Geographical Indications and WTO Negotiations
Released: 2003-07-14T00:00:00

RS21569 -- Geographical Indications and WTO Negotiations

July 14, 2003

What Are Geographical Indications?

The Uruguay Round Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) defines geographical indications as"indications which identify a good as originating in the territory of a Member, or a region or locality in that territory,where a givenquality, reputation or other characteristic of the good is essentially attributable to its geographical origin." (1) The term is most often,although not exclusively, applied to wines, spirits, and agricultural products. Examples of geographical indicationsare Roquefortcheese, Idaho potatoes, Champagne, or Tuscan olive oil.

Why Are Geographical Indications Important?

Geographical indications protect consumers from the use of deceptive or misleading labels. They also provide consumers withchoices among products and with information on which to base their choices. Producers benefit becausegeographical indicationsgive them recognition for the distinctiveness of their products in the market. They are thus commercially valuable.As intellectualproperty, geographical indications are eligible for relief from acts of infringement and/or unfair competition. (2) The use of geographical indications for wines and dairy products particularly, which some countries consider to be protectedintellectualproperty, and others consider to be generic or semi-generic terms, has become a contentious international trade issue.

What Does the Trips Agreement Say About the Protection of Geographical Indications?

The TRIPS Agreement provides two levels of protection for geographical indications and lists exceptions to TRIPS rules for theirprotection.

TRIPS provides general standards of protection for all geographical indications . WTO members must provide the legal means forinterested parties to prevent the misleading or deceptive use of these terms and other forms of unfair competition. WTO membersmust refuse or invalidate the registration of a misleading trademark which contains or consists of a geographicalindication, if amember's legislation so permits or at the request of an interested party.

TRIPS provides additional protection for geographical indications for wines and spirits . WTOmember countries must provide thelegal means for interested parties to prevent misuse of a geographical indication of wines and spirits even wheresuch use does notmislead the public. No exception is granted even if the true origin of the goods is indicated, the geographicalindication is used intranslation, or is accompanied by expressions such as "kind," "type," "style," "imitation," or the like. Theregistration of a misleadingtrademark for wines or spirits must be refused or invalidated. To facilitate the protection of geographical indicationsfor wines, WTOmembers agreed to negotiate the establishment of a multilateral system of notification and registration ofgeographical indications forwines eligible for protection in those members participating in the system.

Exceptions to the protection of geographical indications include: where a term has been used for at least 10 years prior to April 15,1994, or in good faith if prior to that date; where a term is also subject to good faith trademark rights; where a termhas significance asa personal name; and where a term has become identified with the common name for a good or service.

Why Was Protection of Geographical Indications Included in the Trips Agreement?

During the Uruguay Round multilateral negotiations (1986-1994), the European Union (EU) and Switzerland made proposals for ahigher level of protection for geographical indications than provided in existing international agreements. They alsoproposed amultilateral registry for geographical indications. (3) The EU/Swiss proposal would have eliminated most of the exceptions in Article24 which permit the use, for example, of such names as Chablis, Burgundy, or Champagne based on prior or goodfaith use. TheUnited States, on the other hand, while pressing for strong intellectual property protections in general, proposedmore limitedprotections for geographical indications. (4) The UnitedStates proposed simply (1) that member countries would protect geographicalindications of any products through registration of certification or collective marks (see below), and (2) thatappellations of origin ofwines that had not become generic names would be guaranteed protection against misleading use.

The resulting TRIPS provisions for geographical indications represented a compromise between these two positions and postponeddebate over a multilateral registry for wines and spirits and over extending higher protections to agriculturalgeographical indications. The TRIPS compromise on protection of geographical indications reflects more the EU's expansive proposals thanthe United States'more modest ones.

How Are Geographical Indications Protected in the United States? (5)

In the United States, geographical indications are protected under the U.S. Trademark Act (15 U.S.C. 1051 et seq.). Section 4 of theTrademark Act (15 U.S.C. 1054) provides for the registration of "certification marks including indications ofregional origin." Thekinds of certification marks recognized in the Trademark Act include marks that certify that goods or servicesoriginate in a specificgeographic region. These would be the kinds of marks most likely viewed as geographical indications underTRIPS. (6) Partiesasserting rights to use a geographical indication can obtain formal protection via use of the trademark systemthrough registration as acertification mark. (7) The U.S. system for recognitionfor geographic indications applies equally to foreign geographic indications. Anexample is U.S. Registration No. 571,798 ("ROQUEFORT") for that French cheese. Other means also would beavailable to protectgeographical indications (see footnote 5 for details).

The North American Free Trade Agreement (NAFTA) provides protection for some specific geographical indications by recognizingthat Bourbon Whiskey, Tennessee Whiskey, Canadian Whiskey, Tequila, and Mezcal are "distinctive products" inthe NAFTA countries where they are produced (NAFTA, Chapter 3, Annex 313). The so-called D'Amato amendment (Section910 of P.L.105-32 ) provides authority for the use of "semi-generic" names of wines if the true place of origin also isindicated. (8) (This use is amain point of contention in both multilateral and bilateral negotiations with the EU.)

What GI Issues Are Being Debated in the Doha Round?

Two issues concerning geographical indications are under consideration in the Doha Development Agenda: negotiations concerning amultilateral registry for wine and spirits; and debate over extending additional protections for agriculturalgeographical indications.

(1) Negotiating a Multilateral Registry for Wine and Spirits

The Ministerial declaration launching the Doha round of multilateral trade negotiations established the fifth WTO MinisterialConference (September 10-14, 2003 in Cancun, Mexico) as the deadline for completing negotiations for amultilateral system ofnotification and registration. (9)

In the negotiations, the EU has proposed a multilateral system of notification and registration that would create obligations for WTOmember countries to grant exclusive rights for individual geographic indications, rather than allow interested partiesto apply forprotection according to a country's national legal procedures. (10) Participation would be voluntary, but the multilateral registry wouldhave mandatory effect, so that notification of a geographical indication by one country creates a presumption thatit must be protectedeverywhere. Under the EU proposal, a country would be required to grant exclusive rights to producers in thenotifying country,unless it successfully challenged the notification in WTO dispute settlement.

The EU lists among the advantages of a registry with mandatory effect the following. It would provide information to members aboutwhich geographical indications are protected in each member's territory. It would make operational the protectionsextended togeographical indications for wines and spirits provided in TRIPS Article 23, without requiring members to enactnew legislation oradministrative procedures. It would provide transparency and legal certainty to international trade in wine andspirits.

The United States, Japan, Chile, Canada, New Zealand, Australia and others have all expressed concern about a registry withmandatory effect on grounds that it would lead to new and costly administrative burdens and legal obligations. Theysee the proposedmultilateral registry as a clearing house for information about the protection of specific geographical indications ineach country. Applications for protection of geographical indications would be made through existing legal procedures in a WTOmember country.

While multilateral negotiations have been underway, the United States and the EU have been negotiating a bilateral wine agreement. A principal EU objective is to secure an end to U.S. use of "semi-generic" names for wines (see footnote 5). TheEU is also seekingprotection for what it calls traditional terms applied to wines such as "tawny" or "ruby red", among others. Aprincipal U.S. objectiveis to gain acceptance by the EU of U.S. wine-making practices. Because the EU only permits wine made inaccordance with itsregulations to be sold in the EU, a substantial amount of U.S. wine is blocked from that market. Australia and, morerecently, Canadahave concluded bilateral wine agreements with the EU which contain mutual recognition of wine making practicesand agreement byAustralia and Canada to phase out the use of the generic names still permitted under U.S. law.

(2) Extending Additional Protection to Geographical Indications for Agricultural Products

The second issue under debate in the TRIPS Council is that of extending the protection of geographical indications provided for inArticle 23 of the TRIPS Agreement to products other than wines and spirits. This and other so-calledimplementation issues ofimportance to developing countries were to have been addressed by the end of 2002, but were not.

Proposals to extend protection accorded wines and spirits to other agricultural products have been made by the EU (11) and by a groupof European and developing countries. (12) Additional protection for geographical indications of agricultural products is viewed as acorollary of efforts to liberalize agricultural trade and to promote trade of goods with higher added value. Forexample, the EUexplicitly links extending protection for geographical indications to its strategy to promote the development ofquality agriculturalproducts. (13) Proponents also argue that increasedprotection would bring more effective protection of consumers. Negotiations onthis issue are taking place in the TRIPS Council, but the EU has linked reaching agreement on geographicalindications to itswillingness to deal with the agricultural negotiating issues of market access, domestic support, and export subsidies.

Conversely, the United States and a number of other countries argue that the existing level of protection provided by TRIPS enablescountries to maintain access to existing markets; maintains ongoing access to trade opportunities in new andemerging markets;provides adequate protection to producers and consumers; and does not impose new administrative costs and legalobligations onmembers. (14) Additional costs cited by the UnitedStates include potential for consumer confusion (from re-naming and re-labelingproducts), potential producer conflicts within the WTO, and a heightened risk of WTO disputes.

The debate over extending protection for geographical indications of agricultural products is reflected in the U.S. request forconsultations (the first step in WTO dispute settlement) with the EU on EU regulations for the protection ofgeographical indicationsfor wines and spirits (Community Regulation 1493/99) and for other agricultural products (Community Regulation2081/92). TheU.S. request, which has been joined by Australia, argues that the EU regulations violate the TRIPS Agreement(Article 22) byrequiring specific bilateral agreements, rather than recourse to national legal systems, before according recognitionto other countries'registered geographical indications. Commentators have suggested that this possible challenge to EU regulationsanticipates that EUenlargement to include 10 central and eastern European countries could create additional problems for U.S.registered trademarkowners vis-a-vis EU protected geographical names. (15) A case in point is the U.S.-owned Budweiser beer trademark which, althoughregistered in a number of EU countries, could come into question if the Czech Republic registers and claims thename Budweiser,even in translation, as a protected geographical indication in the EU.

Outlook and Congressional Role

Decisions about geographical indications will be on the agenda of the WTO Ministerial Conference in Cancun. The Chairman of theAgriculture negotiating group has identified geographical indications for agricultural products as an unresolvedissue. (16) Congress isclosely monitoring the Doha negotiations; the House Agriculture Committee has scheduled oversight hearings onthe protection ofgeographical indications for agricultural products. Should negotiations result in agreements that require changesin U.S. law coveringgeographical indications, Congress would take up legislation to implement such an agreement under expedited (fasttrack) proceduresestablished in the Trade Act of 2002 ( P.L. 107-210 ).