Good Morning

1. This is the first WTO dispute about those provisions of the TRIPS Agreement relating to TRIPS-defined GIs. Further, it is only the second dispute in which the provisions of the TRIPS Agreement on trademarks have been considered in detail.

2. As a consequence, this dispute has relevance for many commercial actors because of its potential impact on the economic value of their intellectual property rights. Further, many of these rights have been acquired against the background of more than 100 years of internationally agreed rules on trademarks.

3. The WTO dispute settlement system cannot re-write the covered agreements. In particular, we cannot attribute to the TRIPS Agreement rights and obligations which were not agreed during the Uruguay Round negotiations, notwithstanding that participants in those negotiations may have sought different outcomes.

4. Notwithstanding that there are some issues being considered for the first time in this dispute, at a fundamental, conceptual level this dispute is about four key issues. These become very clear when the EC measure is examined closely – and its practical application understood.

5. Firstly, is the EC treating the nationals and products of other WTO Members less favourably than it treats its own nationals and products? The answer is yes.

6. Secondly, with regard to registration and protection of EC-defined GIs, has the EC granted the rights in respect of trademarks it is obliged to grant by the TRIPS Agreement? It has not.

7. Thirdly, is the EC fully implementing its obligations concerning TRIPS-defined GIs? The answer is that it is not doing that either.

8. Finally, in implementing its regime for the registration and protection of EC-defined GIs, has the EC established certain requirements that are so restrictive that the EC has contravened the TBT Agreement? For anyone concerned with trying to meet the EC’s requirements to register an EC-defined GI from another WTO Member, the answer is “yes”.

9. Australia’s claims and arguments in this dispute have been set out in detail in our First Written Submission. Australia will of course respond in detail in our written rebuttal submission to the arguments put forward by the EC in its First Written Submission.

10. My statement today will therefore focus on some threshold issues in this dispute: the measure at issue; the Panel’s terms of reference; and the factual description of the measure. I will also recap some key legal arguments of Australia’s First Written Submission taking account of some specific issues raised by the EC in its First Written Submission.

11. I now turn to the measure at issue in the dispute initiated by Australia. The measure at issue is essentially the EC regime for the protection of designations of origin and geographical indications for agricultural products and foodstuffs, for which Regulation 2081/92 provides the regulatory framework.

12. I want to emphasise that it is an EC measure that Australia is challenging. As the EC itself has stated: “the subject matter of the present dispute falls within the exclusive competence of the EC, and not of the Member States”.[1]

13. The EC’s arguments that versions of Regulation 2081/92 before the adoption of Regulation 692/2003 are outside the Panel’s terms of reference[2] are without merit. The EC mischaracterises the measure at issue as set out in Australia’s request for the establishment of a panel. The EC’s argument equates the meaning of “[and] any amendments thereto (including … Regulation … 692/2003)” to “as amended by … Regulation … 692/2003”, notwithstanding the plain language of Australia’s panel request.

14. Australia is not seeking to analyse historical versions[3] of Regulation 2081/92 in a vacuum: it is seeking a remedy in respect of the 640 currently protected GIs that the EC is seeking to shield from the Panel’s scrutiny.

15. Let me be quite clear on the terms of reference for this dispute. Australia has asked the Panel to determine – within the meaning of DSU Article 12.7 – whether the EC measure is inconsistent with TRIPS Articles 25.4 and 41.1. To that end, the DSU permits the Panel to consider the EC measure’s consistency with Paris Article 4 and TRIPS Articles 43-49 respectively. Indeed, such an examination is necessary for such a determination.

16. Australia also disagrees with the EC’s argument that Paris Article 2.2 is outside the Panel’s terms of reference in this dispute.[4] Paris Article2.2 makes clear the point at which a WTO Member is no longer in compliance with its national treatment obligation under Paris Article2.1. Thus, Paris Article2.2 needs to be considered with Paris Article2.1 as an integral aspect of a WTO Member’s national treatment obligations, and was properly raised as an issue in Australia’s panel request.

17. I turn now to some factual aspects of Regulation 2081/92.

18. The EC says that Australia misunderstands Article12.1 of the Regulation.[5] The EC further says that Articles12.1 and 12.3 do not apply to WTO Members.[6]

19. The EC’s statement is extraordinary. The EC has consistently led other WTO Members to believe that Article12.1 of Regulation 2081/92 applies to them. Confirmation of this can be seen in document IP/Q2/EEC/1 of 1 October 1997 – the review of the EC’s legislation on trademarks, geographical indications and industrial designs. In particular, I draw the Panel’s attention to the EC’s answers to the first question from India and the fourth question from New Zealand.

20. Further, in 2002, the EC was considering the changes to Regulation 2081/92 which were eventually adopted in Regulation 692/2003. An EU press release at the time said:

“… [T]o improve protection of European quality products outside the EU … non-EU countries … would be invited to do so on a reciprocal basis. If a non-EU country introduced an equivalent system including the right of objection for the EU and the commitment to protect EU names on their territory, the EU would offer a specific procedure to register their products for the EU market.”[7]

21. DSU Article 11 expressly provides that a panel should make an objective assessment of the facts of the case. An examination of textual provisions forming part of the measure before it is a proper exercise of the Panel’s authority to assess the facts of the case. So too is consideration of whether the EC’s explanation of those provisions is supported by the relevant texts.

22. Australia submits that the Panel should find that the EC’s explanation is not supported by the texts of Articles12 to 12d of Regulation 2081/92, and that Articles12.1 and 12.3 must be considered to apply to agricultural products and foodstuffs from other WTO Members.

23. Australia further submits that the EC’s advice that paragraphs 1 and 3 of Article 12 don’t apply to WTO Members in effect constitutes an admission by the EC that the equivalence and reciprocity requirements of those provisions are inconsistent with the EC’s WTO obligations.

24. The EC has sought to explain the decision-making process provided by Article 15 of Regulation 2081/92.[8] Australia submits that the EC’s explanation of that process is not accurate. The plain language of Decision 1999/468 indicates that, in significant circumstances, the Commission cannot decide the matter without the consent of either the Committee or the Council, or until the Council has been unable to form an opinion for three months.

25. I turn now to the issue of country of origin labelling. The EC’s explanation that the country of origin labelling requirement in Article12.2 can apply to both the third country and EC names[9] is not convincing.

26. Australia submits that the Panel should find that the EC’s explanation of the country of origin labelling requirement in Article12.2 is not supported by the actual text of Article12.2, particularly when read together with Article 6.6. As the EC admits,[10] the registration of an EC-defined GI from within the Community that is homonymous with an already registered name is governed by Article 6.6, not Article 12.2.

27. Australia notes the EC’s statement that, in respect of the simplified registrations under the now repealed Article 17, the EC did not grant to the owner of a registered trademark within the territory of the EC the exclusive rights required to have been granted by TRIPS Article16.1.[11]

28. I now turn to some of the key legal arguments that have been raised in this dispute.

29. As I noted earlier, Australia’s claims in this dispute fall into four broad categories:

• the rights required to be granted by the EC in respect of trademarks;
• the EC’s national treatment obligations;
• the EC’s obligations concerning TRIPS-defined GIs; and
• the EC’s obligations not to make technical regulations more trade restrictive than necessary.

30. For the purposes of brevity, instead of repeating the arguments made by the United States, I will instead note that Australia endorses those comments concerning the rights required to be granted in respect of trademarks. I make the following additional comments.

31. Australia will respond to the EC’s arguments in detail in our written rebuttal. We want to emphasise, however, that Australia fully agrees that GIs are intellectual property rights covered by the TRIPS Agreement, and that the TRIPS Agreement establishes no hierarchy between trademarks and TRIPS-defined GIs as such.[12]

32. The real issue is whether the EC measure is inconsistent at Community level with TRIPS Article 16.1. Australia submits that the co-existence standard established by Regulation 2081/92 effectively deems the territory of the EC Member State of origin of the EC-defined GI to be synonymous with the territory of the EC as a whole. The co-existence standard ignores the principle of territoriality that has underpinned development of the international regime for the protection of intellectual property. As the Committee on Legal Affairs and the Internal Market of the European Parliament has noted, “to deprive a trademark owner of the exclusive right conferred by Community trademark law by obliging him to allow … [coexistence] … is tantamount to expropriation”.[13] Further, such inconsistency cannot be justified by TRIPS Articles 24.5, 24.3 or 17.

33. Australia endorses the comments made by the United States concerning the EC’s national treatment obligations under the TRIPS Agreement and GATT 1994, and offers the following additional comments.

34. The EC says that Australia has not claimed that Regulation 2081/92 violates the national treatment obligations of the TRIPS Agreement and the Paris Convention by requiring that applications be transmitted by the country in which the geographical area is located.[14] For the record, Australia has in fact clearly referred to this requirement in support of its claim that the measure as a whole does not accord national treatment to non-EC nationals.[15]

35. The EC also says that Australia has claimed that Regulation 2081/92 accords less favourable treatment because a non-EC right holder has no representative in the Article15 decision-making process to speak for its interests.[16] For the record, Australia makes this argument in support of its claim that the measure as a whole does not accord national treatment to non-EC nationals.[17]

36. Australia has claimed that the EC breached its TRIPS Agreement and Paris Convention national treatment obligations by registering more than 120 EC-defined GIs under the normal registration process before 24April 2003, because the EC did not provide non-EC nationals a right of objection. The registrations of those more than 120 EC-defined GIs – which in any case remain in force – clearly form part of the measure at issue in this dispute. The EC offers no explanation why making a right of objection to persons resident or established in the EC but not to other WTO Member nationals does not breach its national treatment obligations. Nor do the EC’s arguments about retrospective remedies have any merit.

37. Finally, Australia notes that bringing the EC’s measure into WTO conformity might not require “undoing” those registrations in the sense that Australia understands the EC to be meaning. The EC might, for example, be able to bring the registrations into conformity by providing for any right holders adversely affected by the registrations to be heard in a civil judicial proceeding, and/or to be justly compensated for any trademarks rights if unsuccessful in overturning particular registrations.

38. Australia does not argue that protection of TRIPS-defined GIs against misleading use or use which constitutes an act of unfair competition must be provided at any given territorial level.[18] What Australia does argue is that the EC must provide at Community level in respect of the Community level registration of EC-defined GIs the legal means for interested parties: to prevent misleading use of an EC-defined GI; and use which constitutes an act of unfair competition. This is particularly so given that Community law takes precedence over inconsistent Member State law.

39. I turn now to the TBT Agreement, which requires that technical regulations not result in less favourable treatment for imported products than for products of national origin. It also requires that technical regulations not be “more trade restrictive than necessary”. Australia submits that aspects of the EC measure are inconsistent with both of these obligations.

40. Having regard to the findings of the Appellate Body in EC – Asbestos and EC – Sardines, Australia has shown that the EC measure is, in part, a “technical regulation” within the meaning of the TBT Agreement. To the extent that the EC measure sets out a mandatory labelling requirement – and sets out processes related to product characteristics – for agricultural products and foodstuffs eligible to bear a registered EC-defined GI, the measure applies to an identifiable group of products, sets out product characteristics, and requires mandatory compliance.

41. As the Appellate Body found in Brazil – Desiccated Coconut, the WTO Agreement was accepted by WTO Members as a single undertaking, and “all WTO Members are bound by all the rights and obligations in the WTO Agreement and its Annexes 1, 2 and 3”. The Annexes of course include both the TBT Agreement and the TRIPS Agreement. Accordingly, a measure implementing matters concerning intellectual property rights is not necessarily excluded from the scope of the TBT Agreement.

42. The EC argues that Regulation 2081/92 itself “does not allow to identify” products which might be affected by Article 12.2.[19] Australia submits that the EC misunderstands the essential distinction made by the Appellate Body between products that are expressly identified on the one hand and those that are identifiable on the other.

43. Similarly, the EC’s arguments that Article12.2, and Articles4 and 10 read together, do not set out product characteristics are not sustainable.[20] Labelling requirements are explicitly included within the scope of a “technical regulation”. Australia submits that the EC’s interpretation of Article12.2, if correct, would render meaningless the concept of a label.[21] In addition, the EC argues that the purpose of Article4(g) – read in conjunction with the inspection structure requirement of Article10 – is not to lay down product characteristics.[22] Regardless of the EC’s intent, Articles4 and 10 read together have the effect of establishing a process related to product characteristics within the definition of a technical regulation.

44. Finally, the EC’s argument that the requirements concerning labelling, and concerning a process related to product characteristics, are not mandatory is not supported by the plain text of the provisions.

45. It remains Australia’s claim that imported products bearing an EC-defined GI are treated less favourably than “like” domestic products in the circumstances in which Article12.2 of Regulation 2081/92 applies.

46. Australia also maintains its claim that the EC measure is “more trade restrictive than necessary” because it obliges other WTO Members to have in place the same type of inspection structures as those mandated for the EC by Regulation 2081/92. The EC has failed to explain why other WTO Members’ systems for compliance verification and/or enforcement, or for the prevention of deceptive practices, can never provide the EC’s required degree of assurance.

47. There are many other issues that could be discussed in this statement. However, for the sake of brevity and given the processes ahead in this dispute, I will conclude Australia’s statement at this point. I look forward to providing further detail through questions and answers, and in our written rebuttal statement.

Thank you.

---