Looking Long-Term, Lisbon System Members Reach Into Wallets To Bail System Out 07/04/2017 by Catherine Saez, Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Pressed to come up with solutions to eliminate the deficit of a World Intellectual Property Organization treaty protecting appellations of origins, members reached into their pocket and came up with close to two-thirds of the needed sum of US$1.5 million. Solutions to reach the financial sustainability of the system are still ongoing, while concerns are voiced as to what extent this financial issue, viewed by some as more political than practical, will hinder the upcoming negotiations on the organisation’s next budget. Lisbon Working Group Chair Nikoloz Gogildidze of Georgia In 2015, a new act of the WIPO-administered treaty protecting appellations of origins was adopted to include geographical indications. The new act also covers geographical indications. Before the new act enters into force, after five members join, a common set of regulations needs to be effective for both instruments. Regulations comes as complementary rules to the treaties. The Working Group for the Preparation of Common Regulations under the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration and the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications met from 3-5 April for its second meeting. The working group was decided upon by the Lisbon Union Assembly in October 2015, according to the report of the assembly meeting [pdf]. The working group was to meet once a year during the 2016/2017 biennium. The Geneva Act covers both geographical indications (GIs), which are signs designating products having a specific geographical origin from which those products derive particular qualities, and appellations of origin, which are GIs with stricter production rules. GIs include roquefort cheese from France, pinggu peaches from China, Switzerland’s gruyère cheese, and Mexico’s tequila. The Quest for Financial Sustainability On the agenda [pdf] of the working group, beyond the issue of the common regulations, was also the question of the financial sustainability of the Lisbon Union. The Lisbon system, administered by WIPO, runs a chronic financial deficit, in part because of the low number of its members (28 out of WIPO’s 189 members). The financial sustainability of the Lisbon Union came into discussion as the Lisbon members, seeking to made the Lisbon system more attractive, in particular by including geographical indications into the system, worked towards a new act of the agreement. WIPO members who are not members of the Lisbon system were excluded from the vote on the new act and some felt the process of approval of the Geneva Act was not legitimate, as the majority of the WIPO membership was not included in the decision. Since then, some non-Lisbon members, such as the United States and Australia, have been demanding that the Lisbon system become financially sustainable. They said funds from other successful WIPO-administered treaties, such as the Patent Cooperation Treaty (PCT) should not be used to sustain the Lisbon system. This demand was one of the major hurdles of the approval of the last WIPO budget in 2015, and according to sources, might come in the way in the upcoming discussions at the 10-14 July Program and Budget Committee, on the 2018/2019 WIPO budget.. Lisbon members have agreed that the system should be sustainable and have been trying to find solutions firstly to eliminate the projected biennial deficit (2016/2017) of the Lisbon Union, about CHF$1.5 million (US$1.5 million), and secondly to address the lack of financial sustainability of the Lisbon System. A document [pdf] laying out proposals on financial matters concerning the Lisbon Union, presented at the last Lisbon Union Assembly in October 2016, suggests that Lisbon members continue to consider the establishment of a contribution system, and monitor the Lisbon fee schedule to review it if necessary. The document also suggests that promotion activities of the Lisbon System including the Geneva Act should be emphasised. Lisbon Members Reach for their Wallets The WIPO secretariat explained this week that the Lisbon system had received contributions from a number of countries: Italy, Portugal, Mexico, Georgia, and France for a total of about CHF 836,000 (US$ 836,000). The secretariat said other Lisbon members were still discussing with their capitals on a possible contribution to cover the projected biennial deficit. The Czech Republic confirmed its intention to contribute some CHF66,000 to the system, Israel also said it would contribute, as well as Peru. Hungary and Bulgaria said consultations are ongoing about a possible contribution. A number of Lisbon members, such as Portugal, and Iran, said it is important that the system be promoted and attract more members. Italy said that raising the fees might be discouraging for countries interested in joining the system. Any decision on the financial sustainability of the Lisbon system should take the needs of developing and least-developed countries into account, the delegate said. GIs can enhance the value of traditional products, safeguard biodiversity and cultural and gastronomic heritage of developing countries, she said. Gabon supported the statement by Italy and said the Lisbon Union is a great development opportunity for developing countries, and cited the example of Cameroon where specific GIs contributed to local development. Italy also said WIPO should promote the Lisbon System, and the Lisbon Union should have the same visibility than other WIPO treaties, such as the PCT. Portugal as well as Hungary, France and Bulgaria underlined the principles of solidarity between WIPO-administered treaties. Iran said Lisbon should be treated on equal footing with other WIPO-administered unions. Israel said it supports the review of the fees and the introduction of new fees, and renewal fees for maintenance services. The United States, speaking as an observer country in the working group, said the Geneva Act moved forward without the support of all WIPO members and it has not been established that WIPO will administer the treaty. The promotion by WIPO itself of the Lisbon System cannot be done with funds from other registration systems, the US delegate said. Australia supported the US statement and also said it is concerned about the prospect of WIPO promoting the Lisbon System as it does not reflect the interest of the broader WIPO membership. Any promotion should be conducted in a balanced manner without prejudice to how GIs are protected globally, the delegate added. China also said that on the matter of financial sustainability, it supports the position of the US. GIs are protected either through sui generis system, such as in members of the Lisbon system, or through trademarks and certification marks, such as in the US and Australia. The summary [pdf] by the working group chair Nikoloz Gogildidze from Georgia reflects the statement of Lisbon member states and underlines the need to ensure that any solution to the financial sustainability of the Lisbon System be in line with the existing WIPO budget principles and methodology, as well as the principle of solidarity among all WIPO unions. The six contribution-financed unions are: the Paris Convention for the Protection of Industrial Property; the Berne Convention for the Protection of Literary and Artistic Works; the Strasbourg Agreement Concerning the International Patent Classification; the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks; the Locarno Agreement Establishing an International Classification for Industrial Designs; and the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks (IPW, WIPO, 8 October 2015). The working group also recommended that the next Lisbon Union Assembly in the fall extend the mandate of the working group to allow for further discussions, in particular on the financial sustainability of the system. Draft Common Regulations: Almost There The working group worked from draft Common Regulations [pdf], and a non-official “non-paper” [pdf] with the latest draft regulations was issued on 5 April. The WIPO secretariat underlined that rule 8.10 of the non-paper will be deleted until agreement is found among the Lisbon members. Rule 8.10 is a safeguard clause introduced by Moldova. According to a source, this comes in reaction to the request of some countries that some individual fees would be levied to cover the costs for their intellectual property office to protect GIs under Lisbon. After Moldova insisted that its proposal be kept in the non-paper to be transmitted to the Lisbon Union Assembly, paragraph 11 of the summary has to be amended to say that the proposal from Moldova will be considered by the Lisbon Union Assembly. The working group recommended that the Lisbon Union Assembly adopt the draft common regulations as drafted this week. Image Credits: WIPO Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Catherine Saez may be reached at csaez@ip-watch.ch."Looking Long-Term, Lisbon System Members Reach Into Wallets To Bail System Out" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.