Drafting Exercise For WIPO Delegates As Lisbon Members Advance On New Act of Treaty

Members of a World Intellectual Property Organization-managed treaty protecting appellations of origin this week are working to add geographical indications to the treaty. They are addressing issues not yet agreed upon, including the sustainability of the system, and how to address prior use of such geographical indications by trademark owners.

The Diplomatic Conference for the Adoption of a New Act of the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration is taking place from 11-21 May.

The new Act of the agreement is meant to extend the international protection currently granted to appellations of origin (AOs) to geographical indications (GIs), and to allow intergovernmental organisations to become members of the agreement in addition to individual states.

The diplomatic conference committee (Main Committee I) dealing with substantial work on the draft articles and draft regulations of the new act of the Lisbon Agreement completed a first consideration of all pending issues that had been identified by the preparatory committee of the conference. New drafts of articles were tabled by Committee I President Miháli Ficsor on 12, 13 and 14 May (IPW, WIPO, 14 May 2015). Most articles are expected to be discussed again during the period of the diplomatic conference.

On 13 and 14 May, delegates of the 28-member Lisbon Agreement, observer nations to the negotiation, and “special” delegations, namely the European Union and the African Intellectual Property Organisation (Organisation Africaine de la Propriété Intellectuelle – OAPI) went through issues concerning the scope of the protection, the legal effect of international registrations, and the potential introduction of fees to the system.

Delegates are working from the Basic Proposal [pdf] for the New Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications, and the Basic Proposal for the Regulations [pdf] under the New Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications.

The existing Lisbon Agreement has a register of AOs, and the new Act would add GIs to the register. The existing register appears to have about 1,000 registrations of AOs, more than half of them in France.

Protection of Registered AO and GIs

Article 11.1.a (Protection in Respect of Registered Appellations of Origin and Geographical Indications – Content of Protection – Use of the AO or GI) refers to the use of products which are of the same kind of the registered AOs or GIs but not coming from the geographical area of origin or not complying with requirements for using such AO or GI.

Alternative A refers to products “which would amount to its misuse, imitation or evocation,” or “which would be detrimental to, or exploit unduly, its reputation.” Alternative B is more focused on the damage to the beneficiary producers of goods that are not of the same kind as AOs and GIs.

A majority of Lisbon members who took the floor were in favour of Alternative A, while some others favoured Alternative B, with observer countries showing the same divide.

Article 11.3 (Declaration Concerning the Content of Protection) with its four alternatives was also discussed with no consensus on either of them.

Also in Article 11, no agreement was found on the “draft agreed statement” which is in the footnote regarding the possible coexistence of homonymous AOs or GIs in a territory. According to WIPO, homonymous GIs are those that are spelled or pronounced alike, but which identify products originating in different places, usually in different countries.

The draft agreed statement says that “… applications concerning appellations of origin consisting of or containing a term occurring in an appellation of origin already registered under the Agreement have not been refused by the International Bureau, and will not be refused by the International Bureau under this Act either, as this would amount to a refusal on a substantive ground. It is for each Contracting Party to decide, on the basis of its own legal system and practice, whether such appellations of origin or geographical indications may coexist on its territory or that one of them shall prevail.”

No consensus was found and the issue was sent to a later discussion.

Protection against Becoming Generic

One of the concerns of some delegations is the fact that AOs or GIs could become generic in some countries that members of the agreement. In order to prevent this situation, Article 12 states that registered AOs and GIs cannot be considered to have become generic as long as they are protected in the contracting party of origin.

On 14 May, a new draft of Article 12 [pdf] (President non-paper No 4) was tabled by Ficsor. The new drafting provides a trimmed version of the article. It was discussed on the same day, without finding consensus among Lisbon members or non-members. It is expected to be discussed again later.

Prior Trademark Rights

This issue has been dividing Lisbon members and non-members as some of the latter protect GIs under a trademark system.

Committee I considered Article 13.1 (Safeguards in Respect of Other Rights – Prior Trademark Rights). The Article contains two alternatives (A and B). Alternative A states that the protection of AOs and GIs “shall not prejudice the eligibility for, or the validity of, the registration of the trademark, or the right to use the trademark, taking into account the legitimate interests of the owner of the trademark…. and provided that the public is not misled.”

Alternative B says that the protection of AOs and GIs … shall be subject to the rights conferred by the prior trademark under national or regional law…”

According to the WIPO secretariat, Alternative A creates an exception to the AO and GI rights, and B defines the co-existence as an exception to the rights of prior trademarks.

Most Lisbon members favoured Alternative A. Non-Lisbon members working with a trademark system said Alternative B was best suited for their needs, as trademarks owners are granted exclusive rights by the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and coexistence with GIs and AOs is not possible.

The issue has to be discussed again at a later stage.

Legal Effect of International Legislation

Three articles were considered under this issue: Article 16.2 (Withdrawal of Refusal – Negotiations), Article 17 (Prior Use – Phasing Out of Prior Use), and Article 19.1 (Invalidation – Grounds for Invalidation).

According to the WIPO secretariat, Article 16.2 does not create any obligation but is an enabling provision. The article deals with negotiations between two contracting parties in case of a refusal to protect certain AOs or GIs in one of them.

Most Lisbon members were in favour of keeping Article 16.2, as some said it provides more clarity, while most non-Lisbon members proposed its deletion. Some said it would be inconsistent with domestic legal principles and provide confusion in trade negotiations. The article was further discussed at a later stage. Some Lisbon members changed course and supported the removal of this item, which was agreed.

On 14 May, a new draft of Article 19.1 [pdf] (President non-paper No 5) was submitted by Ficsor and met with the approval of member states.

Another item of debate was Article 17, deals with the phasing out of prior use, to be considered again later. In essence it states that if protection of a GI is not refused in a country after registration, prior use is terminated.

Non-Lisbon countries that may use the trademark system to protect GIs, such as China and the United States, asked to have this paragraph deleted. The United States raised concern that it might undermine safeguards for prior trademark rights, and that it would be “an unnecessary intrusion into domestic law.”

It was clarified by the committee president that it was understood not to apply to prior trademarks, and that was “not the intention.” This is dealt with under Article 13, he noted. The WIPO secretariat also said this.

Fees

Individual fee

The issue of fees has also been long debated within the Working Group on the Development of the Lisbon System. Non-Lisbon members have remarked in different WIPO bodies that the Lisbon system is not financially sustainable and users of other WIPO agreements should not carry this financial burden since they do not benefit from it. The main financial contributor to WIPO is the Patent Cooperation Treaty.

Lisbon members have argued that most of the expenses relating to the Lisbon system have been due to the work and meetings of the working group and the modernisation of the filing system.

The diplomatic conference was expected to address the issues of individual fees, contributions by members of the Lisbon system, and maintenance fees.

Article 7.5 (Fees – Individual Fees) has two alternatives (A and B). Alternative A links the protection from the international registration with the payment of a fee (7.5.a) and adds that the non-payment of such individual fee will suspend the protection (7.5.b). Alternative B leaves the decision on individual fees to a future meeting of the Lisbon Union Assembly.

Most WIPO members in attendance, whether Lisbon members or non-members, agreed that the Lisbon system required financial sustainability. Some members said it is important for national offices to be able to recover their examination costs. Individual fees would make the system more attractive, if such fees were not to burden the applicants in a significant way, some said.

However, some Lisbon members supported Alternative A, while some others supported Alternative B, as they required more time to consider what they said is a new element to the previous Lisbon agreement.

Maintenance fees

The issue of maintenance fees is addressed in several articles: Article 7.3 (Fees – Maintenance Fees), Article 8.3 (Period of Validity of International Registrations – Effect of Non-Payment of a Maintenance Fee), and Article 24.3.vi (Finances – Sources of Financing of the Budget – Contributions of the Contracting Parties).

Most Lisbon members indicated that they oppose maintenance fees, such as those for renewal, as it departs from the Lisbon system principles and in particular the indefinite protection granted to AOs under the current system. One member asked that a cost-benefit analysis be carried out to see if altering the fee structure of the Lisbon system is an appropriate solution to reaching financial sustainability. Some developing countries remarked that maintenance fees would be a financial burden for applicants, would create legal uncertainty, and would not encourage such countries to join the system.

Non-Lisbon members taking the floor favoured the introduction of maintenance fees.

The matter is expected to be further discussed.

Drafting Proposals Back to Drafting Table

Having achieved the first round of consideration of pending issues, the diplomatic conference revisited some of the pending issues for which a drafting proposal was submitted by Ficsor earlier in the week.

The textual proposal (President non-paper No2) [pdf] on trans-border geographical area, concerning Article 2.2 (Subject Matter – Possible Geographical Areas of Origin), Article 5.3 (Application Filed Directly by the Beneficiaries or a Legal Entity) and 5.4 (Application – Possible Joint Application in the Case of a Trans-border Geographical Area) was again discussed on 14 May, without consensus. The articles are expected to be re-drafted.

The same fate was met by textual proposals made by Ficsor (President Non-Paper No 3) [pdf] on Article 5.2 (Application Filed by Competent Authority), and Rule 5 (Requirements Concerning the Application), which is expected to be re-drafted too.

Main Committee II – Administrative Issues

Today, Main Committee II met for the first time to discuss the non-substantive provisions of the Basic Proposal for the New Act. These are administrative and final provisions contained in Articles 21-34.

While the majority of the provisions were accepted by the Committee, the pending issues to be discussed at its next session (scheduled tomorrow) include Article 22(2)(a)(ix), Article 22(3)(b), Article 24, Article 25(2)(a), Article 26(2), Article 27(1), Article 29(2), Article 29(4), and Article 31(1).

The highlights of this session were the proposal by Algeria to require, for the entry into force of the new Act, the deposit of ratification or accession instruments by ten eligible parties instead of five as currently envisaged in the draft article 29(2) and rewording of Article 31(1), which addresses the question of the application of the Lisbon Agreement, requested by Italy.

IP-Watch Researcher Elena Bourtchouladze and William New contributed to this report.