International Trade Law News

Published by Jacobson Burton Kelley PLLC

On December 21, 2004, a World Trade Organization (WTO) Dispute Settlement Panel sided with the U.S. in its dispute with the E.U. regarding geographic food names, known as "geographical indications" (GIs). In its report in case number WT/DS174/22, the WTO panel agreed with the U.S. that the E.U.'s GI regulation discriminates against U.S. products and producers and is therefore contrary to WTO rules. The panel also agreed with the U.S. that the E.U. could not, consistent with WTO rules, deny U.S. trademark owners their rights. The panel emphasized that any exceptions to trademark rights for the use of registered GIs were narrow, and limited to the actual GI name as registered.

GIs indicate the geographic origin of a product, where the product has some attribute or reputation associated with that origin. Examples include Parma ham, Roquefort cheese, Florida oranges, Vidalia onions and Idaho potatoes. The WTO TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights) defines GIs as "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 geographic origin."

With respect to national treatment, although the E.U. GI Regulation creates a system for the E.U.-wide registration and protection of GIs, the U.S. was concerned that the Regulation imposed significant barriers to registration and protection for non-E.U. persons and non-E.U. products. Under the E.U. system, companies are prohibited from using words in connection with their products that even "evoke" the name of a registered GI, unless they are one of the authorized users of the GI. The U.S. was concerned, for example, that producers of Parma ham in Italy could stop others from using the name Parma or similar names in the E.U. market. The United States alleged that this aspect of the GI Regulation was inconsistent with the E.U.'s national treatment obligations under the TRIPS Agreement (with respect to protection of intellectual property rights of non-E.U. nationals) and under the GATT 1994 (with respect to treatment of non-E.U. goods).

The U.S. was also concerned that the E.U. GI Regulation would not permit trademark owners to enforce their trademarks – that is, they would not be able to stop the confusing uses of similar GIs, which is one of their rights under the WTO TRIPS Agreement. The specific concern was the use of linguistic variations of GIs, where those linguistic variations are confusingly similar to European trademarks of U.S. companies and are used to market the European GI product, causing consumer confusion. The panel agreed with the U.S. that this would present concerns under the TRIPS Agreement, and found that the GI Regulation could only protect GI names as registered, and not linguistic variations of the GIs.

This case dates back to June 1999, when the U.S. requested WTO dispute consultations on the E.U. GI Regulation. On August 18, 2003, the United States requested the establishment of a dispute settlement panel and panelists were appointed in February 2004. Both the U.S. and E.U. can appeal the panel report to the WTO's Appellate Body after the report is circulated to the WTO membership and the public, which will occur in the coming months.