GEOGRAPHICAL INDICATIONS: PAST, PRESENT, AND FUTURE

TABLE OF CONTENTS

1. Introduction
2. History
3. National Protection
4. Regional Protection
• A Case Study:  European Union Regulation
5. International Protection
• Paris Convention for the Protection of Industrial Property
• Madrid Arrangement Concerning the Prevention of False or Misleading Indications of Source
• Lisbon Agreement
• WTO TRIPs Agreement
• Does the Lisbon Agreement Comply with the TRIPs Agreement?
• Cross-Reference for Both Treaties (Lisbon/TRIPs)
• Does the EU Regulation Comply with the TRIPs Agreement?
1. WTO TRIPs Articles 1(1), 2(1), 2(2) and 24(3)
2. WTO TRIPs Article 3(1)
3. WTO TRIPs Article 16(1): “First in Time, First in Right”
4. WTO TRIPs Article 16(2)
5. WTO TRIPs Article 22(1)
6. WTO TRIPs Article 24(5)
7. WTO TRIPs Articles 41(1) and 42
6. The Future of Geographical Indications

INTRODUCTION

Many terms used on products in commerce may have geographical significance and include such expressions as Swiss cheese, Napa Valley chardonnay wine and Philadelphia cream cheese.  However, in the three uses just listed, the word Swiss is used as a generic term, Napa Valley is used as a geographical indication (“GI”) and Philadelphia is used as a trademark.  Accordingly, it is clear that the way a term is used is important in determining whether the geographical term is a generic term, a geographical indication or a trademark.  The following analysis will concentrate on geographical indications, not geographical generic terms or geographical trademarks.

A geographical indication is an expression with a “place-goods” connection which permits the producers of products of a certain geographical region to claim a right in such term to indicate that the products come from such region.  A geographical indication, therefore, is a broad term which refers to any type of expression which connotes a geographical origin of a particular product.  A geographical indication can encompass everything from an “indication of source”, such as Florida oranges or New Zealand mussels, to highly specialized terms called “appellations of origin” (“AOs”), such as Champagne sparkling wine.  Protection for these terms varies from country to country, as is the example with Champagne sparkling wine, which is protected only as a “semi-generic” in the United States (i.e., the term can be used by U.S. vintners outside of the Champagne region in France as long as the correct origin is also noted, in expressions such as “California Champagne”).  To date, the strongest demand for geographical indications has been in the area of wines and spirits.

More importantly, current international GI practice requires that a GI be independently reviewed and examined in each country where protection is sought, since a GI registration in the home country is not sufficient to obtain protection.  A GI may be protected in a particular country, but be considered generic or a trademark in another country.  It is important that the local intellectual property offices and the local courts maintain their competence and jurisdiction over the substantive question of whether a term is a GI or not in a particular country (TRIPs Agreement 24(6); Paris Convention 6 quinquies B; Lisbon Agreement Article 5(3); Model Law (1975) Section 10).

The following review will examine the history of protection for GIs, national laws and court opinions dealing with GIs, regional treatment of GIs such as the EU Agricultural and Foodstuffs Regulation, the principal treaties on GIs and the impact of the WTO TRIPs Agreement on the subject matter, and finally protection for GIs in the 21^st Century.  This review will indicate that GIs are already sufficiently protected under our current legal system and do not need additional attention such as registration regulations or special treatment in statutes or court decisions.

HISTORY

In centuries past the issue of geographical origin was largely confined to local and regional authorities.  For the consumer to purchase BURGUNDY wine or ROQUEFORT cheese, they would have traveled to Burgundy or Roquefort.

Laws concerning GIs in Europe have been developing for hundreds of years.  In Yugoslavia, for example, the Charter of Stevan the First-Crowned governed the sale of wine as early as 1222. In the Middle Ages, so-called “guild marks” were a common means to indicate the geographical location of products, such as MURANO glass from the island of Murano near Venice, Italy.  Yet the appearance of sophisticated laws to protect GIs has increased significantly over the past one-hundred years.

In the so-called “civil law” countries, registration of GIs on a separate register was added to general protection under unfair competition.  Starting in 1905, France generated a series of laws throughout the century that have largely shaped the debate over GIs today.  The French system, it has been suggested (Simon, Lori, Northwestern Journal of Intellectual Law and Business 5:132 (1983) p. 132, 141), developed with the focus of protecting producers and manufacturers as opposed to concerns about consumer confusion or deception.  Despite this, the law in 1905 focused on the deception of the consumer (August 1905 France Law on AOs - “Whosoever shall have deceived or endeavored to deceive the contracting party either as to the nature, substantial qualities, composition or content of useful principles of all merchandise or as to their nature of origin…shall be punished.”).  By May of 1919 the term “Appellations of Origin” had found its way into French law.  Other countries who copied the French legal system also added AO protection to their legal regimes.

In the so-called “common law” jurisdictions, those which followed the British legal system, unfair competition (“passing off”) was coupled with GI registration under trademark law (in the form of collective or certification marks) to obtain protection.  These local systems eventually reached the national level.

In the U.S. and other common law countries protection for geographic indications has largely proceeded based on the law of unfair competition.  This approach centers on the idea that the use of a geographic indication on products originating outside of the indicated area is an act of “passing off” the goods.  Essentially, as in trademark infringement, it is an attempt to capitalize on the goodwill and reputation of the producers in the geographical area.  Furthermore, this approach characterizes the infringer’s acts as an attempt to commit a fraud on the consuming public.  Examples of this approach can be seen in the United States as early as 1895.  In City of Carlsbad v. Kutnow, 68 F. 794 (1895); aff’d, 71 F. 167, (1895), the Court found infringement of the indication CARLSBAD SALTS by a seller using IMPORTED EFFERVESCENT CARLSBAD POWDER on its salts.  The court reasoned that the protection had less to do with a right or interest in the name of the town than the simple fact that the offending user was committing a public fraud.  “It would seem that any manufacturer or dealer of a group all of whom use a particular place name, may sue in equity on behalf of all for protection against a competitor who is using the name that is used by him or his enterprise to their damage.  The fact that the others share the right to use the name does not lessen the loss he suffers or give any better standing to the rival who is stealing unfairly.” (Nims, Unfair Competition and Trademarks, 4^th Ed. (1947), p. 101.)

This approach has the advantage of allowing producers from an area with a reputation for quality products with a cause of action based solely on their reputation and independent of any registration for or prior acknowledgement of this geographic indication.  At the same time, it relies heavily on the need for consumer awareness of the indication and fails to account adequately for situations where the mark has been over-used by third parties.  In the latter situation third party use can be so overwhelming as to eliminate the connection between the product and its origin.  Once consumers cease to assume that a product with a geographic indication is from that area the mark can be considered generic.  As this approach downplays any actual or implied right to use the name by the producers of the region, once consumers associate the indication with a style or type of product rather than its origin the producers from that region are left without a remedy; the mark has become generic.  Nevertheless, this approach, as will be discussed later, was at the center of the Paris Convention and continues to be widely used throughout the world.

Accordingly, the law of the geographical indications shows the law expanding to meet the expanding nature of global trade, from local, to national, to regional, to global.  Although most if not all countries protect geographical indications under unfair competition law, various other mechanisms were created as set forth below.

NATIONAL PROTECTION

As the history of GIs indicates, local regulations coupled with general concepts of unfair competition and trademark law protected local GIs. The next step was nationwide protection. The national laws of countries around the world feature a variety of approaches to the treatment of GIs.  Few of these countries, such as France and Argentina, provide national registration systems for their GIs.  This approach relies on a national registry to store and track all of the GIs used within the country, whether domestic or foreign.  Often the system will not provide for the registration of all GIs.  Instead these systems tend to focus on wines and spirits, leaving the protection of indications of origin to the law of unfair competition.

Internationally the registration system is best exemplified in the Lisbon Agreement.  However, the Agreement failed to gain popularity.  Currently it has only nineteen signatories.  The registration countries generally treat AOs like trademarks in that they must pass registration formalities and then the owner is provided with enforceable rights.

The most common method for protection of GIs in national law is through the use of unfair competition/consumer protection law.  This approach, favored by the U.S. among others, focuses on confusion in the marketplace as the main justification for the protection of GIs.  Under this system the user of a GI can act to prevent another user from using an indication that is or would be likely to cause confusion, mistake, or to deceive consumers.  The strength of this approach is that it places the focus on the need for protection of the GIs when they are threatened by unjustified use.  Rather than according a regional producer property rights in the name of the location of his production, unfair competition allows the producer to challenge an unjustified user based on consumer expectation and confusion.

Nevertheless, there is still some need to assure AO users of rights in their name.  The countries favoring unfair competition as a primary means of protecting GIs have turned to the law of certification marks to fill that void.  Under this system an interested producer can utilize a third-party to insure that all users of the certification mark have not only complied with the geographic constraints imposed by the mark, but compliance with approved methods of production.  This system avoids consumer confusion while simultaneously providing regional producers prospective protection and a means to certify that products sold under the certification mark have been created in conformity with a specific process.  Thus this system allows the benefits of unfair competition law to protect GIs without registration and further allows those producers interested in demonstrating more than the origin of their products a means to further distinguish themselves.

REGIONAL PROTECTION

A Case Study: European Union Regulation

The EU has various GI regulations concerning wines and spirits.  The foregoing analysis will focus on the Agricultural Products and Foodstuffs Regulation, which is currently the subject of a WTO TRIPs Council dispute resolution proceeding (WT/DS 174/1, June 1, 1999).

The 1992 EU Regulation on “Protection of Geographical Indications and Designations of Origin for Agricultural Products and Foodstuffs” (No. 2081/92) dated July 14, 1992 as amended by Regulation No. 535/97 dated March 17, 1997 (hereinafter collectively referred to as “Regulation”) is seriously flawed and violates the WTO TRIPs Agreement in several major aspects.  Although the Regulation does attempt to address the issue of conflict between GIs and trademarks and remedy some of the more serious problems engendered by the existing EU wine regulations, it still falls far short of achieving a balance between protection for legitimate trademarks and legitimate GIs.

The application procedure, outlined in Article 5 of the Regulation, emphasizes the importance accorded to Member States.  While any natural or legal person may file for registration of a GI, they must submit the application to the “competent authority” in the state where the geographical area is located.  Thus the system, from the outset, places national authorities between the interested parties and the European Commission. Upon approval of the formalities of the application the GI is published for opposition.  Again, the Member States’ importance is emphasized, as they are the only parties who may file an opposition.  Thus a concerned third-party is provided no means of direct challenge to an application.  It must enlist the aid of a Member State.  Furthermore, there are only two ways for foreign GIs to obtain protection under the Regulation, namely enter into a bilateral treaty with the EU and apply for protection under Article 12(1) of the Regulation or negotiate a GI provision within the Accession Treaty or by separate treaty.

Within six months of the date of publication of an application by the Commission, Member States (Article 7 (1) of the Regulation) as well as “legitimately concerned natural or legal persons“ (Article 7 (3) of the Regulation) may oppose the proposed registration. However, Article 7 (1) provides a “direct” opposition filed with the Commission only for Member States. Other interested parties may only oppose at the competent national authorities. The final decision will be left to the Commission after consultation of the concerned Member States.

Natural persons and legal entities may only object to the proposed registration by filing a substantiated opposition with the competent authority of the Member State in which they reside or are established if they can show a “legitimate concern“ (Article 7 (3) of the Regulation). “Legitimate Concern“ should mean any legal or economic interest that would be affected by the registration of the respective GI. A legal interest would, e.g., be the ownership of a prior trademark whereas an economic interest could be the sale of goods under a third party’s trademark.

Authorities of the Member States may only review the oppositions with regard to their admissibility considering the legitimate concern and the existence of a substantiation of the opposition. A negative decision on the admissibility can be challenged under national trademark and/or GI laws. The Member States are not competent to review the opposition as to substance. Only the Commission is competent to decide whether an opposition is justified. Although the wording of Article 6 (3) “the competent authority shall take the necessary measures to consider these comments or objections within the deadlines laid down“ does somehow suggest that Member States could consider the justification of the opposition, this sentence should be interpreted as meaning that “the competent authority in the Member State shall take the necessary measures to ensure that the Commission can consider the comments or objections within the deadlines laid down in Article 7 (1)“, i.e. within 6 months. The position that Member States have no right to review oppositions as to substance is also confirmed by Joachim Friedrich Heine in an article published in GRUR 1993 (Joachim Friedrich Heine, Das neue gemeinschaftsrechtliche System zum Schutz geographischer Bezeichnungen, GRUR 1993, 96 et sec.). Mr. Heine is now Deputy General Director of DG VI - Agriculture.

As soon as the Commission has received the opposition, it will, as a first step, decide whether it is admissible. An opposition is only admissible if it is justified by one of the exclusive grounds for opposition as provided in Article 7 (4) of the Regulation. If the Commission decides that an opposition is admissible, it has to instruct the concerned Member States, i.e. the Member State which forwarded the application to the Commission under Article 5 (5) of the Regulation and the Member State which either directly filed an opposition or has submitted an opposition of one of its residents to the Commission, to reach an amicable settlement within three months (Article 7 (5) of the Regulation).

If an agreement is reached, the Member States will communicate the agreement to the Commission and the Commission will either register the GI (Article 7 (5) (a), 6 (4) of the Regulation) or, if there has been an amendment, it will publish the amended application and initiate the procedure of Article 7 again.  If no agreement is reached, the Commission shall take a decision in accordance with the procedure as laid down in Article 15, i.e. the Commission will consult the Expert Committee and ask for an opinion. Should the Commission agree with the opinion issued by the Expert Committee, it will proceed accordingly. Should the Commission disagree, or should the Expert Committee not issue an opinion, the Commission will submit a proposal on the appropriate measures to the Council, who will decide with the qualified majority. If the Council does not decide within 3 months after the Commission has submitted the proposal, the Commission may proceed as proposed.

If the Commission and/or the Council should not decide in favor of the opponent, the opponent may challenge the decision of the Commission to register the GI before the European Court of Justice under Article 173 (2) of the Rome Treaty.

A brief note on the EU Wine and Spirits regulations (viz., 822/87, 2392/89, 1601/91, 3897/91, and 1576/89). A true incident which shocked the European Commission into making some sense of its wine regulations was the famous TORRES wine case.  The Torres family had been making wine in Spain since 1696, and this wine had an international reputation.  Beginning around 1900, the Torres family began to register TORRES as a trademark for wine worldwide.  Pursuant to the EU wine regulations, the Portuguese government in the early 1990’s attempted to register TORRES and TORRES VEDRAS as GIs for a valley north of Lisbon which the government claimed was a traditional wine growing region.  Of course, if these GIs were recognized, the Spanish TORRES trademark would be preempted in the EU and in all countries protected EU GIs through reciprocity or treaties.  The Commission amended its wine regulation to grandfather this type of long standing trademark, but the grandfather standards are so high few trademarks can qualify.  Moreover, the trademark owner could not stop the new GI, but must accept coexistence even if there is public confusion.  The TORRES case has been used effectively by trademark advocates to show the dangers of expanded GI protection.

Do the foregoing systems comply with the World Trade Organization TRIPs Agreement? That issue will be addressed later in this review.

INTERNATIONAL PROTECTION

There are several multinational treaties currently addressing, in one respect or another, GIs.  The following review focuses on the most important.

Paris Convention for the Protection of Industrial Property (1883)

International protection for indications of origin, be they “indications of source” or “appellations of origin”, has developed almost entirely between 1883 and the present.  Prior to that period there were just two bilateral conventions aimed at providing national treatment for the signatories.  The slow birth of this type of intellectual property provision has been attributed to several factors including economics, the difficulty of establishing and defining a specified area that would be appropriate for the designation and the difficulty of determining when a given indication has become so common as to be generic or descriptive.

Soon, however, the view that international cooperation in this field would be beneficial domestically drove countries to seek effective ways to suppress the use of misleading Geographical Indications.  This sentiment crystallized in article 10 of the Paris Convention for the Protection of Intellectual Property.  This provision, as the creation of compromise between those favoring an absolute prohibition of false indications of origin and those fearing international coverage of an issue that had been an exclusively national concern, was qualified to prohibit only false indications of origin used with a trademark of fictitious nature or with fraudulent intent.  The extent of the protection available as a result of this prohibition is clearly limited.

After the creation of the Madrid Arrangement for the Repression of the False Indications of Origin in 1891, several conferences dealt with the possibility of amending the Paris Convention’s provisions in order to remedy the deficiencies of Article 10.  Notably, France, fearing weakening of the Madrid Arrangement, opposed amendment of the Paris Convention at the Washington conference in 1911. In the London conference of 1934 the inadequacies of Article 10 were again debated.  The debate focused on the provisions requirement that the indication be used with a fictitious name or fraudulent intent.  This requirement, it was agreed, meant that protection was only incidentally provided to the indication of origin while the heart of the provision spoke to trade names.  The debate on how to protect the indication or origin directly was marked by a split between those countries that felt domestic tribunals should be free to determine whether each proposed indication was generic and the French position that only the country of origin for the appellation should determine if the appellation has been generic.  The division forestalled any serious changes to Article 10.

Finally in Lisbon, 1958, there was an attempt to cover misleading indications of origin but the amended wording was voted down by one vote.  The Lisbon conference also added paragraph 3(3) 10 bis which is directed at unfair competition.  This provision, as proposed, dealt with misleading indications of origin but, again, one vote prevented the scope of the paragraph from extending that far.

The only significant change occasioned by the conference of London was the amendment of the first paragraph of Article 10.  As amended it reads:

The provisions of the proceeding Article shall apply in cases of direct or indirect use of a false of origin of the product or the identity of the producer, manufacturer or trader.

This amendment eliminated the need for both a false designation of origin to be coupled with a fictitious name in order to trigger the protection provisions of the Article.

Means for enforcement of the prohibitions in Article 10 are detailed in Art. 9.  The convention contemplates several stages of enforcement to be utilized based on the availability of Local Rules to sanction the proposed action.  First on the list of sanctions is seizure at importation, then prohibition on importation and finally seizure within the country.  Provided a country has laws to affect these sanctions, it is important to note that their use is mandatory.

The convention allows public prosecutors, competent authorities and interested parties to request seizure of the goods or other sanctions.  Article 10ter provides for the member countries to provide legal remedies and it includes provision allowing private groups under special circumstances to enforce restrictions on false and misleading trademarks.  Essentially the Paris Convention’s greatest asset is its 99 member constituency.  Its greatest weaknesses include a lack of protection for AOs, a failure to address IOs that have become generic and its failure to address qualified false designations, i.e., “BURGUNDY-type” wine.

Madrid Arrangement Concerning the Prevention of False or Misleading Indications of Source (1891)

In 1886, at the Rome Conference, delegates sought to increase the protection for indications of origin through the amendment of Article 10.  The proposals specifically provided for the repression of all false designations of origin and empowered the domestic courts of the contracting states to determine which of the indications of origin had become generic or descriptive within their land.  These Acts, while adopted, were never ratified.  The Arrangement was proposed again at the Madrid Conference of 1890.  It was suggested that the proposal could take the form of a draft Arrangement and member countries of the general Union could become signatories, thereby securing greater protection for indications of origin.  The proposal occasioned a split between the potential signatories on how best to handle the issue of genericness.  Some countries, notably the U.S., Netherlands, Italy and Belgium, sought to broaden the genericness exception to include designations that were not used with fraudulent intent or, as part of the American proposal, situations where no damage was caused.

The other countries felt that the proposed exception for generic or common names was already too broad.  The delegation from Portugal, proposed the exclusion of agricultural products from the exception because, it reasoned, these products derive their essential character from the geographical area in which they are produced.  Therefore, it is impossible for these names to become descriptive.  When the French delegation proposed limiting the Portuguese amendment to products of the vine, Portugal assented.

Norway and Sweden co-proposed what is now Article 3 of the Arrangement.  This provision allows the producer to place the name and address of the seller on goods of foreign origin provided the country or place of its manufacture is also clearly indicated.

As discussed above, the purpose of the Madrid Arrangement was to fill the gaps in the protection afforded by the Paris Convention.  Thus the Arrangement was directed at simple fraud without the use of a trade name or intent to defraud.  The first Article of the Arrangement reads:

(1)  All goods bearing a false or misleading indication, by which one of the countries to which this Agreement applies, or a place situated therein, is directly or indirectly indicated as being the country or place of origin, shall be seized on importation into any of the said countries.

While there was debate concerning how best to indicate that this provision applied to all goods and that the provision sanctioned use of terms that suggested a general country of origin in addition to localities located therein, ultimately the wording of Article 1 was found to cover both of these issues.  Furthermore, the provisions of the Arrangement were said to cover any goods that moved between two contracting parties to the Arrangement, regardless of where the offending indication was added or the nationality of the defendant.  Also, even indirect designations, such as those using ‘kind’ or ‘type’ were prohibited by the new Arrangement.  The words “or misleading” were added at the Lisbon Conference, and they were designed to extend the protection for indications of origin even further.

Article 4 of the Madrid Arrangement provides that the tribunals of the state in which protection for a given appellation is sought may decide whether the reference has become generic.  In addition to this provision regional appellations of origin for wine products are provided special protections.  Specifically, it exempts regional appellations from becoming generic.  This decision however, is limited to ‘appellations’ and not ‘indications’ of origin.  Thus only those products that receive an essential aspect of their character from the region in which they were created are prevented from becoming generic.  For example, the term FRENCH WINE is not an appellation, while BURGUNDY is a regional appellation and therefore escapes the possibility of one contracting state deeming it descriptive.

At the Lisbon Conference an additional paragraph to Article 4 was proposed.  This addition would have extended the protection of appellations of origin to prevent the use of expressions such as type or kind, translations and other uses that might lead the appellations to be considered generic.  This proposal failed, largely because it was designed to affect appellations and not all indications of source.

For several conferences since its adoption, proposals have been advanced to extend the exception of Article 4 to all goods that derive their essential characteristics from the soil and climate.  Nevertheless these proposals have never been adopted.

The Madrid Arrangement currently has 32 signatories.  Therefore its scope is significantly smaller than that of the Paris Convention.  Like the Paris Convention it fails to address qualified false designations, AOs or the possibility of IOs becoming generic.  In Article 4 the arrangement allows the courts of each country to determine which IOs are already generic but products of the vine are specifically exempted.

A strength of the Madrid Agreement is its provision for mandatory seizure of any product bearing a false designation of source imported into any of the contracting states.  This protection has been expanded to include deceptive indications of source.

Unlike the Paris Convention, private individuals may not request seizure of infringing goods except through petition to the general prosecutor or other competent authority.

Lisbon Agreement (1958)

This agreement is further limited in scope relative to the Madrid Agreement.  In this case there are only 19 member states.  The Lisbon Agreement is the first major multinational treaty to address AOs as such.  Article 2(1) provides the definition for marks covered by the Agreement:

“The geographical name of a country, region or locality which serves to designate a product originating therein the quality and characteristics of which are due exclusively or essentially to the geographical environment, including natural or human factors.”

Thus the Lisbon Agreement does not simply address IOs but only those indications for which the region at issue, by virtue of its nature or human factors, contributes to the quality and characteristics of the product.  This approach restricts the subject matter governed by the agreement to products whose character varies based on the location of its product.  Thus it is impossible to envision an AO for many of today’s mass produced products and even less likely, arguably impossible, to imagine an AO for services. All products not linked to the geography of their area of production are necessarily unprotected under this agreement, i.e., industrial products.

For those products which can squeeze into the limited definition provided for in the Lisbon Agreement there are still more hurdles to be cleared before protection is granted. Article 1(2) of the Agreement requires AOs that seek protection to first be protected in their home countries and second in the International Bureau of WIPO. Procedurally the Lisbon Agreement requires national action to achieve protection.  The competent authority in each country submits IOs to the International Bureau on behalf of a specified group of beneficiaries or users.  The group need not be defined by name, though there must be provisions for identification of those on whose behalf the mark is submitted.

The Bureau examines the appellation for procedural formalities and then it is published.  If any country of the Special Union cannot protect the appellation it must indicate that fact within a year of publication along with the reasons for refusal.  The agreement fails to mention acceptable grounds of refusal so union members are left to refuse protection at their discretion. Provided there are registered prior users of the appellation in countries that accept the responsibility for protection of the appellation said users, under Article 5(6), are granted up to two years to cease use of the appellation.

Finally the Lisbon Agreement plugs the gaps of the Paris and Madrid Agreements insofar as the appellation cannot become generic as long as the home protection remains in force.  Article 3 extends the appellation’s protection to include qualified false designations, i.e., “type” or “kind”.  Finally Article 8 allows private interested parties as well as the general prosecutor and competent local authorities to provide for its enforcement.

WTO TRIPs Agreement (1994)

The WTO TRIPs Agreement mandates that countries in the WTO, now over 130, amend their intellectual property laws to conform to the articles in the treaty. Countries such as the United States actually have more protection than TRIPs, but since TRIPs is considered a floor (Article 1 (1)), this is not a problem.

Articles 22-24 are the pertinent TRIPs provisions on GIs, but Articles 2(2) and 16(1) are relevant also.  The basic mechanism of TRIPs can be explained with the following key points:

• GIs protected without registration.

• Relative protection against false GIs which are misleading (note use must be proven to be misleading), including misleading use in trademarks (ALASKA bananas acceptable if not misleading).

• Absolute protection against false GIs for wine, even though not misleading (ALASKA merlot unacceptable even if not misleading).

• Proposed negotiations for an international GI notification system for wines only.

• Trademark/GI conflict mechanism in Articles 16(1) and 24(5) by protecting prior trademarks from phase-out by later GIs and providing the earlier right holder to block the other party based upon the concept of “first in time, first in right”.

The TRIPs approach was adopted in NAFTA 1712, which may lay the groundwork for the new FTAA (Free Trade Area of the Americas), the proposed Western Hemisphere Economic Community. Most importantly, prior trademark rights are protected and safeguarded.

Article 22 provides a definition of GIs which is similar to appellations of origin.  Accordingly, the TRIPs requirements protect only a specific type of GI, not all GIs.  Under paragraph 2 of Article 22, WTO members are required to provide the legal means for interested parties to prevent misleading use of GIs.  Moreover, subparagraph 2(b) emphasizes that unfair competition must be prevented.  Registration per se is not required as long as there are means to protect against this misleading use.  Paragraph 3 of Article 22 states that WTO members must provide a mechanism by which trademarks which include misleading use of GIs can be prevented.  It is important to note that the key word here is “misleading”, and thus not all uses of GIs are prohibited (for example, ANTARCTICA bananas).  Finally, paragraph 4 of Article 22 reiterates the previous paragraphs and states that false representations to the public should be prohibited.

TRIPs Agreement Article 23 discusses significantly increased levels of protection for GIs for wines and spirits.  Paragraph 1 of Article 23 states that each WTO member will provide protection for GIs for wines and spirits even if the true origin of the goods is indicated or accompanied by expressions such as kind, type, etc.  In paragraph 2 of Article 23 the previous obligations found in 22(3) are strengthened for wines and spirits for incorrect GIs, even if such use is not misleading (e.g., ANTARCTICA merlot).  Moreover, paragraph 3 of Article 23 extends such protection for wines to homonymous GIs for wines only.  Finally, paragraph 4 of Article 23 discusses possible multilateral notification and registration systems for wines which apparently also will be extended to spirits pursuant to the current WTO discussions.

Article 24, paragraph 1 discusses the agreement of WTO members to enter into further negotiations aimed at increased protection of GIs under Article 23, namely for wines and spirits.  It is important to note that Article 24(1) focuses on GIs for wines and spirits only and not GIs generally.  Paragraph 2 focuses on the TRIPs Council and the periodic reviews on the obligations under the agreement.  Paragraph 3 states that WTO members should not diminish the protection of GIs that exist in the member states, although this obligation is somewhat unclear.  As was noted previously, the TRIPs Agreement supersedes the main GI treaty, namely the Lisbon Agreement, in certain key respects and thus Lisbon countries must confront this contradiction.  Additionally, the EU GI regulations pre-empt GI regulations in the EU for wines, agricultural products and foodstuffs and thus this may also create a serious problem for the Lisbon Agreement in the EU.

Article 24, paragraph 4 provides a “grandfather” clause for existing GIs for wines and spirits which have been used for at least ten years preceding the effective date of the agreement of April 15, 1994 (with or without good faith) or in good faith preceding that date.

The true innovation of the TRIPs Agreement is to provide a conflict resolution provision between GIs and trademarks.  This provision is found in paragraph 5 of Article 24, which provides a mechanism by which pre-existing trademarks are safeguarded from subsequent GIs.  This paragraph has specifically rejected the Lisbon Agreement approach of the superiority of GIs and instead focuses on the relative priorities of use or registration of the trademark and the GI.  This paragraph should be extremely important in implementing national legislation, since one of the principal problems today is that trademark rights are being sacrificed to GI rights when paragraph 5 clearly states that prior trademark rights should be respected. This provision should be read in relation to Article 16(1) of the TRIPs Agreement, which clearly establishes a “first in time, first in right” mechanism for conflict resolution, since trademark owners are guaranteed that their trademark registrations will be able to block any subsequent “sign”, including a GI.

Article 24, paragraph 6 focuses on generic terms whereby a WTO member state is not required to protect a GI if such term is already a generic term for other types of commonly used names such as a grape variety name.

Article 24, paragraph 7 provides an incontestability provision whereby after five years the use or registration of a conflicting trademark will become incontestable as to a prior GI.

Article 24, paragraph 8 focuses on the use of a person’s name in business, which is protected under the TRIPs Agreement except where such name is misleading.

Finally, paragraph 9 of Article 24 states that WTO members need not protect GIs when they are no longer protected in the home country.  Article 2(2) is of importance since it indicates that the enumerated treaties are free from derogation.  The Lisbon Agreement is not one of the them.  Article 16(1) lists the rights given to a trademark owner, including the exclusive right to use the trademark even as to other “signs” (presumably including GIs).

We now use these TRIPs criteria to analyze a current GI system such as the EU Regulation on Agricultural Products and Foodstuffs (2081/92).  We can uncover various deficiencies.  The most serious problems with the EU Regulation are apparent lack of national treatment under Article 3(1) of TRIPs, violation of the exclusive trademark owner’s rights provided for in 16(1) of TRIPs, possible violation of the famous trademark owner’s rights in 16(2) of TRIPs, overly broad definition of GIs and designations of origin in Article 2 of the Regulation conflicting with Article 22(1) of TRIPs, lack of appropriate inter partes procedures to object to such GIs in violation of Articles 41 and 42 of TRIPs and, most importantly, lack of the appropriate grandfather clause of Article 24(5) of TRIPs which directly conflicts with Article 14(2) of the Regulation, which states that only registered trademarks currently in use can be grandfathered whereas TRIPs Article 24(5) states that all trademarks applied for or registered in good faith or common law trademarks used in good faith should be grandfathered.  This is simply one example of how all existing GI legislation and treaties need to be completely reviewed to be sure that they are TRIPs compliant.

Does the Lisbon Agreement Comply with the TRIPs Agreement?

The WTO TRIPs Agreement of 1994 includes a section on geographical indications (GIs), namely Section 3 of Part I, Articles 22, 23 and 24, and WTO member countries throughout the world are now struggling to implement these provisions into their national legislation.  Unfortunately, the significance of these provisions has been misunderstood and several countries have ratified or are considering ratification of the Lisbon Agreement to satisfy the requirements under the WTO TRIPs Agreement. The following analysis will demonstrate that the Lisbon Agreement, to the extent it contradicts the TRIPs Agreement, is superceded.

As a special arrangement under Article 19 of the Paris Convention, certain countries created a union for stronger protection of appellations of origin, the so-called Lisbon Union.  These countries are:

Algeria, Hungary, Bulgaria, Israel, Burkina Faso, Italy, Congo, Mexico, Costa Rica, Portugal, Cuba, Slovakia, Czech Republic, TogoFrance, Tunisia, Gabon, Yugoslavia, Haiti

The basic mechanism of Lisbon can be explained with the following key points:

• The local producers of the product must first seek protection (usually by registration or decree) for their appellation of origin (i.e., region’s name) in their home country.

• The protected national appellation of origin is deposited at WIPO in Geneva and extended to all Lisbon Union countries, which have one year to communicate to WIPO that they cannot guarantee protection (Article 5(4)).  If they do not, protection is given, but such protection can always be challenged in a court.

• As long as the appellation of origin is protected in the home country, all other Lisbon countries are obligated to protect it (Article 1(2)), but such protection can always be challenged in a court.

• If an existing trademark right conflicts with a newly registered appellation of origin, it must be phased out within two years (Article 5(6)), since the appellation of origin right is a superior right to the trademark right.

Thus, the Lisbon Agreement is a harsh, Draconian treaty which few countries have joined.  Unfortunately, important countries such as France, Italy and Mexico have joined and thus we must confront its protection system.

Cross-Reference for Both Treaties (Lisbon/TRIPs)

Set forth below, in tabular form, is a comparison of both treaties’ treatment of important GI issues (serious conflicts are noted with an asterisk):

Definitions:

Applicability of International Conventions:*

Position of Foreigners in Absence of International Convention/National Treatment:

A.O. Registration:*

Exclusion from A.O. Protection/Loss of A.O. Protection/Genericness:*

Examination, Opposition and Appeal Procedure:*

Cancellation/Rectification:*

The Right of Use: (In the Event of Conflict Between A.O./G.I. and Trademark)

Sanctions for Unlawful A. O. Use:

Several serious conflicts arise between the two treaties.  Each conflict will be discussed separately below.

A later treaty supercedes an earlier conflicting treaty unless the earlier treaty is exempted from derogation.  In the WTO TRIPs Agreement, Article 2(2) lists four treaties from derogation, namely, Paris, Berne, Rome, and Washington.  Accordingly, it is clear that conflicting provisions in Lisbon are superceded by TRIPs.

It is made clear in the TRIPs Agreement that trademarks are to be protected and enforced against subsequent conflicting signs.  In fact, TRIPs Article 16(1) clearly states that the owner of a registered trademark shall have the exclusive right to prevent all third parties from using similar “signs” where such use would result in a likelihood of confusion.  Such signs include geographical indications.  Moreover, Article 24(5) of the TRIPs Agreement sets forth a safeguard clause to ensure that all trademarks which are applied for or registered in good faith or where rights have been acquired through use in good faith at the time of TRIPs implementation or the GI is protected in the home country should be safeguarded against subsequent geographical indications.  This protection given to trademarks clearly conflicts with Article 5(6) of the Lisbon Agreement (the definitions of Lisbon AOs and TRIPs GIs are almost identical) which states that member countries have up to two years to require phaseout of conflicting trademarks. Phase-out is not optional, only the time for phase-out is (i.e., up to two years).  Therefore, a subsequent geographical indication can destroy existing rights under Lisbon Article 5(6).  Such option is routinely used throughout the Lisbon Union to clear the market of prior trademarks which conflict with subsequent appellations of origin.  Accordingly, Lisbon Article 5(6) clearly conflicts with TRIPs Articles 16(1) and 24(5).  The only instance in which geographical indications would prevail over prior trademarks is where such trademarks are misleading or where such trademarks are for wines or spirits which are not specifically grandfathered.  To avoid public confusion, coexistence is not an option since either the trademark prevails or the geographical indication prevails (to allow coexistence would be to permit prejudice to existing trademark rights).  In any event, all trademarks protected under TRIPs Articles 16(1) and 24(5) should not be phased out pursuant to Lisbon Article 5(6), since Lisbon Article 5(6) is a clear TRIPs Agreement violation.

TRIPs makes it clear that registration is no longer necessary for protection of GIs. In fact, the U.S. protects GIs through unfair competition law as well as through federal regulations without the necessity of registration.

Can a Lisbon member state protect a registered AO if it is a generic term in such member state?  In the home country? Let us focus on the MUNSTER cheese example.

MUNSTER is a registered Lisbon AO (Registration No. 505), and thus should be protected within the Lisbon Union without exception as long as MUNSTER is registered in France.  The TRIPs Agreement includes two important problems for protection of MUNSTER in the WTO member countries, namely, is MUNSTER generic in such member country (TRIPs Article 24(6)), and is MUNSTER generic in the home country even if it is still registered (“protected”) (TRIPs Article 24(9))?  Clearly, if MUNSTER is already generic, Lisbon is superceded and is not effective in protecting MUNSTER.  Moreover there is no provision in Lisbon for cancellation of the home country or WIPO registration if a term becomes generic. Accordingly, a generic though registered term in the home country will not be protected in the WTO countries pursuant to TRIPs 24(9).

In view of the clear conflicts between the Lisbon Agreement and the TRIPs Agreement, any issues of doubt should be resolved in favor of the newer and more comprehensive treaty (TRIPs). It should be made clear, either in a formal declaration of WIPO, or unilaterally by the members of the Lisbon Union and WTO, that Lisbon is superceded. Only when we understand that the Lisbon Agreement, almost 50 years old, is not the answer, can we move forward in the international dialogue on protection of GIs.

Does the EU Regulation Comply with the TRIPs Agreement?

In addition to the foregoing analysis of how the Lisbon Agreement would withstand a TRIPs review, what about the EU Regulation?

The foregoing GI system violates the WTO TRIPs Agreement in several important aspects.  These violations are as follows:

I. WTO TRIPs Articles 1(1), 2(1), 2(2) and 24(3)

WTO TRIPs Articles 1(1), 2(1), 2(2) and 24(3) read as follows:

“Article 1(1)

Members shall give effect to the provisions of this Agreement.  Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement.  Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.

Article 2(1)

In respect to Parts II, III and IV of this Agreement, Members shall comply with Articles 1 through 12, and Article 19, of the Paris Convention (1967).

Article 2(2)

Nothing in Parts I to IV of this Agreement shall derogate from existing obligations that Members may have to each other under the Paris Convention, the Berne Convention, the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits.

Article 24(3)

In implementing this Section, Members shall not diminish the protection of geographical indications that existed in that Member immediately prior to the date of entry into force of the WTO Agreement.”

The WTO TRIPs Agreement is not a model law, but rather establishes minimum standards for intellectual property (“IP”) protection.  As Article 1(1) states, members of the WTO are free to provide more extensive protection for IP rights than set forth in the WTO TRIPs Agreement, but are not obligated to do so.  The problem arises when IP rights provided by the WTO TRIPs Agreement are in conflict.  For example, the EU, in its Regulation, attempts to provide expanded and harmonized protection for GIs and does so at the expense of trademarks.  It is unclear the extent to which Article 24(3) would impact on balancing trademark rights with GI rights, since Article 24(3) states that a member should not diminish the protection of GIs that exist at the time of the entry into force of the WTO TRIPs Agreement.  However, higher levels of GI protection should not be accomplished at the cost of confiscation of trademark rights (certainly contrary to the intent of the drafters of the WTO TRIPs Agreement), due process of law concerning governmental taking of private property, and international law.

II. WTO TRIPs Article 3(1)

WTO TRIPs Article 3(1) reads as follows:

“Article 3(1)

Each Member shall accord to the nationals of other Members treatment no less favorable than that it accords to its own nationals with regard to the protection of intellectual property, subject to the exceptions already provided in, respectively, the Paris Convention (1967), the Berne Convention (1971), the Rome Convention or the Treaty on Intellectual Property in Respect of Integrated Circuits. In respect of performers, producers of phonograms and broadcasting organizations, this obligation only applies in respect of the rights provided under this Agreement. Any Member availing itself of the possibilities provided in Article 6 of the Berne Convention (1971) or paragraph 1(b) of Article 16 of the Rome Convention shall make a notification as foreseen in those provisions to the Council for TRIPs.”

Paris Convention Articles 2 and 3 read as follows:

“Article 2

(1) Nationals of any country of the Union shall, as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals; all without prejudice to the rights specially provided for by this Convention.  Consequently, they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided that the conditions and formalities imposed upon nationals are complied with.

(2) However, no requirement as to domicile or establishment in the country where protection is claimed may be imposed upon nationals of countries of the Union for the enjoyment of any industrial property rights.

(3) The provisions of the laws of each of the countries of the Union relating to judicial and administrative procedure and to jurisdiction, and to the designation of an address for service or the appointment of an agent, which may be required by the laws on industrial property are expressly reserved.

Article 3

Nationals of countries outside the Union who are domiciled or who have real and effective industrial or commercial establishments in the territory of one of the countries of the Union shall be treated in the same manner as nationals of the countries of the Union.”

The Regulation includes several provisions in favor of the EU Member States and their nationals at the expense of other WTO Member States and their nationals:

• only Member States can apply for the protection of their GIs pursuant to Article 17 of the Regulation;

• an application to register a GI pursuant to Article 5 of the Regulation is only available for GIs indicating the origin of a product within a Member State;

• a legitimately concerned natural or legal person may only oppose the registration if it “resides or is established” within a Member State.

Third country GIs can only be protected within the framework of Article 12 of the Regulation if reciprocity is warranted and the third country provides an “inspection arrangement” similar to the one laid down in Article 10 of the Regulation.  In addition, according to the Commission the protection of third country GIs requires the third country to enter into a bilateral agreement with the EU confirming that the prerequisites of Article 12 are met.

Under the Principle of National Treatment (Article 3(1) of TRIPs) any Member State of TRIPs that decides to provide for more extensive protection of intellectual property rights in its national law than is specified by TRIPs must grant the same level of protection also to the nationals of any other TRIPs member, e.g., if the EU decides to provide a more extensive GI protection for EU GIs, the same protection must be available also for GIs of any TRIPs Member Country.

The “Most-Favored-Nation” principle (Article 4 of TRIPs) obliges a country to grant any privileges that it provides for a third country in bi- or multilateral agreements also to all TRIPs Members.  A difference between both above-mentioned principles only occurs where a Country protects intellectual property rights of another country to a higher extent than national intellectual property rights.  In such case the national treatment would not apply.

Since there are no bilateral Treaties entered into by the EU and/or its Members granting third countries intellectual property rights more protection than EU/Member States rights holders, the Most-Favored-Nation principle does not currently affect EU/Member States law on intellectual property.

In addition the EU laws do not give rise to Most-Favored-Nation rights of third countries.  Article 4 of TRIPs provides for an exception to the Most Favored Nation Clause if the relevant legislation has been notified to the Council for TRIPs.  On December 19, 1995, the EU and the Member States notified to the Council for TRIPs, pursuant to Article 4(d) of TRIPs, that both the Treaty Establishing the EU (Maastricht Treaty, covering EC Treaty) and the Agreement Establishing the European Economic Area (EEA) are to be considered as Agreements from which no rights can be derived on the basis of the Most Favored Nation Clause.  The notification covers not only the two Treaties, but also any present or future secondary law issued by the EU and its Member States.  The notification was part of a general notification also as to the GATT Most-Favored-Nation clause and thus was not effected under a particular intellectual property background.

Contrary to the Most Favored Nation Clause, the National Treatment Provision pursuant to Article 3 of TRIPs is not subject to exceptions other than provided in the Berne Convention, the Paris Convention, the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits, all of which are not applicable with respect to the Regulation.  In conclusion, the EU is obliged to grant national treatment with respect to GIs to nationals of all WTO members even where the national GI protection exceeds the minimum standards as provided in TRIPs.

The above-mentioned restrictions which the Regulation imposes on the registration and protection of third country GIs as well as the requirement for a residence within the EU as a prerequisite for an opposition, clearly contravene the Principle of National Treatment as provided for in TRIPs.  As Dr. Stephen Ladas commented on National Treatment in his treatise Patents, Trademarks and Related Rights (Harvard, 1975) at page 971:

“This provision is of a self-executing character and must be given effect in any country of the (Paris) Union regardless of the provisions of national legislation.”

EU GI protection for Third Country GIs may not depend on any requirement of reciprocity as provided in Article 12 of the Regulation because “reciprocity” clearly contradicts the principle of national treatment.  Third country GIs of WTO Members must be protected under the Regulation under identical prerequisites as provided for EU GIs.  Further Third Countries that adhere to TRIPs and/or their nationals must have the same opposition rights as EU nationals and Member States.

The current EU GI opposition procedure as outlined in Regulation Article 7, which will be discussed in greater detail later in the Memorandum, is clearly discriminatory against IP rights holders domiciled outside of the EU.  Although Regulation Article 12 attempts to address the national treatment deficiency, a bilateral treaty is probably required and the additional restrictions of Article 12(1) apply, thus effectively undermining the national treatment.  In effect, non-EU IP rights holders are discriminated against in violation of international law.

III. WTO TRIPs Article 16(1): “First in Time, First in Right”

WTO TRIPs Article 16(1) reads as follows:

“Article 16(1)

The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion.  In case of the use of an identical sign for identical goods and services, a likelihood of confusion shall be presumed.  The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making rights available on the basis of use.”

The violation of Article 16(1) is at the heart of the legal difficulty which the Regulation suffers.  A trademark registrant is entitled to the exclusive trademark rights enumerated above. These rights may be expanded to include trademark users.  The term “sign” is used as a broad term which can include many forms of IP, including a conflicting trademark or a conflicting GI.

In the Regulation, Article 14 sets forth a rudimentary procedure for determining the outcome of conflicts between trademarks and GIs.  In essence, Article 14 permits coexistence for used trademarks registered in good faith before the date on which application for registration of a designation of origin or GI is filed, and a ground for objection against and perhaps denial of a conflicting GI by the owner of a trademark with reputation and renown.  These two approaches severely restrict the applicability of Article 16(1) providing exclusivity of use of the trademark.  As the International Trademark Association stated in its September 1997 Board of Directors resolution on GIs:

“WHEREAS, the International Trademark Association has reviewed the principal international treaties and agreements requiring protection of geographical indications;

WHEREAS, in attempting to implement the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs) and multilateral and bilateral agreements, there appears to be some confusion as to the relationship between geographical indications and trademarks;

BE IT RESOLVED, that the International Trademark Association supports the principle of "first in time, first in right" priority when resolving conflicts between geographical indications and trademarks.”

Accordingly, the “first in time, first in right” principle of trademark exclusivity and conflict resolution has been specifically abrogated by the EU Regulation, creating forced coexistence and subsequent loss of trademark rights and dilution of the trademark.

IV. WTO TRIPs Article 16(2)

WTO TRIPs Article 16(2) reads as follows:

“Article 16(2)

Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to services.  In determining whether a trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of the trademark.”

Article 6 bis of the Paris Convention protects famous and well known (“famous”) trademarks from infringement based on reputation alone and not necessarily use and/or registration in a particular country.  Article 6 bis(1) states:

“Article 6 bis(1)

The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods.  These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.”

Under the provisions of Article 6 bis, a famous trademark is protected against the infringing registration and use of a conflicting sign which is likely to cause confusion.  The Regulation only prohibits registration of a conflicting GI, but is silent on the issue of whether the owner of the famous trademark can enjoin the infringing use of the conflicting GI.  Since it is silent on this issue, presumably the owner of the famous trademark cannot enjoin such use in violation of Article 6 bis of the Paris Convention and Article 16(2) of the WTO TRIPs Agreement.  Although it is arguable that national unfair competition laws would prohibit infringing use of infringing GIs, Article 1 of the Regulation appears to preempt the area of protection of GIs for agricultural products and foodstuffs within the EU legal framework.  Moreover, the Regulation requires that a famous trademark be in use, whereas this requirement is not in the Paris Convention or in the WTO TRIPs Agreement.

V. WTO TRIPs Article 22(1)

WTO TRIPs Article 22(1) reads as follows:

“Article 22(1)

Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.”

The drafters of the WTO TRIPs Agreement did not want to provide broad protection for GIs, but rather specified a particular type of GI similar to an appellation of origin, for the specific provisions of Section 3 on GIs.  Most pertinent is the definition in TRIPs Article 22(1), which provides that a GI must identify:

1. A good;

2. Originating in  the territory of a member or region or locality in that territory;

3. When a given quality, reputation or characteristic of a good is essentially attributable to its geographical origin.

On the contrary, Articles 2(2)(a) and 2(2)(b) of the Regulation defining “designations of origin” and “geographical indications” give broader definitions of the meaning of GIs within the TRIPs Agreement, including whole countries.  Additionally, Article 2(3) of the Regulation states that:

“Certain traditional geographical or non-geographical names designating an agricultural product or a foodstuff originating in a region or a specific place, which fulfill the conditions referred to in the second indent of paragraph 2(a) shall also be considered as designations of origin.”

This provision includes traditional geographical or non-geographical names which clearly expands the scope of GI protection beyond what is envisioned in the WTO TRIPs Agreement which, as previously stated, narrowly defines a GI.

As further evidence of the wide definition of GIs in violation of the WTO TRIPs Agreement, one needs to review the types of products encompassed by the Regulation as set forth in Annexes I and II, which clearly go beyond normal concepts of GIs.  Specifically, such products as beer, bread, pastry, cakes, confectioneries, biscuits and hay are included.  Although it is arguable that the GATT negotiators who developed the WTO TRIPs Agreement may have included protection for appellations of origin for wines and spirits as a compromise, clearly “geographical indications” for cakes and hay were not so considered.

VI. WTO TRIPs Article 24(5)

WTO TRIPs Article 24(5) reads as follows:

“Article 24(5)

Where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith either:

(a) before the date of application of these provisions in that Member as defined in Part VI; or

(b) before the geographical indication is protected in its country of origin;

measures adopted to implement this Section shall not prejudice eligibility for or the validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication.”

Perhaps the most serious TRIPs violation of the Regulation is the Conflict Resolution/Grandfather Clause Provision found in Regulation Article 14 as it conflicts with WTO TRIPs Article 24(5).  Article 24(5) clearly provides that a trademark which has been applied for or registered in good faith or where rights to a trademark have been acquired through use in good faith before the application of the WTO TRIPs Agreement for the GIs protected in the home country should be “grandfathered” (i.e., protected).  This provision overrides Regulation Article 14(2), which states that only registered trademarks which are in use can be grandfathered.  Moreover, Regulation Article 14(3) provides some additional protection for trademarks with reputation and renown, but it is unclear whether such reputed and renowned trademarks need to be registered.  Additionally, Article 14(3) of the Regulation requires that such trademarks be used for a specific length of time, which is not required in WTO TRIPs Agreement Article 24(5).

Regulation Article 14(1) states that any particular trademark application which conflicts with an EU GI may not be registered after publication of the EU GI is made, pursuant to Article 6(2) of the Regulation.  Accordingly, in effect only used trademarks registered in good faith could be grandfathered without due regard to trademark rights arising out of trademark application and/or trademark use.  Additionally, the grandfathering of existing trademarks does not permit the prior trademark owner from preventing the registration of an infringing GI as envisioned by the “first in time, first in right” principle of TRIPs Article 16(1) read in connection with TRIPs Article 24(5).  This Regulation provision clearly violates the balances mechanism set forth in the WTO TRIPs Agreement and gives supremacy to GIs at the expense of trademarks.

All of these provisions clearly violate the letter and spirit of TRIPs Article 24(5).

VII. WTO TRIPs Articles 41(1) and 42

WTO TRIPs Articles 41(1) and 42 read as follows:

“Article 41(1)

Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

Article 42

Members shall make available to right holders civil judicial procedures concerning the enforcement of any intellectual property right covered by this Agreement.  Defendants shall have the right to written notice which is timely and contains sufficient detail, including the basis of the claims. Parties shall be allowed to be represented by independent legal counsel, and procedures shall not impose overly burdensome requirements concerning mandatory personal appearances. All parties to such procedures shall be duly entitled to substantiate their claims and to present all relevant evidence. The procedure shall provide a means to identify and protect confidential information, unless this would be contrary to existing constitutional requirements.”

The WTO TRIPs Agreement makes clear in Article 42 that all IP rights holders must have fair and equitable procedures available to them to resolve IP property rights disputes.  Pursuant to Article 42, WTO Member States must make available to IP rights holders direct legal remedies such as opposition procedures, cancellation procedures and direct legal action in court.

The convoluted opposition procedure in the Regulation effectively denies IP rights holders their “day in court”, since Article 7 only permits Member States to take direct legal action against a conflicting GI.  From a practical point of view, it is unlikely that a member state would be interested in pursuing an individual company’s trademark infringement claims, whereas it might undertake action under a generic term claimed as a GI which affects a local industry, as was seen in the current FETA cheese litigation.  Accordingly, Article 7(1) of the opposition procedure available to Member States violates WTO TRIPs Agreement Article 42 by failing to provide the IP rights holder with an appropriate remedy.  Not only does the limitation of the opposition mechanism to Member States violates the fair and equitable procedures of the WTO TRIPs Agreement, it also violates national treatment under Article 3 of the WTO TRIPs Agreement as well as Articles 2 and 3 of the Paris Convention.  If an infringing GI were promulgated in the state of California, any interested party, either from California or another state in the U.S. or from France, would be able to challenge this infringement in a federal court in California.  The corresponding situation is not true in the EU.

There is an indirect opposition procedure available, namely Regulation Article 7(3), but such indirect opposition procedure only permits the IP rights holder to submit appropriate arguments and evidence to the competent authority of a member state, who will then in turn send it to the European Commission.  This inadequate opposition procedure may even violate the general provisions concerning enforcement in WTO TRIPs Agreement Article 41(1), which states that IP rights holders must have procedures to permit effective action against IP rights infringement.

Apart from the inadequate opposition procedure in Article 7, Regulation Article 17 provides a direct registration system which is not subject to opposition.  Accordingly, Article 17, which may also be applied to new countries acceding to the EU, more clearly violates WTO TRIPs Article 42, since not even the rudimentary opposition procedures available in Article 7 can apply to direct Article 17 GI registration.  Although an ECJ appeal may be possible under Article 173(2) of the Rome Treaty, this appeal procedure is difficult and expensive.  Between Articles 7 and 17, the IP rights holder is provided with inadequate procedural remedies in violation of the WTO TRIPs Articles 41 and 42.

The foregoing is a detailed review of the operation of the Regulation and the serious WTO TRIPs Agreement violations which the Regulation engenders.  The most serious violations are:

1. Special treatment given to EU nationals in violation of the national treatment principle of the Paris Convention and the WTO TRIPs Agreement;

2. Violation of the exclusive trademark rights provided to trademark owners by the WTO TRIPs Agreement under the first in time, first in right principle;

3. Overly expansive definition of a GI which provides significantly greater protection for terms which are questionable GIs;

4. Violation of the trademark/GI resolution mechanism of the WTO TRIPs Agreement;

5. Inadequate procedural remedies to address GI infringements.

6. If these five major issues are addressed and remedied, the Regulation will be transformed into an equitable mechanism for balancing legitimate rights in GIs and trademarks as envisioned by the WTO TRIPs Agreement.

Accordingly, as the TRIPs reviews of the Lisbon Agreement and EU Regulation has shown, all legal instruments which regulate geographical indications need to be modernized to conform to the TRIPs approach, particularly concerning trademarks.

THE FUTURE OF GEOGRAPHICAL INDICATIONS

The foregoing overview indicates that the 130+ WTO member countries as well as other countries are now struggling to implement protection for geographical indications.  What is the future of GI protection for the 21^st Century?  At the moment, the world is  a checkerboard on various systems for protection of GIs, including regulations concerning unfair competition, consumer protection, food labeling, certification or collective marks, appellations of origin, or viticultural registrations.  The WTO TRIPs Agreement is attempting to harmonize the laws of the WTO member states, with varying degrees of success.  It is clear, however, that any future GI protection approach must respect trademark rights pursuant to Articles 16 and 24 of the TRIPs Agreement.  Trademarks and GIs are to be treated equally on a “first in time, first in right” basis in order to provide an equitable balance mechanism between conflicting intellectual property rights.

In addition to increased recognition and protection of trademark rights within GI Systems, the future will focus on greater globalization and harmonization on this issue.  This is inevitable in view of the increasing influence of the WTO as well as the commercial reality of truly global markets for goods and services.  Just as global trademark law in 1900 developed from a chaotic patchwork of conflicting national laws into a relatively globalized and harmonized set of principles in 2000, so GI law will move in this direction by 2100.

The basis of geographical indication protection has been and will always remain unfair competition law.  Many countries will incorporate the geographical indication provisions of the TRIPs Agreement into their trademark law, thus creating a supplemental means of protection.  In this century, countries will realize that specific geographical indication registration statutes are unnecessary and in fact create more problems than they solve, particularly with trademark conflicts.  The protection of various intellectual property rights in geographically significant terms will be the true challenge for and hopefully one of the greatest legal achievements of the new century.