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DISPUTE SETTLEMENT: DISPUTE DS174

European Communities — Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

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The summary below was up-to-date at
See also: One-page summary of key findings of this dispute

Appellate Body and Panel Reports Adopted

Complaints by the United States (WT/DS174) and Australia (WT/DS290).

On 1 June 1999, the US requested consultations with the EC in respect of the alleged lack of protection of trademarks and geographical indications (GIs) for agricultural products and foodstuffs in the EC. The US contended that EC Regulation 2081/92, as amended, 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. The US considered this situation to be inconsistent with the EC’s obligations under the TRIPS Agreement, including but not necessarily limited to Articles 3, 16, 24, 63 and 65 of the TRIPS Agreement.

On 4 April 2003, the US sent an additional request for consultations concerning the protection of trademarks and GIs for agricultural products and foodstuffs in the EC. This request does not replace but rather supplements the 1999 request. The measures concerned are EC Regulation 2081/92, as amended, and its related implementing and enforcement measures (the “EC Regulation”). According to the US, the EC Regulation limits the GIs that the EC will protect and limits the access of nationals of other Members to the EC GI procedures and protections provided under the Regulation. The US claims that the EC Regulation appears to be inconsistent with Articles 2, 3, 4, 16, 22, 24, 63 and 65 of the TRIPS Agreement and Articles I and III:4 of the GATT 1994.

On 17 April 2003, Australia requested consultations with the EC concerning the protection of trademarks and to the registration and protection of geographical indications for foodstuffs and agricultural products in the EC. The measures at issue include 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 and related measures (“the EC measure”).

According to Australia:

• the EC measure seems not to accord immediately and unconditionally to the nationals and/or products of each WTO Member any advantage, favour, privilege of immunity granted to the nationals and/or like products of any other WTO Member,
   
• the EC measure seems not to accord to the nationals and/or products of each WTO Member treatment no less favourable than that it accords to its own nationals and/or like products of national origin,
   
• the EC measure may diminish the legal protection for trademarks,
   
• the EC measure may not be consistent with the EC’s obligation to provide the legal means for interested parties to prevent misleading use of a geographical indication or any use which constitutes an act of unfair competition within the meaning of Article 10bis of the Paris Convention (1967),
   
• the EC may not have met its transparency obligations in respect of the measure, and
   
• the EC measure may be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create.

Australia claims that the EC measure appears to be inconsistent with the EC’s obligations pursuant to Articles 1, 2, 3, 4, 16, 20, 22, 24, 41, 42, 63 and 65 of the TRIPS Agreement, Articles I and III of GATT 1994, Article 2 of the TBT Agreement and Article XVI:4 of the WTO Agreement.

In dispute WT/DS174, Sri Lanka Australia, Hungary, India, Argentina, Bulgaria, Cyprus, the Czech Republic, Malta, Slovenia, Romania, the Slovak Republic and Turkey requested to join the additional consultations. The EC informed the DSB that it had accepted the requests of Argentina, Australia, Bulgaria, Cyprus, the Czech Republic, Hungary, India, Malta, Mexico, New Zealand, Romania, the Slovak Republic, Slovenia, Sri Lanka and Turkey to join the consultations.

In dispute WT/DS290, Bulgaria, Cyprus, the Czech Republic, Malta, the United States, Hungary and Slovenia, New Zealand, Romania, the Slovak Republic, Chinese Taipei and Turkey, Argentina, Colombia and Mexico requested to join the consultations. The EC informed the DSB that it has accepted the requests of Argentina, Bulgaria, Colombia, Cyprus, the Czech Republic, Hungary, Malta, Mexico, New Zealand, Romania, the Slovak Republic, Slovenia, Chinese Taipei, Turkey and the United States to join the consultations.

On 18 August 2003, the United States and Australia requested separately the establishment of a panel. At its meeting on 29 August 2003, the DSB deferred the establishment of the panels. Further to second requests to establish a panel from the US and Australia, the DSB established a single panel at its meeting on 2 October 2003. Australia, Colombia, Guatemala, India, Mexico, New Zealand, Norway, Chinese Taipei and Turkey reserved their third-party rights. On 6 October, China reserved its third-party right. On 10 October, Argentina and Canada reserved their third-party rights. On 13 October, Brazil reserved its third-party rights.

On 13 February 2004, the United States and Australia requested the Director-General to determine the composition of the Panel. On 23 February 2004, the Director-General composed the Panel.

On 17 August 2004, the Chairman of the Panel informed the DSB that it would not be able to complete its work in six months due to the complexity of the case and that the Panel expected to issue its final report to the parties before the end of year 2004.

On 15 March 2005, the Panel report was circulated to Members.

• the Panel agreed with the United States and Australia that the EC’s GI Regulation does not provide national treatment to other WTO Members’ right holders and products, because: (i) registration of a GI from a country outside the European Union is contingent upon the government of that country adopting a system of GI protection equivalent to the EC’s system and offering reciprocal protection to EC GIs; and (ii) the Regulation’s procedures require applications and objections from other WTO Members to be examined and transmitted by the governments of those Members, and require those governments to operate systems of product inspection like EC member States. Therefore, foreign nationals do not have guaranteed access to the EC’s system for their GIs, unlike EC nationals;
   
• otherwise, there is no finding that the substance of the EC system of GI protection, which requires product inspection, is inconsistent with WTO obligations; and
   
• the Panel agreed with the EC that, although its GI Regulation allows it to register GIs even when they conflict with a prior trademark, the Regulation, as written, is sufficiently constrained to qualify as a “limited exception” to trademark rights. However, the Panel agreed with the United States and Australia that the TRIPS Agreement does not allow unqualified coexistence of GIs with prior trademarks.

The DSB adopted the Panel report on 20 April 2005.

Implementation Status of Adopted Reports

At the DSB meeting of 19 May 2005, the European Communities stated its intention to implement the DSB’s recommendations and indicated that it would need a reasonable period of time to do so. On 9 June 2005, the European Communities, Australia and the United States informed the DSB that they had agreed pursuant to Article 21.3(b) of the DSU that the reasonable period of time for implementation shall be 11 months and 2 weeks, expiring on 3 April 2006.

At the DSB meeting on 17 February 2006, the European Communities said that a new regulation on geographical indications which would fully implement the DSB’s recommendations and rulings was being discussed in the Council of the European Union and the European Parliament. It was expected that the Commission’s proposal would be adopted within the agreed reasonable period of time.

At the DSB meeting on 21 April 2006, the European Communities said that they had fully implemented the DSB’s recommendations and rulings by adopting a new regulation which entered into force on 31 March 2006. Australia and the United States disagreed that the European Communities had fully implemented the DSB’s recommendations and rulings and invited the European Communities to take account of their comments and revise the newly promulgated regulation.

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