EU-US Geographical Indications Update

On March 10, 2006, The United States and the European Union signed an agreement on wine-making practices and the labeling of wine. The United States agreed to curb the use of European geographic names such as "chianti" or "burgundy" in return for the EU’s recognition of certain wine-making techniques used by U.S. vintners. The new agreement also provides for mutual recognition of existing current wine-making practices and a consultative process for accepting new wine-making practices. One of the major differences between U.S. and European vintners, for example, is the common use by American winemakers of oak chips to achieve a flavor European wine makers achieve by aging their wines in oak barrels, according to the US Mission to the European Union.

On March 20, 2006, European Agriculture Ministers adopted two regulations on protected designations of origin (PDOs), protected geographical indications (PGIs) and traditional specialities guaranteed (TSGs) for agricultural products at the Farm Council on 20 March. According to a March 20 article in Food Production Daily, the changes were made in a bid to comply with a World Trade Organisation decision that Europe's GI rules served to thwart foreign competition. The main changes include:

• the introduction of a single document for applications containing the name, a brief description of the product, specific rules concerning packaging and labelling, a definition of the geographical area from which comes the agricultural product or foodstuff; and proof of the link between the product and its geographical origin; this single document aims at ensuring key information to be officially published before registration in order to allow any operator to use its right of objection, and the authorities to guarantee protection for the names registered in each Member State. It will also ensure a greater homogeneity and equal treatment for applications; On TSG's, only the restricted product specification shall be transmitted to the Commission;
• the possibility for third countries operators to submit registration application directly through the Commission;
• in order to bring the Community legislation into line, all provisions related to equivalence and reciprocity for products from third countries are deleted in order to allow all names corresponding to geographical areas in third countries to have access to the Community scheme for the protection of GI's; in the same spirit the draft proposal allows third countries as well as Member States or operators to object directly to a registration proposed by groups of producers.

In an OpEd piece for IPFrontline on February 22, 2006, William O. Hennessey, Professor of Law and Chair of Intellectual Property Graduate Programs at Franklin Pierce Law Center, described the essence of the broader dispute between the US and Europe over geographical indications under Article 23.4 of TRIPS, which reads:

"In order to facilitate the protection of geographical indications for wines,
negotiations shall be undertaken in the Council for TRIPS concerning the
establishment of a multilateral system of notification and registration of geographical indications for wines eligible for protection in those Members participating in the system."

According to Hennesy, the "take-it-or-leave-it" text did nothing more than acknowledge the stalemate and kick the question into the future:

The Europeans emphasize the first highlighted phrase ("establishment of a
multilateral system of notification and registration"), while the U.S. and
like-minded states like Canada emphasize the latter ("for protection in those
Members participating in the system."

In essence, the European position is that a registration system similar to the ones in Europe must be mandatory for all WTO Members. The American position is that the plain language of 23.4 means that "Members participating in the system" clearly does not mean "all Members of the WTO"), because if it meant "all Members of the WTO", the words "participating in the system" become superfluous.

In the report of the WTO Secretariat of the Negotiations of the TRIPS Council in early 2003, (Part IV of WTO Document TN/IP/W/7) the Europeans argued that a registration system will be useless if participation is not mandatory. They also suggested that if Article 23.4 means that only some member states will join, the language would have been "plurilateral system" instead of "multilaterial system", to reflect standard GATT/WTO parlance. "It would not have been logical for the negotiators of Article 23.4 to have envisaged a voluntary system," argue the Europeans, "since a voluntary system in WIPO (The Lisbon Agreement) is already in place."

The Americans said, in effect, "Wait a minute. The Lisbon Agreement only has 22 Member states (including France and seven of its former colonies.) The WTO now has 147. Are we to assume we all agreed to sign on to an agreement so few of us ever agreed to in the past?"