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The TRIPS Agreement and the Wine Industry

When considering international relations with respect to the wine industry, most literature recites the Agreement on Trade-Related Aspects of Intellectual Property Rights (commonly called the “TRIPS Agreement”). Generally speaking, the TRIPS Agreement creates standards of intellectual property (“IP”) regulation amongst other members of the World Trade Organization (“WTO”).  This agreement is the first multilateral agreement organized by the WTO that explicitly establishes global protection for geographic indications (“GIs”) for wines produced throughout the world. The Agreement recognizes appellations of origin, which, in the wine industry, is a name used on wine products to designate the specific geographical region in which they are produced. There is much reasoning for recognizing GI protection internationally, but the dominant arguments propose preservation of wine quality and/or reputation and reduction of wine fraud.

There are three articles under the TRIPS Agreement that concern GIs and specifically apply to the wine industry. These articles are Article 22, Article 23, and Article 24. Article 22 of the TRIPS Agreement provides general protection for GIs, Article 23 creates a protection specifically for the GIs of wines and spirits, and Article 24 establishes a duty for countries that are parties to the Agreement to continually negotiate to expand protection for GIs of wines and spirits.

Article 22 of the Agreement reads as follows:

Article 22—Protection of Geographical Indications

1. Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.

2. In respect of geographical indications, Members shall provide the legal means for interested parties to prevent:

(a) the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of origin in a manner which misleads the public as to the geographical origin of the good;

(b) any use which constitutes an act of unfair competition within the meaning of Article 10bis of the Paris Convention (1967).

3. A Member shall, ex officio if its legislation so permits or at the request of an interested party, refuse or invalidate the registration of a trademark which contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if use of the indication in the trademark for such goods in that Member is of such a nature as to mislead the public as to the true place of origin.

4. The protection under paragraphs 1, 2 and 3 shall be applicable against a geographical indication which, although literally true as to the territory, region or locality in which the goods originate, falsely represents to the public that the goods originate in another territory.

In summary, Article 22 defines GIs within the context of the Agreement and requires countries who are parties to the Agreement to supply legal means to prevent the use of false GIs on products that would mislead the public with respect to the product’s true geographical origin. Article 22 additionally requires parties of the TRIPS Agreement to either refuse or invalidate registration of any trademark that  includes or is composed of a GI that would mislead the public as to the product’s true geographical origin.

Article 23 of the Agreement reads as follows:

Article 23—Additional Protection for Geographical Indications for Wines and Spirits

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 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 which contains or consists of a geographical indication identifying wines or for spirits which contains or consists of a geographical indication identifying spirits 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 not having this origin.

3. In the case of homonymous geographical indications for wines, 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.

4. In order to facilitate the protection of geographical indications for wines, negotiations shall be undertaken in the Council for TRIPS concerning the establishment of a multilateral system of notification and registration of geographical indications for wines eligible for protection in those Members participating in the system.

Essentially, Article 23 requires parties to the Agreement to create laws that prohibit the use of false GIs on wines and spirits, even if the true geographical origin of the wine or spirits product is indicated. Article 23 goes so far as to prohibit the use of false GIs on wines and spirits products that use expressions such as, “kind,” “type,” “style,” “imitation,” or the like such as to indicate that the wine or spirits product is not the same as that wine or spirits product with the true GI. The Article additionally calls for the refusal or invalidation of trademarks that include or are composed of a GI identifying wines or spirits that do not originate in the geographic region indicated.

The key to Article 23 that separates it from its predecessor Article 22 is that Article 23 does not require a trademark to be “misleading” for Article 23 to be invoked. On the contrary, it is only when homonymous GIs are used for wines or spirits products that products may be considered misleading. Finally, Article 23 requires the Council of TRIPS to undertake additional negotiations to create a “multilateral system of notification and registration” with respect to GIs for wines.

Article 24 of the Agreement reads as follows:

Article 24—International Negotiations; Exceptions

1. Members agree to enter into negotiations aimed at increasing the protection of individual geographical indications under Article 23. The provisions of paragraphs 4 through 8 below shall not be used by a Member to refuse to conduct negotiations or to conclude bilateral or multilateral agreements. In the context of such negotiations, Members shall be willing to consider the continued applicability of these provisions to individual geographical indications whose use was the subject of such negotiations.

2. The Council for TRIPS shall keep under review the application of the provisions of this Section; the first such review shall take place within two years of the entry into force of the WTO Agreement. Any matter affecting the compliance with the obligations under these provisions may be drawn to the attention of the Council, which, at the request of a Member, shall consult with any Member or Members in respect of such matter in respect of which it has not been possible to find a satisfactory solution through bilateral or plurilateral consultations between the Members concerned. The Council shall take such action as may be agreed to facilitate the operation and further the objectives of this Section.

3. In implementing this Section, a Member shall not diminish the protection of geographical indications that existed in that Member immediately prior to the date of entry into force of the WTO Agreement.

4. Nothing in this Section shall require a Member to prevent continued and similar use of a particular geographical indication of another Member identifying wines or spirits in connection with goods or services by any of its nationals or domiciliaries who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Member either (a) for at least 10 years preceding 15 April 1994 or (b) in good faith preceding that date.

5. Where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith either:

(a) before the date of application of these provisions in that Member as defined in Part VI; or

(b) before the geographical indication is protected in its country of origin;

measures adopted to implement this Section shall not prejudice eligibility for or the validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication.

6. Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services in the territory of that Member. Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of that Member as of the date of entry into force of the WTO Agreement.

7. A Member may provide that any request made under this Section in connection with the use or registration of a trademark must be presented within five years after the adverse use of the protected indication has become generally known in that Member or after the date of registration of the trademark in that Member provided that the trademark has been published by that date, if such date is earlier than the date on which the adverse use became generally known in that Member, provided that the geographical indication is not used or registered in bad faith.

8. The provisions of this Section shall in no way prejudice the right of any person to use, in the course of trade, that person’s name or the name of that person’s predecessor in business, except where such name is used in such a manner as to mislead the public.

9. There shall be no obligation under this Agreement to protect geographical indications which are not or cease to be protected in their country of origin, or which have fallen into disuse in that country.

In summary, Article 24 obligates parties to the Agreement to enter into negotiations with the goal of increasing protection for GIs of wines and spirits. Section One of Article 24 specifically apprises that countries that are parties to the Agreement are prevented from using the exceptions outlined in further provisions of Article 24 to avoid ensuing negotiations.  Section Two of Article 24 allows the Council for TRIPS to review implementation of such provisions outlined under Article 24 and allows same to take action, upon agreement, to promote and advance the objectives of Article 24. Additionally, Article 24 prohibits countries that are parties to the Agreement from reducing protection for GIs that existed prior to the enforcement of the TRIPS Agreement. (This provision serves to provide greater protection for GIs.)

There is a multitude of parties to the TRIPS Agreement and even additional literature that has been written with respect to its enforcement and its provisions. Some literature argues that the United States is not in compliance with the TRIPS Agreement, specifically in terms of GI protection of wines and spirits. Given Australia’s recent ratification of the EU-Australia Wine Trade Agreement, irrespective of much pressure throughout the wine industry to enforce international protection of GIs of wines and spirits, it is not likely these contentions will fade. Regardless, the TRIPS Agreement remains the preeminent agreement among the international community with respect to preserving GIs of wines and spirits.

(Source: Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, arts. 22–24, accessible at Agreement on Trade-Related Aspects of Intellectual Property Rights.)

For more information on wine or alcohol law, international trade, or geographical indications, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

lazahn 9 The TRIPS Agreement and the Wine Industry

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Lindsey is the founder and author of On Reserve: A Wine Law Blog. She is an alcohol beverage and food attorney and is admitted to the New York State Bar.

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