What endgame for GIs in the TTIP negotiations?

I have previously written on the importance that the EU places on extending protection for its geographical indications (GIs) in its negotiations with the US on a Transatlantic Trade and Investment Partnership (TTIP) agreement. In that post, I looked at how the protection of GIs was addressed in a number of recent EU free trade agreements, notably those with South Korea (EUKOR) and with Canada (CETA).

GIs remain one of the tough nuts to crack in the TTIP negotiations, for reasons I outline in this presentation. In a recent update on the outlook for the TTIP talks from Bloomberg, its report included GIs along with certain agricultural tariffs and sensitivities on government procurement and financial services as among the endgame issues where a resolution would only be expected as part of the political trade-offs at the end of the talks. The report noted that US and EU officials will convene a high-level working group in early 2016 to discuss GIs in an attempt to narrow the gap between the two sides.

Much of the disagreement between the EU and the US emerges from differences in how the two sides approach GIs. For the EU, GIs are a quality mark whose protection should be enforced by the public authorities. For the US, GIs are best protected through trademarks as a form of private property right. Different views on what can be registered as a GI and the relationship between trademarks and GIs develop from these different perceptions.

Both the EU and the US have been trying to promote their alternative views of GI protection in a range of different fora including the WTO, the World Intellectual Property Organisation (WIPO) and in the bilateral free trade agreements each is signing with third countries.

The US view emerges most recently in the GI provisions in the proposed Trans-Pacific Partnership (TPP) agreement, the free trade area it has negotiated with 11 other Asian countries and which is currently under ratification. Even if the final text does not contain all that the US was looking for, the TPP chapter on intellectual property basically extends US practice on GIs to other TPP members (there are extensive leaks of earlier drafts of the chapter on the internet, so it is possible to follow the evolution of the text over time).

There are two reasons why it is interesting to examine the TPP text on GIs. The first is that the EU has negotiated (Canada, Chile, Mexico, Peru, Singapore and Vietnam) or is currently negotiating (Japan) free trade agreements with TPP countries which also contain GI provisions. It is possible that the GI provisions in these agreements are inconsistent with the obligations these countries are taking on under TPP. This could have implications for EU exports of GI foodstuffs as well as wines and spirits to these markets.

The second reason is that the TPP text illustrates what the US might be seeking to defend in its TTIP negotiations with the EU. We can only speculate on this because neither the US nor the EU has made public its negotiating texts on GIs.

For these reasons, we now review what the TPP text has to say about GIs, highlighting four issues in particular.

Definition of a GI

The TPP text uses the same definition of a GI as in the WTO TRIPS agreement (Art 18.1). A TPP party can protect GIs either through a trademark or sui generis system or other legal means (Art 18.30) but it must provide that signs that may serve as GIs are capable of protection under its trademark system, and its trademark system must allow for both collective and certification marks (Art 18.19). Signs do not have to be visually perceptible, and could consist of sounds or even scents (Art 18.18).

A footnote to Art 18.19 notes that “Consistent with the definition of a geographical indication in Article 18.1 (Definitions), any sign or combination of signs shall be eligible for protection under one or more of the legal means for protecting geographical indications, or a combination of such means.” Meltzer argues in this assessment that this is a broader definition of a GI than the EU uses as it makes clear that a GI can be a sign or combination of signs, not merely a word or – even more specifically – a geographic place name. However, this seems to be in line with the TRIPS Agreement which defines GIs as ‘indications’ (as compared to the 1958 Lisbon Agreement for the Protection of Appellations of Origin and their International Registration where GIs are defined as ‘the geographical name… which serves to designate a product’).

Co-existence of trademarks and GIs

Art 18.20 deals with the question of co-existence of trademarks and GIs. This question was debated in the WTO case brought by the US and Australia in 2003 against the first EU legislation on GIs Council Regulation No. 2081/92. The EU had claimed that the TRIPS agreement provided for mandatory co-existence meaning that a country could register a GI even where this name was already a registered trademark. The trademark owner’s rights would be ‘grandfathered’, meaning that the owner could continue to use the mark but could not prevent the registration of the GI.

The WTO panel found against the EU view on mandatory co-existence and confirmed that a prior trademark owner enjoys exclusivity against any similar sign, including GIs. It also found that the TRIPS agreement allowed states in their national legislation to provide for limited exceptions to the exclusive right provided to trademark owners, specifically for the fair use of descriptive terms, provided that there was limited risk of confusion. Despite this exception, it upheld the principle that the prior use of a trademark could prevent the registration of a GI name.

Against this background, the TPP text seems to go further in limiting the right of parties under the WTO TRIPS agreement to provide exceptions to the exclusive right provided to trademark owners. Art 18.20 provides:

Each Party shall provide that the owner of a registered trademark has the exclusive right to prevent third parties that do not have the owner’s consent from using in the course of trade identical or similar signs, including subsequent geographical indications, for goods or services that are related to those goods or services in respect of which the owner’s 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.(bolding added)

The wording of this paragraph here closely follows TRIPS Article 16.1 but with the addition of the phrase ‘including subsequent geographical indications’. The significance of this addition is further underlined by a footnote which reads:

For greater certainty, the exclusive right in this Article applies to cases of unauthorised use of geographical indications with goods for which the trademark is registered, in cases in which the use of that geographical indication in the course of trade would result in a likelihood of confusion as to the source of the goods.

It would seem that, whereas under the TRIPS exception it would be up to the trademark owner to show evidence of confusion to defend his exclusive right to the trademark against a proposed GI, under the TPP it would be up to the GI beneficiary to show that it was not causing confusion, thus reversing the burden of proof.

Obligations with respect to administering GI recognition and protection

A system of GI protection will usually involve some administrative procedures in order to be granted GI status which is then enforced by a government agency under a relevant law. The TPP text sets down some ‘good practices’ which should be followed in these administrative procedures (Art 18.31). One is the obligation to accept an application for GI status without requiring the intercession by a Party on behalf of its nationals. Another is that there should be procedures to oppose GIs that are the subject of applications and to cancel the protection and recognition afforded to an existing GI.

Possible grounds for opposition or cancellation include where the GI is likely to cause confusion with a prior trademark (as discussed above) or where the GI term has become generic (‘is a term customary in common language as the common name for the relevant good in the territory of the Party’). This essentially repeats the exception for generic terms in the TRIPS Agreement (the curious may note that the agreement here lapses back into the assumption that a GI consists of words despite the efforts noted above to expand the definition to symbols and even scents).

However, the TPP text goes further by providing guidelines for determining whether a term is customary or not in common language (Art 18.33). The key point is how consumers understand the term, as indicated by sources such as newspapers, dictionaries or websites, but parties are also encouraged to look at whether the term is used in relevant international standards, for example, whether a Codex standard for that term already exists. Further, protection given to a multi-component GI name should not give protection to an individual component of that name if that individual component is a term customary in the common language as the common name for the associated good (Art 18.34).

Treatment of GI protection in international agreements

I noted earlier the potential for confusion and conflict if a country signs free trade agreements with both the US and the EU where both make different demands for the protection of GIs. It is thus interesting that the TPP text contains a whole article (Art 18.36) setting out obligations if, when a TPP party signs an international agreement, it extends protection to GIs that it has not previously recognised through its own administrative procedures.

In this situation, a TPP party is required to make available, on the Internet, details of the terms it is proposing to recognise as GIs and to offer interested parties the possibility to oppose the extension of protection to these additional GIs, including on the grounds that it could cause confusion with a prior trademark or that the term has become generic. It must also inform other TPP parties of the opportunity to oppose no later than the commencement of the opposition period. These obligations also apply where a trade agreement allows additional GI terms to be added to the agreement at a later date. However, terms recognised in trade agreements concluded prior to the TPP are not covered by this article. This article is clearly directed against possible efforts by the EU in the future to obtain protection for its GI names in third countries that the US believes conflict with prior trademarks or generic terms in use in the US.

Implications for the TTIP negotiations

The EU’s negotiating objectives for foodstuff GIs in the TTIP negotiations can be summarised as:

• Establishment of a list of GI names to be protected directly through the agreement.
• Specific arrangements for certain specific GI names (this presumably refers to those GI names where prior trademarks exist in the US or where the US believes the GI terms have become generic).
• Rules guaranteeing an appropriate level of protection for EU GIs.
• Administrative enforcement against the misuse of EU GIs.

Having outlined the US position on GI protection in TPP, it is easy to divine the US responses to these demands:

• EU GI beneficiaries are free to apply for trademark protection as either a collective or certification mark under US trademark law, there is no need for a list of GI names to be appended to the agreement and no mechanism whereby the US government can grant them trademark protection without individual applications being made.
• A TTIP agreement cannot override the prior rights of a trademark owner, whether a limited exception can be made should be decided on a case-by-case basis. Names that have become generic cannot be recognised as GIs.
• A GI beneficiary that believes its rights have been abused is welcome to take action to enforce their rights by contacting the alleged offender and, if necessary, pursuing litigation. In arriving at their decision, the courts will take into account whether the actions of the alleged offender are likely to cause confusion in the minds of consumers (Despite this attempt to show confusion in the use of ‘parmesan’ by Italy’s Parmigiano Reggiano Consortium, the EU believes the US courts too easily accept defendants’ arguments, such as that his mark should be permitted because it is accompanied by the true source of origin, so confusion cannot occur).
• And just to be clear, we reserve the right to object to recognition of your GIs also in third countries with which we sign a free trade agreement. Also, if the TPP is ratified before TTIP comes into effect, an opportunity would have to be given to all other TPP parties to oppose any concessions we might make to recognise EU GIs in TTIP.

In my previous post, I was somewhat optimistic that “Finding a balanced outcome [on GIs] should not be beyond the ingenuity of the negotiators” (see this post for another optimistic view). Now I am not so sure. The US insistence that GIs are a form of private intellectual property rights rather than a matter of public policy which is the EU viewpoint makes it difficult to see how they can trade concessions in a trade agreement. I would welcome suggestions in the comments from those who can see a solution to this conundrum. The proposed TTIP working group on GIs which is due to start meeting soon will have its work cut out.

This post was written by Alan Matthews

Photo credit: ekathimerini.com

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