United States Chided As TRIPS Scofflaw At WTO

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A clause found to be unfairly protecting a rum company’s US market by denying trademark rights quietly stuck into a US Congress appropriations bill in the deep of night in the late 1990s continues to haunt the halls of the World Trade Organization – but that does not seem to trouble US trade authorities. And this is not the only intellectual property-related case being met with US indifference, an irony for possibly the biggest proponent of IP rights in the world.

“The conduct of the United States unscrupulously discredits the WTO dispute settlement system and also constitutes an affront to the intellectual property rights,” an ambassador from Cuba said today at the WTO.

At a WTO Dispute Settlement Body meeting today, a number of WTO members fired shots at the US delegation for its continued failure to change its laws to comply with WTO rulings that found it out of compliance on intellectual property-related issues.

This includes the case involving a rum trademark dating back over a decade, and a more recent case involving a US online gambling ban that led a WTO panel to authorise the Caribbean nation of Antigua and Barbuda to extract payment by not protecting US IP rights until it complies.

The irony of the US as IP scofflaw was not lost on competitors like Antigua and Barbuda or Cuba, which said the US slackness discredits its IP rights enforcement campaign as well as the very WTO dispute settlement process itself.

“It is very ironic to observe the United States projecting laws on intellectual property, despite keeping violations as egregious as Section 211,” under which the Bacardi Company continues to market rum labelled Havana Club, a mark which is otherwise owned by Cuba and partners. “This is one of the most famous cases of trademark counterfeiting and conducting misleading advertising by a company backed by the US legislation.”

The lack of any substantive change by the United States in today’s report to the DSB “is irrefutable proof that this country has [done] nothing during more than 11 years to comply with the DSB recommendations and rulings, which ruled the incompatibility of ‘Section 211 of the Omnibus Appropriations Act of 1998’ with the TRIPS Agreement and the Paris Convention,” the Cuban ambassador to the WTO said in a translated statement. TRIPS is the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. Cuba has interest in the rum case because it is a part owner of the rum trademark everywhere in the world except the United States.

“The legislative projects to which the US delegation makes reference in their reports each month remain stagnant because it does not constitute a priority or real interest for the administration or the Congress of that country,” Cuba said. “However, by their displaying of incoherent foreign policy, we frequently observe how that Member promotes initiatives in terms of ‘enforcement of intellectual property rights.’”

For instance, Cuba said the recently announced US-European Union trade agreement contains the goal of “maintaining and promoting a high level of protection” of IPRs, and said this bilateral trade agreement should be “critically question[ed].”

Even the 27-member European Union weighed in on the Section 211 case, thanking the US for its report and adding the hope that “US authorities will very soon take steps towards implementing the DSB ruling and resolve this matter.” The EU also urged that the US comply with another IP case – Section 110(5) of the US Copyright Act – which involved the US commercial practice of playing music recordings, such as Irish music, aloud in bars without paying royalties. “We refer to our previous statements that we would like to resolve this case as soon as possible,” the EU said.

Venezuela joined Cuba in condemning the United States for its failure to comply with the rum case, and raised deep concerns about a continued lack of action. “This situation is unacceptable, disappointing, and worrying, not only because it affects a developing country member of this organisation, but also for the grave repercussions against the credibility of DSB and the multilateral system of trade,” Venezuela said in its statement (unofficial translation).

Zimbabwe also spoke in support of Cuba, saying, “Once again, it is regrettable that the United States of America continues to disregard the rulings and recommendations of the WTO Dispute Settlement Body in the dispute.”

The United States for its part had numerous complaints about other nations, such as the European Union’s slow adherence to a ruling requiring it to accept biotech products.

Antigua and Barbuda: Last Call for US Settlement

Meanwhile, in the high-profile online gambling case where Antigua and Barbuda have been given the green light to retaliate under the TRIPS Agreement by not protecting US IPRs, the tiny nation today again appealed the United States to show progress toward complying with the WTO ruling.

“The delegation of Antigua and Barbuda has so far not seen substantial progress on compliance by the United States with the DSB’s decision,” the country said in a shortened version of its statement. “Nor have they seen substantial progress by the United States in achieving a settlement with Antigua and Barbuda.”

The country said it is “disappointed” by the lack of progress as the “negative consequences of this protracted impasse are very real for Antigua and Barbuda.” It said the case is a test for member states “seeking to determine whether the [WTO Dispute Settlement Understanding] can deliver practical and timely benefits for small and vulnerable countries.”

It demanded a reason why after 5 years the US still cannot honour the DSB decision nor reach an agreed settlement. In January, the DSB authorised Antigua and Barbuda to use cross-retaliation under TRIPS to recover its damages.

“But before it sets its foot to that path, Antigua and Barbuda appeals to the United States to make one last effort at bringing its complex bureaucratic structure to a decision that will avoid unpredictable consequences,” it said. “The delegation of Antigua and Barbuda also appeals to the DSB to realize that justice delayed is justice denied, and urges closer attention to the systemic issues that surround this case that threaten the health of the system the WTO has for the resolution of trade disputes.”

William New may be reached at wnew@ip-watch.ch.

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