Geographical indications: a discussion on the TRIPs regulation after the Ministerial Conference of Hong Kong.

• Author: Fusco, Stefania
• Position: Trade Related Aspects of Intellectual Property Rights Agreement

INTRODUCTION I. HISTORICAL BACKGROUND, DEFINITION, AND INTERNATIONAL REGULATION. A. Historical Background B. Definition C. The International Regulation of GIs II. THE MULTILATERAL REGISTER FOR WINES AND SPIRITS A. Background and Proposals 1. Background 2. The Proposals for the Multilateral Register B. The TRIPs Agreement 1. The Negotiations on the Protection of GIs before the TRIPs Agreement 2. Article 23(4) of the TRIPs Agreement C. Final Considerations 1. Brief Analysis of the Proposed Systems III. THE EXTENSION OF ARTICLE 23 OF THE TRIPS AGREEMENT TO GIS ON PRODUCTS OTHER THAN WINES AND SPIRITS A. Why Are GIs Needed in the First Place? B. The Debate about the Extension of Article 23 of the TRIPs Agreement 1. GIs as Generic Terms 2. Consumer Protection and Agricultural Policy. 3. Developing Countries and the Issue of Traditional Knowledge 4. Preservation of Culture 5. Costs of GI System 6. Imbalance Between Countries with Regard to Existing GIs C. Practical Perspective About the Extension of Article 23 of the TRIPs Agreement IV. GENERIC TERMS, PRE-EXISTING RIGHTS AND THE EU INITIATIVE TO RECLAIM THE EXCLUSIVE USE OF CERTAIN GIS A. The Issue B. Generic Terms and the Issue of Pre-Existing Rights CONCLUSION APPENDIX INTRODUCTION

The international regulation of Geographical Indications (GIs) on products is one of the most contentious issues in the international negotiations among World Trade Organization (WTO) member states. The discussion revolves mainly around three issues: (i) the creation of a multilateral register for wines and spirits, (ii) the extension of the higher level of protection already existing for wines and spirits to other products, and (iii) the European Union (EU) initiative to regain the exclusive use of certain GI names. The United States and the EU are the two main trading blocks that have set forth the opposing arguments that define the scope of this active debate. The purpose of this paper is to provide a thorough analysis of the most significant arguments presented by WTO delegates and scholars in support of or against the aforementioned issues. This project also represents an attempt to propose a policy recommendation for the solution of the conflict. This recommendation takes into consideration, to the largest extent possible, the interests of all the parties involved.

The regulation of GIs in the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement was the result of a significant compromise among the WTO member states in which the political and economic interests of each of the members was taken into account. The result was a hybrid discipline in which identifiers for similar products are treated in significantly different ways for no apparent logical reason. As part of this compromise, the WTO member states agreed in Article 23 of the TRIPs Agreement to negotiate the establishment of a multilateral system of notification and registration for wines and spirits. Several proposals have been presented over the years on this subject, and they can be generalized into two main themes of argument: one theme proposed by the EU and the other by the United States. The former proposes the creation of a multilateral register, whereas the latter supports the establishment of a voluntary database. From reading the TRIPs Agreement and the available unrestricted documents prepared during the negotiations, it is clear that the WTO member states, in entering the agreement, settled on the establishment of some kind of multilateral register for wines and spirits, and therefore, the EU proposal on this subject is more in line with the signatories' expectations. This multilateral register should not be forgone unless a more efficient system that serves the TRIPs purposes can be identified.

The extension of the level of protection of Article 23 of the TRIPs Agreement to products other than wines and spirits is a more delicate 200 MARQUETTE INTELLECTUAL PROPERTY LAW REVIEW [12:2 Part I of this paper consists of a brief informational background of GIs with particular attention given to their historical development and to the most important international treaties addressing them, such as the TRIPs Agreement which is at the heart of this controversy. Part II discusses the creation of a multilateral register for wines and spirits. In order to facilitate a full understanding of the debate, the existing proposals are jointly summarized with a thorough analysis of the relevant portion of the TRIPs Agreement and the preceding negotiations. This section also presents plausible alternative solutions for the implementation of the relevant portion of TRIPs. Part III is dedicated to the analysis of the extension of Article 23 of the TRIPs Agreement to GIs on products other than wines and spirits. Particular attention will be provided to the economic rationale for such an extension and its limits. It also presents a complete overview of the most important scholarly arguments presented during the negotiations in support of or against the extension. Finally, the chapter will explore issue. Such an extension could severely affect competition in these new markets, and thus, could reduce consumer well-being. Therefore, such an extension should be provided only in the presence of a significant economic justification, such as the producers' abilities to meet the relatively recent consumer demand for varied and high-quality products. Given this fact, it is possible to conclude that such an extension would be warranted only when the extra protection under consideration is related to the production of varied and high-quality products, as in the case of wines and spirits. In these regards, the concept of terroir provides significant guidance because it helps to identify those elements that, because of their strict connection with the territory, are unique and make the products in consideration unique as well. Indeed, it is this intrinsic characteristic of the products in consideration that has to be preserved to meet the consumer demand for variety and quality.

The EU initiative of reclaiming the exclusive use of certain GIs has no basis other than a retaliatory response for the deadlock of the negotiations over GIs that preceded the 2003 Cancun meeting. Indeed, the presence of pre-existing rights to these terms and the fact that many of these geographic terms are generic in other WTO member states cannot be overcome by "historical arguments" that define the use of certain GIs by producers that are not located in the specific geographical area as a form of usurpation. Therefore, no extension should be granted for the identifiers included in the EU list because no legal or economic justification can be identified to support a different conclusion.

Part I of this paper consists of a brief informational background of GIs with particular attention given to their historical development and to the most important international treaties addressing them, such as the TRIPs Agreement which is at the heart of this controversy. Part II discusses the creation of a multilateral register for wines and spirits. In order to facilitate a full understanding of the debate, the existing proposals are jointly summarized with a thorough analysis of the relevant portion of the TRIPs Agreement and the preceding negotiations. This section also presents plausible alternative solutions for the implementation of the relevant portion of TRIPs. Part III is dedicated to the analysis of the extension of Article 23 of the TRIPs Agreement to GIs on products other than wines and spirits. Particular attention will be provided to the economic rationale for such an extension and its limits. It also presents a complete overview of the most important scholarly arguments presented during the negotiations in support of or against the extension. Finally, the chapter will explore why wines and spirits deserve a higher level of protection and will propose an empirical extension of Article 23 of the TRIPs Agreement only to those products that are similar to the products already included in the scope of Article 23. In conclusion, Part IV will briefly discuss the EU initiative to reclaim the exclusive use of certain GIs and will explain why such an initiative should be rejected.

1. HISTORICAL BACKGROUND, DEFINITION, AND INTERNATIONAL REGULATION

   GIs "were the earliest types of trademark." (1) Indeed, GIs have been part of product identity through history. Even at the very beginning of wine production in Italy, for example, indications of origin were applied to containers as a means of classification. Those efforts to protect the product's identity shared the same basic motivations of modern day efforts to provide legal recognition to GIs: economic and consumer protection. (2) In other words, protection of GIs tends to support "the creation of a distinctive product identifier and the assurance to the consumer of the authenticity of products bearing that identifier." (3)

   1. Historical Background

      As international trade started to develop during the eighteenth century, it became clear that, because of their particular qualities, some products from a specific region had a much higher success rate on the international market than others coming from a different region. (4) This trend led merchants to apply marks, which indicated the place of origin of the products, to the products themselves. (5) "These brands were tantamount to a warranty of the quality of these goods," (6) and local authorities started to provide protection for the commercial reputation of these products by passing laws aimed to prevent their adulteration.

      Even though a modern system of private trademarks emerged in Britain as a consequence of the Industrial Revolution, its development did not cause, particularly in Europe, the disappearance of GIs. (7) To the contrary, GIs continued to be associated with those traditional products for which they were initially created. The continuous...