Document: TERMS OF REFERENCE
Date: 22 July 2004
Document codes: WT/DS290/R/Add.1
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

(vi) The EC measure does not ensure that an objection from the owner of a registered
trademark is admissible or that such an objection is considered through the
Article 15 decision-making process, contrary to Article 16.1 of the TRIPS
Agreement...................................................................................................................... 147

(vii) Conclusion..................................................................................................................... 148
B. IN RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE DOES NOT
PROVIDE A PRESUMPTION OF A LIKELIHOOD OF CONFUSION IN THE CASE OF USE OF AN
IDENTICAL SIGN FOR IDENTICAL GOODS, CONTRARY TO ARTICLE 16.1 OF THE TRIPS
AGREEMENT .............................................................................................................................. 148
C. IN RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE PREJUDICES
THE VALIDITY OF AN APPLICATION FOR THE REGISTRATION OF A TRADEMARK BY FAILING
TO GRANT THE RIGHT OF PRIORITY REQUIRED TO BE GRANTED UNDER ARTICLE 4 OF THE
PARIS CONVENTION, CONTRARY TO ARTICLE 24.5 OF THE TRIPS AGREEMENT ....................... 149
D. IN RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE DOES NOT
ASSURE TO WTO MEMBER NATIONALS EITHER EFFECTIVE PROTECTION AGAINST UNFAIR
COMPETITION OR APPROPRIATE LEGAL REMEDIES TO REPRESS ACTS OF UNFAIR
COMPETITION
, CONTRARY TO ARTICLE 2.1 OF THE TRIPS AGREEMENT "INCORPORATING"
ARTICLES 10BIS(1) AND 10TER(1) OF THE PARIS CONVENTION (1967) ..................................... 149
E. IN RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE IS
INCONSISTENT WITH ARTICLES 41.1, 41.2, 41.3 AND 42 OF THE TRIPS AGREEMENT................ 150
(i) Introduction ................................................................................................................... 150
(ii) In respect of the registration of an EC-defined GI, the EC measure does not make
available to trademark right holders civil judicial procedures concerning the
enforcement of their intellectual property rights, contrary to Article 42 of the
TRIPS Agreement .......................................................................................................... 151
(iii) In respect of the registration of an EC-defined GI, the EC measure provides
procedures which are not fair and equitable, and which are unnecessarily
complicated and entail unwarranted delays, contrary to Article 41.2 of the TRIPS
Agreement...................................................................................................................... 152
(iv) In respect of the registration of an EC-defined GI, the EC measure does not
ensure that decisions are based only on evidence in respect of which trademark
right holders were offered the opportunity to be heard, contrary to Article 41.3 of
the TRIPS Agreement..................................................................................................... 152
(v) In respect of the registration of an EC-defined GI, the EC measure does not
ensure the availability under EC law of enforcement procedures as specified in
Part III of the TRIPS Agreement so as to permit effective action against any act of
infringement or trademark rights, contrary to Article 41.1 of the TRIPS
Agreement...................................................................................................................... 153

F. IN RESPECT OF DECISIONS BY EC MEMBER STATES TO GRANT TRANSITIONAL NATIONAL
PROTECTION TO A PROPOSED EC-DEFINED GI, THE EC MEASURE DIMINISHES THE LEGAL
PROTECTION FOR TRADEMARKS, CONTRARY TO ARTICLES 2.1 ("INCORPORATING"
ARTICLES 10BIS(1) AND 10TER(1) OF THE PARIS CONVENTION (1967)), 16.1, 41.1, 41.2,
41.3 AND/OR 42 OF THE TRIPS AGREEMENT .......................................................................... 153
G. CONCLUSION ............................................................................................................................. 153
VIII. THE EC MEASURE DOES NOT PROVIDE THE LEGAL MEANS FOR
INTERESTED PARTIES TO PREVENT MISLEADING USE OR USE WHICH
CONSTITUTES AN ACT OF UNFAIR COMPETITION IN RESPECT OF
GEOGRAPHICAL INDICATIONS PROPOSED TO BE REGISTERED UNDER
REGULATION NO. 2081/92 ..........................................................................................................15 4

TABLE OF CASES CITED IN THIS SUBMISSION

Short Title Full Title
Chile – Price Band System
Chile – Price Band System and Safeguard Measures Relating to Certain
Agricultural Products , Report of the Appellate Body, WT/DS/AB/R,
23 September 2002
Argentina – Footwear
Safeguard
Argentina – Safeguard Measures on Imports of Footwear , Panel Report,
WT/DS121/R, 25 June 1999
EC – Hormones EC Measures Concerning Meat and Meat Products (Hormones), Report of the
Appellate Body, WT/DS26/AB/R, WT/DS48/AB/R, 16 January 1998
Guatemala – Cement II Guatemala – Definitive Anti-Dumping Measures on Grey Portland Cement from
Mexico, Panel Report, WT/DS156/R, 24 October 2000
EEC – Bananas I EEC – Member States' Import Regimes for Bananas , DS32/R , GATT Panel
Report, not adopted
US – Homestyle Copyright United States – Section 110(5) of the US Copyright Act , Panel Report,
WT/DS160/R, 15 June 2000
Canada – Pharmaceutical
Products
Canada – Patent Protection of Pharmaceutical Products , Panel Report,
WT/DS114/R, 17 March 2000
US – Woven Shirts and
Blouses
United States - Measures Affecting Imports of Woven Wool Shirts and Blouses from
India, WT/DS33/AB/R, Report of the Appellate Body, adopted 23 May 1997
Korea – Beef Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, Report of
the Appellate Body, WT/DS161/AB/R, WT/DS169/AB/R, 11 December 2000
US – Shrimp United States – Import Prohibition of Certain Shrimp and Shrimp Products, Report
of the Appellate Body, WT/DS58/AB/R, 12 October 1998
US – Gasoline United States – Standards for Reformulated and Conventional Gasoline, Report of
the Appellate Body, WT/DS2/AB/R, 29 April 1996
EC – Asbestos European Communities – Measures Affecting Asbestos and Asbestos-Containing
Products, Report of the Appellate Body, WT/DS135/AB/R, 12 March 2001
EC – Sardines European Communities – Trade Description of Sardines, Report of the Appellate
Body, WT/DS231/AB/R, 26 September 2002
Japan – Alcoholic
Beverages II
Japan – Taxes on Alcoholic Beverages, Report of the Appellate Body,
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, 4 October 1996
US – CDSOA United States – Continued Dumping and Subsidy Offset Act of 2000, Report of the
Appellate Body, WT/DS217/AB/R, WT/DS234/AB/R, 16 January 2003
Korea – Dairy Safeguard Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products,
Report of the Appellate Body, WT/DS98/AB/R, 14 December 1999

OTHER SOURCES CITED IN THIS SUBMISSION

Short Title Full Title
OED The New Shorter Oxford English Dictionary , Ed. Lesley Brown, Clarendon Press, Oxford, 1993
Bodenhausen
Guide to the Application of the Paris Convention for the Protection of Industrial Property as
Revised at Stockholm in 1967 , Professor G H C Bodenhausen, BIRPI, 1969, WIPO reprint
1991, Geneva
Gervais The TRIPS Agreement: Drafting History and Analysis , Daniel Gervais, Sweet & Maxwell,
London, 1998

INTRODUCTORY REMARKS

1. Council Regulation (EEC) No. 2081/92 ("Regul ation No. 2081/92") established a regime for
the registration – and ongoing protection across the te rritory of the Community – of designations of
origin and geographical indications as these were defined by the EC ("EC-defined GIs"). To date,
approximately 640 EC-defined GIs have been re gistered under Regulation No. 2081/92 – and thus
attract the protection in perpetuity that flows from such registration.

2. Yet more than 600 of these EC-defined GIs we re registered as a result of processes which
were contrary to the EC's obligations pursuant to the:

• Agreement on Trade-Related Aspects of Intellectual Property Rights ("the TRIPS
Agreement" or "TRIPS"), including to the extent that the TRIPS Agreement requires
compliance with provisions of the Paris Convention (1967) ("Paris");
• General Agreement on Tariffs and Trade 1994 ("the GATT 1994" or "GATT"); and/or
• Agreement on Technical Barriers to Trade ("the TBT Agreement" or "TBT");
and, as a consequence, to the EC 's obligations pursuant to the Marrakesh Agreement Establishing the
World Trade Organization ("the WTO Agreement").

3. Moreover, the EC measure
1 remains in violation of the EC's WTO obligations in a variety of
ways.

4. As Australia set out in its First Written Submis sion, Australia is not contesting the EC's right
to register and protect EC-defined GIs as intellectual property.
2 Nor does Australia assert that the EC
is required to provide protection of EC-defined GIs at either Community or EC Member State level.

5. However, Australia does contest whether – in r espect of the registration of an EC-defined GI
– the EC has provided the rights that it is obliged to provide to a trademark right holder or other
interested party. Given that Community law takes primacy over EC Member State law in the event of
a conflict, there is no effective legal right enabling a trademark right holder or other interested party to
challenge particular infringing actions – even leaving aside the issue of having to seek redress in up to
25 national courts individually.

6. The stated intention of Regulation No. 2081/92 was to give protection to terms under "a
Community approach" based on the system of "reg istered designations of origin" introduced by
"certain Member States".
3 That intention was initially given effect in the simplified registration
process provided by the now repealed Article 17 of the Regulation, under which approximately 480
terms that were already protected or established by usage in individual EC Member States were "fast
tracked" on to the Community Register. The only basis on which the "fast track" registration of a

1 As set out in the First Written Submission of Australia (paragraph 20), the measure at issue in this
dispute ("the EC measure") is the EC's regime for the registration and protection of EC-defined GIs on a
Community-wide basis, comprising:
• Regulation No. 2081/92 of 14 July 1992;
• amendments to that Regulation; and
actions to implement and enforce that Regulation, including actions by the Commission, by the EC
Member States and judicial decisions.
2 First Written Submission of Australia, paragraph 4.
3 Regulation No. 2081/92 as originally adopted, sixth and seventh recitals, Exhibit COMP-1.d.

term that was otherwise considered to meet the de finition of an EC-defined GI could be opposed was
that the term was generic.

7. In transposing the protection of EC-defined GIs from the EC Member State to the Community
level, however, the EC did not take account of any trademark rights existing within the territory of
another EC Member State. Instead, the EC in effe ct "deemed" the territory of the EC Member State
of origin of the EC-defined GI to be the terr itory of the Community, and overrode – in effect,
expropriated – any trademark rights in that term that may have existed in any other EC Member State.
Moreover, that same situation continues to exist in respect of registrations of new EC-defined GIs.

8. The EC's action in overriding trademark rights in other EC Member States in relation to the
fast track registration of EC-defined GIs is particul arly noticeable when compared to the treatment of
EC Member State-based trademark rights under the Community Trademark Regulation.
4 Article 8 of
that Regulation expressly provides to the proprietor of an earlier trademark, including the proprietor
of an earlier trademark registered in an EC Member State, the right to oppose a Community trademark
application.

9. Contrary to the EC's assertion that there is no hierarchy between TRIPS-defined GIs and
trademarks
5 under the TRIPS Agreement, it is in fact the EC that has established a system that clearly
grants primacy to EC-defined GIs at the expense of the rights required to be conferred in respect of
pre-existing trademarks.

10. The EC asserts that Australia's claims are "purely theoretical". 6 There is, of course, no
requirement that Australia demonstrate actual trad e effects to be able to initiate a dispute and
Australia has chosen not to identify specific co mmercial interests potentially affected by the EC
measure. That said, Australia, Australian producer s and Australian intellectual property right holders
most definitely do have specific commercial – and systemic – interests potentially affected by the EC
measure. Moreover, the EC cannot say that its me asure has not adversely affected the nationals or
products of other WTO Members: it has not provided the legal avenues by which the issues raised in
this dispute can be effectively tested.

11. The EC asserts that the purported theoretical na ture of Australia's claims "has implications for
the Panel's assessment of whether such claims are well-founded".
7 Australia notes in response to this
extraordinary statement that Article 3.8 of the Dispute Settlement Understanding ("the DSU")
expressly provides: "[i]n 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's function is as set out in DSU Article 11 – "to make an objective assessment
of the matter before it".

I. TERMINOLOGY USED IN THIS SUBMISSION
12. Throughout this Submission, Australia will con tinue to use the terminology used in its First
Written Submission.

13. Thus, except where a different meaning is e xpressly noted, Australia will continue to use the
following expressions in the sense indicated:

– " GI" to refer to a geographical indication in a general sense;

4 Exhibit COMP-7.
5 First Written Submission of the EC, paragraph 294.
6 EC's Response to Question 87 from the Panel following the first substantive meeting, paragraph 223.
7 EC's Response to Question 87 from the Panel following the first substantive meeting, paragraph 224.

– " EC-defined GI" to refer to both a designation of origin and a geographical indication as these
are defined and used in Regulation No. 2081/92;8

– " TRIPS-defined GI " to refer to a geographical indication as this is defined in TRIPS
Article 22.1;

– " Indication of source " to refer to an indication of source within the meaning of Paris
Article 1(2). Both an EC-defined GI and a TR IPS-defined GI are categories of indications of
source;

– " Commission" to refer to the European Commission;

– " Official Journal" for the Official Journal of the European Communities;

– " Register" for the Register of protected designations of origin and protected geographical
indications provided for by Article 6.3 of Regulation No. 2081/92;

– " Regulation No. 2081/92 " to refer to the Regulation in a broad sense or in relation to
provisions that have not been amended since the Regulation originally entered into force;

– " Regulation No. 2081/92#1" to refer to the Regulation as originally adopted and in force from
24 July 1993;

– " Regulation No. 2081/92#2 " to refer to the Regulation as amended by Council Regulation
(EC) No. 535/97 of 17 March 1997 with effect from 28 March 1997; and

– " Regulation No. 2081/92#3 " to refer to the Regulation as amended by Council Regulation
(EC) No. 692/2003 of 8 April 2003 with effect from 24 April 2003.

14. In view of the explanations provided by th e EC in its First Written Submission, however,
Australia will use the phrase "Article 15 decision-making process" in lieu of the phrase "Committee of
EC Member State representatives" in this Submissi on. In any case, Australia addresses this issue in
more detail in Part IV.C of this Submission.

II. THE MEASURE AT ISSUE
A. V
ERSIONS OF REGULATION NO. 2081/92 NO LONGER IN FORCE
15. The EC argues that versions of Regulation No . 2081/92 which were no longer in force at the
time of the Panel's establishment are not within the scope of the Panel's terms of reference.9

16. The EC's argument is without merit. It is premised on an inaccurate characterisation of the
terms of Australia's panel establishment request that seeks to transform Australia's reference to the
amendments introduced by Regulation No. 692/2003 from an illustrative to an exhaustive or exclusive
basis. The EC's argument ignores the plain langua ge of that request by equating the meaning of
"[and] any amendments thereto (including … Regulation … No. 692/2003)" to "as amended by …
Regulation … No. 692/2003".

8 Australia notes the view of the EC – at paragraph 46 of its First Written Submission – that both
designations of origin and geographical indications within the meaning of Regulation No. 2081/92 are
geographical indications as defined in TRIPS Article 22.1.
9 First Written Submission of the EC, paragraph 15.

17. The EC has not even attempted to argue that the registrations of those more than 600 EC-
defined GIs were consistent with the EC's WTO obligations. The EC's whole defence of those
registrations is that they were made pursuant to versions of Regulation No. 2081/92 which are no
longer in force, and therefore cannot be within the Pa nel's terms of reference. Yet the EC's arguments
ignore that, notwithstanding that earlier versions of Regulation No. 2081/92 may no longer be in
force, those more than 600 registrations made pur suant to earlier versions of Regulation No. 2081/92
continue in effect – and the registered terms are protected in perpetuity.

18. In reality, the EC is seeking to shield from the Panel's scrutiny – and from the consequences
of findings of WTO inconsistency – the registra tions, and ongoing protection, of more than 600 EC-
defined GIs pursuant to processes that were inconsis tent with the EC's obligations under the TRIPS
Agreement and GATT 1994. The EC is – in effect – asking the Panel to find that WTO-inconsistent
implementation actions by WTO Members pursuant to short-lived statutory frameworks are beyond
the reach of the WTO dispute settlement system. In Australia's view, such an interpretation of the
covered agreements would be fundamentally at odds with the object and purpose of the WTO
Agreement and the covered agreements generally, and the Dispute Settlement Understanding in
particular.

19. Moreover, the EC is asking the Panel to ma ke such a finding notwithstanding the potential
availability of prospective remedies to bring the WTO-inconsistent EC meas ure into conformity, for
example, by providing access for trademark right holders to civil judicial proceedings and/or by
providing for just compensation for any trademark rights adversely affected by the registration – and
ongoing protection – of an EC-defined GI. Even if revocation – as distinct from invalidation – were
ultimately to be required in a few cases, such action would only need to have prospective effect.

B. A
MENDMENTS TO THE EC MEASURE AFTER PANEL ESTABLISHMENT
20. The EC argues that a number of amendments to the EC measure made after 2 October 2003,
the date of the Panel's establishment by the DSB, are not within the Panel's terms of reference.10

21. In Chile – Price Band System , the Appellate Body considered a situation in which an
amendment to the measure at issu e was enacted after the Panel had been established and while the
Panel was engaged in assessing the measure. The A ppellate Body considered that the amendment in
question "[did] not change the price band system into a measure different from the price band system
that was in force before the Amendment"
11 (emphasis in original) . Further, the Appellate Body
expressly cited with approval the finding of the Panel in Argentina – Footwear Safeguard , in which
the Panel "decided to examine modifications made to the measure in issue during the panel
proceedings, on the ground that the modifications in question did:

… not constitute entirely new safeguard me asures in the sense that they were based
on a different safeguard investigation, but ar e instead modifications of the legal form
of the original definitive measure, which re mains in force in substance and which is
the subject of the complaint[…] (emphasis in original).12
22. The Appellate Body's findings in Chile – Price Band System are particularly pertinent to the
current dispute. None of the amendments identif ied by the EC, including the amendment relating to
the accession of ten new Member States to the EC, in any way "change the essence" of the EC
measure in the sense that the EC measure was – and remains – a measure concerning the availability,
acquisition, scope, maintenance, use and/or enforc ement within the territory of the EC of an

10 First Written Submission of the EC, paragraphs 21-25.
11 Chile – Price Band System, paragraph 137.
12 Chile – Price Band System, paragraph 138.

intellectual property right e xpressly provided for by the TRIPS Agreement , and the prevention of
associated deceptive practices.13

23. The EC measure remains essentially the sa me notwithstanding the amendments to the
measure made since 2 October 2003: none of the amendments changed the essence of the measure
and, accordingly, those amendments form part of the measure at issue in this dispute.

III. TERMS OF REFERENCE
A. A
RTICLE 4 OF THE PARIS CONVENTION AND ARTICLES 43, 44, 45, 46, 48 AND 49 OF THE
TRIPS AGREEMENT
24. Australia wishes to state unambiguously that it has not asked that the Panel find – within the
meaning of DSU Article 12.7 – that the EC measure is inconsistent with Paris Article 4 or with TRIPS
Articles 43, 44, 45, 46, 48 or 49.14

25. However, the DSU does not preclude the Pane l from considering the fact of a measure's
inconsistency with other obligations established by the covered agreements in its assessment of the
WTO consistency of a measure with specified provi sions of the covered agreements. Indeed, an
evaluation of a measure's inconsistency with certain provisions as an issue of fact – whether or not
these provisions are specified as part of the legal basis of a complaint within the meaning of DSU
Article 6.2 – can be a necessary pre-condition for establishing a violation of another, specified
provision. Australia notes that in EC – Hormones, the Appellate Body said:

Panels are inhibited from addressing lega l claims falling outside their terms of
reference. However, nothing in the DSU li mits the faculty of a panel freely to use
arguments submitted by any of the parties – or to develop its own legal reasoning – to
support its own findings and conclusions on the matter under its consideration. A
panel might well be unable to carry out an objective assessment of the matter, as
mandated by Article 11 of the DSU, if in its reasoning it had to restrict itself solely to
arguments presented by the parties to the dispute. …
15
B. ARTICLE 2(2) OF THE PARIS CONVENTION
26. The EC also argues that Paris Article 2(2) is outside the Panel's terms of reference in this
dispute. The EC argues that Paris Article 2(2) is not concerned with national treatment but with a
prohibition on the imposition of requirements as to do micile or establishment, and was therefore not
"raised" in Australia's panel request.16 Australia disagrees.

27. In Australia's view, the word "however" at the beginning of Paris Article 2(2) is properly
understood in the sense of "in spite of". Thus, in spite of the fact that, under Paris Article 2(1), a
country of the Union / WTO Member may impose in its domestic law a condition of domicile or
establishment on its own nationals for the protection of an industrial property right, it may not do so in
respect of nationals of other countries of the Union / WTO Members.
17 Moreover, this interpretation

13 Australia notes that, in its First Written Submission, the EC itself describes Regulation No. 2081/92
as prescribing a procedure "for the registration of geographical indications" (paragraph 160), as "a procedure for
the acquisition of another intellectual property right" (paragraph 327) and as laying down "an administrative
procedure for the acquisition of geographical indications via a system of registration" (paragraph 359).
14 First Written Submission of the EC, paragraphs 26-35.
15 EC – Hormones, paragraph 61.
16 First Written Submission of the EC, paragraphs 36-42.
17 OED, Vol.1, page 1272, defines relevant meanings of "however" as: "[f]or all that, nevertheless,
notwithstanding; but; arch. however much, notwithstanding that. Used in qualifying a whole cl. or sentence".

is consistent with the apparent intent of the par ties to the Paris Convention when Paris Article 2(2)
was amended to include the word "however".
18 The use of "however" at the start of Paris Article 2(2)
therefore establishes a direct and express linkage be tween the provisions of that paragraph and the
provisions of the preceding Paris Article 2(1).

28. Paris Article 2(2) defines the boundary of permissible action in relation to domicile or
establishment in the application of the national treat ment obligation established by Paris Article 2(1).
When a WTO Member conditions the enjoyment of advantages with respect to the protection of
industrial property within the meaning of Paris Artic le 2(1) for nationals of countries of the Union –
and thus on nationals of WTO Members – on a re quirement of domicile or residence, that WTO
Member is no longer in compliance with its nationa l treatment obligation under Paris Article 2(1).
Paris Article 2(2) is thus an integral aspect of a WTO Member's national treatment obligations under
the Paris Convention as "incorporated" into the WTO Agreement , and was properly raised in
Australia's panel establishment request.

IV. THE MEANING OF REGULATION NO. 2081/92
A. R
ULES OF INTERPRETATION OF EC LAW
29. The EC has said: "… the objective assessment of the facts requires establishing the meaning
that the act will normally have within the legal or der of the WTO Member in question. This means
that the interpretation should be guided by the rule s of interpretation customary in the legal order of
such member, and taking account of the legal cont ext of the measure in the domestic law of the
Member".19

30. Australia notes that the European Court of Jus tice ("the ECJ") has held: "… in interpreting a
provision of Community law it is necessary to c onsider its wording, its context and its aims".
20 This
rule has been reaffirmed in a number of subsequent cases, including in an ECJ judgment of September
2003, when the ECJ held: "in interpreting a provisi on of Community law it is necessary to consider
not only its wording but also the context in which it o ccurs and the aims of the rules of which it forms
part".21

31. Thus, notwithstanding that the context and aims of provisions of Community law are key
elements of the ECJ's interpretive rules, so too is the wording of a provision.

B. R
EGISTRATION OF AN EC-DEFINED GI RELATING TO THE TERRITORY OF ANOTHER WTO
MEMBER
32. The EC says that Australia has misunderstood relevant provisions of Regulation No. 2081/92
and that the registration of an EC-defined GI from another WTO Member is not subject to the
conditions of reciprocity and equivalence set down in Article 12 of Regulation No. 2081/92#3.22

18 Bodenhausen, page 31.
19 EC Response to Question 1 from the Panel to the parties, paragraph 6.
20 ECJ judgment: Bosphorus Hara Yollari Turizm ve Ticaret AS v Minister for Transport, Energy and
Communications and others, case C-84/95, [1996] ECR I-3953, paragraph 11, Exhibit AUS-10, attached.
21 ECJ judgment: Freistaat Sachsen and Volkswagen AG and Volkswagen Sachsen GmbH v
Commission of the European Communities , joined cases C-57/00 P and C-61/00 P, paragraph 133, Exhibit
AUS-11, attached.
22 First Written Submission of the EC, paragraphs 65-69.

33. Almost since the inception of the WTO, th e EC has explicitly said that Article 12.1 of
Regulation No. 2081/92 applies to WTO Members who wi sh to take advantage of the higher level of
protection offered by the Regulation.23

34. In March 2002, the EC was considering the changes to Regulation No. 2081/92 that were
eventually adopted in Regulation No. 692/2 003. In a press release dated 15 March 2002,
24 the
European Commission said:

"… [T]he proposal aims at full implementation of the TRIPS agreement
[…] and
improve [sic] protection for geographical indications. To comply with the
Commission's obligations as set out in the TRIPS Agreement, the following
amendments to Regulation (EEC) No. 2081/92 are proposed:
• The right of objection to registrations is extended to WTO member country
nationals with a right and a legitimate interest within EU territory. This gives
WTO member country nationals the same right as EU Member State
nationals to object to registrations of products within 6 months of their
publication in the Official Journal of the European Communities;
• Beyond mere TRIPS consistency, the Commission proposes important
amendments designed to promote the EU system 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 pr oducts 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 procedure to register
their products for the EU market; (emphases added)
• …"
35. In September 2002, in a discussion in the TR IPS Council on issues related to the extension of
the protection of GIs provided for in TRIPS Article 23 to products other than wines and spirits, the EC
representative said in a written statement annexed to the Minutes of that Council meeting: "… I
would like to address one issue that is raised rega rding the fact that the EU register for GIs on
foodstuffs does not allow the registration of foreign GI [sic] unless it is determined that a third

23 For example, in 1997, in the review of the EC's legislation on trademarks, geographical indications
and industrial designs by the WTO TRIPS Council, the EC said:
Question from India: How far is Article 12 of Council Regulation 2081/92/EEC in
compliance with the TRI PS Agreement? Please particularly explain how: … having inspection
arrangements equivalent to Article 10 can be a requ irement for non-Members of the EC, when this is
not a requirement under the TRIPS Agreement? …
EC response: It is important to stress that, in general, conditions provided in Article 12 of
Regulation 2081/92/EEC are only required when a b ilateral agreement is concluded between the EC
and a WTO Member. This means that it only occurs when two parties voluntarily wish higher level of
protection ("ex officio") than this [sic] provided under the TRIPS Agreement. So, this is not a
compulsory condition but another option that can be used when systems are equivalent, in particular
conditions under Article 4 (specifications) and Article 10 (inspection).23 (emphasis added)
The EC responded in similar terms to a question from New Zealand. (WTO document IP/Q2/EEC/1 of
1 October 1997, Part II, EC's reply B.2 to Question 4 from New Zealand.)
24 Press release IP/02/422, Exhibit AUS-04, lodged with Australia's Oral Statement to the first
substantive meeting of the parties with the Panel.

country has an equivalent or reciprocal system of GI protection
"25 (emphasis added). In other words,
the EC statement was expressly premised on the fact that the EC did not allow the registration of
foreign GIs unless a third country has an equivalent or reciprocal system of GI protection. There was
no qualification in that statement that the limitation on the registration of foreign GIs did not apply to
GIs from WTO Members, notwithstanding that the st atement was being made to the TRIPS Council,
the very body charged with overseeing the functioning of the TRIPS Agreement under Article IV:5 of
the WTO Agreement.

36. In November 2002, the Committee on Agricultu re and Rural Development of the European
Parliament issued its Report on the amendments being proposed to Regulation No. 2081/92. That
Report was expressly premised on the understanding that:

The Commission is proposing a special procedure for registering products originating
in third countries on the Community market. In return, third countries will
, in
accordance with the reciprocity principle, ha ve to afford equiva lent protection to
protected Community names . Moreover, in order that products from third countries
can be recognised at EU level, the third countries concerned must be able to give
guarantees equivalent to those required in the Union.26 (emphases added)
37. In March 2003, an official of the Europ ean Commission at a WIPO National Seminar on the
Protection of Trademarks and Geographical Indicat ions in Beirut said non-EU countries "can seek
recognition for your country before the EU based on the fact that you have a system reciprocal to that
of the EU. If your system protects GIs similarly (e nforcement, level of prot ection), our registration
system will be open to your GIs. You can conclude a bilateral agreement with the EU and all your
GIs will be protected in Europe at once."27

38. Yet the EC would have the Panel believe th at – up until now – everyone has misunderstood
the Regulation, notwithstanding:

• the plain language of Regulation No. 2081/92 itself;

• repeated statements by appointed representatives of the European Communities;

• the plain language of a press release from the European Commission itself concerning
the express intent of the very amendments which the EC now relies on to argue that
that Regulation No. 2081/92 is being misunderstood;

• the apparent understanding of the Committ ee of the European Parliament with
primary authority concerning the subject matter of the express intent of the
amendments which the EC now relies on to argue that Regulation No. 2081/92 is
being misunderstood;

25 WTO document IP/C/M/37/Add.1 of 8 November 2002, page 79.
26 Report on the proposal for a Council regulation amending Regulation (EEC) No. 2081/92 on the
protection of geographical indications and designations of origin for agricultural products and foodstuffs
(COM(2002) 139 – C5-0178/2002 – 2002/0066(CNS))", Committee on Agriculture and Rural Development, 6
November 2002, Exhibit COMP-14, page 20.
27 "Geographical Indications and Trademarks: Harmony of Conflict", Presentation by Mrs Susanna
Perez Ferreras, Administrator, Industrial Property Unit, European Commission, Brussels, at the WIPO National
Seminar on the Protection of Trademarks and Geographical Indications, Beirut, March 2003, published as
WIPO document WIPO /TM/BEY/ 03/11B, Exhibit AUS-05 , Slide 15 (lodged with Australia's replies to
questions posed by the Panel to the parties to the dispute following the first substantive meeting with the
parties).

 and
• the plain language of the explanation for the amendment to Article 12 of Regulation
No. 2081/92 provided in recital (9) to Regulation No. 692/2003 that: "[t]he
protection provided by registration under Regulation … 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"

o that is, one of the express aims of the amendments in 2003 to Article 12 of
the Regulation was to guarantee that the Community registration procedure is
available to countries that meet the reciprocity and equivalence conditions;
39. In purported support of its contention, the EC points 28 to a document: (a) which was issued
after the panel in this dispute was established by th e DSB; (b) which was issued by an entity other
than the EC; (c) which carries an express discl aimer that it has been prepared under the WTO
Secretariat's own responsibility; and (d) which – on the previous page – clearly states that reciprocity
and equivalence are conditions for registration of fo reign GIs in the EC. The EC also points to a
statement made in the TRIPS Council on 16 June 2004 – some eight months following the
establishment of the panel in this dispute – and for wh ich, at the time of writing, there is no official
WTO record.29

40. In claiming that Australia has misunderstood Regulation No. 2081/92, however, the EC offers
no explanations of its earlier statements, or of how so many of its own appointed representatives could
have offered the same – consistently incorrect – explanations of the provisions of the Regulation, or of
how such a wide range of interested observers could also have similarly misunderstood the
Regulation. The EC does not explain why it did not use the opportunity of either the 29 August 2003
or the 2 October 2003 DSB meetings to correct Au stralia's misunderstanding, given that Australia
expressly referred to the requirements for reciprocit y and equivalence in making its request for the
establishment of a panel at the DSB of 29 August 2003.30

41. In particular, the EC has not explained wh y the European Commission's press release of
15 March 2002 that specifically addressed the aims of the proposed amendments to Regulation No.
2081/92 which were eventually adopted in Regulat ion No. 692/2003, and the recitals to Regulation
No. 692/2003 itself, should not be accorded at least equal – if not greater – weight than "statements
made by the EC in the course of the Panel proceedings [which] should also be taken into account".
31

42. Moreover, the EC – in responding to question 15 from the Panel following the first
substantive meeting with the parties to the dispute – did not address the ECJ's judgment in Biret
International concerning the relevance of the EC's WT O obligations in implementing a Community
measure.
32 In that judgment, the ECJ found: "… the WTO agreements are not in principle among the

28 Response of the European Communities to Question 16 from the Panel after the first substantive
meeting, referring to WTO document IP/C/W/253/Rev.1.
29 Indeed, Australia notes that there may not even be an official record of the EC's statement published
by the time of the second substantive meeting of the parties with the Panel.
30 WTO document WT/DSB/M/155, paragraph 74.
31 Response of the European Communities to Question 16 from the Panel after the first substantive
meeting, paragraph 40.
32 Case C-93/02 P, Biret International SA v. Council of the European Union , Judgment of the ECJ of
30 September 2003, Exhibit AUS-07 (lodged with Australia 's replies to questions posed by the Panel to the
parties ot the dispute following the first substantive meeting with the parties).

rules in the light of which the Court is to review the legality of measures adopted by the Community
institutions … It is only where the Community h as intended to implement a particular obligation
assumed in the context of the WTO, or where the Community measure refers expressly to the precise
provisions of the WTO agreements, that it is for th e Court to review the legality of the Community
measure in question in the light of the WTO rules".
33

43. The EC has said:

At the time that Regulation 2081/92 was adopted, 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 TR IPS Agreement was in the final phases
of its negotiation. It was therefore the objective that the "without prejudice" clause
should also apply to the TRIPS and other WTO agreements resulting from the
Uruguay Round.
34
44. However, Regulation No. 2081/92#1 made no reference to the General Agreement on Tariffs
and Trade 1947 ("the GATT 1947") in either its recitals or in its operative provisions. Nor did it
make any references – in either its recitals or its operative provisions – to the TRIPS Agreement or the
WTO Agreement more generally. Further, Regulation No. 2081/92#3 makes no reference to the WTO
Agreement in its operative provisions. Thus, consis tent with established ECJ jurisprudence, the
Regulation could not have been intended to implem ent a particular obligation assumed in the context
of either the GATT 1947 or the WTO Agreement.35

45. Regulation No. 692/2003, howev er, did make references to the WTO Agreement in its recitals.
Those references are a generic description of the TRIPS Agreement in recital (8), a specific reference
to TRIPS Article 22 in recital (10), and a specific reference to TRIPS Article 24.5 in recital (11).

46. Having regard to the ECJ's findings in Biret International , the generic description of the
TRIPS Agreement in recital (8) would seem to be irrele vant to the proper interpretation of the
provisions of Regulation No. 2081/92, including th e phrase "[w]ithout prejudice to international
agreements" at the beginning of Article 12.1 of the Regulation, as recital (8) does not show an intent
to implement a particular obligation assumed in the cont ext of the WTO. In the alternative, recital (8)
could only inform the proper interpretation of the provisions of Regulation No. 2081/92 in regard to
the EC's obligations pursuant to the TRIPS Agreement: it could not be considered to show an intent to
implement particular obligations assumed in the cont ext of the WTO in regard to the other covered
agreements, including the GATT 1994.

47. On the other hand, having regard to the ECJ's findings in Biret International , the specific
references to TRIPS Article 22 in recital (10) and to TRIPS Article 4.5 in recital (11) would seem to
be directly relevant to the prope r interpretation of the respective specified provisions of Regulation
No. 2081/92. Further, Australia notes that the findin gs of the ECJ in the cases cited by the EC in its
response to question 15 from the Panel after the fi rst substantive meeting would seem to have been
consistent with the ECJ's findings in Biret International , in that the relevant WTO provisions were
expressly identified in the Community measures at issue in those cases.

48. Australia submits that the EC has not disp roved the factual premise informing Australia's
claims that the registration of an EC-defined GI from another WTO Member is subject to the

33 Ibid, paragraphs 52-53.
34 Response of the European Communities to Question 3 from the Panel after the first substantive
meeting, paragraph 12.
35 Response of the European Communities to Question 3 from the Panel after the first substantive
meeting, paragraph 12.

conditions of reciprocity and equivalence set out in paragraphs 1 and 3 of Article 12 of Regulation
No. 2081/92#3. The EC's counterarguments are not su stainable on the basis of the meaning, context
and aims of those provisions in accordance with the rules of interpretation of EC law.

49. Further, Australia submits that the EC h as not disproved the associated factual premise
informing Australia's claims th at Articles 12a to 12d of Regulation No. 2081/92 only distinguish
between nationals of WTO Members and nationals of other third countries where the express
language of those provisions so provides.

C. A
RTICLE 15 DECISION-MAKING PROCESS
50. The EC argues that Australia has consiste ntly misrepresented the decision-making process
applicable to Regulation No. 2081/92 purs uant to Article 15 of the Regulation. 36 However, Australia
questions whether the EC's description of that process is entirely accurate.

51. As the EC itself acknowledges,
37 under Article 5.3 of Decision 1999/468, 38 the Commission
can adopt a measure "[i]f the measure is in accord ance with the opinion of the Committee" composed
of representatives of the EC Member States. Moreover, Article 5.4 of that Decision states in relevant
part: "[i]f the measures envisaged are not in accord ance with the opinion of the committee, or if no
opinion is delivered, the Commission shall … submit to the Council a proposal relating to the
measures to be taken …".

52. The express language of Articles 5.3 and 5.4 of Decision 1999/468 indicates that the
Commission may only decide a matter required to be referred to the Committee composed of
representatives of the EC Member States with the consent of that Committee
. If that consent is not
forthcoming, the matter must be referred to the EC's Council of Ministers.

53. Under Article 5.6 of Decision 1999/468, once a matter has been referred to the EC's Council
of Ministers, the Commission is only able to deci de a matter if, after a period of three months, the
Council has neither adopted nor indicated its opposition to a proposed measure.

54. The express language of D ecision 1999/468 indicates that the Commission cannot decide a
matter without the consent of either the Committee or the Council, or until the Council has been
unable to form an opinion for three months. Moreover, this does not require exceptional
circumstances – simply disagreement. Thus, the EC's statements that "[u]nder the Regulation,
decisions with respect to the registration of geographical indications are in principle taken by the
Commission",
39 "[o]nly exceptionally, if the measure is not in accordance with the opinion of the
Committee, may the matter be referred to the Council of Ministers", 40 and "the decision-maker under
the Regulation is the Commission, or exceptionally the Council of Ministers" 41 do not accurately
convey the full consequence of the decision-making process under Regulation No. 2081/92.

55. Notwithstanding that the Committee does not ex ercise formal decision-making authority, it
must agree with the Commission's proposed decision before the Commission can formally take that
decision. Alternatively, the Commission may only formally decide a matter in the absence of express
approval or disapproval from the Council of Minist ers. Indeed, Australia notes that the final

36 First Written Submission of the EC, paragraph 79.
37 First Written Submission of the EC, paragraph 82.
38 Council Decision of 28 June 1999 laying down the procedures for the ex ercise of implementing
powers conferred on the Commission (1999/468/EC), Exhibit COMP-8.
39 First Written Submission of the EC, paragraph 80.
40 First Written Submission of the EC, paragraph 82.
41 First Written Submission of the EC, paragraph 83.

preambular recital to Regulation No. 1107/96 – which authorised the first registrations of EC-defined
GIs under Regulation No. 2081/92 by the simplified procedure set out in the now repealed Article 17
– expressly states:

"[w]hereas the vote in the Committee provide d for in Article 15 of Regulation … No.
2081/92 resulted in no opinion; whereas, in the absence of an opinion and in
accordance with that Article, the Commission forwarded a proposal to the Council for
it to act on a qualified majority within three months; whereas, given that the Council
did not act within that period, the proposed measures should be adopted by the
Commission".
42
56. In accordance with the decision-making pr ocesses applicable to Regulation No. 2081/92
pursuant to Article 15 of the Regulation, the Co mmittee composed of representatives of the EC
Member States or the Council of Ministers has to agree with the Commission's proposed decision.
Alternatively, the Council of Ministers may disagre e with the Commission's proposed decision. Only
if the Council of Ministers is unable to form an opinion may the Commission adopt the proposed
measure notwithstanding objections from a number of EC Member States. 43 In fact, Australia notes
that the EC's own information 44 shows that almost half of the EC-defined GIs registered to date have
been registered by the Commission only following th e failure of the Council of Ministers to form an
opinion on the Commission's proposals. This does not suggest only "exceptional" referrals to the
Council.45

57. This process is applicable to many deci sions under Regulation No. 2081/92, including:

• all decisions concerning objections to the proposed registration of an EC-defined GI,
irrespective of
o whether the name is from within the EC or from another WTO Member
 although in respect of a proposed name from an EC Member State, the
decision-making process does not apply if the EC Member State of origin
and an objecting EC Member State are able to reach agreement between
themselves (Article 7.5 of the Regulation),
 or
o whether the objection comes from a national of the EC or of another WTO
Member;
• whether a third country satisfies – with in the meaning of Article 12.3 of the
Regulation – the reciprocity and equivale nce conditions of Article 12.1 of the
Regulation; and
• if the Commission concludes that a name pr oposed by either an EC Member State or
another WTO Member does not qualify for protection, the decision not to proceed
with publication of the application (Artic les 6.5 and 12b.1(b) of the Regulation) –
which publication also constitutes publication for the purpose of inviting objections.

42 Australia notes that similar wording appears in recital (39) to Regulation No. 1829/2002 concerning
the name "Feta". Exhibit COMP-3.b refers.
43 That is, from at least a number of EC Member States that had earlier been sufficient to form a
"blocking minority" to the adoption of the proposed measure by the Commission.
44 Exhibit EC-28.
45 First Written Submission of the EC, paragraph 82.

58. In addition, the Commission may consult th e EC Member States through the Article 15
decision-making process on other issues – for exam ple, under Articles 6.5 and 12b.1(a), before
publishing the details of an application for registration of an EC-defined GI.

59. Australia submits that the EC has not disp roved the factual premise informing Australia's
claims that the Committee composed of EC Member State representatives and/or the Council of (EC
Member States) Ministers participate in the d ecision-making process applicable under Regulation No.
2081/92. Confirmation of this factual premise is provided by the dispute concerning the name
"Feta",
46 which is ongoing, 47 and by the number of EC-defined GIs which were registered by the
Commission following the failure of the Council of Ministers to form an opinion.48

D. PROTECTION OF HOMONYMOUS EC-DEFINED GIS
60. Article 12.2 of Regulation No. 2081/92 provides as follows:

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.
61. According to the EC:

• "the second subparagraph does not concern th ird country names in general, but only
homonyms"49
o by which Australia understands the EC to say that a name that is "identical to"
another name is a "homonym" of that other name;
• "'such names' applies both to third c ountry protected names and to Community
protected names";50
• "[i]n the case of identical names, the requirement to indicate the country of origin can
apply both to the third country name and the Community name. In practice, this
would mean that whichever indication is re gistered later would normally be required
to indicate the country of origin. Where a Community indication is registered after an
identical third country indication, the Community indication would therefore be
required to indicate the country of origin";
51
• "whether a protected name is a 'Community name' or a 'third country name' within the
meaning of Regulation 2081/92 depends on where the geographical area to which the
geographical indication is related is located";52
• "the requirement in Article 12.2 can apply both to geographical indications from a
third country or from the EC, depending on which name has been protected
earlier
[…] ";53

46 See Exhibits COMP-3.b and COMP-11.
47 See Danish Dairy Board statement of 10 January 2003, Exhibit AUS-12, attached.
48 Exhibit EC-28.
49 First Written Submission of the EC, paragraph 87.
50 First Written Submission of the EC, paragraph 88.
51 First Written Submission of the EC, paragraph 88.
52 First Written Submission of the EC, paragraph 138.

• "[b]oth in 'protected name of a third country' and in 'Community protected name',
'protected' in principle means 'protected under Regulation 2081/92'. However, the
provision also applies where protection under Regulation 2081/92 is sought for a
protected name from a third country";
54 and
• in response to a question from the Panel as to whether the requirement to indicate the
country of origin applies also where a name of a geographical area located in the EC
is identical to a Community protected name (irrespective of whether this Community
protected name is the name of a geographi cal area located in the EC or in a third
country), the EC said: "[n]o. 'Community protected name' covers only protected
names of areas located in the EC. Moreove r, the provision applies only to protected
names".
55
62. Thus, on the basis of the EC's explanations, Article 12.2 of Regulation No. 2081/92 applies in
all situations involving identical EC-defined GIs where one of those names concerns a geographical
area within the EC and the other concerns a geographical area in another WTO Member.

63. However, the express basis of Article 12.2 is that there is already an EC-defined GI being
protected under Regulation No. 2081/92: "[i]f a protect ed name of a third country is identical to a
Community protected name". "[A] protected name of a third country" cannot be "identical to
", that is,
the same as, a "Community protected name" unless there is already a "Community protected name" in
existence. Thus, contrary to the EC's explanati ons, having regard to its m eaning, context and aims,
Article 12.2 indicates that it can only apply to s ituations where there is already a "Community
protected name" and the "protected name of a third country" is the later name to be registered.

64. Moreover, elsewhere in Regul ation No. 2081/92, the word "Community" is used consistently
in the sense of the territory of the Community as a whole. For example, it is used in "Community
provisions" in Articles 1.2 and 4.2(i), "Community pr otection" in Article 2.1, "Community laws" in
Article 3.1, "Community trade" in Article 5.5, "the Community" in Article 12.1, "the territory of the
Community" in Articles 12b.3, 12d.2 and 14.2. Its u se in Article 12.2 in the sense put forward by the
EC, that is, in the sense of EC-defined GIs rela ting to geographical areas within the EC, would
constitute the only use of "Community" in that sense in the Regulation, and would in fact seem to be
inconsistent with the express function of the Regu lation as set out in Article 2.1: "Community
protection of [EC-defined GIs] shall be obtained in accordance with the Regulation".

65. Australia submits that the term "Community protected name" in fact refers to an EC-defined
GI that is already being protected under Regulation No. 2081/92, irrespective of whether that name
relates to a geographic area within the Community or in another WTO Member. As the EC itself
acknowledges,
56 an application for the registration of an EC-defined GI from within the territory of
the EC that "concerns a homonym of an already regi stered name from the European Union or a third
country recognised in accordance with the procedure in Article 12.3" is governed by Article 6.6 of
Regulation No. 2081/92.

66. Thus, Article 12.2 of Regulation No. 2081/92 should properly be considered to govern an
application for the registration of an EC-defin ed GI from another WTO Member that meets the
conditions of reciprocity and equivalence established by Article 12.1 of the Regulation where that EC-
defined GI is homonymous with an EC-defined GI that is already being protected under the

53 First Written Submission of the EC, paragraph 446.
54 Response of the European Communities to Question 41(a) from the Panel after the first substantive
meeting, paragraph 108.
55 Response of the European Communities to Question 41(c) from the Panel after the first substantive
meeting, paragraph 110.
56 First Written Submission of the EC, paragraph 89.

Regulation, irrespective of whether the earlier name relates to a geographical area within the EC or in
another WTO Member. Article 6.6 of the Regul ation is the parallel provision governing an
application for the registration of an EC-defined GI from within the EC that is homonymous with an
EC-defined GI that is already being protected under the Regulation, irrespective of whether the earlier
name relates to a geographical area within the EC or in another WTO Member.

67. Australia submits that the EC has not disp roved the factual premise informing Australia's
claims that Article 12.2 of Regulation No. 2081/92 gove rns an application for the registration of an
EC-defined GI relating to a geographical area in another WTO Member that is identical to an EC-
defined GI – whether relating to a geographical ar ea in an EC Member State or in another WTO
Member – that is already being protected within the EC pursuant to the Regulation. The EC's
counterarguments are not sustainable having regard to the meaning, context and aims of those
provisions in accordance with the rules of interpretation of EC laws.

E. C
ONCLUSION
68. DSU Article 11 sets out the functions of a pa nel, and expressly provides that a panel should
make an objective assessment of the facts of the case . As the EC itself says, that requires that the
Panel establish the meaning that Regulation No. 2081 /92 would normally have within the EC's own
legal order.

69. Australia submits that the Panel should find th at the explanations put forward by the EC of
the meanings of the provisions of Regulation No. 20 81/92 concerned with the registration of an EC-
defined GI relating to the territory of another WTO Member, the Article 15 decision-making process
and the protection of homonymous EC-defined GI s are not consistent with the meaning that
Regulation No. 2081/92 would normally have within th e EC's own legal order having regard to the
rules of interpretation applied by the ECJ.

70. Thus, Australia noted with particular inter est the Panel's question whether a statement by the
EC delegation to the Panel is legally binding on the EC, and the relevant part of the EC's response:

… [T]he statements made by the agents of the European Commission before the
Panel commit and engage
 the European Communities.
However, it should also be noted that where the statements of the European
Communities regard the interpretation of Regulation 2081/92, these statements
concern an issue of fact. … Their purpose is … to clarify the existing legal situation
in European Community law. Their intention is not to create new legal obligations in
public international or in Community law.
This being said, the EC does not consider that its statements before the Panel are
without legal significance. … It is not c onceivable to the European Commission that
it would, in the interpretation or applica tion of the Regulation, take a different
approach to the one it has set out before the Panel.57 (emphases added)
71. The EC expressly concedes that statements made by EC representatives before the Panel
regarding the interpretation of Regulation No. 2081/92 are not intended to create new legal
obligations in Community law . The statements of EC representatives before the Panel cannot
therefore be relied upon by the Panel to counter act conclusions concerning the meaning of the
provisions of Regulation No. 2081/92 as a result of th e Panel's objective assessment of the facts of the

57 Response of the European Communities to Question 15 from the Panel after the first substantive
meeting, paragraphs 29-31.

case pursuant to the Panel's obligation under DSU Ar ticle 11. Even if the statements by EC
representatives before the Panel were the only b asis on which to determine how Regulation No.
2081/92 were to apply, given the number of c onflicting statements made by various EC
representatives, WTO Members could not have an y assurance of how the Regulation would be
interpreted by the EC at the conclusion of the Pane l's proceedings. On the other hand, should the EC
apply the provisions of the Regulation in the manne r it has set out, any challenge to the EC's actions
to implement the Regulation would be heard before the ECJ, which would have to consider the
meaning of the provisions of the Regulation in accordance with its normal rules of interpretation of
Community law, that is, considering the wording, context and aims of the provisions at issue. Further,
if it is open to the ECJ to look to statements made by EC representatives before the Panel, would it not
also be open to the ECJ to look at statements ma de by other senior EC representatives and entities in
other contexts?

72. Consequently, only formal amendments of the provisions of Regulation No. 2081/92 could
ensure their interpretation in a manner consistent with the EC's WTO obligations.

V. ESTOPPEL
73. In its First Written Submission, the EC has several times argued that Australia would be
estopped from making certain claims.
58 Moreover, according to the EC:

According to Article 3.10 of the DSU, the par ticipants in dispute settlement procedures under
the DSU are bound by an obligation of good faith. The principle of estoppel is similarly
based on the notion of good faith. Accordingly, the EC considers that the notion of estoppel
is applicable in the context of WTO dispute settlement".59
74. The EC's statement is extraordinary. Accord ing to the EC's logic, estoppel forms part of the
principles of the WTO dispute settlement system merely because estoppel exhibits characteristics
similar to aspects of that system. This is a flawed argument.

75. DSU Article 3.10 does not affect the right of a WTO Member to bring a particular claim.
Rather, DSU Article 3.10 deals with good faith pa rticipation in and observance of WTO dispute
settlement procedures. It could not provide the b asis for a claim of estoppel, assuming for the sake of
argument that such a claim could be made.

76. Although the principle of estoppel may be grounde d in the general principle of good faith (as
noted by the International Court of Justice in the Gulf of Maine Case
60), this does not mean that a
WTO Member may rely on the principle of estopp el to defeat a claim brought by another WTO
Member. Nor is the principle of estoppel imported into the WTO Agreement by the reference in DSU
Article 3.2 to the customary rules of interpretati on of public international law: estoppel is not a
customary rule of interpretation.

77. The principle of estoppel has been raised in earlier disputes. However, it has never been
applied by a panel in determining a claim before it and there are no Appellate Body findings on the
issue.

78. In Guatemala – Cement II, Guatemala argued that Mexico's failure to object immediately to a
delay in a required notification by Guatemala gave rise to an estoppel, although Guatemala did not

58 See, for example, paragraph 344.
59 EC response to Question 89 from the Panel followi ng the first substantive meeting with the parties,
paragraph 227.
60 1984 ICJ Reports, page 305, paragraph 130.

identify a provision of a covered agreement as suppor ting its reliance on the principle of estoppel.
The Panel in that dispute considered that:

[e]stoppel is premised on the view that wh ere one party has been induced to act in
reliance on the assurances of another party, in such a way that it would be prejudiced
were the other party later to change its position, such a change in position is
"estopped", that is precluded.
61
79. The Panel did not find it necessary to determine whether a WTO Member could rely on the
principle of estoppel, as it held that "Mexico wa s under no obligation to object immediately to the
violations" it alleged before the Panel.62 The Panel went on to hold that, as Mexico had:

… raised its claims at an appropriate moment under the WTO dispute settlement
procedures, Guatemala could not have re asonably relied upon Mexico's alleged lack
of protest to conclude that Mexico would not bring a WTO complaint.63
80. Australia notes that the Panel in Guatemala – Cement II held that the fact that a WTO
Member does not complain about a measure at a gi ven point in time cannot by itself deprive that
WTO Member of its right to initiate a dispute at some later point in time. The lack of complaint does
not create an estoppel.

81. Further, in EEC – Bananas I, the Panel rejected an EC argument that the complaining parties'
silence regarding the GATT inconsis tent banana import regimes at issue resulted in the complaining
parties being estopped from making such claims. The Panel noted that "[e]stoppel could only result
from the express, or in exceptional circumstances, implied, consent of the complaining parties".
64
Applying this standard the Panel found that "[t]he mere inaction of the contracting parties could not in
good faith be interpreted as an expression of their consent to release the EEC from its obligations
under Part II of the GATT".65

82. Australia submits that the rationale of the Panel in EEC – Bananas I is equally applicable in
the current case. Australia has never consented – either explicitly or implicitly – to the EC's unilateral
imposition of WTO-inconsistent requi rements for action on the part of Australia. Thus, not having
sought a DSU process earlier cannot be interpreted as an expression of Australia's consent to release
the EC from its obligations under the TRIPS Agreement – or indeed under any of the other covered
agreements. To allow the EC's arguments to stand would lead to the perverse outcome of requiring
WTO Members to hurry to dispute settlement for fear of otherwise losing their rights.

83. Even if the principle of estoppel is applicab le to WTO dispute settlement – which Australia
does not concede – it would not operate to preven t Australia from initiating this dispute or from
pursuing any claims as part of that dispute.

VI. THE REGISTRATION AND ENFORCEMENT OF TRADEMARKS IN AUSTRALIA
84. In its First Written Submission, the EC ma kes a number of incorrect and/or confusing
references to the situation concerning the registra tion and enforcement of trademarks in Australia.
66

61 Guatemala – Cement II, paragraph 8.23.
62 Guatemala – Cement II, paragraph 8.24.
63 Guatemala – Cement II, paragraph 8.24.
64 EEC – Bananas I, paragraph 361.
65 EEC – Bananas I, paragraph 363.
66 See, for example, paragraph 365.

The Australian trademark regime is not the measure at issue in this dispute, and the EC's references to
it are irrelevant. Nevertheless, to ensure accuracy in the record, Australia notes the following points.

85. Australia's Trade Marks Act 1995 is administer ed by the Trade Marks Office, a part of IP
Australia. Initial decisions relating to an applicatio n for registration of a trademark are made within
the Trade Marks Office. Those initial decisions are appellable within the Trade Marks Office.

86. However, neither the Trade Marks Office nor IP Australia is a judicial body within the
meaning of Part III of the TRIPS Agreement. All decisions by the Trade Marks Office concerning
registration and opposition in relation to a trademark application are reviewable de novo by the
Federal Court of Australia.

87. Thus, the situation concerning the registrati on and enforcement of trademarks in Australia
cannot be compared to the situation concerning the registration and enforcement of an EC-defined GI
under Regulation No. 2081/92. The situation in Australia is more akin to that applying in relation to
the Community Trademark Regulation,
67 which is administered by the EC's Office for Harmonisation
in the Internal Market (OHIM). The Communi ty Trademark Regulation provides for an initial
decision-making level and internal appeal at OHIM in respect of the registration of a trademark, with
all actions for infringement of trademark rights being heard de novo by designated Community
trademark courts.

VII. THE EC MEASURE DIMINISHES THE LEGAL PROTECTION FOR
TRADEMARKS IN WAYS NOT PERMITTED BY THE TRIPS AGREEMENT
88. In its First Written Submission,
68 Australia claimed that the EC measure is inconsistent with
the EC's obligations pursuant to the TRIPS Agreement because – in respect of the registration of EC-
defined GIs – the EC measure diminishes the legal protection for pre-existing trademarks in ways not
permitted by the TRIPS Agreement. In particular, the EC measure:

• does not grant to the owner of a registered trademark 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 which are identical or similar to those in respect of which
the trademark is registered where such use would result in a likelihood of confusion,
contrary to TRIPS Article 16.1;
• does not provide for a presumption of a like lihood of confusion in the case of use of
an identical sign for identical goods, contrary to TRIPS Article 16.1;
• prejudices the validity of an application for the registration of a trademark by failing
to grant the right of priority required to be granted under Paris Article 4, contrary to
TRIPS Article 24.5;
• does not assure to WTO Member nationals either effective protection against unfair
competition or appropriate effective legal remedies to repress acts of unfair
competition as required by Paris Articles 10 bis(1) and 10 ter(1), contrary to TRIPS
Article 2.1;
• does not make available to trademark ri ght holders civil judicial procedures
concerning the enforcement of their intell ectual property rights, contrary to TRIPS
Article 42;

67 Exhibit COMP-7.
68 First Written Submission of Australia, paragraphs 88-107

• provides procedures concerning the enforcem ent of trademark rights which are not
fair and equitable, and which are unnecessar ily complicated and entail unwarranted
delays, contrary to TRIPS Article 41.2;
• does not ensure that decisions on the registration of an EC-defined GI are based only
on evidence in respect of which trademark right holders were offered the opportunity
to be heard, contrary to TRIPS Article 41.3;
• does not ensure the availability under its law of enforcement procedures as specified
in Part III of the TRIPS Agreement so as to permit effective action against any act of
infringement of trademark rights, contrary to TRIPS Article 41.1; and
• in respect of decisions by EC Member States to grant transitional national protection
to a proposed EC-defined GI, does not ensure that such decisions are made by an EC
Member State with proper regard to the ri ghts required to be granted to trademark
rights holders in accordance with the EC's obligations pursuant to the TRIPS
Agreement.
89. Australia also claimed that, as a consequen ce of the EC's failure to comply with the
provisions of Paris Articles 10 bis(1) and 10ter(1) in respect of the regist ration of EC-defined GIs and
in respect of decisions by EC Member States to grant transitional national protection, the EC measure
is inconsistent with TRIPS Article 2.1.

90. Australia further claimed that, as a conseque nce of the EC measure's inconsistency with
TRIPS Article 2.1 ("incorporating" by reference Paris Articles 10 bis(1) and 10 ter(1)), 16.1, 24.5,
41.1, 41.2, 41.3 and/or 42 in respect of the regist ration of EC-defined GIs and in respect of decisions
by EC Member States to grant transitional national protection, the EC has failed:

• to give effect to the provisions of the TRIPS Agreement as required by Article 1.1 of
that Agreement;
• to accord the treatment provided for in the TRIPS Agreement to the nationals of other
WTO Members as required by Article 1.3 of that Agreement.
A. I
N RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE DOES NOT
GRANT TO THE OWNER OF A REGISTERED TR ADEMARK THE EXCLUSIVE RIGHT TO PREVENT
CONFUSINGLY SIMILAR OR IDENTICAL USE OF A SIGN FOR SIMILAR OR IDENTICAL GOODS ,
CONTRARY TO ARTICLE 16.1 OF THE TRIPS AGREEMENT
(i) That Regulation No. 2081/92 does not allow the registration of confusing new
trademarks is irrelevant to the claim at issue
91. In the factual circumstances that underpin Aust ralia's claim, the trademark rights already exist
within the territory of the EC under EC Member State law: the trademark rights pre-date the
application for registration of an EC-defined GI and possibly also the adoption of Regulation No.
2081/92 itself. Indeed, they could pre-date th e adoption of Community Trademark Directive
69. Thus,
that Regulation No. 2081/92 and the Community Tr ademark Directive – or indeed the Community
Trademark Regulation70 – might now operate, individually and/or collectively, to prevent the future
acquisition of new trademark rights in geographical names does not mean that such trademark rights

69 First Council Directive of 21 December 1988 to approximate the laws of the Member States relating
to trade marks (89/104/EEC), Exhibit COMP-6.
70 Council Regulation (EC) No. 40/94 of 20 December 1993 on the Community trade mark , Exhibit
COMP-7.

do not already exist within the EC. Indeed, the "Bavaria" trademark registered in Denmark referred to
in Regulation No. 1347/2001
71 is just such an example.

92. Australia notes that the EC acknowledges the possi bility of such a situation when it says: "…
it is extremely unlikely
 that the situation described by Aust ralia will ever present itself in practice" 72
(emphasis added). In reality, the EC cannot say that such trademark rights do not exist because it has
not provided – and still does not provide – to any su ch right holders the effective legal avenues to
challenge an application for the registration of an EC-defined GI. However large or small the number
of such trademarks may be, the EC is obliged by the express provisions of TRIPS Article 16.1 to grant
to the owners of those trademarks the exclusive right to prevent in the course of trade confusing use of
an identical or similar sign for identical or similar goods.

(ii) Article 24.5 of the TRIPS Agreement does not envisage co-existence of TRIPS-defined
GIs and pre-existing trademarks
93. Article 24.5 is placed in Section 3, Part II, of the TRIPS Agreement, which is concerned with
the "Geographical Indications" category of intellect ual property rights. Moreover, TRIPS Article 24
is headed "International Negotiations: Exceptions". In Australia's view, paragraph 5 of Article 24 is
one of the "exceptions" provided by that Article. Further, in the absence of an express provision to
the contrary, the exceptions set out in that Artic le can only be exceptions to the provisions of
Section 3, Part II, of the TRIPS Agreement concerning Geographical Indications.

94. By definition, an "excep tion" is something that does not follow an established rule.73 Thus, in
respect of the universe of trademark rights that fall within TRIPS Article 24.5 – that is, in respect of
"pre-existing" trademark rights – the rules otherw ise established by Section 3, Part II, of the TRIPS
Agreement do not apply to the extent that they would prej udice, that is, adversely affect, the relevant
trademark rights on the basis of being identical or similar to a TRIPS-defined GI. Conversely, had it
been intended that the rights required to be gran ted to the owner of a registered trademark under
TRIPS Article 16.1 should not apply in relation to th e later registration of a TRIPS-defined GI, this
would have been stated expressly in an exception within Section 2, Part II, of the TRIPS Agreement.

95. The EC argues at length that TRIPS Article 24.5 envisages the co-existence of GIs and pre-
existing trademarks.
74 In doing so, however, the EC misc haracterises or ignores Australia's
arguments, and indeed ignores the provisions of the TRIPS Agreement and of its own legislation. At
other times, 75 the EC's arguments seem to be premised on a view that TRIPS Article 24.5 governs
conflicts involving the future acquisition of tradem ark rights and GIs. As Australia does not make
such claims or arguments, it simply notes that such arguments by the EC are irrelevant to the matter at
issue.

96. Australia has not claimed – and does not cl aim – that TRIPS Article 16.1 requires that
"trademarks must prevail over later geographical indications". 76 Rather, Australia has argued:
"[t]ogether with TRIPS Articles 22.3 and 23.2, TRIPS Article 24.5 defines the boundary between a

71 Exhibit EC-9.
72 First Written Submission of the EC, paragraph 323.
73 OED, Vol.1, page 872, defines "exception" in relevant part as "1 The action of excepting …
something from a group, the scope of a proposition, etc.; the state or fact of being so excepted. 2 A … thing
which is excepted; esp. a particular case … that does not follow some general rule or to which a generalization
is not applicable. Foll. by to …"
74 First Written Submission of the EC, paragraphs 294-311.
75 For example, First Written Submission of the EC, paragraph 307.
76 First Written Submission of the EC, paragraph 297.

WTO Member's right to implement measures relating to TRIPS-defined GIs and its obligation to
afford protection to trademarks",77 a statement with which the EC apparently agrees.78

97. The EC argues that WTO Members "are entitle d to provide more extensive protection for
geographical indications, in accordance with Article 1.1 of the TRIPS Agreement".
79 Indeed, they are
– a point expressly recognised by Australia when it said that it was not contesting the EC's right "to
register and/or protect GIs as intellectual property; [or] to implement in its law more extensive
protection for GIs than is required to be provided by the TRIPS Agreement".80

98. However, the EC has ignored the remaining cl ause of that sentence in TRIPS Article 1.1:
"provided that such protection does not contravene the provisions of this Agreement". Thus, more
extensive protection of GIs by the EC cannot be implemented in such a way as to contravene any
TRIPS Agreement provisions, including those concerned with trademark rights. The EC's argument
that TRIPS Article 24.5 allows a WTO Member to prejudice rights of a trademark owner not referred
to in that Article is therefore not sustainable.
81 TRIPS Article 24.5 imposes an obligation on a WTO
Member to ensure that the implementation of Section 3, Part II, of the TRIPS Agreement does not
prejudice specific rights attaching to the universe of pre-existing trademark rights covered by that
provision on the basis being identical or similar to a TRIPS-defined GI.

99. The EC argues that Article 14.2 of Regulation No . 2081/92 is fully consistent with "the right
to use a trademark" provided by TRIPS Article 24.5, the trademark owner's right to use being "one of
the two basic rights of the trademark owner, togeth er with the right to prevent other persons from
using that sign
[…] ".82 However, no provision of Section 2, Part II, of the TRIPS Agreement obliges a
WTO Member to grant to a trademark right holder a "r ight to use a trademark". Moreover, if the EC's
view of the proper interpretation of the rights of a trademark owner provided by the TRIPS Agreement
is that such a right is so inherent in a trademark th at an express statement to that effect is not required,
then by its own admission the Community Trademark Regulation and Directive are inconsistent with
the EC's TRIPS obligations as they do not in f act grant a right to use a trademark within the
Community or require an EC Member State to grant such a right.83

77 First Written Submission of Australia, paragraph 105.
78 First Written Submission of the EC, paragraphs 298-300.
79 First Written Submission of the EC, paragraph 300.
80 First Written Submission of Australia, paragraph 4.
81 Given the EC's assertions concerning the consistency of the Australian Wine and Brandy
Corporation Act with the arguments put forward by Australia in this dispute (First Written Submission of the
EC, footnote 152) and notwithstanding that the provisions of the Australian Wine and Brandy Corporation Act
are not at issue in this dispute, Australia notes that all Australian TRIPS-defined GIs protected under that Act
notwithstanding prior trademark rights are protected with the consent of th e owners of those trademarks (see
Australia's replies to questions 4, 5 9 from the EC to the complaining parties following the first substantive
meeting with the Panel). It is not possible to compare th e circumstances of this dispute to a situation in which a
WTO Member has adopted a different balance of intellectual property rights as a consequence of voluntary
agreement among all potentially affected right holders.
82 First Written Submission of the EC, paragraph 303.
83 Article 9.1 of Council Regulation (EC) No. 40 /94 of 20 December 1993 on the Community trade
mark, Exhibit COMP-7, provides as follows (Articles 5.1 and 5.2 of First Council Di rective of 21 December
1988 to approximate the laws of th e Member States relating to trade marks (89/104/EEC), Exhibit COMP-6,
provide similarly):
A Community trade mark shall confer on th e proprietor exclusive rights therein. The
proprietor shall be entitled to prevent all third parties not having his consent from using in the course of
trade:
(a) any sign which is identical with the Community trade mark in relation to goods or
services which are identical with those for which the Community trade mark is registered;

100. In any case, in Australia's view
84 the better interpretation of TRIPS Article 24.5 is that the
phrase "the right to use a trademark" only applies to trademarks to which rights have been acquired
through use. The TRIPS Agreement does not contain any obligation to grant exclusive rights in
respect of trademarks to which the rights have been acquired through use, notwithstanding that TRIPS
Article 16.1 recognises that a WTO Member can choose to grant rights on that basis. It could be
entirely consistent with a WTO Memb er's obligations pursuant to the TRIPS Agreement to provide a
non-exclusive right to use a trademark to which righ ts have been acquired through use. Were TRIPS
Article 24.5 to have used the phrase "exclusive right to use a trademark", it would have been
presuming that trademark rights acquired through use would always be exclusive rights, which need
not be the case. Further, were TRIPS Article 24.5 to have used the phrase "rights under TRIPS
Article 16.1", it would have been presuming that trademark rights acquired through use would always
be the same as those required to have been granted in respect of a registered trademark: again this
need not be the case.

101. Should the Panel consider that the phrase "the ri ght to use a trademark" applies to the universe
of pre-existing trademark rights covered by TRI PS Article 24.5 as distinct from trademark rights
acquired on the basis of use, it remains the fact that the obligation that a WTO Member "shall not
prejudice … the validity of the registration of a trad emark" applies to registered trademarks within
that universe of pre-existing trademark rights. A ccordingly, a WTO Member's "measures adopted to
implement this Section" cannot prejudice the validity of the registration of those trademarks by
removing the exclusive right of the owners of those registered trademarks to prevent confusing use.

(iii) Article 14.3 of Regulation No. 2081/92 does not allow the registration of a confusing
– as distinct from a misleading – EC-defined GI to be refused
102. The EC also argues that Article 14.3 of Regul ation No. 2081/92 allows the registration of a
"confusing" EC-defined GI to be refused.
85 Article 14.3 of the Regulation provides:

[An EC-defined GI] shall not be registered where, in the light of a trade mark's
reputation and renown and the le ngth of time it has been used, registration is liable to
mislead the consumer as to the true identity of the product. (emphases added)
103. The reason that "Australia [did] not even attempt to interpret the terms of Article 14.3"86 is, of
course, that Article 14.3 of Regulation No. 2081/92 does not concern use that is liable to confuse the
consumer of a good that will bear the proposed EC-def ined GI that is the same as a trademark.
Article 14.3 of the Regulation concerns use that is liable to mislead the consumer of a good that will
bear the proposed EC-defined GI th at is the same as a trademark. 87 Article 14.3 of the Regulation –

(b) any sign where, because of its identity with or similarity to the Community trade
mark and the identity or similarity of the goods or services covered by the Community trade mark and
the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion
includes the likelihood of association between the sign and the trade mark;
(c) any sign which is identical with or similar to the Community trade mark in relation to goods
or services which are not similar to those for which the Community trade mark is registered, where the latter has
a reputation in the Community and where use of that si gn without due cause takes unfair advantage of, or is
detrimental to, the distinctive character or the repute of the Community trade mark.
84 First Written Submission of Australia, paragraph 74, and Australia's reply to Questions 76 and 77
posed by the Panel to the parties following the first substantive meeting with the parties.
85 First Written Submission of the EC, paragraph 286.
86 First Written Submission of the EC, paragraph 287.
87 Moreover, contrary to the EC's statement (at footnote 140 of its First Written Submission), recital (3)
to Regulation No. 1347/2001 (Exhibit EC-9) concerning the registration of "Bayerisches Bier" as an EC-defined
GI expressly provides: "… it was considered … that re gistration of the name 'Bayerisches Bier' was not likely

by its plain language – also requires that the issue of whether use of an EC-defined GI would mislead
the consumer be determined in the light of a trademark's reputation, renow n and the length of time it
has been used.

104. Firstly, "misleading" establishes a stricter evidentiary standard than "confusing". The
ordinary meaning of "confusing" is "perplexing, bewildering".
88 Thus, TRIPS Article 16.1 grants to
the owner of a registered trademark the exclusive ri ght to prevent use of similar or identical sign for
similar or identical goods where such use would perp lex or bewilder the cons umer as to the source
undertaking of the goods. The ordinary meaning of "misleading", on the other hand, is "[t]hat leads
someone astray, that causes error; imprecise, confusing, deceptive". 89 Although "misleading" might
in some contexts be synonymous with "confusing", its use in the context of TRIPS Articles 22.2 and
22.3 – use which misleads the public as to origin – makes clear that the ordinary meaning of
"misleading" in context of those provisions is use which "leads someone astray or that causes error".
In other words, misleading use in the sense of TRIPS Articles 22.2 and 22.3 is use which positively
provokes an error on the part of a consumer. At th e same time, TRIPS Articles 22.2 and 22.3 serve to
confirm that the standard of "confusing" use estab lished by TRIPS Article 16.1 is a separate standard
to that of "misleading" use.

105. The context and aim of Article 14 of Regula tion No. 2081/92 indicate that "misleading" in the
sense of Article 14.3 has a similar meaning to "misle ading" in TRIPS Articles 22.2 and 22.3, that is,
that an EC-defined GI will not be registered where, in the light of a trademark's reputation and renown
and the length of time it has been used, registration of the EC-defined GI is liable to cause an error on
the part of the consumer as to the true identity of the product.

106. Thus, there is a category of applications for registration of an EC-defined GI – those whose
use of a sign would be confusing, but not necessarily misleading – which are excluded by the express
terms of Article 14.3 of Regulation No. 2081/92. Fu rther, in respect of this category, neither the
Regulation nor any other provision of EC law grants to the owner of a registered trademark the rights
required to be granted by TRIPS Article 16.1 with respect to the registration of an EC-defined GI.

107. Secondly, the express terms of Article 14.3 of Regulation No. 2081/92 require that the EC
determine whether registration of a name as an EC-defined GI would be misleading having regard to a
trademark's reputation, renown and the length of time it has been used. Yet TRIPS Article 16.1
requires that a WTO Member grant to the owner of a registered trademark the exclusive right to
prevent unauthorised use in the course of trade of id entical or similar signs for identical or similar
goods "where such use would result in a likelihood of confusion". That right is not in any way
qualified with regard to reputati on and renown and/or length of time a trademark has been in use.
Thus, applications for registration of an EC-defin ed GI whose use of a sign would be misleading for
reasons other than a trademark's reputation and re nown and length of time in use again constitute a
category in respect of which neither Article 14.3 of the Regulation – or any other provision of EC law
– grants to the owner of a registered trademar k the rights required to be granted by TRIPS
Article 16.1.

108. For the owners of registered trademarks wh ich do not meet the tests expressly established by
Article 14.3 of Regulation No. 2081/92 in regard to whether registration of an EC-defined GI would
be liable to mislead the consumer as to the true identity of the product in the light of a trademark's
reputation and renown and the length of time it has b een used, neither the Regulation – nor any other

to mislead the consumer as to the true identity of the product. Consequently, the geographical indication
'Bayerisches Bier' and the trade mark 'Bavaria' are not in the situation refe rred to in Article 14.3 of Regulation
… No. 2081/92" (emphasis added).
88 OED, Vol.1, page 477.
89 OED, Vol. 1, page 1791.

provision of EC law – grants to them the rights required to have been granted to them by the EC
pursuant to TRIPS Article 16.1.

109. Thus, Article 14.2 and 14.3 of Regulation No. 2081/92 read together result in a situation in
which – unless the registration of an EC-defined GI is liable to mislead the consumer as to the true
identity of the product in the light of a trademark' s reputation and renown and the length of time that
trademark has been used – an earlier registered trad emark and a later registered EC-defined GI must
co-exist in the marketplace. Regulation No. 2081/92 simply does not provide for the refusal of the
registration of an EC-defined GI that is confusingly
 similar or identical to a registered trademark
where that EC-defined GI would not be liable to mislead the consumer as to the true identity of the
product.

110. Moreover, the application of those provisions of Regulation No. 2081/92 in the "Bayerisches
Bier" case is fully consistent with Australia's interpretation. Recital (3) of Regulation No.
1347/2001
90 sets out that it was considered that regist ration of the EC-defined GI "Bayerisches Bier"
would not be misleading in relation to the existence of the name "Bavaria" as a trademark pursuant to
Article 14.3 of Regulation No. 2081/92. Recital (4) of Regulation No. 1347/2001 then provides:
"[t]he use of certain trademarks, for exampl e, … 'Bavaria' … may continue notwithstanding the
registration of the geographical indication 'Bayeri sches Bier' as long as they fulfil the conditions
provided for in Article 14.2 of Regulation … No. 2081/92" (emphasis added) . Having found that
registration of "Bayerisches Bier" as an EC-defined GI would not be liable to mislead the consumer as
to the true identity of the product within the mean ing of Article 14.3 of Regulation No. 2081/92, the
EC then considered that the trademark "Bavaria" c ould continue to be used "notwithstanding" – that
is, in spite of – the registration of "Bayerishes Bier" as an EC-defined GI. The EC simply did not
consider whether registration of "Bayerisches Bier" as an EC-defined GI would nevertheless
constitute confusing use in relation to the trademark "Bavaria".

(iv) Article 24.3 of the TRIPS Agreement is irrelevant to the matters at issue
111. The EC argues that, irrespective of whether co-existence of EC-defined GIs and pre-existing
trademarks is consistent with TRIPS Article 24.5, the EC is required to maintain such co-existence by
virtue of TRIPS Article 24.3. TRIPS Article 24.3 provides:

In implementing this Section
, a Member shall not diminish the protection of
geographical indications that existed in that Member i mmediately prior to the date of
entry into force of the WTO Agreement. (emphases added)
112. The "protection of geographical indications that existed in" the EC as of 31 December 1994 91
within the meaning of TRIPS Article 24.3 is the protection provided by Article 13.1 of Regulation No.
2081/92. Article 13.1 of the Regulation begins: "[r] egistered names shall be protected against …".
Article 14.2 of Regulation No. 2081/92 is in the nature of an exception to that protection in respect of
a trademark which fulfils the conditions laid down in Article 14.2.92

113. Australia is not seeking an assessment in this dispute about the "level of" protection granted
to a registered EC-defined GI pursuant to Article 13.1 of the Regulation. Rather, Australia is
challenging the processes by which a property right in an EC-defined GI is acquired under Regulation

90 Exhibit EC-9.
91 In Australia's view, "the date of entry into force of the WTO Agreement" within the meaning of
TRIPS Article 24.3 is 1 Ja nuary 1995. Australia assumes that the EC's refe rence to 31 December 1995 in
paragraph 314 of its First Written Submission is a typographical error.
92 The seventh recital to Regulation No. 1107/96, Exhibit COMP-3.a, and Recital (4) to Regulation No.
1347/2001, Exhibit EC-9.

No. 2081/92 – and the EC's failure to observe its WT O obligations in respect of those processes.
Indeed, the EC has several times described the Regulation in such terms, for example, as prescribing a
procedure "for the registration of geographical i ndications", as "as procedure for the acquisition of
another intellectual property right", and as layi ng down "an administrative procedure for the
acquisition of geographical indications via a system of registration".93

114. Removing the co-existence standard found in Article 14.2 of Regulation No. 2081/92 would
not "diminish the protection of geographical indicati ons" within the meaning of TRIPS Article 24.3.
Accordingly, TRIPS Article 24.3 does not require the system of co-existence to be maintained.

115. Further, and in any case, it is Australia's view that "the protection of geographical indications"
in TRIPS Article 24.3 encompasses protection actuall y extended to specific TRIPS-defined GIs, not
merely the regime that was in pl ace. In the context of the EC me asure, this would mean that the
protection actually extended to registered EC-d efined GIs as of 31 December 1994 could not be
diminished. However, as of that date, no EC-defin ed GIs were registered pursuant to Regulation No.
2081/92. The first registrations were made pursu ant to Regulation No. 1107/96 of 12 June 1996. 94
Once again, TRIPS Article 24.3 does not require the system of co-existence to be maintained.

116. Finally, and again in any case, TRIPS Article 24.3 relates only to the implementation of "this
Section", that is, to Section 3, Part II, of the TRIPS Agreement concerning Geographical Indications.
The obligation to grant to the owner of a registered trademark the exclusive right to prevent confusing
similar or identical use of a sign for similar or identical goods – th e obligation with which the EC's
requirement for co-existence is inconsistent – ari ses from TRIPS Article 16.1, which is in Section 2,
Part II, of the TRIPS Agreement. TRIPS Article 24.3 does not shield the EC from implementing its
obligations pursuant to provisions of the TRIPS Agreement other than those contained in Section 3,
Part II, of that Agreement.

117. Accordingly, for all of the reasons set out above, TRIPS Article 24.3 does not require the
system of co-existence to be maintained.

(v) The requirement for co-existence of a pre-existing trademark right and an EC-defined
GI cannot be justified by Article 17 of the TRIPS Agreement
118. The EC argues in the alternative that, if Article 14.3 of Regulation No. 2081/92 does not
prevent the registration of a confusing EC-defined GI and assuming further that co-existence of a pre-
existing registered trademark and an EC-defined GI is neither consistent with TRIPS Article 24.5 nor
required in the case of the EC by TRIPS Article 24.3, such co-existence would be justified under
TRIPS Article 17.
95

119. TRIPS Article 17 has not been the subject of detailed findings in any previous dispute.
However, the analogous provisions concerning th e patent and copyright provisions of the TRIPS
Agreement have been considered in previous disputes and thus provide some guidance to the proper

93 First Written Submission of the EC, paragraphs 160, 327 and 359 respectively.
94 Exhibit COMP-3.a.
95 First Written Submission of the EC, paragraphs 315-319. Australia also notes the EC's comment in
relation to the provisions of the Australian Trade Marks Act concerning use of a sign to indicate the
geographical origin of goods (at footnote 154 of the EC 's First Written Submission). The exception under the
Act for use of sign to indicate the geographical origin of goods (section 122(1)(b)(i)) does not create an
exception for a TRIPS-defined GI. Section 6 of the Act in fact expressly defines a GI in terms closely mirroring
the terms of TRIPS Article 22.1. Moreover, where the Act refers to a GI as an intellectual property right, it does
so expressly. Thus, for example, section 61 of the Act expressly provides for the rejection of an application for
registration of a trademark that contains or consists of a false GI.

interpretation of TRIPS Article 17. TRIPS Article 30 concerning "Exceptions to Rights Conferred" in
respect of patents was examined in Canada – Pharmaceutical Products . TRIPS Article 13
concerning "Limitations and Exceptions" in respect of copyright and related rights was examined in
US – Homestyle Copyright.

120. In US – Homestyle Copyright, the Panel expressly found that the burden of proof rested on the
responding party "to establish that any exception or lim itation is applicable and that the conditions, if
any, for invoking such exception are fulfilled".
96 Australia submits:

• firstly, that the burden of proof in relation to TRIPS Article 17 in this dispute lies
similarly with the EC as the responding party "to establish that any exception or
limitation is applicable and that the conditi ons, if any for invoking such exception are
fulfilled";97 and
• secondly, that the EC has not met that burden of proof.
121. In the event that the Panel should consider that the EC has in fact met its burden of proof,
Australia submits the following arguments in rebuttal for the Panel's consideration.

122. TRIPS Article 17 permits a WTO Member to provide for "limited exceptions" – or small
diminutions – to trademark rights, measured by th e extent to which the exclusive rights granted by
TRIPS Article 16.1 or to which othe r trademark rights are curtailed. 98 Those limited exceptions must
take account of both the legitimate interests of th e trademark owner and the legitimate interests of
third parties. Thus, any limited exceptions must consider, from both legal and normative societal
perspectives, the interests of both the trademark owne r and third parties in light of the objectives that
underlie the protection of trademark rights. 99 That said, "third parties are by definition parties who
have no legal right at all in being able to perform the tasks excluded by [the relevant IP] rights".100

123. Moreover, the requirements are cumulativ e, each being a separate and independent
requirement that must be satisfied.
101 Thus, for TRIPS Article 17 to be applicable, the exception
must: be limited; take account of the legitimate interests of the trademark owner; and take account
of the legitimate interests of third parties.

124. An exception that allows co-existence with a pre-existing trademark in every case in which an
EC-defined GI is registered cannot be considered "limited" within the term s of TRIPS Article 17.
Further, if TRIPS Article 24.5 does not permit co-existence, such an exception under TRIPS
Article 17 would – in effect – render TRIPS Article 24.5 meaningless.

125. Moreover, an exception that allows co-exist ence with a pre-existing trademark in every case
in which an EC-defined GI is registered denies th e exclusive right to prevent confusingly similar or
identical use required to be granted pursuant to TRIPS Article 16.1 and protected pursuant to TRIPS
Article 24.5. Such an exception cannot therefore be considered to "take account of the legitimate
interests of the owner of the trademark".

96 US – Homestyle Copyright, Panel Report, paragraph 6.13.
97 Australia notes that the EC seems to agree that it bears the burden of proof in relation to TRIPS
Article 17: Response of the European Communities to Question 75(b) from the Panel after the first substantive
meeting, paragraph 199.
98 Canada – Pharmaceutical Products, Panel Report, paragraphs 7.30-7.31.
99 US – Homestyle Copyright, Panel Report, paragraph 6.224.
100 Canada – Pharmaceutical Products, Panel Report, paragraph 7.68.
101 Canada – Pharmaceutical Products, Panel Report, paragraph 7.20.

126. Thus, even without considering what might be the legitimate interests of third parties needing
to be taken into account, the EC argument cannot satisfy the requirements of TRIPS Article 17.

127. Moreover, having regard to the text of TRI PS Article 17 and to the design and architecture of
the TRIPS Agreement generally, Australia submits that TRI PS Article 17 neither permits – nor was
intended to permit – a general release from a WTO 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.

(vi) The EC measure does not ensure that an obj ection from the owner of a registered
trademark is admissible or that such an objection is considered through the
Article 15 decision-making process, contrary to Article 16.1 of the TRIPS Agreement
128. Australia submits that, in respect of the regi stration of an EC-defined GI pursuant to the EC
measure, the EC does not make available to trad emark right holders civil judicial procedures
concerning the enforcement of an intellectual propert y right, contrary to the EC's obligations under
TRIPS Article 42.
102

129. Further and in any case, Australia submits th at to the extent that the Article 15 decision-
making process pursuant to Regulation No. 2081/92 constitutes the initial and only means through
which a trademark right holder can seek to exercise th e trademark rights required to be granted by the
TRIPS Agreement in relation to the registration of an EC-d efined GI, the EC measure does not ensure
that an objection from the owner of a registered trad emark is admissible or that such an objection is
considered pursuant to the Regulation's Article 15 decision-making process.

130. The EC argues in response that TRIPS Article 16.1 does not confer a right of objection on
trademark owners and that in any case Australia's arguments are factually incorrect.
103

131. While TRIPS Article 16.1 may not confer a "ri ght of objection" in express terms, such a right
is nevertheless necessary to allow exercise of the ri ght that is expressly required by that provision to
be granted to the owner of a registered trademark: the exclusive right to prevent in the course of trade
confusing use of an identical or similar sign for identical or similar goods. To say that a TRIPS
Article 16.1 right does not necessitate a right of objection to the proposed acquisition of another
category of intellectual property right is tantamount to saying that a trademark owner may not take the
only means available to prevent a confusing use of th at intellectual property right from day one: that
the only avenue through which trademark rights coul d be enforced by the owner of a registered
trademark is through judicial procedures – assuming that the right holder has effective access to such
procedures – after the alleged confusing use has alread y begun. Australia does not believe that such a
view is sustainable.

132. The EC argument overlooks that, to the exte nt that the Article 15 decision-making process
constitutes the only means through which the owner of a registered trademark can seek to exercise the
rights required to be granted to that owner pursu ant to TRIPS Article 16.1 in respect of the
registration of an EC-defined GI, the Article 15 decision-making process is an enforcement procedure
that is subject to the EC's obligations pursuant to Part III of the TRIPS Agreement. The only means by
which the owner of a registered trademark can seek to invoke that enforcement procedure in respect
of the registration of an EC-defined GI is through the right of objection provided by Regulation No.
2081/92.

102 See Part VII.E.ii below.
103 First Written Submission of the EC, paragraphs 325-344.

133. Further, in arguing that Australia's arguments are factually incorrect,
104 the EC has once again
overlooked the meaning, context and aims of the provisions of Regulation No. 2081/92 at issue and
the actual arguments made by Australia. The expre ss criterion for the admissibility of a statement of
objection from the owner of a registered trademark pursuant to Article 7.4 of Regulation No. 2081/92
is if it "shows that registration of the name propo sed would jeopardize the existence … of a mark".
"[J]eopardise the existence" 105 establishes a far more rigorous standard than a "likelihood of
confusion". For a statement of objection to show that the existence of a trademark would be
jeopardised, the statement of objection would have to show that the very being of that trademark
would be threatened. The grounds of objection in Article 7.4 of Regulation No. 2081/92 are too
narrow to allow the owner of a registered tradem ark to exercise the right required to have been
granted to him/her by TRIPS Article 16.1.

134. The EC also argues that "[w]hile Member st ates are not required to transmit the statements
objections [sic], their decisions are not discretionary and may be subject to judicial review under the
national law of each Member State". Yet the EC does not explain how the possibility of judicial
review of a procedural deficiency under an EC Me mber State's national law grants to the owner of a
registered trademark the rights required to be grante d pursuant to TRIPS Article 16.1 in respect of the
registration of an EC-defined GI under Regulation No. 2081/92. Further, the EC does not even
attempt to reconcile this statement with its advice before the Panel during the first substantive meeting
with the parties to the dispute that Community la w takes primacy over EC Member State law in the
event of a conflict. It seems that – in the EC's view – the possibility of judicial review of a procedural
deficiency at EC Member State level – an action, moreover, which could not in any case invalidate the
Community level registration of an EC-defined GI pursuant to Regulation No. 2081/92 – is sufficient
to fulfil the EC's obligation pursuant to TRIPS Article 16.1. Such an argument by the EC is not
sustainable.

(vii) Conclusion
135. The EC has not rebutted the prima facie case made by Australia that, in respect of the
registration of an EC-defined GI, the EC measure does not grant to the owner of a registered
trademark the exclusive right to prevent confusingly similar or identical use of a sign for similar or
identical goods.

136. Moreover, Australia notes the express provision of TRIPS Article 1.3 that the object of the
treatment provided for in the TRIPS Agreement is nationals. However, in Australia's view, a degree
of care is needed to ensure that a too literal interpretation of the TRIPS Agreement does not result in
unjustifiable discrimination on the basis of the type of intellectual property at issue. The treatment of
nationals cannot be considered in a vacuum divor ced from context: the protection of intellectual
property rights generally.

B. I
N RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE DOES NOT
PROVIDE A PRESUMPTION OF A LIKELIHOOD OF CONFUSION IN THE CASE OF USE OF AN
IDENTICAL SIGN FOR IDENTICAL GOODS
, CONTRARY TO ARTICLE 16.1 OF THE TRIPS
AGREEMENT
137. TRIPS Article 16.1 requires that a WTO Member grant to the owner of a registered trademark
the evidentiary presumption of a likelihood of confusi on in the event of use of an identical sign for

104 First Written Submission of the EC, paragraphs 341-344.
105 OED, Vol.1, defines "jeopardize" as "Put into jeopardy, endanger, put at risk" (page 1444) and
"existence" in relevant part as "2 The fact or state of existing; actual possession of being. b Continued being;
spec. continued being as a living creature, life, esp. under adverse conditions" (page 882).

identical goods. It would of course be open to a WT O Member to provide in its domestic law for that
presumption to be rebuttable in defined circumstances.

138. The EC argues that a WTO Member is not re quired to reproduce the presumption explicitly in
its domestic law.
 106 Even if that is the case, however, the provisions of Regulation No. 2081/92 do
not grant to the "registering authority" – and th us ultimately to the EC courts – the necessary
discretion to apply the presumption.107

139. The EC argues too that the situation would be extremely unlikely ever to present itself in
practice.
108 Even if this were true, it is irrelevant: even if there is only one registered trademark
within the whole of the territory of the EC that meets this criterion, the EC must grant to that
trademark owner the evidentiary presumption of a like lihood of confusion in respect of the proposed
registration of an EC-defined GI.

140. Finally, the EC "considers that none of the registered geographical indications falls within
[the] situation" of being identical to any earlier registered trademark u sed for identical goods.
109 In
reality, however, the EC simply does not know, because it has not provided the means for an owner of
a registered trademark to claim the presumption in respect of the registration of an EC-defined GI.

141. The EC has not rebutted the prima facie case made by Australia that, in respect of the
registration of an EC-defined GI pursuant to Regulation No. 2081/92, the EC does not provide to the
owner of a registered trademark a presumption of a likelihood of confusion in the case of use of an
identical sign for identical goods, contrary to TRIPS Article 16.1.

C. I
N RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE PREJUDICES THE
VALIDITY OF AN APPLICATION FOR THE REGIST RATION OF A TRADEMARK BY FAILING TO
GRANT THE RIGHT OF PRIORITY REQUIRED TO BE GRANTED UNDER ARTICLE 4 OF THE PARIS
CONVENTION, CONTRARY TO ARTICLE 24.5 OF THE TRIPS AGREEMENT
142. Australia argued in straightforward terms in its First Written Submission that the EC measure
does not grant – in respect of the registration of an EC-defined GI – the right of priority required to be
granted by Paris Article 4 and that, as a conse quence, the EC measure prejudices eligibility of an
application for registration of a trademark made in good faith, contrary to TRIPS Article 24.5. As the
EC acknowledges, the Paris Convention does not provide for a similar right of priority in respect of
indications of source.
110 The EC has responded to an argument that Australia has not made. 111 The
EC has not rebutted the prima facie case made by Australia.

D. I
N RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE DOES NOT
ASSURE TO WTO MEMBER NATIONALS EITHER EFFECTIVE PROTECTION AGAINST UNFAIR
COMPETITION OR APPROPRIATE LEGAL REMEDIES TO REPRESS ACTS OF UNFAIR COMPETITION ,
CONTRARY TO ARTICLE 2.1 OF THE TRIPS AGREEMENT "INCORPORATING"
ARTICLES 10BIS(1) AND 10TER(1) OF THE PARIS CONVENTION (1967)
143. The EC argues that Australia's claims are "insufficiently argued and difficult to
understand".112 In fact, Australia's claims are straightforwar d: in respect of the registration of an EC-

106 First Written Submission of the EC, paragraph 322.
107 See Part VII.A.iii above.
108 First Written Submission of the EC, paragraph 323.
109 First Written Submission of the EC, paragraph 324.
110 EC Response to Question 86 from the Panel following the first substantive meeting, paragraph 222.
111 First Written Submission of the EC, paragraphs 354-356.
112 First Written Submission of the EC, paragraph 399.

defined GI, the EC measure does not assure to WTO Member nationals either effective protection
against unfair competition or appropriate legal re medies to repress such acts, contrary to TRIPS
Article 2.1 "incorporating" Paris Articles 10bis(1) and 10ter(1).

144. Paris Article 10 bis(2) provides that an act of unfair competition is "any act of competition
contrary to honest practices in industrial or comme rcial matters". "[H]onest practices in industrial or
commercial matters" within the meaning of Paris Article 10 bis(2), however, include the notion of
honest practices established in international trade.
113 Thus, to comply with its obligation pursuant to
Paris Article 10 bis(1), a WTO Member must assure to nationals of other WTO Members effective
protection against unfair competition that permits acc ount to be taken of honest practices established
in international trade.

145. It cannot be presumed that "effective prot ection against unfair competition" within the
meaning of Paris Article 10bis(1) will only ever involve protection of a TRIPS-defined GI. It may be
that, having regard to the principle of territoria lity and to developments in international trade over
time, recognition of a TRIPS-defined GI could co nstitute an act of unfair competition within the
meaning of Paris Article 10bis(2).

146. It is irrelevant that the EC might not unders tand how the use of a registered EC-defined GI –
even if the registration of that EC-defined GI w as otherwise consistent with the EC's obligations
pursuant to the TRIPS Agreement – could constitute an act of unfair competition within the meaning
of Paris Article 10 bis(2) and thus invoke the EC's obligation pursuant to Paris Article 10 bis(1). It is
also irrelevant that the use of registered EC-def ined GIs "remains subject to the EC legislation on
labelling and misleading advertising, as well as to the law of the EC Member States on unfair
competition".
114 As the EC itself indicates elsewhere, 115 there is no Community "law" in the sense of
a Regulation with Community level effect in rela tion to labelling and mislead ing advertising in any
case. Moreover and in any event, as the EC i ndicated before the Panel, Community law takes
primacy over EC Member State law in the event of a conflict: therefore an EC measure cannot be
overturned by an EC Member State measure in any event.

147. In respect of the registration of an EC-defined GI, the provisions of Paris Articles 10 bis(1)
and 10ter(1) require that the EC provide to the nationals of other WTO Members "effective protection
against unfair competition" and "appr opriate legal remedies effectively to repress all the acts referred
to in Articles … 10 bis". The EC does not in fact comply with those requirements and it has not
rebutted Australia's prima facie case that, by failing to comply with those requirements, the EC has
not complied with the requirements of TRIPS Article 2.1.

E. I
N RESPECT OF THE REGISTRATION OF AN EC-DEFINED GI, THE EC MEASURE IS INCONSISTENT
WITH ARTICLES 41.1, 41.2, 41.3 AND 42 OF THE TRIPS AGREEMENT
(i) Introduction
148. The EC argues 116 that Australia's claims are unfoun ded because Part III of the TRIPS
Agreement does not apply to Regulation No. 2081/92. The EC states that Regulation No. 2081/92
lays down an administrative procedure for the acquisition of EC-defined GIs via a system of
registration, that the Regulation does not purport to regulate the procedures for enforcing trademark

113 See, for example, Bodenhausen, page 144, and WIPO's "Model Provisions on Protection Against
Unfair Competition", Exhibit AUS-09.
114 First Written Submission of the EC, paragraph 400.
115 First Written Submission of the EC, paragraph 434.
116 First Written Submission of the EC, paragraphs 357-365.

rights and that the consequence of Australia's argu ment is that intellectual property rights would
always have to be conferred by a judicial body in accordance with judicial procedures.

149. Once again, the EC misunderstands and/or misc haracterises the basis of Australia's claims.

150. Australia has not contested – and does not c ontest – matters concerning the enforcement of
trademark rights generally, whether those trademar k rights exist at Community or at EC Member
State level. However, Australia notes that – pursuant to Article 159 of Regulation No. 40/94
117 –
"[the EC Trademark] Regulation shall not affect … Regulation … No. 2081/92 on the protection of
geographical indications and designations of origin for agricultural products and foodstuffs …, and in
particular Article 14 thereof". Thus, matters c oncerning the enforcement of trademark rights in
respect of the registration of an EC-defined GIs are specifically excluded from the scope of
Regulation No. 40/94. Moreover, they were so excluded from the time that Regulation No. 40/94 was
adopted. On the other hand, the Community trademark Directive 118 makes no mention of Regulation
No. 40/94 because there is no need: as the EC has itself said before the Panel, Community law takes
primacy over EC Member State law in the event of a conflict.

151. Thus neither Community trademark law nor EC Member State trademark law provide the
means to enforce trademark rights in respect of the registration of an EC-defined GI.

(ii) In respect of the registration of an EC-de fined GI, the EC measure does not make
available to trademark right holders civil judicial procedures concerning the
enforcement of their intellectual property ri ghts, contrary to Article 42 of the TRIPS
Agreement
152. Irrespective of whether the Article 15 decision-making process provided by Regulation
No. 2081/92 is an administrative procedure in rela tion to the acquisition of an intellectual property
right in an EC-defined GI,
119 the EC measure does not provide – in relation to the registration of an
EC-defined GI – access to civil judicial procedur es within the meaning of TRIPS Article 42 for the
enforcement of the trademark rights required to be granted under TRIPS Article 16.1. The fact that a
decision to register an EC-defined GI pursuant to Regulation No. 2081/92 may be subject to judicial
review on points of law does not satisfy the requi rement of TRIPS Article 42. The EC has not
rebutted Australia's prima facie case in respect of this claim.

153. Further and in any case, even if the Article 15 decision-making process provided by
Regulation No. 2081/92 is presumed to be an administrative procedure in relation to the acquisition of
an intellectual property right in an EC-defined GI , to the extent that that decision-making process
constitutes the only means through which a trademark right holder can seek to exercise the trademark
rights required to have been granted by the EC pu rsuant to TRIPS Article 16.1 in relation to the
registration of an EC-defined GI, the Article 15 decision-making procedure is an enforcement
procedure subject to the EC's obligations pursuant to Part III of the TRIPS Agreement.

117 Exhibits COMP-7.a, 7.b.i and 7.b.ii. The text of what is now Article 159 of Regulation No. 40/94
was originally numbered as Article 142 (Exhibit COMP -7.a). However, it was renumbered as Article 159
pursuant to Article 1.5 of Regulation No. 1992/2003 (Exhibit COMP-7.b.i).
118 First Council Directive of 21 December 1988 to approximate the laws of the Member States relating
to trade marks (89/104/EEC), Exhibit COMP-6.a.
119 Australia does not take a position on this issue at this time, noting that it requires consideration of a
broad range of matters – including the nature and status of the European Communities' membership of the
WTO, the shared competence of the EC and its Member States in matters covered by the TRIPS Agreement (in
accordance with ECJ Opinion No. 1/94) and whether the Article 15 decision-m aking process provided by
Regulation No. 2081/92 is in fact an inter-governmental process – and that resolution of the issue is not
necessary to allow the Panel to make appropriate findings.

(iii) In respect of the registration of an EC -defined GI, the EC measure provides
procedures which are not fair and e quitable, and which are unnecessarily
complicated and entail unwarranted delays, contrary to Article 41.2 of the TRIPS
Agreement
154. Again, the EC misunderstands and/or mischar acterises the basis of Australia's claims.
Australia has not said that it can "be assumed those ag encies, or their officials, are 'likely' to breach
systematically those duties".
120

155. TRIPS Article 41.2 requires that "[p]rocedur es concerning the enforcement of intellectual
property rights shall be fair and equitable". In other words, there is an express obligation on the EC to
ensure the impartiality of its procedures for the enforcement of intellectual property rights. Moreover,
Article 5.5 of Regulation No. 2081/92 expressly e nvisages situations involving agreement between
EC Member States without regard to any affected tr ademark rights. It is thus the case that the
possibility of bias in favour of the proposed EC-defined GI cannot be seen to be excluded.

156. The EC argues that the procedures provided in Regulation No. 2081/92 are not unnecessarily
complicated, or entail unwarranted delays.
121 Firstly, the EC argues that it would still be necessary for
the Commission to request the assistance of the EC Member State in order to verify the relevant facts.
Secondly, the EC argues that another WTO Member is estopped from making such a claim should it
decline to act in accordance with the requirements imposed by the Regulation, notwithstanding that
the WTO Member never consented to act in acc ordance with the requirements imposed by the
Regulation to begin with. 122 Under neither argument, however, does the EC address the implications
of the express recognition in the preambular clauses of the TRIPS Agreement that intellectual property
rights are private rights: that, for example, a WTO Member is required to confer on the owner of a
registered trademark a particular set of rights a nd make available the means to enforce those rights
without needing to act through a government.

157. To the extent that the Article 15 decision-mak ing process is considered to provide a means for
the enforcement of a trademark right required to have been granted in accordance with the EC's
obligations pursuant to TRIPS Article 16.1 in relatio n to the registration of an EC-defined GI, the EC
has not rebutted Australia's prima facie case in respect of these claims.

(iv) In respect of the registration of an EC-de fined GI, the EC measure does not ensure
that decisions are based only on evidence in respect of which trademark right holders
were offered the opportunity to be heard, contrary to Article 41.3 of the TRIPS
Agreement
158. To the extent that the Article 15 decision-mak ing process is considered to provide a means for
the enforcement of a trademark right required to have been granted in accordance with the EC's
obligations pursuant to TRIPS Article 16.1 in relatio n to the registration of an EC-defined GI, the EC
has not rebutted Australia's prima facie case in respect of this claim.

120 First Written Submission of the EC, paragraph 381.
121 First Written Submission of the EC, paragraphs 384-386.
122 Australia has addressed the issue of estoppel and its relevance in this dispute in more detail above.

(v) In respect of the registration of an EC-de fined GI, the EC measure does not ensure
the availability under EC law of enforcemen t procedures as specified in Part III of
the TRIPS Agreement so as to permit effec tive action against any act of infringement
or trademark rights, contrary to Article 41.1 of the TRIPS Agreement
159. The EC asserts that TRIPS Article 41.1 "is an introductory provision, which does not impose
any obligation by itself" and continu es "Australia appears to agree …". 123 Again, the EC
misunderstands Australia's claims and arguments.

160. Contrary to the EC's assertion, TRIPS Ar ticle 41.1 imposes a very clear and explicit
obligation that WTO Members "shall ensure
 that enforcement procedures as specified in this Part are
available under their law …". Consistent with nor mal interpretive principles, WTO Members have a
positive duty to make certain that the enforcemen t procedures specified in Part III of the TRIPS
Agreement are available under their law for the purpose specified.

161. Thus, in respect of the registration of an EC-defined GI, a finding by the Panel that the EC
measure is inconsistent with any of TRIPS Articl es 41.2, 41.3 or 42 – or should the Panel otherwise
consider that the EC measure does not comply with any of TRIPS Articles 43, 44, 45, 46, 48 or 49 –
would consequentially require a separate finding of inconsistency with TRIPS Article 41.1.

F. I
N RESPECT OF DECISIONS BY EC MEMBER STATES TO GRANT TRANSITIONAL NATIONAL
PROTECTION TO A PROPOSED EC-DEFINED GI, THE EC MEASURE DIMINISHES THE LEGAL
PROTECTION FOR TRADEMARKS , CONTRARY TO ARTICLES 2.1 ("INCORPORATING"
ARTICLES 10BIS(1) AND 10TER(1) OF THE PARIS CONVENTION (1967)), 16.1, 41.1, 41.2, 41.3
AND/OR 42 OF THE TRIPS AGREEMENT
162. The EC says: "[t]his clai m is entirely dependent on the previous claims submitted by
Australia under the above listed provisions".124

163. Nowhere in Australia's Firs t Written Submission has Australia indicated that its claim is
"entirely dependent" on Australia's other claims. Ind eed, Australia's claims in respect of decisions by
EC Member States to grant transitional national protection to a proposed EC-defined GI are
independent of Australia's other claims and ar e based on the express provision of Article 5.5 of
Regulation No. 2081/92 – and the absence of other pr ovisions requiring EC Member States to grant to
trademark right holders the rights required to be granted to them by the TRIPS Agreement in respect
of a decision to grant transitional national protection.

164. In any case, Australia notes that the implicit assu mption of the EC's statement – "[s]ince those
claims are unfounded, so is this claim"
125 – is that if Australia's other claims are properly founded,
then so is this claim as a matter of course.

165. The EC has not rebutted the prima facie case made by Australia in respect of decisions to
grant transitional national protection to a proposed EC-defined GI.

G. C
ONCLUSION
166. The EC has not rebutted the prima facie case made by Australia that the EC measure
diminishes the legal protect for trademarks in ways not permitted by the TRIPS Agreement, contrary
to Articles 2.1 ("incorporating" Articles 10bis(1) and 10ter(1) of the Paris Convention (1967)), 16.1,

123 First Written Submission of the EC, paragraph 367.
124 First Written Submission of the EC, paragraph 408.
125 First Written Submission of the EC, paragraph 408.

24.5, 41.1, 41.2, 41.3 and/or 42 of the TRIPS Agreement and, as a consequence, to Articles 1.1 and 1.3
of that Agreement.

167. Australia does not contest that the EC may choose to implement in its law more extensive
protection than it is required to do by the TRIPS Agreement. However, that discretion is subject to the
proviso that "such protection does not contravene the provisions of the TRIPS Agreement". Thus, the
discretion offered by TRIPS Article 1.1 is a conditiona l discretion: it applies only to the extent that a
WTO Member offering more extensive protection do es so in a manner that does not contravene the
provisions of the TRIPS Agreement. The EC measure does not meet that condition.

VIII. THE EC MEASURE DOES NOT PR OVIDE THE LEGAL MEANS FOR
INTERESTED PARTIES TO PREVENT MISLEADING USE OR USE WHICH
CONSTITUTES AN ACT OF UNFAIR COMPETITION IN RESPECT OF
GEOGRAPHICAL INDICATIONS PROPOS ED TO BE REGISTERED UNDER
REGULATION NO. 2081/92
168. The EC asserts that Australia's arguments in relation to this claim are "obscure".
126
Nevertheless, the EC then sets out a categorical statem ent as to what it considers to be the meaning of
TRIPS Article 22.2, but without any argument to show that its view is supported by the actual text of
TRIPS Article 22.2 in accordance with normal interpretive provisions.127

169. Australia's claim is st raightforward: in respect of the registration of an EC-defined GI, the EC
does not provide the legal means for interested par ties to prevent use which misleads the public as to
the geographical origin of a good or use which co nstitutes an act of unfair competition within the
meaning of Paris Article 10 bis. The obligation established by TRIPS Article 22.2 extends to any
situation that concerns
 TRIPS-defined GIs: it is not "concer ned exclusively with the protection of
geographical indications", and a trademark right holder is not necessarily excluded from being a
potential "interested party" within the meaning of TRIPS Article 22.2.128

170. As Australia has previously stated,
129 Paris Article 10 bis(2) provides that an act of unfair
competition is "any act of competition contrary to honest practices in industrial or commercial
matters". "[H]onest practices in industrial or commercial matters" within the meaning of Paris
Article 10bis(2), however, include the notion of honest practices established in international trade.
130
It may be that, having regard to the principle of territoriality and to develo pments in international
trade over time, registration and ongoing protection of a TRIPS-defined GI could constitute an act of
unfair competition within the meaning of Paris Article 10 bis(2). For example, it is entirely possible
that there are products which, while originally based on a European production process, have been
further developed and refined outsi de the European country of orig in and which have subsequently
come to represent the "international" trading standa rd for that product: to register the original
geographic name under Regulation No. 2081/92 in su ch circumstances – notwithstanding that the
product may qualify for registration – could well constitute misleading use or use which constitutes an
act of unfair competition within the meaning of Paris Article 10 bis, even within the EC. Yet the EC
does not provide any effective legal avenue through which such issues can be tested.

171. To comply with its obligation pursuant to TRIPS Article 22.2 in respect of the registration of
an EC-defined GI, a WTO Member must provide th e legal means for interested parties to prevent

126 First Written Submission of the EC, paragraph 411.
127 First Written Submission of the EC, paragraph 412.
128 First Written Submission of the EC, paragraph 412.
129 See Part VII.D above.
130 See, for example, Bodenhausen, page 144, and WIPO's "Model Provisions on Protection Against
Unfair Competition", Exhibit AUS-09.

misleading use or use which constitutes an act of unfair competition within the meaning of Paris
Article 10bis. The EC cannot rely on EC Member State unfair competition law in this regard because,
as the EC explained before the Panel, Community law takes primacy over EC Member State law in
the event of a conflict.

IX. THE EC MEASURE DOES NOT ACCORD TO NATIONALS OR PRODUCTS OF
EACH WTO MEMBER TREATMENT NO LESS FAVOURABLE THAN THAT IT
ACCORDS TO ITS OWN NATIONALS OR TO LIKE PRODUCTS OF DOMESTIC
ORIGIN
172. In its First Written Submission, Australia claime d that the EC measure is inconsistent with the
EC's national treatment obligations pursuant to GATT Article III:4,
131 and TRIPS Articles 2.1
("incorporating" the provisions of Paris Article 2) and 3.1.132

A. T
HE REQUIREMENT FOR THE INVOLVEMENT OF ANOTHER WTO MEMBER GOVERNMENT
CONSTITUTES LESS FAVOURABLE TREATMENT UNDER THE EC MEASURE
173. The EC indicates a number of times that it does not consider the requirement established in
Regulation No. 2081/92 for involvement by anot her WTO Member government in the process of
acquisition or enforcement of an intellectual property right to constitute less favourable treatment.133

174. Australia expressly endorses and adopts Canada's clear and succinct portrayal of the issues
concerning the relationship between WTO Members, the EC, the EC Member States and nationals
raised by the EC's argument.
134 In particular, Australia would like to highlight Canada's statement
that, having regard to the EC's explanation that "t he subject matter of the present dispute falls within
the exclusive competence of the EC, and not of the Member States"135:

… the EC Regulation is the equivalent of a national measure, and that any functions
carried out by EC Member States for the purposes of implementing the EC
Regulation are carried out as sub-national units of the EC. … 136
175. In respect of matters concerning the registra tion of an EC-defined GI under Regulation No.
2081/92, it is treatment at EC level ("the national level") which determines whether the EC has met its
national treatment obligation under each of the TRIPS Agreement , GATT 1994 and the TBT
Agreement. As Australia pointed out in its First Written Submission, 137 any outward appearance of
symmetry of treatment in fact masks a fundamentally different situation. It is a supposed symmetry –
or equality – of treatment that is in fact prem ised on other WTO Members being "sub-national" units
of the EC.

176. Thus, wherever the EC relies on an assertion of ensuring "equal treatment"
138 of EC and non-
EC nationals and products as a defence to a claim of a national treatment violation, the EC has not
rebutted the prima facie case made by Australia.

131 First Written Submission of Australia, paragraphs 157-180.
132 First Written Submission of Australia, paragraphs 181-206.
133 See, for example, First Written Submission of the EC, paragraphs 128-129, 145-146 and 207.
134 Third Party Oral Statement of Canada, paragraphs 11-17.
135 First Written Submission of the EC, paragraph 255.
136 Third Party Oral Statement of Canada, paragraph 15.
137 See, for example, paragraph 174.
138 See, for example, First Written Submission of the EC, paragraphs 129, 146 and 207.

B. I
N RESPECT OF PRODUCTS BEARING – OR ELIGIBLE TO BEAR – AN EC-DEFINED GI, THE EC
MEASURE ACCORDS TO THE PRODUCTS OF OTHER WTO MEMBERS TREATMENT LESS
FAVOURABLE THAN THAT IT ACCORDS TO LIKE PRODUCTS OF NATIONAL ORIGIN , CONTRARY
TO ARTICLE III:4 OF GATT 1994
177. The EC's major defence to Australia's clai m is that Regulation No. 2081/92 "does not impose
a condition of reciprocity and systemic equivalen ce for the registration of geographical indications
from other WTO Members". 139 Together with the EC's attempte d explanations that the requirements
of paragraphs 1 and 3 of Ar ticle 12 of Regulation No. 2081/92#3 do not apply to other WTO
Members,140 these statements in effect constitute an ad mission by the EC that the equivalence and
reciprocity conditions of those provisions are inconsistent with the EC's WTO obligations.

178. Thus, to the extent that the Panel considers that the EC's explanations of the meaning of
Articles 12.1 and 12.3 of Regulation No. 2081/92 are not sustainable on the basis of the meaning,
context and aims of those provisions in accordance with the rules of interpretation of EC law, the EC
has not rebutted the prima facie case made by Australia.

179. Moreover, should the Panel consider that Article 12.2 of Regulation No. 2081/92 does not
constitute a technical regulation within the meaning of Annex 1.1 of the TBT Agreement,
141 Australia
notes that Article 12.2 nevertheless accords treatme nt less favourable to im ported products bearing –
or eligible to bear – an EC-defined GI than that accorded to like products of EC origin bearing – or
eligible to bear – an EC-defined GI, inconsistently with GATT Article III:4. In the circumstances in
which it applies, Article 12.2 mandates that the imported like product bearing the later, or second,
registered EC-defined GI also carry a country of or igin label. On the other hand, Article 6.6 does not
mandate such a requirement where the later, or seco nd, registered EC-defined GI is a like product of
domestic origin.

180. The EC seems – in the alternative – to be invoking GATT Article XX(d) as a justification in
respect of at least some of Australia's GATT Article III:4 claim.
142

181. However, despite the fact that it bears the burden of proof in invoking such a defence,
143 the
EC has not attempted to s how that Regulation No. 2081/92 could be justified under GATT
Article XX(d). Australia notes that the findings of the Appellate Body in the Korea – Beef , US –
Shrimp and US – Gasoline disputes provide guidance as to the tests which would have to be met for
an affirmative defence pursuant to GATT Article XX(d) to be available to the EC:

• firstly, for the measure at issue to be provi sionally justified, that the measure is
designed "to secure compliance with laws or regulations which are not inconsistent
with the provisions of" GATT 1994 , and that the measure is "necessary" to secure
such compliance; and
• secondly, further appraisal of the measure under the chapeau of GATT Article XX.

139 First Written Submission of the EC, paragraph 203.
140 First Written Submission of the EC, paragraph 66.
141 See Parts X.A and X.B below.
142 First Written Submission of the EC, paragraphs 190 and 224-226.
143 US – Woven Shirts and Blouses, Appellate Body Report, page 14.

C. IN RESPECT OF APPLICATIONS FOR – OR OBJECTIONS TO – THE REGISTRATION OF AN EC-
DEFINED GI, THE EC MEASURE DOES NOT ACCORD NATIONAL TREATMENT TO NATIONALS OF
OTHER WTO MEMBERS, CONTRARY TO ARTICLES 2.1 ("INCORPORATING" ARTICLE 2 OF THE
PARIS CONVENTION (1967)) AND 3.1 OF THE TRIPS AGREEMENT
182. In its attempt to rebut Australia's claims under these provisions, the EC has repeatedly ignored
or confused the basis of Australia's claims. For example, the EC asserts that Australia has made "no
attempt to establish that Regulati on 2081/92 discriminates between nationals of the EC and nationals
of other WTO members" 144 (emphases in original) . On the other hand, 10 of the first 11 of the EC's
own headings to describe the claims being made – including those by Australia – include the word
"national", "rightholder" and/or "person".

183. Once again, the EC relies primarily on the de fence that the EC does not apply conditions of
reciprocity and equivalence to the registration of an EC-defined GI from another WTO Member.
Thus, to the extent that the Panel considers that the EC's explanations of the applicability of
Articles 12.1 and 12.3 of Regulation No. 2081/92 are not sustainable on the basis of the meaning,
context and aims of those provisions having regard to the rules of interpretation of EC law, the EC has
not rebutted the prima facie case made by Australia.

184. However, Australia notes the surprising stat ements by the EC that the conditions for the
registration of EC-defined GIs under Regul ation No. 2081/92 do not depend on nationality
145 and that
"[w]hether the area to which a geographic [sic] indication is related is located inside the EC or outside
is in no way linked to the question of the nati onality of the producers of the product concerned". 146
The reality is that persons with an interest in securing the registration of the name of a geographical
area as an EC-defined GI will overwhelmingly be nationals of the WTO Member in which that
geographical area is located. Accordingly, Au stralia expressly endorses and adopts New Zealand's
very clear and concise explanation of why the EC's interpretation would render meaningless a WTO
Member's national treatment obligation:

If the EC's interpretation of 'nationals' were to prevail, then even if the EC Regulation
provided that only geographical indications lo cated in the EC could be registered, the
national treatment obligations would not be vi olated: in theory, the nationals of any
country could live in the EC and register EC geographical indications. But this would
mean that persons interested in registering geographical indications located outside
the EC would not be able to do so. They would be disadvantaged in the EC market.
… [A]ccepting the EC's interpretation of 'n ationals' would gut the national treatment
obligation under the TRIPS Agreement of any value with respect to geographical
indications.
147
185. Further, the EC argues that the Panel should rej ect Australia's claim of a violation of the EC's
TRIPS and Paris Convention national tr eatment obligations in respect of the registration of more than
120 EC-defined GIs under the normal registration pro cess. The EC's arguments concerning versions
of Regulation No. 2081/92 no longer in force and registrations made thereunder which continue in
effect are addressed in Part II.A of this Submission above. The EC also asserts – without any
supporting argument – that the individual registratio ns of those more than 120 EC-defined GIs were
not in violation of the EC's national treatme nt obligations. The EC makes this assertion
notwithstanding: that a right of objection was availa ble to EC nationals in respect of these more than
120 EC-defined GIs that was not available to natio nals of other WTO Members; and the express

144 First Written Submission of the EC, paragraph 110.
145 First Written Submission of the EC, paragraphs 123-126.
146 First Written Submission of the EC, paragraph 125.
147 Third Party Oral Statement of New Zealand, paragraph 9.

statement of the intent of Regulation No. 692/2003 in Recital (10) to grant a right of objection to
nationals of other WTO Members on the same terms as the right available to EC nationals.148 The
EC has not rebutted the prima facie case made by Australia.

D. C
ONCLUSION
186. The EC has not rebutted the prima facie case made by Australia that the EC measure is
inconsistent with the EC's national treatment ob ligations pursuant to GATT Article III:4 and TRIPS
Articles 2.1 ("incorporating" the provisions of Paris Article 2) and 3.1.

187. Further, as a consequence of the EC measu re's inconsistency with TRIPS Articles 2.1
("incorporating" by reference Paris Article 2) and 3. 1 in respect of the registration of EC-defined GIs,
the EC measure is inconsistent with the EC's ob ligations pursuant to Articles 1.1 and 1.3 of the TRIPS
Agreement.

X. THE EC MEASURE IS, IN PART, A TECHNICAL REGULATION THAT ACCORDS
LESS FAVOURABLE TREATMENT TO IMPO RTED PRODUCTS THAN TO LIKE
DOMESTIC PRODUCTS AND CREATES UNNECESSARY OBSTACLES TO
INTERNATIONAL TRADE, BEING MORE TRADE-RESTRICTIVE THAN
NECESSARY TO FULFIL A LEGITIMATE OBJECTIVE, TAKING ACCOUNT OF
THE RISKS NON-FULFILMENT WOULD CREATE
188. In its First Written Submission, Australia clai med that, to the extent that Article 12.2 of
Regulation No. 2081/92 is a mandatory labelling provision that applies to imported products bearing –
or eligible to bear – an EC-defin ed GI that is identical to an EC-defined GI from within the EC
already registered under the Regulation for a like domestic product and provides no discretion for the
EC to apply the provision in such a way as to avoid less favourable treatment to the imported product,
the EC measure is a technical regulation that is inconsistent with TBT Article 2.1.

189. Further, Australia claimed th at, to the extent that Articles 4, 10 and 12.1 of Regulation No.
2081/92 establish a mandatory requirement for another WTO Member to have in place in all
circumstances an inspection structure consistent with the requirements of Article 10 of the Regulation,
the EC measure is a technical regulation that is more trade restrictive th an necessary to fulfil a
legitimate objective, taking account of the risks non-fulfilment would create, contrary to TBT
Article 2.2.

A. T
HE EC MEASURE IS , IN PART , A TECHNICAL REGULATION WITHIN THE MEANING OF
ANNEX 1.1 OF THE TBT AGREEMENT
190. As set out by both Australia and the EC, 149 the Appellate Body has found that the definition of
a "technical regulation" in TBT Annex 1.1 establishes three criteria. Australia has argued that
Article 12. 2 – and Articles 4 and 10 read toge ther – of Regulation No. 2081/92 are technical
regulations in accordance with the TBT Annex 1.1 definition. In response, the EC argues that none of
the three criteria are met with respect to Article 12.2 of the Regulation and, in the case of Articles 4
and 10 of the Regulation, the EC argues that two of the criteria are not met and does not address the
third criterion.
150

148 Exhibit COMP-1.h.
149 First Written Submission of Australia, paragraphs 209-224, and First Written Submission of the EC,
paragraph 442.
150 First Written Submission of the EC, paragraphs 443-468.

(i) Article 12.2 – and Articles 4 and 10 read toge ther – of Regulation No. 2081/92 apply to an
identifiable product or group of products
191. The EC argues that Article 12.2 of Regulation No. 2081/92 applies only to cases of
homonymous protected names from the EC and another WTO Memb er and that the Regulation does
not allow identification of products affected by the requirement in Article 12.2. 151 Australia does not
contest that Article 12.2 of Regulation No. 2081/92 applies only to a specific class of protected
names. These names, however, do not exist in isol ation, but with regard to specific agricultural
products or foodstuffs for which the homonymous name s have been registered. Therefore, the EC's
argument that Article 12.2 applies only to names, an d not to the underlying product that those names
identify, is not sustainable.

192. The EC argues that "[t]he Regulation does not allow to identify the products [sic] which
might be affected by this requirement. Accordi ngly, Article 12.2 does not apply to identifiable
products".152 I n EC – Asbestos , the Appellate Body said: "… nothing in the text of [the TBT
Agreement] suggests that those products need be named or otherwise expressly identified in a
'technical regulation'". 153 (emphasis in original) The Appellate Body affirmed that finding in EC –
Sardines and added: "… a product does not necessarily have to be mentioned explicitly in a document
for that product to be an identifiable product. Identifiable does not mean expressly identified". 154
(emphases in original) Article 12.2 of Regulation No. 2081/92 does not expr essly identify any
product. Nonetheless, it does apply to identifia ble products: any imported product bearing – or
eligible to bear – an EC-defined GI that is iden tical to an EC-defined GI already being protected
within the EC under Regulation No. 2081/92. This is the precise distinction made by the Appellate
Body.

193. Australia notes that the EC did not address the question of whether Articles 4 and 10 of
Regulation No. 2081/92 read together apply to an identifiable product or group of products.

194. The EC has not rebutted Australia's prima facie case that Article 12.2 – and Articles 4 and 10
read together – of Regulation No. 2081/92 apply to an identifiable product or group of products within
the meaning of the definition of a technical regulation in TBT Annex 1.1.

(ii) Article 12.2 – and Articles 4 and 10 read together – of Regulation No. 2081/92
mandate compliance with product charact eristics or their related processes and
production methods
195. The EC argues
155 that Article 12.2 – and Articles 4 and 10 read together – of Regulation No.
2081/92 are not mandatory. The EC argues – and Austra lia does not dispute – that registration of an
EC-defined GI under the Regulation is not a precond ition for the marketing of a product in the EC.
Similarly, the EC argues – and Australia does not dispute – that compliance with Articles 12.2 – and
Articles 4 and 10 read together – is not mandatory for placing a product on the market in the EC.

196. However, registration under Regulation No. 2081/92 is mandatory for trading an imported
product eligible to bear an EC-defined GI under the same competitive conditi ons as those afforded a
product of EC origin for which an EC-defined GI h as been registered. As the EC has said, "Article
12.2 is a condition for the registra tion of a geographical indication",
156 and "[t]he existence of

151 First Written Submission of the EC, paragraphs 445-447.
152 First Written Submission of the EC, paragraph 447.
153 EC – Asbestos, paragraph 70.
154 EC – Sardines, paragraph 180.
155 First Written Submission of the EC, paragraphs 453-457 and 467-468.
156 First Written Submission of the EC, paragraph 456.

inspection structures constitutes a condition for registration".
157 Without registration, an imported
product does not benefit from protection against unaut horised use of an EC-defined GI, nor does it
benefit from the reputation of superior quality enge ndered by registration of an EC-defined GI under
the Regulation.

197. Accordingly, the EC has not rebutted Australia's prima facie case that Article 12.2 – and
Articles 4 and 10 read together – of Regulati on No. 2081/92 mandate compliance with product
characteristics or their related processes and prod uction methods for those products bearing – or
eligible to bear – an EC-defined GI.

(iii) Article 12.2 – and Articles 4 and 10 read together – of Regulation No. 2081/92 lay
down product characteristics or their related processes and production methods
198. The EC states that Article 12.2 of Regulation No. 2081/92
 "does not contain a specific
labelling requirement for any specific product" but ra ther that it "sets out merely the conditions under
which a geographical indication will be registered in a situation where there are homonyms from the
EC and a third country". 158 Australia notes that the two statements are not mutually exclusive:
indeed, one of the conditions is a labelling requirement.

199. The EC asserts that Article 12.2 of Regula tion No. 2081/92 does not itself impose a labelling
requirement, but that "the requirement to indicat e the country of origin will be among the labelling
details which must be indicated in the pr oduct specification" required in accordance with
Article 4.2(h) of the Regulation.
159 This argument is not sustainable. Article 12.2 of the Regulation,
and in particular its second sentence – "[u]se of such names shall be authorised only if the country of
origin of the product is clearly and visibly indicated on the label" – clearly imposes a labelling
requirement on an imported product bearing – or elig ible to bear – an EC-defined GI which is
identical to an EC-defined GI which has already been register ed under the Regulation. This
requirement is unaffected by the existence el sewhere in the Regulation of other labelling
requirements.

200. The argument is unfounded on other grounds. A label within the meaning of Article 12.2 of
Regulation No. 2081/92 is something that attaches to a product or to the packaging of a product to
describe the content or nature of the product. Th e EC's argument that "the labelling requirement does
not relate to a product"
160 is unsustainable: it renders the concept of a label meaningless.

201. The EC argues that Articles 4 and 10 read together
 do not lay down product characteristics
because "the purpose of Article 4(g) [sic] in conjunction with Article 10 is not to lay down product
characteristics, but to ensure conformity with the product specification". 161 However, the EC ignores
the actual arguments made by Australia: that is, th at a technical regulation within the meaning of the
TBT Agreement includes a document which may generally be considered to set out a regular sequence
of actions (that is, a process) directed at a specified purpose or the way in which something is
produced and which is connected to one or more product characteristics.
162

202. A measure may lay down related processes within the meaning of a technical regulation, even
if it has a different or additional purpose. The purpose of itself is not conclusive of the proper
characterisation of a measure. In Japan – Alcoholic Beverages II and in US – CDSOA, the Appellate

157 EC response to Question 61 from the Panel following the first substantive meeting, paragraph 136.
158 First Written Submission of the EC, paragraph 449.
159 First Written Submission of the EC, paragraph 450.
160 First Written Submission of the EC, paragraph 451.
161 First Written Submission of the EC, paragraph 461.
162 First Written Submission of Australia, paragraph 218, text in brackets added.

Body considered issues concerning legislative inte nt. In each case, the Appellate Body considered
that it was not necessary for the Panel to inquire into the intent of the respective legislatures: the key
determinant was whether the measures as applie d were consistent with the relevant WTO
obligations.163

203. The EC's argument that trademark laws, such as those implementing certification marks
systems, do not appear so far to have been considered as falling under the TBT Agreement164 is neither
conclusive of, nor relevant to, the issue at hand. Assessing whether a measure is a technical
regulation within the meaning of the TBT Agreement is a threshold issue for the application of that
Agreement: it is not determinative of whether a WT O Member has violated its obligations under that
Agreement. Moreover, the Appellate Body has several times noted the generally cumulative nature of
a WTO Member's obligations, consistent w ith the integrated, binding nature of the WTO Agreement
pursuant to Article II.2 of that Agreement.
165

204. Accordingly, the EC has not rebutted Australia's prima facie case that Article 12.2 – and
Articles 4 and 10 read together – of Regulation No. 2081/92 lay down product characteristics or their
related processes and production methods.

(iv) Conclusion
205. The EC has not rebutted Australia's prima facie case that, in respect of imported products
bearing – or eligible to bear – an EC-defined GI , the EC measure in relevant part applies to an
identifiable product or group of pr oducts, lays down product characteristics or their related processes,
and mandates compliance. The EC measure is therefore, in relevant part, a technical regulation within
the meaning of TBT Annex 1.1.

B. I
N RESPECT OF PRODUCTS BEARING – OR ELIGIBLE TO BEAR – AN EC-DEFINED GI, THE EC
MEASURE ACCORDS TO THE PRODUCTS OF OTHER WTO MEMBERS TREATMENT LESS
FAVOURABLE THAN THAT IT ACCORDS TO LIKE PRODUCTS OF NATIONAL ORIGIN , CONTRARY
TO ARTICLE 2.1 OF THE TBT AGREEMENT
206. Australia claims that, to the extent that Ar ticle 12.2 of Regulation No. 2081/92 is a mandatory
labelling provision that applies to imported products bearing – or eligib le to bear – an EC-defined GI,
it is a technical regulation that accords less favour able treatment to imported products than to like
domestic products, contrary to TBT Article 2.1.

207. Once again, the EC has overlooked or confused the arguments put forward by Australia. In
fact, Australia did not argue that "the jurispr udence concerning Article III GATT can simply be
transposed to Article 2.1 TBT Agreement, for in stance with respect to the likeness of products",
166
notwithstanding that the EC itself has sought to transpose its arguments under GATT Article III:4 in
seeking to rebut Australia's claim of a national treatment violation under the TBT Agreement .167
Rather, Australia suggested – consistent with previous findings of the Appellate Body – that "previous
consideration of GATT Article III: 4 can properly be looked to for clarification of the national
treatment obligation in TBT Article 2.1".168

163 Japan – Alcoholic Beverages II, pages 27-28, and US – CDSOA, paragraph 259.
164 First Written Submission of the EC, paragraph 465.
165 See, for example, Korea – Dairy Safeguard, paragraph 75.
166 First Written Submission of the EC, paragraph 473.
167 First Written Submission of the EC, paragraph 470.
168 First Written Submission of Australia, paragraph 226.

208. In any case, in the context of the present disput e, it is sufficient to consider the issue of like
product within the context of TBT Article 2.1 in term s of basic agricultural products such as apples or
pears bearing – or eligible to bear – an EC-defin ed GI. Australia submits that, notwithstanding the
EC's assertion concerning the "important structural differences" between the TBT Agreement and
GATT 1994 ,
169 an apple from Australia bearing – or eligib le to bear – an EC-defined GI is like
product to an apple from within the EC bearing – or eligible to bear – an EC-defined GI.

209. The EC argues that Article 12.2 of Regula tion No. 2081/92 "does not treat foreign and EC
geographical indications differently".
170 As set out in Part IV.D above, the EC's explanations of the
meaning of Article 12.2 of the Regulation are not sust ainable. In circumstances where an application
for the registration of an EC-defined GI relates to an area in another WTO Member and is identical to
an existing registered EC-defined GI relating to an area within the EC, Article 12.2 mandates that the
product bearing the later, or second, registered EC-def ined GI also carry a country of origin label.
Conversely, Article 6.6 of the Regulation does not mandate this requirement in circumstances where
the later, or second, registered EC-defined GI is also from within the EC.

210. The EC argues that marks of origin are not s ubject to the national treatment obligation of TBT
Article 2.1 because they are governed by GATT Article IX, which imposes an MFN obligation
only.171 The EC argues that if Article 12.2 of Regulation No. 2081/92 is a technical regulation, "this
should not have the effect of rendering the specific provision of Article IX:1 GATT useless".172

211. Australia recognises that GATT 1994 and the TBT Agreement have different purposes and
orientations. Indeed, Australia notes that the Appellate Body said in EC – Asbestos: "… although the
TBT Agreement is intended to 'further the objectives of GATT 1994', it does so through a specialised
legal regime that applies solely to a limite d class of measures. For these measures, the TBT
Agreement imposes obligations on Members that seem to be different from, and additional to, the
obligations imposed on Members under the GATT 1994"173 (emphases in original).

212. Having regard to those findings of the Appella te Body, even if the effect of GATT Article IX
is to impose only an MFN obligation with regard to marks of origin and therefore to exclude the
application of GATT Article III, Australia submits this does not mean that TBT Agreement obligations
(such as that contained in TBT Article 2.1) do no t apply to measures concerning marks of origin if
those measures are "technical regulations".

213. Finally, Australia notes that the General interpretive note to Annex 1A of the WTO Agreement
provides that, in the event of conflict between a provision of GATT 1994 and a provision of another
Annex 1A Agreement, the latter will prevail to the ex tent of the conflict. The EC suggests that, if
Article 12.2 of Regulation No. 2081/92 is considered to be a technical regulation and thus subject to a
national treatment obligation under the TBT Agreement , GATT Article IX:1 would be rendered
"useless". Australia submits that any such conflict is governed by the General interpretive note : to
the extent that GATT Article IX:1 conflicts with a national treatment obligation in another Annex 1A
agreement, the obligation in the latter agreement w ill prevail. The existence of GATT Article IX:1
cannot be used to deny the applicability of TBT Ar ticle 2.1 to a technical regulation dealing with
marks of origin.

214. Accordingly, the EC has not rebutted the prima facie case made by Australia.

169 First Written Submission of the EC, paragraph 474.
170 First Written Submission of the EC, paragraph 476.
171 First Written Submission of the EC, paragraph 481.
172 First Written Submission of the EC, paragraph 481.
173 EC – Asbestos, paragragh 80.

C. IN RESPECT OF PRODUCTS BEARING – OR ELIGIBLE TO BEAR – AN EC-DEFINED GI, THE EC
MEASURE IS MORE TRADE RESTRICTIVE T HAN NECESSARY TO FULFIL A LEGITIMATE
OBJECTIVE, TAKING ACCOUNT OF THE RISKS NON -FULFILMENT WOULD CREATE , CONTRARY
TO ARTICLE 2.2 OF THE TBT AGREEMENT
215. The EC makes a number of arguments in respon se to Australia's claim under TBT Article 2.2.

216. The EC says that the existence of inspection structures is only required with respect to the
specific product for which protection is sought.174 Australia notes that it has not contested this issue.

217. The EC says that Regulation No. 2081/92 does not determine the specific design of the
inspection structures.
175 Yet Article 10.3 of the Regulatio n expressly provides that inspection
structures "must … have permanently at their disposal the qualified staff and resources necessary to
carry out inspection of agricultural products and foods tuffs bearing a protected name". In Australia's
view, a requirement that such an inspection struct ure "must" have permanently at its disposal the
"necessary" qualified staff mandates a specific design feature: moreover, it mandates a specific
design feature that does not admit of the possibility that use of temporary staff – for example, during
harvest season – may be all that is necessary to provide the required level of assurance. In addition
and in any case, Regulation No. 2081/92 – whether through Article 10 or another provision – does not
admit of the possibility that no inspection structure may be required at all in some circumstances.

218. Further, Article 12a.2(b) of Regulation No. 2081/92 requires that a WTO Member submit to
the Commission, among other documents , a "declaration that the struct ures provided for in Article 10
are established on its territory". In Australia's view , this is a clear statement that a specific type of
structure must be established, and that alternativ e mechanisms which may perform the same function
but are not "inspection structures", e.g. systems of laws, are excluded. Thus, the express terms of the
Regulation preclude any leeway insofar as the type of inspection structure required of another WTO
Member is concerned.

219. The EC asserts that Australia's "real concer n is not with the specific requirements for
inspection structures set out in Regulation 2081/92, but rather that it considers that no inspection
structures at all should be required".
176 Contrary to the EC's assertion, Australia has not contested –
and does not contest – that some type of comp liance verification mechanism may be necessary in
most cases to ensure that a product bearing an EC-defined GI complies with its product
specification.177 Australia does argue, however, that the EC model "one size fits all" inspection
structure model may not be the only mechanism by which the EC's required degree of assurance can
be provided in all circumstances. Further, Australia argues that the EC measure does not allow for the
possibility of any inspection structure being unnecessary. In this context, Australia notes the EC's
puzzling argument that "a monopolistic situation might require inspections even more strongly". 178
Even if so, the EC has not explained why other consumer protection mechan isms could not provide
the necessary degree of assurance. Nor has the EC explained how an EC model inspection structure
would be necessary in all circumstances to preven t EC consumers being misled or deceived, for
example, in the event that the misleading or decep tive conduct at issue concerns product from a third
country.

174 First Written Submission of the EC, paragraphs 486-487.
175 First Written Submission of the EC, paragraphs 488-491.
176 First Written Submission of the EC, paragraph 492.
177 Indeed, Australian law provides for a verification mechanism to be a part of the requirements for
registration of a certification trademark.
178 First Written Submission of the EC, paragraph 497.

220. The EC asserts that the inspection struct ure requirement is "necessary to achieve the
legitimate objectives of Regulation 2081/92".
179 However, having regard to normal interpretive
principles, for a measure to be "necessary" unde r TBT Article 2.2, no other, less restrictive,
alternatives can exist. The EC has not explained why the alternative systems suggested by Australia –
alone or in combination – could not in any circ umstances provide the same degree of assurance as the
EC's system for compliance verification and/or enforcement, or for the prevention of deceptive
practices. Nor has the EC explained the basis fo r the effective underlying assumption that that all
other such systems in place in other WTO Members are deficient in all circumstances compared to the
EC's system.

221. The EC has argued that the discretion given to the EC under TRIPS Article 1.1 to implement
in its law more extensive protection than is required by the TRIPS Agreement , provided that such
protection does not contravene the provisions of th at Agreement, "cannot be limited on the basis of"
TBT Article 2.2.
180 Yet the EC offers no argument in support of its view. The EC does not offer any
explanation of how its view is consis tent with the express provisions of the TRIPS Agreement or with
the object and purpose of that Agreement, including as expressed in the first preambular clause that
"measures and procedures to enforce intellectual pr operty rights do not themselves become barriers to
legitimate trade". Nor does the EC offer any explan ation of how its view is consistent with the
provisions of Article II.2 of the WTO Agreement in relation to the integrated, binding nature of the
covered agreements.181

222. Australia notes that the EC has not contested Australia's contention that Articles 4, 10 and
12.1 of Regulation No. 2081/92 read together are trade restrictive because their effect is to limit the
opportunities for products from other WTO Members otherw ise eligible to bear an EC-defined GI to
those cases where the imported product originates in a WTO Member that has an Article 10-type
inspection structure in place.182 Thus, Australia understands that the EC does not dispute this issue.

223. Further, the EC has not rebutted Australia 's contention that Articles 4, 10 and 12.1 of
Regulation No. 2081/92 are more trade restrict ive than necessary because they establish an
irrebuttable presumption that no other system that may exist in another WTO Member could in any
circumstance provide the same degree of assu rance as the EC-mandated inspection structure. 183 Nor
has the EC rebutted Australia's contention that Ar ticles 4, 10 and 12.1 of the Regulation do not allow
for the possibility of any inspection structure being unnecessary.184

224. As a consequence, the EC has not rebutted the prima facie case made by Australia that – to
the extent that Articles 4, 10, and 12.1 of Regulation No. 2081/92 manda te that another WTO
Member have in place in all circumstances an insp ection structure as set out in Article 10 of the
Regulation – the EC measure is more trade restrictiv e than necessary to fulf il a legitimate objective,
taking account of the risks non-fulfilment would create.

D. C
ONCLUSION
225. The fact that a measure is intended to impl ement an intellectual property right does not of
itself remove that measure – or relevant aspects of that measure – from the scope of the TBT
Agreement. The EC has not rebutted the prima facie case made by Australia that the EC measure is,

179 First Written Submission of the EC, paragraph 500.
180 First Written Submission of the EC, paragraph 499.
181 See Australia's response to Question 55 from th e Panel following the first substantive meeting with
the parties.
182 First Written Submission of Australia, paragraph 251.
183 First Written Submission of Australia, paragraphs 252-254.
184 First Written Submission of Australia, paragraph 255.

in part, a technical regulation. Similarl y, the EC has failed to rebut Australia's prima facie case that
the EC measure – to the extent that it is a tec hnical regulation – is inconsistent with the EC's
obligations under TBT Articles 2.1 and 2.2.

XI. AS A CONSEQUENCE, THE EC HAS NOT ENSURED THE CONFORMITY OF ITS
LAWS, REGULATIONS AND ADMINISTRATIVE PROCEDURES WITH ITS WTO
OBLIGATIONS
226. The EC has not rebutted Australia's prima facie case that the EC measure at issue in this
dispute is inconsistent with:

• Articles 2.1 ("incorporating" Articles 2, 10bis(1) and 10ter(1) of the Paris Convention
(1967)), 3.1, 16.1, 22.2 24.5, 41.1, 41.2, 41.3 and/or 42 of the TRIPS Agreement;
• Article III:4 of the GATT 1994; and/or
• Articles 2.1 and/or 2.2 of the TBT Agreement.
227. As a consequence, the EC has not given effect to the provisions of the TRIPS Agreement ,
contrary to Articles 1.1 and 1.3 of that Agreement.

228. Further, as a consequence of its failure to comply with its obligations pursuant to the TRIPS
Agreement, the GATT 1994 and the TBT Agreement , the EC has not ensured the conformity of its
laws, regulations and administrative procedures w ith its obligations as provided in the annexed
Agreements, contrary to Article XVI.4 of the WTO Agreement.

229. Australia respectfully reiterates its request th at the Panel make the findings referred to above,
and recommend that the EC bring the EC measure in to conformity with its WTO obligations. In
addition, Australia reiterates its request that the Pa nel find that, by its inconsistency with the EC's
WTO obligations, the EC measure nullifies or impa irs the benefits accruing to Australia under the
TRIPS Agreement, the GATT 1994, the TBT Agreement and the WTO Agreement.

ANNEX A-6

OPENING STATEMENT OF AUSTRALIA
SECOND SUBSTANTIVE MEETING

(11 August 2004)

1. The EC has not rebutted the prima facie case made by Australia with respect to the
inconsistencies of the EC's measure with the EC's WTO obligations. Instead, the EC has made a
number of arguments that are unsubstantiated, incorrect , or simply irrelevant with regard to the actual

claims and arguments put forward by Australia.

2. Our statement today will therefore recap some of the key elements of our claims and
arguments, particularly to highlight areas where the EC has implicitly or explicitly accepted the
validity of our arguments. We note that this statement forms a part
 of Australia's argumentation in
this dispute – it is not intended as a summary of our entire case. 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.

THE MEANING OF REGULATION NO. 2081/92
3. The EC argues that "… due account must … be taken of the meaning which is given to the
measure in question by the authorities of the Member concerned".
1 In support of its argument, the EC
says that the Panel in US – Section 301 found that "considerable deference must be given to the
explanations given by the Member concerne d as to the meaning of its own measure". 2 In fact, the
EC's characterisation of the Panel's findings in that dispute is not accurate. What the Panel actually
said was that "… any Member can reasonably expect th at considerable deference be given to its views
on the meaning of its own law". 3 There is a considerable difference in the meaning of deference that
must be given and deference that can be "reasonably expected".

4. In the US – Section 301 dispute, the Panel found as it did on the basis of an interpretation of
those provisions that was legally authoritative in domestic law. In the present case, however, the EC
has no such legally authoritative interpretation of th e meaning of the provisions at issue to offer to
show that Australia's interpretation of the meaning of Regulation 2081/92 in accordance with the EC's
own rules of interpretation is flawed.

5. Australia has demonstrated the proper meani ng of the provisions of Regulation 2081/92 in the
context of EC domestic law. Australia has demonstr ated the meaning based on a consistent pattern of
statements by authorised EC representatives over many years, including in the WTO TRIPS Council
and in WIPO; an official public document issued by the European Commission on the express intent
of the proposed amendments to Regulation 2081/92 eventually adopted in Regulation 692/2003; clear
statements about the meaning of Regulation 2081/92 and of the intent of the proposed amendments on
the part of the Committee of the European Parlia ment with primary responsibility for the subject
matter; the express provisions of the preambular recitals to Regulation 692/2003 itself; the ECJ's
rules of interpretation, under which it is necessary to consider wording, context and aims in
interpreting provisions of Community law; and relevant ECJ jurisprudence.

1 Second Written Submission of the EC, paragraph 8.
2 Second Written Submission of the EC, paragraph 8.
3 United States – Sections 301-310 of the Trade Act of 1974 , Report of the Panel, WT/DS152/R,
paragraph 7.18.

6. The EC has not offered any explanation of the meaning of the provisions of
Regulation 2081/92 in its domestic law that reconciles its latest view with these facts. On the other
hand, the EC discusses in detail ECJ jurisprudence which addresses only some of the issues in this
dispute – and which in any case:

• is consistent with the wider ECJ jurisprudence identified by Australia; and
• does not invalidate the meaning of the provi sions of the Regulation at issue as put
forward by Australia.
7. The EC asks that the Panel – and the complain ing parties – accord deference to its statements
before the Panel on the meaning of Regulation 2081/ 92. At the same time, however, the EC admits
that its statements have no legal significance in Community law.

8. The EC asks that the Panel – and the complain ing parties – ignore all other statements by
authorised EC representatives as to the proper m eaning of Regulation 2081/92. In doing so, however,
the EC offers no credible explanation as to:

• why the explanation it offers before the Panel as to the meaning of the Regulation is more
authoritative than the explanations offered by other EC representatives or in an official
European Commission press release;
• what would prevent the EC from reverting to those previous explanations of the meaning
of the Regulation at some future time; or
• how other WTO Members can be assured that an y future rejection of an application for
the registration of an EC-defined GI w ould not be based on the application of
Articles 12.1 and 12.3 of the Regulation to them.
9. The EC's arguments in reply are summed up in the statement that "… the Panel should not
assume that the institutions of the EC, and in par ticular the European Court of Justice, will ignore
WTO obligations in the interpretation and application of Regulation 2081/92".
4 No one is suggesting
the ECJ will ignore the EC's WTO obligations. However, the Regulation itself and the ECJ's
approach to interpretation as stated in its jurisp rudence provides incontrovertible evidence that the
EC's latest view of the Regulation is not sustainable.

TRADEMARKS
TRIPS
 ARTICLE 16.1
10. Australia has claimed that – in respect of the registration of an EC-defined GI – the EC
measure diminishes the legal protection for trademar ks, contrary to TRIPS Article 16.1. The EC
measure does not grant to the owner of a regist ered trademark the exclusive right to prevent
confusingly similar or identical use of a sign in th e course of trade for similar or identical goods. Nor
does the EC measure provide for a presumption of a likelihood of confusion in the case of use of an
identical sign for identical goods. Moreover, to the extent that the Article 15 decision-making process
constitutes the initial and only means through which the owner of a trademark can seek to exercise –
in respect of the registration of an EC-defined GI – the trademark rights required to be granted by the
TRIPS Agreement, the EC measure:

• does not ensure that an objection from a trademark owner is admissible in such
circumstances; and

4 Second Written Submission of the EC, paragraph 26.

• does not ensure that such an objection from a trademark owner will be considered in the
Article 15 decision-making process.
11. In response, the EC has asserted:

• that Article 14.3 of Regulation 2081/92 prevents the registration of EC-defined GIs that
would result in a likelihood of confusion with an earlier trademark; or
• that TRIPS Articles 17, 24.3 or 24.5 somehow justify the co-existence of TRIPS-defined
GIs and earlier trademarks.
12. As Australia has addressed most of the EC's supporting arguments in its Written Rebuttal
Submission, I will focus here on the arguments made by the EC in its Written Rebuttal Submission.

Article 14.3 of Regulation 2081/92
13. Regulation 2081/92 provides that an EC-defined GI shall not be registered where – in the
light of a trademark's reputation and renown and the length of time it has been used – registration of
that EC-defined GI "is liable to mislead the consumer as to the true identity of the product".

14. In Australia's view, the EC's attempts to s uggest that Article 14.3 of the Regulation does what
the EC says it does is an implicit admission by the EC that nowhere else does the Regulation even
attempt to provide trademark right holders with the rights required to have been granted to them under
TRIPS Article 16.1.

15. However, "mislead" is used in Article 14.3 in the sense of causing a consumer to mistake
 the
true identity of the product, rather than as a syn onym of "confuse" in the sense of causing a consumer
to be puzzled about the true identity of the product. It is therefore simply not sustainable for the EC to
argue that "mislead" and "confuse" mean the same thing.

16. The EC argues that Australia has misinterpret ed Article 14.3 of Regulation 2081/92 and that
Australia's reading of the provision "is unsupported by the ordinary meaning of its terms". The EC
also argues that Australia's interpretation "is neither workable nor reasonable in practice and cannot be
reconciled with the obligations imposed upon the EC authorities by other provisions of
Regulation 2081/92".
5

17. However, Australia's interpre tation of Article 14.3 of the Regul ation is fully consistent with
the relevant rules of interpretation of EC law. It considers the wording, context and aims of the
provision, in accordance with the ECJ's well-establis hed case law. Although the EC claims that the
ECJ would not ignore the EC's obligations, the ECJ itself has implemented a test that requires express
reference to an international agre ement or its provisions. But there is nowhere in the Regulation any
reference to a precise provision of the TRIPS Agreement to indicate to the ECJ an intent to implement
a particular obligation assumed in the context of the WTO or another international agreement.
Further, Australia's interpretation of "mislead" is fu lly consistent with the interpretation of that word
by the EC in the case of the registration of "Bayerisches Bier".
6

18. Even if the EC's interpretation was correct, the immediate consequence is that it would render
the reference in Article 14.2 to the grounds for revocation under the Community Trademark Directive
and Regulation totally meaningless. In both cases, the relevant grounds for revocation are that, in
consequence of its use, the trademark "is liable to mislead the public
, particularly as to the …

5 Second Written Submission of the EC, paragraph 277
6 Regulation No. 1347/2001, Recital (3), Exhibit EC-9.

geographical origin …". 7 Yet elsewhere, both the Directive and the Regulation expressly grant to
owner of a trademark the exclusive right to prevent use of a similar or identical sign for similar or
identical goods where "there exists a likelihood of confusion on the part of the public".8

19. A likelihood of confusion on the part of the public as elaborated by the ECJ in its case law
9 is
a very different standard from conduct which positiv ely causes a consumer to mistake the source of a
product. Thus, the Community Trademark Directiv e and Regulation differentiate the meanings of
"confuse" and "mislead". As a consequence, th e reference to the revocation provisions of those
instruments in Article 14.2 of Regulation 2081/92 imports that differentiation into that Regulation.

20. The EC also asserts that Australia's interpre tation of the meaning of Article 14.3 "would lead
to a result that is incompatible with" Ar ticles 7.4 and 7.5(b) of Regulation 2081/92. 10 A g a i n ,
however, the interpretation of Article 7.4 – and consequently Article 7.5(b) – being put forward by the
EC is premised on a meaning of the words "jeopardi se the existence" that is simply not consistent
with the meaning and context of those provisions.

21. The plain meaning of "jeopardize the existence … of a mark" in Article 7.4 of
Regulation 2081/92 is to threaten the very being of that mark. Threatening the very being of a
trademark is a very different standard for the admissibility of a statement of objection than the
standard established by a likelihood of confusion.

22. As a final point, I choose not to take offen ce at being called crass and ignorant when it comes
to the complexities of EC law as done by the EC th is morning. I do question the EC's judgment in
making such an allegation with respect to my fell ow Australians – particularly when the EC has,
including in the consultations, been unhelpful on the relevant issues. I will therefore briefly ask my
colleague to say a few words about the various translations.

23. English translation: The EC asserts that Australia hasn't considered other linguistic versions
of Regulation 2081/92, and that these sh ed light on the intention of the EC.
11 In fact, Australia had
indeed noted the language used in the French and Spanish versions. The EC seems to have
overlooked that the complaining parties submitted the French version of the Regulation as Common
Exhibit 1.c. Moreover, Australia fails to understa nd how its argument is undermined by the Spanish
version. Saying that the very being of a trademark must be adversely affected seems to us to be not
much different to saying that the very being of a trademark must be threatened.

TRIPS Article 24.5
24. TRIPS Article 24.5 does not envisage the co-existence of TRIPS-defined GIs and earlier
trademarks as argued by the EC. In accordance w ith TRIPS Article 24.5, where a trademark has been
registered in good faith, a WTO Member's measures a dopted to implement Section 3, Part II, of the
TRIPS Agreement concerning GIs may not prejudice the validity of the registration of an existing
trademark on the basis that the trademark is identical with or similar to a GI. In other words, a WTO
Member's measures adopted to implement the TR IPS Agreement provisions concerning GIs may not
adversely affect the legitimacy of a trademark's re gistration. Such measures may not provide for the

7 Directive 89/104/EEC, Article 12.2(b), Exhibit COMP-6, and Regulation No. 40/94, Article 50.1(c),
Exhibit COMP-7.
8 Directive 89/104/EEC, Article 5.1(b), Exhibit CO MP-6, and Regulation No. 40/94, Article 9.1(b),
Exhibit COMP-7.
9 See, for example, Opinion of Advocate General Jacobs, Marca Mode v Adidas AB and Adidas
Benelux BV, paragraph 40, Exhibit US-12.
10 Second Written Submission of the EC, paragraph 282.
11 Second Oral Statement of the EC, paragraph 230.

validity of a trademark's registration to be prejudiced because the trademark contains or consists of a
GI.

25. Because a WTO Member is prohibited from pr ejudicing the validity of the registration of a
trademark in implementing the GIs provisions of the TRIPS Agreement, the necessary and logical
consequence is that the rights required to be gran ted to the owner of a registered trademark under
TRIPS Article 16.1 continue to attach to that tr ademark. Once a valid trademark is registered,
exceptions to the rights required to be grante d to the owner of that trademark under TRIPS
Article 16.1 must accord with TRIPS Article 17, to which I will return shortly.

26. To the extent that registration and/or use of an EC-defined GI would constitute confusingly
similar or identical use of a sign fo r a similar or identical good, the owner of a registered trademark is
required to be granted the exclusive right to prevent the registration and/or use of that EC-defined GI.
Thus, TRIPS Article 24.5 does not envisage the co-existence of TRIPS-defined GIs and earlier
registered trademarks.

TRIPS Article 24.3
27. TRIPS Article 24.3 does not require the EC to maintain the co-existence of EC-defined GIs
and earlier trademarks as argued by the EC. Austra lia has responded to this argument in detail in its
Rebuttal Submission.
12 In addition – in the circumstances of th e measure at issue in this dispute – to
the extent that TRIPS Article 24.3 might protect th e geographical indications that existed within the
EC on 31 December 1994, it would do so only in respect of the territories of those EC Member States
which did protect the EC-defined GIs as at that date.

TRIPS Article 17
28. I noted earlier that – once a valid trademark is registered – exceptions to the rights required to
be granted to the owner of that trademark under TRIPS Article 16.1 must accord with TRIPS
Article 17.

29. The EC has already put forward a number of arguments in support of its contention that the
requirement of Regulation 2081/92 for the co-existence of an EC-defined GI and a pre-existing
trademark right is justified by TRIPS Article 17. Australia responded to these arguments in its
Written Rebuttal Submission.
13

30. The EC now argues as well that Article 14. 3 of Regulation 2081/92 "would nonetheless
prevent the registration of confusing geographical indications in those instances where the likelihood
of confusion is greater".
14 Even leaving aside the issue of whether Article 14.3 applies in a situation
of "confusing" – as distinct from "misleading" – use to which I referred earlier, the right required to
be granted to the owner of a registered trademark under TRIPS Article 16.1 is not subject to a test of
the degree of likelihood in relation to the likelihood of confusion. Rather , it is a right that applies in
all circumstances of a likelihood of confusion.

31. The EC argues that the phrase "the fair use of descriptive terms" in TRIPS Article 17 includes
a term used to indicate the place of origin of a pr oduct, which in turn includes any term used as an
"indication of source" in the sense of the Paris Convention, which in turn includes both TRIPS and
EC-defined GIs.
15

12 Australia's Written Rebuttal Submission, paragraphs 111-117.
13 Australia's Written Rebuttal Submission, paragraphs 118-127.
14 Second Written Submission of the EC, paragraph 337.
15 Second Written Submission of the EC, paragraph 338.

32. However, the EC argument ignores the principle of territoriality that underpins the global
regime for the protection of IP rights. It assumes that all indications of source, including TRIPS and
EC-defined GIs, are immediately and universally recognised as such.

33. The EC argument also ignores that while GIs may be a "sub-set" of indications of source in
the sense of the Paris Convention, they are – in accordance with TRIPS Article 22.1 – a very
particular sub-set. They don't simply identify or describe a good as originating in a geographic place.
If that were all they did, IP protection would not be needed – nor would it be appropriate. This surely
is precisely the distinction between a geographic te rm and a TRIPS-defined GI. TRIPS Article 22.1
says that a geographic term qualifies to be called a "g eographical indication" in a specific situation.
That situation is where the term signifies that a gi ven quality, reputation or other characteristic of the
good is essentially attributable to its geographical or igin. This is not descriptive of the geographic
origin, nor is it descriptive of the quality, reputat ion or other characteristic of the good that is
essentially attributable to its geographical origin. It is much more than that: it signifies the causative
link between geographical origin and some characteristic of the product.

34. Thus, TRIPS-defined GIs are not "descriptive terms" in the sense of TRIPS Article 17 that
simply indicate the place of origin of a product. The EC's suggested interpretation would render
meaningless the express requirement of TRIPS Article 22.1 that a TRIPS-defined GI indicate that a
given quality, reputation or other characteristic of the good be essentially attributable to its
geographical origin. Moreover, such an interpre tation would be contrary to the principle of
effectiveness in the interpretation of treaties th at the Appellate Body has several times expressly
recognised.
16

35. Similarly, the EC's professed difficulty in understanding the provisions of the Australian
Trade Marks Act
17 ignores the principle of territoriality. Bearing in mind that Australia's recognises
IP rights as private rights, it is up to GI right holders from the EC – or anywhere else – to act to
protect those rights in the territory of Australia. This can be done through the multiple opportunities
provided by Australian law to oppose the registration of a trademark, or by seeking to invalidate or
revoke such a registration in accordance with Austra lian law. If GI right holders do not make use of
those opportunities, then a trademark right holder can legitimately seek to exercise the rights granted
by Australian law to prevent confusing use of a TRIPS-defined GI.

36. Finally, the EC's view that the phrase "fair u se of descriptive terms" in TRIPS Article 17 can
encompass confusingly similar or identical use of TRIPS-defined GIs for similar or identical goods
would also render meaningless the provisions of TRI PS Article 24.5, contrary to the principle of
effectiveness in the interpretation of treaties.

The evidentiary presumption of a likelihood of confusion
37. Australia has addressed the EC's arguments – in respect of the registration of EC-defined GIs
– concerning the evidentiary presumption of a likeli hood of confusion required to be granted to the
owner of a registered trademark in the case of us e of an identical sign for identical goods in its
Written Rebuttal.
18

16 See, for example, Korea – Dairy Safeguard , Report of the Appellate Body, WT/DS98/AB/R,
paragraph 80
17 Second Written Submission of the EC, footnote 219.
18 Australia's Written Rebuttal Submission, paragraphs 137-141.

38. As a final point on this issue, Australia notes that the Community Trademark Directive and
Regulation both expressly reproduce that evidentiary presumption.
19

Conclusion
39. The EC has not rebutted the prima facie case made by Australia that – in respect of the
registration of an EC-defined GI – the EC measure diminishes the legal protection for trademarks,
contrary to TRIPS Article 16.1. The arguments put by the EC in response to Australia's claims are not
sustainable. Either they do not accord with the actual provisions of Regulation 2081/92 having regard
to rules of interpretation applicable to domestic EC legislation, or they are not supported by the
relevant provisions of the TRIPS Agreement.

TRIPS ARTICLE 24.5
40. Australia has claimed that – in respect of the registration of an EC-defined GI – the EC
measure diminishes the legal protection for trademar ks, contrary to TRIPS Article 24.5. The EC
measure prejudices eligibility of an applicati on for registration of a trademark because
Regulation 2081/92 does not afford the right of priority required to be afforded by Paris Article 4.

41. The EC asserts that Paris Article 4 "cannot be applied in order to determine whether an
application is 'grandfathered' in accordance with Article 24.5".
20 However, the EC's argument ignores
that – consistent with TRIPS Article 2.1 – it is obliged to comply with Paris Article 4. Thus, the EC's
obligation to apply a right of priority to a tradem ark application in accordance with Paris Article 4
exists independently of its obligations under TRIPS Article 24.5.

42. It is not a case of applying Paris Article 4 "i n order to determine whether an application is
'grandfathered' in accordance with Article 24.5" in the sense put forward by the EC. Rather, it is a
case of whether, having given effect to its obligat ions – including those which arise from Paris
Article 4 – an application is
 "grandfathered" by TRIPS Article 24.5.

43. The EC has not rebutted Australia's prima facie case.

P
ARIS ARTICLES 10BIS(1) AND 10TER(1), AND TRIPS ARTICLE 2.1
44. Australia has claimed that – in respect of the registration of an EC-defined GI – the EC
measure diminishes the legal protection for trademarks, contrary to Paris Articles 10 bis(1) and
10ter(1) as "incorporated" by TRIPS Article 2.1. The EC measure does not assure effective
protection of trademarks against unfair competition, and does not assure appropriate legal remedies to
repress effectively such acts of unfair competition.

45. Trademarks are expressly recognised as a cat egory of industrial property protected by the
Paris Convention. Moreover, the provisions of Paris Articles 10bis and 10ter apply in respect of all
 of
the industrial property rights protected by the Paris Convention.

46. The obligations established by Paris Articles 10 bis(1) and 10 ter(1) are straightforward, and
WTO Members are required to comply with those ob ligations 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.
21 That would

19 Directive 89/104/EEC, Article 5.1(a), Exhibit CO MP-6, and Regulation No. 40/94, Article 9.1(a),
Exhibit COMP-7.
20 First Written Submission of the EC, paragraph 355.
21 First Written Submission of the EC, paragraph 399.

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 right within the EC considered that such issues may be raised
by the registration of an EC-defined GI.

47. The EC has not rebutted the prima facie case made by Australia.

TRIPS
 ARTICLES 41 AND 42
48. It is Australia's claim that – in respect of the registration of an EC-defined GI – the EC
measure diminishes the legal protection for trademar ks, contrary to TRIPS Articles 41 and 42. The
EC measure does not make available to trademark right holders civil judicial procedures concerning
the enforcement of their IP rights, contrary to TRIP S Article 42. Further, to the extent to which the
Article 15 decision-making process constitutes the initial and only means through which a trademark
right holder can seek to exercise the trademark rights required to have been granted under TRIPS
Article 16.1, the EC measure:

• provides procedures which are not fair a nd equitable, and which are unnecessarily
complicated and entail unwarranted delays, contrary to TRIPS Article 41.2; and
• does not ensure that decisions are based only on evidence in respect of which trademark
right holders were offered the opportunity to be heard, contrary to TRIPS Article 41.3
49. As a consequence – in respect of the registra tion of an EC-defined GI – the EC measure does
not ensure the availability under its law of enforcem ent procedures as specified in Part III of the
TRIPS Agreement, contrary to TRIPS Article 41.1.

50. The EC has said: "[t]rademark owners ha ve a right to challenge the validity of the
registrations under Regulation 2081/92 also in t hose cases where no right of objection has been
provided as part of the registration procedure".
22 In other words, according to the EC:

• firstly, there can be occasions when a right of objection to the proposed registration of an
EC-defined GI is not provided to a trademark owner; and
• secondly, in that event, trademark owners ha ve only the right to challenge the validity of
the registration of an EC-defined GI in judicial proceedings: they do not have access to
judicial proceedings to enforce their rights in a trademark.
51. By its own admission, the EC does not make ava ilable to trademark right holders civil judicial
procedures concerning the enforcement of any IP ri ght covered by the TRIPS Agreement, contrary to
Article 42 of that Agreement.

52. Similarly, by its own admission, the EC does not make decisions on the merits of a case based
only on evidence in respect of which parties were offered the opportunity to be heard, contrary to
TRIPS Article 41.3.

53. The EC is obliged by Article 41.2 to provi de procedures for the enforcement of IP rights
which are fair and equitable. Inherent in that requi rement is that such procedures must be seen to be
fair and equitable to potential users of the proce dures. The nature of the Article 15 decision-making
process does not allow the possibility of bias in favour of the proposed EC-defined GI to be seen to be
excluded. Thus, the EC has not rebutted Australia's prima facie case that the EC measure is
inconsistent with TRIPS Article 41.2.

22 Second Written Submission of the EC, paragraph 297.

54. Further, the EC is obliged to ensure that procedures for the enforcement of IP rights are not
unnecessarily complicated or entail unwarranted de lays. The EC has yet to offer any valid
justification for requiring a national of another WT O Member to forward an objection to the proposed
registration of an EC-defined GI through the govern ment of another WTO Member. The EC has not
even attempted to justify the requirement that a statement of objection on the basis of a trademark
right within the territory of the EC be lodged through another WTO Member government. The EC
has not rebutted Australia's prima facie case that the EC measure is inconsistent TRIPS Article 41.2.

55. As a consequence of the EC measure's inc onsistency with TRIPS Articles 41.2, 41.3 and 42
and in any case – including because the EC has not given effect to the provisions of TRIPS
Articles 43, 44, 45, 46, 48 and 49 – the EC has not ensured the availability of enforcement procedures
in respect of the registration of an EC-defined GI against any act of infringement of IP rights covered
by the TRIPS Agreement, contrary to TRIPS Article 41.1.

56. The EC has not rebutted Australia's prima facie case.

T
RANSITIONAL NATIONAL PROTECTION BY EC MEMBER STATES
57. Australia also claims that the EC measure diminishes the legal protection for trademarks –
contrary to TRIPS Articles 16.1, 41.1, 41.2, 41.3 an d 42, and Paris Articles 10bis(1) and 10ter(1) as
incorporated by TRIPS Article 2.1 – in respect of EC Member State decisions to grant transitional
national protection pursuant to Article 5.5 of Regulation 2081/92. Regulation 2081/92 does not
ensure that such decisions by EC Member States ta ke account of the EC's obligations pursuant to the
TRIPS Agreement.

58. The EC has not rebutted Australia's prima facie case.

NATIONAL TREATMENT
GATT
 ARTICLE III:4
59. Australia has claimed that – in respect of the registration of an EC-defined GI – the EC
measure accords to the products of another WTO Member treatment less favourable than that it
accords to like products of national origin, contrary to GATT Article III:4. The EC measure applies
conditions of reciprocity and equiva lence to the registration of an EC -defined GI for an imported like
product. The EC measure requires that another WTO Member government endorse an application for
the registration of an EC-defined GI for an imported like product. Finally, the EC measure as a whole
accords less favourable treatment to the registration of an EC-defined GI for an imported like product.

60. In response, the EC has asserted that:

• Articles 12.1 and 12.3 of Regulation 2081/92 do not apply to other WTO Members: thus,
the EC does not impose a condition of reciproc ity and equivalence on the registration of
an EC-defined GI from another WTO Member;
• the requirement that an application for regi stration of an EC-defined GI from another
WTO Member be transmitted by the govern ment of that WTO Member does not amount
to less favourable treatment; and
• "Australia has argued that Regulation 2081/92 accords less favourable treatment in that
there is an overall bias in the decision-making process".
23

23 First Written Submission of the EC, paragraph 219.

61. Australia noted with particular interest ho w the EC avoided answering the Panel's question as
to whether the conditions of reciprocity and equivale nce would be inconsistent with the EC's national
treatment obligations under the TRIPS Agreem ent and GATT 1994 if applied to another WTO
Member. Australia submits that the EC's failure to give a clear answer to this question in the
circumstances of the measure at issue in this dispute, and its arguments in this dispute generally, must
be viewed as an admission by the EC that applying such conditions would constitute a breach of those
national treatment obligations.

62. Australia notes that the EC's rebuttal to this asp ect of Australia's claim consists solely of the
assertion that Articles 12.1 and 12.3 of Regulation 2081/92 do not apply to other WTO Members.
Thus, to the extent that the Panel considers the EC's explanations of the proper interpretation of those
provisions is not sustainable on the basis of the ru les of interpretation of EC law, the EC has not
rebutted Australia's prima facie case.

63. The EC refers to Australia's "remarkable" argument about the EC's failure to correct
Australia's understanding of the proper interp retation of Article 12.1 of Regulation 2081/92.
24
Nonetheless, the EC once again ignores the fundamenta l point at issue. Why has the EC consistently
stated or implied – before the panel stage of th is dispute – that Article 12.1 did apply to WTO
Members? If Australia's understanding of the proper meaning of the Regulation – and Article 12.1 in
particular – was so wrong as a factual matter , why didn't the EC seek to correct Australia's
understanding at the earliest opportunity?

64. Equally, the EC has not rebutted Australia's claim concerning the need for an application to
be transmitted by another WTO Member government. The EC measure in effect requires other WTO
Member governments to act as sub-national units of the EC. A superficial appearance of symmetry of
treatment does not – in the circumstances of the EC measure – constitute treatment no less favourable
within the meaning of GATT Article III:4.

65. Finally, beyond mischaracterising an aspect of the claim, the EC has simply not responded to
Australia's claim concerning the treatment afforded to imported products by the EC measure as a
whole.

66. The EC is invoking Article XX(d) only in respect of Australia' s claim concerning the
requirement that an application for the registrati on of an EC-defined GI for an imported product be
submitted through the government of the WTO Memb er in which the relevant geographical area is
located.

67. In Korea – Beef , the Appellate Body indicated that determination of whether a measure is
"necessary" within the meaning of Article XX(d) shoul d be considered in the context of whether there
is a WTO-consistent alternativ e measure available which a WTO Member could reasonably be
expected to employ, or whether there is a less WTO-inconsistent alternative measure reasonably
available.

68. Thus, in relation to the EC's requirement that another WTO Member government verify and
submit an application for the registration of an EC -defined GI for an imported product: is there a
WTO-consistent alternative measure reasonably available? Yes – the EC could simply leave it to the
applicant to provide the required information. In addition – and in any case – the EC could ask
 for the
cooperation of another WTO Member government afte r an application has been lodged should such
cooperation be necessary to enable an application to be assessed. Is there a less WTO-inconsistent
alternative measure reasonably available? Yes – once again, the EC could ask for the cooperation of

24 Second Written Submission of the EC, paragraph 89.

another WTO Member government after an applica tion has been lodged should such cooperation be
necessary to assess an application.

69. Moreover, the EC has not even attempted to establish a prima facie case that the requirement
for an application for the registration of an EC-d efined GI for an imported product to be submitted
through the government of the WTO Member in wh ich the relevant geographical area is located is
consistent with the chapeau
 of Article XX. A simple assertion 25 does not constitute a prima facie
case. The EC has not met its burden of proof for the invocation of GATT Article XX(d).

70. In any case – should the Panel consider that the requirement for an application for the
registration of an EC-defined GI for an imported product to be submitted th rough the government of
the WTO Member in which the relevant geographical area is located is provisionally justified under
paragraph (d) of Article XX – Au stralia submits that the requireme nt would constitute "unjustifiable
discrimination between countries where the same c onditions prevail" within the meaning of the
chapeau. Once again, if the term is already "r egistered" or otherwise expressly protected under
another WTO Member's law – whether as a GI or, for example, as a certification trademark – the
information could just as readily be provided by the applicant as by another WTO Member
government. Further, and in any case, Australia notes that in US – Shrimp, the Appellate Body found
that a measure being applied in a way that "require[d]
 other WTO Members to adopt a regulatory
program that [was] not merely comparable , but rather essentially the same " (emphases in original)
was not justifiable within the meaning of the chapeau of Article XX26

71. The EC has not rebutted Australia's prima facie case in regard to GATT Article III:4. Indeed,
having regard to paragraph 33 of the EC's Oral Statem ent this morning, the EC seems to agree that its
measure does in fact breach its GATT Article III:4 obligations.

PARIS ARTICLE 2 AND TRIPS ARTICLES 1.1 AND 1.3, 2.1 AND 3.1
72. Australia claims that – in respect of the regi stration of, or objections to, an EC-defined GI –
the EC measure does not accord national treatment in the protection of intellectual property, contrary
to Paris Article 2 and TRIPS Articles 1.1 and 1.3, 2.1 and 3.1. In respect of the registration of more
than 120 EC-defined GIs under the normal registra tion process, the EC measure provided a right of
objection to persons resident or established in an EC Member State that was not available to other
WTO Member nationals. In addition, the EC measure as a whole does not accord national treatment
to the nationals of other WTO Members.

73. In the US – Section 211 Appropriations Act dispute, the Appellate Body found that "… the
jurisprudence on Article III:4 of the GATT 1994 may be useful
 in interpreting the national treatment
obligation in the TRIPS Agreement". 27 In Australia's view, the general principles that underpin the
"treatment no less favourable" standard of GATT Article III:4 were intended to apply in the context of
TRIPS Article 3.1. Thus, each WTO Member is re quired to accord to the nationals of other WTO
Members treatment no less favourable than the treatment it accords to its own nationals with regard to
the protection of intellectual property.

74. In Australia's view, the obligation in TRIPS Ar ticle 3.1 could appropriately be considered in
this dispute within the framework of the question: "does the treatment accorded by the EC measure
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"?

25 EC's Second Written Submission, paragraph 238.
27 US – Section 211 Appropriations Act, Appellate Body report, paragraph 242.

75. Australia has addressed the EC's arguments in respect of the registration of more than 120
EC-defined GIs under the normal registration process in detail in its Written Rebuttal Submission.
Did the treatment accorded by the EC measure modify the conditions of competition in the EC market
to the detriment of other WTO Member nationals, who were able to object to the registration of these
EC-defined GIs? Most assuredly, yes. Ther e was simply no mechanism by which a national of
another WTO Member who was not resident or established in an EC Member State could object to the
proposed registration of an EC-defined GI.

76. The EC again relies on the assertion that Artic les 12.1 and 12.3 of Regulation 2081/92 do not
apply to other WTO Members. As in relation to GATT Article III:4, Australia submits that the EC
must be viewed as having conceded that applying conditions of reciprocity and equivalence to the
registration of an EC-defined GI from another WTO Member would breach the "treatment no less
favourable" standard of TRIPS Article 3.1. Thus, to the extent that the Panel considers the EC's
explanation of the proper interpretation of Regula tion 2081/92 is not sustainable on the basis of the
rules of interpretation of EC law, the EC has not rebutted Australia's prima facie case.

77. Equally, the EC has not rebutted Australia's claim concerning the need for an application or
an objection to be transmitted by another WTO Member government. Requiring that another WTO
Member government act as a "sub-natio nal" government of the EC in respect to an EC measure is not
– and indeed cannot be – "treatment no less favourab le" to nationals of other WTO Members within
the meaning of TRIPS Article 3.1. Given the e xpress recognition by the TRIPS Agreement that IP
rights are private rights, there is no basis in the Ag reement to deny applicants for the registration of
EC-defined GIs direct access to the EC as the WTO Member granting the IP right. Nor is there any
basis in the Agreement to require that nationals of other WTO Members lodge objections to the
registration of an EC-defined GI through anot her WTO Member government. Notwithstanding a
superficial appearance of symmetry of treatment, the EC measure accords less favourable treatment to
the nationals of other WTO Members with regard to the protection of intellectual property within the
meaning of TRIPS Article 3.1.

78. Moreover, Australia notes the EC's assertion that the registration of the 480 EC-defined GIs
under the simplified registration system is in any case outside the temporal scope of the TRIPS
Agreement because of TRIPS Article 70.1. In the Canada – Patent Term dispute, the Appellate Body
found that Article 70.1 applies where acts were done, carried out or completed before the date of
application of the TRIPS Agreement for a Member.
28 As the registrations of those 480 EC-defined
GIs were not done, carried out or completed before 1 January 1996, they are subject to all of the EC's
obligations pursuant to the TRIPS Agreement.

79. The EC has not rebutted Australia's prima facie case that the EC measure is inconsistent with
Paris Article 2 as "incorporated" by TRIPS Article 2.1, as well as TRIPS Articles 1.1 and 1.3, and 3.1.

GEOGRAPHICAL INDICATIONS
TRIPS
 ARTICLE 22.2
80. It is Australia's claim that – in respect of the registration of an EC-defined GI – the EC
measure does not provide the legal means for inter ested parties to prevent misleading use or use
which constitutes an act of unfair competition within the meaning of Paris Article 10bis.

81. The EC's response
29 presupposes that the territory of the EC Member State of origin of an EC-
defined GI and the territory of the EC itself are interchangeable. Indeed, some of the EC's own

28 Canada – Patent Term, Report of the Appellate Body, paragraphs 54-55.
29 Second Written Submission of the EC, paragraphs 381-393.

Member States have argued vigorously that the term "Feta" should not have been registered as an EC-
defined GI because it has long been a generic term within those Member States.

82. In addition, the EC's response is premised on a mischaracterisation of Australia's arguments.
Australia has not said that registration of a term as an EC-defined GI in territory A could be deemed
misleading simply because the term has become generic in territory B.
30

83. The EC disparages Australia's reliance on B odenhausen, but ignores that the EC itself has
elsewhere relied on that source.
31 The EC also ignores that Australia pointed as well to the WIPO
Model Provisions on Protection Against Unfair Co mpetition in support of its contention that Paris
Article 10bis encompasses the notion of honest practices established in international trade. 32 In its
turn, however, the EC offers no sources in support of its own interpretation of TRIPS Article 22.2.

84. Australia does not purport to say whether it may be that registration of any particular EC-
defined GI would be misleading or would constitute an act of unfair competition within the meaning
of Paris Article 10bis under TRIPS Article 22.2.

85. What is clear, however, is that the EC has an obligation to provide the legal means by which
interested parties can seek to test such issues in re lation to the registration of an EC-defined GI. It
does not do so.

TRIPS ARTICLES 1.1 AND 2.1
86. As a consequence of the EC's failu re to comply with Paris Articles 10 bis(1) and 10 ter(1) in
respect of the registration of an EC-defined GI, the EC has not complied with TRIPS Article 2.1.

87. Further, and in any case, as a consequence of the EC's failure to comply with any of its
obligations under the TRIPS Agreement in respect of the registration of an EC-defined GI – including
in relation to decisions by EC Member States to grant transitional national protection – the EC has
failed to give effect to the provisions of the TRIPS Agreement, contrary to TRIPS Article 1.1.

TBT
TBT
 ARTICLES 2.1 AND 2.2
88. Australia claims that the EC measure is a t echnical Regulation that is inconsistent with TBT
Article 2.1 to the extent that Article 12.2 of Regulation 2081/92:

• is a mandatory labelling provision
• that applies to imported products bearing, or eligible to bear,
• an EC-defined GI that is identical to an EC-defined GI from within the EC already
registered under the Regulation
• for a like domestic product and provides no discretion for the EC to apply the provision in
such a way as to avoid less favourable treatment to the imported product.
89. Australia also claims that the EC measure is a technical Regulation that is more trade
restrictive than necessary to fulfil a legitimate objective – taking account of the risks non-fulfilment

30 Second Written Submission of the EC, paragraph 389.
31 First Written Submission of the EC, footnote 46.
32 Australia's reply to Question 24 from the Panel following the first meeting with the parties.

would create – contrary to TBT Article 2.2, to the extent that Articles 4, 10 and 12.1 of
Regulation 2081/92:

• establish a mandatory requirement
• for another WTO Member to have in place in all circumstances an EC-mandated
inspection structure.
90. In reply, the EC sets out arguments that are irrelevant to Australia's claims.

91. Firstly, on the threshold question as to whether th e Regulation is in part a technical regulation,
with respect to Articles 4 and 10 of the Regulation, the EC alludes to other provisions of the TBT
Agreement – those dealing with conformity assessme nt procedures – while only partially addressing
Australia's arguments supporting its claim that those Articles read together constitute a technical
regulation.

92. The question at issue is th e following: has the EC rebutte d Australia's claim that these
provisions of the Regulation impose (i) pr oduct characteristics or related processes
 or a labelling
requirement (ii) applying to identifiable products and (iii) with which compliance is mandatory? If
the answer is no, the EC has not rebutted Australia 's claim that these provisions constitute technical
regulations. Any discussion of what might be a conformity assessment procedure under the
Regulation – or of what might be the function of the inspection structure mandated by Article 10 of
the Regulation – is irrelevant to this central question.

93. Secondly, with regard to Australia's claim pursuant to TBT Article 2.2, the EC confuses the
issue by responding to claims Australia has not made. It asserts, wrongly, that Australia objects to the
idea of inspection structures per se , preferring that there be no inspection structure at all. It then
proceeds to elaborate on elements of the inspecti on structure required by Article 10, stating that
Australia "[has] been unable to identify a single element in the requirements of Article 10 … that
would be objectionable".
33

94. Australia has not sought to identify objecti onable elements in the inspection structure
mandated by Article 10 because it is not that structur e itself which is "objectionable". Let's be clear
on what Australia does consider to be the "objectionable" – and WTO-inconsistent – feature of the EC
regime. It is not one or more specific elements of the inspection structure provided for in Article 10.
Nor is it the notion of a verification process for the authenticity of agricultural products bearing an
EC-defined EC.

95. It is
 the fact that the Article 10 type of in spection structure is imposed on other WTO
Members, regardless of their existing inspection stru ctures and/or other systems or mechanisms that
perform the same function. If such a requireme nt were necessary, the EC would have had to
determine that no other system in any WTO Member could in any circumstances provide the same
degree of assurance as the EC's system for comp liance verification and enforcement, or for the
prevention of deceptive practices.

96. That is the issue here. The EC's repeated explanations of how its inspection structures work
and how unobjectionable its features may be are irrelevant to this central point.

97. Australia submits that the EC has not rebutte d Australia's claim that Regulation 2081/92 is in
part a technical regulation. Similarly the EC has failed to rebut Australia's prima facie case that to the
extent it is a technical regulation, the EC measure is inconsistent with TBT Articles 2.1 and 2.2.

33 Second Written Submission of the EC, paragraph 103.

98. I would like to make a final point in relati on to the TBT Agreement. Australia noted with
interest the EC's selective use of the Appellate Body's findings at paragraph 241 of its Oral Statement.
The EC noted the Appellate Body's in the EC – Asbestos dispute that products to which a technical
Regulation applies need not be expressly identified in order to be an "identifiable product". The EC
then went on to say – and I quote: "[h]owever, th e product should at least be identifiable on the basis
of the document itself. This is not the case here …". If the EC had continued reading the Appellate
Body report, it would have seen that – two paragra phs later the Appellate Body said: "although this
prohibition against products containing asbestos applies to a large number of products, and although it
is, indeed, true that the products to which this prohibition applies cannot be determined from the terms
of the measure itself, it seems to us that the products covered by the measure are identifiable: all
products must be asbestos free and produc ts containing asbestos are prohibited".
34 Those further
findings by the Appellate Body in that dispute are equally applicable here.

TRIPS ARTICLE 20
99. As a final point concerning the actual claims made by Australia – and with the benefit of the
explanations of the EC measure now provided by the EC – I confirm that Australia withdraws its
claim under TRIPS Article 20.
GENERAL ISSUES
100. I would also like to make some general comme nts about some of the EC's characterisations of
issues raised by this dispute. I note that there ar e a number of statements and comments made by the
EC in this dispute about international law, WTO dispute settlement and even Australia's intellectual
property system. Australia does not agree with ma ny of these, but in the interests of not being
distracted from the main issues in the dispute, we ha ve chosen not to engage in pointless debate. But
there are some EC "red herrings" on which I feel I must comment for the record.

101. Firstly – having regard to the requirements of the DSU – Australia is not obliged to address
each and every claim and to set out its complete case at each and every stage of the dispute. Nor is
Australia obliged to demonstrate adverse trade eff ects from a measure it is complaining against. And
it is for the complaining Member to judge whethe r dispute settlement action would be "fruitful" in
accordance with DSU Article 3.7: the function of the Panel is to "make an objective assessment of
the matter before it" in accordance with DSU Article 11.

102. Indeed, particularly after hearing the statement by the EC this morning, I would suggest that it
looks like part of the Panel's work is going to re quire checking the EC's citations and sources very
carefully, given that a number of them are misleadi ng. I simply don't believe the EC's attempts at
alleging differences between Australia and the US add anything to its arguments. There are no
material differences anyway, and surely the EC is not suggesting that where Australia and the US
agree, we are right and the EC accepts it is wrong?

103. Moreover, on the subject of citations and f ootnotes, Australia notes the EC's inclusion of
substantive text in some footnotes which was not r ead. It is therefore unclear to Australia what
constitutes the EC's Oral Statement.

104. Secondly, a superficial similarity between asp ects of the complaining and responding parties'
implementation measures does not constitute a defence for a challenged measure. It is rarely possible
to consider the meaning of a legislative provision in isolation, a fact recognised by the EC in its own

34 EC – Asbestos, Appellate Body Report, paragraph 72.

statement that the meaning of Regulation 2081/92 must be assessed within the legal order of the EC. 35
The EC's attempts to have the Panel examin e Australia's measures implementing Australia's
obligations under the TRIPS Agreem ent should be dismissed. For these reasons, Australia requests
that the Panel reject Exhibits EC-67, EC-68, EC-78 and EC-79. They are not relevant to the measure
at issue in Australia's complaint, and do not c onstitute rebuttal of arguments made by Australia.
Australia is very willing to discuss its legislati on should the Panel so wish. Ultimately, however,
Australia's legislation is simply not relevant to th is dispute. For the same reasons, Australia requests
that the Panel also reject Exhibits EC-73 concer ning Canadian legislation and EC-80 concerning New
Zealand legislation.

105. Thirdly, the EC seems to be of the view th at the territories of the EC and of its constituent
Member States can be interchangeable for the pur poses of some IP rights, and that geographical
indications are granted some form of primacy as an IP right by the TRIPS Agreement. How else
could an EC-defined GI that was not recognised as su ch in all of the EC's individual Member States
be transformed overnight into a term protected throughout the territory of the EC without regard to the
EC's other obligations under the TRIPS Agreement? Yet the territories of the EC and its constituent
Member States are not interchangeable in any and all circumstances come what may. Nor does the
TRIPS Agreement grant primacy to any particular IP right, whether a TRIPS-defined GI or a
trademark.

106. Finally, the EC has expressly acknowledged th at "… the subject matter of the present dispute
falls within the exclusive competence of the EC, and not of the Member States".
36 The subject matter
of this dispute – in respect of the complaint initia ted by Australia and as set out in Australia's panel
establishment request – is, in effect, the EC's regime for the registration and protection of EC-defined
GIs.

107. Thus, the rights and obligations of a WTO Member under TRIPS Article 1.1 devolve directly
onto the EC in its own right insofar as the subject matter in this dispute is concerned.

108. Moreover, pursuant to that Article, a WTO Member must unreservedly give effect to the
provisions of the TRIPS Agreement – including the standards concerning the availability, scope and
use for all
 categories of IP rights as set out in Part II of the Agreement. These, of course, include the
standards established by the Agreement concerning the scope and use of trademarks. A WTO
Member may implement more extensive protection than it is required to implement – but only if that
more extensive protection is not in breach of the provisions of the TRIPS Agreement, including those
concerning trademarks. Finally, while each and ever y WTO Member is able to decide for itself how
to implement the provisions of the TRIPS Agreement, whether these constitute rights or obligations, it
is not consistent with the EC's obligations to interpret the TRIPS Agreement in such a way that its
internal legal order renders provisions of that Ag reement meaningless insofar as the territory of the
EC and/or its individual Member States is concerned.

CONCLUSION
109. While the EC has sought to complicate the issu es before the Panel, I think at least three or
four key issues are clearer as we go into this second meeting with you.

110. Firstly – in respect of the registration of an EC-defined GI – do trademark holders have a
readily discernible and specific right under the Re gulation as required to be provided to them under
TRIPS Article 16.1? While the EC has sought to suggest that there is something resembling this
within the Regulation, these arguments require a re interpretation of key terms within intellectual

35 See, for example, Second Written Submission of the EC, paragraph 7.
36 First Written Submission of the EC, paragraph 255.

property law, such as "confuse" versus "mislead". The EC has not provided any credible evidence
even then that there is anything in the Regulation that provides for the security of this right. This
clearly contrasts with its own specific Regulation and Directive in respect of trademarks which would
otherwise apply – but for the system of protection of GIs under Regulation 2081/92 – with respect to
GIs registered pursuant to that Regulation. Conseq uently, the EC has not rebutted Australia's claims
in this context.

111. Secondly, does Article 12.1 of the Regulation apply with respect to nationals of WTO
Members? The EC has introduced little or no credible evidence, as opposed to unsubstantiated
statements, that provides reassurance that it doesn't. Consequently, at least with respect to claims
about reciprocity and equivalence, the EC is in breach of its national treatment obligations.

112. Thirdly, with respect to geographical indications themselves, the EC has argued that it
provides for TRIPS Article 22.2 rights under EC Member State law. Again, a clear admission with
respect to what is lacking under the Regulation itself. But again, the system of protection of GIs
under Regulation 2081/92 and with respect to GIs registered pursuant to that Regulation disturbs what
may otherwise be sufficient to meet the EC's ob ligations. Consequently, the EC has not rebutted
Australia's claims in this context either.

113. Fourthly, the EC has not provided any credib le argument why a measure cannot be examined
under both the TBT Agreement and TRIPS, given they ar e part of the same agreement. By contrast,
Australia has been mindful of findings of the Appe llate Body on the integrated nature of the WTO
Agreement. Further, Australia has shown why asp ects of Regulation 2081/92 are subject to the TBT
Agreement, and how the Regulation breaches obligations established by that Agreement.

114. For all these reasons, and those substantia ted in our other statements and submissions,
Australia submits that the EC measure is inconsistent with a number of the EC's WTO obligations.

ANNEX A-7

CLOSING STATEMENT OF AUSTRALIA
SECOND SUBSTANTIVE MEETING

(12 August 2004)

 Mr Chairman, Members of the Panel

 Between the written argumentation and the two me etings with you, I believe that when you
review all of the material that Australia h as submitted, you will see that Australia's case is
straightforward, succinct and t horoughly substant iated. And the EC can rest assured we have
carefully considered our case and the implications.

 Australia endorses all of the arguments put fo rward by the United States. Where there are
differences between the complainants, these are a r esult of different understandings of the flawed
measure at issue in this dispute, and, in any case, are not material differences.

 I will therefore not go through our substantive claims and arguments again, except for two
points.

 The discussion on the ECJ this morning was interesting in the context of our claims under
TRIPS Article 16.1 and Article 42. In particular, it is useful to compare the EC's answers with the
Appellate Body discussion in Canada – Patent Term . At paragraph 92, where the Appellate Body
was talking about the relevant right, it said that the right must be “a readily discernible and specific
right, and it must be clearly seen as such”.

 With respect to GATT Article XX(d), in add ition to the US's comments, we note the EC's
attempt to shift the burden of proof regarding the chapeau to the complaining parties in its closing
statement. The EC has clearly failed to meet it s burden of proof for invoking a GATT Article XX(d)
defence.

 On the rest of the substance, I will not reopen all the debates, but obviously found much in the
EC's closing statement that we disagree with.

 I believe you will find little from the EC by wa y of substantiated rebuttal that addresses
Australia's actual claims and arguments.

 Instead, the EC has ignored our actual claims and arguments and adopted the tactic of
insulting Australia. At the same time, the EC ha s directed its rebuttal to claims and arguments
Australia has not made.

 Further, it has variously claimed poor drafti ng, abandoned previous statements made by
various EC entities and authorised representatives, or just ignored aspects of its own Regulation and
legal system.

 None of this constitutes rebuttal of Australia's prima facie case, however.

 And none of this constitutes an excuse to tr y and get from the WTO Membership through the
Regulation what the EC failed to get out of the Uruguay Round.

 The obligations of the EC are clear, and the EC is not living up to these to the extent and as
shown in Australia's submissions.

 Thank you, Mr Chairman and Members of the Panel.

ANNEX A-8

REPLIES BY AUSTRALIA TO QUESTIONS POSED BY THE PANEL
FOLLOWING THE SECOND SUBSTANTIVE MEETING

(26 August 2004)

I. TABLE OF CASES CITED IN THIS SUBMISSION

Short Title Full Title
Korea – Beef Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, Report of
the Appellate Body, WT/DS161/AB/R, WT/DS169/AB/R, 11 December 2000
US – Section 211
Appropriations Act
United States – Section 211 Omnibus Appropriations Act of 1998, Report of the
Appellate Body, WT/DS176/AB/R, 2 January 2002
Japan – Alcohol Taxes Japan – Taxes on Alcoholic Beverages, Report of the Appellate Body,
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, 4 October 1996
EC – Asbestos European Communities – Measures Affecting Asbestos and Asbestos-Containing
Products, Report of the Appellate Body, WT/DS135/AB/R, 12 March 2001
Korea – Dairy Safeguard Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products,
Report of the Appellate Body, WT/DS98/AB/R, 14 December 1999
Canada – Patent Term Canada – Term of Patent Protection, Report of the Appellate Body,
WT/DS170/AB/R, 18 September 2000
India – Patents India – Patent Protection for Pharmaceutical and Agricultural Chemical
Products, Report of the Appellate Body, WT/DS50/AB/R, 19 December 1997

II. OTHER SOURCES CITED IN THIS SUBMISSION

Short Title Full Title
OED The New Shorter Oxford English Dictionary , Ed. Lesley Brown, Clarendon Press,
Oxford, 1993

94. The Panel takes note that, in the EC's view, th e specific conditions contained in Article 12(1)
of Regulation (EC) No. 2081/92 do not apply to WTO Members because the introductory phrase
"[w]ithout prejudice to international agreements" ensures that the WTO agreements prevail where
there is a conflict with the Regulation (EC rebuttal, para. 55). Which precise EC obligations under
the WTO agreements would be prejudiced by the a pplication of those specific conditions to other
WTO Members? In particular:

 (a) would the EC's obligations under Artic le III:4 of GATT 1994 be prejudiced?

 (b) would the EC's obligatio ns under Article 3.1 of the TRIPS Agreement be prejudiced?
If not, please explain the relevance of y our reference to the fact that the TRIPS
Agreement obliges WTO Members to provide protection to GIs in accordance with
Section 3 of Part II and the general provis ions and basic principles of the TRIPS
Agreement (EC first written submission, paras 65-66). EC

95. Can the EC provide the Panel with any offic ial statement by the Commission or any other EC
institution, that the application of conditions of reciprocity and equivalen ce, such as those under
Article 12(1) of Regulation (EC) No. 2081/92, would be inconsistent with th e EC's obligations under
international agreements, in particular, the WTO Agreement? EC

96. The EC has provided a revised Guide to Regulation (EC) No. 2081/92, dated August 2004
(Exhibit EC-64). Was this new version prepared in connection with this Panel proceeding? How is it
relevant to the Panel's work if the Commission assu mes no liability for its contents (see its cover
page)? A new paragraph in the introduction (page 5) indicates that "the Commission reserves the
right to amend procedures" and indicates the possibility of further possible revisions. Does this mean
that the Guide could be changed back to the old version? EC

97. The Panel takes note of the EC's responses to Panel questions nos. 16 and 17 and the EC's
rebuttal, paras 79-86. Please explain in detail how the Commission's interpretation that Article 12(1)
of Regulation (EC) No. 2081/92 does not apply to WT O Members is consistent with the statements in
the EC responses in the TRIPS Council review of le gislation to question No. 4 posed by New Zealand
and the follow-up question posed by India on page 24 in IP/Q2/EEC/1 (cited in Australia's rebuttal,
para. 33, fn. 23). EC

98. Is it the EC's submission that the conditions in Article 12(1) of Regulation (EC) No. 2081/92
do not apply to WTO Members so that:

 (a) WTO Member nationals may obtain GIs fo r areas located in all countries; or

 (b) persons from all countries may obtain GI s for areas located in all WTO Members?
EC

99. The EC has referred to other Community legal acts in relation to the meaning of the phrase
"without prejudice to international agreements" (E C rebuttal, paras 62-66). Please also refer to
Regulation (EC) No. 2082/92 on certificates of sp ecific character for agr icultural products and
foodstuffs, which was adopted with the Regulation at issue in this dispute. To what international
agreements does the phrase "[w]ithout prejudice to international agreements" refer as used in
Article 16 of that Regulation? EC

100. In Regulation (EC) No. 753/2002 on wine (set out in Exhibit US-35), Articles 34-36 refer to
"third countries", apparently to refer to both WTO and non-WTO Members. It expressly states
wherever a "third country" is limited to, or excl udes, WTO Members. Why was Regulation (EC)
No. 2081/92 drafted in such a way that the meani ng of "third country" in Articles 12 through 12d is

not clearer each time it was used? Does the use of "WTO Member" together with "third country" in
certain instances in Articles 12 through 12d of Regulati on (EC) No. 2081/92 not suggest that the term
"third country" excludes WTO Members in those articles? EC

101. The Panel takes note of the parties' respecti ve views on the meaning of "nationals" under the
TRIPS Agreement and the Paris Convention. Withou t prejudice to those view s, please explain in
detail which nationals should be compared
 for the purposes of the TRIPS national treatment
obligations, based on the text of the agreement.

 Please refer to the quadrant in the third party submission of Chinese Taipei (para. 9). Both
the EC and the US compare an EC national with rights to a GI located in the EC. On the US view,
that national should be compared with a US national with rights to a GI located in the US. But on
the EC view, that national should be compared with a US national with rights to a GI located in the
EC. Would it be appropriate inst ead to compare all EC nationals
 with rights to GIs who might wish
to register them under Regulation (EC) No. 2081/ 92, wherever the geographical areas are located,
and compare them with all US nationals with rights to GIs who might wish to register them under the
Regulation, wherever the geographical areas are located?

 More generally, is there a principle in the TRIPS Agreement that all nationals of one WTO
Member with rights to a particular category of intellectual property, such as GIs, should be compared
with all nationals of other WTO Members with rights to the same category of intellectual property,
unless the text of the agreement indicates that with respect to particular types of products or other
sub-categories, they require particular treatment? USA, AUS, EC

1. As set out by Chinese Taipei, there are four combinations of nationa ls and geographic areas
that can be examined:

 1. EC national, relevant geographical area located within the EC;
 2. Non-EC national, relevant geogra phical area located within the EC;
 3. EC national, relevant geographical area located outside the EC; and
 4. Non-EC national, relevant geogra phical area located outside the EC.

2. Regardless of any other comp arisons, it is appropriate, and necessary, to compare Category 1
with Category 4 for the purposes of determining wh ether there is a breach of the EC's national
treatment obligations.

3. TRIPS Article 3.1 provides that nationals of other WTO Members shall be accorded treatment
no less favourable than that accorded to a WTO Member 's own nationals with regard to the protection
of intellectual property. Protection is defined in that context as including "matters affecting the
availability, acquisition, scope, maintenance and enforcement of intellectual property rights …".

4. At least one right at issue in this dispute is the right of a person to register an EC-defined GI
to which that person has a valid claim. Clearly, under the EC measure, nationals (however defined) of
a non-EC WTO Member, when seeking to register an EC-defined GI for a geographical area outside
the EC (that is, Category 4 above) are treated less fa vourably than EC nationals seeking to register an
EC-defined GI for a geographical area inside the EC (that is, Category 1 above).

5. There is nothing in the TRIPS Agreement or Paris Convention that enables or excuses such
less favourable treatment for non-EC nationals.

102. Is it safe to assume that persons reside nt or established in one country to produce
agricultural products or foodstuffs will be considered "nationals" of that country for the purposes of
TRIPS? Why is it, or is it not, safe to assume that applicants for GIs under Regulation (EC) No.

2081/92 are "nationals" of the country where their GI is located, for the purposes of TRIPS? USA,
AUS, EC

6. As set out in response to question No. 101 above , there is clearly at least one category of non-
EC nationals that is being treated less favourably th an a category of EC nationals with regard to the
protection of an EC-defined GI to which the respec tive nationals have a claim. It is therefore not
necessary to make any assumptions about the population of other categories, or to seek to characterise
all
 persons in every WTO Member that may be seeking to register an EC-defined GI.

7. In any case, Australia notes that the Appellate Body in Korea – Beef , with regard to the
national treatment obligation in GATT Article III:4 held that, notwithstanding the fact that the
measure did not in and of itself result in less fa vourable treatment to imported products, the effect
 of
the measure in that dispute was to treat impor ted products less favourably than domestic like
products.1 Similarly, in the present dispute, the overwhelming majority of applications for
registrations related to geogra phical locations in other WTO Me mbers will be made by nationals
(however defined) of those Members. Thus, the effect of the EC measure is that the specific
provisions and additional requirements of the meas ure for names relating to products originating
outside of the EC will overwhelmingly apply to non-EC nationals.

103. The Panel takes note that the EC does not exclude entirely that "under certain circumstances,
measures which are neutral on their face may noneth eless constitute less fa vourable treatment of
foreign nationals" and that the EC believes that national treatment under TRIPS should not overlap
with GATT 1994 (EC response to Panel questi on No. 29, paras 71 and 74). What other
considerations are relevant to th e assessment of de facto discrimination under TRIPS? What is the
relevance, if any, of the fact that the TRIPS Agreement does not contain a general exceptions
provision analogous to Article XX of GATT 1994? USA, AUS, EC

8. The preambular clauses to the TRIPS Agreem ent expressly recognise "the need for new rules
and disciplines concerning … the applicability of the basic principles of GATT 1994". As the
Appellate Body has noted, the national treatment ob ligation is a "cornerstone of the world trading
system that is served by the WTO".
2 The Appellate Body has found that: "… as the language of
Article 3.1 of the TRIPS Agreement, in particular, is similar to that of Article III:4 of the GATT 1994,
the jurisprudence on Article III:4 of the GATT 1994 may be useful in interpreting the national
treatment obligation in the TRIPS Agreement ".3 I n Korea – Beef , the Appellate Body said:
"[a]ccording 'treatment no less favourable' means … according conditions of competition no less
favourable to the imported product than to the like domestic product".4 (emphasis in original)

9. It was against that background that Australia suggested that the "treatment no less favourable"
obligation in TRIPS Article 3.1 c ould appropriately be considered within the framework of the
question: "does the treatment accorded by the EC measure modify the conditions of competition in
the EC market to the detriment of nationals of ot her WTO Members with regard to the protection of
intellectual property?". 5 In Australia's view, considering the obligation established by TRIPS
Article 3.1 in that manner ensures that the basic na tional treatment principle that is a cornerstone of
the world trading system applies in relation to the protection of intellectual property and in relation to
nationals rather than to products. Further, and as a consequence, considering the obligation
established by TRIPS Article 3.1 in that manne r enables any factors which may constitute de facto
discrimination within the meaning of TRIPS Article 3.1 to be properly assessed.

1 Korea – Beef, paragraphs 142-148.
2 US – Section 211 Appropriations Act, paragraph 241.
3 US – Section 211 Appropriations Act, paragraph 242.
4 Korea – Beef, paragraph 135.
5 Second Australian Oral Statement, paragraph 74.

10. It is true that the TRIPS Agreement does not contain a mirror provision to GATT Article XX
in the same way as, for example, GATS Article XIV. Unlike GATT 1947 and GATS at the time of
their respective negotiations, the TRIPS Agreement was not a pioneering multilateral agreement for
many of the IP rights it covers. Thus, it expr essly recognises that multilateral regimes with broad
adherence already existed – and continue to co-exist – for the protection of many of the IP rights to
which it relates. Further, it recognises that, in accordance with those established multilateral regimes,
IP rights are generally made available, acquired a nd enforced in accordance with the national laws of,
and with respect to the territory of, a party to those regimes.

11. Reflecting the historical development of th e international IP protection regime, the TRIPS
Agreement – at Article 7 – expressly recognises that the protection and enforcement of IP rights
should take place "in a manner conducive to social and economic welfare", and – at Article 8.1 –
expressly provides that WTO Members "may, in form ulating or amending thei r laws and regulations,
adopt measures necessary to protect public health and nutrition …, provided that such measures are
consistent with the provisions of this Agreement" . In other words, WTO Members may take account
of legitimate public policy objectives and principles when establishing their national regimes for the
protection of IP rights. Having incorporated leg itimate public policy objectiv es and principles in its
national regime, a WTO Member is obliged to apply such measures consistently with the provisions
of the TRIPS Agreement. These include the national treatment and MFN obligations at TRIPS
Articles 3.1 and 4 respectively, as well as the oblig ation to comply with the national treatment
obligation of Paris Article 2. Once a WTO Member adopts measures for the protection of a category
of an IP right, those measures apply equally to its own nationals and to the nationals of all other WTO
Members.

12. Further, to the extent that a legitimate pub lic policy objective may be specific to a particular
category of IP right, the provisions of Part II of the TRIPS Agreement provide additional means for a
WTO Member to prevent the acquisition of some categories of IP rights, for example, through TRIPS
Articles 15.2 and 27.2 in respect of trademark and pate nt rights respectively, or to limit the scope of a
category of IP right, for example, through TRIPS Articles 17 and 30 in respect of trademark and
patent rights respectively. Indeed, TRIPS Article 27.2 expressly anticipates that a WTO Member may
wish to adopt patentability exclusions on the basis of the necessity to protect human, animal or plant
life or health or to avoid serious prejudice to the environment.

13. An overarching exceptions provision analogous to GATT Article XX is thus unnecessary.

14. Further, given the express provisions of TR IPS Articles 7 and 8, and of TRIPS Articles 15.2
and 17, and 27.2 and 30, the omission of an overarching exceptions provision analogous to GATT
Article XX must be considered to have been de liberate. The absence of an analogous provision is,
therefore, irrelevant to the assessment of the existence of de facto discrimination within the meaning
of the national treatment obligation set out in TRIPS Article 3.1.

104. Please provide your interpretation of the t erm "separate customs territory" as used in
footnote 1 to Article 1.3 of the TRIPS Agreement in accordance with the cust omary rules of treaty
interpretation. What relevance can be drawn from the fact that the same term is used in Article XXVI
of GATT 1994? USA, AUS, EC

15. As a general matter, Australia notes that a " separate customs territory" within the meaning of
TRIPS footnote 1 would normally be a customs territo ry that is distinct or detached from another
customs territory.

16. Australia also notes that, in accordan ce with ECJ Advisory Opinion No. 1/94,
6 competence in
the subjects covered by the TRIPS Agreement is shared between the EC and its Member States, with
some matters being solely within the domain of the EC Member States. In relation to matters covered
by the TRIPS Agreement, the customs territory of the EC will not always be the same as the
individual territories of its constituent Member States. There may be occasions in relation to matters
covered by the TRIPS Agreement when the "customs territor [ies]" of its Member States may be
distinct from the "customs territory" of the EC its elf. Moreover, in some matters covered by the
TRIPS Agreement, for example, trademarks, rights can be acquired with respect to either the territory
of the EC under the Community Trademark Regulation or the territory of a constituent Member State.
This suggests that the respective cu stoms territories are separate, that is, that the respective customs
territories are distinct or detached from each other, in relation to such matters covered by the TRIPS
Agreement.

17. In Australia's view, consideration of whet her the EC would constitute a "separate customs
territory" within the meaning of footnote 1 of the TRIPS Agreement would also require consideration
of the nature of the EC's membership of the WTO more generally. That latter consideration would
need to take account of many factors, including th e provisions of Articles IX.1, XI.1, XII.1 and XIV
of the WTO Agreement, as well as the Explanator y Notes to that Agreement. The terms of GATT
Articles XXIV:2 and XXVI may secondarily provide some relevant context for that consideration,
although they would not be determinative.

105. The Panel takes note of the EC's view that it is not a separate customs territory Member of
the WTO within the meaning of footnote 1 to Ar ticle 1.3 of the TRIPS Agreement (EC rebuttal,
para. 35).

 (a) Which natural persons
 does the EC consider EC nationals for the purposes of
TRIPS? Are they also nationals of EC member States?

 (b) Which legal persons
 does the EC consider EC national s for the purposes of TRIPS?
Are they also nationals of EC member States? EC

106. What are the nationalities of the applicant s for GIs registered under Regulation (EC)
No. 2081/92? Have there been any applicants who were not nationals of the EC member State in
which the relevant GI was located? Please supply details of any that were not, and the relevant GIs.
To the extent that you are aware of the nationality of persons other than the applicants who use a GI
in accordance with its registration, please supply the same information. EC

107. The Panel takes note of the examples of foreigners and foreign companies which have
invested in Europe (EC rebuttal, para. 46 and Exhib its EC-36 to EC-39; EC second oral statement,
para. 28 and Exhibits EC-61 to EC-63). Is the Larsen firm a French company? Have Suntory
Limited, E & J Gallo and the Robert Mondavi fam ily formed subsidiaries, joint ventures or other
entities under the laws of France and Italy to invest in those wine estates? Did Sara Lee, Kraft Foods
and Nestlé purchase companies formed under the law of an EC member State?

 The Panel takes note that the EC argues that the possibility that these foreign nationals
formed legal persons under the laws of an EC memb er State is not attributable to Regulation (EC)
No. 2081/92 (EC second oral statement, para. 30). Is it appropriate to exclude such other factors
from an examination of the WTO-consistency of the Regulation? Does the EC submit that the Panel
should "pierce the corporate veil" and refer to ownersh ip and control to determine nationality for the
purposes of TRIPS? EC

6 ECJ Advisory Opinion No. 1/94, Exhibit AUS-13.

108. Article 13 of Regulation (E C) No. 2081/92 provides certain protection for registered names.
Please explain the practical operation of this article with respect to products, including the types of
orders which may be made under Article 13(1) and the consequences of Article 13(3). How would
they affect imported products? How would they provide less favourable treatment to imported
products? USA, AUS

18. In response to referrals for preliminary rulings from courts of the EC Member States, the ECJ
has made findings concerning the extent of prot ection afforded by Article 13.1 of Regulation
No. 2081/92 in well-publicised cases concerning th e registered names of "Prosciutto di Parma" 7 ("the
Prosciutto judgment") and "Grana Padano"8 ("the Grana Padano judgment").

• In the Prosciutto judgment, the ECJ found that "… the protection conferred by [an EC-
defined GI] does not normally extend to operatio ns such as slicing and packaging the
product. Those operations are prohibited to third parties outside the region of production
only if a condition to that effect is e xpressly provided for in the specification"
(paragraph 94).

• In the Grana Padano judgment, the ECJ found:

o "Article 4.1 … makes eligibility to use [an EC-defined GI] subject to the
product's compliance with a specification. Article 8 … makes the affixing of the
indication [EC-defined GI] on a product subject to its compliance with the
regulation, and hence with the specification. Article 13 then determines the
content of the uniform protection conferred on the registered name"
(paragraph 76); and

o "… Regulation No. 2081/92 must be interpreted as not precluding the use of [an
EC-defined GI] from being subject to the condition that operations such as the
grating and packaging of the product take place in the region of production,
where such a condition is laid down in the specification" (paragraph 83).

19. In relation to Article 13.3 of Regulation No. 2081/92 and generic terms, "[i]n accordance with
Article 3 …, the generic nature of a name hindering its registration must be assessed with regard to
the Community situation as a whole".
9

20. In cases concerning the registered names "Parmigiano Reggiano"
10 ("the Parmesan
judgment") and "Epoisses de Bourgogne"11 ("the Chiciak judgment"), the ECJ has found:

• in the Parmesan judgment, that "… in the present case it is far from clear that the
designation 'parmesan' has become generic" (p aragraph 20), despite an earlier Opinion by
Advocate General Ruiz-Jarabo Colm er ("the Canadene Opinion") 12 that the term
"parmesan" had become generic (paragraph 35 and footnote 49, and paragraph 77).

• in the Chiciak judgment concerning the protecti on to be afforded to the constituent parts
of a compound term, that: "… under the system of protection created by the 1992
regulation questions c oncerning the protection to be accorded to the various constituent

7 "The Prosciutto judgment", Exhibit AUS-14.
8 "The Grana Padano judgment", Exhbit AUS-15.
9 Regulation No. 1347/2001, preambular Recital (5), Exhibit EC-9.
10 "The Parmesan judgment", Exhibit AUS-16.
11 "The Chiciak judgment", Exhibit AUS-17.
12 "The Canadeane Opinion", Exhibit AUS-18.

parts of a name, and, in particular, the qu estion whether a generic name or a constituent
part protected against the practices referred to in Article 13 of the 1992 regulation may be
concerned, are matters which fall for determin ation by the national court on the basis of a
detailed analysis of the facts presented before it by the parties concerned" (paragraph 38).

21. Following the Parmesan judgment, the Eur opean Commission has initiated action in the ECJ
against Germany for failure to protect the regist ered term "Parmigiano Reggiano" as required by
Regulation No. 2081/92, because cheeses not made in accordance with the product specification for
that term continue to be sold in Germany under the name "Parmesan". In reply, Germany has asserted
that "Parmesan" is a generic name.
13

22. In addition, Australia notes that the ongoing le gal action in the ECJ concerning registration of
the term "Feta" largely revolves around the issue of whether that term is generic.14

23. As relevant to the issues before the Panel, it is already clear from the terms of Article 13.1 of
Regulation No. 2081/92 – when read together with Articles 14.2 and 14.3 and in accordance with the
rules of interpretation of EC law – that the owner of a registered trademark would not be able to
prevent confusingly similar or identical use of a sign for similar or identical goods.

24. Further, it is also clear that the protection a fforded by Article 13.1 is able to be extended to
any restrictive condition(s) included in the pro duct specification mandated by Article 4 of the
Regulation.

25. This situation is particularly detrimental to the objective of security and predictability in trade
intended to be fostered by the WTO.

26. The situation concerning the term "parme san" illustrates the uncertainty created as a
consequence of the protection afforded by Artic le 13.1 of Regulation No. 2081/92. As far as
Australia can ascertain, use of the word "parmesan" as a generic product descriptor in the territory of
the EC is banned on the basis that the ECJ has found "it is far from clear that the designation
'Parmesan' has become generic". However, the ECJ's finding was made in a preliminary ruling
relating to criminal proceedings in Italy, the EC Member State of origin of the registered term
"Parmigiano Reggiano". If "parmesan" originally was the French translation of the term "Parmigiano
Reggiano"
15 – an issue Australia does not contest in th ese proceedings – it logically follows that it
would not have been a generic term within Italy: thus, no evidence would have been considered in the
criminal proceedings in Italy, and thus referred to the ECJ. If use of what are considered in many
parts of the world – including many EC Member States – to be generic product descriptors can be
prevented within the territory of the EC on such a basis, on what other bases could such terms be
prevented? Moreover, potential co mpetitors have no way of knowi ng what terms may be considered
to be translations of a registered – and thus protected – name.

27. The uncertainties created by the practical ope ration of Article 13.1 of Regulation No. 2081/92
and its application in situations in volving generic terms partially inform Australia's claims concerning
TRIPS Article 22.2 and Paris Articles 10 bis(1) and 10 ter(1) in respect of the registration of an EC-
defined GI. Australia has not been able to identif y any means within the EC's legal order by which a
legitimately interested person – whether natural or le gal, or a national of the EC or of another WTO
Member – is assured of access to a court empowered to consider substantively an act of unfair
competition contrary to honest practices in industrial or commercial matters, including in international

13 "The Parmesan press release, Exhibit AUS-19.
14 See Common Exhibits COMP-3.b ("the Feta amendment") and COMP-11 ("the Feta judgment"), and
Exhibit AUS-12.
15 The Parmesan judgment, Exhibit AUS-16, paragraph 20.

trade, in respect of the registration of an EC-defined GI. The fact that Australia has not made a claim
under GATT Article III:4 concerning less favourable tr eatment to imported products on the basis of
Article 13.1 of the Regulation as well in this dis pute is without prejudice to Australia's view of
whether there are in fact grounds for such a claim.

109. Leaving aside the rights conferred by Ar ticle 13 of Regulation (EC) No. 2081/92, the
complainants refer to the "intent and the effect of the Regulation", the "perceived" advantages of
registration and the benefits "claimed by the EC" to be gained from protection under the Regulation
(US first written submission, paras 61-62; Australi a's first written submission, para. 197 and US and
Australia's respective responses to Panel question No. 32). On what basis do the complainants argue
that the aims and effects of the EC measure are relevant to ascertaining less favourable treatment
within the meaning of Article III:4 of GATT 1994? USA, AUS

28. Australia notes that its reference to the adva ntages of registration perceived by EC producers
at paragraph 197 of its First Written Submission was in the context of its claim that the EC measure as
a whole does not accord national treatment to non- EC nationals under TRIPS Article 3.1 and Paris
Article 2. On the other hand, Panel question No. 32 – and Australia's response – expressly referred to
like products and thus, by implication, GATT Article III:4.

29. In examining a claim under GATT Article III:4 in Korea – Beef, the Appellate Body recalled
its finding in Japan – Alcohol Taxes that:

The broad and fundamental purpose of Article III is to avoid protectionism in the
application of internal tax and regulatory measures. More specifically, the purpose of
Article III "is to ensure that internal measur es 'not be applied to imported or domestic
products so as to afford prot ection to domestic production'".
[…] Toward this end,
Article III obliges Members of the WT O to provide equality of competitive
conditions for imported products in relation to domestic products.[…] … 16
30. In this dispute, the effect of the EC meas ure taken as a whole is to afford protection to
domestic production within the meaning of GATT Article III:4. This is consistent with the intent of
the EC measure, in particular as expressed in the preambular recitals of Regulation No. 2081/92#1.17
However, Australia notes that even if the Panel believes the aim of the Regulation is not to provide
protection to domestic production, the effect is the critical determining factor.

31. Further, Australia recalls the findings of the Appellate Body in US – Section 211
Appropriations Act concerning the usefulness of GATT Article III:4 jurisprudence in interpreting the
TRIPS Agreement national treatment obligation.
18

32. It is these – now well-established – findings by the Appellate Body that provide the support
for Australia's claims that Regulation No. 2081/92 specifically – and the EC measure as a whole –
accord less favourable treatment to non-EC nationals and to imported products within the meaning of
TRIPS Article 3.1 and GATT Article III:4 respectively.

110. Does the EC contest that, to the extent t hat Regulation (EC) No. 2081/92 provides GI
protection for EC nationals and is a law affecting EC products, GI protection for other WTO Member
nationals and imported products sole ly through other laws, such as labelling and unfair competition,
would be less favourable treatment? EC

16 Korea – Beef, paragraph 135, referring to Japan – Alcohol Taxes, pages 16-17.
17 Common Exhibit COMP-1.d.
18 US – Section 211 Appropriations Act, paragraph 242.

111. Does the EC contest that national treatment and MFN obligations under TRIPS apply to
TRIPS-plus protection, and apply to Regulation (EC) No. 2081/92 even to the extent that it does not
merely implement the EC's obligations under Article 22? EC

112. The Panel takes note that the Commission has not recognized any country under Article 12(3)
of Regulation (EC) No. 2081/92 (EC response to Panel question No. 10, para. 22). Is the Commission
obliged to recognize any country that satisfies the conditions set out in Article 12(1)? USA, AUS, EC

33. No.

34. Article 12.1 of Regulation No . 2081/92 expressly provides that the Regulation "may" apply to
an agricultural product or foodstuff from a "third count ry". Thus, even if the conditions set out in
Article 12.1 are complied with by a WTO Member or other third country, the EC is not obliged to
recognise that WTO Member or other third country under Article 12.3. (And if it does recognise a
WTO Member or other third country, it must in any case do so in accordance with the terms of the
Regulation.)

113. The EC argues that there must be a subst antive difference between two provisions governing
the registration of GIs in order fo r one to entail less favourable t reatment (EC second oral statement,
para. 40). What is a "substantive" difference in this sense? Does the EC allege that there is a
de minimis standard for less favourable treatment under TRIPS or GATT 1994? Is a simple
difference in language insufficient to establish different treatment? EC

114. With respect to registration applicati ons under Article 12a(2) of Regulation (EC)
No. 2081/92, a third country must verify that the requirements of the Regulation are satisfied before it
transmits the application:

 (a) to what extent is this designed to conf irm the protection of the GI in its country of
origin in accordance with Article 24.9 of the TRIPS Agreement, and to what extent
does it respond to other objectives?

 (b) is this additional to the requirement that a registration application transmitted to the
Commission must be accompanied by a description of the matters set out in
Article 12a(2)(a)?

 (c) does the Commission also examine wheth er the application satisfies the conditions
for protection under Article 12b(1)(a)? Ho w is this examination different from the
verification by the third country? EC

115. With respect to objections under Article 12b(2) (a) of Regulation (EC) No. 2081/92, what is an
objection that "comes from a WTO Member"? With respect to objections under Article 12d(1) of the
Regulation, what is the meaning of a person who "is from a WTO Member"? Do they both refer to
the place of residence or establishment of the person who wishes to object? Must objections under
both provisions be sent to the country in which the person resides or is established? EC

116. To the extent that certain responsibilities under Articles 12a and 12d(1) of Regulation (EC)
No. 2081/92 are borne by non-EC WTO Members:

 (a) how is the EC satisfied that every other WTO Member has the authorization to carry
them out? (Please refer to Brazil's response to Panel third party question No. 1) (EC
second oral statement, paras 72-77).

 (b) if other WTO Member governments lack authorization to carry them out, can they be
carried out by the EC instead?

 (c) to what extent does the EC itself
 accord no less favourable treatment to the nationals
of other Members, and to what extent do other WTO Members share the
implementation of that obligation? Can a Member delegate the implementation of
WTO obligations to other Members with or without their prior consent?

 (d) to what extent has the EC accorded cer tain treatment to the nationals of other WTO
Members rather than to the governments of those other WTO Members? EC

117. The Panel takes note of the EC's response to Panel question No. 8 concerning the meaning of
"third country" and seeks clarification as to whether "third country" as used in Article 12(2) of
Regulation (EC) No. 2081/92, includes WTO Memb ers. If so, why does the "without prejudice"
clause in Article 12(1) form part of the context of Articles 12(1) and (3) but not Article 12(2)? If not,
where does the Regulation cover identical GIs from the EC and other WTO Members? EC

118. The Panel takes note that, in Australia's vi ew, the identical GI labelling requirement would
not be inconsistent with Article 2.1 of the TBT Agreement if it was applied to both EC and imported
products according to date of registration, not or igin. (Australia's response to Panel question No.
53). Even if Article 12(2) does not apply to EC products as well as imported products, does the
Commission have the discretion to apply the same requirement according to the date of registration to
EC products under Article 6(6) in order to ensure that the identical labelling requirement is applied
to the later GI irrespective of the origin of the products? USA, AUS, EC

35. Australia notes that its response to Pa nel question No. 53 was in the context only
 of
Article 12.2 of Regulation No. 2081/92 which – having re gard to the rules of interpretation applicable
to EC law – governs the registration of an EC-d efined GI from another WTO Member where that
name is identical to an existing Community protect ed name. Where the earlier protected name relates
to a geographic area within the EC, Article 12. 2 mandates that the imported product clearly and
visibly indicate the country of origin on the label. In the situation covere d by Article 12.2 which is
the subject of Australia's claim, Article 6.6 has no relevance.

36. As set out in response to question No. 123 below, Article 12.2 of the Regulation mandates a
means of distinguishing an imported product, ra ther than functioning as a mark of origin per se .
Thus, Article 12.2 mandates less favourable treatment to imported products bear ing – or eligible to
bear – an EC-defined GI which is identical to an already registered EC-defined GI relating to a
geographical area within the EC.

119. What is the difference, if any, in the me aning of the word "homonymous" as used in
Article 6(6) of Regulation (EC) No. 2081/92 and "i dentical" as used in Article 12(2)? Why does the
EC consider that homonyms are covered by the wo rd "identical" in Article 12(2) (EC response to
Panel question No. 43)? EC

120. The Panel takes note of Australia's confirma tion that the only less favourable treatment under
the identical GIs labelling requirement is relabelli ng costs (Australia's response to Panel question
No. 52). Would imported products have to be relabelle d? Would existing marks of origin satisfy this
requirement? What does "clearly and visibly indicated" mean? AUS, USA, EC

37. Australia notes that the labelling costs that it referred to in its response to Panel question No.
52 could involve either re-labelling or additional la belling, depending on the circumstances. It is
possible that in some cases existing labels may – coincidentally – meet the labelling requirement of
Article 12.2 of Regulation No. 2081/92.

38. Having regard to the wording, context and aim of Article 12.2 of the Regulation, the "clearly
and visibly indicated" standard would seem to requi re at a minimum that the label be noticeably
evident in the same field of vision as the registered name and the [EC-defined GI] symbol (Article 8
of Regulation No. 2081/92 and Articles 5a and 5b of Regulation No. 2037/93
19).

121. The Panel takes note that Australia refers to Ar ticle 6(6) of Regulation (EC) No. 2081/92 as
the parallel provision to Article 12( 2) (Australia's rebuttal, paras 65-66). Does Australia wish the
Panel to address alleged discrimination arising from differences between these two provisions? What
is the less favourable treatment? AUS

39. Australia notes that paragraphs 65-66 of its Written Rebuttal Submission form part of
Australia's argument concerning the proper interpre tation of Article 12.2 of Regulation No. 2081/92
as an issue of fact. The proper interpretation of th at provision – and of Article 6.6 of the Regulation –
as an issue of fact forms the basi s of Australia's claim that the EC measure accords less favourable
treatment to imported products bearing – or eligible to bear – an EC-defined GI than to domestic like
products bearing – or eligible to bear – an EC-defin ed GI, contrary to the EC's obligations under TBT
Article 2.1. In that context, the labelling require ment can be expected to modify the conditions of
competition to the detriment of the producers of th e imported product bearing – or eligible to bear –
an EC-defined GI in situations where a different, or additional, label is required to be produced and
attached to a product because of the extra expense which will be incurred.20

122. Please refer to the phrase "labelling requirements as they apply to a product" as used in the
definition of "technical regulation" in Annex 1.1 of the TBT Agreement.

 (a) The EC argues that the "origin of a pr oduct is different from the product itself" (EC
response to Panel question No. 50). However, as the EC acknowledges, the origin of
a product may confer specific characteristics on it. This is consistent with the
definitions of designation of origin and ge ographical indication in Article 2 of
Regulation (EC) No. 2081/92, which provide that "the quality or characteristics of
the product ... are essentially or exclusivel y due to a particular geographical
environment ..." and that the product " possesses a specific quality, reputation or
other characteristics attributable to that geographical origin ...". How then is the
origin of a product entitled to bear a registered GI different from the product itself?
EC

 (b) What is the meaning of the words "as they apply to" as used in this part of the
definition? Do they refer to the applic ation of labelling requirements to the
characteristics of a product, or to the product itself, or both? AUS, EC

40. TBT Annex 1.1 defines a "technical regulation" as follows:

Document which lays down product charact eristics or their related processes and
production methods, include 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. (emphasis added)
41. The plain reading of this provision indicates that the words "as they apply to" refer to a
product (as opposed to the characteristics of a product).

19 Common Exhibit COMP-2.
20 Australia's First Written Submission, paragraphs 237-241.

42. Moreover, Australia's interpreta tion is consistent with the findings of the Appellate Body in
EC – Asbestos , and confirmed in EC – Sardines , that according to the TBT Annex 1.1 definition
labelling requirements are themselves an example of a product characteristic:

The heart of the definition of a "technical regulation" is that a "document" must "lay
down" … "product characteristics". The word "characteristic" has a number of
synonyms that are helpful in understanding the ordinary meaning of that word, in this
context. Thus, the "characteristics" of a product include, in our view, any objectively
definable "features", "qualities", "attribut es" or other "distinguishing mark" of a
product. Such "characteristics" might relate, inter alia , to a product's composition,
size, shape, colour, texture … In the definition of a "technical regulation" in
Annex 1.1, the TBT Agreement itself gives certain examples of "product
characteristics" – "terminology, symbol s, packaging, marking or labelling
requirements". These examples indicate that "product characteristics" include, not
only features and qualities intrinsic to the product itself, but also related
"characteristics", such as the means of identification, the presentation and the
appearance of a product. …
21 (emphasis in original)
123. Does the requirement to display a country of origin on a label under Article 12(2) of
Regulation (EC) No. 2081/92 constitute a mark of origin covered by Article IX of GATT 1994? AUS,
EC, USA

43. Even if the labelling requirem ent established by Article 12.2 of Regulation No. 2081/92 is a
mark of origin within the meaning of GATT Article IX, Article 12.2 is the means by which the EC
measure compulsorily differentiates between a registered EC-defined GI on an imported product and a
registered EC-defined GI on a domestic EC good, where the imported product bears the later
registered EC-defined GI. As such, Article 12. 2 mandates a means of distinguishing an imported
product, rather than functioning as a mark of origin per se.

44. Further, Australia's claims under the TBT Agreement are entirely unaffected even if GATT
Article IX applies. The TBT Agreement, as noted by the Appellate Body in EC – Asbestos, imposes a
specialised legal regime applying to measures within its scope. The Appellate Body found that these
obligations "seem to be different from, and additional to" (emphases in original) the obligations
imposed on Members under the GATT 1994.
22 Moreover, the Appellate Body has noted several times
the generally cumulative nature of a WTO Member's obligations, consistent with the integrated,
binding nature of the WTO Agreement pursuant to Article II.2 of that Agreement. 23 Thus, even if
GATT Article IX:I does exclude marks of origin from the GATT Article III:4 national treatment
obligation, it does not follow that TBT obligati ons – including the national treatment obligation in
TBT Article 2.1 – do not apply to marks of origin measures if those measures qualify as a "technical
regulation".

124. The definition of "technical regulation" in Annex 1.1 of the TBT Agreement expressly
encompasses "marking or labelling requirements as they apply to a product, process or production
method". Are marks of origin and labels of orig in covered by Article IX of GATT 1994 excluded from
the scope of the TBT Agreement? Why did the negot iators not explicitly carve them out of its scope?
Can a line be drawn between marks of origin that fall under the TBT Agreement and those that do
not? What are the systemic consequences for marks of origin if they all fall within the scope of the
TBT Agreement? AUS, EC, USA

21 EC – Asbestos, paragraph 67.
22 EC – Asbestos, paragraph 80.
23 See, for example, Korea – Dairy Safeguard, paragraphs 74-75.

45. As noted in response to question No. 123 above, even if Article 12.2 of Regulation
No. 2081/92 is covered by GATT Article IX, this does not exclude the simultaneous application of the
TBT Agreement to the same provision. In Australia's view, it would be a perverse outcome if an
agreement that was meant to "further the objectives of GATT 1994", and an agreement which prevails
over the provisions of the GATT 1994 in the event of conflict, was made narrower in scope by having
express provisions read out of that agreement.

46. The only line that has to be drawn is the line that already exists – the TBT Agreement applies
to measures that it defines within its scope. Th is is exactly the same outcome as between the
Agreement on Sanitary and Phytosanitary Measures and relevant GATT provisions, or the Agreement
on Subsidies and Countervailing Measures and relevant GATT provisions.

47. As to the question of the systemic conse quences marks of origin requirements falling under
the TBT Agreement, Australia recalls that WTO obligations are generally cumulative
24 and that it is
not uncommon for measures to fall under more than one WTO Agreement. This is consistent with the
Appellate Body statement referred to in response to question No. 123 above that the TBT Agreement
imposes a specialised legal regime applying to meas ures within its scope, and that these obligations
"seem to be different from, and additional to" (emphases in original) the obligations imposed on
Members under the GATT 1994. 25 Australia notes also that marks of origin requirements have not
been excluded from the scope of other WTO Agreem ents: indeed, Article 1.2 of the Agreement on
Rules of Origin expressly includes within its scope ru les of origin used in the application of origin
marking requirements under GATT Article IX. Whether all mark of origin requirements will fall
under the scope of the TBT Agreement is an open qu estion – there may be such requirements that are
not in the form of measures covered by the TBT Agreement.

125. To what extent would any less favourable treatment under Article 2.1 of the TBT Agreement
have to be determined in light of the regul atory objective a Member is trying to pursue under
Article 2.2? AUS, EC

48. Australia understands that the "regulatory objec tive" referred to in the Panel's question is the
legitimate public policy objective pursued via a techni cal regulation, as distinct from the intent of the
legislators with regard to the specific application or treatment accorded by a measure to imported and
domestic products.

49. Unlike TBT Article 2.2, TBT Article 2.1 makes no reference whatsoever to regulatory
objectives. It simply establishes a national treatment obligation in respect of technical regulations,
reproducing the GATT Article III:4 "treatment no less favourable" obligation. Moreover, Australia
has previously noted that the TBT Agreement was negotiated to further the objectives of GATT
1994.
26 Australia has also previously noted the findi ng of the Appellate Body on the usefulness of
jurisprudence on GATT Article III:4 in interpretin g the national treatment obligation in another
agreement.27 Australia notes too the findings of the Appellate Body in Japan – Alcohol Taxes:

… It is not necessary for a panel to sort through the many reasons legislators and
regulators often have for what they do and weigh the relative significance of those
reasons to establish legislative or regulato ry intent. If the measure is applied to
imported or domestic products so as to afford protection to domestic production, then

24 Korea – Dairy Safeguard, paragraphs 74-75.
25 EC – Asbestos, paragraph 80.
26 See, for example, Australia's First Written Submission, paragraph 226.
27 Ibid.

it does not matter that there may not have been any desire to engage in protectionism
in the minds of the legislators or the regulators who imposed the measure. … 28
50. Against that background, it is Australia's view that the appropriate standard for determining
any less favourable treatment within the meaning of TBT Article 2.1 is that set out by the Appellate
Body in Korea – Beef when it found: "[w]hether … imported products are treated 'less favourably'
than like domestic products should be assessed … by examining whether a measure modified the
conditions of competition in the relevant market to th e detriment of imported products". 29 (emphasis
in original)

126. With respect to Article 10(3) of Regulation (EC) No. 2081/92:

 (a) the first indent sets out certain requirements for designated inspection authorities
and/or approved private bodies. Do these apply to all countries whose GIs are
protected under the Regulation, including non-EC member States?

 (b) the fifth indent appears to refer onl y to EC member States and third countries
recognized pursuant to Article 12(3). Where does the Regulation refer to the
applicable standard for WTO Members not recognized pursuant to Article 12(3),
whose requirements private bodies must fulfil for approval purposes?

 (c) the fifth indent refers to "[t]he equivalent standard or the applicable version of the
equivalent standard". What equivalent standard has been established for GIs for
areas located in WTO Members which do not satisfy the conditions of equivalence
and reciprocity in Article 12(1)? What are the criteria for establishing that
standard? Is it a matter of determining what is "equivalent" to standard EN 45011?
Or is it a matter of determining what standard would fulfil the objectives of the
Regulation in the light of each third country's own circumstances and conditions?
EC

127. Article 12a(2)(b) requires a d eclaration by a third country government that the structures
provided for in Article 10 are established on its territory. Article 10(2) refers to inspection
authorities and/or private bodies approved for that person by the Member State
 and Article 10(3)
provides that where they outsource they continue to be responsible vis-à-vis the Member State for all
inspections. What is the exact nature of the role that third country governments must play in the
creation and maintenance of the inspection structures that are called for under Article 10? EC

128. In the goods area, it is not uncommon t hat importing country governments designate, or
require the accreditation of, the bodies which expor ters may use in the territory of the exporting
country in order to determine compliance with pr oduct requirements. To what extent does the EC
actually give the US and Australia more, rath er than less, flexibility by allowing the US
and Australian governments themselves to designate the bodies that may participate in the inspection
process? Can the US and Australia elaborate on the reasons for which they consider governmental
involvement problematic? USA, AUS

51. Australia reiterates that it does not contest all requirements for an inspection structure per se,
nor does it consider government involvement in su ch procedures necessarily to be problematic.
Rather, Australia contests the EC measure's imposition of EC-mandated inspection structures on other
WTO Members, regardless of any existing inspectio n structures and/or other systems or mechanisms
that perform the same function as the EC-mandated inspection structures.

28 Japan – Alcohol Taxes, pages 27-28.
29 Korea – Beef, paragraph 137.

52. This requirement is, firstly, trade restrictiv e, because it restricts the opportunities for non-EC
producers to register an EC-defined GI to cas es where the products in question originate from
Members with EC-mandated inspection structures in place. Secondly, the requirement is more trade
restrictive than necessary. For such a requireme nt to be necessary within the meaning of TBT
Article 2.2, the EC would have had to have determined that no other system in any WTO Member
could in any circumstances provide the same degree of assurance as the EC's system for compliance
verification and/or enforcement, or for the prevention of deceptive practices.

129. The Panel takes note of the US arguments on in spection structures (US rebuttal, paras 46-48
and 89-93; US second oral statement paras 21-27). What aspects of government involvement in
inspection structures do you allege constitute less favourable treatment for foreign nationals
? What
aspects do you allege constitute less fa vourable treatment for imported products ? Is there less
favourable treatment where such structures already exist? USA

130. Other than governmental involvement in the inspection structures, what aspects of the
inspection structures do the US and Australia find problematic? USA, AUS

53. Please see answer to question No. 128 above.

131. Which EC Directives govern conf ormity assessment to EC techni cal regulations in the goods
area? To what extent do those Directives req uire foreign governmental involvement in the
designation/approval of conform ity assessment bodies, when mut ual recognition agreements in the
conformity assessment area do not already exist? EC

132. The Panel takes note of the EC's examples of flexi bility in the design of inspections structures
(EC rebuttal, para. 104 and Exhibit EC-48). Do these examples all relate to the nature of the
inspecting authority? Who determ ines what constitutes an appropriate inspection for each product,
and on the basis of what criteria? EC

133. The Panel takes note that Australia argues t hat the product specification requirements set out
in Article 4(2) of Regulation (EC) No. 2081/92 in clude "product characteristics", in particular
subparagraphs (b) and (e). (Australia's rebuttal, par as 197 and 204) If the inspection structures are
designed to ensure that the product specifications u nder Article 4 of the Regulation are fulfilled, how
can they be a technical regulation and not a conformity assessment procedure? AUS, EC

54. The TBT Annex 1.1 definition of "technical regulation" includes, in addition to product
characteristics, a document that lays down "relat ed processes and production methods, including the
applicable administrative provisions". Australia has argued
30 therefore that a document which does
not stipulate mandatory product characteristics per se but lays down related processes that are
mandatory is a "technical regulation" for the purposes of the TBT Agreement.

55. Having regard to the ordinary meaning of the words in their context, a mandatory requirement
for the verification of compliance with product specifi cations to be carried out in a particular manner
is a process related to product characteristics , and therefore corresponds to the TBT Annex 1.1
definition of a technical regulation. Thus, Artic les 4 and 10 of Regulation No. 2081/92 read together
constitute a technical regulation. The fact that these provisions read together address the issue of
conformity does not change their nature as a technical regulation.

56. The EC argues that the difference between a technical regulation and a conformity assessment
procedure is that one sets out product characteristics in abstract terms while the other is concerned

30 Australia's First Written Submission, paragraphs 214-221.

with enforcement of such regulations in concrete cases. 31 However, this interpretation does not
correspond to the Appellate Body's interpretation of the term "technical regulation", nor the definition
of that term in the TBT Agreement. It ignores th e express terms of the TBT Annex 1.1 definition that
a technical regulation may lay down "related processes and production methods, including the
applicable administrative provisions". Moreover, a technical regulation lays down mandatory product
characteristics applicable to identifiable products: this does not imply a regulation that is "abstract".32

134. The Panel takes note of the EC's response to Panel question No. 61, in particular regarding
the Panel's terms of reference. However, does the EC contest that a "conformity assessment
procedure" within the meaning of the TBT Ag reement assesses conformity with a "technical
regulation" or "standard" within the meaning of the TBT Agreement? If not, then can the EC
complete its analysis and explain whether the insp ection structures of Regulation (EC) No. 2081/92
assess conformity with each individual product specific ation referred to in Article 4 of the Regulation
for a registered name, and that those specifications therefore would constitute a "technical
regulation" within the meaning of the TBT Agreement? EC

135. The EC invokes Article XX(d) of GATT 1994 as a defence to the national treatment and MFN
claims with respect to third country governments' verification and transmittal of applications, the
identical GIs labelling requirement and inspection stru ctures requirement. The EC alleges that these
requirements are "necessary" to secure compliance with Regulation (EC) No. 2081/92 or to attain the
legitimate objectives of the Regulation (EC rebuttal, paras 228-242, paras 263-265; EC second oral
statement, paras 132-135):

 (a) what is the "measure" necessary to secu re compliance with laws or regulations
within the meaning of Article XX(d) in each case? What are the laws and regulations
with which each one secures compliance? Are the "measures" separate from the laws
or regulations?

 (b) can a measure that secures compliance with the "objectives" of a regulation, rather
than a regulation itself, satisfy Article XX(d)?

 (c) in what sense does each of these meas ures "secure compliance" with laws or
regulations? Are they enforcement mechanisms?

 (d) how are the laws and regulations with which each measure secures compliance not
inconsistent with the GATT 1994? EC

136. With respect to the issue whether the measures are neces sary to secure compliance, and
without prejudice to the WTO-consistency of any alternative measures:

 (a) is the requirement that a third country government verify applications "necessary" to
secure compliance in cases where an applicant itself is able to prove that a GI is
protected in its country of origin, for exam ple, by submitting an authenticated copy of
a registration certificate?

 (b) is the requirement that a third country government verify applications "necessary" to
secure compliance in cases where the third country has no registration system for GIs
or where determinations that a GI is protected under unfair competition laws are
only made by the judicial branch of government after litigation?

31 EC response to Question 60 from the Panel following the first meeting with the Panel,
paragraph 133.
32 Ibid.

 (c) is the requirement that a third coun try government transmit applications "necessary"
to secure compliance in cases where an applicant itself is able to send an application
to the Commission?

 (d) why does a third country government need to verify whether the person objecting is
resident or established in the third coun try? Why does the Commission need consult
with the third country if the statement of objection is admissible? (EC response to
Panel question No. 34).

 (e) is the identical GIs labelling requirem ent "necessary" to secure compliance in cases
where there is already a clear distinction in practice in the usual presentation of the
relevant products without clearly and visibly displaying the country of origin?

 (f) is the requirement that a third country government designate inspection authorities
"necessary" to secure compli ance in cases where the Commission could designate
them in third countries (see US second oral statement, para. 53)?

 (g) is the requirement that a third country government declare that inspection structures
are established on its territory "necessary" to secure compliance in cases where an
applicant could arrange for independent insp ection structures to be put in place in
respect of a specific product (see US second oral statement, para. 53)?

 (h) how is the requirement that a private in spection body continues to be responsible vis-
à-vis a third country government "necessary" to secure compliance in cases where
the EC could conduct its own inspections of foreign GIs (see US second oral
statement, para. 53)?

 (i) how is the requirement that the inspection authorities and/or private bodies have
permanently
 at their disposal staff and resources necessary to ensure that all
products bearing GIs comply with the produc t specifications in their registrations?
(see Australia's rebuttal submission, para. 217). EC

137. The Panel takes note of the EC's view that Article 14(3) of Regulation (EC) No. 2081/92
allows its authorities to refuse or invalidate the registration of any confusing GIs (EC first written
submission, para. 286; EC rebuttal, para. 270). The complainants do not agree (US second written
submission, para. 166 and Australia's second written submission, para. 109). The following examples
have been referred to in this proceeding:

 (a) BAYERISCHES BIER and BAVARIA and HØKER BAJER?

 (b) BUDEJOVICKÉ PIVO and BUDWEISER?

 (c) GORGONZOLA and CAMBOZOLA?

 Could these GIs be used in accordance with th eir registrations in a way that results in a
likelihood of confusion with the respective trademark(s)? USA, AUS, EC

57. Yes.

58. Statements by the EC that Article 14.3 of Regulation No. 2081/92 would permit the EC to
refuse registration of an EC-defined GI on the basis of a likelihood of confusion are not sustainable
when considered in light of the wording, context and aims of the provision as required by the rules of

EC law (see response to question No. 149 below). Equa lly, the EC's statements that Article 14.3 of
the Regulation permits the EC to invalidate regist ration of an EC-defined GI on the basis of a
likelihood of confusion are unsustainable for the sa me reasons. Moreover, the EC has not sought to
explain how a trademark owner woul d have standing to initiate legal action seeking invalidation of a
registration of an EC-defined GI on th e basis of a likelihood of confusion . These are particularly
important issues given the express terms of Arti cle 142 (now Article 159) of Regulation No. 40/94 33
and – in the case of the owner of a trademark registered in an EC Member State – the fact that
Community law has primacy over EC Member State law in the event of a conflict.
34

59. Even if Article 14.3 of the Regulation di d permit the EC to refuse or invalidate the
registration of an EC-defined GI on the basis of a likelihood of confusion, it would still be possible for
the registered EC-defined GIs "Bayersiches Bier" and "Bud ĕjovické pivo" to be used in a way that
results in a likelihood of confusion with the resp ective trademarks. Even within the EC Member
States where the trademarks "Bavaria", "Høker Baje r" and "Budweiser" are registered, the protection
afforded by Regulation No. 2081/92 – in particular Article 13.1 – makes clear that the owner of a
registered trademark would not be able to prevent confusingly similar or identical use of a sign for
similar or identical goods (see response to ques tion No. 108 above). Moreover, even the EC's
assertion that a trademark right holder could initiate infringement action is highly qualified: "… a
court would be entitled
 to find, depending on the specific circumstances of each case , that the 'used
sign' is different from the 'registered sign' and, therefore, not protected …" 35 (emphases added). Even
where those trademarks are not registered in ot her EC Member States, each could still enjoy a
reputation in the territories of those other States – particularly in adjoining States – which the EC-
defined GI right holders could exploit through conf usingly similar use of translations of the EC-
defined GIs. The EC has not explained how, in such situations, the owners of those trademarks would
be assured of the rights of a registered trademark owner to initiate infringe ment action, or of the
standing to initiate legal action un der other legal provisions, such as labelling, misleading advertising
or unfair competition laws.36

60. In relation to the registered EC-defined GI "Gorgonzola", Austra lia understands that the
trademark "Cambozola" was not considered to be a translation or a synonym of "Gorgonzola".
Rather, it was considered to be a sign that delib erately sought to evoke "Gorgonzola", even though
there was no likelihood of confusion.
37

138. What is the meaning of the phrase "[w]ith due regard to Community law" in Article 14(2) of
Regulation (EC) No. 2081/92? Which aspects of "Community law" are relevant? What is the
meaning of the phrase "shall not affect [Regulatio n No. 2081/92] ... and in particular Article 14
thereof" in Article 142 of Regulation (EC) No. 40/94 on the Community trade mark? EC

139. The Panel takes note of the EC's view that the owner of a trademark may not prevent the right
holders of a registered GI from using the registere d name on the grounds that such name is confusing
(EC second oral statement, para. 181). Please confirm that as long as a GI remains registered and is
used in accordance with its registration, a trademark owner may not enforce his trademark rights
against that use either under the Regulation on th e Community trademark or the national trademark
laws of the member States. What legal prov isions prevent the trademark owners exercising their
rights against persons using a GI in accordance with its registration? EC

33 Common Exhibit COMP-7.
34 Australia's Closing Statement at the second su bstantive meeting with the Panel, referring to Canada
– Patent Term, paragraph 92.
35 EC's Second Written Submission, paragraph 302.
36 Australia's Closing Statement at the second su bstantive meeting with the Panel, referring to Canada
– Patent Term, paragraph 92.
37 The Gorgonzola judgment, Exhibit EC-32, paragraph 26.

140. Under what provision of Regulation (EC) No . 2081/92 does the registration of a GI give the
right holder a positive right to use the GI? How is that right delimited? Does it include translations
of the protected term? For example, what uses do th e registrations of the four cheese GIs referred to
in Exhibit US-52 permit? How far does that po sitive right extend before it can be challenged under
labelling and misleading advertising laws? EC

141. What is the legal basis for an action to invalidate a registration under Regulation (EC)
No. 2081/92 on the grounds of c onfusion with a trademark? Is there any basis for an action to
invalidate a GI registration in Regulation (EC) No. 40/94 on the Community trade mark? EC

142. The Panel takes note of the EC's view t hat the owner of a concurrent trademark could
challenge a decision to register a GI inconsistently with Article 14(3) of Regulation (EC) No. 2081/92
even after the GI has been forma lly registered (EC response to Pane l question No. 67; EC rebuttal
paras. 270 and 296). If a trademark owner app lied to invalidate a GI registration under
Article 14(3):

 (a) is this a precondition to a trademark infringement action?

 (b) is there any time-limit on such an invalidation action?

 (c) is this possibility available where the GI is registered pursuant to an Act of Accession
or otherwise without the normal application procedures?

 (d) how would such an application for invalidation relate to the cancellation procedure
in Article 11a of the Regulation? Are th e grounds for cancellation in Article 11a
exhaustive? EC

143. The Panel takes note that the Council Decision to register BAYERISCHES BIER as a GI
states that "[i]n view of the facts and information available, it was, however, considered that
registration of [that name] was not liable to misl ead the consumer as to the true identity of the
product" (Exhibit EC-9, para. (3), cited in EC rebut tal, para. 287). Please detail what were the facts
and information to which the Council referred in that Decision and how they were evaluated so that
the Panel can see how the criteria in Article 14(3) were applied in that case. EC

144. The Panel takes note that Commission Regulation (EC) No. 1107/96 (set out in
Exhibit COMP-3a), which effected the registration of many individual GIs, recites Article 14(2) and
(3) of Regulation (EC) No. 2081/92. How were Article 14(2) and (3) taken into account in the
registration of those GIs? EC

145. Please refer to Article 24.5 of the TRIPS Agreement and comment on the suggestion that:

 (a) the phrase "shall not prejudice eligibility for or the validity of the registration of a
trademark" merely creates an exception to the obligations in Articles 22.3 and 23.2 to
refuse or invalidate the registration of trademarks; and

 (b) the phrase "shall not prejudice ... the ri ght to use a trademark" merely creates an
exception to the obligations in Articles 22.2 and 23.1 to provide the legal means to
prevent certain uses and does not create any positive right. USA, AUS, EC

61. Australia does not consider that TRIPS Article 24.5 can be said merely to create an exception
to the obligations in TRIPS Article 22.2, 22.3, 23. 1 and/or 23.2. As Australia has said previously, 38
TRIPS Article 24.5 – together with TRIPS Articl es 22.3 and 23.2 – defines the boundary between a
WTO Member's right to implement measures relating to TRIPS-defined GIs and its obligation to
afford protection to pre-existing trademark rights. In establishing that boundary, TRIPS Article 24.5
in effect also creates a positive right: that the sp ecified trademark rights, for example, those required
to have been granted in accordance with Paris Artic le 4, cannot be adversely affected by measures
adopted to implement Section 3, Part II, of the TRIPS Agreement.

62. Australia has previously noted the principle of territoriality that underpins the global regime
for the protection of IP rights.
39 Moreover, that has been the case for more than 100 years. Thus,
pursuant to the provisions of Paris Article 6(1), "[ t]he conditions for the f iling and registration of
trademarks shall be determined in each country of the Union by its domestic legislation". It was, in
effect, the norm for parties to the Paris Conventi on to provide for the registration of a misleading
trademark – that is, a trademark that positively provoked an error on the part of the consumer as to the
source undertaking of the good – to be refused or invalidated ex officio. At the same time, whether a
specific sign was misleading was determined in relation to the territory of that Paris Convention party:
a sign could have been determined to be misleading in relation to the territory of country A but not of
country B, and vice versa. As a consequence, registration and use as a trademark of a sign recognised
as a GI in country A could have been determined to be misleading, while registration and use as a
trademark of that same sign in country B could have been determined not to be misleading.

63. The TRIPS Agreement reinforces that situati on, establishing a general obligation on a WTO
Member to provide – as a minimum standard 40 in its domestic legal regi me covering trademarks and
TRIPS-defined GIs – that:

• use of a trademark that contains or consists of a TRIPS-defined GI and which misleads
the public as to the true place of origin cons titutes a ground for refusal or invalidation of
that trademark; or

• in the case of wines and spirits, use of a trademark that contains or consists of a TRIPS-
defined GI for wines or spirits not originati ng in the place indicated by the GI constitutes
grounds for refusal or invalidation of that trademark.

64. In any case, the clauses quoted in the questi on cannot be considered in isolation from the
previous phrase "measures adopted to implement th is Section". Moreover, that phrase – and TRIPS
Article 24.5 more generally – cannot be considered in isolation from the rights expressly required to
be granted to the owner of a registered trademar k pursuant to TRIPS Article 16.1 as well as the fact
that, in accordance with the principle of territori ality, a WTO Member may make available to the
owner of a trademark on the basis of use
 the exclusive right to prevent confusingly similar or identical
use of a sign. Nor can the phrase "measures adopt ed to implement this Section" – and TRIPS
Article 24.5 more generally – be considered in isolation from the right expressly accorded under
TRIPS Article 1.1 to a WTO Member to implement in its law more extensive protection than required
by the TRIPS Agreement, provided that such prot ection does not contravene the provisions of the
Agreement.

146. The Panel takes note of the respective view s of the EC and US on simultaneous exercise of
rights with respect to use (EC rebuttal, para. 309 and US rebuttal, para. 119). Without prejudice to

38 See, for example, Australia's Written Rebuttal Submission, paragraph 96.
39 See, for example, Australia's Second Oral Statement, paragraph 32.
40 See heading of Part II of the TRIPS Agreemen t, covering both Trademarks and Geographical
Indications.

the EC's views on Article 24.5, would there be any practical
 conflict between the rights to prevent
certain uses conferred under Articles 16.1 and 22.2 of TRIPS? Under what circumstances is it
impossible for, simultaneously:

 (a) a trademark owner to prevent uses
 of a sign where such use would result in a
likelihood of confusion (under Article 16.1), and

 (b) a right holder in a GI to prevent uses
 of an indication that are misleading with
respect to the geographical origin of the product or which constitute unfair
competition (under Article 22.2) except on the basis that the trademark is identical
with, or similar to, the GI (under Article 24.5)? USA, AUS, EC

65. Australia has several times set out its view during the course of this dispute 41 that TRIPS
Article 24.5 – together with TRIPS Articles 22. 3 and 23.2 – defines the boundary between a WTO
Member's right to implement measures relating to TRIPS-defined GIs and its obligation to afford
protection to pre-existing trademark rights.

66. Thus, in Australia's view, the only relevan ce of TRIPS Article 22.2(a) to trademark rights
would be in the context of the acquisition of new tr ademark rights. There would thus be no practical
conflict in the application of TRIPS Articles 16.1 and 22.2(a).

67. Australia notes that a conflict between a trad emark and a GI right usually arises because of
the way in which the signs are being used and not b ecause of their inherent nature. Thus, a trademark
owner would be able to take action to prevent conf using use. In such a situation, a court would
typically look at the nature and scope of any rights, the legitimate interests of the parties and the facts
of the case. Regulation No. 2081/92 – far from faci litating such an assessment consistent with the
rights required to be granted to the owner of a registered trademark under TRIPS Article 16.1 –
prevents it irrespective of the circumstances.

147. Article 24.5 as finally ag reed contains the phrase "measures adopted to implement this
Section shall not prejudice eligibility for or the validi ty of the registration of a trademark, or the right
to use a trademark". Please comment on the suggestion that during the Uruguay Round negotiations
there was a disagreement as to whet her the predecessor to this provis ion in the Brussels Draft should
be made permissive rather than mandatory, and that the choice of this language was part of an effort
to reach agreement on the issue of the mandato ry / permissive nature of the provision. USA, AUS,
EC

68. Australia is not in a posi tion to comment in these dispute settlement proceedings on the
proposition set out in this question.

69. DSU Article 3.2, however, requires that the pr ovisions of TRIPS Article 24.5 – and indeed of
the WTO Agreement as a whole – be clarified in dispute settlement proceedin gs in accordance with
the customary rules of interpretation of public intern ational law. Those interpretive rules have been
found by the Appellate Body to be set out at Ar ticles 31 and 32 of the Vienna Convention on the Law
of Treaties.
42 Australia notes that the Appellate Body found in India – Patents that: "[t]he duty of a
treaty interpreter is to examine the words of the treaty to determine the intentions of the parties. This
should be done in accordance with the principles of treaty interpretation set out in Article 31 of the
Vienna Convention."43 (emphasis added)

41 See, for example, Australia's Written Rebuttal Submission, paragraph 96.
42 See, for example, Japan – Alcohol Taxes, pages 10-12.
43 India – Patents, paragraph 45.

148. What is the meaning of the phrase "where su ch use would result in a likelihood of confusion"
as used in Article 16.1 of the TRIPS Agreement? How should such likelihood of confusion be
assessed? How does the assessment differ from that under Article 14(3) of Regulation (EC)
No. 2081/92? In particular:

 (a) how should the likelihood of confusion, and the liability to mislead the consumer, be
assessed with respect to a mark to which ri ghts have not been acquired on the basis
of use?

 (b) as of what time should the likelihood of confusion, and the liability to mislead the
consumer, be assessed?

 (c) are the trademark's reputation and renown and the length of time it has been used
necessarily relevant to both analyses? USA, AUS, EC

70. The words "where such use would result in a likelihood of confusion" in TRIPS Article 16.1
have three key elements: "such use"; "would result"; and "a likelihood of confusion". Having regard
to the normal rules of interpretation applicable to the WTO Agreement:

• "such use" refers to use of an identical or similar sign for goods or services which are
identical or similar to those goods or servi ces in respect of which the trademark is
registered or in respect of which trademark rights have been acquired by use;

• "would result" means that such use will have the specified outcome or consequence if the
use were to be allowed; and

• "a likelihood of confusion" means that there is a reasonable chance that consumers of the
goods or services at issue would be puzzled or bewildered as to the source of the goods or
services.

71. There are, in addition, two implicit premises: firstly, that there is – or is intended to be –
active use of a trademark; and secondly, by the u se of the words "would result", that the right to
prevent confusingly similar or identical use of a sign necessarily encompasses pre-emptive
 action.

72. The likelihood of conf usion is assessed having regard to the principle of territoriality. In
general terms, it is assessed on the basis of a r easonable number of the re levant consuming public
being caused to wonder as to the source of the products . Accordingly, in the context of the specific
questions above (see also Australia's response to question No. 149 below):

 (a) In respect of trademarks to which rights have not been acquired on the basis of use,
how rights have been acquired does not a ffect the assessment of the likelihood of
confusion per se . It is the prospective use of th e second sign that is the issue.
Although substantial use and renown of the trademark mean that a wider range of
uses by other parties may cause the consumer to wonder as to the source of a good,
reputation is not a prerequisite for a likelihood of confusion or for the exercise of the
rights required to be granted under TRIPS Article 16.1. It is possible to cause
confusion with a registered trademark even where it has little use and no reputation.
This can occur both by virtue of the signs themselves or by the way in which the
signs are used and presented. Moreover, even where trademark rights have been
acquired through registration, such trademar ks are used: this post-acquisition use
also forms the context of any likelihood of confusion.

 Similarly, how rights have been acqui red does not affect the assessment of the
liability to mislead the consumer. On the other hand, some degree of reputation
would normally be required if a consumer is to be provoked into error in a purchase.

 Moreover, having regard to its wording, context and aim, Article 14.3 of Regulation
No. 2081/92 is premised on there bei ng a distinction between confusing and
misleading use.

 (b) The likelihood of confusion and the liabilit y to mislead the consumer may need to be
assessed at several stages.

 An initial assessment must be made as at th e date of application for registration of a
trademark. Further, this assessment should be informed – in accordance with a WTO
Member's law – by the evidentiary presumption of a likelihood of confusion required
to be granted to the owner of a registered trademark for use of an identical sign for
identical goods under TRIPS Article 16.1. Where the second application relates to
the registration of a GI, the initial assessm ent must be made as at the date of
application for registration of the GI, agai n informed by the evidentiary presumption
required to be granted to the owner of a registered trademark.

 Subsequently, an assessment can be made at the time of use. An assessment at this
time typically considers not only the later sign, but the nature of its use. It may be
that the sign in and of itself would not result in a likelihood of confusion or be liable
to mislead the consumer, but that over time the manner in which the sign is presented
and used would have one or other of those outcomes.

 The rights required to be granted under TRIPS Article 16.1 do not limit the rights of
the owner of a registered trademark to be able to prevent confusing use of a sign.
Those rights extend to all such use, and incl ude use of an identical sign for identical
goods (presumed to be confusing), of a misleading sign, or of a sign intended to
deceive. Further, those rights apply both at the time of the initial application for
registration of a later trademark or GI and at later stages of use, including in the case
of changed circumstances which would result in a likelihood of confusion.

 (c) The reputation and renown and the length of time a trademark has been used are not
necessarily relevant to the assessment of a likelihood of confusion.

 TRIPS Article 16.1 states that a likelihood of confusion is to be presumed in the case
of use of an identical sign for an identical good. Clearly, reputation and renown and
the length of time a trademark has been used are not relevant in such a situation.

 Of course, in reality, the likelihood of confusion is a continuum. Where there is
extensive use, reputation and/or renown and the signs are similar, these are relevant
factors. However, it is possible to find that confusion is likely even though there is
very little use and very little reputation and no renown. Equally, it is possible that
renown can lessen the likelihood of confus ion. Discerning consumers in a market
where significant care in purchasing is th e norm – for example, when purchasing a
vehicle – would normally be more aware of slight differences in a sign.

 On the other hand, where the assessment concerns whether a sign would be liable to
mislead
 the consumer (as is required by Ar ticle 14.3 of Regulation No. 2081/92 in
respect of an EC-defined GI), such fact ors as reputation, renown and extent of use
would normally be highly relevant.

149. What are the differences between "confusi on" and "misleads" as used in Articles 16.1 and
22.2 of the TRIPS Agreement, respectively? Do they have any bearing on the misleading standard
under Article 14(3) of Regulation (EC) No. 2081/92? USA, AUS, EC

73. Having regard to customary rules of interpretation:

• the ordinary meanings of "confusion" include "embarrassment", "perplexity", "disorder",
and "the quality of being confused, indistinct or obscure";
44 and

• the ordinary meanings of "misleading" are "[t]hat leads someone astray, that causes error;
imprecise, confusing, deceptive".45

74. "Confusion" in the sense of TRIPS Article 16.1 is use which would cause perplexity or
bewilderment on the part of the consumer as to th e source undertaking of the good. In other words,
"confusion" concerns use which would cause the consumer to wonder about the source undertaking of
the good.46

75. On the other hand, although "misleading" mi ght in some contexts be synonymous with
"confus[ing]", the wording of TRIPS Article 22.2 – use which misleads the public as to the
geographical origin of the good – makes clear that the ordinary meaning of "misleading" in the
context of that provision is use which "leads some one astray or that causes error". In other words,
misleading use in the sense of TRIPS Article 22.2 is use which positively provokes an error on the
part of a consumer as to the geographical origin of the good.
47

76. The wording, context and aim of Article 14.3 of Regulation No. 2081/92 confirm that
"misleading" in the sense of Article 14.3 is sim ilar to the meaning of "misleading" in the sense of
TRIPS Article 22.2. Article 14.3 of the Regulation refe rs to a situation where "registration is liable to
mislead the consumer as to the true identity of the product". In other words, "misleading" is used in
the sense of Article 14.3 of causing the consumer to mistake the true identity of the product.

77. Indeed, the words "confusion" and "misleading" have been used throughout Regulation
No. 2081/92 in the same sense as they have been used in TRIPS Articles 16.1 and 22.2. 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. On the other hand, the word "misleading" is used throughout
the Regulation – 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 a consumer.

78. Further, this distinction is shown even more clearly in the French version of the Regulation.
48
For every occurrence of "confusion" in the English version, the word "confusion" is used in the
French version. On the other hand, for every occu rrence of "mislead" or "misleading" in the English
version of the Regulation, the French version u ses the language: "induire le [public/consommateur]
en erreur quant à la veritable origine du produit" (Articles 3.2, 13.1(d) and 14.3); "donne à penser à
les consommateurs" (Article 6.6); and "fallacieuse quant à la provenance, l'origine" (Article 13.1(c)).

44 OED, Vol.1, page 478.
45 OED, Vol.1, page 1791.
46 Australia's Written Rebuttal Submission, paragraph 104.
47 Ibid.
48 Common Exhibit COMP-1.c.

79. Thus, notwithstanding EC arguments that Article 14.3 of Regulation No. 2081/92 would
permit the registration of an EC-defined GI to be refused on the basis of a likelihood of confusion,
49
such an interpretation would not be sustainable having regard to the rules of interpretation of EC law.
The word "misleading" in Article 14.3 of the Regul ation establishes a stricter evidentiary standard
than "confusion" as "confusion" is used elsewhere in the Regulation, in the same way that the word
"misleading" in TRIPS Article 22.2 establishes a stricter evidentiary standard than the word
"confusion" in TRIPS Article 16.1.

150. The United States refers to the possibility of informing "consumers about the origin of a
product and its characteristics through the use of de scriptive terms in a non-trademark sense without
affirmatively confusing the consumer about the s ource of goods" (US response to Panel question No.
75(b)). Would the addition of such a requiremen t in Article 14 of Regulation (EC) No. 2081/92 in
respect of either prior trademarks, later geographical indications, or both, satisfy the requirements of
Article 16.1 of the TRIPS Agreement in the view of the United States? Or does the United States
object to any later protection of a geographical indi cation that is confusingly similar to a prior
trademark? USA

151. Please comment on the suggestion that Article 24.3 of the TRIPS Agreement was inserted in
the draft text in November 1991 to make it clear that the exceptions provisions
 in Section 3 of Part II
could not be used as a justification for diminish ing a Member's pre-existing protection of GIs. USA,
AUS, EC

80. As in the case of Question 147 above, Austra lia is not in a position to comment in these
dispute settlement proceedings on the proposition set out in this question.

81. Again as in the case of Question 147 above, Australia notes the findings of the Appellate
Body that "[t]he duty of a treaty interpreter is to examine the words
 of the treaty to determine the
intentions of the parties".50 (emphasis added)

152. If a Member is obliged to diminish the pre-existing protection of GIs in order to allow
trademark owners to exercise their rights under Article 16.1 as against GIs, does that obligation not
arise under Article 16.1 rather than "[i]n implementing this Section", as used in Article 24.3? EC

153. Without prejudice to the EC's view that a GI confusingly similar to a trademark will not be
registered, if one were registered nevertheless, in what way would this exception be "limited"? In
particular, could the rights of the GI owner be limited in such a way as to minimize the likelihood of
confusion? EC

154. What, specifically, are "the legitimate interest s of the owner of the trademark and of third
parties" within the meaning of Article 17? How can legitimate interests be "taken into account"
under Article 17 where they conflict with other relevant interests? USA, AUS, EC

82. As set out in TRIPS Article 15.1, the purpose of a trademark is to distinguish the goods or
services of one undertaking from those of other unde rtakings. A trademark serves to identify the
source of a good or service, thus enabling consumers to be informed of the quality of that good or
service having regard to its source. Therein lies the economic value of the trademark to its owner.

83. It is a legitimate interest of a trademark ow ner to maintain the economic value of the private
property right in the trademark by maintaining the trademark's capacity to distinguish the owner's
goods from the goods of others. A trademark owner does this through the exclusive right to prevent

49 See, for example, the EC's Second Written Submission, paragraph 285.
50 India – Patents, paragraph 45.

confusingly similar or identical use of a sign for similar or identical goods or services required to be
granted to that trademark owner by a WTO Member under TRIPS Article 16.1. Any dilution of this
capability damages the legitimate inte rest of the trademark owner. Confusing or misleading use of a
sign may deprive the trademark owner of income. Moreover, confusing or misleading use of a sign
may also result in a diminution of the reputation of a trademark if the infringing use involves goods or
services of lesser quality. TRIPS Article 17 permits uses of signs as an exception to TRIPS
Article 16.1 only where there is a small diminution of the capacity to distinguish a trademark owner's
goods or services from those of other undertakings.
51

84. Third parties within the meaning of TRIPS Article 17 would normally include consumers and
other traders. Consumers have a legitimate inter est in being able to purchase products they intended
to purchase rather than products of which they ha ve no knowledge. Other traders have a legitimate
interest in being able to use signs that they need to use
 in order to describe or present their goods or
services in the marketplace. Thus, TRIPS Article 17 expressly refers to fair use of descriptive terms.
It is important to note, however, that "fair use of descriptive terms" does not encompass all use of a
sign or class of descriptive terms: the use of the word "fair" expressly limits the manner in which a
"descriptive term" may be used as an exception.

85. The legitimate interests of trademark owners can be "take[n] account of" within the meaning
of TRIPS Article 17 by ensuring that such owne rs are able to prevent use that undermines the
economic value of the trademark right. In particul ar, the legitimate interests of trademark owners
require that they be able to prevent use that undermines the capacity of the sign to serve as a
trademark and to prevent use that undermines the capacity of the sign to distinguish the goods or
services of the owner from those of other undertakings. "Fair use of descriptive terms" cannot include
use which does not take account of these legitimate interests of trademark owners.

86. The legitimate interests of others can be "t ake[n] account of" within the meaning of TRIPS
Article 17 by ensuring that consumers are not gi ven cause to wonder about the source of a good or
service and that other traders are able to use terms they need to use
 to describe or present their goods
or services. The latter requirement does not, however, mean that other traders are able to use a sign
freely in the face of an existing trademark. It mu st be seen in terms of the manner in which other
traders need to use the sign at issue. It is reasona ble and fair for people to be able to use their actual
address, or to be able to say "made in Australia". On the other hand, it is not reasonable or fair to use
a term in a way that has a signifying function, ra ther than a purely descriptive one, if that use
undermines the capacity of a trademark to functio n as a trademark, thus undermining its economic
value. This is true even if the term has some descriptive connotation. Thus, TRIPS Article 17
balances the requirement of providing other trader s with the terms they need to use with the
requirement of ensuring that a trademark is ab le to distinguish the goods or services of one
undertaking from those of other undertakings.

155. Does an exception to the exclusive right in Article 16.1 presuppose a certain degree of
confusion? Does "fair use of descri ptive terms" within the meaning of Article 17 include the use of a
trademark to indicate source? USA, AUS

87. TRIPS Article 17 permits a WTO Member to provide "limited exceptions" – or small
diminutions – to the rights required to be granted under TRIPS Article 16.1.
52 Within those confines,
an exception to the scope of the rights required to be conferred under TRIPS Article 16.1 presupposes
the possibility of a minimal degree of confusion.

51 Australia's Written Rebuttal Submission, paragraphs 121-127.
52 Australia's Written Rebuttal Submission, paragraphs 121-127.

88. Further, and in any case, the essence of a TR IPS-defined GI – of which EC-defined GIs are
generally a sub-set – is that it indicates a causativ e connection between a particular geographic origin
and the nature, reputation or some other characteri stic of the product. If a TRIPS-defined GI were
purely descriptive, there would not be any need – or indeed basis – for an intellectual property right,
and thus for Section 3, Part II, of the TRIPS Agreement.
53

89. In relation to the second question above, an indication of source within the meaning of the
Paris Convention describes the geographic origin of the product. Consistent with the express terms of
TRIPS Article 15.1, a trademark does not do this: ra ther, it functions as a means of distinguishing the
goods or services of one undertaking from those of other undertakings.

90. It is possible for a trademark to denote source as a secondary effect. Consider, for example, a
hypothetical trademark "Sydney Monarch". Such a tr ademark could be distinctive for a whole range
of goods or services, but consumers would nor mally assume some connection with Sydney.
Certainly, "Sydney" is an indication of source and s hould not be used in a way to mislead. However,
it would not be true to say that the whole trad emark "Sydney Monarch" was being used primarily
either as an indication of source (within the meaning of the Paris Convention) or as a descriptive term.
Rather, the trademark must be taken as a whole a nd would be seen as functioning to distinguish the
goods of one undertaking from those of others.

91. Equally, if there was already a trademark "Monarch" for similar or identical goods or
services, a decision to allow the use of "Sydney Monarch" as a trademark (on the pretext that it was
descriptive) would contravene each of the tests of TR IPS Article 17. It would not constitute a limited
exception, because it would attack the essential dist inguishing feature of the trademark "Monarch",
thus undermining its economic valu e. Nor would allowing "Sydney Monarch" to be used in this
context constitute "fair use of a descriptive term": it reproduces the essential distinguishing feature of
another trademark. Thus, although the word "Sydn ey" in such a trademark may have a geographic
connotation, its use is not fundamentally as a descriptive term, and allowing use of such a trademark
would not take account of the legitimate interests of the owner of the trademark "Monarch" and of
third parties.

92. Trademarks are not merely descriptive, and cannot be considered "descriptive terms" within
the meaning of TRIPS Article 17. In the same wa y, and for the same reasons, use of a GI cannot be
said to be merely use of an indication of source w ithin the meaning of the Paris Convention or to be
use of a descriptive term within the meaning of TRIPS Article 17.

156. Why do the requirements in Article 17 differ from those in Articles 13, 26.2 and 30 of the
TRIPS Agreement? How should their interpretation reflect those differences? USA, AUS, EC

93. Australia notes that the nature of IP rights other than trademarks and GIs has not been the
subject of detailed consideration in this dispute. Moreover, it is the EC that has argued that the
differences in language between TRIPS Articles 13, 17 26.2 and 30 have significance. The EC
therefore has the burden of proof in establishing a prima facie case to this effect, which Australia
submits it has not done. However, should the Panel consider that the EC has met its burden of proof,
Australia submits the following comments.

94. The differences in the texts of TRIPS Articl es 13 concerning copyright and related rights, 17
concerning trademarks, 26.2 concerning industri al designs and 30 concerning patents reflect
differences in the nature of each of those rights. Rights concerning copyright material include rights
in relation to authoring, copying, using, adapting, arranging, altering and importing.
54 Rights

53 Australia's Second Oral Statement, paragraphs 31-36.
54 Articles 9-15 of the Berne Convention.

concerning industrial designs include rights in relation to making, selling or importing. 55 Rights
concerning patents include rights in relation to making, using, offering for sale, selling and/or
importing.

95. The most immediate difference between the texts of the four provisions is that TRIPS
Articles 13, 26.2 and 30 refer to "limitations or exceptions" or "limited exceptions" that do not
"conflict with [a/the] normal exploitation" of the protected right or "unreasonably prejudice" the
legitimate interests of concerned parties. Clearly, an exception must relate to the nature of the right.
"Exploitation" is relevantly defined as the action or practice of utilising or taking advantage of
something for one's own ends.
56 The word "exploitation" was clearly intended to reflect the broad
nature of the rights required to be granted in rela tion to copyright, industrial designs and patents.
Having regard to the ordinary meanings of the words, 57 "unreasonably prejudice" should be
considered in the sense of exceptions that unfairly affect the interests of concerned parties. Again, the
words clearly reflect the broad nature of the rights required to be granted in relation to those other IP
rights.

96. Under the TRIPS Agreement, however, a trademark does not attract the same spectrum of
rights as those other categories of IP rights: it attr acts only the exclusive right to prevent confusingly
similar or identical use
 for similar or identical goods. "Use" is relevantly defined – having regard to
the context of Section 2, Part II, of the TRIPS Agreement generally and of TRIPS Article 15.1 in
particular – in terms of the purpose served by the thing used. 58 A trademark is used for the purpose of
distinguishing the goods or services of one u ndertaking from those of other undertakings. A
trademark may be used for that purpose in respect of a very few or a very large number of goods or
services emanating from a single undertaking.
59

97. Thus, the nature of the right required to be granted by the TRIPS Agreement in respect of a
trademark is very different to the other rights. Moreover, the provisions of TRIPS Article 17 need to
be interpreted having full regard to the nature of the right actually accorded to a trademark. Thus, any
exception must be limited. For example, "use of d escriptive terms" must be "fair" having regard to
the nature of the right required to be granted by Article 16.1. The legitimate interest of a trademark
owner clearly includes the ability to use the sign as a trademark – that is, that the sign be able to
distinguish the owner's goods or services from those of other undertakings. To this end, a small level
of confusingly similar use of a sign could only be justified in situat ions where the legitimate interests
of the trademark owner and of other parties could not reasonably be met in any other way.

98. Nonetheless, TRIPS Article 17 shares a common structure and purpose with TRIPS
Articles 13, 26.2 and 30 and shoul d be interpreted accordingly.
60 Each allows a WTO Member to
provide limited exceptions – that is, small diminuti ons – to the particular rights required to be
conferred for each category of IP right, while pr oviding that those exceptions not undermine the
essential nature of the IP right and give due weight to legitimate competing interests. The wording of
TRIPS Article 17 differs from those of the analogous provisions for other categories of IP rights in

55 TRIPS Article 26.1.
56 OED, Vol.1, pages 888 and 889, definitions of "exploit" and "exploitation" respectively.
57 OED, Vol.2, relevantly defines "unreasonably" and "unreasonable" in the sense of "going beyond
what is reasonably or equitable (page 3503) and "prejudice" as "[h]arm or injury to a person or thing that may
result from a judgement or action, esp. one in which his or her rights are disregarded".
58 OED, Vol.2, page 3531, definition of "use" as a noun, section IV.
59 Australia notes too that differences in the nature of the various categories of IP rights are reflected as
well in the varying nature of the provisions of the TRIPS Agreement concerning compulsory licensing of IP
rights. TRIPS Article 21 expressly prohibits compulso ry licensing of trademarks, while TRIPS Article 31
recognises the possibility in respect of patents. The TRIPS Agreement is silent on the issue, however, in respect
of copyright and industrial designs, as well as in respect of GIs.
60 See Australia's Written Rebuttal Submission, paragraphs 118-127.

recognition of the differing nature of a trademark right. However, those differences do not change the
essential similarities of the provision. In particular, it is not consistent with TRIPS Article 17 to allow
exceptions that are neither limited nor fair, or wh ich fundamentally obviate the ability of a trademark
to distinguish the goods or services of one undertaking from those of other undertakings.

157. The United States alleges that the EC does not provide legal means required under Article 22
of the TRIPS Agreement (see United States first wr itten submission, paras 1 77-178; US rebuttal,
para. 213). Do you claim that the EC fails to pr ovide a legal means to prevent uses of indications in
accordance with Article 22.2 because of alleged inadequacies in Regulation (EC) No. 2081/92 alone?
Or do you allege that measures outside the Panel' s terms of reference are also inadequate to fulfil
that obligation? If the latter, on what evidence do you rely? USA

158. The Panel notes the United States' submission that the Panel should find that "the EC GI
Regulation" is inconsistent with Articles 16. 1 and 22.2 of the TRIPS Agreement (US rebuttal,
paras 166 and 217, respectively). However, why woul d it be appropriate to conclude that a single
measure, rather than a Member, fails to comply with each obligation? If the EC or its member States
adopted other measures which complied with Artic les 16.1 and 22.2, could they fill the gaps in the
alleged inconsistencies in Regulation (EC) No. 2081/92? USA

159. May protection for designations of origin a nd geographical indications now be afforded in
the EC only
 within the framework laid down by Regula tion (EC) No. 2081/92? To what extent does
the EC implement its obligations under Article 22.2 of the TRIPS Agreement through Regulation (EC)
No. 2081/92 and to what extent through other measu res (see EC first written submission, paras 433
and 434)? Are the other measures cited by the EC alone sufficient to fulfil its obligations under
Article 22.2? EC

160. To what extent does the EC implement its obligations under Article 22.2 of the TRIPS
Agreement through Regulation (EC) No. 2081/92 and to what extent through other measures? Does
the EC believe that the complainants should prove a negative, i.e. that no legal means required under
Article 22.2 are available? Can a respondent simply argue that other measures, outside the Panel's
terms of reference, fulfil an obligation, without pr oof of how those oth er measures fulfil that
obligation? EC

161. Australia refers to Article10bis(1) of the Pa ris Convention, "as incorporated by TRIPS
Article 2.1" (Australia's first written submission, para. 75, also para. 268) and also submits that
"Paris Article 10bis.1 deals with the issue of unfair competition, which is not otherwise dealt with in
the TRIPS Agreement except 'in respect of geographic al indications' in TRIPS Article 22.2" (response
to Panel question No. 82). Please clarify whether Australia seeks a finding that the alleged
inconsistency with Article 10bis is a violation of Article 2.1 or 22.2 of the TRIPS Agreement or both.
AUS

99. Australia makes two distinct claims involving Paris Article 10 bis. Firstly, Australia claims
that – in respect of the registration of an EC-d efined GI – the EC measure diminishes the legal
protection for trademarks, contrary to the EC's ob ligation pursuant to TRIPS Article 2.1 to comply
with Paris Article 10 bis. Secondly, Australia claims that – in respect of the registration of an EC-
defined GI – the EC does not provide the legal me ans for interested parti es to prevent use which
constitutes an act of unfair competition within the meaning of Paris Article 10 bis, contrary to TRIPS
Article 22.2.

100. Australia confirms that it seeks distinct findings in respect of each of these claims.

162. How did Australia's reference to Article 24. 5 of the TRIPS Agreement in its request for
establishment of a panel put the EC on notice that Australia challenged Regulation (EC) No. 2081/92

in respect of Article 24.5 in conjunction with Article 4 of the Paris Convention (1967) as incorporated
by Article 2.1 of the TRIPS Agreement? In Austra lia's view, to what exten t could a respondent begin
preparing its defence of this claim without knowing that it was based on the right of priority? AUS

101. In accordance with TRIPS Article 24.5, the EC has an express obligation not to prejudice the
eligibility for registration of a trademark on the basis that the trademark is identical with, or similar to,
a GI. Separately, the EC has an express obligation to comply with the requirement of Paris Article 4
in respect of the right of priority for applicati ons for registration of a trademark in accordance with
TRIPS Article 2.1.

102. Australia's panel establishment request set out that Australia's claim was that the EC measure
diminishes the legal protection for tradem arks under the TRIPS Agreement, contrary inter alia to
Article 24.5 of that Agreement. The obligation not to prejudice eligibility for the registration of a
trademark is plain, even on a cursory reading of TRIPS Article 24.5. Given the express obligation on
the EC to comply with Paris Article 4, it was clear that non-compliance with that provision would
constitute prejudice to the eligibility for registrati on of a trademark, thereby diminishing the legal
protection for trademarks under the TRIPS Agreement and thus falling within the terms of Australia's
panel establishment request.

103. Australia remains conscious that DSU Article 6.2 requires that a complaining party's request
for the establishment of a panel inter alia identify the specific measures at issue and provide a brief
summary of the legal basis of the complaint suffici ent to present the problem clearly, to enable the
responding party to being preparing its defence. At the same time, however, Au stralia is of the view
that some caution is needed in interpreting and ap plying this provision: it should not be interpreted
and applied in such a way as to require that a complaining party have fully developed its
argumentation for a dispute – in effect, to have pr epared its first written submission – before lodging
its panel establishment request.

163. The Panel takes note of Australia's and th e EC's respective views on the applicability of
Article 70.1 of the TRIPS Agreement to individual GI registrations (Australia's response to Panel
question No. 90; EC rebuttal, para. 202). On 31 December 1995, at what stage of the procedure
under the former Article 15 were the GIs later registered under Article 17? Did any individual GIs
registered under Article 6 have an objection period that expired prior to 1 January 1996? EC

164. In what way are the objectives and principles set out in Articles 7 and 8 of the TRIPS
Agreement, and the considerations recited in the first paragraph of its preamble, relevant to the
interpretation of the provisions of that agreement at issue in this dispute? USA, AUS, EC

104. As Australia explained in response to question No. 103 above, the TRIPS Agreement
provides that a WTO Member may incorporate le gitimate public policy objectives and principles
within its national measures to implement an IP right. However, once a WTO Member adopts
measures for the protection of a category of IP right, those measures apply equally to its own
nationals and to the nationals of all other WTO Members.

ANNEX A-9

COMMENTS OF AUSTRALIA ON THE EUROPEAN COMMUNITIES'
REPLIES TO QUESTIONS POSED BY THE PANEL AND TO QUESTIONS
POSED BY AUSTRALIA FOLLOWING THE SECOND SUBSTANTIVE MEETING

(2 September 2004)

INTRODUCTION

1. These comments supplement Australia's claims and arguments in this dispute, addressing
issues newly raised in the EC's responses to questions from the Panel following the second
substantive meeting with the parties. They sh ould be read together with Australia's earlier
submissions, statements and responses to questions. Au stralia's silence in relation to any issue raised
in the EC's responses to questions should not be construed as signifying Australian agreement to the
arguments made by the EC.

2. In its responses to the Questions from the Pa nel following the second substantive meeting, the
EC has submitted as Exhibits extracts from the trademark legislation of a number of WTO Members
not party to this dispute.
1 The EC itself has said: "… the objective assessment of the facts requires
establishing the meaning that the act will normally have within the legal order of the WTO Member in
question. This means that the interpretation should be guided by the rules of interpretation customary
in the legal order of such member, and taking acc ount of the legal context of the measure in the
domestic law of the Member".2

3. Notwithstanding that the EC has raised the provisions of other WTO Members' trademark law
and thus has the burden of proof – according to its own argument – of establishing the meaning of
those provisions within the legal order of the WTO Member in question, it has not made any attempt
to do so.

4. Australia requests that those Exhibits be excl uded from the Panel's cons ideration of the EC's
responses to Question Nos. 139 and 153.
3

QUESTION NO. 96

5. The EC states that "… where an institution h as adopted rules which are not legally binding, it
may nevertheless not depart from such rules without giving the reasons which have led it to do so". 4

1 Exhibits EC-93 (re Canada's Trade Mark Law), EC-94 (re Hong Kong's Trade Marks Ordinance),
EC-95 (re India's Trade Marks Act), EC96 re New Zeal and's Trade Marks Act), EC-97 (re Singapore's Trade
Marks Act), EC-98 (re South Africa's Trade Marks Law), EC-104 (re Japan's Trademark Law), EC-105
(re Romania's Trade Marks Act) and EC-106 (re Iceland's Trade Marks Act).
In addition, Australia has already requested th e exclusion of Exhibit EC-80 (re New Zealand
legislation) – as well as Exhibit EC-73 (re Canadian legislation) – in its Second Oral Statement, paragraph 104.
If, however, the Panel were to find that Exhibit EC-80 was admissible as an Exhibit to the EC's Second Oral
Statement, Australia requests that – in any case – it be excluded from the Panel's consideration of the EC's
answer to Question No. 153 as the EC has not established the meaning of that provision within New Zealand's
legal order.
2 EC Response to Question No. 1, paragraph 6.
3 See also Australia's comment on the EC Responses to Question Nos. 137 and 139 below for a clear
example of the dangers of considering provisions of other WTO Members' trademark laws in isolation.
4 EC Response to Question No. 96, paragraph 9.

The implicit – but nevertheless unambiguous – premise of that statement is that an institution may
depart from the rules it has adopted provided it gives reasons for doing so.

6. Australia notes too that the Guide to Regulatio n No. 2081/92 is in the nature of administrative
guidance.
5 I n India – Patents , the Appellate Body examined an analogous situation involving
administrative instructions that seemed to contradict mandatory provisions of the relevant legislation.
However, the Appellate Body in that dispute was not persuaded that administrative instructions would
prevail over the contradictory mandatory provisions of the Act at issue in the event of a legal
challenge nor, as a consequence, that the administ rative instructions provided a sound legal basis to
preserve the IP rights at issue.6

7. Further, Australia notes that should the Panel consider that re lated implementing and
enforcement actions adopted on or after 2 October 2 003 are outside the Panel's terms of reference as
argued by the EC, so too would be the Guide and the EC's 16 June 2004 TRIPS Council statement.

QUESTION NO. 97

8. Australia notes that the EC's response conf usingly combines the situation concerning GIs as
defined in TRIPS Article 22.1 ("TRIPS-defined GIs" ) with the situation concerning "designations of
origin" and "geographical indications" as defined in Article 2.2 of Regulation No. 2081/92 ("EC-
defined GIs").

9. Further, the EC's response fails to make cl ear the full context of its initial response to the
question from New Zealand. The paragraph quote d by the EC was preceded by the following
paragraphs:

Council Regulation 2081/92/EEC sets out the procedure for the registration of
geographical indications in the Community territory. The procedure contained in
Articles 5, 6 and 7 is as follows:
1. A group of producers must submit a detailed application for registration to
the competent authority of the Memb er State, in accordance with the
conditions specified in the Regulation.
2. If the application is considered to be in conformity with the Regulation, it
shall be referred to the Community authorities, who will verify that the
conditions of the Regulation have been formally satisfied and will publish the
application in the Official Journal to allow other parties the opportunity to
raise objections.
3. If an objection is raised, the final decision on registration is taken by the
Commission and Member States.
10. Thus, the reference to "the procedure fo llowed by Community producers as outlined above
…, in accordance with the principle of national treat ment" in the paragraph cited by the EC was in
fact the procedure to be followed by "producers" of other WTO Members who wished to register an
EC-defined GI from within the EC. The "principle of national treatment" referred to by the EC was in
fact a reference to the principle of national treatment of nationals
 under the TRIPS Agreement.

5 The EC itself refers to the relevant section of the guide as "providing guidance to interested
governments and applicants" (EC Response to Question No. 96, paragraph 7).
6 India – Patent Protection for Pharmaceutical and Agricultural Chemical Products , Report of the
Appellate Body, WT/DS50/AB/R, paragraphs 69-70.

11. Moreover, as the response to the question from India cited by the EC
7 makes clear:

"… in general, conditions provided in Article 12 of [the Regulation] are only required
when a bilateral agreement is concluded between the EC and a WTO Member. This
means that it only occurs when two parties voluntarily wish higher level of protection
("ex officio") than this provided under the TRIPS Agreement. …"
12. In other words, the EC stated that if anot her WTO Member wishes to benefit from the higher
level of protection made available under Regulation No. 2081/92, a bilateral agreement addressing the
conditions provided for in Article 12 of the Regulation is required.

13. Further, the EC's response again fails to make clear the full context of the subsequent
response to the follow up question from India. Th e extract quoted by the EC was preceded by the
following statements:

As a preliminary remark, the Community would like to underline that the protection
of geographical indications foreseen in Ar ticle 22.2 of the TRIPS agreement is
provided for in Council Directive 79/112/EEC [concerning food labelling] and
Council Directive 84/450/EEC [concerning misleading advertising]. …
The protection foreseen by these provisions under Community law and Member
States' law is applicable to any WTO Member citizen without discrimination.
(a) On the one hand, Council Regulation 2081/92/EEC provides for:
(i) the "reputation" which is attributable to the name
(geographical origin) (Article 2); and
(ii) the product (which is cove red by the geographical name)
which complies with a specification (Article 4).
This means that the Regulation has established a difference between the designation
and the product.
Both conditions are cumulative.
On the other hand, to comply with a sp ecification, it is important to guarantee a
continuity and homogeneity of the product's characteristics which are necessary as a
reference for the inspection bodies. This is essential also for the consumer.
As a matter of fact, a geographical indica tion requires anyway that the product which
is covered presents a defined description. If these conditions must be complied with
by the producers established in the EC to obtain an [EC-defined GI], they must also
be complied with by the third country nationa ls, should they wish to obtain the same
protection.
(b) …
14. Thus, the clear message being conveyed by th e EC when the full answer is considered in
context was that Regulation No. 2081/92 was not concerned with the protection of TRIPS-defined GIs

7 EC Response to Question No. 97, paragraph 14.

in the sense of TRIPS Article 22.2. Rather, the Regulation deals with products which have both a
reputation and a product specification in the sense of Article 4 of the Regulation. If another WTO
Member wishes to take advantage of the higher le vel of protection potentially available for such
products under the Regulation, then that WTO Member must have in place a system equivalent to that
in place in the EC, including in relation to the produ ct specification and the inspection structure. The
EC could not allow any other system because, if it did, EC producers would be discriminated against.

QUESTION NO. 101

15. The EC says it "does not consider the present case requires any comparison between
nationals".8 The EC has not sought to explain how its vi ew is consistent with the express requirement
of TRIPS Article 1.3, which provides that "Members shall accord the treatment provided for in this
Agreement to the nationals of other Members".

QUESTION NOS. 103 AND 113

16. In responding to Question No. 103, the EC does not accept the express recognition of the
applicability of the basic principles of GATT 1994 in the preamble to the TRIPS Agreement, or the
finding of the Appellate Body in US – Section 211 Appropriations Act relating to the usefulness of the
jurisprudence on GATT Article III:4 in interpre ting the TRIPS national treatment obligation. 9 Yet in
responding to Question No. 113, the EC nonetheless relies on a basic GATT principle and GATT
jurisprudence in support of its argument.

17. Further, the EC now seems to be suggesti ng that GATT Article XX(d) could also excuse a
breach of the TRIPS Agreement.
10 However, the EC has not even attempted to meet its burden of
proof in relation to the potential applicability of GATT Article XX(d) to the TRIPS Agreement.

QUESTION NO. 106

18. The examples referred to by the EC at paragraph 54 both involve EC nationals.

QUESTION NOS. 114 AND 116

19. In responding to Question No. 116, the EC says 11 that because:

(a) all WTO Members are obliged to provide protection to TRIPS-defined GIs in
accordance with TRIPS Article 22;
(b) the EC is not obliged to provide protection to TRIPS-defined GIs not
protected in their country of origin in accordance with TRIPS Article 24.9;
and
(c) any WTO Member should be able to state whether it protects a "GI" for
which protection is sought in the EC;
then a WTO Member cannot:

8 EC Response to Question No. 101, paragraph 22.
9 United States – Section 211 Omnibus Appropriations Act of 1998 , Report of the Appellate Body,
WT/DS176/AB/R, paragraph 242.
10 EC Response to Question No. 103, paragraph 36.
11 EC Response to Question No. 116(a), paragraph 74.

(1) argue that it does not have "authority" to state whether a "GI" is protected in
its territory; and
(2) at the same time claim that this "G I" should be protected in the EC.
20. Australia has not claimed in this dispute that the EC is not in compliance with its obligations
under the TRIPS Agreement because a TRIPS-defined GI
 cannot be registered under Regulation
No. 2081/92 if that TRIPS-defined GI does not also meet the definition of an EC-defined GI under
Article 2.2 of that Regulation. From the beginni ng, Australia has expressly recognised the EC's right
to implement in its law more extensive protection for GIs than is required to be provided by the
TRIPS Agreement.12

21. On the other hand, and in its responses to both Question Nos. 114 and 116, the EC totally
ignores the implications of a situation where protection of an EC-defined GI is provided by other
means, for example, through registration of a term as a certification trademark. 13 In addition, the EC
argument that a WTO Member cannot say that it does not have authority to state whether a GI is
protected within its territory
14 overlooks that – as in the Australian legal order, for example – in the
absence of an explicit court judgment, no government agency might be able to be empowered to
provide, with the necessary degree of assurance, the certification required by the EC.

22. Further, the EC's responses make clear that – one way or another – the EC will seek to ensure
that its views on the registration and protection of EC -defined GIs prevail. The EC has conceded that
the reciprocity and equivalence conditions of Ar ticle 12.1 of Regulation No. 2081/92 would be
inconsistent with the EC's obligations under GATT Ar ticle III:4 if those conditions were to be applied
to other WTO Members.
15 Yet having made that concession, the EC now seeks to have the Panel find
that the EC can nonetheless require other WTO Members to participate in the implementation of a
system of registration and protection of EC-defined GIs, even though that system is contrary to the
EC's obligations pursuant to the WTO Agreement. The EC argues that if other WTO Members don't
"cooperate" – in effect, adopt the EC's system – it is their own fault that nationals of those other WTO
Members can't access the benefits of the EC's system.

23. At the same time, the EC does not explain how such a view might be in harmony with the
express recognition in the preambular clauses of th e TRIPS Agreement that IP rights are private
rights. Nor does it explain how its requirements are consistent with th e requirements of TRIPS
Article 1.3 to "accord the treatment provide d for in this Agreement to the nationals
 of other
Members".

24. Further, notwithstanding its arguments that any interpretation of the TRIPS Agreement must
consider the relevance of GATT Article XX(d),
16 the EC has not acknowledged the finding of the
Appellate Body in US – Shrimp that a measure being applied in a way that " require[d] other WTO
Members to adopt a regulatory program that [was] not merely comparable, but rather essentially the
same" (emphases in original) was not justifiable under the chapeau of GATT Article XX.17

12 Australia's First Written Submission, paragraph 4, second bullet point.
13 See, for example, Australia's First Written Submission, paragraph 198.
14 EC Response to Question No. 116(a), paragraph 74.
15 EC Response to Question No. 94.
16 See, for example, EC Response to Question No. 103, paragraph 36.
17 United States – Import Prohibition of Certain Shrimp and Shrimp Products , Report of the Appellate
Body, WT/DS58/AB/R, paragraph 163, referred to in Australia's Second Oral Statement, paragraph 70.

QUESTION NO. 122

25. The EC's attempts to make a conceptual distinction for the purpose of interpreting the
mandatory labelling requirement in Article 12.2 of Regulation No 2081/92 between the origin of a
product eligible to bear an EC-defined GI and th e product itself are flawed. The origin of a product
eligible to bear an EC-defined GI is inextricably linked to that product by virtue of the definitions set
out in Article 2.2 of the Regulation. In addition, the notion of origin involves a product; a
geographical location only becomes a geographical origin if there is something that has been
produced in it. Australia submits therefore that when talking about the origin of a product (as
opposed to simply a geographical location) eligible to bear an EC-defined GI, the EC's argument 18
that the labelling requirement applies to the origin of the product and not the product itself, does not
make sense.

26. Australia would also like to point out that, contrary to the EC's suggestion,
19 Australia has not
argued that the origin of a product is a product char acteristic within the meaning of the definition of
"technical regulation" in the TBT Agreement. Ra ther, Australia argues that the mandatory labelling
requirement in Article 12.2 of Regulation No. 2081/92 for the specific products envisaged by that
Article meets the definition of a "technical regulation" pursuant to the TBT Agreement.

QUESTION NO. 124

27. The EC's statement
20 that GATT Article IX:1 21 "exempts origin marking from national
treatment obligations" is incorrect. GATT Artic le IX:1 imposes a positive obligation of no less
favourable treatment vis-à-vis products of third countries (MFN obligation). It is silent on the issue of
origin marking requirements in relation to the national treatment obligation in GATT Article III:4.

QUESTION NO. 125

28. The EC suggests that the Panel might have to consider whether GATT Article XX would be
applicable within the context of the TBT Agreement. In Australia's view, had the drafters wished for
the TBT Agreement to contain a direct reference to GATT Article XX, they would have included one.
Instead, TBT Article 2.2, read in light of the preamble, which reproduces closely the chapeau of
GATT Article XX, contains a similar "necessity" test to that in GATT Article XX.

29. In any case, these issues are outside the paramete rs of what the Panel needs to consider in
determining whether Article 12.2 of Regulati on No. 2081/92 accords less favourable treatment,
contrary to TBT Article 2.1, to imported like products bearing – or eligible to bear – an EC-defined
GI. Moreover, the EC bears the burden of proof for establishing any significance of GATT
Article XX in the context of the TBT Agreement. The EC has not, however, met its burden: indeed,
it has not presented any supporting arguments.

QUESTION NO. 134

30. Australia assumes that the first sentence of paragraph 119 of the EC's response was intended
to read "any claim under the provision of Ar ticles 5-9 TBT Agreement concerning inspection
structures" as, as the EC itself says, Australia has made a claim under TBT Article 2.2.

18 First Written Submission of the EC, paragraph 451.
19 EC Response to Question No. 122, paragraph 91.
20 EC Response to Question No. 124, paragraph 99.
21 Australia assumes that the reference to Article XI:I is a typographical error.

31. Further, notwithstanding the EC's statement th at "the essential question which the Panel needs
to decide is whether these structures by themselves are a technical regulation",
22 Australia's claim in
relation to the inspection structure requirement is th at Article 4, in particular Article 4.2(g), and
Article 10 read together constitute the technical regulation. 23 Australia has not made a claim in
relation to the inspection structure requirements of Article 10 of Regulation No. 2081/92 in isolation.

QUESTION NO. 135

32. Once again, the EC invokes its right – pursuant to TRIPS Article 1.1 – to implement in its law
more extensive protection than it is required by the TRIPS Agreement to grant, 24 without also
acknowledging the conditionality of that right: "provided that such protection does not contravene the
provisions of this Agreement". 25 Thus, even if Regulation No. 2081/92 might be a measure not
inconsistent with the provisions of the GATT 1994 within the meaning of GATT Article XX(d) – an
issue Australia does not concede – it would only be so to the extent that it was fully consistent with
the EC's obligations pursuant to the TRIPS Agreement.

QUESTION NO. 136

33. Once again, the EC ignores the implications of a situation where protection of an EC-defined
GI is provided through registration of a term as a certification trademark.26

34. And once again, the EC's response makes clear that – one way or another – the EC will seek
to ensure that its views on the registration and protection of EC-defined GIs will prevail.

35. In the context of this question, the EC seeks to have the Panel accept the view that – when a
WTO Member has a system of registration and protection similar to that of the EC – there is no
problem. According to the EC's logic, a requireme nt for another WTO Member government to verify
an application for registration of an EC-defined GI "would not seem burdensome" and "the impact on
exports … should be extremely small".
27 That the requirement – even in those situations – would not
meet the necessity test of GATT Article XX(d) seems to have been overlooked by the EC.

36. Equally, the EC seeks to have the Panel accep t the view that – when a WTO Member does not
have a system of registration and protection similar to that of the EC – it is reasonable for the EC to
seek to compel another WTO Member to act as a sub-national unit of the EC in any case.
28 I n
addition, the EC argument that other WTO Memb er governments must verify that applications
comply with the requirements of Regulation No. 2081/92 29 overlooks that – as in the Australian legal
order, for example – in the absence of an explicit court judgment, no government agency might be
able to be empowered to provide, with the necessar y degree of assurance, the certification required by
the EC.

37. Even if requiring
 the cooperation of another WTO Member may be "an issue of timing and
sequencing of the application process" in some cases, 30 the provisions of Regulation No. 2081/92 do
not provide for the possibility that an applicant c ould demonstrate compliance with the requirements

22 EC Response to Question No. 134, paragraph 119.
23 Australia's First Written Submission, paragraphs 209-224.
24 EC Response to Question No. 135, paragraph 130.
25 Australia's Second Oral Statement, paragraph 108.
26 See Australia's comment above on the EC Response to Question No. 116.
27 EC Response to Question No. 136(a), paragraph 134.
28 EC Response to Question No. 136(b), paragraphs 135-138.
29 EC Response to Question No. 136(a), paragraph 131.
30 EC Response to Question No. 136(c), paragraph 141.

of Articles 2.2, 4 and 10 directly, for example, on the basis of registration as a certification trademark.
Compelling the involvement of the government of another WTO Member in the application process
does not meet the necessity test of GATT Article XX(d).31

38. The EC now says that "… Regulation 2081/92 does not require unnecessary levels of staff to
be maintained throughout the year" and that "… since it is presumably not economic to establish and
wind down an inspection body every year, in such a case it would be reasonable to entrust the
function of inspections to a body which also carries out tasks other than inspections under Regulation
2081/92".
32 Article 10.3 of the Regulation expressly pr ovides: "[d]esignated inspection authorities
and/or approved private body must … have permanently at their disposal the qualified staff and
resources necessary to carry out inspection of agricultural products and foodstuffs bearing a protected
name" (emphasis added). Australia contests that Article 10.3 – having regard to its wording, context
and aims – may properly be interpreted in the ma nner now suggested by the EC. Article 10.3 is
clearly premised on the inspections being undertaken by an autonomous agency, the staff of which are
permanently available to that agency.33

39. In any case, Australia's claim in relation to the EC's requirement to have in place in all
circumstances an EC-mandated insp ection structure has been made under TBT Article 2.2. In that
context, the EC has not met its burden of proof to show that GATT Article XX(d) has any
significance in the context of the TBT Agreement.
34

40. Finally, Australia recalls that the EC h as invoked GATT Article XX(d) only in respect of
Australia's claim concerning the requirement that an application for the registration of an imported
product be submitted through the government of the WTO Member in which the relevant
geographical area is located. Moreover, the EC has not, at any stage in this dispute, attempted to
establish a prima facie case that such a requirement is c onsistent with the chapeau of GATT
Article XX.35

QUESTION NOS. 137 AND 139

41. The EC argues that Australia is requesting "a remedy against the confusing use of a registered
geographical indications [sic] which many Members do not provide with respect to the infringement
of a registered trademark by a latter [sic] registered trademark". 36 The EC points to the trademark
provisions of a number of other WTO Members whic h it has set out in its response to Question No.
139.37 Australia has already requested that the Pane l exclude from consideration the provisions of
other WTO Members' trademark laws.38

42. The inherent dangers of considering provisi ons of other WTO Members' trademark laws in
isolation from their full context are amply demonstrated in the case of the Australian Trade Marks Act
provision cited by the EC (section 122(1)(e)). That provision – when considered in the full context of
the Act and in the legal order of Australia – ex cepts certain actions from infringing an earlier
trademark right only where the prior right holde r expressly consented to the co-existence, for

31 Australia's Second Oral Statement, paragraphs 67-70.
32 EC Response to Question No. 136(f), paragraph 155.
33 The implicit premise of Article 10.3 of Regulation No. 2081/92 is confirmed by the EC's subsequent
statement (in paragraph 155) that: "… in such a case it would be reasonable to entrust the function of
inspections to a body which also carries out tasks other than inspections under Regulation 2081/92".
34 See Australia's comment above on the EC Response to Question No. 125.
35 Australia's Second Oral Statement, paragraphs 66-70.
36 EC Response to Question No. 137, paragraph 163.
37 EC Response to Question No. 139, paragraph 170 and footnote 68.
38 See Introduction above.

example, in a licensing arrangement, or where the prior right holder failed to take the extensive
opportunities provided under Australia law to prevent the acquisition of the later trademark right.

43. Notwithstanding the EC's assertions to the co ntrary, Australia is not requesting a remedy
which it does not provide with respect to the infringement of a trademark right under its own domestic
law.

QUESTION NOS. 143, 146, 148 AND 149

44. The EC's responses are premised on "confusio n" and "mislead" being synonymous terms in
the context of both TRIPS Article 16.1 and Article 14. 3 of Regulation No. 2081/92. In support of its
contention that "confusion" in the sense of TRIPS Ar ticle 16.1 is synonymous with "mislead" in the
sense of Article 14.3 of the Regulation, the EC points to a WIPO publication. Further, the EC appears
to be arguing that "mislead" in the context of TRIPS Article 22.2 is also synonymous with
"confusion" in the sense of TRIPS Article 16.1.
39

45. A WIPO publication cannot be determinativ e of the issue. Notwithstanding the obvious
synergy between matters which fall within the purvi ew of WIPO and matters covered by the TRIPS
Agreement, the interpretation of the TRIPS Agre ement is expressly reserved to the Ministerial
Conference and the General Conference of the WT O in accordance with Article IX.2 of the WTO
Agreement. Moreover, the WIPO publication quoted by the EC is not inconsistent with Australia's
view of the proper interpretation of the notion of "a likelihood of confusion". As Australia has
previously said, in reality the likelihood of confusion is a continuum.40 The publication quoted by the
EC simply defines one point in the continuum. It does not equate confusing to misleading, but rather
suggests that if a particular use is confusing, it is likely also to mislead. Further, Australia notes that
other WIPO publications explain the notion of "a likelihood of confusion" in different ways, for
example:

… The basic test is whether the allegedly similar mark resembles the protected mark
in such a way as to be likely to confuse the average consumer as to the source of the
goods or services or as to the connection between the concurrent users of the similar
marks, taking into account all the circumst ances of the particular case. In other
words, a mark is generally considered "confus ingly similar" if it is so similar to the
protected mark that a substantial number of average consumers are likely to be
confused or misled as to the source of the goods or services sold under the similar
mark, in the belief that such products or services originate from the same enterprise
which owns and/or uses the protected mark (or that there is a "connection" between
such enterprise and the enterprise using the si milar mark, as, for example, in the case
of a licensor and a licensee).
41
46. Finally, as the Appellate Body found in India – Patents, "[t]he duty of a treaty interpreter is to
examine the words of the treaty to determine the intentions of the parties" 42 (emphasis added). It is
the actual words of the TRIPS Agreement that de termine a WTO Member's obligations pursuant to
that Agreement.

39 EC Response to Question No. 149.
40 Australian Response to Question No.148, paragraph 72(c).
41 The Role of Industrial Property in the Protection of Consumers , WIPO, Geneva 1983, Exhibit
AUS-20, paragraph 41.
42 India – Patent Protection for Pharmaceutical and Agricultural Chemical Products , Report of the
Appellate Body, WT/DS50/AB/R, paragraph 45.

QUESTION NO. 145

47. The EC says – in the context of a WTO Me mber enacting a measure permitted by TRIPS
Article 15.2 to prevent registration of a GI as a trademark – that "if a trademark has been registered,
or applied for, before either of the two dates mentioned in Article 24.5, the Member in question would
be prohibited by virtue of Article 24.5 from i nvalidating that trademark on the ground that such
trademark is identical or similar to a geographical indication".
43

48. Australia notes, however, that the two dates me ntioned in TRIPS Article 24.5 do not apply to
a good faith application for, or registration of, a trademark.
44 In accordance with the normal usage of
punctuation in the English language, had it been in tended that the two dates apply to a trademark
application or registration, there would have been a comma between the words "good faith" and
"either". In the absence of a comma, the two dates are applicable only "where rights to a trademark
have been acquired through use". Moreover, Au stralia notes that the French text of TRIPS
Article 24.5 similarly does not apply the two dates to a trademark application or registration.

QUESTION NO. 148

49. The EC refers to Australia's request to register the term "Australia" as a GI under the
Australia-EU bilateral agreement concerning trade in wine. 45 Australia notes that the bilateral
agreement does not form part of the measure at issue in the dispute initiated by Australia. In any case,
the term "Australia" on its own could not per se function as a trademark as it could not distinguish the
goods or services of one undertaking from those of other undertakings.

QUESTION NO. 153

50. Once again, the inherent danger of consider ing provisions of other WTO Members' trademark
laws in isolation from their full context is demonstr ated in the case of the Australian Trade Marks Act
provision cited by the EC (section 122(1)(b)(i)). That provision excepts certain actions from
infringing an earlier trademark right where a sign is used to indicate the geographical origin of a good
or service. When considered in the full context of the Act and in the legal order of Australia, and as
previously explained by Australia
46 and notwithstanding the EC's seeming unwillingness to accept
that explanation, 47 a sign used to indicate geographical origin within the meaning of section
122(1)(b)(i) does not include either a TRIPS- or an EC -defined GI. It simply means a sign to indicate
a place from which the goods or services originate, i rrespective of whether that place may also be a
geographical indication within the meaning of TRI PS Article 22.1. Thus, for example, the right
holders of the certification trademark "Stilton" in Au stralia could not automatically prevent good faith
use of the phrase "Made in Stilton" to indicate the place from which another product originated.

51. Australia has already requested that the Pa nel exclude from consideration the provisions of
other WTO Members' trademark laws.
48

43 EC Response to Question No.145, paragraph 199, first bullet point.
44 While section 61 of the Australian Trade Marks Act applies those two dates to applications for and
registrations of trademarks also, it does so in the context of a higher level of protection of TRIPS-defined GIs
consistent with the provisions of TRIPS Articles 1.1 and 15 .2. Australia retains the right – consistent with its
obligations under other provisions of the TRIPS Agreements – to diminish that level of protection if, with the
passage of time, the application of that provision were to be shown to be unfair consistent with the principle of
territoriality.
45 EC Response to Question No. 148, paragraph 220.
46 Australian Response to Question No. 80 from the Panel.
47 EC's Second Written Submission, footnote 219.
48 See Introduction above.

52. Finally, and in any case, the ECJ case law referred to by the EC
49 as supposedly supporting its
view of the proper interpretation of an indication of geographical origin in the Community Trademark
Directive and Regulation in fact concerned use of such an indication as a trademark . Further, it
concerned a term that was expressly recognised as a geographic source of natural mineral waters
under the relevant EC Directive. Moreover, Australia notes that the Explanatory Memorandum
prepared by the European Commission concerni ng the proposed changes to Regulation No. 2081/92
which were eventually adopted in Regulati on No. 692/2003 expressly re ferred to the problems
revealed by applications for registration of mineral and spring waters as EC-defined GIs. 50 The case
law referred to by the EC does not substantiate its argument.

QUESTION NOS. 159 AND 160 AND AUSTRALIAN QUESTION NOS. 2 AND 3

53. At no stage in this dispute has Australia clai med that "the additional protection afforded to
registered geographical indications under Article 13.1 of Regulation No. 2081/92 … could be ‘an act
of unfair competition'".
51 Rather, Australia has claimed that – in respect of the registration of an EC-
defined GI – the EC does not provide the legal mean s for interested parties to prevent misleading use
or use which constitutes an act of unfair competition within the meaning of Paris Article 10bis.52

54. Further, Australia notes the inherent contradi ction in the EC's responses to Question Nos. 159
and 160. On the one hand, it ac knowledges that Australia has not
 claimed that "the other measures
cited by the EC" – in its First Written Submission and in the responses of the EC and its Member
States in the context of the TRIPS Article 24.2 revi ew by the TRIPS Council – "are not sufficient to
protect geographical indications that have not been registered Regulation 2081/92". 53 On the other
hand, it argues that because Australia has not men tioned those other measures in the context of its
claim in respect of the registration of an EC-defin ed GI – even though Australia does not contest the
issue of whether those other measures are sufficient to meet the EC's obligations in respect of TRIPS-
defined GIs more generally – Australia has impr operly shifted the burden of proof to the EC. 54 The
consequence of the EC's argument is that Aust ralia should have analysed and demonstrated a
negative, notwithstanding an express and unambiguous obligation on the EC to make available the
legal means to prevent the uses set out in TRIPS Article 22.2.

55. Moreover, and in any case, Australia notes that the EC Responses to Australian Question
Nos. 2 and 3 do not show that – in respect of the registration of an EC-defined GI – the EC assures
access:

• by a trademark right holder to "appropriate legal remedies effectively to repress" acts of
unfair competition within the meaning of Paris Article 10 bis as required by Paris
Article 10ter(1);

• by "interested parties" to "legal means … to prevent" misleading use or use which
constitutes an act of unfair competition within the meaning of TRIPS Article 22.2; or

49 EC Response to Question No. 153, paragraphs 242-244 and footnote 99.
50 Proposal for a Council Regulation amending Regulation (EEC) No 2081/92 on the protection of
geographical indications and designations of origin for agricultural products and foodstuffs , Brussels,
15.03.2002, 2002/0066 (CNS), Exhibit US-20.
51 EC Response to Question No. 159, paragraph 263.
52 Australia's First Written Submissi on, paragraphs 154-155, and Aust ralia's Second Oral Statement,
paragraphs 80-85.
53 EC Response to Question No. 159, paragraph 263.
54 EC Response to Question No. 160, paragraph 265.

• by a trademark right holder to "civil judicial procedures concerning the enforcement of
any intellectual property right covered by this Agreement" within the meaning of TRIPS
Article 42.

56. Firstly, "the Codorníu judgment"
 55 did not address the rights of trademark holders generally.
(It concerned a single trademark right holder who was able to show that its trademark registration pre-
dated registration of the term at issue by some 65 years. 56) Moreover, the EC admits this when it
asserts that there are some circumstances where a trademark right holder will be able to show it is
individually concerned.
57 Equally, this suggests that there will be circumstances where a trademark
right holder will not meet this threshold requirement.

57. Secondly, even if – in accordance with the ECJ's judgement in Commission of the European
Communities v Jégo-Quéré & Cie SA
58 – a trademark right holder or, in the context of TRIPS
Article 22.2, an interested party were always able to initiate action to ensure review of the legality of
acts of the institutions, "review of the legality of the acts of the institutions" does not necessarily
extend to the exercise of rights required to have b een granted to such persons pursuant to the EC's
obligations under the TRIPS Agreement. "… [T]h e WTO agreements are not in principle among the
rules in the light of which the Court is to review the legality of measures adopted by the Community
institutions …". 59 Unless an obligation arising from the EC 's membership of the WTO Agreement is
incorporated in an act of an institution, a trademar k right holder or interested party is not assured of
the rights required to have been granted to th at person under the TRIPS Agreement. Thus, for
example, where the EC's breach of an obligation is by omission – such as in the case of TRIPS
Article 22.2 in respect of the registration of an EC-d efined GI – there is no act of an institution whose
legality can be reviewed.

58. Thirdly, notwithstanding the EC's argument that "Regulation 2081/92 and the other measures
mentioned in its first submission apply cumulatively",
60 Australia notes again that the other measures
are specifically excluded (Article 142 – now Artic le 159 – of the Community Trademark Regulation)
from applying to, or would not prevail over, the relevant rights granted by Regulation No. 2081/92.61

59. In Canada – Patent Term , the Appellate Body examined a claim concerning the obligation
pursuant to TRIPS Article 33 to grant a term of patent protection of not less than 20 years. The
Appellate Body found: "]t]he opportunity to obtain a twenty-year term must be a readily discernible
and specific right …".
62 The current situation is analogous: the opportunity to exercise the rights
required to be granted to a person pursuant to th e EC's obligations under the TRIPS Agreement must
be readily discernible and specific.63

55 Codorníu SA v Council of the European Union (Case C-309/89), [1994] ECRI-01853,
Exhibit EC-111.
56 The Codorníu judgment, paragraphs 21-22. Australia also notes that the term at issue – "cremant" –
was considered to " [refer] primarily not to the origin but the method of manufacture" of the wine
(paragraph 28).
57 "… this does not mean necessarily that a trademark holder will never be able to show that it is
individually concerned. In particular, a trademark holder could seek to rely on the Codorníu case law" 57
(emphases added): EC Response to Australian Question No. 2, paragraph 9.
58 Case C-263/02 P, Exhibit EC-113.
59 See Australian Response to Question No. 6, referring to the Biret judgment, Exhibit AUS-07.
60 EC Response to Question No. 159, paragraph 258. Australia understands the EC's reference to
"other measures mentioned in its first submission" to mean those measures listed at paragraph 434 of that
submission.
61 See, for example, Australia's Written Rebuttal Submission, paragraphs 146 and 171.
62 Canada – Term of Patent Protection, Report of the Appellate Body, paragraph 92
63 See Australia's Closing Statement to the second meeting with the Panel.

QUESTION NO. 163

60. The EC once again says: "… as a matter of fact, no objection procedure applied under the
simplified procedure regardless of whether EC re sidents or foreign residents were involved".
64
However, the EC has also said: "[b]ecause of the concerns raised by the owners of the trademarks at
issue and by some Member States, the EC institu tions could not reach a decision with respect to [the
"Bayerisches Bier"] name as of the time of the adoption of Regulation 1107/96"65 (emphasis added).

61. Clearly, there was indeed a mechanism availabl e 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. How else could "the owne rs of the trademarks at issue" have made their
concerns known?

62. Australia maintains its claim that a right of objection was available to persons resident or
established in an EC Member State that was not av ailable to other WTO Member nationals in respect
of the registration of more than 480 EC-defined GIs under the simplified registration process, contrary
to Articles 1.1 and 1.3, 2.1 ("incorporating" Artic le 2 of Paris Convention) and 3.1 of the TRIPS
Agreement.
66 Further, and contrary to the EC's assertion, 67 the registrations of those 480 EC-defined
GIs are encompassed by Australia's claims under TRIPS Articles 16.1, 68 2.1 ("incorporating" Paris
Articles 10bis69 and 10 ter70), 24.5, 71 42, 72 41.2, 73 41.3 74 and 41.1, 75 as well as under TRIPS
Articles 1.1 and 2.1.76

63. TRIPS Article 70.1 does not place the registrations of the 480 EC-defined GIs pursuant to
Regulation No. 1107/96 outside the temporal scope of the TRIPS Agreement for any purpose. That
any inconsistencies with the EC's obligations pursuant to the TRIPS Agreement may have arisen from
acts of omission, or because the proposed list of names to be registered was already under
consideration by a decision-making authority as at 1 January 1996 (the date of application of the
TRIPS Agreement for the EC), does not excuse the EC from complying with any of its obligations

64 EC Response to Question No. 163, paragraph 271.
65 EC Response to Question No. 144, paragraph 195.
66 Australia's First Written Submission, paragraphs 190-194.
67 EC Response to Question No. 163, paragraph 270.
68 Australia's First Written Submission, paragraphs 88-107.
69 Australia's First Written Submission, paragraphs 113-115.
70 Australia's First Written Submission, paragraphs 115-118.
71 Australia's First Written Submission, paragraphs 81-87.
72 Australia's First Written Submission, paragraphs 119-125.
73 Australia's First Written Submission, paragraphs 126-140.
74 Australia's First Written Submission, paragraphs 141-144.
75 Australia's First Written Submission, paragraphs 145-148.
76 Australia's First Written Submission, paragraphs 151-152.

pursuant to the TRIPS Agreements in respect of act s of registration of EC-defined GIs which took
place after that date.

AUSTRALIAN QUESTION NOS. 2 AND 3

64. See Australia's comment on EC Responses to Question Nos. 159 and 160 above.

ANNEX A-10

COMMENTS OF AUSTRALIA ON THE REPLY OF THE
WORLD INTELLECTUAL PROPERTY ORGANIZATION
TO THE PANEL'S LETTER OF 9 JULY 2004

(28 September 2004)

Through this letter, I am conveying Australia's comments on the reply of the World Intellectual
Property Organization ("WIPO") to the Panel's request of 9 July 2004. In that letter, the Panel
requested factual information available to WIPO releva nt to the interpretation of Article 2 of the Paris
Convention for the Protection of Industrial Propert y (1967), and of any other provisions concerning
the eligibility of natural or legal persons for protection under that Convention.

As a preliminary matter, Australia notes that none of the parties to the dispute have argued that
interpretation of Paris Article 2 in accordance with the customary rules of interpretation of public
international law, which have gui ded Australia's interpretive appro ach in this dispute, leaves the
meaning of Paris Article 2 ambiguous or obscure or leads to a result which is manifestly absurd or
unreasonable. Consequently, the Panel is not oblig ed to have recourse to supplementary means of
interpretation, such as those contained in the records provided by WIPO.

Nevertheless, the records confirm that the interpretation of the Convention put forward by Australia in
this dispute is fully consistent with the intent of the negotiators of the Convention.

The records show a clear intent on the part of th e negotiators that Paris Article 2 should not permit
any condition of domicile or establishment to be im posed on the nationals of other countries of the
Union for the enjoyment, as regards the protection of industrial property, of the advantages that a
country grants to its own nationals.

In addition, the Report of the Drafting Commission at the 1925 Revision Conference at The Hague
expressly states, in relation to the provision that is now Article 2(2) of the Paris Convention, that:

… we put at the beginning [of this sentence] 'however' to show that this [condition]
concerns a restriction on the rule, expr essed in indent 1, of the reservation of
fulfilment of the conditions and formalities imposed on nationals.
Accordingly, the records explicitly confirm the view of the relationship betw een paragraphs 1 and 2
of Article 2 of the Paris Convention put forward by Australia in its First Oral Statement (at
paragraph 16) and in its Written Rebuttal Submissi on (at paragraphs 26-28). Paris Article 2(2)
defines the boundary of permissible action in relatio n to conditions of domicile or establishment for
nationals of other WTO Members in the applicati on of the national treatment obligation established
by Paris Article 2(1), and is an integral aspect of the national treatment obligation established by the
Paris Convention with which a WTO Member is required to comply. Consequently, Paris Article 2(2)
was properly raised in Australia's panel establishment request.