral statement, paras. 46-47; response to Panel question No. 106.
186 European Communities' response to Panel question No. 22.
187 European Communities' rebuttal submission, paras. 45-48; second oral statement, paras. 28-30;
response to Panel question No. 106.
188 European Communities' response to Panel question No. 107; second oral statement, paras. 29-30.
189 European Communities' response to Panel question No. 23; rebuttal submission, paras. 37-40.
191 European Communities' response to Panel question No. 24.
192 European Communities' response to Panel question No. 26.
193 European Communities' response to Panel question No. 101 and comments on that response.
194 European Communities' second oral statement, paras. 39-41; response to Panel question No. 113.

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
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.
195
(ii) Main arguments of third parties
7.165 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 geographical areas is discrimination between nationals.196
7.166 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 explicit 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" under the TRIPS Agreement extends de jure to geographical area.197
7.167 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.198
7.168 Colombia considers that any distinction that in an y way identifies the GIs of the European
Communities clearly entails a violation of national treatment obligations.199
7.169 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 treatment 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 3.2.200

195 European Communities' response to Panel question No. 29; rebuttal submission, para. 49; second
oral statement, paras. 33-37; response to Panel question No. 103.
196 Annex C, paras. 23 and 34.
197 Annex C, paras. 57-63.
198 Annex C, para. 93.
199 Annex C, para. 101.
200 Annex C, para. 104.

7.170 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.201
7.171 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
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 and, according to the preamble, higher incomes.
202
7.172 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 EC or a non-EC national, with a GI, whether lo cated in the European Co mmunities or outside the
European Communities, receives treatment less favourab le than that accorded to an EC national with
a GI located in the European Communities. Footnote 1 to the TRIPS Agreement applies to the
European Communities as a separate customs territory.203
(iii) Consideration by the Panel
National treatment obligations in the TRIPS Agreement
7.173 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 that agreement, and the other found elsewhere, in
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 of the TRIPS Agreement.
7.174 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]

201 Annex C, para. 110.
202 Annex C, paras. 130-132.
203 Annex C, paras. 168-172.

7.175 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.
Protection of intellectual property

7.176 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."
7.177 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."
7.178 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.
7.179 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.
7.180 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 where measures provide a higher level of protection.
Less favourable treatment accorded to the nationals of other Members

Less favourable treatment
7.181 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. 204 Like the pre-
existing intellectual property conven tions, Article 3.1 applies to "na tionals", not products. Like

204 Three of these national treatment obligations ar e incorporated in the TRIPS Agreement itself:
Article 2 of the Paris Convention (1967), (considered below at paras. 7.250 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.

GATT 1994, Article 3.1 refers to "no less favourable" treatment, not the 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:
"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 property agreements or conventions;"
7.182 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.205 Where these exceptions and limitations do not apply, the language of the basic obligation
in the first sentence of Article 3 is very broad, referring to treatment that is "no less favourable".
7.183 We recall that the Panel in US – Section 211 Appropriations Act , in a finding with which the
Appellate Body agreed206, 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."207
7.184 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.
7.185 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 suppliers, rather than to nationals.208
7.186 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:

205 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.
206 See the Panel report on US – Section 211 Appropriations Act , at paras. 8.131-8.133, the Appellate
Body report, at para. 258. The Appellate Body has also assessed "no less favourable" treatment in the context of
trade in goods under Article III:4 of GATT 1994 in terms of whether the measure modifies conditions of
competition: see its report in Korea – Various Measures on Beef, paras. 137 and 144
207 GATT Panel report on US – Section 337, para. 5.11.
208 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.

"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
same time, however, the examination need not be based on the actual effects of the
contested measure in the marketplace."
209
7.187 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, considered later in this report.
7.188 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 7.152 that they do so apply.
7.189 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. 210 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 hur dle" in obtaining protection that does not apply to
geographical areas located in the European Communities.
211 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.
7.190 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.

209Appellate 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.
210 Australia's first written submission, paras. 196, 199 and 206. 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 favourable treatment where
they apply: see its first written submission, paras. 62-69 and 113-126. 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
questions Nos. 94(a) and 113.
211 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.

Nationals of other Members
7.191 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
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 accord treatment, which includes national treatment.212
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]
7.192 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.213
7.193 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."
7.194 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 Australia. 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
Members for the purposes of the TRIPS Agreement.
7.195 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

212 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.
213 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 identification of Article 3 of the
Berne Convention (1971) which concerns authors who are nationals 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.

replaced with "nationals" in Articles 2 and 3 in th e Hague Act of 1925 without , apparently, changing
the scope of the Convention.
214
7.196 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]215
7.197 This is consistent with the pos ition under public international law. 216 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. 217 With respect to
legal persons, each Member first applies its own criteria to determine nationality.
7.198 The meaning of "nationals" under public internati onal law is also relevant to the meaning of a
Member's "own nationals". Whilst the TRIPS Agreement 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 the other national treatment obligations incor porated by reference, including Article 2 of the
Paris Convention (1967). To that extent, the way in which a Member defines its own nationals can

214 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 consistent with the terminology of the Convention: see
Actes de Paris, 1925, report of drafting committee, p. 538.
215 See Bodenhausen supra at 79, pp. 27-28.
216 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.
217 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.

also be subject to review for the purposes of de termining conformity with its national treatment
obligations under the TRIPS Agreement.
7.199 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. 218 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. 219
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.220
7.200 Australia has not challenged the criteria used by the European Communities to determine
nationality. The Panel notes that these criteria app ear to be the same as those used in public
international law. 221 Therefore, the Panel can use them to determine which pers ons are "nationals"
under Article 3.1 of the TRIPS Agreement.
7.201 Australia has referred to the specific definition of "nationals" in footnote 1 to the TRIPS
Agreement.222 The Panel notes that that specific defin ition only applies in the case of a separate
customs territory Member of the WTO. The Euro pean Communities submits that it is not such a
Member and Australia does not assert that it is. 223 Therefore, the Panel does not consider this specific
definition further.
7.202 Australia also refers to Article 10(2) of th e Paris Convention (1967) which sets out persons
who shall be deemed an "interested party" for th e purposes of an obligation related to certain false
indications. Article 10(2) refers inter alia to establishment in the locality or country falsely indicated.
7.203 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. Ar ticle 10(2) is a deeming provision for the term
"interested party" used in Article 9(3) of th e Paris Convention (1967), as made applicable under
Article 10(1). Once a person has qualified as a national, Article 10(2) may provide guidance on
whether that person may be treated as an interested party 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 Convention (1967) for the purposes of Article 1.3 of the TRIPS Agreement.
7.204 Therefore, the Panel finds no specific definition of "nationals" applicable in this dispute and
confirms its finding at paragraph 7.200 as to the cr iteria that can be used to determine which persons
are "nationals" for the purposes of Article 3.1 of the TRIPS Agreement, for the purposes of this
dispute.

218 Article 8 of the EC Treaty.
219 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 natural persons who are nationals of EC member States.
220 European Communities' response to Panel question No. 105. It also referred to a criterion based on
the nationality of controlling shareholders, but the evidence in support does not appear to indicate that this is of
relevance to corporate nationality under the TRIPS Agreement.
221 Supra at 216.
222 Australia's response to Panel question No. 23.
223 Australia's response to Panel question No. 104.

7.205 Turning to the Regulation, it is agreed that it does 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.
Formally identical provisions
7.206 On its face, the Regulation contains formally identical provisions vis-à-vis the nationals of
different Members, with respect to the availability of GI protection.
7.207 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 favourable" 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."
224
7.208 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
treatment between imported and like domestic products is thus neither necessary, nor sufficient, to
show a violation of Article III:4".225 It then proceeded to apply the relevant standard of examination.
7.209 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.226
7.210 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 the standard we set out at paragraph 7.184, 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 7.187, which focuses on
the "fundamental thrust and effect" of the Regulation.

224 GATT Panel report on US – Section 337, para. 5.11.
225 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.
226 Panel report on Canada – Pharmaceutical Patents, at paras. 7.100-7.105.

Which nationals to compare?
7.211 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.
7.212 The Panel finds that the following graphic, b ased 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

7.213 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 7.152 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.
7.214 Australia submits that the Panel should compare the treatment of a hypothetical EC national
with a GI located in the Europ ean Communities, and the treatment of a hypothetical non-EC national
with a GI located outside the European Communities. This is a comparison of a person in quadrant 1
with a person in quadrant 4 in the graphic.
7.215 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.
7.216 Australia also submits that there is discrimi nation 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.
7.217 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

intellectual property in comparable situations.
227 On the one hand, this excludes a comparison of
opportunities for nationals with respect 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.228
7.218 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.
229
7.219 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 1994.230
7.220 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
7.221 Articles 5 through 7 of the Regulation set out a re gistration procedure for GIs that refer to a
geographical area located within the te rritory of the European Communities.
231 Articles 12a and 12b

227 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.
228 See the European Communities' responses to Panel questions Nos. 25, 101 and 103.
229 The Panel notes that its approach based on the respective 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 that the measure accords to the group of 'like'
 imported products 'less favourable treatment' th an 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.
230 European Communities' rebuttal submission, para. 49; response to Panel question No. 29.
231 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 out 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.

set out a registration procedure for GIs that refers to a geographical area 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.
7.222 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 following 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 15 232, 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 which it produces or obtains within the meaning
of Article 2(2)(a) or (b).
7.223 These definitions of applicants cross-refer to the definitions of designations of origin and
geographical indications in the Regulation in Article 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 envi ronment with its inherent 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."

232 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.

7.224 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.
7.225 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 GI specification.
7.226 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 produc t, 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 th ird countries, including WTO Members, on the other
hand.
7.227 The Panel recalls its finding in paragraph 7.218 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.
7.228 Australia argues that the reality is that persons with an interest in securing registration of the
name of a geographical area as a GI under the Re gulation will overwhelmingly be nationals of the
WTO Member in which that geographical area is located.
233
7.229 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.234 However, in the Panel's view, that is not dispositive of the issue.
7.230 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

233 Australia's rebuttal submission, para. 184 and response to Panel question No. 102. Brazil and
Canada expressed the same view: see Annex C, paras. 24 and 47.
234 European Communities' comment on US responses to Panel questions Nos. 102 and 103.

"geographical indication" and the requirements of th e product specifications. The structure is evident
in the different registration procedures.
7.231 Complete data on the persons who have actua lly availed themselves of protection under the
Regulation is not available. Any person who produces and/or processes and/or prepares products
according to the specifications in a GI registration is entitled to use the GI. Data on the persons who
have applied for, and obtained, protection under the Regulation and their respective addresses is
available but their nationality is not recorded. Howe ver, 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.
7.232 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.
7.233 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. 235 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.
7.234 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, which apply in the case of a separate customs territory Member of the
WTO, are clearly intended to provide close substitu te 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 co mmercial establishment". They are taken from the
criteria used for the assimilation of nationals in Arti cle 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 understood in this pre-existing intellectual property convention. Under Article 3 of the Paris
Convention (1967), "domicile" is not generally unders tood to indicate a legal situation, but rather a
more or less permanent residence of a natural person, and an actual headquarters of a legal person. A
"real and effective industrial and commercial establishm ent" is intended to refer to all but a sham or
ephemeral establishment.
236

235 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 with 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 comp any with an Italian subsidiary; Nestlé which sold Vismara, a salami firm, to an
Italian company. The persons who acquired GI protectio n 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.
236 Bodenhausen, supra at 79, 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

7.235 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.
7.236 Further, the Panel recalls its finding at paragra ph 7.218 that it is appropriate for the purposes
of this claim under Article 3.1 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. An objective assessment of that comparison cannot ignore the difference in treatment
between quadrants 1 and 2 and quadrants 3 and 4 in the graphic set out earlier.
7.237 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.
237 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.238
7.238 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.
239
7.239 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.240
7.240 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.

Records of the Paris Convention provided to the Panel by the International Bureau of WIPO, and quoted in
Bodenhausen, ibid., p. 34.
237 European Communities' first written submission, para. 142.
238 See paragraph 10 of the recitals to the April 2003 amending Regulation, set out in para. 7.121.
239 European Communities' response to Panel question No. 107.
240 Article 8a of the EC Treaty provides that every citizen of the European Union shall have the right to
move and reside freely within the territory of the EC member 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
specification within the territory of the European Communities, but apply to the European Communities' own
nationals only.

Defences based on systemic considerations
7.241 The European Communities argues that the interpretation of the national treatment obligations
in the TRIPS Agreement and GATT 1994 should not lead to "systematic overlap" between them.
7.242 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.
241
7.243 The European Communities also argues that one must take account of the absence in the
TRIPS Agreement of a general exceptions provision analogous to Article XX of GATT 1994.
7.244 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 Agreement 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. 242
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 necessarily imply consistency with them all.243
7.245 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."
7.246 These principles reflect the fact that the agreem ent does not generally provide for the grant of
positive rights to exploit or use certain subject matte r, but rather provides for the grant of negative
rights to prevent certain acts. This fundamental f eature of intellectual property protection inherently
grants Members freedom to pursue 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.
7.247 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.
244 There is also a series of specific exceptions in the provisions relating to the minimum

241 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.
242 Panel report on Canada – Periodicals , at para. 5.17; Appellate Body report on Canada –
Periodicals, DSR 1997:I, 449, at 465.
243 See, for example, the Appellate Body report on Argentina – Footwear (EC) , para. 81; and the
Appellate Body report on Korea – Dairy, para. 74; and the Panel reports on EC – Bananas III, para. 7.160.
244 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.

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.
7.248 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

7.249 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 Article 3.1 of the TRIPS Agreement.
Article 2 of the Paris Convention (1967)
7.250 Australia also makes claims under the national tr eatment obligation set out in Article 2 of the
Paris Convention (1967). These claims are made u nder 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.
7.251 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 wi th Articles 1 through 12, and Article 19, of
that Convention.
245 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.
7.252 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
not actually reached a conclusion on this claim. Ho wever, further findings on this claim would not
provide any additional contribution to a positive solution to this dispute and are therefore unnecessary.
7.253 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

245 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.

contains a requirement of domicile or establishment. 246 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.
7.254 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 incorporated by Article 2.1 of the TRIPS Agreement.
(c) National treatment under GATT 1994
(i) Main arguments of the parties
7.255 Australia claims the Regulation is inconsistent with Article III:4 of GATT 1994 because it
imposes conditions of reciprocity and equivalence on the availability of protection . The agricultural
products and foodstuffs from the European Commun ities and from third countries for which GIs may
be registered under the Regulation are like products in the sense of Article III:4. The reciprocity
condition in Article 12(1) of the Regulation refers to protection of "corresponding products" from the
European Communities which encompasses, at least, like products.247 It argues that the Regulation is
a measure affecting the internal sale and/or offering for sale of imported products because imported
products can only benefit from the Community-wid e protection under the Regulation and/or the
esteem purportedly attached where they are registered, and imported products may not bear a
registered GI even if it is the common name for a product in the country of origin and/or in the course
of trade.
248
7.256 Australia argues that the Regulation accords less favourable treatment to imported products
because it imposes distinct additional requirements of equivalence and reciprocity for registration to
which domestic products are not subject. Those a dditional requirements significantly modify the
conditions of competition for impor ted products because if another WTO Member is not willing and
able to satisfy them, GIs from that Member are una ble to be registered and protected for products
imported from that Member into the EC market.249
7.257 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. 250 It does not contest that the Regulation is a measure affecting the
internal sale of products.251
7.258 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

246 The Panel recalls its findings at para. 7.234 above on the meaning of those terms as understood
under Article 3 of the Paris Convention (1967).
247 Australia's first written submission, paras. 161-162 and 166-167.
248 Australia's first written submission, para. 164.
249 Australia's first written submission, paras. 168 and 179; response to Panel question No. 32.
250 European Communities' first written submission, paras. 195-197.
251 European Communities' first written submission, para. 194.

registration of GIs from other WTO Members.
252 It concedes that the app lication of those conditions
would prejudice its obligations under Article III:4 of GATT 1994.253
(ii) Main arguments of third parties
7.259 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.254
7.260 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 market to the disadvantage of imported products.255
7.261 New Zealand considers that the complainant has 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 arguments raised in relation to that claim apply equally here.
256
(iii) Consideration by the Panel
7.262 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. 257 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 elements of an inconsistency
with Article III:4 are all met in this claim. These are that the imported and domestic products at issue
are "like products"; that the measure at issue is a "law, regulation, or requirement affecting their
internal sale, offering for sale, purchase, transportatio n, distribution, or use"; and that the imported
products are accorded "less favourable" treatment than that accorded to like domestic products.
258
7.263 The Regulation sets down requirements concerning the use of certain names in the
presentation for sale of agricultural products and foodstuffs. 259 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.260

253 European Communities' response to Panel question No. 94.
254 Annex C, para. 25.
255 Annex C, para. 95.
256 Annex C, para. 141.
257 European Communities' response to Panel question No. 94(a).
258 These three elements are also set out in the Appellate Body report on Korea – Various Measures on
Beef at para. 133.
259 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 with respect to 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.
260 The Panel recalls its comment on the order of analysis in para. 7.87 and its findings in para. 7.244,
that there is no hierarchy between GA TT 1994 and the TRIPS Agreement, which appear in separate annexes to

7.264 The Regulation links the protection of the name of a product to the territory of a particular
country.261 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.
7.265 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 protection 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
262 and Florida citrus may be like cítricos
valencianos263 for the purposes of Article III:4 of GATT 1994.
7.266 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.
264
7.267 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 conditions of competition of the relevant products.
7.268 The declared purposes of the Regulation set out in its preamble include the following, which
links GIs to demand for products:

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.
261 Exceptionally, it may extend across a border of more than one country, see Articles 5(5) and 12a(1)
of the Regulation.
262 Registered by Commission Regulation (EC) No. 1107/96, p. 13, Exhibit COMP-3a.
263 Registered by Commission Regulation (EC) No. 865/2003, Exhibit COMP-4b.i.
264 See the Appellate Body report on Korea – Various Measures on Beef , paras. 137 and 142; and also

"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;"
7.269 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.
7.270 The European Communities does not contest that these are benefits of protection under the
Regulation. It refers to the right to use the d esignation and logo under Article 8 and the possibility of
excluding others from use of the GI under Article 13.
265
7.271 The Panel also notes that there is the possib ility 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 products and foodstuffs from the European Communities.
7.272 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, inconsistently with Article III:4 of GATT 1994.266
7.273 The European Communities has not asserted that , with respect to the availability of
protection, the Regulation is justified by Article XX(d) of GATT 1994.267
7.274 Australia argues that less favour able treatment is accorded by the European Communities'
"inability to state clearly" what is required by Ar ticle 12 of the Regulation, or to state the decision-
making criteria that would govern the assessments required to be made under Article 12 of the
Regulation.268 However, the Panel notes that, given the European Communities' defence that it did
not apply the conditions in Article 12 to WTO Me mbers, there was little discussion of what precisely
is required by those conditions. In view of the Panel's conclusion, it is unnecessary to consider this
issue further.
7.275 Australia also argues that the disadvantage ac corded by the Regulation to imported products
bearing a GI located in another Member is "cum ulative", by reference to the equivalence and

266 This conclusion is without prejudice to the Panel' s examination of the inspection structures required
for registration, considered later in this report.
267 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 assert Article XX(d) as a defence only with respect to inspections, 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).
268 Australia's first written submission, para. 177.

reciprocity conditions, the application procedures, the regulatory committee (considered below) and
the two factors in paragraph 7.274. 269 However, given that Australia did not elaborate on how the
cumulative effect of these aspects of the Regul ation allegedly accords less favourable treatment
distinct from that accorded by each of them separately, the Panel does not consider it necessary to
consider this issue further.
2. Application procedures
(a) Description of application procedures under Articles 5 and 12a of the Regulation
7.276 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. 270 Article 5 applies where it is located in an EC member State.
Article 12a applies where the GI is located in a third country.
7.277 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.
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. [...]"
7.278 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."
7.279 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

269 Australia's first written submission, para. 178; response to Panel question No. 32.
270 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.

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 Australia has not put in issue.
(b) National treatment under the TRIPS Agreement
(i) Main arguments of the parties
7.280 Australia claims that the Regulation is inconsistent with Article 3.1 of the TRIPS Agreement
and Article 2 of the Paris Convention (1967), as incor porated by Article 2.1 of the TRIPS Agreement,
because non-EC nationals seeking to register a GI lo cated in the territory of another WTO Member
are not able to apply for registration directly to the European Communities – whether to the
Commission or another Community-level body. Ar ticles 12(3) and 12a of the Regulation, read
together, require that another WTO Member in which the GI is located pre-approve every
application.
271 The European Communities has an obliga tion to provide the means for intellectual
property right holders to exercise their rights without intervention by another government.272
7.281 Australia argues that the legally defined ri ghts and obligations between the European
Communities and EC member States and EC member State nationals makes the registration process
for EC nationals fundamentally different for non-EC nationals.
273 Australia adopts Canada's portrayal
of the issues concerning the relationship between WTO Members, the European Communities, the EC
member States and nationals. If the subject matt er of this dispute lies within the exclusive
competence of the European Communities, not EC me mber States, then any functions carried out by
EC member States in implementing the Regulation are carried out as sub-national units of the
European Communities. Any outward appearance of symmetry of treatment therefore masks a
fundamentally different situation.
274 Australia would transmit an application for registration to the
Commission if it became aware of one from within Australia, but it could not state positively that it
could meet the equivalence and reciprocity conditions.275
7.282 Australia also claims that the Regulation imposes a requirement of establishment in the
European Communities inconsistently with Article 2(2) of the Paris Convention (1967).276
7.283 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.
7.284 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. 277
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

271 Australia's first written submission, paras. 172 and 198; first oral statement, para. 34.
272 Australia's response to Panel question No. 38.
274 Australia's rebuttal submission, paras. 174-176, citing Canada's third party oral statement; and
Australia's second oral statement, para. 77.
275 Australia's response to Panel question No. 38.
276 Australia's first written submission, paras. 198 and 206.
277 European Communities' first written submission, para. 130.

authorities facilitates cooperation durin g the registration process and should be of practical benefit to
the applicant.278
7.285 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 EC. 279 There are many examples of international cooperation between
governments in the protection of private rights in cluding, in the field of intellectual property
protection, such as the Madrid Protoc ol, the Lisbon Agreement and Article 6 quinquiesA(1) of the
Paris Convention, and in the fields of certificat es of origin, technical standards, conformity
assessment, transport, fisheries and judicial coop eration. These examples illustrate that in an
increasingly interdependent world, the effective protection of individual rights in cross-border
situations inevitably engenders a need for cross-border cooperation.280
7.286 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.
281 The transmission of the application by the
same government is not a significant extra burden.282
(ii) Main arguments of third parties
7.287 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 their respective authorities an
application for registration under the Regulation.283
7.288 Argentina expresses uncertainty regarding the consistency 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.284
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 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. 285
7.290 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 the same in substance.
The provisions on verification by, and transmission to, the Commission differ between the procedures
which suggests that third countries must satisfy more than an EC member State.

278 European Communities' response to Panel question No. 33; rebuttal submission, paras. 124-129.
279 European Communities' first written submission, para. 131.
280 European Communities' response to Panel question No. 37.
281 European Communities' rebuttal submission, paras. 131-134; response to Panel question No. 114.
283 See their respective responses in Annex C, paras. 18, 32, 103, 118, 160 and 179.
284 Annex C, paras. 7-15.
285 Annex C, para. 27.

7.291 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.
286
7.292 Mexico refers to cochineal as a practical exampl e of the way in which Mexican producers
would be required to go through specific procedures which EC nationals are not.287
7.293 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
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.288
(iii) Consideration by the Panel
7.294 These claims are made under the national treatme nt obligations in 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.
7.295 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
7.296 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".
7.297 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."
7.298 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 indications", as defined in the Regulation. It is not disputed
that "designations of origin" and "geographical indicat ions", as defined in the Regulation, are a subset
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.

286 Annex C, para. 99.
287 Annex C, paras. 115-117.
288 Annex C, paras. 136-137.

7.299 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
7.300 The Panel recalls its findings:
(a) at paragraphs 7.221 to 7.239 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
(b) at paragraph 7.184 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 para graph 7.187 that in this ex amination we will focus on the
"fundamental thrust and effect" of the Regulation.
7.301 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.289 However, Australia challenges the Regulation, in this respect, "as such".
7.302 Australia claims that the treatment acco rded under the application procedures in
Article 12a(1) and (2) is less favourable treatme nt than that accorded under the applications
procedures in Article 5(4) and (5). There is an apparent equivalence in the drafting of these
provisions but the question is whether this would imply a modification of the effective equality of
opportunities with regard to the protection of intellectual property.
7.303 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 requirements of the Regulation. This involves a
detailed examination of the application in accordance with the criteria in the
European Communities' Regulation, not the domestic law of the country 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 application concerns a geographical area located
outside the European Communities, the authorities must also transmit a description of

289 However, the United States provided evidence from the Idaho Potato Commission that it could not
obtain protection for its US certification mark in the Europ ean 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.
The European Communities responds that this is based on a misperception of the 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.

the protection of the GI in its country of origin, as well as a declaration concerning
inspection structures.
290
7.304 We recall the European Communities' e xplanation of its domestic constitutional
arrangements, set out at paragraph 7.148, 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". 291 It follows that any application
relating to a geographical area located in an EC member State is filed directly with a " de facto organ
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.
7.305 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."
7.306 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 right to such treatment.
7.307 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 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, 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.
7.308 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". 292 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 interpre tations 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

290 For the purposes of this report, references to examination and transmission of "applications" include
examination and transmission of these supporting documents. Inspection structures requirements are considered
later in this report.
291 European Communities' second oral statement, para. 148.

competence to perform this analysis. 293 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 protection forms part of the conditions under Article 12(1)
of the Regulation. We have found that require ment, as a precondition to the availability of GI
protection, to be inconsistent with the national treatment obligations in the TRIPS Agreement and
GATT 1994.
7.309 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.
7.310 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.
7.311 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 functions are completely outside its control.
7.312 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.
294 The Panel notes that under two of them, th e 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.
7.313 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 origin.295
7.314 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 the Panel's terms of reference.
7.315 The Panel recalls its finding at paragraph 7. 248 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.

293 See comments by Brazil in Annex C, para. 32.
294 See European Communities' response to Panel question No. 37, and Exhibits EC-20 through EC-27.
295 Nothing in these findings purports to diminish the rights of Members under Article 5 of the TRIPS
Agreement either.

7.316 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 with Article 3.1 of the TRIPS Agreement.
7.317 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 Agreemen t. With respect to Article 2(2) of the Paris
Convention (1967), the Panel recalls its finding at paragraph 7.251 and, for the same reasons,
concludes that, with respect to the applica tion procedures, the Regulation does not impose a
requirement of domicile or establishment inconsis tently with that provision, as incorporated by
Article 2.1 of the TRIPS Agreement.
(c) National treatment under GATT 1994
(i) Main arguments of the parties
7.318 Australia claims that the Regulation is inconsiste nt with Article III:4 of GATT 1994 because
it requires the WTO Member in whose territory a geographical area is located to pre-approve each and
every application for registration. This is a di stinct and additional requi rement imposed on products
imported into the European Communities which si gnificantly modifies the conditions of competition
for imported products vis-à-vis domestic like products in the EC market. Any outward appearance of
symmetry of treatment therefore masks a fundamentally different situation, for the reasons given
earlier.
296
7.319 Australia argues that the relevant aspects of th e application procedures are not justified under
Article XX(d) of GATT 1994. They do not satisfy the "necessary" test in paragraph (d) because, as in
Korea – Various Measures on Beef , alternative measures are reasonably available. The European
Communities could leave it to the applicant to provide the required information and/or it could ask for
the cooperation of another WTO Member government af ter an application has been filed should such
cooperation be necessary to enable an application to be assessed. They do not satisfy the chapeau of
Article XX because if the term is already regi stered, the applicant could provide a registration
certificate as readily as the third country government. As in US – Shrimp , the Regulation requires
other WTO Members to adopt a regulatory framework that is not merely comparable but essentially
the same.
297
7.320 The European Communities responds that this claim must fail. It reiterates its arguments
that the application procedures provide equal treatment, not less favourable treatment.298
7.321 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. 299 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

296 Australia's first written submission, paras. 172-174.
297 Australia's second oral statement paras. 66-70.
299 European Communities' rebuttal submission, paras. 237-239.

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
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.300
7.322 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 Australia. Verifi cation 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 Australian government would not be better
qualified than the right holder or the European Comm unities. Transmission of applications by third
country governments is an integral part of the application procedure and should not be viewed in
isolation. It has no significant impact on trade in goods. It makes no difference whether the European
Communities asks for cooperation from a third country government before or after an application is
filed.301
(ii) Main arguments by third parties
7.323 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.302
7.324 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.303
7.325 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.
304
(iii) Consideration by the Panel
7.326 This claim concerns procedures for applications for registration under the Regulation. The
Panel recalls its findings:

300 European Communities' rebuttal submission, paras. 237-239; responses to Panel question
Nos. 135(a), (b) and (c) and 136(a).
301 European Communities' response to Panel question No. 136(b), (c) and (d).
302 See their respective responses in Annex C at paras. 18, 27, 103, 118 and 180.
303 Annex C, para. 27.
304 Annex C, paras. 141-143.

(a) at paragraph 7.263, 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 7.264 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 7.265 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 7.266, 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 paragraphs 7.267 to 7.269 on the subs tantive advantage provided under Article 13
of the Regulation that affects the conditions of competition of the relevant products;
(f) at paragraphs 7.303 to 7. 307 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 transmitted to the
Commission; and
(g) at paragraph 7.311 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.
7.327 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.
7.328 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.
7.329 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. Howeve r, 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.
305

305 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.

7.330 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 this 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;"
7.331 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.
306 However, the term "laws or regulations" is qualified by the
phrase "not inconsistent with the provisions of this Agreement".
7.332 The European Communities argues that the requi rements of examination and transmission of
applications by governments secure compliance with the Regulation.307 However, the Panel has found
that the Regulation itself 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 Comm unities argued that 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 Communities did not demonstrate that it
was "not inconsistent" with GATT 1994.308
7.333 The Panel also notes the use of the term "necessary" in paragraph (d) of Article XX. 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 contribution 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]
309
7.334 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:

308 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 responses to Panel questions No. 135(a), (c) and (d).
309 Appellate Body report on Korea – Various Measures on Beef, para. 161.

"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
Member concerned could 'reasonably be expect ed to employ' is available, or whether
a less WTO-inconsistent measure is 'reasonably available'."
310
7.335 The Panel will follow this approach.
7.336 Australia argues that the European Communiti es could reasonably be expected to allow
applicants to file applications directly with its authorities without prior verification by third country
governments, and that this is WTO-consiste nt. Many other WTO Members employ such a
procedure.311 It is not disputed that such a procedure would be WTO-consistent.
7.337 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 country of the GI is in a position to carry out".312
7.338 The Panel observes that Articles 6(2) and 1 2b(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.
7.339 With respect to factual and legal questions that, as part of the examination, can 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.
313 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.
7.340 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

310 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.
311 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.
313 European Communities' response to Panel question No. 136(a).

examination by governments, including third country governments, is necessary, it has not established
that transmission by them is necessary either.
7.341 Therefore, the Panel considers that the Eur opean Communities has not discharged its burden
of proving that examination and transmission of applications by governments are covered by
paragraph (d) of Article XX. It is therefore unnecessary to consider the chapeau of Article XX.
7.342 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
7.343 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.
7.344 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."
7.345 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 with 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."

7.346 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
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."
7.347 Article 7(4) sets out the grounds for admissi on of objections. Articles 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
7.348 Australia claims that the Regulation is inconsistent with Article 3.1 of the TRIPS Agreement
and Article 2 of the Paris Convention (1967), as incor porated by Article 2.1 of the TRIPS Agreement,
because the objection procedures accord less favourable treatment to non-EC nationals.
314
7.349 Australia argues that a non-EC national resident or established in a third country has no direct
means to object to registration but must lodge an objection through the government of the WTO
Member in which that person resides or is established.
315 That government is responsible for
verification and transmission of the objection. Australia argues that, with respect to objection
procedures, as with respect to application pro cedures, the legally defined rights and obligations
between the European Communities and EC member States and EC member State nationals makes
the registration process for EC nationals f undamentally different for non-EC nationals.
316 A n y
outward appearance of symmetry of treatment therefore masks a fundamentally different situation.317
7.350 Australia submits that Article 12d of the Regulation limits the persons who may file
objections to those resident or established in a country that satisfies the conditions of equivalence and
reciprocity.318
7.351 Australia argues that certain individual registra tions, which remain in force, were effected
under the simplified procedure in Article 17 of the Regulation prior to its deletion in April 2003,
without granting a right of objection to WTO Member nationals. 319 It refers to the Bayerisches Bier
registration (considered in Section VII:D below) an d argues that there was a mechanism available to
at least some EC trademark right holders to make their objections known.320
7.352 Australia also claims that the measure at i ssue is inconsistent with national treatment
obligations under the TRIPS Agreement because cert ain individual registrations, which remain in
force, were effected under Article 6 of the Regul ation prior to its amendment by the insertion of

314 Australia's first written submission, para. 203 and second oral statement, para. 77.
315 Australia's first written submission, para. 203.
317 Australia's rebuttal submission, paras. 174-176, citing Canada's third party oral statement; and
Australia's second oral statement, para. 77.
318 Australia's first written submission, para. 204.
319 Australia's first written submission, paras. 190-194.
320 Australia's comments on EC response to question No. 163.

Article 12d in April 2003, without granting a ri ght of objection to WTO Member nationals. 321 This
claim is dealt with in Section VII:E of this report under the heading "individual registrations".322
7.353 The European Communities responds that these claims must fail. The verification and
transmission of an objection by a third country s hould 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
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 beneficial 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.323
7.354 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 equiva lence 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). 324 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.325
(ii) Main arguments of third parties
7.355 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 respective authorities an objection
to registration under the Regulation.326
7.356 Brazil considers that the requirement to file objections 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.327
7.357 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

321 Australia's first written submission, paras. 184-189.
322 Australia mentioned Article III:4 of GATT 1994 in response to Panel question No. 92 but has not
raised a claim under GATT 1994 in relation to the objection procedures.
323 European Communities' response to Panel question No. 34; rebuttal submission, paras. 155-159;
second oral statement, paras. 89-94.
324 European Communities' first written submission, para s. 73-75; first oral statement, para. 50;
second oral statement, paras. 86-88.
326 See their respective comments in Annex C in paras. 18, 103, 118, 110 and 179.
327 Annex C, para. 28.

example of the way in which Mexican producers woul d be required to go through specific procedures
which EC nationals are not.
328
7.358 New Zealand argues that the objection procedure can pot entially result in an application for
registration not proceeding. Not having the right to object 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.329
(iii) Consideration by the Panel
7.359 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 "opposition procedures".
7.360 These claims relate to two separate issues: (1) regarding verification and transmission of
objections by governments; and (2) regard ing equivalence and re ciprocity conditions.330 The Panel
will address these issues in turn.
Verification and transmission
7.361 These claims are made under the national treatme nt obligations in 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.
7.362 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
7.363 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."

328 Annex C, para. 110.
329 Annex C, paras. 139-140.
330 Australia also makes a claim with respect to the right of objection under the former Article 17 of the
Regulation, which has been repealed. The Panel recalls its decision in paras. 7.14 and 7.17 that it would not
make any recommendation with respect to prior versions of the Regulation that are no longer in force but it
would make findings with respect to prior versions of the Regulation where they serve some useful purpose in
reaching conclusions with respect to measures within its terms of refere nce, including individual registrations,
that are currently in force. The Panel makes certain findings on the right of objection under the former
Article 17 for that purpose in para. 7.746.

7.364 The Panel recalls its finding at paragraph 7.299 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. It is not dis puted that "designations of origin" and "geographical
indications", as defined in the Regulation, are a subset of geographical indications, the subject of
Section 3 of Part II, and therefore part of a cate gory of intellectual property within the meaning of
Article 1.2 of the TRIPS Agreement. Therefore, the objection procedures are subject to the national
treatment obligation in Article 3.1 of that Agreement.
Less favourable treatment accorded to the nationals of other Members
7.365 Australia claims that the procedures relating to verification and transmission of objections are
inconsistent with the national treatment obligations under the TRIPS Agreement.
7.366 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 7.221 to
7.239 and considers, for the same reasons a fortiori, that the treatment accorded by the Regulation to
persons resident or established in certain countries will, objectively, translate into treatment of persons
with the nationality of those countries.
7.367 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.
331 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.332
7.368 The Panel recalls its finding at paragraph 7.184 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 7.187 that in this examination we will focus on the
"fundamental thrust and effect" of the Regulation.
7.369 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. 333 However, Australia challenges the Regulation, in
this respect, "as such".
7.370 Australia claims that the treatment accorded under the objection procedures in Articles 12b(2)
and 12d(1) is less favourable treatment than that ac corded under Article 7(3). There is an apparent

331 European Communities' first written submission, para. 142.
332 See paragraph 10 of the recitals to the April 2003 amending Regulation, set out in para. 7.121
above.
333 However, the United States provided evidence from the US Dairy Export Council and the National
Milk Producers Federation that US dairy producers and processors had been unable to prevent the registration as
protected GIs in the European Union of a number of cheese types that they cons idered generic prior to
registration. The European Communities responds that this is based on a misperception of the content of the
Regulation: see its rebuttal submission, para. 85.

equivalence in the drafting of these provisions but the question is whether this would imply a
modification of the effective equality of opportuniti es with regard to the protection of intellectual
property.
7.371 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
334 and forward or transmit it to the Commission.
7.372 We recall the European Communities' expl anation of what amounts to its domestic
constitutional arrangements, set out at paragraph 7.148, 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".335 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.
7.373 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 Commission. A group or person who submits an objection
in a third country has no right to such treatment.
7.374 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.
7.375 The European Communities submits that the re quirement that statements of objection be
transmitted by the country where the person is resident 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.
336
The Panel recalls its finding at paragraph 7.309 that the obligation to accord national treatment with
respect to a measure of the European Communities is the obligation of the European Communities.

334 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.
335 European Communities' second oral statement, para. 148.

For the reason set out in paragra ph 7.310 in relation to applicatio n procedures, the Panel considers
that the European Communities has failed to accord no less favourable treatment itself to the nationals
of other Members.
7.376 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.
7.377 The Panel recalls its finding at paragraph 7. 248 that the fact that a general exceptions
provision along the lines of Article XX of GATT 1994 was not included in the TRIPS Agreement has
no impact on its analysis of Article 3.1.
7.378 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)
7.379 In view of the conclusion at paragraph 7.378 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.
7.380 The Panel recalls its finding at paragraph 7.2 53 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

7.381 Australia claims that the right to file an obj ection under Article 12d(1) of the Regulation is
limited to countries that satisfy the equivalence a nd reciprocity 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 WT O 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 solely for the purpose of determining the European Communities'
compliance with its WTO obligations.337
7.382 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 7.346 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,

337 In this regard, the Panel recalls its comments at para. 7.106 above.

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.
7.383 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 recita ls to the April 2003 amending Regulation which
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 e quivalence and reciprocity conditions to the issue
of protection provided by registration to foreign names.
338
7.384 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 residents from WTO countries to object to the application.339
7.385 Therefore, based on this understanding of Ar ticle 12d(1) of the Regulation, the Panel
concludes that with respect to the equivalence a nd reciprocity conditions, as allegedly applicable to
objections, Australia has not made a prima facie case in support of its claims under Article 3.1 of the
TRIPS Agreement or Article 2(1) of the Paris Conven tion (1967) as incorporated by Article 2.1 of the
TRIPS Agreement.
Summary of conclusions regarding objection procedures
7.386 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 Article 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; and
(c) Australia has not made a prima facie case in support of its claims with respect to the
equivalence and reciprocity conditions, as allegedly applicable to the objection
procedures.
4. Regulatory committee
(a) Description of procedure laid down in Article 15 of the Regulation
7.387 The Regulation provides that certain decisions shall be taken by the European Commission
"in accordance with the procedure laid down in Article 15". These include decisions not to proceed
with registration of a GI under Articles 6(5) and 12b( 1)(b); decisions whether or not to proceed with
registration of a GI where an objection is admissible under Articles 7(5)(b) 340, 12b(3) and 12d(3);

338 Paragraphs 9 and 10 of the recitals to Council Regulation (EC) No. 692/2003 set out at para. 7.121
above.
339 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.
340 Where no agreement is reached among EC member States.

decisions to cancel registration of a GI under Artic le 11a; and decisions whether a third country
satisfies the equivalence and recipr ocity conditions under Article 12(3). 341 The Regulation provides
that the Commission may ask the committee provided for in Article 15 for its opinion prior to taking
certain other decisions. These include decisions to pr oceed with registration of a GI located in a third
country under Article 12b(1)(a) and decisions to re gister a homonym of an already registered GI
under Article 6(6).342
7.388 Article 15 of the Regulation provides, relevantly, as follows:
"1. The Commission shall be assisted by a committee.
2. Where reference is made to this Article, Articles 5 and 7 of Decision
1999/468/EC shall apply. (...)"
7.389 Decision 1999/468/EC (the so-called "Comitology Decision") lays down the procedures for
the exercise of implementing powers conferred on the Commission. 343 Article 5 of that Decision sets
out a regulatory procedure which provides that the Commission shall be assisted by a regulatory
committee composed of the repr esentatives 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
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.344
(b) National treatment under the TRIPS Agreement
(i) Main arguments of the parties
7.390 Australia argues that the Regulation is inconsistent with Article 3.1 of the TRIPS Agreement
and Article 2.1 of the TRIPS Agreement (incorpor ating Article 2 of the Paris Convention (1967))
because "a non-EC national trademark right holde r does not have a national representative on the
Committee to speak for its interests". It set out the procedure that is established under Article 15.345
7.391 The European Communities responds that this claim is manifestly unfounded. The
decision-maker is the Commission, or exceptionally the Council. The Committee merely assists the
Commission but does not take decisions itself. EC member State representatives on the Committee

341 Under the simplified procedure in the former Article 17 of the Regulation, the Commission was
required to register all names in accordance with the procedure laid down in Article 15.
342 The procedure under Article 15 is also applicable in certain other cases, including Articles 1(1), 2(5)
and 5(5).
343 It is reproduced in full in Exhibit COMP-8.
344 Article 15 of the Regulation, set out in Exhib its COMP-1b and EC-1, Article 5 of Council Decision
(EC) No. 1999/468 set out in Exhibit COMP-8 and the European Communities' first written submission,
paras. 81-82. The three month time-limit is set by Article 15 of the Regulation.
345 Australia's first written submission, paras. 58 and 203. In relation to a claim under Article 41 of the
TRIPS Agreement, it also referred to the Committee as the ultimate decisi on-making body for the enforcement
of trademark rights in the circumstances governed by the Regulation: see para. 147.

do not speak for particular right holders, but represent the respective EC member State.
346 Australia
has not provided arguments to substantiate its claim.347
(ii) Main arguments of third parties
7.392 China notes the procedure under Article 15 and that the committee is composed only of
representatives of EC member States. This procedure for the resolution of possible disputes on
publication is available to names from WTO Members, but the process does not invite WTO
Members to participate.348
(iii) Consideration by the Panel
7.393 These claims are made under the national treatme nt obligations in 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 can consider these claims together.
7.394 The parties agree that the regulatory procedur e established under Article 15 of the Regulation
is as described above. The procedure under Article 15 has been applied to the consideration of
particular applications to register GIs located within the European Comm unities where there was an
admissible objection from an EC member State. In several cases the Commission's draft measures
were not in accordance with the op inion of the Committee and therefore had to be submitted to the
Council of Ministers. In most of these cases the Council did not act and the Commission then adopted
the measures.
349 The Council adopted the measures itself in the cases of "Bayerisches Bier", "Aceto
Balsamico tradizionale di Modena" and "Aceto Balsamico tradizionale di Reggio Emilia".350
7.395 The Panel notes that this regulatory procedure, which is set out in Article 5 of the Comitology
Decision, appears to be a standard procedure for the exercise of implementing powers conferred on
the European Commission under Community law. Howe ver, in the context of this Regulation, the
standard regulatory procedure operates in conjunc tion with the application and objection procedures,
which require the EC member States to examine and transmit applications and objections to the
Commission.
7.396 Australia's claims rest on the premise that th e representatives of the EC member States on the
regulatory committee act as representatives of groups who submit an application for registration of a
GI located in their respective territories, of persons who wish to object who are resident or established
in their respective territories, and of interests in pr oducts the subject of an application for registration
of a GI located in their respective territories.
7.397 The Panel notes that the regulatory committe e must be consulted in cases where the
Commission proposes to register a GI and there is an admissible objection. In these cases, the
representatives of both the EC member State that fo rwarded the application and the EC member State
that objects participate in the Committee's consider ation of the matter, as well as in any action taken
by the Council of Ministers. However, accord ing to Article 5(5), the EC member State which
transmitted the application has already decided that the application satisfies the requirements of the
Regulation and, according to Article 7, the EC memb er State that objects has already taken the view
that there are grounds to do so.

346 European Communities' first written submission, para. 154.
347 European Communities' second oral statement, para. 100.
348 See Annex C, para. 83.
349 This included the first registration of "Feta" which was later annulled.
350 This information was provided by the European Communities in a table of applications for
registration on which the Committee established by Article 15 was consulted. See Exhibit EC-28.

7.398 The Panel notes that the Regulation refers to both persons and EC member States, as well as
third countries. With respect to applicants, Article 5 of the Regulation refers to an applicant group but
an EC member State checks and forwards the application and, thereafter, the Commission
communicates with the "Member State concerned". With respect to objections, Article 7(1) grants
only the EC member States the right to raise objectio ns to registration before the Commission, whilst
Article 7(3) provides that any legitimately con cerned natural or legal person may object to the
proposed registration by sending its statement to th e EC member State in which he resides or is
established. Where an objection is acknowledged to be admissible within the meaning of Article 7(4),
Article 7(5) provides that the Commission is to ask the "Member States concerned" to seek agreement
among themselves: it makes no provision for any intervention by individuals.
351 Articles 6(1), 9 and
11 also refer to the "Member State(s) concerned" in the procedures under the Regulation.352
7.399 The Panel recalls that it has already accepted the European Communities' explanation that
Community laws are generally not executed thro ugh 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".353 We note its explanation that:
"When fulfilling their functions under Regulation 2081/92, a Member State is in no
way identified with the applicant or the pe rson raising the objection. In verifying the
applications or statements of objection, the Member State must correctly, impartially
and objectively apply the terms of the Regula tion. Similarly, when exercising its role
in the Committee, the Member States must be guided by the terms of the Regulation,
and not act as a representative of any individual applicant or objecting person."
354
7.400 The Panel does not consider that these features of the Regulation "as such" compel any
different treatment of different GIs. Under the national treatment obligations of the TRIPS
Agreement, evidence is required that, in the appli cation of these procedures, the authorities cannot, do
not or will not apply the Regulation in the same way to the nationals of other Members and the
European Communities' own nationals. Australia has not provided any such evidence.
7.401 Further, Australia's references to procedural fa irness, due process and/or transparency in the
regulatory committee's decision-making process do not appear to relate to the national treatment
obligations, but rather other provisions of the TRIPS Agreement.
7.402 Accordingly, the Panel concludes that Australia has not made a prima facie case in support of
its claims with respect to th e regulatory committee 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.
(c) National treatment under GATT 1994
(i) Main arguments of the parties
7.403 Australia argues that the Regulation is inconsistent with Article III:4 of GATT 1994 because
the outcome of applications for registration are determined through a process, that is, the Committee
of EC member State representatives, "in which there is no representative or advocate for the

351 Confirmed by the Court of First Instance of the European Communities in Case T-215/00, SCEA La
Conqueste v Commission [2001] ECR II-181, para. 45, reproduced in Exhibit COMP-12.
352 Article 11 establishes a process for cancellation due to non-compliance with specifications among
"Member States concerned". Article 11a also distinguishes between requests for cancellation by persons and the
State which submitted the original application.
353 European Communities' second oral statement, para. 148.
354 European Communities' response to Panel question No. 39.

registration of a GI for an imported product and no requirement for procedural fairness, due process
and/or transparency concerning that Committee's decision-making process".
355
7.404 The European Communities responds that Australia's claim to have a representative on the
Committee is not reasonable. The public authorities of a WTO Member must be presumed to
administer their duties properly and fairly. This is independent of the nationality of the civil servants
and employees working for such authorities. There are no "EC representatives" in the public
authorities and agencies of Australia.
356
(ii) Consideration by the Panel
7.405 The Panel notes that this claim, like those cl aims in respect of the regulatory committee
brought under the TRIPS Agreement, rests on the prem ise that the representati ves of the EC member
States on the regulatory committee act as representativ es of groups who submit an application for
registration of a GI located in their respective te rritories, of persons who wish to object who are
resident or established in their respective territories, and of interests in products the subject of an
application for registration of a GI located in their respective territories.
7.406 The Panel recalls its finding at paragraph 7.400 that the relevant features of the Regulation "as
such" do not compel any different treatment of diffe rent GIs. Under the national treatment obligation
in Article III:4 of GATT 1994, evid ence is required that, in the application of these procedures, the
authorities cannot, do not or will not apply the Regul ation in the same way to imported products and
EC products and that this accords less favourable treatment. Australia has not provided any such
evidence. Accordingly, the Panel concludes that Australia has not made a prima facie case in support
of its claim with respect to the regulatory committee under Article III:4 of GATT 1994.
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
7.407 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."

355 Australia's first written submission, para. 177.
356 European Communities' first written submission, para. 155.

(ii) Main arguments of the parties
7.408 Australia claims that this labelling requirement ap plies to the use of GIs from other WTO
Members so that use of a GI on a product from anot her WTO Member can be authorized only if it
meets this labelling requirement.357
7.409 Australia does not consider that Article 12(2) of the Regulation can apply to the registration
of both EC and third country GIs in view of its act ual text which expressly relates to a situation where
the later registered GI is "a protected name of a th ird country". As long as it is drafted in that form,
the European Communities is not bound to apply the interpretation that it has offered, and the
European Court of Justice would enforce the specific terms of the Regulation.358 Australia also argues
that the European Communities' explanation of the country of origin labelling requirement in
Article 12(2) is not supported by the actual text of Ar ticle 12(2), particularly when read together with
Article 6(6), which applies to the registration of a GI located in the European Communities.359
7.410 Australia submits that the meaning of "such nam es" is unclear but understands that it refers to
a third country GI protected in that third country and which is identical to a prior GI on the EC
register. It submits that the meaning of "protect ed name of a third country" is ambiguous but, given
the context, it assumes that it refers to a third country GI protected in that third country. 360 Later, it
argues that the term "Community protected name" re fers to a GI already on the register whether from
the European Communities or a third country.361
7.411 Australia argues that "clearly and visibly indi cated" means that the label must be noticeably
evident in the same field of vision as the GI and the GI symbol.362
7.412 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
homonyms and not to third country names in general. 363 It confirms that there have been no cases in
which this provision has been applied in practice.364
7.413 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.
365 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 EC.
366 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. 367 "Such names" is written in the

357 Australia's first written submission, paras. 220 and 223.
358 Australia's first oral statement, para. 25; response to Panel question No. 53.
360 Australia's first written submission, paras. 235-236.
362 Australia's response to Panel question No. 120.
363 European Communities' first written submission, paras. 445-446 and 475-476.
364 European Communities' response to Panel question No. 44.
365 European Communities' first written submission, para. 88 and 134-135; rebuttal submission,
para. 145.
366 European Communities' response to Panel question No. 41.
367 European Communities' response to Panel question No. 43.

plural which clearly indicates that the requirement can relate to both the EC and third country GIs.
368
Nothing in the wording of the provision prevents it applying to GIs from both third countries and the
EC.
369 Even if "Community protected name" referre d to EC and third country names already on the
register, "protected name of a third country" shoul d be interpreted to include names protected in a
third country, whether or not from the European Communities or a third country. 370 In the EC's view,
Article 12(2) has no specific link with Article 12(1).371
7.414 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. 372 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). 373 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. 374 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
different third countries. 375 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.376
7.415 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.377
(iii) Consideration by the Panel
7.416 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".
378 The labelling requirement has
not been applied in practice. However, Australia challenges this aspect of the Regulation "as such".
7.417 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 its WTO obligations.
379
7.418 The parties disagree on the scope of the labe lling requirement. Australia does not exclude
that it may apply to all GIs from third countries, like the wider context in Article 12, which applies to
all GIs from third countries that satisfy the conditio ns in paragraph 1 and are recognized as equivalent

369 European Communities' second oral statement, para. 81.
370 European Communities' second oral statement, para. 82.
371 European Communities' response to Panel question No. 117.
372 European Communities' first written submission, para. 89; response to Panel question No. 118.
373 European Communities' first written submission, para. 479.
374 European Communities' response to Panel question No. 119.
375 European Communities' response to Panel question No. 42.
377 European Communities' response to Panel question No. 120.
378 The use of this term does not prejudge whether this is a "labelling requirement" as used in
Annex 1.1 of the TBT Agreement. That issue is considered at paras. 7.448-7.449.
379 In this regard, the Panel recalls its comments at para. 7.106.

under paragraph 3. The European Communities r esponds that it applies only to identical or
homonymous GIs, consistent with the immediate context in paragraph 2 of Article 12.
7.419 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 mo re 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, which has not been applied, the Panel agrees.
7.420 Even though Australia understands that the provision only refers to "identical" GIs 380, the
parties disagree on the meaning of "such names". Australia assumes from the context that it refers to
the subject of the previous indent, which is "a protect ed name of a third country" that is identical to a
Community protected name. The European Commun ities responds that it refers not only to "a
protected name of a third country" which is identic al, but also to the "Community protected name"
with which it is identical.
7.421 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.
7.422 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 "the product" which is in the singular, so that the plural form is not
determinative of the issue before us.
7.423 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

380 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
"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. 7.467 below.

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.
7.424 The Panel also notes that the first indent of Article 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 practical 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."
7.425 The Panel will revert to the parallel in the cons truction of the requirements in Articles 12(2)
and 6(6) in its consideration of this claim.
(b) National treatment under the TBT Agreement
(i) Main arguments of the parties
7.426 Australia claims that the Regulation is inconsistent with Article 2.1 of the TBT Agreement
because the labelling requirement in Article 12(2) accords less favourable treatment to imported
products.
381 Firstly, it argues that the labelling requireme nt in Article 12(2) of the Regulation falls
within the definition of a "technical regulation" in Annex 1.1 of the TBT Agreement.
7.427 Australia argues that the Regulation applies to an "identifiable group of products" within the
meaning of Annex 1.1 of the TBT Agreement becau se Article 12(2) applies to agricultural products
and foodstuffs for which GI protection is sought where the GI is identical to a GI already on the EC
register. These are not expressly identified in the Regulation but th ey are identifiable.382 Although it
applies to GIs, these exist with re gard to specific agricultural produc ts or foodstuffs for which the
homonymous GIs have been registered.383
7.428 Australia argues that the Regulation lays dow n "product characteristics or their related
processes" within the meaning of the definition in Annex 1.1 of the TBT Agreement, in that it sets out
a specific labelling requirement. It provides that the use of GIs from other WTO Members will only
be authorized "if the country of origin of the produc t is clearly and visibly indicated on the label." To
that extent, the Regulation is a document which "inc lude[s ] ... labelling requirements as they apply to
a product" within the meaning of a technical regulation as defined in Annex 1.1 of the TBT
Agreement. If this requirement was not considered to relate to a product, it would render the concept
of a label meaningless. The words "as they ap ply to" refer to a product, as opposed to the
characteristics of a product. In any case, the origin of a product is inextricably linked to that product
by virtue of the definitions of a "designation of or igin" and "geographical indication" in Article 2(2)

381 Australia's first written submission, para. 241.
382 Australia's first written submission, paras. 209-213; rebuttal submission, para. 192.

of the Regulation and inherently involves a product. Australia does not argue that "origin" is product
characteristic, but that the labelling requirement itself is a product characteristic.384
7.429 Australia argues that the labelling requireme nt is "mandatory" within the meaning of
Annex 1.1 of the TBT Agreement because Article 12( 2) uses the term "shall". Australia does not
dispute that it is not a precondition for the marke ting of a product in the European Communities.
However, it is mandatory for trading an imported product in the European Communities with a GI in
the same competitive conditions as those afford ed to a domestic product in the European
Communities with a GI. An imported product does not benefit from the protection against
unauthorized use provided by registration, nor from the reputation of superior quality engendered by
registration.385
7.430 Australia submits that the labelling require ment concerns both imported and domestic
products that are "like" within the meaning of Article 2.1 of the TBT Agreement. It is sufficient for
the Panel to consider the issues in the contex t of a general presumption of likeness. GIs are
intellectual property rights and do not affect the analysis of likeness of the underlying products.
Products bearing a GI from an area that straddles the external border of the European Communities
could be exactly the same although some would be imported. Further, GI protection under the
Regulation concerns unfair competition between pr oducts which normally involves a high degree of
similarity or likeness. Jurisprudence on Article III:4 of GATT 1994 can be looked to for clarification
of the national treatment obligation in Article 2.1 of the TBT Agreement.
 386
7.431 Australia claims that Article 12(2) provides di fferent treatment to imported products because
Article 6(6) does not mandate that corresponding do mestic products bear a country of origin label. 387
It alleges that this is less favourable treatment b ecause "there are likely to be situations" where the
labelling requirement modifies the conditions of co mpetition to the detriment of imported products. 388
Specifically, it creates costs of additional labelling or re-labelling. It does not allege that it accords
any other less favourable treatment. It accepts that in some cases existing labels may, coincidentally,
satisfy the labelling requirement. However, where a different, or additional, label is required to be
produced and attached to a product, this will create ex tra expense that can be expected to modify the
conditions of competition to the detrimen t of producers of the imported product. 389 The appropriate
standard for determining less favourable treatment is that whether the measure modifies the conditions
of competition in the relevant market to the detriment of imported products. 390 The European
Communities bears the burden of proving that Ar ticle XX of GATT 1994 has any significance in the
context of the TBT Agreement but it has not presented any supporting arguments.391
7.432 Australia accepts that, if the European Commun ities were to interpret Article 12(2) of the
Regulation according to whichever GI was registered later, that this could be expected to overcome its
inconsistency with Article 2.1 of the TBT Agreement. 392 However, in the situation covered by
Article 12(2) which is the subject of its claim, Article 6(6) of the Regulation has no relevance. 393 It

384 Australia's first written submission, paras. 219-220; response to Panel question No. 122 and
comment on EC response to that question.
385 Australia's first written submission, para. 223; rebuttal submission, paras. 195-196.
386 Australia's first written submission, paras. 226, 230-233; rebuttal submission, para. 207.
388 Australia's first written submission, para. 239.
389 Australia's responses to Panel questions Nos. 52, 120 and 121.
390 Australia's response to Panel question No. 125.
391 Australia's comment on EC response to Panel question No. 125.
392 Australia's response to Panel question No. 53.
393 Australia's response to Panel question No. 118.

refers to Article 6(6) only in relation to the factual issue of the proper interpretation of
Article 12(2).
394
7.433 Australia argues that a measure implementing ma tters concerning intellectual property rights
is not necessarily excluded from the scope of the TBT Agreement. 395 The assessment of whether a
measure is a technical regulation within the meani ng of the TBT Agreement is a threshold issue for
the application of that agreement but is not dete rminative of a violation. WTO obligations are
generally cumulative.396
7.434 Australia argues that the labelling requireme nt mandates a means of distinguishing an
imported product, rather than functioning as a mark of origin per se. Even if it is a mark of origin,
Article 12(2) is the means by which the Regula tion compulsorily differentiates between GIs on
imported and domestic products. Ar ticle IX:1 of GATT 1994 is silent on the issue of national
treatment and marks of origin. However, even if excludes the application of Article III of GATT
1994, it does not exclude the application of Article 2.1 of the TBT Agreement if the measure is a
"technical regulation". Further, even if Article 2.1 did conflict with Article IX, Article 2.1 would
prevail in accordance with the General Interpretative Note to Annex 1A to the WTO Agreement.397
7.435 The European Communities responds that Article 12(2) of th e Regulation is not a technical
regulation within the meaning of Annex 1.1 of the TBT Agreement. 398 It is not a labelling
requirement but merely sets out the conditions unde r which a GI will be registered in a situation
where there are homonyms from the European Communities and a third country.399
7.436 The European Communities argues that Article 12(2) does not apply to identifiable products
within the meaning of Annex 1.1 because the Regul ation itself does not allow one to identify the
products which might be affected by the requirement to indicate the country of origin.400
7.437 The European Communities argues that Ar ticle 12(2) does not lay down product
characteristics within the meaning of Annex 1. 1 because it does not contain a specific labelling
requirement for any specific product. It is not Article 12(2) itself which imposes a labelling
requirement but rather, according to Article 4(2)(h ), the product specification for an individual GI,
which contains the specific labelling details. Furthe r, it does not relate to a product, process or its
production method but merely to a product's geogra phic origin which is different from the product
itself. Origin may confer specific characteristic s or a reputation on a product which may entitle it for
protection as a GI but those issues are already covered by TRIPS and do not need to be addressed by
the TBT Agreement. Origin marking is al ready covered by Article IX of GATT 1994.
401 In addition,
the phrase "labelling requirements as they apply to a product" appears to refer to the application of
labelling requirements to characteristics of a product, process or production method.402

394 Australia's response to Panel question No. 121.
395 Australia's first oral statement, para. 41.
397 Australia's rebuttal submission, paras. 212-213; responses to Panel question Nos. 123-124.
398 European Communities' first written submission, paras. 439 and 457.
399 European Communities' first written submission, para. 449; response to Panel question No. 50.
400 European Communities' first written submission, para. 447.
401 European Communities' first written submission, paras. 448-452; responses to Panel question
Nos. 50 and 122.
402 European Communities' response to Panel question No. 122.

7.438 The European Communities argues that Article 12( 2) is not mandatory within the meaning of
Annex 1.1 because the possibility to apply for GI protection is a right, not an obligation. GI
registration is voluntary and not a precondition for the marketing of products.403
7.439 The European Communities argues that Australia has failed to establish that products bearing
homonymous GIs from the European Communities covered by Article 6(6) and a product from a third
country covered by Article 12(2) would be "like". Th e comparable situation under Article 6(6) is that
of two homonymous GIs from the European Comm unities, not one from the European Communities
and one from a third country. It is therefore unnecess ary to resolve the meaning of "like products" in
Article 2.1 of the TBT Agreement.404
7.440 The European Communities argues that Artic le 12(2) does not accord less favourable
treatment because it applies in a non-discriminat ory fashion to European Communities and third
country GIs. The requirement applies to hom onyms from the European Communities and a third
country and will be a condition for the registration of the GI for which protection is sought later.
Article 6(6) does not explicitly require the indicatio n of a country of origin because it deals with a
wider set of conflicts, in particular, homonyms from the same EC member State, where the country of
origin would not make a "clear distinction" in prac tice". It could also deal with other conflicts not
resolved by Article 12(2) such as homonyms from the same third country, or different third
countries.
405 An indication of the country of origin of the later registered GI avoids practical risks of
confusion because, typically, the prior registered GI will have been marketed longer under that GI and
be known by consumers. It also takes into account th e fact that the prior registration cannot easily be
amended.406 Imported products would not necessarily have to be re-labelled as the country of origin
may already be clearly and visibly indicated on the labe l. Existing marks of origin may be sufficient.
The affixation of an additional label clearly and visi bly indicating the country of origin would also be
sufficient.407 The legitimate regulatory objectives of th e Member concerned must be taken into
account in the application of both Article 2.1 and 2.2 of the TBT Agreement. Alternatively, the Panel
would have to consider whether Article XX of GA TT 1994 is applicable within the context of the
TBT Agreement.408
7.441 The European Communities argues that the requi rement under Article 12(2) is a mark of
origin covered by Article IX of GATT 1994, which excludes national tr eatment obligations. It is not
possible to distinguish marks of origin which fall under the TBT Agreement and those which do not.
There is no textual basis for distinguishing gene ral origin marking requirements and those which
cover only specific products. If Article 12(2) was cons idered a technical regulation, Article 2.1 of the
TBT Agreement could not apply to origin marki ng requirements lest it render Article IX:1 useless. 409
The European Communities does not argue that there is a conflict, but rather that Article IX:1 and
Article 2.1 should be interpreted in a harmoni ous way that gives meaning to both of them. 410 Finally,
Article 1.2 of the Agreement on Rules of Origin deals inter alia with Article IX on marks of origin
but makes no mention of the TBT Agreement, which would be hard to explain if the TBT Agreement
applied to marks of origin.411

403 European Communities' first written submission, paras. 453-456.
404 European Communities' response to Panel question No. 51.
405 European Communities' first written submission, paras. 477-479; response to Panel question
No. 42.
406 European Communities' response to Panel question No. 54.
407 European Communities' response to Panel question No. 120.
408 European Communities' response to Panel question No. 125.
409 European Communities' first written submission, para. 481; first oral statement, para. 72; responses
to Panel questions Nos. 123 and 124.
410 European Communities' second oral statement, para. 245.
411 European Communities' response to Panel question No. 122.

(ii) Main arguments of third parties
7.442 New Zealand supports the arguments of Australia in its first written submission that the
Regulation is inconsistent with Article 2.1 of the TBT Agreement.
412
(iii) Consideration by the Panel
7.443 This claim concerns Article 12(2) of the Regulation "as such". 413 Article 2.1 provides as
follows:
"2.1 Members shall ensure that in r espect of technical regulations, products
imported from the territory of any Member shall be accorded treatment no less
favourable than that accorded to like products of national origin and to like products
originating in any other country."
7.444 The Panel considers that the essential elements of an inconsistency with Article 2.1 of the
TBT Agreement are, as a minimum, that the measure at issue is a "technical regulation"; that the
imported and domestic products at issue are "like products" within the meaning of that provision; and
that the imported products are accorded "less favourable" treatment than that accorded to like
domestic products. We will consider these elements below.
Technical regulation

7.445 The threshold issue for the Panel to decide is whether the requirement in Article 12(2) of the
Regulation is a "technical regulation" within the me aning of the TBT Agreement. If it is not, then
Article 2.1 of the TBT Agreement will not be appli cable. Annex 1.1 of that agreement provides as
follows:
"For the purpose of this Agreement, however, the following definitions shall apply:
1. Technical regulation
Document which lays down product charact eristics or their related processes and
production methods, including the applicable administrative provisions, with which
compliance is mandatory. It may also include or deal exclusively with terminology,
symbols, packaging, marking or labelling requirements as they apply to a product,
process or production method." [Explanatory note omitted]
7.446 The parties refer to the two elements that appear in the text of this definition, namely that a
technical regulation is a "[d]ocument which lays down product characteristics or their related
processes and production methods, including the a pplicable administrative provisions" and "with
which compliance is mandatory", as well as to the issue that a technical regulation must be applicable
to an identifiable product or group of products, explained by the Appellate Body in EC – Asbestos and
EC – Sardines.
414 The Panel will address these in turn.
7.447 The parties disagree as to whether the second indent of Article 12(2) itself lays down a
labelling detail. In the Panel's view, it clearly does. The text of the second indent of Article 12(2)

412 Annex C, para. 124.
413 In this sub-section will refer to it as the "second indent of Article 12(2)" as the words "labelling
requirement" appear in the text of Annex 1.1 of the TBT Agreement.
414 Australia's first written submission, para. 210, and the European Communities' first written
submission, paras. 441-442, both cite the Appellate Body report on EC – Sardines, para. 176, which referred to
the Appellate Body report on EC – Asbestos, paras. 66-70.

expressly sets out the condition that the country of origin must be clearly and visibly indicated on the
label. Even though the product specifications under Article 4.2(h) lay down the labelling details for
products relating to each individual GI as it is registered, this does not alter the terms of Article 12(2).
7.448 The parties disagree as to whether the second indent of Article 12(2) of the Regulation lays
down a product characteristic. The Panel notes that it expressly sets out a requirement that concerns
what must be indicated on "the label" of a product. That is a labelling requirement. 415 The second
sentence of the definition of "technical regulati on" in Annex 1.1 of the TBT Agreement expressly
refers to "labelling requirements" as an example of a technical regulation.
7.449 The Panel notes that this example in the defin ition in Annex 1.1 is qualified by the words "as
they apply to a product, process or production me thod". The text does not limit the scope of the
example by stating what the labels must indicate in order for them to constitute a technical regulation.
Rather, they explain to what the labelling requirements "apply". This simply means that a
requirement concerning a product label is a labelli ng requirement that applies to a product. The
context shows that the subject of the second sentence, "[i]t" refers back to the noun "[d]ocument" as
qualified by the relative clause beginning "which lays down" and ending with the word "mandatory".
Were this not so, the element that "compliance is mandatory", for example, would not apply to the
items described in the second sentence, which woul d be contrary to the object and purpose of the
obligations concerning technical regulations. As a re sult, a document that "deal[s] exclusively with ...
labelling requirements as they apply to a product" can be an example of a "[d]ocument that lays down
product characteristics". The issue is not whethe r the content of the label refers to a product
characteristic: the label on a product is a product characteristic. Therefore, the second indent of
Article 12(2) of the Regulation deals exclusively with a labelling requirement "as it applies to a
product".
7.450 In any event, the second indent of Article 12(2) requires that the country of origin be clearly
and visibly indicated on the label of a product in or der to provide a means of identification where two
GIs are identical. In the Panel's view, the purpose of this requirement is indicated by the first indent
of Article 12(2), namely, that it is a means to avoid th e practical risks of confusion. In other words, it
is a means of identification. In this respect, the Panel agrees with the view of the Appellate Body in
EC – Asbestos and EC – Sardines that a means of identification is, itself, a product characteristic.
416
7.451 In summary, a document that lays down a requi rement that a product label must contain a
particular detail, in fact, lays down a product charact eristic. This interpretati on is consistent with a
Decision of the TBT Committee in which Members agreed as follows:
"In conformity with Article 2.9 of the Ag reement, Members are obliged to notify all
mandatory labelling requirements that are not based substantially on a relevant
international standard and that may have a significant effect on the trade of other
Members. That obligation is not depende nt upon the kind of information which is
provided on the label, whether it is in the nature of a technical specification or not."417
7.452 Therefore, the Panel considers that the second i ndent of Article 12(2) is a "[d]ocument which
lays down product characteristics or their relate d processes and production methods, including the
applicable administrative provisions" and a labelling re quirement that applies to a product, within the
meaning of the definition of "technical regulation".

415 It is not contested that it ca nnot be a labelling requirement beca use it only lays down one product
characteristic.
416 Appellate Body reports on EC – Asbestos, para. 67, and EC – Sardines, para. 191.
417 "Decisions and Recommendations adopted by the Committee since 1 January 1995", document
G/TBT/1/Rev. 8 of 23 May 2003.

7.453 The Panel will now consider whether compliance is mandatory with the second indent of
Article 12(2) of the Regulation. The ordinary mean ing of the word "mandatory" can be defined in the
case of an action as "obligatory in consequen ce of a command, compulsory. (Foll. by upon)".
418 The
second indent uses the word "shall", which indicates that it is mandatory for products subject to
Article 12(2) to obtain the benefits of registration under the Regulation.
7.454 As to the European Communities' argument that this is not a mandatory requirement in order
to market the relevant products in the European Communities, the Panel notes the approach taken to a
similar argument made by the European Communities in a previous dispute. The panel in that dispute
recalled that a document may require positively that a product contain certain characteristics or it may
require negatively that the product not possess certain characteristics. That panel reasoned that, by
requiring the use of a particular type of product und er a particular trade description, the measure at
issue in effect lay down product characteristics in a negative form, that is, by excluding other products
from being marketed under that description.419
7.455 In the present dispute, the Panel notes that only products that comply with a product
specification in a GI registration may use the indicati ons PDO, PGI or equivalent national indications.
Further, agricultural products and foodstuffs b earing an unregistered identical GI may not be
marketed in the European Comm unities under that name where they infringe prior registered GIs
which, given that the GI is identical, appears inevitable unless the products are not comparable.
7.456 The second indent of Article 12(2) makes a di stinction between those products using a GI
identical to a Community protected name that sa tisfy the labelling requireme nt, and those which do
not. The negative implication that follows from this requirement is that products with a GI identical
to a Community protected name that do not satisfy this labelling requirement must not use the
indications PDO, PGI or equivalent national indicati ons and, to the extent that they fall within the
protection granted to a prior identical Community protected name, must not be marketed in the
European Communities using that GI. Therefore, the second indent of Article 12(2) is an obligatory
or mandatory requirement.
7.457 The Panel agrees with the view of the Appella te Body that compliance would be impossible
with a technical regulation if it were not applicable to identifiable products.
420 The parties disagree as
to whether the second indent of Article 12(2) applies to an identifiable product. It refers to "the
product" but does not name any product. However, Article 12(2) forms part of the Regulation which
has a defined product coverage described in Article 1(1) as those agricultural products intended for
human consumption referred to in Annex I to the EC Treaty, the foodstuffs listed in Annex I to the
Regulation and the agricultural products listed in Annex II to the Regulation, subject to certain
exceptions for wine-sector products, except wine vinega rs or spirit drinks. A procedure is specified
for the amendment of the product coverage in Annexes I and II to the Regulation. That is a large, but
defined, group of products. Article 12(2) is applicable to them all, although it lays down a specific
requirement that is only triggered where a name is identical to a Community protected name. The
identical criterion permits identification of the pro ducts to which this requirement will apply in a
given case. To date, there have not been any.

418 The New Shorter Oxford English Dictionary (1993).
419 Panel report on EC – Sardines, paras. 7.43-7.45, citing the Appellate Body report on EC – Asbestos,
para. 69.
420 "A 'technical regulation' must, of course, be applicable to an identifiable product, or group of
products. Otherwise, enforcement of the regulation will, in practical terms, be impossible": Appellate Body

7.458 Therefore, the Panel considers that compliance is mandatory with the second indent of
Article 12(2) of the Regulation, within the meani ng of the definition of "technical regulation", and
that this requirement applies to identifiable products.
7.459 Accordingly, the Panel's preliminary finding is that the labelling requirement is a "technical
regulation" within the meaning of the definition in the TBT Agreement and that Article 2.1 of that
agreement may be applicable.
7.460 The European Communities argues that this la belling requirement cannot be subject to the
national treatment obligation in Article 2.1 of the TBT Agreement due to the terms of Article IX of
GATT 1994 on marks of origin.
7.461 The Panel considers it unnecessary to reach a defi nitive view on this issue, in view of its
findings below on "less favourable treatment". It su ffices for the purposes of this dispute to note that
the definition of a "technical regulation" in A nnex 1.1 and the preamble to the TBT Agreement
specifically include "marking and la belling requirements" without any indication that marks of origin
are excluded.421 Article 1.4 and 1.5 specifically exclude certain purchasing specifications addressed
in the Agreement on Government Procurement and san itary and phytosanitary measures as defined in
the SPS Agreement, but there is no express exclusion for marks of origin. 422 In any event, it has not
been shown that Article 12(2) of the Regulation is , in fact, a requirement to display a mark of
origin.423
7.462 The Panel also recalls the views of the Appellate Body in EC – Asbestos and EC – Sardines
that, when examining whether a measure is a technica l regulation, "the proper legal character of the
measure at issue cannot be determined unl ess the measure is examined as a whole". 424 The second
indent of Article 12(2) is a small part of the Regulation which applies in a narrow circumstance.
Clearly, the Regulation is an intellectual property m easure but the parties do not ask the Panel to take
a position on whether the product specifications require d under Article 4(2) are technical regulations
and the inspection structures required under Article 10 are conformity assessment procedures within
the meaning of the TBT Agreement. 425 The characterization of the whole measure is therefore a

421 Many Members, including the parties to this disput e, have notified marks and labels of origin to the
TBT Committee. See, for example, G/TBT/Notif.9 5.155, G/TBT/Notif.95.106, G/TBT/Notif.95.438,
G/TBT/Notif.96.42, G/TBT/Notif.96.269, G/TBT/Notif.96.364, G/TBT/Notif.96.450, G/TBT/Notif.97.112,
G/TBT/Notif.97.113, G/TBT/Notif.98.206, G/TBT/Notif.98.448, G/TBT/Notif.99.548, G/TBT/Notif.99.668,
G/TBT/Notif.00.65, G/TBT/ Notif.00.94, G/TBT/Notif.00.289, G/ TBT/Notif.00.483, G/TBT/N/ARG/7,
G/TBT/N/ARG/9, G/TB T/N/JPN/7, G/TBT/N/JPN/12, G/ TBT/N/PER/A, G/TBT/N/CHL/33,
G/TBT/N/THA/92, G/TB T/N/THA/94, G/TBT/N/USA/25, G/ TBT/N/JPN/78, G/TBT/N/GBR/7,
G/TBT/N/JPN/123, G/TB T/N/JPN/124, G/TBT/N/KOR/76, G/TBT/N/ISR/36 and G/TBT/N/ISR/42. Further,
there was a general understanding among signatories of the Tokyo Round TBT Agreement, recorded in the 1994
Annual Report of the Committee established under that agreement, that mandatory marking requirements
applied in the context of marking the origin of products were covered by the provisions of that agreement, but
one signatory (not a party to the current dispute) could not join a consensus on that issue: see GATT document
L/7558 of 30 November 1994 in BISD 41S/718 at 719. The Tokyo Round TBT agreement, like the current
TBT Agreement, referred to "marking and labelling requirements".
422 This implies no view as to whether Article IX of GATT 1994, which includes an MFN treatment
obligation but no national treatment obligation, impliedly excludes marks of origin from the scope of the
obligation in Article III:4 of GATT 1994. That is an issue which need not, and do not, decide.
423 See, 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.
424 Appellate Body reports in EC – Asbestos, para. 64, and EC – Sardines, paras. 192-193.
425 See the parties' respective responses to Panel question No. 60 and the European Communities'
response to Panel question No. 134.

complex issue on which there has been little argume nt and which the Panel considers unnecessary to
decide for the purposes of this claim.
Like products

7.463 Article 2.1 of the TBT Agreement refers to "products imported from the territory of any
Member" and inter alia "like products of national origin". An essential element of a claim under
Article 2.1 is the existence of like products. Austra lia submits that it is sufficient for the Panel to
consider the issues in the context of "a genera l presumption of likeness". The European Communities
contests the likeness of products within the meaning of Article 2.1 of the TBT Agreement. The Panel
considers it unnecessary to reach any view on this i ssue, in view of the findings below on "less
favourable treatment".
Less favourable treatment
7.464 Article 2.1 of the TBT Agreement refers to "treatment no less favourable". An essential
element of a claim under Article 2.1 is that, in resp ect of technical regulations, the treatment accorded
to imported products is "less favourable" than that accorded to like products of national origin. The
Panel notes the similarity in the terms used in Ar ticle 2.1 of the TBT Agreement and Article III:4 of
GATT 1994, which also refers to "treatment no less favourable". The preamble to the TBT
Agreement expressly sets out the desire "to further the objectives of GATT 1994". However, in view
of its findings below, the Panel considers it suffi cient for the purposes of this dispute simply to
observe that the starting point for this analysis must be whether the measure at issue accords any
difference in treatment.
7.465 Australia claims that the treatment accorded under the labelling requirement for GIs located in
third countries, including WTO Members, is less favour able than that accorded to GIs located within
the European Communities.
7.466 The Panel has found at paragraph 7.423 that the labelling requirement only applies to
products bearing GIs from third countries that are iden tical to a Community protected name. This is a
narrow circumstance.
7.467 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.
7.468 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 by providing that "the country of origin of the
product is clearly and visibly indicated on the label". In contrast, Article 6(6) states the condition in
terms of factors that "a clear distinction in practice between the 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".
7.469 The Panel does not consider that the mere fact that imported pr oducts and products of
European Communities' origin are subject to differe nt legal provisions is in itself conclusive in
establishing an inconsistency with the national tr eatment obligation in Article 2.1 of the TBT

Agreement. Nor is it conclusive that the indicatio n of the "country of origin" is both mandatory and
express in the Regulation for imported products only, since the Regulation does not mandate that the
European Communities must not impose the same labelling requirement on domestic products.
7.470 The European Communities explains that the diffe rence in 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 member St ates, as well as to a GI within the European
Communities identical to a GI located in a third country, which Article 12(2) does not.
7.471 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) of the Regulation permits the European
Communities to apply the same condition found in the text of Article 12(2) so that both requirements
would be applied to the GI registered later in time , irrespective of the origin of the product or the
location of the GI. The European Communities has confirmed to the Panel that the clear distinction in
practice would normally require the indication of the country of origin.426
7.472 Australia accepts that, if the European Commun ities were to interpret Article 12(2) of the
Regulation according to whichever GI was register ed later in time, this could be expected to
overcome its inconsistency with Ar ticle 2.1 of the TBT Agreement. 427 Although it later argued that
Article 6(6) was of no relevance, the Panel does not agree for the reasons set out above.
7.473 Australia has not provided any evidence that th e formal difference in the wording of the two
requirements leads to any difference in treatment nor that it accords any different treatment to
imported products. It has not provided evidence that, where the European Commission applies the
same condition under the labelling requirement in Article 12(2) and the last tiret of Article 6(6), that
such a practice would not survive a legal challenge before the European Court of Justice.
7.474 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 consistent with international law".428
7.475 Therefore, for the above reasons, in par ticular, the confirmation by the European
Communities that the clear distinction in practi ce under Article 6(6) would normally require the
indication of the country of origin, the Panel concl udes that Australia has not made a prima facie case
in support of this claim.
7.476 Accordingly, it is unnecessary for the Panel to c onsider whether an assessment of conformity
with Article 2.1 of the TBT Agreement requires reference to be had to the regulatory objective
pursued by a measure as referred to in Article 2.2 of the TBT agreement, or th e absence in the text of
the TBT Agreement of a general exceptions provision such as Article XX of GATT 1994.

426 European Communities' first written submission, para. 479; response to Panel question No. 118.
427 Australia's response to Panel question No. 53.
428 See supra at 172.

C. T
RADE-RESTRICTIVENESS CLAIM
1. Inspection structures
(a) Description of inspection structures (Articles 4.2(g), 10 and 12a of the Regulation)
7.477 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" was 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.
7.478 The Panel continues its examination in respect of these particular requirements, bearing in
mind the aim of the dispute settlement mechanism, which is to secure a positive solution to a
dispute429, and the views of the Appellate Body in Australia – Salmon on the principle of judicial
economy.430 Were the Panel not to examine the claim with respect to the inspection structures
requirements within the application procedures, its conclusion on the inspection 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.
7.479 An application for registration of a GI must be accompanied by certain documents. The first
is the product specification. Article 5(3) provides as fo llows 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."
7.480 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."
7.481 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 agricultural 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;"
7.482 A specification refers to a particular product and the list of items that Article 4 requires to be
included in a product specification all appear to be product-specific.
7.483 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:

429 Article 3.7 of the DSU.
430 Appellate Body report on Australia – Salmon, para. 223.

"(b) a declaration that the structures provided for in Article 10 are established on
its territory."
7.484 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.431
7.485 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 bodies 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
specifications. We highlight the requirements for inspection authorities under Article 10(3) which are
relevant to the claims below.
7.486 The characteristics of the inspection authorities 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."
7.487 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."
7.488 The applicable standards for private 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."
7.489 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

431 European Communities' response to Panel question No. 126(a).

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.
7.490 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.
432
7.491 The responsibilities of governments are set out in Article 10(1) and (2). 433 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
designates a public inspection authority, it carries out inspections itself. Where the government
approves a private inspection body, it must ascertain th at the private body is capable of fulfilling its
functions in accordance with Article 10(1) and meet s the requirements of Article 10(3), set out above.
The 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 for continued monitoring that an approved private body continues to meet the
requirements.
434
(b) Trade-restrictiveness under the TBT Agreement
(i) Main arguments of the parties
7.492 Australia claims that the inspection structures required by Articles 4, 10 and 12(1) of the
Regulation are inconsistent with Article 2.2 of the TBT Agreement. Article 10 requires that EC
member States have in place these inspection structures. Article 12a(2)(b) requires that other WTO
Members provide a declaration that the structures provided for in Article 10 are established in its
territory.
435
7.493 Australia argues that the Regulation is a "tec hnical regulation" within the definition in
Annex 1.1 of the TBT Agreement because Articles 10 and 4 (in particular Article 4.2(g)) together
require inspection structures to check that products using a GI comply with the product specifications
in the GI registration. Article 4.2(b) and (e) provide that product specifications include "product
characteristics". The process of checking compliance with the specifications is a regular sequence of
actions, i.e. a process, and falls within the mean ing of "product characteristics or their related
processes".436
7.494 Australia does not take a position on whether th e definitions of "technical regulation" and
"standard" and the definition of a "conformity ass essment procedure" in Annex 1 are necessarily
mutually exclusive, but agrees that a conformity assessment procedure requires at the very least a

432 The European Communities supplied copies of EN 45011 and ISO/IEC Guide 65:1996 to the Panel
in Exhibits EC-2 and EC-3, respectively. See European Communities' response to Panel question No. 126(c).
433 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.
434 Uncontested information provided by the European Communities in its responses to Panel question
Nos. 127 and 132.
435 Australia's first written submission, para. 249.
436 Australia's first written submission, paras. 221- 222, 224; rebuttal submission, paras. 201-202;
response to Panel question No. 133 and comment on EC response to Panel question No. 134.

separate technical regulation or standard against which products are to be assessed. 437 Australia
submits that it is irrelevant to this claim whethe r or not the Regulation is an intellectual property
measure and also subject to another WTO covered agreement.438
7.495 Australia argues that the inspection structure requirements are mandatory for products that
use a registered GI. Therefore, they are manda tory for trading an imported product in the same
competitive conditions as those afforded to a domes tic product that uses a registered GI. Australia
does not dispute that inspection structures, and GI registration, are not a precondition for the
marketing of a product in the EC.
439
7.496 Australia does not contest that the Regulation could pursue legitimate objectives or that it is
capable of generally fulfilling those legitimate objectives. 440 It argues that the Regulation is more
trade restrictive than necessary to fulfil its le gitimate objective, taking account of the risks non-
fulfilment would create, contrary to Article 2.2 of the TBT Agreement. Its claim is based on the
allegation that the Regulation imposes an "absolute requirement" for an EC model inspection structure
as a condition for the registration of a GI, irrespectiv e of the circumstances in the Member in which
the GI is located or of the circumstances of the trade in the relevant products.441
7.497 Australia argues that the Regulation mandates the type of structure or design for inspection
that other WTO Members must have in place. Su ch a requirement cannot be necessary to fulfil the
Regulation's legitimate objective unless the Europe an Communities had determined that no other
systems in any WTO Member would in any circumstances provide the same degree of assurance as its
own system.442 Inspection structures in a WTO Member where the good is produced is meaningless
where the unauthorized use involving goods from a third country WTO Member occurs in the
European Communities.443
7.498 Australia does not contest that inspection structures may be required with respect to a specific
product for which protection is sought or that so me type of compliance verification mechanism may
be necessary in most cases. Nor does it consider that government involvement is necessarily
problematic.444 It challenges the fact that the Regul ation dictates specific design features:
Article 10(3) provides that an inspection structure must have permanently have at its disposal the
necessary qualified staff, yet temporary staff may be all that is necessary to provide the required level
of assurance 445; Article 10 does not allow for the possibility that inspection structures might be
unnecessary446; Article 12a(2)(b) requires a declaration as to the structures provided for in Article 10,
which excludes alternative measures that are not inspec tion structures at all, such as systems of laws.
However, Australia does not challenge these specific elements, rather it challenges the fact that the
Article 10-type inspection structure is imposed on other WTO Members regardless of their existing
inspection structures or other systems that would perform the same function.447
7.499 Australia argues that alternative measures can achieve the EC's legitimate objectives with the
same degree of effectiveness, such as laws ag ainst misleading and deceptive commercial practices
enforced by an investigating authority, which ma y operate in conjunction with food labelling laws

437 Australia's response to Panel question No. 60.
439 Australia's first written submission, paras. 221-222, 224; rebuttal submission, paras. 195-197.
440 Australia's first written submission, paras. 247-248.
441 Australia's response to Panel question No. 58.
442 Australia's first written submission, paras. 249-254.
443 Australia's first written submission, para. 256.
444 Australia's rebuttal submission, para. 219; response to Panel question No. 128.
447 Australia's second oral statement, paras. 94-95.

enforced by a food authority. These authorities c ould ensure that products comply with their
specifications and address any risks created by non- fulfilment. Further alternative measures include
the tort of passing off, industry certifications, self-regulation by producers and consumer protection
mechanisms.
448
7.500 The European Communities responds that none of these provisions are a " technical
regulation" within the meaning of the TBT Agreemen t. Article 4 does not lay down product
characteristics for specific products. These charact eristics are contained in the application for
registration. Article 4 simply sets out the re quirements with which a product specification must
comply in order to permit GI registration. The pr oduct characteristics are contained in an individual
GI application.449 Inspection structures are not "related pr ocesses" within the definition of a technical
regulation in Annex 1.1 of th e TBT Agreement because they are not related to the product
characteristics and, if they were, then all c onformity assessment procedures would be technical
regulations which would lead to a systematic ove rlap between the various provisions of the TBT
Agreement.450
7.501 The European Communities submits that the pur pose of Article 4.2(g) in conjunction with
Article 10 is to ensure conformity with th e product specification, not to lay down product
characteristics. The TBT Agreement makes a clea r distinction between technical regulations and
standards in Articles 2 to 4 and procedures to assess conformity with them in Articles 5 to 9. The
dividing line between them is perfectly clear in the definitions in Annex 1. This claim does not fall
within Article 2 but appears to fall with in Articles 5 to 9 of the TBT Agreement. 451 The inspection
structure requirements are not a technical regulation. They cannot be both a technical regulation and a
conformity assessment procedure .452 It does not contest that a conformity assessment procedure
assesses conformity with a technical regulation or a standard as defined in Annex 1.3 of the TBT
Agreement but does not consider it necessary for the Pa nel to decide whether the inspection structures
are indeed conformity assessment procedures. It does not contend that the general requirement that a
GI must correspond to certain product specificati ons constitutes a technical regulation since it is
merely a condition for the grant of an intellectua l property right. A different question would be
whether individual product specifications for individual GIs would be technical regulations but that is
an issue which the Panel does not need to address.
453
7.502 The European Communities argues that Articles 4 and 10 are not mandatory because GI
protection is voluntary. It is not a precondition for placing products on the market.454
7.503 The European Communities argues that the existence of inspection structures is not more
trade-restrictive than necessary because it is only required with r espect to the specific product for
which protection is sought; it does not determine the specific design of the inspection structures; and
they are necessary to achie ve the legitimate objectives of the Re gulation. Unfair competition laws
might be adequate to implement GI protection under Article 22.2 of the TRIPS Agreement but
Article 1.1 allows Members to implement more extensive protection. This discretion under
Article 1.1 cannot be limited on the basi s of Article 2.2 of the TBT Agreement. 455 The European

448 Australia's first written submission, paras. 258-260 ; response to Panel question No. 62; rebuttal
submission , para. 219.
449 European Communities' first written submission, paras. 464-465.
450 European Communities' second oral statement paras. 246-247.
451 European Communities' first written submission, paras. 460-463.
452 European Communities' rebuttal submission, para. 406; response to Panel question No. 133.
453 European Communities' second written submission, paras. 407-408.
454 European Communities' first written submission, para. 467.
455 European Communities' first written submission, paras. 484-501.

Communities refers to its arguments on this point in relation to the claim under national treatment
obligations of the TRIPS Agreement.456
7.504 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 a nother Member. While Article 6.1 of the TBT
Agreement stipulates that Members ensure, whenev er possible, that they accept the results of
conformity assessment procedures in other Members, this only applies when certain conditions are
fulfilled. Article 6.3 encourages Members to ente r into negotiations for the mutual recognition of
conformity assessment procedures. Article 6.4 encourages Members to permit participation of
conformity assessment bodies located in the terr itories of other Members in their conformity
assessment procedures but it is not a legal obligation to permit such participation. Australia has
concluded a mutual recognition agreement which permits bodies designated by those countries to
carry out conformity assessment with respect to EC standards and vice versa. 457 Australia has failed
to explain why government involvement in designation of inspection bodies is problematic.458
(ii) Main arguments of third parties
7.505 New Zealand supports the arguments of Australia in its first written submission that the
Regulation is inconsistent with Article 2.2 of the TBT Agreement.459
(iii) Consideration by the Panel
7.506 This claim is made under Article 2.2 of the TBT Agreement, which provides as follows:
"2.2 Members shall ensure that technical regulations are not prepared, adopted or
applied with a view to or with the effect of creating unnecessary obstacles to
international trade. For this purpose, tec hnical regulations shall not be more trade-
restrictive than necessary to fulfil a legitimate objective, taking account of the risks
non-fulfilment would create. Su ch legitimate objectives are, inter alia: national
security requirements; the prevention of deceptive practices; protection of human
health or safety, animal or plant life or h ealth, or the environment. In assessing such
risks, relevant elements of consideration are, inter alia: available scientific and
technical information, related proces sing technology or intended end-uses of
products."
7.507 The threshold issue for the Panel to decide is whether the inspection structures requirements
under Article 10 of the Regulation, read together wi th the product specifications of Article 4 of the
Regulation, are a "technical regulation" within th e meaning of the TBT Agreement. We note, once
again, that the definition of that term in Annex 1.1 provides as follows:
"For the purpose of this Agreement, however, the following definitions shall apply:
1. Technical regulation
Document which lays down product charact eristics or their related processes and
production methods, including the applicable administrative provisions, with which
compliance is mandatory. It may also include or deal exclusively with terminology,

456 European Communities' rebuttal submission, paras. 415.
457 European Communities' response to Panel question No. 131.
458 European Communities' comment on Australia's response to Panel question No. 128.
459 Annex C, para. 124.

symbols, packaging, marking or labelling requirements as they apply to a product,
process or production method." [Explanatory note omitted]
7.508 The Panel will first examine whether Articles 4 and 10, read together, are a "[d]ocument
which lays down product characteristics or their re lated processes and produc tion methods, including
the applicable administrative provisions". If they are not, they cannot be a technical regulation within
the meaning of this definition and it is unnecessary to examine whether "compliance [with it] is
mandatory" or whether it applies to identifiable products.
460
7.509 Australia claims that the inspection struct ures requirements lay down a "process" which is
related to an identifiable group of products. Whilst it appears that the specification for a particular
product described in Article 4 must lay down pro duct characteristics and related production methods,
Australia has not pursued a claim in respect of produ ct specifications except insofar as they relate to
the inspection structures requirements.
7.510 The Panel must consider whether the inspection structures requirements, read together with
Article 4 of the Regulation, are a "process" within the meaning of the definition of a "technical
regulation". The ordinary meaning of the term "process" can be defined as follows:
"A thing that goes on or is carried on; a continuous series of actions, events or
changes; a course of action, a procedure; esp. a continuous and regular action or
succession of actions occurring or performed in a definite manner; a systematic
series of actions or operations directed to some end, as in manufacturing, printing,
photography, etc."
461
7.511 Inspections of particular product specifications , in a general sense, may correspond to this
definition. However, the context of the term "techni cal regulation" in Annex 1 shows that it is one of
a suite of definitions that includes "standard" a nd "conformity assessment procedures". The terms
"technical regulations" and "standards" themselves form part of the definition of the term "conformity
assessment procedures", which is defined as follows:
"3. Conformity assessment procedures
Any procedure used, directly or indirectly, to determine that relevant requirements in
technical regulations or standards are fulfilled.
Explanatory note
Conformity assessment procedures include, inter alia, procedures for sampling,
testing and inspection; evaluation, ve rification and assurance of conformity;
registration, accreditation and approval as well as their combinations."
7.512 This definition shows that "conformity assess ment procedures" assess conformity with
"technical regulations" and "standards". This suggest s that they are not only distinct from one other,
but mutually exclusive. Whilst a single measure can combine both a technical regulation and a
procedure to assess conformity with that technical regulation, it would be an odd result if a conformity
assessment procedure could fall within the definition of a technical regulation as well.

460 These issues are set out in paras. 7.446 and following in relation to the claim under Article 2.1 of the
TBT Agreement.
461 The New Shorter Oxford English Dictionary (1993).

7.513 The object and purpose of the TBT Agreement is , in large part, disclosed by the two main
groups of substantive provisions that it contains: one that relates to technical regulations and
standards in Articles 2 to 4, and another that rela tes to conformity assessment procedures in Articles 5
to 9. It is also reflected in the preamble, of wh ich the fifth recital, and also the third and fourth
recitals, draw this distinction.462 If the Panel were to embed measures subject to Articles 5 to 9 in the
definition of a technical regulation and thereby subject them to the technical regulations provisions in
Articles 2 to 4 as well, it would lead to an unreasona ble result. In this respect, we note that the
explanatory note refers to "procedures for ... insp ection" as an example of conformity assessment
procedures. This suggests that a procedure for inspection is not a technical regulation.
7.514 Turning to the Regulation, the Panel notes that the inspection structures provided for in
Article 10 of the Regulation do not set out "a continuous series of actions, events or changes" or a
"course of action, a procedure" within the ordinary meaning set out at paragraph 7.510 above. It does
not set out the steps that are to be undertaken to ensure compliance with a pr oduct specification, such
as with the product specifications contained in Article 4 of the Regulation. Rather, it merely sets out
the requirements for the design of inspection authorit ies and private bodies. It does not deal with the
process by which these inspection authorities and pr ivate bodies are to conduct their inspections once
they are established. Further, these inspection structures may be excluded a priori from the definition
of a "technical regulation" under the TBT Agreement, in view of the context of that definition and the
object and purpose of the Agreement, as explained at paragraphs 7.511 to 7.513 above. However, it is
unnecessary to consider this issue further for the purposes of this dispute.
7.515 Therefore, the Panel concludes that the inspec tion structures requirements in the Regulation,
read together with Article 4 of the Regulation, are not a "technical regulation" within the definition of
that term in Annex 1.1 of the TBT Agreement. Ac cordingly, the Panel concludes that Article 2.2 of
the TBT Agreement is inapplicable and rejects Australia's claim.
D. TRADEMARK CLAIMS
1. The relationship between GIs and prior trademarks
(a) Introduction
7.516 Australia claims that the Regulation is inconsis tent with Article 16.1 of the TRIPS
Agreement because it denies the owner of a registered trademark the exclusive right to prevent uses of
GIs which would result in a likelihood of confusion with a prior trademark. 463 Its claim does not
concern conflicts involving the future acquisition of trademark rights and GIs.464
7.517 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

462 They provide as follows:
"Recognizing the important contribution that international standards and conformity
assessment systems can make in this regard by improving efficiency of production and
facilitating the conduct of international trade;
Desiring therefore to encourage the development of such international standards and
conformity assessment systems;
Desiring however to ensure that technical regulations and standards , including packaging,
marking and labelling requirements, and procedures for assessment of conformity with
technical regulations and standards do not create unnecessary obstacles to international trade"
[emphasis added]
463 Australia's first written submission, paras. 6, 60 and 102-103.

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 exception under Article 17 of the TRIPS Agreement.
465
7.518 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 infringe the rights conferred by the other. The use of
this term does not imply any view on whether such a regime is justified.
7.519 The Panel will begin its examination of this claim by describing Article 14(2) of the
Regulation and how the Regulation can, in principle, limit the right 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
7.520 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.
7.521 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
Australia does not contest, that under the European Communities' domestic law, this positive right is
implicit in several provisions, including Article 4(1) , which refers to eligibility to use a protected
designation of origin or a protected geographical i ndication; Article 8, which provides that the
indications PDO and PGI and e quivalent national 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.
466
7.522 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. 467 Therefore, the registration
does not affect the right of trademark owners to exercise their rights with respect to such uses.468

465 European Communities' first written submission, paras. 268-273.
466 Confirmed in the European Communities' response to Panel question No. 139.
467 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

7.523 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.
7.524 Paragraph 2 of Article 14 deals with prior 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 grounds 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]
7.525 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
and a trademark can coexist under Community law. It is intended to implement Article 24.5 of the
TRIPS Agreement.
469
7.526 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.

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 61.
468 Under Community law, those rights would become meaningless if there was no positive right to use
the registered GI. See the European Communities' rebutta l submission, para. 301; responses to Panel questions
Nos. 139 and 140 (but contrast its comment on Australia's response to Panel question No. 137).
469 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 Article 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 judgement of
the Court was submitted by the European Communities' in Exhibit EC-32.

7.527 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.
7.528 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
470, 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. 471 This corresponds to the right provided for in Article 16.1 of the TRIPS
Agreement.
7.529 However, Article 159 of the Community Trademark Regulation, as amended 472, 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]
7.530 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
party.473 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.
7.531 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.
7.532 The phrase "[w]ith due regard to Community law" also refers to other legislation, such as
labelling and misleading advertising legislation, 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.
474
7.533 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

470 European Communities' response to Panel question No. 138. The "Community Trademark
Regulation" refers to Council Regulation (EC) No. 40/94 on the Community trade mark, 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.
471 Article 9 of the Community Trademark Regulation and Article 5 of the First Trademark Directive.
472 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.
473 European Communities' first written submission, para. 317; response to Panel question No. 76;
rebuttal submission, para. 336.
474 European Communities' response to Panel question No. 140.

has been used, registration is liable to mislea d the consumer as to the true identity of
the product."
7.534 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 true 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.
7.535 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. Australia disagrees. The
Panel will consider this factual issue below.
(c) Article 14(3) of the Regulation
(i) Main arguments of the parties
7.536 Australia argues that Article 14(3) of the Regulation does not concern use that is liable to
"confuse" but rather concerns use that is liable to "mislead". "Misleading" is a stricter evidentiary
standard than "confusing". The ordinary meaning of "confusing" is "perplexing, bewildering".
Although the two words can be synonyms, the contex t of "mislead" in Article 22.2 and 22.3 of the
TRIPS Agreement refers to misleading use which positively provokes an error on the part of a
consumer. The standard of confusing established by Article 16.1 is a separate standard. The wording,
context and aim of Article 14(3) of the Regulation c onfirm that its use of "misleading" is similar to
that in Article 22.2 and 22.3 of the TRIPS Agreemen t. Therefore, the express terms of Article 14(3)
do not exclude registration of GIs whose use would be confusing but not necessarily misleading. 475 If
this were not so, the reference in Article 14(2) to grounds for revocation of a trademark in the
Community Trademark Regulation and Trademark Directive would be meaningless because those
grounds include liability to "mislead the public ... as to ... geographical origin" and are distinguished
from the exclusive right to prevent use where there exists a "likeli hood of confusion". The reference
to revocation imports that differentiation into the Regulation.
476 The word "confusion" is used in
Articles 6.6, 7.5(b), 12.2, 12b(3) and 12d(3) of the Regulation in the sense of wondering about the
source of the good, but the word "misleading" is used in Articles 3.2, 6.6, 13.1(c), 13.1(d) and 14.3 in
the sense of an action which positively provokes an error on the part of the consumer.477
7.537 Australia argues that Article 14(3) requires consideration of a trademark's reputation, renown
and the length of time it has been used, which are not required by Article 16.1 of the TRIPS
Agreement. Trademark owners cannot exercise th eir rights against GIs where their use would be
misleading for other reasons. Trademarks that do not meet the tests expressly established by
Article 14(3) of the Regulation cannot be protected by the right provided for in Article 16.1 of the
TRIPS Agreement.478
7.538 Australia notes that the right provided for in Article 16.1 of the TRIPS Agreement refers to
where "such use would result in a likelihood of confusion" . It argues that this implies that there is, or
is intended to be, active use of a trademark and th at the right encompasses pre-emptive action. The
way in which the trademark rights have been acqui red does not affect the assessment as it is the

475 Australia's rebuttal submission, paras. 104-106; in its second oral statement it referred to the
difference between "mislead" and "confuse" as causing a co nsumer to "mistake" the true identity of a product
and to be "puzzled" about the true identity of a product: see para. 15.
476 Australia's second oral statement, paras. 18-19.
477 Australia's response to Panel question No. 149.
478 Australia's rebuttal submission, paras. 107-108.

prospective use of the second sign that is in issue. Reputation is not a prerequisite and it is possible to
cause confusion with a registered trademark even wh ere it has little use and no reputation. The right
to prevent confusing use applies both at the time of the application for registration of the later
trademark or GI and at later stages of use, incl uding in the case of changed circumstances which
would result in a likelihood of confusion on the basis of a likelihood of confusion.
479
7.539 Australia argues that the only instance in whic h Article 14(3) has been applied shows that
there was no consideration of the issue whether registration of the GI "Bayerisches Bier" would
constitute confusing use in relation to the prior trademark "BAVARIA".
480 In response to a question
from the Panel, Australia argued that the register ed GIs "Bayerisches Bier", "Budejovické pivo" and
"Gorgonzola" could be used in accordance with their r espective registrations in a way that results in a
likelihood of confusion with particular trademarks.481
7.540 Australia argues that the protection provided by the Regulation, in particular Article 13.1,
makes clear that the owner of a registered trad emark would not be able to prevent "confusingly
similar or identical use of a sign for similar or id entical goods". The right of a trademark owner to
initiate an infringement action on the grounds that a GI as used is different from the GI as registered
depends on the circumstances of the case. Trademarks registered in particular EC member States
only, could still enjoy reputation in other EC me mber States. The European Communities has not
explained how owners of those trademarks woul d have standing to initia te legal action under
labelling, misleading advertising or unfair competition laws.482
7.541 Australia notes that Article 7(4) of the Regulation provides that an objection is admissible if it
"shows that the registration of the name proposed wo uld jeopardize the existence ... of a mark". This
refers to a threat to the very being of the mark wh ich is a far more rigorous standard than a likelihood
of confusion. This is also true of the French and Spanish versions of the Regulation.483
7.542 Australia denies the allegation that it is reques ting a remedy against GI rights that it does not
provide with respect to trademark rights under its own law. It submits that the Panel should not
consider the provisions of the trademark laws of other Members in isolation. For example, whilst
Australia's trademark law excepts certain actions fro m infringing an earlier trademark right, it applies
only where the prior right holder expressly consente d to the coexistence or failed to prevent the
acquisition of the later trademark right.484
7.543 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. 485 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.486
7.544 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

479 Australia's response to Panel question No. 148.
481 Australia's response to Panel question No. 137.
482 Australia's response to Panel question No. 137.
483 Australia's rebuttal submission, para. 133; second oral statement, paras. 20-21 and 23.
484 Australia's comment on EC responses to Panel question Nos. 137 and 139.
485 European Communities' first written submission, paras. 275-277.
486 European Communities' first written submission, para. 292; rebuttal submission, paras. 271-276.

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 name has acquired distinctiveness through use.487
7.545 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. 488 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.
489 It asserts that Australia bears
the burden of proving that the EC's interpretation of "misleading" is less reasonable or that it is
impossible to interpret "misleading" consistently with Article 16.1. One of the ordinary meanings of
"misleading" is "confusing".490
7.546 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
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 endorsement that they apply "without prejudice to any
beer trademark or other rights existing in the European Union on the date of accession".491
7.547 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. 492 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 th e grounds mentioned in Articles 11 and 11a are
exhaustive.
493
7.548 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

487 European Communities' first written submission, paras. 278-285; rebuttal submission, para. 270.
488 European Communities' first written submission, paras. 286-291.
489 European Communities' response to Panel question No. 68.
490 European Communities' second oral statement, para. 162.
491 European Communities' rebuttal submission, paras. 286-293; response to Panel question No. 142.
492 European Communities' responses to Australia's questions Nos. 2 and 3 after the second substantive
meeting.
493 European Communities' responses to Panel questions Nos. 67 and 142; rebuttal submission,
paras. 294-297; second oral statement, paras. 174-179.

existence ... of a mark". It argues that this language is broad enough to encompass any instance of
likelihood of confusion with any mark. Logically, Article 14(3) must permit registration to be refused
in such cases. Article 7(5)(b) refers expressly to a decision having regard to the "likelihood of
confusion".
494
7.549 The European Communities argues that Community law provides the 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 misleading advertising and the EC member States' unfair competition
laws.
495
7.550 The European Communities argues that few, if any, Members provide a remedy to prevent
confusing use of a registered trademark without first 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.496
(ii) Main arguments of third parties
7.551 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.497
7.552 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.498
7.553 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.499
7.554 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 pursuant to Article 16.1 of the TRIPS Agreement.500
(iii) Consideration by the Panel
7.555 Australia does not take issue in this dispute with trademark rights acquired after a GI is
registered. 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

494 European Communities' first written submission, para. 336; response to Panel question No. 68;
rebuttal submission, paras. 282-285.
495 European Communities' response to Panel question No. 63; rebuttal submission, paras. 298-303.
496 European Communities' second oral statement, para. 181; response to Panel question No. 139.
497 See their respective comments in Annex C, see paras. 19, 37, 106 and 120.
498 Annex C, para. 29.
499 Annex C, paras. 148-152.
500 Annex C, para. 178.

than a GI under Article 14(2) of the Regulation. Th erefore, there is no need to consider that issue
either.
7.556 Australia challenges coexistence under the Regula tion "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.501
7.557 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
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.
7.558 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.
502
7.559 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.
7.560 Turning to the text of Article 14(3) of the Re gulation, the Panel's first observation is that
Article 14(3) 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 limit ed to liability to mislead as to a single issue, and
not with respect to anything else.
7.561 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. 503 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,

501 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 constitute a trademark infringement, Article 14(2) would be
redundant in all of these situations.
502 In this regard, the Panel recalls its comments at para. 7.106.
503 Article 14(3) presupposes the applicability of Ar ticle 13, which requires a consideration of the
similarity of the goods and signs.

renown or use. Otherwise, Article 14(3) does not pr event the registration of a GI, on the basis that its
use would affect any prior trademark outside that subset.
7.562 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 confusion" and the "actual risk of confusion".
504 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.505
7.563 For these reasons, the Panel considers that Au stralia 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.
7.564 Consistent with this view, it can be noted that 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. 506 This at least suggests that
Article 14(3) was considered different from a blanket protection of trademark rights.
7.565 The European Communities has submitted that Au stralia's interpretation of Article 14(3)
would conflict with Article 7(4), which provides th at 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 language encompasses any instan ce of likelihood of confusion between the proposed
GI and a prior trademark. 507 It has not explained why the text does not set forth the likelihood of
confusion standard, when the following provision of the Regulation in Article 7(5)(b) does. The
contrast is marked. Article 7(5)(b) sets out a procedure to reach ag reement in cases where an
objection is admissible, which appears to indicate th at it contains a lower standard than the ground for
objection in Article 7(4).
7.566 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 this risk. The evidence show s that signs eligible for protection as GIs can and
have been registered as trademarks in the Community. 508 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

504 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.
505 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
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.
506 The Committee proposal is set out in Exhibit COMP-14.
507 European Communities' response to Panel question No. 68; rebuttal submission, paras. 282-285.
508 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.

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.
7.567 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 registration. 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.
509 The parties then
made various submissions on this point, based on which 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
to relate to improper application of Artic le 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
510;
(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 wh ere 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
511; and
(d) Article 14(3) is apparently not mandatory in all cases as three GIs registered in
accordance with the terms of an Act of A ccession to the European Union cannot be
invalidated on the basis of Article 14(3).512
7.568 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

509 European Communities' response to Panel question No. 67; see also 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.
510 Australia's comment on EC response to Panel question Nos. 159 and 160; European Communities'
second oral statement, para. 177.
511 Australia's comment on EC responses to Panel question Nos. 159 and 160; European Communities'
second oral statement, para. 178.
512 European Communities' response to Panel question No. 142(c).

would otherwise 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 ab le to anticipate, at the time of the proposed GI
registration, all subsequent uses of the 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 simply refer to names without limiting the way in which they are
used.
7.569 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
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"
513; 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".514
7.570 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.515
7.571 Australia also refers to some specific cases in which the Regulation has been applied in
support of its claim, as set out in the following paragraphs.
7.572 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

513 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, and reproduced
in Exhibit EC-30.
514 Article 2(2) of Council Directive 84/450/EEC rela ting to the approximation of the laws, regulations
and administrative provisions of the Member States concerning misleading advertising, referred to in the
European Communities' responses to Panel question No. 63, fn 39, and reproduced in Exhibit EC-31.
515 See information supplied by the European Commun ities' 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.

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.
516
7.573 Australia alleges that the GI "Bayerisches Bier " could be used in a manner that would result
in a likelihood of confusion with these prior trademarks. 517 In response to a direct question from the
Panel, the European Communities did not deny this specific allegation. It only responded that "in
principle" a name registered fo llowing the assessment required by Article 14(3) "should not give rise
to confusion when used subsequently" and submitted that "in practice" this may happen only when the
registered name is used together with other signs or as part of a combination of signs. This was a
conspicuous choice of words because in the same response it commented in detail on two other
specific cases which it considered irrelevant to the dispute.
518
7.574 Australia also alleges that three Czech beer GIs, "Bud ĕjovické pivo", " Českobudĕjovické
pivo" and "Bud ĕjovický mĕšt’anský var" could be used in a ma nner that would result in a likelihood
of confusion with the prior trademarks BUDWEI SER and BUD, registered in respect of beer. 519 In
response to a direct question from the Panel, the European Communities did not deny that these GIs
could be used in a manner that would result in a lik elihood 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". 520
This might imply that it accepts a likelihood of confusion, but considers that there are other means
besides Article 14(3) to deal with that.
7.575 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 such a likelihood of confusion with these specific prior trademarks.
7.576 For the above reasons, the Panel considers th at the European Communities has not rebutted
Australia's prima facie case that Article 14(3) of the Regulation cannot prevent all situations 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.
7.577 The Panel will now proceed to examine whether the TRIPS Agreement requires Members to
make available to trademark owners rights against signs when they are used as GIs.

516 Council Regulation (EC) No. 1347/2001 reproduced in Exhibit EC-9.
517 See Australia's response to Panel question No. 137.
518 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 registration. 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 Communities' first written submission, fn. 140 to para. 288;
rebuttal submission, para. 287; and responses to Panel questions Nos. 137 and 143 and compare Council
Regulation (EC) No. 1347/2001 supra at 516 and the Commission Guide to the Regulation (August 2004
edition, p. 12) in Exhibit EC-64.
519 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,
520 European Communities' rebuttal submission, paras. 286-293; response to Panel question No. 142.

(d) Relationship between protection of GIs and prior trademarks under the TRIPS Agreement
(i) Main arguments of the parties
7.578 Australia argues that nothing in the TRIPS Agreement justifies a failure to grant the right
provided for in Article 16.1. Had the negotiators intended to permit Members to act inconsistently
with this obligation, they would have said so explicitly. Article 17 is an express exception to
trademarks and nothing in Section 3 of Part II on GI protection could be interpreted in such a way as
to create an exception to trademarks.
521
7.579 Australia does not argue that trademarks must prevail over later GIs. 522 Rather, it argues that
Article 24.5, together with Articles 22.3 and 23 .2, defines the boundaries of the range of possible
actions open to a Member to implement GI protection in relation to trademarks. 523 Article 24.5 does
not require or permit any negation or other li mitation of the trademark owner's right under
Article 16.1.524 It can only be an exception to the provisions of Section 3 on GI protection in view of
its location and title. 525 It also creates a positive right that specified trademark rights cannot be
adversely affected.526
7.580 Australia argues that the "validity of the regist ration of a trademark" refers to the ongoing
legality of the good faith registration of a trademark. The legal bundle of rights contained in a validly
registered trademark includes the exclusive right to prevent confusing use granted under Article 16.1.
Measures adopted to implement GI protection cannot undermine that exclusive right. The "right to
use a trademark" refers to the ongoing ability to use a trademark to which rights have been acquired
through use. Measures adopted to implement GI protection cannot adversely affect such rights.
527
Whatever may have been intended by the phrase the "right to use a trademark", it is separate from,
and additional to, the exclusive right to prevent confusing uses required under Article 16.1.528 It is not
required under Section 2 of Part II. 529 Article 24.5 does not refer to the "exclusive" right to use a
trademark because trademark rights acquired through use are not always exclusive.530
7.581 Australia argues that there is no conflict be tween Articles 16.1 and 22. With respect to
Article 22.2, the only relevance of Article 22.2(a) to trademark rights would be in the context of
acquisition of new trademark rights. 531 With respect to Article 22.3, for example, Australian
trademark law expressly provides that registration of a trademark may be opposed if it contains or
consists of a false GI.532
7.582 Australia argues that a complaining party bears the burden of proof where it alleges a breach
of obligations pursuant to Article 24.5 but a res ponding party bears the burden of proof where it relies
on Article 24.5 to excuse or justify a measure's in consistency with another provision. Article 24.5

521 Australia's first written submission, para. 104.
523 Australia's first written submission, para. 74.
524 Australia's first written submission, para. 106; response to Panel question No. 72.
525 Australia's response to Panel question No. 78; rebuttal submission, para. 93.
526 Australia's response to Panel question No. 145.
527 Australia's response to Panel question No. 76; rebuttal submission, para. 100.
528 Australia's response to Panel question No. 77.
531 Australia's response to Panel question No. 146.
532 Australia's response to Panel question No. 79.

does not alter the scope of Article 16.1 but confirms the continued applicability of the rights granted
under Article 16.1 in the circumstances covered by Article 24.5.533
7.583 The European Communities responds that this claim is unfounded. 534 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 Articles 22.3 and 23.2 which also pr ovide protection to GIs vis-à-vis trademarks. 535
Section 2 of Part II cannot be applied without having regard to Section 3.536
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.537
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". 538 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. 539 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
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 coexistence, 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.540
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

533 Australia's response to Panel question No. 75(a).
534 European Communities' first written submission, paras. 269-273.
535 European Communities' first written submission, paras. 294-300.
536 European Communities' rebuttal submission, paras. 306-307.
537 European Communities' first written submission, para. 301.
538 European Communities' comment on US response to Panel question No. 145.
539 European Communities' first written submission, para. 305; response to Panel question No. 76.
540 European Communities' response to Panel question No. 76; rebuttal submission, paras. 327-328.

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.
541
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. 542 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).
543 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.544
7.588 The European Communities argues that there is no "conflict" between Articles 16.1 and 22.3
but that 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 Ar ticle 16.1 to prevent certain uses of signs. The
simultaneous exercise of both rights would lead to a situation where neither the trademark owner 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 24.5.545
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.546
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 trademarks acquired through use
do not have under Article 16.1 because rights the basis of use are optional under Article 16.1. It notes
that Australia cited Article 24.5 in its request for establishment of a panel and makes a claim under
that provision in its first written submission.
547
(ii) Main arguments of third parties
7.591 Argentina argues that coexistence is inconsistent with 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

541 European Communities' response to Panel question No. 145.
542 European Communities' first written submission, para. 307; response to Panel question No. 77.
543 European Communities' first written submission, para. 308; response to Panel question No. 76.
544 European Communities' response to Panel question No. 147.
545 European Communities' rebuttal submission, paras. 308-310; response to Panel question No. 146.
546 European Communities' response to Panel question No. 76.
547 European Communities' response to Panel question No. 75; rebuttal submission, paras. 312-315.

determines the boundaries for alternatives available to Members in the implementation of measures
relating to GI protection and its link to trademarks.548
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 16.1.549
7.593 Colombia argues that, under the TRIPS Agreement, no form of protection is superior to
another. Therefore, the Regulation cannot deny the right of the trademark owner under Article 16.1 of
the TRIPS Agreement. Such denial constitutes a clear violation of WTO obligations.550
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 contravenes Article 24.5 of the TRIPS Agreement but
also a recognized general principle of law.551
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 c onflict 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.
552
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.553
(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.

548 Annex C, para. 5.
549 Annex C, para. 36.
550 Annex C, para. 102.
551 Annex C, para. 114.
552 Annex C, paras. 148-151.
553 Annex C, para. 178.

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 contain standards relating to
categories of intellectual property rights. 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 another 554, 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.555
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
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. Otherwise, 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

554 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 incorporated by Article 35 of the TRIPS Agreement.
555 Articles 22.3 and 23.2, respectively.

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.556 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.
557
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.
7.607 The principal verb in Article 24.5 is "shall not prejudice". There are various definitions of the
verb "prejudice" used in the three authentic language versions of the TRIPS Agreement. 558 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

556 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.
557 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.
558 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).

French and Spanish versions , which are equally authentic
559, 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 Panel notes that the word "prejudice" is relatively common in all three versions of the
TRIPS Agreement and the phrase "shall not prejudice " or "shall in no way prejudice" occurs three
other times in the English version, including once in another exception in Article 24, and once in
relation to prior rights in Article 16.1 itself.
560 Read in context, "prejudice" simply appears to be a
word which the drafters used to indicate that a par ticular 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 "refuse 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.
 561
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 interpretation. 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, there is no language in Article 24.5
of the TRIPS Agreement which would provide for the conferral 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,

559 See the final clause of the WTO Agreement.
560 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, an d the word "prejudice" appears in th e exception clauses in Articles 13,
26.2 and 30 (and Article 27.2 in the English version), and also in Article 63.4.
561 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.

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.562
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.
563
This is the right saved by Article 24.5 where it provides that certain measures "shall not prejudice ...
the right to use a trademark".564
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
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 protection 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.

562 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 trademarks inconsistent with that additional protection.
See the European Communities' response to Panel question No. 145. In the Panel's view, this overlooks the
subject of Article 24.5 which is "meas ures 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 implemen t 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.
563 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.
564 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.

7.616 Both parties submit that Article 24.5 implies ce rtain things. Australia 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 lik elihood of confusion. In contrast, the European
Communities argues that the use of the more specific language in Ar ticle 24.5 in fact implies a
limitation on the trademark owner's right to exclude use.
565
7.617 As to Australia's argument, the Panel notes the contrast between the use of the specific terms
"eligibility for or the validity of the registration" in Article 24.5, rather than simply "existing prior
rights", which is the language used in the last sente nce 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 u sed 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.
566 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 Agreement – 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 th e preamble, includes the provision of adequate
standards and principles concerning the availability , scope, use and enforcement of trade-related
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.

565 European Communities' first written submission, para. 301; response to Panel question No. 147.
566 That position may be evidenced by, among other things, the express provision in the Community
Trademark Regulation that it shall not affect the GI Regulation and, in particular, Article 14 thereof. There is no
such provision in Section 2 of Part II of the TRIPS Agre ement on trademarks that refers to Section 3 of Part II
on GIs.

7.622 The European Communities submits that this is a conflict resolved by Article 22.3 (and 23.2)
by effectively giving priority to the GI. 567 The Panel agrees that Article 22.3 and Article 23.2 can
resolve conflicts with later trademarks but they do not resolve conflicts with prior trademarks that
meet the conditions set out in Article 24.5.
7.623 The European Communities notes that the simulta neous exercise of two negative rights to
prevent uses provided for in Articles 16.1 and 22.2 (a nd 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. It sees this potential for
conflict as a matter which should be avoided in the interpretation of the TRIPS Agreement.
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. 568 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."
569
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 ri ght for the owners of trademarks subject to
Article 14(2). Article 24.5 of the TRIPS Agreement is inapplicable and does not provide authority to
limit that right.
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 and 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 Australia argues that Article 24.3 of the TRIPS Agreement refers to the protection provided
by Article 13 of the Regulation, which is subject to the exception in Article 14(2). Removal of the
coexistence standard in Article 14(2) of the Regula tion would not diminish that protection. Further,
Article 24.3 encompasses protection for individual GIs as of 31 December 1994. As of that date,
there were no GIs registered under the Regulation, but only GIs registered under the laws of the EC

567 European Communities' response to Panel question No. 146.
568 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.
569 Appellate Body report on EC – Hormones, para. 181.

member States. Finally, Article 24.3 relates only to the implementation of Section 3 and not the
trademark right under Article 16.1 of the TRIPS Agreement.
570
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. 571 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 24.3.572 Article 24.3 applies "[i]n implementing this Section". The
Section includes Article 24.5, which prevents Me mbers from invalidating and prohibiting the use of
grandfathered trademarks.573
(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 justify a breach of the Section on trademarks.574
(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:
"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.

570 Australia's rebuttal submission, paras. 111-117; second oral statement, para. 27.
571 European Communities' first written submission, paras. 272, 312-314.
572 European Communities' response to Panel question No. 74.
573 European Communities' response to Panel question No. 152.
574 Annex C, para. 158.

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 575, 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 unclear 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.
576 To the
extent that those amendments diminished the gene ral level of protection of GIs under the European
Communities' system, they would be inconsistent 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 under 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 abuse. 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.
7.637 For all the reasons set out above, the Panel concludes that Article 24.3 is inapplicable.
(f) Article 17 of the TRIPS Agreement
(i) Main arguments of the parties
7.638 Australia argues that the European Co mmunities has not met its burden of proof to establish
that the conditions of Article 17 of the TRIPS Agreem ent are fulfilled. Austra lia interprets "limited
exception" to mean small diminutions to trademark rights. Article 14(2) of the Regulation is not a
"limited exception" because it allows coexistence with a pre-existing trademark in every case in which
a GI is registered. If Article 17 covered this situ ation it would render Article 24.5 meaningless. Fair
use of descriptive terms does not include use of all de scriptive terms, but only such use as is fair. Use
of a term in a way with a signifying function, rath er than a purely descriptive function, is not "fair
use". If a GI was purely descriptive, there would be no need or basis for an intellectual property right

575 See the final clause of the WTO Agreement.
576 See Council Regulation (EC) No. 692/2003, Article 13, and paragraph 11 of the recitals, set out in
Exhibit COMP-1h.

and thus, for Section 3 of Part II of the TRIPS Ag reement. A trademark does not attract the same
spectrum of rights as other categories of intellectua l property: it attracts only one right, to prevent
uses which result in a likelihood of confusion.
577
7.639 Article 14(2) does not take account of the legitim ate interests of the owner of the trademark
because it denies the exclusive right to prevent c onfusingly similar or identical use required by
Article 16.1 of the TRIPS Agreement. A legitimat e interest of the owner is to maintain the
trademark's capacity to distinguish the owner's goods . Article 17 only permits a small diminution of
the capacity to distinguish. The third parties woul d normally include consumers and other traders.
Consumers have a legitimate interest in being able to purchase products which they intended to
purchase. Other traders have a legitimate interest in being able to use signs that they need to use. For
this reason, Article 17 gives the example of fair use of descriptive terms. Having regard to the text of
Article 17 and the design and architecture of the TRIPS Agreement generally, Article 17 does not
permit a general release from a Member's obligation to grant the basic right attached to a registered
trademark in the event of acquisition of another type of intellectual property right without some
express recognition of that fact.
578
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".579
7.641 The European Communities argues that 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
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 third 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 de scriptive 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.
580
(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

577 Australia's rebuttal submission, paras. 120-124; responses to Panel question Nos. 154-156.
578 Australia's rebuttal submission, paras. 125-127; response to Panel question No. 154.
579 European Communities' first written submission, paras. 315-318; rebuttal submission,
paras. 333-338, 348-350; responses to Panel question No. 75(b).
580 European Communities' first written submission, pa ra. 319; rebuttal submission, paras. 339-347;
responses to Panel questions Nos. 153 and 154; comment on US response to Panel question No. 154.

honest concurrent use, prior use in good faith, co mparative advertising, uses for spare parts and
certain non-commercial fair uses.581
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.582
(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 Australia submits that the European Communiti es, 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. 583 Therefore, the Panel will follow this approach in the
present dispute.
7.646 Article 17 provides as follows:
"Exceptions
Members may provide limited exceptions to the 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 the 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.

581 See their respective comments in Annex C.
582 Annex C, para. 159.
583 All parties note that it was the approach of two previous 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 – Pharmaceuticals observed that a respondent cannot demonstrate that
no legitimate interest of a patent owner 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 to the first set
of rights and obligations and not to the fact that a provision creates exceptions to the rights to be conferred by
Members on the nationals of other Members.

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 "limited" 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.
Australia interprets this in terms of a small diminution of rights. The European Communities does not
disagree with this approach. The Panel 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". 584 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.
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 for in Article 16.1. Th erefore, 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 impact can be taken into account in the proviso.
In this regard, the Panel notes the absence of any reference to a "normal exploitation" of the trademark
in Article 17, and the absence of any reference in Section 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
import 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 them . The Panel recalls these elements in the text of
that provision as follows:

584 Panel report on Canada – Pharmaceutical Patents, para. 7.30.

"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 "limited" 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. The Panel recalls th at, according to Article 2(2) of the Regulation, set out above at
paragraph 7.223, 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. The Panel notes that there is no limit in terms of the quantity of goods
which may benefit from the exception, as long as they conform 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 Article 17, as fair use of descriptive terms
implies no limit in terms of quantity either, and the text indicates that it is a limited exception for the
purposes of Article 17. The quantity of goods which benefits 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 accordance 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.
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. The Panel recalls its finding earlier in paragraph 7.522 that the GI registration does not
confer a positive right to use any other signs or co mbinations of signs nor to use the name in any
linguistic versions not entered in the register. The trademark owner's right is not curtailed against any
such uses. If the GI registration prevented th e trademark owner from exercising its rights against
these signs, combinations of signs or linguistic ve rsions, which do not appear expressly in the GI
registration, it would seriously expand the exception 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 7.524, 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)) provides 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. The Panel recalls its finding in paragraph 7.525
that Article 14(2) is an exception to Article 13, wh ich 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 Panel notes that Article 14(2) only expressl y provides that the trademark may continue to
be used. 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 any goods which
originate in a different geographical area or which do not comply with the specifications
585, and that
the positive right to use the GI extends only to the li nguistic versions that have been entered in the
register and not to other names or si gns which have not been registered. 586 Accordingly, on the basis
of the terms of the GI Regulation and of the Co mmunity Trademark Regulation, and the explanation
of them provided by the European Communities, th e Panel finds that not only may the trademark
continue to be used, but that the trademark owne r'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 registration.
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.587
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.

responses to Panel questions Nos. 76 and 153.
586 European Communities' rebuttal submission, paras. 288, 293 and 301; responses to Panel questions
Nos. 63, 137 and 140; and comment on US response to Panel question No. 137.
587 Supra at note 495 and European Communities' first written submission, para. 319; response to
Panel question No. 153.

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. The Panel must first establish what ar e "legitimate interests". Read in context, the
"legitimate interests" of the trademark owner ar e contrasted with the "rights conferred by a
trademark", which also belong to the trademark owner. Given that Article 17 creates an exception to
the rights conferred by a trademark, the "legitimate interests" of the trademark owner must be
something different from full enjoyment of those le gal rights. The "legitimate interests" of the
trademark owner are also compared with those of "t hird parties", who have no rights conferred by the
trademark. Therefore, the "legitimate interests", at least of third parties, are different from simply the
enjoyment of their legal rights. This is confirmed by the use of th e verb "take account of", which is
less than "protect".
7.663 The Panel agrees with the following view of the Panel in Canada – Pharmaceutical Patents ,
which interpreted the term "legitimate interests" of a patent 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."
588
In our view, this is also true of the term "legitimate interests" of a trademark owner and third parties in
the context of Article 17.
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 reputation 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 provides 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.

588 Panel report on Canada – Pharmaceutical Patents, para. 7.69.

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."
589
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".590 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 also their rights, have been taken into account.
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 distinctiveness will be affected by the use of the GI.
The Panel does not consider this fatal to the a pplicability of Article 17 given that, as a provision
permitting an exception to the exclusive right to prevent uses that would result in a likelihood of
confusion, it presupposes that a certain degree of lik elihood of confusion can be permitted. In the
light of the provisions of Articles 7(4) and 14(3) , we are satisfied 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 pr ovides that the trademark may continue to be
used, on certain conditions.
7.671 The Panel notes 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 Artic les 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 Panel also notes that there may be situati ons where, 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 tho se using the GI and to distinguish the respective
undertakings.
7.673 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

589 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.
590 European Communities' rebuttal submission, paras. 286-293; response to Panel question No. 142.

GIs registered under the Regulation over a period of eight 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 exceptions. 591 Three of these are the Czech beer GIs, the
registration of which is subject to the endorsemen t set out earlier. 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.
7.674 The Panel will now consider whether the excep tion created by the Regulation takes account
of the legitimate interests of third parties.
7.675 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
course of trade. That function is served not only fo r the owner, but also for consumers. Accordingly,
the relevant third parties include consumers. 592 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.
7.676 Turning to the Regulation, Article 14(3) expr essly addresses consumers, by providing for the
refusal of GI registration where "registration is liable 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."
593
7.677 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.
7.678 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.
7.679 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.
7.680 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.

591 See responses to Panel question No. 47 and Annex C.
592 This is confirmed by the reference in Article 16.2 to "the relevant sector of the public", in relation to
well-known trademarks.
593 European Communities' response to Panel question No. 143.

Nevertheless, as "legitimate interests", the interests of GI users as third parties within the meaning of
Article 17 would be different from the legal protection provided for in Articles 22 and 23.
7.681 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
provides contextual support for the notion that the interest of GIs users in using a place name to
indicate their products is "legitimate".
7.682 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.
594 These considerations support the view that the interests of GI users
of which the Regulation takes account are "legitimate".
7.683 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.
7.684 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.
7.685 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 TRIP S Agreement. Australia has not succeeded in
rebutting that presumption.
7.686 Therefore, the Panel concludes that with r espect to the coexisten ce 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.
Articles 24.3 and Article 24.5 of the TRIPS Agreement are inapplicable.
2. Identical signs for identical goods
(a) Presumption of confusion
(i) Main arguments of the parties
7.687 Australia claims that the measure at issue is inc onsistent with Article 16.1 of the TRIPS
Agreement because it does not "provide for" or "implement" the presumption of a likelihood of

594 Supra at note 495 and European Communities' first written submission, para. 319; response to
Panel question No. 153.

confusion in the case of use of an identical sign for identical goods. 595 The provisions of the
Regulation do not grant to the authorities the necessary discretion to apply that presumption.596
7.688 The European Communities refers to its defence to the previous claim and makes some
additional comments: Members are not required to reproduce explicitly the presumption of
Article 16.1 in their domestic law as long as the au thorities have the necessary discretion and comply
with the presumption in practice. It is extremely unl ikely that this situation will ever present itself in
practice in view of the trademark registrab ility criteria and the GI definitions and product
specifications. If the situation should arise, Ar ticle 14(3) of the Regulation would permit the
authorities to implement the presumption. This clai m is purely theoretical as none of the GIs actually
registered fall within this situation.
597
(ii) Main arguments of third parties
7.689 Brazil does not agree with the European Communiti es that there is no need to "reproduce
explicitly" the presumption in Article 16.1 of the TRIPS Agreement as long as the registering
authority or the courts had adequate discretion to ap ply it. In Brazil's view, even if the domestic law
of each EC member State incorporated the presump tion, this would not mean that the Community-
level registration under the Regulation also provided for its incorporation.
598
7.690 New Zealand refers to the second ground for admissibility of objections in Article 7(4) of the
Regulation. It agrees with Australia that the Regulation is inconsistent with Article 16.1 of the TRIPS
Agreement because the owner of a registered trademar k may not be able to object successfully to a
proposed GI registration even if its use would constit ute use of an identical or similar sign that would
result in a likelihood of confusion.599
(iii) Consideration by the Panel
7.691 Article 16.1 of the TRIPS Agreement, in its firs t sentence, provides for a right that refers to
"identical or similar" "signs" and "goods or servi ces" and depends on a "likelihood of confusion". In
its second sentence, it provides for a presumption of a " likelihood of confusion" with respect to use of
an "identical sign for identical goods or services". Therefore, the second sentence clarifies how the
first sentence is implemented, in particular circumstances.
7.692 The Panel refers to its conclusion on the previous claim, which is based on the finding that the
first sentence of Article 16.1 is applicable, and that the Regulation prevents the exercise of the right
that it requires to be conferred. It follows th at the presumption in the second sentence, which governs
implementation of the first sentence, is also applicable, in the particular circumstances that it sets out.
7.693 Australia has argued that the measure at issu e does not "provide for" or "implement" a
presumption of a likelihood of confus ion in the case of use of an iden tical sign for identical goods.
There is no requirement that the text of the GI Re gulation, or its related or implementing measures,
should explicitly "provide for" this presumption. As for the discretion granted to authorities under the
Regulation, Australia has only demonstrated th at the Regulation "as such" does not permit the
authorities to implement the presumption in the sec ond sentence only to the extent that it does not
permit them to implement the right provided for in the first sentence. Therefore, a finding on this

595 Australia's first written submission, para. 93 and subheading.
597 European Communities' first written submission, paras. 320-324.
598 Annex C, para. 30.
599 Annex C, para. 153.

claim will not provide any additional contribution to a positive solution to this dispute and the Panel
declines to consider it further.
3. Trademark owners' right to object to GI registration
(a) Admissibility of objections
(i) Main arguments of the parties
7.694 Australia claims that the Regulation is incons istent with Article 16.1 of the TRIPS
Agreement because it does not ensure that objections to registration are admissible on the grounds that
use of the GI would result in a likelihood of confus ion. Article 7(4) of the Regulation provides that
objections are only admissible if the GI does not comply with the conditions in the Regulation or
registration would "jeopardize the existence" of an entirely or partly identical trademark. This
requirement also applies to objections by persons resident or established in other WTO Members by
virtue of Articles 12b(3) and 12d(2).
600
7.695 Australia argues that a right of objection is necessary to allow exercise of the right expressly
required by Article 16.1 of the TRIPS Agreement, although a right of objection itself may not be
expressly required. An objection procedure is th e only means available to a trademark owner to
prevent a confusing use. The standard of "jeopardi ze the existence" is a far more rigorous standard
than a "likelihood of confusion".601
7.696 The European Communities responds that Article 16.1 of the TRIPS Agreement does not
grant a right to object to the registration of trad emarks, GIs or other intellectual property rights.
Objection procedures in general are addressed in Ar ticle 62.4 of the TRIPS Agreement and trademark
objection procedures specifically are addressed in Article 15.5. The right to object is not necessary to
"exercise" effectively the substantive right provided for in Article 16 if final registration decisions are
subject to judicial review in accordance with Article 62.5.602
7.697 The European Communities argues that Article 7( 4) of the Regulation permits objections if
the proposed GI would jeopardize the existence of the mark, regardless of whether it is entirely or
partially identical. It refers to the French and Sp anish versions of the Regulation and asserts that this
ground is broad enough to encompass the lik elihood of confusion with the trademark. 603 This is
confirmed by the fact that Australia is unable to identify any case in which the grounds of objection
were limited in the manner alleged. 604 Australia bears the burden of proof and must show that this
reading is unreasonable and that it is impossible to read Article 7(4) of the Regulation consistently
with Article 16.1 of the TRIPS Agreement.605
(ii) Main arguments of third parties
7.698 Brazil argues that EC nationals would be able to protect a GI to the detriment of a prior
registered trademark much more rapidly and efficiently than another WTO Member national would be
able to defend trademark rights vis-à-vis an application for registration.606

600 Australia's first written submission, paras. 88-92.
601 Australia's rebuttal submission, paras. 131, 133.
602 European Communities' first written submission, paras. 327-333.
603 European Communities' first written submission, paras. 334-338.
604 European Communities' rebuttal submission, para. 353, citing Australia's response to EC question
No. 1.
605 European Communities' second oral statement, para. 230.
606 Annex C, para. 31.

(iii) Consideration by the Panel
7.699 Article 16.1 of the TRIPS Agreement sets out the minimum right which Members must
provide to the owners of registered trademarks a nd which they may also make available on the basis
of use. It is a right for trademark owners to prev ent certain uses. The Panel takes note that trademark
owners are not able to exercise their right to pr event use of a GI after GI registration. However,
Australia has not explained why the trademark owner's right to prevent use implies a right to object to
GI registration.
7.700 Article 15.5 provides for a right of objection to registration of a trademark but there is no
corresponding provision in Part II regarding the registration of a GI . There are provisions on the
acquisition and maintenance of intellectual propert y 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 cross-refere nced in paragraph 5. The opportunity or right to object forms part
of an opposition procedure. However, Article 62 lies outside the Panel's terms of reference.
7.701 For these reasons, the Panel concludes that Au stralia has not made a prima facie case in
support of this claim.
(b) Consideration of objections
(i) Main arguments of the parties
7.702 Australia also claims that the Regulation is inc onsistent with Article 16.1 of the TRIPS
Agreement because it does not ensure that an objectio n by the owner of a registered trademark will be
considered by the "ultimate decision maker", being the regulatory committee of EC member States.
This applies to objections filed by persons resi dent or established in an EC member State under
Article 7(1) of the Regulation and also objections filed by persons resident or established in other
WTO Members under Article 12b(2) and 12d(1). Austra lia argues that consideration of an objection
by the regulatory committee is essential to a regist ered trademark owner being able to exercise the
rights required to be conferred by Article 16.1 of the TRIPS Agreement. 607 Australia disagrees with
the European Communities' views on estoppel.608
7.703 The European Communities refers to its defence to the prev ious claim. It adds that the
Committee established under Article 15 of the Regul ation is not the "ultimate decision maker".
Further, the authorities of the EC member States are not required to transmit objections to the
Commission, but their decisions are not discretionary and may be subject to judicial review based on
procedural requirements of their respective admini strative laws. Whilst the authorities of other WTO
Members enjoy complete discretion in the transm ission of objections to the Commission, those
Members would be estopped from complaining that th e refusal of their own authorities to transmit an
objection had infringed the trademark rights of their own nationals.
609
(ii) Consideration by the Panel
7.704 The Panel refers to its findings at paragraphs 7.699 and 7.700 and concludes, for the same
reasons, that Australia has not made a prima facie case in support of this claim.

607 Australia's first written submission, paras. 94-99.
608 Australia's rebuttal submission, paras. 73-83.
609 European Communities' first written submission, paras. 339-344; second oral statement, para. 231.

E. O
THER CLAIMS
1. Minimum standards of GI protection
(a) Main arguments of the parties
7.705 Australia claims that the European Communities fa ils to provide at Community level the
legal means for interested parties to prevent uses in respect of a GI registered, or proposed to be
registered, under the Regulation, contrary to Article 22.2 of the TRIPS Agreement. 610 It argues that
the obligation under Article 22.2 of the TRIPS Agr eement creates an obligation "in respect of" GIs
which means "as concerns" GIs. The obligation is not limited to actions to protect GIs, but extends to
any situation that concerns GIs, including a situati on involving the proposed registration of a GI that
potentially constitutes an act of unfair competition within the meaning of Article 10 bis of the Paris
Convention (1967).611
7.706 Australia argues, by way of example, that it is entirely possible that there are products which,
while originally based on a European production pr ocess, have been furthe r developed and refined
outside the European country of origin and wh ich have subsequently come to represent the
"international" trading standard for that product. Registration of that name as a GI – although it may
qualify for registration - could well constitute misl eading use or an act of unfair competition within
the meaning of Article 10 bis of the Paris Convention (1967). 612 Australia does not challenge any
particular GI as contrary to Article 22.2 of th e TRIPS Agreement, but argues that the European
Communities has failed to provide the legal means by wh ich interested parties can seek to test "such
issues" in relation to the registration of a GI under the Regulation.613
7.707 Australia argues that the Europ ean Communities is not obliged to comply with a particular
obligation through a single measure applicable thr oughout its territory but rather, while it can choose
to offer more extensive protection of GIs at the Community level, it must also ensure that it does not
breach its TRIPS obligations in doing so. The Eu ropean Communities has effectively implemented a
TRIPS right – at the Community level – without also effectively implementing at the same level the
concurrent TRIPS obligations. 614 An assertion that the European Communities complies with
Article 22.2 of the TRIPS Agreement under the laws of the EC member States is an admission that the
Regulation itself does not comply. The Regulation disturbs what may otherwise be sufficient to meet
the European Communities' obligations.
615
7.708 The European Communities considers that this claim is insufficiently argued but responds
as follows: (1) It considers that Article 22.2 of the TRIPS Agreement is concerned exclusively with
the protection of GIs. It cannot be invoked by a trademark right holder to prevent the use of a GI;
(2) The use of a validly registered GI, which is otherwise consistent with the TRIPS Agreement,
cannot mislead the public as to the geographical origin of the goods. Registration of the GI seeks to
avoid precisely that; and (3) Registration or use of a GI consistently with domestic law cannot
constitute an act of unfair competition within the meaning of Article 10 bis of the Paris Convention
(1967). In any event, registered GIs remain s ubject to EC labelling and misleading advertising
legislation and the unfair competition laws of th e EC member States. These other measures and the

610 Australia's first written submission, paras. 7 and 61.
611 Australia's first written submission, paras. 154-155.
612 Australia's rebuttal submission, para. 170. See also its response to Panel question No. 24.
613 Australia's second oral statement, para. 85.
614 Australia's responses to Panel questions Nos. 81 and 82.
615 Australia's second oral statement, para. 112.

Regulation apply cumulatively. In any event, regi stration of a GI is not a "use". (4) There is no
requirement that protection must be at the Community level.616
7.709 The European Communities comme nts as follows on the example of a product name which
has become generic: (a) It does not understand how u se of a name which is not generic but is a GI in
the country of protection could be misleading; (b ) Article 22.2 concerns acts against the holders of
GIs as defined in Article 22.1, not other parties; (c ) the exercise of a right conferred by a Member to
comply with the TRIPS Agreement is not a di shonest practice in international trade; and
(d) Article 22.2(a) requires the protection of GIs unl ess they have become generic in the country of
protection, but Australia's example implies that Article 22.2(b) prevents the protection of GIs if they
have become generic in another country.
617
(b) Consideration by the Panel
7.710 The Panel begins its considera tion of this claim by noting that 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 10bis of the Paris Convention (1967)."
7.711 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' implementation of Article 22.2.
7.712 Article 22.2 creates an obligation that applies "in respect of" geographical indications. The
ordinary meaning of the word "respect" as used in th at phrase can be defined as "relation, connection,
reference, regard. Earliest in have respect to; now chiefly in with respect to, in respect to".
618
7.713 This is a very broad phrase. However, in accordance with the general rule of treaty
interpretation, the ordinary meaning of the phrase "in respect of" must be interpreted in context and in
the light of the object and purpose of the Agreement.
7.714 Article 22.2 is found in Section 3 of Part II of the TRIPS Agreement. Part II sets out
minimum standards concerning the availability, scope and use of intellectual property rights, which is
one of the objects and purposes of the Agreement, as highlighted in paragraph (b) of the second recital
in its preamble. The first seven sections of Part II contain standards relating to categories of
intellectual property rights. Each Section provides for a different category of intellectual property,
setting 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.

616 European Communities' first written submission, pa ras. 411-415; rebuttal submission, para. 393;
response to Panel question No. 159.
617 European Communities' rebuttal submission, paras. 386-392.
618 The New Shorter Oxford English Dictionary (1993).

Section 3 contains all these features for the category of GIs, as highlighted in its title, which reads
"Protection of Geographical Indications". Article 23.1 expressly provides for protection to prevent
use of a GI for wines and spirits. Whilst the protection of GIs affects the protection of trademarks, as
expressly recognized in Articles 22.3 and 23.2, Sect ion 3 does not provide for trademark protection,
except to the extent that trademark systems are used to protect GIs. Therefore, read in context, the
obligation in Article 22.2 to provi de certain legal means "in respect of" GIs, is an obligation to
provide for the protection of GIs.
619 Australia's claim does not appear to concern the protection of
GIs, but rather the protection of other subject matter against the protection of GIs. Therefore, it does
not disclose a cause of action under Article 22.2.
7.715 With respect to the example of product names that may satisfy the conditions for protection in
the Member where protection is sought but which have become the international trading standard for a
product, it is not entirely clear what Australia mean s by the term "international trading standard".
However, it suffices to note that Article 22.2 appl ies to geographical indications that satisfy the
definition in Article 22.1. Article 22.2 does not apply to generic terms, as confirmed by Article 24.6.
Each Member applies the definition of GIs with r espect to its own territory so that the question
whether the indication is generic or otherwise not entitled to protection in another Member's territory
is not relevant, unless the other Member is the country of origin.
7.716 Australia's example does not concern another Me mber that is the country of origin, and
therefore is inapposite to Article 22.2.
7.717 With respect to the suggestion that the Eur opean Communities must provide the legal means
to test issues such as those in the above example, the Panel notes that Article 22.2 creates an
obligation to provide the legal means to prevent certain uses. To the extent that Australia's reference
to the testing of issues relates to the right to seek eventual legal relief, it has failed to demonstrate
what uses covered by Article 22.2 are permitted by the Regulation without a legal means of
prevention.
7.718 For the above reasons, the Panel rejects Aust ralia's claim under Article 22.2 of the TRIPS
Agreement.
2. Articles 10bis and 10ter of the Paris Convention (1967)
(a) Main arguments of the parties
7.719 Australia claims that the European Communities de nies to nationals of other WTO Members
effective protection against unfair competition and appropriate legal remedies to repress effectively all
acts of unfair competition, contrary to Article 2.1 of the TRIPS Agreement "incorporating
Articles 10bis(1) and 10 ter(1) of the Paris Convention (1967)". 620 This claim is based on the
argument that the Regulation provides a Community-wide system of registration of GIs that provides
effective protection from acts of unfair competit ion, including in relation to later trademark
applications, within the Community, but not a Co mmunity-wide system of effective protection of
trademarks from acts of unfair competition arisin g from the later registration of GIs under the
Regulation.
621 Australia argues that Article 10 bis(1) includes the obligation to protect trademarks
against unfair competition from a GI and that Article 10 ter(1) therefore ensures that a Member

619 Consequently, whilst Article 22.4 provides for protection against GIs, it only applies to the
protection of other GIs.
620 Australia's first written submission, paras. 6 and 60. Australia quotes the text of Articles 10 bis and
10ter and Bodenhausen, see supra at 79, p. 144, on the meaning of Article 10 bis(2), in first written submission,
paras. 75 and 76, fns. 32, 33 and 34; and rebuttal submission, para. 144, referring to the same source and WIPO
Model Provisions on Protection against Unfair Competition set out in Exhibit AUS-9.
621 Australia's first written submission, paras. 10, 113-118.

provides the mechanisms necessary to assure prot ection against unfair competition "in any guise" 622
and to assure to nationals of other Members ef fective protection against unfair competition that
permits account to be taken of honest pr actices established in international trade. 623 Australia
confirms that it seeks distinct findings in respect of its claim under Article 10 bis pursuant to
Article 2.1 of the TRIPS Agreement and its claim under Article 22.2(b) of the TRIPS Agreement.624
7.720 The European Communities responds that this claim is insufficiently argued and difficult to
understand. Australia does not explain how the use of a registered GI, which is otherwise consistent
with the TRIPS Agreement and, in particular, Artic les 16 and 24.5, could constitute an act of unfair
competition within the meaning of Article 10 bis(1) of the Paris Convention (1967). In any event, the
use of a registered GI remains subject to EC le gislation on labelling and mi sleading advertising, as
well as the laws of the EC member States on unfai r competition, which are outside the Panel's terms
of reference. There is no basis in Article 10 bis(1), or anywhere else in the Paris Convention (1967)
for the proposition that the protection against unf air competition must be provided at any given
territorial level. The claim under Article 10 ter(1) of the Paris Convention (1967) is unfounded for the
same reasons.625 The European Communities responded to the claim under Article 2.1 of the TRIPS
Agreement separately, and argued that, as a conseque nce of the other two claims, this claim was also
unfounded.626
(b) Consideration by the Panel
7.721 The Panel notes that Australia's claims relate to two provisions of the Paris Convention
(1967) and the protection of trademarks against acts of unfair competition arising from the later
registration of GIs. These claims are based on th e assertion that where the European Communities
implements "Community-wide" protection for GIs against unfair competition arising from trademark
protection, it must also implement Community -wide protection for trademarks against unfair
competition arising from GI protection.
7.722 The European Communities indicated that it had difficulty understanding the claims but it
responded as set out in paragraph 7.720.
7.723 Australia's response to the Europ ean Communities' concerns was that "[i]t is irrelevant that
the EC might not understand" how the use of a TRI PS-consistent GI could constitute an act of unfair
competition and that "[i]t is also irrelevant" that the use of a registered GI remains subject to
legislation on labelling, misleading a dvertising and unfair competition laws. 627 However, it did
provide an additional element to its ar guments when it referred to Article 10 bis(2) and speculated as
follows:
"It may be that, having regard to the principl e of territoriality and to developments in
international trade over time, recognition of a TRIPS-defined GI could constitute an
act of unfair competition within the meaning of Paris Article 10bis(2)."
7.724 The Panel sought clarification from Australia as to the relevance of the fact that a measure is
or is not applicable throughout a Member's territory , and whether Australia's claim was related to the
fact that the EC member States are also WTO Members. Australia reiterated the assertion in its claim,
but added that the European Communities had effectively implemented a "TRIPS right", at

622 Australia's response to Panel question No. 82.
623 Australia's rebuttal submission, paras. 144-145.
624 Australia's response to Panel question No. 161.
625 European Communities' first written submission, paras. 398-402.
626 European Communities' first written submission, paras. 403-404.

Community level, without also effectively implem enting at the same level the concurrent "TRIPS
obligations".
628 Australia did not explain why, in its view, the right to provide more extensive
protection than that required by the minimum standards of the TRIPS Agreement entailed
"concurrent" obligations.
7.725 The Panel observed that these claims related to trademark protection and sought clarification
from Australia on the need for additional conclusions if there were a conclusion on the claims under
Article 16.1 of the TRIPS Agreement. Australia re iterated its assertion of an obligation to protect
trademarks against unfair competition from a GI, but added that these provisions together ensure that
a Member actually provides the mechanisms necessary to ensure protection against unfair competition
"in any guise". Australia did not elaborate on why, in its view, the GI Regulation should provide such
protection. Its final comments on these claims were as follows:
"The obligations established by Paris Articles 10 bis(1) and 10 ter(1) are
straightforward, and WTO Members are required to comply with those obligations by
the terms of TRIPS Article 2.1. Australia does not have to explain how the use of a
registered EC-defined GI could constitute an act of unfair competition within the
meaning of those provisions of the Paris Convention. That would be determined by
the body required to be empowered by the EC to consider such matters in the event
that the holder of an industrial property ri ght within the EC considered that such
issues may be raised by the registration of an EC-defined GI." [emphasis added]
7.726 The Panel has reviewed Australia's submissions , statements and responses to questions and
notes that, whilst Australia has repeat edly stated the obligations with which it alleges inconsistencies,
it has not clearly explained the fundamental premi se of its claims, which is that the European
Communities must provide at Community-level protection for trademarks against unfair competition
arising from GIs. Nor has it clearly explained why the measure at issue should provide that
protection. The Panel considers that those issues needed to be explained. The Panel itself sought
clarification of certain issues and notes that the res pondent also raised these matters in its first written
submission.
7.727 The Panel cannot relieve Australia of its res ponsibility to prove its case. Some evidence,
although not necessarily specific instances, was required to indicate what uses covered by
Article 10bis of the Paris Convention (1967) are permitted by the Regulation without a legal means of
prevention. Australia's speculative remark "having regard to the principle of territoriality and to
developments in international trade over time" rest ated the nature of the measure at issue and the
nature of the obligation at issue without making a cl ear link between the two. Australia's example of
products that have become the "international" tradin g standard, considered in the previous sub-section
in relation to Article 22.2(b) of the TRIPS Agreemen t, does not appear to relate to the present claim,
which relates to the protection of trademarks from acts of unfair competition. Consequently,
Australia has not demonstrated that legal remedies are required in accordance with Article 10 ter(1)
either.
7.728 Accordingly, the Panel concludes that Australia has not made a prima facie case in support of
its claims under Articles 10 bis and 10 ter of the Paris Convention (1967) "as incorporated in" the
TRIPS Agreement.
629

628 Australia's response to Panel question No. 81.
629 This does not imply any view as to whether and in what respects Articles 10 bis and 10 ter of the
Paris Convention (1967) are incorporated by Article 2.1 of the TRIPS Agreement.

3. Claims under Part III of the TRIPS Agreement
(a) Main arguments of the parties
7.729 Australia claims that the Regulation is inconsistent with Articles 41.1, 41.2, 41.3 and 42 of
the TRIPS Agreement because of the provisions concerning objections by a trademark right holder,
and the functioning of the regulatory committee.
630
7.730 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.
631
(b) Consideration by the Panel
7.731 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 intellectual property
rights covered by the Agreement, including geographi cal indications, by virtue of the definition of
"intellectual property" in Article 1.2 and the first sentence of Part III. However, Australia's claims
concern an inter partes procedure permitting objections which is related to the acquisition of
intellectual property rights under the Regulation. As such, it is covered by Part IV of the TRIPS
Agreement, not Part III. The general princi ples in Article 41.2 and 41.3 apply to such inter partes
procedures, where a Member's law provides for them, by virtue of Article 62.4 of the TRIPS
Agreement. However, Article 62.4 is outside the Pa nel's terms of reference. Accordingly, the Panel
rejects these claims.
4. Claims concerning transitional national protection
(a) Main arguments of the parties
7.732 Australia claims that the Regulation does not ensure that decisions by EC member States to
grant transitional national protection pursuant to Article 5(5) do not diminish the protection of
trademarks under the TRIPS Agreement, in the same way as registration of GIs at the Community
level. As a consequence, it claims that the Regula tion is inconsistent with Article 2.1 ("incorporating
Articles 10bis(1) and 10ter(1) of the Paris Convention (1967)"), Articles 16.1, 41.1, 41.2, 41.3 and/or
42 of the TRIPS Agreement. It submits that these claims are independent of its other claims.
632
7.733 The European Communities responds that these claims are dependent on the substantive
claims and are equally unfounded.633
(b) Consideration by the Panel
7.734 These claims concern Article 5(5) of the Re gulation, which provides that, in certain
circumstances, an EC member State may "on a tr ansitional basis only, grant on the national level a
protection in the sense of the present Regulation" for GIs pending a decision on registration by the
Commission.
7.735 The Panel recalls once again that, in its prel iminary ruling of 5 April 2004, it assured the
European Communities that "it is fully entitled to know the arguments of Australia during the course

630 Australia's first written submission, paras. 119-148.
631 European Communities' first written submission, paras. 357-389, 393-397.
632 Australia's first written submission, paras. 149-150; rebuttal submission, paras. 162-165.
633 European Communities' first written submission, paras. 407-408.

of the proceedings. Those arguments must be set out and may be clarified in Australia's
submissions."
634
7.736 Australia has cited a series of numbered provis ions of the TRIPS Agreement and provided
narrative text that paraphrases those provisions, bu t it has set out little in the way of supporting
arguments. It has not explained whether Article 5(5) grants EC member States authority to continue
to apply national legislation, what is the nature or content of that protection, how it can diminish
trademark protection "in the same way" as the prot ection granted by registration under the Regulation
nor how this is alleged to violate enforcement ob ligations in Part III of the TRIPS Agreement.
Therefore, it is not clear why Australia considers th at the Regulation should ensure that decisions of
EC member States should be taken with proper rega rd to the provisions of the TRIPS Agreement.
Accordingly, Australia has not made a prima facie case in support of its claim.
5. Claims concerning individual registrations
(a) Main arguments of the parties
7.737 Australia claims, for reasons related to the amen dment of the Regulation in April 2003,
violations of the national treatment obligations in Articles 2(1) and 2(2) of the Paris Convention as
incorporated by Article 2.1 of the TRIPS Agreement, and in Article 3.1 of the TRIPS Agreement, the
obligation in Article 2.1 of the TRIPS Agreement to comply with Articles 1 through 12 and 19 of the
Paris Convention (1967), and the obligation in Arti cle 1.3 of the TRIPS Agreement to accord the
treatment provided for in the TRIPS Agreement to the nationals of other Members.635
7.738 Australia notes that as of April 2003, more than 120 GIs had been registered under the
Regulation according to a procedure which granted a right of objection to persons resident or
established in an EC member States but not to na tionals of other WTO Members not resident or
established in an EC member State. The amendment inserted Article 12d which grants a right of
objection to persons resident or established in WTO Members, but did not provide any right of
objection to GIs already registered or adjust the period for lodgement of objections to applications
which were pending.
636
7.739 Australia also notes that as of April 2003, more than 480 GIs had been registered under a
simplified procedure under the former Article 17 wh ich granted a right of objection to EC member
States but not to the nationals of other WTO Memb ers. The amendment repealed Article 17 but did
not grant a right of objection to nationals of other WTO Members in respect of GIs already registered
or affect the continuing registrations in any other way.
637
7.740 In response to a question from the Panel, Austra lia indicated that it seeks relief in respect of
existing registration for which the European Comm unities did not comply with Articles 16.1, 22.2,
41.1, 41.2, 41.3 and 42 of the TRIPS Ag reement and Article III:4 of the GATT 1994. 638 It submits
that its claims under these provisions, as well as its claims under Article 2.1 of the TRIPS Agreement,
"incorporating" Articles 10 bis and 10 ter of the Paris Convention (1967), and Article 24.5 of the
TRIPS Agreement, encompass the registration of 480 GIs under the simplified procedure.
639
However, it does not challenge any specific individual registration.

634 See para. 40 of the 5 April 2004 preliminary ruling set out in para. 7.2 of this report.
635 Australia's first written submission, paras. 189 and 194.
636 Australia's first written submission, paras. 184-188.
637 Australia's first written submission, paras. 190-193.
638 Australia's response to Panel question No. 92.
639 Australia's comment on the EC response to Panel question No. 163.

7.741 The European Communities responds that the individual registrations themselves are not in
violation of national treatment obligations. Austra lia's claim is based exclusively on the argument
that no right of objection was available to third country nationals under the Regulation prior to its
amendment. The rules governing the procedure leading up to the adoption of the measure are not the
same as the measure itself. It is not clear how an individual registration that grants protection to a
specific GI could grant less favourable treatment to third country nationals.
640 Moreover, under the
simplified procedure, there was no right of objection to European Communities residents or third
country residents.641
7.742 The European Communities considers it important to remark that Australia is seeking a
retroactive remedy that it could not have obtaine d had it attacked the measure while it was still in
force. It submits that it is universally accepte d that Article 19.1 of the DSU signifies that the
recommendations of panels and the Appellate Body are prospective, not retrospective, in nature.
Even if Australia had challenged the Regulation before it was amended, it could not have claimed that
the European Communities undo all the registrations already carried out or reopen a possibility of
objection against such registrations or provide compensation.642
7.743 The European Communities consid ers that Australia's claims under provisions other than the
national treatment provisions were raised after its first written submission and without any supporting
arguments. In any case, these claims relate to objection procedures, which are optional under the
TRIPS Agreement and unrelated to the treatment of products under GATT 1994.643
(b) Consideration by the Panel
7.744 The Panel notes that these claims concern indi vidual registrations effected under the former
Article 17 of the Regulation, which has been rep ealed, and under Article 6 of the Regulation, which
remains in effect.
7.745 With respect to individual registrations e ffected under the former Article 17 of the
Regulation, the Panel recalls its ruling in paragraph 7.17 that it will make findings with respect to
prior versions of the Regulation where they serve some useful purpose in reaching conclusions with
respect to measures within its terms of reference, in cluding individual registrations, that are currently
in force.
7.746 The simplified procedure under the former Artic le 17 of the Regulation granted no right of
objection. Article 7 provides for objections, but the former Article 17(2) provided that Article 7 "shall
not apply" under the simplified procedure. Austra lia directs our attention to a judgement of the
European Court of Justice, concerning protection of the name "Feta", which made reference to
Article 17(2). However, the Panel notes that the findings of the Court in that judgement do not
suggest that a right of objection under Article 7 applied under the simplified procedure.644
7.747 The Panel noticed that the initial registrations under Article 17 in 1996 recited provisions of
the Regulation that concerned prior trademark rights. 645 In response to a question from the Panel, the
European Communities explains that this was an implicit reference to "Bayerisches Bier" which was

640 European Communities' first written submission, paras. 158-161, 171.
641 European Communities' first written submission, para. 172; rebuttal submission, paras. 186-190.
642 European Communities' first written submission, paras. 162-169, 171; rebuttal submission,
paras. 179-185 and 191-196.
643 European Communities' rebuttal submission, paras. 171-173; response to Panel question No. 163.
644 Denmark, Germany and France v Commission , joined Cases C-289/96, C-293/96 and C-299/96
[1999] ECR I-01541: see Australia's first written submission, para. 191 and Exhibit COMP-11. The Panel refers
to para. 92 of the findings of the Court.
645 Commission Regulation (EC) No. 1107/96 set out in Exhibit COMP-3a.

not registered at that time "[b]ecause of the concerns raised by the owners of the trademarks at issue
and by some Member States".
646 On the basis of that statement alone, Australia asserts that "[c]learly,
there was indeed a mechanism available to at least some EC trademark right holders to make their
objections known in the context of the decision- making process provided by Article 15 of Regulation
No. 2081/92."647 However, Australia has not been any more specific concerning this mechanism. 648
Therefore, Australia has not demonstrated the first premise of its national treatment claim with respect
to individual registrations effected under the former Article 17, which was that there was a difference
in the procedures or opportunities for objections themselves.
7.748 With respect to individual registrations effected under Article 6 of the Regulation,
Article 7(3) provides a prior right to submit statemen ts of objections to EC member States to persons
resident or established within the European Co mmunities. The European Communities amended the
Regulation in April 2003 by inserting Article 12d, which provides a right to submit statements of
objections to the authorities of other WTO Members to persons resident or established in those other
WTO Members. Therefore, with respect to registrations effected under Article 6, there was
previously a difference in the objection procedur es. However, Australia does not challenge the
procedures for objections as they stood prior to the April 2003 amendment. It challenges individual
registrations effected under the Regulation, includ ing all those effected prior to that amendment,
which remain in effect. It does not challenge any specific individual registration.649
7.749 The Panel observes that the act of registration, and the omission of not allowing objections
from foreign residents, both occurred in the past, prio r to the date of establishment of the Panel. The
provisions of the Regulation which provided for th ese acts and omissions ha ve been amended and no
longer exist as they did at the time of the registrations. However, the individual registrations, in terms
of the legal protection which flows from those re gistrations in accordance with Article 13 of the
Regulation, constitute subject matte r which continues to exist. Th erefore, the TRIPS Agreement is
applicable to them.650
7.750 Nevertheless, Australia has not demonstrated how individual registrations, as opposed to the
procedures under which they were granted, either u nder the former Article 17 or the current Article 6,
are inconsistent with the European Communities' obligations under the TRIPS Agreement, either in
respect of national treatment or any of the other obligations that that agreement lists, because it
effectively asserts the identity of the past act of registration and the presently existing subject matter.

646 European Communities' response to Panel question No. 144.
647 Australia's comment on the EC response to Panel question No. 163.
648 Australia's national treatment claims under the TRIPS Agreement with resp ect to the regulatory
procedure under Article 15 are considered at paragraphs 7.390 to 7.402 above.
649 The Panel asked Australia to clarify the form of the recommendations which it seeks in respect of
individual registrations. Australia did not identify any specific individual registrations. Instead, it replied that
"Australia seeks rulings and recommendations to the degr ee necessary to establish the extent to which the EC's
actions in registering – and thus providing ongoing protection to – more than 600 EC-defined GIs were
inconsistent with the EC's obligations under the covered agreements at the time at which those EC – defined GIs
were registered, thus enabling those continuing registrations to be brought into conformity with the EC's
obligations under the covered agreements". The Panel also asked Australia whether it sought relief in respect of
individual registrations in respect of their continuing inconsistency with trademark rights to be conferred under
Article 16.1 of the TRIPS Agreement and, if so, to list th e individual registrations. It replied that "Australia is
not able to say which individual registrations may have constituted a denial of rights to trademark right holders
... or to another party with a legitima te interest under any of the cited pr ovisions. With due respect, however,
nor can the EC legitimately say that its actions have not resulted in a denial of rights required to have been
granted or made available under the TRIPS Agreement ...." See Australia's responses to Panel questions
Nos. 91 and 93.
650 This is consistent with the approach of the Appellate Body to patents granted prior to the date of
application of the TRIPS Agreement in Canada – Patent Term, at para. 69.

The continuing individual registrations are the subject of Australia's claims here, but Australia does
not submit any evidence relating to them, either individually or as a group, other than the
circumstances surrounding the act of registration, and the fact that they remain in force.
7.751 Therefore, in view of the finding in paragr aph 7.750 and, additionally with respect to
individual registrations under Article 17, the finding s in paragraph 7.747, the Panel concludes that
Australia has failed to make a prima facie case in support of its claims with respect to individual
registrations.
6. Claim under Article 1.1 of the TRIPS Agreement
(a) Main arguments of the parties
7.752 Australia claims that, as a consequence of the Re gulation's inconsiste ncies with various
provisions of the TRIPS Agreement, the European Communities has failed to comply with Article 1.1
of the TRIPS Agreement. 651 This claim does not address a separate aspect of the Regulation but
Australia does seek confirmation that a WTO Member is obliged to give effect to the provisions of the
TRIPS Agreement before it is able to offer more extensive protection for one particular category of
intellectual property right.652
7.753 The European Communities responds that these claims are dependent on the substantive
claims and are equally unfounded.653
(b) Consideration by the Panel
7.754 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."
7.755 The Panel notes that the first sentence creates an obligation for Members to give effect to the
provisions of the TRIPS Agreement and the second sentence recognizes Members' freedom to
implement more extensive protection, subject to a condition. After the expiry of the transitional
arrangements in Articles 65 and 66 (and 70.8 and 70.9 ), as applicable, a Member is obliged to give
effect to the provisions of the Agreement with resp ect to each category of intellectual property right,
irrespective of whether it implements more extensiv e protection in the same or another category of
intellectual property right.
7.756 The Panel notes that Australia's claim under Article 1.1 is a consequential claim and considers
that further findings on it would not provide any ad ditional contribution to a positive solution to this
dispute. The Panel exercises judicial economy with respect to this claim.

651 Australia's first written submission, paras. 153, 189, 194, 206.
652 Australia's response to Panel question No. 82.
653 European Communities' first written submission, paras. 405-406.

7. Consequential claims
(a) Main arguments of the parties
7.757 Australia 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 no later than 1 January 1996, because th e actions alleged in its other claims constitute
contraventions of the European Communities' obligations under the TRIPS Agreement.
654
7.758 Australia claims that the European Communities has not complied with Article XVI:4 of the
WTO Agreement.655 as a consequence of the Regulation's inconsistency with various provisions of the
TRIPS Agreement, GATT 1994 and the TBT Agreement, and of the European Communities' failure
to observe its obligations pursuant to Articles 1.1, 2.1 and 65.1 of the TRIPS Agreement.
7.759 The European Communities responds that these claims are dependent on the substantive
claims and are equally unfounded.656
(b) Consideration by the Panel
7.760 The Panel notes that these are consequential claims and considers that findings on them
would not provide any additional c ontribution to a positive solution to this dispute. Therefore, the
Panel exercises judicial economy with respect to these claims.
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 Australia's 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;
(c) the claim under Article 4 of the Paris Convention (1967), as incorporated by
Article 2.1 of the TRIPS Agreement and, consequently, under Article 24.5 of the
TRIPS Agreement, is outside the Panel's terms of reference;
(d) the claim under Article 41 in conjunction with Articles 43, 44, 45, 46, 48 and 49 of
the TRIPS Agreement is outside the Panel's terms of reference;
From Section B of the findings:
(e) Australia 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

654 Australia's first written submission, paras. 207-208.
655 Australia's first written submission, paras. 266-267.
656 European Communities' first written submission, paras. 502-503.

Communities, including WTO Members a nd the European Communities has not
succeeded in rebutting that case;
(f) 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;
(ii) with respect to the application pr ocedures, insofar as they require
examination and transmission of applications by governments; and
(iii) with respect to the objection procedur es, insofar as they require verification
and transmission of objections by governments;
(g) Australia has not made a prima facie case in support of its claims that the Regulation
is inconsistent with Article 3.1 of the TR IPS Agreement and with Article 2(1) of the
Paris Convention (1967) 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; or
(ii) with respect to the regulatory committee;
(h) 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;
(ii) with respect to the application procedures; or
(iii) with respect to the objection procedures;
(i) the Regulation is inconsistent with Article III:4 of GATT 1994:
(i) with respect to the equivalence and re ciprocity conditions, as applicable to
the availability of protection; and
(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;
(j) Australia has not made a prima facie case in support of its claims that the Regulation
is inconsistent with Article III:4 of GATT 1994 with respect to the regulatory
committee;
(k) Australia has not made a prima facie case in support of its claim that the Regulation is
inconsistent with Article 2.1 of the TB T Agreement with respect to the labelling
requirement;

From Section C of the findings:
(l) Article 2.2 of the TBT Agreement is inapplicable to the inspection structures
requirements, read together with Article 4 of the Regulation, and the Panel rejects
Australia's claim;
From Section D of the findings:
(m) 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;
(n) Australia has not made a prima facie case in support of its claims that the Regulation
is inconsistent with Article 16.1 of the TR IPS Agreement with respect to the right of
objection of trademark owners;
From Section E of the findings:
(o) the Panel rejects Australia's claim under Article 22.2 of the TRIPS Agreement;
(p) Australia has not made a prima facie case in support of its claims that the Regulation
is inconsistent with Article 10 bis and 10 ter of the Paris Convention (1967) "as
incorporated in the TRIPS Agreement";
(q) the Panel rejects Australia's claims unde r 41.1, 41.2, 41.3 and 42 of the TRIPS
Agreement (except as noted at paragraph 8.1(d));
(r) Australia has not made a prima facie case in support of its claims with respect to
transitional national protection; and
(s) Australia has not made a prima facie case in support of its claims with respect to
individual registrations.
8.2 The Panel exercises judicial economy with respect to Australia's 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(g))
(b) Article 16.1 of the TRIPS Agreement (with respect to the presumption of confusion);
(c) Articles 1.1 and Article 65.1 of the TRIPS Agreement;
(d) Article III:4 of GATT 1994 (except as noted in paragraph 8.1); and
(e) Article XVI:4 of the WTO Agreement.
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 agr eements, it has nullified or impaired benefits accruing to Australia
under these agreements.
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 Regulation 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.