September 24, 1997
Issues and Policy Committee
WHEREAS, the International Trademark Association has reviewed the principal international treaties and agreements requiring protection of geographical indications;
WHEREAS, in attempting to implement the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and multilateral and bilateral agreements, there appears to be some confusion as to the relationship between geographical indications and trademarks;
BE IT RESOLVED, that the International Trademark Association supports the principle of “first in time, first in right” priority when resolving conflicts between geographical indications and trademarks.
There is a fundamental, philosophical conflict between the protection of geographical indications and trademarks. Proponents of geographical indications view these designations as absolute, i.e., once created they should be entitled to exclusivity even if this means extinguishing valid, pre-existing trademark rights. Proponents of trademarks generally believe that conflicts between geographical indications and trademarks should be resolved by the traditional principle of “first in time, first in right.” The Issues and Policy Committee requests that the Board of Directors adopt a resolution creating a balance between valid trademarks and valid geographical indications, enabling conflicts between the two to be decided on the basis of priority under national and international law.
Several treaties and regional arrangements have attempted to set the appropriate standard for resolving the conflict between geographical indications and trademarks. This issue was one of the most contentious, spawned by such cases as the Torres case, during the negotiation of the TRIPS Agreement. In this case, the TORRES trademark had been registered and used for wine for many years. The Portuguese government declared a “Torres Vedras” geographical indication, which, under a European Commission regulation on wine, would have resulted in prohibiting the use of the TORRES trademark since it was in conflict with a geographical indication. Although the Commission subsequently amended its regulation to allow the co-existence of both the geographical indication and the trademark, the likelihood of confusion under this compromise greatly disadvantages the trademark holder.
TRIPS supposedly resolved these conflicts by endorsing the “first in time, first in right” principle. The worldwide implementation of the geographical indications articles of the TRIPS Agreement (Articles 22-24), however, has created confusion and potential harm to trademark owners since valuable trademark rights may be preempted by geographical indications. For example, in 1996 the government of Vietnam was considering revising its civil code based on the 1974 WIPO Model Law for Developing Countries on Appellations of Origin and Indications of Source which gives such indications priority over pre-existing trademarks. WIPO has yet to revise the Model Law to conform with TRIPS -- a fact that INTA brought to the attention of the Vietnam government.
What are Geographical Indications?
The general term “geographical indication” encompasses many concepts, including, but not limited to, “indications of source” and “appellations of origin.” As defined by TRIPS, “geographical indications are ... indications which identify a good as originating in a territory... 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.” (Article 22(1)). Thus producers of products of a certain geographical region are permitted to claim a right to use a geographical indication for that region (e.g., Napa Valley for chardonnay). Importantly, a geographical indication is not a trademark with geographical significance, such as BOSTON MARKET for restaurants, nor is it a generic term such as Swiss cheese. A geographical indication is a term which is given protection as an indication of geographical origin, such as New Zealand mussels, either sui generis as an appellation of origin or through unfair competition and/or consumer protection laws.
The conflict between trademarks and geographical indications arises when a given term with geographical significance may be protected as a trademark. In that event, the owner of a pre-existing trademark faces global extinction of its brand equity if one government decides to designate a geographic term as a geographic indication. The Torres case is a classic example of how this could occur.
“First in Time, First in Right” Conflict Resolution
INTA has long recognized the potential harm that advocates of geographical indications might inflict on trademark owners. In 1981 when revisions to the Paris Convention were being proposed to address this issue, the then USTA Board approved a resolution which would allow countries to prohibit the use of a geographical indication or refuse or invalidate its registration as a trademark only where (1) the use of the geographical indication misleads the public as to the true country of origin or (2) the indication is the subject of a trademark registration or application and its use is of a nature as to mislead the public as to the true country or origin.
INTA made its position known during the subsequent negotiations on TRIPS. The TRIPS Agreement attempts to resolve the conflict between trademarks and geographical indications by creating a coexistence mechanism (“grandfather clause”) in Article 24(5) as follows:
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:
- before the date of application of these provisions in that Member as defined in Part VI; or
- 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.
This TRIPS “coexistence mechanism” apparently contradicts and therefore supersedes Article 5(6) of the Lisbon Agreement on the Protection of Appellations of Origin (1958) which mandates the phase out of pre-existing trademarks that conflict with a subsequent appellation of origin. Moreover, the Lisbon Agreement is not specifically exempted from derogation (as is the Paris Convention, among other intellectual property treaties) under TRIPS Article 2(2) and may contradict the right afforded to trademark owners under TRIPS Article 16(1). That provision recognizes that trademark owners have the exclusive right to prevent third parties from “using in the course of trade identical or similar signs” that would result in a likelihood of confusion. The use of the broad term “signs” instead of “trademarks” suggests that the right of a trademark owner to prevent encroachment on its rights extends broadly to cover all “signs” used in the course of trade, including both trademarks and geographical indications if misused or used as trademarks. This is consistent with TRIPS Article 17, which provides for limited exceptions to be made to the rights of trademark owners, such as fair use of descriptive terms. In its 1996 report INTA’s Geographical Indications Task Force concluded that the TRIPS Agreement unambiguously protects all pre-existing trademarks against usurpation by geographical indications.
Even though TRIPS appears to have reached a compromise between proponents of geographical indications and trademark owners, it also calls for further negotiations between WTO Members to provide “additional” protection for geographical indications for wines and spirits which are expected to begin in 1998. These negotiations already are providing an opportunity for geographical indications proponents to seek to reopen the entire issue in order to provide greater protection of geographical indications at the expense of trademark rights. In such an atmosphere and with most developing countries not having to implement TRIPS until 2005, there exists the strong possibility of laws being passed which would give preference to geographical indications over trademarks as was almost the case in the Vietnam example described above.
For the foregoing reasons, the Issues and Policy Committee recommends that the Board of Directors affirm the basic principle that conflicts between geographical indications and trademarks be determined on a “first in time, first in right” basis. Such an affirmation would be consistent with the recently adopted Vision Statement, which reaffirmed INTA’s dedication to being the world leader in promoting and supporting trademark rights.