Document: Oral Statement
Date: 15 March 2004
Document codes: WT/DS174/R/Add.1
Complainant: U.S.
Respondent: EU
Third parties: Argentina, Australia, Brazil, Canada, China, Taiwan, Colombia, Guatemala, India, Mexico, New Zealand, Turkey
Dispute stage: Panel
Agreements cited: Art. 1.1, 2.1, 3.1, 4, 16.1, 20, 22.1, 22.2, 24.5, 41.1, 41.2, 41.4, 42, 44.1, 63.1, 63.3, 65.1  Intellectual Property (TRIPS)Art. I, III:4  GATT 1994

ANNEX A

SUBMISSIONS BY THE UNITED STATES

Contents Page
Annex A-1 United States' Response to th e European Communities' Request for a
Preliminary Ruling (15 March 2004)
A-2
Annex A-2 First Written Submission of the United States (23 April 2004)

A-14
Annex A-3 Oral Statement of the United States – First Substantive Meeting
(23 June 2004)

A-60
Annex A-4 Replies by the United States to Questions posed by the Panel and the
European Communities to the Complaining Parties following the First
Substantive Meeting (8 July 2004)

A-73
Annex A-5 Second Written Submission of the United States (22 July 2004)

A-113
Annex A-6 Opening Statement of the Unite d States – Second Substantive Meeting
(11 August 2004)

A-167
Annex A-7 Closing Statement of the Unite d States – Second Substantive Meeting
(12 August 2004)

A-192
Annex A-8 Replies by the United States to Questions posed by the Panel following
the Second Substantive Meeting (26 August 2004)

A-197
Annex A-9 Comments of the United States on the European Communities' Replies
to Questions posed by the Panel and to Questions posed by Australia
following the Second Substantive Meeting (2 September 2004)

A-245
Annex A-10 Comments of the United States on the Reply of the International Bureau
of WIPO to the Panel's Letter of 9 July 2004 (28 September 2004)

A-288

I. INTRODUCTION
1. The European Communities ("EC") offers no le gitimate basis for its request for a preliminary
ruling ("EC Request") that the US panel request in this dispute fails to meet the requirements of
Article 6.2 of the Understanding on the Rules and Procedures Governing the Settlement of Disputes
("DSU"). To the contrary, as required by Article 6. 2, the US panel request properly "identif[ies] the
specific measures at issue and provide[s] a brief summary of the legal basis of the complaint sufficient
to present the problem clearly."

2. The EC would, in contrast, have this Panel require the identification, not of the "specific
measures", but of the specific aspects or parts of the measures that the United States intends to raise in
this proceeding. The EC would also have this Pane l read into Article 6.2 another requirement that is
not there and that the Appellate Body has specificall y rejected: a requirement that the United States
summarize the specific legal arguments to be presente d in the first US submission. The Appellate
Body in EC Bananas
1 has already rejected the suggestion that a complaining party must summarize its
legal arguments in the panel request, and this Panel should do so as well.

II. STATEMENT OF FACTS
3. The United States requested formal dispute se ttlement consultations with the EC concerning
"the protection of trademarks and geographical i ndications for agricultural products and foodstuffs",
and, in particular, Regul ation 2081/92, as amended, 2 almost five years ago, on June 1, 1999. 3 Th e
United States and the EC held a first set of consu ltations on July 9, 1999. In its request, the United
States stated that Regulation 2081/92 "does not provide national treatment with respect to
geographical indications, and does not provide sufficient protection to pre-existing trademarks that are
similar or identical to a geographical indication." At no time during this first set of consultations did
the EC suggest it did not understand the legal basis for the US complaint.

4. Indeed, over the course of the following f our years, numerous consultations were held
between representatives of the United States and of the EC concerning, in detail, what the United
States perceived to be inconsistencies between Regulation 2081/92 and the WTO obligations of the
European Communities.4

5. On April 4, 2003, the United States requested additional consultations with the EC which,
inter alia , specified that Regulation 2081/92, as am ended, and its related implementing and
enforcement measures appeared to be inconsistent with the national treatment and most favored nation
("MFN") obligations of the Agreement on Trade-Related Aspects of Intellectual Property Rights
("TRIPS Agreement"), with respect to nationals, and the General Agreement on Tariffs and Trade

1 Report of the Appellate Body, European Communities – Regime for the Importation, Sale and
Distribution of Bananas, WT/DS27/AB/R, adopted September 25, 1997 ("EC Bananas").
2 Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications
and designations of origin for agricultural products and foodstuffs.
3 WT/DS174/1.
4 Letter from Joseph Papovich to Joao Pacheco, dated June 6, 2001, incorporating 20 questions
concerning Regulation 2081/92 (Exhibit US-1); Letter from Joseph Papovich to Joao Pacheco, dated August 21,
2001, attaching additional 15 questions (Exhibit US-2); Letter from Steve Kho to Jean-Jacques Boufflet, dated
May 19, 2003, enclosing 36 questions for purposes of the May 27, 2003, consultations, and addressing, among
other issues relative to Regulation 2081: national treatment, most favored nation treatment, exclusivity of
trademarks, implementing regulations and enforcement, availability of legal means for interested parties to
prevent misleading uses of geographical indications, transparency, and definitions of geographical indications
(Exhibit US-3). These documents from the consultations are relevant because they show that the EC is not in the
dark, as it claims to be, concerning problems with respec t to Regulation 2081/92. The claims in this dispute,
however, are as set forth in the US panel request.

1994 ("GATT 1994"), with respect to goods.
5 On May 19, the United States submitted detailed
questions to the EC in advance of consultations that were held on May 27, 2003, which, as noted
above, addressed issues that are the subject of the panel request.6 Again, at no time during this last set
of consultations did the EC even suggest it did not understand the legal basis for the US complaint.

6. The May 27 th consultations also failed to resolve the matter. Consequently, on August 18,
2003, the United States requested the establishment of a panel, specifically identifying Regulation
2081/92, as amended, and its relate d implementing and enforcement me asures, and providing a brief
summary of the legal basis of the complaint. That summary consisted of both a narrative and a
specific citation to particular paragraphs of the TRIPS Agreement and the GATT 1994.

III. THE REQUIREMENTS OF DSU ARTICLE 6.2
7. Article 6.2 of the DSU requires, in relevant part, that a request for the establishment of a
panel:

identify the specific measures at issue and pr ovide a brief summary of the legal basis
of the complaint sufficient to present the problem clearly.
8. The EC Request contains a number of quotati ons from Appellate Body and panel reports, in
particular from Korea Dairy
7 and EC Bananas, that explain this provision and emphasize its role and
importance in dispute settlement. It has entirely missed, however, one aspect of these reports which is
critical to the issue now before this Panel: the key distinction between the claims – which must be
included in the panel request – and the arguments in support of those claims – which need not be
included. As the Appellate Body explained in EC Bananas:

In our view, there is a significant difference between the claims identified in the
request for the establishment of a panel, which establish the panel's terms of reference
under Article 7 of the DSU, and the arguments supporting those claims, which are set
out and progressively clarified in the first written submissions, the rebuttal
submissions and the first and second panel meetings with the parties.
8
9. Furthermore, and contrary to the EC's argu ment at paragraph 37 of its preliminary ruling
request, the Appellate Body in EC Bananas made clear that a panel request may adequately state a
claim if the request simply cites the pertinent provision of the WTO agreement:

We accept the Panel's view that it was suffi cient for the Complaining Parties to list
the provisions of the specific agreements alleged to have been violated without
setting out detailed arguments as to which specific aspects of the measures at issue
relate to which specific provisions of those agreements.
9
10. The Appellate Body confirmed this reading in Korea Dairy. In that dispute, the problem with
the panel request was that it cited too broadly to Article XIX of the GATT 1994 and various articles
of the Agreement on Safeguards, all of which contained numerous s ub-articles, so that it was difficult
to determine which specific obligations in those provisions were at issue. 10 The US panel request in

5 WT/DS290/1 /Add.1.
6 See Exhibit US-3.
7 Report of the Appellate Body, Korea – Definitive Safeguard Measure on Imports of Certain Dairy
Products, WT/DS98/AB/R, adopted January 12, 2000 ("Korea Dairy").
8 EC Bananas, para. 141.
9 Id.
10 The Appellate Body explained:

this dispute, by contrast, cites to specific provisi ons of the WTO agreements at issue, and cannot be
said to suffer a similar defect.

11. The EC also fails to note that even if a panel request is insuffici ently detailed "to present the
problem clearly," the Panel is not automatically depr ived of jurisdiction over the matter. Rather, the
Panel must examine, based on the "particular ci rcumstances of the case," whether the defect has
prejudiced the ability of the responding party to defe nd itself. As the Appellate Body explained in
Korea Dairy:

In assessing whether the European Commun ities' request met the requirements of
Article 6.2 of the DSU, we consider that, in view of the particular circumstances of
this case and in line with the letter and spirit of Article 6.2, the European
Communities' request should have been more detailed. However, Korea failed to
demonstrate to us that the mere listing of the articles asserted to have been violated
has prejudiced its ability to defend itself in the course of the Panel proceedings.
Korea did assert that it had sustained pr ejudice, but offered no supporting particulars
in its appellant's submission nor at the oral hearing. We, therefore, deny Korea's
appeal relating to the consistency of th e European Communities' request for the
establishment of a panel with Article 6.2 of the DSU.
11
12. Therefore, in evaluating claims regarding whether a panel request "presents the problem
clearly," the Panel must consider the particular ci rcumstances of the dispute, including whether the
responding party has been prejudiced.

13. The EC asserts that, inconsistently with Article 6.2, the US panel request neither (1) identifies
the specific measures at issue, nor (2) provides a br ief summary of the legal basis of the complaint
sufficient to present the problem clearly, and that th e EC has thereby been seriously prejudiced. As
detailed in the sections that follow, the EC is wrong on all counts.

IV. THE EC'S ASSERTION THAT THE US PANEL REQUEST DOES NOT IDENTIFY
THE "SPECIFIC MEASURES AT ISSUE" IS INCORRECT
A. I
N CITING REGULATION 2081/92, THE US PANEL REQUEST HAS IDENTIFIED THE "SPECIFIC
MEASURES AT ISSUE"
14. The EC argues that specifically citing a particular EC regulation is not "sufficiently specific to
permit an identification of the ‘specific measure [ sic: measures] at issue'." 12 The EC argues that the
complainants should have identified which specifi c aspects of Regulation 2081/92 they intend to

In the present case, we note that the European Communities' request for a panel, after identifying the
Korean safeguard measure at issue, listed Articles 2, 4, 5 and 12 of the Agreement on Safeguards and
Article XIX of the GATT 1994. Article XIX of the GATT 1994 has three sections and a total of five
paragraphs, each of which has at least one distinct obligation. Articles 2, 4, 5 and 12 of the Agreement
on Safeguards also have multiple paragraphs, most of which have at least one distinct obligation. The
Agreement on Safeguards in fact addresses a comp lex multi-phased process from the initiation of an
investigation, through evaluation of a number of f actors, determination of serious injury and causation
thereof, to the adoption of a definitive safeguard m easure. Every phase must meet with certain legal
requirements and comply with the legal standards set out in that Agreement.

Korea Dairy, para. 129.
11 Id., para. 131.
12 EC Request, paras. 14 - 15. The EC quotes Ar ticle 6.2 as requiring id entification of a single
"measure" at issue, whereas Article 6.2 refers to the "measures" at issue.

raise, and claims that "it would have easily been possible for the complainants to provide more
specific references to individual provisions of Regulation 2081/92."
13 This argument is groundless,
for several reasons.

15. First, Article 6.2 requires that the complaini ng party identify the "specific measures at issue"
in its panel request, and the United States has do ne precisely that in identifying EC Regulation
2081/92, in its entirety. There is nothing in Article 6.2 which limits the right of complaining parties to
choose the measures they wish to challenge, and pr evious disputes have c overed a broad range of
measures.
14 This, in itself, is grounds for rejecting the EC request.

16. Second, the EC suggests that identifyin g EC Regulation 2081/92, which addresses the
protection of geographic indications and designati ons of origin for agricultural products and
foodstuffs, is analogous to identifying the entire civil code of another Member. 15 E C R e g u l a t i o n
2081/92, however, is not like a civil code. Unlik e a civil code, which addresses a broad range of
subject matter, including, for example, marriage , adoption, labor, property, contracts and other
obligations, and antitrust, EC Regulation 2081/92 addresses one specific subject , i.e., the rules for the
protection of designations of origin and geographical indications for certain agricultural products and
foodstuffs. Indeed, while it is true, as the EC notes, that EC Regulation 2081/92 includes several
articles, they all relate to this one subject, and in f act all of these articles are relevant to the US claims
in this dispute.

17. Third, the EC offers an "illustrative list" of supposedly distinct "topics" in Regulation
2081/92. Apart from the fact that Article 6.2 incl udes no requirement that specific "topics" within a
measure be identified,
16 Regulation 2081/92 is an integrated whole: Article 12a, for instance, which
concerns applications for third country geographical indications, contains specific cross-references to
Articles 4, 5, 12, and 15, which in turn cross-refere nce Articles 2, 4, and 6. And, of course, other
articles, e.g., addressing definitions, objective, and scope, are implicitly incorporated. Taking into
account the integrated nature of EC Regulation 20 81/92, the United States chose, in exercising the
broad discretion afforded it under Article 6.2, to identify the whole Regulation as the "specific
measures at issue."

18. Fourth, the EC quotes from a number of disput es in which the sufficiency of panel requests
under Article 6.2 was considered, but does not point to any in which the Appellate Body or a panel
found that identifying a particular law or regulation as a measure, without identifying particular
articles of the law or regulation, is insufficient. For instance, in EC Bananas, both the panel and the
Appellate Body found a request sufficient when it referred to "a regime for the importation, sale and

13 EC Request, para. 22. The EC Request does not question the inclusion of amendments to Regulation
2081/92 as part of the measures at issue in the US pa nel request. The United Stat es therefore assumes that
whether the inclusion of amendments is sufficiently specific under Article 6.2 is not at issue.
14 See, e.g., United States – Measures Affecting the Cross-Border Supply of Gambling and Betting
Services ("United States Gambling" ), Request for Establishment of a Panel by Antigua and Barbuda,
WT/DS285/2, in which the cited measures included a range of code sections and constitutional provisions for all
50 US states and several US territories.
15 EC Request, para. 18.
16 The EC apparently does not believe itself obligated to identify specific topics within a measure in
other disputes; e.g., United States – Tax Treatment for "Foreign Sales Corporations" , WT/DS108 ("US FSC"),
where the measures identified were sections 921-927 of the US Internal Revenue Code and related measures.
The cited statutory provisions alone consisted of seven sections with numerous sub-parts, taking up more than
20 pages of the EC's first exhibit. Further, in Canada – Measures Relating to Exports of Wheat and Treatment
of Imported Grain, WT/DS276/12, Preliminary Ruling circulated July 21, 2003 ("Canada Wheat"), in which the
EC is a third party, the EC stated, at paragraphs 15-16 of its June 4, 2003, comments, that the US identification
of "the Canada Grain Act and Canadian grain regulations," without referencing specific articles, was sufficient
to satisfy the requirements of Article 6.2.

distribution of bananas established by Regulation 4 04/93 and subsequent EC le gislation, regulations
and administrative measures ... which implem ent, supplement and amend that regime." 17 Indeed, the
issue in prior disputes regarding the identification of measures at issue has generally been whether
Article 6.2 requires a citation to a particular law or regulation, or whether simply describing the
measure without citation is specific enough. On that particular question, the panel in Canada Wheat,
the only dispute cited by the EC on this issue, noted that it is desirable but unnecessary for panel
requests to "specify measures of general application – i.e., laws and regulations – by name, date of
adoption, etc."
18 In this dispute, by contrast, the US panel request specifically cites Regulation
2081/92 and the EC is arguing that even this "desi rable," although unnecessary, form of identification
is insufficient. In short, the EC is seeking to dramatically increase the level of specificity required
under Article 6.2 in this proceeding without any text ual or other basis, simply to suit its immediate
interest in this dispute.

19. For the reasons above, the US reference to Re gulation 2081/92 constitutes an identification of
the specific measures at issue, as required by Article 6.2.

B. I
N IDENTIFYING REGULATION 2081/92 "AND ITS RELATED IMPLEMENTING AND
ENFORCEMENT MEASURES", THE US PANEL REQUEST IDENTIFIED THE "SPECIFIC MEASURES
AT ISSUE"
20. The EC argues that Australia's identifica tion of "related implementing and enforcement
measures" falls short of the Article 6.2 requirement to identify the "specific measures at issue." The
EC asserts, at footnote 10, that the US panel re quest does not include a reference to "related
implementing and enforcement measures." This is in correct. In paragraph 2 of its panel request, the
United States defines the measures at issue – Regul ation 2081/92, as amended – to include its related
implementing and enforcement measures. Be that as it may, the EC has not challenged this aspect of
the US panel request, even after it was pointed ou t at the March 3 organizational meeting that the
United States used precisely the same formulati on as Australia. Under these circumstances, it is
unclear on what basis the EC continues to maintain its complaint about the Australian panel request.

21. In any case, the EC's argument with respect to Australia's panel request is wrong and ill-
founded. The EC claims that "related" is a vague term and that many laws and regulations might be
considered "related." It also claims that many laws and regulations may be necessary to implement
and enforce the regulation. Therefore, the EC pr ofesses ignorance of what measures are at issue.
This argument is disingenuous. The Australian pa nel request does not refer to unknown "related
implementing and enforcement" measures. It re fers to a specific regulation providing for the
protection of geographical indications in the EC and its
 related implementing and enforcement
measures. The identification of these measures is spec ified through the reference to its relationship to
Regulation 2081/92, i.e., those measures that enforce and implement Regulation 2081/92. As noted
above, the Appellate Body found less sp ecific language to be adequate in EC Bananas: "a regime for

17 EC Bananas, para. 140.
18 Preliminary Ruling of the Panel, Canada – Measures Relating to Exports of Wheat and Treatment of
Imported Grain, WT/DS276/12, circulated on July 21, 2003 ("Canada Wheat"), para. 19:

We note that the United States' panel request refers to "laws" and "regulations", yet does not specify the
relevant laws and regulations by name, date of adoption, etc. We consider that it is desirable for
Members to be as specific as possible in identifying measures of general application, including by
indicating their name and date of adoption. However, by its terms, Article 6.2 does not require that
panel requests explicitly specify measures of general application – i.e., laws and regulations – by name,
date of adoption, etc. Therefore, we consider that the fact that the United St ates has not specified the
relevant laws or regulations by name, date of adoption, etc. does not necessarily render the panel
request inconsistent with Article 6.2.

the importation, sale and distribution of bananas est ablished by Regulation 404/93 and subsequent EC
legislation, regulations and administrative measur es ... which implement, supplement and amend that
regime."
19 The EC itself adopted a similar approach in US FSC when it identified the measures as
"sections 921 - 927 of the Internal Revenue C ode and related measures establishing special tax
treatment for ‘Foreign Sales Corporations'."20

22. Finally, the EC is in a poor position to be pleading that the "related implementing and
enforcement measures" are not specified. In tr ying to understand these measures fully during the
course of consultations almost one year ago, the ve ry first category of information the United States
and Australia requested from the EC was with respec t to "Implementing Regulations." In particular,
the United States asked for a list of "all EC rules, regulations or other measures implementing or
related to EC Regulation 2081/92" and copies of all such "relevant measures." In addition, the United
States asked several specific questions about re levant member State implementing regulations,
including those related to member State inspection structures, and asked for copies of all such relevant
measures. The EC was utterly unresponsive to th is request during the consultations, and never
provided citations to a single implementing measur e in response to this request, despite numerous
opportunities to do so. Article 4.10 of the DSU stat es that Members will engage in dispute settlement
procedures in good faith in an attempt to resolve th e dispute. More specifically, Article 4.3 of the
DSU obliges the Members to enter into consultations in good faith. Given the failure of the EC itself
to identify Regulation 2081/92's implementing and enforcement measures by citation, this Panel
should require no more specificity of the United St ates than the EC was w illing to offer the United
States.

23. The EC, in arguing that the identification of "related implementation and enforcement
measures" is unspecific, refers to the preliminary ruling in Canada Wheat, where, in paragraphs 20
and 24, the panel found that, "in the absence of an e xplicit identification, sufficient information must
be provided in the request for establishment of the panel itself that effectively identifies the precise
measures at issue."
21 The Canada Wheat panel found there was not sufficient information where the
panel request contained contradictory references which obscured the content and meaning of the
"laws and regulations" referred to in the request. 22 However, that panel also found that a similarly
broad reference to "actions" was clear, in context, because the request stated that these actions related
to "purchases or sales involving wheat exports."23

24. In this dispute, there are no contradictory references, and there is no uncertainty as to the
content or the nature of the "implementing and enforcement measures" at issue: they are the
implementing and enforcement measures that are "related" to Regulation 2081/92, on the protection of
geographical indications and designations of origin for agricultural products and foodstuffs.

25. In summary, both the Australian and the US panel requests specifically identify the
"implementing and enforcement measures" at issue in this dispute, consistent with Article 6.2.

19 EC Bananas, para. 140.
20 WT/DS108/2, July 9, 1998.
21 EC Request, paras 25 and 26.
22 Canada Wheat, para. 24.
23 Canada Wheat, para. 26.

V. CONTRARY TO THE EC'S ALLEGATIONS, THE US PANEL REQUEST
PROVIDES A BRIEF SUMMARY OF TH E LEGAL BASIS OF THE COMPLAINT
SUFFICIENT TO PRESENT THE PROBLEM CLEARLY
A. THE US PANEL REQUEST PROVIDES A BRIEF SUMMARY OF THE LEGAL BASIS OF THE
COMPLAINT SUFFICIENT TO PRESENT THE PROBLEM CLEARLY
26. The United States does provide a brief summary of the legal basis of the complaint sufficient
to present the problem clearly, as required by Article 6.2. It both lists the specific provisions of the
TRIPS Agreement and the GATT 1994 alleged to be violated, and pr ovides, in addition, a brief
textual explanation of the basis of the complaint.

1. Citations to specific WTO agreement provisions
27. The Appellate Body has made clear on sever al occasions, directly contrary to the EC's
assertion in paragraph 37 of its request, that a panel request may adequately summarize the legal basis
of the complaint under Article 6.2 by simply citing the pertinent provisions of the WTO Agreement.
24
The EC cites Korea Dairy, in which the Appellate Body stated that there may be circumstances in
which a "listing of treaty articles would not satisfy the standard of Article 6.2." 25 But in that
proceeding the articles cited had multiple paragr aphs, many of which had their own distinct
obligations: for instance, the panel request cite d Article XIX of the GATT 1994, containing three
sections and five paragraphs, each with at least one distinct obligation, and Article 12 of the
Safeguards Agreement, which spans two pages and contains 11 paragraphs.26

28. By contrast, the US panel request in this dispute lists 17 specific provisions of the TRIPS
Agreement and two specific provisions of the GATT 199 4. Where an article consisted of more than
one paragraph, the US panel request specifica lly identified the particular paragraph number. 27
Generally, each of these paragraphs consists of a single obligation. Unlike in the case of Korea
Dairy, there are no circumstances in this dispute that would render citation to the relevant specific
provision of the WTO agreement insufficient under Article 6.2.

2. Narrative description
29. Moreover, the US panel request does not rest solely on specific citation to particular WTO
obligations. It also includes a brief narrative descr iption of the legal basis for the complaint, adding
clarity to the summary. For instance, it summarizes that, in the view of the United States, Regulation
2081/92 does not provide national or most favored na tion treatment to goods or nationals of other
WTO Members, and that Regulation 2081/92 dimini shes legal protection for trademarks (with a
specific illustrative reference to the right to prevent confusing uses of an identical or similar sign and
adequate protection against invalidation). It also st ates, as a brief summary of the legal basis of the
complaint, in conjunction with specifically cited WTO agreement provisions, that Regulation 2081/92
does not provide the legal means for interested par ties to prevent the misleading use of a geographical
indication, defines geographical indications in a manner inconsistent with the TRIPS Agreement, is
not sufficiently transparent, and does not provide fo r adequate enforcement procedures. Contrary to
the EC's argument at paragraph 42 of its request, there is no requirement under Article 6.2 that each

25 Korea Dairy, para. 124, cited in EC Request, para. 36. The EC's conclusion, at paragraph 37, that
identification of the treaty provisions "is a necessary, but not sufficient condition under Article 6.2 DSU"
(emphasis in original) is a patently incorrect reading of Korea Dairy.
26 Korea Dairy, para. 124.
27 Except for GATT 1994 Article I, which consists of one paragraph followed by several exceptions.

part of the narrative be specifically linked to par ticular WTO provisions, nor does the EC point to any
disputes in which this was required.

30. As stated above, the citation to specific WTO obligations in the US panel request is sufficient
to summarize the legal basis for the complaint un der Article 6.2. The narrative is an additional
description of the legal basis. Therefore, there is no legitimate foundation in this dispute for the EC to
assert that the US panel request violated the second prong of Article 6.2.

3. Attendant circumstances
31. In addition to (1) the specific citation to WTO obligations, which alone is a sufficient
summary of the legal basis of the complaint, a nd (2) the narrative description, which additionally
describes the legal basis, the attendant circumstan ces surrounding this panel request make clear that
the panel request's summary of the legal basis of the complaint is sufficient and presents the problem
clearly. The Appellate Body, in Korea Dairy, clarified that the sufficiency of the panel request can be
judged in light of these circumstances.
28

32. There is a long history of consultations in th is dispute. The United States requested formal
consultations on June 1, 1999, and the first set of consultations was held almost five years ago, on
July 9, 1999, and continued through the last set of formal consultations on May 27, 2003. As noted
earlier, and as set forth in further detail below, as a result of these consultations it is abundantly clear
that the EC understands the legal basis of the US complaint.

B. THE EC'S REAL CRITICISM OF THE US PANEL REQUEST IS THAT IT DOES NOT SET FORTH THE
US ARGUMENTS, WHICH IS NOT REQUIRED BY ARTICLE 6.2
33. Previous panels and the Appe llate Body have been very careful to distinguish between the
claims that must be made in a panel request under Article 6.2 -- i.e., the brief summary of the legal
basis for the complaint sufficient to present the problem clearly -- and the arguments supporting those
claims. The claims must be set forth in the pane l request. The arguments do not. As the Appellate
Body stated in EC Bananas:

We accept the Panel's view that it was suffi cient for the Complaining Parties to list
the provisions of the specific agreements alleged to have been violated without
setting out detailed arguments as to which specific aspects of the measures at issue
relate to which specific provisions of tho se agreements. In our view, there is a
significant difference between the claims identified in the request for the
establishment of a panel, which establis h the panel's terms of reference under
Article 7 of the DSU, and the arguments supporting those claims, which are set out
and progressively clarified in the first written submissions, the rebuttal submissions
and the first and second panel meetings with the parties.29
34. In this dispute, the EC is not faulting the United States for failing to set out the legal basis for
the complaint. It is faulting the United States, incorrectly, for not including its arguments in support
of that basis.30

28 Korea Dairy, para. 124.
29 EC Bananas, para. 141.
30 In criticizing the specificity of the "measures" unde r Article 6.2, the EC argues incorrectly that the
lack of citation to individual provisions of Regulation 2081/92 "does not permit the EC to understand which
specific aspects among those covered by Regulation 2081/92 the complainants intend to raise . . ." EC Request,
para. 22 (emphasis added). Article 6.2 requires an iden tification of the specific measures at issue; it does not
require identification of the specific "aspect" of the measures. In fact, the EC's argument appears to be

35. With respect to national treatment, for exampl e, the EC complains that the US panel request
does not specify which provision or aspect of Regul ation 2081/92 violates the EC's national treatment
obligations, and "in which way such a violation is deemed to occur." 31 This is precisely what the
Appellate Body in EC Bananas found was not required. The United States will lay out in detail the
specific ways in which Regulation 2081/92 fails to provide national treatme nt to non-EC nationals
and non-EC goods, but will do so in its submissions, as part of its arguments supporting the claim that
Regulation 2081/92 denies national treatment to non-EC nationals and goods.32

36. In other words, the legal basis for the complain t, made clear in the US panel request, is that
the EC's regulation for the protection of certain geogr aphical indications is inconsistent with specific
national treatment obligations in the TRIPS Agre ement, the Paris Convention, and the GATT 1994.
The detailed arguments as to how specific aspects of Regulation 2081/02 are inconsistent with these
obligations will be the subject of the arguments to be presented in future US submissions.

37. Similarly, with respect to MFN treatment, th e EC complains that the panel request does not
specify which provision of Regulation 2081/92 violates MFN obligations, how such a violation
occurs, which WTO Members are being denied favorable treatment, what this more favorable
treatment is, and how it is conferred. Such detailed explanations and argumentation clearly go beyond
the requirements for a brief summary of the legal b asis for the complaint pursuant to Article 6.2, and
instead fall squarely into the category of arguments in support of the claim that the regulation does not
provide most favored nation treatment with respect to goods and nationals of WTO Members.
33

38. With respect to "legal protection for tr ademarks," the EC acknowledges that Regulation
2081/92 addresses the issue of conflicts between trad emarks and geographical indications in three
paragraphs of Article 14, and in Article 7(4), all of which can and do have significant negative
implications for trademark rights provided for under the TRIPS Agreement.
34 The EC further claims
that Regulation 2081/92 provides "specific solutions" to the various conflicts between trademarks and
geographical indications. 35 By engaging in the substance of th e US claims in such detail in its
preliminary ruling request, it is obvious that the US summary of the legal basis of the complaint was

confusing the Article 6.2 requirement that the measures be identified with the requirement that the legal basis be
summarized ( i.e., the claims). Even with respect to the cl aims, however, the Appellate Body specifically
rejected this argument in the paragraph of EC Bananas quoted above. This issue is discussed in further detail in
this section, but suffice it to say that the EC cannot fairly claim to be in the dark about what aspects of
Regulation 2081/92 are at issue. See, e.g., footnote 32 below.
31 EC Request, para. 44.
32 The claims are clear from the US panel request. Bu t, in addition, the EC cannot fairly claim to be
unaware of the problem presented, in light of the long history of consultations. For instance, several of the
questions put to the EC in consultations question why non-EC nationals cannot register their own geographical
indications for originating products, and why they are faced with various problematic provisions in Regulation
2081/92 that do not apply to EC nationals. See, e.g., May 19, 2004, Consultation Questions, questions 7-25
(Exhibit US-3); indeed, the EC Request itself attach es, as EC Exhibits 2 and 3, the minutes of the DSB
meetings in which the United States described some of the specific problems with Regulation 2018/92,
including with respect to national and most favored nation treatment, among other issues. EC Exhibit 2,
33 With respect to this issue, too, the EC cannot fairly claim to be in the dark. Several questions were
raised in consultations about why nationals and products of some WTO Members -- i.e., those that have a
system of geographical indi cation protection that is equivalent to th e EC system -- have rights and receive
protections that other WTO Members do not. See, e.g., May 19, 2004, Consultation Questions, questions 7-25
(Exhibit US-3); EC Exhibit 2, para. 72; EC Exhibit 3, paras. 28-29.
34 EC Request, paras 46-48.
35 Yet it is these "solutions", among other things, that are at issue, particularly in light of the exclusive
right of the registered trademark holder, under Article 16 .1 of the TRIPS Agreement, to prevent the use of an
identical or similar sign that is likely to confuse.

sufficient to present the problem clearly.
36 The EC's desire to "understand which specific problems
the United States wishes to raise" is a request fo r argumentation that is appropriate for the first
submission, but not for a panel request, a point that the EC has itself noted in other disputes.37

39. With respect to Regulation 2081/92's failure to "provide legal means for interested parties to
prevent the misleading use of a geographical indication," the EC claims that Regulation 2081/92
contains detailed provisions regarding the protection of registered geographical indications that do
provide such means. Again, the EC is interest ed in engaging in argumentation regarding the US
claims, prior to the US first submission. And ag ain, that the United States did not provide such
argumentation in its panel request is not a violation of Article 6.2.

40. With respect to the differences between Re gulation 2081/92's defin ition of "geographical
indication" and that in the TRIPS Agreement, the EC is disingenuous to argue that the United States
does not explain the differences between the two defi nitions. The TRIPS Agreement definition is in
Article 22.1 of the TRIPS Agreement; the Regulati on definition is in Article 2.2(b) of Regulation
2081. The differences between them are obvious, and speak for themselves. As for the nature of the
breach, this is properly a subject for arguments in the submissions of the parties. Again, however, it is
disingenuous for the EC to argue that it does not understand the US claim. As the United States
explained to the EC during consultations, the TR IPS Agreement contains obligations to protect
geographical indications, as defined in the TRIPS Agreement, yet Regulation 2081/92, which is how
"Community protection of ... geographical indications of agricultural products and food stuffs shall be
obtained", offers protection to an apparently different category of geographical indications.
Differences in coverage therefore raise obvious qu estions of consistency with TRIPS Agreement
obligations.
38

41. The EC arguments with respect to transpar ency and enforcement procedures suffer from the
same defects: the EC is attempting to engage in argumentation on the substance of the claims -- for
instance, asserting that Regulation 2081/92 is tran sparent, and faulting the United States for not
detailing how it is not transparent -- instead of tryi ng to make out a case that the legal basis is not
sufficiently summarized.

42. The above are examples of how the EC, in alleging that the US panel request does not
"provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly",
is in fact arguing that the United States has not adequately set out its arguments in support of those
claims. It is clear from the face of the panel request, particularly in light of the attendant
circumstances of the consultations, that the US pa nel request does provide a sufficient brief summary
of the legal basis of the complaint that presents the problem clearly.

36 Note also the detailed discussions that occu rred on this subject at the consultations. See, e.g.,
May 19, 2004, Consultation Questions, "Article 14 -- Exclusivity of Trademar ks", questions 29-36, and
"Article 13" , questions 27 - 28 (Exhibit US-3).
37 In United States Gambling , the EC itself criticized the US request for an Article 6.2 preliminary
ruling in its October 24, 2003, comments, arguing at paragraph 16 that the issue raised by the United States "was
strictly connected with the substance of the case, which is legally and factually rather complex" and, therefore,
"not suited for adjudication through a summary preliminary ruling proceeding brought under article 6.2 of the
DSU." Further, the EC criticized Ko rea's preliminary ruling request in Korea -- Measures Affecting Trade in
Commercial Vessels, WT/DS273, characterizing Korea' s objections to the panel request as "an ill-fated attempt
to have the Panel make findings on substantive legal issues that should be at issue during the regular Panel
phase, not at the preliminary stage."
38 See, e.g., May 19, 2004, Consultation Questions, "Definition of GIs", questions 4 - 6 (Exhibit US-3).

VI. THE US PANEL REQUEST DOES NOT PR EJUDICE THE ABILITY OF THE EC
TO DEFEND ITSELF
43. The EC argues that the Appellate Body has "a ttached importance" to the question of whether
a responding Party has suffered prejudice as a result of any deficiencies with respect to Article 6.2.
More to the point, however, in Korea Dairy, the Appellate Body denied Korea's Article 6.2 claim in
toto because, although it had asserted prejudice, Korea offered no supporting particulars.39

44. The EC's argument that it is prejudiced by the US panel request is nothing more than a
restatement of its argument, refuted above, that the request is insufficiently detailed with respect to
actual arguments to support the legal basis of the complaint. In light of the Appellate Body's
reasoning in Korea Dairy, such a mere restatement is plainly insufficient to establish prejudice. If
lack of detail in the panel request automatically meant "prejudice", there would be no need for a
"prejudice" analysis. Even if the EC had succeeded in demonstrating that the US panel request does
not meet the requirements of DSU Article 6.2, which it has not, the EC has offered nothing to suggest
that it has been prejudiced.

45. The EC argues, at paragraph 71, that the Unite d States made a similar "prejudice" argument in
US Lamb,
40 and states that the same standard should be applied in the present case.41 Of course, if this
Panel does adopt the same standard as in the US Lamb dispute, it will reject the EC's request,
consistent with the US Lamb panel's rejection of the US argum ent and its finding that the panel
request in US Lamb was consistent with Article 6.2.42

46. The EC speculates, at paragraph 73 of its request, that either both co-complainants are
conspiring to leave the EC in the dark, or both are unsure of the case they are intending to bring. The
truth is more mundane: Article 6.2 requires only a brief summary of the legal basis for the complaint
sufficient to present the problem clearly. It does not, as explained above, require a preview of the
arguments that will be submitted later during the course of the panel proceedings.

VII. CONCLUSION
47. For the reasons stated above, the EC's argumen ts in support of its request for a preliminary
ruling that the US panel request does not meet the requirements of Article 6.2 are without merit.
Accordingly, the Panel should reject that request.

39 Korea Dairy, para 131.
40 Report of the Panel, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen
Lamb Meat from New Zealand and Australia, WT/DS178/R, adopted May 16, 2001 ("US Lamb").
41 EC Request, para. 72.
42 US Lamb, para. 5.53.

TABLE OF REPORTS

Short Form Full Citation
Belgian Family Allowances GATT Panel Report, Belgian Family Allowances, BISD 1S/59, adopted
7 November 1953.
Canada – Patent Term Panel Report, Canada – Term of Patent Protection, WT/DS170/R, adopted
12 October 2000.
Canada – Autos Panel Report, Canada – Certain Measures Affecting the Automotive Industry,
WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by the
Appellate Body Report.
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive
Industry, WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000.
Chile – Alcohol Panel Report, Chile – Taxes on Alcoholic Beverages, WT/DS87/R, WT/DS110/R,
adopted 12 January 2000, as modified by the Appellate Body Report.
Chile – Alcohol Appellate Body Report, Chile – Taxes on Alcoholic Beverages, WT/DS87/AB/R,
WT/DS110/AB/R, adopted 12 January 2000.
EC – Asbestos Appellate Body Report, EC – Measures Affecting Asbestos and Asbestos
Containing Products, WT/DS135/AB/R, adopted 16 April 2001.
EEC – Parts and
Components
GATT Panel Report, EEC – Regulations on Imports of Parts and Components,
BISD 37S/132, adopted 16 May 1990.
EC – Sardines Appellate Body Report, EC–Trade Description of Sardines, WT/DS231/AB/R,
adopted 23 October 2003.
India – Autos Panel Report, India–Measures Affecting the Automotive Sector , WT/DS/146/R,
WT/DS175/R, adopted 5 April 2002.
Indonesia – Autos Panel Report, Indonesia–Certain Measures Affecting the Automobile Industry,
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R, adopted 23 July 1998.
Italian Agricultural
Machinery
GATT Panel Report, Italian Discrimination Against Imported Agricultural
Machinery, L/833 BISD, 7S/60, adopted 23 October, 1958.
Japan – Alcohol Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R,
WT/DS10/AB/R, adopted 1 November, 1996.
Korea – Alcohol Appellate Body Report, Korea – Taxes on Alcoholic Beverages, WT/DS75/AB/R,
WT/DS84/AB/R, adopted 17 February 1999.
Korea – Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled
and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001.
US – FSC
(Article 21.5–EC)
Panel Report, United States – Tax Treatment for “Foreign Sales Corporations” –
Recourse to Article 21.5 of the DSU by the European Communities ,
WT/DS108/RW, adopted 19 January 2002.
US – Malt Beverages GATT Panel Report, United States – Measures Affecting Alcoholic and Malt
Beverages, DS23/R, BISD 39S/206, adopted 19 June 1992.
US – Section 211 Panel Report, United States – Section 211 Omnibus Appropriations Act of 1998,
WT/DS176/R, adopted 1 February 2002, as modified by the Appellate Body
Report.
US – Section 211 Appellate Body Report, United States – Section 211 Omnibus Appropriations Act
of 1998, WT/DS176/AB/R, adopted 1 February 2002.
US – Section 337 GATT Panel Report, United States – Section 337 of the Tariff Act of 1930 , BISD
36S/345, adopted 7 November 1989.

I. INTRODUCTION
1. The EC's Geographical Indications ("GI") Regulation 1 sets up a regime for the protection of
geographical indications in order to realize and maxi mize what it considers to be substantial benefits
for those producing and selling qualified agricu ltural products and f oodstuffs in the EC.
Unfortunately, the Regulation suffers from significant defects. First, while making these benefits
easily available to EC nationals and products , it erects very significant – indeed, nearly
insurmountable – barriers against many non-EC nationals and products.

2. Second, and importantly for all
 owners of registered trademarks – both US and European –
the GI Regulation grants this protection at the expen se of trademark rights that the EC is specifically
obliged to guarantee under the TRIPS Agreement.2

3. The EC must, under the TRIPS Agreement, offer certain protections for geographical
indications. It is not, however, permitted to do so in a manner that discriminates against non-EC
nationals and products, nor is it pe rmitted to do so at the expense of its TRIPS Agreement obligations
with respect to trademarks.

4. This submission details how the EC's GI Regulation is inconsistent with the TRIPS
Agreement and the GATT 1994
3 because of its discrimination agai nst non-EC nationals and products.
It is inconsistent with the national treatment obligations of the TRIPS Agreement and the Paris
Convention,4 both of which require national treatment as to "nationals" of other WTO Members. It is
also inconsistent with the national treatment ob ligations of the GATT 1994 with respect to products
from other WTO Members. Further, the GI Regulati on is inconsistent with the obligation to provide
most favored nation ("MFN") treatment with respect to nationals of other WTO Members, under the
TRIPS Agreement, and with respect to products of other WTO Members, under the GATT 1994.

5. Next, and directly contrary to the express ob ligations of the TRIPS Agreement with respect to
trademarks, the EC's GI Regulation denies the owner of a registered trademark his exclusive right to
prevent all third parties from using similar or identic al signs for goods or services that are identical or
similar to those covered by the trademark registra tion – including geographical indications – where
such use would result in a likelihood of confusion. For example, the owner of a registered trademark
must, under the TRIPS Agreement, be able to take action against another producer selling an identical
product, labeled with an identical name (protect ed as a geographical indication after the trademark
registration), on the same shelf as the trademarked product. That owner cannot take such action under
the EC GI Regulation.

6. Finally, as detailed further below, the EC GI Regulation fails to provide interested parties
with the legal means to protect their geographical indications, as required by the TRIPS Agreement.

1 i..e., the measure at issue in this dispute: Council Regulation (EEC) No. 2081/92 of July 14, 1992 on
the protection of geographical indications and designations of origin for agricultural products and foodstuffs, as
amended, and its related implementing and enforcement m easures. In this submission, references to the "GI
Regulation" or the "EC GI Regulation" are references to this measure, which includes both Regulation 2081 and
its related implementing and enforcement measures. Refere nces to particular article s of the GI Regulation are
references to Regulation 2081/92 itself, as most recently amended, provided as Exhibit COMP-1.b.
2 Agreement on Trade-Related Aspects of Intellectual Property Rights.
3 General Agreement on Tariffs and Trade (1994).
4 Paris Convention for the Protection of Industrial Property , done at Paris, March 20, 1883, as revised
at Brussels, December 14, 1990, at Washington, June 2, 1911, at The Hague, November 6, 1925, at London,
June 2, 1934, at Lisbon, October 31, 1958, and at Stockholm, July 14, 1967. References to the Paris Convention
are, unless otherwise indicated, to the Stockholm Ac t of this Convention (1967). The Paris Convention
Article 2 national treatment obligation is incorporated into the TRIPS Agreement by Article 2.1 of the TRIPS
Agreement.

7. Consequently, the EC GI Regulation is also inconsistent with obligations under the TRIPS
Agreement to enforce intellectual property rights.

II. PROCEDURAL HISTORY
8. On June 1, 1999, the United States requested consultations with the EC, pursuant to Article 4
of the DSU
5 and Article 64 of the TRIPS Agre ement regarding the GI Regulation. 6 Consultations
were held on July 9, 1999, and thereafter, but failed to resolve the dispute.

9. On April 4, 2003, the United States supplemen ted its request for consultations with a request
for additional consultations with the EC pursuant to Article 4 of the DSU, Article 64 of the TRIPS
Agreement, and Article XXII of the GATT 1994.
7 The Government of Australia also requested
consultations with the EC, and joint consultations were held on May 27, 2003, which also failed to
resolve the dispute. Consequently, on August 18, 2003, the United States requested the establishment
of a panel, with standard terms of reference. 8 Australia also filed a request for the establishment of a
panel, with standard terms of reference, on the same day. 9 At the meeting of the WTO Dispute
Settlement Body ("DSB") on October 2, 2003, th e DSB established a single panel pursuant to
Article 9.1 of the DSU, with standard terms of reference, to examine the US and Australian
complaints.10

10. The panel was composed on February 23, 2004.
11

11. On March 3, 2004, the EC requested that the Pa nel issue separate panel reports with respect to
the complaints filed by Australia and the United St ates, pursuant to Article 9.2 of the DSU. On
April 23, 2004, the Panel confirmed that it would submit separate reports on this dispute.

III. FACTS
12. The EC GI Regulation lays down the rules fo r the protection of geographical indications of
agricultural products and foodstuffs intended for hum an consumption throughout the member States
of the EC.
12 It provides, in Article 2(1), that Community protection for geographical indications of
agricultural products and foodstuffs shall be obtained in accordance with the Regulation, and
establishes a comprehensive system for the registration and protection of GIs, as well as for objecting
to the registration of GIs.

13. According to its preamble, the GI Regulation is a response to a consumer market that is
increasingly willing to pay premium prices for ag ricultural products and foodstuffs with an
identifiable geographic origin. For those producers able to register such designations of origin at the
member State level, according to the preamble, this enables producers of qualifying products to secure
higher incomes. The EC GI Regulation recognizes this benefit for qualifying products and producers
and extends this benefit in a uniform manner throughout the EC.

5 Understanding on Rules and Procedures Governing the Settlement of Disputes.
6 WT/DS174/1 (June 1, 1999).
7 WT/DS174/1/Add.1 (April 4, 2003).
8 WT/DS174/20 (August 19, 2003).
9 WT/DS290/18 (August 19, 2003).
10 Dispute Settlement Body: Minutes of Meeting Held on 2 October 2003 , WT/DSB/M/156, circulated
November 10, 2003, para. 33.
11 WT/DS174/21; WT/DS290/19 (February 24, 2004).
12 Article 1(1) of the GI Regulation. Exhibit COMP 1.b. To avoid confusion, this submission will
refer to countries that are part of the European Comm unities as "member States", as distinguished from WTO
Members.

14. Under the GI Regulation, a geographical indi cation is defined as the name of a region, a
specific place or, in exceptional cases, a country, used to describe an agricultural product or a
foodstuff:

(a) originating in that region, specific place or country, and
(b) which possesses a specific quality, reputation, or other characteristics attributable to
that geographic origin and the production and/or processing and/or preparation of
which take place in the defined geographical area.
13
15. In order to use a protected geographic indica tion, a product must comply with the relevant
specification, as provided for in Article 4(2) of the GI Regulation.14

Registration
16. Under Article 5 of the GI Regulation, a pe rson or a group of producers and processors may
apply for a geographical indication – i.e., a qualifying "name" – with respect to the products which
they "produce or obtain" by sending the application to "the Member State in which the geographical
area is located."

17. Thus, under Article 5, only pe rsons or groups producing or obta ining products in the EC may
file an application for a GI registration, and only products "produced or obtained" in the EC may be
the subject of the registration.

18. The application must be accompanied by a "p roduct specification" that includes information,
not just on the product itself, but on how it is produced, as well as the details of the government
inspection structures in place to ensure compliance with the specifications.
15 To summarize the
details provided in Article 4 of the GI Regula tion, the product specification must include, at a
minimum:

(a) name of the product, including the GI
(b) description of the product and its ph ysical, chemical, microbiological and/or
organoleptic characteristics
(c) definition of the geographical area
(d) evidence that the product or iginates in the geographical area

13 Article 2(2)(b) of the GI Regulation. The GI Regulation also applies to a narrower category of
geographical source indications, i.e., "designations of origin", defined in Article 2(2)(b). The distinction
between the broader category of "geographical indications" and the narrower category of "designations of
origin" is not relevant for purposes of this submission, since the GI Regulation applies equally to both.
Therefore, the United States will refer in this submi ssion to both categories collectively as "geographical
indications" or "GIs". Further, there are obvious differences between "geographical indications" as defined in
the EC GI Regulation and "geographical indications" as defined in the TRI PS Agreement. The use of the same
term to describe both in this submission is not meant to imply that the definition in the EC GI Regulation is
consistent with the definition in the TRIPS Agreement.
14 Article 4(1) of the GI Regulation.
15 Article 4(2) of the GI Regulation.

(e) description of the method of obtaining the product and information concerning
packaging, if the group making the request determines and justifies that the packaging
must take place in the geographic area
(f) details bearing out the link with the geographical environment or origin
(g) details of inspection structures required by Article 10 of the GI Regulation (Article 10
contains detailed rules concerning inspection structures that the government must
maintain in order to register a GI, and requires that any private inspection body
approved by a member State must comply with EC standard EN 45011. This
standard does not appear to be available from public sources,
16 and the United States
is unaware of any "equivalent" standard approved for non-EC countries, referenced in
Article 10(3)).
(h) specific labeling details
(i) requirements laid down by EC or member State provisions.
19. Under Article 5(5) of the GI Regulation, th e EC member State is required to forward the
application to the EC Commission, if the application satisfies the requirements of the GI Regulation.

20. After verification that the application for regi stration meets the formal requirements of the GI
Regulation, and assuming the application withstands objections, if any, the geographical indication is
entered in the "Register of protected designations of origin and protected geographical indications"
maintained by the Commission and published in the Official Journal of the European Communities.
17

21. Article 12(1) states that the GI Regulation "m ay apply" to agricultural products or foodstuffs
from other WTO Members – i.e., producers and processors in anot her WTO Member may apply to
register the GI associated with products in that Member – only if that WTO Member:

(a) can give guarantees identical or equiva lent to those referred to in Article 4 ( i.e., with
respect to the product specifications and inspection procedures required by the EC);
(b) has inspection arrangements and a right to objection equivalent to those laid down in
the EC GI Regulation for EC GIs; and
(c) is prepared to provide protection equivalent to that available in the EC to agricultural
products and foodstuffs from the EC (i.e., offers reciprocal treatment to EC products).
22. In other words, in order to benefit from the GI Regulation, a WTO Member must adopt a
system for GI protection that is equivalent to that in the EC, that is, a system (i) under which the WTO
Member can provide guarantees equivalent to those in the GI Regulation that its GI products meet the
EC product specifications in Articles 4 and 10 of th e GI Regulation, (ii) providing objection rights
equivalent to those in the GI Regulation, (iii) provi ding for internal inspection structures equivalent to
those in the EC, and (iv) providing GI protection to EC products that is equivalent to that available in
the EC. Further, these conditions require "reciprocity": the EC will register and protect GIs associated
with products from another WTO Member only if that WTO Member provides "equivalent" GI
protection in its own territory to "corresponding" products from the EC.

16 The United States tried unsuccessfully to obtain this standard from public sources, although it
appears that it may be available for purchase from national members of the European Committee for
Standardization. See, e.g.,
http://www.cenorm.be/cenorm/standards_drafts/index.asp
17 Article 6(4) of the GI Regulation.

23. Under Article 12(3), upon request of the WT O Member concerned, the EC examines whether
a WTO Member satisfies the above conditions "as a r esult of its national legislation." Only if it does
so is registration and protection available in th e EC under the GI Regulation for products from that
WTO Member.

24. Article 12a sets out app lication procedures for producers and processors from other WTO
Members satisfying these conditions of equivalency and reciprocity. It requires those producers and
processors to submit an application to the "authorities" in the relevant WTO Member, and requires the
WTO Member, before submitting the application, to "consult" with any EC Member State that has a
geographical area or a traditional name connected to that area with the same name as is in the
application.18 It also requires the WTO Member to de termine whether the application satisfies the
requirements of the GI Regulation. It then re quires the WTO Member to describe the basis for
protection of the GI in that WTO Member, and d eclare that it has in place the same inspection
structures required of EC member States. Next, the WTO Member is instructed to forward the
application and accompanying documentation to the Commission.

25. Article 12(2) requires that any use of a geogra phical indication in connection with products of
other WTO Members can be authorized only if the country of origin "is clearly and visibly indicated
on the label."
19 There is no similar requirement with respect to products of EC member States.

Objections
26. "Legitimately concerned" natural or legal pers ons that reside or are established in a member
State of the EC may object to a proposed registration under Article 7(3) of the GI Regulation. Only
persons who can demonstrate a "legitimate economic in terest", however, are authorized to consult the
application.
20 Statements of objection are admissible 21 if they demonstrate that a proposed
registration (a) does not qualify for protection pursuant to the Regulation ( e.g., for failure to meet the
definition of geographical indication in the GI Regul ation); (b) would "jeopardize the existence of an
entirely or partly identical name or of a mark or the existence of products which have been legally on
the market for at least five years" prior to publication of the application; or (c) is of a generic name. 22
The person objecting must file the statement of obj ection with the member State in which that person
is resident or established. That member State then may object to the registration within six months of
publication of the application.23

27. By contrast, under Articles 12b and 12d, just as in the case of registration, it appears that
persons from another WTO Member can object to an application for GI registration only if that WTO
Member satisfies the conditions of equivalency and r eciprocity laid down under Article 12. Further,
they may not submit their objections directly to an authority in the EC, such as the Commission or
even to an EC member State, which is require d to evaluate the objections pursuant to the GI
Regulation and has a long-established internal mech anism for working with the Commission on these
matters. Rather, they must submit their objection to the WTO Member in which they reside or are
established, which then is supposed to decide whether to forward the objection to the Commission. In
addition, only a person from a third country th at has a "legitimate interest" may object to a
registration, and only those with a "legitimate ec onomic interest" are authorized to consult the

18 It is not clear how third country officials become aware that such a situation exists.
19 It is unclear under the Regulation whether this applies to all third country GIs.
20 Article 7(2) of the GI Regulation.
21 It appears from the context of Article 7 of the GI Regulation that this means that the objection is
eligible for consideration by the EC Commission.
22 Article 7(4) of the GI Regulation.
23 Articles 7(1) and 7(2) of the GI Regulation.

application.
24 This is in contrast to objections from pers ons resident or established in an EC member
State, who need only be "legitimately concerned."25

Scope of protection
28. The very broad scope of protection for regi stered geographical indications is set out in
Article 13(1) of the GI Regulation, which states that

Registered names shall be protected against the following:
 (a) any direct or indirect commercial use of a name registered in respect of products not
covered by the registration in so far as those products are comparable to the products
registered under the name or insofar as using the name exploits the reputation of the protected
name;

 (b) any misuse, imitation or evocation, even if the true origin of the product is indicated
or if the protected name is translated or accomp anied by an expression such as 'style', 'type',
'method', 'as produced in', 'imitation' or 'similar';

 (c) any other false or misleading indicati on as to the provenance, origin, nature or
essential qualities of the product, on the inner or outer packaging, advertising material or
documents relating to the product concerned, a nd the packing of the product in a container
liable to convey a false impression as to origin;

 (d) any other practice liable to mislead the public as to the true origin of the product.

29. Article 13(2) also provides that protected names may not become generic, i.e., become the
"common name" of an agricultural product or foodstuff.
26

30. In addition, only products qualified to use a re gistered GI may include the official EC "GI"
symbol or logo on its labels, packaging, and advertising materials.27

31. Finally, Article 14 specifically addresses tradem arks in the context of GIs. Article 14(2)
provides that if the use of certain prior trademar ks "engenders one of the situations indicated in
Article 13", they "may continue to be used notwithstanding the registration of" a geographical
indication. The GI Regulation fails to provide th e owner of a valid prior trademark the right to
prevent the use of a GI that results in a likelihood of confusion with respect to the trademark.

24 Article 12d(1) of the GI Regulation.
25 Article 7(3) of the GI Regulation.
26 See Article 3(1) of the GI Regulation.
27 Article 5a of Commission Regulation (EEC) No. 2037/93 of 27 July 1993, laying down detailed
rules of application of Council Regulation (EEC) No. 2081/92 on the protection of geographical indications and
designations of origin for agricultural products and foodstuffs ("Commission Regulation 2037/93"). Exhibit
COMP-2.a.

IV. THE EC GI REGULATION IS INCONS ISTENT WITH THE EC'S OBLIGATIONS
UNDER THE TRIPS AGREEMENT AND THE GATT 1994
A. THE EC GI REGULATION IS INCONSISTENT WITH THE EC'S OBLIGATIONS TO PROVIDE
NATIONAL TREATMENT
32. The EC GI Regulation is inconsistent with two different national treat ment obligations under
the WTO Agreements. The first is the obligation to provide national treatment with respect to the
nationals of other WTO Members under Article 3.1 of the TRIPS Agreement, and, through its
incorporation by Article 2.1 of the TRIPS Agreement, Article 2 of the Paris Convention. The second
is the obligation to provide national treatment with respect to the products of other WTO Members,
under Article III of the GATT 1994. This section a ddresses each of these inconsistencies separately
below. Section A.1 immediately below addresses the GI Regulation's inconsistencies with the
national treatment obligations of the TRIPS Agreem ent and the Paris Convention. Section A.2 then
addresses the GI Regulation's inconsistencies w ith the national treatment obligations of the
GATT 1994.

1. The EC GI Regulation is inconsistent with the EC's national treatment obligations with
respect to nationals of other WTO Members under the TRIPS Agreement and the Paris
Convention
(a) The national treatment obligation under the TRIPS Agreement and the Paris Convention
(i) Introduction
33. The national treatment obligation has been a standard element in intellectual property
agreements for over 120 years, dating from 1883, wh en the Paris Convention was first concluded.
28
The Appellate Body called it a "fundamental principle of the world trading system" 29 and noted that
the framers of the TRIPS Agreement not only incor porated the national treatment obligations of the
Paris Convention directly into the TRIPS Agreement, but also saw fit, in addition, to include an
additional provision on national treatment in the TR IPS Agreement. "Clearly," the Appellate Body
concluded, "this emphasizes the fundamental signifi cance of the obligation of national treatment to
their purposes in the TRIPS Agreement."30 The Appellate Body continued:

Indeed, the significance of the national treatme nt obligation can hardly be overstated.
Not only has the national treatment obligati on long been a cornerstone of the Paris
Convention and other international intellectual property conventions. So, too, has the
national treatment obligation long been a cornerstone of the world trading system that
is served by the WTO.
As we see it, the national treatment obligation is a fundamental principle underlying
the TRIPS Agreement, just as it had been in what is now the GATT 1994.31
34. There is a considerable body of GATT a nd WTO dispute settlement reports that have
considered the national treatment obligation in Article III of the GATT 1994. But there has been only
one dispute raising the national treatment obligation in the context of the TRIPS Agreement and the

28 See Gervais, Daniel, The TRIPS Agreement: Drafting History and Analysis , Sweet & Maxwell (2nd
Edition, 2003) , p. 98. Exhibit US-1.
29 Appellate Body Report, US – Section 211, para. 233.
30 Appellate Body Report, US – Section 211, paras. 239-240.
31 Appellate Body Report, US – Section 211, paras. 241-242.

Paris Convention.
32 Therefore, this dispute represen ts only the second time that the TRIPS
Agreement and Paris Convention obligations with resp ect to this "fundamental principle of the world
trading system" will be clarified.

(ii) Article 2 of the Paris Convention
The ordinary meaning of the terms in Article 2 of the Paris Convention

35. Article 2.1 of the TRIPS Agreement directly incorporates many provisions of the Paris
Convention, including the national treatment obligation in Article 2 of the Paris Convention:

Nationals of any country of the Union sha ll, as regards the protection of industrial
property, enjoy in all the other countri es of the Union the advantages that their
respective laws now grant, or may hereafte r grant, to nationals; all without prejudice
to the rights specifically provided for by this Convention. Consequently, they shall
have the same protection as the latter, and the same legal remedy against any
infringement of their rights, provided th at the conditions and formalities imposed
upon nationals are complied with.
36. Article 2(2) of the Paris Conve ntion specifies, in addition, that no requirement of domicile or
establishment shall be imposed on nationals of othe r Members as a prerequisite for the enjoyment of
any industrial property right.

37. In the Paris Convention, "industrial prope rty" is understood "in its broadest sense".
33
"Protection of Industrial property", for which Me mbers must provide national treatment, includes,
among its "objects", trademarks, indi cations of source or appellations of origin, and the repression of
unfair competition, 34 and applies specifically to agricultu ral industries and all manufactured and
natural products.35

38. The protection of "indications of source" is clarified in Article 10 of the Paris Convention,
which provides that remedies be made available to "interested parties" against goods bearing false
indications as to their source. "Interested party" includes any producer of goods located in the locality
falsely indicated as the source (or located in the region where such locality is situated) or any
producer located "in the country where the false indication of source is used". 36 Similarly,
Article 10bis, which addresses unfair competition, requires Members to assure nationals of all other
Members effective protection against unfair compet ition, which includes "indications or allegations
the use of which in the course of trade is lia ble to mislead the public as to the nature, the
manufacturing process, the characteristics, the suita bility for their purpose, or the quantity, of the
goods."

39. Therefore, with respect to the Paris Conven tion, national treatment "as regards the protection
of industrial property" includes national treatment as regards the right of all interested parties,
regardless of nationality, to prevent false indications that certain goods come from the region in which
those interested parties produce goods or that the goods possess certain characteristics.
37 Further, this
protection with respect to indications of source a nd unfair methods of competition is not limited to

32 i.e., US – Section 211.
33 Article 1(1) of the Paris Convention.
34 Article 1(2) of the Paris Convention.
35 Article 1(3) of the Paris Convention. Examples given include grain, fruit, cattle, mineral waters,
beer, flowers, and flour.
36 Article 10(2) of the Paris Convention.
37 See Articles 10 and 10bis(3) of the Paris Convention.

situations in which the region fal sely indicated as the source is in the territory in which the false
indication is used. Rather, it includes situations where that region – in which interested parties
produce goods – is outside that territory ( e.g., a region in the territory of another Paris Convention
Member).38 It is this protection, which concerns fa lse indications of source and unfair methods of
competition in relation to any region in which interested parties are producing goods, that is subject to
the national treatment obligation. Of course, a Member may impose substantive and procedural
requirements for obtaining this protection on inter ested parties. But whatever requirements are in
place with respect to indications of source and unfai r methods of competition, they have to provide
the same advantages to non-nationals as they do to nationals.

40. This is clear from the language of the national treatment obligation itself, in Article 2(1) of
the Paris Convention, which provides that, as regards the protection of indications of source and
unfair competition, among other industrial property:

Nationals of any country of the Union sha ll ... enjoy in all the other countries of the
Union the advantages that their respective laws now grant, or may hereafter grant, to
nationals ... Consequently, they shall have the same protection as the latter, and the
same legal remedy against any infringement of their rights.
41. The ordinary meaning of these terms is that, whatever advantages a Member grants to its own
nationals with respect to the industrial property rights at issue, must also be granted to the nationals of
other Members. This obligation does not dictate th e substance or procedures of a Member's laws on
intellectual property. It requires only that, whatev er a Member's substantive rules or procedures –
such as those of the EC's GI system, with its pa rticular processes – they must result in the same
advantages for nationals of other Members.

Relationship between Article 2(1) of th e Paris Convention a nd conditioning national
treatment on reciprocity and equivalence
42. The ordinary meaning of the national treatme nt obligation speaks for itself: a Member cannot
deny to other nationals advantages that it grants to its own nationals with re spect to indications of
source and unfair competition. However, there are two specific concerns underlying this obligation
that are relevant to this dispute. First is the concern that "reciprocity" must not be a condition for
protecting the industrial property of other Members' nationals: a Member must treat nationals of other
Members at least as well as it treats its own, regardless of the treatment accorded by the other
Members to their own or other nationals. 39 The second is that a Member may not require that other
Members adopt particular substantive or procedural rules as a condition for protecting the intellectual
property rights of the nationals of those Members (i.e., "equivalence").40

38 Article 10 of the Paris Convention defines "interested parties" as including both producers in the
locality falsely indicated as the source, and those in the country where the false indication of source is used.
39 See, e.g., Bodenhausen, G.H.C., Guide to the Application of the Paris Convention for the Protection
of Industrial Property, United International Bureau for the Protection of Intellectual Property (BIRPI) (1969) (
reprinted (World Intellectual Property Organization) 1991), p. 12 (citing "the very important basic rule of the
Convention", a principle which means that each Member must apply to nationals of other Members "the same
treatment as it gives to its own nationals , without being allowed to require reciprocity." Emphasis in original.)
Exhibit US-2.
40 The importance of these conclusions was made clear at the very first negotiating session for the Paris
Convention in 1880, where the concept of national treatment in intellectual property rights was born. In the
welcoming remarks for that first session, the French Minister for Agriculture and Commerce stated that the
Conference could not achieve a complete international treat y of industrial property because of the difficulty of
unifying national laws. He concluded that the Conference should, therefore, strive to find the means to constitute
a union which, without encroaching on domestic legislation
, would assure national treatment and lay down a
number of uniform general principles. Actes de Paris , 1880, pp. 14 - 17, at p. 16 (emphasis added). Exhibit

(iii) Article 3.1 of the TRIPS Agreement
43. As the Appellate Body recently noted, the importance of national treatment in the TRIPS
Agreement is reflected in the fact that the frame rs of the WTO Agreement not only incorporated the
long-standing national treatment obligation in th e Paris Convention directly into the TRIPS
Agreement, but they also added additional TRI PS Agreement-specific provisions that build on the
Paris Convention national treatment obligations.
41

44. Article 3.1 of the TRIPS Agreement requires a WTO Member to "accord to the nationals of
other Members treatment no less favourable than that it accords to its own nationals with regard to the
protection of intellectual property."
42 In that provision, "the term intellectual property refers to all
categories of intellectual property that are the subject of Sections 1 through 7 of Part II" 43 of the
TRIPS Agreement, which includes the categories "trademarks" (section 2) and "geographical
indications" (section 3). "Protection" is broad in meaning, and includes "matters affecting the
availability, acquisition, scope, maintenance and enfo rcement of intellectual property rights as well as
those matters affecting the use of intellectual property rights specifically addressed in this
Agreement."
44 The ordinary meaning of Article 3.1, therefore, signifies a broad obligation for the EC
to accord non-EC nationals no less favorable treatment than it accords its own nationals with respect
to the availability, acquisition, scope, maintena nce and enforcement of rights in geographical
indications, as well as to those matters affecting the use of geographical indications that are the
subject of the TRIPS Agreement.

45. Under the TRIPS Agreement, these rights incl ude the right, with respect to geographical
indications, for "interested parties" to have the legal means to prevent the use of designations on a
good that mislead the public as to the geographic origin of the good. Similarly to the Paris
Convention, this includes the right of all interested parties, regardless of nationality, to prevent uses in
one Member that, inter alia, mislead the public into thinking that a good comes from the geographic
region of the interested parties in another Member. This reading is reinforced by the definition of
"geographical indications" in the TRIPS Ag reement as "indications which identify a good as
originating in the territory of a Member, or a region or locality in that territory
. . ." . Therefore, the
national treatment obligation under the TRIPS Agre ement is that, whatever treatment a Member
accords to its own nationals with respect to the rights in geographical indications, it must accord
treatment at least as favorable to nationals of other WTO Members. This does not necessarily dictate
how a Member provides for geographical indication protection, and does not prevent a Member from
imposing substantive and procedural rules with resp ect to that protection. However, it does require

US-3. In the negotiations on the national treatment provision, the French negotiator who had prepared the initial
draft emphasized that, in order to be acceptable, the convention would have to respect the internal legislation of
all contracting parties to the extent possible , and to restrict it to an obligation to extend national treatment to
foreigners. Actes de Paris , 1880, pp. 33 (emphasis added). Exhibit US-3. In the course of that discussion, the
national treatment obligation was clarified by the deletion of the word "reciproquement" from the original draft.
Id., pp. 39-45. Exhibit US-3. And indeed, in subsequent revisions to this provision, several proposals to include
a reciprocity element in the obligation found no support and were withdrawn. For instance, a proposal by the
United States to provide for the right to impose upon nationals of the other countries the fulfillment of
conditions imposed on its nationals by those countries found no support and was withdrawn. Actes de La Haye,
1925, pp. 413-415 (First Sub-Committee). Exhibit US-4.
41 Appellate Body Report, US – Section 211, paras. 239-240.
42 Footnote omitted.
43 Article 1.2 of the TRIPS Agreement.
44 Article 3, fn. 3, of the TRIPS Agreement.

that, whatever those rules are, they do not result in less favorable treatment of other Members'
nationals.45

46. As in the case of the Paris Convention nati onal treatment obligation, implicit in the TRIPS
Agreement national treatment obligation is a pr ohibition on conditioning the treatment of other
Members' nationals on reciprocity or on other Members having a specific domestic regime of
protection. Indeed, the national treatment ob ligation is a recognition that, despite the many
substantive and procedural obligations in the TRIP S Agreement, not all aspects of the protection of
intellectual property rights are subject to specific obligations, and that the TRIPS Agreement does not
represent or require a complete harmonization of the Members' intellectual property laws. The
obligation is that, whatever the rules are for a Me mber's own nationals, including with respect to
aspects not harmonized by the TRIPS Agreement, they mu st treat other Members' nationals at least as
favorably.

47. The context of the TRIPS Agreement national treatment obligation supports this reading.
Article 3.1 is in Part I of the TRIPS Agreement, entitled "General Provisions and Basic Principles".
The specific obligations with respect to each of th e categories of intellectual property are set out in
Part II: "Standards Concerning the Availability, Sc ope and Use of Intellectual Property Rights". But
the obligations specific to each of the seven categor ies of intellectual property in Part II do not cover
all procedural and substantive aspects of protecting th ose intellectual property rights. For this reason,
Article 3.1 is a general provision enunciating a basic principle underlying the obligations that follow
in Part II that, whatever the rules are with resp ect to the protection of the seven categories of
intellectual property – even with respect to those ru les that are not subject to specific obligations –
they must not result in treatment for other Members' nationals that is less favorable than that accorded
one's own nationals.

48. Further, another "general provision and basic principle" is in Article 1.1, which specifically
emphasizes that Members "shall be free to determ ine the appropriate method of implementing" the
TRIPS Agreement. This provision recognizes that there are different ways to implement the
obligations of the TRIPS Agreement and that Memb ers are not obligated to select any particular
means of implementation over anot her. Article 1.1 also permits Members to implement more
extensive protection than is required by this Agreem ent, but specifically requires that any such more
extensive protection not contravene the provisions of the Agreement. Therefore, whatever means of
implementation or extent of protection a Member chooses under the TRIPS Agreement, it must not
treat other Members' nationals less favorably than one's own nationals. This safeguard is critical,
especially in the area of geographic indications, in which there is an acknowledged wide variety of
mechanisms used to implement the obligations.
46

49. Article 1.1 of the TRIPS Agreement as a w hole underscores the conclusion already apparent
from the ordinary meaning of Article 3.1 that a Member may not condition protection of GI rights on
other Members having an equivalent system of protection: where the TRIPS Agreement itself
provides the freedom for Members to determin e the appropriate method of implementing its
provisions, a particular Member cannot undercut this right by requiring a particular method of
implementation as a condition of protecting GI rights. Again, this principle is especially significant in

45 Indeed, as stated in its preamble, one object a nd purpose of the TRIPS Ag reement is to provide
adequate standards and principles concerning the availability, scope and use of trade-related intellectual
property rights. GI rights are partic ularly "trade-related" to the extent they relate to the protection in one
Member's territory of GIs indicating an area in another Member's territory.
46 See, e.g., "Document SCT/6/3 Rev. on Geographical Indications: Historical Background, Nature of
Rights, Existing Systems for Protection and Obtaining Protection in Other Countries," World Intellectual
Property Organization (WIPO) Document SCT/8/4 (April 2, 2002) (Exhibit US-5); "The Definition of
Geographical Indications," WIPO Document SCT/9/4 (October 1, 2002) (Exhibit COMP-16).

the area of geographical indications, where there is a wide variety of methods for implementing the
TRIPS Agreement obligations.

50. With respect to national treatment in the context of goods, under Article III of the GATT
1994, as one panel noted, determinations as to whether imported "like products" are being
discriminated against must be made "in the light of the purpose of Article III, which is to ensure that
internal taxes and regulations ' not be applied to imported or dom estic products so as to afford
protection to domestic production'. The purpose of Ar ticle III is not to harmonize the internal taxes
and regulations of contracting parties, which differ from country to country." 47 The same is true for
the national treatment provision in the TRIPS Agreement.

51. The underlying principle for the national tr eatment obligation was illustrated recently in US –
Section 211 . In that dispute, the panel recognized that, although the TRIPS Agreement contained
obligations on the kinds of signs that must be elig ible to be trademarks, it did not contain obligations
with respect to who was the legitimate "owner" of a trademark under domestic law. The particular
ownership rules for trademarks – like many substantive and procedural rules on intellectual property –
were left to the domestic legislation of the Memb ers. After expressing concern about the potential for
abuse through arbitrary national legislation on owne rship, the panel noted that the TRIPS Agreement
"is not without safeguards against potential abuse", specifically noting that "Articles 3 and 4 of the
Agreement require a Member to accord national and most-favoured-nation treatment to the nationals
of other Members."
48 In other words, the panel, affirmed by the Appellate Body, found that the
TRIPS Agreement had not harmonized or imposed sp ecific trademark ownership rules, but that the
national treatment and most-favored-nation obligat ions provided the necessary safeguards against
abuse in those areas where the TRIPS Agreement did not provide specific obligations.

(iv) Conclusion with respect to Article 2 of the Pa ris Convention and Article 3.1 of the TRIPS
Agreement
52. In sum, the right with respect to indicati ons of source, unfair competition, and geographical
indications in the Paris Convention and the TRIPS Ag reement includes the right of interested parties
with respect to designations that mislead the pub lic in a given territory into thinking that a good
comes from the region in which the interested pa rty is established and produces goods, and, in the
case of geographical indications under the TRIPS Ag reement, that the good possesses the qualities,
reputation, or other characteristic of products comi ng from that geographic area. This right applies
whether or not the interested party is established and producing goods in the territory of the Member
in which the misleading use is occurring. It is this right in geographical indications and indications of
source that is subject to the national treatment ob ligation: whatever requirements a Member has may
not result in less favorable treatment for other Members' nationals.

53. Moreover, the EC has an obligation under th e TRIPS Agreement and the Paris Convention to
treat non-EC nationals at least as well as EC nationals in all matters pertaining to the availability,
acquisition, maintenance, and enforcement of right s in both non-EC and EC geographical indications
and other types of indications of source, including with respect to the ability of non-EC nationals to
register and protect the indications of source a nd geographical indications of goods they produce in
their country of nationality from misleading and un fair uses in the EC. These national treatment
provisions prohibit making the availa bility, acquisition, maintenance, and enforcement of these rights
for nationals of other Members contingent on "reciprocity" by other Members. Further, these national
treatment provisions prohibit making the availability , acquisition, maintenance, and enforcement of
rights for nationals of other Members contingent on those other Members having a particular system
of protection themselves. Indeed, especially with respect to geographical indications, where there are

47 US – Malt Beverages, para. 5.25. Emphasis added.

numerous accepted methods among the WTO Members of offering GI protection, there is no
requirement in the TRIPS Agreement that a Member adopt a particular system of GI protection.49 Nor
can a single Member impose such a requirement as a prerequisite for other Members' nationals to
receive protection. A Member cannot, through the selective withholding of rights from another
Member's nationals, obtain concessions from other Me mbers that it was unable to achieve at the
negotiating table in the TRIPS Agreement. To the contrary, the national treatment obligation is clear:
in all matters pertaining, inter alia, to the availability, acquisition, enforcement and maintenance of
rights in geographical indications located in the territory of WTO Members, non-EC nationals must be
accorded treatment at least as favorable as EC nationals.

54. The EC GI Regulation fails flatly to meet this obligation.

55. In sections b and c below, the United States describes in a unitary fashion how the EC GI
Regulation is inconsistent with the national treat ment obligations of the TRIPS Agreement and the
Paris Convention. As discussed above, however, there is a distinction between the relevant rights in
the Paris Convention and those in the TRIPS Agreem ent. "Protection of Industrial property" under
the Paris Convention has as its object "indications of source or appellations of origin and the
repression of unfair competition", and so requires protection against direct or indirect use of a false
indication of geographic source that may, inter alia, mislead the consumer as to the characteristics of
the goods. The TRIPS Agreement also covers indica tions of geographic source where they rise to the
level of "geographical indication" as define d in Article 22.1 of the TRIPS Agreement – i.e., where "a
given quality, reputation, or other ch aracteristic of the good is essentially attributable to that origin."
The GI Regulation's rules with respect to geographi cal indications are also rules with respect to
indications of source and unfair methods of compe tition. As such, they are subject both to the
national treatment obligation of the Paris Conventio n, which requires national treatment with respect
to indications of source and unfair methods of comp etition, and to the national treatment obligation of
the TRIPS Agreement, which requires national treatment with respect to GIs in particular.

56. For ease of reading, therefore, in sections b and c below, when reference is made to the
national treatment obligation with respect to GIs, it is understood to mean a reference to the TRIPS
Agreement national treatment obligation with respect to GIs, as well as the Paris Convention national
treatment obligation with respect to designations of origin and unfair competition.

(b) Non-EC nationals are accorded less favorable treatment than EC nationals under the GI
Regulation with respect to the registration and protection of geographical indications.
(i) Introduction
57. The EC GI Regulation is entir ely inconsistent with the nationa l treatment obligations of the
Paris Convention and the TRIPS Agreement. Indeed, it specifically conditions GI protection on
reciprocity and equivalence, two conditions that the national treatment obligation was specifically
intended to prohibit. Further, it runs directly contrary to the freedom that Members have under
Article 1.1 of the TRIPS Agreement to determine the appropriate method of implementing the TRIPS
Agreement. To summarize the details presented further below, the explicit purpose of the GI
Regulation is to bestow numerous significant commercial and competitive advantages on those
entitled to register and use geographical indicati ons, including higher profits, a coveted label, the
ability to stop others from a wide variety of uses, including the use of words that even "evoke" the
geographical indication, broad enforcement in all EC Member States (both by government authorities
on their own initiative, as well as by right holders) , and guarantees against their registered name
becoming generic, among other significant benefits . These advantages are available immediately and

49 See, e.g. , WIPO Document SCT/8/4 (Exhibit US-5) and WIPO Document SCT/9/4 (Exhibit
COMP-16).

uniformly throughout the EC, which the EC itself recognizes is a significant advantage over
attempting to seek protection separately under the diffe rent laws of each of the EC member States
(even assuming that this is possible).

58. Yet these advantages are not made available on the same terms to the nationals of all other
Members. EC nationals are permitted to register their home-based EC geographical indications, and
obtain all of the considerable competitive advant ages touted by the EC, but US nationals (and
nationals of most other WTO Members) are currently not able to register their home US geographical
indications, and therefore cannot get any of the bene fits of EC-wide GI protection summarized above.
This is plainly inconsistent with the EC's obligations under the TRIPS Agreement and Paris
Convention to treat US and other WTO Member nationals at least as well as EC nationals with respect
to the protection of rights in geographical indications.

59. Further, taking the United States as an example, the only way that US nationals might in the
future be able to register US-based GIs, and thus obtain the same EC-wide GI protection for their US-
based GIs as EC nationals have for their EC-based GIs, is for the United States to (a) reciprocally
grant equivalent GI protection for agricultural products and foodstuffs coming from the EC;
50 and (b)
adopt a system for protecting geographical indications that the EC unilaterally decides is equivalent to
that in the EC, including equivalent inspection and objection systems. As discussed above, such
requirements are directly contrary, not only to the letter of the national treatment obligation, but also
to its specific objective of prohibiting the conditi oning of national treatment on reciprocity and
equivalency. Further, it forces Members to adopt a particular set of rules to implement the TRIPS
Agreement, contrary to Article 1.1 of the TRIPS Agreement. Instead of recognizing that there are
many different ways to fulfill the TRIPS Agreement ob ligations on GIs, the EC is in effect telling the
United States that its nationals will not be able to register their US-based GI s in the EC and receive
EC-wide protection for those GIs – as EC nationals are permitted to do with respect to their EC-based
GIs – unless the United States adopts a system for GI protection that the EC judges is equivalent to
the EC system. In addition, only if the United States agrees, through this EC-mandated system, to
offer reciprocal protection to EC products, will the EC allow US nationals protection with respect to
their U.S-based GIs comparable to what EC nationa ls already receive with respect to their EC-based
GIs.

60. These conditions simply cannot stand up in th e face of the national treatment obligations of
the TRIPS Agreement and the Paris Convention.

(ii) The EC GI Regulation accords less favorable t reatment to non-EC Nationals with respect to
registration and consequent protection
61. The preamble to the EC GI Regulation speci fies that its major objective is to bestow a
competitive benefit on producers of products with registered GIs, recognizing that:

(a) empirically, consumers are tending to a ttach greater importance to the quality of
foodstuffs, generating a growi ng demand for agricultural products or foodstuffs with
an identifiable origin;
(b) experience in the EC member States has b een that agricultural products or foodstuffs
with a registered and identifiable origin have proven successful for producers of those
products, who have thus been able to secu re higher incomes in return for improved
quality; and

50 Article 12(1) of the GI Regulation.

(c) in light of the diversity of national practices with respect to registered GIs, a uniform
approach will ensure "fair competition be tween the producers" of registered GI
products.
62. The specific advantages bestowed on producers of registered GI products are laid out in the
GI Regulation, including:

(a) The ability to register their GIs in the official EC-wide "Register of protected
designations of origin and protected geographical indications".51
(b) The right to use the protected geographical indication throughout the EC market on
products that qualify for the GI.52
(c) The right to use an official EC "symbol" or "logo" informing the consumer that the
product is a registered GI. 53 As the relevant EC regula tion explains, "[t]he logo will
allow producers of food products to increase awareness of their products among
consumers in the European Union... The pres ence of this logo is a genuine guarantee
for all European consumers, making it clear th at the special nature of this product lies
in its geographical origin. Because of this, products will inspire more confidence. As
producers, the logo provides you which [ sic] a marketing tool. You will be able to
put the logo on the labels or packaging of your products, and also use it in your
advertising."54
(d) A broad right to have that registered GI protected throughout the EC, both
automatically, at the initiative of government authorities, as well as through private
rights of action,55 against a broad range of competing and disparaging uses.56
(e) Protection from having the registered GI become generic (which causes the
geographic indication to lose its value).57
Non-EC National are accorded less favorable treat ment with respect to the registration and
protection of their non-EC-based GIs than EC nationals are with respect to their EC-based
GIs
63. Plainly, the GI Regulation offers significant advantages and favorable treatment to producers
of qualifying products with respect to the av ailability, acquisition, scope, maintenance, and
enforcement of rights in GIs, as well as matters af fecting the use of GIs. Unfortunately for US
producers of quality products from US regions, these considerable advantages with respect to rights in
GIs are available only for producers and processors in the EC. Article 5(3) requires that the
application for the registration of a GI be "sent to the member State in which the geographical area is
located." US producers of quality products from US geographical areas, therefore, cannot even file a
registration application, because their GI does not refer to a region in the EC.

51 Articles 6(1) - 6(4) of the GI Regulation.
52 Article 4(1) of the GI Regulation.
53 Article 5a of Commission Regulation 2037/93, p. 5. Exhibit COMP-2.a.
54 Annex II of Commission Regulation 2037/93. Exhibit COMP-2.a.
55 Review under Article 24.2 of the Application of the Provisions of the Section of the TRIPS
Agreement on Geographical Indications, Responses to the Checklist of Questions, Addendum, WTO Council
for Trade-Related Aspects of Intellectual Property Rights, IP/C/W/117/Add.10, March 26, 1999 ("Article 24.1
Review"), Responses of the EC to Questions in Document IP/C/B nos. 1, 34, and 35.
56 Article 13 of the GI Regulation.
57 Article 13(3) of the GI Regulation.

64. The only avenue available to US nationals to apply for GI protection with respect to their
US-based GIs is in Article 12, which provides that the GI Regulation may a pply to goods from third
countries, including WTO Members, but only if that WTO Member satisfies certain conditions. First,
that WTO Member must adopt a system for GI protection that is equivalent to that in the EC, that is, a
system (i) under which the WTO Member can provide guarantees equivalent to those in the GI
Regulation that its GI products meet the EC produ ct specifications in Articles 4 and 10 of the GI
Regulation, (ii) providing objection rights equivalent to those in the GI Regulation, (iii) providing for
internal inspection structures e quivalent to those in the EC,
58 and (iv) providing GI protection to EC
products that is equivalent to that available in th e EC. The required inspection structures, described
under Article 10 of the GI Regulation, must satisfy numerous specific requirements, including, if
private bodies are responsible, compliance with requirements laid down in other European
standards.59 Second, any such WTO Members must offer reciprocity: the EC will register and protect
products from another WTO Member only if that WT O Member is "prepared to provide protection
equivalent to that available in the Commun ity to corresponding agricultural products for [ sic. "or"]
foodstuffs coming from the Community."

65. In other words, a US national is not able to acquire, does not have available to him, and is
unable to enforce, the same rights to his US-based GIs as EC nationals have with respect to their
EC-based GIs, unless the United States (1) harmonizes its GI protection system to that of the EC (and,
therefore drops its current system of protection through the certification and collective mark system
and creates two separate GI protection systems, one specific to GIs, the other trademark-based); and
(2) offers reciprocity with respect to European products.

66. These requirements of equivalency and reci procity by a WTO Member as a condition of
granting GI rights to nationals of that Member are in consistent with, and indeed, directly contrary to,
the national treatment obligations of the TRIPS Agreement and the Paris Convention.

67. This reading of the national treatment obliga tion is not unique to geographical indications.
For instance, in the area of trademarks, there are, in general, two recognized systems for providing
trademark protection among WTO Members. The EC bases trademark ownership on registration; the
United States generally bases trademark ownership on use.
60 The TRIPS Agreement is designed to
accommodate both systems, and neither is preferred. 61 Yet the TRIPS Agreement does contain an
obligation, in Article 15, to make certain signs eligib le for registration as trademarks. It also requires,
in Article 16.1, that the owner of a registered trad emark be provided with specified exclusive rights to
prevent certain uses of similar or identical signs. The EC could not, consis tent with its national
treatment obligations, withhold from US nationals the ability to register signs or to prevent confusing
uses, simply because the US system of trademark protection is different from that of the EC. Nor
could it refuse to allow US nationals to register a trademark in the EC or to exercise its trademark
rights unless the United States agreed to permit EC nationals to base their US trademark ownership
on registration in the United States, rather than use, contrary to the US system of trademark
protection. In the area of trademarks, as in the area of geographical indications, the EC simply cannot
condition intellectual property protection for a WT O Member's nationals on that WTO Member (1)
adopting an EC-equivalent system of protection and (2) offering reciprocal protection to EC products
or nationals. As discussed above, both of these conditions on making intellectual property protection
available to US nationals – equivalency and recipr ocity – are inconsistent with the EC's national

58 Article 12(1) of the GI Regulation.
59 Article 10 of the GI Regulation.
60 E.g., Appellate Body Report, US – Section 211, para. 199.
61 Note, e.g., that Article 16.1, providing rights with respect to registered trademarks, states that those
rights shall not "affect the possibility of Members making rights available on the basis of use." See also US –
Section 211, paras. 188, 199.

treatment obligations. This is as true in the area of geographical indications as it is the in area of
trademarks.

68. Finally, even if a non-EC national succeeds in registering his home-based GI in the EC, he is
still faced with treatment that is less favorable than that accorded his EC national counterpart. Under
Article 12(2) of the GI Regulation, a name register ed by such a non-EC national will be authorized
"only if the country of origin of the product is cl early and visibly indicated on the label." There is no
such requirement with respect to the use of name by an EC national with respect to his EC-based GI.

The national treatment obligation in the cont ext of goods is instructive as to the GI
Regulation's inconsistency with the national treatment obligations of the TRIPS Agreement
and Paris Convention
69. This conclusion is also consistent with a long line of adopted dispute settlement rulings and
recommendations with respect to national treatment in the area of goods under the GATT 1994. The
Appellate Body noted in US – Section 211 that the national treatment obligation is a fundamental
principle underlying the TRIPS Agreement, just as it was in what is now the GATT 1994.
62 T h e
Appellate Body noted further that the language of Article 3.1 of the TRIPS Agreement is similar to
that of Article III:4 of the GATT 1994, and stated that "the jurisprudence on Article III:4 may be
useful in interpreting the national treatment obligation in the TRIPS Agreement."63 Indeed, one object
and purpose of the TRIPS Agreement is to establish new rules and disciplines "concerning the
applicability of the basic principles of GATT 1994."
64 As the Appellate Body itself has noted,
national treatment is one of these principles.65

70. The dispute settlement history under Article III of the GATT 1994 does in fact offer some
useful guidance for this dispute. Both the Appellate Body and panels have repeatedly established that
"[t]he broad and fundamental purpo se of Article III [the national treatment obligation] is to avoid
protectionism in the applicati on of tax and regulatory measures"
66 Of course, the national treatment
obligation in the GATT 1994 applies to products a nd that in the TRIPS Agreement and the Paris
Convention applies to nationals. But the genera l principle is easily extrapolated: the national
treatment obligation is intended to avoid protectioni sm with respect to the protection of intellectual
property rights.

71. To this end, in the goods c ontext under Article III, the Appellate Body has stated that it will
examine objectively the underlying criteria used in a measure, its structure and its overall application
to ascertain whether it is applied in a way that affords protection to domestic products.
67 According to
the Appellate Body, the protective application of a measure "can most often be discerned from the
design, the architecture, and the revealing structure of a measure." 68 In the dispute Japan – Alcohol ,
such factors as the magnitude of dissimilar ta xation between a primarily Japanese-produced white
spirit, shoju, and a primarily imported white spir it, vodka, was considered evidence of a protective
application.

72. Similarly, in the dispute Korea – Alcohol, the Appellate Body affirmed the panel's finding of
a violation of national treatment in Korea's low taxe s on soju and high taxes on other types of alcohol.
The Appellate Body noted with appr oval the Panel's explanation that "[ t]here is virtually no imported

62 Appellate Body Report, US – Section 211, para. 242.
63 Appellate Body Report, US – Section 211, para. 242.
64 Second paragraph, preamble, TRIPS Agreement.
65 Appellate Body Report, US – Section 211, para. 242.
66 Appellate Body Report, Japan – Alcohol, page 16, citing US – Section 337.
67 Appellate Body Report, Japan – Alcohol, page 29.
68 Id.

soju, so the beneficiaries of this structur e are almost exclusively domestic producers."
69 In other
words, the structure of the tax – although the rat es were not expressly based on the origin of the
product – was such that the high taxes were imposed almost exclusively on imported products.

73. In Chile – Alcohol , the Appellate Body found that, even though Chile's tax structure was
based on objective criteria – i.e., higher taxes were imposed on beverages with higher alcohol content,
and lower taxes on beverages with lower alcohol content – there was a violation of national treatment
because the lower tax rate ended at the point wh ere most domestic products were found, and the
higher tax rate began at the point where most imports were found.
70

74. In this dispute, applying the principles found in adopted dispute settlement rulings and
recommendations with respect to GATT Article III, the GI Regulation's protective structure is plain.
The GI Regulation specifically recognizes the significant advantages it is granting, then systematically
denies these advantages to nationals producing in th eir country of nationality when that country does
not adopt EC-style rules and promise reciprocal treatment.

75. Similarly, just as the substantial differen ce between the tax rates on imported products and
domestic products was evidence of the prot ective nature of the measure in the Alcohol disputes, the
substantial difference in treatment between EC -based GIs and non-EC-based GIs – one can be
registered and protected on an EC-wide basis, a nd the other cannot – is evidence of the protective
nature of the GI Regulation.

76. In addition, the national treatment obligati on with respect to goods under Article III of the
GATT 1994 has been found to require "treatment of imported products no less favourable than that
accorded to the most-favoured domestic
 products ."71 In this dispute, by analogy, the treatment
accorded to the most favored EC nationals is the ability directly to register and protect GI products
that they produce or obtain in their country of nationality under Article 5 of the GI Regulation. By
contrast, non-EC nationals produci ng or obtaining products in their country of nationality are faced
with additional conditions, under Article 12, amounting to less favorable treatment. It is not relevant
that certain EC nationals – i.e., those producing or obtaining products outside the EC – might be faced
with these same conditions. Non-EC nationals ar e entitled, not to the less favorable treatment
accorded some EC nationals, but to the treatment acco rded the most favored EC nationals. This is the
treatment accorded to EC nationals who can regist er and protect GI products they produce in their
country of nationality.

The GI Regulation's TRIPS-inconsistent c onditions for permitting the registration and
protection of GIs may be viewed as "extra hurdles" faced by non-EC nationals
77. The Appellate Body has been clear that a measur e is inconsistent with national treatment if it
imposes an "extra hurdle" on non-EC nationals that is not imposed on EC nationals. 72 As discussed
above, the requirements imposed by the GI Regulati on on non-EC nationals as a condition of national
treatment are not merely an "extra hurdle": they ar e themselves directly inconsistent with the national
treatment obligation. However, they also can be viewed as "extra hurdles" imposed on non-EC
nationals, albeit "extra hurdles" that are themselves inconsistent with national treatment.

78. The EC GI Regulation plainly imposes a numbe r of "extra hurdles" on non-EC nationals who
wish to have their home-based GIs registered a nd protected under the GI Regulation and achieve the
same protection as is accorded to EC nationals with respect to their EC-based GIs. This registration

69 Appellate Body Report, Korea – Alcohol, para. 150, citing the panel report, para. 10.101.
70 Appellate Body Report, Chile – Alcohol, para. 66.
71 US – Malt Beverages, paras. 5.17, 5.33 (emphasis added).
72 Appellate Body Report, US – Section 211, paras 260-268.

and protection goes to the availability, acquisiti on, maintenance, and en forcement, among other
matters, of GI rights in the EC.

79. Article 22.2 of the TRIPS Agreement requires Members to provide the legal means for
interested parties
 to prevent misleading uses of GIs and any use constituting an act of unfair
competition under Article 10 bis of the Paris Convention. The GI Regulation does provide the direct
legal means for persons established in the EC to apply for registration and have their EC-based GIs
protected on an EC-wide basis. 73 By contrast, non-EC nationals h oping to have their non-EC based
GIs registered and protected face a number of additional hurdles. First, and perhaps most
significantly, under Article 12(1) of the GI Regulat ion, that national would have to convince its
government to adopt an EC-equivalent system of GI protection (including extensive inspection
systems and the like), to offer reciprocal GI treat ment to EC agricultural products and foodstuffs, and
to take actions necessary to convince the EC, under Article 12(3), that its GI protection system and
offer of reciprocity satisfy the EC's requirements . To achieve protection, the WTO Member would
have to actually take all of these steps, with all of the additional time, effort, and expense that this
entails. An EC national seeking to register its ow n EC-based GI does not have to do any of this to
register and have protected its GIs on an EC-wide basis.

80. Indeed, as a practical matter, non-EC nationals do not have the legal means to have their non-
EC-based GIs registered and protected under the GI Regulation, and do not have any sure way of
obtaining those legal means. These interested partie s simply are not in a position, either to establish a
full EC-style GI system in their home country, or to provide reciprocal treatment.

81. Second, even where this hurdle does not exis t – where the EC has determined that the GI
protection system of a WTO Member is equivalent to the EC system and where that Member offers
reciprocal treatment to EC products – the non-EC na tional still faces an extra hurdle not faced by EC
nationals. Unlike his EC-based counterpart, a non-EC national seeking protection for his home-based
GI cannot apply for registration directly to the co mpetent authorities in Europe. Rather, he must
petition his government to apply on his behalf. That non-EC Member may have neither the
infrastructure nor the inclination to satisfy the stringent EC requirements with respect to that
application, which includes an independent analys is of whether the application meets the EC's
standards, possible consultations with EC Member States, the development and submission of the
legal provisions and the usage on which the GI stat us is based, a declaration that the full EC-
compliant inspection structures exist in that WT O Member, and any other documents on which that
Member's assessment was based.
74

82. In other words, the GI Regulation has in place procedures, directly applicable to EC nationals
and member States, under which EC nationals can apply through their member States to the
Commission to have their GIs registered and prot ected on an EC-wide basis. There are no such
procedures in place with respect to an applica tion from a non-EC national producing products outside
the EC. An EC national has the infrastructure and th e regulations in place that allow him to register
his EC-based GI directly with his member State. A non-EC national has no such infrastructure or
regulations, and must depend on the WTO Member of which he is a national to first put such
procedures in place.

83. For these reasons, in addition to those men tioned above, non-EC na tionals are not being
accorded treatment as favorable as that granted EC nationals under the GI Regulation with respect to
the protection of geographical indications, under Artic le 3.1 of the TRIPS Agreement. And they are
not enjoying all the advantages being granted to EC nationals with respect to their indications of
source or with respect to unfair competition, unde r Article 2(1) of the Paris Convention. They

73 E.g., Articles 5 and 6 of the GI Regulation.
74 Articles 12(1) and 12(2) of the GI Regulation.

certainly do not have the "same protection" as EC nationals or the "sam e legal remedy against
infringement of their rights" with respect to indications of source or unfair competition.

The EC GI Regulation requires non-EC nationals to become established in the EC as a
condition of obtaining GI protection, contrary to Article 2 of the Paris Convention
84. In addition, permitting only GIs located in the EC to be registered and protected is
inconsistent with the Paris Convention prohib ition on requiring domicile or establishment as a
condition of enjoying intellectual property rights. As discussed above, Article 2(1) of the Paris
Convention requires Members to permit nationals of other Members to enjoy the advantages "that
their respective laws now grant, or may hereafter grant", to their own nationals. Paris Convention
Article 2(2) provides, in addition, that the Member where protection is claimed – in this dispute, the
EC – may not impose any "requirement as to domicile or establishment" in that Member on nationals
of other Members "for the enjoyment of any industrial property rights." As discussed above,
"industrial property" is understood broadly under th e Paris Convention, and includes indications of
source or appellations of origin, including GIs.

85. The EC GI Regulation imposes an obvious re quirement of establishment in the EC as a
condition of enjoying rights with respect to indications of origin. It may be possible under the GI
Regulation for a US national to register and protect a geographical indication located in the EC, even
though he cannot, absent the conditions noted above, do so with respect to his US-based GIs.
Therefore a US national might be able to register and protect a GI only if he is producing a product
that qualifies for that geographical indication in the EC.
 Further, he can only claim rights under the
GI Regulation with respect to products produced in the EC. Therefore, in order to enjoy rights related
to indications of source provided for under the GI Regulation, he must produce or obtain agricultural
products or foodstuffs in the EC , and to do this he must have some form of investment or business
establishment in the territory of the EC. This requi rement that he establish himself in the EC as a
precondition to obtain protections with respect to indications of source and unfair competition, is
directly prohibited by Article 2(2) of the Paris Convention.

86. In sum, the EC GI Regulation accords less fa vorable treatment to non-EC nationals than to
EC nationals with respect to the registration and cons equent protection of GIs. It is for this reason,
inconsistent with Article 2 of the Paris Convention and Article 3.1 of the TRIPS Agreement.

(c) The EC GI Regulation accords less favorable tr eatment to non-EC nationals with respect to
opportunity to object to the registration of GIs
87. It is not only in the registration of GIs that the GI Regulation is inc onsistent with national
treatment obligations. The GI Regulation also lays out rules to permit natural or legal persons to
object to the registration of a GI.
75 The ability to object to the regi stration of a GI falls within the
scope of "protection of intellectual property" under Article 3.1 of the TRIPS Agreement and
"protection of industrial property" under Article 2(1) of the Paris Convention, with respect to which
national treatment must be provided because the ability to object is part of the ability to prevent others
from using indications in a way that is misleading as to source. Further, the right to object is
necessary to the ability to acquire, maintain, or en force intellectual property rights and to prevent
misleading indications of source.
76

88. The GI Regulation's provisions with respect to the ability to object to the registration of GIs
accord less favorable treatment to non-EC nationals than to EC nationals in several respects.

75 Articles 7, and 12b(2) and 12d of the GI Regulation.
76 See, e.g., Article 7(4) of the GI Regulation, in which the grounds for objection include where the GI
would "jeopardize the existence of an entirely or partly identical name or of a mark" in the EC.

89. First, the provisions for objecting to the registration of GIs mirror those for registering GIs in
several respects, and therefore suffer from the sa me national treatment defects as those described
above with respect to registration. For instance, under the GI Regulation, EC nationals can object to a
registration directly by submitting their objection to the member State in which they reside or are
established.
77 Under Article 7(3), "[t]he competent authority shall take the necessary measures to
consider these comments or objections within the deadlines laid down." 78 The EC member States are
then instructed to collaborate in determining how to respond to the objection, or to otherwise refer to
the Commission for a final decision.

90. By contrast, non-EC nationals cannot subm it their objection directly to the competent
authorities in the EC, but must request that their own country transmit the objection.
79 That country
may or may not have an appropriate mechanism to process the objection, and may or may not be
inclined to transmit the objection, for its own poli tical or other reasons. By contrast, EC member
States have certain obligations under the EC GI Regulation with respect to the processing of
objections, and there is an infrastructure in place in the EC to process those objections. As discussed
above, the Appellate Body has been clear that a Member's measure is inconsistent with national
treatment obligations if it imposes an extra hurdle on other Members' nationals that is not imposed on
the Member's own nationals. 80 This is one of those "extra hur dles" to GI protection that non-EC
nationals face, and is, therefore, a violation of national treatment.

91. Further, this additional hurdle also corr esponds to a "requirement as to domicile or
establishment", which is a prohibited condition for th e enjoyment of rights under Article 2(2) of the
Paris Convention. EC persons can submit objections to the member State in which they reside or are
established, knowing that those objections will be c onsidered in accordance with the GI Regulation.
By contrast, persons not resident or established in the EC are not accorded the same or "no less
favorable" treatment, simply because they are not resident or established in the EC.

92. Moreover, Article 12d limits the persons who can object to a registration application
submitted by an EC member State to persons fro m "a WTO member country or a third country
recognized under the procedure provided for in Article 12(3)" i.e., satisfying the conditions of
equivalency and reciprocity described in the previous section. Just as conditioning registration of US-
based GIs on equivalency and reciprocity is imperm issible under the national treatment obligations of
the TRIPS Agreement and the Paris Convention, so, too, is conditioning the right to object to a
registration on equivalency and reciprocity. Theref ore, the analysis provided in the previous section
with respect to registration and EC-wide protection is equally applicable to objections.

93. Finally, the EC GI Regulation allows only no n-EC nationals with a "legitimate interest" to
object to a GI registration application, and pr ovides further that only those with a "legitimate
economic interest" may consult the application for the GI. One of the grounds for objecting to the
registration of a name under Article 7(4) is that th e registration would jeopardize the existence of an
entirely or partly identical name or the existence of products which have been legally on the market
for at least five years. Since the GI Regulation gr ants more favorable treatment to EC nationals than
to non-EC nationals with respect to the registrati on and EC-wide protection of GIs in the first place,
EC nationals are similarly more favored than non-EC nationals with respect to the ability to object,
because they are in a better position than non-EC nationals to have a "legitimate interest" or a
"legitimate economic interest" with respect to compet ing names in the EC. Non-EC nationals face an
extra hurdle with respect to having a name that could be jeopardized by the registration of a GI.

77 Article 7(3) of the GI Regulation.
78 Emphasis added.
79 Articles 12b.2 and 12d.1 of the GI Regulation.
80 See, e.g., Appellate Body Report, US – Section 211, para. 264; US – Section 337, para. 5.19.

94. Further, unlike a non-EC national, who must have a "legitimate interest" or a "legitimate
economic interest" in order to object to the regist ration of a GI, an EC national wishing to object
under Article 7(3) of the GI Regulation may do so if he is "legitimately concerned". It would appear
that the requirement that one be "legitimately concerned" is a lower standard than the requirement that
one have a "legitimate interest", making it easier for an EC national to object to a registration than a
non-EC national.

95. For all of these reasons, the GI Regulation's provisions with respect to objections to a GI
registration are inconsistent with the national treat ment obligations of the TRIPS Agreement and the
Paris Convention.

2. The EC GI Regulation is inconsistent with the EC's national treatment obligations with
respect to goods of other WTO Members under the GATT 1994
96. Article III:4 of the GATT 1994 requires Members to accord no less favorable treatment to
products originating in the territory of other Me mbers than it accords to like products of national
origin "with respect to all laws, regulations and requ irements affecting their internal sale, offering for
sale, purchase, transportation, distribution or use. " The Appellate Body has noted that Article III:4
should be interpreted in light of Article III:1, wh ich provides that the Memb ers recognize that these
laws, regulations and internal re quirements "should not be applied to imported or domestic products
so as to afford protection to domestic production." The result, according to the Appellate Body, is
that Article III obligates Members "to provide equality of competitive conditions for imported
products in relation to domestic products."
81 So, as the Appellate Body has concluded in prior
disputes, the fundamental question of whether there is a violation of Article III of the GATT 1994 is
answered "by examining whether a measure modifi es the conditions of competition in the relevant
market to the detriment of imported products."82

97. The answer to this question with respect to the EC GI Regulation is a resounding "yes". The
EC GI Regulation is primarily intended to permit products that qualify for a registered geographical
indication to gain substantial competitive advantages, in terms of prices, profits and market share,
over their conventional counterparts that do not so qu alify. The EC's motivation behind promulgating
the GI Regulation is the strong belief that producer s of products accorded GI protection fare much
better in the marketplace than producers of products not accorded GI protection, and that restrictions
on access to GI status and the provision of EC-wid e protection for those GIs will enhance this
profitability.83 So, it is flatly inconsistent with Article III: 4 to make this favorable GI status available
under the GI Regulation to products of EC origin if those products meet certain requirements and
specifications, but to make it unavailable to pr oducts of other WTO Members unless additional
requirements are met: i.e., unless those Members can prove to the satisfaction of the EC Commission
that they (1) have a GI system that is equivalent to the EC's; (2) provide reciprocal GI protection to
EC products, and (3) are willing and able to in tervene at the EC Commission on behalf of its
nationals. It is obvious from the structure and ar chitecture of the EC GI Regulation that it treats
imported products less favorably than domestic pr oducts, and that it shifts the competitive conditions
dramatically in favor of EC products.

98. The paragraphs that follow will establish that each of the elements of an Article III.4 violation
is met.

81 Appellate Body Report, Japan – Alcohol, p. 16 (emphasis added).
82 Appellate Body Report, Korea – Beef, para. 135, quoting Japan – Alcohol, pp. 16-17.
83 Preamble, GI Regulation.

(a) The imported and domestic products are "like"
99. Both the Appellate Body and pa nels have been clear that, where there is a general measure of
general application ( i.e., not directly regulating specific products), the issue with respect to "like
product" is not whether particular traded products are "like", but rather whether the measures makes
distinctions between products based solely on origin. 84 As the Appellate Body has noted, the term
"like product" in Article III:4 of the GATT 1994 "is concerned with competitive relationships
between and among products."85 The issue is whether any formal differentiation in treatment between
an imported and a domestic product could be based upon the fact that the products are different – i.e.,
not like – rather than on the origin of the products involved.86

100. In the case of the GI Regulation, the only difference between the pr oducts that may benefit
from GI registration and protection – products from th e EC – and those that may not so benefit on
similarly favorable terms – products from other WTO Members – is their origin. Consequently, it is
clear that the EC agricultural products and foodstuffs that are eligible for GI registration under one set
of criteria and the non-EC agricultural products and foods tuffs that are only eligible if they satisfy an
additional set of criteria are like products for purposes of Article III:4.

(b) The GI Regulation affects the "internal sale, offering for sale, purchase, transportation,
distribution or use" of the imported product
101. Under Article III:4, Members have a national treatment obligation "with respect to all laws,
regulations and requirements affecting the internal sale, offering for sale, purchase, transportation,
distribution or use" of imported products of the te rritory of any other Member. This is a broad
formulation, and a number of GATT and WTO disput e settlement reports have noted that the term
"affecting" goes beyond measures that "directly" gove rn the conditions of sale or purchase, so as to
cover measures which might "adversely modify the conditions of competition between domestic and
imported products."
87

102. The GI Regulation does exactly this. As discu ssed more fully in the "Facts" section III and in
section IV.A.1.b above, the GI Regulation governs th e manner in which registered names can be used
– and not used – on products that are sold, offered for sale, purchased, distributed or used. It governs

84 See Panel Report, US – FSC (Article 21.5 – EC) , paras. 8.133 (Finding it unnecessary "to
demonstrate the existence of actually traded like products in order to establish a violation of Article III:4" when
a measure makes distinctions "between imported and domestic products" that are "solely and explicitly based
on origin." See also Panel Report, India – Autos , para 7.174 (when origin is "the sole criterion distinguishing
the products, it is correct to treat such products as like products within the meaning of Article III:4.")
85 Appellate Body Report, EC – Asbestos , para. 103. See also discussion of Alcohol disputes in
section IV.A.1.b.ii(2) above.
86 Panel Report, US – FSC (Article 21.5 – EC), para. 8.132.
87 Eg., Panel Report, India – Autos , para. 7.196 ("Under GATT and WTO jurisprudence, the term
'affecting' has consistently been defined broadly. In particular, it has been well established that it implies a
measure that has 'an effect on' and this indicates a broad scope of application" ( citing to Italy – Agricultural
Machinery, BISD 7S/60, para. 12.) See also Panel Report, Canada – Auto s, para. 10.80 (This term therefore
goes beyond laws and regulations which directly govern the conditions of sale or purchase to cover also "any
laws or regulations which might adversely modify the conditions of competition between domestic and imported
products."); Panel Report, US – FSC (Article 21.5 – EC) , at paras 8.139, 8.144 ("We agree with the views
expressed in previous GATT and WTO panel reports that Article III:4 applies also to measures in the form of
conditions that must be satis fied in order to obtain an 'advantage' from the government ... Furthermore, the
terms 'law, regulation or requirement affecting…' in Article III:4 are general terms that have been interpreted as
having a broad scope" [footnotes omitted].) Indeed, in US – Section 337, the panel found that a law enforcing
intellectual property rights with respect to imported products was a measure "affecting" internal sale of imported
products.

the use of the special EC GI symbol, or logo, on labels, packaging and advertising for certain
products, throughout the EC marketplace that, accor ding to the EC, provides consumer with a
guarantee of quality and geographical origin with respect to those products, and provides the EC
producer increased profits and market share.
88 It allows the products that qualify for the registered GI
name numerous and very broad protections agains t other competitive and disparaging uses of the GI
associated with the product, including protection by government authorities on their own initiative, as
well as protection requested by private parties. 89 And it provides protection against the geographical
indication of the product becoming generic. 90 The GI Regulation is, therefore, a law or regulation
"affecting [the] internal sale, offering for sale, purchase, transportation, distribution or use" of
imported products.

(c) The imported product is accorded "less favorable treatment" than the domestic like product
103. The Appellate Body has stated that "[t]he term 'less favorable treatment' expresses the general
principle, in Article III:1, that internal regulations 'should not be applied ... so as to afford protection
to domestic production.' If there is 'less favourable treatment' of the group of 'like' imported products,
there is, conversely, 'protection' of the group of 'like' domestic products."91

104. It could not be clearer that the EC GI Regulation accords imported products less favorable
treatment than domestic products. Agricultural pr oducts and foodstuffs from another WTO Member
will not be accorded the same favorable treatmen t under the GI Regulation as like products from the
EC:

(a) unless that WTO Member has an internal system of GI protection that is equivalent to
that in the EC;
(b) unless that WTO Member is prepared to offer reciprocity of GI protection to EC
agricultural products and foodstuffs;
(c) unless a WTO Member is prepared itself to apply to the EC for an affirmative
decision with respect to the above points; and
(d) unless, with respect to a particular app lication for a GI, that WTO Member is willing
and able to submit an application to the EC on behalf of its national, certifying to the
presence of EC-equivalent and mandate d inspection structures and other
requirements.
105. Imposing these requirements as a condition of according imported products as favorable
treatment as domestic like products is contrary to the Article III:4 national treatment obligation, which
requires that such treatment be accorded unconditionally.
92 Further, for imported products from WTO
Members whose system of GI protection does not ma tch that of the EC and which cannot meet the
EC's requirements with respect to reciprocity, among other requirements, the less favorable treatment
is obvious, and has been discussed in detail above . To summarize, even where such products
produced outside the EC qualify as GIs under the defi nition provided in the GI Regulation, because of

88 Preamble of the GI Regulation; Regulation 2037/93 (Exhibit COMP-2.a).
89 Article 13(1) of the GI Regulation.
90 Article 13(3) of the GI Regulation.
91 Appellate Body Report, EC – Asbestos, para 100.
92 See, e.g., Belgian Family Allowances, in which a Belgian provision exempting from certain charges
products from countries requiring family allowance be nefits was found inconsistent with MFN (and likely)
national treatment obligations.

their reputation or other characteristics, they cannot , unlike their "like" counterparts produced in the
EC:

(a) be registered in the official EC-wide "Reg ister of protected designations of origin and
protected geographical indications";
93
(b) use a registered geographical indication throughout the EC market; 94
(c) include on the packaging, label, or adve rtising the official EC "symbol" or "logo"
informing the consumer that the product is a registered GI;95
(d) receive the broad protections throughout the EC provided to registered products, both
on the government's own initiative and throug h private rights of action, against an
extremely broad range of competing and disparaging uses;96 or
(e) be protected from having their geographi c name become generic (which causes the
geographical indication to lose its value).97
106. Further, even where the EC does permit importe d products to be registered and protected, that
imported product is still faced with treatment that is less favorable than that accorded its EC
counterpart. Under Article 12(2) of the GI Regulati on, a registered name can be used in connection
with imported products "only if the country of origin of the product is clearly and visibly indicated on
the label." There is no such requirement with respect to the use of name on a product of EC-origin.

107. In sum, the EC GI Regulation accords less favorable treatment to imported products than it
does to like products of national origin in respect of laws, regulations and requirements affecting their
internal sale, offering for sale, purchase, transporta tion, distribution, or use. Consequently, it is
inconsistent with EC's obligations under Article III:4 of the GATT 1994. Nor can this less favorable
treatment for imported products be justified under any of the exceptions provided under Article XX of
the GATT 1994.

B. T
HE EC'S GI REGULATION IS INCONSISTENT WITH THE EC'S OBLIGATIONS TO PROVIDE MOST
FAVORED NATION TREATMENT
108. Just as was the case with respect to nationa l treatment, the EC GI Regulation is also
inconsistent with two different most-favored-nati on obligations under the WTO Agreements, the first
with respect to nationals of WTO Members under Article 4 of the TRIPS Agreement, and the second
with respect to the products of other WTO Members, under Article I:1 of the GATT 1994. This
section addresses each of these inconsistencies sep arately below. Section B.1 immediately below
addresses the GI Regulation's inconsistencies with the MFN obligations of the TRIPS Agreement.
Section B.2 then addresses the GI Regulation's inc onsistencies with the MFN obligations of the
GATT 1994.

93 Articles 6(1) - 6(4) of the GI Regulation.
94 Article 4(1) of the GI Regulation.
95 Article 5a of Regulation 2037/93. Exhibit COMP-2.a. As Annex II of this regulation explains,
"[t]he logo will allow producers of food products to increase aw areness of their products among consumers in
the European Union... The presence of this logo is a genuine guarantee for all European consumers, making it
clear that the special nature of this product lies in its geographi cal origin. Because of th is, products will inspire
more confidence. As producers, the logo provides you which [sic] a marketing tool. You will be able to put the
logo on the labels or packaging of your products, and also use it in your advertising." (Emphasis added.)
96 Article 13 of the GI Regulation.
97 Article 13(3) of the GI Regulation.

1. The EC GI Regulations is inconsistent with the EC's most favored nation obligations
with respect to other WTO Member's nationals under the TRIPS Agreement
(a) The TRIPS Agreement requires that any advantag e, favor, privilege or immunity granted to
nationals of any other country be accorded i mmediately and unconditiona lly to the nationals
of all other WTO Members
109. As the Appellate Body recently confirmed, the most favored nation obligation is as significant
and as fundamental to the world trading system as the national treatment obligation:

Like the national treatment obligation, the obligation to provide most-favoured-nation
treatment has long been one of the corner stones of the world trading system. For
more than fifty years, the obligation to provide most-favoured nation treatment in
Article I of the GATT 1994 has been both central and essential to assuring the
success of a global rules-based system for trade in goods. Unlike the national
treatment principle, there is no provisi on in the Paris Convention (1967) that
establishes a most-favoured-nation obligation w ith respect to rights in trademarks or
other industrial property. However, the framers of the TRIPS Agreement decided to
extend the most-favoured nation obligation to the protection of intellectual property
rights covered by the Agreement. As a co rnerstone of the world trading system, the
most-favoured-nation obligation must be acco rded the same significance with respect
to intellectual property rights under the TRIPS Agreement that it has long been
accorded with respect to trade in goods under the GATT. It is, in a word,
fundamental.
98
110. Indeed, the MFN obligation is, if anything, ev en more explicit in its rejection of conditions
such as reciprocity and equivalent internal systems than is the national treatment obligation.

111. Article 4 of the TRIPS Agreement, the MFN obligation, provides that:

With regard to the protection of intellectual property, any advantage, favour, privilege
or immunity granted by a Member to the nationals of any other country shall be
accorded immediately and unconditionally to the nationals of all other Members.
112. The phrase "with regard to the protection of intellectual property" is the same phrase as
appears in the national treatment obligation, and refers, inter alia, to the rights of nationals in matters
pertaining to the availability, acquisition, scope, maintenance, and enforcement of rights in their
geographical indications, as well as those matters affecting the use of geographical indications
addressed in the TRIPS Agreement, i.e., with respect to their ability to protect their geographical
indications from misleading uses and unfair acts of competition. The strong language that all
advantages must be accorded "immediately and unc onditionally to nationals of all other Members"
emphasizes that this MFN provision prohibits making the availability, acquisition, maintenance, and
enforcement of these rights to nationals of other Members contingent on (a) "reciprocity" by other
Members vis-à-vis EC nationals; or on (b) the other Members having a particular system of protection
themselves.

113. The context of these terms confirms this r eading. Within the framework that establishes
strong MFN obligations for the protection of intellect ual property, Article 4 also sets forth a limited
number of particular advantages, favors, privileges, or immunities, which, may, extraordinarily, be
exempted from this obligation. Notably, Article 4(b) specifically exempts from this obligation any
advantage, favor, privilege or immun ity granted in accordance with the Berne Convention for the

98 Appellate Body Report, US – Section 211, para. 297.

Protection of Literary and Artistic Works (1971) and the International Convention for the Protection
of Performers, Producers of Phonogram s and Broadcasting Organizations (1961) ("Rome
Convention") that authorize a Member to depart fro m the general national treatment rule under those
conventions. Certain provisions of these copyright and related right conventions permit that treatment
accorded nationals be a function no t of national treatment, but of the treatment accorded in another
country – i.e., that a Member may in specific cases make the extent of protection for copyrighted
works or the subject matter of related rights depend on the extent of protection in the country of origin
of the work, instead of granting the same extent of protection to all nationals. Other specific
exemptions from the MFN obligation, particularly in the area of copyright and related rights, are laid
out in Article 4.99

114. By contrast, there is no exemption for advant age, favors, privileges, or immunities granted
with respect to rights in geographical indications. The context of the terms in Article 4 therefore
confirms that "reciprocity" is clearly prohibited with respect to GIs.

115. Further, adopted dispute settlement reports under Article I of the GATT 1994 (MFN in the
goods context) provide guidance with respect to this obligation. The GATT panel in Belgian Family
Allowances found a violation of Article I:1 based on Belgium's measure conditioning a benefit to
imported goods – in that case, an exemption fro m a levy collected on purchases of products – on the
adoption by the exporting Member of a system requiring companies to provide family allowance
benefits to its employees that meets specific requirements.
100 The panel found that the exemption was
inconsistent with Article I (and possibly Article III) because "it introduced a discrimination between
countries having a given system of family allowan ces and those which had a different system or no
system at all, and made the granting of the exemption dependent on certain conditions."101

116. In sum, the immediate and unconditional re quirement in the MFN obligation to accord the
same advantages, privileges, favors, or immunities to all nationals of WTO Members with respect to
GIs does not permit Members to condition those advantages on an individual Member having a
particular protection system or being prepared to offer reciprocity.

(b) The EC GI Regulation grants significant adva ntages, favors, privileges, and immunities to
nationals of some countries that it does not accord at all to nationals of WTO Members
117. As discussed above with respect to national treatment, the EC GI Regulation grants numerous
and significant advantages, favors, privileges, and immunities to the nationals of any third country
with respect to their home-based GIs, as long as that country (a) has a GI protection system equivalent
to that of the EC; and (b) provides protection to EC na tionals that is equivalent to that available in the
EC with respect to agricultural products and foodstuff s. Further, these advantages, favors, privileges,
and immunities are available only if that third coun try is willing and able to convince the EC that it
satisfies the EC's requirements with respect to the pr otection of GIs, and, with respect to applications
for the registration of GIs, is willing and able to advocate on behalf of its national vis-à-vis the EC.
102
None of these advantages, favors, privileges, or im munities are available to nationals producing in
their country of nationality, where that country is not willing or able to satisfy these requirements.

118. Consequently, the EC GI Regulation is inc onsistent with the most-favored-nation obligation
of the TRIPS Agreement for the same reasons that it is inconsistent with the national treatment
obligation of the TRIPS Agreement. With respect to the registration and EC-wide protection of GIs,

99 See also Gervais, pp. 105 - 110.
100 Belgian Family Allowances, paras. 3, 8.
101 Belgian Family Allowances, paras. 3, 8.
102 The actions required of WTO Members with respect to GI applications and objections are detailed
in the discussion on national treatment, and will not be repeated here.

as well as the right to object to the registration of GIs, the GI Regulation conditions the protection of
intellectual property rights for a WTO Member's nationals on equivalency and reciprocity, and it
imposes additional hurdles on nationals of some WTO Members that are not imposed on Members of
other WTO Member nationals. With respect to th e latter point, a national from a WTO Member that
already has in place a system of GI protection that is equivalent to the EC's system – recall, however,
that there are many ways of implementing GI obligations, including that used by the EC – is not faced
with the hurdle of developing a new GI protecti on system. A national from other WTO Members,
such as the United States, by contrast, faces this considerable hurdle.
103

119. Indeed, the GI Regulation is inconsistent w ith the MFN obligations of the TRIPS Agreement
in two respects. First, as among non-EC WTO Memb ers, nationals from WTO Members that satisfy
the EC's conditions of reciprocity and equivale ncy are accorded more favorable treatment than
nationals from those WTO Members that do not. In this connection, for example, the EU has signed a
joint declaration on the protection of geographical indications and designations of origin of
agricultural products and foodstuffs with Switzerland, which states that:

The European Community and Switzerland (hereinafter referred to as "the Parties")
hereby agree that the mutual protection of designations of origin (PDOs) and
geographical indications (PGIs) is essential for the liberalization of trade in
agricultural products and foodstuffs between the Parties ... The Parties shall provide
for provisions on the mutual protection of PDOs and PGIs to be incorporated in the
Agreement on trade in agricultural products on the basis of equivalent legislation, as
regards both the conditions governing the re gistration of PDOs and PGIs and the
arrangements on controls.
104
120. Nationals of a WTO Member that does not meet the EC's conditions, by contrast, cannot
expect to have their home-based GIs registered and protected.

121. Second, each of the EC member States is also a WTO Member. Therefore, under Article 4 of
the TRIPS Agreement, any advantage, favor, privilege , or immunity granted by an EC member State
to a national of another EC member State must be accorded immediately and unconditionally to the
nationals of all non-EC WTO Members. Yet, u nder the GI Regulation, for all of the reasons
described in the section of this submission on natio nal treatment, an EC member State grants more
favorable treatment to nationals from other EC me mber States than it accords to nationals from non-
EC WTO Members, with respect to the protection of GIs.

122. In sum, in these two respects, the GI Regul ation accords advantages, favors, privileges, and
immunities to nationals of some countries that it does not accord to nationals of other WTO Members,
despite the Article 4 requirement to accord them "i mmediately and unconditionally to the nationals of
all other Members."

103 In US – Section 211, para. 314, the Appellate Body incorporated and applied the "additional hurdle"
analysis used in analyzing the national treatment claim in its analysis of the MFN claim.
104 Agreement between the European Community and the Swiss Confederation on trade in agricultural
products - Final Act - Joint Declarations, including Joint Declaration on the protection of geographical
indications and designations of origin of agricultural products and foodstuffs, OJ L 114 , April 30, 2002, p. 366.
Exhibit US-6.

2. The EC GI Regulation is inconsistent with the EC's most favored nation obligations with
respect to goods of other WTO Members under the GATT 1994
(a) Article I:1 of the GATT 1994 requires that an y advantage, favor, privilege, or immunity
granted to any product originating in any other country be accorded immediately and
unconditionally to the like product originating in the territories of all other WTO Members
123. Article I:1 of the GATT 1994 provides that:

with respect to all matters referred to in paragraphs 2 and 4 of Article III, any
advantage, favour, privilege or immunity granted by any contracting party to any
product originating in or destined for any other country shall be accorded
immediately and unconditionally to the like products originating in or destined for the
territories of all other contracting parties.105
124. "Matters referred to in para graphs 2 and 4 of Article III" in clude, with respect to imported
products, "laws, regulations, and requirements affecting their internal sale, offering for sale, purchase,
transportation, distribution or use." As discussed above in the context of national treatment, the GI
Regulation is such a measure.

125. Further, the "like products" requirement is satisfied in the case of the EC GI Regulation,
because, as discussed in the context of national treat ment, the GI Regulation makes distinctions based
solely on the origin of the product.

126. Therefore, Article I:1 of the GATT 1994 requi res that any advantage, favor, privilege, or
immunity granted by the EC GI Regulation to agricu ltural products and foodstuffs originating in any
country be accorded, immediately and unconditionally
 to the agricultural products and foodstuffs
originating in the territories of all other WTO Members.

(b) The EC GI Regulation grants significant adva ntages, favors, privileges, and immunities to
agricultural products and foodstuffs originating in some countries that it does not accord to
like products originating in the territories of all WTO Members
127. The EC GI Regulation does not satisfy the requirements of Article I:1 of the GATT 1994.
Rather, the Regulation grants significant advantag es, favors, privileges and immunities to products
from a third country only if that country (a) has a GI protection system equivalent to that of the EC
and (b) provides protection to EC nationals that is eq uivalent to that available in the EC with respect
to agricultural products and foodstuffs. These significant advantages, favors, privileges, and
immunities have been detailed elsewhere, and includ e the ability to be marketed as a quality product
of identifiable geographic origin, the right to be ma rketed with a coveted EC GI symbol, protection,
including at the authorities' own initiative, agains t a broad range of competing uses of the product's
geographical indication, and protection against th e geographic indication becoming generic (and thus
losing its value). These are all advantages, favors, privileges, and immunities that are granted to the
products of third countries that meet the conditions of reciprocity and equivalent GI systems, as
determined by the EC. The Regulation does not a ccord these advantages, favors, privileges, and
immunities to the products of any third country that does not meet these conditions, despite the
Article I:1 requirement to accord them "immediatel y and unconditionally to the nationals of all other
Members." Rather, it accords them to imported goods "subject to conditions with respect to the
situation or conduct of"
106 WTO Members, discriminating against like products based on the origin of
the product. Further, it imposes an "extra hurdl e" on imported goods from some WTO Members that

105 Reference to Notes and Supplementary Provisions in Annex I omitted.

it does not impose on imported goods from other WTO Members, as detailed in the preceding
sections.

128. This conclusion is in accord with GATT and WTO dispute settlement reports going back to
the earliest days of the GATT. A GATT panel in Belgian Family Allowances found a violation of
Article I:1 based on an exemption from a fee that was available only with respect to products from
countries that required its companies to offer a sp ecific family allowance benefit that satisfied
requirements of Belgian law. That panel found th at the fee exemption "would have to be granted
unconditionally to all other contracting parties."
107

The consistency or otherwise of the system of family allowances in force in the
territory of a given contracting party with the requirements of the Belgian law would
be irrelevant in this respect, and the Belg ian legislation would have to be amended
insofar as it introduced a discrimination be tween countries having a given system of
family allowances and those which had a different system or no system at all, and
made the granting of the exemption dependent on certain conditions.108
129. Similarly, in this dispute, the GI Regula tion "introduce[s] a discrimination between countries
having a given system of [GI protection] and those which ha[ve] a different system." Consequently,
for all of the reasons above, the GI Regulation is inconsistent with Article I:1 of the GATT 1994.
Further, this discrimination is not excused by any of the exceptions under Article XX of the GATT
1994.

C. THE EC GI REGULATION IS INCONSISTENT WITH THE EC'S OBLIGATIONS UNDER
ARTICLE 16.1 OF THE TRIPS AGREEMENT
1. Introduction
130. Article 16.1 of the TRIPS Agreement requir es Members to give owners of registered
trademarks the exclusive right to prevent confusing uses of simila r or identical signs by all third
parties:

The owner of a registered trademark shall ha ve the exclusive right to prevent all third
parties not having the owner's consent from using in the course of trade identical or
similar signs for goods or services which are id entical or similar to those in respect of
which the trademark is registered where such use would result in a likelihood of
confusion. In case of the use of an identical sign for identical goods or services, a
likelihood of confusion shall be presumed.
131. Contrary to this obligation, and as explained in detail below, the EC GI Regulation fails to
provide the owner of a valid prior registered tradem ark with the exclusive right to prevent all third
parties (including those entitled to use a registered GI ) from using identical or similar signs (including
GIs) that result in a likelihood of confusion.
109 This shortcoming is directly inconsistent with the EC's
obligations under Article 16.1 of the TRIPS Agreement.

107 Belgian Family Allowances, para. 3.
108 Belgian Family Allowances, para. 3.
109 In fact, even in a case where the GI is presented as a sign that is identical to a registered trademark
and is being used fo r an identical good (where, under the TRIPS Agreement, a likelihood of confusion is
presumed), under the GI Regulation, the owner of the registered trademar k is powerless to prevent that sign
from being used in the course of trade.

2. The US argument in light of the relationship between trademark rights and GI rights
132. In many ways, GIs and trademarks serve the same function, in that they both are "source"
indicators and can therefore serve as indicators of quality. They both aim to prevent consumers from
being misled or confused as to whether the go ods they buy possess the anticipated qualities and
characteristics.110 Moreover, they both may take a similar physical form, prominently displayed on
labels and in advertising materials. On the on e hand, trademarks indicate the source of goods as a
particular undertaking ( e.g., a producer or group of producers). 111 On the other hand, geographical
indications indicate the source of the goods as a particular geographic area, where a quality,
reputation, or other characteristic of the good is essentia lly attributable to that origin. Both forms of
intellectual property are aimed at distinguishing go ods so that the consumer can make informed
judgments about the goods they buy.

133. In addition, the TRIPS Agreement bestows each with a certain degree of exclusivity. Both
trademark owners and GI owners
112 have the right to exclude others from certain uses of signs or
indications. The right for trademark owners under Article 16.1 of the TRIPS Agreement is the right to
exclude all others (including those entitled to use a registered GI) from using identical or similar signs
(including GIs) for the same or similar goods in a way that results in a likelihood of confusion as to
the source of the goods. Under Article 22.2 of the TR IPS Agreement, the right for GI owners is to
prevent uses (including of trademarks) that mislead the consumer as to the geographic origin of the
goods or constitute an act of unfair competition. 113 There is nothing inconsistent in these two
obligations, and each should be given its full sc ope in a manner that does not bring them into
conflict.114

134. With the distinctions and similarities betw een these two categories of intellectual property
rights in mind, the United States argues in this disput e that the EC GI Regulation is inconsistent with
Article 16.1 of the TRIPS Agreement because, under the EC GI Regulation, owners of prior registered
trademarks cannot prevent all third parties from using identical or similar signs on the same or similar
goods for which the trademark is registered, even where there is a likelihood that the consumer will be
confused. Under Article 14(2) of the GI Regulation, the best that the owner of a valid prior registered
trademark can hope for is the ability to continue using its trademark, but without the ability to
exercise the exclusive right that lies at the heart of his trademark right. This is inconsistent with
Article 16.1 of the TRIPS Agreement.

135. The United States is concerned in this disput e with the trademark rights provided owners of
valid prior trademarks under Article 16.1 of the TR IPS Agreement. For example, as stated at the
outset of this submission, under Article 16.1, the owne r of a registered trademark has to be able to

110 And, indeed, among the varied means of satisfying the TRIPS Agreement obligations with respect
to geographical indications, a number of WTO Members have chosen to protect geographical indications
through their trademark system, notably through the use of certification marks and collective marks. See WIPO
Document SCT/8/4 (Exhibit US-5) and WIPO Document SCT/9/4 (Exhibit COMP-16).
111 See Article 15.1 of the TRIPS Agreement.
112 i.e., the collective body of authorized users of the GI.
113 In addition, Article 22.3 of the TRIPS Agreement provides that Members must refuse or invalidate
the registration of a trademark consisting of a GI that misleads the public as to the true origin of the product .
Note also that Article 23.2 of the TRIPS Agreement provides for the refusal or invalidation of certain
trademarks for wine and spirits that contain or consist of a geographical indication. Since the GI Regulation
does not apply to wine and spirits, however, this provision is not directly relevant to this dispute.
114 As recognized by the panel in Indonesia – Autos, para 14.28, "in public international law there is a
presumption against conflict," which "is especially rele vant in the WTO context since all WTO agreements ...
were negotiated at the same time, by the same Members and in the same forum." Footnotes omitted. Of course
individual GIs that are identical or sim ilar to trademarks may, however, "conflict" in the sense that the GI may
be confusing consumers.

take action against another producer selling an iden tical product, labeled with an identical name
(protected as a geographical indication after the trademark registration), on the same shelf as the
trademark owner's trademarked product. The GI Regulation does not allow him to do this. The
United States is not arguing that trademarks that "m islead the public as to the true place of origin" of
the underlying goods in a given territory must be re gistered and provided Article 16.1 rights in that
territory.
115 Rather, the US argument is narrow in focus, but critical: where a valid prior registered
trademark exists, the owner of that trademark mu st, under Article 16.1, be able, through judicial
proceedings or otherwise, to prevent all third pa rties from using a GI when the trademark owner can
demonstrate that the GI is identical or similar to the trademark for identical or similar goods, and is
used in a manner that is likely to confuse the c onsumer as to the source of the goods. As discussed
below, the EC GI Regulation is inconsistent with this obligation.

136. In section 3 below, the United States describes the obligation to provide an exclusive right to
prevent confusing uses under Article 16.1 of the TRIPS Agreement and explains why the exclusive
right to prevent confusing uses is the essence of th e trademark rights under the TRIPS Agreement.
Section 4 then describes how the EC GI Regulation is inconsistent with this Article 16.1 obligation.

3. Article 16.1 of the TRIPS Agreement requires Members to provide the owners of
registered trademarks with the exclusive right to prevent all
 third parties from using
identical or similar signs resulting in a likelihood of confusion
(a) Ordinary meaning of the terms in Article 16.1
137. Article 16.1 provides that:

The owner of a registered trademark shall ha ve the exclusive right to prevent all third
parties not having the owner's consent from using in the course of trade identical or
similar signs for goods or services which are id entical or similar to those in respect of
which the trademark is registered where such use would result in a likelihood of
confusion. In case of the use of an identical sign for identical goods or services, a
likelihood of confusion shall be presumed.
116
138. The ordinary meaning of the terms in Article 16.1 confirms the breadth and strength of the
rights that must be accorded owners of registered trademarks. "Prevent" means to "[s]top, hinder,
avoid", and "[c]ause to be unable to do ... something." 117 "All" means the "entire number of" and
"without exception". 118 "Exclusive" means "[n]ot admitting of the simultaneous existence of
something; incompatible" and "[o]f a right, privil ege, quality, etc.; possessed or enjoyed by the
individual(s) specified and no others."119

139. Further, the ordinary meaning of Article 16.1 shows that geographical indications are
included among the "signs" whose use an owner of a re gistered trademark must be able to prevent.
"Sign" has a broad meaning, as indicated in Article 15.1 of the TRIPS Agreement, which includes as
particular examples of signs "words, including person al names, letters, numerals, figurative elements,
and combinations of colours." The ordinary meaning of "sign" confirms this broad meaning: a "mark,
symbol or device used to represent something or distinguish the object on which it is put"; "an

115 See Article 22.3 of the TRIPS Agreement. Further, under Article 22.2 of the TRIPS Agreement,
with respect to GIs, interested parties must be provided the legal means to prevent us es that mislead the public
as to the geographical origin of the good.
116 Emphasis added.
117 The New Shorter Oxford English Dictionary (4th ed 1993), p. 2348 (Exhibit US-7).
118 The New Shorter Oxford English Dictionary (4th ed 1993), p. 52 (Exhibit US-7).
119 The New Shorter Oxford English Dictionary (4th ed 1993), p. 875 (Exhibit US-7).

indication or suggestion of a present state, fact, quality, etc." 120 Similarly, "indication", which is part
of the TRIPS Agreement Article 22.1 definition of "geographical indication" is "something that
indicates or suggests; a sign, a symptom, a hint." 121 In short, the fact that "sign" is a broad term, and
specifically includes an "indication", along with the fact that the ordinary meaning of "indication"
includes a "sign", confirms that geographical indica tions are signs, the confusing use of which owners
of registered trademarks must be able to prevent under Article 16.1.
122

140. The ordinary meaning of the terms in Article 16.1, therefore, confirms that the owner of a
registered trademark must, under Article 16.1, have the exclusive right to stop

all third parties ( i.e., the entire number of third parties, without exception, including
third parties producing products that use a GI),
from using in the course of trade identical or similar signs (i.e., including identical or
similar geographical indications, that is, "indications" that identify a good as
originating in a particular geographic area wh ere "a given quality, reputation, or other
characteristic of [that] good is essentially attributable to " that geographic area) for
goods or services which are identical or simi lar to those in respect of which the
trademark is registered,
where such use would result in a likelihood of confusion.
(b) The context of the terms in Article 16.1
141. The context of Article 16.1 confirms the ordina ry meaning of these terms. Where there is a
need to clarify the relationship among individual rights in geographical indications and trademarks,
the TRIPS Agreement does so explicitly. For instance, Article 22.3 of the TRIPS Agreement provides
that protection of a geographical indication requ ires that a Member "refuse or invalidate the
registration of a trademark" in certain specific inst ances where the trademark consists of or includes a
geographical indication and its use would mislead the consumer as to the origin of the goods.
123

120 The New Shorter Oxford English Dictionary (4th ed 1993), p. 2858 (Exhibit US-7).
121 The New Shorter Oxford English Dictionary (4th ed 1993), p. 1348 (Exhibit US-7).
122 Notwithstanding the GI Regulation, the EC's own Community Trademark Regulation reflects this.
Article 4 of that regulation defines a trademark to "consist of any signs" and the preamble states that the
function of a trade mark is to "guara ntee the trade mark as an indication of origin." Council Regulation (EC)
No. 40/94 of 20 December 1993 on th e Community Trademark, OJ L 11, Ja nuary 14, 1994, p. 1 ("Regulation
40/94 on the Community Trademark"). See also Article 2 of the First Council Directive of 21 December 1988
to approximate the laws of the Memb er States relating to registered trademarks (89/104/EEC), OJ L 40,
February 2, 1989, p. 1. Exhibits COMP-6 and COMP-7.a.
123 Article 22.3 of the TRIPS Agreement requires the refusal or invalidation of a trademark registration
"which contains or consists of a geographical indicati on with respect to goods not originating in the territory
indicated, if use of the indication in the trademark for such good s in that Member is of such a nature as to
mislead the public as to the true place of origin." This reflects princi ples that were alr eady included in the
domestic trademark law of WTO Members. See, e.g., Regulation 40/94 on the Community Trademark,
Article 7(1)(g) ("The following shall not be registered: ... trademarks which are of such a nature as to deceive
the public, for instance as to the ... geographical origin of the goods or services") (Exhibit COMP-7.a); First
Council Directive 89/104/EEC Article 3(1)(g) ("The following shall not be registered or if registered shall be
liable to be declared invalid: ... trademarks which are such a nature as to deceive th e public, for instance as to
the ... geographical origin of the good s or services.") (Exhibit COMP-6). Th e principle these provisions reflect
is not a superiority of geographical indications over trademarks, but a desire to protect the public or consumers
from being misled.

142. The Appellate Body has made clear, e.g., in EC – Sardines , that any exception to an
obligation must be explicitly set out in the text of the Agreement.
124 Indeed, where the TRIPS
Agreement negotiators meant to sp ecify an exception to, or a limit on, geographical indication and
trademark rights, they did so explicitly. Article 24.5, for example, is an exception to the protection of
geographical indications
125 that specifies that a Member's measures to protect geographical indications
under the TRIPS Agreement shall not prejudice eligibilit y for or the validity of the registration of a
trademark, or the right to use a trademark. It appli es to trademarks that were applied for or registered,
or whose rights have been acquired thr ough use either before January 1, 1996, 126 or before the
geographical indication is protected in its country of origin. In other words, where implementation of
the GI provisions of the TRIPS Agreement might otherwise have prejudiced "eligibility for or the
validity of the registration ... or the right to use a trademark" – and Article 23.2, which requires the
invalidation of wine and spirit trad emark registrations that contain or consist of wine or spirit GIs,
might be an example of such a case – Article 24.5 would prevent that result for, or would
"grandfather", those trademarks covered by its terms.

143. Similarly, when a conflict between rights to exclude must result in a compromise, the TRIPS
Agreement negotiators were also careful to spell this out. For instance, because GIs are a specific
type of sign linked to geographic origin, the TRIPS Agreement contemplates some instances where
two identically named places exist and therefore wh ere two similar geographical indications may be
used simultaneously under conditions set by the Me mbers. Article 23.3 of the TRIPS Agreement
provides for the situation where two different GI s for wine have the same name: "homonymous
geographical indications". Article 23.3 provides that "protection shall be accorded to each
indication", but that "[e]ach Member shall de termine the practical conditions under which the
homonymous indications in question will be differe ntiated from each other, taking into account the
need to ensure equitable treatment of the producer s concerned and that consumers are not misled."
No such provision exists allowing Members to permit continued use of a GI that is identical or similar
to a valid prior registered trademark that would result in a likelihood of confusion, in the face of an
infringement challenge by the trademark owner.

144. In sum, the ordinary meaning of the terms in Article 16.1, confirmed by their context,
demonstrates that owners of registered trademarks must be given the exclusive right to prevent all
third parties, including those authorized to use GI s, from using in the course of trade similar or
identical signs, including geographical indications, for goods or services that are identical or similar to
those covered by the trademark registration, where such use would result in a likelihood of confusion.

(c) The object and purpose of the TRIPS Agreement with respect to Article 16.1
145. Further, Article 16.1 must also be read in light of the object and purpose of the TRIPS
Agreement, and specifically with respect to Article 16.1 and its grant of exclusive rights. The
Appellate Body in US – Section 211 emphasized the importance of the exclusive nature of these
rights, finding that Article 16.1 confers on the owne r of "registered trademarks an internationally
agreed minimum level of 'exclusive rights' that all WTO Members must guarantee in their domestic

124 Appellate Body Report, EC – Sardines, paras. 201 - 208.
125 Article 24, in section 3 of the TRIPS Agr eement – "Geographical Indications" – is entitled
"International Negotiations; Exceptions". It should be noted here that Article 17 of the TRIPS Agreement
contains a general provision that permits Members to provide "limited exceptions" to the rights conferred by a
trademark, such as fair use of descriptive terms, but any such limited exceptions "must take account of the
legitimate interests of the owner of the trademark and of third parties." The EC GI Re gulation does not qualify
as a "limited" exception, because there is no limit placed on the permitted uses of registered GIs that are
identical or similar to prior valid re gistered trademarks. Further, the GI Regulation does not take into account
the legitimate interest of the trademark owner.
126 Article 24.5 specifies the date of application of the TRIPS Agreement provisions, which, for the
European Communities, is January 1, 1996.

legislation", and that these exclusive rights "protect the owner against infringement of the registered
trademark by unauthorized third parties."127

146. Indeed, EC jurisprudence, like that of the United States, recognizes that trademark exclusivity
– the right of the owner of a registered trademark to prevent the use of a similar or identical sign that
would result in a likelihood of confusion – is the core of a trademark right. For example, Advocate
General Jacobs of the European Court of Justice stated in the Hag-II case that:

A trademark can only fulfil that role [ i.e.,to identify the manufacturer and to
guarantee quality] if it is exclusive. Once th e proprietor is forced to share the mark
with the competitor, he loses control over the goodwill associated with the mark. The
reputation of his own goods will be harmed if the competitor sells inferior goods.
From the consumer's point of view, equa lly undesirable consequences will ensue,
because the clarity of the signal transmitted by the trademark will be impaired. The
consumer will be confused and misled.
128
147. These principles have been consistently follow ed by the European Court of Justice, which
held, for instance, in Bristol-Myers Squibb v. Paranova A/S, that:

As the Court has recognized on many occasions, the specific subject matter of a
trademark is in particular to guarantee to th e owner that he has the exclusive right to
use that trademark …
129
148. As detailed below, the GI Re gulation is an abrupt deviation from this jurisprudence in the EC.
Maintenance of the principle underlying this juri sprudence would benefit nationals of all WTO
members that are trademark owners in the EC – including nationals of the EC.

149. That the exclusivity of a trademark owner's ri ght is the core of trademark rights has similarly
been emphasized by the US Supreme Court. The Court held in 1916 that "the right to use a trademark
is recognized as a kind of property, of which the ow ner is entitled to the exclusive enjoyment to the
extent that it has actually been used."
130 That early judgment was fully endorsed in the 1999 decision
in College Savings Bank v. Florida Pre paid Postsecondary Education Expense Board , in which the
Court stated that "[t]he hallmark of a protected propert y interest is the right to exclude others. That is
one of the most essential sticks in the bundle of rights that are commonly characterized as
property."131

150. In sum, Article 16.1 enshrines a principle of trademark protection recognized in the
jurisprudence of both the United States and the EC, and imposes an obligation on Members that
reflects the vital importance to trademark owners of exclusivity in the use of their trademarks.

127 Appellate Body Report, United States – Section 211, para. 186.
128 Advocate General's Opinion in Case C-10/89, SA CNL-Sucal NV v. HAG GFAG, delivered on 13
March 1990 [1990] ECR I-3711, at para. 19. Exhibit US-8.
129 C-427/93, Bristol-Myers Squibb and others v. Paranova , [1996] ECR I-3457, at para. 44 (Exhibit
US-9); see also Advocate General's Opinion in Case C-517/99, Merz & Krell GmbH & Co. KG, delivered on 18
January 2001, [2001] ECR I- 6959, at paras 31, 42 ((Exhibit US-10); C-349/95, Frits Loendersloot and George
Ballantine & Son Ltd. , [1997] ECR I-6227, at para. 24 ((Exhibit US-11); Advocate General's Opinion in Case
C-425/98 – Marca Mode CV. v. ADIDAS AG and ADIDAS Benelux B.V. , delivered on 27 January 2000, [2000]
ECR I-4861, at para. 34 (Exhibit US-12).
130 US Supreme Court, Hamilton-Brown Show Co. v. Wolf Brothers & Co., 240 US 251, 272 (1916).
Exhibit US-13.
131 US Supreme Court, College Savings Bank v. Florida Prepaid Postsecondary Education Expense
Board, 527 US 666, 667 (1999). Exhibit US-14.

(d) Conclusion with respect to the meaning of Article 16.1
151. In light of the clear obligation under Article 16.1, contained in the ordinary meaning of its
terms, in their context, and in light of the object and purpose of the TRIPS Agreement, it is plain that
the owner of a registered trademark must be given the exclusive right to prevent all third parties,
including those authorized to use GIs, from using in the course of trade similar or identical signs,
including geographical indications, for goods or servi ces that are identical or similar to those covered
by the trademark registration, where such use would result in a likelihood of confusion.

4. Contrary to Article 16.1 of the TRIPS Ag reement, the EC GI Regulation does not
permit owners of registered trademarks to exercise their Article 16.1 exclusive rights to
prevent confusing uses
(a) The text of the EC GI Regulation makes clear that owners of registered trademarks are not
permitted to exercise their Article 16.1 rights
152. The EC GI Regulation denies owners of regi stered trademarks their right under Article 16.1
of the TRIPS Agreement to prevent confusing uses of similar or identical signs.

153. Article 4(1) of the EC GI Regulation provid es that an agricultural product or foodstuff that
complies with the specification filed with a GI regist ration – and only that product – is eligible to use
a protected geographical indication, i.e., the name of a qualifying region, specific place, or country.
132
Article 13 of the GI Regulation provides that na mes registered under that Regulation "shall be
protected against" a broad range of uses or practices by those not authorized to use the name under the
GI Regulation.

154. By contrast, nothing in the GI Regulation provides that the use of the GI can be limited in any
way by the owner of a valid prior registered tr ademark who wishes to exercise his exclusive right
under Article 16.1 of the TRIPS Agreement – that is, the right to prevent the use of a geographical
indication in a manner that is likely to confuse th e consumer as to the source of a product identified
with the earlier trademark. Nor is there any discretion provided under the EC GI Regulation to
prevent or limit uses of EC-registered GIs by qualif ied GI users, except in the case of a homonymous
use.
133

155. To the contrary, Article 14 of the EC GI Regulation reinforces that owners of registered
trademarks are denied their rights under Article 16.1 of the TRIPS Agreement. Most obvious is
Article 14(2), which addresses the situation of a trademark right that predates the GI right,
134 but
where the use of the trademark creates one of the si tuations against which registered GI names are to
be protected under Article 13 of the GI Regulation – e.g., the prior registered trademark "evokes" the
later-registered GI name, in the terminology of Article 13. Under Article 16.1 of the TRIPS
Agreement, if the use of the later GI in connection with identical or similar goods is likely to confuse
the consumer as to the producer of the goods, then the owner of the registered trademark should have
the exclusive right to prevent that confusing use by the GI owner. The EC GI Regulation should
reflect this.

156. The EC GI Regulation, however, takes a very different approach. Far from providing that the
owner of a prior registered trademark has the right to prevent confusing uses, as is required by

132 Article 2.2(b) of the GI Regulation (definition of "geographical indication").
133 Article 6(6) of the GI Regulation.
134 Under the EC GI Regulation, this is a trademark that acquires rights (by application, registration, or,
where permitted, by use) before either (1) a GI registra tion application has been submitted to the EC; or (2) the
GI is protected in its country of origin.

Article 16.1, the GI Regulation, as a narrow exception to the general GI right to prevent a broad range
of uses, simply permits the registered trademark holder to keep using his trademark "notwithstanding"
the later GI registration. To be precise, Article 14( 2) provides that such a trademark that predates the
GI registration "may continue to be used notwithstanding
 the [later] registration of a ... geographical
indication". (Emphasis added.)

157. In other words, Article 14(2) specifically e nvisions that, even in cases where use of a GI
raises a likelihood of confusion within the meani ng of Article 16.1 of the TRIPS Agreement, the
product that is marketed and labeled with that GI can be sold alongside a similar or the same product
that has been marketed and labeled with an identical or similar valid prior registered trademark. The
owner of the trademark will have no ability to exercise his TRIPS Agreement Article 16.1 rights to
prevent any confusing use by the later-registered GI . As discussed above, however, the right to use a
trademark without the right to exclude others fro m confusing uses would mean practically nothing,
since the whole purpose and value of a trademark is to be able to distinguish one company's goods
from the goods of other companies; without the ability to stop confusing uses, this value is eliminated.
As Advocate General Jacobs of the European Cour t of Justice wrote, a trademark's role can be
fulfilled "only if it is exclusive. Once the proprieto r is forced to share the mark with the competitor,
he loses control over the goodwill associated with th e mark... From the consumer's point of view,
equally undesirable consequences will ensue, becau se the clarity of the signal transmitted by the
trademark will be impaired. The consumer will be confused and misled."135

158. Article 14(3), the sole provision in the EC GI Regulation that addresses the confusing use of
registered GIs vis-à-vis trademarks, underscores the limited imp act that trademarks can have on GIs
under the GI Regulation. Article 14(3) provides that a GI shall not be registered "where, in the light
of a trade mark's reputation and renown and the length of time it has been used, registration is liable to
mislead the consumer as to the true identity of the product." 136 In other words, under the EC GI
Regulation, trademark rights are fully respected onl y where the trademark has been used for a long
time, and has considerable "reput ation and renown". There is no guidance in the GI Regulation with
respect to this standard.

159. The exclusive right under Article 16.1 to prev ent confusing uses, however, is not limited to
owners of long-standing trademarks of reputation and renown, however this is interpreted. Rather, it
is an exclusive right the Members must provide to all
 owners of valid prior registered trademarks,
regardless of time of use, or of the trademark's reputation and renown.

160. In light of the EC GI Regulation, the EC trademark rules give no comfort that trademark
owners' Article 16.1 rights will be respected. The EC trademark rules
137 generally provide for the
rights required by Article 16.1 of the TRIPS Agreement. However, the EC Trademark Regulation, for
example – which provides for a multinational tradem ark right across the EC – specifically undercuts
these rights with respect to confusing geographical i ndications by stating, at Article 142, that the
Trademark Regulation "shall not affect" the EC GI Regulation (which in parallel provides for a
multinational GI right across the EC), and "in particular Article 14 thereof." Moreover, by operation
of law, trademark law rights under the laws of th e EC member States cannot contradict the provisions
of EC regulations, including the Trademark Regulat ion and the GI Regulation. Article 249 of the
Treaty Establishing the European Community states that a regulation "shall be binding in its entirety

136 Emphasis added.
137 Council Regulation (EC) No 40/94 of 20 D ecember 1993 on the Community Trademark
("Regulation 40/94 on the Community Trademark") and the First Council Directive of 21 December 1988 to
approximate the laws of the Member States relating to registered trademarks (89/104/EEC). Exhibits COMP-
7.a and COMP-6.

and directly applicable in all [m]ember States."
138 Consequently, if there is a conflict between
domestic trademark law and the EC GI Regulation, the EC GI Regulation prevails.139

161. In sum, under the EC GI Regulation, those who qualify to use a GI with respect to particular
products have a right to use that GI, even if that use results in a likelihood of confusion with respect to
a prior registered trademark. The best that the trademark holder can hope for, under these
circumstances, is continued use of his trademark on his own goods in the course of trade. But as the
jurisprudence quoted above points out, the right to use a registered trademark means nothing if the
owner of that trademark cannot exercise his exclusiv e right to prevent the use of the same or similar
signs on the same or similar goods that is likely to r esult in confusion. For this reason, Article 16.1 of
the TRIPS Agreement requires Members to provide these exclusive rights in respect of all
 third
parties.

(b) The EC's explanations of the GI Regulation and the circumstances surrounding its coming
into force confirm that the GI Regulation prevents owners of registered trademarks from
exercising their Article 16.1 rights
162. In various published explanations of the GI Regulation, the EC has emphasized the right of
GI owners to use the GI and the fact that conflictin g trademarks will only be able to be used alongside
such GIs, provided that the trademarks remain valid. This confirms the above reading of the text that,
under the GI Regulation, the best the trademark holder can hope for is to be able to continue to use his
trademark alongside the confusing GI.

163. For instance, Advocate General Jacobs of the European Court of Justice has explained that
"Article 14(2) is designed to allow a prior tradem ark to co-exist with a subsequently registered
conflicting designation of origin provided that the trade mark was registered in good faith."
140
Advocate General Jacobs concluded that, in light of a subsequently registered geographical indication,
the "use of the name" protected by a registered trad emark can "be allowed to continue pursuant to
Article 14(2) of the regulation", but only if the additional requirements of Article 14(2) have been
met.141 In addition, a publication of the European Commission opines that the TRIPS Agreement only
provides that a valid prior trademark will "exist al ongside the" later-registered identical or similar

138 Consolidated Version of the Treaty Establishing the European Community, Article 249.
Exhibit US-15.
139 See, e.g., Judgment of the European Court of Justice in Simmenthal II, in which the Court stated as
follows:
[I]n accordance with the principle of the precedence of Community law, the relationship between
provisions of the Treaty and directly applicable measures of the institutions on the one hand and
national law of the Member States on the other is such that those provisions and measures not only by
their entry into force render automatically inapplicable any conflicting provision of current national law
but - in so far as they are an integral part of, a nd take precedence in, the legal order applicable in the
territory of each of the Member States - also preclude the valid adoption of new national legislative
measures to the extent to which they would be incompatible with Community provisions.

Case 106/77, Amministrazione delle Finanze dello Stato v. Simmenthal SpA , [1978] ECR 629, at para.
17. Exhibit US-16.

140 Opinion of Advocate General's Opinion in Case C-87/97, Consorzio per la Tutela del Formaggio
Gorgonzola v. 1. Käserei Champignon Hofmeister GmbH & Co. KG, Heising, Germany 2. Eduard Bracharz
Gesellschaft mbH, Vienna, Austria , delivered on December 17, 1998, para. 51. Exhibit US-17. The advocates
general assist the European Court of Justice by providing "reasoned opinions on the cases brought before the
court", opinions that the judges consider when drafting the ultimate ruling. See "European Union institutions
and other bodies, The Court of Justice", <http://europa.eu.int/institutions/court/index_en.htm>. Exhibit US-18.
141 Id., para. 58.

geographical indication.142 Indeed, the EC has specifically ch aracterized the relationship between a
geographical indication and a previously registered trademark in this situation as "coexistence", and
states that "... the TRIPs [Agreement] ... clearly envisages coexistence."143

164. Moreover, the EC has explained to the TRI PS Council that once a geographical indication is
registered pursuant to the GI Regulation, "everybo dy who meets the established criteria has the right
to use the geographical indication."
144 There was no suggestion of any limitation on that right with
respect to any prior registered trademark owners. Further, in the proposal that ultimately led to an
amendment to the EC GI Regulation in April 2003,145 the Commission explained that Article 14 offers
a trademark no more than the "possibility of co-existence."146

165. Thus, far from offering any comfort that th e GI Regulation preserves Article 16.1 trademark
rights, these numerous explanations confirm the opposite conclusion.

166. This conclusion is even further buttressed by the unfortunately ill-fated attempt by the
European Parliament to address the problem created by denying trademark owners their exclusive
right to prevent confusing uses of signs under EC law. The Committee on Legal Affairs and the
Internal Market of the European Parliament was crit ical of Article 14(2) of the GI Regulation for the
very reasons identified in this submission: under Ar ticle 14(2), trademark owners lose their right to
prevent all third parties from using a similar or identi cal sign that results in a likelihood of confusion.
That Committee stated:

To deprive a trademark owner of the exclusive right conferred by Community
trademark law by obliging him to allo w a similar designation of origin or
geographical indication, such as is likely to cause confusion, to coexist with the
trademark is tantamount to expropriation. Given that the regulation makes no
provision to compensate trademark owners , such expropriation would constitute
illegal confiscation.
147
167. The proposed amendment by the Committe e on Legal Affairs w ould have added the
following language, in relevant part, to the end of Article 14(2):

142 TRIPS Agreement – Geographical Indications, Official Publication of the European Commission,
p. 23. Exhibit US-19.
143 European Commission, Directorate General Trad e, Report to the Trade Barriers Regulation
Committee, TBR Proceedings concerning Canadian practices affecting Community exports of Prosciutto di
Parma, p. 35 (1999). Exhibit COMP-13.
144 Review Under Article 24.2 of the Application of the Provisions of the Section of the TRIPS
Agreement on Geographical Indications, Responses to the Checklist of Questions, Addendum, Council for
Trade-Related Aspects of Intellectual Property Rights, IP/C/W/117/Add.10 (26 March 1999), p. 13 (EC
response to question 36). The EC has also explained that "a geographical indication must be used [in order to
maintain rights]." Id. at p. 12 (response to question 30).
145 Council Regulation (EC) No 692/2003 of 8 April 2003 amending Regulation 2081/92, OJ L 99,
July 14, 2003, p. 1. Exhibit COMP-1.h.
146 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, presented by the
Commission of the European Communities, 2002/0066 (Brussels, March 15, 2002), p. 4. Exhibit US-20.
147 Opinion of the Committee on Legal Affairs and the Internal Market for the Committee on
Agriculture and Rural Development 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, European Parliament, 2002/0066(CNS) (10 September 2002), p. 14. Exhibit US-21. See also
Exhibit COMP-14.

This Regulation shall be without prejudice to the right accorded under the laws of the
Member States and/or Council Regulation (EEC) No 40/94 of 20 December 1993 on
the Community trade mark to bring proceedings for infringement of the right
embodied in a trade mark conforming to the conditions set out in the first sentence of
this paragraph on account of the use of a designation of origin or geographical
indication subsequent to that trade mark, be it under the civil, administrative, or
criminal law of the Member States.
148
168. This proposed amendment would have inco rporated the substantive disciplines of EC
trademark law into the GI Regulation, thereby pr oviding for the ability of trademark owners to
exercise their exclusive rights. In particular, the amendment would have provided for the rights of the
owner of a valid prior registered trademark to prev ent the use of a similar or identical geographical
indication when such use would result in a likelihood of confusion with the trademark.

169. Unfortunately, the amendment was not adopted, and the defect in the EC GI Regulation
remains in place.

5. Conclusion with respect to the GI Regulation's inconsistency with Article 16.1
170. To conclude, TRIPS Article 16.1 requires that owners of registered trademarks have the
exclusive right to prevent confusing uses by others . The EC GI Regulation does not permit owners of
registered trademarks to exercise those rights. Therefore, the EC GI Regulation is inconsistent with
the EC's obligations under Article 16.1 of the TRIPS Agreement.

D. T
HE EC GI REGULATION IS INCONSISTENT WITH ARTICLE 22.2 OF THE TRIPS AGREEMENT
171. Article 22.2 of the TRIPS Agreement requires that "[i]n respect of geographical indications,
Members shall provide the legal means for interested parties to prevent:

(a) the use of any means in the desi gnation or presentation of a good that
indicates or suggests that the good in question originates in a
geographic area other than the true place of origin in a manner which
misleads the public as to the geographic origin of the good;
(b) any use which constitutes an act of unfair competition within the
meaning of Article 10bis of the Paris Convention (1967).
172. As discussed above in the context of nati onal treatment, Article 22.2 requires WTO Members
to provide these legal means directly to all "interested parties", a requirement that is not met by
simply providing such means to WTO Members at the government-to-government level.

173. "Interested parties" is not defined in th e TRIPS Agreement, but Article 10 of the Paris
Convention, concerning false indications of geogra phical source, provides useful context that an
"interested party" includes a producer or seller established in the region falsely indicated as the
source. As discussed in the national treatment cont ext, this includes producers or sellers in regions
located outside the territory of the country where the false indication of source is being used.

174. The EC GI Regulation does not provide the lega l means required by Article 22.2 to interested
parties in at least two respects. First, as discuss ed above, interested persons with GIs outside the EC
do not have the legal means to register and protect their own GIs – that is, those GIs in their country
of origin – on an EC-wide basis under the GI Regulation. They therefore do not have the legal means

148 Exhibit US-21, at pp. 13-14.

under the GI Regulation to prevent misleading uses under Article 22.2(a) or acts of unfair competition
under Article 22.2(b) of the TRIPS Agreement "[i]n respect of geographical indications."

175. It is important to recall that Article 2(1) of the GI Regulation specifies that "Community
protection of designations of origin and of geog raphical indications of agricultural products and
foodstuffs shall be obtained
 in accordance with this Regulation." 149 The broad protections laid out in
Article 13 of that Regulation appear to encompass those that are required by Article 22.2 of the
TRIPS Agreement. And, in fact, some interested parties – those with geographical indications located
in the EC – do have the legal means to protect their GIs against misleading uses and acts of unfair
competition through the registration process.

176. But for interested parties with geographical indications located outside the EC, the legal
means to protect their GIs on a uniform basis throughout the territory of the EC are theoretically
available only if the WTO Member in which thei r products are produced adopts an EC-specified
system of GI protection and offers reciprocal treatment to EC goods.
150 With respect to interested
parties in other WTO Members that do not satisfy these requirements, therefore, the EC GI Regulation
fails to provide any legal means whatsoever to prevent misleading uses or unfair acts of competition
on an EC-wide basis.

177. Further, even if that Member adopted the appropriate system and offered reciprocity to the
EC, the interested party would continue to depe nd on its Member government to intercede on its
behalf and consult with any affected EC member State, make a determination that the interested
party's application meets the requirements of the GI Regulation, certify to the Commission that it has
the proper protection system and inspection structur e in place, and transmit the application to the
Commission.
151 Therefore, the EC GI Regulation does not provide the legal means to prevent
misleading uses on an EC-wide basis to "interested parties" from all WTO Members.

178. Thus, an interested party from a Member that does not have an EC-equivalent system and that
does not offer reciprocity does not have the lega l means required by Article 22.2 of the TRIPS
Agreement. Further, there is nothing that this in terested party can do to obtain the "legal means"
guaranteed him under the TRIPS Agreement, because it is not in a position, either to establish a full
EC-style GI system in his home country, or to provide reciprocal treatment. In addition, even if such
a system were in place, the interested party would need to rely on its own government to act on an
application, which that government may or may not have the infrastructure or the political inclination
to do. Consequently, the GI Regulation provides a possible method – and one that is highly intrusive
and costly – only for other Members to obtain Article 22.2 protection on behalf of interested parties in
their territory. It does not provide those legal means directly to those interested parties, as required by
Article 22.2.

179. Moreover, there is a separate and possibly more serious concern with respect to interested
parties' ability to object to the registration of GIs under the EC GI Regulation. As discussed above in
the context of national treatment, the ability to object to a registration is an important element of the
legal means required to prevent misleading uses and acts of unfair competition under Article 22.2 of
the TRIPS Agreement. This is because once a GI is registered and protected, there appears to be no
ability to prevent or limit its use through the EC,
152 even if it is or becomes misleading or confusing.
In spite of this, interested parties from third countries cannot object directly to the registration of a GI.
Rather, they must request their government to do so.
153 However, their government may or may not

149 Emphasis added.
150 Article 12 of the GI Regulation.
151 Article 12 of the GI Regulation.
152 Recall that this is an EC Regulation, which is immediately applicable in all EC member States.
153 Articles 12b and 12d of the GI Regulation.

have the infrastructure or the inclination to present the objection to EC officials. Making the exercise
of private rights contingent on actions of government entities outside the right holder's control fails to
provide legal means to exercise a private right, as required by Article 22.2 of the TRIPS Agreement.

180. Further, Article 12d limits the persons who can object to an application for registration
submitted by an EC member State to persons fro m "a WTO member country or a third country
recognized under the procedure provided for in Article 12(3)", i.e., satisfying the conditions of
equivalency and reciprocity described earlier in this submission. It appears that interested parties
from WTO Members who do not satisfy the conditions of equivalency and reciprocity may not object
to the registration of a GI, and therefore do not have the legal means to prevent misleading uses
required by Article 22.2 of the TRIPS Agreement.

181. In addition, the GI Regulation provides, unde r Articles 7, 12b and 12d that only those with a
"legitimate interest" or a "legitimate economic intere st" have a right to object. As discussed above,
the Paris Convention provides that an interested pa rty can be any producer or seller established in the
region falsely indicated as the source in a given te rritory, which may be different from the region in
which the false indication is being used. To the extent that the GI Regulation's requirement means
that the person must have an economic interest in the EC
, it is inconsistent with the TRIPS Agreement
obligation to make legal means available to all "int erested parties" and not just those established or
doing business in the EC.

182. Finally, the possible grounds for objection – that the registration of the name "would
jeopardize the existence of an entirely or partly id entical name or of a mark or the existence of
products which have been legally on the market for at least five years"
154 – is unduly restrictive and
does not provide legal means to object to a registrati on in order to prevent "the use of any means in
the designation or presentation of a good that indicates or suggests that the good in question originates
in a geographic area other than the true place of origin in a manner which misleads the public as to the
geographic origin of the good" or " any use which constitutes an act of unfair competition within the
meaning of Article 10bis of the Paris Convention (1967)."

183. Consequently, the EC GI Regulation fails to provide the required legal means to interested
parties as required by Article 22.2.

E. T
HE EC GI REGULATION IS INCO NSISTENT WITH THE EC'S ENFORCEMENT OBLIGATIONS
UNDER THE TRIPS AGREEMENT
184. Part III of the TRIPS Agreement – "Enforcement of Intellectual Property Rights" – contains a
broad range of obligations with respect to the en forcement of intellectual property rights covered by
the Agreement, which includes trademark rights and rights in geographical indications. As described
in section IV.C of this submission, the EC GI Re gulation denies the owner of a registered trademark
its Article 16.1 exclusive right to prevent all thir d parties from using the same or similar signs for
identical or similar goods as those for which the tr ademark is registered where such use would result
in a likelihood of confusion. Further, the EC GI Regulation does not, with respect to GIs, provide the
required legal means to interested parties to prev ent misleading uses or acts of unfair competition.
Therefore, as summarized below, that Regulati on is also inconsistent with numerous TRIPS
Agreement obligations to enforce intellectual property rights.

185. Article 41.1 requires that enforcement pro cedures be available to permit effective action
against any act of infringement of intellectual pr operty rights, and expediti ous remedies to deter
further infringements. In contrast, under the EC GI Regulation, an owner of a registered trademark
does not have any procedures available to him to ta ke action against infringement of his trademark by

154 Article 7(4) of the GI Regulation.

a registered GI, and has no remedies available to him to deter such further infringements. The same is
true of interested parties with GIs based in territories other than the EC.

186. Article 41.2 requires that enforcement pro cedures be fair and equitable, and not be
unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.
Article 41.4 requires the opportunity for judicial re view. Neither of these obligations are satisfied
with respect to owners of registered trademar ks trying to enforce their Article 16.1 rights vis-à-vis a
confusing GI or to interested parties with GIs based in territories other than the EC.

187. Article 42 requires that civil judicial procedures concerning the enforcement of "any
intellectual property right" be made available to rightholders. Article 44.1 requires that judicial
authorities have the authority to issue orders to desist from infringement. As detailed in this
submission, no such procedures or injunctions are available to owners of registered trademarks vis-à-
vis confusing signs that are registered as GIs. A nd no such procedures or injunctions are available to
holders of rights in GIs located in WTO Members that do not satisfy the equivalency and reciprocity
requirements of the GI Regulation.

188. Consequently, the EC GI Regul ation is inconsistent with the TRIPS Agreement obligations to
enforce intellectual property rights, including Articles 41.1, 41.2, 41.4, 42, and 44.1.

F. T
HE EC GI REGULATION IS INCONSISTENT WITH ARTICLE 65.1 OF THE TRIPS AGREEMENT
189. Under Article 65.1 of the TRIPS Agreement, th e EC was obligated to apply the provisions of
the TRIPS Agreement as of one year after the da te of entry into force of the WTO Agreement, i.e.,
one year after January 1, 1995, or as of January 1, 1996.

190. As demonstrated in this subm ission, the EC GI Regulation is still inconsistent with several
provisions of the TRIPS Agreement, and conseque ntly also violates Article 65.1 of the TRIPS
Agreement.

V. CONCLUSION
191. For the foregoing reasons, the United States re quests that the Panel find that the EC GI
Regulation is inconsistent with the EC's obligations under the TRIPS Agreement and the GATT 1994,
and to recommend that the EC bring its measure into conformity with those obligations.

ANNEX A-3

ORAL STATEMENT OF THE UNITED STATES
FIRST SUBSTANTIVE MEETING

(23 June 2004)

1. Good morning, Mr. Chairman and members of th e Panel. We have asked that you review the
EC's GI Regulation – after five years of fru itless consultations – because it presents two major
problems seriously affecting the rights of all WTO Members.

2. The Regulation sets up what the EC has characterized as a powerful system for registering
and protecting geographical indications for agricultura l products and foodstuffs sold in the substantial
EC market. According to the EC, this system bestows significant commercial benefits on those
persons and products able to qualif y for protection. The EC has claimed that this system allows
qualifying EC products to command higher prices in the EC market and to compete favorably based
on quality. Indeed, so commercially meaningful is th is GI protection that, in the eyes of the EC, it
helps make it politically feasible to reduce or eliminate the EC's agricultural subsidies.

3. The problem is that the Regulation denies e qual access to this powerful system of protection
for non-EC nationals and products. Specifically, the Regulation puts in place a mandatory legal
structure that directly allows only EC nationals to register and protect their GIs for EC products.
Non-EC nationals, by contrast, cannot apply at all, unless their government has adopted a system of
GI protection that (1) mirrors the EC's and (2) provides reciprocal protection to EC products – in other
words, the "equivalence" and "reciprocity" requirements. Further, the non-EC national, unlike the EC
national, can neither apply for, nor object to, a GI registration directly. Rather, the non-EC national –
unlike the EC national – can only hope that his gove rnment will voluntarily put procedures in place to
process objections according to EC standards and will be willing to try to convince the EC that (1) the
government's GI protection system satisfies the EC 's requirements and that (2) the particular GI
should be registered.

4. As we detailed in our first submission, these asp ects of the GI Regulation – the requirement of
reciprocity and equivalence and the requirement fo r government-level intervention – discriminate in
favor of EC nationals and products and against th e nationals and products of other WTO Members.
Further, with respect to countries that do happen to have an EC-equivalent sy stem of GI protection,
the GI Regulation discriminates in favor of nationa ls and products of those countries and against the
nationals and products of WTO Members that do not have such a system. In other words, the EC's GI
Regulation violates the national treatment and MFN obligations of the TRIPS Agreement, the Paris
Convention, and the GATT 1994. For some of these same reasons, the GI Regulation does not
provide the legal means required under the TRIPS Agreement for the protection of geographical
indications.

5. Further, the GI Regulation grants these significan t protections to EC nationals and products at
the expense of rights that the EC is obligated to pr ovide to owners of registered trademarks under the
TRIPS Agreement. The TRIPS Agreement requires that WTO Members provide to the owners of
registered trademarks the exclusive right to prevent confusing uses of similar or identical signs by all
third parties. But under the GI Regulation, registered GIs are immune from the exercise of this right.
Under the GI Regulation, if a person is using a GI that consists of the same or similar signs as a prior
registered trademark – and does so in a manner that causes confusion with the trademark – the owner
of the registered trademark is powerless to prevent that use. All that owner can do is continue to use
his trademark in commerce, watc hing as the ability of that trademark to distinguish his goods is
eroded away. This situation is simply not permitted by the TRIPS Agreement.

6. My oral statement this morning will focu s on the two principal issues outlined above,
although I will also briefly touch on other arguments raised by the EC. In sum, despite its denials and
arguments to the contrary, the EC's first submission confirms the WTO inconsistencies noted above in
every respect.

National Treatment/MFN

Requirements of Equivalence and Reciprocity

7. With respect to the lack of national and MFN treatment in the EC's GI Regulation, there are a
few key questions that this Panel must examine. First, and astonishingly, the EC now claims that
WTO Members do not have to satisfy the equivale nce and reciprocity requirements. Yet, these
requirements are clearly set out as preconditions for registering all third country GIs in Articles 12
and 12a of the EC GI Regulation. According to the EC, those requirements would "prejudice" the
WTO Agreements, under Article 12(1). The United States is, of course, pleased that the EC has
finally acknowledged that these requirements are inconsistent with WTO obligations.

8. Nevertheless, we remain skep tical. Article 12(1) of the GI Regulation clearly says that the
Regulation may apply to products from a third country only if that country meets certain conditions,
among them equivalence and reciprocity. These requirements apply with respect to GIs from any
third country. There is no exclusion for WTO Members in Article 12(1), even though WTO Members
are specifically mentioned in other parts of the Regulation. Therefore, there is every reason to believe
that Article 12(1) means what it says. Of course, the EC reserves its flexibility to protect specific
non-EC GIs through bilateral agreements, so Article 12(1) also states that it is "without prejudice to
international agreements." But there is nothing in Article 12(1) to suggest that WTO Members are
excluded from its requirements.

9. Further, Article 12a of the Regulation sets out the sole process under the GI Regulation for
registering non-EC GIs. But Article 12a provid es such a procedure only for countries that have
satisfied the requirements of Article 12(1). Article 12a(1) says that a third country fulfilling the
conditions of Article 12(1) may send a registration application to the Commission. Article 12a(2)
describes what the third country referred to in Article 12(1) must do to apply for a GI registration on
behalf of its nationals. If, as the EC suggests, Article 12(1) does not apply to WTO Members,
Article 12a also does not apply to WTO Memb ers, with the consequence that there is no system
whatsoever under the GI Regulation for registering GI products from WTO Members. The EC has
asserted that certain of the "third country" procedur es in Article 12a apply to WTO Members, but that
other references to "third countries", inexplicably, exclude WTO Members. There is simply no basis
in the Regulation for picking and choosing which provisions apply to WTO Members and which do
not.

10. Not only that, but until recently, the EC itself claimed that WTO Members do have to satisfy
the reciprocity and equivalence requirements. We ha ve held over five years of consultations, focused
to a significant degree on the WTO-consistency of the reciprocity and equivalence requirements. Not
once in those five years did the EC mention that these requirements do not apply to WTO Members.

11. To the contrary, the EC's clearly articulated view – at least prior to last month in this
proceeding – was that (1) agricultural products from a WTO Member are not eligible for GI
registration in the EC unless that Member satisfies the reciprocity and equiva lence requirements; and
(2) the United States, for one, does not satisfy those requirements, and so its nationals cannot register
their US GIs.

12. We note, for instance, the written submission of the EC to the TRIPS Council, in September
2002, in which the EC, in describing its GI Registra tion system in the context of TRIPS obligations
discussed the "fact that the EU register for GIs on f oodstuffs does not allow the registration of foreign
GI unless it is determined that a third country has an equivalent or reciprocal system of GI
protection."
1 Or its statement in that same document that GI "registration systems should be primarily
aimed at the identification of domestic GIs." 2 Likewise, its admission that the EC GI procedure
requiring EU member States to verify that products meet the GI definition is "ill-adapted to foreign
GIs."3

13. In addition, there are a number of statemen ts from EC officials in connection with the
amendments to the EC GI Regulation last year that emphasize the importance to the EC of requiring
reciprocity and equivalence as a condition of registering GIs from non-EU countries. This is touted as
a means of encouraging the adoption of the EC GI protection system abroad.
4 The references are to
"non-EU" countries, not "non-WTO Members."

14. This Regulation has been in place and enforced for almost 12 years. In that time, according to
the EC itself, over 640 EC geographical indications have been registered.
5 How many third country
GIs have been registered? To our knowledge, none. Th is is not too surprising, since, at least up until
last month, the EC has been confirming to WTO Members the plain meaning of the GI Regulation –
that their nationals may as well not even apply for a GI unless the WTO Member is prepared to
convince the Commission that it has a GI system that is equivalent to the EC's system and that offers
reciprocal treatment to EC products. The EC has in effect been demanding that WTO Members adopt
its system of GI protection, thereby trying to extract from its trading pa rtners through the GI
Regulation what it could not get during the Uruguay Round negotiations.

15. And now the EC wants this Panel to find th at the exact opposite is true, despite the presence
of the same GI Regulation language – "without prejudi ce to international agreements" – that has been
in place for almost 12 years and despite the explanations provided by the EC itself during five years
of consultations and in several other fora – simply because the EC is now, for purposes of this dispute,
saying so. The EC amended this regulation last year with respect to some aspects of registration and
objection, but, notably, left this language regarding equivalence and reciprocity untouched.
6

16. With all due respect, this Panel should examin e very thoroughly the factual basis for the EC's
newfound – and unsupported – interpre tation of its Regulation. If the EC can objectively establish
that no requirements of reciprocity and equivale nce apply to WTO Members – despite the clear
language to the contrary – this clarification will be welcome. But mere as sertions by the EC for
purposes of this dispute are insufficient. To th e contrary, the plain meaning of the Regulation,
supported by the repeated assertions of the EC itself to WTO Members, demonstrate the contrary.

Equivalence by another name

17. Further, even if the Panel were to agree with the EC that Article 12(1) does not apply to WTO
Members and that there is an alternative regist ration process for WTO Members somewhere in the GI

1 IP/C/M/37/Add.1, p. 79.
2 Id., p. 80 (emphasis added).
3 Id., p. 80.
4 See, e.g., "Food quality: Commission proposes better protection for geographical names", IP/02/422,
Brussels, March 15, 2002. Exhibit US-22. See also Exhibit US-20, p. 3; Exhibit COMP-14, pp. 20, 21, 23.
5 See www.europa.eu.int/comm/agriculture/publi/capleaflet/cap_en.htm.
6 See Council Regulation (EC) No 692/2003 of 8 April 2003 amending Regulation 2081/92, OJ L 99,
July 14, 2003, p. 1. Exhibit COMP-1.h.

Regulation, the EC nonetheless admits that Article 12a(2) requires WTO Members to submit a
declaration that certain specific inspection structures are "established" on its territory.

(Parenthetically, as I noted a moment ago, Article 12a(2) applies only to third
countries that have been deemed to satisfy the requirements of reciprocity and
equivalence under Article 12(3), an article that the EC now says does not apply to
WTO Members. So it is not clear on what basis this Article applies to WTO
Members at all, under the EC's new interpretation. But, assuming for the sake of
argument that it does,)
This requirement for inspection structures is tantam ount to a requirement of equivalence, the same
requirement that the EC itself appears to admit is WTO-inconsistent.

18. The purported function of the required "inspec tion structures", which are also required of EC
member States under Article 10, is to ensure th at any agricultural product or foodstuff bearing a
protected name complies with the relevant specification.
7 Under Article 10, the inspection authorities
of a country must have permanent qualified staff and resources "necessary to carry out inspection of
agricultural products and foodstuffs bearing a protected name." One of the requirements of Article 10
is that if the inspection body establishes that an agricultural product bearing a protected name does not
meet the criteria in the specification, it must take all necessary steps to ensure that the EC GI
Regulation is complied with.

19. So, in order for its nationals to qualify for GI protection, a WTO Member must establish an
inspection structure with the authority and the r esources to enforce the EC's GI Regulation and to
ensure that any agricultural product or foodstuff bearing a protected name qualifies for that name.

20. Although the EC calls this requi rement a product "specification", as if it were related solely to
whether the product itself qualifies to be a geogra phical indication, this is not really a product
"specification" in the usual sense. Instead, it is a requirement th at WTO Members adopt the same
bureaucratic structures related to the protection of GIs as the EC has. But other WTO Members have
the freedom under the TRIPS Agreement to set up a system that is different from the EC's for
protecting GIs, and the EC cannot make protection of GIs conditional on other Members' adopting an
EC-style system. The United States, for one, has not adopted the EC's approach to protecting GIs,
and does not necessarily require an EC-style inspec tion structure. This fact, however, should not
prevent US nationals from obtaining GI protection in the EC on the same basis as EC nationals.

21. In brief, the EC's requirement that the Unite d States establish EC-style inspection structures to
enforce GIs is simply equivalence by another name: The EC will not protect the GIs of US nationals
unless the United States establishes th e same inspection structures, w ith the same responsibilities and
resources, that are required of EC member States. The EC has apparently recognized that it cannot
require equivalence from WTO Members as a condition for protecting their GIs. For the same reason,
it cannot require WTO Members to establish EC-sty le inspection structures to enforce GIs as a
precondition.

The GI Regulation discriminates against certain nationals

22. The EC claims that its GI Regulation discriminates based on the location of the geographical
area covered by the GI, and not on the basis of nationality.
8 This razor-thin distinction is not
meaningful, and is certainly not a basis on wh ich to determine whether fundamental TRIPS
Agreement obligations are being respected. To the question, "whose GI rights are overwhelmingly

7 Article 10(1) of the EC GI Regulation.
8 E.g., EC First Written Submission, para. 125.

connected to agricultural products and foodstuffs obtained or produced in the United States," the
answer is obviously, "nationals of the United Stat es." To the question, "whose are overwhelmingly
connected to products produced in the EC," the answ er is, equally obviously, "EC nationals." No one
can be under any illusion that, in providing one set of requirements for agricultural products grown in
the EC and a more burdensome set for agricultura l products grown outside the EC, non-EC nationals
are being treated less favorably than EC nationals w ith respect to the protection of their geographical
indications. One might just as easily argue that a regulation directed at large white birds with long
necks swimming in Lac Leman is not directed at swan s, or that a regulation directed at birds that
quack has nothing to do with ducks. Rights in GIs, perhaps to a greater extent than other forms of
intellectual property, are inherently related to the territory of the national.

23. A US national growing a special onion in a particular region in the Southeast United States is,
under the TRIPS Agreement, entitled to obtain geogr aphical indication protection for his product on
terms that are at least as favorable to those acco rded to, for example, French nationals for their
products. That US national, who has perhaps bu ilt up the quality and reputation of his product over
many years, is simply not in the same position as a similarly situated French national in France to
apply for, register and protect his GIs in the EC. Nor does he have any means of obtaining the same
treatment as his French counterpart. He can't simp ly move his farm to France and qualify for GI
protection, because the reputation and quality of his product is connected with its geographic area in
the United States. It is simply not enough for the EC to assert that the location of the geographic area
has nothing to do with nationality: this US person cannot protect his GI in the EC under the GI
Regulation because of his US location. Further, if prev ious WTO dispute resolution findings with
respect to national treatment in the goods area provi de any guidance, US nationals are entitled to the
best treatment granted to any EC national, which is the treatment granted the EC national with a GI in
the EC.

24. To highlight the problem further, the Pa nel should recall that, under the TRIPS Agreement
and the Paris Convention, "nationals" of a Memb er include legal persons who have a commercial
establishment in that Member. So, if the US national at issue is a corporation or partnership running
an onion farm in the United States, the only way that it could get the same treatment as a French
national would be for it to establis h a farm growing onions in the EC . But this is tantamount to a
requirement that the farm move or expand its commercial establishment to the EC, which would mean
that it would qualify under the TRIPS Agreement as an EC national.

25. In other words, as applied to legal persons such as a farm, "national" treatment for US
nationals is available under the GI Regulation only if the US national becomes an EC national . (Of
course, such a move would eliminate the ability to register the foreign GI, as the goods would no
longer have a quality, reputation, or other characteristics essentially attributable to their location.)

26. This requirement subverts the whole purpose of the national treatment requirement. The EC
is supposed to give national treatment to nationals of the United States, not give national treatment to
any US national who agrees to become an EC national. Yet, this is the practical effect of the EC's
restrictive definition of "national treatment" and "most favored nation treatment".

27. It is also one reason that the EC is wrong to argue that the US "national treatment" claim does
not include Article 2, paragraph 2 of the Paris Conve ntion. This paragraph of the Article 2 national
treatment provision prohibits requiring establishment in the country where protection is claimed as a
condition of enjoying rights. In this instance, the GI Regulation's requirement for a commercial
establishment in Europe as a precondition to claimi ng the same rights as nationals is simply another
aspect of its denial of national treatment to nationa ls of other WTO Members, a claim clearly within
this Panel's terms of reference.

Requirement that the WTO Members intervene on behalf of their nationals

28. As the US first submission stated, anothe r way the EC GI Regulation denies national and
MFN treatment, and also fails to provide legal mean s for interested parties to protect GIs, is its
requirement that a non-EC national's government take action in order for its national to protect its GI
rights. For GI registration applications, the WTO Member government has to determine that the
application meets the EC GI Regulation's requirement s, has to demonstrate to the EC how the GI is
protected in that country, and has to demonstrat e that it has established the necessary "inspection
structures", discussed earlier. And this is assuming, for the sake of argument, that the WTO Member
does not also have to convince the Commission that it has satisfied the requirements of equivalence
and reciprocity. Even for objections to GI a pplications, the WTO Member has to process that
objection and present it to the Commission. The non-EC interested party has no ability to do that
himself directly.

29. Now, the EC has a glib res ponse to this argument: "The United States should not invoke its
unwillingness to cooperate", says the EC, "to demonstrat e a national treatment violation by the EC".
This response avoids the issue. The issue is not whether the United States itself is willing to, as the
EC puts it, "cooperate" with the EC's GI registra tion process. The issue is whether, under the GI
Regulation, a non-EC national has the same direct means to register his GI in the EC or to object to
the registration of a GI in the EC, as does the EC national. He does not: the non-EC national has to
go through a non-EC government that, unlike EC member States, is under no obligation to process GI
registration applications or objections.

30. The EC tries to sell this requirement as "equa l" treatment, because EC nationals must also
apply to their member State governments for regist rations and objections, and EC member States also
have to have inspection structures in place. But this is a false "equality". The EC can, and in the GI
Regulation does, impose substantive and procedural requirements on its member States. The GI
Regulation, therefore, directly provides the means in the EC for EC nationals to register their GIs and
to object to the registration of GIs. The TRIPS national treatment requirements are not satisfied by
imposing the same requirements on WTO Members as the EC imposes on its member States. The
TRIPS requirement is that the nationals of WTO Members are entitled to treatment at least as
favorable as that accorded to EC nationals.

31. In sum, the GI Regulation provides the dir ect means, through mandatory enforceable rules
imposed on its member States, and through the in frastructure and bureaucracy established under the
European Union, for EC nationals to register their GIs and to object to the registration of GIs. A non-
EC national, by contrast, does not have those means, but must hope that its government will
voluntarily put in place the necessary rules, regul ations and infrastructure to process EC GI
applications and objections, and will advocate to the Commission on behalf of its nationals.

32. This does not provide equal treatment to non-EC nationals, and it does not provide non-EC
interested parties with the legal means to protect GIs.

33. As the US and EC first submissions demonstrate, the issues we have just discussed cut across
a number of the US claims, and demonstrate how, despite the EC's arguments to the contrary, the EC
GI Regulation denies national treatment and most-fa vored nation treatment with respect to both the
nationals and the products of other WTO Members, and fails to provide the legal means to protect
GIs. Before moving on to the trademark issue, we do want to respond briefly to a number of the EC's
arguments that are specific to particular claims.

Responses to other arguments

34. First, the GI Regulation says that any EU na tional who is "legitimately concerned" may object
to a GI registration, while non-EC nationals must ha ve a "legitimate interest" in order to object. The
EC responds that there is no difference between th e two standards. The United States submits to you,
however, that a person may be "concerned" without his concern rising to the level of a "legitimate
interest". The "legitimate interest" standard for non- EC nationals was introduced just last year; if the
EC meant for the standard to be the same, why not use the same words? The EC has not sustained its
burden of rebutting the presumption that this amounts to less favorable treatment.

35. Second, with respect to the special rule that non-EC GIs must be accompanied by a country of
origin indication on its label, the EC claims that this rule applies to both EC and non-EC products, and
that, in any case, country of origin marking requirements can never give rise to a national treatment
violation. The provision at issue, however, is in Article 12(1), which deals exclusively with the
authorization of non-EC GIs, not EC GIs. In addition, this provision is not a general country of origin
requirement as described in Article IX of the GATT 1994; rather, it is a special rule that is triggered
by the fact that a third country product is charact erized as a GI, and is intended to encumber the non-
EC GI itself.

36. Third, the EC argues that there is no MFN violation because the GI Regulation has not yet
been applied to discriminate among WTO Members. But the United States is challenging this
measure on its face, not any particular application of the measure. The fact is that Articles 12(1) and
12a of the GI Regulation are designed purely to favor nationals from countries that have an EC-style
GI protection system, including inspection structures, and to disfavor nationals from countries that
don't. This is contrary to MFN obligations.

37. The EC also argues that it s member States are entitled to treat other nationals from the EC
more favorably than nationals from other WTO Members, because they are doing so pursuant to an
EC regulation. But each EC member State has an obligation to provide MFN treatment vis-a-vis
nationals of all other WTO Members. That they may be acting pursuant to an EC regulation does not
excuse them from this obligation.

38. Fourth, the EC claims that the less favorable treatment provided non-EC products is excused
by Article XX(d) of the GATT 1994. The EC has not made out a prima facie case that this is so, but
has merely asserted it. This Panel should reject this argument on that basis alone. The GI Regulation
does not satisfy the requirements of Article XX(d): it is not necessary to ensure compliance with laws
or regulations that are not inconsistent with the GATT 1994.

39. Finally, the EC claims that the enforcemen t obligations of the TRIPS Agreement do not apply
to the GI Regulation, because that Regulation d eals only with the acquisition and enforcement of
intellectual property, and not with enforcement. This is incorrect. The TRIPS Agreement requires
enforcement procedures to permit effective action against any act of infringement of the covered
intellectual property rights. The GI Regulation prevents trademark owners, for instance, from
enforcing their Article 16.1 rights with respect to regist ered GIs. This is plainly inconsistent with the
obligation to provide such enforcement.

Trademark Rights

40. We would like to spend the balance of our time discussing the trademark right issue. We start
by noting that, within a span of just a few pages, the EC's submission states that: (1) there is no
hierarchy between GIs and trademarks; (2) the Unit ed States is trying to establish a hierarchy of
trademarks over GIs; and (3) the proper balance is to provide GIs with rights superior to trademarks:
that is, that TRIPS permits GIs to prejudice " any right" of trademark owners, with the only exception

being certain grandfathered trademarks that can be "used" in commerce but that are deprived of the
critical ability to exclude confusing uses by all others. 9 Interestingly, the EC derives this far-reaching
ability to prejudice all trademark rights from, of all places, an article providing for exceptions, not to
trademark rights, but to GI rights.

41. The EC's assertions notwithstanding, the Un ited States agrees that there is no hierarchy
between trademarks and GIs. In fact, the United States took great pains in its first submission to make
it clear that is important to give all of the TRIPS provisions their full scope. There is no inconsistency
between the obligation to provide trademark owners with the right to exclude uses by all others of
signs that are likely to confuse consumers, on the one hand, and the obligation to give interested
parties the ability to prevent misleading uses of GIs, on the other. The issue is not whether one form
of intellectual property is "superior" to another, as the EC claims, but how to provide the rights set
forth in the TRIPS Agreement in a manner that gives full affect to all of its provisions.

42. In other words, the EC's characterizations of the US position are wrong. We'd like to
emphasize certain basic points that set the relationshi p between trademarks and GIs in context. First,
trademarks that lack distinctiveness or that mislead consumers as to the origin of goods may, under
the TRIPS Agreement and the Paris Convention, be re fused registration. If they are registered, such
marks may be subject to invalidation. The EC's c oncerns on this score, therefore, are misplaced. The
United States was clear in its first submission that this dispute concerns valid prior trademarks, not
trademarks that are subject to invalidation under the TRIPS Agreement and the Paris Convention.
10

43. Second, despite the EC's suggestions to the c ontrary, it is not the position of the United States
that a trademark owner will necessarily succeed in an action against a GI owner. For example, if a
trademark owner brings an infringement action against the user of a similar or identical GI, the
trademark owner might not be able to prove that the particular use of the GI would result in a
likelihood of confusion. Or the GI owner might be able to show that the trademark is subject to
invalidation.

44. With this understanding as a backdrop, let us now respond briefly to the EC's arguments with
respect to trademark rights.

Article 14(3) of the EC GI Regulation

45. The EC appears to argue that, under the GI Re gulation, owners of registered trademarks do
not need the Article 16.1 right to exclude all ot hers from confusing uses of their signs, for two
reasons. First, the EC argues that it is unlikely that any trademarks would be registered that could be
confused with a GI (i.e., the risk of confusion is "limited").
11 Second, the EC argues that Article 14(3)
allows it to prevent the registration of all geographical indications that are confusing vis-a-vis certain
trademarks.

46. But neither of these arguments addresses the ma in point, which is that the TRIPS Agreement
requires that the owner of a registered trademark be able to exclude all others from the confusing use
of identical or similar signs. And that the EC GI Regulation does not accord or even accommodate
that right with respect to registered GIs.

47. The EC's argument, in essence, is to concede th at owners of registered trademarks are being
deprived of their TRIPS Agreement right s, but to claim that they do not need those rights, because

10 E.g., US First Written Submission, para. 135.

Article 14(3) of the EC GI Regulation ensures that confusing GIs will not be registered in the first
place.

48. This is not good enough, nor is it true. Th e TRIPS Agreement requires that trademark owners
be given a certain exclusive right, and the EC can not legitimately respond that the right can be
withheld because it is unnecessary.

49. Moreover, it is untrue that the Article 16.1 right to exclude is unnecessary. First, the EC
argues that few trademarks that contain or consist of a GI are registrable, and that the United States is
therefore making much ado about nothing. Even if the Panel accepts the unsupported assertion that
the number of trademarks affected is small, how ever, it is beyond dispute that those registered
trademarks – whatever their number – must be acco rded Article 16.1 rights. It is no defense to a
WTO violation to claim that the number of specific rights affected is small.

50. In addition, however, it is simply untrue that valid registered trademarks cannot incorporate
certain "geographical" elements. Take the hypothe tical example of an EC registered trademark,
"Luna", used in connection with ch eese. Assume that the residents in the small town of Luna, Spain,
start making cheese after the "Luna" mark was regist ered. If that cheese subsequently qualifies for GI
protection, it would be eligible for registration as a GI, and, once registered, the owners of the "Luna"
trademark would be powerless to stop the rightholder s of the "Luna" GI from using the "Luna" name
in a way that confuses the consumer. This is si mply not a result permitted by Article 16.1 of the
TRIPS Agreement. This is only a hypothetical, ad mittedly, but in fact there are thousands of
registered trademarks around the world that incorporate or happen to sound like geographical names.

51. Second, contrary to the EC's arguments, Ar ticle 14(3) of the GI Regulation does not satisfy
the obligations under Article 16.1 of the TRIPS Ag reement. Article 14(3), the Panel will recall,
allows the EC to reject GI registrations where, in the light of a trademark's reputation and renown and
the length of time it has been used, the GI regist ration is liable to mislead the consumer as to the
identity of the product.

52. This standard does not satisfy the TRIPS Ag reement obligations for several reasons. To
begin, it applies criteria that are different from a nd more restrictive than Article 16.1. Article 16.1
requires that the owner of a registered trademark have the exclusive right to prevent all uses of
identical or similar signs that result in a likelihood of confusion. This is not a right reserved solely to
registered trademarks of a certain reputation or of any particular renown, nor is there any requirement
under Article 16.1 that the trademark be used for an y length of time. Article 16.1 articulates a right
that is owed under the TRIPS Agreement to the owner of any valid registered trademark.
Article 14(3), by contrast, comes into play only wh ere there exists a trademark with a reputation,
renown, and history of use.

53. Now, the EC implies that Article 14(3) actually permits the EC to block registration of a GI
whenever there is a likelihood of confusion with a re gistered trademark, regardless of use, reputation
or renown of the trademark. But that is not what Article 14(3) says: Article 14(3) clearly requires
reputation, renown and use for some period of time. The EC not only confirms this reading in
paragraph 290 of its submission, it has also confirme d this obvious meaning in its public explanations
of its regulation outside of this meeting room. Thus, although the EC criticizes the United States in
this room for characterizing Article 14(3) as requi ring "long use", the EC itself uses the phrase "used
for a long time" in describing the requirements of Article 14(3) outside this room, as our Exhibit
US-23 shows.
12

12 See also Exhibit US-24.

54. In any event, Article 14(3) does not, as re quired by Article 16.1 of the TRIPS Agreement,
provide the trademark owner with the right to prevent confusing uses. It merely authorizes the EC to
decline registration of a GI in limited circumstan ces. These are two different things. Moreover,
Article 14(3) does not afford the trademark owner the right to ensure that no uses of that GI will result
in a likelihood of confusion. Thus, even if Artic le 14(3) accorded rights to trademark owners rather
than just authority to the EC, the trademark owner would not necessarily be able to tell, at the time of
registration of the GI, whether the use of the GI will be confusing. For example, a registered GI may
unexpectedly be used in translation, or in a manne r that emphasizes certain aspects or letters of the
geographical name, in a way that causes a likeli hood of confusion with respect to a registered
trademark.

55. Take the EC's own example of the GI "Bay erisches Bier", which the Commission decided to
register despite concerns raised under Article 14(3) that it could confuse the consumer in relation to
the "Bavaria" trademark in Holland. The Commissi on may have well been right that the reputation
and renown of those trademarks were not such that the registration of the GI "Bayerisches Bier" is
liable to mislead the consumer as to the identity of the product. But, once that GI is registered, how
does the Commission ensure that the GI is not used in Holland, perhaps translated as "Bavaria Beer" –
perhaps using signs similar or identical to those of the "Bavaria" trademark – in a manner that results
in a likelihood of confusion? If the use of a GI confuses the consumer, shouldn't the trademark owner
have the ability to prevent that use? TRIPS Article 16.1 says yes. The EC GI Regulation says no.

56. In short, the decision under Article 14(3) on whether to register a GI is distinct from the
ability of a registered trademark owner to exercise its TRIPS Article 16.1 rights once it is registered.
The EC cannot invoke the former to implement the latter.

TRIPS Article 24.5

57. The EC next argues that TRIPS Article 24.5 defines the boundary between trademarks and
GIs, and that it specifically permits the EC to prejudice the Article 16.1 right of prior trademark
owners – that is, the exclusive right to prevent all third parties from using identical or similar signs in
a manner that results in a likelihood of confusion.
13

58. But the EC is wrong. Article 24.5 is merely an exception to the obligation to protect GIs.
Just as there are exceptions to patent obligations in the patent section of TRIPS (Article 30, in
Section 5), exceptions to copyright obligations in the copyright section of TRIPS (Article 13, in
Section 1), exceptions to trademark obligations in the trademark section of TRIPS (Article 17, in
Section 2), there also exist exceptions to GI obligat ions in the GI section of TRIPS (Article 24, in
Section 3). Each of these articles, including Article 24, is explicitly labeled "exceptions", and they are
exceptions only to the obligations arising in the section in which they are found.

59. Article 24.5, therefore, is an exception to the scope of protection for GIs, an exception that
protects certain grandfathered trademarks. It pr ovides that measures adopted to implement the GI
section of TRIPS "shall not prejudice eligibility for or the validity of the registration of a trademark,
or the right to use a trademark, " on the basis that the trademark is identical or similar to a
geographical indication. The plain meaning of th is provision is that, in whatever respect the
implementation of the GI section of TRIPS might otherwise prejudice the registration, eligibility for
registration, or the use of a grandfathered trademar k, Article 24.5 will prevent that result. The EC's
argument, by contrast, transforms a provision that plainly protects certain grandfathered trademarks
into a provision that empowers it to prejudice trademarks.

13 EC First Written Submission, paras. 298, 301.

60. The EC's reading appears to hinge on the Article 24.5 obligation that GI measures not
prejudice the "right to use the trademark." Th e EC argues that the GI Regulation permits the
continued "use" of the trademark in commerce, and therefore does not prejudice the "right to use the
trademark", satisfying the Article 24.5 requirement. But the EC ignores two important facts.

61. First, Article 24.5 also contains a separate obligation not to prejudice the eligibility for or the
validity of the registration of trademarks. The EC seems to think that this is a mere technical
requirement that is satisfied by simply maintain ing a registration on the books. But under the TRIPS
Agreement, "registration" of a trademark means some thing very specific: the owner of a registered
trademark has a certain right to exclude all others from the use of confusingly similar signs. Where,
under Article 24.5, a Member cannot prejudice the validity of a trademark registration, the registration
remains valid and the rights that go with that regist ration under Article 16.1 remain in force. In this
way, Article 16.1 provides a sword to registered tr ademark owners, while Article 24.5 shields against
anything in the GI section that could adversely affect grandfathered trademarks.

62. Article 24.5 cannot be read so as to require only that a name appear on the list of registered
trademarks, but that all rights connected with that registration can be denied. Without the associated
rights, "registration" is virtually meaningless.

63. Second, the EC seems to read the Article 24. 5 obligation not to prejudice the right to use a
trademark as affirmative permission to prejudice th e Article 16.1 right to exclude all others from
confusing uses. But the fact that the TRIPS negotiators included both a prohibition on prejudicing
uses and a prohibition on prejudicing registration, do es not mean that the rights associated with
registration are to be ignored.

64. The November 1990 "Brussels Draft" of the TR IPS Agreement contained a predecessor to the
current Article 24.5 requiring that registrations of grandfathered trademarks not be refused or
invalidated. It made no mention of "use" of the trademarks.
14 This obligation, taken alone, means
that registered trademarks remain registered and therefore benefit from their Article 16.1 rights. A
reading that the trademarks remain registered but are deprived of all of the rights of registration would
make no sense. Subsequently , the negotiators added an additional requirement that the use of such
trademarks should also not be prejudiced on the grounds that they are similar to a GI. It is this
additional obligation that the EC is now using to assert that the only trademark right preserved under
Article 24.5 is the right to use the trademark in commerce, and that Article 24.5 no longer preserves
the right to exclude all others. In other words, the EC is reading the language that clarifies and adds
to the protection for grandfathered trademarks as a denial of the key protection given specifically to
grandfathered trademarks: the right to exclude.

65. In addition, during this same period, the nego tiators tightened the requirement not to "refuse
or invalidate" trademark registrations up to a require ment not to even "prejudice" the validity of such
registrations or the right to use the trademark. This emphasizes further that the negotiators were
increasing the protection of grandfathered trademarks, not reducing it.

66. The EC's interpretation, therefore, simply makes no sense from the ordinary meaning of the
text, and is contradicted by the negotiating history.

67. Further, the EC's interpretation of these term s is inconsistent with their context. When
Article 24.5 refers to the "right to use a trademark" , the Panel should keep in mind that a trademark is
"used" by its owner – how? – to distinguish his good s from the goods of others. If that owner is not
able to exclude all others from using confusingly similar signs – i.e., to maintain the distinctiveness of
his trademark as a source-identifier – his ability to use the trademark to distinguish his goods is

14 See Exhibit US-25.

severely prejudiced. As recognized by Advocate Genera l Jacobs of the European Court of Justice in
HAG II, 15 a trademark can only fulfill its role of identifying the manufacturer and guaranteeing
quality if it is exclusive: the exclusive right of trademark owners to prevent confusing uses is the core
of the trademark right. 16 As the EC itself suggests, the TRIPS Agreement negotiators knew how to
draft a provision that required some accommodation be tween the rights of different right holders, for
instance, in the area of two homonymous wine GIs. Article 24.5 is not such a provision.

68. The EC questions why certain wine labeling regul ations in the United States appear to permit
grandfathered trademarks to co-exist with later geographical indications. Although this question is
not relevant, as this dispute involves neither wine nor US regulations, suffice it to say that, even
where the wine labeling regulations permit the use of terms that may be similar to trademarks, US
courts have confirmed that the tr ademark owner fully retains his exclusive right to prevent confusing
uses of his signs.

Article 24.3 of the TRIPS Agreement

69. Having failed to show that Article 14(3) of the GI Regulation provides TRIPS Article 16.1
rights to trademark owners, and having failed to show that Article 24.5 of the TRIPS Agreement
permits the EC to prejudice those rights freely, th e EC next argues that Article 24.3 of the TRIPS
Agreement requires the EC to deprive trademark owners of their Article 16.1 rights. According to the
EC, this is because Article 24.3 requires that, in im plementing protections for GIs, a Member may not
diminish the protection of GIs that existed befo re the TRIPS Agreement entered into force.
Therefore, according to the EC, Article 24.3 re quires the EC to maintain "co-existence of
geographical indications and earlier trademarks."
17

70. This view is misguided. To begin, as in the case of Article 24.5, Article 24.3 is an exception
with respect to the implementation of the GI section of the TRIPS Agreement. It is not an exception
to the implementation of the trademark obligations. The meaning of Article 24.3 is that GIs should be
protected in accordance with the GI section of the TRIPS Agreement, but that the protection provided
those GIs should not diminish the protections for GIs that existed when the TRIPS Agreement came
into force. Article 24.3 does not impose any such exceptions on the obligation to provide trademark
rights under Article 16.1.

71. Under the EC's interpretati on, Article 24.3 would create a major and permanent exception to
the trademark section of the TRIPS Agreement. It would require a Member to apply all aspects of a
pre-TRIPS GI regime to all GIs – including those re gistered after January 1, 1996 – even though this
means that the Member would never fully implement the rights granted trademark owners by
Article 16.1.

72. The Panel should recall that the TRIPS Agreem ent text, and Article 24.3 in particular, was
essentially agreed to by December 1991, three years before the WTO Agreemen t came into force.
The EC GI Regulation entered into force a year and a half later, on June 5, 1993. Under the EC's
expansive reading of Article 24.3 – that is, requiri ng a freezing of GI protection systems regardless of
any WTO obligation (and not just the GI obligations) – a Member could have put in place a GI
"protection" regime that exempted GI owners fro m the copyright and patent disciplines, or, indeed,
any other WTO obligations, and then pointed to Article 24.3 as a broad exception to those obligations.

15 Exhibit US-9.
16 Exhibit US-9.

73. Plainly, this reading is incorrect. Articl e 24.3 is an exception to the implementation of
protections for GIs, not an exception to the implementation of trademark – or other WTO –
obligations.

Article 17 of the TRIPS Agreement

74. Finally, the EC argues that, as permitted by Article 17 of the TRIPS Agreement, the GI
Regulation constitutes a limited exception to trademark protection – the fair use of descriptive terms –
that takes account of the legitimate interests of the owner of the trademark and of third parties.

75. The EC's assertions would be more credible if the EC had not specifically rejected a proposed
amendment to Article 14(2) of the GI Regulation that would have clarified that the trademark rules on
"fair use" exceptions apply to GIs.
18 But this amendment was rejected in favor of the much broader
"exception" provided for under the GI Regulation. A limited exception to trademark protection, such
as that provided by a "fair use" ex ception, takes account of the leg itimate interests of the trademark
owner and of third parties on a case-by-case basis, depending on the manner in which a descriptive
term is used. For example, it should be possible to inform consumers about the origin of a product
and its characteristics through the use of descr iptive terms in a non-trademark sense without
affirmatively confusing the consumer about the sour ce of the goods. It is possible simultaneously to
protect the legitimate interests of the consumer, the GI owner and the trademark owner. The GI
Regulation makes no such distinctions, however, but simply offers a broad immunity against actions
by trademark owners, based purely on whether a particular GI has been registered. Further, with
respect to the scope of the so-called "exception", the GI Regulation entirely eliminates the trademark
holder's right to prevent confusing uses by all othe rs, which is the whole core of his legitimate
interest. This is not a limited exception and it does not take into account the legitimate interests of the
owner of the trademark or, indeed, of the consum er. Consequently, the EC GI Regulation does not
satisfy the requirements of Article 17 of the TRIPS Agreement.

Conclusion

76. Mr. Chairman, members of the Panel, this concludes the oral presentation of the United States
this morning. We thank you for your attention and, indeed, for your willingness to serve on this Panel
to review the important issues presented by this di spute. We look forward to our further discussions
this afternoon and tomorrow.

18 See Exhibit US-21.

ANNEX A-4

REPLIES BY THE UNITED STATES TO QUESTIONS POSED BY THE PANEL
AND THE EUROPEAN COMMUNITIES TO THE COMPLAINING PARTIES
FOLLOWING THE FIRST SUBSTANTIVE MEETING

(8 July 2004)

Q1. To what extent is the Panel bound by the EC's interpretation of its own Regulation?
USA, AUS, EC

Response:

1. The Panel is not bound by the EC's interpreta tion of the GI Regulation. The Panel is charged
under Article 11 of the DSU with making "an objective assessment of the matter before it, including
an objective assessment of the facts of the case ..." Therefore, as the Appellate Body has emphasized,
for instance, in India – Patents (US),1 panels often must make a deta iled examination of the domestic
law of a Member in order to assess the conformity of that law with WTO obligations. 2 I n t h i s
capacity, the Panel is a finder of fact: the Panel should "establish the meaning" of municipal law, "as a
factual element", to "check whether these factual elements constitute conduct" contrary to WTO law. 3
The party asserting the inconsistency – in this disput e, the United States and Australia – has the initial
burden of setting out evidence and arguments sufficien t to demonstrate the inconsistency; if that
burden is met, it is up to the responding party – the EC – to bring forth evidence and arguments to
disprove the claim.

2. In conducting the analysis of municipal la w, panels and the Appellate Body have stated
expressly that "we are not bound to accept the interpretation [of municipal law] presented by the
[responding Member]".
4 I n India – Patents (US) , the Appellate Body pointed out that if the panel
were obliged to accept the interpretation of munici pal law offered by India in that dispute, the
consequence would be that "only India can assess whether Indian law is consistent with India's
obligations under the WTO Agreemen t. This, clearly, cannot be so." 5 In that dispute, India's
explanation for certain "contradictions" in its mu nicipal law was rejected by the panel and the
Appellate Body.6 Further, for panels to accept uncritically the responding Member's interpretation of
its own municipal law would preclude them from making their own "objective assessment" of the
matter, including the "factual element" of municipal law.7

1 Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical
Products ("India – Patents (US) " , WT/DS50/AB/R, adopted 16 January 1998), para. 66 ("It is clear that an
examination of the relevant as pects of Indian municipal law …is essential to determining whether India has
complied with its obligations under Article 70.8(a). There was simply no way for the Panel to make this
determination without engaging in an examination of Indian law.")
2 See also Appellate Body Report, India – Patents (US) "), para. 67; Appellate Body Report, United
States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan ("US – Hot-Rolled Steel ") ,
WT/DS184/AB/R, adopted 23 August 2001, para. 200; panel report, United States – Sections 301-310 of the
Trade Act of 1974 ("US – Section 301 Trade Act ") , WT/DS152/R, adopted 27 January 2000, para. 7.18; Panel
Report, United States – Anti-Dumping Act of 1916 – Complaint by the European Communities ("US – 1916 Act
(EC) ") , WT/DS136/R and Corr.1, adopted 26 September 2000, as upheld by the Appellate Body Report,
WT/DS136/AB/R, WT/DS162/AB/R, paras. 6.48-6.50.
3 Panel Report, US – Section 301 Trade Act, para. 7.18.
4 Panel Report, US – Section 301 Trade Act, para. 7.19.
5 Appellate Body Report, India – Patents (US), para. 66.
6 Appellate Body Report, India – Patents (US), para. 70.
7 See Panel Report, US – 1916 Act (EC), para. 6.48.

3. Although panels are not bound by the interp retation offered by a responding Member of its
own legislation, the panel in US – Section 301 suggested that the responding Member "can reasonably
expect that considerable deference be given to its views on the meaning of its own law."
8 However,
in making an objective assessment, panels must criti cally review the interpretation offered, as they
would critically review any other evidence pertaining to the facts. In that respect, panels should
weigh the circumstances carefully and determine what credibility to ascrib e to the interpretation
offered.

4. In some circumstances, the interpretation ma y be the result of other legal instruments that
pre-date the dispute. Thus, the panel in US – Section 301 accorded particular credibility to the
interpretation given by the United States to its la w because that interpretati on was reflected in an
authoritative statement of administrative action ("SAA" ), issued by the President prior to the dispute,
and approved by the US Congress.
9

5. In this dispute, by contrast, the question is perhaps not how much weight to give to the EC's
interpretation, but which of the conflicting interpre tations to take into account: that consistently
provided to WTO Members in the years leading up to the EC's first written submission in this
proceeding, or that provided for the very first time in the EC's first written submission.

6. Related to this question are the questions of the Panel to the EC concerning whether the
Commission's interpretation of Regulation No. 208 1/92 is "binding on the European Communities"
(question 15); what would be the most authoritative statement of the interpretation of the Regulation
in European Community law (question 15); and wh ether the EC member States and the Council are
bound by the Commission's interpretation of the Regulation (question 70).

7. As these questions also bear on the weight that the Panel should give to the Commission's
interpretation of this measure in this dispute, th e United States would like to offer its views on these
questions.

8. According to Article 220 of the EC Treaty, the Court of Justice of the European Communities
("ECJ") and the Court of First Instance are respons ible for "ensuring that in the interpretation and
application" of EC law "the law is observed".
10 The Court has interpreted this provision to mean that
it is the "ultimate interpretive authority in relation to the EC Treaty."11 The ECJ is the highest court of
EC law, and only its interpretation of the EC GI Regulation would be binding on the institutions and
member States of the EC. Although it is true that in many, if not all, WTO Members, the highest
authority for interpretation of a domestic law is th e courts, there are particular aspects of the EC
system that are distinct from other Members' systems and that are relevant to the Panel's consideration
of the evidence in this dispute.

9. For instance, the EC Treaty specifically envisages that the Commi ssion may incorrectly
interpret or apply EC law, and the Treaty lays dow n judicial procedures for action to be taken against
the Commission (Articles 230 and 232 of the EC Treaty). This underscores that, in EC law, the

8 Panel Report, US – Section 301 Trade Act, para. 7.19
9 See Panel Report, US – Section 301 Trade Act, paras. 7.111 and 7.112.
10 The EC Treaty provisions discussed in this response are included as Exhibit US-26.
11 EU Law (2nd edition), Craig and De Burca, p. 30. Exhibit US-27. See also the ECJ's Opinion 1/91
on the Draft European Free Trade Agreement, [1991] I-ECR 6079, para. 35, where the ECJ explains that, "in the
allocation of responsibilities defined in the Treaties", it has the "exclusive jurisdiction" for ensuring that "the
law is observed". Exhibit US-28. In the ECJ's Opinion 1/92, also on the Draft European Free Trade Agreement,
[1992] I-2821, para. 22, the ECJ states that its decisions are "binding" in the Community legal order, pursuant to
Article 220 of the EC Treaty (formerly Article 164). Exhibit US-29.

Commission's interpretation of EC law does not appear to have any special authority under EC law
itself and may in fact be wrong.

10. A good example of this is the so-called "com fort letters" issued by the Commission in the
exercise of its powers in the field of competition law. Where commercial parties notify an agreement
to the Commission seeking an exemption under Articl e 81(3) of the EC Treaty, the Commission may
respond through an informal "comfort letter". This letter expresses the opinion of the Commission on
the interpretation and application of EC compe tition laws. The letter binds the Commission.
However, if the agreement is challenged in a natio nal court, the national court is not bound by the
Commission opinion. Indeed, according to the ECJ, th e national court is not even obliged to take the
Commission opinion into account, although it "may" do so.
12

11. In the same vein, in proceedings before the ECJ, the Commission generally submits a brief.
However, the Commission's brief carries no greater we ight before the ECJ than a brief submitted by a
private party, or by one of the other Community inst itutions or an EC member State. In many cases,
the ECJ does not even accept the Commission's interpretation of provisions of Community law.

12. Therefore, it follows that the interpreta tion of the EC GI Regulation offered by the
Commission to the Panel in this dispute (particularly in light of the fact that this interpretation
contradicts all previous interpretations provide d by the EC) is not binding upon the European
Communities. It is no more than the opinion of the Commission and has no special authority.

13. The significance of this fact for this Panel mi ght be illustrated by an example. Assume that,
in applying its interpretation of the GI Regul ation, the Commission grants an application for
registration of a GI for a product from a WTO Member that has not received approval pursuant to
Article 12(3) of the GI Regulation. The Commission would, by that act, have failed to apply the
provisions of Articles 12 and 12a, which state that an application can only be entertained from only
those third countries that have received approval under Article 12(3). In other words, the Commission
would have registered a GI in circumstances wher e the Council had legislated that no GI should be
registered.

14. In that case, the Commission's act would be ope n to challenge before the ECJ by any member
State or by the Council or European Parliament, unde r Article 230 of the EC Treaty. Further, natural
or legal persons that are directly and individually concerned by the decision could also challenge the
Commission's act. In those proceedings, the Commission's interpretation of the Regulation would not
be binding upon the ECJ. To the contrary, the EC J could reach the view that the Commission was not
entitled to disregard the requirements in Article 12(1) and 12(3).

15. In that regard, the ECJ has already ruled th at "the 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".
13 In other words, the ECJ would not entertain the Commission's argument
that it was entitled to disregard the terms of the Regulation in order to comply with WTO law.
Instead, the ECJ will apply EC legislation even if that legislation is WTO-inconsistent.14

12 Bellamy & Child, European Community Law of Competition (5th edition, Roth), para. 10-028, citing
Case 99/79 Lancome v. Etos [1980] ECR 2511. Exhibit US-30.
13 Case C-93/02 P, Biret International SA v. Council of the European Union, judgment of 30 September
2003, para. 52. Exhibit US-31.
14 See Case C-149/96, Portuguese Republic v. Council of the European Union , judgment of 23
November 1999, paras. 49 – 52. Exhibit US-32. Portugal argued that a Council decision concerning market
access for textiles from Pakistan was contrary to Commun ity law as it was inconsistent with WTO law. The
ECJ declined to examine the WTO law arguments and held that the Council decision could not be challenged
for these reasons. The ECJ found that the arguments on WTO law were "unfounded", without any substantive

16. The only exception to this appears to be wh ere the EC legislation "intended to implement a
particular obligation assumed in the context of the WTO agreements, or where the Community
measure refers expressly to the precise provisions of the WTO agreements".
15 In that event, the ECJ
will examine whether EC legislation is consistent with the WTO oblig ations it seeks to implement.
However, even in that case, the ECJ would not allow the Commission simply to disregard provisions
of a Regulation. The Commission must apply the legislation. If the Commission considered that the
legislation was WTO-inconsistent it could have ch allenged the Council's adoption of the legislation
before the ECJ under Article 230 of the EC Treaty.

17. The Panel should also be aware that, acco rding to Article 211 of the EC Treaty, the
Commission has a responsibility in EC law for ensu ring that the EC Treaty and secondary legislation
"are applied". In that respect, if the Commission takes the view that an EC member State or another
institution has failed to respect EC law, the Commission may bring proceedings to the ECJ under
Articles 226, 230 or 232 of the EC Treaty. However, the Commission's responsibility under
Article 211 does not confer any special status upon th e Commission's interpretation of EC law. The
other institutions, and the Member States, can and do take different views from the Commission as to
the meaning of EC law. At the end of the day, it is for the ECJ to ensure th at "the law is observed",
according to Article 220.

18. For all these reasons, the Panel should not accord any particular deference to the
Commission's most recent interpretation of the GI Regulation, newly minted for purposes of this
dispute, taken alone. This new interpretation does not appear to be based on any published official
notice; it appears to run counter to the terms of the Regulation; and does not appear to be authoritative
or binding as a matter of EC law. Further, as discussed above, the United States has substantial
concerns that the EC's interpretation would not stand up to ECJ review.

Q2. Can the procedures under Articles 5 and 6 of Regulation (EC) No. 2081/92 apply to names of
geographical areas located outside the EC? EC

Q3. Did the phrase "[w]ithout prejudice to in ternational agreements" in Article 12(1) of
Regulation (EC) No. 2081/92 predate the TRIPS Ag reement? Did it refer to any specific agreements
when it was adopted? Which agreements does it ref er to now? Would it cover bilateral agreements
for the protection of individual geographical indications? EC

Q4. Is it unusual that the text of Article 12(1) of Regulation (EC) No. 2081/92 covers only a small
number of countries that are non-WTO Members, but the introductory phrase "[w]ithout prejudice to
international agreements" covers th e entire membership of the WTO? Why was this structure
retained when the Regulation was amended in April 2003? EC

Q5. In paragraph 8 of the US oral statement it is implied that the purpose of the phrase "[w]ithout
prejudice to international agreements" in Article 12(1) of Regulation (EC) No. 2081/92 is to reserve
the EC's flexibility to protect specific non-EC GIs through bilateral agreements. In the US view, in
what way does the phrase apply to bilateral agreements ? Please also explain on what basis the US
draws the distinction between bilateral and other international agreements. USA

inquiry. In essence, the ECJ ha s already accepted, therefore, that Council legislation may well be
WTO-inconsistent and must still be applied in the EC legal order.
15 Biret International SA, para. 53. Exhibit US-31.

Response:

19. The "without prejudice" language recognizes th at international agreements may lay down
specific GI rules ( i.e., either directly specifying GI protection for specific names or specifying
procedures and requirements for protecting GIs from the pa rties to that agreement). In such an event,
the specific regime established in the international agreement will be applied directly.

20. As context and by way of background, the EC has sought and granted protection to specific
geographical indications in bilateral agreements with individual countries. Such provisions are
contained, for instance, in the EC's agreement in the wine sector with Canada, Chile, and South
Africa, among others, in which EC-wide GI protecti on is granted to specific GI terms listed in those
agreements under specific procedures.
16 And, indeed, the basic EC wine regulation, Council
Regulation (EC ) 1493/1999, provides that imported wines bearing a geographical indication may be
eligible for the EC's protection and control scheme for geographical indications "subject to
reciprocity".
17 Further, the EC's wine labeling regula tion, containing rules for applying Regulation
1493, makes the use of GIs for wine from third countri es subject to a requirement that they not give
rise to confusion with the geographical indication of "another imported wine included in the lists in
agreements concluded between the Community and third countries." 18

21. In other words, in this area, the EC provides certain general rules for the use of GIs from third
countries, but makes those rules subject to specific agreements that the EC has reached with certain
third countries with respect to protection of specific GIs.

22. Similarly, in the non-wine context, the Join t Declaration included in the bilateral agreement
between Switzerland and the EC "on the protection of geographical indications and designation or
origin of agricultural products and foodstuffs" specifically anticipates speci al rules concerning both
the registration of Swiss GIs and the inspection structures to be required of Switzerland:

[t]he Parties shall provide for provision on the mutual protection of PDOs and PGIs
to be incorporated in the Agreement on trad e in agricultural products on the basis of
equivalent legislation, as regards both th e conditions governing the registration of
PDOs and PGIs and the arrangement on controls.

23. Thus, to provide for the likelihood th at these "conditions governing [PDO and PGI]
registration" and the "arrangement on controls" w ill not necessarily mimic exac tly the conditions and
inspection structures required in the EC GI Regulat ion, the GI Regulation states that the conditions
and inspection structures required of third countries in the GI Regulation are "[w]ithout prejudice to
international agreements", such as that negotiated with Switzerland.

16 See, e.g., Agreement between Canada and the European Community on Trade in Wines and Spirit
Drinks, Articles 10 and 11 ("In implementation of paragraphs 1 and 2, after receiving an official application by
diplomatic note from Canada justifying that the names in paragraph 1 are geographical indications, the
Community shall take the necessary steps to have the names listed in Annex III (b) protected by the competent
authorities responsible for enforcement so that any wine s incorrectly presented or described with a protected
Canadian geographical indication are not placed on, or are withdrawn from, the market"). Exhibit US-33. See
also Agreement Between the European Co mmunity and the Republic of South Africa on Trade in Wine,
http://europa.eu.int/eur-lex/pri/en/oj/dat/2002/l_028/l_02820020130en00040105.pdf;
17 Council Regulation (EC) No. 1493/1999 of 17 May 1999, OJ L 179, 14.7.1999, page 1, Annex VII
(G)(4). Exhibit US-34.
18 Article 36(3) of Commission Regulation (EC) No. 753/2002 of 29 April 2002, laying down certain
rules for applying Council Regulation (EC) No. 1493 as regards the description, designation, presentation and
protection of certain wine sector products, OJ L 118, 4.5.2002, p. 1. Exhibit US-35.

24. There are other examples of bilateral agreem ents to which the "without prejudice" language
would appear to apply. For instance, there are b ilateral agreements for the protection of specific GIs
between member States of the EC and third coun tries, such as those between Austria and the
Czechoslovak Republic and between Portugal and the Czechoslovak Republic on the protection of
specific Czech GIs.
19 As the Supreme Court of Justice in Portugal noted in a case involving the latter
agreement, the language of the GI Regulation – "[w] ithout prejudice to international agreements" – is
aimed at excluding from "its field of application th e third countries which are parties in agreements
entered into with member States." 20 There are other bilateral and plurilateral agreements involving
member States on GIs. Examples are provided in WTO document, IP/C/W/85/Add.1, 2 July 1999,
Overview of Existing International Notifica tion and Registration Systems for Geographical
Indications Relating to Products Other Than Win es and Spirits, (Note by the Secretariat). As
discussed above, certain of these agreements provide GI protection for specific names (examples
include the Austria / Czechoslovak agreement that pr otects a list of named GIs) and the (plurilateral)
Stresa Convention,
21 which protects a large number of names of cheeses.

25. In addition, the EC is also seeking more specific agreements on GIs. For instance,
Article 46(4) of the Cotonou Agreement states that the EC, its member St ates and the ACP countries
may enter into agreements on the protection of "ge ographical indications for products of particular
interest" to the parties. The EC is also engaged in negotiations with China on a bilateral agreement on
GIs. (see http://europa.eu.int/comm/external_relations/china/intro/sect.htm).

26. In the context of all of these specific b ilateral and plurilateral agreements, the "without
prejudice" language allows the Commission to apply the specific GI protection regimes established by
international agreements independe ntly of the Regulation. For instance, if the EC concludes an
agreement with a third country to provide GI pr otection for named agricultural products from that
country, there is no need to use the registration procedures in the Regulation. The Commission can
simply insert the names concerned in the register on the basis of the newly established international
regime and the "without prejudice" language in the GI Regulation.

27. Similarly, if an international agreement were to lay down special procedures governing the
registration of GIs for products from particular th ird countries, the Regulation would not prevent the
Commission from applying these procedures directly, even though they are different from the
procedures in the Regulation.

28. In these cases, the international agreement would be applied directly without need for
implementing rules. In short, instead of applying the Regulation, the Commission would apply
specific rules laid down in the agreement that deal with the particular fact situation. And the
Commission would derive authority for its act dire ctly from the international regime to which it
specifically applies, displacing the general rules in the EC GI Regulation.

29. In the case of the national treatment obligati on in the TRIPS Agreement, by contrast, there is
no specific international registration regime for the Commission to apply. The Commission does not
even purport to be applying an international regi me of any kind. Instead, the Commission appears to

19 See Case C-216/01, Budejovicky Budvar v. Rudolf Ammersin, judgment of 18 November 2003, paras.
70 and 71 (where the French government asserted that the "without prejudice" language preserved the
protections offered by the Austrian-Czechoslovak Agreement; the ECJ did not have to address that assertion,
however, since the case was decided on other grounds) . At the time of the dispute, the Czech Republic, a
successor State to the Czechoslovak Republic, was not a member State of the Eu ropean Union and was,
therefore, a third country for these purposes. Exhibit US-36.
20 Exhibit US-37.
21 Signed on 1 June 1951 and entered into force on 12 July 1953. To date the contracting parties are
Austria, Denmark, France, Italy, The Netherlands, Norway and Switzerland.

acknowledge that it is applying the Community regist ration regime. However, apparently because of
the requirements of the national treatment obliga tion in the TRIPS Agreement, the Commission now
says it has to apply the Community regime differently from the regime the Council adopted.

30. The Commission is, therefore, purporting to appl y a regime that is not provided for either in
an international agreement or in Community law. In short, there are no specific rules in an
international agreement to apply; instead, the Comm ission now purports to be taking it upon itself to
modify the Community general rules.

31. But the "without prejudice" language does not authorize the Commission to apply rules that
have no legal basis whatsoever, be it in internationa l law or Community law. Furthermore, in general
Community law, as the United States understands it, the Commission does not enjoy the legal
authority to modify or refuse to apply a Council Regulation. Only the Council can modify its own
Regulation.

32. Accordingly, the Commission appears to have no legal authority to receive GI applications
for products from a third country unless the third c ountry has requested, and been granted, approval
by the Commission, pursuant to Article 12(3) of the Regulation.

33. With respect to the Panel's question a bout whether these agreements are necessarily
"bilateral", the EC has generally sought reciprocal treatment, which implies that in general such
agreements are bilateral. But the United States notes that the EC is also negotiating agreements in the
wine sector with Mercosur, whic h would probably be characterized as plurilateral, and also notes the
example of the Stresa Convention, discussed above, wh ich is also plurilateral. It is, of course,
possible for a multilateral agreement to provide for specific procedures and conditions for registering
and protecting certain GIs of all parties to the agre ement, as the EC has negotiated on a bilateral basis
and plurilateral basis in the past. But, for the reasons mentioned above, the WTO Agreement is not
such an agreement.

Q6. What meaning does Australia give to the phrase "[w]ithout prejudi ce to international
agreements" in Article 12(1) of Regulation (EC) No. 2081/92? AUS

Q7. Do the last sentence of Article 12(3) of Regulation (EC) No. 2081/92 and the first clause in
Article 12a "[i]n the case provided for in Article 12(3)" limit the applicability of Article 12a? EC

Q8. Which references to a "third country" in Articles 12, 12a, 12b and 12d of Regulation (EC) No.
2081/92 include all WTO Members, and which do not ? What, in the context of each reference,
indicates what "third country" means? Why are different terms not used? EC

Q9. Why is it that only the rights of objection in Articles 12b(2)(a) and 12d(1) of Regulation (EC)
No. 2081/92 mention a "WTO Member" or "WTO me mber country"? Is it relevant that Regulation
(EC) No. 692/2003 explained, in its 10th recital, that in the matter of objections the provisions in
question apply without prejudice to international agr eements but, in its 9th recital, it explained that
the protection provided by registration is open to third countries' names by reciprocity and under
equivalence conditions? EC

Q10. Has the Commission recognized any countries und er the procedure set out in Article 12(3) of
Regulation (EC) No. 2081/92? Have any countries requ ested to be recognized under that procedure?
EC

Q11. Has an application for registration under Regulation (EC) No. 2081/92 ever been made in
respect of the name of a geographical area located outside the EC? If so, what happened? EC

Q12. Has any group or a natural or legal p erson interested in a geographical indication for
agricultural products or foodstuffs originating in your territory ever sent a registration application to
your authorities pursuant to Regulation (EC) No. 2081/92? If not, do you know the reason? USA,
AUS

Response:

34. As the United States explained to the Pane l during its first meeting, there is no office
established within the US Government for processing a pplications for GI registrations in the EC; nor
is the United States in a position to assess whether a ny such application would meet the requirements
of the EC GI Regulation, as that regulation requires.
22 Therefore it is not clear to whom such an
application would be sent.

35. However, after consulting various agencies in the US Government, it does not appear that any
applications have been submitted, although ther e have been discussions with private sector
stakeholders about the lack of access to the EC GI system. The United States is not privy to all of the
reasons that a person with a US-based GI would not file an application. However, as illustrated by the
case of the Idaho Potato Commission, which protects "Idaho Potatoes" as a certification mark in the
United States, such rightholders recognize that it wo uld be futile to apply, because the United States
does not satisfy the GI Regulation's equivalence and reciprocity requirements.

36. In testimony presented to the Committee on Agri culture in the US House of Representatives
on July 22, 2003, a representative of the Idaho Pota to Commission testified that, in order to achieve
GI protection under the GI Regulation, the country se eking GI protection for its nationals has to show
that it "has essentially adopted the EU system for prot ecting GI's. This puts the EU in the position of
evaluating the laws of another WTO Member, and then making a determination that their system for
protecting GI's is reciprocal to the laws of the EU."
23 Testifying that "the existing US certification
mark system is not, in the view of the EU, suffi cient", he concluded that there was no way for US
agricultural producers to achieve such protection. He further stated that "the attorneys we have
retained in the EU to investigate and advise us of any recourse that might be available to us have all
reached the same conclusions: the EU system has simply shut us out. We are powerless to protect our
name in the EU, but EU nationals are free to register and use our name."
24

37. As far as the United States is aware, the s ituation of the Idaho Potato Commission is not
unique, and its view of the situation, which has been set out in public statements, is shared by many
relevant stakeholders in the United States. For instance the US Dairy Export Council and the National
Milk Producers Federation have also complained to the US Government that, absent EC-equivalent
legislation in the United States, US persons are not eligible to register their GIs in the EU.25

38. Further, neither the Idaho Potato Commiss ion nor any other US stakeholder would have
received contrary information from the US Government . To the contrary, as discussed in the US first
written submission, the EC has made clear on numer ous occasions, including during five years of
consultations, that the United States would have to satisfy the conditions of reciprocity and
equivalence to have US-based GIs registered, a nd that the United States does not satisfy those
conditions. Indeed, responding on January 16, 20 03, to the US concern about conditioning the
availability of GI registration on equivalence and reciprocity, the EC specifically wrote that "it is true

22 Article 12a(2) of the GI Regulation.
23 See Exhibit US-38, at p. 352.
24 Exhibit US-38 at p. 353.
25 See Letter from US Dairy Export Council and the National Milk Producers Federation to the Office
of the United States Trade Representative, dated March 26, 2004. Exhibit US-39.

that US GIs cannot be registered in the EU" , but claimed that other avenues for protection ( e.g.,
member State unfair competition rules) were available.26

39. In other words, the lack of applications appears to result from the success of the EC GI
Regulation in erecting barriers to those applications.

Q13. What discretion does the Commission enjoy in the application of Regulation (EC)
No. 2081/92? EC

Q14. Please express your view on whether and to what extent the mandatory/discretionary
distinction in GATT and WTO jurisprudence appli es under the TRIPS Agreement. Would the nature
of those TRIPS obligations wh ich are not prohibitions but rather oblige Members to take certain
actions, affect the application of the distinction? USA, AUS, EC

Response:

40. In this dispute, the EC has argue d, at para. 12 of its oral statement
27

In order to substantiate their claim, th e complainants should have established that
Regulation 2081/92 mandates necessarily the registration of later confusing
geographical indications. In turn, this w ould have required them to show that
Article 14(3) cannot be interpreted in a ma nner which allows the registering authority
to refuse the registration of confusing geogra phical indications. At the very least, the
complainants should have established that , in practice, Article 14(3) is being
interpreted and applied in a manner whic h results in a consistent pattern of
registrations of confusing geographical i ndications. The complainants have proved
none of this. Indeed, they have not even attempted to do so. As mentioned, their
complaint is purely theoretical. The Panel, therefore, should conclude that, as a matter
of fact, the complainants' claim would be unfounded even on their own interpretation
of Article 16.1 of the TRIPS Agreement.
41. This is not a proper application of the mandato ry/discretionary analysis. Article 16.1 of the
TRIPS Agreement requires Members to provide owne rs of registered trademarks with certain
exclusive rights to prevent confusing uses of signs, including GIs. A WTO Member cannot decline to
provide this right, guaranteed by the TRIPS Agreement, on the grounds that the owner of the
registered trademark is unlikely to need it in light of how the EC might apply Article 14(3). Yet, that
is just what the EC is arguing. Further, Article 14( 3) cannot substitute entirely for this right. First,
Article 14(3) applies only in the case of possible conf usion with trademarks "in light of a trade mark's
reputation and renown and the length of time it has b een used". By contrast, Article 16.1 rights are
required regardless of the reputation, renown, or length of time of use of the registered trademark.
More significant, however, Article 14(3) cannot substitute entirely for TRIPS Article 16.1 rights
because it is not possible to determine with certainty at the time of registration whether the use of a GI
will likely result in confusion with a registered tr ademark, as such a determination is made on a case-
by-case basis, and may require an evaluation of the use of the GI in the marketplace.

42. Simply stated, the EC cannot provide the requi red exclusive rights to owners of registered
trademarks under TRIPS Article 16.1 by invoking the unrealistic hope that the EC authorities will
make the exercise of those rights unnecessary through th e use of Article 14(3) of the GI Regulation.
The EC is incorrect in stating that to establish its TRIPS Article 16.1 claim, the United States "would
need to prove that Regulation 2081/92 mandates ne cessarily the registration of confusing geographic

26 See Exhibit US-40.
27 See also, EC First Written Submission, paras. 277 and 292.

indications."
28 The issue is not whether the EC has the legal discretion to grant or deny the
registration of GIs when there is the possibility of confusion with any trademark (although the EC
does not have such discretion.). The issue is whether the EC is providing owners of registered
trademarks with the rights required by Article 16.1.

43. Thus, in the context of this dispute, a breach has been established through the failure of the
EC to provide the right in question in its municipal law. The mandatory/discretionary analysis is not
required in this particular instance. This is not to say, however, that it might not be relevant in other
TRIPS Agreement contexts, including where the TR IPS Agreement obliges Members to take certain
actions. For example, if a Member maintains a measure which affirmatively precludes the Member's
authorities from taking required actions, under a mandato ry/discretionary analysis, the measure would
mandate a breach of the TRIPS Agreement obligation.

44. Finally, the EC has no basis for alleging that a challenge to the EC GI Regulation requires a
showing of a "consistent pattern" of registering confusing GIs. As described above, the EC is
obligated to provide a right in its municipal law, and it is not. Nevertheless, the United States notes
that in the one invocation of Article 14(3) cited by the EC, the Commission decided to register the
name Bayerisches Bier as a GI, notwithstanding ha ving been informed of a trademark ("Bavaria")
used for beer that included that name (apparently in translation).
29 This specific application of the
Regulation does not give the United States much conf idence that Article 14(3) fulfills the Article 16.1
rights of registered trademark owners.

Q15. What would be the most authoritative statement of the interpretation of Regulation (EC) No.
2081/92? Is a statement by the EC delegation to this Panel legally binding on the European
Communities? EC

Response:

See response to question 1.

Q16. Can the EC provide the Panel with any official statement predating its first written
submission that names of geographical areas locate d in all WTO Members could be registered under
Regulation (EC) No. 2081/92 without satisfying its equivalence and reciprocity conditions? EC

Response:

45. See Exhibit US-40, in which, in a communication to the United States, the EC confirmed that
US GIs "cannot be registered in the EU." See also Exhibit US-44 (slide 14/15).

Q17. Is the EC's explanation of the availability of registration of foreign GIs under its system, set
out in its written statement to the Council for TRIPS in September 2002, (IP/C/M/37/Add.1, para. 142
and Annex, pp. 77-85) consistent with the text of Articles 12-12c of the Regulation? Why did that
written statement not qualify the position that the Regulation's equivalence and reciprocity conditions
apply to foreign GIs, if they did not apply to WTO Members, to whom the statement was addressed?
EC

Q18. Did the EC member States agree with the Commission's written statement to the Council for
TRIPS in September 2002 with respect to the conditions attached to the registration of foreign GIs?
How can the Commission ensure that the Council of Ministers will not prevent registration under the

29 See Exhibit US-41.

Regulation of the name of a geographical area loca ted in a third country WTO Member because that
Member does not satisfy the equivalence and reciprocity conditions of Article 12(1)? EC

Q19. Has a judicial authority ever ruled on the ava ilability of protection provided by registration
for third countries under Regulation (EC) No. 2081/92? If the Commission registered the name of a
geographical area located in a third country WTO Me mber, could that registration be subject to
judicial review because the area was located in a WTO Member that did not fulfil the equivalence and
reciprocity conditions of Article 12(1) of the Regulation? EC

Q20. With reference to paragraph 43 of the EC's oral statement, does the EC contest that
equivalence and reciprocity conditions such as tho se under Article 12(1) and (3) of Regulation (EC)
No. 2081/92, if applied to other WTO Members, would be inconsistent with the national treatment
obligations in the TRIPS Agreement and/or Article III:4 of the GATT 1994? EC

Q21. If Switzerland, as a WTO Member, can apply for registration of its GIs under Regulation
(EC) No. 2081/92 without satisfying equivalence and reciprocity conditions, what was the purpose of
its joint declaration with the EC concerning GIs set out in Exhibit US-6 and mentioned in paragraph
119 of the US first written submission and paragrap hs 243-244 of the EC's first written submission?
USA, AUS, EC

Response:

46. While the United States cannot speak for Switzer land, in the view of the United States, if
there were no requirement for equivalence and reciprocity in the GI Regulation, as the EC maintains,
it would make little sense for Switzerland to agree to "mutual protection" of GIs "on the basis of
equivalent legislation". In effe ct, Switzerland would be agreeing to more onerous requirements than
would be required under the GI Regulation. By co ntrast, such an agreement would be useful if it
meant that Switzerland did not have to meet the eq uivalence and reciprocity requirements in the GI
Regulation.

Q22. Are there any legal requirements or other pr ovisions in EC or national laws which ensure
that groups or persons entitled to apply for regis tration under Article 5 of Regulation (EC) No.
2081/92 are always, or usually, EC citizens or legal persons organized under the laws of the EC or an
EC member State? What conditions have been laid down for natural or legal persons to be entitled to
apply for registration pursuant to Article 5(1)? USA, AUS, EC

Response:

47. Under Article 5 of the GI Regulation, onl y an association of producers and/or processors
working with the same agricultural product or foods tuff may apply for a GI registration; Article 2 of
Commission Regulation (EEC) No 2037/93 of 17 July 1993
30 permits applications by a group of
individuals without legal personality where national law treats such a group as a legal person. Under
Article 5.2, "[a] group or a natural or a legal pe rson may apply for registration only in respect to
agricultural products or foodstuffs which it produces or obtains" within a particular region. Therefore,
with respect to applications for GIs referring to regi ons within the EC, it would appear to follow that
those entitled to submit an application for EC-based GIs include legal persons under member State
national law that produce or process products in a par ticular region of that member State; in other
words, such applicants are, generally legal persons under the laws of the EC or the EC member State.
Indeed, as a practical matter, any commercial en tity growing agricultural products or processing

30 Laying down detailed rules of application of Council Regulation (EEC) no 2081/92 on the protection
of geographical indications and designations of origin for agricultural products and foodstuffs, OJ L 185,
28.7.1993, p. 5 (Exhibit COMP-2.a).

foodstuffs in a member State of the EC will set up a legal entity under the laws of that member State
for that purpose.

48. Of course, Article 12a, provides for applicati ons from "a group or a natural or legal person as
referred to in Article 5(1) and 5(2) in a third c ountry" that satisfies the equivalence and reciprocity
conditions, so the same considerations apply w ith respect to applicants from qualifying third
countries: "legal persons" in such a third country pr oducing or obtaining product in that third country
may also be able to submit an application for their GIs.

Q23. How do you interpret the term "nationals" as used in Article 1.3, including footnote 1, and
Articles 3.1 and 4 of the TRIPS Agreement and Article 2 of the Paris Convention (1967) in relation to
this dispute? Do a Member's nationals necessarily include natural persons who are domiciled, or
legal persons who have a real and effective indus trial and commercial establishment, in that
Member? USA, AUS, EC

Response:

49. Article 1.3, footnote 1, specifies that "nationa ls" of a WTO Member that is a separate customs
territory, such as the EC, means "persons, natural or legal, who are domiciled or who have a real and
effective industrial or commercial establishment in th at customs territory." This is a definition that
applies to the TRIPS Agreement as a whole, so it is a definition that also applies to Articles 3.1 and 4
of the TRIPS Agreement. Thus, for instance, under Article 3.1, the EC has an obligation to accord
nationals of other Members treatment no less favorab le than it accords natural or legal persons who
have a real and effective industrial or commercial establishment in the EC. Further, under Article 2 of
the Paris Convention, "nationals" refe rs to both natural and legal persons,
31 and, under Article 3,
persons that are not nationals of a Paris Union memb er country, but that are domiciled or that have a
real and effective industrial or commercial establis hment in the territory of one of the member
countries, are also treated as nationals of that member country.

Q24. In your view, which natural or legal p ersons can be considered "interested parties" in the
sense of Article 22.2 of the TRIPS Agreement? Is Article 10(2) of the Paris Convention (1967)
relevant? USA, AUS, EC

Response:

50. "Interested parties" is not defined in the TR IPS Agreement, but the ordinary meaning of the
term under TRIPS Article 2.2 would in clude a party that has an interest in the subject matter of the
geographical indication. Article 10(2) of the Paris Convention, which concerns similar subject matter
to TRIPS Agreement Article 22 of the TRIPS Agreem ent (including false indications of geographical
source), provides useful context that an "interested party" includes producers or sellers of the relevant
goods that are either established and producing in the region falsely indicated as the source, or
established and producing in the country where the fa lse indication of source is used. Article 10 is
relevant in this respect notably because it is one of the Paris Convention provisions specifically
incorporated into the TRIPS Agreement by Article 2.1.
32

Q25. Is it appropriate to compare nationals who are interested in GIs that refer to areas located in
different WTO Members in order to examine national treatment under the TRIPS Agreement? Why or
why not? USA, AUS, EC

31 Bodenhausen, p. 27. Exhibit US-2.
32 See Gervais, page 193 (The definition of interested party in Article 10(2) "is useful and may be used
to interpret the expression "interested party" used in Article 22(2)). Exhibit US-42.

Response:

51. GIs are by nature related to geographic territo ry. An analysis of national treatment requires
comparing the treatment of different nationals with respect to the protection of their intellectual
property. Therefore it is appropriate to compare th e treatment of domestic nationals with respect to
the protection of their home-based GIs to the trea tment of foreign nationals with respect to the
protection of their home-based GIs. In addition, as a practical matter, and particularly in the
agricultural sector, which is intrinsically tied to the land, a measure that provides less favorable
treatment to products originating in certain WTO Me mbers also provides less favorable treatment to
the nationals of that Member.

Q26. If national treatment can be examined in relation to GIs in terms of the location of the
geographical area to the territory of a Member, is it appropriate to examine national treatment in
relation to any other intellectual property rights in terms of an attachment to a Member besides the
nationality of the right holder? Why or why not? USA, AUS, EC

Response:

52. National treatment obligations should be analyzed on a case-by-case basis, based on the
measure at issue, as well as on the particular type of intellectual property right; broad conclusions in
the absence of a particular issue are difficult to fo rmulate accurately. However, the United States
notes that footnote 1 to Article 1.3 of the TRIPS Agreement defines "national" throughout the
Agreement not in terms of nationality, but in term s of where a person is domiciled or where a person
has a real and effective industrial or commercial establishment. Further, in Article 1.3, "nationals" of
other Members include persons meeting certain cr iteria for protection under other international
agreements. In the case of copyri ght, as an example, non-nationals that would be treated as nationals
for purposes of protection under the Berne Conventio n would include non-nationals whose works are
first published in a member country (Berne Conve ntion, Article 3), or persons with "habitual
residences" in such a country. Similarly, under the Rome Convention, there are points of attachment
that are broader than mere nationality, includi ng where a phonogram was first fixed, or where a
performance took place, or where a broadcast originated.

53. Geographical indications may be different fro m other forms of intellectual property in the
degree to which they are related to the territories of the Parties, but finding points of attachment that
go beyond mere "nationality" in a technical sense is not unusual.

Q27. Can the Panel assume that it is likel y that interested parties in relation to names of
geographical areas located in a Member are nationa ls of that Member? Have the complainants
attempted to gather data on the relative numbers of EC, and non-EC, interested parties in names of
geographical areas located within, and outside, the EC that might be eligible for registration under
Regulation (EC) No. 2081/92? Would such data be relevant? USA, AUS

Response:

54. Any meaningful and realistic appraisal of whether a measure provides less favorable
treatment to nationals with respect to geographical indications would take into account that nationals
have an interest in GIs in the country of their na tionality, particularly with respect to agricultural
products and foodstuffs. Therefore, a measure that provides less favorable treatment of, for instance,
agricultural products from the United States would provide less favorable treatment to the US
nationals that produce them.

55. Further, since the EC's requirements have discouraged anyone from applying for GI
registration with respect to GIs in the United States, it is not possible to determine whether, for

instance, there are any French nationals who woul d, in the absence of the barriers in the EC GI
Regulation, seek to register a US-based GI in the EC.

56. In addition, as further support for this obvi ous link, the United States conducted a search for
certification mark applications by French, German, Spanish and Italian nationals. As the Panel is
aware, the United States protects geographical indications through certification marks (although
certification marks can include subject matter that goes beyond "geographical indications" as defined
in the TRIPS Agreement or the EC GI Regulation). The results are attached as Exhibit US-43, and
show that nationals of a country typically regist er names that refer to geographical areas from the
territory of their nationality. For example, the cer tification mark applications and registrations from
French nationals include names of French geographi c origin, and not names of US origin. The same
is true of applications from Germ an, Italian, and Spanish nationals. Similarly, Exhibit 43 includes a
sample search of US entities with registered cer tification marks referring to selected food products,
which shows that those entities are interested in geographical areas in the United States.

57. However, in the view of the United States, such data, while they might be obvious, are not
necessary, because of the obvious lin k between the natural and lega l persons who would seek GI
protection for agricultural products and foodstuffs and the territory of the Member in which they are
growing or producing such products.

Q28. Do you have information on the numbers of EC nationals who are interested parties in
relation to GIs protected in your territory for agr icultural products and foodstuffs other than wines
and spirits? USA, AUS

Response:

58. The information with respect to certification marks filed by various EC nationals, described in
response to question 27, would suggest that EC nationa ls have an interest primarily in GIs referring to
regions in their country of nationality. In additio n, however, interested parties would also include
those who are likely to be damaged by the registration of a GI – e.g., an EC national using a generic
term on a product exported to the United States, where there is an application at the USPTO to make
that term proprietary. The United States has no way to know the number of EC nationals who are
interested parties in this sense, but notes that a ny such parties are free to object to, or request
cancellation of, the registration of a certification mark.

Q29. The Japan – Alcoholic Beverages II, Korea – Alcoholic Beverages and Chile – Alcoholic
Beverages disputes show that measures which are or igin-neutral on their face can be inconsistent
with Article III of GATT 1994. Is Regulation (E C) No. 2081/92 also open to challenge under
Article 3.1 of the TRIPS Agreement despite its apparently national-neutral text? EC

Q30. In Article 2(1) of the Paris Convention ( 1967) as incorporated in the TRIPS Agreement by its
Article 2.1, should the words "country of the Uni on" be read mutatis mutandis to refer to "WTO
Member"? USA, AUS, EC

Response:

59. Article 2.1 of the TRIPS Agreement requires WTO Members to "comply" with, inter alia ,
Article 2(1) of the Paris Convention, which impos es obligations with respect to the treatment of
"[n]ationals of any country of the Union." Th erefore, "country of the Union" should be read mutatis
mutandis to refer to "WTO Member". The United States notes, however, that it is a WTO Member as
well as a "country of the Union," so that its na tionals are owed national treatment by the EC
regardless of the interpretation of this phrase.

Q31. What is the respective scope of the national treatment obligations in Article 2(1) of the Paris
Convention (1967) and Article 3.1 of the TRIPS Agreement? Do they overlap? USA, AUS, EC

Response:

60. The national treatment obligations of the Paris Convention apply with respect to the
protection of industrial property as defined in the Paris Convention. Those of the TRIPS Agreement
apply to the protection of intellectual property as defined in the TRIPS Agreement. There is
substantial overlap in these protections, but they are not entirely co-extensive.

61. With respect to the national treatment obligation itself, the scope of the obligation is slightly
different in the Paris Convention compared to th e TRIPS Agreement – notably, the Paris Convention
requires that the "same protection" be granted to nationals of other Members as is granted to a
Member's own nationals, whereas the TRIPS Agre ement requires "no less favourable" treatment.
However, the United States does not believe that this difference in scope is relevant for purposes of
this dispute, as the treatment provided by the EC is neither the "same" nor "no less favorable."
Similarly, the United States does not believe that the difference between other nationals enjoying the
advantages of one's own nationals (Paris Convention Article 2(1)) a nd other nationals being accorded
treatment "no less favourable" than that accorded on e's own nationals (TRIPS Agreement Article 3.1)
is significant in this dispute, since the EC GI Regulation complies with neither standard.

Q32. If Regulation (EC) No. 2081/92 grants diff erent treatment to names, why does this amount to
less favourable treatment to like products? What evidence is there of actual modification of
conditions of competition? Would such evidence be relevant to a determination of less favourable
treatment? USA, AUS

Response:

62. Through the registration and protection of GI s for certain products, the GI Regulation bestows
numerous significant competitive advantages on tho se products, which are detailed in the GI
Regulation itself.
33 But access to this system of GI protecti on is not available to products of non-EC
origin on as favorable a basis. The issue is not granting different treatment to "names" as such, but
rather granting favorable treatment for products whose names qualify for a particular status that brings
with it competitive advantages. The EC itself in its GI Regulation indicates that products that benefit
from GI protection show enhanced profitability; indeed , that is the very reason for the Regulation. In
addition, the EC has provided specific evidence of this competitive advantage, in presentations aimed
at demonstrating the value of its GI registration system.34

63. With respect to the issue of "like product", both the Appellate Body and panels have been
clear that, where there is a measure of general application ( i.e., not directly regulating specific
products), the relevant "like produc t" consideration is not whether particular traded products are
"like", but rather whether the measure at issue ma kes distinctions between products based solely on

33 See US First Written Submission at paras. 104-107.
34 E.g., "Geographical Indications: An Opportunity for Japanese Specialty Products", Tokyo – Osaka,
10-12 March 2004 (showing pricing differentials for GI vs comparable non-GI products). Exhibit US-44.

origin.
35 As the Appellate Body has noted, the term "like product" in Article III:4 of the GATT 1994
"is concerned with competitive relationships between and among products."36 The issue is whether

any formal differentiation in treatment between an imported and a domestic product
could be based upon the fact that the products are different – i.e., not like – rather
than on the origin of the products involved.37
64. In the case of the GI Regulation, the only difference between the pr oducts that may benefit
from GI registration and protection – products from th e EC – and those that may not so benefit on
similarly favorable terms – products from other WT O Members – is their origin. Consequently, the
EC agricultural products and foodstuffs that are elig ible for GI registration under one set of criteria
and the non-EC agricultural products and foodstuffs that are eligible onl y if they satisfy an additional
set of criteria are like products for purposes of Article III:4.

65. The EC GI Regulation itself offers evidence that both the intent and the effect of the
Regulation is to provide competitive benefits on qualifying products. Further, however, the
Regulation, on its face, provides for a lack of equality of competitive conditions between domestic
products, on the one hand, and imported products on the other, by providing for numerous
competitive advantages on qualifying products and by im posing barriers to access to those advantages
on imported products. Panels in pr evious disputes, in analyzing "less favourable treatment", have
examined the lack of equality of competitive cond itions provided in the measure itself, without
reliance on an actual demonstrated impact in the marketplace. E.g., US – Section 337
38; US –
Gasoline39. Therefore, evidence of an "actual" modification of competitive conditions in the
marketplace is not required. Indeed, the Appellate Body in US – FSC (Article 21.5) stated that

The examination of whether a measure involves "less favourable treatment" of
imported products within the meaning of Article III:4 of the GATT 1994 must be
grounded in close scrutiny of the "fundamental thrust and effect of the measure
itself". This examination cannot rest on si mple assertion, but must be founded on a
careful analysis of the contested measure and of its implications in the marketplace.
At the same time, however, the examination need not be based on the actual
effects of the contested measure in the marketplace."
40
Q33. Is there a public policy requirement specific to GIs which underlies the requirement that a
group or person must send a registr ation application under Regulati on (EC) No. 2081/92 to the EC
Member State or authorities of a third country in which the geographical area is located, rather than
directly to the Commission? EC

35 See Panel Report, US – FSC (Article 21.5 – EC) , paras. 8.133 (Finding it unnecessary "to
demonstrate the existence of actually traded like products in order to establish a violation of Article III:4" when
a measure makes distinctions "between imported and domestic products" that are "solely and explicitly based
on origin.") See also Panel Report, India – Autos, para 7.174 (when origin is "the sole criterion distinguishing
the products, it is correct to treat such products as like products within the meaning of Article III:4.")
36 Appellate Body Report, EC – Asbestos , para. 103. See also discussion of Alcohol disputes in
section IV.A.1.b.ii(2) of US First Written Submission.
37 Panel Report, US – FSC (Article 21.5 – EC), para. 8.132
38 United States – Section 337 of the Tariff Act of 1930 , Panel Report, adopted 7 November 1989,
BISD 36S/345, para. 5.11.
39 United States – Standard for Reformulated and Conventional Gasoline , Panel Report, WT/DS2/R,
adopted 20 May 1996, as modified by Appellate Body Report, WT/DS2/AB/R.
40 United States – Tax Treatment for "Foreign Sales Corporations" , Appellate Body Report,
WT/DS108/AB/RW, adopted 29 January 2002, para. 215 (emphasis added).

Q34. Is there a public policy requirement specific to GIs which underlies the requirement that a
person wishing to object to a registration under Regulation (EC) No. 2081/92 must send an objection
to the EC Member State or authorities of a third co untry in which he resides or is established, rather
than directly to the Commission? EC

Q35. Has an objection to the registration of a name under Regulation (EC) No. 2081/92 ever been
filed by a person from a third country? If so, what happened? EC

Q36. Has any person ever sent an objection to th e registration of a name under Regulation (EC)
No. 2081/92 to your authorities? If not, do you know the reason? If so, did your authorities transmit
it to the EC Commission? USA, AUS

Response:

66. As in the case of registrations, no US gove rnment agency has established regulations or
procedures to receive, process, or transmit objections to the registration of names under the EC GI
Regulation. Therefore, US persons have no mean s of raising objections within the meaning of
Article 12b of the EC GI Regulation. After consu lting with agencies to which such objections might
have been presented, the United States is not awar e of any formal objections being presented to it to
be processed by the United States in accordance with the EC GI Regulation.

67. It is a matter of public record, however, that there are a considerable number of US
stakeholders that are negatively impacted by the registration of GIs in the EC, but who did not have
the means to present their concerns or objections to the EC Commission. The United States attaches,
as Exhibit US-39, a letter from US Dairy Export C ouncil and the National Milk Producers Federation
to the Office of the United States Trade Representa tive, dated March 26, 2004, which states that
because of the discriminatory nature of the GI Regul ation, "dairy producers and processors have been
unable to prevent the registration as protected GIs in the EU of a number of cheese types that had
clearly become generic names before their registrati on." This interferes with their ability to use food
names that they have developed over a large number of years.

68. In addition, the EC has apparently register ed three names from the Czech Republic as part of
the accession protocol of the Czech Republic to the European Union.
41 The registration of these
names is of concern to a US stakeholder, but the United States is aware of no available means for that
stakeholder to object to the registration. Under Ar ticle 7 of the GI Regulation, an objection is based
on a review of the application for registration of a name and the product specification that
accompanies the application. In the case of th ese three names, there was no application for
registration, and, as far as the United States is aw are, no product specification. Indeed, repeated
requests for a copy of any proposed product specifi cation for these names have been rebuffed by the
EC. Nor, as far as the United States is aware, was any application for registration made public by the
EC under Article 6(1) and (2) of the GI Regulation. In sum, it appears th at these names have been
registered without any ability to object to them. Nor was there an ability to object to other names
registered as GIs upon accession of new EC member St ates, or upon adoption of Regulation 2081/92.
This is significant, since of the 612 GIs registered in the EC, 487, or 80 percent, were registered in
this way.
42

Q37. Please indicate examples of other internatio nal arrangements, such as the Madrid Protocol,
under which national governments cooperate by acting as agents or intermediaries in the protection

41 These three names were provided as Exhibit COMP-3.c, paras. 18(a)-(b).
42 The 487 GIs registered in this way are recorded in Commission Regulation 1107/96, as amended
(Exhibit COMP-3(a)). The 125 remaining registered GIs are recorded in Commission Regulation 2400/96, as
amended (Exhibit COMP-4(a)).

of private rights. Which of these arrangements are established under international treaties and which
under the legislation of one of the parties to the arrangement? Which are relevant to the matter
before the Panel? USA, AUS, EC

Response:

69. There are a number of examples in which par ties have voluntarily come together to mutually
agree to facilitate the protection of private rights. Under the Madrid Protocol, the United States, like
other Contracting Parties, agrees to provide a mechanism for US trademark owners to file an
international application through the United States Pa tent and Trademark Office (" USPTO") that is
then forwarded to WIPO, which sends the applicati on to the national office of the Contracting Parties
in which the applicant requested an extension of prot ection. This Protocol is a mechanism of mutual
convenience for trademark owners to which the Unit ed States and other countries voluntarily agreed:
instead of having to file applications in numerous countries, the trademark owner files one
application, which is then forwarded to those c ountries (which, then process the application according
to their domestic trademark law). This is not an example in which one WTO Member is requiring that
trademark applications from nationals of anothe r WTO Member be submitted to that Member,
reviewed for compliance with the other
 Member's trademark law, and then transmitted along with a
demonstration that particular protection and enfor cement regimes are in place in the territory of the
national making the application.

70. Similarly, the Patent Cooperation Treaty (P CT) provides for a filing mechanism in which a
patent applicant can file an international patent application with the patent office of the PCT
Contracting State in which they reside, eventua lly enter national stage processing of the patent
application, and thereby effectively apply for patent protection for an invention in each of the relevant
Contracting States. Under the PCT, the applican t may obtain a non-binding search and examination
of the application, but the final determination on patentability is made by, and under the national law
of, each of the designated Contracting Parties. On ce again, this is an agreed mechanism for the
mutual convenience of the Contracting Parties' nationals: it is not a case of one WTO Member
unilaterally requiring another Member to assess or en sure compliance with the first Member's patent
laws, or to demonstrate the existence of any par ticular protection or enforcement mechanism within
its territory.

71. Another example in the patent area is the Budapest Treaty, which provides that Contracting
States allowing or requiring the deposit of microorga nisms as part of a patent application shall
recognize the deposit of a microorganism with any in ternational deposit authority. As part of this
treaty, the Contracting Parties also agree to a set of requirements with respect to those deposits.
Again, this is not the case of one WTO Member requiring another Member to assess whether the
deposit complies with the first Member's laws. To the contrary, the Contracting Parties have mutually
agreed to a set of requirements with respect to these deposits. And again, there is no unilateral
requirement that the other Member demonstrate to the first Member that it has put into place a
particular protection or enforcement mechanism within its territory.

72. These examples are relevant for several reasons. First, they facilitate, rather than hinder, the
ability of foreign nationals to seek intellectual property rights in the territories of other Treaty
Members. Second, they recognize the validity of the underlying intellectual property right – as
created in the territory of any Treaty Member. In other words, no Treaty Member is obligated to meet
the standards of another Treaty Member to ensure that its nationals are eligible to seek and obtain
protection in the territories of other Treaty Member s. Further, in none of these agreements were
WTO Members unilaterally imposing particular protection or enforcement regimes on another
Member. Rather, recognizing that private parties seek protection for their private rights directly under
the laws of the Member in which protection is sought, these agreements provide voluntary
mechanisms for facilitating the pursuit of such protection.

Q38. If a group or person interested in a GI in your territory were to send an application for
registration or objection to registration under Re gulation (EC) 2081/92 to your authorities, would
your Government be able and/or willing to transmit such an application to the EC Commission? If
not, please explain why. USA, AUS

Response:

73. As an initial matter, the important questi on is not the willingness of the United States to
transmit an application or objection, but whether, by requiring Members to do so the EC is making
legal means available to all interested parties and is according no less favorable treatment to all US
nationals than it provides to EC nationals. As noted above, where "Member to Member" interactions
exist, they are generally established as the result of a negotiated treaty – not as the result of the
unilateral requirements of one Member.

74. This said, from a practical point of view, in the case of the United States, it would probably
not be difficult to designate an office in the US government to perform a purely ministerial act of
transmitting registration applications and objections to the EC. However, this fact alone is not
particularly relevant, for several reasons. First, th e fact that the United States may be able to set up
such an office does not mean that all WTO Member s would be in a similar position from a resource
point of view. Nationals of countries who cannot are effectively barred from access to the EC system.
Second, the fact that the United States would likely be willing to transmit all such documents does not
mean that all WTO Members would. It may well be that, in order to avoid aggravating already
difficult negotiations with the EC over GIs, fo r instance, other WTO Members would hesitate
transmitting a controversial or politically sensitive registration application or objection.

75. Perhaps more significant, the EC GI Regulation does not simply require the transmission of
applications and objections. Putting aside the fact that a WTO Member must first satisfy equivalence
and reciprocity requirements under Article 12(3) of the GI Regulation before it can even apply for a
GI Registration, Article 12a(2) of the GI Regula tion would require the United States to (1) make a
determination that the requirements of the GI Regul ation are satisfied; (2) provide a description of the
legal provisions and usage on the basis of whic h the geographical indication is protected or
established in the United States; (3) make a decl aration that the full inspection structures for
agricultural products and foodstuffs are established in the United States ( i.e., the same inspection
structures required of EC member States); and submit other documentation that would support the
application. Aside from the fact that these are requirements that go beyond mere "transmission", it is
not even clear on what basis a US government aut hority would be in a position to assess whether the
application meets the requirements of the EC GI Regul ation. Similar questions arise with respect to
whether a person has standing under the GI Regulation to object to a GI registration, or whether the
objection is sufficiently substantiated.

Q39. Does an EC member State participate in decision-making on a proposed registration either in
the Committee established under Article 15 of Regu lation (EC) No. 2081/92 or in the Council of
Ministers, where that EC member State transm itted the application or an objection to it to the
Commission? Is the EC member State identified with the applicant or person raising the objection in
any way? Are there any limits on the participation of the EC member State – for instance, can it
object to an application which it transmitted? EC

Q40. How many applications to register names under Regulation (EC) No. 2081/92 have been
considered by the Committee established under Artic le 15 of the Regulation or the Council of
Ministers? EC

Q41. In paragraph 137 of your first written submi ssion, you indicate that the term "such names" in
the second sub-paragraph of Article 12(2) of Regulation (EC) No. 2081/92 is a reference to the first
sub-paragraph of Article 12(2), and that this means that the requirem ent to indicate the country of
origin applies where "a protected name of a thir d country is identical to a Community protected
name". Please clarify the meaning of the following term s, as used in Article 12(2) of Regulation (EC)
No. 2081/92:

 (a) what is the meaning of the term "prot ected" in the phrase "a protected name of a
third country"?

 (b) does the phrase "a Community protect ed name" cover both names of geographical
areas located in the EC as well as in third countries, registered under the
Regulation?

 (c) does the requirement to indicate the c ountry of origin apply 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
geographical area located in the EC or in a third country). EC

Q42. If Article 12(2) of Regulation (EC) No. 208 1/92 applies to the registration of a name of a
geographical area located in the EC that is identical to a name, already registered in the EC, of an
area located in a third country, what is the differen ce in its scope compared to Article 6(6) of the
Regulation? Why is it necessary to cover this situation in both provisions? EC

Q43. Where does Regulation (EC) No. 2081/92 provide for the registration of a name of a
geographical area located in a third country WT O Member which is a homonym of an already
registered name? Where does it provide for the re gistration of a name which is a homonym of an
already registered name of a geographical area located in a third country WTO Member? EC

Q44. Can the EC provide the Panel with any official statement predating its first written
submission that Article 12(2) of Regulation (EC) No. 2081/92 applies to names of geographical areas
located in the EC and that Article 12(2) will be applied on the basis of the date of registration? EC

Q45. With respect to paragraph 135 of the EC 's first written submission, could the Council of
Ministers prevent a registration because the Commission applied Article 12(2) to names of
geographical areas located in the EC on the basis of the date of registration? EC

Q46. Has a judicial authority ever ruled on the a pplicability of Article 12( 2) of Regulation (EC)
No. 2081/92? If the Commission applied Article 12(2) to the name of a geographical area located in
the EC on the basis of the date of registration, coul d that action be subject to judicial review due to
the fact that the area was located in the EC? EC

Q47. Are you aware of any GIs registered under Re gulation (EC) No. 2081/92 that are identical or
confusingly similar to Community protected trademarks owned by your own nationals? USA, AUS

Response:

76. Those stakeholders with the strongest direct interest in trademark rights have a substantial
concern that registered GIs can and will give rise to confusion with trademarks in the marketplace,
and that the trademark owner would be powerless to prevent such use. Trademark owners see a real
threat in the GI Regulation. In this connection th e United States would like to share with the Panel a
written comment that the United States received on Ma rch 26, 2004, before this Panel was composed,
from the International Trademark Association (INTA), which is attached as Exhibit US-45. INTA

describes itself as a 126-year-old not-for-profit organi zation of more than 4000 members from more
than 150 countries and the largest organization in the world dedicated solely to the interests of
trademark owners. INTA expresses its concern, on behalf of its members, that the forced
"coexistence" between trademarks and confusingly similar GIs in the GI Regulation, "which
introduces consumer confusion into the marketplace and impairs the substantial investment made by
trademark owners, is incompatible with the fundame ntal rules of exclusivity of the prior right as
endorsed in Article 16 of the TRIPS Agreement and is highly discriminatory against trademarks".

77. In addition, there are three registered geogr aphical indications, set out in paragraph 18 of
Annex II of the Czech Republic's Act of Accession (included as Exhibit COMP-3.c) that present
concerns. The names are Budejovické pivo, Ceskobudejovické pivo and Budejovický mešt'anský var.

78. Based on these registrations, a Czech produ cer has claimed entitlement to use the names
"Budweiser Budvar", "Budweis", and "Budbräu" on Czech beer sold in Sweden. In trademark
infringement proceedings pending before the Swed ish courts, a US company holding prior valid
registered Swedish trademarks for the names BUDWEISER, BUD and BUDWEISER KING OF
BEERS has brought trademark infringement claims against the Czech producer, arguing that use by
the Czech producers of "Budweiser Budvar", "Budw eis", and "Budbräu" on Czech beer sold in
Sweden raises a likelihood of confusion. In its defense, the Czech producer has argued that the GI
registration recorded in paragraph 18 of Annex II of the Czech Republic's Act of Accession includes
the right to use the registered GIs (Budejovi cké pivo, Ceskobudejovické pivo and Budejovický
mešt'anský var) in translation, and that "Budwei ser Budvar", "Budweis", and "Budbräu" constitute
German translations of one or another of the three registered GIs.

79. Additionally, as noted at paragraph 50 of th e United States' oral statement, there are many
registered trademarks around the world that inco rporate or sound like geographical names, which
could give rise to a likelihood of confusion. For example, FARO is a registered Community
Trademark used in connection with coffee and tea.
43 If the residents in the town of Faro, Portugal,
begin to produce coffee or tea, and these products ar e registered pursuant to the GI Regulation, then
the owner of the registered Community Trademark will be unable to prevent the rightholders of the
Faro GI from using the Faro name in a manner that causes a likelihood of consumer confusion.

Q48. Would the United States pursue any claim in respect of Article 12(2) of Regulation (EC)
No. 2081/92 if that provision only applies to identical names? USA

Response:

80. Yes. Although the United States submits that Article 12(2) appears to apply to all protected
names of a third country, that provision is inconsiste nt with the national treatment obligations even if
it applies only to third country names that are identic al to protected EC name. In effect, under such a
reading of Article 12(2) in the case of identical na mes, it is the third country GI, and not the EC GI,
that must be burdened by a clear and visible indication of the country of origin on the label. This is a
violation of national treatment obligations.

Q49. Do you seek separate rulings on the procedur al aspects of Regulation (EC) No. 2081/92 or a
ruling on the Regulation as a whole? For example, should the provision in Article 12(2) be examined
in isolation, or would it be appropriate to adopt an approach like the Panel in Korea – Beef, which
only examined a display sign requirement within its findings related to a system as a whole? USA,
AUS, EC

43 EC OHIM Application No. 000957100 (Registered March 24, 2000). Exhibit US-46.

Response:

81. The United States is seeking specific findings on each of the aspects of the EC GI Regulation
it has raised, in order to assist in securing a positive result in this dispute.

Q50. In paragraph 451 of its first written subm ission, the EC argues that labels which address the
geographical origin of a product cannot be cons idered a technical regulation under the TBT
Agreement, since they do not apply to a "product, pr ocess or production method". Why in the EC's
view is the geographical origin of a product not rel ated to that product or its process or production
method? Does the coverage of the TBT Agreement w ith respect to labels depend on the content of the
labels? EC

Q51. How should the term "like products" be interpreted under Article 2.1 of the TBT Agreement?
If the labelling requirement in Article 12(2) of Regulation (EC) No. 2081/92 applies to situations
where identical names arise between imported pro ducts and EC products, but does not apply to
situations where identical names arise between two EC products, to what extent would this be a
distinction between "like situations" rather than a distinction between "like products"? AUS, EC

Q52. Does Australia allege that Article 12(2) of Regulation (EC) No. 2081/92 provides any less
favourable treatment to imported products besides labelling costs? AUS

Q53. The EC argues in paragraph 88 of its first written submission that Article 12(2) of Regulation
(EC) No. 2081/92 is meant to be read in the following way: "whichever indication is registered later
would normally be required to indicate the country of or igin." If the EC interpreted Article 12(2) this
way in practice, would this satisfy Australia, or would Australia also view this interpretation as
providing less favourable treatment to imported products? AUS

Q54. Article 12(2) of Regulation (EC) No. 2081/ 92 is designed to avoid "practical risks of
confusion". How would the application of the country of origin label on the basis of a product's date
of registration help avoid those risks of confusion? EC

Q55. Does the TRIPS Agreement apply as l ex specialis as regards GATT 1994 and the TBT
Agreement, with respect to a practical condition to differentiate homonymous or identical GIs on a
label? Please comment in the light of Article 23.3 of the TRIPS Agreement, which is applicable to
homonymous GIs for wines, and the national treatment obligation, which is applicable to GIs for
other products. USA, AUS, EC

Response:

82. WTO Members must comply with each of the obligations that apply with respect to
homonymous or identical GIs – whether the TRIPS Agreement, GATT 1994, or the TBT Agreement.
Where the TRIPS Agreement provides, for instance, in Article 23.3 that Member should determine the
practical conditions under which homonymous wine indications will be differentiated from each
other, such differentiation should not result in l ess favorable treatment of nationals of other WTO
Members with respect to the protection of GIs, and should not result in less favorable treatment of
products from other WTO Members. As the Appe llate Body has made clear on several occasions,
different treatment is not necessarily less favorable treatment.

Q56. With reference to paragraphs 17-21 of the US oral statement, does the Panel need to consider
the US arguments concerning the declaration unde r Article 12a(2) of Regulation (EC) No. 2081/92
and the inspections structures, if it reaches a conclu sion on the applicability to WTO Members of the
equivalence and reciprocity conditions in Article 12(1)? USA

Response:

83. Yes, the Panel should consider the US argumen t with respect to the required declaration and
the inspection structures regardless of its findings with respect to the applicability to WTO Members
of the equivalency and reciprocity conditions. The reason is that if the Panel finds that the GI
Regulation requires WTO Members to comply with the reciprocity and equivalence conditions
specified in the Regulation (rejecting the unsupporte d opinion of the Commission), and further finds
that these conditions are inconsistent with WT O obligations, the EC could simply amend the
regulation to remove these conditions in Article 12(1), with the result that the equivalence
requirement imposed through the inspection structure requirement in Article 12a(2) might remain. It
is important to a resolution of this dispute, ther efore, that the Panel make a finding as to the EC
requirement that the United States adopt the same inspection structures as are required of EC member
States.

84. In addition, the arguments concerning the d eclaration and the inspection structures are also
relevant to the argument that requiring the inter cession of the US government is itself inconsistent
with national treatment and with Article 22.2 of the TRIPS Agreement, which is separate from the
argument that requiring reciprocity and equivale nce is inconsistent with national treatment
obligations.

Q57. Does the EC consider that it may appl y equivalence and reciprocity conditions to WTO
Members under Article 12a(2) or any other prov ision of Regulation (EC) No. 2081/92, even if
Article 12(1) does not apply to them? EC

Q58. Please clarify whether your claim is that the requirement of the existence of an inspection
structure as a condition for the registration of a GI is inconsistent with WTO obligations per se, or
the particular inspection structures requirem ents under Regulation (EC) No. 2081/92, are
inconsistent with the EC's WTO obligations. In th e latter case, please specify in detail which aspects
of the inspection structures required under the Re gulation are inconsistent with the EC's WTO
obligations. USA, AUS

Response:

85. Dictating that a Member have a particular inspection structure to (1) enforce agricultural
product and foodstuff GIs in general in the United States, and (2) ensure compliance with the
requirements of the EC GI Regulation, is itself inco nsistent with the EC's WTO obligations. Such a
unilateral requirement by the EC is not related to the question of whether the product for which GI
protection is sought in the EC qualifies for that protection under the specifications submitted under the
GI Regulation for that product. Indeed, the particular method chosen by another WTO Member to
enforce GI rules in its territory is not relevant to such a determination.

Q59. Under what circumstances would the Commission consider the holder of a GI certification
mark registered in another WTO Member to meet the requirements for in spection structures under
Article 10 of Regulation (EC) 2081/92 (read together with Article 12a of that Regulation)? EC

Q60. Australia argues that the EC's inspection structures requirements are a technical regulation
under the TBT Agreement (paragraphs 209-224 of its fi rst written submission). Is there a dividing
line lies under the TBT Agreement between a techni cal regulation and a conformity assessment
procedure? If so, where does it lie? AUS, EC

Q61. If the inspection structures are conformity assessment procedures, are the eligibility criteria
for registration under Regulation (EC) No. 2081/92 , against which conformity is assessed, technical
regulations? AUS, EC

Q62. With respect to paragraph 259 of Australia's first written submission, can Australia provide
examples of alternatives to the EC's inspection structures which would be less trade restrictive and
achieve the same objective? AUS

Q63. What does Article 14(2) of Regulation (EC) No. 2081/92 mean where it provides that a prior
trademark "may continue to be used"? Can a trademark owner invoke the rights conferred by the
trademark registration against the user of a GI used in accordance with its GI registration? EC

Q64. Does Article 14(2) of Regulation (EC) No. 2081/92 implement the provision in Article 24.5 of
the TRIPS Agreement that measures adopted to im plement the Section on GIs shall not prejudice
"eligibility for or validity of the registration of a trademark, or the right to use a trademark" or does it
only implement the provision that such measures sh all not prejudice "the right to use a trademark"?
EC

Q65. Does the scope of Article 14(2) of Regul ation (EC) No. 2081/92, as drafted, include
trademarks applied for or registered, or to which ri ghts have been acquired, subsequent to both dates
set out in Article 24.5(a) and (b) of the TRIPS Agreement? EC

Q66. Has Article 14(2) of Regulation (EC) No. 2081/92 ever been applied in a specific case? For
example, what did the national courts finally decide in the Gorgonzola case, referred to in Exhibit
US-17 and in footnote 140 to paragraph 163 of the US first written submission, after the order of the
European Court of Justice? EC

Q67. Does Article 14(3) of Regulation (EC) No. 2081/92 affect the possibility of coexistence of GIs
already on the register with prior trademarks, such as Gorgonzola? In these cases, is Article 14(3)
relevant to the applicability of Article 14(2)? EC

Response:

86. In the view of the United States, Article 14(3) does not affect the possibility of "coexistence"
of GIs already on the register with prior trademar ks. The EC argues that "geographical names" are
generally not distinctive and, therefore, not often apt for registration as trademarks.
44 This argument
attempts to minimize the violation of TRIPS Article 16.1 by arguing that few trademarks that contain
or consist of a GI are registrable, and thus that th ere will rarely be a conflict between a trademark that
contains or consists of a GI and an identical or si milar GI. Even if the Panel were to accept that the
potential set of trademarks is small, however, tho se trademarks that are validly registered would
potentially fall in the category of trademarks subject to "coexistence" under Article 14(2).

87. As the United States stated at the first meeting,
45 Article 14(3) of the GI Regulation does not
entirely satisfy the obligations under Article 16.1 of the TRIPS Agreement. First, Article 16.1
articulates a right that is owed under the TRIPS Agreement to the owner of any valid registered
trademark, while Article 14(3) comes into play (and does so only through action by the EC) only
where there exists a trademark with a reputation, renown, and history of use. Second, it is not
necessarily possible, at the time of registration of the GI, for the trademark owner to know from the
GI registration itself whether the use of the GI will be confusing. For example, a registered GI may
unexpectedly be used in translation, or in a manne r that emphasizes certain aspects or letters of the
geographical name, in a way that causes a likeli hood of confusion with respect to a registered
trademark. By the time a registered trademark owner realizes that a registered GI is being used in a
manner that causes a likelihood of confusion with re spect to the trademark, however, it may be too

44 E.g., EC First Written Submission, para. 279.
45 See Oral Statement by United States, paras. 51-55.

late to challenge the registrati on under Article 14(3). Third, as explained in the US response to
Question 36, GIs may be registered outside the sc ope of the established procedures under the GI
Regulation, such as through an accession treaty, in a manner that precludes any objections based on
Article 14(3) or any other provision of the GI Regulation.

Q68. Article 14(3) of Regulation (EC) No. 2081/ 92 mentions certain criteria. If these are not
exhaustive, why does is it not expressly stated as in Articles 3(1), 4(2) and 6(6) of the Regulation? Do
other criteria, such as similarity of signs and goods fall within "reputation and renown"? Is the
criterion of "length of time [a trade mark] has been used" relevant to its liability to mislead if the
trademark has not been used for a significant, or considerable, length of time? EC

Q69. Can the EC provide the Panel with any official statement predating its first written
submission that application of the grounds for registration, invalidity or revocation of trademarks and
Article 14(3) of Regulation (EC) No. 2081/92 will or should be applied in such a way as to render
Article 14(2) inapplicable? EC

Q70. Do the EC member States agree with the Commission's submission to this Panel that the
terms of Article 14(3) of Regulation (EC) No. 2081/92, if properly interpreted, are sufficient to
prevent the registration of any confusing GIs? Could the EC member States apply national trademark
laws in a way that made this impossible? Coul d the Council of Ministers prevent the application of
Article 14(3) of the Regulation if proposed by the Commission in a specific case and apply
Article 14(2)? EC

Q71. Has a judicial authority ever ruled on the in terpretation of Article 14(3) of Regulation (EC)
No. 2081/92? If Article 14(3) of the Regulatio n, the Community trademark regulation and national
trademark laws were applied in such a way as to pr event the registration of GIs that were confusing
with a prior trademark, could this be subject to judicial review? EC

Q72. The Panel notes the responses of Members to the Checklist of Questions in document
IP/C/W/253/Rev.1 cited by the EC in footnote 150 of its first written submission, which show that
there are diverse approaches taken by several Members to accommodate possible conflicts between
GIs and prior trademarks. Would this mean that th e TRIPS Agreement, in particular Article 24.5,
allows for some degree of flexibility for individual WTO Members to implement their obligations?
USA, AUS

Response:

88. The TRIPS Agreement does allow for a cer tain amount of flexibility in implementing
obligations. As Article 1.1 of the TRIPS Agreement states, "Members shall be free to determine the
appropriate method of implementing the provisions of this Agreement within their own legal system
and practice."

89. However, Article 1.1 is equally clear that Members are to give effect to the provisions of the
TRIPS Agreement, and that Members may implemen t more extensive protection than is required
provided that such protection does not contravene the provisions of the Agreement. One such
provision that may not be contravened is Article 16.1. A Member must, under Article 16.1, grant
trademark owners the right to exclude all others fro m using identical or similar signs that result in a
likelihood of confusion. Similarly, a Member must observe its obligatio ns under Articles 22.2 and
22.3. As the United States explains in response to question 79, there is no thing inconsistent or
mutually exclusive about these obligations. In determining what "flexibility" to grant WTO

Members, the Panel should adopt an interpretation th at gives each provision its full scope, in light of
the presumption in public international law against conflict between obligations.
46

90. Further, the United States notes that the referenced document discusses conflicts between
trademarks and GIs in general term s, and generally with respect to the issue of whether a GI will be
registered. It does not, however, address a key question that is before the Panel: regardless of whether
a GI is registered or not, does the trademark owner retain his Article 16.1 rights to prevent uses of
similar or identical signs that give rise to a like lihood of confusion. The EC essentially argues that
Article 22 supersedes Article 16.1 in importan ce (although the EC also supports the contrary
argument by saying that – under TRIPS – GI rights do not supercede trademark rights; thus it is not
entirely clear what the EC's actual position is), and th en supports this argument by suggesting that the
US wine labeling system provides for "co-existence. " The issue, however, is the right of trademark
owners to prevent confusing uses of his signs. Un der US law, consistent with the requirements of
Article 16.1 of the TRIPS Agreement, the United St ates provides the legal means for the owners of
registered trademarks to prevent infringing uses of signs. See also response to question 3 from the
European Communities.

Q73. Please supply a copy of the wine regulati ons referred to in paragraph 16 of the EC oral
statement. EC

Q74. Which particular GIs did the EC prot ect under Regulation (EC) No. 2081/92 prior to
1 January 1995? Is Article 24.3 of the TRIPS Agreement relevant to any other GIs? EC

Q75. Which party bears the burden of proof in relation to:

 (a) Article 24.5 of the TRIPS Agreement? In particular, does this relate to the scope of
the obligation in Article 16.1? Does it create an exception for measures otherwise
covered by Article 16.1? Or neither?

Response:

91. Since the EC is arguing that Article 24.5 is an affirmative defense to the US claims that the GI
Regulation is inconsistent with the EC's obligati ons under Article 16.1 of the TRIPS Agreement (that
is, that Article 24.5 is an exception to Article 16.1), it is the EC, as the party asserting the defense, that
bears the burden of proof. As the Appellate Body noted in Japan – Apples , "although the
complaining party bears the burden of proving its case, the responding party must prove the case it
seeks to make in response."
47

92. The United States notes, however, that, in its view, Article 24.5 is not an exception to the
obligations in Section 2: Trademarks, which includ es Article 16.1; rather it is an exception to the
obligations in Section 3: Geographical Indications. See also Response to question 78 below.

 (b) Article 17 of the TRIPS Agreement? In particular, does this only permit exceptions to
the rights conferred by a trademark, or does it also create an exception to the
obligations imposed on Members? USA, AUS, EC

Response:

93. As the party asserting that its GI Regulation fa lls within the Article 17 exception, it is the EC,
as the party asserting the defense, that bears the bur den of proof. As the Appellate Body noted in

47 Para. 154.

Japan – Apples, "although the complaining party bears the burden of proving its case, the responding
party must prove the case it seeks to make in response."48

94. Article 17 of the TRIPS Agre ement permits Members to provide limited exceptions to the
rights conferred by a trademark, such as fair use of descriptive terms. However, the Members, in
providing for such exceptions to trademark rights, must ensure that they are limited, and must ensure
that any such exceptions take account of the legitimat e interests of the owner of the trademark and of
third parties. Indeed, as the United States explained in its oral statement, the exception to Article 16.1
rights in the EC GI Regulation is not limited and it does not take into account the legitimate interests
of the trademark owner or of third parties. As the United States noted in its oral statement, at
paragraph 75, it is possible to inform consumers ab out the origin of a product and its characteristics
through the use of descriptive terms in a non-trad emark sense without affi rmatively confusing the
consumer about the source of the goods. It is po ssible in this sense simultaneously to protect the
legitimate interests of the consumer, the GI owne r and the trademark owner. The GI Regulation
makes no such distinctions, but simply offers a broad immunity from a finding of trademark
infringement based purely on whether a particular GI has been registered.

95. Article 14(2) of the GI Regulation, which the EC asserts meets the strict requirements of
Article 17 of the TRIPS Agreement, automatically and in every case (according to its terms) divests a
trademark owner of its right to prevent use of an iden tical or similar registered GI in a way that raises
a likelihood of confusion. This is so even if the trademark owner could demonstrate that the
particular use of the GI at issue does not qualif y as "fair use of [a] descriptive term[]." Under
Article 14(2), the EC adopts an irrebutable presumpti on that a registered GI's use will, in all cases,
without consideration of the particular circumstances, constitute "fair use of descriptive terms." In the
view of the United States, this is not a limited exception.

96. Finally, even under the EC's own interpre tation of TRIPS Article 17, the EC fails to
acknowledge that non-geographic names are subject to registration under Article 2(3) of the GI
Regulation ( e.g., Feta). Nothing in the EC's interpreta tion explains how the Article 17 fair use
exception applies to non-geographic names.

Q76. Article 24.5 of the TRIPS Agreement uses the phrases "validity of the registration of a
trademark" and "the right to use a trademark". Please set out your interpretation of these phrases, in
accordance with the general rule of treaty interpretation in Article 31 of the Vienna Convention on
the Law of Treaties and, if appropriate, the supplemen tary means in Article 32. Please explain how
you determine what is the relevant context. USA, AUS, EC

Response:

"validity of the registration of a trademark"

97. As the United States explained in paragraphs 61-62 of its oral statement, the prohibition on
prejudicing the "validity of the registration of a trademark," within the meaning of Article 24.5,
requires Members to provide Article 16.1 rights to the trademark owner at issue. If a trademark
remains registered, then, under Article 16.1, the owner of that registered trademark must be given its
Article 16.1 rights.

98. The ordinary meaning of validity is "[ t]he quality of being (esp. legally) valid,"
49 where
"valid" refers to something "[p]ossessing lega l authority" or "legally acceptable or binding." 50

48 Para. 154.
49 New Shorter Oxford English Dictionary, p. 3541. Exhibit US-47.
50 New Shorter Oxford English Dictionary, p. 3541. Exhibit US-47.

Registration means "[t]he action of registering or recording,"
51 and to "register" means to "[f]ormally
enter or cause to be entered ... in a particular register." 52 Therefore, under the ordinary meaning of
these terms, the "validity of the registration" refe rs to the possession of legal authority accorded by
virtue of the entrance of a trademark in a register. Thus, the meaning of "validity of the registration of
a trademark" must be read in connection with the legal authority accorded by trademark registration,
which is the right provided for in Article 16.1, in addition to rights under domestic law. Article 16.1
demonstrates the clear link between registration an d the legal authority that must be accorded the
trademark owner by the registration – the right to prevent all others from using a similar or identical
sign that causes a likelihood of confusion. Trademark registration is virtually meaningless without the
associated Article 16.1 rights.

99. Moreover, as the United States has explained in its oral statement,
53 TRIPS negotiating
history reveals that the language of Article 24. 5 evolved from a simple prohibition against
invalidation of registration (in the Brussels Draft) to a requirement that Members not even "prejudice"
the validity of the trademark registration. 54 This is a more stringent requirement, as the ordinary
meaning of the term "prejudice" is "injury, damage, harm," 55 while the earlier version simply
prevented complete eradication of the mark. Thus , the addition of the word "prejudice" means that
Article 24.5 protects more than just the removal of a trademark from the register, as the EC argues.
At a minimum, it must prevent Members from eliminating the core right of a trademark registration –
the Article 16.1 right to prevent all others from confusing use.

100. Article 15.1 of the TRIPS Agreement also pr ovides relevant context, as it requires that the
only signs "capable of constituting a trademark" ar e signs that are "capable of distinguishing the
goods or services of one undertaking from those of other undertakings". Without the ability to
exercise the Article 16.1 rights to prevent all othe rs from confusing uses, the trademark may lose this
ability to distinguish, and therefore may no longer be "capable of constituting a trademark."

101. Thus, the loss of the ability to distinguish goods or services certainly prejudices the "validity
of the registration of a trademark".

"the right to use a trademark"

102. Beginning with the ordinary meaning, "right " refers to "[t]he st andard of permitted and
forbidden activity".
56 "Use" is defined as the "applica tion or conversion to some purpose." 57 Thus,
the ordinary meaning of "prejudice ... the right to use" is the harm or damage to the permitted or
forbidden activity associated with application of a trademark to its purpose. From the context
provided by Articles 15.1 and 16.1, the purpose of a tr ademark is to allow its owner to distinguish the
owner's goods from the goods of others. Under Article 15.1, any sign or combination of signs capable
of distinguishing the goods or services of one undert aking from those of another must be capable of
constituting a trademark. Under Article 16.1, the owner of a registered trademark must "have the
exclusive right to prevent all third parties ... from using in the course of trade identical or similar
signs for goods or services which are identical or sim ilar to those in respect of which the trademark is
registered where such use would result in a likelih ood of confusion." Further, Article 16.1 provides
that this obligation does not affect the possibility of making rights available on the basis of use.

51 New Shorter Oxford English Dictionary, p. 2529. Exhibit US-47.
52 New Shorter Oxford English Dictionary, p. 2528. Exhibit US-47.
53 Oral Statement of the United States, paras. 64-65, Exhibit US-25.
54 Exhibit US-25.
55 New Shorter Oxford English Dictionary, p. 2333. Exhibit US-47.
56 New Shorter Oxford English Dictionary, p. 2598. Exhibit US-47.
57 New Shorter Oxford English Dictionary, p. 3531. Exhibit US-47.

103. A contextual consideration in interpreting this phrase is that the chapeau to Article 24.5 refers
to certain trademarks "applied for or registered", and the chaussette states that measures shall not
prejudice "eligibility for or the validity of the regist ration of a trademark"; further, the chapeau also
refers to certain trademarks whose rights "have b een acquired through use", and the chaussette refers
correspondingly to the obligation not to prejudice the "right to use" a trademark. Contextually,
particularly considering that Article 16.1 specifically anticipates Members making trademark rights
(e.g., the right to exclude others) available based on u se, there is support for an interpretation that the
"right to use a trademark" refers, at least in pa rt, to the right provided for under a Member's national
law to acquire and continue to maintain trademar k rights through use. In this way, both phrases in
this question – the "validity of the registration of a trademark" and the "right to use a trademark" refer
to the right of the owner of the trademark to exclude others from using similar signs (i.e., to be able to
distinguish his goods from the goods of others), and the requirement of Article 24.5 is not to prejudice
this right to exclude others.

104. There is support for this reading in the ne gotiating history. The predecessor provision to
Article 24.5, Article 24.2 of the Brussels Draft, of November 1990, containe d only an obligation not
to take action to refuse or invalidate the registration of certain trademarks, with no reference to use.
By the time of the Dunkel Draft, a year later, in December 1991, the inclusion of trademarks
"acquired through use" in the chapeau appears at th e same time as the obliga tion in the chaussette not
to prejudice the "right to use a trademark".

105. However, "the right to use a trademark" is not specifically limited in the text to trademarks
whose rights are acquired through use (although it would appear to include such trademarks). Rather
the obligation not to prejudice the right to use a trademark – to harm or damage the permitted or
forbidden activity associated with application of a trademark to its purpose – would include an
obligation with respect both to registered and non-re gistered trademarks not to damage the ability to
use the trademark to distinguish the goods of the ow ner from the goods of others. In this sense, too,
not prejudicing the right to use the registered trademark means not prejudicing the ability of the owner
of the registered trademark to use his trademark to distinguish his goods from the goods of others.
Plainly, if the owner cannot exclude others from confusing uses of identical or similar signs, the
owner's ability to use the trademark for its purpose is severely prejudiced.

Q77. Article 24.5 of the TRIPS Agreement uses the phrase "right to use" a trademark. Why did the
drafters not choose to state, for example, "exclusive rights" or "rights under Article 16.1"? Is that
fact relevant to interpretation of the phrase "right to use" a trademark? USA, AUS, EC

Response:

106. As suggested in the response to question 76, the phrase "right to use a trademark" references
trademarks whose rights are "acquired through use", as set out in the Article 24.5 chapeau, and also
the right to use a trademark for its purpose, i.e., to distinguish the trademark owner's goods from the
goods of others. It accurately describes the scope of the exception to GI protection. A reference to
"exclusive right to use" would have been conf using, because the specific "exclusive right" in
Article 16.1 is the right to exclude, not the right to use per se.
58 A simple reference to "exclusive
rights", without the reference to use, would have been duplicative of the obligation not to prejudice
the validity of the trademark, and also would not have clearly addressed the issue of trademarks
acquired through use. Finally, simply referring to the "rights under Article 16.1" would also have
been confusing, because there are three sets of rights described in Article 16.1: the right to exclude
others from confusing uses, in the first sentence; "exi sting prior rights" in the first half of the third
sentence; and the "rights" made available by Memb ers on the basis of use, in the second half of the
third sentence.

58 With respect to patents, Article 28 uses the word "exclusive" is a similar manner.

Q78. With reference to paragraph 58 of the US oral statement, Article 24.5 of the TRIPS
Agreement refers to trademarks; certain Members implement GI obligations through collective and
certification marks; Article 25.2 refers to more than one category of intellectual property, as does
Article 4 of the IPIC Treaty as incorporated by Article 35 of the TRIPS Agreement. Therefore, must
the provisions dealing with each category of inte llectual property covered in Part II of the TRIPS
Agreement be restricted to one Section? Can the rights conferred by a category of intellectual
property and an exception to them appear in different Sections of Part II? USA, AUS

Response:

107. As the United States has noted, Article 24.5 is a clearly-labeled "exception" to the protection
of geographical indications in Part II, Section 3 of the TRIPS Agreement. It is not an exception to
trademark protection, which appears in Part II, Section 2.

108. The United States would not extrapolate the inte rpretation of this specific provision to a broad
conclusion that the provisions dealing with each cate gory of intellectual property covered in Part II of
the TRIPS Agreement must be restricted to its own section. Provisions that appear in one section of
Part II, but that explicitly address rights related to a nother section of Part II, must, of course, be given
effect. By contrast, the United States does not believe that a clearly-labeled "exception" to the scope
of protection for a right defined in one section can be considered an "exception" to the scope of
protection for a different right defined in another section.

109. In other words, a provision listed under the heading "exception" in a particular section
logically carries with it the strong presumption that it is an exception to the scope of protection for the
right defined in the section in which it appears. An "exception" excepts or "exempts" something from
"the scope of a proposition."
59 The "scope of the proposition" in a given section of Part II of the
TRIPS Agreement must refer to the scope of protec tion accorded by the provisions of that section.
Thus, an "exception" to the geographical indication section (Section 3) is an exception to the
obligations with respect to geographical indica tions under that section. This would appear
particularly to be the case where, as here, each sec tion of Part II of the TRIPS Agreement has its own
exception provision.

110. By contrast, in the case of "transitional arrangeme nts," which appear in an individual "Part" of
the TRIPS Agreement, the logical presumption is that the provisions are not limited to any one part or
section unless otherwise indicated. Suppose, instead, that each section of Part II of the TRIPS
Agreement had its own individua l section entitled "transitional arrangements." The presumption in
that case would be that the transitional arrangement s apply to each individual section, whether it be
for trademarks, patents, copyrights, etc. This is the way in which the "exceptions" have been drafted.

111. The Appellate Body has inte rpreted provisions based on their place in the overall structure of
the covered agreement at issue, giving careful consider ation to the headings or titles of the sections in
which the provisions appear. In Canada – Dairy, the Appellate Body stated that:

A strong presumption arises that the language which is inscribed in a Member's
Schedule under the heading, "Other terms and Conditions", has some qualifying or
limiting effect on the substantive content or scope of the concession or commitment.
60

59 New Shorter Oxford English Dicti onary at p. 872 (see definitions of "except" and "exception").
Exhibit US-47.
60 Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products ,
WT/DS103/AB/R (adopted 27 October 1999), para. 134 (emphasis in original).

112. This is equally true of a heading "exceptions ." An "exception" provision to the geographical
indications section should therefore be interpre ted to limit the protection otherwise granted to
geographical indications.

113. Apart from the placement of Article 24.5 in Section 3 of Part II, the United States has also
noted that Article 24.5 does not substantively provide an exception to the scope of protection for
trademarks set out in Article 16.1. The exceptions to the trademark rights are explicitly provided for
in Article 17. Rather, it provides a "shield" against anything in the GI Section that could adversely
affect grandfathered trademarks.

Q79. Is there a conflict between Articles 16.1 and 22.3 of the TRIPS Agreement? How may a
Member avoid or resolve any potential conflict? USA, AUS

Response:

114. The United States does not believe there is a conflict between Articles 16.1 and 22.3 of the
TRIPS Agreement. The obligations are not mutua lly exclusive and both can be implemented by a
Member in a way that gives each its full scope. As the United States noted at paragraph 133 of its
first written submission and paragra phs 41-42 of its oral statement, the TRIPS Agreement contains
obligations to provide trad emark and GI owners the right to exclude others from certain uses of signs
or indications. The right for trademark owners, under Article 16.1, is the right to exclude all others
from using identical or similar signs in a way th at results in a likelihood of confusion. Under
Article 22.3, trademarks that mislead consumers in a given territory as to the origin of goods should
be refused registration or, if they are registered, s ubject to invalidation. Both of these provisions can
and should be interpreted in a way that does not presume a conflict between them, based on the
presumption in public international law against conflict.
61 If a trademark is misleading to consumers
in a given territory, it may be refused registration. If registered, however, and if it is not subject to
invalidation, it must provide its owner the legal basi s to exclude others within the territory from the
confusing use of identical or similar signs.

Q80. Are any exceptions permitted to exclusive trademark rights under your domestic law for
concurrent registrations, honest concurrent use or comparative advertising? If so, are these limited
to other trademarks? Can they cover GIs? USA, AUS

Response:

115. The United States provides for several de fenses to trademark infringement actions.
Sections 33(b)(5) and (6) of the Lanham Act provide for what might be called honest concurrent use
of two trademarks, but it should be emphasized that in the United States, concurrent use is allowed
only to the extent that the marks are used in co mmerce in two different geographic areas within the
United States. To allow for concurrent use of the two marks in the same area by two different owners
would likely cause consumer confusion as to the source of the goods.

116. Section 33(b)(5) specifically refers to a situ ation where prior common law rights have been
established in a particular limited area that conflict with a later federally registered trademark. This
can lead to a court-ordered "concurrent use" of th e two marks, but – as mentioned above – in different

61 As recognized by the Panel in Indonesia – Autos, at para. 14.28, "in public international law there is
a presumption against conflict," which "is especially re levant in the WTO context since all WTO agreements,"
including all the provisions of the TRIPS Agreement, "w ere negotiated at the same time, by the same Members
and in the same forum."

geographic areas within the United States.
62 Section 33(b)(6) refers to a situation where a registered
mark owner charges that an earlier registered mark infringes the later registered mark and the court
can order concurrent use registrations. Again, such concurrent use would only be allowed in different
geographic areas in the United States.63

117. In the United States, these rules cover GIs, si nce GIs are also protected in the United States
through the certification and collective mark system.

118. In addition, Section 33(b)(4) of the Lanham Act provides for a defense based on fair use of
descriptive terms, e.g., the use of an individual's name or a descriptive term including of geographic
origin.
64 The descriptive terms that are covered by the "fair use" defense cannot be used as
trademarks, i.e., to distinguish the goods of one undertaking from those of other undertakings. The
trademark in a descriptive term attaches only to th e specialized, secondary meaning that a word has
acquired, and not to its original, primary descriptiv e context. The fair use defense gives practical
force to that distinction by protecting the public's right to continue using the primary descriptive value
of words and thus to use that aspect of a word th at falls outside the scope of the trademark. The
central purpose of the fair use defense, in other word s, is to protect the particular descriptive usages
that are not covered by the trademark and thus are not, by definition, infringing uses.

119. In any case, "fair use" requi res a case-by-case determination of entitlement to the limited
exception, upon challenge by a trademark owner. For example, in Schafer Co. v. Innco Management
Corp., 797 F.Supp. 477 (E.D. N.C. 1992), aff'd 995 F.2d 1064 (4th Cir. 1993), the owner of the
SOUTH OF THE BORDER trademark (associated with a theme park located south of the border
between North Carolina and South Carolina) cha llenged the use by a motel owner of the words
"Border Exit" and "South of Border Exit" on highway b illboards that directed drivers to the motel. In
defense, the motel owner raised the fair use defense, based on the fact that "South of the Border" is
generally known as the name of the town surrounding and including the trademark owner's theme
park.

120. The court first described the limits of the fair use exception under US law as follows:

[The user invoking fair use] must adapt and design his usage of the geographical term
so as not to cause a likelihood of customer confusion.
65

62 15 USC §1115(b)(5), Section 33(b)(5) of the Lanham Act, reads: "That the mark whose use by a
party is charged as an infringement was adopted without knowledge of the registrant's prior use and has been
continuously used by such party or those in privity with him from a date prior to (A) the date of constructive use
of the mark established pursuant to section 7(c), (B) the registration of the mark under this Act if the application
for registration is filed before the effective date of th e Trademark Law Revision Act of 1988, or (C) publication
of the registered mark under subsection (c) of section 12 of this Act: Provided, however, That this defense or
defect shall apply only for the area in which such continuous prior use is proved…."
63 15 USC §1115(b)(6), Section 33(b)(6) sets forth another defense to infringement: "That the mark
whose use is charged as an infringement was registered and used prior to the registration under this Act or
publication under subsection (c) of section 12 of this Ac t of the registered mark of the registrant, and not
abandoned: Provided, however, that this defense or def ect shall apply only for the area in which the mark was
used prior to such registration or such publication of the registrant's mark…."
64 15 USC §1115(b)(4), Section 33(b)(4) of the Lanham Act, sets forth the defenses to a claim of
infringement that include: "that the use of the name, term, or device charged to be an infringement is a use,
otherwise than as a mark, of the party's individual name in his own business, or of the individual name of
anyone in privity with such party, or of a term or device which is descriptive of and used fairly and in good faith
only to describe the goods or services of such party, or their geographic origin…."
65 Schafer Co. v. Innco Management Corp., 797 F.Supp. at 481 (internal citations omitted).

Then, with respect to the particular use of "Borde r Exit", the court proceeded to examine the facts of
the particular case at issue, in the following manner:

The phrase "Border Exit" accurately describes th e location of the exit--Exit 1, either
A or B--which travelers must take to reach defendant's motel. It does not purport to
serve as a symbol of defendant's establishment or services. Nor does it in any way
suggest to the traveling public that defe ndant's establishment is somehow connected
with plaintiffs' establishment.
Moreover, defendant has adapted its design and usage of "Border" so as not to
confuse the traveling public. First, "Bor der" modifies "Exit," a geographical term,
rather than a service defendant provides. S econd, the visual depiction of "Border" on
defendant's billboards does not resemble the visual depiction of "Border" on any of
plaintiffs' billboards. Finally, prominently displayed on the left half of each of
defendant's billboards is defendant's trad ename "Family Inns of America" and its
logo. Nothing in the record suggests that defendant's use was anything other than a
good-faith attempt to point travelers on I-95 in its direction, and § 1154(b)(4) permits
defendant to do that without infringing upon plaintiffs' mark.
66
Similarly, the court found that the use of "South of Border" on the exit sign s also constituted fair
use.67

121. Under the law of the United States, the defense of "comparative advertising" is a form of the
defense of fair use. Comparative advertising is advertising that compares the relative qualities of
competitive goods or services. As long as a competitor's trademark is used fairly and in good faith
and only to describe or make reference to the goods or services of the trademark owner, such fair use
in the form of comparative advertising will be av ailable as a defense. This unauthorized use of a
competitor's trademark can occur so long as the a dvertising does not contain misrepresentations or
create a likelihood that purchasers will be confused as to source, identity, or sponsorship of the
advertiser's product.

Q81. Please cite any authority for the propositi on that a Member must comply with a particular
WTO obligation through a single measure applicable throughout its territory. Is your claim
concerning an "EC-wide" level of protection based on the fact that the EC's member States are also
WTO Members? AUS

Q82. If the Panel were to uphold the compla inants' claims under Article 16.1 of the TRIPS
Agreement, how would conclusions with respect to th e claims under Articles 1.1, 22.2, 24.5, 41.1,
41.2, 41.3 and 42, and under Articles 10bis(1) and 10ter(1) of the Paris Convention (1967) provide
an additional contribution to a positive solution to this dispute? USA, AUS

Response:

122. Whether the Panel agrees or disagrees with the United States with resp ect to its Article 16.1
claim, conclusions with respect to the other US claims – in particular the claim under Article 22.2 that
legal means are not being made available to interest ed parties and the failure to provide enforcement
procedures related to such means – would assist th e Parties in understanding the actions that the EC
would need to take to bring its measure into conformity with its WTO obligations.

66 Schafer Co. v. Innco Management Corp., 797 F.Supp. at 481 (internal citations omitted).
67 Schafer Co. v. Innco Management Corp., 797 F.Supp. at 481, 482.

Q83. If the Panel were to reject the compla inants' claims under Article 16.1 of the TRIPS
Agreement, would there be any scope for it to uphold the claims under Articles 1.1, 22.2, 24.5, 41.1,
41.2, 41.3 and 42, and under Articles 10bis(1) and 10ter(1) of the Paris Convention (1967)? USA,
AUS

Response:

123. Yes, the United States believes, for instance, that whether or not the GI Regulation is
inconsistent with the EC's obliga tions under Article 16.1, the EC mu st nevertheless provide the legal
means under Article 22.2 for interested parties to prev ent the uses described in that Article, and must
provide enforcement procedures with respect to those rights.

Q84. Are the procedures raised in the United States' claims under Article 22.2 of the TRIPS
Agreement governed by Part IV of the TRIPS Agreement? If so, can they also be governed by Part II?
USA

Response:

124. Article 22.2, in Part II of the TRIPS Agreem ent, requires that Members provide interested
parties with the legal means to prevent certain uses, inter alia , of certain signs and indications. If
those means are not provided, and the United Stat es submits they are not, then there is an
inconsistency with Article 22.2. It should be noted that fulfilling this obligation may or may not result
in the acquisition or maintenance of intellectual property rights, e.g., in the case of the ability to object
to a registration.

125. It may also be true that procedures for acqui ring and maintaining intellectual property, such as
GIs, are inconsistent with Part IV, for instance, because, under Article 62.2 of the TRIPS Agreement,
the registration process does not result in a registration being granted in a reasonable period of time.
But the United States is not raising any such claims under Part IV in this dispute.

126. It does not appear that a claim of inconsis tency would have to come within the scope of
Part IV or of Part II, and cannot come within the scope of both. Notably, Article 62.1, which permits
Members to require compliance with reasonable procedures and formalities, provides that such
procedures and formalities must be consistent with the provisions of the TRIPS Agreement. This
language plainly envisions that a measure can viol ate both Article 62.1 and other provisions of the
TRIPS Agreement, including those in Part II.

Q85. Are the procedures rais ed in Australia's claims under Articles 41 and 42 of the TRIPS
Agreement governed by Part IV of the TRIPS Agreem ent? If so, can they also be governed by
Part III? AUS

Q86. Article 4 the Paris Convention (1967) creates no right of priority for indications of source.
Does this indicate that they are irrelevant for the purposes of the right of priority? AUS, EC

Q87. What is the significance of the EC's statement that the complainants' claims are
"theoretical"? Does the EC suggest that this affects the Panel's mandate or function in any way? EC

Q88. Please clarify the form of the recommendatio ns which Australia seeks in respect of versions
of Regulation (EC) No. 2081/92 prior to its most re cent amendment, as distinct from registrations
effected under them. Please cite to the dis pute settlement rules and procedures of the covered
agreements under which this form of recommendation is requested. AUS

Q89. Is there a notion of estoppel in WTO dispute settlement which applies where a Member
refrains from raising claims in relation to a measure until after it is amended? EC

Q90. Does Australia challenge registrations of geographical indications, or procedures leading up
to such registrations or to refusal of such registr ations, that took place prior to 1 January 1996? If
so, please explain how Article 70 of the TRIPS Agreement applies to these measures. AUS

Q91. Please clarify the form of the recommendations which Australia seeks in respect of individual
registrations. Please cite to the dispute settlement rules and pro cedures of the co vered agreements
under which this form of recommendation is requested. AUS

Q92. Does Australia seek relief in respect of existi ng individual registrations for reasons related to
rights of objection? How many such registrations were made under the former Article 17 of the
Regulation? How many under Article 6? Does Austra lia seek relief in respect of any other aspect of
procedures leading up to existing individual registrations? Please cite to any previous GATT or WTO
panel report which has made such a recommendati on. Please explain why such a recommendation
would be appropriate in this dispute if the Panel upheld Australia's claim. AUS

Q93. Does Australia seek relief in respect of indi vidual registrations in respect of their continuing
inconsistency with trademark rights to be conferred under Article 16.1 of the TRIPS Agreement? If
so, please list these individual registrations. AUS

QUESTIONS POSED BY THE EUROPEAN COMMUNITIES
TO THE COMPLAINING PARTIES

To Australia

Question 1

Could you please give details of any case where th e authorities of the Member States have declared
inadmissible an objection for the reasons alleged under Claim 21 (Australia's FWS, paras. 88-92)

Question 2

Could you please give details of any application for the registration of a trademark that has been
refused for the reasons alleged under Claim 24 (Australia's FWS, paras. 81-87).

To the United States

Question 3

The EC understands that the regulations of the US Alcohol and Tobacco Ta x and Trade Board, and
more specifically Section 27 CFR 4.39(i), provide fo r the co-existence of geographical indications for
wine and some earlier trademarks, under certain conditions.

 (a) Is this understanding correct?

 (b) If so, how does the United States reconc ile this form of co-existence with the
interpretation of Articles 16.1 and 24.5 of the TRIPS Agreement that it has put
forward in this dispute?

Response:

127. The United States notes that the US wine labeling regulations are not part of this Panel's terms
of reference; indeed, this dispute involves neither US measures nor wine products. With this caveat,
under the regulations of the US Alcohol and Tobacco Tax and Trade Bureau ("TTB"), TTB authorizes
the use of the names of certain viticultural areas on wine labels. However, there is nothing in this
authorization that deprives the trademark owner of his right to pursue an infringement action against
uses of that name that create a likelihood of confusion with respect to that trademark. See, e.g.,
Sociedad Anonima Vina Santa Rita v. US Dept. of the Treasury, 193 F.Supp.2d 6 (D.D.C. 2001) ("Of
course, it is entirely possible or, indeed, likely that wineries will eventually produce labels bearing the
Santa Rita Hills AVA designation. If Plaintiff conc ludes that any of those labels infringes on its
trademark, Plaintiff is fully entitled to bring suit under the Lanham Act against the entity that has
developed the label. In other words, the ATF's a pproval of the Santa Rita Hills AVA does not affect
Plaintiff's right to pursue trademark claims agains t individual wineries if and when those wineries use
labels that infringe or dilute Plaintiff's mark.") (Exhibit US-48).

To Australia

Question 4

The EC understands that Australia's Wine and Br andy Corporation Act 19 80 (the "WBC Act")
prohibits the use of a registered geographical indication for wine which does not originate in the area

covered by the geographical indication. The EC further understands that no exception to this
prohibition is provided with respect to prior trademarks.

 (a) Is this understanding correct?

 (b) If so, how does Australia reconcile this prohibition on the use of earlier trademarks
with the interpretation of Articles 16 and 24.5 of the TRIPS Agreement that it has
advanced in this dispute?

Question 5

The EC further understands that the Geographical Indications Committee set up by the WBC Act has
announced that

 The GIC will not determine a geographical i ndication where there is an exclusive trademark
using the name which is the same or similar to the trademark, without the approval of the
trademark owner.

 (a) Is this policy still in place?

 (b) What is the legal basis for this policy? Has the GIC the authority to derogate from
the WBC Act?

 (c) Does this policy apply also with th e respect to the registration of foreign
geographical indications?

 (d) If so, does it apply also when the tr ademark was registered after 1 January 1996 and
after the date of protection of the geographical indication in the country of origin?

 (e) If so, how does Australia reconcile this policy with the terms of Article 24.5 of the
TRIPS Agreement?

To Australia

Question 6

 (a) Are the registration and opposition pro cedures before Australia's Trade Mark Office
"enforcement procedures" within the meaning of Part III of the TRIPS Agreement?

 (b) Is Australia's Trade Mark Office a "judicial body"?

 (c) Are the registration and opposition pr ocedures before Australia's Trade Mark Office
"judicial procedures" within the meaning of Article 42 of the TRIPS Agreement?

 (d) Does Australia's Trade Mark Office ha ve the authority to order the remedies
provided in Articles 44, 45 and 46 of the TRIPS Agreement?

To the United States

Question 7

 (a) Are the registration and opposition proce dures before the US Patent and Trademark
Office ("PTO") "enforcement procedures" within the meaning of Part III of the TRIPS
Agreement?

 (b) Is the US PTO a "judicial body"?

 (c) Are the registration and opposition procedures before the US PTO "judicial
procedures" within the meaning of Article 42 of the TRIPS Agreement?

 (d) Does the US PTO have the authority to ord er the remedies provided in Articles 44, 45
and 46 of the TRIPS Agreement?

Response:

128. The United States fails to see the relevance of th ese questions to the dispute at hand. Notably,
none of the procedures or authorities of the USPTO are included within this Panel's terms of
reference. Nevertheless, as explained at the first meeting, certain aspects of the procedures of the
USPTO could be regarded as part of the enforcem ent procedures available to US rightholders who
believe that they are likely to be damaged by the registration of a mark or the continued registration of
a mark. For instance, a petitioner who successfully cancels a registra tion at the USPTO can take the
registration to a federal court to get an inj unction against infringing use. Further, among the
procedures available at the USPTO are proceedi ngs before administrative law judges and the
Trademark Trial and Appeal Board ("TTAB"), which are quasi-judicial.

To Australia and the United States

Question 8

 (a) Would it be possible under your domes tic law for an EC national who owns an
Australia/US trademark to claim before the Australian/US courts that another
trademark has been registered by Australia 's Trade Mark Office/ the US PTO in
violation of Article 16.1 of the TRIPS Agreement, even where it is not contested that
such registration is in conformity with a ll the relevant provisions of your domestic
trademark law?

Response:

129. With the caveat that this Panel's terms of reference do not include US measures, any person
likely to be damaged by the registration or continued registration of a mark at the USPTO may request
cancellation of the registration at the USPTO or in a federal court and woul d cite grounds under US
law for such a request.

 (b) If not, is it your position that your domes tic law is inconsistent with Part III of the
TRIPS Agreement, because it does not provide "j udicial civil procedures" in order to
"enforce" Article 16.1?

Response:

130. No, because where a trademark owner's rights are being infringed – where another person is
using in commerce identical or similar signs for good s or services that are related to those in respect
of which the trademark is registered in a manner that creates a likelihood of confusion – the trademark
owner can enjoin that infringement and obtain damages, costs, and lost profits. Further, a trademark
owner with superior rights, either under common law or in a prior registration, may obtain
cancellation of a later registered trademark either through a federal court (where the true owner can
also receive an injunction as well as damages) or through the USPTO. This answer is provided with
the caveat that this Panel's terms of reference do not include any US measures.

To Australia

Question 9

The WBC Act set up a register of geographical indications. While the WBC Act lays down the
conditions and procedures for the registration of Australian geographical indications, it does not
appear to provide any conditions or procedures for the registration of foreign geographical
indications.

 (a) Can foreign geographical indications be registered under the WCB Act?

 (b) If so, what are the relevant conditions and procedures for the registration of foreign
geographical indications?

 (c) Has any foreign geographical indicatio n been registered under the WCB Act, other
than those registered pursuant to a bilateral agreement?

To Australia and the United States

Question 10

Have Australia and the United States ever been requested to transmit an application for the
registration, under Regulation 2081/92, of a geogra phical indication relating to an area located in
their territory? If yes, what action have they taken?

Response:

131. Please see the US response to Panel questions 12 and 36.

Question 11

Have Australia and the United States ever been request ed to transmit a statement of objection to the
registration, under Regulation 2081/ 92, of a geographical indicati on? If yes, what action have they
taken?

Response:

132. Please see the US response to Panel questions 12 and 36.

To the United States

Question 12

How many US geographical indications for produc ts falling under the scope of Regulation 2081/92
are protected in the United States?

Response:

133. The United States is unclear as to the relevance of this question. If the EC is implying that
there are no geographical indications in the United St ates that would fall within the scope of the GI
Regulation, on what basis does the EC make this implication?

To Australia

Question 13

How many Australian geographical indications for products falling under the scope of
Regulation 2081/92 are protected in Australia?