Second Written Submission of the European Communities

WT/DS290/R/Add.2
Page B-197

ANNEX B-5

SECOND WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES

(22 July 2004)

TABLE OF CONTENTS

GLOSSARY 169

I. Introduction 170

II. The objective assessment of the content of Regulation2081/92 170

A. The proper approach to the interpretation of Regulation2081/92 as a measure of EC domestic law 170

B. The importance of WTO law and obligations for the interpretation of Regulation2081/92 in the EC legal order 172

III. Regulation2081/92 is compatible with national treatment obligations, and does not impose a requirement of domicile or establishment 174

A. National treatment under the TRIPS Agreement (Article3.1 TRIPS and Article2.1 TRIPS in conjunction with Article2.1 Paris Convention) 174

1. The Meaning and Scope of National Treatment under the TRIPS Agreement 174

(a) The meaning of "national" 174

(b) The conditions for applications and objections do not depend on nationality 176

2. Claim 1: Non-EC nationals are accorded less favorable treatment than EC nationals with respect to the registration of geographical indications through the application of a condition of reciprocity and equivalence 178

(a) The complainant's interpretation is incompatible with the plain wording of Regulation2081/92 178

(b) The without prejudice clause requires that the WTO Agreements be taken into account 178

(c) It is not uncommon for Community legal acts to apply "without prejudice to international agreements" 179

(d) The "without prejudice" clause was not intended to apply only to bilateral agreements, or to agreements which contain "specific rules" on geographical indications 180

(e) The evidence adduced by the complainants is neither pertinent nor conclusive 182

(f) The EC is not belated in having corrected the complainants' misunderstanding 183

3. Claim 1bis: Regulation2081/92 violates the national treatment obligations under the TRIPS Agreement by requiring the existence of inspection structures with respect to the specific product for which protection is requested 184

(a) The requirement of inspection structures represents equal, not unequal treatment 185

(b) The requirement of inspection structures does not require "equivalence by another name" 185

(c) Regulation2081/92 does not impose an "EC model" of inspection structures 186

(d) The existence of inspection structures is necessary for attaining the objectives of Regulation2081/92 187

4. Claim 2: Regulation2081/92 violates the national treatment obligations under the TRIPS and the Paris Convention by requiring that applications must be transmitted by the country in which the geographical area is located 189

(a) The cooperation of the country on whose territory the area is located is indispensable for the implementation of Regulation2081/92 189

(b) The requirement that the application be verified by the country on whose territory the area is located is not unreasonable 190

(c) The requirement that the application be transmitted by the country on whose territory the area is located is not unreasonable 192

5. Claim 3: Non-EC nationals are accorded less favorable treatment than EC nationals with respect to the requirement to indicate the country of origin for homonymous geographical indications 193

6. Claim 4: Regulation2081/92 accords less favourable treatment to non-EC nationals by subjecting the right to object to the registration of geographical indications to conditions of reciprocity and equivalence 194

7. Claim 5: Regulation2081/92 accords less favourable treatment to non-EC nationals by requiring their own country to transmit the objection 194

(a) The complainants are not required to verify the admissibility of objections, but merely to transmit the objection 195

(b) The transmission of objections is not an unreasonable requirement 195

8. Claim 6: Regulation2081/92 accords less favourable treatment to non-EC nationals by requiring non-EC national to have a "legitimate interest" to object to the registration of geographical indications 196

9. Claim 7: Regulation2081/92 accords less favourable treatment because a non-EC rightholder has no "representative" in the regulatory committee to "speak for him" 196

10. Claim 8: A right of objection was available to persons resident or established in an EC Member State that was not available to other WTO Member nationals in respect of the registration of more than 120 geographical indications under the normal registration process 197

(a) The legal basis of Australia's claim is unclear, and keeps shifting 197

(b) Australia's claims regarding old versions of Regulation2081/92 are outside the terms of reference of the Panel 198

(c) Australia's claims are moot and therefore not within the terms of reference of the Panel 198

(d) Australia has not shown that the individual registrations are in violation of national treatment obligations 200

(e) There is no legal basis for the recommendations suggested by Australia 200

11. Claim 9: A right of objection was available to persons resident or established in an EC Member State that was not available to other WTO Member nationals in respect of the registration of more than 480 EC-defined GIs under the simplified registration process 201

B. Prohibited requirement of domicile or establishment (Article2.1 TRIPS in conjunction with Article2.2 Paris Convention) 202

1. Claim 10: Regulation2081/92 requires non-EC nationals to become established in the EC as a condition for registering geographical indications 202

2. Claim 11: Regulation2081/92 requires non-EC nationals to become established in the EC as a condition for objecting 202

C. National Treatment under ArticleIII:4 GATT 203

1. The regulation 2081/92 is not incompatible with ArticleIII:4 GATT 203

(a) Claim 12: Regulation2081/92 accords less favourable treatment as regards the conditions for registration of foreign geographical indications 203

(b) Claim 12bis: Regulation2081/92 violates the national treatment obligations under the GATT by requiring the existence of inspection structures with respect to the specific product for which protection is requested 203

(c) Claim 13: Regulation2081/92 accords less favourable treatment as regards the requirement that the application must be transmitted by the government of the third country 204

(d) Claim 14: Regulation2081/92 accords less favourable treatment as regards the requirement to indicate the country of origin 204

(e) Claim 15: Regulation2081/92 accords less favourable treatment due to an overall bias in the decision-making process 205

2. The measure would be justified under ArticleXX(d) GATT 205

(a) The requirement of inspection structures is justified by ArticleXX(d) GATT (Claim12bis) 206

(b) The requirement that the application must be verified and transmitted by the government where the area is located is justified by ArticleXX(d) GATT (Claim 13) 207

(c) The requirement to indicate the country of origin for homonymous geographical indications is justified by ArticleXX(d) GATT (Claim 14) 207

IV. Regulation2081/92 is compatible with the obligation to provide most-favoured-nation treatment 208

A. Article4 TRIPS 208

1. Claim 16: As among non-EC WTO Members, nationals from WTO Members that satisfy the EC's conditions of reciprocity and equivalency are accorded more favourable treatment than nationals from those WTO Members that do not 208

2. Claim 17: Under Regulation2081/92, an EC Member State grants more favourable treatment to nationals from other EC Member States than it accords to nationals from non-EC WTO Members 210

B. Claim 18: By subjecting the registration of third-country geographical indications to conditions of reciprocity and equivalence, the EC measure is inconsistent with the most-favoured-nation obligation under the ArticleI:1 GATT 210

1. ArticleI:1 GATT is not violated 210

2. The EC measure would be justified under ArticleXX(d) GATT 211

V. Regulation2081/92 does not diminish the legal protection of trademarks 211

A. Article16.1 of the TRIPS Agreement 211

1. Claim 19: Article14(2) of Regulation2081/92 is inconsistent with Article16.1 of the TRIPS Agreement in that it allows the co-existence of geographical indications and earlier registered trademarks 211

(a) Article14(3) of Regulation2081/92 211

(i) Registrability of geographical names as trademarks 211

(ii) Standard of evidence for establishing the meaning of Article14(3) 212

(iii) The Complainants have misinterpreted Article14(3) 213

(iv) There is no evidence that Article14(3) has been applied in accordance with the complainants' interpretation 214

(v) Article14(3) confers enforceable rights to the trademark owners 216

(vi) EC law provides means to prevent confusing uses of a registered geographical indication 217

(b) Article24.5 of the TRIPS Agreement 219

(i) Relationship between Section 3 of PartII and Article16.1 219

(ii) The meaning of "the right to use a trademark" 220

(c) Article24.3 of the TRIPS Agreement 223

(d) Article17 of the TRIPS Agreement 223

(i) The scope of the exception is "limited" 224

(ii) The exception "takes account" of the interests of the trademark owners 225

(iii) Article17 applies to non-geographical names 227

2. Claim 20: Regulation2081/92 does not provide for a presumption of a likelihood of confusion in the case of use of an identical sign for identical goods 227

3. Claim 21: Article7(4) of Regulation2081/92 is inconsistent with Article16.1 of the TRIPS Agreement because it limits the grounds of objection 227

4. Claim 22: Regulation2081/92 does not ensure that objections from trademark owners will be considered by the Committee 227

B. Claim 23: By requiring the co-existence of a registered geographical indication and an earlier trademark, Article14(2) encumbers unjustifiably the use of the trademark, contrary to Article20 of the TRIPS Agreement 227

C. Claim 24: Article14(1) of Regulation2081/92 is inconsistent with Article24.5 of the TRIPS Agreement because it does not afford the right of priority provided in Article4 of the Paris Convention 228

D. Articles41.1, 41.2, 41.3, 41.4, 42, 43, 44.1, 45, 46, 48 and 49 of the TRIPS Agreement 228

1. General Considerations 228

2. Claim 25: Regulation2081/92 is inconsistent with Article41.1 of the TRIPS Agreement 230

3. Claim 26: Regulation2081/92 is inconsistent with Article41.2 of the TRIPS Agreement 230

4. Claim 27: Regulation2081/92 is inconsistent with Article41.3 of the TRIPS Agreement 231

5. Claim 28: Regulation2081/92 is inconsistent with Article41.4 of the TRIPS Agreement 231

6. Claim 29: Regulation2081/92 is inconsistent with Article42 of the TRIPS Agreement 231

E. Claim 30: Regulation2081/92 is inconsistent with Article10bis (1) and 10ter (1) of the Paris Convention 231

F. Consequential Claims 231

1. Claim 31: Regulation2081/92 is inconsistent with Article2.1 of the TRIPS Agreement 231

2. Claim 32: Regulation2081/92 is inconsistent with Article1.1 of the TRIPS Agreement 231

3. Claim 33: The transitional national protection provided by the Member States is inconsistent with Articles2.1, 16.1, 41.1, 41.2, 41.3 and/or 42 of the TRIPS Agreement 231

VI. The EC measure is consistent with the obligation to provide protection to geographical indications under article 22.2 of the TRIPS Agreement 231

1. Claim 34: Regulation2081/92 is inconsistent with Article22.2 of the TRIPS Agreement 231

2. Claim 35: Regulation2081/92 is inconsistent with Article1.1 of the TRIPS Agreement because it is inconsistent with Article22.2 234

3. Claim 36: Regulation2081/92 is inconsistent with Article22.2 TRIPS 234

VII. Regulation2081/92 is consistent with obligations under the TBTAgreement 234

A. Regulation2081/92 is not a technical regulation 235

1. Article 12(2) of Regulation2081/92 is not a technical regulation 235

2. Articles4 and 10 of Regulation2081/92 are not a technical regulation 235

B. Claim 37: Article 12(2) of Regulation2081/92 is incompatible with Article2.1 of the TBT Agreement 236

C. Claim 38: Articles4, 10, and 12 (1) of Regulation2081/92 are incompatible with Article2.2 of the TBT Agreement 236

VIII. Claim 39, 40: The EC measure is compatible with Article65.1 TRIPS and ArticleXVI:4 WTO 237

IX. conclusion 237

Table of WTO cases referred to in this submission

Short Title / Full Case Title and Citation of Case
Canada – Autos / Panel Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/R, WT/DS142/R, adopted 19June2000, as modified by the Appellate Body Report, WT/DS139/AB/R, WT/DS142/AB/R, DSR2000:VII, 3043
EC–Sardines / Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23October2002
EC–Hormones / Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13February1998, DSR1998:I,135
Korea – Various Measures on Beef / Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10January2001
US – Gasoline / Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20May1996, DSR1996:I,3
US – Section301 Trade Act / Panel Report, United States – Sections 301-310 of the Trade Act of 1974, WT/DS152/R, adopted 27January2000, DSR2000:II,815

GLOSSARY

Commission, EC Commission / Commission of the European Communities
Committee / Committee of representatives of the Member States referred to in Article 15 of Council Regulation 2081/92
Community Trademark Regulation / Council Regulation (EC) No 40/94, of 20December 1993, on the Community Trademark, as amended
Council, EC Council / Council of the European Union
Court of Justice, European Court of Justice / Court of Justice of the European Communities
DSU / Understanding on Rules and Procedures Governing the Settlement of Disputes
EC / European Communities
GATT / General Agreement on Tariffs and Trade 1994
FOS / First Oral Statement
FWS / First Written Submission
GI / Geographical indication
Member States, EC Member States / Member States of the European Union
Official Journal / Official Journal of the European Union
Paris Convention / Stockholm Act of the Paris Convention for the protection of Industrial property, of 14 July 1967
Regulation 2081/92, Regulation / 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, as amended on the date of establishment of the Panel
SCM Agreement, SCM / Agreement on Subsidies and Countervailing Duties
Trademarks Directive / First Council Directive 89/104, of 20 December, on the Community Trademark, as amended
TBT Agreement, TBT / Agreement on Technical Barriers to Trade
TRIPS Agreement, TRIPS / Agreement on Trade-Related Aspects of Intellectual Property Rights
US / United States
WTO Agreement / Marrakesh Agreement Establishing the World Trade Organization

I.  Introduction

1. This submission provides the rebuttal of the European Communities to the arguments made by the complainants at the first meeting with the Panel of 23-24 June 2004, as well as in their responses to the questions from the Panel and from the EC of 8 July 2004. The EC has addressed some of those arguments as part of its own responses to the Panel's questions. In order to avoid unnecessary repetitions, the EC will refer to those responses where appropriate.

2. In the following section, the EC will first discuss some horizontal issues concerning the objective assessment of the content of Regulation2081/92. In the following sections, the EC will comment on the arguments of the complainants claim by claim, following the structure already used in the EC's first written submission.