WIPO/GEO/SFO/03/11

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WIPO/GEO/SFO/03/11
ORIGINAL: English
DATE: July 4, 2003
WORLD INTELLECTUAL
PROPERTY ORGANIZATION

worldwide symposium on geographical indications

organized by
the World Intellectual Property Organization (WIPO)

and
the United States Patent and Trademark Office (USPTO)

San Francisco, California, July 9 to 11, 2003

Geographical Indications and Trademarks : The Road from Doha

document prepared by Burkhart Goebel, International Trademark Association (INTA)

Introduction

1.It is certainly appropriate to describe the TRIPS Agreement as a milestone in the international development of intellectual property protection at the end of the 20th Century. The continuing implementation of the TRIPS Agreement has already at this point in time resulted in a significant strengthening of the protection of copyright, trademarks, patents, plant breeders' rights, [1] and the like. In particular, enforcement measures have improved and anti-counterfeiting ranks high on the political agenda of most industrialised and developing countries.

2.One type of intellectual property has, however, profited exceptionally from the TRIPS Agreement: geographical indications.

3.Prior to the enactment of the TRIPS Agreement, it would clearly have been misleading to talk about a comprehensive global system for the protection of geographical indications. Both the Paris Convention and the 1891 Madrid Agreement on False Designations of Origin deal with the protection of geographical indications, but cover only a fairly small portion of it. The Lisbon Agreement is broader in its scope of protection, but suffers from limited membership.[2] The same analysis applies on a country-by-country basis. Geographical indications were protected through a patchwork of bilateral agreements, sui generis registration systems, certification or collective trademark protection, unfair competition laws, labelling laws and the like.

4.Against this background, the achievements of the 1994 TRIPS Agreement are more than remarkable. It established a worldwide minimum standard of protection for geographical indications which I will describe in some detail below. At the same time, the TRIPS Agreement addressed specifically one of the issues which had stood in the way of the further development of GI protection, namely the possible conflict with other intellectual property rights, specifically trademarks. Being the first multi-lateral agreement tackling both kinds of intellectual property rights at the same time, the TRIPS Agreement struck a careful and adequate balance between geographical indications and trademarks giving exclusivity to the prior of the two rights on a country-by-country basis.

5.Whilst most Member States of the WTO are still travelling down the road of TRIPS implementation, the Doha Round has opened a new chapter for the protection of geographical indications. The WTO Member States are currently negotiating or discussing sensitive issues such as the establishment of a multi-lateral system for the notification and registration of geographical indications, the extension of so-called additional protection for wines and spirits to products other than wines and spirits and the removal of what some Member States perceive as unjustified barriers to trade in products designated with geographical indications. Those negotiations and discussions may eventually perpetuate and – where necessary – clarify the balance between trademarks and geographical indications achieved under the TRIPS Agreement. However, they might also call into question the achievements of the Uruguay Round at the expense of trademark owners. We therefore need to analyse the current trade negotiations and carefully consider the protection of geographical indications in order to make sure that also after Doha there is harmony rather than conflict in the protection of geographical indications and trademarks.[3]

The Status Quo: Geographical Indications and Trademarks under the TRIPS Agreement

6.The TRIPS Agreement entered into force on 1 January 1995. It is binding upon all Member States of the WTO and thereby comprises almost all relevant markets in the world. As mentioned above, it is the first multi-lateral treaty that comprehensively addresses geographical indications and trademarks at the same time.

1.The Protection of Geographical Indications under the TRIPS Agreement

7.The TRIPS Agreement defines geographical indications as follows in Art. 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 region or locality in that territory where a given quality, reputation or other characteristic of the good is essentially attributable to is geographical origin." (Art. 22 (1) TRIPS)

a)Scope of Protection

8.Pursuant to Art. 22 (3) TRIPS, geographical indications for products other than wines and spirits are protected against misleading use of the respective designation. The provision reads as follows:

"A Member shall, ex officio, if its legislation so permits or at the request of an interested party, refuse or invalidate the registration of a trademark which contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if use of the indications in the trademark for such goods in that Member is of such a nature as to mislead the public as to the true place of origin."

9.Protection against misleading use means that it needs to be assessed in each particular Member State whether consumers are misled by the use of a designation similar or identical to the geographical indication at issue. It may well be that the designation, which is (still) a geographical indication in its country of origin, has become or has always been a generic term in another country. Accordingly, consumers would not be misled as they would perceive the designation as generic and not as an indication of the geographical origin of the product at issue. It may also be that the designation is protected and perceived by consumers as a trademark. In that case it would be perceived as a reference to the manufacturer and not to the geographical origin of the product. Again, the consumer would not be misled. Finally, it may also be that the designation which causes concern in the other country is sufficiently similar to the geographical indication so that the consumers will not be misled. All this is very familiar to trademark owners and basically boils down to the application of the well established principle of territoriality.

10.Examples of designations which may serve as a geographical indication, as a trademark and as a generic term at the same time can easily be found. SWISS may serve as a geographical indication for watches, be a trademark (an airline) as well as a generic term (for a type of cheese in most, if not all countries). Another example relating to one and the same product is PILSEN which is still protected as an appellation of origin under the Lisbon Agreement and therefore protected as such in a number of countries, which is at the same time a generic term in many other countries, including most of Northern Europe, and finally constitutes the leading beer brand in Uruguay and has been so for decades.

11.With regard to wines and spirits, Art. 23 provides for so-called additional protection. Geographical indications for wines and spirits are not only protected against misleading use, but also against any use for products not originating in the place indicated by the geographical indication in question. This protection applies even where the true origin of the goods is indicated or the geographical indication is used in translation or accompanied by expressions such as "kind", "type", "style", "indication", or the like (Art. 23 (1) TRIPS).

12.The registration of a trademark for wines or spirits which contains or consists of a geographical indication identifying wines or spirits shall be refused or invalidated with respect to such wines or spirits not having this origin (Art. 23 (2) TRIPS).

13.The practical effects of this level of protection are well described in a Communication from Bulgaria, Cuba, Cyprus, the Czech Republic, the European Communities, Switzerland and a number of other WTO Member States:[4]

"The practical effect of this provision is to permit interested parties to prevent, without having to prove that the public is misled or that there is an act of unfair competition,

-The use of the geographical indication by others, generally, for products not originating in the place indicated by the geographical indication in question (e.g. unqualified use of Napa Valley by French producers in France);

-The use of the geographical indication even in conjunction with an additional indication in which the true place of origin of the products is indicated (e.g. Napa Valley of France);

-The use of the geographical indication even if the geographical indication is used in translation (e.g. Valle de Los Cactus) and

-The geographical indication if accompanied by expressions such as "kind", "type", "style", "imitation" or the like (e.g. type of Napa Valley).

b)The Grandfathering of Trademarks under Art. 24 (5) TRIPS

14.Additional protection as provided for under Art. 23 TRIPS is the main area where the grandfathering clause of Art. 24 (5) TRIPS comes into play. According to that provision, a measure to implement the Section on geographical indications of the TRIPS Agreement 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 trademark is identical with or similar to a geographical indication, if the trademark has been acquired in good faith either:

-before the date of application of these provisions it that Member as defined in part VI; or

-before the geographical indication is protected in its country of origin.

2.Trademarks

15.Once it comes to the protection of trademarks, the TRIPS Agreement is much less revolutionary than with regard to the protection of geographical indications. This does not come as a surprise. Trademarks have been protected throughout the world on fairly similar standards for more than a century. Trademarks are well established and recognised as the key assets of brand owners in an industrialised society. Trademarks serve as the main communication tool between a manufacturer and the consumer. Trademarks inform the consumer not only about the origin of a particular product, but carry a variety of different functions in the communication process between brand owners and consumers. Trademarks inform consumers about the quality of a product, they carry emotions, they communicate a certain lifestyle and the like.

a)Trademark Protection under the TRIPS Agreement

16.The scope of protection of a trademark is defined in Art. 16 of the TRIPS Agreement, the first paragraph of which reads as follows:

"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 with or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In the case of the use of an identical sign for identical goods or 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."

17.In a nutshell, the trademark grants its owner the exclusive right to its use. The owner of a trademark may prevent all third parties from using any confusingly similar sign in the course of trade for identical or similar goods or services. The core feature of a trademark is its exclusivity. As Florent Gevers has put it in 1995 at the Melbourne Symposium on geographical indications: the right to use includes the right to exclude.[5]

18.By establishing this scope of protection the TRIPS Agreement only confirms what had been recognised both at member state level as well as in international agreements for a long time. What is often overlooked and therefore presumably worthwhile to raise also in the context of this paper is the fact that the exclusivity granted to a trademark is not only indispensable for the proper functioning of a trademark system, it is also an expression of the trademark as an emanation of the fundamental right to private property. The intellectual property right in a trademark is just as exclusive as any tangible property right would be. The very essence of a private property right is that it grants the legal possibility to exclude others from its use.

b)A Trademark's Exclusivity as a Fundamental Right

19.As I just mentioned, the fact that a trademark as a piece of private property fully participates in the protection of the fundamental guarantee to private property in most constitutions in the world is sometimes overlooked. Whereas there had been some doubts as to the protection of a trademark as a fundamental right in the early days of trademark protection, in particular in the United States,[6] the mere fact that the brand very often constitutes a much more important asset of a company than a specific production plant in 21st Century industrial societies should certainly have erased all such doubts and uncertainties which were still around a Century ago. As a case in point, the German Federal Constitutional Court has long ago recognised that the protection of the fundamental right to private property naturally expands to trademarks by holding:

"A trademark does not only indicate the origin of a product but is an expression of the producer's will to make an industrial effort. A person thus acquiring an asset must be protected by the constitutional guarantee of property. The aim of constitutional protection is to grant security concerning those acquired assets and the reliance on the continued existence of a person's rights. State measures depriving the trademark owner of his rights do not comply with this constitutional protection of property."[7]

20.In the meantime, intellectual property rights have been recognised as participating in the constitutional guarantee of private property in numerous constitutions around the world[8] and particularly so in Europe. Intellectual property rights are recognised as constitutional property rights in the case law on Art. 1 of Prot. 1 of the European Convention on Human Rights,[9] and expressly in the 2000 European Charta of Fundamental Rights, Art. 17 (2) of which reads:

"Intellectual Property shall be protected."

21.In its explanatory note, the Convention for the European Charta of Fundamental Rights explained this straightforward and unqualified protection as follows:

"Protection of intellectual property, as one aspect of the right of property, is explicitly mentioned in para 2 because of its growing importance and Community secondary legislation. Intellectual property covers not only literary and artistic property but also patent and trademark rights and associated rights. The guarantees laid down in para 1 shall apply as appropriate to intellectual property."[10]

22.At this point in time there should not be any doubt that the private property right to a trademark is protected by the constitutional guarantee to private property. This guarantee safeguards the exclusivity of the property owner's use of his property which may be affected only under certain conditions and subject to compensation. I would like to re-emphasise that the core of the private property right trademark is its exclusivity, as was persuasively set out by Advocate General Jacobs of the European Court of Justice in his famous opinion in the Kaffee Hag case delivered on March 13, 1990, where he stated in para 19:

"A trademark can only fulfil that role if it is exclusive. Once the proprietor is forced to share the mark with the competitor, he loses control over the goodwill associated with the mark. The reputation of his own goods will be harmed if the competitor sells inferior goods. From the consumers' point of view, equally undesirable consequences will ensue, because the clarity of the signal transmitted by the trademark will be impaired. The consumer will be confused and misled."[11]

23.Against the background that the private property right trademark is protected in its exclusivity under the constitutions of – in the meantime presumably the majority of – WTO member states, it cannot surprise that such exclusivity is also provided for and guaranteed under the TRIPS Agreement.

c)The Conflict between trademarks and Geographical Indications under the TRIPS Agreement

24.As already mentioned, the TRIPS Agreement is the first multi-lateral Agreement on intellectual property rights dealing with trademarks and geographical indications at the same time. The TRIPS Agreement laid down an adequate solution to the possible conflict between a trademark and a geographical indication by providing the exclusivity of a valid prior good faith trademark registration pursuant to Art. 16 (1) TRIPS.

25.This interpretation of the TRIPS Agreement is presumably the prevailing one among the WTO Member States. Exclusivity of the prior right is the prevailing conflict solution mechanism in all certification marks or collective marks systems for the protection of geographical indications (e.g. United States, Canada and China), but this conflict resolution mechanism is also provided for in statutory law of countries which provide for sui generis registration of geographical indications such as Art. 106 of the Hungarian Trademark Act.[12]

26.However, the interpretation of the TRIPS Agreement providing exclusivity to the prior trademark is not a view uniformly held among all WTO Member States. In particular the European Communities traditionally pursue a concept of geographical indication protection which assumes a certain element of superiority of geographical indications over trademarks. Historically, this may be rooted in the early 20th Century disputes over the Champagne appellations of origin as well as the concept of public or common goods versus private property. Examples of this concept of superiority of geographical indications – which is not reflected in the TRIPS Agreement which sets both trademarks and geographical indications on equal footing as private property rights – can easily be found in secondary legislation of the EC.

27.EC Reg. 1493/1999 on the common organisation of the market in wine provides for example for the discontinuation of the use of a prior trademark, if a confusingly similar designation is later on protected as a geographical indication for wine.[13] In other words, the trademark would have to be expunged from the register and its use would be enjoined despite the fact that a trademark had been validly registered in good faith with a better priority. The trademark would be expropriated. The Regulation does not provide for compensation.

28.Another example where the prior trademark would continue to exist, but lose its exclusivity is EC Reg. 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs. This piece of EC legislation is based on the concept of co-existence between a prior trademark and a later geographical indication (but not vice versa). [14]