WORLD TRADE

ORGANIZATION

RESTRICTED

IP/C/M/37/Add.18 November 2002

(02-6169)

Council for Trade-Related Aspectsof Intellectual Property Rights

MINUTES OF MEETING

Held in the Centre William Rappardon 17-19 September 2002

Addendum

Chairman: Ambassador Eduardo Pérez Motta (Mexico)

The present document contains the record of the discussion which took place on agenda items A, B and D-P during the TRIPS Council meeting held on 17-19 September 2002. The discussion on item C concerning paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health is recorded in document IP/C/M/37.

Subjects discussed Page Nos

A. NOTIFICATIONS UNDER PROVISIONS OF THE AGREEMENT...........................................2

B. REVIEW OF NATIONAL IMPLEMENTING LEGISLATION...................................................2

D. ISSUES RELATED TO THE EXTENSION OF THE PROTECTION OF GEOGRAPHICAL INDICATIONS PROVIDED FOR IN ARTICLE 23 TO PRODUCTS OTHER THAN WINES AND SPIRITS.........................................................................................................................19

E. REVIEW OF THE PROVISIONS OF ARTICLE 27.3(B).....................................................44

F. RELATIONSHIP BETWEEN THE TRIPS AGREEMENT AND THE CBD...........................52

G. PROTECTION OF TRADITIONAL KNOWLEDGE AND FOLKLORE....................................58

H. REVIEW OF THE IMPLEMENTATION OF THE AGREEMENT UNDER ARTICLE 71.1.......62

I. IMPLEMENTATION OF ARTICLE 66.2............................................................................62

J. NON-VIOLATION AND SITUATION COMPLAINTS.........................................................63

K. ELECTRONIC COMMERCE.............................................................................................68

L. OTHER OUTSTANDING IMPLEMENTATION ISSUES (TIRETS 93 AND 94 AND PROPOSAL BY LDCS ON THEIR TRANSITION PERIOD)...................................................................69

M. REVIEW OF THE APPLICATION OF THE PROVISIONS OF THE SECTION ON GEOGRAPHICAL INDICATIONS UNDER ARTICLE 24.2..................................................69

N. TECHNICAL COOPERATION AND CAPACITY-BUILDING...............................................71

O. INFORMATION ON RELEVANT DEVELOPMENTS ELSEWHERE IN THE WTO.................74

P. OBSERVER STATUS FOR INTERNATIONAL INTERGOVERNMENTAL ORGANIZATIONS...74

ANNEX....................................................................................................................................77

IP/C/M/37/Add.1Page 2

A. NOTIFICATIONS UNDER PROVISIONS OF THE AGREEMENT

(i) Notifications under Article 63.2

- Notifications from Members whose transitional periods under Article 65.2 or 65.3 expired on 1 January 2000 or acceded to the WTO after that date

1. The Chairman drew attention to the Secretariat's updated note reflecting the status of the notifications received from these Members so far. The note showed from which of the Members in question notifications had been received by 9 September 2002. Since then, additional notifications of laws and regulations had been received from Thailand and Cuba. From the 79 Members in question, there were seven who had not yet submitted any notification concerning their implementing legislation. Notifications from a number of other Members were incomplete. Recalling that pursuant to Article 63.2 of the TRIPS Agreement the notifications of the laws and regulations in question were generally due as of 1 January 2000, he once again urged these Members to submit the outstanding material without delay. He also urged them, if not all the material to be notified was ready yet, to submit whatever could be notified now and complement the notification as soon as other parts of the material to be notified were ready for submission. He reminded delegations that, under the WTO/WIPO Cooperation Agreement and decisions taken by WIPO's Governing Bodies, the International Bureau of WIPO was in a position to assist delegations with the translation of their main dedicated intellectual property laws and regulations, as required.

- Notifications from other Members and notifications of amendments of laws notified earlier

2. The Chairman informed the Council that, since its previous meeting, notifications of either new legislation or amendments to legislation notified earlier had been received from China; the Czech Republic; Germany; Grenada; Guatemala; Hong Kong, China; Lithuania; Luxembourg; Morocco; the Philippines; Spain; and Switzerland. These notifications would be available in the IP/N/1 - series of documents.

(ii) Notifications under Article 69

3. The Chairman informed the Council that, since the previous meeting, new notifications of contact points under Article 69 of the TRIPS Agreement had been received from Angola and China, as well as updated information from Bangladesh, Canada and Chinese Taipei (subsequently circulated as document IP/N/3/Rev.6/Add.2.). There were now 117 Members who had notified contact points under Article 69.

B. REVIEW OF NATIONAL IMPLEMENTING LEGISLATION

(i) Follow-up to reviews already undertaken

4. The Chairman recalled that, as requested by the Council at its meeting in June 2002, the Secretariat had circulated an informal note in document JOB(02)/108 that listed all the outstanding material required to complete reviews that the Council had already undertaken. The table attached to the note listed those Members whose reviews were initiated at the Council's meetings in April, June and November 2001, and March and June 2002 but had not yet been completed, and it identified all the outstanding material. In addition, the note also listed a number of Members whose reviews had already been deleted from the Council's agenda, but to whom further questions had been posed.

5. He said that Malaysia and Oman had now provided responses to all of the questions posed to them. He proposed that the reviews of the legislation of Malaysia and Oman be deleted from the

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agenda, it being understood that any delegation should feel free to revert to any matter stemming from these reviews at any time.

6. The Council so agreed.

7. The Chairman said that the table indicated that there were 21 Members whose reviews had been initiated between April 2001 and June 2002 that had not yet been completed. The table referred to submissions received before 4 September 2002. Since then, the Secretariat had received responses to all outstanding questions posed to Guyana (subsequently circulated in document IP/C/W/381). Suriname was in the process of submitting information on the status of preparation of its TRIPS implementation. This information would be circulated to the Council once it became available.

8. The Chairman recalled that, at the Council's previous meeting, the representative of Mauritius had said that the questions concerning the legislation of Mauritius raised by a number of delegations had been all related to Mauritius' old laws. He had informed the Council that his delegation had had extensive consultations with these delegations, and that all the issues that had been raised by them had been factored in the new draft legislation, which was at that time before Parliament. Finally, he had expressed his hope that this explanation would set to rest the questions raised and that the matter could be closed once the new laws had been circulated to Members. The Chairman requested that the delegations that had posed questions to Mauritius to indicate whether they were satisfied with this explanation and that the review could be deleted from the Council's agenda, or whether they still preferred to get responses to the questions they had posed, or whether they preferred to revert to the matter once the new legislation had been notified and circulated to Members.

9. The representatives of the United States, Canada and Switzerland requested Mauritius to respond the questions posed to it, but on the basis of the new legislation rather than the old legislation.

10. The Chairman urged the 20 delegations who had not yet submitted their responses to all outstanding questions to do so without delay.

11. He said that the note also listed five Members whose reviews had already been deleted from the Council's agenda on the understanding that any delegation should feel free to revert to any matter stemming from the review at any time. In this connection, certain questions had been raised with regard to the implementing legislation of these countries.

12. The representative of Argentina said that her delegation would provide responses to the outstanding questions arising from the review of Argentina's legislation by the next Council meeting.

13. The Chairman suggested that the Council request the Secretariat to update its note on pending reviews before the next meeting.

14. The Council took note of the statements made and agreed to proceed as suggested by the Chairman and to revert to the matter at its next meeting.

(ii) Reviews of legislation of China and Chinese Taipei

China

15. The Chairman recalled that, at its meeting in June 2002, the Council had agreed that its normal review of China's TRIPS implementation and the review under the transitional review mechanism of China's Protocol of Accession would be combined at the present meeting and that the normal review would be conducted following the Council's standard procedures. He said that China's notification of its laws and regulations had been circulated in documents IP/N/1/CHN/1 and Addendum 1, and the texts of the notified laws and regulations in the relevant law series documents. China's responses to

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the Checklist of Issues on Enforcement had been circulated in document IP/N/6/CHN/1. China had received questions from Australia, Canada, the European Communities and their member States, Japan, the United States and Switzerland (documents IP/C/W/364, 366, 361, 362, 365 and 372, respectively). The submission from the United States contained both general comments and questions, and also referred to the transitional review mechanism. In addition, the European Communities and their member States had submitted a document concerning the transitional review mechanism which had been circulated in document IP/C/W/371. China's responses to these questions had been circulated in document IP/C/W/374 and Addendum 1. More recently, China had received questions from Korea, which had been circulated in document IP/C/W/380. Furthermore, China had submitted information in the context of the transitional review mechanism as required under Section VI of the Annex 1A to its Protocol of Accession (IP/C/W/382). In addition, the Council had just received the following material: additional questions posed by Japan, responses to some of the questions posed by Korea, and a communication from China entitled "Intellectual Property Right Protection in China" (subsequently circulated in document IP/C/W/362/Add.1, 374/Add.2 and 384, respectively).

16. The representative of China said that, as a new Member of the WTO, China welcomed the opportunity of reviewing its legislation and protection of intellectual property rights by the TRIPS Council. China was fully committed to the strengthening and improvement of the multilateral trading system. Given that China took its obligations under the WTO very seriously, it had brought a strong team from the capital, which included experts and senior representatives from relevant government agencies, who played a pivotal role in preparing all the documents and providing the answers to the questions posed by various delegations. He trusted that their presence would be conducive to improving mutual understanding. He said that, since the process was a combination of the legislative review as well as the transitional review under paragraph 18 of China's Protocol of Accession, he wished to focus on three issues: first, the performance of China's obligations of notification; second, the progress of China's efforts to make the relevant rules and regulations consistent with the TRIPS Agreement; and third, China's efforts for the enforcement of the laws and regulations on IPR protection.

17. On the issue of notification, he said that, pursuant to Article 63.2 of the TRIPS Agreement, China had notified all of the eight "main dedicated laws" related to IPR protection on 21 May 2002, including the Copyright Law, one Patent Law, one Trademark Law and one Implementing Regulations of the Patent Law of the People's Republic of China. The newly amended Implementing Regulations of the Copyright Law and Implementing Regulations of the Trademark Law were notified on 23 August 2002. On 12 July 2002, the Criminal Law, one Anti-Unfair Competition Law and one Civil Procedure Law were also notified to the TRIPS Council in summary as "other laws and regulations". Pursuant to the decision of the TRIPS Council of 21 November 1995, China had notified its responses to the Checklist of Issues on Enforcement relating to the TRIPS Agreement on 12 July 2002. Pursuant to Article 69 of the TRIPS Agreement, information on contact point in China had been notified on 1 August 2002. Apart from the notification obligations set out by the TRIPS Agreement and the Council, China had provided responses to the questions it had received prior to the review from six Members, including Australia, Canada, the European Communities and their member States, Japan, Switzerland and the United States. Among them, the responses to Australia, the European Communities and their member States, Japan and the United States had been submitted on 23 August 2002, while the answers to Canada and Switzerland had been submitted on 2 September 2002. China had received questions from the Republic of Korea just days before the meeting, and had been able to provide responses to some of them just prior to the review. China had also provided the Council with the information requested under Annex 1 of its Protocol of Accession.

18. With the conclusion of this preparation, China had provided complete information to the Council for this review as required by the TRIPS Agreement, related decisions by the Council and its Protocol of Accession. China's IPR laws and regulations were characterized by their broad coverage and great quantity. The notification to the WTO and the provision of required information for the review had

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entailed huge tasks, not the least of which was translation, and had required enormous input of manpower and financial resources. The fulfilment of the tasks by the Chinese Government in spite of tremendous difficulties was a further demonstration on the sincerity and resolve of China to honour its obligations on transparency and implement its commitments.

19. On the issue of the progress of legislation, he said that China's IPR protection system had begun taking shape as early as the 1970s, and had become a principal component of China's policy of economic reform and opening-up. The Chinese Government believed that the intellectual property protection system played an important role in promoting science and technology innovation, cultural prosperity and economic development. Regarding foreign investment attraction, effective IPR protection was an important contributing factor for the inflow of foreign investment. Long before China's accession to the WTO, a cross-the-board amendment of IPR laws and regulations had been initiated with a view to bringing IPR protection in line with the requirements laid out by the TRIPS Agreement. This process had been completed so far. This massive overhaul of IPR legislation covered almost all major IPR related laws and regulations, including one Copyright Law, one Patent Law, one Trademark Law, one Implementing Regulations of Patent Law, the Regulations on Protection of Computer Software, the Implementing Regulations of Copyright Law and the Implementing Regulations of Trademark Law of the People's Republic of China. Apart from that, a series of new regulations including the Regulations on Protection of Layout-Designs of Integrated Circuits and Regulations on Protection of New Varieties of Plants had been promulgated.

20. The revised Copyright Law extended the scope of protection, clearly defined the right of performers and producers, added the provisional measures of property and evidence preservation, stipulated the amount of statutory damages and enhanced the administrative sanctions on infringements that harmed public interests. The Law was now in full compliance with the requirements of the TRIPS Agreement. The revised Trademark Law specifically provided for the protection of geographical indications and well-known trademarks, expanded the scope of eligible subject-matter of a trademark, stipulated the right of priority, added the judicial review to the administrative decisions relating to trademark registration and strengthened the cracking down on trademark infringement. The revised Patent Law set the conditions for granting compulsory licences, and added the provision of judicial review for the administrative decisions regarding patent of utility model and design. Regulations on Protection of Layout-Designs of Integrated Circuit, issued in April 2001, defined the protection of the layout-designs of the integrated circuit. In the revised Patent Law, Trademark Law and Copyright Law, provisional measures to stop infringing acts before the trial had been stipulated to further strengthen the protection of right owners. Because of those major amendments made to the related laws and regulations in this regard, the legislation on IPR protection in China had been greatly improved and had achieved full compliance with the TRIPS Agreement.

21. It was the view of the Chinese Government that the extensive involvement in international exchange and cooperation on IPR protection was a principal approach to draw on the advanced experience from other countries and enhance the capacity and level of China's IPR protection. Since the 1980s, China had joined in succession a number of major international conventions, treaties and agreements on IPR protection, namely the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, the Universal Copyright Convention, the Madrid Agreement Concerning the International Registration of Marks, the Madrid Protocol Concerning the International Registration of Marks, the Nice Agreement Concerning the International Classification of Goods and Services for the Purpose of the Registration of Marks, the Lugano Agreement on Establishing International Classification of Industrial Designs, the Patent Cooperation Treaty, the Strasbourg Agreement on the International Patent Classification, the Geneva Convention for Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms, the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purpose of Patent Procedures and the Convention for the Protection of New Plant Varieties. While actively participating in the related international conventions, the Government of China had entered into bilateral cooperation with a number of countries on intellectual property protection, such

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as the EU-China Intellectual Property Rights Cooperation Programme. Projects of that kind had helped China to train its professionals in the field of intellectual property protection and enhance the legal consciousness of the government officials for trade administration. Those bilateral activities had played a positive role in bringing China's IPR protection system up to international standards and promoting the development of trade.

22. On the issue of enforcement of IPR protection, the representative of China said that the IPR protection provided by the Chinese Government did not stop at the achievements in the area of legislation. Concurrent with the continuous improvement on domestic legislation, consistent priorities had also been given to issues related to IPR protection like the sharpening of the awareness of IPR protection among the general public and the strengthening of the enforcement of IPR laws and regulations so as to ensure an effective IPR legal system on the national scale. The enforcement of IPR protection in China took the pattern of Parallel Channels and Coordinated Operation. Where infringement occurs, the right holders of intellectual property might either bring a lawsuit to the court or file a complaint to the governing administrative agencies. The administrative agencies might take various measures as remedies for IPR protection, including orders to stop the infringement and imposition of fines. Cooperation among governmental agencies responsible for IPR enforcement had been continuously strengthened. In May of the year 2001, the State Administration of Industry and Commerce, the Ministry of Public Security and the State Intellectual Property Office had convened the State Council IPR work conference and reached consensus on the establishment of an inter-agency liaison mechanism, including with information-sharing system and an enforcement-coordination system. Administrative measures were welcomed by right holders for their quick response to infringing activities and low cost.

23. The Chinese Government at all levels was fully aware of the role played by IPR protection in promoting economic development. Local authorities had promulgated a large number of regulations strengthening IPR protection in line with those at the national level. Effective measures including the cross-region joint actions were also taken to eliminate regional protectionism for infringers and crack down on illegal practice like counterfeiting. Cooperative networks on trademark enforcement had been established in provinces of the East China and North-East China. Members might refer to the documents provided by the Chinese delegation for further details and related statistics on IPR enforcement in China in 2001. In respect of the enforcement of Trademark Law, in the year 2001 there had been 41,163 trademark law violation cases in total. Infringers had been ordered to pay the right owners the damages of RMB 3,343,400 in total and there had been 86 cases transferred to criminal procedures. In respect of the enforcement of the Copyright Law, in the year 2001, copyright administrative authorities had accepted 4,416 cases in total, among which 4,306 cases had been concluded with rulings. Among those concluded, 3,607 cases had ended with the imposition of a fine upon the infringers; 633 cases had ended with mediation; and 66 cases had been transferred to criminal procedings. The Committee on Protection of Quality and Brands for Foreign Invested Enterprises in China had acknowledged the great importance attached and effective measures taken by the Chinese Government at all levels to crack down on counterfeited products.

24. The representative of China said that effective IPR protection was the incubator for inventions and creations, and also the driving force behind economic development and social innovation. Upgrading the level of the protection of IPRs was an irreversible trend and would, in the long run, serve the common interests of all countries. Finally, he thanked the Chairman for his efforts to have that review progressing smoothly, the Secretariat for its painstaking preparation, and Members for their active and meticulous attitude. With such an attitude, he believed that his delegation would hear comments that would be helpful for the cause of IPR protection in China.

25. The representative of Djibouti said that the area of TRIPS was very difficult and had significant implications, sometimes negative, for countries who simply did not have enough experience or who just had joined the WTO. He believed that when a country acceded to the WTO, it should be allowed time to manage this area. The WTO could not ask that all the TRIPS conditions be met. A certain

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time for reflection and for adaptation was necessary not only for China but also for other developing countries who did not have much experience in this field.

26. The representative of the European Communities appreciated the reference that the delegation of China had made to the programme of technical cooperation which had been in existence for several years between the European Communities and China. He thought that all Members could congratulate China for the progress it had made in this area. Last year, the European Communities had welcomed China's accession to the WTO, which came after 15 years of very difficult negotiations. China's accession was a historic leap forward for the WTO and making the WTO a truly global organization. Membership in the WTO would profit both China and its trading partners, reinforcing China's place in the global economy and ensuring a greater degree of certainty for traders in China. In that vein, the European Communities would continue to work with China in order to ensure that it took its full place in the WTO.

27. For the benefits of the WTO membership to be fully realised, it was essential that China implemented its terms of accession in a timely and comprehensive manner. The monitoring of China's WTO compliance would be a major EC priority in the years to come. The Chinese delegation had already demonstrated its commitment to this process. The European Communities counted on China to continue to do so and give an opportunity to review the progress on a regular basis. He said that China's improvement of its intellectual property legislation over recent years could be qualified as remarkable. With the exception of a number of outstanding concerns, generally speaking the framework of legislation protecting intellectual property rights in China was largely in line with international standards laid down in the TRIPS Agreement. Along with a number of other WTO Members, the European Communities had posed a number of questions with regard to the review of China's IP legislation. It had received the responses only last week. Therefore, his delegation was still analysing in detail the responses provided by China, and it might have to revert to this issue in the future and pose additional questions and ask for further explanations.

28. The European Communities and its member States had elaborated upon the current state of IP legislation in China in their communication on the transitional review mechanism of China (document IP/C/W/371). In paragraph 3 of that communication they had asked China to provide additional information, in particular, on the protection of undisclosed information pursuant to Article 39 of the TRIPS Agreement and on the protection of geographical indications. His delegation had recently had a chance to discuss the protection of geographical indications with the Chinese delegation, but continued to have questions concerning the functioning of that type of protection. In addition, he wished to discuss the current status of the Implementing Regulations of Copyright and Trademarks.

29. In the same document, the European Communities had also elaborated on the success story of China's implementing process of IP legislation. However, the European Communities were aware that further action was necessary in particular in the area of enforcement. The level of piracy and counterfeiting remained extremely and unacceptably high. He encouraged the Chinese authorities to continue to step up their efforts to fight piracy and counterfeiting. In his view, the inter-agency authority was of extreme importance. In many countries, there was a need for many different agencies to cooperate with each other in order to have coordinated action, in particular, to fight piracy and counterfeiting. In their communication, the European Communities had encouraged China to establish a clear and comprehensive long term strategy in the area of enforcement of IP rights. Despite the major efforts that had already been undertaken, a well-designed strategy playing out over several years was indispensable. The European Communities were willing to explore with the Chinese authorities how enforcement could be further enhanced. He hoped that the Chinese authorities would carefully look at the suggestions in paragraph 10 of the communication, and he was looking forward to discussing with China any follow-up to the communication.

30. He said that in the area of enforcement, it was important that the Chinese authorities examined whether to raise the upper limit of administrative penalties. Also, the provision regarding

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compensation for losses should be reconsidered so that judiciary recourse would become more attractive. In the case of repeat offenders, the criteria for criminal prosecution should be lessened. Some terms in the Criminal Code, such as "relatively high sales" or "extremely serious conditions", should be defined more precisely. The procedure for requesting a trademark to be considered as a well-known mark should be clarified. He hoped that the Trademark Office, with the issuance of new Trademark Law and the Implementing Regulations, would begin processing applications for foreign well-known trademarks. The Chinese customs should be empowered to transfer serious cases they discovered to prosecutors for criminal investigation and prosecution. Both the high bonds and storage fees that were requested by the Chinese custom authorities had been responsible for deterring many IP owners from recording their rights with the customs. Such bonds should be lessened.

31. Finally, he indicated that the European Communities and its member States were committed to continuing their programme of technical cooperation with China in this area, in particular with regard to enforcement.

32. The representative of Korea expressed his appreciation of the opening remarks of the Chinese delegation outlining China's policy to increase IPR protection in China and to honour its commitments under the TRIPS Agreement and other international agreements. Korea also welcomed China's recent notification of its TRIPS implementing laws and regulations, together with its responses to the Checklist of Issues on Enforcement, which reflected China's efforts to meet its obligations as a new Member and to bring its domestic laws and regulations in line with the TRIPS Agreement. Korea looked forward to close cooperation with China in the area of intellectual property as it expected that bilateral transactions in that area would grow substantially in the coming years along with the overall expansion of trade between the two countries.

33. He thanked China for the prompt responses that it had received to many of the questions it had posed to it. This demonstrated China's sincere endeavour to stand by its commitments to the TRIPS Agreement and strengthened multilateral trading system. Korea expected that responses to the outstanding questions would be provided in due course.

34. The representative of Japan thanked the delegation of China for its presentation. In accordance with Section 18 of the Protocol on the Accession of People's Republic of China which established the process for the Transitional Review Mechanism (the "TRM"), he provided the following comments on China's implementation of the TRIPS Agreement.

35. He said that Japan appreciated China's efforts to provide legislation protecting intellectual property rights over the recent years. A number of laws had been introduced and that administrative and judicial functions for the enforcement of those laws had also been improved. He believed that those efforts would promote international economic activities, and facilitate developmental and technological improvements in China. Japan hoped China would notify the TRIPS Council of relevant laws and regulations that had not yet been notified, and wished to further clarify the situation in regard to laws and regulations and their enforcement through the questions that Japan had already posed and would pose, and replies to those questions.

36. Japan was concerned about the serious situation in regard to intellectual property rights' infringements, including counterfeiting and piracy, in China. Damages were growing serious and export of infringing goods to third countries was beginning to have negative effects on international trade. While it noted the efforts of the Chinese Government to solve these problems, Japan hoped that China would take further steps to improve the situation. He said that, in Japan, an organization consisting of over 150 companies and associations from many industries had been set up in April 2002 to address these problems. It had recently submitted an urgent request to the Japanese Government concerning problems in China. The Japanese private sector as well as the Government were highly interested in the protection of intellectual property rights in China.

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37. Based on the above circumstances, Japan requested the Chinese Government to address the following points in a timely manner. Given that, at present, his delegation did not have sufficient information on the Chinese legal system and its enforcement, it might wish to raise further points in the future, after gaining a clearer picture of the situation.

38. Firstly, the representative of Japan expressed his concern that the Chinese Government's enforcement was inadequate in view of Part II of the Protocol, including Articles 41 and 61. Japan requested further improvements in the enforcement of existing legal protection on the following aspects: (a) Criminal Procedures: active implementation of criminal prosecution, including amendments in the guidelines for criminal prosecution, strengthening of criminal penalties; (b) Administrative Procedures: improvement in enforcement by administrative agencies, imposition of maximum administrative penalties and raising of upper limit of administrative penalties; (c) Judiciary Procedures: review of provision of compensation for losses in order to facilitate judiciary recourse; (d) Improvements in export regulations and laws, and the efficacy of controls against the export of infringing goods; (e) Strengthened cooperation among different enforcement authorities; (f) Elimination of local protectionism: the Chinese Government's strong leadership was required to prevent regional governments and administrative agencies from favouring local industries; (g) Destruction of goods that infringe rights: Japan requested that authorities completely destroy seized infringing goods, in order to prevent repetition of counterfeit crimes, and that they do not charge a fee for destruction from the right holders.

39. As regards the patent examination processes, he said that he appreciated China's efforts to eliminate delays in patent examination processes, but he was still concerned about the possibility that these delays might undermine the objectives of Article 62.2 of the TRIPS Agreement.

40. As regards the protection of well-known trademarks, he said that he was concerned that foreign well-known trademarks were not given equal treatment with Chinese trademarks. He requested clarification of how the current list of well-known trademarks under the old law would be treated in the new Implementing Regulations of the Trademark Law, and whether there would be any new list of well-known trademarks under the new regulations. He asked China to confirm that the existence of the list of well-known trademarks under the old law would not cause foreign well-known trademarks to be treated less favourably than domestic well-known trademarks under the new legal regime in term of their protection, including criminal enforcement.

41. As regards licensing regulations on patents and know-how, he said that his delegation was concerned that some licensing provisions, including Article 24 of the Technology Import/Export Control Regulations, imposed on foreign licenser heavier burden than on domestic licensers. He requested this concern to be addressed appropriately.

42. As regards the system requiring foreign patent applicants to use representative offices designated as those for foreign applicants, he said that, under Article 19 of Patent Law and Article 18 of Trademark Law, foreign applicants were required to carry out procedures to obtain patent/trademark rights in China through representative offices designated by the Chinese Government as those for foreign applicants. That could put foreign applicants at a disadvantage. He requested the issue to be addressed appropriately.

43. In concluding, he expressed his appreciation of the efforts by China over recent years to improve its intellectual property rights regime. Although the protection of IP had already been strengthened in a number of ways, there remained a lot of things that the Chinese Government could do. His delegation strongly hoped that China would further strengthen protection of IPR in China. Finally, he said that he wished to have his comments included in the TRIPS Council's report to the General Council on the TRM, bearing in mind a possible recommendation by the General Council according to paragraph 18.2 of the Protocol on the Accession of China.

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44. The representative of the United States recognized and appreciated the hard work done by China's legislators, administrative officials, judicial officials, and others in reviewing, enacting and drafting new intellectual property laws and regulations as part of implementing China's WTO commitments and in strengthening China's legal regime for the protection and enforcement of intellectual property. He said that his delegation recognized that, in addition to revision of key laws, such as patent, trademark and copyright law, conducted over the past two years, China had had to enact, revise or annul many central government laws, regulations and other measures as well as sub-central measures dealing with intellectual property.

45. He expressed his appreciation of the presentation by the Chinese delegation and the considerable effort that had been made in responding to the US questions in such a complete manner. He said that, in addition to the obligations contained in the TRIPS Agreement, the comments and questions his delegation had submitted had been based on the Report of the Working Party on the Accession of China (WT/MIN(01)/3) (the "WPR") and intended to form a part of the transitional review mechanism.

46. He said that the United States considered transparency in making laws, regulations, rules and other measures, including the opportunity to provide comments on such provisions as set forth in Section 2, paragraph 2(C) of China's Protocol of Accession and in paragraphs 324 through 336 of the WPR to be a key aspect of China's WTO commitments. In particular, he said that China had committed to publish its laws, regulations and other measures in an official journal and provide a reasonable period for comment to the appropriate authorities before such measures were implemented. Moreover, China had agreed that to make these laws, regulations and other measures available to WTO Members upon request before they were implemented or enforced. The Law on Legislation authorised officials to provide the opportunity to receive comments and required publication of laws, regulations and other measures. He said that the United States strongly urged China to provide this opportunity in all cases. He also said that the United States had certainly appreciated the opportunity to work with China in developing its law and regulations.

47. He said that the United States did share the concerns expressed by other Members regarding the high level of piracy and counterfeiting in China. He urged China to take further steps to significantly reduce overall rates of infringement. He said that the United States looked forward to continued bilateral cooperation with China that it had enjoyed for some time in order to complete the revisions of its trademark and copyright implementing regulations as well as assisting China in its efforts to harmonize its laws with new treaties to which it might wish to accede, such as the WIPO Copyright Treaty and one WIPO Performances and Phonograms Treaty.

48. Finally, he said that his delegation had had only a brief period of time to review the answers that China had provided to its questions. But as a result of that brief review, it wished to pose a few follow-up questions in several key areas, and it might have additional follow-up questions later on.

49. The representative of Switzerland thanked the delegation of China for the presentation and the summary of new Chinese IP legislation. He congratulated China for its commitment and considerable efforts to bring its legislative framework in compliance with its TRIPS obligations. Effective legal protection of IPRs and in particular the consistent enforcement of that legislation played a crucial role for the economic development and integration into the international trade community and the WTO. He said that his delegation had received responses from China to the questions that it had submitted. It would submit a few follow-up questions to the Chinese delegation in the course of the week.

50. The representative of Australia thanked China for the information it had provided during the Council's meeting and for the responses to the questions posed by his delegation. He recognized China's achievements in developing IP law and increasing awareness among Chinese officials and business of the importance of strong IPR protection and enforcement. He also noted the concerns expressed by some delegations about China's implementation of its TRIPS obligations. He welcomed

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China's willingness to continue its efforts to improve TRIPS implementation and an opportunity to engage with China in these efforts in the WTO, in a regional forum like APEC, and at the bilateral level where they had established an effective dialogue on a number of IP issues.

51. The representative of Pakistan thanked the delegation of China for its very concise and comprehensive presentation, and congratulated China for implementing its obligations under its Protocol of Accession. It was a commendable performance given the numerous tasks of amending major laws and regulations governing the protection of IPRs. He said that WTO Members should also acknowledge the swiftness with which China had responded to its obligations, as well as to the questions raised by other Members. This was an ample evidence of the level of seriousness that the Chinese Government attached to its accession to the WTO. The obligations should not be more onerous than what had been taken on by the rest of the membership. Finally, he assured China about the full cooperation of his delegation as and when required.

52. The representative of Canada congratulated China on the tremendous progress it had made in a very short time, and thanked it for its comprehensive overview and responses to questions posed by her delegation. It was clear that China was working hard to bring broad changes that complied with the TRIPS Agreement. She particularly appreciated the Chinese delegation's comments on the enforcement measures China had already implemented. She encouraged China to continue to work on this very important aspect of IPRs. Her delegation was studying the responses it had received and it might have some follow-up questions.

53. The representative of China said that his delegation appreciated very much the comments and questions given by various delegations. He thanked them all for their active participation and their input for this review. Furthermore, he wished to comment on certain questions that seemed to be of common concern to other Members.

54. As regards copyright, he said that after the revised Implementing Regulation would enter into force, each local copyright administration department could investigate and deal with all infringing acts (including those involving foreign right owners) that took place in its own administrative area, without the necessity of requiring approval by the copyright administration department under the State Council. Accordingly, there was no different procedure applicable to domestic cases involving foreign companies as regards administrative penalties. Article 21 of the revised Implementing Regulations of Copyright Law provided that the use in accordance with the Copyright Law of a published work without permission from copyright owners shall not conflict with a normal exploitation of the work and shall not unreasonably prejudice the legitimate interests of the copyright owner. This provision was in conformity with the renowned "three-step standard of examination" enshrined in the Berne Convention and the TRIPS Agreement. In the enforcement of the Copyright Law, the application of either the "reasonable exploitation" or the "legitimate statutory licensing " should not be in violation with the above-mentioned provision.

55. On patents, he said that the consultation process provided for in Article 57 of the Patent Law of the People's Republic of China was optional. It was neither mandatory nor a prerequisite for instituting legal proceedings in the court. It was his understanding that consultation before taking legal actions or going for dispute settlement outside of court was a regular practice to settle disputes in most countries. According to Article 10 of the Patent Law of the People's Republic of China, where Chinese entities or individuals intended to assign their right to apply for patent or patent right to foreigners, they must obtain the approval of the competent department concerned of the State Council. This was not applicable to foreigners assigning their right to apply for a patent or patent right to Chinese entity or individuals or to foreigners. Hence there was no conflict between Article 10 of China's patent Law and Article 3 of the TRIPS Agreement.

56. On trademarks, he said that the requirement for foreigners to use a designated trademark agency was an international practice rather than something unique to China. Such practice was in full

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compliance with the requirements of Article 2.3 of the Paris Convention and Article 3 of the TRIPS Agreement. The problem of only some trademark agents can be used by foreign enterprise no longer existed. From 1 January 2001, all trademark agencies legally established were entitled to deal with foreign business on trademarks. Moreover, foreigners who needed to use an agent referred to those who were not domiciled or did not have industrial or commercial establishment in China. According to the Trademark Law and its Implementing Regulations, the protection of well-known marks was applied equally to the domestic and foreign right holders. China had provided a very high level of protection for foreign well-known marks such as IBM, Adidas, Nike, just to mention a few of them. The information on the list of well-known trademarks and the website that provided the information was not accurate. Clarifying two points in this regard, he said that, firstly, the list was simply a record of cases that the Trademark Office had dealt with. It did not mean that those not on the list were not protected as well-known marks. Secondly, the protection of well-known marks was specifically provided in the newly revised Trademark Law and its Implementing Regulations. The specific procedural rules on the determination of the well-known marks were under revision. Where a dispute arose, the owner of a well-known trademark might be enlisted by approaching either administrative or judiciary authorities for the determination on whether his mark was well-known or not. Where a mark was so determined, the application for registration of the other party must be rejected. The disputed registration must be cancelled and the use of the disputed mark must be prohibited.

57. On layout-designs of integrated circuits, he said that the provisions of the Regulations on the Protection of Layout-Designs of Integrated Circuits were fully in conformity with the provisions in Section 6 of Part two of the TRIPS Agreement. If the discrete complied with the provisions of Articles 2 and Article 4 of the Regulations, it could be protected through applying for a registration of a layout-design under the Regulations. Where the discrete did not meet the requirements of the Regulations and thus could not be protected by the Regulations, it was still possible to have it protected as trade secrets under the Anti-Unfair Competition Law. In addition, if the technology involved in the discrete met the requirements for applying for a patent as provided for in the Patent Law, patent protection could be sought through applying for a patent.

58. On geographical indications, he said that geographical indications were protected mainly under the system of trademark law and its implementing regulations. Articles 3, 16, 52 and 53 of the Trademark Law and the relevant provisions of the revised Implementing Regulations provided adequate protection for geographical indications as required under Article 22.2 of the TRIPS Agreement. In addition, Anti-Unfair Competition Law also provided protection for geographical indications.

59. On enforcement, he said that, in China, administrative authorities had the authority to impose sufficient penalties to prevent or deter further infringement. For instance, in accordance with Article 47 of the Copyright Law, copyright administration might impose administrative penalties on an infringer who also prejudiced the public interests. Such penalties included: ordering the infringing act to be ceased; confiscating the unlawful income; confiscating or destroying the infringing copies; imposing a fine and confiscating the material, tools and instrument mainly used to produce infringing copies. For serious offenders, the provisions provided sufficient legal basis for preventing or deterring further infringement through judicial procedures. For the infringement of trademarks and copyright, the offender shall be sentenced to a set term of imprisonment of not more than three years or criminal detention, and concurrently or independently be sentenced to a fine. If the sum from the sale is high, the offender shall be sentenced to a set term of imprisonment of no less than three years and not more than seven years and concurrently be sentenced to a fine. In accordance with Article 48 of the Copyright Law, an infringer had to pay compensation for damages pursuant to the actual loss of the right owner or to the unlawful income of the infringer. In case the actual loss of the right owner or the unlawful income of the infringer could not be determined, the court may decide on compensation not more than 500,000 yuan in RMB. Generally speaking, the maximum of 500,000 yuan in RMB was per lawsuit. For infringement of a patent, the offender shall be sentenced to fixed-term imprisonment of not more that three years or criminal detention and concurrently or independently be

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sentenced to a fine. With regard to China's protection of intellectual property, he said that it was fully in compliance with the requirements set forth in Article 61 of the TRIPS Agreement in respect of criminal law and criminal punishment. The degree of China's criminal punishment was one of the severest in the world.

60. He explained that these were initial comments and answers to some of the questions raised at the meeting. For other questions his delegation had either provided written answers before the meeting or would provide them as soon as possible after the meeting.

61. Finally, he said that he strongly believed this review had been very helpful for China to further strengthen its enforcement of IPR protection. China had every reason to provide a high level of IPR protection since China was having a growing number of local inventions and famous trademarks to be protected. Besides, whether China could attract more foreign investment to China and whether foreign enterprises would like to bring in new technologies to China depended very much on the level of its protection of IPRs. Although this was the first year of China's membership, China had already seen a sharp increase of inflow of foreign investments which demonstrated the great determination of the Chinese Government to protect IPRs and the progress it had achieved so far in this field.

62. The Chairman suggested that the Council offer an opportunity to the Chinese delegation to respond to any initial or follow-up questions to which it had not yet responded later in the course of the meeting. If there were any written questions and responses which could not be given by the end of this meeting, then in accordance with the normal procedure of this Council, there would be the opportunity for those delegations who wished to submit their questions to do so after the meeting.

63. The Council so agreed.1

Chinese Taipei

64. The Chairman recalled that, at its meeting in March 2002, the Council had decided to review the legislation of Chinese Taipei at the present meeting. The Secretariat had received a notification of the TRIPS implementing laws and regulations from Chinese Taipei, as well as its responses to the Checklist of Issues on Enforcement. He said that the notification of Chinese Taipei had been circulated in document IP/N/1/TPKM/1 and the texts of its main laws and regulations in the related laws series documents. The responses to the Checklist on Issues of Enforcement were available in document IP/N/6/TPKM/1. Chinese Taipei had received questions from Australia, Canada, the European Communities and their member States, Japan, Korea, the United States and Switzerland (documents IP/C/W/364, 366, 367, 362, 380, 379 and 372, respectively ). The responses to Japan had been circulated in advance of the meeting in document IP/C/W/373. The Secretariat had recently received copies of the responses to Australia, Canada, the European Communities and their member States, Korea, the United States and Switzerland (subsequently circulated in document IP/C/W/373/Add.1). In addition, Japan had just submitted additional and follow-up questions (subsequently circulated in document IP/C/W/362/Add.1).

65. The representative of Chinese Taipei said that since Chinese Taipei became a WTO Member on 1 January 2002, his delegation had submitted a total of 26 notifications on Chinese Taipei's IP related laws and regulations. In the past couple of years, members of the working party on Chinese Taipei's accession to the WTO had made a great effort to review all relevant laws and regulations in order to ensure their WTO conformity. Chinese Taipei's IP legislation, in particular, was one of the areas in respect of which members of the working party had expressed their satisfaction. However, his Government would not be contented with the past achievements. It understood that IP related matters evolved with ever growing society and legislation should be able to cope with the rapid progress in modern technology.

1 For further discussion, see paragraphs 84-96 below.

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66. In order to respond to these challenges, several draft amendments to copyright law, trademark law, patent law and plant seed law were now under either administrative or legislative review. His delegation would notify the Council after the completion of these amendments. He said that the Council was welcome to take up these matters and arrange their review in due course. In fact, some Members had already demonstrated their interest in them by raising specific questions concerning these draft amendments. For the sake of transparency, his delegation would try its best to address these questions even though the amendment proposals were not yet ready for review. His Government had attached great importance to this review exercise, and it had organised a big team from the relevant agencies to answer the questions already submitted and to any follow-up questions, to the extent possible, already at he present meeting. He expressed his gratitude to those Members who had posed questions for the close interest that they had taken in Chinese Taipei IP legislation.

67. He said that his Government had always considered the constant improvement of IPR protection a high priority on its trade agenda. Chinese Taipei firmly believed that technological innovation, transfer and dissemination of technology could only be promoted through adequate and proper IPR protection, and this was instrumental to its sustainable trade development conducive to the enhancement of its social and economic welfare. Chinese Taipei recognized the importance of bringing its IPR regime into compliance with international norms. In connection with its accession to the WTO, Chinese Taipei Government had revised and implemented IPR laws and regulations to bring the level of its IPR protection regime not only in conformity with the TRIPS Agreement but also with other relevant international conventions. He said that his Government continued to duly modify its IPR-related laws and regulations to conform to international norms. Noting that Members had raised questions relating to Chinese Taipei's copyright, trademark, geographical indications, industrial designs, patents, plant varieties, IC layouts, undisclosed information, and enforcement, he introduced a few main points of the legal system in each field of intellectual property rights in order to enable Members to comprehend the issues within a broader perspective and with reference to the Chinese Taipei IPR legislative system.

68. The current Copyright Law, which had entered into force on 14 November 2001, was formulated in accordance with the TRIPS Agreement in combination with the Berne Convention. All the nationals of WTO Members were entitled to receive the same level of copyright protection as theirs. The Copyright Law provided for, retroactively, from the date of Chinese Taipei's accession to the WTO, the term of copyright protection for author's life plus fifty years or fifty years from the date of first publication.

69. The existing Trademark Law had been amended in 1997 and put into force on 1 November 1998. Combinations of colours were eligible for protection. In addition, the right holder might now request for the destruction or other necessary disposal of the infringing goods or of the materials or implements that had been utilised to conduct such infringing act. In order to further extend protection on well-known trademarks or service marks, Chinese Taipei had referred to the Joint Recommendation concerning provisions on the protection of well-known marks that had been adopted by the assembly of the Paris Union for the protection of industrial property and by the General Assembly of WIPO in September 1999. The Main Points for Determining Well-Known Marks and Service Marks 2000 had been established in accordance with the said Joint Recommendation. Geographical indications were protected as required by the TRIPS Agreement. Relevant laws and regulations to provide such protection included the Fair Trade Law and Trademark Law. In addition, the Tobacco and Alcohol Administration Law had been enacted on 19 April 2000. Under the said law, the Regulations Governing the Labeling of the Alcohol Products had been enacted on 30 December 2000. Those provisions provided alcohol products with the additional protection.

70. Invention patents, new utility model patents and new design patents were protected under Chinese Taipei's Patent Law. The latest amendment to the Patent Law, in connection with its accession to the WTO, had entered into force on 1 January 2002. Provisions such as national treatment of priority claim, patentable subject-matter, term of protection, rights conferred, exceptions to rights conferred

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and other use without authorization of the right holder were in conformity with the TRIPS Agreement. The Integrated Circuit Layout Protection Act had been put into force on 11 February 1996. It complied with the TRIPS Agreement and the Treaty on Intellectual Property in Respect of Integrated Circuits (adopted in Washington on 26 May 1989). Part of the Integrated Circuit Layout Protection Act had been amended and promulgated on 12 June 2002. The protection of trade secrets had originally been found in regulations deriving from the Civil Law, Criminal Law and Fair Trade Law. Pursuant to Article 39.2 of the TRIPS Agreement, the Government had enacted the Trade Secret Law in 1996 to clarify provisions governing the related definition, belonging, infringement and civil compensations. The post-marketing surveillance system on new drugs had been implemented since 1993. All test data submitted for the approval of the competent authority enjoyed the above-mentioned pipeline protection. He believed that this system was in conformity with Article 3 9 of the TRIPS Agreement.

71. IPR enforcement was of great importance to IP protection. Chinese Taipei had undertaken stringent enforcement measures to deal with trademark counterfeiting and copyright piracy. The enforcement mechanism of intellectual property rights involved government agencies at different levels, including courts, prosecution offices, police, Customs, Intellectual Property Office and the Anti-Counterfeiting Committee of the Ministry of Economic Affairs. The Implementation Regulation for Suspension of Release of Goods Infringing on Copyrights or Plate Rights by Customs Authorities had been implemented to prohibit the importation and exportation of goods that violated copyright laws. To combat counterfeiting and piracy activities, in particular, on pirated optical disks, the Optical Disk Law (ODL) had been enacted and it had entered into force on 16 November 2001. The Joint Optical Disk Enforcement Task Force (JODE) – a team dedicated to combat counterfeiting and piracy – had been established to integrate the personnel and resources of relevant authorities to effectively crack down, with the assistance of the police force, counterfeiting and piracy. Business entities were not allowed to manufacture optical disks unless they obtained the approval for filing of source identification code of optical disks in advance. To raise public awareness on the importance of IPR protection, the Government had declared the year 2002 as the "Action Year of IPR Protection". In conjunction of this announcement, numerous crackdowns had been carried out islandwide on counterfeiting and piracy since 30 January 2002. It was expected that more and better performance results would be achieved.

72. Chinese Taipei attached great importance to adequate and effective IPR protection. It also looked at IPR protection as an indispensable part of daily life. As a Member of the WTO, the Government would actively participate in the ongoing multilateral trade negotiations on the TRIPS Agreement. Chinese Taipei was determined to bring its IP-related laws and regulations into conformity with the TRIPS Agreement and other relevant international conventions.

73. In conclusion, the representative of Chinese Taipei said that the era of information technology had brought huge impact on the scope and architecture of the IPR protection regime. To deal with such an unprecedented challenge, WTO Members had properly and timely revised their IPR-related disciplines. Chinese Taipei was no exception. To keep its IPR regime duly updated in parallel with that taking place both at the WTO and in other international conventions, Chinese Taipei believed that technical assistance was necessary. This would enable it to have access to relevant IPR-related information and to participate in IPR-related activities, and enable it to fulfill its notification obligations reflecting transparency as required by the TRIPS Agreement.

74. The representative of Japan thanked Chinese Taipei for its comprehensive presentation and responses to Japan's questions. He said that the forum established by the Industrial Association had submitted to the Government of Japan a set of urgent requests on 12 September 2002 on the implementation of IP by Chinese Taipei. He believed that these requests reflected the strong interest that the Japanese Government and the private sector had on the protection of IPRs in Chinese Taipei.

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75. The representative of Korea welcomed Chinese Taipei's comprehensive presentation and notification of its TRIPS-implementing laws and regulations. He expressed his appreciation of Chinese Taipei's efforts to bring its IP regime in full conformity with the TRIPS Agreement, and looked forward to a close cooperation with Chinese Taipei in the IP area, as it was one of Korea's important trading partners in the region. He appreciated Chinese Taipei's prompt answers to the questions posed by his delegation.

76. The representative of the United States thanked the delegation of Chinese Taipei for its presentation, its answers to US questions as well as its extensive efforts to bring Chinese Taipei IP regime in line with its WTO obligations. The US had enjoyed a long relationship with Chinese Taipei on the issue of IP and recognized the progress that had been made, but he drew attention to the fact that IP situation in Chinese Taipei remained extremely serious. He expressed particular concerns both with respect to the need to complete the process of amending Chinese Taipei's copyright law to bring it into full conformity with TRIPS obligations, but also with respect to the situation of enforcement against copyright piracy. In particular, he drew Members' attention to question 12, posed by the United States on the issue of enforcement. In this question, the United States had drawn the attention to the fact that the level of optical disc media piracy in Chinese Taipei continued to be high despite the recent enactment of optical disc law. It had been reported that the losses to US copyright industry had totalled over 300 million in 2001 as a result of piracy. It had been further reported that Chinese Taipei had at least 61 known optical media plants and 9 or more underground plants containing over 11 hundred replication lines, including 93 DVD lines, over 200 VCD lines and over 800 CDR lines. All of these lines were engaged in manufacture of finished optical media products, including CDs, CD ROMs, VCDs, DVDs and CDRs, as well as blank media. The total potential production capacity of these plants, that was not including the CDR capacity, was over one billion. That dwarfed by far the 40 billion units legitimate domestic demand. Finally, he expressed his appreciation of the fact that Chinese Taipei had identified this year as a special year of enforcement. He said that his Government was committed to working with Chinese Taipei to change and significantly reduce the level of copyright piracy, particularly optical disc piracy in this year of enforcement. He hoped that his government could look to a drastically improved situation in the not too distant future.

77. The representative of Switzerland expressed his appreciation of Chinese Taipei's comprehensive presentation, and said that the choice of the year of 2002 as the year of IP protection was a symbol of its commitment to IP protection. He hoped that the measures and additional initiatives Chinese Taipei was taking this year would be successful and sustainable, in particular in the field of enforcement. He also looked forward to cooperating with Chinese Taipei in the area of IP. In addition, he said that his delegation had received from Chinese Taipei the responses to their questions in the course of its review procedure. It had analyzed these responses and had no follow-up questions for the time being, but reserved its right to come back with further question if necessary in the course of procedure.

78. The representative of Canada joined the other Members expressing appreciation to Chinese Taipei for its work to implement its TRIPS obligations and for its comprehensive report. While it was clear that Chinese Taipei was taking many important steps to implement the TRIPS Agreement and the obligations contained therein, she agreed that there was still some work to be done. In addition, she thanked for the answers to Canada's questions.

79. The representative of Australia thanked Chinese Taipei for the presentation and responses to the questions posted by Australia. Australia and Chinese Taipei had a positive bilateral trade relationship in the area of IPR, and thus cooperated closely in other fora, such as APEC. Australia welcomed the efforts made by Chinese Taipei to bring its legislation in line with the standards provided under the TRIPS Agreement. He had also noted some concerns expressed by some other delegations, and appreciated Chinese Taipei's willingness to engage further with other Members on these issues.

80. The representative of the European Communities thanked Chinese Taipei for the information it had provided, and said that he recognized that it had significantly enhanced the protection of IPRs

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over the last several years. However, to respond to the continued complaints about insufficient enforcement, Chinese Taipei should urgently work on setting up an adequate enforcement system, commencing with the judicial system and adequate training of IPR judges. The EC industry had been particularly concerned about inadequate enforcement efforts vis-a-vis persistent manufacturing and exportation of pirated software, video games and other optical media, including in particular compact disc piracy. Another concern was the lack of adequate protection for the packaging and presentation of goods ( "trade dresses"). In Chinese Taipei, the problem of look-alikes was particularly serious for consumer goods and spirits. There was a widespread copying of colour combinations, shapes and materials of the appearance of well-known European brands. The problem of false labelling and "look-alike" products would probably be reduced if Chinese Taipei were to introduce adequate protection for geographical indications as it ought to do under Article 23 of the TRIPS Agreement. Therefore, he urged Chinese Taipei to comply with Article 23 of the TRIPS Agreement whereby additional protection to wines and spirits should be granted, not only to prevent a third party from registering a trademark containing a geographical indication but also to prevent a third party from using such a sign in the course of commerce.

81. The representative of Chinese Taipei thanked all the delegations who had provided questions and remarks as well as encouragement to Chinese Taiwan's IP legislation efforts as well as enforcement. He said that his Government was determined to fully comply with the TRIPS Agreement and the WTO rules on IPR legislation and practice, and it welcomed Members to pose follow-up questions during the Council meeting or afterwards. He provided initial oral responses to the additional and follow-up questions posed by Japan (subsequent written responses can be found in document IP/C/W373/Add.1). In concluding, he thanked all the delegations that had been working with his delegation by providing information and questions as well as continued communication with it. He also reiterated that his Government was determined to comply with the TRIPS Agreement and all WTO rules fully.

82. The Chairman suggested that the Council offer an opportunity to the Chinese Taipei delegation to respond to any initial or follow-up question to which it had not yet responded in the course of the meeting.

83. The Council so agreed.

Further Discussion

84. Reverting to this agenda item, the Chairman recalled that the Council had agreed to provide the opportunity to the delegations of China and Chinese Taipei to respond to any initial or follow-up questions to which they had not yet had an opportunity to respond. He said that China had already provided its responses to some of the questions that it had received from Korea, but it had not yet been able to respond to all of the questions. China had received some additional questions from Japan, and follow-up questions from the United States.

85. The representative of China said that, after the completion of the TRM review of China two days earlier, Japan and the United States had posed some follow-up questions to China. China had already provided respective written replies with copies to the Secretariat (subsequently circulated in document IP/C/W374/Add.2). If Japan or the United States would have further questions, China wished to discuss with them and other WTO Members in the framework of the standard legislation review, on a bilateral basis, or through China's WTO enquiry points based in MOFTEC (Ministry of Foreign Trade and Economic Cooperation). For the remaining questions raised by Korea, he said that his delegation would provide written replies as soon as possible.

86. The Chairman recalled that Chinese Taipei had already provided oral responses to some of the questions posed by Japan, and Chinese Taipei had received some follow-up questions from the United States.

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87. The representative of Chinese Taipei said that, after Tuesday's meeting, in addition to the follow-up questions posed by Japan, his delegation had received the follow-up questions from the United States. After providing oral responses to some of them, he said that written responses would be submitted shortly (subsequently circulated in document IP/C/W/373/Add.2). In concluding, he said that his delegation was eager to see the early completion of the legislation review and it would do its utmost to answer all the follow-up questions in a timely fashion.

88. The representative of Japan thanked China for its prompt written responses to his delegation's additional questions. His delegation was still analysing the written responses to its initial questions. In addition to these responses, it wished to look at the additional documents submitted two days earlier by China. Then it would like to raise further questions and comments in the process of the TRM review of this year.

89. The representative of the United States thanked both Chinese Taipei and China for their efforts at the present meeting to respond his delegation's follow-up questions. He appreciated the efforts and opportunity to clarify certain issues. He said that his delegation intended to review the answers in some more detail and might follow up with some additional questions as part of the transitional review mechanism.

90. The representative of China said that China was ready to discuss with other WTO Members follow-up questions in the framework of the legislation review, bilaterally or through China's WTO enquiry point. The TRM exercise must proceed on the basis of Article 18 of China's Protocol of Accession to the WTO. China was not obliged to share any responsibility beyond that provision.

91. The Chairman said that in accordance with the normal procedures, the Council should agree on a time-frame for any further follow-up questions and responses to those follow-up questions. He suggested that the Council provide the period until 11 October for any follow-up questions to be sent in writing with a copy to the Secretariat and for the period until 8 November for responses to be supplied in writing, again with a copy to the Secretariat.

92. With regard to China, he said that the Council also had to decide on the report that it had to make to the General Council in accordance with the transitional review mechanism. He suggested that the Secretariat be requested to draft a factual report which would describe what had happened and make reference to the documentation that had been produced, including the relevant parts of the Council's minutes.

93. The representative of Japan said that he understood that the report was to be submitted with a view to the review by the General Council and a possible recommendation from it under paragraph 18.2 of China's Protocol of Accession. It was up to the General Council to decide whether it should make a recommendation or not, but the TRIPS Council needed to provide the necessary information for the General Council's review and decision. Therefore, the report needed to accurately reflect the TRM review in the TRIPS Council, including Japan's specific concerns.

94. The representative of China said that paragraph 18 of the Protocol on China's Accession to the WTO said that " [c]onsideration of issues pursuant to this Section shall be without prejudice to rights and obligations of any Member, including China, under the WTO Agreement or any Plurilateral Trade Agreement". This meant that the process of the TRM should not create any excessive burdens on WTO Members, including China. The ultimate objective of the TRM was to facilitate and improve China's implementation of the WTO agreements and its commitments under the Protocol.

95. The Chairman recalled that the Council had agreed that its normal review of China's TRIPS implementation and the review under the transitional review mechanism would be combined and that the normal review would be conducted following Council's standard procedures.

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96. The Council took note of the statements made and agreed to proceed as suggested by the Chairman.

C. ISSUES RELATED TO THE EXTENSION OF THE PROTECTION OF GEOGRAPHICAL INDICATIONS PROVIDED FOR IN ARTICLE 23 TO PRODUCTS OTHER THAN WINES AND SPIRITS

97. The Chairman recalled that, organized in paragraph 18 of the Doha Ministerial Declaration, the Ministerial Conference had noted that "issues related to the extension of the protection of geographical indications provided for in Article 23 to products other than wines and spirits will be addressed in the Council for TRIPS pursuant to paragraph 12 of this Declaration". Since its last meeting, the Council had received a communication from Australia, Canada, Guatemala, New Zealand, Paraguay, the Philippines and the United States on the implications of Article 23 (document IP/C/W/360). In addition, the Council had just received a new communication from Argentina, Australia, Canada, Chile, Chinese Taipei, the Dominican Republic, El Salvador, Guatemala, New Zealand, Paraguay, the Philippines and the United States on the same matter (subsequently circulated in document IP/C/W/386).

98. As agreed by the Council at its last meeting, the Chairman had circulated a Checklist of Issues (document JOB(02)/117) in order to have a more systematic discussion on this topic at the present meeting. In preparing it, he had taken into account not only the debates at the June and earlier meetings of the Council but also subsequent communications from delegations and issues raised at informal consultations. He pointed out that the purpose of the Checklist was not to limit discussion, but rather to facilitate the debate and to do so in a more organized and systematic matter. Consequently, he stressed that all issues of significant concern to delegations must be open to discussion and that any checklist would necessarily be non-exhaustive. Regarding the relationship between the work under this agenda item and the work done under other agenda items and in other fora, he said that the Council could not exclude issues that some delegations considered important in relation to the Council's mandate. In this regard the Council would have to make sure that when it dealt with questions that were also being examined in other fora, it should take advantage of the work done elsewhere, rather than duplicate it. As to the timing, he recalled that the Council was required to report on this matter to the TNC by the end of the year. Thus, it was necessary that the Council timed the consideration of the items of the Checklist so that they would have been discussed by that time. That meant, in practical terms, that the Council had the present and November meetings for this purpose. If Members so wished and the meeting schedule permitted, an additional informal meeting could also be organized.

99. He noted that he had grouped the issues raised into three categories: The first concerned the legal issues relating to the differences between the general protection for geographical indications provided for in the TRIPS Agreement and the additional protection for GIs for wines and spirits. The second related to broader policy questions such as the impact on producers and consumers of any extended protection. The third concerned the impact on governments, in particular the administrative costs and burdens of the procedures associated with any extended protection. He suggested that the Council focus at the present meeting on the legal issues in the first category, given that they were issues which Members were hopefully equipped to address at short notice, and also because clarity in regard to these legal matters should contribute to a greater and better understanding of the possible impact of extended protection and also of procedural matters, to be discussed at a second stage at the November meeting. The Checklist also referred to a number of issues that could be taken up under the second and third baskets of issues in November.

100. Introducing the new communication from a number of developed and developing country Members (subsequently circulated in document IP/C/W/386), the representative of Guatemala said that the extension of Article 23 of the TRIPS Agreement to cover geographical indications for all products had been promoted as providing benefits to WTO Members and, surprisingly, had also been promoted as a solution to what some regarded as unfair special treatment for geographical indications

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for wines and spirits. Were both claims to be true, developed and developing country Members would stand to gain much from these alleged benefits. For that reason, his delegation had reviewed proposals aimed at extending Article 23 to geographical indications for products other than wines and spirits with an eye toward gaining such benefits for its industries and consumers. However, its review had led it to conclude that extension would not provide meaningful benefits, but would instead create new trade-related problems and difficulties. Not all WTO Members were producers or consumers of wine. Given the nature of the Council's work and the discussions held by it, the fact that some WTO Members had geographical indications for many products for which they sought additional protection, while other Members had only a few, if any, geographical indications to which such additional protection would apply was particularly relevant to the discussion on extension although, at first glance, it would have seemed beneficial to request an extension of Article 23 to geographical indications for products other than wines and spirits. A Member might only have a few geographical indications for domestic products in which it was interested but it would be obliged to provide the means to protect hundreds or thousands of geographical indications from Members with formal systems for such indications. Members needed to evaluate the true commercial opportunities they would receive as a result of an extension of Article 23 compared with the protection they would have to provide. The problem that Guatemala had with access of its products did not necessarily stem from difficulties with its geographical indications, but rather from other factors. Many developing countries would stand to benefit much more from greater market access and the dismantling of protectionism than from the extension under discussion.

101. WTO Members that were looking towards extension of Article 23 to provide protection for specific terms in the territories of other Members might discover that those terms did not receive protection because other Members had concluded that the terms did not meet the definition of a "geographical indication". He was not sure as to whether all Members considered country names to be eligible for protection as geographical indications. Thus, it was unlikely that the extension of the protection provided for in Article 23 to other products would provide the promised protection for all terms in all WTO Members. Geographical indications to which the exceptions under Article 24 did not apply already received sufficient protection under Article 22.2, the provisions of which applied to all geographical indications for all products of all WTO Members, and embodied the delicate balance between the needs and aspirations of producers, consumers and public policies. Article 22 provided for protection against misleading uses of geographical indications. The standards of Article 22 could ensure that geographical indications did not become generic, if they had not already become so through use that had been perfectly legitimate until now.

102. The promised benefits of an Article 23 extension would not be as comprehensive as some had claimed. These benefits would likely not be achieved because the terms for which protection was sought did not qualify as geographical indications under the definition of Article 22, or because they could be considered to be misleading to consumers, or because they would not be covered by an extension of Article 23 due to the fact that they were already under one of the Article 24 exceptions. Some delegations had indicated certain terms for which they would have desired Article 23-level protection. However, many of these terms were already generic in other countries. Extension of Article 23 would not provide protection for these terms because they would fall under the Article 24.6 exception for terms of customary usage and Members would not be obliged to protect them. Exceptions under Article 24.6 were established by each Member inside its own territory. A term which was generic in one Member might be a protected geographical indication in another. He noted with concern that a bilateral agreement could make it difficult for producers in a Member where a specific term was generic to export that product using the generic term to other markets.

103. He said that the new communication listed terms that had been mentioned in the TRIPS Council as examples of terms that deserved as much protection as wines and spirits, and would only receive such protection if the scope of Article 23 was extended. Many of these terms were sufficiently protected under the Article 22 standard without any confusion or would not be eligible for protection if Article 23 was extended. Although the document provided a number of examples, there

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would be many more to come, especially from developing countries which lacked experience with systems of protecting geographical indications.

104. Implementation of an extended Article 23 could involve major costs for governments, manufacturers and consumers in the form of new administrative mechanisms to implement the broadened standards, the need of re-labelling and repackaging, and the costs related to the confusion this change would impinge on consumers who would no longer be able to find the products they were accustomed to buy.

105. Concluding, the representative of Guatemala said that the extension of Article 23 to all goods would not be the panacea that many Members had envisioned. The benefits of such an extension would accrue to those WTO Members with many geographical indications protected under formal registration systems monitored and enforced by the government. The burden would fall on those Members with few, if any, geographical indications, on those that protected geographical indications through trademark and unfair competition regimes, and on those with domestic food industries that had for many years used, in marketing their products at home and abroad, geographical terms that originated in countries from which the founders of those industries had emigrated in search of new opportunities.

106. Turning to the Checklist, the Chairman said that the first topic that might be considered among the legal issues involved issues relating to protectable subject-matter. While some delegations had expressed the view that this matter did not need discussion in this context given that no change to the definition contained in Article 22.1 was envisaged, some other delegations had indicated that, given the different implications of extended protection, it was difficult to discuss this matter without more information as to the nature and number of terms that might be eligible for protection, as well as more information in regard to such matters as to the relative role of the country of origin and the country where protection was sought in determining the criteria for eligibility of protection, the eligibility of country names, non-place names and of so-called "traditional expressions", etc. The second topic involved issues relating to the protection to be granted, including the difference in the level of protection taking into account the exceptions provided for in Article 24, the difference in the treatment of the relationship between trademarks and geographical indications, and the difference in the treatment of homonymous geographical indications. He added that these were only suggestions on how the discussion could be organized.

107. The representative of Brazil said that her delegation was not a demandeur on the subject, but, taking into account its commitment to discuss implementation issues, it wished to comment on the current debate in the TRIPS Council on geographical indications. The review of the implementation by the WTO Secretariat offered comprehensive information on geographical indications from both the legal and administrative points of view. According to this document, geographical indications were protected in different ways by different countries. Diverse legal means were used to implement the TRIPS Agreement, ranging from trademarks to sui generis legislation. While the information contained in the note was useful for understanding how systems that provided protection for geographical indications worked, many aspects still remained to be addressed. Given that the economic aspects extension had not been sufficiently studied, an economic and statistical analysis of existing protected geographical indications would certainly be a helpful instrument in understanding the real impact of such protection. To date, no economic data or evidence had been provided about gains, benefits and market shares for groups such as producers, distributors and consumers, among others. The economic value of protected geographical indications had not been quantified or well estimated. Furthermore, there was no evidence of alleged economic losses arising out of a weaker level of protection. Another aspect that deserved further analysis was the cost of maintaining a system for the protection of geographical indications. In this regard, Members seeking extension should provide more information on costs, particularly administrative and legal, as well as on investment costs incurred by holders of protected geographical indications.

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108. Another matter of particular interest to countries like Brazil that had benefited from the historical influx of immigrants was the impact of extension on the cultural practices of their peoples. Given that extension could lead to the disruption of trade and even to market closure, she wondered whether it would be legitimate to deprive these peoples from practices that were closely linked to their cultural identity.

109. The representative of the Czech Republic said that extension would not have any implication on the definition of Article 22.1. The Czech Republic's aim was to ensure the application of the same level of protection to all geographical indications falling under that definition of Article 22.1, which itself applied to the Article 22 protection as well as to the Article 23 protection. In order to clarify her statement, she proposed leaving Article 22.1 as it was and changing Article 23 as follows:

"Each Member shall provide the legal means for interested parties to prevent the use of a geographical indication identifying goods for such goods not originating in the place indicated by the geographical indication in question, even where the true origin of the goods is indicated or the geographical indication is used in translation or accompanied by expression such a kind, type, style, imitation or the like".

110. The representative of Australia congratulated the Chairman for his initiative in putting forward a list of issues aiming at facilitating a more systematic discussion and agreed that the list was meant to be non-exhaustive. One could get the impression from the Checklist that this exercise was essentially about clarifying legal issues, the impact on producers and consumers, and the administrative costs of possible additional protection. In his view, the issues went well beyond what was described in the Checklist. They went to the heart of trade policy issues and to consequences for governments.

111. A week before the meeting a major report had been published by the Commission on Intellectual Property Rights (CIPR)2, which surveyed the promises and pitfalls of intellectual property rights for developing countries. Its central message, as portrayed by the media, was that developing countries should avoid committing themselves to rich-world systems of IPR protection, unless such systems were beneficial to their needs. Nor, it suggested, should rich countries push for anything stronger. It was interesting that in this report, which was generally critical of the Agreement and the costs of establishing intellectual property rights systems, when it addressed geographical indications it said that "in our view it is far from clear whether these countries, developing countries, will be able to gain significantly from the application of geographical indications". It suggested that further research was needed before developing countries should contemplate any new commitments, and this, as he understood it, was the approach Brazil had adopted. In his view, there had not been a thorough airing of the important policy implications of additional protection. Some delegations had argued that equity demanded that if additional protection for wines and spirits existed there should also be similar protection for other products. This completely ignored the fact that the bulk of Members made no distinction between the protection of Article 22 and the protection of Article 23 in their home markets. It also ignored the fact that Article 23 protected one large group of wine producing countries at the expense of new competitors. Why had all other wine producing nations expressed serious concerns at the new wine regulations that had been introduced by one Member, under the partial guise of the TRIPS Agreement, if they were happy with the way in which the so-called additional protection had been implemented? Additional protection merely meant that those countries which applied protection at the border now wanted to apply protection extra-territorially.

112. The representative of Australia said that the use, in the Checklist of Issues, of the phrase "new unauthorized usage of geographical indications" was inaccurate. Any decision about whether a geographical indication was authorized or not was a decision to be made by individual Members in

2 Integrating Intellectual Property Rights an Development Policy. Report of the Commission on Intellectual Property Rights. London, September 2002.

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the market concerned. Like all other forms of intellectual property rights protection, such as patents and copyrights, it was for national governments, not an international organization, to decide whether a term was permitted or not. If a Member wanted to exercise its rights under the DSU, it could do so, but as he understood it there had not been one case in which the Appellate Body had declared that a geographical indication was not authorized under the TRIPS Agreement. He also recalled that the Argentine delegation had asked at the last meeting that those demandeurs who had commonly used the word "usurped" should not use that term and the same should apply to any Secretariat paper which mentioned unauthorized use of geographical indications. This went to the wider issue of the framing of some of the issues in the document and the characterization of respective positions. It was not clear that there had been a ''fair amount of discussion" on the differences between the general level of protection and the additional level of protection or very much discussion at all on the adequacy of Article 22-type protection. He concluded by saying that Australia was ready to address the issues identified in the Checklist, on the clear understanding that it would revert to them later on in the meeting.

113. The representative of Bulgaria said that all the underlying basic arguments of the paper presented by Guatemala were flawed. The paper claimed that "apparently the term 'Bulgarian yoghurt' is used as a generic term in France". Contesting this claim, he noted that the term "Bulgarian yoghurt" was not generic, only famous. He recalled the mandate in paragraph 12 of the Doha Ministerial Declaration, which spoke of the determination of the Ministers "to find appropriate solutions" to the implementation issues, this being one of them, and of the report to the TNC by the end of 2002 "for appropriate action". The situation about extension was not different from the one about TRIPS and Public Health. Therefore, Bulgaria believed that the work on extension should be accelerated so that the Council would be able to arrive to an appropriate solution to be recommended to the TNC by the end of this year. He also seconded the Chairman's suggestion to hold an additional meeting on the issues relating to extension.

114. The proponents of the extension had already given answers to the issues contained in the Checklist in several submissions. In this regard, he disagreed with the statement of the representative of Australia that the Council had not discussed these issues sufficiently; on the contrary, there had been substantial debates on all those issues. Coming to the first item under the legal issues, i.e. the differences between the general protection under Article 22 and the additional protection under Article 23, he said that this had been described as the starting-point of the debate about extension. It was understandable why this was so, because the opponents of extension wanted a broad debate of policy issues. He could perfectly agree to discuss this item again, despite the fact that the Council had already done it in the past, provided, however, that this would not limit the discussions and, particularly, would not prevent Members from focusing on the substantive issues regarding extension. He also recalled that, from a chronological viewpoint, the differences mentioned in the Checklist had never been the starting-point of the discussion. The central differences were, instead, those between the treatment of wine and spirits, on one hand, and the remaining other products on the other. So Members should, in fact, focus their discussion not on the former differences but rather on the latter ones.

115. It was difficult to understand why wines and spirits should be treated differently from other products. Why the theft of oranges should be punished differently from the theft of apples? Or why the piracy of piano music should be treated differently from the piracy of violin music? There had been no convincing justification for this difference. He noted that Article 22 prohibited the lying about the origin of goods, whereas Article 23 prohibited the misuse of a reputation which belonged to others. Why did the proponents want the additional protection to be extended? Or, as put by the opponents of extension, why was Article 22-type protection insufficient? Because the proponents wanted to prevent not only the lying as to the origin of the goods, but also the misuse of reputation acquired by others, and also because the TRIPS Agreement provisions did not guarantee this protection, contrary to what was said in the joint paper IP/C/W/360. For example it was perfectly legal under the TRIPS Agreement to sell yoghurt of Bulgarian taste, or taking another Bulgarian

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product, to sell feta of Bulgarian type. This was, he repeated, perfectly legal and it was absolutely ineffective to apply Article 22 to prohibit the use of such expressions for those products. The opponent's argument was that some countries had many geographical indications while some others had only a few. He believed that this argument went against the very nature of the protection of property rights, in general, and of intellectual property rights, in particular. He wondered whether the intent of the opponents of extension was to propose a change in the nature of the TRIPS Agreement from a minimum standard of protection to the exchange of concessions and reciprocity, like it was the case under GATT and GATS. Did the United States, Australia and other opponents also want to apply this same approach of reciprocity to trademarks, patents and copyrights? For example, the United States seemed to have several million registered trademarks and patents. Would the United States agree that others would only protect a number of US patents equal to the number of their patents protected in the United States?

116. In his view, the essential issue was not the existing number of terms but the interests of the different countries, and, from this perspective, the fundamental question was whether there should be a difference between wines and spirits on the one hand (which were produced by some countries and not by others) and other products on the other (in which other countries were especially interested). In fact, there were no convincing justification for the existence of this difference. It was also important to note that the proposal to extend additional protection was directed to the future, i.e. it would give a signal to work for the reputation of specific products in particular places and to look for niches in the market for such products. Therefore, it was in the interest of all countries to have this protection extended.

117. The proponents of the extension had not recommended any changes to the definition in Article 22.1. However, he wondered whether the opponents of the extension wanted to, e.g. exclude country names, or propose something more specific on non-place names or traditional expressions? From the viewpoint of both his country's proposal for extension and the Doha mandate on extension, such questions pertaining to the nature of the additional protection were irrelevant and fell outside the scope of the mandate. Furthermore, traditional expressions were foreign to the extension debate because they were a completely different kind of protection of intellectual property rights

118. The representative of Bulgaria said that his proposal regarding extension was exactly the same as that by the representative of the Czech Republic, i.e. that the reference to "wines and spirits" should be deleted from the heading of Article 23 heading and that the expressions "wines for such wines" and "spirits for such spirits" in paragraph 1 of the same Article should be, respectively, replaced by the expression "goods for such goods" and deleted from the text. The exceptions of Article 24 should apply to the extended product coverage. As to the second point for discussion, i.e. the difference of treatment of the relationship between trademarks and geographical indications, he said that this question was covered by the joint proposal presented by Bulgaria and other co-sponsors in June 2002 (document IP/C/W/353) and in this regard it was proposed as follows: the first reference to "wines" in paragraph 2 of Article 23 had to be replaced by a reference to "goods" and the second reference to "wines" had to be replaced with the expression "such goods". Furthermore, the reference to "spirits" had to be deleted and the third reference to "wines or spirits" had to be replace to a reference to "goods". Finally, commenting on the third point of discussion, which referred to homonymous geographical indications, he proposed a change in paragraph 3 of Article 23, which consisted in deleting the reference to "wines" and replacing it with the words "the same good".3

3 To illustrate these proposed changes, the representative of Bulgaria provided the following text to be included into the minutes of the meeting:

Proposed changes to Article 23 of the TRIPS Agreement

Article 23

Additional Protection for Geographical Indications for Wines and Spirits

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119. The representative of the Kyrgyz Republic said that he supported the work on the extension of additional protection of geographical indications to products other than wines and spirits. An appropriate and balanced solution was being sought by all to this complex issue, which involved many aspects of life, such as historical heritage and economic sustainability. Fairer practices in trade at national, regional and, above all, international level, should exist in order to promote competition and investment flows. The use of the word "territory" in the definition of geographical indications led one think about future applications of this term in a broader context, which could eventually cause misunderstandings among Members. For example, the Kyrgyz "Uzgen rice", was an unique grain because of its red color and taste. Was it a product originating in the Kyrgyz Republic? One could answer that question in the affirmative, but would it be also possible to say that all the Kyrgyz products were "Uzgen rice"? He believed that that was not the case. Nevertheless, he was of the view that geographical indications of several small islands, or inland territories, could be attributed to products where special characteristics were indeed distinct from the same products. This made it necessary for the work to proceed on a case-by-case basis. He urged the Council to clarify the definition of geographical indications so as to allow it to develop a common solution as soon as possible.

120. The representative of Canada said the her delegation was pleased to co-sponsor the paper introduced by Guatemala and fully associated herself with Guatemala's remarks. Reacting to the suggestions by other Members to insert new language to Article 23, she said that this was rather premature because the Council was far from concluding that any extension was even required. She also thanked the Chairman for the preparation the Checklist of Issues as a means of facilitating the present discussion. Although there were other issues that could be added to the Checklist, she believed that it would be a useful tool, as it had been the case in other areas of discussion. She also said that there was merit in gathering empirical data regarding the protection of geographical indications, as had been suggested by Brazil, and, in this regard, her delegation desired to consider how it could accomplish this objective, even if only to provide some factual evidence.

121. With regard to the legal differences between the levels of protection provided by Articles 22 and 23, she said that Canada remained convinced that the level of protection offered by Article 22 was not only sufficient for all GI products, but also the most appropriate mechanism. What was still not clear, and had not been demonstrated, however, was why the protection of Article 22 was not sufficient. She invited again delegations to provide the Council with concrete examples of the problems they had had, or were currently encountering, in obtaining satisfactory protection under Article 22. The work of the Council would be greatly facilitated if examples were put on the table.

122. The same could be said of Article 23 because, while wines and spirits, de jure, benefited from the additional level of protection for their geographical indications, de facto, there was no evidence that this was the case. The Council's discussions on the respective levels of protection granted under

1. Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits goods for such goods not originating in the place indicated by the geographical indication in question, even where the true origin of the goods is indicated or the geographical indication is used in translation or accompanied by expressions such as "kind", "type", "style", "imitation" or the like.

2. The registration of a trademark for wines goods which contains or consists of a geographical indication identifying wines or for spirits which contains or consists of a geographical indication identifying spirits such goods shall be refused or invalidated, ex officio if a Member's legislation so permits or at the request of an interested party, with respect to such wines or spirits goods not having this origin.

3. In the case of homonymous geographical indications for wines the same   goods protection shall be accorded to each indication, subject to the provisions of paragraph 4 of Article 22. Each Member shall determine the practical conditions under which the homonymous indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.

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Articles 22 and 23 had revealed that a misconception concerning the extent of the protection of Article 23 was still prevalent. According to her interpretation, Article 23 conferred exclusive rights over a particular geographical indication to one group of producers, effectively depriving others of the right to use that geographical indication. Unlike Article 22, which stated that Members should provide a legal means to prevent the use of geographical indications in a manner that misled the public as to the geographical origin of the good or in any way that constituted an act of unfair competition, Article 23 had no such requirement. Extending Article 23 would certainly not provide the following things: market access, a balanced geographical indications regime, and the renegotiation of the exceptions.

123. As to the question of market access, she said that it was not the role of intellectual property rights to provide it, and this was certainly not the intent of Article 23. Recalling that during the Council's previous meeting, Canada's experience with the application of Article 23 had been briefly addressed, she said that, as mentioned on that occasion, many technical requirements could prevent access to a given market, such as the requirements addressing product standards and grading, packaging and labelling, health and safety and food additives. Intellectual property rights could not abrogate any of these requirements. In the case of wine, for example, geographical indications would not guarantee market access. In fact, in Canada's case, geographical indications had done nothing to assist it in gaining access for its wines into the European Union. Its access had been blocked by a number of factors, including differences in oenological practices, and labelling regulations. The same would apply to other products. Canada, for example, had product regulations for canned fruit, fresh and frozen fruit, fresh and frozen vegetables, fruit juices, tomato paste, ketchup, spaghetti sauce and pizza sauce, just to name a few. If import requirements were not met, a product could not enter a country, regardless of whether or not it was a registered geographical indication in that country.

124. Regarding the questions about imbalance, she stated that some Members had argued that an imbalance existed between the protection granted by Articles 22 and 23. However, while this could be true in theory, in practice this did not appear to be the case. In fact, a real imbalance was more likely to arise out of the extension of Article 23. As it had been said in previous meetings, most Members had a limited number of indications they would want to see protected. In Canada, for instance, only seven geographical indications for wine had been registered. By contrast, in bilateral negotiations, the European Communities were seeking protection for close to 10,000 geographical indications, 95% of which had no commercial value in Canada. Consequently Canada believed that the same disparities, not balance, would appear if extension were to be granted to other products beyond wine and spirits.

125. With respect to the exceptions provided under Article 24, it had been suggested that a derogation or abrogation of some of those exceptions could accompany the extension of Article 23. Canada did not see any reason for changing the scope of the exceptions for other products. She also noted that Canada would consider most of the notable examples that had been given in the Council as being generic names. She wondered what exactly was the benefit that Members expected to get with an extension that was not already available to them under Article 22. This seemed to be the underlying question that the Council continued to grapple with. Concluding, she asked all Members to consider why it was that all New World wine producers, collectively, were against the extension of the protection provided for in Article 23 to other products? There seemed to be hidden questions within that.

126. The representative of Uruguay said that document IP/C/W/360 contained many points supported by her delegation in previous meetings. She was convinced that extension, as such, would not constitute for countries like Uruguay a guarantee of market access or an automatic increase of exports. If it was true that, on one hand, it would be possible to have exclusive rights over some specific products, it was no less true, on the other, that this could also result in the impossibility of exporting products under some given names, which were brought by the migratory flows to some countries in the beginning of the last century. The terms and names which were used to designate some given products and which remained in use were a consequence of the cultural tradition that

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came along with immigration. What Uruguay proposed, then, was a cost-benefit exercise, i.e. one in which the Council should pay special attention to the fact that a possible extension could also close the doors for traditional and growing industries. In this regard, she reminded Members that, according to the definition contained in Article 22 of the TRIPS Agreement, for an indication to be considered a geographical indication, it was not enough just to have a geographical origin. In addition, the product identified by such an indication needed to have some characteristics related to the reputation and quality, which were attributable to its geographical origin. These two words, "reputation" and "quality", were very significant. They were characteristics that could not be attained just from one day to the next. So, in order to obtain protection for geographical indications it was necessary to demonstrate that a given product complied with that definition. It was difficult to believe that countries which did not have geographical indications would be able to obtain protection in a short period of time. On the contrary, geographical indications would not bring immediate solutions. Uruguay would not like to see geographical indications becoming a new mechanism of protectionism, acting as a barrier to the access of its products to the international markets.

127. Her delegation was aware that Articles 22 and 23 granted a level of protection to wines and spirits which was different from the level of protection provided for other products. However, she could not to accept the argument according to which the protection provided for in Article 22 to products other than wines and spirits was not adequate. She reminded Members that the language of Article 23 resulted from the negotiations of the Uruguay Round and that this language was accepted by her country as part of the negotiation package. Concerning costs, she shared the view, expressed in document IP/C/W/360, according to which a proposed extension would create disproportionate costs for countries that, like Uruguay, had very few or no geographical indications, and would, on the contrary, force them to give additional protection for geographical indications originated from a group of countries having hundreds or thousands of such indications. Therefore, her delegation did not see the benefit of the extension and considered that the Council had to continue studying each point in depth before turning to the next step. Finally, regarding the suggestion presented by the Bulgarian and Czech delegations, she agreed with the Canadian delegation that it was still premature to discuss any new language for Article 23.

128. Welcoming and supporting the Chairman's proposal to structure the discussion under agenda item D according to a checklist of key issues, the representative of Switzerland said that it was instrumental to organize the Council's discussion on every issue, including extension, more thoroughly, in order to fulfill its task of making a recommendation for appropriate action to the TNC by the year's end. However, this would only be possible if Members in their interventions would stick to questions that were relevant to the issue of extension. Looking at the heavily charged agenda of the TRIPS Council, he believed that neither the Chairman, the delegations nor the Secretariat had the time or resources for any duplication of work, if such work already under way in the Council under other agenda items or in fora outside the WTO, such as, in particular, the Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications (SCT) of the WIPO.

129. He recalled that at the Council's last meeting, those delegations in favour of extension, among them Switzerland, had submitted a fourth detailed communication on the extension of the additional protection of geographical indications to products other than wines and spirits (document IP/C/W/353). This communication discussed various aspects of extension by highlighting how it could be enshrined in Section 3 of the TRIPS Agreement and presented a proposal to be included in the report of the TRIPS Council to the TNC. This communication, therefore, addressed exactly the type of questions mentioned by the Chairman under the three bullet points of legal issues and should be the focus of the discussion under way in the present meeting. Detailed answers to the questions raised at the Council's last meeting, which were again raised in document IP/C/W/360, could be found in the four communications that had been presented by the delegations in favour of extension during the course of the last two years. For this reason his delegation did not want to repeat at length all the reasoning already contained in those four documents (IP/C/W/204/Rev.1, IP/C/W/247/Rev.1, IP/C/W/308/Rev.1 and IP/C/W/353). He felt that the debate had reached a stage in which substantive

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progress needed to be made. However, in the light of some of the opponents' comments, he felt that "demystification" of not only of patents but also of geographical indications might be needed.

130. The co-sponsors of communication IP/C/W/360 had concluded that extension "will not provide meaningful benefits but will instead create new difficulties". Delegations critical of extension claimed that there existed an "imbalance" regarding the number of geographical indications to be protected. Their agreement that some Members called more geographical indications their own than others was true. However, the same was also true with regard to patents and trademarks. To his knowledge, none of the delegations against extension had ever used this argument as a basis for claiming that an adequate and effective protection of patents and trademarks resulted in an imbalance of rights and obligations. The fact that some Members had more geographical indications than others was simply due to the fact that the former had recognized earlier than the latter the potential marketing value that a geographical indication could add to a given product. Therefore, they had started to invest earlier and in a more sustainable manner in the development of their geographical indications. Members having a longer tradition in the protection of geographical indications also had more geographical indications which were recognized and protected than those which were just beginning to discover geographical indications as a marketing tool for their own products in the international market. This state of things had been, and continued to be, very similar to other intellectual property rights. It was also crucial at this very stage that both developing and developed country Members, which wanted the benefits provided for in the GI-related TRIPS provisions to be available to their own goods, would be given effective protection for the geographical indications associated with these products, which were by far not only wines and spirits. Otherwise, they would justifiably feel discouraged to make the effort to foster geographical indication protection at their national level. It was not so much the number of geographical indications that counted when assessing the merits of a better protection, but rather the economic value or the potential value of each well-protected geographical indication. Often, one particular geographical indication had been considered more valuable than one hundred other geographical indications. One example of a valuable geographical indication was "Tequila" for a Mexican spirit. With globalization, the interest of having an effective protection for these kinds of signs had increased considerably at the international level, as demonstrated by the size of the list of delegations in favour of extension.

131. After citing Swiss cheese "Etivaz" as a recent example of how a geographical indication became "famous" in just a short time, the representative of Switzerland posed the following question: Who would really have known some time ago of the existence of such indication outside Switzerland or perhaps Europe? Nowadays, this was no longer the case and even the co-sponsors of communication IP/C/W/360 mentioned this geographical indication in their submission. This cheese and its geographical indication were therefore currently familiar to 144 WTO delegations and beyond. This example served to illustrate that nowadays, thanks to globalization and the fast flow of goods and information, awareness of the public of a specific geographical indication and a particular product could develop very quickly, and was an increasing tendency in the future. This was the reason why it was important for the WTO to have effective means of protection for geographical indications at the international level, extension being the solution that would provide such effective protection.

132. Reacting to the fears expressed by the opponents of the extension regarding the consequences of extension on the future of their traditions and the exceptions under Article 24 of the TRIPS Agreement, he asked them to once again read paragraphs 15 and 16 of communication IP/C/W/308/Rev.1 and paragraphs 35 to 39 of communication IP/C/W/353, in which it was proposed that the current exceptions for wines and spirits should also exist for products for which additional protection should be extended.

133. Responding to the opponents' argument that generic indications would nullify the benefits of extension for certain geographical indications, he said that if a geographical indication should prove to have become generic in one Member, this did not mean that it had lost all its economic value in other countries. As mentioned in the communication IP/C/W/360, exceptions applied on a per-Member

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basis, which meant that extension would offer legitimate producers an effective legal means to enable them to prevent the "degeneration" of their geographical indications in new markets. He concluded by saying that "fair trade" was a term used more and more in relation to globalization, and in particular with regard to trade from the developing to the developed world. Extension was certainly not the answer to all the questions relating to "fair trade", but it certainly was one part of this big picture.

134. The representative of Kenya said that the Chairman's Checklist of Issues was helpful in facilitating a more systematic discussion. He advised the Council to consider requesting the WIPO to provide information on three particular issues, namely on protectable subject-matter, the relationship between trademarks and geographical indications and the treatment of homonymous geographical indications. This would enable the Council to concentrate on other issues that were directly related to the extension, like the difference in the level of protection between Articles 22 and 23 and the impact of extension on producers and consumers as well as on governments.

135. The representative of Jamaica wondered whether the opponents of extension were proposing that the link between a product and its geographical origin did not need to be established? If that was the case, then they were seeking to negate the very essence of what constituted a geographical indication, the definition of which was enshrined in Article 22.1 of the TRIPS Agreement. In document IP/C/W/360, particularly on issue 2, paragraph 5, on "the definition of geographical indication", a number of concerns had been raised. It was not clear to her why the definition of geographical indications had been considered a barrier and why concerns regarding the definition still persisted. As the representative of Bulgaria had mentioned earlier, these concerns had already been addressed by the proponents of the extension. She draw the attention of the Members to communication IP/C/W/353, paragraph 6, which stated that "the definition of geographical indications according to Article 22.1 applies to any geographical indication irrespective of the product concerned and irrespective of whether the protection level of Article 22 or 23 applies". The question of the definition was therefore not a question specific to extension but one of general bearing within the context of the protection of geographical indications. However, if delegations felt it was necessary to further discuss this issue, they could do so under agenda item M on the built-in review provided in Article 24.2 of the TRIPS Agreement.

136. Notwithstanding this, she wished to address three points which had been consistently raised by some delegations in the context of the definition of geographical indications. In her view, names of countries were, in principle, eligible to qualify as geographical indications, provided that they met the requirements of Article 22.1, i.e. that that they identified a product as originating from the territory of that given Member; and where a given quality, reputation or other characteristic of the good was essentially attributable to its geographical origin. Examples of such geographical names were "Luxembourg" for meat products or "Swiss" for watches. Secondly, not only geographical names were covered by the definition of Article 22.1 of the TRIPS Agreement, but also the so-called "traditional designations". In the Checklist of Issues theses indications were referred to as "non-place names". "Traditional designations" were names which did not correspond to a geographical name, but which did entail a geographical reference, since they were only used according to a practice or a regulation for products that had a precise origin conferring them a given quality, reputation or other characteristic. Examples of "traditional designations" were "Tête de Moine" for a Swiss traditional cheese and "Basmati" for rice from the sub-Himalayan region of the Indian sub-continent. Such "traditional designations", or non-place names, were to be distinguished from "traditional expressions" or "traditional methods", which entailed no geographical reference and were therefore outside the definition of Article 22.1 of the TRIPS Agreement. Thirdly, she recalled that a geographical indication could also exist as a symbol or an emblem, such as the "Taj-Mahal" to designate Indian products of that region, or the "Eiffel Tower" for products from the region of Paris, or the "map of Jamaica", to designate coffee or sugar originated from that country.

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137. The TRIPS Agreement gave Members clear guidance in respect of the definition of geographical indications and could therefore help to harmonize the national concepts and definitions of geographical indications. This was exactly the reason why the delegations in favour of extension advocated this issue in the framework and why it was, therefore, of paramount importance for the TRIPS Agreement to provide for an effective and balanced protection for geographical indications. She also recalled, in this context, that Article 1.1 of the Agreement gave Members the freedom to determine how they would implement the TRIPS provisions within their legal system and practice, according to the method they think appropriate. In conclusion, commenting on the changes to Article 23 of the TRIPS Agreement suggested by the representative of Bulgaria, she said that her delegation supported them and considered them to be a positive step to the right direction.

138. Noting that this was the first time China was taking the floor on the issue of geographical indications, the representative of China said that, in principle, her delegation endorsed the proposal made by several Members on the extension of the protection of geographical indications provided for in Article 23 of the Agreement to products other than wines and spirits. The rationale behind this position was that the multilateral trading system should exist for the benefit of all Members and that it should also maintain the balance of interests between different goods among Members. If the producers of wines and spirits could enjoy the level of protection in accordance to Article 23, why the producers and traders of other products could not also be protected under that same provision? That was the simple reason why China supported extension. However, her delegation also has several concerns.

139. First of all, according to Article 23, the scope of protection after extension would cover translations of geographical indications. At first, her delegation thought that the Chinese language could be easily distinguished from other languages, thus making any conflicts with foreign names unlikely. However, a large number of Chinese terms would be excluded from further use on products and services due to the simple fact that their equivalents in either English, Spanish or other languages would be recognized as geographical indications. Consequently, this would result in many difficulties in China. Secondly, pursuant to Article 24.6 of the TRIPS Agreement, if a geographical indication was determined to be identical with a generic term or with a term customary in common language as a common name for goods and services in the territory of a given Member, then such Member would not have the obligation to protect that geographical indication. However, since there were no rules on how one could make such determination, it would be difficult for the relevant authority to deal with the conflict of rights between geographical indications and generic terms. Thirdly, if a given geographical indication were not being used for a certain consecutive period of time, e.g. for three years, within the territory of a Member, it could be revoked by the relevant authorities in the same manner as provided in trademark laws. Fourthly, if a given geographical indication conflicted with a trademark, or a name of an enterprise, or any other trade name, how would the rules deal with these kinds of conflicts? Would the exception for "prior use" be recognized?

140. These issues needed to be dealt with when addressing extension, otherwise it could end up being a source of uncertainty and unpredictability for the multilateral trading system. Since China had a relatively long history, many local geographical indications had been cultivated during the formation process of its culture and civilization. That was the reason why China was a stakeholder on the issue of geographical indications. Thus, her delegation would like to cooperate with all Members to find a balanced, economically sound and legally predictable solution for this issue.

141. The representative of Korea said that his delegation would be pleased to engage in the discussions in the way suggested in the Checklist of Issues. He believed that it was important to enhance a common understanding of the definition in Article 22.1. The issues raised by some Members, such as country names and non-place names, highlighted such need. In comparison to wines, which had been mostly protected by indications of source or by appellations of origin and strictly controlled by the respective governments or communities in some European countries, products other than wines had been usually protected by trademarks and had no collective control

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system. Therefore, the interpretation of the definition and the way of determining which geographical indications identifying products other than wines and spirits would be eligible for protection was not an easy task, and appeared to cause much confusion for producers and consumers alike. One of the main differences between general protection and additional protection was the existence of conditions regarding misleading the public. It had been often claimed that the general level of protection would not be sufficient because it would place the burden of proof on the owner of the geographical indication. However, he wished to hear more explanations as to the inadequacy of such general level of protection. In most countries, trademarks had to be registered pursuant to the country's national laws and regulations in order to be able to enjoy protection in that territory. On the other hand, there did not yet exist such globally established practices or principles concerning geographical indications. The extension would, in accordance with Article 23.2, force Members to reconsider the status of their registered trademarks.

142. The representative of the European Communities said that he very much supported the Chairman's efforts to engage all Members in a constructive discussion on this matter. Some delegations had indicated that the Checklist would not stop them from raising other matters. The communication introduced that morning raised more questions than answers, and probably questions that were not very relevant to finding a solution. It also appeared that it did not take account of the detailed information already presented by many delegations. He was ready to continue the debate on all relevant issues, but the Council should avoid duplicating other discussions that were taking place in the context of the TRIPS Agreement or in other fora. He then highlighted the main points discussed in his written statement including, inter alia, the issue of imbalance in numbers, registration systems and national treatment, the rule of the country of origin and principle of territoriality, country names, non-geographical names as geographical indications, and traditional expressions. As requested by the delegation of the European Communities, its full written statement is reproduced in an Annex to these minutes.

143. The representative of Chile recalled that his delegation was a co-sponsor of document IP/C/W/360, and associated himself with the statement by the representative of Australia regarding non-authorized uses. It was argued by the representative of Bulgaria and in document IP/C/W/353 that "currently no economic or systemic reason existed to protect the geographical indications of certain products in a different manner than others". Chile was in agreement with this assertion. Nevertheless, his delegation regretted that those who now supported the Bulgarian proposal had not asked themselves that question years ago when the additional protection for wines and spirits was negotiated during the Uruguay Round. At that time there had also been no reason to discriminate in favour of certain products to the disadvantage of others. However, that discrimination was established in Article 23 and currently there were two distinct regimes for one category of intellectual property. Although his delegation believed that there were no differences between wines and spirits and other products, it did not believe that the solution would be to extend the additional protection of Article 23 to all types of products. The additional protection was not achieved at the urging of the countries that now supported his delegation's proposal, rather, it was achieved at the urging of those sponsoring the proposal for the extension of protection. The real reasons behind wanting to extend protection to other products were the same ones that those countries had had when they pushed for additional protection for wines and spirits. Those were the real reasons and not the reasons of balance between developed and developing countries.

144. Since his delegation was not in favour of discriminating among different types of products, it was also not in favour of discriminating between different categories of intellectual property. He could not see a reason for eliminating the requirements for the general protection of Article 22, i.e. the need to prove that the public was misled or that unfair competition had been incurred, and not to do this, for instance, with trademarks. His delegation had not heard sufficient reasons to grant such strong protection to a specific category of intellectual property and not to grant something similar to another category. It had been argued that the requirement to prove that "the public had been misled" led to legal uncertainty and judges could reach differing solutions in similar cases. This argument

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could lead to the absurdity of saying that fair use exception in the area of copyright should be eliminated or that the possibility of granting compulsory licences for patents should be abolished, because they could produce legal uncertainty among right-holders and because judges might reach diverging decisions each time they evaluated such cases.

145. He stated that the exceptions included in the TRIPS Agreement had been very well thought out at the time they were drafted. Eliminating them would create uncertainty not only among consumers but also among those that had being using such denominations for many years. It was not clear to him how the exceptions of Article 24 would work in conjunction with the proposal by Bulgaria. He did not agree with tightening the protection standards of geographical indications because of a problem that probably had more to do with implementation than with lack of protection. He also disagreed with Bulgaria's assertion about the need to prevent someone from taking advantage of the reputation created by others. In his view, often those who would take advantage of the reputation created by others were the same ones who would sought the relinquishment of long-used denominations. For these reasons and those presented in his delegation's document, he was not in favour of extension. Nor was his delegation in agreement with the drafting of alternative language to the current language of the Agreement. Finally, he said that he was not aware of the legislation to which the representative of the European Communities had referred. As far as he knew, Chile had provided protection precisely as required by the TRIPS Agreement, and differentiated between wines and spirits and other products.

146. The representative of Hungary said he was in a fortunate position because the four papers previously submitted by the proponents of extension on this matter, the most recent being document IP/C/W/353, had already extensively dealt with the legal issues. Responding to the comments by certain developed country delegations that extension was not in the interest of developing countries, he noted that document IP/C/W/353 was co-sponsored by 35 WTO Members, including a significant number of countries that did not fall under the developed category. He stated that perhaps it should be left to individual Members to say what was in their interest and what was not. Turning to the issue of protectable subject-matter, he said that, as the proponents of extension had unambiguously indicated in writing, most recently in paragraph 8 of document IP/C/W/353, extension would have absolutely no implication for the definition of geographical indications in Article 22.1 of the TRIPS Agreement. Demandeurs did not want to change the definition in this provision; the debate was simply about increasing the level of protection currently available for products other than wines and spirits to the level of Article 23. Since no changes were sought to the definition, which was applicable to both of those products that enjoy Article 22-level protection only as well as to wines and spirits, questions related to the definition did not seem to be relevant to the debate over extension.

147. He said that, nevertheless, given the many questions posed by some opponents in the TRIPS Council, as well as in the Special Session, demandeurs had made clear (e.g. in paragraph 7 of document IP/C/W/353 or in their interventions at the last Special Session, the record of which could be found in TN/IP/M/2, paragraphs 26-64) that the names of localities, regions and even countries could be geographical indications under Article 22.1, provided that they met the conditions set out therein, in particular regarding the existence of a link between the quality, reputation or other characteristics of a product and its geographical origin. He clarified that any name or sign that conveyed geographical origin and fit the definition in Article 22.1 was eligible for protection as a geographical indication. Because of the necessity to establish the linkage between the quality, reputation and other characteristics and the geographical origin of goods, the question of whether a certain name fit the definition could only be determined on a case-by-case basis, taking into account all the relevant specifics of individual situations. He thought that many of the misunderstandings regarding which names or signs would or would not fit the definition in Article 22.1 could be traced back to a failure to keep in mind the importance of this linkage. He emphasized that rules of origin or indications of source and geographical indications should not be mixed and that the former, i.e. rules of origin and indications of source, did not indicate any quality, reputation or other characteristic and served a completely different purpose.

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148. He said that it was argued in document IP/C/W/360 that there was an imbalance in numbers: some Members had geographical indications for many products, while others had only a few. The conclusion this paper seemed to suggest was that the sheer difference in numbers in itself was a sufficiently clear indication of who would benefit from extension. He agreed with the point made by the European Communities, according to which the number of geographical indications protected at home, for example through a register, and the number of instances when right-holders actually went abroad to use the legal means WTO Members were obliged to provide under Articles 22 and 23, were completely separate issues. The approach in IP/C/W/360 lost sight of the fact that the economic value of individual geographical indications could vary quite significantly. The economic value of a world-famous indication used in relation to, for example, a speciality food product, especially if the production area was considerable in size, could be far larger than the total value of a large number of indications used in relation to products known in their own home country only. He clarified that such an assessment could only be done country by country, taking into account the individual market situations and consumption patterns. In other words, the assessment of the potential economic impact of extension was perhaps a little more complex an issue than what document IP/C/W/360 seemed to suggest. In response to earlier comments by Brazil, he stated that for these reasons, it seemed very difficult, if not impossible, to put a figure to how much an individual geographical indication was worth. In particular, it would be very difficult to quantify the difference between the two levels of protection in terms of economic value.

149. He was somewhat surprised to hear the argumentation on numbers from some of the co-sponsors of document IP/C/W/360 that were normally demandeurs in the intellectual property field and who, to his delegation's best recollection, did not raise similar concerns, for example, when the introduction of product patent protection for pharmaceuticals was discussed in the Uruguay Round negotiations. He quoted the following excerpt from a recent WTO document prepared for the Working Group on Trade and Investment (WT/WGTI/W/136, in particular paragraphs 5 and 6): "While developing countries and countries in Central and Eastern Europe increased their share of patents registered in the United States from 1.5% in 1977-82 to 3% in 1990-96, the bulk of the 3% share was accounted for by Korea and Chinese Taipei". To put these figures into perspective he also quoted another excerpt from the same paper, which said that the top ten developed countries in terms of R&D expenditure (amounting to 84% of the world total in 1993) took out close to 92% of all patents in the United States in 1995-98. He emphasized that he was not attacking patent protection, but simply asking delegations to show consistency in their argumentation.

150. He noted that the exceptions in Article 24 (relating to prior use, good faith, prior application for and acquisition of trademarks, and generic expressions) were equally applicable to Articles 22 and 23 levels of protection. The demandeurs, in paragraph 41(b) of IP/C/W/353, had confirmed that the exceptions contained in Article 24 should apply mutatis mutandis. This showed that extension was essentially for the future, which should ease the concerns of those that had not yet been convinced of its desirability. The grandfathering exception was of particular relevance in light of the important agricultural non-trade concern, namely, the preservation of cultural identity, which was raised orally and in writing in IP/C/W/360 by a significant number of agricultural exporters. He failed to see how the continued availability of all the exceptions, including the grandfathering exception, would not adequately take care of that concern, unless the countries in question were expecting new, large-scale immigration flows, especially from regions from which they had not already welcomed immigrants.

151. Commenting on homonymous geographical indications discussed in paragraphs 21-29 of IP/C/W/353, he stated that Article 23.3 specifically covered the case of homonyms geographical indications for wines whose use did not represent to the public that the good had originated from another territory, as provided in Article 22.4. In such cases both indications had to be protected, and the WTO Members concerned had to determine the conditions necessary to differentiate homonymous indications for wines. In doing so, they had to ensure that consumers were not misled and that the producers concerned were treated equitably. What did this imply? In his view, this implied that WTO Members had to keep their respective markets open in cases of homonymous geographical

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indications, and this called for an ad hoc solution to ensure the coexistence of products bearing these geographical indications. This provision in Article 23.3 was especially drafted to deal with the effects of historical colonization or immigration flows in terms of their resulting city, region and locality names that were identical to the ones used in the home countries of immigrants. He believed that this provision provided additional proof that extension was not irreconcilable with the idea of adequately addressing genuine concerns related to the preservation of cultural diversity. He emphasized, however, that keeping the possibility open for domestic manufacturers to start selling products under names that free-ride under the geographical indications of others, did not seem to fall within these legitimate concerns.

152. Responding to the delegation of Jamaica, the representative of Australia said that the Council had agreed that the definition of a geographical indication clearly encompassed country names. But he was puzzled by the unequivocal assurance, accompanied by some examples, made by the representative of the European Communities during this meeting, according to which a country name did fit into the definition of geographical indications. He was perplexed with the difference between the rhetoric of what the European Communities said and the reality of what it practised, as illustrated by EC Regulation 2081/92, which referred to geographical indications for a country "in exceptional circumstances". Additionally, a recent EC wine regulation (Regulation 753/2002) stated that imported wines with indications "serving exceptionally to identify a wine as originating in the territory of a third country could only be used if they were listed in Annex IV of the Regulation". However, Annex IV was a blank page with no country listed on it. In this regard, he posed the following questions: As a matter of practice, and also bearing in mind what the European Communities and other demandeurs of extension and of an international register wanted, would terms like "Bulgarian yoghurt", "Jasmin rice", "Chinese tea", "Kenyan coffee", "Hungarian salami" or "Jamaican rum" be allowed to be registered as country geographical indications? In practice, would claims to protect Thailand or China, or whatever other country name, be accepted irrespective of the product to which the Member sought to attach that name? Or, would this only happen in the most exceptional circumstances? And, if so, what were they? He also recalled that, in the case of wine, no country with which the European Communities had a bilateral TRIPS-plus agreement had been allowed to use the name of their country as a name for wine. In others words, one would not be permitted to use, e.g. "Australian Chardonnay" on the label.

153. Recalling that the representative of Bulgaria had again highlighted the reputation of its "yoghurt" and "feta", a reputation to which he also attested, the representative of Australia said that if the demandeurs of the extension got what they wanted, there would still be no guarantee that Bulgaria, or any other country-name like Bulgaria, would be accepted as a geographical indication. Actually, if Bulgaria acceded to the European Communities, it would not be permitted to use the term "feta" in the products it exported to the European Communities. And, furthermore, if the demandeurs succeeded, regardless of whether Bulgaria joined the EC, Australia would be forced to prohibit the imports of Bulgarian "feta" because in the European Communities this would be a protected Greek term and, therefore, it would be in the register. And because it would be in the register, Australia would have no obligation to accept and protect it, unless it wanted to go into lengthy dispute settlement procedures.

154. He recalled that Switzerland and Bulgaria had explained that an extended GI-regime would only apply to new geographical indications. Did this mean, then, that something like "Ceylon tea" and "Indian Basmati rice" would not be covered? This was an important question because it seemed to him that those developing countries that had supported the idea of extension had done so on the assumption that a country name, and their commodity, would be accepted on this international register that the demandeurs were seeking.

155. As to "traditional terms", he recalled the EC representative's statement according to which "non-geographical names" were unquestionably not covered under the definition of a geographical indication. If this was so, why, then, the European Communities in its official press-statement on the

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"wine GIs", when it came to some "traditional expressions", implied very clearly that this was indeed covered by the TRIPS definition of geographical indications? One, however, could not have it both ways. One could not, on one hand, give assurance that anything it will do on "traditional expressions" would not be done under the TRIPS Agreement, and, on the other, give an official press statement saying that these same "traditional expressions", which were nothing more than normal English adjectives, would be covered as geographical indications. So, what would exactly be the status of, for example, the European Communities' traditional specialty goods? How would they be linked to particular countries? It was not clear, then, whether extension would necessarily have no implications for Article 22.1 of the TRIPS Agreement, as the demandeurs claimed. That, he believed, was a question all Members needed to decide. What was clear to him was that the way Article 22.1 would be structured and interpreted would have significant implications for all Members, including those with particular ambitions in relation to particular products, and those that would have to implement and enforce a wide variety of products on behalf of the other Members.

156. Concluding, he also recalled the EC representative's previous statement that just because some countries provided in their domestic legislation for provisions, measures or concessions that would go beyond what they were officially called upon to do under the WTO, so ipso facto those countries had to support extension in fora like the WTO. He did not think there was anything that suggested this premise. There was no basis to think that just because a country did something in its own national interest, that therefore it had to be prepared to come to the WTO and enter into a commitment to an undertaking which would go far beyond what it had done nationally. Actually, the key point under the TRIPS Agreement, when it came to geographical indications, was the principle of "territorial application", in other words, each Member would decide whether a geographical indication was a geographical indication or not. Under the proposal of the demandeurs, however, that right would be taken away and exchanged to a complicated process of international registration, of challenges, of disputes, and arbitration, which would be performed by people that would not be officers of the governments of the Members. So, by its very definition, the additional protection that the demandeurs were seeking for products other than wines and spirits would go well beyond the current rights and obligations under Article 23.

157. The representative of Malta, commenting on opponent's arguments concerning the alleged imbalance in numbers, said that regarding geographical indications, as well as other intellectual property rights, numbers were not fundamental for the consideration of the economic and commercial impact of geographical indications. It was the quality of the geographical indications that mattered and not the quantity. Furthermore, he was of the view that Article 22 should remain intact, while he fully supported the proposed changes to Article 23.1, namely, to delete any mention of wines and spirits both in the title and the text and to replace it by "all goods." He noted that the rationale behind these changes was explained in detail in document IP/C/W/353, which his delegation had co-sponsored.

158. The representative of India reminded that his delegation's views were contained in communication IP/C/W/353, which had been referred to by the representative of the Czech Republic. India's proposal on extension had no implications on the definition in Article 22.1. Interested parties should have the means to prevent the use of geographical indications without having to prove that the public was misled or there was an act of unfair competition.

159. The issues raised in document IP/C/W/360 did not seem to reflect the legal position contained in the TRIPS Agreement. He did not understand the argument that a term like "Basmati rice" could not be considered a geographical indication merely because it did not name the actual place of origin. Where in Article 22 was it said that only geographical names could be geographical indications? This would amount to inventing a new definition of geographical indications. "Basmati rice" was recognized in India as containing certain defined characteristics and coming from a certain region of the country. The legal system recognized it, though, at present it was not formally registered. But this was a temporary situation that did not prevent India from protecting this term as a geographical

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indication. Similarly, there was nothing in Article 22.1 that would prevent recognition of geographical indications coming from two countries. He noted that the principle of territoriality, as applied to the TRIPS Agreement, had been elaborated by the representative of the European Communities.

160. The representative of Argentina shared many of the points made by Australia. He noted that some delegations had made specific proposals to amend the TRIPS Agreement, and said that he was not prepared to receive such proposals. His delegation had produced a communication two days before the Doha Declaration appeared, and in particular, his delegation read paragraph 18 of the Doha Declaration in a way that, at most, enabled the Council to consider to address the question of extension. In no way could the Council take the mandate to mean that it could re-open the TRIPS Agreement to extend protection to products other than wines and spirits.

161. Undoubtedly, this was an issue that had very complex and sophisticated ramifications. He congratulated those delegations from developing countries that were in a position and prepared to move forward in an intense and committed way, because it showed that they had gathered studies and analysed these matters and that those analyses had shown that it was in their national interest to work on a model with these characteristics. His delegation had not been able to do this and was not in a position to evaluate all this, which was why it had taken the attitude it had. The definition contained in Article 22 applied to all geographical indications, including those mentioned in Article 23. According to the definition, for geographical indications to be eligible for protection, the following conditions had to be fulfilled: the existence of the product, the product had to have a given quality, reputation and other qualities connected to its geographic origin and it should originate in the region, etc. Up to that moment, the coverage had been quite wide. From there on, however, only the national legislation of each country could further elaborate the scope, the coverage and the nature of what was covered by Article 22.1. This was the right of Members, according to the Agreement, which enabled them to apply the system in their own legal framework according to their own legal system. Intellectual property rights were private rights that were applied territorially and, hence, Members had the option of deciding the degree of protection and the conditions applying them and their validity.

162. The representative of New Zealand said that, although her delegation welcomed the Checklist to assist in structuring the discussion of the Council, it associated itself with Australia's statement regarding the caveats of this document, in particular it was not an exhaustive list of issues and that the discussion could not be divorced from trade policy and development concerns. She noted the Chairman's and others' wish to avoid duplication with other agenda items and fora, with which her delegation had no quarrel. She noted, however, that under this agenda item the Council's report-back requirement stemmed from paragraph 12 of the Doha Declaration, which provided the context for a part of the Council's work, i.e. the evaluation of current implementation of TRIPS in this area, including any problems, and the consequent trade and development prospects of Members. Because of this element in the Council's mandate on extension, the Council had to give due attention to these issues. Therefore, while she appreciated that the agenda item on Article 24.2 implementation review of the geographical indication provisions was a separate agenda item, the theme of implementation was very relevant to both agenda items.

163. Turning to the issue of definition, she noted that from her delegation's own practical experience, there could be a difference between what many countries understood as being or not being covered by the Article 22 definition and, in practice, of what protection was actually provided. This was the reason her delegation had supported a discussion on this issue, since it had hoped that expectations of possible benefits were in fact realistic. This was why a discussion of the definition was relevant, contrary to what the Council had heard from some delegations. She noted from the minutes of the Council's last meeting, that India, when introducing a paper on behalf of a number of delegations, had noted that under that proposal, producers of Chinese tea, French ceramics and Turkish carpets would have, under extension, an effective instrument of protection. That comment interested her delegation considerably because that had not been its experience with respect to extended protection for wine. The delegation had been told that, for example, the term "New Zealand

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Chardonnay" could not receive protection under the European Communities' system because it represented a geographical area that was too big to satisfy the second part of the Article 22 definition, i.e. that a "given quality, reputation or other characteristic of the good was essentially attributable to its geographical origin". She, then, wondered whether anyone had looked on the map recently and compared the landmass of New Zealand to, for example, China, Turkey or France? If New Zealand was too large to meet the European Communities' test of distinctiveness, then how were other countries supposed to? Or was New Zealand missing something else? Was there possibly some idea that production methods used for wine could be distinguished against, for example, the production methods to grow tea, and could hence provide some sort of basis for a discriminatory approach to whether a country GI would be recognized?

164. She understood that concerns had been expressed by demandeurs that the test of misleading the consumer under the current Article 22 level of protection was subjective and that it lent itself to too great a variation across nations. As she had pointed out earlier, this was perhaps a concept to be thought about with respect to the Article 22 definition: Were the subjective criteria that seemed to be used by some countries in determining whether some geographical indications met the definition such that some would advocate the need for rectification to the Article 22 definition? The key difference between Article 22 and 23 levels protection was that Article 23 provided for absolute protection to one right-holder. This absolute right of protection was far greater than the level of protection applied to other intellectual property instruments in the TRIPS Agreement. On the other hand, Article 22 level protection explicitly provided for the objectives of preventing unfair competition, while maintaining a balance of interests between different producers and between consumers and producers. Article 22 allowed for these objectives to be met through the use of a "misleading consumers test". This was a well respected and durable test, used historically in a large number of legal systems and also in a large number of legal contexts. Article 23, on the other hand, made no accommodation for this important principle. She hoped that those who had raised the issue of the imbalance of numbers would understand that her delegation was indeed concerned about the costs that would arise from the imbalance in numbers. However, at the end of the day, for her delegation, it was the nature of protection that was the crucial issue in looking at the economic values and disadvantages that flowed from possible extension. Article 22 was, therefore, more consistent with the objectives of the TRIPS Agreement, as seen under Article 7, which stated that the protection and enforcement of intellectual property rights should be done in a way that was conducive to social and economic welfare and to a balance of rights and obligations. Similarly, Article 8 of TRIPS noted the undesirability of intellectual property rights being used to unreasonably restrain trade.

165. The exceptions in Article 24 could provide some relief for marketing transition under a possible extension scenario. But she also believed that a disproportionate amount of faith was put in these exceptions as a means to facilitate a smooth transition in the market to a higher level of protection. She was not sure how much faith could be placed on these exceptions, especially when it had been obliquely said by the demandeurs in their proposal, presented at the last meeting, that Article 24.6, the crucial exception on generics, would need to be adjusted. Article 23 level protection and the associated deletion of consumer deception and anti-competitive behaviour tests, severely reduced the ability of producers from outside the geographical area to use the courts to objectively test whether terms were eligible for protection or had in fact become generic. This did diminish producers' ability to avail themselves of the Article 24.6 exception. For this reason, she did not necessarily see that some of the exceptions in their current state would be enough to avoid serious trade disruption under a possible extension scenario.

166. In closing, she responded to two of the points made by the European Communities. At one stage in his intervention, the representative of the European Communities had noted the existence of a low level of foreign registrations in some countries, which had already implemented an Article 23 level of protection. Her delegation believed that the fact mentioned by the European Communities, in reality, had the effect of emphasizing the argument according to which there was no problem with Article 22 and that producers currently felt they already had sufficient protection. The European

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Communities had also noted that some countries already provided for Article 23 level extension despite the fact that they were opposing this development in the Council. She stated that in her delegation's general experience there was nothing like national experience to fully understand the true evils of something.

167. The representative of Pakistan noted that one argument in communication IP/C/W/360 was that the protection of geographical indications under Article 22 was sufficient and that its mechanism had simply not being used. He recalled that the delegations in favour of extension, including his own delegation, had already set out in detail in paragraphs 9 to 14 of their communication (document IP/C/W/247/Rev.1) why the protection granted by Article 22 was insufficient in comparison to the one offered by Article 23. In the same document, the delegations critical of extension perceived the fact that producers entitled to use the geographical indication "Swiss" for chocolate had taken steps under Article 22 to fight misuse of this geographical indication, as evidence that the protection granted by this provision was sufficient. However, this was so only because Article 22 was the only protection available to be used, even if an inadequate one. Similarly, "American Limoges" for porcelain dinnerware, also used in communication IP/C/W/360 as an example to demonstrate that Article 22 level protection was sufficient, was only because it had passed the "misleading test". However, with extension, no such cumbersome and legally uncertain test would have been necessary. The term Limoges being an indication for French quality porcelain, could, under the more effective level of protection of Article 23, not have been used in American porcelain. In comparison to Article 23, the protection under Article 22 was based on subjective criteria, i.e. the expectations of the public in a specific market of a particular product and the geographical indication and the knowledge of that geographical indication. On the other hand, Article 24 level protection, which based protection on one simple objective criterion, namely on whether the product actually originated from the place indicated by that particular geographical indication. Small producers and associations would simply not have the necessary means to prevent the abusive use of their geographical indications in a foreign country if the protection of their indications continued to be subject to the difficult and burdensome proof that the public had been misled, or that there was an act of unfair competition. Offering them, instead, the less-costly and legally-secure protection of Article 23 for their geographical indications would not only encourage them to prevent abusive use of their indications, but would also avoid the investment they had made in the development and marketing of their products to be in peril.

168. The representative of Sri Lanka associated herself with the statements made by Switzerland, India and all the proponents of the extension. She discussed the confusion there appeared to be between geographical indications and terms such as indications of source and appellation of origin. As requested by the delegation of Sri Lanka, its full written statement is reproduced in the Annex to these minutes.

169. The representative of the Czech Republic said that her delegation and the other proponents of extension had clearly stated several times that the proposal for extension was designed to have effects only for the future and would not affect existing uses of names that coincided with protected geographical indications to the extent that they had been in conformity with the TRIPS Agreement, along the lines of what was provided in Article 24. She was pleased to note that this view was shared in paragraph 10 of document IP/C/W/360. However, it seemed that the arguments of paragraph 10 of the that document, regarding generic terms and customary usage, had been used only to convince Members of the usefulness of extension, because generic terms fell under the Article 24 exceptions. These arguments were not at all in line with paragraph 25 of the same document, which underlined the fears of producers of losing some generic or customary terms.

170. Commenting on the term "pilsner", which was used as an example in paragraph 25 of document IP/C/W/360, she reiterated that the extension would only have effects for the future and would not in any case revoke the status quo in using this geographical indication originally coming from Bohemia. The Czech Republic had never associated the extension of geographical indications with the term "pilsner", but only with Czech beer as an example of a kind of product. The

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Czech Republic did not make any attempt in the WTO to protect the term "pilsner" world-wide. There was no reason to be afraid of losing the term "pilsner", which had been used as a generic term or as a beer type indication. For example, in one EC member State various modifications of the term "pilsner" had been used since the 19 th century and 60% of the total beer consumption had been sold under one of "pilsner" denominations, and producers of this country were not at all concerned about losing this terms due to extension. The fact that the European Communities belonged to the group of demandeurs proved this point. She also raised another argument directed to Members who had not yet come to a clear decision on favouring the extension because of extensive use of the term "pilsner" in their country. The brewery from the town Pilsen in the Czech Republic had recently started to license the production of Pilsner Urquell abroad. If the Czech Republic had had any interest to protect the geographical indication "pilsner" under the extended Article 23, the licensed production of Pilsner Urquell would have never occurred.

171. Although the Czech Republic had no interest to protect the term pilsner as a geographical indication under the extended Article 23, the pilsner story could illustrate very well the negative impact of sufficient protection of geographical indications. The pilsner beer was for the first time produced in the town Pilsen in 1842 and it was exported abroad under the name Pilsner Bier in German language. German was at that time an official language in the territory of Bohemia. The beer, which was based on a new production method (bottom fermentation), became quite popular and famous due to its quality, taste characteristics, hop flavour and golden colour. The beer's fame became fatal for its name. Other breweries world-wide started to produce beer using the same technology. It became customary in most countries to sell beer of this particular type with the denomination "pilsner" or modifications of it. In the terminology, which had being used today, it could be said that foreign breweries free-rode on the reputation and goodwill of the Pilsner beer. The infringement was so extensive at that time and the term "pilsner" was used with such frequency, that it was, despite many attempts, impossible for the legitimate owner of the geographical indication to prevent counterfeiting and the use of the term in a generic sense. Inefficiency, in the "pilsner" example, was consequence of several reasons. One of the most important reasons was the lack of effective legislation on the protection of geographical indications, both at the multilateral and national levels. There was little practice regarding procedures of staving off illegal use of product denominations and regarding procedures against steps leading to the situation where terms became generic. The situation was further complicated by the distance of some territories where the term was used where the producer was not present. It was now a historical fact that the denomination "pilsner" was considered in most of countries, and among consumers, as referring to a particular type of beer independent of the country or place of origin. The original Pilsen brewery lost markets in these counties and its export was seriously damaged. Assessment of this type of losses could be easily expressed in numbers. Concluding, she said that nowadays there existed the opportunity to prevent such disasters for all geographical indications, which were for their owners and countries valuable property and heritage and which still had not become generic terms. The Council should seize this chance for the benefit of all WTO Members.

172. The representative of Chinese Taipei said that, although GI extension was one of the major concerns for his Government, it had provided high level of protection to geographical indications for wines and spirits, as required by Article 23 of the TRIPS Agreement. The Agreement did not intend to oblige Members to provide extended protection to products other than wines and spirits. To do so, would impose an additional burden on Members who did not have a balanced interest on extension. In this regard, he recalled that balance of interests was one of the fundamental principles in the WTO. He associated his delegation with the view, previously advocated by Canada, Korea and many others, according to which Article 22 already provided adequate protection of geographical indications. The current intellectual property rights system, such as collective marks and certification marks, needed only minor tuning in order to cover the protection of geographical indications for goods other than wines and spirits. There was, therefore, no need to establish a whole new system that would be costly

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and burdensome, as it would be the case if extension would take place. Concluding, he expressed his support of document IP/C/W/360.

173. The representative of Switzerland said that Article 22 of the TRIPS Agreement offered a basic level of protection for geographical indications identifying any types of products. Article 23, for its part, offered an additional protection, which, however, was limited to geographical indications identifying wines and spirits, when they were used on wines and spirits respectively, in other words, when they were used within the same product category. For the purpose of illustration, he gave the example of the term "Bordeaux", identifying a famous French wine, and that could only benefit from the protection under Article 23 if it was misused on a wine not originating from France. But if the GI "Bordeaux" was used on, e.g. biscuits, or on clothes produced outside of France, i.e. it was used to identify a product outside the same product category, then the protection of Article 22 would apply, since these non-wine products were not the goods that the GI "Bordeaux" would normally identify. Therefore, the key difference was that while Article 22 limited protection to cases where the use of a GI misled the public as to the true geographical origin of the product, or where such use constituted an act of unfair competition, Article 23 provided protection for geographical indications for wines and spirits if the respective GI was used on wine or on spirit products. In the latter case, one would not be required to prove either that the public was misled or that it was a case of unfair competition. Also, Article 23 protection differed from the one in Article 22 in that it prohibited the misuse of geographical indications with accompanying expressions such as "style", "type", "kind", "imitation". Lastly, and differently from Article 22, Article 23 did provided protection in cases where a geographical indication was used in a translated form. In short, Article 22 made protection dependent on two criteria, which shifted a difficult burden of proof on the legitimate users of a geographical indication who wanted to prevent abuse. Furthermore, the misleading test introduced a subjective element, which, again, rendered protection more complicated and legally insecure.

174. Exceptions in Article 24 applied to both Article 22 and 23 level of protection and, therefore, would also apply under extension. The exceptions of Article 24 took into due account Members' national regulations and practices before the entry into force of the TRIPS Agreement and the need to balance the interests of the various parties interested in the use and protection of geographical indications. The delegations in favour of extension did not want to shift this balance.

175. Concluding, he said that he could still had gone on speaking about many other matters related to the discussion of the Council but because the time was short we would have to refrain from doing so. He added, however, that a solution for this lack of time needed to be found so Members would be able to accomplish the work that laid before them, particularly the legal issues, to which the other remaining issues were dependent on. One possibility, he suggested, would be scheduling an inter-sessional meeting of the Council before the November regular meeting.

176. The representative of Malta said that he fully supported the proposal by the Swiss delegation to have an additional meeting of the TRIPS Council dedicated to the issue of extension before the November meeting. This would enable the discussion to be reflected in the Council's report to the TNC, which the Members would adopt in the November meeting. He believed that no procedural impediments existed for such a meeting to be organized.

177. The representative of the United States thanked Guatemala for introducing communication IP/C/W/360, which his delegation was pleased to co-sponsor with a number of other WTO Members, both developed and developing. The concepts in that paper continued to get wide and increasing support. He associated himself with a number of comments made by Canada, New Zealand and other co-sponsors of the paper.

178. Turing to legal matters, he said that the United States had taken note of the fact that some Members who were among the demandeurs on this issue did not make protection available to the nationals of other WTO Members on the basis of national treatment. It was then interesting to hear

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earlier in the present meeting one Member providing the Council with its own definition of national treatment under the TRIPS Agreement in the area of geographical indications. It was thus pertinent to question whether all Members had fully appreciated just exactly what the definition that this Member had offered really meant for the discussion the Council was having. This was an important inquiry because when exploring the real meaning of such a definition one would find it to be much more fundamental to the issue of whether or not any benefits would flow from extension, than to the issues of whether a country name could be considered a geographical indication or some of the other issues the Council had discussed. The European Communities' definition, at least as he understood it, said that under TRIPS, national treatment would be available to nationals of other WTO Members, but not to products. What that meant was that a WTO Member would have the opportunity in the European Communities to obtain protection if it wanted to register an European geographical indication. However, he did not think that too many Members would be expecting to build a business on the registration of European geographical indications. In fact, he had always thought that what each Member had negotiated for under the TRIPS Agreement was the protection for their own geographical indications. He therefore found this interpretation to be quite shocking. He believed that the right interpretation would be the one which would incorporate the idea that all Members expected that their own geographical indications would be protectable on a national treatment basis in the territories of other WTO Members. And if that was not the case, he certainly would not be able to imagine why anyone would have any interest in engaging in extension of the protection provided under the TRIPS Agreement.

179. The representative of Brazil, reacting to the European Communities' reference to his country's legislation, said that had the European Communities taken notice of his delegation's intervention during the Council's previous meeting and of the presentation of the Brazilian laws during the review of its IP legislation, it would not have been necessary for the European Communities to obtain the same information through an inquiry to the Brazilian national IP authorities. Provisions in its laws that implied anything beyond the TRIPS Agreement should not be construed as an agreement on TRIPS-plus proposal in the Council. In this regard, he was in full agreement with the arguments provided by Australia and Argentina. Another important point raised by the European Communities, related to the balance. The European Communities had noted that, so far, Brazil only had one geographical indication protected, called "Cachaça", while the European Communities had a couple of registrations and applications for geographical indications. This, in his view, in no way demonstrated this was a "balanced" situation. He believed that a better way to approach the issue of whether there existed balance among Members would be to analyse the number of geographical indications currently protected in their own country. While noting that the current number of Brazilian geographical indications protected in Brazil was exactly one, he wished to know how many geographical indications the European Communities protected in their member States, so then he would have a better idea of balance in terms of the potential interest in expanding protection of geographical indications. Balance, he continued, also related to the level of experience among Members in protecting their geographical indications. In the case of Brazil, the one geographical indication it had protected so far had been registered only in December 2001. There was no question that the great number of geographical indications protected within the EC member States and in any other countries that had more experience had enjoyed a longer time of protection. Therefore, Brazil certainly believed that it would be important to take into account the experience that countries had in this area.

180. As to Hungary's reference to his delegation's suggestion to base the Council's discussions on empirical evidence, he believed that it should not be difficult to bring some examples from national experiences that could, actually, be beneficial to the proponents of extension. In this sense, he was somewhat surprised when he saw the reaction of one of the proponents to the provision of factual evidence on the benefits of extension. Hungary had also mentioned the relationship between patents and geographical indications and, if he had understood it correctly, the argument was that there was no empirical study on the benefits from the patent protection for pharmaceutical products. If that was the case, when Brazil introduced the element of engaging in a factual evidence-based exercise, this

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was precisely the kind of imbalance it was seeking to avoid in reproducing imbalances already incorporated in the area of patent protection. So, Brazil now believed that TRIPS had been criticized in large part due to the lack of evidence of potential benefits that all Members could enjoy from incorporating either patent or geographical indication protection. Therefore, Brazil was precisely trying to avoid this type of uninformed decision and his delegation did not think that there should be any problems in bringing factual evidence to the Council's discussions.

181. The representative of the European Communities said that the Council should concentrate on questions directly concerned with the substance of the issues pertaining to its mandate and not on other matters that had nothing to do with it. He agreed with those delegations which had suggested an extra meeting to be held before the next formal meeting of the Council.

182. The representative of Paraguay said that perhaps the representative of the European Communities should hold itself to substantive issues and not refer to the legislation of other countries, which had nothing to do with the subject-matter at hand. Article 1 of the TRIPS Agreement provided that Members' legislation could offer greater protection than that stipulated in the Agreement. This did not mean that Members were obliged to agree internationally to a greater protection than provided in the Agreement, nor that they had agreed to extend the obligations they had through it. He agreed with the representative of Argentina that there was no mandate to negotiate. What existed was a signal from the Doha Ministerial Conference to the Council to discuss, and, at the end of 2002, the Chair of the Council should inform the TNC of the topics discussed and the conclusions reached.

183. The nature of intellectual property rights was based on the protection of knowledge. This, within the negotiations in other frameworks, such as in WIPO, had led to the protection not only of knowledge but also to the attribution of geographical location to the place where the people applying that knowledge to the production of a good were found. That was the reason why extra protection was offered - the protection by geographic indications. This did not mean that they should continue in that forum under-mining the basic concepts and nature of IP protection. As another Member had mentioned, in the end they would be bestowing protection upon the product before knowledge; that was not what intellectual property protection was about. His delegation, which was a co-sponsor of document IP/C/W/360, believed that the extension of the additional protection under Article 23 to other products was not a valid choice. The capacity to legislate and to apply law was a prerogative of the state and there was a territorial framework within which a country could apply these laws and regulations. His delegation found that some countries tried to extra-territorialize their laws and regulations. Paraguay applied its laws and regulations, and the international agreements it had signed and ratified, within its borders. Thanks to the fact that Paraguay faithfully applied what it had signed, his country did not yet have any cases of dispute resolution.

184. The representative of Mexico found the Checklist to be a creative and useful way to give a new dynamic to a discussion that, frankly, was going in circles. Mexico generally supported document IP/C/W/360, presented by Guatemala and other countries. His delegation believed it was useful and illustrative of the discussion the Council was having. In his view, the imbalance in geographical indications between Members was very marked, whether by value, volume or prestige. His delegation found it hard to identify the need to modify the TRIPS Agreement to extend the protection of Article 23 and the potential benefits flowing from extension, because, among other reasons, general protection was offered by Article 22.

185. The representative of Bulgaria, responding to the delegations that had said that presenting proposals for extension was "ambitious" or "extremely ambitious", said that if the Council did not get a substantive solution to this issue, as mandated by paragraph 12 of the Doha Declaration, it would not have fulfilled its mandate, and this would have an impact on Bulgaria's position on other things. His delegation thought that other proposals in other areas were extremely ambitious, so there should be no mistake of its positions in other areas of these negotiations.

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186. The representative of Tunisia supported the suggestion to organize an additional meeting with a view to achieving a mutually acceptable solution which would enable the Council to correct the imbalance which currently existed regarding the protection of geographical indications.

187. The representative of Argentina said that paragraph 12 of the Doha Declaration was a paragraph about the fulfilment of commitments made. As long as no commitments had been made, there could be no fulfilment. Therefore, in no document emerging from Doha was there a commitment to negotiate an extension of the subject-matter at hand.

188. The Chairman thanked Members for allowing the Council to have a very rich discussion on the topic, which was sufficiently complex to require much more time. He knew that some delegations would have liked to speak again, while others, which would have liked to, had not yet spoken. He appreciated their understanding and proposed that the Council have another informal meeting open to all delegations. The main goal of the meeting would be to finish the discussion of the first legal section and begin the discussion of sections two and three. He also asked the Secretariat to help the Council by making a thematic compilation regarding the first section based on what the Council had discussed in the present meeting, so that all Members could have factual information of the discussions in the present meeting on the first topic. The objective would be to have at the Council's disposal a document where all the information relating to the discussions at the present meeting would be available organized in a thematic manner and would compile the positions of the delegations during the present discussion on legal matters.

189. The representative of Morocco was in favour of holding another meeting and supported the preparation of a compilation of issues. Such a document should incorporate not only the oral interventions but also all the papers and communications that had been produced regarding these issues, particularly the legal ones. It would also be important to do the same with the other two remaining issues in the Checklist.

190. The representative of Canada said that it was very clear from the present discussion that the Council obviously had more work to do. She thought that the one common theme that they had heard throughout the day was how important the work in other fora was to the whole process. She wondered if it might not be good to perhaps postpone the meeting after the meeting of the WIPO Standing Committee on Trademarks, if the Council decided to have it, until after that work was completed, which could factor into the discussion.

191. The representative of Argentina said that the Council could wait before taking a decision, particularly in regards to a specific date, until the end of the session. The representative of Switzerland said that it was important that to fix the date, and supported Morocco's suggestion that written communications should also be taken into consideration in the thematic compilation. The representative of the United States requested some time to consider the proposal. The representative of the Czech Republic said that he appreciated both proposals and supported the suggestion of Morocco to incorporate in the summary also the written proposals from both sides.

192. The representative of Sri Lanka said that she was in favour of requesting the Secretariat to prepare a compilation. If the Council did not take into account the previous submissions and the oral interventions made, the document might not reflect the correct picture of the issues discussed. Therefore, she asked that when the Secretariat compiled the document it reflect both oral and written submissions.

193. Following consultations on the matter, the Chairman proposed that the Council hold an informal meeting on Sunday 10 November to continue this discussion. He also proposed that the Secretariat be requested to prepare prior to the Council's next formal meeting a compilation of the elements contained in the oral statements made at the present meeting and the written submissions

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prepared for it, including the points made at the forthcoming informal meeting, in relation to the first "basket of issues".

194. The Council so agreed.

D. REVIEW OF THE PROVISIONS OF ARTICLE 27.3(B)

195. The Chairman informed the Council that, as had been agreed during the June 2002 meeting, the Secretariat had now circulated the information contained in informal notes, JOB(02)59, 58 and 60 on the review of the provisions of Article 27.3(b), the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD) and the protection of traditional knowledge and folklore, as working documents IP/C/W/369, IPC/W/368 and IPC/W/370, respectively. He recalled the Council's invitation to WIPO, UNCTAD, FAO, the World Bank, CGIAR, CBD, UNEP and UPOV, to provide updated information on their activities with respect to agenda items E, F and G. Since its meeting in June, the Council had received information from the World Bank (subsequently circulated in document IP/C/W/347/Add.4), in addition to the information from the FAO, the CBD, UNCTAD and UPOV that had been received already prior to the June meeting (documents IP/C/W/347 and addenda 1-3, respectively). Furthermore, he recalled that Members were urged at the March 2002 meeting to provide responses to the questionnaire on the implementation of Article 27.3(b) by June 2002. The Secretariat was also requested to update document IP/C/W/273 on the basis of any responses received from Members. To this effect the Secretariat had issued a reminder on 26 March 2002, as contained in airgram WTO/AIR/1756, to provide this information. Since then, the Secretariat had received additional responses from Estonia; Hong Kong, China; Lithuania and Thailand as contained in documents IP/C/W/125/Add.20, 22, 23 and 21, respectively, and a supplement from the Czech Republic, issued in IPC/W/125/Add.8/Suppl.1. The Secretariat would update the synoptic table in its summary note as requested by the Council in light of these new submissions. Further, the Chair informed the Council of the communication that had just been received from the EC and their member States on the review of Article 27.3(b), the relation between the TRIPS Agreement and the CBD, and the protection of traditional knowledge and folklore (subsequently circulated in document IP/C/W/383).

196. The representative of the European Communities said that IP/C/W/383 dealt with the three agenda items viz. E, F and G in one communication and that, in preparing the document, the EC had reviewed the minutes of the meeting of the TRIPS Council and the documents tabled over the last few years. The EC believed that with this communication, they would contribute positively and constructively to the mandate laid down in paragraph 19 of the Doha Declaration, which instructed the TRIPS Council to continue the review of Article 27.3(b) and to examine the relationship between the TRIPS Agreement and the CBD, the protection of traditional knowledge and folklore and other relevant new developments. He believed that a flexible and non-dogmatic position by all Members of the TRIPS Council and a genuine willingness to look at reasonable measures would allow the Council to take a fresh look at all these issues in a relatively short period of time. He said he was convinced that solutions could be found which genuinely reflected the concerns of developing countries, while not affecting the substance nor the balance of rights and obligations laid down in the TRIPS Agreement. It was important for Members to create a favourable intellectual property environment for research in the area of biotechnology.

197. The representative of Zimbabwe recalled his delegation's intervention at the last formal meeting of the TRIPS Council in June 2002 and reiterated that he saw a lot of common ground in the discussion of this issue and believed that it was possible for the TRIPS Council to adopt a decision reflecting areas of agreement, so that Members could turn their focus to those other areas where no agreement existed. One of the areas of disagreement appeared to be the very need for definitions to give precise meaning to certain terms in Article 27.3(b), such as microorganisms, non-biological processes and essentially biological processes for the production of plants and animals. The EC, in its concept paper on this issue, had devoted nine or ten paragraphs to give reasons why they did not think

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that engaging in the exercise of definitions was a good idea. Some of the reasons given against seeking a common understanding of these terms included the fact that there were difficulties getting all WTO Members to agree on definitions; that WIPO rather than the TRIPS Council was the right forum to agree on definitions of technical issues, and that definitions could compromise Members' flexibility in the use and interpretation of the terms that the Council sought to define. The difficulty of getting all WTO Members to agree on definitions should not, in his view, deter the Council from embarking on the exercise of coming up with precise definitions of certain terms. He said that he was aware of the fact that the WTO Members appeared to have difficulties agreeing on a number of issues, not just on definitions, but this fact had not deterred the WTO membership from tackling difficult issues in the past and should not deter them now.

198. He continued that, in an apparent recognition of the importance of giving specific meaning to the terms in Article 27.3(b), the EC had noted in paragraph 21 of their paper in relation to microorganisms that the definition of the scope of microorganisms was important at the domestic level as these were widely used in the pharmaceutical, chemical or biotechnology industries and as these were the only form of living organisms for which WTO Members were obliged to provide patent protection. Zimbabwe was not convinced that while it was necessary at the national level to give precise meaning to the term 'microorganism', it was not necessary to do so at the international level.

199. Zimbabwe was also not convinced that WIPO was the right forum to agree on definitions of technical terms simply because, as the EC stated, WIPO had more expertise on this specific technical issue. His delegation saw no reason why, if indeed that was the case, the TRIPS Council could not enlist the services of these same experts to help it arrive at specific definitions. He wondered why the EC appeared to think that it would be any easier to agree on the definitions at WIPO when the same WTO membership was more or less replicated in WIPO. There was no intention on the part of those Members, including Zimbabwe, who were advocating precise definitions, to diminish or erode any flexibilities that Members felt they had in respect of the meanings that they currently attributed to any of those terms, a fear raised by the EC in their paper. He believed that specific meanings could be arrived at while preserving reasonable flexibilities and that defining the terms in Article 27.3(b) was necessary and could be done if all the Members put their minds to this task.

200. The representative of the European Communities emphasized that his delegation had tried to look at all the issues which had been addressed over the last few years in a comprehensive manner. In his view, some degree of realism was necessary if Members wanted to make progress on some of the issues in a reasonable time perspective. In his view, Members should be selective in deciding the issues on which to concentrate in the TRIPS Council. In light of the experience of work undertaken in the WIPO in many areas, he believed that the WIPO was the best forum to undertake an exercise on the question of definitions of highly technical terms and was therefore not convinced that the TRIPS Council could usefully embark on this exercise. He believed that all Members had some interest in retaining their flexibility in this and other areas of the TRIPS Agreement. It was clearly within the jurisdiction of countries that patentability needed to be examined and that definitions to which the EC had referred to needed to be put into practice. This should be borne in mind when Members reflected on what sort of follow up they wanted on to this particular issue.

201. The representative of China said that her delegation understood that Article 27.3(b) of the TRIPS Agreement preserved the rights of Members to decide whether or not to exclude plants and animals from patentability in the light of their specific national interests and needs. According to Article 27.3(b), plants and animals other than microorganisms and essentially biological processes for the production of plants or animals, other than non-biological and microbiological processes, may be excluded from patentability. However, since there was no definition of the terms 'microorganism', 'non-biological' or 'microbiological processes' either in the TRIPS Agreement or in other international fora, it was difficult for Members to achieve further consensus with respect to the protection of biotechnology-related inventions. Moreover, with the rapid development of the biotechnology

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industry, there had been much debate with respect to the patentability of, or the grounds for the grant of patents to, genes of animals, plants, human beings or genetic materials in general, or the grounds for the grant of patents to species of transgenetic plants or animals. Special concerns had been expressed about whether granting patents to such inventions ran counter to the public order or morality. China considered biological material to be chemicals and granted patents to microorganisms and genes so long as these inventions met the requirement for patentability as provided for in the Chinese patent law and so long as their commercial exploitation did not go against public order and morality. In conclusion, as the review of Article 27.3(b) was mandated in the TRIPS Agreement, her delegation looked forward to further cooperation in the TRIPS Council to push forward the consultation and debate in this particular field, taking into consideration the relevant provisions of the CBD and the protection of traditional knowledge and folklore. China would do her part to contribute to the efforts in the TRIPS Council aimed at providing effective protection for inventions in the field of plants and animal varieties and for biotechnology-related inventions in general.

202. The representative of Malaysia believed that there was no inherent conflict between the provisions of the TRIPS Agreement and CBD. TRIPS was an agreement that promoted the protection of intellectual property rights, while the CBD recognized that owners of genetic resources should also benefit from the use of these resources. If at all there was any conflict, it arose because of the fact that most of genetic resources resided in the developing world, while the technologies to develop these resources were not within its domain. TRIPS could provide a bridge to this divide by providing a multilateral means to enable rights holders of genetic resources to have recourse to benefit sharing. However, the TRIPS Agreement could itself be used to promote technological innovation and the transfer and dissemination of technology. Joint cooperation between the holders of technology and owners of genetic resources should be stepped up to jointly develop new products, so that the benefits of ownership of genetic resources went beyond mere benefit sharing. Similarly, the protection of traditional knowledge and folklore also encouraged the utilisation of genetic resources and this should also bring benefits to their owners. Some Members had developed their own models of protection while others were in the process of doing so, as was seen from the experiences of Australia, India and Peru that had been shared in the Council. Malaysia welcomed more ideas on how Members' legislation dealt with these issues on a national level, as this would help in future deliberations in the Council. The Council may take some time to reach a consensus on how to proceed on issues of 27.3 (b), relationship with CBD and traditional knowledge and folklore but, in the interim, WTO Members should continue discussions on improving the understanding of Members on the developmental linkages between TRIPS Agreement and the protection of genetic resources, definitions, and patentability criteria and instruments that could be used to promote technological innovation, transfer of technology and other developments that could contribute to the protection of genetic resources, traditional knowledge and folklore.

203. The representative of Egypt said that his delegation agreed that there seemed to be no conflict between the two Agreements from a legal point of view but, on a preliminary basis, he said that intellectual property rights were related to, and had implications for, the implementation of the CBD objectives. The CBD asserted the sovereign rights of nations over their national resources, and the right to determine access to these resources, with the aim of facilitating their sustainable use, on the basis of prior informed consent and mutually agreed terms that provided for fair and equitable sharing of benefits. Conserving biodiversity and achieving these objectives of the CBD were not completely possible under a regime of private monopoly rights that resulted from TRIPS because private property regimes would undermine the access and benefit sharing provisions of the CBD. These points of inconsistency should be addressed in order that the signatory countries could meet the requirements for complying with both agreements as had been recognized in the Doha Declaration. To achieve this consistency there should be a focus on how intellectual property rules might need to be modified in order to provide support for access to genetic resources and to allow for benefit sharing.

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204. He recalled that during the last TRIPS Council meeting, a group of developing countries had submitted a communication in which they required the patent applicant to disclose the origin of the genetic resources and to provide evidence of prior informed consent. His delegation believed that this requirement would increase transparency and would help in ensuring the effectiveness of any benefit sharing provisions. He said that these benefits could take various forms, including the transfer of technology. In this regard, the CBD addressed the importance of intellectual property rights for developed countries and called for satisfying the demands of developing countries to facilitate access to technology. This could be realised by continuing scientific research based on genetic resources, with the full participation of the countries supplying their genetic material and, at the same time, ensuring access to technologies on fair and favourable terms. The increasing role of biotechnology in development, and its contribution to better health, food security and other areas, provided an opportunity for coordination between those countries rich in biological resources but lacking the technology, on the one hand, and those that had the technology to use these resources, on the other hand, in order to serve the needs of sustainable development.

205. The representative of Brazil recalled the document circulated by a group of developing countries on the relationship between the TRIPS Agreement and the CBD and elaborated on the proposal made to amend the TRIPS Agreement in order to incorporate requirements for disclosure of the source of the genetic material used in the invention. He said that this was going to be one of the priority issues for the TRIPS Council to include in the Chairman's report to the Trade Negotiations Committee and urged that the necessary procedures be initiated in order to prepare this report. He recalled that the recent World Summit on Sustainable Development (WSSD) at Johannesburg had issued an implementation plan, paragraph 42 of which clearly stated that commitments should be made to implement benefit sharing with the prior consent and participation of the communities that held traditional knowledge. The plan foresaw negotiations, within the CBD, of an international regime to promote and protect fair and equitable benefit sharing arising from the use of genetic resources. Brazil believed that it was all the more important for the TRIPS Council to incorporate the elements suggested by developing countries into the TRIPS Agreement as otherwise any progress within the CBD in terms of benefit sharing might be harmed by potential conflicts that might arise from its relationship with the TRIPS Agreement. He agreed with many other delegations, including Egypt, that, in principle, the TRIPS Agreement and the CBD should be mutually supportive and that the Council should take appropriate steps to prevent any potential conflict between these two Agreements. Any failure to achieve a successful mechanism to ensure the complementarity between these two instruments would, he said, be detrimental to both agreements.

206. With respect to the document circulated by the EC, he sought clarification if the requirements to demonstrate benefit sharing in the use of the invention and evidence of prior informed consent were part of the requirements established in the patent procedures. He believed that benefit sharing and prior informed consent were key elements of the CBD and that, in the absence these two requirements, the main gap between the TRIPS Agreement and CBD would remain. He also queried the EC about the legal consequences of non-compliance and asked for further elaboration with respect to those lying outside the ambit of patent law.

207. Turning to traditional knowledge and the role of WIPO, he said that Brazil had participated actively in WIPO's Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore and did not agree with the EC that the TRIPS Council was not the right place to negotiate a protection regime for a complex new issue subject-matter like traditional knowledge or folklore. This issue should be discussed both in the WTO and in WIPO, to the extent of their own mandates, as well as in the CBD and the FAO, to the extent of the contribution that each organization could provide.

208. With respect to the effective sui generis systems to protect plant varieties, Brazil agreed with the EC that the UPOV Convention met the standard of effectiveness in Article 27.3(b) and that other models might be equally effective, so that UPOV was not the only model to be followed. He

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welcomed the flexible approach of the EC regarding farmers' rights and farmers' exemptions and agreed that these could be justified under Article 27.3(b) or under Article 30 of the TRIPS Agreement. In his view, it was important to demonstrate how broad the scope of Article 30 was. Finally, with respect to definition of microorganisms, Brazil believed that one important point to bear in mind in this discussion was that microorganisms as found in nature should not be patententable. In other words, purification or isolation of microorganisms should not amount to patentable subject-matter.

209. The representative of the United States said that, as Members of the TRIPS Council knew well, the view of his delegation was that Article 27.3(b) provided considerable flexibility for WTO Members by allowing an exception to the mandate in Article 27.1 that patents be available for any invention, whether product or process, in all fields of technology, so long as it met the standards of patentability. Individual Members were free to exclude from patentability plants and animals and essentially biological processes for the production of plants and animals. By the same token, Members were free to provide patent protection for such subject-matter and the United States did so, so long as the inventions were new, useful and non-obvious. The US credited that level of protection with the subsequent development of its strong biotechnology industry. A Member that chose to avail of the exemption allowed by 27.3(b) must ensure that, in doing so, protection remained available for microorganisms and for non-biological and microbiological processes that met the standards of patentability.

210. The United States agreed with the EC's statement that trying to define terms such as microorganisms in the TRIPS Council was not the best way forward. Technology in this field was advancing so rapidly that, even if Members were able to agree on a definition, it would most likely soon be outmoded. Currently there was no consensus among patent experts on a definition of microorganisms as it applied to patents and in addition, because the subject was an extremely technical one, if any effort was to be made to develop such a definition, the more appropriate forum would be the WIPO Standing Committee on Patents. Article 27.3 (b) required a Member that chose not to provide protection for plant varieties under its patent law to provide an effective sui generis system for the protection of plant varieties. However, Members were free to do both as the United States did. The US believed that the standards provided by UPOV 1991 were appropriate standards for an effective sui generis system of protection for new varieties of plants. Adherence to such standards would help to ensure a more uniform international system of protection for plant varieties around the world. A lack of such uniformity could reduce market access for small plant breeders and biotech developers because obtaining and maintaining protection in other markets would be more time consuming and costly. He reiterated that if other systems that were similarly effective could be developed, the US would certainly encourage Members to explore using those other systems as well. The US believed UPOV was an existing mechanism that provided the type of uniformity that would facilitate trade in this area.

211. His delegation believed strongly that patent systems provided an incentive to the best and the brightest world-wide to invest in research and development of products and processes that improved lives. As his delegation had noted in a prior paper, the incentives provided by the patent system over the last two decades had brought about myriad inventions in agricultural biotechnology that had improved crop yields for farmers and reduced dependence on chemical pesticides, herbicides and had improved the nutritional level of food. On the pharmaceutical biotechnology side, hundreds of highly accurate tools for diagnosing and treating diseases and other physical afflictions had been developed in recent years and more were in the pipeline. A search of the patent database of the kind of examples of patents granted and sought in the United States had highlighted the fact that it was not just developed countries that sought patents on biotechnological inventions. For example, on September 3rd 2002 a patent had been granted to an entity in Brazil for the method of producing a recombinant anaemia virus. On May 15th 2001, a patent had been granted to a research institute in Egypt, together with the University of Wyoming, for a particular form of a bacteria. Similarly, the Council of Scientific and Industrial Research in India had been granted a patent for a bacteria that produced a protease inhibitor and there were many other such examples. He said that it would not be

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in the interests of any Member to preclude the patenting of plants and animals and microorganisms and that the US was keen on always retaining such patents under its law. He believed that these examples, and others that could be found, demonstrated that substantial potential existed in many developing countries for a strong biotechnology industry. In this regard, he urged all Members to explore thoroughly the benefits of patent grants in this area.

212. The representative of the European Communities said that, in accordance with Article 27.3(b), Member countries would have to provide for the protection of plant varieties either through patents or through an effective sui generis system or by any combination thereof. He said that the provision gave no further guidance of what was to be understood by an effective sui generis system and that the absence of a definition meant that Members had a considerable degree of flexibility in determining how their legislation should meet the standard of effectiveness and in designing a protection regime that was appropriate to their specific national situations. A growing number of WTO Members had signed the UPOV Convention which was, in his view, an effective, flexible and widely recognized model for the protection of plant varieties, given that it was subscribed by fifty or more countries. However, while UPOV 1978 and 1991 should be considered as meeting the standard of effectiveness under Article 27.3(b) of the TRIPS Agreement, these were, as stated explicitly in their communication, not necessarily the only valid or effective sui generis systems for plant variety protection and other models might exist. However, in order to be effective, any protection regime for plant varieties should respond to a certain number of criteria, as had been stated in their communication.

213. Turning to "farmers' rights" and "farmers' exemptions", he clarified that 'farmers rights' were a set of measures that recognized the ancestral role of farmers in developing food crop varieties and preserving biodiversity, as set out under Article 9 of the new FAO International Treaty on Plant Genetic Resource for Food and Agriculture, and that "farmers' exemptions", on the other hand, were exemptions to plant variety rights or patents which allowed farmers to save, use for further multiplication, exchange or sell seeds of protected varieties of plants. For instance, both the EC regulations on plant variety rights and the directive on Legal Protection of Biotechnological Inventions contained the so called "farmers' privilege" clause which applied to the main food crops. These allowed small farmers to freely use protected seeds for further multiplication on their own holdings. Farmers with smaller sized holdings were required to pay an equitable remuneration appreciably lower than the amount charged to big farmers, to whom normal conditions applied. His delegation considered that farmers' exemption could be justified under Article 27.3(b) of the TRIPS Agreement as an exception to plant variety right protection, or under Article 30 of the TRIPS Agreement as an exception to patent protection on genetic resources for food and agriculture, as the case may be. However, it should not deduced from the EC's communication that Article 30 of the TRIPS Agreement allowed for broad exceptions.

214. Finally, he said that in many least developed or developing countries all or part of the farming activity was performed on small farms at subsistence level and that all commercial activities of farmers were of limited geographical scope. In these situations, his delegation was of the opinion that such developing country Members might well create, in their national laws, a broader farmers' exemption for the benefit of subsistence farmers or small farmers who lacked access to financial resources for new seeds every growing season. This would allow them to save, re-plant, exchange, share and re-sell seeds to other small farmers, provided they did not use the denomination of the variety or the related trademark. However, farmers with significant commercial interests should be subject to the normal rules.

215. The representative of Japan said that his delegation had not changed its position on the review of Article 27.3(b) since submitting its position paper in document IP/C/W/236. He said that Japan's position also remained consistent and unchanged with respect to the relationship between the CBD and TRIPS Agreement. He made preliminary observations with respect to tiret 95 of outstanding implementation issues, especially the issue relating to the recent international treaty established under

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the FAO, stating that he found it premature to start discussion on this issue in the TRIPS Council. In his view, it would be appropriate to wait for the discussion to develop in the FAO or other fora because this treaty had not yet entered into force. There were various unclear points regarding the interpretation of Article 12.3(d) of that treaty which could be more appropriately clarified through the discussion on material transfer agreements within the framework of the FAO.

216. With respect to protection of traditional knowledge and folklore, he said that this issue had been extensively discussed at the Intergovernmental Committee of WIPO from the view point of intellectual property experts. Therefore, his delegation would be cautious about starting discussions in the TRIPS Council as it was better to wait for the development and results from that Committee. Turning to the issue of disclosure and origin of genetic resources and prior informed consent, he thought that purely from the viewpoint of patent granting procedures, these could not be considered as requirements for necessary disclosure to carry out the invention under Article 29.1 of the TRIPS Agreement. He believed that the additional obligations should not be put on patent applications under the TRIPS Agreement only related to biotechnological inventions. Since the requirements of disclosure of origin of genetic resources and evidence of prior informed consent were not patentability-related issues, but rather additional procedures or formalities related to patent grant, he was concerned about consistency with Article 62.1 of the TRIPS Agreement.

217. The representative of Peru agreed with the EC that Article 27.3 (b) contained flexibilities which had to be maintained, particularly in order to avoid unilateral pressure to take on higher commitments than those in the Agreement. Her delegation had doubts as to whether the TRIPS Council should clarify and study the issue of microorganisms because in the case of a dispute, it would be in the hands of a special body and the Appellate Body, which was not desirable. However, she did not think that the WIPO was the sole forum to study this aspect. In her view, the inclusion of the issue of farmers' rights in the discussion was relevant because Article 27.3 (b) specifically referred to the protection of plant varieties and many Members had included provisions regarding farmers rights in their legislation. She also suggested that the FAO should be invited to make an oral presentation with respect to document IP/C/W/347 at the next meeting of the TRIPS Council.

218. The representative of Singapore said that the subject under discussion was a difficult one, particularly because it was still evolving. He said that Members should take into account the developments in the field of biotechnology during the review of Article 27.3 (b), because the issue of patentability of genetic material was, in addition to the provisions of Article 27.3(b), governed by these developments. However, in his view the TRIPS Council should be slow in making any changes that would affect the emerging world of biotechnology. He recalled the point raised by a number of delegations with respect to the discussions taking place in other fora, such as the WIPO and the FAO, related to this issue and said that it would be helpful for the TRIPS Council to monitor closely the developments in other fora and take on board issues relevant to its work. There would be a danger of duplicating work and creating unnecessary controversy in relation to areas which may be more usefully discussed in terms of expertise in other fora.

219. With respect to the relationship between CBD and the TRIPS it was important to recognize the need to examine the issue of complementarity between the two agreements. It would be useful to bear in mind the principles of treaty interpretation and that agreements needed to be examined in a way that did not create conflict by identifying areas of potential conflict and finding ways to resolve such conflicts. Regarding patentability of genetic materials under the CBD, he said that overly broad patents granted in certain countries was an issue that other delegations should convey to their capitals and ensure that such acts were avoided in the course of implementation of their legislation. Turning to prior informed consent and benefit sharing, he said that these were difficult issues, since one side maintained that these issues should be dealt with at multilateral level while the other side pointed out that doing so went beyond the boundary of intellectual property and stepped into an area that was best dealt with at the bilateral level through contracts. He said that the Council should continue examining this issue and take note of activities elsewhere, including the work in the WIPO committee.

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220. The representative of UPOV said that the task of UPOV was to provide and to promote an effective system of plant variety protection aimed at encouraging the development of new varieties of plants for the benefit of society, whether in a developed or developing country. UPOV had 51 Members, many of whom were developing countries, who had experienced beneficial effects with regard to productivity, competitiveness, income and development through plant variety protection. He said that the plant variety protection system of the European Union was based on the UPOV Convention, and that 13 of its member States were contracting parties to the UPOV Convention. He pointed out that UPOV was the only existing sui generis system for the protection of new varieties of plants which was internationally recognized. He referred to paragraph 77 of the EC concept paper (IP/C/W/383) enumerating the criteria for an effective regime for plant variety protection and said that the plant variety protection system established on the basis of the UPOV Convention met all these criteria and was therefore compatible with Article 27.3 (b) of the TRIPS Agreement. The UPOV Convention provided for an effective sui generis system at the national level as well as a system of international harmonisation for plant variety protection so that all breeders in all UPOV member countries could enjoy the same level of protection. He said that enhancing international harmonisation was an indispensable tool for the protection of new varieties of plants, for international trade and transfer for technology. If a country were to introduce its own system of protection, plant breeders in that country would not enjoy the benefits derived from international harmonisation and this could complicate and distort international trade in seeds. In such a case, breeders in UPOV member countries would be hesitant to release their varieties there and this would mean that farmers in that country would lose the possibility of benefiting from the use of the best varieties developed. Further, the introduction of a system which was not compatible with the internationally harmonized system raised questions with regard to the spirit of the TRIPS Agreement.

221. He continued that at the national level, the most important element in agricultural policy was the development of the seed industry and the protection of new varieties of plants was considered to be one of the most effective tools for that purpose. All countries wanted to have a competitive seed sector composed of companies from both the public and private sectors and, since both sectors needed financial resources to maintain a breeding programme for new varieties, additional financial resources could be provided through an effective system of plant variety protection. He said that the UPOV Convention required, for reasons of market transparency, the use of a given variety denomination whenever seed of a protected variety was traded. He referred to IP/C/W/383 and said that it described the possibility of reducing the level of protection by allowing the sale of seeds without using the variety denomination. This carried the risk of creating confusion and undermining the whole system because it made it difficult, if not impossible, for the breeder to recover the cost of his breeding program. He emphasized that the practices of farmers in relation to unprotected varieties and land races would not be affected in any way by the introduction of the UPOV system of plant variety protection. The UPOV system was designed to encourage the development of new varieties of plants for the benefit of society that provided benefits to both breeders and farmers. It included exemptions to farmers for the use of protected varieties for private and non-commercial purposes, including for subsistence farming. Farmers could, for example, use protected varieties for experimental purposes and for breeding other varieties. In addition, farmers might be permitted to use farm saved seeds of protected varieties but such permission should be within certain constraints designed to ensure that the incentives for breeders to develop new varieties were not undermined. Further, farmers could develop and protect their own varieties under the UPOV Convention.

222. Moreover, he said, the UPOV system provided greater flexibility to a public breeding station that had been granted breeders' rights with respect to conditions for permitting the exploitation of the protected variety. The breeder might, for instance, allow a farmer to exchange or sell seeds to neighbours. Public research institutes in many developing countries played a very important role in the breeding of staple food crops and were free to allow their protected varieties to be distributed through traditional channels from one farmer to another, while excluding the varieties from commercial use by other competing entities. In this regard, the UPOV system was compatible with the use of traditional channels when breeders, especially public research institutes, wished to use such

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channels. Therefore, the lack of adequate protection for new varieties in developing countries could result in a failure to provide a key incentive for potential investment to develop agriculture. Consequently, developing countries would lose an opportunity to develop their national agriculture, horticulture and forestry sectors and to enhance their overall economic development. He said that UPOV recognized the importance of capacity building and had a capacity building programme covering more than 90 countries in Africa, Asia, the Pacific region, Latin America, the Caribbean and in countries in transition.4

E. RELATIONSHIP BETWEEN THE TRIPS AGREEMENT AND THE CBD

223. The representative of India recalled his delegation's detailed response made at the last meeting to concerns expressed by Members on India's proposals on disclosure and prior informed consent and added that one concern that had been expressed was that benefit sharing should be achieved through privately concluded bilateral contracts and that national law could establish a legal basis for such contractual agreements. In his view, it was evident that Members recognized that contracts could be entered into prior to transfer of biological resources and knowledge and that the elements of such contracts could be prescribed by national law. In view of this, opposition to the idea that Article 29 of the TRIPS should mandate disclosure that such contracts had indeed been entered into was surprising. He said that his country, and several others, had not opposed bilateral agreements for achieving benefit sharing. His country's position was that the law should lay down the minimum standards for prior informed consent and benefit sharing as required under the CBD. This could be facilitated further through model forms of material transfer agreements and information transfer agreements. The agreements could not however conflict with the basic framework of the CBD for access, prior informed consent and benefit sharing which was recognized in the laws adopted by several countries. A contract against the principles of CBD and against the national law implementing the CBD would, therefore, be struck down as violative of public policy. Disclosure norms that mandated full disclosure of source, whether contracts were entered into and whether national laws on access and benefit sharing were complied with or not, would act as a deterrent against access and unauthorised use by any patent applicant. It would also act as a self-monitoring and auto-check mechanism leading to lesser instances of unauthorised use and the onus would be entirely on the patent applicant to provide the relevant information. It was, therefore, difficult to see how such a requirement would raise administrative costs for governments. Further, it was evident that national law requiring bilateral agreements alone was not adequate, especially in the case of genetic resources and knowledge that were easy to take away under conditions where countries rich in biodiversity and traditional knowledge did not have the capacity to track violations on their own.

224. Another set of concerns expressed by some Members was that expanding the norms of disclosure could be contrary to the non-discrimination clause under Article 27.1 of the TRIPS Agreement. His delegation failed to appreciate how such norms could be considered as contrary to the non-discrimination principle since the same norms would apply equally to both foreign and domestic patent applicants. The argument of discrimination on the basis of the field of technology too was not well-founded because when inventions in the field of technology involved the use of bio-resources, the special circumstances surrounding such resources and associated information mandated additional norms for disclosure. He said that it was an established principle of interpretation that treating dissimilar fields of technology differently would not be contrary to the principle of non-discrimination. He noted that some Members had indicated that the proposal to introduce additional conditions for disclosure in Article 29 would go beyond CBD because it was up to each contracting party to establish its own system for controlling access to genetic resources and benefit sharing. However, he said, contracting parties to the CBD had themselves recognized that patents and other intellectual property rights might influence the implementation of the Convention and had pointed out that such rights should be supportive of and not contrary to the objectives of the Convention. Therefore, his delegation had proposed, in this context, that the patent rights were not enjoyed at the

4 For conclusions, see paragraphs 256 and 257.

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expense of violating the provisions of national level regimes for implementing the objectives of the CBD and hence patents contrary to the objectives of the CBD should not be granted.

225. The representative of the European Communities said that his delegation was fully aware of the need for the Council to take decisions on the three agenda items which their communication had addressed. Turning to the relationship between the CBD and the TRIPS Agreement, he said that the CBD, on one hand, clearly acknowledged the need to adequately and effectively protect intellectual property rights and urged its members to ensure that intellectual property rights were supportive of its objectives. The TRIPS Agreement, on the other hand, did not refer to the principles of the CBD on access to genetic resources and benefit sharing arising from their use. However, this did not mean that the TRIPS Agreement would run counter to the CBD. In his view, these two agreements did not conflict from a legal perspective and there was nothing in the provisions of either that would prevent a country from fulfilling its obligations under both. For instance, the CBD did not prohibit patents on inventions using genetic material. Similarly, the TRIPS Agreement did not prevent signatories to the CBD from exercising their right to regulate access to their genetic resources, to require prior informed consent or to share in the benefits arising from their use. However, it would not be correct to close the door to any debate on the grounds that, in the absence of legal incompatibility between the two agreements, there cannot be a problem with implementing both agreements, because there was considerable interaction between the rights referred to under the TRIPS Agreement and the subject-matter of the CBD.

226. The TRIPS Agreement, in its implementation, could be used to support the objectives of the CBD such as the fair and equitable sharing of benefits arising from the use of genetic resources, since there was scope for congruence of interests between providers and users of intellectual property rights. Furthermore, the latter contributed to creating benefits stemming from the use of genetic resources in the form of financial returns or access to the relevant technology. For this reason, his delegation was of the view that any examination of the link between the CBD and the TRIPS Agreement should focus on the ways and means of implementing both instruments in a mutually supportive manner and on creating an interface between the two.

227. At national level, it was his delegation's view that it was the duty of WTO Members and the CBD signatories to honour their commitments. He said that both agreements allowed for a significant degree of flexibility with regard to national implementation and this left scope for a balance in their application. Further synergies in their implementation could be created at the international level. Therefore, it was important for governments to ensure policy coherence in dealing with issues relevant to the interplay between the TRIPS Agreement and CBD, in order to ensure an integrated approach across institutions. In that context, he reiterated that granting observer status to the CBD in the TRIPS Council would play a crucial role in creating a clear appreciation of the links between the two agreements. He added that the direct relationship between the work in the CBD and that of the TRIPS Council, as expressed in paragraph 19 of the Doha Ministerial Declaration, made such observership indispensable. It was also important to underline that legislative, administrative and policy approaches, on the one hand, and contractual approaches, on the other, should not be set against each another. He said that in his delegation's view, multilateral rules, national regulatory or policy measures and contractual arrangements were complementary instruments in securing the principles of the CBD. The EC therefore welcomed the Bonn Guidelines on Access to Genetic Resources and Benefit Sharing which set out practical ways and means of implementing the core principles of the CBD.

228. Turning to disclosure requirements, one of the key chapters in the EC communication, he noted that a number of Members had expressed the view that the TRIPS Agreement should be amended in order to reconcile or harmonize it with the CBD. Further, he noted the proposals made to incorporate a requirement into the TRIPS Agreement that patent applicants disclose the geographical source and origin of the genetic material used and produce an official certificate or evidence that domestic laws on access and benefit sharing of the source country were respected. He said that his

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delegation agreed that there was need to examine and discuss the possible introduction of a system at the global level such as a self-standing disclosure requirements that would allow Members to keep track of all applications and patents granted for genetic resource-related inventions. He saw merit in a system that would ensure transparency and allow national authorities granting access to genetic resources to keep track of patent applications linked to the use of these resources. However, he said, the information provided by patent applicants under such a system should be limited to geographic origin of the genetic resources or traditional knowledge used in the invention, and that such a disclosure requirement should not act as an additional formal or substantial patentability criterion. He elaborated that the legal consequences of respecting such requirements should lie outside the ambit of patent law. He referred to the questions raised by the Brazilian delegate on this matter and said that the EC's proposal was that each country should decide for itself how it would provide for sanctions when there were violations of the disclosure obligations but that such sanctions should be outside the patent legislation. In his view, such a system of disclosure would meet concerns expressed by a number of WTO Members and would also help to prevent misappropriation of genetic resources and related traditional knowledge by allowing patent offices to establish novelty more accurately through focused searches. Further, it would help countries providing access to genetic resources to monitor and keep track of compliance with the rules on access and benefit sharing rules. He referred to the question posed by the Brazilian representative on prior informed consent and the need to demonstrate the existence of benefit sharing schemes and agreed that disclosure requirements was the way forward to the discussions in the TRIPS Council.

229. The representative of China said that, as the Brazilian delegate had pointed out, her delegation was not so sure whether the disclosure requirements in the EC concept paper were the same as those proposed by the developing countries as contained in documented IP/C/W/356. She reiterated that her delegation believed, from the perspective of sustainable development of mankind, that the TRIPS Agreement and the CBD were mutually supportive. The TRIPS Agreement focused more on the protection and dissemination of technology, while the CBD was targeted at sustainable development. She said that the protection and dissemination of technology would improve and facilitate sustainable development although this did not mean that the two international instruments could automatically be implemented in a mutually supportive manner. For this reason, her delegation believed that the TRIPS Council should discuss thoroughly the means and ways of ensuring that the TRIPS Agreement and the CBD were interpreted and implemented in a mutually supportive manner. In this regard, her delegation suggested the incorporation of the basic rules recognized by the CBD into the TRIPS Agreement, such as national sovereignty, prior informed consent, and equitable sharing of benefits. She also believed that amendment of the TRIPS Agreement was indispensable to fulfil these requirements and suggested that the TRIPS Council should recommend these amendments to the TNC by the end of 2002.

230. The representative of Columbia, speaking behalf of the members of the Andean Community, namely, Bolivia, Columbia, Ecuador, Peru and Venezuela, said that with respect to the relationship between intellectual property and the objectives of the CBD and in light of the implementation plan of the recent summit on sustainable development held in Johannesburg, the worrying trend of loss of global biodiversity could only be slowed down if at least (1) the local population of the countries of origin of biodiversity benefited from the preservation and sustainable use of biodiversity; (2) the objectives of the CBD were integrated into sectoral and inter-sectoral programmes and policies; and (3) there was access to the results and benefits derived from biotechnological innovations based on genetic resources. Further, the WSSD had made an appeal to countries to move toward an international regime for sharing of benefits resulting from access to genetic resources, whilst bearing in mind the fact that intellectual property rights could not be seen in isolation from a whole set of factors which were political, economic, ecological, legal and social. Therefore, the international community should, in light of that and by virtual of the appeal from the Johannesburg summit, consider transferring of technology protected by intellectual property rights as a means of implementing the requirements for sharing of the benefits derived from access to genetic resources and as a contribution of the TRIPS Agreement towards the objective of sustainable development.

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231. He continued that the Andean Community held the view that Members must have in place international mechanisms that were effective in ensuring defensive as well as positive protection of the rights of countries of origin of genetic resources, knowledge, innovation and practices of indigenous and local communities. The TRIPS Agreement could create a favourable environment for research and development in biotechnology by incorporating requirements for disclosure of the country of origin of genetic resources and traditional knowledge that was used in the invention and proof of fair and equitable sharing of benefits as well as proof of prior informed consent. He said that all of these elements were part of the criteria of the Bonn Guidelines agreed to at the Sixth Conference of the Parties to the CBD recently at the Hague and stressed the importance of the TRIPS Agreement in assisting attaining the objectives of the CBD through the maintenance of mutual support, synergy and integrity of both instruments. In this regard, he reiterated the importance of giving the CBD observership in the TRIPS Council.

232. The representative of Canada reiterated her delegation's view that the TRIPS Agreement and the CBD could be implemented in a mutually supportive and consistent manner and that they did not conflict with each other from a legal perspective. She emphasized the importance of the TRIPS Agreement and the role of intellectual property rights in promoting innovation and in the dissemination of the resulting technology. At the same time she recognized the importance of preserving global biodiversity in order to achieve environmental objectives and sustainable development. Her delegation took seriously developing country Members' concerns related to genetic resources and benefit sharing and recognized the need for international cooperation to address these concerns. She said that her delegation was working hard, in a variety of international fora, to achieve this goal. Canada itself possessed a significant diversity of national resources similar to many countries in the TRIPS Council and was keen to promote both biotechnological innovation and biodiversity conservation. However, she did not share the view that altering the flexibility inherent in 27.3(b) would be helpful in that regard and did not support the idea of using the intellectual property regime to enforce the provisions of environmental agreements, or any other agreement for that matter, unless it could be conclusively demonstrated that such a link was necessary to achieve the innovation-related objectives that underlie intellectual property rights themselves. Rather, she believed that the solution to concerns about the implementation of access and benefit-sharing provisions of the CBD was best achieved through the development of effective national access laws which would require material transfer agreements to be entered into on mutually agreed terms. Such agreements would be more effective than trying to police the terms of access at the time when a patent was to be granted on a resulting innovation. Therefore, she supported biodiversity-rich Members developing their own national access laws in a manner that ensured both and facilitated access to genetic resources for continued use in valuable research and the fair and equitable sharing of benefits.

233. In light of the WSSD decision to negotiate an international regime on benefit sharing, Canada preferred to continue working constructively, as it had been for some time in the relevant working groups of the CBD, to build on voluntary guidelines designed to assist biodiversity rich countries in establishing effective national access laws. She added that the recent initiative in the WIPO Intergovernmental Committee to establish a database of sample contractual terms would certainly contribute to these efforts and that Members should allow that work to run its full course before beginning a comprehensive assessment of the merits of the proposals that were before the TRIPS Council.

234. The representative of the United States referred to a paper that his delegation had introduced a year ago in which each of the provisions of the CBD that might bear any relationship to intellectual property had been analysed. The paper had also described in detail the way in which a contract system provided for in national law would be both an efficient and effective way for granting access to genetic resources and for ensuring benefit sharing, including the transfer of technology. He said that he was relieved to hear more Members in the TRIPS Council acknowledging that there were actually no conflicts between the TRIPS Agreement and the CBD and that he was aware of some interest in continuing to explore whether there might be some hypothetical situations where

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implementation of these two instruments were in conflict. His view was that such an effort might not be the best use of the Council's resources since Members were aware of the exercise being made by the WIPO of collecting examples of provisions in access and benefit-sharing contracts concerning intellectual property and genetic resources through a recently distributed questionnaire. This study, once completed and its results distributed to the members of the Intergovernmental Committee, would provide significant experience in this area and would enable those with less experience to rely on the provisions that had already withstood the test of time and law. His delegation expected such an exchange of information to diminish, to a great extent, any possible uneven playing field in this area and so he urged Members seeking to regulate access to their genetic resources to continue considering actively the careful implementation of an access regime establishing such a contractual system. He added that such a system could be put in place immediately, based on existing contract law and therefore did not require waiting for the outcome of other discussions in the TRIPS Council or other bodies.

235. He reiterated that a contractual system could ensure the sharing of benefits arising from the commercialization of the results of research and development based on materials to which access had been provided, whether or not these results were the subject of a patent. Further, he said that contracts could specify how disputes that might arise under any contract would be handled and in what jurisdiction. He recalled that there were a number of international agreements that dealt with mutual recognition and enforcement of judgements in contracts and said that his delegation did not find that any benefits would result from a requirement in patent law to disclose the source of genetic resources related to research and development of an invention claimed in a patent. On the contrary, his delegation felt that such a requirement would needlessly impose burdens on patent applicants who were using genetic material as the basis for research and development currently without regard to the source of the materials or to the significance of the materials to any end result. The fact of the matter was that even if a party that failed to disclose relevant information on the source of genetic resources, where identified, was sanctioned through the patent being declared invalid or unenforceable, no benefit-sharing would accrue in the source country of those genetic resources. However, he said that successful suits for breach of contracts could, in fact, result in court orders for specific performance or damages. He suggested that perhaps Members could explore in more detail, at the next meeting, the exact practical benefits and the expectations of the proponents from disclosure requirements, even disclosure requirements that, as the EC noted, would not in fact be linked in any way to patent status.

236. The representative of Brazil asked the Members to take into account elements already provided in his previous intervention under the previous agenda items given that his delegation understood that there were overlapping elements in the previous, current and next agenda items. In the light of the intervention by the United States with respect to Brazil's participation in the development of its own biotechnology industry, he said that last year his delegation had highlighted this point. He said that Brazil's situation as a mega-biodiversity country with a growing biotechnology industry only supported their position and was not contrary to the development of the biotechnology. Brazil's proposal, on the other hand, would encourage the development of the biotechnology industry, while taking into account the objectives of the TRIPS Agreement to promote biotechnological innovation and the transfer and dissemination of technology to the mutual advantage of producers and users of technological knowledge. He believed that the objectives of the CBD were similar and his delegation understood that there could be complementarities between the CBD and the TRIPS Agreement if Members took appropriate measures.

237. He continued that the proposal by developing countries concerning the relationship between the TRIPS Agreement and the CBD lay in a tripod which included, as a condition for acquiring patent rights, the disclosure of the source and country of origin of the biological resources and of the traditional knowledge used in the invention, evidence of prior informed consent and evidence of fair and equitable benefit sharing under the national regime of the country of origin. In his view, these three elements were important in ensuring the mutual support between the TRIPS Agreement and the CBD and therefore could not be isolated from each other. While disclosure requirements were

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certainly encouraged as one of the elements contained in the Bonn Guidelines, his delegation believed that Members could not consider requirements alone without taking into account the core issues of benefit sharing and prior informed consent. He therefore urged the EC and other Members to ensure that the objectives of the TRIPS Agreement did not run counter to those of the CBD. In his view, an amendment to the TRIPS Agreement would be necessary to ensure that the objectives of the two instruments were complementary.

238. Turning to the points raised by India and the United States, he agreed that there was no opposition in the TRIPS Council to bilateral contractual arrangements or to the establishment of national legislation. However, he questioned whether contracts or national legislation alone were sufficient. He said that certain contractual arrangements could hinder the holders of genetic resources or traditional knowledge from benefiting from the commercial exploitation of their efforts. He added that while national legislation was definitely a necessary step in ensuring access to legislation, international action was also necessary. Further, he said that there were no limits that prevented countries from allowing the patentability of genetic resources without providing for the use genetic resources in a sustainable way. Turning to the issue of granting observer status to the CBD, he said that to do so would be an important step forward but not sufficient in itself.

239. The representative of Kenya said that there seemed to be a common understanding of the need for sharing of the benefits arising from the use of genetic resources for inventions in general, whether a patent was granted or not. His delegation agreed with the EC that the TRIPS Agreement and the CBD could be implemented in a mutually supportive way. He also agreed with the points raised by the Chinese delegation that implementation of the two instruments in a mutually supportive manner could be well reflected if Members initiated an amendment to the TRIPS Agreement in such a way that allowed the incorporation of the CBD's relevant provisions, as had been the case with other arrangements such as the Berne and the Paris Conventions.

240. Further, his delegation agreed with the proposal made by the EC that countries should monitor the use of genetic resources, whether such use resulted in grant of a patent or not, although this might be a relatively more expensive exercise beyond the reach of most of the countries. He said that his delegation would prefer disclosure provided in good faith and trust. He supported the proposal to grant observer status to the CBD and said that it was important to do so because that could assist Members in coming up with solutions to some of the problems that they might face in the TRIPS Council in future.5

F. PROTECTION OF TRADITIONAL KNOWLEDGE AND FOLKLORE

241. The representative of Bolivia said that traditional knowledge was such an important world resource that Members should actively support international efforts aimed at guaranteeing its protection. His delegation favoured an international system that would preserve and develop the knowledge generated by the indigenous populations and communities. He was concerned about the use of traditional knowledge without authorisation from these populations and communities and about the fair and equitable sharing of benefits to them. In his view, rules established nationally or regionally on this subject were not sufficient and therefore his delegation sought the establishment of a multilateral framework that would ensure effective legal protection and allow the legitimate possessors of this knowledge to exercise effective control over access, use and exploitation, and against reproduction, imitation, transmission and other trade acts related to traditional knowledge, including its expressions and manifestations. He added that the respective rights should be enforced through an effective means of compliance whose standards should not be lower than those already established multilaterally. He said the Council should work jointly with other relevant international fora and bodies.

5 For conclusions, see paragraphs 256 and 257.

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242. The representative of the European Communities said that their communication dealt with the protection of traditional knowledge and folklore, including the development of a sui generis system of protection. His delegation was of the view that preventive approaches to avoid misappropriation of traditional knowledge through inappropriate patenting could be dealt with by the TRIPS Council and that this would require Members to explore methods of documenting and sharing information on traditional knowledge. He said that the EC supported proposals aimed at establishing databases and registers that would allow patent examiners to take into account traditional knowledge in prior art searches. He drew Members' attention to the Swiss proposals on this issue and said that it would be useful to re-examine them in this context. In his view when traditional knowledge was used as a basis for further innovations, disclosure of the original traditional knowledge would be an important way of ensuring benefit sharing among holders of the traditional knowledge. Therefore, the EC supported further work towards the development of an international sui generis model for the legal protection of traditional knowledge in the WIPO. In his view, at this stage the TRIPS Council was not the right place to negotiate a protection regime for a complex new subject-matter like traditional knowledge or folklore, but the work being done by WIPO's Intergovernmental Committee should be built upon. Based on the outcome of the WIPO process, Members could then determine whether any further work was warranted in the TRIPS Council.

243. The representative of Venezuela referred to comments made by her delegation at the last meeting and said that her delegation was interested in seeing a report submitted to the TNC that included all the items addressed by the developing countries in the TRIPS Council. She supported the proposal to amend the TRIPS Agreement in order to make it compatible with the CBD. She said that a database of traditional knowledge was an important element in determining novelty or inventive step and would prevent bio-piracy. In her view, the CBD and the TRIPS Agreement were mutually supportive. In this regard, the relationship between the database and the status of technology was an important issue requiring a solution that would make it possible to include certain elements of traditional knowledge in the database without implying that such knowledge was part of the public domain. She reminded Members that there was no obligation in TRIPS to disclose the origin of the genetic resources or the associated traditional knowledge when seeking patent protection. Such a proposal would guarantee transparency as well as facilitate Members in making use of their rights. She suggested that Members could have an in-depth debate aimed at establishing such an obligation which could then be incorporated into national patent legislation.

244. With respect to the form and content of the proposed database, she said that there were many issues pending and a long way to go before Members could decide to connect regional and national patent authorities to an international network. She wondered who would assume the cost of such an electronic interconnection between databases and shared the view that if a decision was made to establish such databases in future, then they should only contain the knowledge agreed to and disclosed on a voluntary basis by the communities. She added that Members should ensure that the data contained therein did not facilitate patenting without the element of novelty, and also ensure proper management of its use. She said that her delegation was aware of the different competent bodies in this area and emphasized the importance of complementarity between the work being done in various organizations within their own area of competence. Furthermore, she said that she was sure that the work in WIPO would be strengthened by the results that would emerge from the TRIPS Council and vice versa and it was for this reason that she did not consider it desirable to study these issues in one single organization.

245. The representative of Hong Kong, China referred to an international symposium on traditional medicines hosted by his country under the auspices of the APEC intellectual property experts group from the 19 to 22 of March 2002 and said that the report on this symposium was available and circulated in document IP/C/W/377/Add.4. He said that this symposium covered in detail issues related to the intellectual property protection for the fruits of research in traditional medicines. He mentioned that the proceedings thereof were relevant to a number of issues being discussed in the TRIPS Council, including public health, Article 27.3(b), the CBD, traditional knowledge and folklore.

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Further, he said that a record of the proceedings was available in DVD ROM format and had already been submitted to APEC Members.

246. The representative of New Zealand said that the protection of traditional knowledge was a complex and sensitive issue for her delegation and internationally. In the light of that, she was concerned that submissions from Members focused primarily on mechanisms that could be used to protect traditional knowledge without there being a prior understanding of exactly what such protection meant in the context of TRIPS. She said that there were different views on this in her country. For instance, the Maori people of New Zealand considered 'protect' to mean to preserve traditional knowledge and to prevent it from being used by anyone other than traditional knowledge holders. Others thought protection should allow for the development of traditional knowledge, including where this involved use by others, and to enable traditional knowledge holders to share in any benefits that might result from it, where appropriate.

247. Some traditional knowledge holders in New Zealand considered their language and images to be cultural treasures that should not be used by others. Such people were upset by recent events where Maori language or imagery had been used without their permission, for example in a range of "Lego" toys and in the design of "Adidas" rugby boots. Others considered that there were some aspects of Maori traditional knowledge which may be shared or even commercially exploited, provided there was appropriate recognition of the source of that knowledge. In her view, intellectual property rights were relevant in achieving the objective of facilitating the appropriate development of traditional knowledge, although such rights would not necessarily be able to achieve the preservation of traditional knowledge. In light of these differing philosophies, she said that her delegation was of the view that engaging in discussions for specific mechanisms that could be implemented at the international level might be premature. Instead, it would be important to consider first discussing the purpose of protection and the full range of mechanisms, whether intellectual property based or sui generis, that might assist indigenous peoples to protect and develop their traditional knowledge. It would also be important to ensure that this process was informed by the wishes of the traditional knowledge holders themselves.

248. With respect to New Zealand's intellectual property laws, she said that currently there were no specific provisions in these laws directly aimed at the protection of traditional knowledge, although aspects of traditional knowledge were protected, to some extent, by existing general intellectual property laws within the limits inherent in those laws. She added that her country had made progress in developing measures that were specifically designed to either preserve or facilitate the appropriate use of traditional knowledge. For example, there was currently a bill before the New Zealand Parliament which would amend the Trademarks Act to prevent the inappropriate registration of trademarks and enable the invalidation of existing trademarks that contained Maori text and imagery where this would be offensive to a significant section of the population in New Zealand, including the Maori community. In addition, the government had funded, in the trademarks area, the development of the Maori-made trademark. This trademark was a certification of authenticity and quality, indicating to consumers that the creator of the work they were buying was of Maori descent and was of a particular quality. This collective trademark was developed in response to concerns raised by the Maori people regarding the protection of cultural and intellectual property rights, the misuse and abuse of their concepts, styles and imagery and the lack of commercial benefits accruing to them. Further, the government has continued to consider whether the development of a national sui generis system to protect traditional knowledge would be appropriate. She said that her country had also provided assistance to Pacific Island countries which mandated the South Pacific Commission to develop a draft model law for the protection of traditional knowledge.

249. With respect to international action to preserve and facilitate the use of traditional knowledge, her delegation considered instituting appropriate measures at the national level to be an essential pre- cursor. She said that action at the international level might be necessary given that the global economy was interconnected. However, she did not have any views on what form such action

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should take but said that her delegation would continue to work on this issue domestically and would participate in the work in other international fora, such as the WIPO, with the view to achieving progress.

250. The representative of the United States said that the term 'traditional knowledge' much like 'intellectual property' was used to refer to a wide variety of subject-matter. However, as the representative of New Zealand had pointed out, unlike the situation with intellectual property, the subject-matter of traditional knowledge had not really been clearly identified. He said that his delegation believed, as in the case of access to genetic resources, that access to traditional knowledge could be provided for under national legislation that provided for contracts that ensured prior informed consent and benefit sharing. In addition, some forms of intellectual property rights such as certification marks, law against misappropriation, tort law, moral rights and other such rights provided for under national law could, in many cases, be used to facilitate or enhance the protection of such knowledge. Further, he said that using laws currently in force, and those already well understood, would enable holders of traditional knowledge to protect such knowledge immediately. In his view, since traditional knowledge was often a combination of elements such as cultivation of genetic resources, use of traditional medicine, ritual chants and ritual dress, protection could be most effective by using a combination of laws.

251. Turning to folklore, he noted that a number of countries, including his own, had described how they already provided for the preservation of folklore. He referred to the discussions underway in WIPO's Intergovernmental Committee and emphasized that Members did not have to wait for the conclusion of those discussions or of discussions in the WTO. He said that various avenues were currently available for Members interested in protecting traditional songs and encouraged those who had not done so to join the WIPO Performances and Phonograms Treaty (WPPT). The WPPT provided for the protection of performances of traditional music and was the only neighbouring rights treaty to explicitly include the protection of performers of expressions of folklore. Members could also consider implementing the WIPO-UNESCO model provisions, adopted as far back as 1982, for national laws on the protection of expressions of folklore against illicit exploitation and other prejudicial actions. Further, Members could implement sui generis national legislation to protect traditional songs and/or other expressions of folklore. He said that his delegation was aware that some countries provided for a certain degree of protection of expression of folklore through their existing copyright laws. Consequently, his country had examined aspects where existing law could be used to protect traditional knowledge and an agreement had been reached to protect against consumer deception with respect to tribal expressions of folklore through the Indian Arts and Crafts Act.

252. The representative of Peru agreed with the statements made by the representatives of Bolivia and Venezuela and was of the view that the TRIPS Council, in coordination with other relevant international bodies, should look into ways of providing defensive and positive protection to traditional knowledge that would be subject to multilateral dispute settlement procedures.

253. The representative of India shared the view that databases for assessing the genuineness of novelty and inventiveness in a patent application involving the use of biological resources or traditional knowledge was a useful tool that could be used by patent examiners world-wide. In his view, the need to stem the misappropriation of the knowledge, innovation and practices of local and indigenous communities formed the basis of the justification for the proposal that patent applications should disclose compliance with norms of prior informed consent and benefit sharing as required under national laws. He added that such a provision only enhanced the commitment to ensure that the patent applications covered inventions that were novel and inventive and built upon the information and resources obtained from the countries and communities of origin. Turning to databases of knowledge of local and indigenous communities, he said that these exercises had been initiated in many countries and India's Traditional Knowledge Digital Library was an example of such an effort. He said that currently India's digital library sought to encompass only information on biological resources that had been codified in India's written texts, which was in itself an awesome

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task given the vast breadth and depth of information available articularly. However, he was aware of the inherent limitations of this exercise, particularly that such databases could not be completely comprehensive and exhaustive of all the existing traditional knowledge and bio-resources in India. It might not, for instance, cover knowledge and resources documented in the lesser known texts within India's territory; or that preserved by communities in its oral form; or that which is constantly evolving through informal innovations within a community. Another nuance in the whole debate was when information about a resource in the database actually led the inventor to use an undocumented close relative of such a resource for the purposes of crafting his invention. Further, information contained in the patent application in current regimes might not contain elements that could be directly traceable to such a database and a simple search of the database might not always yield a direct result with respect to the prior art. In his view, mandatory disclosure of the source of information and knowledge would be critical in addressing such grey areas.

254. The representative of Kenya said that Members, including his own country, that come from regions where traditional knowledge was vibrant and highly practised, were aware of the advantages that could arise from the protection of traditional knowledge. In his view, the protection of traditional knowledge was important to ensure that such knowledge was sustained because certain communities or countries/societies that made use of it were unable to access modern technology. In addition, traditional knowledge had proved to be more efficient in certain instances in solving problems than modern technology. He cited an incident in a village Malawi involving a wild beast that demonstrated the importance of traditional knowledge. For this reason, regional groupings such as ARIPO were look into ways of accelerating the mechanism for the protecting traditional knowledge.

255. The representative of Brazil reiterated that while the developing countries' proposal was supported on the tripod of the three well-known requirements that he had cited earlier, the EC's paper was based on only one leg, namely, the disclosure requirement. For this reason, his delegation believed that the EC proposal might be insufficient to provide a sustainable solution to prevent acts of bio-piracy abroad. He associated his delegation with the view expressed the delegations of Venezuela, Peru, New Zealand, India, Kenya and others that the conventional intellectual property system contained limitations to protect traditional knowledge effectively and adequately. Turning to databases, he shared the view that they could be useful in facilitating patent examiners' check against patent requests relating to unauthorised use of the knowledge of traditional communities. He also shared the views of the delegations of Venezuela and New Zealand that the creation of databases should not be based on information disclosed without the prior informed consent of their owners. He said that databases should not result in the facilitation of biopiracy and that this was an issue of serious concern.

256. The Chairman proposed that the Secretariat be requested to periodically update its summary notes on agenda items E, F and G, not after every meeting necessarily, but when significant new material had been presented. Furthermore, referring to the suggestion made by Peru, he proposed that the Council invite the FAO to make a presentation on the International Treaty at the Council's next meeting.

257. The Council took note of the statements made under these three agenda items and agreed to proceed as suggested by the Chair.

G. REVIEW OF THE IMPLEMENTATION OF THE AGREEMENT UNDER ARTICLE 71.1

258. The Chairman recalled that, at the Council's meeting in March 2002, the previous Chairman had noted that a substantial number of suggestions for topics to be considered under the Article  71.1 review had been made prior to the Doha Ministerial Conference, but some of them had overlapped with other items on the Council's post-Doha agenda. In considering how to organize its work, the Council had invited Members to submit ideas for issues to be taken up under this agenda item by the

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present meeting, without prejudice to the right of Members to submit ideas at a later stage. To date, no suggestions had been tabled by any Members.

259. The Council agreed to revert to the matter at its next meeting.

H. IMPLEMENTATION OF ARTICLE 66.2

260. The Chairman recalled that, at Doha, Ministers had instructed the TRIPS Council to put in place a mechanism for ensuring the monitoring and full implementation of the obligations under Article 66.2 of the TRIPS Agreement. The Ministers had also agreed that, to this end, developed country Members should submit, prior to the end of 2002, detailed reports on the functioning in practice of the incentives provided to enterprises for the transfer of technology in pursuance of the commitments under that Article. These submissions should be subject to a review in the TRIPS Council and information should be updated by Members annually. Therefore, the Doha Decision had set out a clear time-frame for the submission of these reports by developed country Members, namely by the end of 2002. He also recalled that, in response to a request to developed country Members to provide information on the implementation of their obligations under Article 66.2 of the TRIPS Agreement, many developed country Members had supplied information on this matter and the TRIPS Council had discussed these submissions. At its last meeting, the TRIPS Council had received a communication from least-developed countries containing considerations for the establishment of a monitoring mechanism under Article 66.2 of the TRIPS Agreement.

261. Given the need for early action to implement the Ministerial instruction and in the light of the suggestions and discussions in the TRIPS Council and informal consultations, he had circulated an informal note (JOB(02)/118) in which he had suggested a number of elements for the consideration of the Council that could form the basis of a decision on this matter. Since delegations might need more time to consider these suggestions, he suggested that the Council revert to the matter at its next meeting. He recalled that the Doha Decision called for detailed reports from each developed country Member by the end of the year 2002. Thus, he also suggested that developed country Members be requested to make such information available for the Council's meeting in November 2002. In doing so, they could be invited to use the guidelines contained in his informal note if they found them useful.

262. The Council so agreed.

I. NON-VIOLATION AND SITUATION COMPLAINTS

263. The Chairman recalled that, at Doha, the Ministerial Conference had adopted a Decision on Implementation-Related Issues and Concerns (WT/MIN(01)/17). Paragraph 11.1 of the Decision stated: "The TRIPS Council is directed to continue its examination of the scope and modalities for complaints of the types provided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 and make recommendations to the Fifth Session of the Ministerial Conference. It is agreed that, in the meantime, Members will not initiate such complaints under the TRIPS Agreement." Thus, the TRIPS Council had a time-frame for its work, namely that it should be in a position to make recommendations to the fifth Ministerial Conference, to be held in Cancún, Mexico in September 2003. As requested by the TRIPS Council at its meeting in March 2002, the Secretariat had circulated prior to the June meeting in document IP/C/W/349 a summary note of the points raised in the substantive discussion of this agenda item so far. At that time, he had also circulated an annotated agenda in document JOB(02)/66 raising a number of questions that Members might wish to address. However, at the June meeting, the Council had not had enough time to adequately discuss this item.

264. In order to be able to prepare recommendations, the TRIPS Council would need to have specific proposals from delegations, and have fully discussed them sufficiently in advance of the fifth

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Ministerial, so that Members had a clear picture of the options available and their implications. He suggested that the first meeting of the Council in 2003 be set as a target date for the submission of proposals while the Council might continue its discussion of the matter on the basis of the annotated agenda still at the November meeting. However, he said that this would not preclude earlier papers which he encouraged Members to submit, or later ones in an effort to find common ground.

265. The Chairman said that the Council had just received a communication from Peru on behalf of Argentina, Bolivia, Brazil, Cuba, Ecuador, Egypt, Malaysia, Pakistan, Peru, Sri Lanka and Venezuela.

266. The representative of Peru, introducing the joint communication on behalf of its co-sponsors, said that it was a priority task for the Council to reach a consensus on non-violation and situation complaints with respect to the TRIPS Agreement in order to fulfil the mandate given by the Doha Ministerial Conference, which had instructed the Council to make recommendations to the fifth Ministerial Conference. She believed that it was a wrong assertion that the expiration of the deadline provided in Article 64.2 of the TRIPS Agreement might make non-violation and situation complaints automatically applicable to the TRIPS Agreement. Article 64.1 of the TRIPS Agreement established that Article XXIII of GATT was applicable to the TRIPS Agreement, subject to Articles 64.2 and 64.3 of the TRIPS Agreement. Despite the expiration of the time-period provided in Article 64.2, non-violation and situation complaints were only applicable to the TRIPS Agreement in conformity with the procedures established in Article 64.3, i.e. once consensus had been achieved on the issue.

267. She was in favour of a transparent, predictable and equitable mechanism for settling trade disputes. However, she believed that the application of non-violation and situation complaints to the TRIPS Agreement raised some fundamental concerns. It was not necessary because the TRIPS Agreement, unlike other WTO agreements, was a sui generis agreement. It was not designed to protect market access or the balance of tariff concessions but rather to establish minimum standards of intellectual property protection, which, if abused, might even undermine market access. Non-violation and situation complaints were unnecessary to protect any balance of rights and obligations internal to the TRIPS Agreement, as these were reflected in the Agreement's principal obligations and flexibilities, and the Agreement explicitly stated that WTO Members were not obliged to implement more extensive protection. Rights and obligations in the TRIPS Agreement were best effected through WTO Members' good-faith application of its provisions in accordance with established principles of international public law recognized by the Appellate Body of WTO. The implementation of the TRIPS Agreement did not require recourse to the legally imprecise notion of non-violation and situation complaints.

268. The application of non-violation and situation complaints also raised systemic concerns by introducing incoherence among different WTO agreements, which could nullify or impair the benefits in the TRIPS Agreement. It also threatened to upset the balance of rights and obligations in the TRIPS Agreement by elevating private rights over the interests of the users of intellectual property – both within and between the countries and over other important public policy considerations in a manner inconsistent with Article 3.2 of the DSU. It could also undermine the regulatory authority and infringe sovereign rights by exposing to challenge any measure that affected IP and that could not have been foreseen at the time of the Uruguay Round. Furthermore, it threatened to limit the flexibilities inherent in the TRIPS Agreement to secure objectives relating to legitimate policies, such as protection and promotion of public health, nutrition, environment, biodiversity, enhancement of transfer of technology and other issues of public interest in sectors of vital importance to socio-economic and technological development.

269. She believed that the benefits accruing under the TRIPS Agreement were adequately described in its text, including its preamble, objectives and principles, which fully took into account the development dimension. These benefits ensured that measures and procedures for the enforcement of IPRs did not become barriers to legitimate trade, the promotion of technological

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innovation and transfer and dissemination of technology, and that the mutual benefits to producers and users of technological know-how could enhance social and economic well-being. The balance between rights and obligations, protection of public health and nutrition, and promotion of public interest in sectors of vital importance for the social, economic and technological development, could ensure that IPRs did not limit trade in an unjustifiable manner or be detrimental to international transfer of technology. Such benefits, which accrued to Members rather than to private entities, were adequately protected through good-faith application, and did not require recourse to a legally imprecise notion of non-violation and situation complaints.

270. Continuing, the representative of Peru said that she welcomed other Members' attempts to clarify and narrow the definition of measures that might give rise to non-violation and situation complaints. However, defining "measure", even narrowly, would not address concerns that the remedy would infringe sovereign rights and undermine the Agreement's flexibilities. These concerns arose not merely from a lack of clarity about which measures could be challenged, but more fundamentally from legal uncertainty inherent in the concept of non-violation and situation complaints. There was insufficient guidance in Article 26 of the DSU and in GATT dispute settlement practice for panels and the Appellate Body to apply non-violation and situation complaints in the context of the TRIPS Agreement. Extending the non-violation and situation remedy – and with it the right to challenge measures that were otherwise consistent with WTO obligations – might unbalance the proper distribution of responsibilities between WTO Members, panels and the Appellate Body. All these concerns raised fundamental challenges to the multilateral trading system. Introducing non-violation and situation complaints in the TRIPS context was unnecessary and created tension with the security and predictability provided by the multilateral trading system. It was incompatible with the long-term best interests of the multilateral trading system and of all the WTO Members.

271. In the light of these concerns, she proposed that the TRIPS Council recommend to the fifth Ministerial Conference that non-violation and situation complaints under Article XXIII.1(b) and (c) of GATT 1994 be determined inapplicable to the TRIPS Agreement.

272. The representative of Chile said that it was important for the TRIPS Council to make recommendations to the fifth Ministerial Conference on the issue of non-violation and situation complaints. The communication of Peru offered a lot of interesting food for thought for the future. He noted that the historical development of this concept under GATT was of great interest, and that such complaints could raise conflicts with different agreements of the WTO. He hoped that the Council would have more time to discuss this issue in the future.

273. The representative of Columbia, speaking on behalf of the Andean Community, recalled that the discussion on non-violation and situation complaints in the TRIPS Council went back to 1999. Since then, a number of WTO Members had presented their communications on this issue. The application of non-violation and situation complaints within the framework of the TRIPS Agreement did cause a great deal of concern. Members ran the risk of creating an imbalance between rights and obligations of producers and users of technological knowledge, which could result in the creation of new obligations. The application of non-violation and situation complaints would limit the technological and innovative capacity of countries. It would also make it difficult for national authorities to implement policies and measures in their economic, social, health, environment and cultural areas, which were not directly related to IPRs, and affect their enjoyment of the rights and limit the flexibilities contained in the TRIPS Agreement.

274. He was also concerned about the criteria on the modalities and scope of non-violation and situation complaints, which could affect the implementation of the TRIPS Agreement. The Andean Community insisted that the concept of non-violation and situation complaints, which was developed under GATT 1947, was foreign to the TRIPS Agreement. To date, WTO Members had only resorted to these types of complaints in a limited number of cases. These types of complaints had been drawn

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up to remedy situations which had not been provided for by GATT at that time, such as internal subsidies to goods. Therefore, it was difficult to justify their application within the current WTO system, and more particularly, within the framework of the TRIPS Agreement. It was not necessary and went contrary to the interests of WTO Members.

275. The representative of Canada said that the communication introduced by Peru along with the Secretariat's summary note had given the TRIPS Council an overall sense of the range and complexity of the issues involved in this discussion. Her delegation had fully supported the mandated examination of the scope and modalities involved in allowing these types of complaints to be brought forth in matters involving IPRs in the TRIPS Council. From the beginning of this examination, her delegation had expressed the concern that transplanting these types of remedies into the TRIPS environment would introduce unsettling measures of uncertainty. Over the years, many other Members had echoed her delegation's concerns. The Council had collectively generated a body of analysis which had set out in detail why the TRIPS Agreement should be treated differently from the other WTO agreements in respect of these provisions. While not all Members might agree on every specific issue, many of them agreed in principle that the uncertainty created by the pursuit of this exceptional remedy in the TRIPS setting was unsettling. Nevertheless, the Council had the responsibility to provide a recommendation on this issue to the fifth Ministerial Conference. The paper introduced by Peru suggested that the TRIPS Council recommend that non-violation and situation complaints be determined to be inapplicable to the TRIPS Agreement. She said that although her delegation was still reviewing this paper, it supported many points raised in it. Adequate time was needed to discuss this issue in advance of the fifth Ministerial Conference. She supported the Chairman's suggestion to have a substantive discussion on this issue in January 2003.

276. The representative of Hong Kong, China said that, while his delegation was not a co-sponsor the paper introduced by Peru, it supported the proposal in its paragraph 56 that the Council should recommend to the fifth Ministerial Conference that non-violation and situation complaints be determined inapplicable to the TRIPS Agreement. The paper had set out quite detailed arguments to support this proposal. Article 1 of the Agreement provided that Members should not be obliged to implement in their laws more extensive protection than was required by this Agreement, provided that such protection did not contravene the provisions of this Agreement. Members were also free to determine the appropriate method of implementing the provisions within their own legal systems and practice. He was particularly concerned about the many uncertainties involved if non-violation and situation complaints were made applicable to the TRIPS Agreement and the potentially onerous burden on a Member defending non-violation and situation complaints. Moreover, he said that it was unclear why the existing framework of the TRIPS Agreement was insufficient and how a non-violation remedy could help to promote the purpose and intent of the TRIPS Agreement.

277. The representative of the European Communities said that the paper presented by Peru was a valuable contribution to the debate that involved complex technical, legal and systemic questions. He agreed that there was a need to come to a conclusion on this issue by the fifth Ministerial Conference. He concurred with Canada that, in view of the deadline, it would be more appropriate to postpone the further examination of this issue until January 2003. His delegation needed some time to examine Peru's paper and would certainly come back to it at a later stage.

278. As one of the co-sponsors of the paper presented by Peru, the representative of Brazil said that his delegation fully subscribed to the elements presented in the Peruvian intervention. Non-violation and situation complaints could be more properly understood in the context of GATT 1947, when a number of important areas of international trade, such as technical barriers to trade, sanitary and phytosanitary measures and subsidies had not yet been codified. The evolution of the multilateral trading system, however, demonstrated that non-violation complaints had seldom been raised in the dispute settlement mechanism when they had been more appropriately addressed in the context of trade in goods. In light of the sui generis nature of the TRIPS Agreement, he believed that the application of non-violation and situation complaints to the TRIPS Agreement could raise a number

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of systemic concerns, regarding the creation of legal uncertainty and the possibility of upsetting the balance of all WTO agreements. Of particular concern was the possibility that non-violation measures might undermine, in the context of the TRIPS Agreement, the regulatory authority of Members, thus affecting important areas of public interest, such as public health and nutrition. He believed that a recommendation by the TRIPS Council to ensure that non-violation and situation complaints were not going to apply to the TRIPS Agreement would be the most coherent way of addressing this matter.

279. The representative of India associated his delegation with the statement made by Peru, and requested the Secretariat to indicate India as one of its co-sponsors.

280. The representative of Argentina said that, as one of the co-sponsors of Peru's paper, his delegation shared the views expressed by Peru. Non-violation and situation complaints were inherent to agreements where there was an exchange of concessions and where the parties reciprocally assumed obligations which were directly linked to market access. In that context, concessions agreed to in the case of GATT 1994 could be nullified or impaired by non-tariff measures. However, the TRIPS Agreement was not one of those market access agreements. The typical effect of intellectual property rights was to avoid having third parties enter the market or engage in trade without the consent of the IP right holder. Furthermore, market access issues concerned products and not rights. In respect of an agreement which contained rules and disciplines and where there was an agreement to observe such rules and disciplines, it was not possible to nullify a benefit without committing an infringement of the rule agreed to. In respect of this type of agreement, such as the TRIPS Agreement, there could be no nullification if there was no violation or infringement. The possibility of a non-violation or situation complaint in a situation where there was no violation would give rise to uncertainty as to the legality of governmental measures which a Member might legitimately adopt. It would also open up the possibility of such measures, even when they were legal and legitimate, being called into questions by other Members. Furthermore, non-violation and situation complaints would upset the balance of rights and obligations which existed under the TRIPS Agreement. Therefore, his delegation supported the proposal contained in paragraph 6 of Peru's paper.

281. The representative of Malaysia said that, as a co-sponsor of Peru's paper, her delegation gave it's support to the statement made by Peru. Speaking on behalf of the ASEAN countries, she said that ASEAN thanked the Secretariat for its comprehensive compilation of the various interventions brought forth in the debate on scope and modalities for non-violation and situation complaints in document IP/C/W/349. The compilation highlighted the complexity of the debate in finding common interpretations of what was meant by the benefit, nature or measures that gave rise to these types of complaints. She said that the fact that the TRIPS Council had not been able to engage substantively in establishing the scope and modalities in the last six years highlighted the fact that it was a new subject and that it was difficult to establish any concrete understanding regarding such complaints. The objectives of the TRIPS Agreement, as noted in its preamble and paragraph 7, called for the promotion of effective and adequate protection of intellectual property rights which should contribute to technological innovation and transfer of technology and that measures and procedures to enforce IP rights should not themselves become barriers to trade or affect public policies. There was inherent tension between the enforcement of intellectual property rights and ensuring that such measures and procedures did not become barriers to international trade, and other policies that protected public interests. The TRIPS Agreement was a minimum standards agreement seeking to ensure a balance of rights and obligations between the objective of promoting international trade and technological innovation and a pursuit of public interests with the protection of private intellectual property rights. The introduction of the notion of non-violation and situation complaints would heighten further the tension between both sets of rights. Any non-violation or situation complaints could be brought, depending on which side one was. Both sides might seem to have grounds for complaints. One party could bring a complaint of impairment of benefit due to ineffective protection in enforcement. Equally, the other party could bring a charge or complaint that certain TRIPS-consistent measures had failed to result in technological transfer or had impeded the implementation of public policy goals.

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Any such complaint could start an unending chain of accusations and countercharges. She said that the TRIPS Council should avoid provisions that allowed such events to occur. The TRIPS Agreement was an agreement negotiated between governments for the protection of private rights. Any non-violation and situation complaints could technically mean that private rights could extend beyond what had been negotiated. This clearly should not be the intention of non-violation and situation complaints. She wondered whether some measures could be subject to a non-violation case if they brought about the highest level of protection and were consistent with the TRIPS Agreement, but could have other effects of constraining technology transfer or deterring the achievement of public policy objectives. She also wondered whether it constitute a non-violation case if the government of a Member had enacted all relevant legislation to give effect to the TRIPS Agreement and taken all reasonable steps in enforcement but the outcome fell short of the intended impact. She said that if they constituted non-violation cases, the existence of non-violation and situation complaints would bind a government to higher protection than what was stated in the TRIPS Agreement. She said that ASEAN shared the concerns that application of non-violation and situation complaints in intellectual property would introduce legal uncertainties and unpredictability, as well as obligations beyond the normal implementation of the TRIPS Agreement. For these reasons, she said that ASEAN was of the view that there was no justification for non-violation and situation complaints and these should not be made applicable to the TRIPS Agreement. Finally, her delegation urged the TRIPS Council to adopt the recommendation in Peru's paper for the fifth Ministerial Conference.

282. The representative of Singapore associated his delegation with the remarks made by the coordinator of the ASEAN group, Malaysia. He said that the issue of non-violation and situation complaints was extremely delicate and difficult. The fact that the drafters of the TRIPS Agreement did not feel confident enough to take them as a remedy and the fact that the TRIPS Council had spent last five to six years trying to understand their application to the Agreement indicated the difficulty and uncertainty of applying them to the TRIPS Agreement. He believed that, after a further study of this issue, all Members would conclude that the TRIPS Council should make a recommendation to the Trade Negotiations Committee and the Ministerial Conference that non-violation and situation complaints should not apply to the TRIPS Agreement. He did not object further discussion, because there could be novel ideas which might come through. However, the application of non-violation and situation complaints to the TRIPS Agreement was an area which might lead to a complication rather than a solution.

283. The representative of Egypt, a co-sponsor of document IP/C/W/383, said that the paper raised a number of important issues and gave detailed analysis of the various elements surrounding the concept of non-violation and situation complaints. The dispute settlement mechanism of the WTO was a major contribution to the stability of the global economy. It made the trading system more secure, predictable and credible. However, the use of non-violation and situation complaints would increase the legal uncertainty and threaten the predictability and security that the system sought to guarantee. Given the special nature of the TRIPS Agreement, it was extremely difficult and inappropriate to transpose non-violation and situation complaints to it. Such complaints were only proper to an agreement concerning market access and reciprocal concessions. One of the goals of the TRIPS Agreement was to ensure maximum flexibility in the domestic implementation of laws and regulations. However, applying non-violation and situation complaints in the TRIPS area might constrain some Members' ability to introduce new socio-economic developmental, environmental and cultural measures.

284. The representative of Kenya associated his delegation with the communication presented by Peru, and said that his delegation was in full support of the proposal that non-violation and situation complaints should not apply to the TRIPS Agreement.

285. The representative of Korea said that his delegation was pleased to be able to continue the work on non-violation and situation complaints, though there had been a divergence of views among Members. He recalled that Korea had submitted a paper in the year 2000 on this topic, which had

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highlighted three elements which had been considered to be the essential requirements for a claim to be remedied, namely measures, the benefits accruing under the TRIPS Agreement and the causality between measures and damages. The communication by Peru and other co-sponsors contributed to enhancing Members' understanding of the issues involved and provided the TRIPS Council with good prospectives for dealing with the issue. The special nature of the TRIPS Agreement should be fully taken into account in the Council's discussion. The preamble, objectives and principles of the TRIPS Agreement, as set out in its Articles 7 and 8, provided the Council with good guidance to reach a proper conclusion.

286. The representative of the United States said that his delegation continued to be of the view that it was entirely appropriate for non-violation and situation complaints to be available to all WTO Members. This benefit or remedy would not just be available for the United States. He took note of certain issues identified in Peru's paper that his delegation had just received, but had not yet been able to go through entirely. Therefore, he expected the TRIPS Council to return to the issues raised in it at the next opportunity. He agreed with the Chairman's suggestion that the Council defer this issue until January 2003. He hoped that the TRIPS Council could at some point resolve once and for all the availability of non-violation and situation complaints in the TRIPS Agreement and the scope and modalities of their application. His delegation believed that non-violation and situation complaints had already in fact been available and clearly provided for in the WTO Agreement. However, paragraph 11 of Peru's paper indicated that some Members thought that the United States believed that non-violation and situation complaints would automatically become available at the expiration of the period in the Doha Declaration which tried to determine the scope and modalities.

287. The Chairman clarified that his suggestion was that the Council continue its discussion of the matter at its November meeting. Furthermore, he suggested that the first meeting of the Council in 2003 be set as a target date for the submission of proposals.

288. The Council so agreed.

J. ELECTRONIC COMMERCE

289. The Chairman recalled that the Secretariat had been requested at the TRIPS Council's March meeting to update its factual background note on intellectual property and electronic commerce as circulated in document IP/C/W/128 in February 1999. He asked the Secretariat to inform the Council on the status of the requested document.

290. A representative of the Secretariat said that he regretted that because of the shortage of staff resources the Secretariat had not been able to update this paper in time.

K. OTHER OUTSTANDING IMPLEMENTATION ISSUES (TIRETS 93 AND 94 AND PROPOSAL BY LDCS ON THEIR TRANSITION PERIOD)

291. The Chairman said that the Council had covered most of the outstanding implementation issues under the previous agenda items and recalled that the remaining outstanding implementation issues referred to in paragraph 13 of the Doha Decision on Implementation-Related Issues and Concerns were the following:

- Tiret 93: The transitional period for developing countries provided for in Article 65.2 shall be extended.

- Proposal by Least-Developed Countries, 22 October 2001: The General Council agrees that the transition period for LDCs shall be extended so long as they retain the status of an LDC.

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- Tiret 94: Articles 7 and 8 of the TRIPS Agreement to be operationalized by providing for transfer of technology on fair and mutually advantageous terms.

292. He said that he intended to consult with Members prior to the Council meeting in November 2002 on the way in which the Council should report to the Trade Negotiations Committee by the end of this year.

293. The Council agreed to revert to the matter at its next meeting.

L. REVIEW OF THE APPLICATION OF THE PROVISIONS OF THE SECTION ON GEOGRAPHICAL INDICATIONS UNDER ARTICLE 24.2

294. The Chairman recalled that, at its meeting in March 2002, the Council had urged those Members that had not provided responses to the Checklist of Questions contained in document IP/C/13 and Add. 1 to do so before the present meeting, if possible. The Secretariat had issued airgram WTO/AIR/1756 on 26 March 2002 to remind Members of the Council's invitation to provide this information. Since the Council's meeting in June 2002, further responses had been obtained from Lithuania and Morocco, and circulated in Addenda 24 and 25 to document IP/C/W/117. To date, the Council had received responses to the Checklist from 42 Members. These responses, except for the four most recent ones, had been summarized in a Secretariat note contained in document IP/C/W/253. He informed the Council that it had just received a communication from Canada providing information on the protection of geographical indications in Canada (subsequently circulated in document JOB(02)/119). At the Council's last meeting, the representative of the European Communities had indicated that the European Communities and their member States had intended to submit questions to Australia in relation to its responses to the Checklist of Questions circulated in document IP/C/W/117/Add.19. The European Communities had indicated that, by means of this list of questions, it was seeking further clarification with respect to the relevant Australian legislation, its interpretation and application in practical terms, as well as its implementation in conformity with the provisions in Articles 22 to 24 of the TRIPS Agreement. Since then, the final list of these questions had been circulated in JOB(02)/97.

295. Introducing its communication, the representative of Canada said that Canada used its regime for certification marks under the federal Trademarks Act to fulfil its obligations under Article 22 of the TRIPS Agreement. A certification mark was a special type of trademark used for the purpose of distinguishing goods and services that were of a defined standard from those that were not. The defined standards might relate to, inter alia, the quality of goods and services, and/or the area within which the goods had been produced or services performed, i.e. the geographical origin of the goods and services. The standard was set solely by the owner of the mark. Certification marks must be registered under the Trademarks Act and they were subject to publication and opposition proceedings in Canada. The duration of protection was 15 years and registration could be renewed every 15 years, as was the case for regular trademarks. The owner of the certification mark had rights to prevent unauthorized use of the mark. Canada's Trademarks Act included a provision which expressly allowed for the protection of certification marks that were descriptive of the place of origin for goods and services.

296. The use of certification marks in Canada provided several advantages. First of all, the costs were low. The fee for applying to register a trademark, including a certification mark, was only Can$150 (roughly US$100). Certification marks had first been introduced in Canada's Trademarks Act in 1952, so this means of protection was well established. Many other countries already used certification marks and were familiar with the approach. The owner of the certification mark determined the standard to which the goods had to adhere in order to use the mark. For example, the standard for "Danish Blue Cheese" was that the cheese be produced in accordance with the Danish law with respect to such production. The owner of the certification mark had considerable leeway in defining the standard and could make it as narrow or as broad as it wished. Geographical names

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could also be registered as certification marks, and they were not limited to names. Certification marks might also be registered for a given word or words, design, symbol or combination thereof, provided that the same requirements for registration of regular trademarks were met in this regard. Her delegation had included in its communication some of its legislation, a website address for the full law, a few examples of other GIs that were protected and some details on how Canada dealt with wines and spirits in its legislation.

297. The representative of Australia said that his delegation was ready to make a presentation on the application of Article 24.2 of the TRIPS Agreement in Australia. This presentation covered most of the issues that had been raised by the European Communities. However, he thought it might be a more sensible way to submit the document in writing and circulate it in the interests of saving time.

298. The representative of the European Communities thanked the delegation of Canada for presenting the paper which provided some very valuable information about the way Canada had complied with or had implemented its TRIPS obligations with respect to geographical indications. He also appreciated the willingness of the delegation of Australia to come up with a presentation, and the opportunity to hear that presentation to see if it indeed contained responses to the many questions it had raised. This raised the question of how to proceed with this review, and he wished to hear other delegations' proposals as to how to organize the work pertaining to the review of Article 24.2 of the TRIPS Agreement. This was a valuable opportunity to increase the understanding of geographical indications.

299. He requested the Canadian delegation to provide further information on how the system of certification marks worked. First, as regards the principle of country of origin, he said that all Members might agree on the principle that when a country recognized a geographical indication, the third countries had to take at face value the fact that the geographical indication in question met the definition of Article 22.1 of the Agreement. His understanding was that there might be certification trademarks that indeed contained a GI, whereas some other certification trademarks might not contain a GI, because it depended on the standard. He wondered if a Canadian right holder went for example to Switzerland and claimed GI protection, how could the Swiss judge know whether that certification mark contained a geographical indication or not. His second question related to the issue of conflicts between trademarks and GIs. A conflict between trademarks was decided in many countries under the rule "first in time, first in right". It meant in practical terms that a prior in time trademark prevailed over a later in time trademark if it brought consumer deception. Article 22.3 of the Agreement, which said that "[…] a Member shall invalidate the registration of a trademark, which contains or consists of a geographical indication", suggested that there could be cases in which a trademark needed to be invalidated. In other words, a trademark that had been registered needed to be invalidated because it contained a geographical indication. This was a different rule from "first in time, first in right", and he wondered how this was applied when the two subjects of intellectual property that entered into conflict were a geographical indication which was contained in a collective trademark or in a certification trademark and a regular trademark. His third question covered a generics issue that was not explicitly addressed in Canada's paper but in Canada's actual legislation. He thought that this was a very relevant question because, the question of what was and what was not a generic was a very relevant one to understand GI protection. Paragraph 2 of Article 11.8 of the Canadian Trademarks Act was entitled "exceptions for customary names", while paragraph 3 was entitled "exceptions for generic names for wines". There seemed to be two different categories: customary names and generic names. However, Article 24.6 of the TRIPS Agreement, which he understood was about generics, only talked about customary terms. He wished to have a clarification of whether there was a difference between generics and customary names.

300. Finally, he noted that Canadian trademark law contained a very long list of generic names. It had 18 names for wines including Claret, Bordeaux, Medoc, Masala, Malaga, Chablis and Tokai and further ones for spirits like Grappa mark, Geneva gin and Cresso. The list implied that the Canadian authorities had come to a determination that those names were indeed generic. He wished to know

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how they had come to that determination. In other words, his delegation was interested in finding out which kind of aspects Canadian authorities had taken into consideration when building up that list. In particular, he was very interested in finding out for example how a name like Bordeaux had been included in the list, as, according to his sources, Bordeaux had never been used in Canada except by French producers.

301. The Council took note of the statements.

M. TECHNICAL COOPERATION AND CAPACITY-BUILDING

Annual Updates on Technical Cooperation Activities

302. The Chairman recalled that, at its meeting in June 2002, the TRIPS Council had agreed to focus on technical cooperation at this meeting. In preparation for this annual review, developed country Members had once more been requested to update information on their technical and financial cooperation activities relevant to the implementation of the TRIPS Agreement in time for this meeting. Other Members who had also made available technical cooperation had been encouraged to share information on these activities if they so wished. In addition, intergovernmental organizations observers to the Council as well as the WTO Secretariat had been invited to provide information. The Council had received information from the following developed country and other Members: Japan; Australia; the Czech Republic; Norway; Canada; Hong Kong, China; and the United States. The resulting documentation concerning the technical cooperation activities of developed country and other Members was being circulated in documents IP/C/W/377 and Addenda. The Council had also obtained updated information from the following intergovernmental organizations: the IMF, OECD, FAO, WHO, WIPO, UNCTAD and UPOV. This information was being circulated in documents IP/C/W/376 and Addenda. Updated information on the WTO Secretariat's technical cooperation activities in the TRIPS area could be found in document IP/C/W/375. Some of the information had been received only very recently, and most of it was, so far, available only in its original language. Therefore, he intended to provide an opportunity, at the Council's next meeting, for the Members of the Council to make further comments on the information submitted for this meeting that they might not yet have been able to study, or any further information provided before that meeting.

303. The representative of the United States said, introducing the US technical assistance report, that he was pleased to report that his Government had provided over 100 programmes since September 2001 for police, customs, judges, prosecutors and domestic industries in over 70 countries. The format of its submission in 2002 was slightly different from its past submissions due to a development of which he was particularly proud. For the first time, the information on US Government IP technical assistance programmes was being collected and displayed on the Internet. This database was available to the world at www.training.ipr.gov. The database was offered free of charge to any one with internet access. The database had been created by the Department of State Bureau of Economic and Business Affairs, with the full endorsement of all IP agencies. He invited the Secretariat and all the WTO Members to visit the website to get up-to-date information on US Government as well as US industry programmes that were offered on intellectual property. This would give Members an up-to-date picture of the full range of programmes that were available to Members. He welcomed any expressions of interest from the Membership in any of the programmes that were identified on the website primarily through their local embassies.

304. The Chairman urged Members that had not yet provided updated information to do so.

305. The Council took note of the statements made.

Joint Initiative

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306. The Chairman recalled that the WIPO and WTO Secretariats had launched on 14 June 2001 a Joint Initiative on Technical Cooperation for Least-Developed Countries. Since then, the WTO Secretariat had kept the Council informed about the implementation of the Joint Initiative.

307. The representative of the Secretariat said that the Joint Initiative with WIPO had two phases: first, the organization of two major regional events, and, second, country-specific activities. The first of the major regional workshops, which was for the least-developed countries in Africa and Haiti, had been held in Dar es Salaam, Tanzania in April 2002. The second one, which was for the least-developed countries in the Asia and Pacific region, would be held in Bangladesh from 11 to 14 December 2002. As regards the second phase of country-specific activities, the Secretariat had been discussing with WIPO how to respond to the quite large number of requests that had been received under the Joint Initiative. The Secretariat intended to start off the process of these country-specific activities before the end of 2002. It hoped to have a fairly large number of these activities during the course of 2003, and was discussing this matter with the Technical Cooperation Division of the WTO, which was responsible for technical cooperation funds. It had to be ensured that the necessary country-specific activities for least-developed countries under the Joint Initiative would find their place in the Secretariat technical cooperation plan for 2003, which was presently under preparation. He said that another constraint which should be taken into account was staff resources to cope with the rising level of activity in the TRIPS Council. This was becoming a very significant constraint affecting the Secretariat's technical cooperation activities in this area. The number of pages of the Council's minutes in the different years was a fair indicator of the overall intensity of activities in the TRIPS area. In the first four years of the TRIPS Council's operation between 1995 and 1998, there had been between 55 and 75 pages of minutes per annum, which then had increased to 130 in 1999 and to 294 in 2001. In 2002, the number of pages already amounted to 237 by the end of the Council's meeting in June. However, Secretariat staff professional resources had gone from four to five during that period. Although some additional posts for technical cooperation had been made available using the Programme Support Fund, the TRIPS area had not qualified for one of those. Finally, since the Secretariat was in the process of preparing its technical cooperation plan for 2003 and tried to cooperate as much as possible with the other intergovernmental organizations in this area, he said that it would be helpful if the intergovernmental organizations could provide in the coming days details of the events in which they would like to participate in 2003 so that they could be included in the technical cooperation plan.

308. The representative of WIPO recalled the request of the European Communities at prior meetings following up on a communication WIPO had received from Commissioner Pascal Lamy concerning the Joint Initiative. Commissioner Lamy had requested that the two Organizations associate the WHO with the implementation of the Joint Initiative. In reply, WIPO had stated that it had cooperated with other intergovernmental organizations, including the WHO, to achieve the goals and objectives in its technical cooperation activities. To this end, WIPO and the WTO had invited the WHO to participate on the issue of IP and public health at their joint meeting held in Tanzania. At that meeting, the WHO had been represented by a special envoy and several regional staff stationed in Africa. WIPO also planned to invite the WHO to the forthcoming joint meeting in Bangladesh. As it usually did, WIPO would also invite the WHO to other WIPO meetings where it felt that the WHO could make a significant contribution.

309. The representative of Zambia recognized the problems faced by the Secretariat in the light of the high demands, but very limited resources to respond to them. He believed that most Members were aware of this, but he was not sure about the proper procedure to respond to the Secretariat's resource problems. He suggested that at the next meeting the Council could consider how those Members could assist the Secretariat in various ways, such as in terms of human resources as well as finance. He requested the Chairman to clarify whether this was the way to proceed.

310. The representative of Senegal thanked the representative of the Secretariat for his presentation of the initiatives that had been taken and the meetings that had been held. He supported the statement

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made by the representative of Zambia who was not only an overall coordinator of the group of LDCs in the WTO but also a focal point for LDCs for the TRIPS Agreement. He realized that there were problems, but was concerned about the lack of action in the Council to overcome these problems. He thanked the delegate of WIPO for her statement on the Joint Initiative between WIPO and the WTO on technical assistance for LDCs. He particularly welcomed the inclusion of the WHO into this work. In the light of the Doha Declaration on the TRIPS Agreement and Public Health, bringing the WHO into the Joint Initiative should no longer be on an ad hoc basis but on a more structured basis. The WIPO and WTO Secretariats should consider the possibility of making this more systematic, which would provide greater security.

311. The representative of Singapore said that the remarks regarding assistance to the Secretariat certainly found sympathy with his delegation, and that some action should be taken on this particular issue. Referring to his experiences with the IP working group during the Uruguay Round, he said that the lack of resources had been a long-time problem in the area of IP.

312. The representative of the Secretariat said that he appreciated the reactions of delegations to what he had said earlier. It was becoming very difficult to combine the increased emphasis on technical cooperation that the WTO was required to have pursuant to the Doha Declaration with the greater intensity of work in the TRIPS Council and to service the Members adequately. He said that some of the Council's documents were not always as early, for example, as would be desirable from the point of view of the efficient working of the Council. As regards action to address the problem, it was up to the Secretariat to put forward budget proposals to the Members of the WTO. The Secretariat would be quite shortly putting forward budget proposals. Then it was up to the Budget Committee to consider those proposals and to Members to decide on what they could provide.

313. The Chairman said that the Council had made a good diagnosis of the situation, regardless of what the procedures were that needed to be followed to address the lack of resources. The Secretariat needed to give good service to Members, at a time when Members were asking for ever more information and more services. Some solution would have to be found. Members of the TRIPS Council were also Members of the Budget Committee, which was the appropriate place for any necessary decisions to be taken.

314. Responding to the delegation of Senegal, the representative of WIPO said that cooperation between WIPO and the WHO was not on an ad hoc basis. There was a general structure already provided within the UN system to cooperate between the sister agencies and the UN itself. She added that WIPO hoped to be invited to meetings of the WHO that dealt with IPR issues. There was going to be a meeting between the Directors General of WIPO and the WHO, and WIPO was waiting for the WHO's reply at this point. WIPO looked forward to a closer cooperation with other agencies on the matters of intellectual property.

315. The Chairman invited least-developed countries to submit their requests for assistance to the WIPO and WTO Secretariats. He also emphasized the importance of assisting least-developed country Members to implement the TRIPS Agreement and make best use of the intellectual property system for their economic, social and cultural development and welfare.

316. The Council took note of the statements.

N. INFORMATION ON RELEVANT DEVELOPMENTS ELSEWHERE IN THE WTO

Dispute Settlement

317. The Chairman said that, by means of a communication dated 6 November 2000, the United States, Ireland and the European Communities had notified to the Dispute Settlement Body that they had reached a mutually agreed solution on all the matters raised by the United States in documents

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WT/DS/82/1 and WT/DS115/1 concerning the protection of copyright and neighbouring rights under Ireland's law. This communication had been circulated as document IP/D/8/Add.1 and IP/D/12/Add.1.

General Council

318. The Chairman recalled that the TRIPS Council, at its meeting of 25-27 June 2002, had approved a draft waiver in respect of the obligations of LDC Members under Article 70.9 of the TRIPS Agreement until 1 January 2016, and had agreed to forward it to the General Council for adoption. This draft waiver had been adopted by the General Council on 8 July 2002. The General Council's decision had been circulated in document WT/L/478.

319. The Council took note of this information.

O. OBSERVER STATUS FOR INTERNATIONAL INTERGOVERNMENTAL ORGANIZATIONS

320. The Chairman recalled that, at the Council meeting in June 2002, he had proposed, following consultations, that the Council grant observer status to the African Regional Intellectual Property Office (ARIPO), the African Intellectual Property Organization (OAPI) and the Cooperation Council for the Arab States of the Gulf (GCC) on an ad hoc basis, i.e. subject to review in the light of any further guidance from the General Council on the grant of observer status to other intergovernmental organizations. However, at that time, not all delegations had been prepared to take a decision on the matter. He asked whether there had been any developments in delegations' thinking and whether the Council could now decide to grant ad hoc observer status to these three organizations.

321. The representative of Kenya supported the Chairman's suggestion that these three organizations be granted observer status.

322. The representative of the European Communities said that there had not been any change in his delegation's position. He wondered whether the Chairman had any plans for further consultations, given that the Council had to produce a certain report and recommendation to other bodies of the WTO so that a decision could be taken on the issue of the observer status of international intergovernmental organizations.

323. The Chairman said that if there was any change in the position of those countries that had problems with his proposal, he would like to hear those changes. If not, he took it that the Council was in the same situation as at its previous meeting. In that case, he took it that the Council was not in a position to take a decision at this meeting.

324. The representative of Senegal said that he agreed with the delegation of Kenya in supporting granting observer status to ARIPO, OAPI and the GCC. As to OAPI, he once again appealed to the delegations who had opposed consensus in the TRIPS Council to reconsider their position. At present, Senegal was chairing the governing body of OAPI, which was an intergovernmental organization with 16 French-speaking country members. The initial treaty had been adopted in 1977. French-speaking African countries had some 40 years of experience in the application of intellectual property systems. The first agreement had been signed in Libreville in 1962 and, since that time, OAPI had been the main vehicle of technical assistance given to the 16 French speaking-countries. OAPI had 133 million inhabitants, and there were 35,000 patents deposited in OAPI. OAPI had abundant and lengthy experience in this area which should help to tip the balance in favour of granting observer status to it as well as to ARIPO, which was somewhat different in its management compared to OAPI. He said that, in its paragraph 6 statement, his delegation had been advocating the concept of domestic market as referred to in Article 31(f) of the TRIPS Agreement also to cover free trade areas and organizations that had certain types of intellectual property legislation. This was the case of OAPI. He had not seen any major opposition to this element.

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325. He was aware of the systemic nature of observer status in WTO. There was a consensus in the WTO that subsidiary bodies should deal with requests for observer status on a case-by-case basis. It was on the basis of the requests from OAPI, ARIPO and the GCC, that the Chairman had made his proposal which had been agreed to informally and unanimously in the Council's informal meeting before it had come to a formal meeting for decision. Granting observer status on an ad hoc basis to these organizations should not in any way prejudice the systemic issue. First of all, the Council still had to deal with the systemic matter of observer status, and secondly a final decision needed to be taken in the WTO. He pleaded in favour of this consensus and once again urged any Member who could not go along with this consensus to reconsider its position. He placed his confidence in the Chairman to hold further consultations so that, at the next meeting, the Council would be able to take a decision.

326. The representative of Zambia expressed his delegation's support the admission of the organizations applying for observer status. He sought a clarification by suggesting that the Chairman put the question the other way, that is, whether there was any Member who had a problem with the admission of the organizations referred to.

327. The representative of the European Communities expressed his delegation's full support for what the delegation of Senegal had said, and called upon the common sense of those Members which for systemic reasons had not yet been able to join the consensus.

328. The representative of Kenya did not believe that there was any delegation opposed to giving ad hoc observer status to these organizations. He said that he would appreciate it if the Chairman could put the question in the way Zambia did so that the Council could know whether there was any delegation that was opposed to the decision.

329. The representative of Egypt said that his delegation would like to see all those organizations interested in attending the Council's meetings granted observer status, particularly when they had relevance to the work of the Council. However, the Council could not reach a selective decision or follow a selective approach to each decision on an issue of a systemic nature, which the General Council had been seized with for quite some time now. For that reason, his delegation did not see how Members of the Council could at this meeting find a way out of that problem either by trying to have different categories like ad hoc observers or special invitees or any other selective approach. This position was shared by a number of WTO Members and groups.

330. The Chairman said that the Council was not in a position to take a decision at the present meeting. He indicated that he would hold consultations prior to the next meeting with a view to finding a solution which would be satisfactory to all delegations.

331. The Council took note of the statements made.

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ANNEX

WRITTEN STATEMENT BY THE EUROPEAN COMMUNITIES ON ITEM D (See paragraph 142)

We thank Australia, Canada, Guatemala, New Zealand, Paraguay, the Philippines and the United States for their Communication on "Extension" (Doc. IP/C/W/360).

We would also like to thank the Chairman for its "Checklist of issues relating, to the "extension of the protection of GIs provided for in Article 23 to products other than wines and spirits". This delegation very much supports your efforts, Mr. Chairman, to engage all delegations in a constructive discussion on this matter.

Given the short time since the receipt of your note, I had prepared a full reply to the arguments and issues raised in document IP/C/W/360. However, we plan to adhere as closely as possible to the structure proposed in your note and we will keep our arguments and replies on the issues of "costs" to the November scheduled as proposed by you.

As a preliminary, general comment, we would like to profit from this occasion to underline that the paper tabled by Australia, the United States and other raises more questions than it provides answers. Yet, I want to reiterate that this delegation is committed to discuss all issues as we have done in the past and we do not refuse to discuss any papers. It will take me some time, I am afraid, but I hope it is worthwhile.

First, I wanted to state that it is not true that the proponents of "extension" ask the Members of the WTO to assume new obligations without counterbalancing concessions as stated in recital 3 of the Communications by Australia and others. To the best of our knowledge, we have never stated this and we believe that all WTO remain free to ask any concessions they may wish to demand at the appropriate time. As a matter of fact, we would be very interested to hear what Australia and others are having in mind, when asking counter-concessions in the field of "extension". This raises, of course, the first question. Could Australia and the co-sponsors of that paper clarify to the membership which counter-concession they wish to receive in exchange of agreeing to "extension"? I am sure that this is a relevant question, certainly to the proponents of "extension".

ISSUES RELATING TO PROTECTABLE SUBJECT-MATTER

1. Imbalance in numbers

(a) Impact when it comes to GIs

Now let me turn to the question of "imbalance in numbers" as the first item for today's discussion and issue number 1 of the paper tabled by the Australia, the United States and others. That paper essentially argues that, while some Member, like the EC, have large numbers of GIs which may benefit from "extension", other Members don't. Yet, "extension" would impose a burden to protect those hundreds of geographical indications without a counterbalancing benefit. I must confess the argument looks good, but unfortunately does not correspond to reality and I will illustrate this with two examples. Let's take the case of two WTO Members: a medium-size country, Paraguay, and a large country, Brazil.

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Paraguay enacted a Law on Trademarks and Geographical Indications (Law 1294) on 6 August 1998. That Law already provides for "extension". In other words, the very "extension" that Paraguay opposes in the TRIPS Council is already available under its own internal legal order. Paraguay does not have a system of registration for GIs and has chosen to enforce GI protection by putting that protection in an IPR law that can be invoked before domestic courts. Now, we contacted the Director of the Department of Intellectual Property of the Ministry of Industry of Commerce. We inquired Mr. Gonzalez about the number of foreign right-holders that have inquired about registering its GIs or attempted to enforce GI protection in Paraguay since the enactment of GI protection. The answer was very clear: ZERO. Since 1998, ZERO foreign GIs have attempted to enforce GI protection in Paraguay.

Let's now take the case of Brazil. Brazil protects GIs, contrary to Paraguay, protects both foreign and domestic GIs via a registration system. Again, Brazil is a country that already provides for "extended" protection via its Law of Industrial Property, (n. 9279) of 4 May 1996 and implementing act of 28.11.2000. We contacted representatives of the INPI, the national authority in charge of GI registration. and, according to the INPI, the large number of foreign GIs that have been registered and whose burden must be shouldered by the Brazilian administration amounts to TWO. I repeat TWO foreign geographical indications. I must however concede in something, they are both EU geographical indications. And I must concede in something else, there are three more applications from Europe, along with 6 Brazilian applications (Vinhos Finos do Vale dos Vinhedos, Bento Gonçalves, Rio Grande do Sul, as well as the Region of Cerrado de Minas Gerais for coffee, the Queijos of Friburgo and the chocolates of Gramado) and one registered Brazilian GI, which, for the illustrative (and no publicity) purposes, "Cachaça".

Now, from these two examples, I get no evidence of this alleged "imbalance in numbers". I will tell you why. The TRIPS Agreement obligations on GIs are very limited. The TRIPS Agreement asks WTO Members to provide the "legal means to interested parties". (Articles 22 and 23 TRIPS). So it is up to the right-holders to go to a certain countries and avail themselves of the type of protection provided for in the country concerned. The TRIPS Agreement does not protect automatically anything and does not force any WTO country to do so. When right-holders decide to go to a third country to benefit from that protection, they do so when they (1) have the export capacity to make the investment worthwhile, and when (2) they have an interest. The figures show that not many GI right-holders attempt to go abroad and avail themselves of the protection offered by the TRIPS Agreement.

(b) Imbalance in numbers and economic importance?

Yet, There the is indeed another element which must be taken into consideration when assessing the economic benefits of an "extended" GI protection and resulting market opportunities: the existing and potential trade flows regarding each individual geographical indication. Australia and the cosponsors of that paper make the. The opponents of extension seem to be making following equation: "the more GIs one has, the more the benefits". This does not stand the laugh test. How can one possibly compare the potential of trade inflows of, e.g. the United States GI "Napa Valley wines" with the small EU GI for "Costers del Segre"? How can one compare the trade inflows of "Basmati Rice", that, according to a recent CIPR report, previously cited by another delegate in the room, amount to 300 million dollars and the thousands of farmers with those of the French "Calgots de Tarragoria", which does not export outside the EU at all? It is clear that there is a difference of reality and potential of names like "Café de Colombia" and the Italian GI "white asparagus from

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Cimadolmo". Again, I repeat, numbers don't seem to matter that much but economic values do.

(c) Imbalance in numbers and other IPRs

As I have mentioned before, the issue of numbers is not per se a real one in our view. However, 1 also want to draw the attention about one clear fact. The United States that denounces that the EU would benefit to a greater extent than others because it has some 500 geographical indications and this is good enough to deny the claim for extension.. However, we wonder whether the United States would apply the same reasoning to other fields of intellectual property. The EU Trademark Office has so far registered about 132,218 trademarks but, ladies and gentlemen, by May 2002, the United States Patent Office gave the certificate, of registration 2,570,478. I repeat 2,570,478. M more than two million of trademarks. The figures for patents are even much more substantial substantially higher. Mr. Chairman, if we want to talk about imbalance in number, I would like to ask the United States what their plans are for trademarks. Shall we repeal the TRIPS chapter on trademarks because only they benefit from it?

2. Registration Systems and National Treatment

Now, before I move on to speak, once again, about the definition, I would like to address one issue that is raised regarding the fact that the EU register for GIs on foodstuffs does not allow the registration of foreign GI unless it is determined that a third country has an equivalent or reciprocal system of GI protection. This, of course, begs the question as to the role of registration systems in general, also with respect to the protection of foreign GIs and the issue of national treatment.

Let me first explain how we comply in the EU with the TRIPS requirement of offering GI protection to third country GIs. As you know, the TRIPS section on GIs leaves total freedom to WTO Members to comply with it. Indeed, (and will read the relevant provision because some delegation seem to forget it), Article 1 of the TRIPS Agreement states that "Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice."

Now, lets turn to the obligations of the TRIPS Agreement. Both article 22.2 and 23.1 of the TRIPS Agreement clearly state the sole obligation on WTO Members: to provide "the legal mans for interest parties to prevent the use of a geographical indication".

We have seen how, for example, Brazil provided those means via a registration system, whereas Paraguay did not have such system but permitted that GI protection, as implemented in its domestic law, to be invoked by foreign right-holders. The EC, for example, provides those legal means via its Labelling foodstuff legislation (Directive 2000/13). That legislation forbids in its Article 2.1 that

"[t]he labelling and methods used [in the marketing of foodstuffs] must not (a) be such as could mislead the purchaser to a material degree, particularly: (i) as to the characteristics of the foodstuff and, in particular, as to its nature, identity, properties, composition, quantity, durability, origin or provenance and method of manufacture or production"

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This Directive supplements the EC unfair competition laws and provides, to all foreign GIs, the minimum level of protection required by Article 22 against consumer deception. Any third country right-holder can invoke this provision before any EU Court and avail itself of the protection that TRIPS prescribes. Incidentally, as you may know, this has no cost whatsoever for the EC administration as all costs are borne by the interested producer.

This is just an example of a cost-efficient system that permits GI protection with costs down to the bare minimum.

Let's however talk about registration systems and the question of registration of foreign GIs. The questions of identifying GIs and protecting GIs should be separated and clearly distinguished. We have seen already that GI registration systems are not required by TRIPS. Yet, many countries have opted to put them into place, this is the case, as we have seen, for Brazil, and also that of the EU. Now, what could be the role of registration systems with respect to GIs? When I look at the practice of WTO Members, I would be tempted to answer that such role is twofold: identification of domestic GIs and, sometimes, the protection of foreign GIs.

The EC believes that registration systems should be primarily aimed at the identification of domestic GIs. For example, the EC registration system of EU GIs requires applicants to provide evidence that the GI definition of article 22.1 of the TRIPS Agreement is met. This may mean, in particular, evidence that there is a link between the protected quality, reputation or other characteristic, is due to the geographical origin, and that the protected name evokes that origin, including, in some cases, "country names", if they fulfill the criteria of Article 22.1, like for any other GI. We also ask our EU MS to verify that evidence. This specific EU procedure is ill-adapted to foreign GIs. Let me give you an example, how can the EC verify if "Jasmin Rice" fulfils the criteria of a GI in a country like Thailand which lies more than 10.000 kin away?

It seems to us that the logical conclusion is to limit the registration system to domestic GIs and protect foreign GIs via other means, as 1 explained before, such as a Foodstuffs labelling legislation or unfair competition laws or, like Paraguay, via general GI legislation. Brazil has decided to use their register also to protect foreign GIs, which is also a valid option that we applaud. Chairman, they keep on saying that the national treatment obligations of the TRIPS Agreement entitle WTO GIs to be registered under national systems.

Much to my surprise, I found out that the national treatment, according to the United States, gives rights to GIs, and apparently also to trademarks and patents. Even more shocked I was, Mr. Chairman, when I re-read Article 3 of the TRIPS Agreement on national treatment. This provision says that (I read it for the benefit of certain Members that keep on not understanding it): "[e]ach Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals ...." Let me emphasise the word "nationals", because it is crucial. National Treatment in the TRIPS Agreement gives rights to nationals not to GIs or Trademarks. This is different in the GATT Agreement. There, Article III of GATT states that "(...) internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production."

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That difference should not be disregarded. Those entitled to rights under TRIPS are nationals. Under GATT those are "goods". Now, we said that they are perfectly entitled to apply for GI registration in the EC as some of their companies have done regarding EU GIs.

Yet, I am happy to report to this Council that many other countries seem to have understood that perfectly. We have already spoken about Uruguay and Brazil, let me then now continue in the South-American continent.

Let's start by Argentina, which enacted on January 2001 a law on GIs for agri- -foodstuffs that, curiously enough, already provides for extension. I may revert to that curious fact that Argentina is against "extension" whereas its national law already provides for "extension". Now I want to focus on Article 23 of that Law. It actually provides that "the foreign geographical indications of agricultural and foodstuff products may be registered when our country has concluded agreements on reciprocity in which the conditions of registrations will be established" l., This provision is quasi-identical to the Article 12 of the relevant EC regulation that the United States believes to be TRIPS incompatible. I will have to conclude that, according to the United States, the Argentinean new law would be in breach of the TRIPS Agreement.

Now, let's move on to Uruguay. The Regulatory Decree 34/999 of 3 March 1999 which implements Law 17.011 on Industrial Property also has a provision, in -Article 65, that indicates that "the foreign producers, manufacturers, artisans or service providers, as well as foreign competent public authorities, may register their foreign geographical indications according to international treaties concluded by this Republic". Interestingly, the Uruguayan law already provides for the "extension". Yet, as the Uruguayan law, under the United States approach, would be found to be in breach of TRIPS Agreement, as far as national treatment is concerned.

Let me also say a few words about Chile at this stage. Chile enacted, prior to the entry into force of the TRIPS Agreement, law 18455 of 31 October 1985 establishing the norms of production, elaboration and marketing of alcohols and vinegar. This law protects appellations of origin but only if they are Chilean. Article 27 of that law states that "the establishment, by the president of the Republic of (…) appellations of origin for wines and spirits" will concern "areas of that country". So it seems that for Chile we have the same problem of national treatment that the EU, Argentina and Uruguay: while foreign national can apply for registration, foreign GIs cannot be registered.

Worthy of note is that Chile does not have yet specific legislation regarding the recognition and protection of GIs for other products. Yet, there is a Draft Law 824-01. Article 95 of that draft law states that "Foreign GI right-holders protected in their country of origin ( ... ) will enjoy the same protection as this law provides to national GIs. However, this will not apply in those cases where, according to international conventions and treaties, there is not obligation to recognize the legal effect to those foreign geographical indications". No wonder then that the EC has recently concluded a bilateral treaty with Chile that provides for protection to EU GIs in the Chilean territory.

Now, let's move on to the Andean Community. This is a special case as the applicable instrument covers Peru, Bolivia, Equator and Venezuela. Again, here, Decision 486 of the Andean Community contains Article 219 which provides that "regarding

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appellations of origin and geographical indications protected in third countries, the competent national offices may recognize that protection, as long as this is foreseen in a convention in which a Party is Member." Again, we are faced with an unfortunate group of countries that, like the EU, are apparently in violation of the TRIPS Agreement, according to the US interpretation of the TRIPS Agreement.

Next in line is Panama, which is an special case. First, Panama already provides for "extension", which, at this stage, is no news to this Council. Yet, the Panama law on industrial property states, in its article 137, that "the state of Panama owns the geographical indications" and how this fits with the idea of protecting foreign GIs.

With respect to Costa Rica, it seems that like Brazil, foreign GIs may register in that country, but like Brazil, they will have to pay taxes that foreign nationals will not pay. Sounds like, following the United States argument, both Brazil and Costa Rica may well be in violation of the TRIPS provisions on national treatment.

Continuing our way northwards, I have to say that Nicaragua definitely joins the group of non-TRIPS compliant countries, according to the US interpretation of national treatment. Law 380 on Marks and other distinctive signs states, with respect to GIs (Article 71) that "foreign producers, manufacturers and artisans, as well as the competent foreign public authorities, may only register their geographical indications when this would be foreseen in an international treaty to which Nicaragua is a party, or when in the foreign jurisdiction, Nicaraguan geographical indications would receive an equivalent treatment to that provided under this law".

Honduras would also be in the same situation. Article 126 of the Law of industrial property states that "foreign producers, manufacturers and artisans, as well as the competent foreign public authorities, may only register their geographical indications when this would be foreseen in an convention or international treaty, or when in the foreign country would provide reciprocity to the nationals and residents of Honduras".

Much of the same can be said about El Salvador. Article 67 of Decree 868 on Marks and other distinctive signs, establishes that "foreign producers, manufacturers and artisans, as well as the competent foreign public authorities, may only register their geographical indications when this would be foreseen in an international treaty in which El Salvador is a party, or when in the foreign country would provide reciprocity to the geographical indications of E1 Salvador."

Now, Guatemala, one of the proponents of the Communication, happens also to have the same problem than itself voices out! Indeed, Guatemalan law (Decree 57-2000) on industrial property, states (Article 81) that "foreign geographical indication will be protected according to international treaties concluded by Guatemala". The contradiction speaks for itself, but I will not move to Mexico without indicating that this Law of Guatemala happens to provide for extension already. For those who want to see it, read article 83, I have a copy of it.

Finally, the Mexican law on GIs, which also provides for "extension" but, with respect to foreign GIs, does not appear to permit their registration. Indeed, the protection of the Mexican GI Law starts with a declaration of the Institute of intellectual property (Article 157), where as, under Article 167 of that Law, "geographical indications will belong to the Mexican state". This fits poorly with protecting foreign GIs, which certainly do not belong to the State of Mexico. Yet, Mexico has concluded an agreement with the EC for the mutual protection of GIs on

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spirits, which makes us think that they also do so via international conventions, as the EU did when concluding a bilateral agreement for the mutual protection of spirits GIs.

Mr. Chairman, I am tempted to now move on to the Caribbean but you will hear more of the same. So I decided to provide one last bit of information about another continent, so you don't get the impression that only the whole of South America and the EC is in violation of the TRIPS Agreement, according to the United States, for not permitting the registration of foreign GIs. This is why I want to refer to the Bangui Agreement, that provides for IP protection in 15 African countries. Unfortunately, Article 4 the 1999 Bangui Agreement also provides that "foreign geographical indications in the territories of the Member States of that organization cannot be registered by the organization unless this is foreseen in an international convention to which the Member States are party or by a related implementing legislation".

I know for a fact, Mr. Chairman, that not only the EC, the South-American countries and half of Africa understand that one can protect foreign GIs without registering them: many other countries find themselves in this situation. The United States interpretation of the principle of national treatment is at odds with the legislative practice of a large number of Members of this Council. Not registering foreign GIs does not mean that they cannot be protected.

Yet, from that research, a hard fact come up very, very often. Many countries that oppose extension, have it already at home. Why then opposing? I think this Council is entitled to understand why.....

The role of the country of origin and principle of territoriality

Regarding the question of territoriality, we regard this as a non-issue. In fact, we would like to register our agreement with the views expressed by the Australian delegation at the latest Special Session of the TRIPS Council. The principle of territoriality does indeed apply to the TRIPS Agreement and assumes that WTO Members accept at face value another Member's claim that a particular term meets the definition of GIs in their territory, including those relating to country names, for the entitlement to the "legal means to interest parties" that the TRIPS obligations imposes. Such entitlement does not determine whether the particular GI will eventually be protected. This would be the case of a claim for protection of the name "telephone" for a wine GI, as the Australian delegate mentioned in the last special session of the TRIPS Council. We want to recall that we stated this very same view at the latest special session as set out in paragraph 63 of the meeting report.

Country Names

Mr. Chairman, Australia, the United States and other co-sponsors of Communication IP/C/W/360, continue to attempt to make us believe that the definition is a problem. They claim, in paragraph 5 of their Communication that "country names" or "fanciful terms" may not meet the definition.

Mr. Chairman, I am a bit puzzled. We discussed this issue at the Special session on the "multilateral system of notification and registration" where our position, that I will now repeat, was reflected in paragraph 63 of the Meeting report. I did not hear a single voice against the fact that "country names" are eligible under the definition of a GI under Article 22.1 of the TRIPS Agreement. In fact, our Communication IP/C/W/353, in paragraph 7, expressly admits "country names" as eligible for

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protection. The EU has registered country names as GIs, like in the cases of "Luxembourg", "Svecia". Yet, the EU has not limited that to small countries. So far, the EU has not limited this protection to country names of foodstuffs GIs. For example, in the area of wines and spirits, the EU protects the following country names: Martinique Rhum, Guadeloupe Rhum, Reunion Rhum, Guyane Rhum, Irish Whisky, Whisky Español, Brandy Italiono, Deutscher Weinbrand (Germany Brandy), Eau-de-vie de marc or de pommes or de poires or de kirsch or de quetsch or de mirabelle, or de prunelles – marque national luxembourgeoise, Dansk Akvavit (Danish Aquavit), Anís Español, Ginjinha Portuguesa, Anís Portugués. So even country names of the largest EU Member States (as Germany) are protected as GIs. There was not a disagreement that this is a matter regarding implementation, as indicated by the Chairman of the Special Session in para. 140 of the Report of that meeting (TN/IP/X1/2). It seems to me that raising this issue again, and again, and again is simply a waste of time for this Council. We are happy to discuss issues of definition, if there is a real problem, under the Review of Article 24.2, which happens to even, be quoted in para. 5 of the Communication by Australia, the United States and other. Here, the legitimate question is the following: why shouldn't this question be discussed under the Article 24.2 Review? Why Australia insists in discussing the definition, where there is a general agreement in this discussion? Mi. Chairman, it simply escapes me.... We are offering a discussion on this under Article 24.2. Why isn't this enough?

Non-geographical names as GIs

Australia, the United States and others suggest, when speaking about "Basmati Rice", that non-geographical names may not be eligible as a GI. On the question of eligibility of non-geographical names, once again I reiterate our opinion, as stated in paragraph 7 of our Communication IP/C/W/353 and paragraph 63 of the meeting report of the Special Session of the TRIPS Council. In our view, those terms are eligible as long as they identify a product as coming from a certain territory. As I said, earlier this week, to me, "Jamine Rice" clearly evokes Thailand and, as far as I am concerned, could be a GI irrespective of its non-geographical nature. The EU has a number of those GIs, like "Vinho Verde", "Cava" and some others.

Traditional Expressions

Mr. Chairman, Australia and others claim that the EU considers traditional expressions as geographical indications and will claim protection for those terms via the TRIPS Agreement. I want, once again, to reiterate our position, as stated in paragraphs 58 and 63 of the meeting report of the last special session. "Traditional expressions" are NOT geographical indications. The EU is not protecting them as GIs and therefore, under Article 24.9 of the TRIPS Agreement they are not entitled to GI protection. This view is therefore identical to that expressed by Brazil, even by Australia, in paragraphs 60 and 62. GIs are not geographical indications because they are not protected as such and they are not entitled to protection.

WRITTEN STATEMENT BY SRI LANKA ON ITEM D (See paragraph 168)

Like other delegations, my delegation would like to thank you for your initiative in bringing out a checklist of issues, in order to facilitate a more focused and systematic discussion in the Council. From the very beginning, it was our expectation that all Members approach this issue in a more pragmatic manner rather than engage in confused and heated debate. The deliberations need to be

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more enriching and clarifying on many related issues. Now that, Members have a checklist before them, we expect that all Members would be more constructive and structured in their approach.

We also expect that all Members would take into account your suggestion to avoid duplication of work done under other agenda items of the TRIPS Council.

Mr. Chairman,

My delegation wishes to make its intervention in two parts, first outlining some points on the differences between the general level of protection for GIs and the additional protection provided for in Article 23 for Wines & Spirits, and second to address the two topics which you have outlined in your informal paper.

When one compares the differences between the general level of protection provided from Article 22 and absolute or additional or enhanced protection provided for in Article 23, the following points can be derived at:

1. The standard protection available under Article 22 approach, is protection against commercial practices that are considered to be misleading or constitute acts of unfair competition. The kind of protection available under this remains limited to cases where the public is misled by the use of a GI as to the true geographical origin of the product, or where such use constitutes an act of unfair competition.

2. Article 22 protection is applicable, if products are falsely presented to the public as originating in a particular territory, in that it constitutes an act of unfair competition. Therefore, it does not provide a sufficient intellectual protection for the benefit of the producer entitled to use a GI. Other producers can misuse the GI along with the indication of the true origin of the product. It therefore enables free riding by other producers to the renown of a GI. On the other hand, Article 23 protection does not allow the other producers to use the particular GIs in the same manner and thereby preventing the misuse of it.

3. The requirement of the misleading test under Article 22, where important questions of definition and scope of protection are made on an ad hoc basis, depending on national judicial systems, creates considerable legal uncertainty.

4. As the producer, entitled to use a particular GI has to prove that the public has been mislead and that there has been an act of unfair competition, the cost of protection of a GI on producer is high.

5. On the other hand, Article 23 permits ex officio action by all Members against false indications or origin, thus reducing the cost of protection on the producer.

6. The protection under Article 23 has two components:

Protection for each identified GI in the case of homonymous indications.

The establishment of a multilateral system of notification and registration of GIs for such identified products.

7. The absolute protection or higher level of protection, provided for under Article 23 consists of the prohibition to include expressions such as "type, style, imitation, or like" in products that do not originate in the place indicated by the GI in question. This level or protection is provided only for wines and spirits, at present. This level

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of protection demands the ex officio denegation or invalidation of any trademark that indicates a GI identifying wines and spirits. (Article 23.1 of the TRIPS Agreement).

8. The main difference between these two levels of protection is that, in order to prevent the incorrect use of a geographical indication under the common or ordinary protection, the party that considers itself affected must furnish proof that the improper use of the geographical indication is misleading the public or that it constitutes an act of unfair competition.

It is also pertinent to mention here that the above arguments have been already presented to this Council by a group of countries, including that of mine, in the submission, IP/C/W/247/Ref.2 made in May 2001, and Section II of submission IP/C/W/353 made in June 2002.

Let me now come to the first topic, issues relating to protectable subject-matter.

At the outset, Mr. Chairman, we believe that "extension" has no implications on the definition provided for in Article 22.1, as the exercise we have embarked concerns the different level of protection between GIs for Wines and Spirits and those for other products.

However, as we believe that Members in the Council need to be clear on what we are proposing, hence we continue to engage in the discussion on this issue.

The joint submission, IP/C/W/353 presents clearly that the definition of Article 22.1 is flexible enough as it protects geographical names of localities, regions or countries or any name to qualify as a GI as long as it meets the following criteria:

(1) If the subject-matter is a good and it does not represent ideas or procedures and it exists in reality.

(2) The identification by the GI correspondents to a territory of a Member or a region or a locality of that territory. The goods can also be identified by an indication, therefore not necessarily the name of a geographical place on earth.

(3) There needs to be a special quality, reputation or other characteristic inherent in the goods.

(4) The quality, reputation or other characteristics are essentially attributable to the geographical origin of the goods. There has to be a special link between the origin, and the quality, reputation and special characteristics.

Accordingly, that country names that do not quality those criteria may not be eligible for protection as GIs. The above criteria apply to all goods, whether they receive Article 22 or 23 protection. Article 22.1 also refers to indications that are not necessarily the names of geographical places on earth, however, any indication that fulfils the above criteria may be eligible for protection as GIs. This is because, although those GIs do not represent a true place on the earth, nevertheless the goods have derived a reputation for their quality and special characteristics that are essentially attributable to the place where such goods are produced or originated.

It is important to remind ourselves that what we are dealing here. We discuss here geographical indications, and not "traditional expressions". These two are two different issues and distinctive concepts. As any delegation stated before, GIs should exist in reality and therefore GIs do not represent "ideas" and "expressions".

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My delegation also noticed that some delegations try to confuse the term GIs with other terms, such as "indication of source" and "appellation of origin". We understand their confusions, as both these concepts are linked to the idea of GIs.

What is an "indication of source"

The term "indication of source" as described in both, the Paris Convention and the Madrid Agreement, means any expression or sign used to indicate that a product or a service originates in a country, region or specific place.

"Indication of Source" is more generic, simple and broad concept, which corresponds to the origin of a product. This concept includes both GIs and Appellation of origins. It refers to the designation of any country or place situated therein, from where the product originates. It only indicates a geographical region or a place and does not imply any special quality or characteristics of the product on which an indication of source is used.

This concept therefore does not require that the product own a certain quality or a reputation or characteristics or natural and human conditions linked to its geographical origin. In that sense, Indications of Source cover country names and names of geographical regions.

What is "appellation of origin"

The term "appellation of origin", as defined in Article 2 of the Lisbon Agreement, means the geographical name of a country, region or specific place, which serves to identify a product originating therein and whose characteristics and qualities are due exclusively or essentially to the geographical environment, including both natural and human factors. The geographical names identifying "appellation of origins" indicate that a product originates in a specific geographical region, only when the characteristic qualities of the product are due to the geographical environment, including natural and human factors.

"Appellation of origin" is more specific and a very narrow concept, which is limited and linked to the quality and characteristics, belonging to a particular geographical environment, where the products originates from. The factors both natural (soil and climate) and human form and influence the special quality and characteristics of the product. Those special qualities and characteristics of the product should be exclusively due to their geographical environment.

The names identifying "appellation of origin" should necessarily correspond to the geographical name of a country, region or a locality and should also be linked to the quality or characteristics that are essentially attributable to the place of origin. In that sense, "Appellation of origins" only relates to geographical names and not to symbols or signs or other kind of expressions which serve to designate a product.

Compared to "indications of source" and "appellation of origins", the term "appellation of origin, as defined in Article 2 of the Lisbon Agreement, means the geographical name of a country, region or specific place, which serves to identify a product originating therein and whose characteristics and qualities are due exclusively or essentially to the geographical environment, including both natural and human factors.

The term "GI" is relatively a new concept. The term GI is the TRIPS Agreement includes "appellation of origin" but does not cover the "indications of source". Accordingly, the definition of the TRIPS Agreement differs in a number of ways from the terms "indication of source" and "appellation of origin". The term GI is not as narrow as "appellation of origins", but not as wide as "indications of source".

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Under TRIPS Agreement a GI, to be protected, has to be an indication, such as symbols or signs that points out to a given country or a region or a locality, but not necessarily the name of a geographical place on earth. The indication has to identify a good as originating in the territory of a Member or a region or a locality of that territory. Therefore the definition provided for in Article 22 expands the Lisbon Agreement concept of "appellation of origins" to protect goods, which derive a reputation from their place of origin, provided that reputation is essentially attributable to the quality or other characteristics of the place of origin.

It could be notice that a number of bilateral and plurilateral agreements, entered between countries before the TRIPS Agreement came into effect and in few cases, even after it cam into force, were based on the concept of "appellation of origins", thereby building on commitments to provide a higher level of protection than that obliged by the TRIPS Agreement. Those agreements entered outside the framework of TRIPS Agreement provided mutual concessions and benefits to the parties involved. These concessions and benefits came in different forms. Some related to removing various forms of barriers to trade bilaterally thereby providing greater market access for products that are being traded among them.

Hence, my delegation strongly believes that reference to bilateral and plurilateral agreements in the TRIPS Council does not do any good to the process, rather it creates confusions among the membership. What the TRIPS Council is mandated to do is to clarify the issues relating to the implementation of the commitments and obligations provided for in the TRIPS Agreement. Any Member who is interested in understanding these concepts further can refer to background material prepared by WIPO in April 2002 contained in Document SCT/8/4.

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