Minutes - TRIPS Council - View details of the intervention/statement

Ambassador Alejandro Jara (Chile)
83. The representative of Australia referred to paragraph 114 of the minutes of the previous meeting (document IP/C/M/32) and added the following preliminary comments in response to the new paper that had been introduced by Switzerland (document IP/C/W/308) as a further demonstration of her delegation's willingness to engage seriously and constructively in the extension debate and to further assist Members in making a measured and balanced assessment of the potential benefits and costs of amending the treaty provisions. It was a gross oversimplification of the costs involved in implementing new obligations to increase the higher level of protection of Article 23 to all products. It was easy for countries which already had elaborate geographical indication protection systems in place to claim that new obligations would only require minor legal changes, but there was a whole range of other costs that needed to be considered, including the differential impact that these might have on Members. Implementing and administering new laws involved considerable costs, both in terms of money and other resources, for most governments and might impact proportionately more on developing countries. Members had different systems in place to protect geographical indications and this was a fundamental aspect of TRIPS flexibility under Article 1.1. Accordingly, a change in obligations would have a much greater impact on some Members than others and it was a gross generalization to dismiss the changes as minor for all Members. The proposed new obligations would apply to all goods and all Members, even those who chose not to protect any of their own domestic geographical indications. Every Member would be obliged to protect the geographical indications of all other Members at the enhanced level of protection in order to avoid MFN violations. This could involve a considerable burden as some Members had hundreds, if not thousands, of geographical indications. The costs would not just be minor legislative changes. The Council needed to consider the entire costs that extension would entail, including administration of modified laws, trade implications for producers, including possible closure of market access opportunities, increased potential for consumer confusion, costs to industry of relabelling and marketing and the other costs outlined in document IP/C/W/289. Regarding the claim that extension would reduce potential consumer confusion by enhancing clarity and security about the origin of the product, Article 22 already operated to ensure that the consumer was not misled as to the origin of the product. This reflected the fundamental function of a geographical indication as a means of informing the consumer about the geographic origin of a product. Accordingly, the existing protection conferred on all goods under TRIPS by Article 22 already guaranteed that consumers were not misled as to the origin of a product. The additional protection conferred under Article 23 did not provide the consumer with any additional information concerning the origin of the product. Regarding the argument that Article 22 was inadequate because the use of qualifiers such as "style" and "kind" undermined the genuine geographical indication over the long term and made them generic, she said that the use of these qualifiers provided a clear distinction between the use of the geographical indication on a product entitled to it, and a similar product that did not have a particular quality, reputation or other characteristic that was essentially attributable to that geographic origin. The demandeurs had not presented any evidence of cases where a geographical indication, which was protected in its country of origin, had become generic in this way. This led to the conclusion that this risk was not very real. If there were genuine concern, then Members should examine more closely the meaning and implementation by Members of Article 24.6 to see how this provision was functioning. Australia had long advocated the need for a thorough examination of each of the provisions on geographical indications in the TRIPS Agreement in the context of the Article 24.2 review. The argument that extension would reduce the costs for plaintiffs and judicial authorities since they would not have to prove the misleading element of Article 22, and that this would compensate for the additional costs of extension, conceded that there would be costs and that these costs should be accompanied by compensatory benefits. The fundamental question that needed to be asked was what exactly were the full costs that would result from extension and whether these were outweighed by any likely benefits. The suggestion that removing the need to prove the misleading element would be compensation for the increased costs was misconceived as the producers that would gain the purported benefit of increased protection were not the same party that would suffer the increased costs. It was the government that needed to implement the more burdensome steps to protect geographical indications. Costs would also be redistributed to industries that would be subject to claims that they could no longer use certain words and would need to defend their rights and re label their products. Consumers would also be confused about products. This example pointed to the critical importance of Members considering the full picture and taking to heart the range of interests that would be affected by a change to existing levels of protection. Paragraph 6 of document IP/C/W/308 recognized that a national registration system was not the only means or a prerequisite to implementation of Article 23 obligations. It was useful that the sponsors of the paper had pointed this out, but it begged the question as to what other forms of protection would in fact be sufficient to fulfill obligations under Article 23 and underlined the lack of examination of this issue in the Council. Paragraph 15 of document IP/C/W/308 acknowledged that Article 24 exceptions would not have to be abandoned. She welcomed this clarification, but this begged the question as to what effect those exceptions would have on the eligibility for protection of many geographical indications that countries were seeking to protect, including those mentioned by India. In conclusion, document IP/C/W/308 underlined the need for a much more thorough examination of the issues associated with calls for extension.