WORLD TRADE RESTRICTED IP/C/M/36/Add.1 10 September 2002 ORGANIZATION (02-4741)

Council for Trade-Related Aspects of Intellectual Property Rights

MINUTES OF MEETING

Held in the Centre William Rappard on 25-27 June 2002

Addendum

Chairman: Ambassador Eduardo Pérez Motta (Mexico)

The present document contains the record of the discussion which took place on agenda items A, B and D-Q during the TRIPS Council meeting held on 25-27 June 2002. The discussion on items C(i) and (ii) concerning paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health and the extension of the transition period provided for in paragraph 7 of the Declaration is recorded in document IP/C/M/36.

Subjects discussed Page Nos

A. NOTIFICATIONS UNDER PROVISIONS OF THE AGREEMENT ...... 2 (i) Notifications under Article 63.2...... 2 (ii) Notifications under Articles 1.3 and 3.1 ...... 3 (iii) Notifications under Article 69...... 3 B. REVIEW OF NATIONAL IMPLEMENTING LEGISLATION ...... 3 (i) Follow-up to reviews already undertaken...... 3 (ii) Reviews of legislation of Qatar and of Saint Vincent and the Grenadines...... 6 (iii) Arrangements for future reviews...... 7 D. ISSUES RELATED TO THE EXTENSION OF THE PROTECTION OF GEOGRAPHICAL INDICATIONS PROVIDED FOR IN ARTICLE 23 TO PRODUCTS OTHER THAN WINES AND SPIRITS...... 9 E. REVIEW OF THE PROVISIONS OF ARTICLE 27.3(B)...... 44 F. RELATIONSHIP BETWEEN THE TRIPS AGREEMENT AND THE CONVENTION ON BIOLOGICAL DIVERSITY ...... 49 G. PROTECTION OF TRADITIONAL KNOWLEDGE AND FOLKLORE ...... 49 H. REVIEW OF THE IMPLEMENTATION OF THE AGREEMENT UNDER ARTICLE 71.1 ...... 59 I. IMPLEMENTATION OF ARTICLE 66.2 ...... 60 J. NON-VIOLATION AND SITUATION COMPLAINTS ...... 62 K. ELECTRONIC COMMERCE...... 63 IP/C/M/36/Add.1 Page 2

L. OTHER OUTSTANDING IMPLEMENTATION ISSUES (TIRETS 93 AND 94 AND A PROPOSAL BY LDCS ON THEIR TRANSITION PERIOD)...... 63 M. REVIEW OF THE APPLICATION OF THE PROVISIONS OF THE SECTION ON GEOGRAPHICAL INDICATIONS UNDER ARTICLE 24.2 ...... 64 N. TECHNICAL COOPERATION AND CAPACITY-BUILDING ...... 66 O. INFORMATION ON RELEVANT DEVELOPMENTS ELSEWHERE IN THE WTO...... 66 P. OBSERVER STATUS FOR INTERNATIONAL INTERGOVERNMENTAL ORGANIZATIONS...... 67 Q. OTHER BUSINESS ...... 69

1. The Council adopted the agenda for the meeting with the following understandings: first, that the Council would ensure that all mandates relevant to each agenda item were met; second, that this was done within the specified time-frames; and third, that the Council would ensure an equitable sharing of the time between the different agenda items.

A. NOTIFICATIONS UNDER PROVISIONS OF THE AGREEMENT

(i) Notifications under Article 63.2

- Notifications from Members whose transitional periods under Article 65.2 or 65.3 expired on 1 January 2000 or acceded to the WTO after that date

2. The Chairman drew the attention of Members to the Secretariat's note reflecting the status of the notifications received from the Members whose transitional period under Article 65.2 or 65.3 expired on 1 January 2000 or who had acceded to the WTO after that date (JOB(02)/64). It showed that, out of the 79 Members in question, there were seven who had not yet submitted any notification concerning their implementing legislation. Notifications from a number of other Members were incomplete. Recalling that pursuant to Article 63.2 of the Agreement the notifications of the laws and regulations in question were generally due as of 1 January 2000, he urged these Members to submit the outstanding material without delay. He also urged them, if not all the material to be notified was ready yet, to submit whatever could be notified now and complement the notification as soon as other parts of the material to be notified were ready for submission. He reminded delegations that, under the Agreement Between the World Intellectual Property Organization and the World Trade Organization and decisions taken by WIPO's Governing Bodies, the International Bureau of WIPO was in a position to assist delegations with the translation of their main dedicated intellectual property laws and regulations, as required.

- Notifications from other Members

3. The Chairman said that Bangladesh had informed the Council about the enactment of a new Copyright Act in line with the TRIPS Agreement, and stated that after some further minor amendments, the English version of the Act and the rules thereon would be available for notification (document IP/N/1/BDG/1). Furthermore, he informed the Council that, since the previous meeting, notifications of amendments to legislation notified earlier had been received from Canada, Costa Rica, the Kyrgyz Republic and Tunisia. These notifications would be available in the IP/N/1/- series of documents.

4. The representative of Canada said that the notification that her delegation had just submitted contained, in addition to the copies of the texts of amending laws and regulations, explanatory background notes for each as well as other supporting documentation such as website addresses for further information. IP/C/M/36/Add.1 Page 3

5. The representative of China said that his delegation had notified its main dedicated laws relating to the TRIPS Agreement. He expected that responses to the Checklist of Issues on Enforcement would be submitted to the Council in the next few weeks.

(ii) Notifications under Articles 1.3 and 3.1

6. The Chairman informed the Council that, since the previous meeting, Chinese Taipei had notified under Article 3.1 of the TRIPS Agreement that it was availing itself of the possibilities provided in Article 6 of the Berne Convention as incorporated into the TRIPS Agreement (subsequently circulated as document IP/N/2/TPKM/1).

(iii) Notifications under Article 69

7. The Chairman informed the Council that, since the previous meeting, new notifications of contact points under Article 69 of the Agreement had been received from Bangladesh, Chinese Taipei, Georgia and Grenada as well as updated information from the delegations of the Brazil, Cuba, Egypt, Israel and the Philippines (subsequently circulated in document IP/N/3/Rev.6/Add.1). There were now 114 Members who had notified contact points under Article 69.

8. The Council took note of the statements made.

B. REVIEW OF NATIONAL IMPLEMENTING LEGISLATION

(i) Follow-up to reviews already undertaken

- April 2001 review

9. The Chairman recalled that, at the previous meeting, it had been noted that five Members whose reviews had been initiated in June 2001 had questions outstanding. Since then, Cameroon and Grenada had provided responses to most of the outstanding questions (documents IP/C/W/302/Add.1 and IP/C/W/301/Add.1, respectively), but there were still a few initial questions posed to these Members that remained to be responded.

10. No other further responses had been obtained since the last meeting. Congo still had some outstanding initial and follow-up questions and Suriname some follow-up questions. Guyana had not yet provided responses to any initial questions.

11. He said that the Secretariat had received answers to all questions, including follow-up questions, from Namibia (document IP/C/W/248 and addenda), and proposed that the review of the legislation of Namibia be deleted from the agenda, it being understood that any delegation should feel free to revert to any matter stemming from this review at any time.

12. The Council so agreed.

- June 2001 review

13. The Chairman recalled that, at the previous meeting, it had been noted that nine Members whose reviews had been initiated in June 2001, had initial or follow-up questions outstanding. Since then, Albania and the United Arab Emirates had provided responses to all questions, including follow- up questions, posed to them (documents IP/C/W/267/Add.3 and IP/C/W/291/Add.3, respectively).

14. The representative of the United Arab Emirates said that, as for all WTO Members, it had been necessary for his country to undertake legal reforms to cope with the commitments arising from its WTO membership and to align the its intellectual property legal system with the provisions of the IP/C/M/36/Add.1 Page 4

TRIPS Agreement. The reform had meant not only amending already existing provisions but also introducing new rules, especially with regard to patent and copyright laws. This and other considerations of more constitutional nature had delayed the alignment of its laws with the TRIPS Agreement. The federal nature of the UAE and the need for more coordination at various levels had contributed to this delay. In spite of this situation, the UAE had begun its review at the Council's meeting in June 2001 by providing the Council with answers to questions posed by Canada, Japan, the European Communities, Switzerland and the United States (documents IP/C/W/291 and addenda 1-3). The review had been undertaken on the basis of the already existing laws, namely the Patent and Designs Law, the Trademarks Law and the Copyright and Neighbouring Rights Law. The review had also taken fully into account the amendments foreseen at that stage to be introduced to these laws.

15. He said that the internal process of the UAE had been concluded and it stood ready to provide the WTO with the three laws as amended, finalized and approved by the UAE legislative authorities at both local and federal levels. It only remained for the three bills, namely the Trademarks Law, the Patent and Industrial Designs Law and the Copyright and Neighbouring Rights Law, to receive the constitutional approval of the highest authority in the UAE, which was expected very soon. The approved amendments were designed:

- to restructure the legal texts being amended so as to introduce clearer technical and juridical language in keeping with the current international terminology;

- to adapt the substantive provisions of the already existing laws to the TRIPS Agreement with regard particularly to patents, industrial designs and copyrights;

- to introduce new terms of protection as stipulated by TRIPS provisions while keeping longer periods where it was the case before implementing the TRIPS commitments such as for trademarks;

- to enhance enforcement measures, including administrative, judicial and customs procedures and bolster the powers of competent authorities especially as regards preventive and border measures; and

- to extend patent protection to new technological fields as well as to streamline and precise the definitions regarding copyrights, so as to align the UAE intellectual property with the TRIPS provisions.

16. Concluding, the representative of the United Arab Emirates said that he believed that the amended laws reflected in full the TRIPS provisions and that his country would spare no effort to cope with its obligations and enhance its intellectual property system.

17. The Chairman proposed that the reviews of the legislation of Albania and the United Arab Emirates be deleted from the agenda, it being understood that any delegation should feel free to revert to any matter stemming from this review at any time.

18. The Council so agreed.

19. The Chairman said that the Secretariat had just received responses to all remaining outstanding questions from Oman, which had not yet been circulated to all Members (subsequently circulated as document IP/C/W/282/Add.4).

20. No responses to initial questions had been received from Mauritius, and from Saint Kitts and Nevis. The authorities of Saint Kitts and Nevis had informed the Secretariat that they would provide responses to all questions posed to them by the end of this year. In addition, some initial and IP/C/M/36/Add.1 Page 5

follow-up questions remained outstanding from Egypt and Fiji, and some follow-up questions were outstanding from Kenya and the Philippines.

21. The representative of Mauritius said that the questions raised concerning the legislation of Mauritius by few Members were all related to Mauritius' old laws. His delegation had had extensive consultations with the concerned delegations. He expressed his gratitude to them for their valuable guidance and advice. He added that his delegation had also consulted the Secretariat and that it had been informed that it had taken care of all the issues that had been raised. These issues had been duly factored in the new draft legislation, which took care of all the queries that had been raised. Copies of the legislation had been circulated to all Members.1 Since then, Mauritius had taken active steps and was pleased to report that its new legislation was now before Parliament, having already gone through the first reading. The work of Parliament was expected to be completed by the late July or early August. Arrangements would then be made to provide the revised laws on TRIPS in due course to all Members and the Secretariat. He expressed his hope that this explanation would now set to rest the questions raised and that the matter could be closed once the new laws had been circulated to Members.

22. The representative of Kenya said that her delegation would be in position to submit the remaining responses before the next meeting.

23. The representative of Egypt said that he expected to be able to provide responses to the outstanding questions before the next meeting. New legislation had been passed by Parliament two weeks prior to the present meeting. This would expedite the process of finalizing the review.

24. The representative of Switzerland noted that his delegation had not yet received responses to the initial questions it had posed to Argentina. At the time when these questions had been submitted, Argentina had indicated that it could not provide responses since the issues raised in the questions were under consultations between the United States and Argentina. Referring to document WT/DS171/3,2 he noted these consultations had now resulted in a mutually agreed solution. He said that his delegation was looking forward to receiving responses to the questions it had posed in due time. Furthermore, he thanked Oman and the United Arab Emirates for their responses and said that he would study them in detail and, if necessary, come back with follow-up questions.

- November 2001 review

25. The Chairman said that, with respect to the November 2001 review, responses to all outstanding initial and follow-up questions had been received during the previous meeting or since then from Antigua and Barbuda, Barbados, Brunei Darussalam, Gabon, Ghana, Sri Lanka, Thailand, Tunisia and Uruguay. These responses had been circulated in documents IP/C/W/317, 325, 318, 338, 343, 324, 319, 331 and 330, respectively, and in addenda to these documents. He proposed that that the review of the legislation of these Members be deleted from the agenda, it being understood that any delegation should feel free to revert to any matter stemming from this review at any time.

26. The Council so agreed.

27. The Chairman said that also Malaysia had provided, since the previous meeting, responses to all outstanding questions. They had been circulated in addenda 1 and 2 to document IP/C/W/327. Responses to the last outstanding questions had not yet been circulated to Members (subsequently circulated as document IP/C/W/327/Add.3).

1 See document IP/N/1/MUS/1. 2 See also paragraph 280 below. IP/C/M/36/Add.1 Page 6

28. No responses to initial questions posed at that review had been received from Swaziland. In addition, some initial questions remained outstanding from Cuba and Zimbabwe. Furthermore, there were some initial and follow-up questions that remained outstanding from Brazil, India and Pakistan.

29. The Representative of Zimbabwe apologised for the delay and said that responses to the outstanding questions would be provided shortly.

30. The Representative of Brazil said that his delegation was still analyzing the outstanding questions from Canada and Switzerland and that he expected to be able to provide responses to them shortly.

31. The Representative of India said that due to some procedural formalities not been fulfilled his delegation had not yet been able to respond to the about eight outstanding questions but expected to do so in the near future.

32. The Representative of Pakistan said that his delegation would provide responses to the remaining questions as soon as possible, but not later than the Council's next meeting.

- March 2002 review

33. The Chairman recalled that, at its meeting in March 2002, the Council had initiated the reviews of Moldova and Nigeria, and agreed to postpone the review of the legislation of Saint Vincent and the Grenadines to the present meeting. As regards Moldova, there were still some initial questions that remained outstanding. Since the meeting in March, Nigeria had provided responses to most questions that had been posed to it. These responses had been circulated in document IP/C/W/344. However, there were still a number of outstanding initial questions.

34. The representative of Nigeria said that his delegation would provide responses to the outstanding questions before the Council's next meeting.

35. The Chairman urged the delegations who had outstanding initial or follow-up questions from earlier reviews to submit their responses to these questions without delay. He noted that going through all the outstanding questions from reviews already undertaken was somewhat complicated. He suggested that the Secretariat be requested to circulate, in order to help the Council and the Members in question, prior to the Council's meeting in September an informal note listing all the outstanding material required to complete the various reviews. Furthermore, he asked the Secretariat to maintain contact with the delegations that had outstanding questions to respond.

36. The Council took note of the statements made and agreed to proceed as suggested by the Chairman and to revert to this sub-item at its next meeting.

(ii) Reviews of legislation of Qatar and of Saint Vincent and the Grenadines

- Qatar

37. The Chairman said that Qatar's notification of its laws and regulations had been circulated in document IP/N/QAT/2, and the texts of the notified laws in the relevant law series documents. Qatar's responses to the Checklist of Issues on Enforcement had been circulated in document IP/N/6/QAT/1. Qatar had received questions from Australia, Canada, the European Communities and its member States, Japan, Switzerland and the United States (documents IP/C/W/328, 314, 320, 208, 315 and 215 Addendum 1, respectively). Qatar had provided responses to most of these questions (document IP/C/W/346), but there were still a number of questions from the European Communities, Japan, Switzerland and the United States to which written responses had not been obtained prior to the present meeting. IP/C/M/36/Add.1 Page 7

38. In accordance with the standard procedures, the delegation of Qatar provided a brief introductory overview of the structure of its legislation in the areas covered by the TRIPS Agreement and of the changes that it had had to bring about in order to make the legislation compatible with the Agreement. The record of the introductory statement as well as the questions put to it and the responses given (including responses to any follow-up questions posed after the meeting) will be circulated in the following documents: IP/Q/QAT/1, IP/Q2/QAT/1, IP/Q3/QAT/3 and IP/Q4/QAT/1.

39. The representatives of Canada and Switzerland thanked the delegation of Qatar for the introductory remarks and responses to their questions. The representative of Switzerland said that he looked forward to receiving responses to the outstanding questions number 6 and 7, and indicated that he would submit one follow-up question in the course of the following week.

- Saint Vincent and the Grenadines

40. The Chairman said that the delegation of Saint Vincent and the Grenadines had informed the Secretariat that it would not be able to attend the present meeting. It was in the process of submitting information to the Council for review. This information would be made available to the Council as soon as possible. He suggested that the Council revert to the review of its legislation at its next meeting.

41. The Council so agreed.

(iii) Arrangements for future reviews

- China

42. The Chairman recalled that, at its meeting in March, the Chair had said that he imagined that, in regard to the TRIPS Agreement, Members would want to conduct China's normal TRIPS review together with the review by the TRIPS Council foreseen for this year in the transitional review mechanism (TRM) under China's Protocol of Accession. The representative of China had welcomed this proposed combination of the transitional review with the Council's normal review of China's TRIPS implementing legislation. The Council had agreed to revert to this matter at the present meeting.

43. Since the meeting in March, he had consulted Members on the arrangements for these reviews. At the Council's informal meeting of 17 May, Members had indicated that they would agree that the Council's normal review of China's TRIPS implementation and the review under the transitional review mechanism would be combined at the Council's meeting scheduled for 17-19 September 2002. The normal review would be conducted following the Council's standard procedures. By way of background information, he informed the Council that the Secretariat had received a notification of the TRIPS implementing laws and regulations from China.3

44. He suggested that the Council confirm the dates for the submission of questions and responses under China's normal review in accordance with the Council's standard practice as follows:

- questions should be submitted to China, with a copy to the Secretariat, by 9 July 2002, i.e. 10 weeks before the meeting in September 2002; and

- responses to questions posed within that deadline should be submitted by 20 August 2002, i.e. four weeks before the meeting in September 2002.

3 The notification of China has been circulated in document IP/N/1/CHN/1 and the texts of its main laws and regulations in the related law series documents. IP/C/M/36/Add.1 Page 8

45. As regards the procedures applicable for the reviews in September, he clarified that he was suggesting that Members might use the standard TRIPS review procedures this year for the normal TRIPS Council review, and that he was not suggesting any special procedures for the TRM review this year. The question of what should be done by the TRIPS Council for future TRM reviews would have to be considered next year, according to China's Protocol of Accession and in the light of whatever practice for such reviews had been evolved by other WTO bodies.

46. The representative of Japan said that he supported the initiation of the review of China's legislation at the Council's meeting in September. However, since China's notification of its legislation had been circulated just before the expiration of the 9 July 2002 date for the submission of questions, he was concerned about not having enough time to examine the legislation and to prepare questions. Therefore, he believed that it would be reasonable to allow the submission of further questions for the November meeting of the Council. Furthermore, he said that the legislation in some areas, such as the protection of geographical indications and trade secrets as well as enforcement, had not yet been notified, and hoped that the outstanding material would be notified as soon as possible.

47. Turning to the methodology of the whole review process, he said that, according to China's Protocol of Accession, the review of legislation relating to the TRIPS Agreement would take place after the accession each year for eight years and thereafter there would be a final review in the tenth year or at an earlier date decided by the General Council. Given that this was the first time the TRIPS Council was to review legislation under the eight year term, the Council should seek an effective and efficient method to do so. In considering such a method for the review, it was extremely important to take into account the following three points. First, the eight year term given by the Protocol should be utilized efficiently and effectively for both reviewing and reviewed Members. Second, the review mechanism in the TRIPS Council should be consistent with the review mechanisms applied by other WTO bodies. Third, the review mechanism in the TRIPS Council should, however, be based on the nature of the IP system. IP legislation and practices and/or operations under that legislation should be reviewed separately and independently, given that practices and/or operations under the legislation would develop over time.

48. Accordingly, it would be reasonable to divide the whole review process into three stages. The first stage could be, for example, the normal review, the second stage could look at the practices and operations under the legislation, and the third stage could focus on emerging issues. While not insisting on a three stage review mechanism, he believed that the Council should make its best efforts to let the whole review process be a fruitful one for every concerned Member.

49. The representative of China agreed with the initiation of the review at the Council's meeting in September using the procedures as suggested by the Chair. Responding to the comments made by Japan, he clarified that geographical indications and undisclosed information were covered by the trademark law and certain other laws and regulations that had already been notified. He reiterated that China would submit its responses to the Checklist of Issues on Enforcement in the coming weeks. As regards the conduct of future reviews, he said that China's Protocol of Accession already provided how TRM reviews should be conducted in the various bodies of the WTO. In his view, the Council could now agree to conduct the normal legislative review combined with the first year's TRM review, and discuss later how future TRM reviews should be conducted in light of the practice of other WTO bodies as well according to paragraph 18 of China's Protocol of Accession.

50. The representative of the European Communities said that he was pleased that the review of the notified legislation would be initiated at the September meeting, and hoped that outstanding legislation would be notified as soon as possible. Expressing sympathy towards the points raised by Japan, he said that he would appreciate being given a full opportunity to address questions to China once all laws and regulations had been duly notified. It was in the interest of the entire membership that the process work smoothly and that all Members be given the opportunity to examine thoroughly the legislation of China as had been done with the legislation of all other new Members. He was not IP/C/M/36/Add.1 Page 9

yet in a position to take a view concerning Japan's ideas about the methodology for future reviews, but indicated that he wished to ensure that a fruitful and effective review would take place.

51. The representative of Japan said that, while he did not insist on a three stage review mechanism, he was ready to provide a non-paper to clarify his ideas to Members.

52. The Chairman said that the dates that he had suggested in accordance with the Council's standard practice were aimed at facilitating a detailed review and providing sufficient time for reactions from all delegations. This standard practice also provided flexibility, including the possibility to submit follow-up questions. He reiterated that there was agreement that the Council's normal review of China's TRIPS implementation and the review under the transitional review mechanism would be combined at the Council's meeting in September 2002, but that the question of what should be done by the Council for future TRM reviews would be considered next year, according to China's Protocol of Accession and in the light of whatever practice for such reviews would have been evolved by other WTO bodies.

53. The Council agreed to proceed as suggested by the Chair.

- Chinese Taipei

54. The Chairman recalled that the Council had decided, at its meeting in March, to review the legislation of Chinese Taipei at its meeting scheduled for 17-19 September 2002. The Secretariat had received a notification of the TRIPS implementing laws and regulations from Chinese Taipei, as well as its responses to the Checklist of Issues on Enforcement. The notification of Chinese Taipei had been circulated in document IP/N/1/TPKM/1 and the texts of its main laws and regulations in the related laws series documents. The responses to the Checklist on Issues of Enforcement were available in document IP/N/6/TPKM/1. He reminded delegations that that questions should be submitted to Chinese Taipei, with a copy to the Secretariat, by 9 July 2002, i.e. 10 weeks before the meeting in September 2002; and responses to questions posed within that deadline should be submitted by 20 August 2002, i.e. four weeks before the meeting in September 2002.

55. The representative of Chinese Taipei thanked for the opportunity to have the IP regime of Chinese Taipei reviewed. His delegation hoped to receive all the questions by 9 July 2002, but might need more time to prepare responses to them. He believed that through this process Chinese Taipei would receive cooperation and technical assistance from Members to upgrade its IP regime.

56. The Council took note of the statement made.

D. ISSUES RELATED TO THE EXTENSION OF THE PROTECTION OF GEOGRAPHICAL INDICATIONS PROVIDED FOR IN ARTICLE 23 TO PRODUCTS OTHER THAN WINES AND SPIRITS

57. The Chairman recalled that, in paragraph 18 of the Doha Ministerial Declaration, the Ministerial Conference had noted that "issues related to the extension of the protection of geographical indications provided for in Article 23 to products other than wines and spirits will be addressed in the Council for TRIPS pursuant to paragraph 12 of this Declaration". While there were a number of different interpretations of this mandate, he believed that there was a common understanding that the Council had to report on this issue to the Trade Negotiations Committee by the end of 2002. This set an important time-frame that the Council should take into account in organizing its work.

58. He recalled that, at its meeting in March, the Council had had a thorough discussion on the substance of the issue. Since that meeting, the Council had received a communication from Switzerland on behalf of Bulgaria, Cuba, Cyprus, the Czech Republic, the European Communities and their member States, Georgia, Hungary, Iceland, India, Kenya, Liechtenstein, Malta, Mauritius, IP/C/M/36/Add.1 Page 10

Pakistan, Romania, the Slovak Republic, Sri Lanka, Switzerland, Thailand and Turkey (document IP/C/W/353).

59. Introducing the communication in document IP/C/W/353, the representative of India said that the list of its co-sponsors had increased and now included Bulgaria, Cuba, Cyprus, the Czech Republic, the European Communities and their member States, Georgia, Hungary, Iceland, India, Jamaica, Kenya, Liechtenstein, Malta, Mauritius, Pakistan, Romania, the Slovak Republic, Slovenia, Sri Lanka, Switzerland, Thailand and Turkey. The names of the teas, coffees, rice, bananas, carpets and handicraft of the co-sponsors of the communication were at stake and that it was their cultural heritage that the co-sponsors sought to protect. They wished to reserve the names of their products for their producers so that these producers could develop and, along with them, their countries. He said that, while certain countries argued strongly against extension and spoke of costs, it was interesting to note that most of the "opponents" produced wines and spirits. He wondered whether they would be on his side if wines and spirits would be the ones discriminated against.

60. He said that the communication built upon previous communications such as document IP/C/W247/Rev.1 where it was explained why it was necessary to extend the protection of geographical indications for wines and spirits also to geographical indications for other products, and document IP/C/W/308/Rev.1 where it was laid down why the extension of protection would benefit all WTO Members, trade and consumers. The communication being presented showed how easily extension could be incorporated in Section 3 of Part II of the TRIPS Agreement on "Geographical Indications". He said that he and the co-sponsors hoped that this would enable the Council to fuel the discussions on the matter for the benefit of the entire membership. Currently, only geographical indications for wines and spirits benefited from the effective protection under Article 23 of the TRIPS Agreement. Extension aimed to protect geographical indications of all products alike in the future in an effective manner.

61. He recalled that long discussions had been held in the Council on the advantages and costs that extension would involve or could involve. Yet, no one had shown that the additional protection for wines and spirits caused any costs when it had been first introduced in 1994. He said that it was now time to enter into a more substantive discussion examining the concrete consequences of extension so that Members of the Council could focus on what extension really meant within the TRIPS Agreement and in their own countries. The co-sponsors hoped to contribute, with the communication, to a better understanding of what the concrete consequences of extension and benefits of extension for Members were and hoped to create also a base for fruitful discussion in the Council.

62. He said that extension would have no implications on the TRIPS Article 22.1 definition of geographical indications, which applied to indications or signs borne by any product. It was undisputed that the definition was flexible enough to protect geographical names of localities (like "Cognac" for spirits), regions (like "Napa Valley" for wines) or countries (like "Luxembourg" for meat products). Any name or sign that evoked a geographical origin on a product and that met the requirements of the definition, in particular the link between the quality, reputation or other characteristics of a product and its geographical origin, was eligible for GI protection.

63. Currently, producers and other interested parties such as consumers had no effective means to prevent the use of denominations such as "Antigua Coffee produced in Argentina” or "Australian Cortez Coffee" because judges might decide that such use of geographical indications did not mislead the public and did not constitute an act of unfair competition because the real origin of the product was indicated. On the other hand, the use of "Napa Valley Wine from Spain" or "Australian Saint-Emilion" was forbidden because of the effective protection granted to geographical indications for wines and spirits by Article 23.1. This illustrated the present imbalance between the standards of protection under Article 22.1 and the additional protection under Article 23.1. Article 23.1 permitted interested parties to prevent, without having to prove that the public was misled or that there was an IP/C/M/36/Add.1 Page 11

act of unfair competition, the illegitimate use of geographical indications of wines and spirits on such products. Geographical indications for all products deserved to benefit from effective protection in order to prevent the illegitimate use of a geographical indication on the same category of products as the one identified by the geographical indication.

64. He said that extension would have positive effects for all Members. The benefits of additional protection would no longer be limited to a few countries which were producers of wines or spirits, most of which were not developing countries. He believed that the TRIPS Agreement would finally be re-balanced. Producers of Guatemalan coffee, Chinese tea, Darjeeling tea, Ceylon tea, French ceramics, Turkish carpets, etc. would have an effective instrument allowing them to prevent free-riding on the reputation of their geographical indications. He believed that real progress would be achieved when Members would be able to effectively prevent the use of geographical indications on products not coming from the region identified by the geographical indication, even if such use did not mislead the public or did not constitute an act of unfair competition, as was currently the case only for geographical indications for wines and spirits.

65. The proposal being presented examined the effect of extension on the provisions of Section 3 relating to the relationship between geographical indications and trademarks. He recalled that Section 3 did not allow that names for wines and spirits protected as geographical indications be registered as trademarks. Yet, if a geographical indication was for rice, coffee or bananas, it could be registered as long as the consumer was not misled. For example, there was a trademark for "Chuao Cacao from Ecuador", but there could not be a trademark such as "Barossa Valley from Argentina". He said that the cost of a consumer survey demonstrating that the consumer was misled could be in a country like India thousands of dollars. How could producers from developing countries afford this? Why should wine producers from the European Union, United States, Australia, Chile, New Zealand and Argentina, the main wine growing regions, benefit from this advantage and not theirs? With extension, Article 23.2 of the TRIPS Agreement would apply to all products. Administrative registrars or judges would refer to a simple and objective criterion: does, for instance, tobacco identified by the trademark containing the geographical indication "Arapiraca" actually originate from the geographical area in Brazil designated by this geographical indication or does it not? In short, with extension no costly consumer surveys would be necessary and uncertainty for consumers would no longer exist. Producers and consumers of that region would obtain more effective and less costly protection for their geographical indications against illegitimate use of the indication in trademarks.

66. The representative of India further examined the effect of extension on the provisions of Section 3 relating to homonymous geographical indications (i.e., where the name of two identical locations in different countries were both protected as geographical indications). Article 23.3 provided that in cases of homonymous geographical indications for wines, both indications must be protected. WTO Members were prompted to keep their markets open in such cases with a mandate to find adequate solutions for the coexistence of products bearing homonymous geographical indications, taking into account interests of consumers and producers. While this trade fostering solution was currently limited to wines, it was clear that the same solution could benefit other products, including spirits as well as all other products benefiting from GI protection. He wondered why carpets, rice and teas should not benefit from this very same solution that would open foreign markets to them.

67. With extension, Article 23.3 would apply to homonymous geographical indications for all products. As explained in document IP/C/W/353, Article 22.4 would continue to apply for all products for cases not covered by Article 23.3 as was currently the case for wines. The advantages of extension for homonymous geographical indications were evident and clearly illustrated the advantages that extension would have for trade, producers and consumers alike. Extending the scope of Article 23.3 to geographical indications for all products would promote trade and keep markets open. IP/C/M/36/Add.1 Page 12

68. The aim of extension was that all products would benefit from the more effective protection under Article 23 currently available only to geographical indications for wines and spirits. Referring to the on-going negotiations on the establishment of a multilateral system of notification and registration of geographical indications, he said that nothing in Article 23.4 prevented such system being open in the future to any geographical indication which met the definition of Article 22.1. This was a logical consequence of the re-balancing of the GI protection under the TRIPS Agreement.

69. Paragraphs 4 to 9 of Article 24 contained a number of exceptions designed to provide flexibility in implementing the protection provided for in Articles 22 and 23 of the Agreement. He said it was important to note that extending the additional protection of Article 23 to geographical indications for products other than wines and spirits would not have direct implications on these exceptions and they would continue to apply. This showed that the proponents of extension were ready to take into account the concerns of those who still had questions. Many delegations wanted to make Members believe that extension would disrupt trade and make re-labelling necessary. He recalled that in 1994, when the additional protection was granted to wines and spirits, nothing of that kind had happened. In fact, none of the evils and the costs that certain delegations attributed to extension had actually occurred when the additional protection had been granted to wines and spirits. Why? Simply because the exceptions of Article 24 had taken care of this matter. Why should Members now not be able to do the same? By extending the protection under Article 23 to geographical indications for all products, adjustments along the lines of the existing provision of Article 24 might be needed. The proponents were ready to work on that, since the aim of extension was that geographical indications for all products benefit from the same protection as currently granted by the TRIPS Agreement only to geographical indications for wines and spirits. Adjustments to Article 24, where needed, should be guided in particular by the following principles. First, they should not diminish the level of protection currently available to geographical indications. Second, they should enable a flexible solution taking into account the interests of various market participants; use in good faith, uses for a long period of time, and not misleading the consumer should be the key criteria when looking at the use of geographical indications qualifying for exceptions. Third, adjustments to Article 24 should be crafted restrictively and allow only restrictive interpretations as inherent in the nature of exceptions.

70. Concluding, the representative of India said that the present communication attempted to describe the main elements of the extension of the additional protection to geographical indications for products other than wines and spirits. The co-sponsors of the paper proposed that the TRIPS Council recommend to the TNC to adopt the following guidelines for the negotiations on extension. First, the protection under Article 23 should apply to geographical indications for all products. Second, the exceptions contained in Article 24 should apply mutatis mutandis. Third, the multilateral register to be established should be open to geographical indications for all products. He added that positive results on extension were a prerequisite for an overall balance in the different areas of the negotiations of the Doha Development Agenda.

71. The representative of the United States shared the view of the Chair and the representative of India that a detailed examination of the concrete effects of extension was needed. Extension of Article 23 of the TRIPS Agreement to cover geographical indications for all goods had been advertised as a solution to what some regarded as unfair special treatment of geographical indications for wines and spirits. Extension had also been promoted as providing market access benefits to WTO Members. If extension of Article 23 were actually able to provide these claimed benefits, the United States had many goods that would stand to gain from such an extension. For that reason, the delegation of the United States had carefully reviewed all of the proposals aiming to extend Article 23 protection to products other than wines and spirits. However, after examination, it was concluded that extension would create new difficulties for Members and not the advertised benefits. IP/C/M/36/Add.1 Page 13

72. Introducing certain elements of a forthcoming communication4, he said that the potential imbalance associated with extension had not yet been addressed. One Member might only have a few geographical indications for domestic products for which it was interested in getting additional protection. However, under the proposals, this Member would be obligated to protect hundreds or thousands of geographical indications from Members that had already established formal systems for such indications. For example, the EC member States had registered over 600 names for foodstuffs and beer under the EC geographical indications Regulation 2081/92 and Members could expect the European Communities to pursue protection for each one of those 600 names in any such negotiation. That was an imbalance for any Member only seeking to protect one or two names. This imbalance was exacerbated by the fact that according to his reading of Regulation 2081/92, the European Communities did not in fact provide protection for non-EC geographical indications. That meant that the European Communities was not providing protection for place names of other WTO Members. The only exception was where there was a bilateral agreement between the European Communities and another WTO Member or where the European Communities had determined that a country, another WTO Member for example, had established a system of GI protection that was exactly equivalent to that which the European Communities provided. Therefore, he encouraged all Members to examine the true commercial opportunities they would receive as a result of extension of Article 23 compared to the protection they would have to provide to other WTO Members. He wondered how many of the co-sponsors of document IP/C/W/353 had been successful in their efforts to even obtain the basic TRIPS protection for these products, for example, in the European Communities. He recalled that his delegation had earlier provided information on the extent to which Members had been able to get protection for such products under the existing standards of the TRIPS Agreement in the United States.

73. He said that Article 22 was sufficient to provide adequate protection where Members implemented such protection. It provided protection against misleading use of geographical indications. He understood that that some Members were concerned about geographical indications becoming generic. However, the Article 22 standard could ensure that this did not happen. With the advent of the TRIPS Agreement, if a more recent geographical term became generic, it was probably due to the fact that its owner had not attempted to prevent its unauthorized use. This was the responsibility of the owner of a geographical indication since, as recognized in the Preamble to the TRIPS Agreement, intellectual property rights were private rights. In the United States, for example, geographical indications such as "Stilton" for cheese, "Parma" for ham, "Roquefort" for cheese and "Swiss" for chocolate already received Article 22 level protection. He said the owners of those geographical indications had taken steps to prevent unauthorized uses of their geographical indications in the United States. The United States legal system presently offered the legal means to prevent the unauthorized or misleading use of a geographical indication.

74. Referring to some examples raised at previous meetings, he said that the Swiss geographical indication "Etivaz" for cheese which identified an indigenous cheese from Switzerland could be asserted to prevent unauthorized use of the term "Etivaz" or a similar misleading term for any cheese or related product that falsely suggests a connection to the "Etivaz" cheese from Switzerland. As regards "Basmati", his delegation was not aware that the term "Basmati" was protected as a geographical indication in the country of origin and, under Article 24.9 of the TRIPS Agreement, other WTO Members would not as a result of negotiations to expand Article 23 be obligated to extend this protection to "Basmati". Therefore, the term would not benefit from extension of Article 23 to geographical indications for products other than wines and spirits. Some WTO Members might not consider "Basmati" to be a term eligible for protection as a geographical indication since it did not in fact identify an actual place to which the particular quality and characteristics of the rice were attributable. Additional issues might be raised if exclusive protection for this term was requested by more than one Member. As regards the term "Bulgarian yoghurt", it was apparently used as a generic term in France. Even if Article 23 were extended, France could apply the exception for generic terms

4 Subsequently circulated in a document IP/C/W/360. IP/C/M/36/Add.1 Page 14

and Bulgaria would not receive the expected protection as a result of extension. The use of the term "Bulgarian" as a generic reference was consistent with the view of some WTO Members that country names might not be eligible for protection as geographical indications. These were some of the reasons why concrete discussion was needed in order to decide whether the advertised benefits were in fact available.

75. Turning to the issue of costs, he said that the implementation of extended Article 23 could necessitate serious costs to governments, manufacturers and consumers in the form of new administrative mechanisms to implement the broadened standards. This included re-labelling, re-packaging and confusion costs to the consumer who could not find the products they were accustomed to buying. As regards costs to governments, he said that, were Article 23 to be extended, implementation of the new Article 23 provisions would be required. Once the Article 23.4 multilateral system negotiations would be completed, it would be likely that some Members would enforce implementation through dispute settlements based upon Articles 22, 23 and the Article 23.4 multilateral system. Some Members placed high importance on their geographical indications and their protection. Because Article 23, in the EC view, essentially required a labelling regime wherein all labels would be policed for compliance with Article 23 requirements, the implementation burdens of such a system would become complicated. Were Article 23 extended to cover geographical indications for all goods, presumably the number of labels to be reviewed and policed would increase exponentially.

76. Continuing, the representative of the United States said that the EC and Swiss systems for recognition of geographical indications provided for government recognition, oversight and enforcement of the standards established for the use of geographical indications. In Members that did not have such a system, for the government to assume those responsibilities would require considerable resources to set up the system and ongoing resources to maintain it. The recent EC paper did not explicitly require governments to enforce geographical indications. However, given that the current EC system of GI protection, as well as that of some other demandeurs, did not provide national treatment but rather provided protection for other WTO Members' names only if the other Member had an equivalent system of government enforcement, he was concerned that, rather than amending a system to fulfil its national treatment obligations, demandeurs would seek to export this heavily regulated government enforced system to all Members wishing to obtain reciprocal benefits of extension. He believed that Members should be conscious of that prospect in assessing what the costs would be in agreeing to any such extension.

77. Turning to the relationship between trademarks and geographical indications, he said that, for example, his delegation understood that the European Communities had deleted mineral waters from coverage under their GI regulations. He believed that this might have been because of potential conflict between European trademarks for mineral water and European geographical indications for water. The mark "Evian" for mineral water could also qualify as a geographical indication. If the European Communities received a GI registration application for "Evian", it would have to decide whether its own regulations would apply so as to cause commercial harm to the "Evian" trademark by allowing the geographical indication and the trademark to co-exist, even if the "Evian" trademark was established first or by going so far as to cancel the trademark altogether. As an example, this potential conflict highlighted why discussion of extension must include discussion of the proper relationship between geographical indications and trademarks. He believed that all Members had producers that relied very heavily on trademark protection to establish the quality and source of goods that they exported internationally. Moreover, the European Communities' practice had been to demand the elimination of the use of exceptions, such as those contained in Article 24 of the TRIPS Agreement, as a condition for the bilateral agreements it had entered into. There would be even more incentive to demand elimination of the exceptions through the TRIPS process because it would apply to all WTO Members. Hence, it could accomplish this all at one time rather than through individual bilateral agreements. Elimination of the exceptions in Article 24, such as the exception for generic terms, would force US companies to abandon names even in the domestic market no matter how long those IP/C/M/36/Add.1 Page 15

names had been used or how much had been invested in them. He noted in this regard a recent decision of the European Court of Justice that the term "feta", considered to be generic in many WTO Members, was a geographical indication for soft white cheese from Greece. The European Communities had since decided to adopt a regulation that would prevent non-Greek producers of soft white cheese from using the term "feta" within the European Communities. It would be expected, therefore, that the European Communities would seek to eliminate such use by producers in the territories of other WTO Members should Members engage in a negotiation to extend to protection to food products beyond wine and spirits.

78. Concluding, the representative of the United States said that extension of Article 23 to all goods would not be the panacea that many Members envisioned. The benefits of such extension could accrue to those WTO Members that already had a significant number of geographical indications protected under formal registration systems policed and enforced by their governments. The burdens would fall on those Members with few geographical indications, those that protected geographical indications through trademark and unfair competition regimes and those Members with domestic food industries that had for many years used, in marketing their products domestically and abroad, geographical terms that originated in countries from which the founders of those industries had emigrated for political or religious reasons. For the latter Members, the benefits of such extension would be few and the obligations many.

79. The representative of Argentina said that the TRIPS Agreement protected private rights on the basis of territorial application and was, therefore, a sui generis agreement among the multilateral trade agreements in Annex 1 of the WTO Agreement. Among the general objectives of the GATT/WTO which aimed at reducing tariffs and other trade barriers, the multilateral regulation of intellectual property rights became necessary to reduce distortions and barriers to international trade so that proper protection of such rights would not become barriers to legitimate trade, as noted in the Preamble to the TRIPS Agreement. Consequently, Members should consider that the main objective of these debates was to avoid intellectual property rights becoming barriers to trade. The extension to products other than wines and spirits was a claim which would strengthen territorial rights to the detriment of liberalisation and facilitation of international trade.

80. In reply to a comment made that the countries that produce wine had additional advantages and were nevertheless opposed to the extension of these so-called advantages to other products, she pointed out that Argentina, a wine-producing country, had not yet seen any of those advantages. The implementation of the protection system under Article 23 by Argentina had resulted in a financial and administrative burden that was very difficult to cope with due to the lack of experience with this kind of protection, the high costs of implementing the system corresponding to Article 23, and the costs of capacity-building. In addition, some countries were questioning the implementation of the exceptions Argentina was entitled to avail of under Article 24 and under Article 23.3. If there were advantages, they had been enjoyed to date by those countries that had a long tradition of this type of protection and which happened to be those who were pushing strongly for the extension of protection. Argentinian wines continued to face the same problems of access to certain markets as they had faced already before the conclusion of the TRIPS Agreement. The TRIPS Agreement had not removed any barriers to trade in wine and, as a consequence of bilateral agreements on geographical indications, the legitimate access of Argentinian wines to third party markets had been directly affected.

81. If difficulties had arisen in implementing protection at the national level for geographical indications in respect of only two products, it would not be consistent to propose in the WTO an extension of this protection to other products. The statements that the extension of protection would not require the establishment of a new, expensive and complicated international mechanism were not consistent with the reality faced by developing countries when they tried to implement existing standards of protection under TRIPS. If it were so simple and automatic to implement the protection provided under Article 23, the Agreement itself would not provide for the establishment of a multilateral system of notification and registration for wines and spirits. This also showed that IP/C/M/36/Add.1 Page 16

protection under Article 23 was not "absolute", as some Members maintained. The features of the notification and registration system which would finally be established for wines and spirits would determine the degree of complexity of the system and the costs to be borne by every Member at the national level. There would inevitably be a correlation between the complexity of the system and the burdens that Members would have to bear. It had also been stated that the extension of the protection under Article 23 to other products merely signified that a geographical indication could be used for certain products only if those products really originated in the indicated geographical region. That concept did not correspond to the definition of Article 22.1 because it took no account of the requirements which were quality, reputation, or other characteristic of the good essentially attributable to its geographical origin and which were elements inherent in the protection provided by geographical indications. On that issue, which was basic for the definition established in Article 22.1, there had been a substantive debate during the previous week at the WIPO Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications. Those statements corresponded to appellations of origin and not to "geographical indications" as defined in the TRIPS Agreement.

82. She said that the costs for geographical indications being recognized abroad would depend in some cases on the conditions that each country had established for the recognition of foreign geographical indications. Regarding legal costs, nothing indicated a priori that conflicts would not continue or even deteriorate.

83. Article 22, applicable to all products, was the general rule of protection. Article 23 complemented Article 22 and not vice versa, because Article 23 was the exception to the general rule. Articles 22 and 23 were not different as regards the basic obligation on Members to provide legal means so that interested parties could prevent the use of geographical indications. In both cases, the obligation on Members was to provide legal means to the holders of any IPRs, recognized as private rights in the Preamble to the TRIPS Agreement so that these right holders could exercise them in their respective national jurisdictions. Article 22 contained a definition of geographical indications without distinguishing between products. This definition was an agreed upon, harmonized concept in itself. Protection under Article 23 was not exclusive or absolute and was an exception to the general rule established in Article 22. Also, geographical indications required a link between a product and a particular quality, reputation, or other characteristic. Therefore, national authorities should not merely examine whether the product originated from the place designated by the geographical indication.

84. She fully agreed on the importance of the exceptions in Article 24. Exceptions were part of the balance between rights and obligations that the Agreement tried to established. It was still not clear how those exceptions had been implemented in national legislations and, still less, how they prevailed in bilateral agreements concluded since the conclusion of the TRIPS Agreement. The information available on the latest agreements relating to wines showed that there had been a certain erosion of those exceptions. If countries in favour of the extension of Article 23 protection considered that exceptions in Article 24 should be fully valid, they should make sure that all Members shared that point of view and encourage the collection of information as to how these exceptions had been taken into consideration since the conclusion of the TRIPS Agreement.

85. Regarding homonymous geographical indications , she said that, in respect of paragraphs 21 to 24 of document IP/C/W/353, some of the countries that had submitted this document did not apply this approach in practice. In paragraphs 26 to 28 of the same document, they relativized what was said in Article 23.3. In addition, those paragraphs reaffirmed the importance of the connotation that geographical indications should have for the consumer. Paragraph 4 of the same document argued for setting up a comprehensive system of protection of geographical indications, which seemed to indicate that those delegations were not only promoting extension of the protection under Article 23 but also a re-writing of the TRIPS Section on geographical indications. She said that her delegation was surprised and concerned that in the same paragraph the document referred to the exceptions in the Agreement and at the same time it claimed that there were "transition periods" for the use of certain geographical indications, which were not at all provided for in the TRIPS Agreement. She recalled IP/C/M/36/Add.1 Page 17 that, at the last Council meeting, one delegation had said that strict protection of geographical indications, as had been demonstrated by the overwhelming support for the extension, was of overriding priority for developing countries. This did not correspond to the reality nor to the debates. In light of the documentation submitted and interventions made at previous Council sessions, it might be deduced that only a small number of developing country Members were expressly in favour of extension. That same delegation had argued that as a result of growing international competition relating to generic agricultural products and commodities there could be a sharp fall in the income of new Members, and that those countries needed other sources of income; the protection of geographical indications would guarantee market access for those countries. That statement had been repeated in document IP/C/W/353. In this respect, she said that some developing countries promoting the extension of protection for geographical indications were foreseeing the possibility of protecting generic agricultural commodities. However, there was no proof that the protection of geographical indications would overcome the present obstacles that existed in some countries to trade in agricultural products such as dairy products.

86. Associating her delegation with the statement made by Australia at the Council's previous meeting, the representative of Argentina said that the issue of immigration, culture and customs was important. Argentina was among the countries of the world that historically had had the greatest immigration, estimated at 6 million people between 1850 and 1970. In 1975, foreigners had accounted for 25.5% of the population of the country. That percentage had reached its maximum in 1914, a year when 2.5 million foreigners lived in Argentina. In that same year, 49% of the population of Buenos Aires was made up of foreigners. Between the end of the second world war and 1952, 110,000 people per year came to Argentina, which was higher than the levels in previous years. She said that these figures showed that, while many delegations spoke of illegitimate or abusive use, there were many legitimate uses because immigrants took customs with them when they immigrated, either for economic, social or other reasons. Therefore, customs were maintained and, in fact, were acquired rights which Members could not wipe out in the course of negotiations.

87. The Doha Ministerial Declaration did not give a mandate to negotiate an extension of protection under Article 23 to products other than wines and spirits. Ministers had noted that issues related to the extension of the protection of geographical indications provided for in Article 23 to products other than wines and spirits would be addressed within the TRIPS Council pursuant to paragraph 12 of the Declaration. She said that it was obvious that the discussion did not cover the establishment of negotiation modalities. On the TNC decision of 4 February 2002, she believed that the TNC was not empowered to amend the mandate in paragraph 18 of the Declaration. She recalled that the TNC had also indicated that other issues in paragraphs 18 and 19 would be addressed on a priority basis. The TNC did not mention any specific issue nor did it establish any order of priorities among the various issues dealt with either in paragraph 18 or 19. Each body set up by the TNC, or to which it assigned items determined by Ministers in Doha, would determine the form in which the various items would be tackled. The mandate that Ministers gave to the TRIPS Council was to submit a report to the TNC which would decide on appropriate action. She said that her delegation, therefore, was not in a position to support the proposal contained in paragraph 4 of document IP/C/W/353.

88. The representative of Australia said that the interventions by Argentina and the United States had begun to focus on the issues that the Council had to address. He believed that no delegation would ever deny another delegation the opportunity to table a proposal for negotiation on any subject, irrespective of whether the WTO was in negotiating mode or not. However, it was presumptuous and unhelpful for a group of delegations to put forward a proposal to extend rights and disciplines when Ministers had specifically charged Members to examine the issues relating to the implementation of an agreement which was already in force. He was prepared to engage in a debate about the mandate in the Doha Declaration relating to the extension of IP protection for products other than wines and spirits though his delegation did not think it was very valuable. Taking account of the significant differences that existed before Doha, Ministers had decided that the best they could do was to ask the IP/C/M/36/Add.1 Page 18

Council to look at the issues and to report to the TNC by the end of the year. They had not initiated negotiations. He disagreed with the Chair's statement earlier in the meeting that a thorough discussion of the issues had taken place at the March meeting. Members had only began to talk about the issues. He recalled the reaction the previous week at the TBT Committee to the new EC wine regulations which were notified to the Committee. There was little interest or incentive for a large number of interested delegations to begin contemplating a new set of obligations until Members were satisfied that parties to the TRIPS and TBT Agreements were prepared to conform with their existing obligations. He said that a large number of non-European wine exporting countries voiced serious reservations about the new EC wine regulations which, inter alia, were based on an interpretation of the TRIPS Agreement that was not shared by others. In their justification for new protectionist measures, the European Communities had claimed that certain traditional terms which they had reserved for their exclusive use were in effect covered by the TRIPS Agreement's definition of geographical indications. This was despite the reassurance he believed he had heard at the last meeting from the representative of the European Commission that traditional expressions had nothing to do with geographical indications. In those circumstances, his delegation was not interested in a proposal to extend additional protection to products other than wines and spirits until there was an agreed understanding of how the existing TRIPS Agreement was to be interpreted. Accordingly, like Argentina, his delegation was not in a position to engage in a discussion of the proposal in document IP/C/W/353. However, he remained committed to carry out the injunction which Ministers gave at Doha.

89. Responding to the point made by the representative of India on the desire of the demandeurs to protect their cultural heritage, the representative of Australia said that Australia, too, was concerned about the protection of its cultural heritage and worried that extension might impact on its desire to do that. She recalled that her delegation had spoken extensively on that issue in at the Council's meeting in March. As regards India's comments on the fact that Article 23 covered only wines and spirits, she said that her delegation understood the feelings that this generated and had some answers to that concern. She pointed out that Article 23 was not a negotiating goal of the wine and spirit sector in Australia nor did it reflect an acknowledgement that the balance struck in Article 23 was an ideal one for wines and spirits let alone other products. Australia's experience of the high level of GI protection in the wines and spirits sector had shown the costs associated with such protection, the administrative burden, and the pure economic rent that it gave to a certain group of producers in one region of the world. She associated her delegation with Argentina in that it had not been able to discern any practical benefits of this protection over and above that already contained in Article 22. It had not prevented Australia's trading partners from finding other means from keeping Australian wines out of their markets. Finally, in response to India, on the term "Australian St. Emilion", she noted that, according to some Members in the Council, Australia would not even be allowed to use the term so that was a non-issue.

90. She recalled that at the Council's meeting in March, the Australian delegation had outlined a number of issues that required discussion, including the trade and welfare implications of extension. It had raised the question of the competing interests that must be balanced in any GI protection regime and how the appropriate balance of such interests could be determined. As previous TRIPS Council submissions by Australia and others had pointed out, the potentially conflicting interests included those of consumers, producers of a product with a distinctive reputation or tradition of production, and producers who had an interest in unrestricted use of common product descriptions.

91. Referring to the case of the protection of "feta" cheese under EC Regulation 2081/92, and its impact on non-Greek European producers of that product, she said that France, Germany and Denmark had been contesting since 1994 a claim by Greece over the latter's bid to claim the exclusive right to use the term "feta". France, Germany and Denmark had claimed that, on the basis of patterns of production and consumption in their countries, "feta" had, for them, become a generic term. Despite their best efforts, however, in June 2002, the EC had announced a proposal to register "feta" IP/C/M/36/Add.1 Page 19 under the European GI registration system. The proposal would enter into force later in the year unless the European Council voted against it.

92. Non-Greek EC producers were not happy about that. At the WTO symposium in May 2002, the Danish Dairy Board had expressed its views on the feta case. It characterized feta as a "world commodity" and that it was unacceptable that the term be reserved for the exclusive use of one EC member State. She said that it apparently had cost Denmark 1.5 million Euros to argue its case, which it lost, before the Commission. She believed there were similar situations with French and German feta producers. Under the Commission's proposal, Australia would be obliged to follow the EC practice. In an Australian delicatessen, there was Greek feta, Bulgarian feta, Danish feta, German feta and French feta. If the Commission had its way, consumers would find, in the delicatessen, Greek feta and a variety of other white cheeses which they had no idea about. Was this in the interests of consumers? Not Australian consumers.

93. She said that this case demonstrated perfectly the kind of administrative nightmare that could arise over the use of just one term, and how inappropriate balances could be struck. It also demonstrated how the application of the TRIPS GI exceptions, in this case the customary use exception, was far from cut and dried. If the Commission succeeded in its proposal to reserve feta to Greece, the decision would not only have implications for the three EC member States mentioned. Bulgaria, for example, was also a feta producer. In fact, soft white cheese labelled as "Bulgarian feta" commanded a premium price at gourmet food stores in Australia. She believed that no Australian consumer who bought "Bulgarian feta" was deceived or misled about the origin of that cheese. With Bulgaria in the process of acceding to the EC, including the EC GI regime, if the European Communities had its way, very soon Australian consumers would no longer be able to buy "Bulgarian feta". This would certainly be a loss for them. But it would also be a loss for the Bulgarian feta producers, who might never find a successful means of marketing their exported soft white cheese in Australia.

94. Extension had been characterized by Ministers as an implementation issue and that, as such, the Council should address the issues related to the extension of additional protection to products of specific interest to developing countries. She drew Members' attention to an article in the May edition of the publication "Bridges" published by the International Centre for Trade and Sustainable Development, entitled "Extension of Stronger Geographical Indications Protection: Against the Interests of Developing Countries". Taking the example of basmati rice, she said that a food standards agency in that part of the world had recently undertaken an exercise, in the interests of consumers, to find a legal definition for the term "basmati". The work involved research into the establishment of DNA profiling to trace the properties of rice, and the development of a method of tracking certain premium rice varieties. She said that the prospect of DNA profiling for basmati suggested strongly that that term could not be a GI. If the variety could be identified genetically, then it was difficult to see how it could also have a geographical limitation. If that was correct, then extension of Article 23 to other products would have no added value for protection of basmati rice.

95. Her delegation had recently undertaken research on coffee production and trade in Africa. With real coffee prices at around half of what they were in the 1960s, it was understandable that coffee producing countries, especially those that were heavily dependent on export income from coffee, looked to ways to improve their returns. In that context, the potential benefits of geographical indications for coffee had been held out as an answer to the falling prices received by producer countries. However, considering a range of issues related to coffee production and trade, including the production chain, the way coffee was branded and marketed and by whom and the resources involved in those activities, her delegation's research indicated that GI protection would offer no solution to the systemic causes of declining coffee prices. Indeed, her delegation had concluded that as a potential legal remedy, geographical indications offered no obvious advantage over existing alternatives. The benefits promised through extension of additional GI protection to coffee are IP/C/M/36/Add.1 Page 20

illusionary. Where coffee producers did stand to gain was through market access negotiations directed at substantially reducing tariff escalation in major consuming markets.

96. Australia had for several years been saying that the Council should undertake a thorough examination of national models of GI protection and thereby reach a better collective understanding of the available implementation methods, what was effective and enforceable and what was not and what were the costs associated with each type of system. Australia hoped that the debate later in the week under Item M (Article 24.2 review) would shed light on those issues. Her delegation urged for input and advice from developing countries an essential first step was for the Council to engage in a serious discussion about national systems. This was a necessary precondition to enable Members to come to an informed decision about what action, if any, Members should recommend to the TNC at the end of the year.

97. The documentation submitted by developing country Members in their reviews of national legislation appeared to indicate that some developing country Members did not yet have any GI protection regime in place, nor was it clear when they would be enacted. At the same time, demandeurs, including some without any GI protection in place, were claiming that the current TRIPS text should be rewritten to extend Article 23 to all products. She was concerned that demandeurs were advocating a re-write of TRIPS text before some Members had implemented the current protection, let alone had the chance to determine from practical experience what, if any, changes were desirable.

98. Australia had also raised at the March meeting of the TRIPS Council a series of questions concerning the practical operation of the Article 22.1 definition of geographical indication, application of the various exceptions to GI protection and other technical issues related to the existing rules. One month before the present Council meeting, IP experts at a meeting of the WIPO Standing Committee on Trademarks, Industrial Designs and Geographical Indications (SCT) took part in perhaps the most substantive multilateral dialogue to date on geographical indications. As a long-time advocate of the need for substantive multilateral GI discussions, Australia was pleased to have participated in that debate. One of the things her delegation took from that meeting was that there was a need for the TRIPS Council, as the body charged under TRIPS Article 68 with responsibility for "monitoring the operation of the TRIPS Agreement", to undertake its own discussion on the issues raised in the WIPO SCT as they related to the specific rules set out in the TRIPS Agreement. Intellectual property experts in the SCT had noted that it would be inappropriate for the SCT to discuss specific TRIPS provisions. For that reason, it was vital that the TRIPS Council undertake that task as the responsible body. She requested the Secretariat to circulate a copy of the SCT minutes as a TRIPS Council document when they become available.

99. The representative of Australia said that one of the main topics of discussion at the SCT was the definition of a GI. The basic outcome of the debate was that more work was needed in this area and it was agreed that the WIPO Secretariat would prepare a new paper on the topic for discussion at the next SCT meeting in November. Some of the topics to be covered in that paper included the application of the definition at the national level by different systems of protection, the practical differences between the systems of protection of geographical indications such as appellations of origin and the system of protection under collective and certification marks, links between the product and its geographical origin and issues related to reputation, and whether the goods on which a GI was used must necessarily be produced in a particular place. She said that some of those issues were fundamental to the very concept of geographical indication. The fact that intellectual property experts were having to consider them demonstrated that the international dialogue on geographical indications was still at a very elementary level. Her delegation was struck in WIPO by the number of developing countries that had indicated their great interest in seeing the substantive dialogue continue and shed more light on that difficult area. The WIPO Secretariat had also been tasked to prepare a paper on the issue of territoriality, i.e., the concept that intellectual property rights were only valid in respect to the territory for which they had been acquired and in which they could be enforced. That paper would IP/C/M/36/Add.1 Page 21

consider two aspects, first, whether the criteria for eligibility of a term for protection as a GI were determined by the country of origin of the GI or by the country where the protection was sought, and, second, how relevant GI exceptions were applied. Those issues raised very basic elements of how GI protection regimes operated in practice. There was a need to consider those issues with direct reference to TRIPS rules.

100. She proposed, in response to the Doha Declaration mandate from Ministers that Members consider "issues related to extension", that the TRIPS Council take up five issues for discussion at its September meeting. Firstly, the definition and application of TRIPS Article 22.1; secondly, the impact of the principle of territoriality on the implementation of TRIPS Section 3; thirdly, the interaction between trademarks and geographical indications in light of relevant TRIPS provisions, such as Articles 16 and 24; fourthly, the cost differential between Article 22 vs. Article 23 protection; and finally, the Article 24 exceptions.

101. The new EC wine Regulation No. 753/2002 had been notified to the WTO two weeks prior to the Council meeting and discussed at the previous week's TBT meeting. The new Regulation restricted the use of descriptive and/or generic terms such as "chateau", "vintage", "ruby" and "tawny", terms which had no specific connection with a geographical source, on the basis that their use may cause consumer deception. Australia was unable to accept the concept lying at the heart of the new Regulation that a WTO Member could reserve for the exclusive use of one of its industries common adjectives and other descriptive terms. She could not accept that reserving the exclusive use of common English language words like "ruby" and "tawny" was the least trade restrictive means of achieving any legitimate objective. Nor would she accept the claim made by the European Communities that so called "traditional terms" had any connection with intellectual property rights. Most of the terms listed in the various annexes to the Regulation were nothing more than common descriptive adjectives, and the EC's efforts to reserve them for the exclusive use of the wine industries of EC Member states could not be legitimized by seeking to claim them as intellectual property rights.

102. The representative of Pakistan said that the Doha Ministerial Declaration in its paragraphs 12 and 18 provided for the issues related to the extension of the protection of geographical indications to be addressed in the regular meetings of the TRIPS Council on a priority basis along with other outstanding implementation issues, leading to a recommendation to the TNC by the end of 2002 for appropriate action. He said that his delegation, along with a group of Members, had once again co- sponsored a paper, presented by India, proposing certain guidelines for the negotiations on extension to be recommended to the TNC for adoption. The paper discussed the question of extension, its implications and advantages at considerable length and also dealt with legal and administrative components of extension in a comprehensive manner.

103. He recalled that his delegation had, on numerous occasions, advocated the need for extension. The goal of the WTO agreements and a common interest of WTO Members was to establish or ensure a fair and predictable legal framework within which international trade could flourish. He associated his delegation with Argentina's statement that the TRIPS Agreement, like other WTO agreements, aimed to reduce trade distortions and impediments to international trade. He believed that granting the level of protection of Article 23 not only to wines and spirits but to geographical indications for all products, established a uniform level of protection for geographical indications at the multilateral level and remedied the legal uncertainty regarding the level of protection granted by WTO Members to specific geographical indications. It also allowed the TRIPS Agreement to provide a single benchmark for protection, which would be complemented by Members at the national level, irrespective of the individual protection system they had chosen to apply. Predictability, transparency and legal security for the protection of geographical indications within the WTO framework would be enhanced and the risk of trade distortions minimized.

104. Extension facilitated the protection and enforcement of geographical indications, since the misleading test and/or the proof of a case of unfair competition would no longer have to be IP/C/M/36/Add.1 Page 22 established. A simple examination as to whether the product actually originated from the place indicated by the geographical indication used with that product would suffice, just as for wines and spirits. Extension, therefore, would bring cost savings for judicial and administrative authorities as well as for those entitled to the use of a geographical indication and those interested in the enforcement of their rights against misuse. The purpose of extension was not to benefit those Members with a large number of geographical indications at the expense of those with few. The aim was to achieve a level playing field under the TRIPS Agreement for all geographical indications, enabling all Members and their products to benefit from additional, more effective protection. Like most developing country Members, Pakistan also attached great importance to the mandate regarding implementation issues and concerns. Positive results on extension as well as on other implementation issues were a prerequisite for an overall balance in the different areas of the negotiations of the Doha Round.

105. The representative of Switzerland said that proponents of extension had explained many times in the TRIPS Council why extension was needed to achieve an improved and facilitated protection of intellectual property under the TRIPS Agreement. A fair and equitable protection of geographical indications for all goods for the benefit of all Members was the goal. People who would benefit included honey producers from Chile, tobacco producers from Brazil, coffee producers from Congo, ceramic producers from Japan and Korea and carpet producers from Uzbekistan. They should enjoy the same effective level of protection as wine and spirits producers already had. The current imbalance of GI protection under the TRIPS Agreement led to illegitimate free-riding on famous geographical indications for products other than wines and spirits. Such free-riding endangered the investments local producers had made along the years to develop reputed quality products as well as the future economic development of new local quality products to be marketed at the national and the international level. He recalled that the United States had given the example of "Bulgarian yoghurt" produced in France and that Bulgaria would not get protection for its yoghurt in France because of the exceptions contained in Article 24 of the Agreement, and that the grandfather clause of Article 24.4 and the generic exception clause of Article 24.6 would also apply to goods to which additional protection would be extended. The representative of Switzerland said that the continued application of these exceptions was indeed part of his delegations' communication, which showed that his delegation proposed a balanced approach taking into consideration all interests of all parties at the table. What would be, then, the benefit for Bulgaria if extension were approved? It was to stop the possibility to free-riding on famous geographical indications for products other than wine and spirits. He urged the Council to continue without any further delay to work out the legal elements necessary to do away with the current imbalance in the TRIPS Agreement in the field of protection of geographical indications. The communication in document IP/C/W/353, introduced by India on behalf of its co-sponsors, provided the basis for that work with a view of reaching a mutually agreeable solution.

106. Responding to the argument made by the United States that some Members might have hundreds of geographical indications while others would have only a few and therefore an imbalance would arise in case of extension, he said that he did not see any difference between geographical indications and trademarks. The United States had thousands of trademarks which had to be protected in developing and least-developed countries whereas the United States had only a few ones from these countries to protect. The same was true for all intellectual property rights.

107. Proponents of extension were not asking for an extension on a particular Member's level of protection, they were not asking for the EC level of protection at the WTO. They asked for a level of protection that already existed, the one provided for in TRIPS Article 23 for geographical indications for wines and spirits. His delegation recalled that Members were free to choose how to implement such a level of protection. Members could choose to implement it by giving a right holder the right to defend and enforce its geographical indication in court in case of abuse. Thus, it was up to the right holder to take charge of enforcement. However, by granting the more effective protection of Article 23, Members would give the right holder an effective instrument to do that, unlike in the case of IP/C/M/36/Add.1 Page 23

Article 22 protection. By implementing Article 23 protection in this way and applying this more effective protection to any geographical indication, it did not matter whether 500 or just a few geographical indications benefited from this more effective level of protection and no imbalance of costs and burdens for Members would arise.

108. He believed that the communication presented by India would be a useful basis for addressing extension and would enable the TRIPS Council to recommend to the TNC to adopt the guidelines for the negotiations on extension as set out in part IV of the communication in document IP/C/W/353. He added that positive results on extension were a prerequisite for an overall balance in the different areas of negotiations of the Doha Round.

109. The representative of Turkey said that his delegation was one of the co-sponsors of communication IP/C/W/353 and associated itself with the statements made by India, Pakistan and Switzerland. The issue of the extension of protection of geographical indications for wines and spirits to geographical indications for other products was a very important issue for all Members. This was an outstanding issue on the TRIPS agenda and also a focus of attention when Members looked at other negotiations carried out in the WTO. While not wanting to underestimate the importance attached to other TRIPS issues, he said that any progress which could be attained on this issue would give his delegation fresh optimism for other negotiations. There was a clear mandate given by the Doha Declaration that needed to be fulfilled by the end of the year. If appropriate action could be taken, Members could eliminate the imbalance existing in the TRIPS Agreement. Elimination of that imbalance would bring a more equitable and reasonable system of protection of geographical indications through extension and establishment of a multilateral register as well as ensuring sufficient flexibility already existing within the TRIPS architecture.

110. Current application of the TRIPS Agreement stipulated protection favouring certain products, while discriminating others with an inadequate system of protection. Extension would bring protection and security for many producers in different countries. He stressed that the issue was neither a North-South issue nor an issue emerging between trading blocs with particular trade interests. The co-sponsors of the paper consisted of Members from 36 countries with different levels of development and economic production structures. His delegation joined other Members in proposing that the TRIPS Council recommend to the TNC to adopt guidelines for the negotiations on extension, namely the extension of protection for all products, the preservation of exceptions accordingly and the establishment of a multilateral register.

111. The representative of Romania recalled that her delegation was a co-sponsor of document IP/C/W/353. A balanced coverage by the Agreement of all products would be the main advantage of the extension. The document proposed to set out a series of elements that should be taken into account in debating the question of extension contained in the definition of geographical indications. Article 22.1 drew no distinction between products and provided for a balanced protection of all geographical indications. Extension would mean that it would no longer be necessary that the interested party prove that the public had been misled or that there was unfair competition. Regarding the relationship between geographical indications and trademarks, extension would mean that Article 23.2 would apply to all products. Finally, regarding homonymous geographical indications, Article 23.3 could be applied to all products.

112. The representative of Hungary recalled that, at the Council's meeting in March, the representative of Australia had started off the discussion on the scope of extension by saying that the debate over the last few years generated considerably more heat than light, confusion than consensus and passion than persuasion. Than he went on, and some others later followed, by posing a great number of questions that necessitated further study and called for clearer answers from demandeurs, in particular on how and under what conditions extension was sought and should take place. The representative of Hungary said that many of the questions raised that were relevant to the issue had already been answered, not only orally but also through written communications. Together with IP/C/M/36/Add.1 Page 24 fellow supporters, his delegation decided to make a further effort in providing answers in a clear, straightforward and easily understandable format and set out how and why extension should take place and what his delegation wanted to achieve by the end of the year. The result was document IP/C/W/353 that Hungary had co-sponsored. He said that he hoped that the paper would generate more light than heat, would result in more persuasion than passion and would lead Members from confusion towards consensus on that important issue.

113. The representative of Hungary said that Part III of the document gave a clear, unambiguous indication of what extension would entail and analyzed the implications of it. By doing so it answered some of the basic questions put forward by Australia and others. For example, paragraph 8 explained that the debate on extension did not concern the definition of geographical indication in Article 22.1 and stated that it was not the intention of the demandeurs to seek changes to this definition. This also answered the question on whether the demandeurs wanted to include services in the definition. Paragraph 7 made it clear that in the view of the demandeurs names of localities, regions and even countries could be geographical indications under Article 22.1, provided they met the conditions set out therein, in particular regarding the existence of a link between the quality, reputation or other characteristics of a product and its geographical origin. He said that is was also clear from the paper that rules of origin or indications of source and geographical indications should not be mixed, and that rules of origin and indications of source did not indicate any quality, reputation or other characteristic. Part IV of the paper set out the expectation of the co-sponsors in regard of the content of the Council's recommendation to be made to the TNC in its report by the end of the year. He called attention in particular to paragraph 41(b) that, in response to enquiries by Members, including Australia, confirmed that demandeurs would foresee the exceptions contained in paragraph 24 (relating to prior use, good faith prior application for and acquisition of trademarks, generic expressions) to apply mutatis mutandis. This showed that extension was for the future and should ease the concerns of those that had not yet been convinced of its desirability.

114. He hoped that the arguments focussing on imaginary costs or implementation burdens, especially from those Members that normally were demandeurs in the IP field and those who did not raise the same concerns in relation to patent protection of pharmaceutical products, would not get undue attention. He also hoped not to hear that the real reason for opposing extension was to retain the right to start selling products under names that free-ride on other Members' geographical indications, which would be a strange argument in the IP context. At previous meetings, Australia and others had referred to public policy exceptions and the need to retain them in the GI field. He did not understand that reasoning. In relation to other forms of intellectual property, the scope of exceptions, like Article 30 in the case of patents, were extremely limited and the possibility to retain the right to start selling products under names that free-ride on geographical indications of others would not seem to be such a limited exception.

115. Regarding the preservation of cultural diversity, his delegation was moved by the Australian statement at the Council's last meeting on the cultural dimension of extending the scope of Article 23 protection. By explaining how important it was for Australia to protect and preserve its cultural diversity through the continued use of indications brought in by immigrants and used in relation to agricultural products, foodstuffs and beverages, the representative of Australian had made a very strong case for an important non-trade concern. At the Council's present and last meetings, similar arguments had been used by the United States, Argentina and Uruguay. The representative of Hungary welcomed the marked change in the position of some major agricultural exporters in relation to non-trade concerns, which he hoped would not be limited to the concerns of the countries that were referred to as part of the "new world" but would also include regional development, folklore etc. He noted that extension was something that would mostly affect what would happen in the future, which would not seem to be irreconcilable with this concern, unless the countries in question expected further large scale immigration flows. IP/C/M/36/Add.1 Page 25

116. After the March meeting, his delegation had conducted research on whether Hungarian geographical indications free-rided on in Australia were indeed used by expatriate Hungarians. He said that his delegation's findings did not support the assertions made by Australia. For example, the Hungarian geographical indication "Csabai", used in relation to a famous spicy salami, was used in Australia by a company of Mr. Otto Wort whose name did not suggest any connection to Hungary. The name of Hungary's most famous product, the wine "Tokaj", was used on labels by at least five Australian producers. The Australian labels included, "Bailey's Liquor Tokaj", "Campbell's Fruit- blend Tokaj", "R. L. Buller and Son's Victoria Tokaj", and "Stanton and Killeen Classic Tokaj".

117. Concluding, he said that he associated his delegation with the statements made by India, Pakistan, Switzerland and others. Progress in this area was needed also for his delegation for the overall balance of the Doha negotiations. His delegation saw a strong and natural connection between improving the protection for geographical indications, both in terms of extending the product coverage of Article 23 as well as through the establishment of an effective register under Article 23.4, and the agricultural negotiations. He said that his delegation's objective and expectation was to get a decision from the TNC at the end of 2002 that would give an impetus to move forward substantially with the negotiations on the scope of extension in the framework of the Doha Round. Failing to do so would chip away from the enthusiasm his delegation might have in other negotiating areas, within which they did not see adequate trade-off possibilities.

118. The representative of Estonia said that her delegation wished to be added to the list of co-sponsors of document IP/C/W/353.

119. The representative of Japan said that his position on extension had not changed since the Council's meeting in March. A further examination of the issue was needed before a final position could be decided based on the recognition of the advantages and disadvantages of extending the list of products to which Article 23 applied. In addition to analyzing the advantages and disadvantages of extension, it was important to identify and examine basic elements such as the definition and the requirements for additional protection. Protection under Article 23 seemed extremely strong compared to the protection of trademarks, especially as regards the territory of the protection and the necessity of misleading the public as a requirement for protection. Adequate attention should be paid to the consistency with existing IP regimes, in particular the protection of trademarks. He believed that it would be beneficial to take account of the discussions at the WIPO SCT. He noted that paragraph 41 of document IP/C/W/353 proposed that geographical indications for all products should be protected under Article 23. This would make Article 23, rather than Article 22, the general rule. This proposal should be examined very carefully because such a change would greatly affect the present situation.

120. The representative of Korea said that geographical indications were very unique in many respects compared to other IPRs protected under the TRIPS Agreement. The form of protection in regions with a long and settled history often differed from GI regimes chosen by other Members. Due to these differences, there was room for conflicts between geographical indications and existing trademarks. Uncertainties arose from having a geographical indication protected in one country while it was a generic term in another. The TRIPS Council discussions on extension had not yet resulted in convergence of views on fundamental aspects. In view of this, Members might aim at reaching agreement on concepts rather than debating the pros and cons of extension. In this regard, he supported Australia's suggestion to focus the debate on substantive elements associated with GI protection.

121. The representative of Canada said that previous speakers had addressed many important arguments that needed to be considered before the Council would be able to report to the TNC later in the year. She informed the Council that her delegation would be a co-sponsor of the paper to which the United States had referred earlier and associated her delegation with many of the views expressed by the United States. Like the United States, Australia, New Zealand, Korea and others, her IP/C/M/36/Add.1 Page 26 delegation could not support the approach of the paper on extension introduced by India. The Doha Ministerial Declaration required the TRIPS Council to continue to address these issues, not to negotiate them. Therefore, it was inappropriate to put forward proposals on modalities for the extension of the GI protection. She continued to believe that Members needed to do more thinking and develop a better understanding of the situation before it was realistic to fully engage in a discussion about extension.

122. She recalled that, at the Council's meeting in March, her delegation had asked countries who were in favour of extending the protection of geographical indications to give examples of the problems they had encountered when protecting geographical indications under Article 22. She said that, regrettably, no responses had been received. She said that while Article 22 was not a popular subject, there were some important issues that her delegation wanted to raise. It was important to remember that the basis of protection for geographical indications was found in Article 22 and that Article 23 was an exception to the general rule. It was also essential to note the importance for Members to protect geographical indications in their country of origin before claiming any international protection. This meant not only having the domestic legal means to protect geographical indications, but also investing the time and effort required to have a given product associated with a geographical place.

123. With regard to the definition of Article 22, she said that a common understanding of the scope of the definition was needed. For example, the definition of Article 22 referred to quality, reputation and other characteristics. It did not specifically refer to whether or not the entire chain of production or just parts of the production needed to be carried out in a geographical location. There was also a question of origin of the raw material contained in the final product. For example, how would "dijon mustard" be treated? The issue of exceptions was also very important. It was generally accepted that Article 24 applied to wines and spirits as well as to other products. This might cause unpleasant surprises for many countries who sought extended protection when they would realize that the term for which they sought protection was generic in other countries. She did not see any reason for changing the scope of the exceptions for products other than wines and spirits.

124. She said that those issues were important and had implications on principles such as national treatment, i.e. they would determine and affect whether a Member's geographical indication would be protected in other countries. She recalled that her delegation, like other new world wine producers, had neither requested or supported the inclusion of Article 23 in the TRIPS Agreement. Also, Canada had not benefited from having any increased market access for their wines. Many interventions had been made in previous TRIPS Council meetings that an imbalance existed in the level of GI protection. She said that while this might have been true notionally, factually it needed to be considered which countries benefitted from the extended level of protection under Article 23. Like Argentina and Australia, she said that her delegation had not realized any benefits for wine exports beyond the protection provided for in Article 22.

125. The representative of Canada said that over the last 10 years or so, many Members might have had meetings with specialized negotiating teams from particularly the European Communities who were interested in negotiating bilateral agreements pursuant to Article 24. One of the reasons was to have common terms which fell under Article 24 exceptions further protected given that many terms that countries liked to qualify as geographical indications might not be protected because of the exceptions for common terms contained in Article 24 of TRIPS. There was an outstanding question of whether other Members had the time, the money and the expertise to pursue this kind of bilateral negotiations for other products. Australia had not been able to protect "Australian Chardonnay" as a geographical indication and Canada had not been able to secure access for "Canadian Icewine" as a geographical indication in Europe through use of Article 23. Continued efforts on Canadian negotiators part to ensure that Canada was able to take advantage of Article 23 had been very costly. IP/C/M/36/Add.1 Page 27

126. Members needed to understand what countries sought to protect before deciding the best and most efficient way of doing so. From her delegation's experience, the ability to access and have protection for wines and spirits had not provided any additional market access. In the past, and most recently, by the EC paper on extension, Article 23 had been linked to the promise of increased market access. This was not necessarily guaranteed. She recalled a comment made by Australia on the draft EC wine labelling Regulation. Her delegation was particularly concerned with the unnecessarily restrictive nature of many of the provisions of that Regulation. Some examples included tolerance for alcohol declarations, protection of bottle shapes, varietal content criteria, requirements for wine competitions and related MFN and national treatment considerations. In the TRIPS context, it was the use of certain descriptive terminology, otherwise known as "traditional expressions", in the EC that also troubled her delegation. Why should, for example, wine producers from France enjoy exclusive rights to the use of the word "château" which meant palace or country house? European wine consumers, it could be assumed, were well placed to know what a "château" was and to be able to distinguish between Château Nenin in France or Château des Charmes from the Niagara peninsula in Canada. We would also ask if it was really necessary to legally define the term "dry" so as not to confuse consumers? After all, governments would never be able to harmonize consumer preferences to ensure that all Members agreed on what was sweet, tasty or fruity wine. She said that her delegation remained convinced that the level of protection offered by Article 22 was not only sufficient for all products but also the most appropriate mechanism. It provided Members with a good degree of flexibility to implement their obligations. This was very important as Members had, in the past, complained about the high cost of implementing TRIPS. Many countries were still in the process of determining the best ways and means of protecting geographical indications domestically. She said that her delegation stood ready to continue work in the TRIPS Council so that it would be in a better position to report on deliberations later in the year. Finally, she expressed support for Australia's request to the Secretariat to circulate the WIPO SCT minutes relevant to geographical indications to Members of the TRIPS Council.

127. The representative of Mexico believed that all Members agreed that it was important to discuss the issue in depth. He thanked those Members that had made submissions which his delegation was examining. As a preliminary remark he said that the issue had to be tackled with care. He was not convinced that additional protection, as suggested, would provide any major benefits for Mexico in light of complications inherent in extending the list of products, particularly since many indications had become generic terms not only in their territory but in that of many other countries as well.

128. The representative of the Slovak Republic, as a co-sponsor of the paper contained in document IP/C/W/353, associated her delegation with the statements by India, Pakistan, Switzerland, Turkey, Romania, Hungary and other Members supporting the extension of additional protection for geographical indications to products other than wines and spirits. The aim of the TRIPS Agreement was to reduce distortions and impediments to international trade and to promote effective and adequate protection of intellectual property rights based on the principle of non-discrimination. That should serve Members as a main premise in negotiations on this important issue. The aim was further reflected in individual parts of the Agreement, including the part on geographical indications. Article 22 defined principles for the protection of geographical indications generally. Article 23 set out the additional protection for geographical indications available for a particular group of products, namely wines and spirits. This divided geographical indications into two groups, geographical indications with additional protection and geographical indications with the basic level of protection. There were many products of a given quality, reputation or other characteristics attributed to their geographical origin that were generally known not only in their domestic markets but also abroad. The quality and reputation gave important advantages both in domestic and foreign markets. Additional protection for geographical indications should be available in a non-discriminatory manner and therefore should be extended to all categories of products. She said that equal protection of all geographical indications would have a positive impact on both producers and consumers. For producers of such products, extension would be a valuable marketing tool increasing their chances of IP/C/M/36/Add.1 Page 28

better market access and would prevent free-riding on the reputation of their products. Extended protection would facilitate product identification and prevent consumers from being misled. The multilateral register to be established should be open to geographical indications for all products. She shared the view presented by Hungary and said that it would allow the resolution of many problematic issues with regard to geographical indications, for example Tokaj wine originating in the Tokaj region of the Slovak Republic. She hoped that the issue of extension be properly addressed in the TRIPS Council within the framework of given mandates and that an appropriate solution on negotiations on this issue would be found and included in the report of the TRIPS Council to the TNC by the end of the year. The TRIPS Council should recommend to the TNC to adopt the negotiating guidelines as proposed in paragraph 41 of the joint communication.

129. The representative of the Czech Republic said that her delegation was a co-sponsor of the document IP/C/W/353. She recalled that, at the Singapore Ministerial Conference, Members had agreed to enter into negotiations aimed at increasing the protection of individual geographical indications, although no time-frame was specified. Ministers confirmed this mandate in paragraphs 12 and 18 of the Doha Ministerial Declaration. She said that Members were now at the stage of negotiations on extension and that positive results of these negotiations were necessary in order to reach an overall balance in the different areas of the Doha round. Members were not far from concluding the debate on the positive and negative effects of extension, and now they had to proceed further in order to fulfil paragraph 12(b) of the Doha Declaration and report to the TNC for appropriate action. She proposed that the TRIPS Council recommend to the TNC that it take a decision on the following main parameters of extension. First, the protection under Article 23 should apply to geographical indications for all products. Second, the exceptions of Article 24 should apply mutatis mutandis. Third, the multilateral register, the establishment of which was negotiated in the Special Session of the TRIPS Council, should be open to all geographical indications subject to the definition of Article 22.1 of the TRIPS Agreement.

130. As regards generic terms, she assured that the proposal in document IP/C/W/353 would not affect existing uses of any names and would not have retroactive effect. It led to a win-win situation and would have a positive impact in every field of interest. The present level of protection of geographical indications was discriminatory in relation to products other than wines and spirits and caused certain inconveniences for consumers who could rely on geographical indications indicating the origin of wines and spirits but were forced to carefully study labels of other products bearing a name of a geographical place in order to be informed of their true origin. The enhanced level of protection of geographical indications would be appreciated also by concerned producers for whom legal protection and challenge procedures would be easier, more effective and less costly. The incentive for regional development and expansion of small and medium sized enterprises, in developing countries should also be considered as an important benefit. The document had no aim other than to propose a decision leading to ensuring in the future the same conditions for producers of all products with a quality that is attributable to their geographical origin, for development of all regions irrespective of the nature of the products through which these regions had acquired reputation and for all consumers, without distinguishing whether they were consumers of wines, spirits or if they preferred beer, cheese or something else.

131. The representative of Sri Lanka associated her delegation with the statement made by India. At the Council's meeting in March, one delegation had asked "what was meant by protecting a geographical indication"? In response, she said that, like in any other area of IP, protecting a geographical indication meant protecting its rightful users who were entitled to prevent anybody from using that geographical indication on goods that did not have the indicated geographical origin. Like trademarks, geographical indications were subject to the principle of "speciality". They were only protected for the kind of products on which they were actually used and "territoriality" meant that they were protected for a given territory only and were subject to the laws and regulations applicable to that territory. An exception to the principle of speciality existed for geographical indications having a reputation. In order to obtain international protection for a geographical indication, the territorial IP/C/M/36/Add.1 Page 29 scope of a geographical indication should be extended through international agreements, either bilateral or multilateral.

132. Responding to the questions on whose interests were sought to be enhanced or protected and whether there was an aim to promote regional industries or was it to protect consumers, she said that unauthorized use of a geographical indications took unfair advantage of, or was detrimental to the reputation of that geographical indication and, thus, constituted an act of unfair competition. It was therefore harmful to producers and consumers. So in effect, interests of both legitimate producers and the consumers would be protected.

133. Was the aim of the demandeurs simply to give exclusive rights in relation to protected geographical indications? Responding to this questions, she said that the TRIPS Agreement was all about protecting private rights, as stated in its Preamble, whether it be trademarks, patents, copyrights or geographical indications, thereby granting an exclusive right to the legitimate holder over such rights. However, there was a distinction to be made between trademarks and geographical indications. If protection of geographical indications was provided through a sui generis system and built on the provisions of the TRIPS Agreement, then their protection would be governed by the provisions of TRIPS Agreement. Then a geographical indication would be considered as a generic description, which was applicable to the use by all traders in a particular geographical location for goods which emanated from that location. Accordingly, the right to protect a geographical indication against wrongful appropriation was enjoyed by all traders from the particular geographical location. In practice, rights related to geographical indications were monitored and protected by the producers of that location, thus preventing free transfer from one owner to another. The user must have the appropriate association with the geographical region and must comply with the production of that location. Hence, there were no individual private rights per se. Trademarks, on the other hand, were signs, which distinguished the products of a specific trader from those of its competitors. Thus, they were not likely to be descriptive and could not be generic. Under certification or collective marks, a geographical indication belonged to a group of traders or a producer association.

134. How was the Council to reconcile the interests of producers with a distinctive reputation or tradition of production and those of producers who had an interest in the unrestricted use of common product descriptions, personal names and unregistered trademarks and business names? Responding to this question she said that the definition in Article 22.1 set out the conditions that a geographical indication had to fulfil. In addition, there were also exceptions in Article 24, which would be applicable in deciding what could be protected. The proposal in the joint communication was designed to have effects only for the future trade and would not affect existing uses of names that coincided with protected geographical indications to the extent that they had been in conformity with the TRIPS Agreement, along the lines of what was embedded in Article 24.

135. Addressing the questions on which products deserved additional protection and whether services should be included, she said that the extension of Article 23 protection to products other than wines and spirits had no implications on the definition in Article 22.1. This definition did not distinguish between products and therefore would be applicable to all goods. Extension of the product coverage would be subject to the exceptions provided in Article 24.

136. Were the demandeurs asking to embark on a re-write of the TRIPS Agreement? Responding to this question, she said that as the group's proposal outlined, once the Council would agree to extend the protection of Article 23 to products other than wines and spirits, proposals would be submitted for a suitable approach, which could be accommodated within the provisions of Article X of the WTO Agreement. The demandeurs would certainly not believe that such approach, whether it be an authoritative interpretation or an amendment, would necessitate a re-writing of the TRIPS Agreement. As regards the question "Are the demanders suggesting the removal of the consumer deception test and the 'fair use' exceptions for geographical indications protection now clearly enunciated in the TRIPS Agreement?", she said that the demandeurs did not expect to remove these provisions, as the IP/C/M/36/Add.1 Page 30 goods which did not qualify for additional protection could need to have protection under Article 22.2.

137. The representative of Sri Lanka recalled that a question was asked whether the demandeurs for extension of additional protection were seeking to change the definition provided for in Article 22. The demandeurs believed, as also highlighted in their communication, that the definition provided for in Article 22 was flexible enough to identify the scope of its application and to differentiate geographical indications from "indications of source" and "appellations of origin". This definition contained six conditions that had to be fulfilled. First, geographical indications identified goods. Second, geographical indications did not represent ideas or procedures, therefore geographical indications had to exist in reality. Third, goods had to be identified by an indication, but not necessarily the name of a geographical place. On this point, she recalled that several delegations had claimed that only a geographical name could be protected and had cited the example of basmati rice noting that it could not be protected because it did not relate to a geographical location. In her view this was not true since it was not only the place or geographical name that could be an indication, but other indications could also be protected, provided that they fulfilled the six conditions that she was listing. Fourth, an identification corresponded to a territory of a Member or a region or a locality of that territory. This meant that country names and also regional names could be protected provided they fulfilled all other criteria. Fifth, geographical indications had to identify their origin. Sixth, there had to be a special link between the origin and the quality, reputation or special characteristics.

138. Responding to the question "If a term is deemed generic in one WTO Member country, is it necessarily perceived as having become generic in another Member country?", she said that if a geographical indication became generic in its country of origin, it then became generic in other Members. If the Council accepted the concept that a geographical indication could become generic in a non-origin country and in consequence would become generic in another/all Member countries, it could be misused. Through unfair use, it would be possible to make most geographical indications generic in any Member state. An additional benefit of extension would be the elimination of the risk that such names could in the future become generic terms.

139. She noted that there had been many questions about cost implications. Some Members had argued that the Council should first understand and quantify the relative costs and benefits and ground its discussions on the practical impact of extension. One delegation had suggested that the Council look into the regulatory and administrative impact, the impact on trade, and the impact on consumers. A number of delegations in presenting the above proposals were sympathetic towards developing countries as to how they were going to bear the cost on implementation of additional obligations and commitments if the Council extended the additional protection to products other than wines and spirits. Developing countries were grateful to those developed country delegations for having considered such cost implications. Her delegation would be further grateful if some delegations were also equally concerned about the cost implications of the implementation of TRIPS Agreement as a whole and other WTO Agreements such as the SPS and TBT, in particular. From different studies undertaken on the subject of TRIPS implementation implications, it was clear that for a large number of developing countries, enacting, implementing and enforcing an efficient and effective IP regime would put stress and strain on the very limited resources and administrative skills available in them. The UNDP Human Development Report 2001 analyzed different implications of TRIPS implementation on developing countries. It recognized the fact that implementing and enforcing the intellectual property rights regime by developing countries put stress on their already scarce resources and administrative skills. So if the Council was so concerned about the cost implications, the first thing the Council must do was to delete the TRIPS Agreement from the book. Was the Council prepared to do this? As long as the TRIPS Agreement remained, the cost implications of implementation of all provisions of the Agreement also remained. Did the same delegations also consider the cost implications of granting patent rights at the national level to the holders of such rights when they forwarded their patent application through the WIPO PCT system. Studies showed that the number of patent applications processed through the PCT, the majority of which belonged to IP/C/M/36/Add.1 Page 31 the applicants from developed countries, was increasing in an alarming way. When these applications entered the national process, how did patent officers, which were not ready to accommodate such a large quantity, cope with such large numbers of applications for registration? Were these delegations also concerned about the costs and benefits knowing very well that there were no benefits to the country, who was obliged to provide adequate protection whether it be for trademarks or patents? This was to her delegation a clear example of accruing double standards, one for all other regimes in the TRIPS Agreement and the other for geographical indications.

140. The representative of Sri Lanka said that some delegations had also talked about the loss of market access opportunities, due to the increase in the product coverage of enhanced protection for geographical indications. Were those delegations also concerned about the loss of market access opportunities due to the increase in the SPS and TBT standards which came into effect with the emergence of the SPS and TBT Agreements? She said that she had made a similar statement in the Special Session of the Committee on Trade and Development and expressed her willingness to provide this information to any interested delegation. Technical assistance provided by the WTO and WIPO to developing countries in creating national legislation on intellectual property seemed to have helped beneficiary countries. In a similar vein, technical assistance could be provided to developing countries to understand the issues posed by various delegations as relevant and requiring more clarity. Similarly, technical assistance could be provided to train the officials dealing with registration.

141. With respect to the protection of geographical indications under the TRIPS Agreement, Members should have two issues in mind: first, how to provide protection for foreign right holders; and second, how to obtain protection for local right holders and how to provide protection for local right holders in foreign countries. What was the cost involved in pursuing these issues? On the first issue, there was no additional cost that needed to be borne by the country which was legally bound to provide protection, other than looking at the available data on prior registered geographical indications and whether such claimed geographical indications satisfied the six criteria embodied in the definition of Article 22. These criteria were similar to those for assessing patentability. What was the cost that was going to be involved with respect to the second issue? A Member would have to introduce necessary provisions into its domestic legislation to protect local geographical indications. Was there a cost in introducing those provisions? Her delegation did not think that there was an additional cost, but if a country so wished it could obtain technical assistance from WIPO for this purpose.

142. The biggest challenge for developing countries was to identify potential goods that could be protected as geographical indications at the national level. Once these goods were identified, similar protection needed to be obtained at the international level. Provided that developing countries were able to obtain protection in foreign countries under Article 22, any unfair act by unauthorized persons would then need to be monitored by the countries who own geographical indications. Due to resource constraints, developing countries would not be able to monitor the respective markets, whether such unfair practices were taking place or not. So by default, those names could become generic due to improper use. Sri Lanka had had difficulties in monitoring the registration of geographical indications and patents in different countries. A multinational company by the name of Unilever had launched an application in the PCT system as a way to protect an innovation that the company claimed on black leaf tea. The application was submitted in 1997. As required by the PCT, the company named the countries where the patent should be registered. The company had applied to patent this innovation in all the major tea importing countries that were of interest to Sri Lanka. This application had entered the national level after fulfilling the stages. The main tea importing countries like the United States, Australia and other major countries had granted the patent for this product. She discovered this three years later when it was too late to invoke the decision. How was Sri Lanka going to challenge this patent? Sri Lanka claimed that this was a bad patent because those who taste tea and those who blend tea and those who looked at the technical details provided for in this innovation claimed that this was not an invention. This was a blend that had been used for over 200 years. It involved national knowledge that was exploited by a multinational company. Developing countries did not have the IP/C/M/36/Add.1 Page 32 resources to go to every country and challenge this patent, because under the TRIPS Agreement patentability criteria were vague and not rigid. Similarly, if there was no additional protection under Article 23 there would be no possibility to protect "Ceylon tea" in the major tea importing markets in developed countries. This meant that Sri Lanka would have to monitor each and every case where unfair use was taking place. Enhanced protection could benefit developing countries by reducing the costs of enforcement and monitoring.

143. Concluding, she said that Sri Lanka was a tea producing and exporting country. It exported 60% of its production in bulk form because it did not own any brand. These brands were mainly owned by multinational companies. Recently, a Sri Lankan tea exporter had developed its own tea brand under the name "Dilmah" for the Australian market, surprisingly, under the concept that it contained 100% Ceylon tea and came from the finest gardens in Sri Lanka. This was a consumer confidence building exercise that the company had launched. The exporter carefully monitored the production and packaging processes in Sri Lanka, which had generated employment and value added. This was a clear demonstration that a company could build up name recognition because of protection.

144. The representative of Australia posed the following questions to Sri Lanka. (i) Was "Dilmah" a registered trademark in Australia? (ii) How the protection of geographical indications could solve the patent problem that the representative of Sri Lanka had talked about? (iii) Did Sri Lanka protect any geographical indications in its own market? If it did not, it would be ruled out of any chance of protection abroad because of the exception provisions in the TRIPS Agreement.

145. Responding to the third question, the representative of Sri Lanka said that the legislation was still in draft form but these provisions had been introduced into it. It used to recognize "Ceylon tea". However, more products would be included through the latest amendment that had been submitted to Parliament. On the second question, she said that certain rights that her country could exercise on its knowledge and products were being exploited and misused and by default her country had allowed them to be used by other people. The patent case was a bitter lesson for most tea producing countries, because they could not export black leaf tea, it had instead to be exported by the company. If additional protection was not available for "Ceylon tea", then each and every country where this name was misused had to be monitored. Regarding the first question on "Dilmah", she said that the company had been able to establish the trademark because it had entered the market with a 100- percent Ceylon tea concept, which was a geographical indication.

146. The representative of Uruguay recalled the points made by the representatives of the United States, Argentina, and Australia concerning problems such as costs related to extension. The form and content of any decision in this respect would need the approval of all Members. While being prepared to participate in the TRIPS Council, as in all the other bodies of the WTO, in a constructive manner in discussions with a view to ensuring that the Council could fulfil the mandate entrusted to it and report to the TNC at the end of 2002, he said that in his view paragraphs 12 and 18 of the Doha Declaration did not provide any mandate to establish modalities for extension. In case of extension, the different interpretations Members gave to the definition of geographical indications might undermine the balance under the TRIPS Agreement. Paragraph 39 of the document IP/C/W/353 was not clear on the treatment of generic terms. He was also concerned about the possible effect of extension on products resulting from migration since the beginning of the last century. Many terms and names used to denominate various products were consequences of cultural traditions connected to migration.

147. According to document IP/C/W/353, documents IP/C/W/247/Rev.1 and IP/C/W/308/Rev.1 had explained the reasons for which this group of countries believed that the protection under Article 22 was clearly inadequate and insufficient. Having re-read these documents, he still had his doubts. The reasons given related to the differences between the levels of protection stemming from the text of Articles 22 and 23 of the Agreement. But even though it had been repeatedly requested, no IP/C/M/36/Add.1 Page 33 information had been given on practical cases in which a country had experienced real difficulties in protecting a geographical indication in another country in accordance with the provisions of the Agreement. While acknowledging that Article 23 provided a different level of protection for wines and spirits, he did not accept the argument that the protection granted by Article 22 for other products was inadequate. Article 23 was a result of negotiations during the Uruguay Round that was accepted at that time as part of a package of negotiations without it necessarily reflecting the interests of his country or being particularly beneficial to it. In the light of the subsequent experience, the application of Article 23 had resulted in problems rather than benefits. The fact that at that time his delegation had agreed to the inclusion of Article 23, which it now believed was an error, did not mean to say that now it was prepared to repeat that error. Therefore, his delegation was not prepared to extend the level of protection to other products since it believed that the present level of protection granted pursuant to Article 22 was adequate.

148. Uruguay was a small country and it was a competitive producer of high quality wines which were recognized world wide. This was a sector which had developed and slowly but surely was making progress thanks to the major efforts that had been made. Nevertheless, he agreed with the delegations of Australia and Argentina that there were no benefits that had resulted from the TRIPS Agreement. On the contrary, there were cases where the difficulties in accessing certain countries' markets had been greater. These problems were in no way connected to measures relating to intellectual property, particularly geographical indications. Therefore, his delegation did not agree with the assertion that extension would imply per se better opportunities for market access. This would have to be analysed and studied together with other measures which had been adopted by various countries with a view to protect their markets.

149. As regards costs, he associated himself with the comments made by the representatives of the United States, Australia and Argentina. It had been claimed that the beneficiaries of extension would be Members with different levels of development. However, he believed that extension would benefit just a few countries and would affect in a negative manner a larger number of Members. The extension which had been suggested would imply an imbalance and excessive cost for countries such as Uruguay. His country would then see itself obliged to provide additional protection to geographical indications of a minority group of countries which had a large number of indications. Costs would not be insignificant.

150. Concluding, the representative of Uruguay stated that he was very concerned that it was suggested in document IP/C/W/353 that the multilateral register for wines and spirits to be established be extended to cover other products. There was no doubt that this went well beyond the mandate contained in paragraph 18 of the Doha Ministerial Declaration of Doha. Therefore, he rejected any link that anyone wished to establish between those two issues.

151. The representative of New Zealand said that document IP/C/W/353 appeared to be a negotiating proposal. There were a number of negotiating mandates, but geographical indication extension was not one of them. That sort of decision belonged elsewhere at another time and upon agreement of all Members. She recalled that many of the points raised by the United States had also been raised by her delegation at previous meetings. This time she wished to focus on her delegation's recent experience with the regulatory development in one of the key markets which showed just how far the concept of geographical indications in an extended form could be stretched as a means to create regulatory and non-tariff barriers to trade.

152. Recalling her earlier remarks on the relationship between geographical indications and other forms of IP protection and on competition issues, she said that viewing geographical indications purely in an IP context might cause the Council to overlook some of the significant anti-competitive and trade-restricting effects of extension. The manner in which some Members were choosing to implement their Article 23 obligations bore witness to this and called into question whether the objectives and principles of the TRIPS Agreement, as reflected in its Articles 7 and 8, were being IP/C/M/36/Add.1 Page 34

respected. This point related to the concept of a level playing field or at least, balanced obligations. Some demandeurs had pointed out the discriminatory treatment between wines and spirits and other products under the TRIPS Agreement as it currently stood and accused others, especially those with wine industries, of being unfair in seeking to deny extension to other products. It was entirely the experience with Article 23 for New Zealand's wine industries, particularly the recent experience, which meant her delegation could not support the concept of additional protection for other products. Article 23 protection could restrict innovation, it could hurt market access and it could increase regulatory costs in terms of meeting unjustified and unnecessary requirements in other markets. New Zealand's wine industry, while grateful for the level of protection afforded under Article 22 of the Agreement, bemoaned the day that they were forced to accept Article 23 level protection. One should imagine the job that officials had had back home in outlining the issue of extension to other industries when the wine industry had got there before them and had warned these others of the real commercial risks.

153. She pointed out that in making this assessment, New Zealand's wine industry was not bemoaning the fact that its access to geographical related terms of others was restricted – but rather all the "bells and whistles" and "add-ons" that could be attached to an extended level of protection and the problems this could create in using their own geographical indications in other markets, i.e. in their attempts to compete on a similar basis with other more long established wine industries. The wine industries had just been presented with some new labelling regulations for products intended for a major export market. Members might wish to refer to the detailed comments and analysis given on this Regulation by a significant number of countries at the previous week's TBT Committee meeting. This Regulation attempted to restrict the use of certain production and process related product terms to certain individual geographical indications only, including generic terms such as colours. Similarly, certain types of packaging containers were restricted to certain individual geographical indications, again depriving other GI users of basic production and process related terms that had nothing to do with a geographical indication. A similar attempt was being made with respect to wine varieties. A further underlying aspect of the regulation was that it did not practically accommodate the notion of equivalence, or the fact that regulatory approaches differed across the WTO Membership, a connect which is enshrined also in the TRIPS Agreement. This amounted to attempts to export certain regulatory and enforcement approaches to other WTO Members. Finally, this Regulation provided for the use of country names as a geographical indication, an issue which was of great interest to New Zealand. However, such protection was to be only provided in "exceptional" circumstances, again seriously restricting its rights under the current TRIPS provisions. These were not necessarily intellectual property issues but TBT issues not relevant to the TRIPS Council's consideration. However, on could not ignore these serious downstream non-tariff barriers and regulatory effects stemming from the concept of extended GI protection that some Members might choose to utilize. The reason one could not ignore them was the very great and damaging practical effect they could have on trade. This evidence went to show that having a protected geographical indication did not guarantee market access.

154. Her delegation had asked for the identification of specific problems of the implementation of the current TRIPS provisions of geographical indications, but had received none, which was a shame because it made it difficult to take forward a discussion on what Members might do to assist others in better implementation of the provisions, including possible assistance to developing countries seeking to pursue their legal rights in third markets. She was also concerned that the negative implications of extension for innovation and access to terms that were not envisaged now but might be in the future could impact on those with fledgling export industries, particularly food ones. A natural marketing cycle for these industries appeared to be industry establishment through the production of more generic products followed by diversification into higher value added and boutique products. The sort of regulatory and anti-innovation impacts associated with an expansive definition of geographical indications might hinder that market development. IP/C/M/36/Add.1 Page 35

155. It appeared that the demandeurs would wish to give geographical indications precedence over established trademarks for all products, not just for wines and spirits. In her delegation's view, there was no reason why one form of IP should take precedence over another, especially in instances where a trademark had been established first. Again, the justification of providing legal certainty was given, but this applied only to the GI owner and could cause considerable legal and market uncertainty for the trademark owner. When talking about uncertainty, one also needed to consider the consumer. Extended protection, and the associated risk that it would override existing trademarks and tie up terms which were seen as generic was, contrary to assertions by the demandeurs, likely to decrease consumer choice. As some consumer associations had recently pointed out, GI extension could mean that consumers were provided with less information on objective qualities and the nature of products. While welcoming the demandeurs view that the important exceptions in Article 24 would be considered in the context of extension, she said that the rather restrictive conditions which seemed to be placed on such adjustments to the exceptions did not seem to acknowledge fairly the reality of the large number of terms in use presently – particularly those of a perceived generic nature – and the WTO's obligation to avoid trade and market disruption. She referred to the examples given by the United States that had shown the great uncertainties that could result for the terms in question, which already benefited from secure protection under Article 22 and non GI-related mechanisms. In many of the examples provided, the concept of the definition of geographical indications seemed a crucial one. Finally, she welcomed Australia's proposal on a discussion structured along the lines that had arisen in previous discussions, namely the definition of a geographical indication, territoriality issues, the relationship between geographical indications and trademarks, the cost differentials between Articles 22 and 23, and the Article 24 exceptions.

156. The representative of the European Communities associated himself with the comments made by India, Pakistan, Switzerland, Turkey and others. It was the first time that the European Communities were co-sponsors of a communication advocating extension. With this, the European Communities had wanted to show their commitment to developing country demands in a round that should be the Development Round. This matter had become a prerequisite for the balance of the development agenda. He said he was puzzled when several delegations had claimed that extension was not in the interest of developing countries. Responding to the comments on the discussions that had taken place at the TBT Committee, he said that the regulation discussed there did not concern the subject-matter covered by the TRIPS Agreement. It was not a regulation aimed at providing the level of protection which was compulsory under the TRIPS Agreement.

157. Recalling that, at the Council's previous meeting, the representative of Guatemala had asked Members to indicate whether they were aware of the geographical indication "Antigua Coffee" being used in any country but Guatemala, he told that his delegation had got in touch with the Specialty Coffee Association of America, a US-based organization, founded in 1982 that represented 2500 companies around the world, including 100 US companies, 21 companies from Australia, 70 companies from Canada, 30 from Mexico, as well as companies from New Zealand, Argentina and 13 companies from Guatemala. They included retailers, roasters, roaster/retailers, producers, exporters, importers and, effectively, any company involved with the coffee industry that had any interest or dedication to quality coffee. Through them, his delegation got in touch with ANACAFE (National Association of Guatemalan Coffees) and, in particular, with APCA (Producers Association of Antigua Coffee). The current president of the APCA had told it that each year over 50 million pounds of coffee labelled as "Antigua" were sold throughout the world. Yet, Antigua did not produce more than six million pounds annually. In other words, each year, 44 million pounds of false Antigua coffee were sold around the world. This meant that nearly 8 times more of false Antigua coffee was sold around the world than genuine Antigua coffee. He said that it was striking that more Antigua Coffee was sold in US markets than actually entered the US territory. What were the consequences of that situation? Consumers wishing to buy "Antigua coffee" would not know what they were getting. The same report indicated that "although current US consumption was flat, consumers were purchasing more value added products through the speciality coffee industry which was driving up the overall market value". In short, consumers were not drinking more coffee but they were drinking better IP/C/M/36/Add.1 Page 36

coffee. Coffee consumers had moved away from price-based purchasing to a purchasing trend that focussed on product variety and quality. The quality conscious purchasing trend had evolved coffee from a beverage of pseudo-commodity characteristics to one with cultural and sensory ties. The APCA had pointed to that glut of "false" Antigua in the marketplace as one reason they were receiving prices that did not reflect the true value of genuine Antigua coffee. In a period of ten years, 440 million pounds of false "Antigua Coffee", if not more, would be sold around the world. He referred to the steer price crises that the coffee market had been undergoing already for some years of which countries like Brazil and Colombia suffered.

158. The International Coffee Organization (ICO) had recently stated that "without corrective measures it was hard to see prices recovering in the near future. If exporting countries take the passive route, the law of the fittest will apply and it will be the smaller producers, several of which depend on coffee for foreign revenue, who will be worst hit, as indeed is already the case. One of the serious social consequences would be a very real risk that the farmers in some countries may find it much easier to give in and start to grow illegal crops. Countries which, grow high quality beans require real investment in terms of good husbandry. But, due to the prices now being paid for their beans, coffee farmers are on their knees and the situation is poised to bring real problems in terms of disaffection within producing countries, which could all too easily lead to social unrest coupled with pressures for migration to urban areas and to developed countries". In order to remedy that situation, the ICO was for example proposing to move towards quality and proposed to establish a system of Certificates of Origin linked to quality. The Speciality Coffee Association of America had argued for extension before the USTR. The chairman of that association had asked his delegation to pledge for a better protection of "Antigua Coffee" before Guatemalan authorities. He believed that everybody agreed with the chairman of that association when he said that "for speciality coffees, geographical indications and truth in labelling goes beyond issues of price. Single-origin speciality coffees are stories in a cup. Exceptional single origin coffees create a connection to far-away locations, places unknown to many people, intangible sense except through the cup. Speciality coffee is about coffee that could not have come from just anywhere. We carefully prepare and serve single origin coffees and say: 'This is what the foothills around Mt. Kenya taste like'." Finally, the representative of the European Communities expressed his support for a structured discussion.

159. The representative of Jamaica associated herself with the comments made by India on behalf of the proponents of the extension of geographical indications to products other than wines and spirits. Her delegation remained concerned about the disparity in the levels of protection for one and the same intellectual property right, geographical indications. The current level of protection for products other than wines and spirits was inadequate. Unlike Article 23, Article 22 did not prevent the use of geographical indications accompanied by expressions such as "like, kind, style or imitation". Such safeguards for wines and spirits as enshrined in Article 23 should be accorded to other products. Many opponents had argued that they did not see the benefits of enhanced protection. In fact, some wine producing countries had informed the Council that they did not see any benefits accrued as a result of enhanced protection for wines and spirits. That might have had a lot to do with restrictions encountered as a result of arrangements struck elsewhere rather than with the efficacy of Article 23. She believed that a higher level of protection to safeguard legitimate producers of products actually originating from the place indicated by the geographical indication was warranted. It was necessary to move beyond a mere "misleading" test to ascertain whether a right had been infringed. There needed to be a stronger mechanism, which could be achieved under Article 23.

160. She drew attention to paragraph 7 of document IP/C/W/353, which stated, inter alia, that "the definition of geographical indications is flexible enough as it may protect geographical names of localities, regions or countries". New Zealand had expressed two concerns as regarded extension, one concerning restrictions to market access and the other concerning restrictions to innovation. Contrary to the views expressed by New Zealand, her delegation was of the view that extension could, in fact, lead to innovation, including the development of niche products with, for example, products with particular characteristics which were attributable to their geographical origin and products which IP/C/M/36/Add.1 Page 37 would be safeguarded because terms such as "like, kind, style, etc." would be prohibited. Producers of such niche products could become real competitors rather than seeking to usurp denominations of legitimate producers of products originating from the place indicated by geographical indications. She thanked the European Communities for their presentation of statistics regarding "Antigua Coffee", which had made her very concerned about "Blue Mountain Coffee".

161. The representative of the United States said that, as Switzerland had observed, the United States did have thousands of trademarks which were protected in the markets of other WTO Members pursuant to the TRIPS Agreement, but that there was a fundamental difference between the issue of providing trademark protection and what was being discussed in the Council. The difference was that the United States provided full protection for the trademarks of other WTO Members. Part of the issue that was being discussed was whether there were commercial opportunities for Members resulting from the expansion of GI protection. Not all Members were enjoying the commercial advantages of the GI protection that was negotiated in the Uruguay Round. Should Members agree to expand that protection, it was not guaranteed that all Members would enjoy the commercial opportunities being promised by the demadeurs. He regretted that certain Members rather than engaging in a dialogue on the existence of commercial opportunities, chose instead to suggest that success on the issue of extension was a prerequisite for progress in other areas. The Council should discuss the real world and the real facts and figure out what the benefits were. He asked the representative of the European Communities whether under EC Regulation 2081/92 on geographical indications, Guatemala could obtain protection for their geographical indications without having to provide what the European Communities decided was an equivalent system of protection.

162. The representative of Kenya, associating himself with the statement by India on behalf of the co-sponsors of the communication, said that he was seeking fair play and an opportunity for equal gains from the intellectual property regime. He indicated that Members of the Council should look at all issues with an open and objective mind. He recalled that the United States had indicated that some Members asking for extension had not even conformed to the TRIPS requirements that were provided for in the TRIPS Agreement. He believed that some of those countries which had not yet conformed to the TRIPS Agreement in the GI area might be reluctant to do so because they had not seen balance involved in the protection. There was a high likelihood that once the issue of imbalance was solved they could move fast to conform with their obligations. The United States had also mentioned that the obligations were many and the benefits few. He foresaw that extensions would benefit the developing world, including Kenya. Also consumers would be better off choosing products with right indications of origin. It was true that not all Members would benefit equally from GI provisions; they had different capacities, some would have none while others several thousand geographical indications to register. However, this was the general trend observed in the whole intellectual property regime. Members were already under an obligation to protect other IP rights including patents, trademarks and so forth. Some Members filed thousands of patent applications every year while others might not file a single application in a given year. What was important was to establish a system which enabled Members to benefit equally. If a Member was not able to draw benefits today, let that Member have access to those benefits tomorrow. Concerning Sri Lanka's experience on branding tea, he said that there might be other similar cases.

163. The representative of Cuba, one of the co-sponsors of document IP/C/W/353, said that extension was essential for its trade. Geographical indications for tobacco associated with qualities and characteristics which could not be repeated elsewhere had a long tradition in Cuba. This led to the illegitimate use of those geographical indications as trademarks by many multinationals in different parts of the world. Cuba had invested over the last eight years some US$ 400,000 to defend these geographical indications. Nevertheless, it was still insufficient to establish its claims and obtain indemnity in all the territories where illegitimate use was being made of those geographical indications for tobacco. There had been expenses which Cuba as a developing country had not been able to cover. A number of arguments had been presented to justify the insufficiency of Article 22 with a view to trying to ensure better protection. She was surprised that certain Members felt that IP/C/M/36/Add.1 Page 38

Article 22 was perfectly adequate though it could lead to discrimination. Geographical indications for tobacco were as import as those for wines and spirits. Extension would be an element that would contribute to improving the balance.

164. The representative of Chile said that it was still unclear what the potential effects of extension were i.e. whether one would be better or worse off as a result. Responding to the representative of the Czech Republic who had justified her position by saying that the objective of the TRIPS Agreement was to eliminate obstacles to trade, he said that this did not seem to be an issue of market access; to the contrary, the debate was potentially leading to the limitation of market access. The representative of Sri Lanka had spoken of things which did not really concern the protection of geographical indications. A number of countries had said that there was an imbalance and that they wanted a level playing field and benefits which existed for certain sectors for other sectors. He believed that all of that could be corrected by simply eliminating the additional protection for wines and spirits. He asked for consistency when delegations discussed for example agriculture, industrial products or import subsidies. He was in favour of a structured discussion, as suggested by Australia.

165. The representative of Switzerland said that, in order to fully benefit from the protection of geographical indications, authorities and producers in Member countries, especially in developing and least-developed country Members, needed to be proactive. The WTO Secretariat trade policy report on Mexico was an example of why geographical indications offered tremendous opportunities and great benefits for the development and prosperity of Members' economies. According to paragraph 226 of that report "Mexico's alcoholic beverages industry, an intensive user of trademarks and geographical indications, has developed into one of the country's most dynamic export activities. Mostly due to beer and spirit sales which account for almost 64% and 26% of beverage exports, Mexico enjoys a wide and growing surplus in this product group. This is in part the result of concerted efforts by the authorities to ensure that Mexican denominations of origin received adequate protection in foreign markets." Paragraph 227 concluded that "Mexico's experience with regard to Tequila is a prime example of the considerable financial benefits that could arise from the rights granted through geographical indications".

166. In paragraph 40 of the report prepared for WIPO's Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore meeting, held on 13-21 June 2002, several countries referred to the importance geographical indications had in the protection of traditional knowledge. In his view, without any protection of geographical indications Members would never succeed in having total protection for traditional knowledge. Indigenous people and local farmers in various countries had developed over the years their own knowledge for obtaining food and medicines from their land. That knowledge often evolved outside the legal structure of intellectual property protection system. Considering that many of those products produced according to traditional and ancient methods had a given quality, reputation or other characteristic essentially attributable to their geographical origin, they might be eligible for protection by geographical indications. Traditional knowledge was often linked to a specific place or region where a certain product was made or to traditional methods or conditions prevailing in a specific area. That conferred on the products certain characteristics or reputation related to their geographic origin. He cited the examples of Mexican enola beans, Peruvian yacon or Andean nuna beans. Concluding, he said that extension was a chance for all WTO Members. It was important that each WTO Member seized that opportunity for its own benefit.

167. The representative of Singapore said that the Council was dealing with an area that carried high and important economic stakes. This issue had also come up in WIPO's SCT and the two sessions on domain names. The Ministers' decision at Doha to examine the issue was timely. It had been correctly noted that the issue had been solved towards the end of the Uruguay Round as part of a deal. Perhaps it was not time to examine whether that solution had been correct. IP/C/M/36/Add.1 Page 39

168. The representative of Brazil said that his delegation was committed to the mandate contained in paragraph 18 of the Doha Ministerial Declaration and recognized the right of other Members to bring proposals forth in light of that mandate. His delegation would not try to re-interpret the mandate that was at hand and would have systematic concerns if the mandate already established would be changed. In that respect, he thanked India for presenting the joint proposal in document IP/C/W/353 on behalf of a number of delegations. He said that he would revert back to the content of the proposal in further discussions. Brazil was a country rich in local products with quality and reputation. Within the domain of trademarks, it had protected consumers against deceptive practices since the late 19th century and the implementation of the Paris Convention. Since 1997, Brazil had provided protection for geographical indications in line with the provisions of the TRIPS Agreement. In spite of the existing legal framework to protect geographical indications, the reality in Brazil was that producers had little or no experience in that kind of protection of intellectual property rights. Only in December 2001 did the Brazilian Government grant ex officio protection to the first Brazilian geographical indication "Cachaca", a spirit.

169. He stressed that Brazil was not a demandeur on geographical indications on that particular product or on any other product or service. While respecting the legitimate trade interests of other Members on that issue, his delegation followed the debate with a certain degree of caution in light of the potential costs and benefits that extension could result in. His delegation shared the concerns expressed by a number of delegations regarding the balance between protecting only a few if any national geographical indications versus an obligation to protect a great number of foreign geographical indications. Another question was whether Members could realistically expect to receive returns from extended protection of geographical indications.

170. He recalled that Australia had argued that GI protection would offer any solution to the decline in coffee prices or any advantages, and that benefits would be illusionary. The representative of Brazil said that he did not necessarily think that geographical indications were illusionary or that they would provide no obvious advantages or returns. A better chance should be given to implementation of Article 22 of the TRIPS Agreement so that countries could explore the potential of that particular provision to assess the positive effects that the protection of geographical indications could provide. He agreed with Australia that market access negotiations were a way to provide more substantial gains. He did not necessarily take the point of the European Communities that survival of the fittest would result if geographical indications were not put in place.

171. Responding to the intervention of Chile, he said that he took the point on the possibility of lowering the standards of protection as one way of levelling the playing field. While being fully committed to respecting the TRIPS Agreement, his delegation could for the sake of coherence consider taking the same approach in other areas of intellectual property. He said that he was not totally negative about the point raised by Switzerland on the relationship between geographical indications and traditional knowledge, but he did not see that as an answer to the protection of traditional knowledge. In fact, geographical indications would be just as limited and ineffective as other forms of intellectual property rights. Geographical indications would not be a means to prevent biopiracy. Regarding the paper prepared by the WIPO Secretariat, he noted that quite a number of delegations had asked the WIPO Secretariat to re-draft that document so that other IPRs could also be considered. It was felt that there was an imbalance and that there was no good reason to single-out geographical indications as one way of protecting traditional knowledge. Concluding, he associated his delegation with the statement by Turkey that it was not a North-South issue. Both developed and developing countries, large and small, had expressed eloquent arguments on both sides of the debate. For that reason, the Council's discussions should aim at a balanced result after a consideration of all concerns related to the issue.

172. The representative of Colombia said that before entering into a detailed discussion of the proposals, it was necessary to have an in-depth analysis of different elements. She supported the IP/C/M/36/Add.1 Page 40

themes suggested by Australia for a structured discussion, adding to the list of issues the relationship between rules of origin, trademarks and geographical indications.

173. The representative of Morocco said that extension was a matter of priority in the work of the Council. Her delegation was examining document IP/C/W/353 and might become its co-sponsor. The arguments put forward would lead to a climate of security for the protection of geographical indications and to a balance without differentiating between products.

174. The representative of Guatemala considered that the application of Article 23 was sufficient to protect Guatemala's interests. Countries producing products protected by Article 23 such as Canada, Australia and Argentina considered that they did not have positive experience with that additional protection. He agreed that information on WIPO's work on geographical indications could be useful for Members before they went on with further negotiations in the Council. Regarding the Council's mandate, he associated his delegation with the statement by Uruguay. He expressed his appreciation of the work that the European Communities had done on "Antigua coffee" and said that his delegation would continue to discuss with Guatemalan producers and it would let the Council know if it received a proposal from them.

175. The representative of Argentina said that the WIPO document referred to was a compilation of replies to a questionnaire to which only 48 Members of the WTO had replied and five of those Members had mentioned, among other categories of intellectual property, geographical indications. As Brazil had pointed out, it was considered that paragraph 40 reflected in an unbalanced manner the opinions of the countries that had replied. There had been an agreement to re-word it because it was considered that the Secretariat had gone too far as regards giving conclusions. Regarding market access, she asked Switzerland that if, for example, Argentina wanted to protect its cheese with geographical indications, how would that facilitate the entry of Argentinian cheese to the Swiss market.

176. The representative of Mexico agreed with the representative of Switzerland that "tequila" was a successful geographical indication, and invited him to try it to find out why it was successful. The fact that a product was protected by a geographical indication did not necessarily mean that it would be successful, neither did it apply that it would have a greater access to markets. Mexico protected geographical indications for products not falling within the categories of Article 23. It was important to note that, precisely due to Mexico's experience, he considered that extension would, apart from some Members who had hundreds of geographical indications, mean that the balance would finally be negative for most Members.

177. The representative of the Philippines said that the meeting had confirmed the need to be careful and cautious about attempts which sought to expand the various types of protection currently afforded under the TRIPS Agreement. He wondered whether the existing provisions had sufficient flexibility if appropriately implemented or operationalized to afford adequate protection of products for which GI protection was sought. There was a divergence of views on the interpretation of paragraph 18 of the Doha Ministerial Declaration. While he appreciated the submission by 36 countries, he wished to view it simply in the context of an examination of the issues related to the extension of the protection of geographical indications as mandated by paragraph18. In that regard, he was inclined to evaluate the submission in accordance with the checklist of issues suggested earlier by Australia. That included the definition, the application of Article 22.1, the impact of the principle of territoriality on the implementation of Section 3 of the TRIPS Agreement, interaction between trademarks and geographical indications, cost differentials between protection under Articles 22 and 23 and exceptions under Article 24. Submissions by Australia, the United States, Argentina and others had adequately demonstrated the pragmatic difficulties which both consumers and administrators among WTO Members would encounter if an extended system for protection of geographical indications was ever put in place. The Philippines too had certain products for which it might wish to claim benefits flowing from additional GI protection, for instance the Philippine IP/C/M/36/Add.1 Page 41

mangoes, Manila envelopes and Manila hemp, but he was concerned about the costs on the other side of the equation ranging from those related to the anticipated shifts in production or marketing methods or strategies to costs related to diminished market access.

178. A system of protection based on geographical indications concerned, in essence, private rights. The protection of geographical indications based on the existing system, i.e. trademarks, prevented the use of similar or identical names when the use was misleading or confusing to the public. There was an element of public interest involved in the latter system. That element would be obviated if the system of protection was based solely on geographical origin, as Article 23 required the implementation of an absolute standard, i.e. if the goods did not come from the place named then the geographical indication would be invalid regardless whether its use would mislead the public. To require the present regime to begin using a different standard that did not take account of the public interest, necessitated a fundamental philosophical change, which he believed all Members should be cautious to undertake.

179. The representative of Bulgaria said that it had been repeatedly argued that the extension of the additional protection for geographical indications to products other than wines and spirits would imply protecting hundreds of foreign geographical indications from some Members compared to a few from some other Members and that this would constitute an imbalance. That argument went against the essence of intellectual property protection. It was not made when the TRIPS Agreement was included in the multilateral trading system for other intellectual property rights. The TRIPS Agreement was about the protection of a certain kind of property and setting minimum standards. Therefore, if Members spoke of imbalances then they should look at the coherence itself and not approach the question in terms of exchanging concessions.

180. Much had been said on the issue of costs, including on administrative difficulties and confusion to consumers. Some Members had repeatedly responded that there were no or negligible costs resulting from the protection of foreign geographical indications; only a change in legislation was needed in order to allow courts to protect foreign geographical indications. It was necessary to provide domestic protection first before seeking foreign protection. This would involve some administrative framework and was an opportunity for producers who would be eager to bear those administrative costs. He wondered whether those Members who had been disappointed with the benefits resulting from additional protection to their wines and spirits abroad had thought about abolishing the domestic protection of the geographical indications for those wines and spirits, if that protection was so costly and their industry was even against it.

181. It had been implied that the demandeurs were expecting more benefits than was true. One argument had been that the exceptions provided under Article 24 on generic names, prior use and grand-fathering precluded protection. The United States had given the example of Bulgarian yoghurt. He said that Bulgarian yoghurt was not generic, only famous. The aim of extension was exactly to put an end to the process of names becoming eventually generic. The exceptions would ensure that existing producers, including those that wanted to make good use of their cultural heritage, could continue the production of the products they were producing. Therefore, the argument on exceptions was misplaced; it was an argument against the potential and real concerns of existing producers of products which could claim GI protection.

182. It had been argued that extension would result in a barrier to trade but would not ensure additional market access. He clarified that he was not arguing that extension per se would ensure market access but it was definitely not a new barrier to trade. He disagreed with the argument that extension would imply restrictions on innovation since extension was meant to provide an incentive to work for the reputation of a product and a region. Many of the opponents arguments had nothing to do with the relevance of the proposal to extend additional protection to all products and concerned specific problems between some Members in the broad field of geographical indications. Those problems either had nothing to do with extension per se or could be solved exactly by extending the IP/C/M/36/Add.1 Page 42

existing protection. For example, the United States had asked why Article 22 protection was not sufficient. At present, yoghurt "à la bulgare" could be produced legitimately and could not be challenged under the TRIPS Agreement. With additional protection, such use would be illegal. Responding to the comments by Australia on Bulgarian feta, he said that the problem was not that Bulgarian feta was being sold in Australian gourmet shops; extension would not mean that the feta would no longer be sold in Australian gourmet shops. What he did not want was that Australian gourmet shops could sell Bulgarian-like feta.

183. Several delegations had argued that there was no mandate for discussing modalities. The representative of Bulgaria said that he had not proposed discussions on modalities but on guidelines. In the Doha Declaration, Ministers had expressed their determination to find appropriate solutions and to propose appropriate action before the end of the year. He was disappointed with the Australian delegation which had refused to discuss the proposal of the co-sponsors in the paper presented by India. Concluding, he said that, like others who had spoken on behalf of the co-sponsors, positive results on the extension of additional protection for geographical indications to products other than wines and spirits was a prerequisite for the overall balance of the negotiations within the Doha Development Round. For his delegation this meant that progress in this matter would influence other matters, and the issue of extension had to do with more than just geographical indications.

184. Responding to the representative of Bulgaria, the representative of Australia said that his delegation's contribution in the Council and in the period leading up to Doha showed that it was prepared to discuss the issue. The case of Bulgarian yoghurt and Bulgarian feta were the very issues it tried to get at. Bulgaria regarded their yoghurt and their feta as very famous products. The European Communities had just passed a regulation which would deny Bulgaria from selling Bulgarian feta in the EC, once the Council would have passed the regulation. If his delegation accepted the proposal by the co-sponsors, it too would have to deny Bulgaria the right to sell Bulgarian feta in Australia. On Bulgarian yoghurt, the question was whether the European Communities would accept the words "Bulgarian yoghurt" as a geographical indication from Bulgaria. He betted that they would not. The other issue was that even if the European Communities did accept yoghurt, would Bulgaria as a country be accepted as a geographical indication? A number of countries had said that the IP definition of geographical indications was flexible enough. He believed that that was the problem; the definition was so flexible that some countries were abusing it by claiming that traditional terms, English adjectives that described a Portuguese product, were somehow a geographical indication. That was why the issue of the European Communities' wine regulation was so relevant to the debate. He said that he could understand that the European Communities did not want to dwell on the EC system or the EC wine regulation but the fact was that they were critical to the question on extension.

185. Developing country Members had repeatedly said that they needed to level the playing field. Kenya had asked wine exporters how they would feel if the tables were turned. The representative of Australia said that Chile had given an answer to that, and he was sure that if all non-European wine exporters were asked whether they would cut Article 23 and go back to Article 22, the decision would be unanimous. That was because of their experience with Article 23 in relation to wine. In recent years, a number of countries in the new world, namely Chile, Argentina, South Africa, the United States, Canada, New Zealand, Uruguay and Australia had developed a flourishing wine industry. Was that because they protected geographical indications and sold wines on the basis of geographical indications? It was because of quality, innovation, marketing, investment and good reputation. The European Communities would say that the reason was the use of their names. However, Australia had agreed not to use their names at the time of the TRIPS negotiations. Australia was now facing new wine regulations going beyond geographical indications picking up terms which were ordinary English adjectives. Australia had a drink called "Port" and it accepted that the word was based on the Portuguese word "oporto", so it willingly gave up on the use of the word. Then, looking for something to use on the label, Australian producers used "vintage", "ruby" or "tawny", which were English words and not English interpretations of Portuguese words. Yet his delegation had been told IP/C/M/36/Add.1 Page 43 they could not do that. It had also been told that the European Communities owned certain bottle shapes. This was to say that in a few years time the champagne-type bottle which was used all over the world would suddenly be declared as a traditional expression or a traditional shape. In Switzerland, the town of Champagne was being deprived of making a wine which was not even champagne. The point was that the whole definition of geographical indications was being perpetrated in a way that was not comfortable with and that was why he was concerned with the extension issue.

186. He recalled that Kenya had said that developing country Members might be more comfortable in complying with old obligations if the new obligations were balanced up. He understood that to a certain extent, but wondered whether it was genuinely true and whether that was the real reason why some developing country Members had not introduced Article 22 protection let alone Article 23. He suspected it was because it was such a costly effort. The reason he was promoting caution was underlined during the WTO Public Symposium. Who were the people counselling his delegation to be cautious? They were the Danish Dairy Board and a Spanish wine producer, both of whom had gone through a difficult times, the wine producer losing its trademark and spending many years fighting to have it re-established and the Danish Dairy Board on the issue of feta. Concluding, the representative of Australia said that he was genuinely prepared to debate the issues and believed that the type of system the European Communities had was relevant. The matter was not a simple issue of changing Article 23 to cover all products.

187. The representative of Bulgaria said that the problems mentioned by Australia had nothing to do with the issue on the table. The example of problems relating to the protection of "feta" as a geographical indication in the European Communities was not an issue relevant to extension; it concerned Article 22 protection, not Article 23 protection. He added that Australia had not answered his question on whether it had considered abolishing its domestic protection of geographical indications for wines and spirits.

188. The representative of the European Communities said that he sympathized with Bulgaria's comment that many points raised by Australia did not have anything to do with the debate at stake.

189. The Chairman proposed that, in order to have a more systematic discussion on this topic at the Council's meeting in September, he would prepare a checklist of issues taking into consideration the points raised in the discussion. At that meeting, the Council should consider not only the substance of the matter but also how it should report to the TNC by the end of the year. Furthermore, he proposed that the Secretariat be requested to circulate to Members the report of the eight session of the WIPO Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications, held on 27-31 May 2002, once it became available.

190. The representative of Switzerland said that it was important not to mix up the item on extension with the item on Article 24.2. There should not be any repetition of what was discussed at the WIPO Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications and under agenda item M. He wished to focus on the issue of paragraph 18 of the Doha Declaration and on agenda item D, namely the extension of protection under Article 23 to products other than wines and spirits.

191. The representative of the European Communities associated his delegation with the statement by Switzerland. There should be no duplication of work in the different international organizations. He hoped this could be avoided when the Chairman consulted with delegations in order to ensure that the list produced would not be a duplication of work with what was happening in WIPO. Many arguments had been put on paper and their repetition should be avoided at the next meeting.

192. The representative of the United States said that the Chair's proposal was constructive and the suggestions made by Australia contained some themes he might want to focus on. He respected the IP/C/M/36/Add.1 Page 44

concern of the European Communities in not duplicating work done in another forum. If a focus was kept on TRIPS provisions, duplication could be avoided.

193. The Council agreed to proceed as suggested by the Chair.

E. REVIEW OF THE PROVISIONS OF ARTICLE 27.3(B)

194. The Chairman recalled the request made by the TRIPS Council at the last meeting of March 2002 to the Secretariat to prepare short papers summarizing the relevant material that had been presented to the Council during its earlier discussions and listing all the relevant documentation on three subjects, namely the review of the provisions of Article 27.3(b); the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD); and the protection of traditional knowledge and folklore. He informed Members that these three notes had been circulated in documents JOB(02)/59, JOB(02)/58 and JOB(02)/60, respectively. He also informed Members that the TRIPS Council had received updated information from the FAO, the CBD, UNCTAD and UPOV on their activities and that this had been circulated in documents IP/C/W/347 and its addenda 1-3, respectively. The International Bureau of WIPO had also submitted a paper on issues relevant to the work of the TRIPS Council which had been circulated in document JOB(02)/15. In addition, a communication on UNCTAD's work relating to paragraph 32(ii) of the Doha Ministerial Declaration, had been circulated jointly between the Committee on Trade and Environment and the TRIPS Council in document IP/C/W/350. Furthermore, the Secretariat had sent a reminder to Members in airgram WTO/AIR/1756 on 26 March 2002 to provide responses to the questionnaire on the implementation of the provisions of Article 27.3(b), but no further responses had been received. The Secretariat would update the synoptic table in its summary note, as requested by the Council at its last meeting, once a number of new submissions had been received. The Council had also received a communication from Brazil, on behalf of a group of developing countries, namely Brazil, China, Cuba, Dominican Republic, Ecuador, India, Pakistan, Thailand, Venezuela, Zambia and Zimbabwe, on the relationship between the TRIPS Agreement and the CBD, and the protection of traditional knowledge and this had been circulated as document IP/C/W/356.

195. The representative of the Secretariat introduced documents JOB(02)/59, JOB(02)/58 and JOB(02)/60, and said that they were based on discussions in the TRIPS Council in the context of the review of the provisions of Article 27.3(b). The subject-matters covered in each document had been presented in a manner that avoided undue duplication, although the task of separating the topics had not been easy. He explained that the reason for circulating the documents as informal papers was to ascertain whether the approach taken was satisfactory to all delegations. Subject to any comments that might be made, the documents would be issued as working documents.

196. The representative of WIPO gave an overview of the proceedings of the meeting of the Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore (hereinafter referred to as the IGC), held in Geneva from 13 to 21 June 2002. He said that the meeting had covered a discussion of both the operation of existing forms of intellectual property protection and new or adapted forms of sui generis protection with respect to traditional knowledge and folklore. Almost every category of intellectual property covered in the TRIPS Agreement had been discussed at some level of detail. There had also been discussion on sui generis database protection and specific sui generis forms of protection of traditional knowledge and folklore. The meeting had made progress on specific issues relating to genetic resources, traditional knowledge and folklore (or expressions of traditional culture). On genetic resources issues, the meeting had endorsed the creation of an electronic database of contractual practices and clauses relating to intellectual property, access to genetic resources and benefit-sharing. A wide range of stakeholders would be invited to contribute contract and licence clauses and to share their experiences in licensing and contracting on genetic resources and intellectual property. The database would serve as a practical resource to assist those concerned with intellectual property aspects of genetic resources. It had been stressed during the WIPO meeting that the database exercise would serve as an immediate IP/C/M/36/Add.1 Page 45 practical tool for those engaging in licensing negotiations and would also be a source for further study of licensing and contractual issues relating to intellectual property and genetic resources. Also concerning genetic resources, the meeting had agreed that the WIPO Secretariat should commence a technical study concerning laws requiring patent applications to disclose details such as the source of genetic resources or of any traditional knowledge, innovations and practices used in a claimed invention, as well as on similar measures concerning prior informed consent. This decision was based on an invitation to WIPO by the 6th Conference of Parties to the CBD to conduct such a study, as contained in decision VI/24 on access and benefit-sharing. He informed the Council that WIPO would be circulating a questionnaire, which would form the basis of the study, for comments in the near future.

197. He continued that, with respect to the protection of traditional knowledge, discussions covered both immediate technical measures for the protection of traditional knowledge against adverse claims of intellectual property rights and broader conceptual issues relating to sui generis legal systems for the identification, recognition and protection of traditional knowledge. On technical measures, the meeting agreed to develop a portal of traditional knowledge databases as a pilot project to advance the study of intellectual property aspects of traditional knowledge databases. Most importantly, the databases would serve as a means to improve access of patent examiners to details of traditional knowledge in order to facilitate identification of patent claims that cover existing traditional knowledge. He said that more information on the portal could be obtained from the WIPO Secretariat or its website. In addition, presentations of national initiatives on traditional knowledge databases had been made by China, India, Venezuela and the North American indigenous community. These database systems covered subject-matters ranging from traditional knowledge fully in the public domain; traditional knowledge which was the subject of existing intellectual property rights but was available for public access; and traditional knowledge which was recorded in a database but remained subject to restricted access. The IGC had at this meeting agreed on a programme of cooperation on the documentation of traditional knowledge in the public domain. The programme was to include a tool kit that gave practical advice to those assessing intellectual property implications of traditional knowledge documentation; a survey of the objectives and functional requirements for traditional knowledge databases; and technical specifications of existing database initiatives. On the conceptual issues, substantial policy discussions took place at the meeting based on several Secretariat studies and a review of existing legal approaches. The discussions covered a range of legal options for protecting traditional knowledge, including better ways of using existing intellectual property laws, consideration of the elements of a possible sui generis system for protecting traditional knowledge and possible ways of defining the term "traditional knowledge". He said that with respect to folklore or expressions of traditional culture, the IGC commissioned studies on national experiences on the protection of folklore both through existing intellectual property systems, such as copyright or specific folklore legislation and existing customary laws and protocols in the protection of expressions of folklore as well as on the relationship between customary law and existing intellectual property systems. This would serve as the basis for improved capacity building activities concerning the protection of expressions of traditional culture.

198. He said that the outcome of these various studies and activities would form the basis of IGC's work at its meeting in December 2002. The participants welcomed the collaborative efforts of WIPO with other international organizations, in particular with the United Nations Permanent Forum on Indigenous Issues. The meeting also discussed and approved various forms of enhanced practical, legal and technical assistance to strengthen national protection systems on traditional knowledge, folklore and related matters. These activities would include work on intellectual property documentation concerning traditional knowledge such as databases on traditional knowledge and national legal systems for the protection of folklore. They would also involve active partnership with member States, representatives of traditional knowledge-holders and other stake-holders, to ensure that they were practical and useful. In conclusion, he said WIPO looked forward to further dialogue with the WTO on these important issues. IP/C/M/36/Add.1 Page 46

199. The representative of Brazil appreciated the overview given of relevant work in WIPO. The TRIPS Council could have similarly benefited from information on the developments at the sixth Conference of the Parties to the CBD held at the Hague and it was unfortunate that a representative of the CBD could not give such a briefing to the Council. Brazil believed that WIPO's work on specific issues relating to genetic resources, traditional knowledge and folklore could be useful for Members to implement technical measures to protect traditional knowledge, even though these were not norm- setting exercises. However, intergovernmental organizations other than WIPO had overlapping mandates on this set of issues as demonstrated by the CBD's recent achievements on the protection of traditional knowledge and folklore; the FAO's recently concluded International Treaty on Plant Genetic Resources for Food and Agriculture (hereinafter the FAO treaty on plant genetic resources), and the WTO's Ministerial Declaration's mandate in paragraph 19 directing the TRIPS Council to examine the relationship between the TRIPS Agreement and the CBD, and the protection of traditional knowledge and folklore. It was important that these organizations work in synergy and Brazil hoped that the work in WIPO would be made use of in the TRIPS Council discussions, particularly as databases could be an important way of protecting or preventing traditional knowledge from misusing patents. Brazil was pleased with the progress made in WIPO but would also like to ensure that its programmes were in the right direction, namely in line with the principles and objectives of the CBD. He also noted that the Standing Committee on Patents in WIPO was currently discussing the draft substantive patent law treaty, an issue of serious concern to Brazil since, if approved, it could narrow down many of the flexibilities contained in the TRIPS Agreement. Brazil urged other delegations to participate in that exercise to ensure that the flexibilities contained in Article 27.3(b) on non-patentability of plants and animals, and in other Articles, were preserved.

200. The representative of Zimbabwe looked forward to working closely with all Members in finalising the review of the provisions of Article 27.3(b) and hoped that the Doha mandate would spur Members to work toward a satisfactory completion of the review process. The Doha Declaration stated clearly that the review must be undertaken taking into account the objectives and principles, as set out in Article 7 and 8 of the TRIPS Agreement, and the development dimension. Thus, the solutions proposed and the outcome must reflect these overarching objectives and principles, must be based on consensus and must take into account all concerns raised by Members.

201. Zimbabwe believed that it was possible for the TRIPS Council to adopt a decision reflecting agreement among Members on certain issues without getting involved in protracted procedures. Where there was no agreement, the TRIPS Council could focus on the urgent areas, drawing on Members' proposals and elements of the work programme. Areas of possible agreement include the recognition of Members' right and freedom to determine and adopt appropriate regimes to protect plant varieties by an effective sui generis system. Such regimes could, for instance, include the UPOV system or the African model law on genetic resources and community rights. However, he believed that the provisions of the TRIPS Agreement did not oblige Members to join UPOV or enact UPOV-like laws and indeed, an appropriate and beneficial approach was to have systems of protection which could address the local realities and needs. The African model law legislation on the protection of the rights of local communities, farmers and breeders and on the regulation on access to biological resources was one example of a sui generis system that had been developed to provide appropriate and effective protection for the rights and knowledge of farmers and indigenous peoples and local communities. The preservation of non-commercial uses of plant varieties and the system of seed-saving and exchange among farmers were matters of important public policy, regardless of the type of sui generis or patent systems adopted for protecting plant varieties. In addition, ensuring food security and preserving the integrity of rural or local communities were important. That, however, did not imply that the legitimate rights of commercial plant breeders should not be protected but that these should be balanced against the needs of farmers and local communities in developing countries. Any system should enable Members to retain their right to develop systems that would not undermine the tradition of their farming community and indigenous people in innovating and developing new plant varieties that enhance biodiversity. Another area of agreement could be the implementation of the provisions of the TRIPS Agreement and the CBD in a mutually supportive and consistent manner. In IP/C/M/36/Add.1 Page 47

this respect, Members should retain the right to require, within their domestic laws, the disclosure of sources of any biological materials that constituted some input in the invention claimed. Similarly, it could be agreed that traditional knowledge and inventions of local communities could be protected under appropriate regimes, on the understanding that the TRIPS Agreement provided only minimum standards and did not prevent Members from adopting additional areas of protection. It was important to develop mechanisms for ensuring equity in relation to the use of traditional knowledge, through appropriate international arrangements and mechanisms, to supplement domestic laws and measures. The identification and documentation of genetic resources and traditional knowledge could provide a means of assisting searches and examinations for novelty and inventive step, and a mechanism for ensuring equity in the use of traditional knowledge. Cooperation with all relevant international organizations, such as WIPO and the CBD, and with private sector organizations, would be important in order to arrive at an appropriate solution to Members concerns raised under Article 27.3(b). Special consideration should be given to fully engaging and respecting the concerns of indigenous peoples and local communities in developing any mechanism on traditional knowledge. Definitions giving precise meaning to certain terms in Article 27 such as micro-organisms, non biological processes and essentially biological processes for the production of plants and animals would be useful but any flexibility that Members have should, at the same time, be highlighted.

202. Once areas of agreement were reached on the review of Article 27.3(b), the TRIPS Council could focus on the outstanding issues raised under Article 71.1, other provisions on technology transfer to least-developed countries, dispute settlement and other areas for possible negotiations, in particular the use of additional protection to all geographical indications under the TRIPS Agreement. He referred, in this context, to the African proposal that indicated possible areas of agreement and disagreement. He requested the Secretariat to identify and compile areas of agreement on the basis of discussions so far and papers presented on the review of the provisions of Article 27.3(b). In conclusion, he urged Members to engage in this exercise in order to aid the Secretariat and determine the way forward by the next TRIPS Council meeting.

203. The representative of Peru wanted her country to be added as a co-sponsor to document IP/C/W/356. She said that the TRIPS Council had a specific mandate, under the Doha Ministerial Declaration, to review the relationship between the TRIPS Agreement and the CBD, in particular to ensure that the two agreements were mutually supportive, and the protection of traditional knowledge and folklore. Article 15 of the CBD stipulated clearly that Parties should adopt the necessary measures to ensure equitable benefit-sharing and prior informed consent and, on this basis, many Members had incorporated in their national and/or regional legislation provisions to give effective compliance to those principles. For instance, the joint industrial property regime of the Andean Community had included provisions to ensure that patents based on genetic resources or traditional knowledge were only granted after proof of a contract on access to the genetic resources or authorization to use the traditional knowledge. However, she said, rules adopted at the national and regional levels were not sufficient to prevent misappropriation, which largely occurred in countries that did not have such legislation. It was therefore important to include, in the TRIPS Agreement, requirements for disclosure of the origin of genetic resources, equitable benefit-sharing and prior informed consent. These requirements were not more difficult to comply with than any other requirements for granting a patent. She recognized that there were Members who maintained that it would be complicated to have such requirements and who pointed out that the objectives of the CBD could be obtained through signing of bilateral contracts. If that were the case, she questioned why there was a problem in adopting provisions at the multilateral level that reflected the principal elements of these contracts. She recognized that bilateral contracts afforded a certain degree of protection but said that such contracts did not provide the necessary legal security since they were voluntary in nature. Furthermore, there was a need to ensure that the contracts were equitable and beneficial to both parties and this was a particular difficulty at present because the vast majority of indigenous communities did not have the appropriate legal training to negotiate contracts of this nature. There was, therefore, need to have provisions at a multilateral level that would preserve the legitimate rights of the owners of genetic resources and traditional knowledge. Peru believed that the IP/C/M/36/Add.1 Page 48

proposal contained in document IP/C/W/356 constituted a first step by calling for defensive protection to prevent misappropriation. However, this should be complemented by proposals to obtain positive protection for traditional knowledge.

204. She informed the Council that Peru had drafted a proposal for a sui generis protection regime for collective knowledge belonging to indigenous peoples and communities. The proposed regime contains provisions on the protection of the knowledge of indigenous peoples or communities and on the use of biological diversity. It was drafted through a consultative process, taking on board the concerns of the indigenous communities and addressing issues from a regional and community context. The main elements include the goals to promote, respect, protect and preserve the collective knowledge of indigenous people and communities as well as the broad-based application and development of such knowledge; to guarantee its use based on prior informed consent; to promote fair and balanced benefit-sharing; and to prevent any wrongful grant of patents for inventions that did not recognize the traditional knowledge on which the invention was based. Indigenous peoples' knowledge was not only valuable to the local communities since, for instance, such knowledge could be a useful departure point for research and development of new products, particularly in the pharmaceutical, biochemical and cosmetics industries. Experience had shown that there were increased chances of success when such research was based on traditional knowledge, thus reducing the time and cost of conducting research. Despite that, very few communities had, to date, received any form of remuneration for sharing their knowledge with third parties and yet third parties had received intellectual property protection for their products. She alluded to other problems such as the loss of traditional knowledge and the use of such knowledge without authorization. At present nowhere was there a legal framework to regulate the conditions of access to such knowledge and the entitlements of those owning it. Although some international instruments recognized the rights of indigenous people over their knowledge, there was no country that had provided an effective protection regime.

205. Peru's proposed protection regime would require that any one seeking access to the collective knowledge for industrial or commercial purposes, requests authorization from the appropriate organization representing the indigenous peoples and communities. Furthermore, a contract licence specifying the conditions for appropriate remuneration and guarantee for benefit-sharing must be signed and registered with the office of intellectual property in Peru (INDECOPI), which would ensure compliance with a minimum set of conditions. Indigenous peoples and communities signing such a contractual licence would receive an initial payment, in monetary or other form, intended to promote their sustainable development and a percentage of the gross pre-tax benefits obtained from the utilization of that knowledge would be paid to the peoples themselves. An indigenous peoples' and communities' development fund, administered by five representatives of organizations representing indigenous people and communities and two representatives from the national commission of the Andean Amazonian and Afro-Peruvian people, would be created to ensure that benefits from shared knowledge were also channelled to the broader communities other than those holding a licence. A percentage of the gross pre-tax sales would be paid to the fund, from which indigenous peoples and communities holding contractual licences would receive direct remuneration, while the rest would receive an indirect remuneration for the use made of their knowledge. In addition, three types of voluntary registers, aimed at protecting, preserving and safeguarding the collective knowledge, interests and entitlements of indigenous peoples and communities over their contents and to provide INDECOPI with information, would be set up. There would be a national public register, a confidential register and local registers on collective knowledge from indigenous peoples and communities. The first two registers would be administered by INDECOPI, while the third one would be held and administered by the communities themselves. Communities may institute infringement proceedings with INDECOPI where knowledge had been disclosed, acquired or used unfairly and/or without their consent. INDECOPI may take procedural action similar to that laid down for infringement of a patent and other industrial property rights. However, indigenous peoples and communities could continue to adopt agreements defining benefit-sharing and resolving their conflicts in keeping with their customary laws and traditions. Furthermore, a special Council, whose IP/C/M/36/Add.1 Page 49 main purpose would be to monitor and follow up the application of the proposed regime of protection, would be set up to protect indigenous knowledge. She added that the Peruvian proposal did not claim to be the last step but should be considered as the first step of departure for discussion among the indigenous peoples and communities and civil societies. Peru also intends to hold, within the next one year, a broad-based consultative process with various indigenous communities aimed at providing explanatory information and responding to queries regarding the proposed protection regime. Two workshops, one for indigenous facilitators and local consultations organized by these facilitators and another national consultation to consolidate the proposal with the participation of indigenous facilitators, would also be held. Peru would conduct a legal technical review of the viability of the proposal and draw up a legal instrument that would genuinely protect the interests of indigenous peoples and communities.

206. The Council took note of the statements made and agreed to revert to the matter at its next meeting.

F. RELATIONSHIP BETWEEN THE TRIPS AGREEMENT AND THE CONVENTION ON BIOLOGICAL DIVERSITY

G. PROTECTION OF TRADITIONAL KNOWLEDGE AND FOLKLORE

207. The Chairman reminded Members that the Secretariat had received a joint communication from Brazil, on behalf of a group of developing countries, on the relationship between the TRIPS Agreement and the CBD and the protection of traditional knowledge, which had been circulated as document IP/C/W/356.

208. The representative of Venezuela introduced the joint communication submitted by Brazil, on behalf of a group of developing countries, and said that it was based on the negotiating mandate contained in paragraph 19 of the Doha Ministerial Declaration. It also contained a summary of the relevant provisions in the CBD and made reference to the main provisions of the Bonn decision on access to genetic resources and on fair and equitable benefit-sharing adopted during the 6th Conference of Parties of the CBD in April 2002. The co-sponsors of the communication believed that the TRIPS Agreement and the CBD should be mutually supportive and should promote sustainable use of biological resources. While the CBD recognized the sovereign right of Parties over their biological resources, the TRIPS Agreement allowed Members to grant patents on biological resources i.e plants, animals and micro-organisms. Further, the TRIPS Agreement did not contain any provisions which would avoid acts of biopiracy committed through request for patents by a person in one country on genetic resources under the sovereignty of another country, as evidenced in the turmeric, basmati rice and ayahuasca cases. In addition, unauthorized patenting raised possibility of potential conflicts between the TRIPS Agreement and the principle of sovereignty of States over their genetic resources, as contained in the CBD, and thus an amendment to the TRIPS Agreement was required. Such an amendment should require patent applicants to indicate, as a condition for acquiring patent rights on inventions based on biological materials or traditional knowledge, first, the disclosure of source and country of origin of the biological resource and the traditional knowledge used in the invention; second, evidence of prior informed consent of the possessors of the biological resource through the approval of authorities under the relevant national regimes of the country of origin; third, evidence of fair and equitable benefit-sharing under the national regime of the country of origin. Failure to find a solution that would ensure mutual support between TRIPS and the CBD could be prejudicial to the objective of both instruments and modification of the TRIPS Agreement to include some CBD elements would have to be a necessary outcome of negotiations on pending implementation issues under the single undertaking principle in trade negotiations, as provided for in the Doha Declaration.

209. The representative of Colombia said that the relationship between TRIPS Agreement and the CBD, and the protection of traditional knowledge and folklore, were among the outstanding IP/C/M/36/Add.1 Page 50

implementation issues raised by Members. Therefore, the TRIPS Council should take up, on a priority basis, issues referred to in the Doha Declaration and report to the TNC by the end of 2002 for appropriate action. He appreciated the Secretariat notes in documents JOB(02)/58 and JOB(02)/60 which, in his view, gave a complete picture of the various proposals dealt with to date. He drew Members' attention to sections on access to genetic resources, potential conflicts between TRIPS Agreement and the CBD, and concerns regarding the grant of intellectual property rights on the basis of traditional knowledge to persons other than indigenous populations or communities where the knowledge originated. In his view, the work in the various international fora relating to access to genetic resources should be complementary and mutually supportive, particularly with regard to the disciplines contained in the TRIPS Agreement and to the principles and objectives of the CBD. According to Colombia, countries had the sovereign right to regulate access to genetic resources and to protect the related traditional knowledge, but national and regional protection regimes were not sufficient to give international protection to third parties. Therefore, international disciplines needed to be strengthened through, for instance, the incorporation in the TRIPS Agreement of the objectives, principles and measures contained in the CBD and of the Bonn guidelines on access to genetic resources and the fair and equitable sharing of benefits resulting from their use, in order to avoid biopiracy. Furthermore, Members should require applications for patenting inventions based on biological materials and/or related traditional knowledge, to first reveal the country of origin of genetic resources and the traditional knowledge used in the invention; second, provide evidence of prior informed consent through approval of authorities and communities of the country of origin; and third, provide evidence of fair and equitable benefit-sharing of the country of origin and its local communities. He stressed that the Bonn guidelines were agreed upon without prejudice to domestic or regional existing rules and the sovereign right of States over their natural resources. He supported the proposal made by Brazil and other developing countries and considered it desirable to explore other alternatives that did not imply modification of the TRIPS Agreement, in addition to the proposed mandate to review Article 27.3(b), such as having an interpretative understanding on the relationship between the TRIPS Agreement and the CBD, as provided for in Article IV paragraph 1 of the Marrakesh Agreement.

210. The representative of Norway said that the TRIPS Agreement should play an important role in the implementation of the CBD. Having an obligation under the TRIPS Agreement to disclose the origin of genetic resources when applying for patent protection could be one way of ensuring transparency and enforcement of rights on genetic resources that are subject to patenting. He urged Members of the TRIPS Council to give full consideration to whether the TRIPS Agreement needed to be strengthened in order to require or allow for the mandatory disclosure of the origin of genetic resources in relation to patent applications. He noted with interest the request of the contracting parties to the CBD in their decision VI/24, directed at WIPO, to undertake inter alia a technical study on a number of issues, including methods consistent with obligations in treaties administered by WIPO on disclosure requirements for patent application of certain elements. In conclusion, he looked forward to the result of WIPO's technical study which, in his view, would be an important element for the TRIPS Council's forthcoming deliberations in assessing whether such a proposal would be a feasible way to make the TRIPS Agreement better harmonized with the objectives of the CBD.

211. The representative of Pakistan found the Secretariat's three notes helpful and informative. He said that paragraphs 12 and 19 of the Doha Ministerial Declaration gave a mandate to introduce proposals for negotiations in the context of outstanding implementation issues as an integral part of the work programme. In addition, paragraph 47 specified that the conduct, conclusion and entry into force of the negotiations shall be treated as part of the single undertaking in the multilateral round of trade negotiations under the Doha Development Agenda. Speaking as a co-sponsor of the paper presented by Venezuela, he said that the TRIPS Agreement and the CBD should be mutually supportive and should promote the sustainable use of resources. Genetic resources and the associated traditional knowledge were important and it was revealed in a recent study that 85 per cent to 90 per cent of the basic livelihood needs, such as food, medicines, shelter, of the world's poor were based on direct use of biological resources and related traditional knowledge. Over 1.4 billion poor IP/C/M/36/Add.1 Page 51 farmers relied on farm-saved seeds and local plant breeding techniques as their primary source of seed. He added that 57 per cent of the top 150 brand names of drugs, described during a six months period in 1993, contained at least one major active compound devised or patented, at that time or at some point, from compounds based on biological diversity. Similarly, of the 35 plants-derived drugs included in these top 150 best selling drugs, 94 per cent contained at least one compound with proven use in traditional medicinal practices by indigenous and local communities. However, no benefits had accrued to the indigenous communities who were the right holders of genetic resources and the related traditional knowledge. The TRIPS Agreement allowed private rights to be granted over genetic resources that were subject to sovereign rights, thus subordinating public rights on the genetic resources recognized in the CBD to the grant of private rights, such as patents, under the TRIPS Agreement. Article 27 of the TRIPS Agreement disregarded the fact that genetic material or traditional knowledge could be used or incorporated in an inventive process without prior informed consent and without benefit-sharing. Pakistan believed that mechanisms that mandated the inclusion of prior informed consent and warranted benefit-sharing were fundamental to achieving a cost- effective solution legalizing the access to genetic resources and traditional knowledge. The disclosure of the origin of the genetic material and associated traditional knowledge would avoid initiation of expensive judicial actions to revoke patents that used or incorporated illegally-acquired resources and associated knowledge. The proposed solution would not be more burdensome than any other regular requirement concerning the ordinary disclosure of an invention. National access legislation was not a sufficient and adequate means to prevent situations where the genetic material had been illegally accessed or used without authorization or incorporated, in an inventive process or into an invention, outside of the national jurisdiction.

212. The representative of India said that the cross-referencing in the three papers by the Secretariat was testimony to the fact that the subjects addressed were interrelated and that it would be incomplete to refer to any one of the three issues without referring to the other two. Commenting on the proposals made by a group of developing countries, including his own, on the relationship between the TRIPS Agreement and the CBD, and traditional knowledge and folklore, circulated in document IP/C/W/356, he said that the proposal included requirements on disclosure of the source of origin of genetic materials and the associated traditional knowledge, evidence of prior informed consent, and benefit-sharing in accordance with the national regime in the country of origin. He said that the co-sponsors of this proposal constituted around 45% of world's total population and thus reflected the immense importance laid by people who would like protection of their valuable resources and knowledge. He noted that similar proposals had been presented in earlier discussions, and commented upon, as reflected in the Secretariat's papers. He observed that from a reading of the papers it was clear that firstly, there had been no mention by any delegation that the problem of biopiracy did not exist. In fact the possibility of an individual ignoring legal requirements and obtaining samples of genetic material without entering into an access arrangement with the appropriate party, had been recognized. Secondly, there were no arguments made that the proposed solution to amend the TRIPS Agreement in order to incorporate the disclosure requirements would not solve the problem. Arguments had only been made that a system of voluntary contracts and criminal and/or civil remedies included in a country's laws, could tackle the problem, but these arguments had already been effectively replied to. The civil and criminal remedies provided under national laws were obviously not a deterrent to check illegal use in third countries. Several developing countries had provisions in their domestic legislation specifying conditions for access, benefit-sharing and requirements of proof of prior informed consent of the communities owning such resources and/or the relevant entities that serve them. In short, such a mandatory disclosure requirement would be complementary to the system of contracts and the civil and criminal remedies in national laws. Only mandatory disclosure requirements and national regimes for access and benefit-sharing, when put together, could ensure a reasonable level of legal predictability against misuse of genetic resources and traditional knowledge of indigenous communities in developing countries. IP/C/M/36/Add.1 Page 52

213. He said that previous responses to this proposal had made the following arguments: (i) that the proposed amendments were a legal and administrative nightmare and an unnecessary burden; (ii) that the amendments would not be consistent with the TRIPS Agreement and would conflict with Article 62.1, which provided for "reasonableness" of procedures and formalities for grant of patents, and with Article 27.1, which provided for non-discrimination in patent availability between fields of technology; and (iii) that suggestions of a stand alone multilateral system and/or other solutions for disclosing and sharing information on geographical origins could be discussed without affecting the TRIPS Agreement, even while suggesting that those could later be brought into the TRIPS Agreement if need be.

214. India's response to these arguments was that Article 29 of the TRIPS Agreement mandated certain requirements for disclosure but did not preclude Members from imposing any additional requirements for disclosure. Therefore, any additional procedural formalities stipulated for the grant of patents should be within the realm of reasonableness and in accordance with the provisions of Article 62.1. Furthermore, it had been recognized that there would be a few individuals who might access genetic resources and traditional knowledge in violation of domestic legislation. In such a case, assessment of the necessary evidence would be conducted as a matter of routine by the designated authorities and would therefore not lead to additional burdensome obligations. He was confident that no Member would oppose imposition of a little extra burden of disclosure where access to genetic resources and traditional knowledge violated national legislation. He suggested that concerns relating to additional burden on patent seekers needed to be viewed in their proper perspective. The proposal of developing countries stemmed from the fact that the burden on traditional or indigenous societies to seek annulment of wrong patents issued inadvertently was tremendous. He questioned the concern that was shown for the convenience of only a few patent seekers, who had not even cared to follow the laws of one country, and the lack of any concern for the legitimate rights of a large number of indigenous people. It was the balancing of a largely one-sided agreement that Members were seeking under the aegis of the Doha Development Agenda. In response to the points raised about addressing this issue elsewhere and only bringing it to the TRIPS Council later if need be, he said that the very fact that the existence of the problem was not disputed and no comments had been made that the proposed amendments on disclosure requirements would not solve the problem, was in itself convincing enough to conclude that the TRIPS Agreement was the most appropriate place to address the issue. In conclusion, he said that mandatory introduction of the requirements for disclosure of the source of genetic material and the associated traditional knowledge, and the evidence of prior informed consent and benefit-sharing in accordance with the laws of the country of origin, was the simplest solution that Members could propose to restore the rights of traditional communities in a legally meaningful manner. It was his view that Members should now begin engaging in finding appropriate modalities to give effect to the proposed solution.

215. The representative of Egypt welcomed and supported the paper presented by Venezuela and observed that many questions had been raised relating to the impact of intellectual property rights on biodiversity, access to genetic resources and the existence of and solution to a conflict between the CBD and the TRIPS Agreement. According to him, the provisions of the TRIPS Agreement were relevant to, and had implications for, the implementation and achievement of the CBD's objectives. In his view, there seemed to be no contradiction between the two instruments and neither were the two instruments drawn up in a way that intended a conflict. Instead, each one followed its path of interest and the results covered similar grounds. However, access to genetic resources under the TRIPS Agreement would be under the control of intellectual property right holders and subject to private ownership and, in that case, governments would have no means of regulating access or demanding a share of the benefits. Therefore, minor changes might be needed to make the two agreements mutually supportive and to ensure the development of a fair and equitable multilateral framework on access to biodiversity and benefit-sharing between those with the resources and those with the technology. Benefits could take the form of compensation, sharing of profits from the commercialization of the product derived from a genetic resource, or access to the supply of IP/C/M/36/Add.1 Page 53

technology. In addition, a sui generis system compatible with the TRIPS Agreement should take into account the objectives of other international treaties, especially those of the CBD.

216. On the subject of the protection of traditional knowledge and folklore, the representative of Egypt said that traditional knowledge was a common factor between genetic resources and folklore and that it was therefore difficult to treat these issues separately. He believed that the inter-linkage between genetic resources and folklore should guide the TRIPS Council's future work in treating this topic and promised to provide substantive comments on this matter in the next meeting.

217. The representative of Indonesia shared the concerns raised in the joint communication by a group of developing countries and supported that proposal (IP/C/W/356) on requirements for patent application relating to biological material or traditional knowledge. Indonesia was of the view that the CBD and the TRIPS Agreement addressed the subject of biological diversity and traditional knowledge in very different ways. The CBD, on one hand, placed emphasis on the conservation of biological diversity, sustainable use of its components, the fair and equitable sharing of benefits arising over use of genetic resources and the need to respect, preserve and maintain traditional knowledge. The TRIPS Agreement, on the other hand, emphasized the primacy of private rights over public rights but did not recognize prior informed consent and benefit-sharing on patents and other intellectual property rights using genetic resources and traditional knowledge. As a country rich in biodiversity and traditional knowledge, Indonesia had long been concerned with the difference that existed between the CBD and the TRIPS Agreement with regard to biological diversity and traditional knowledge. Indonesia had many experiences of the unauthorized use of genetic resources and traditional knowledge where patents were granted outside its territory without prior informed consent and had undoubtedly resulted in loss in economic terms and ownership to the local community and to the country. Indonesia was of the opinion that a bilateral approach to the protection of genetic resources and traditional knowledge and to benefit-sharing might not provide an adequate solution. Moreover, developing countries did not have the needed resources to monitor or follow up each and every patent outside the country. Therefore, Indonesia believed that more needed to be done, at the multilateral level, to ensure that agreements relating to biodiversity and traditional knowledge were mutually supportive and promoted the sustainable use of resources. In this regard, Indonesia supported the proposal to have additional conditions in the TRIPS Agreement on acquiring patent rights relating to biological material and traditional knowledge, such as disclosure of source and country of origin of biological resources and traditional knowledge used in the invention; evidence of prior informed consent; and evidence of an equitable benefit-sharing as stated in document IP/C/W/356. Furthermore, a multilateral solution would be more cost-effective in preventing biopiracy than the resort to the revocation of patents, which was time-consuming and expensive. According to Indonesia, the additional conditions would not be burdensome to patent applicants as suggested by some. Instead, the requirements would have a positive effect by ensuring a predictable environment for governments, investors, traditional communities and researchers. Indonesia encouraged the Secretariat to work closely with other related international organizations such as WIPO, the CBD and FAO secretariats on this issue. In conclusion, Indonesia drew Members' attention to the recommendations of the WIPO Asia–Pacific Regional symposium on intellectual property rights, traditional knowledge and related issues held in Jakarta, Indonesia in October 2001. Those recommendations emphasized, inter alia, the importance of access to and transfer of technologies that made use of genetic resources, including technologies protected by patents and other intellectual property rights.

218. The representative of Thailand said that traditional knowledge was a very important subject that Thailand could hardly ignore or avoid expressing its needs and interests. Thailand was one of the countries that had much valuable, traditional and ancestral cultural heritage and therefore had the need to preserve, respect and protect indigenous knowledge derived from generation to generation. Furthermore, Thailand appreciated the efforts and contributions of the group of developing countries in IP/C/W/356 on the relationship between the TRIPS Agreement and the CBD, and the protection of traditional knowledge. It was in Thailand's interest to amend the TRIPS Agreement in a way that IP/C/M/36/Add.1 Page 54

would strengthen the protection of traditional knowledge. He said that the proposed conditions on disclosure of the source, evidence of prior informed consent and evidence of fair and equitable benefit-sharing were aimed at ensuring that indigenous peoples and communities were neither exploited nor were their contributions forgotten by patent holders of new inventions, creations and innovations. Thailand also supported and shared the views expressed in a Communiqué of the seminar on the systems for the protection and commercialization of traditional knowledge held in New Delhi, India from 3 to 5 April 2002, as reflected in document WT/CTE/W/214. It had been recognized in the Communiqué that there was need to develop a sui generis system of protecting traditional knowledge and rewarding the knowledge-holders at the national and international levels. According to Thailand, commercialization of traditional knowledge based products and services, should, where appropriate, be promoted with the emphasis on equitable benefit-sharing with local and indigenous communities and proof of prior informed consent. The transfer, utilization and commercialization of traditional knowledge should take place through fair and equitable terms and conditions. The possible components for the international recognition of sui generis systems were also identified in paragraph 5 of that document and protection of traditional knowledge should be given a broad interpretation to cover products as well as services, since the definition of traditional knowledge and folklore went far beyond the scope of genetic resources that patent-owners might seek to protect under the patent regime. Thailand reserved its rights to engage in more discussion on other appropriate approaches in the context of negotiations under paragraphs 12 and 19 of the Doha Declaration.

219. The representative of Brazil said that the paper presented by Venezuela, on behalf of a group of developing countries including his own, raised important issues to be addressed in the context of developments after the Doha Ministerial Conference. The substance of the proposal in the document should not have come as a surprise to Members, given that a number of individual delegations had already presented this proposal to amend the TRIPS Agreement in order to incorporate some elements of the CBD. According to Brazil, the proposal had two main elements: one, to give the necessary political thrust to issues relating to biological resources and two, to recognize the negotiation mandate set forth in paragraphs 12 and 19 of the Doha Ministerial Declaration. He also noted other important developments outside the WTO, such as the outcome of the CBD decision VI/24 of the 6th Conference of Parties establishing the Bonn guidelines on access to genetic resources and fair and equitable sharing of the benefits arising out of their utilization. These guidelines stated, inter alia, that Contracting Parties should take appropriate legal, administrative or policy measures in regard to the use of genetic resources under their jurisdictions and support compliance with prior informed consent of the Contracting Party providing such resources on mutually agreed terms of access. They further stated that countries should also consider, inter alia, measures to encourage the disclosure of the country of origin of the genetic resources and traditional knowledge, innovations and practices of indigenous and local communities in the applications for intellectual property rights and consider measures aimed at preventing the use of genetic resources obtained without prior informed consent of the Contracting Party providing such resources. Members should therefore consolidate, in a substantive way, proposals in the context of the Doha negotiations and the above-mentioned developments. Brazil said that the proposal was aimed at achieving a recommendation by the TRIPS Council to the TNC on a decision to amend the TRIPS Agreement provisions in order to allow Members to require, as a condition of acquiring patent rights, that an applicant for a patent relating to biological materials or traditional knowledge, disclose the source and country of origin of the biological resources and traditional knowledge used in the invention, provide evidence of prior informed consent through approval of authorities under the relevant national regimes and provide evidence of fair and equitable benefit-sharing under the national regimes of the countries providing the biological resources and traditional knowledge. He said that failure to provide a solution to ensure mutually supportive relationship between the TRIPS Agreement and the CBD might be detrimental to the objectives of both instruments. Supporting the statement of the Indian delegation, he said that the disclosure requirement should not be taken in isolation from other necessary measures aimed at ensuring adequate implementation of the CBD, such as legislation on access to genetic resources and establishment of bilateral contracts. IP/C/M/36/Add.1 Page 55

220. He also referred to a document, circulated by the United States at the last meeting of the TRIPS Council, relating to bilateral contracts on access to genetic resources and said that such contracts would constitute a means of implementing national and international legislation on access to genetic resources. However, it was clear to many Members that bilateral contracts alone were not a sufficient way of providing adequate benefit-sharing or prior informed consent. Moreover, the issue of bilateral contracts would be dealt with in a practical and more efficient way in the WIPO's IGC and he encouraged the US delegation to consider raising this issue there. The synergy between discussions in WIPO, the WTO and the CBD would help countries in implementing such measures.

221. With respect to the proposal on the relationship between the TRIPS Agreement and the CBD contained in a joint paper co-sponsored by Brazil, he said that it was based on the mandate and sought to bring some balance and to avoid potential conflicts that could arise from inadequate implementation of the TRIPS Agreement. In Brazil's view, without the addition of the proposed elements, the likelihood of the TRIPS Agreement resulting in the sanctioning of acts of biopiracy was high and that there could be evidence that this was actually happening. From a systemic point of view these were important elements to be taken into consideration, in the context of the Doha Development Agenda, as part of the outstanding implementation issues and the multilateral round of trade negotiations established in the Doha Ministerial Declaration. He said that the joint communication, in its paragraphs 15 and 16, addressed the issue of traditional knowledge from a defensive point of view. Although it would be important to include safeguards in patenting procedures to prevent the misuse of traditional knowledge from unauthorized sources, defensive protection was still insufficient to provide adequate protection for traditional knowledge. Therefore, it might be necessary for the TRIPS Council to give further consideration to proposals, in the future, on a possible international framework to provide positive protection as addressed in a seminar held by the Government of India and UNCTAD on the protection and commercialization of traditional knowledge at New Delhi on 3-5 April 2002. The input from that seminar would, in his view, be extremely helpful in the elaboration of the above proposal.

222. The representative of Australia said that his delegation was conscious of the need to address the concerns relating to biopiracy expressed by many delegations and had responded comprehensively to them in its paper submitted to the TRIPS Council in 2001 and circulated as IP/C/W/310. In that paper Australia had pointed out that the problem of biopiracy should first be addressed through the implementation of effective systems at the national level for regulating access to genetic resources and benefit-sharing according to the CBD. He said that Australia, as an active participant under both treaties, did not consider that there was a conflict between the CBD and the TRIPS Agreement and that this position was based on Australia's status as a mega bio-diverse country, like many other participants in the debate, with a commitment to supporting an emerging biotechnology sector. With respect to national implementation, the Secretariat's comprehensive paper on the relationship between the TRIPS Agreement and the CBD (JOB(02)/58) indicated that only four Members had made submissions on their national legislation, practices and experiences in the area of genetic resources and benefit-sharing. That was not surprising as few Members had put in place CBD-implementing systems. Therefore, there was very little practical administrative experience to draw upon in assessing their operational effectiveness. However, he was pleased with the information shared by the representative of Peru about her country's system and explained that the Australian draft regulations, as summarized in IP/C/W/310, also sought to ensure that the community shared in the benefits derived from the discovery of commercial uses of genetic material of Australian native plants, animals and micro-organisms and to provide certainty to industry and to researchers. A key element was the requirement for agreements between the person or company seeking access to biological resources and the provider of the resources, which Australia considered to be consistent with the CBD Bonn guidelines. He therefore urged Members to make submissions on national experiences as the Council sought practical solutions. With respect to the WIPO's IGC meeting held in June 2002, he pointed out two aspects which were relevant to the discussions in the TRIPS Council. Firstly, the IGC had agreed to establish a database of contractual practices and intellectual property clauses related to genetic resources. The contributions of government research institutes, community groups, corporations and IP/C/M/36/Add.1 Page 56

other key stakeholders would, in his view, be useful in assessing the need for and the nature of any changes to national and international regimes. Secondly, members of the IGC agreed to contribute to a detailed programme work to assess the interrelationship between the TRIPS Agreement and the CBD. The IGC would, among other items, analyse the impact of intellectual property regimes on access to and use of genetic resources and the efficacy of disclosures on country of origin and prior informed consent in monitoring compliance with access provisions. Australia believed that any attempt to amend the international intellectual property regime to enforce compliance with CBD obligations based on the preliminary information, which was still emerging, would be unusual in international practice and premature. Moreover, there was insufficient compelling evidence that national systems could not work effectively to combat biopiracy and, even if there was such evidence, other options, short of amending the conditions of patentability, could be used to address the problem. Such options could include measures to enhance information-sharing between patent offices or disclosure of the source of genetic material in patent applications. Australia appreciated the contributions contained in document IP/C/W/356 and looked forward to continued discussion in the TRIPS Council in accordance with the Doha mandate. In Australia's view, the substantial contributions from Members would enhance mutual understanding of the problems and would allow Members to consider possible solutions.

223. The representative of the European Communities said that the joint communication by a group of developing countries was timely and valuable to the debate on the relationship between the TRIPS Agreement and CBD. It was an important contribution to several items which appeared to be high on the Doha Development Agenda and would allow the TRIPS Council to have a focused debate on the issue of disclosure of origin which lay at the heart of the relationship between the TRIPS Agreement and the CBD. The intervention by the representative of WIPO was also valuable although the EC delegation, like others, regretted that the TRIPS Council was not able to benefit from the expertise of the CBD Secretariat. He called upon the Chairman to try and convince the delegation which still believed that it was not appropriate to have representation from the CBD Secretariat.

224. He said that proposals relating to the relationship between the TRIPS Agreement and the CBD, and to the protection of traditional knowledge, had been made in the last few years in the context of the review of the provisions of Article 27.3(b). He also said that the Secretariat's paper JOB(02)/58 contained comprehensive overviews which would enable the membership to make progress on that subject-matter. He recalled that the European Communities had shown its openness to discuss the proposal on disclosure of origin, especially with the view to creating more transparency and to allowing Members providing access to their genetic resources to obtain information on the commercial use of inventions based on genetic resources or traditional knowledge. That had been the message of his delegation at WIPO's IGC meeting. He indicated that his delegation would comment in detail on the proposal from developing countries at the next meeting but raised one question based on the reference to paragraphs 12 and 19 of the Doha Ministerial Declaration in that paper. He said that it would be useful if the co-sponsors could identify which item or items of outstanding implementation issues they would like to invoke for these discussions, as had been referenced in paragraph 12 of their paper. In conclusion, he informed the Members that the EC and their members States were in the course of preparing a communication which would be submitted to the TRIPS Council before the meeting in September 2002.

225. The representative of Japan questioned whether the proposed requirements for disclosure of origin of the genetic resources and traditional knowledge in the patent applications relating to biotechnology and evidence of prior informed consent could be construed as being within the ambit of the disclosure requirements stipulated in Article 29 of the TRIPS Agreement. In his view, the disclosure requirements in the TRIPS Agreement were sufficient, clear and complete for an invention to be carried out and therefore the proposed requirements would be additional requirements. He said that Japan could not, at present, support the addition of new obligations by inserting elements such as the proposed disclosure requirements into the TRIPS Agreement. IP/C/M/36/Add.1 Page 57

226. With respect to the protection of traditional knowledge and folklore, he said that substantial discussions had taken place at the IGC in WIPO, particularly from the intellectual property experts' viewpoint. He urged the TRIPS Council to take into account the progress and results there since the concepts of traditional knowledge and folklore protection seemed quite new to the field of intellectual property system. He also urged Members to take into account the consistency of such protection with the existing intellectual property protection systems in order to avoid unnecessary conflict between new and already existing systems. When considering the protection of traditional knowledge and folklore, there were many items requiring in-depth discussions such as the definition of subject-matter, claims on who is the right holder, relationship between passive and active protection and so on. It seemed more reasonable to clarify these issues before discussing the framework for protecting traditional knowledge and folklore. Moreover, there were clear requirements for the granting intellectual property rights, such as novelty, inventive step, and industrial applicability, but requirements for the protection of traditional knowledge and folklore were not clear. Therefore, he believed that these discussions should take into account the expertise of WIPO's IGC.

227. The representative of China supported efforts aimed at bringing the relationship between the TRIPS Agreement and the CBD, and the protection of traditional knowledge and folklore into WTO's multilateral trade negotiations. She said that paragraphs 12 and 19 of the Doha Ministerial Declaration mandated the TRIPS Council to work towards the objective of negotiation and recommend concrete proposals for the multilateral negotiation in its report to the TNC at the end of 2002. China viewed the proposal to amend the TRIPS Agreement to be important from the perspective of sustainable development of mankind and that it could be achieved by interpreting and implementing the TRIPS Agreement and the CBD in a mutually supportive manner. The two legal instruments had many common features of which transfer of technology from developed countries to developing and least-developing countries was one. However, there were differences that lay in the relevant provisions. For example, the CBD, on one hand, recognized national sovereignty over domestic natural resources, including biological ones, the principles of prior informed consent, equitable sharing of benefits arising out of the utilization of genetic resources and the protection of traditional knowledge, including knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity. The TRIPS Agreement, on the other hand, recognized intellectual property rights as exclusively private rights subject to certain exceptions and limitations provided therein. Nonetheless, efforts had been made in the CBD and in the Doha Declaration to set out guidelines to achieve the common goals of the two international legal instruments in a mutually supportive manner. For instance, Article 16 (5) of the CBD recognized that patents and other intellectual property rights may have an influence on the implementation of that Convention, and obliged Contracting Parties to cooperate in that regard, subject to national legislation and international law, in order to ensure that such rights were supportive of and did not run counter to its objectives. She pointed out that paragraph 2 of the Doha Declaration stated that "we seek to place the needs and interests of developing Members at the heart of the work programme adopted in this Declaration", while paragraph 6 reaffirmed Members' "commitment to the objective of sustainable development".

228. She said that the developing country proposal, outlined in document IP/C/W/356, sought to incorporate the basic rules recognized by the CBD into the TRIPS Agreement, such as national sovereignty, prior informed consent and equitable share of benefits and that this was based on the premise that sustainable development underlay both instruments. Therefore, she believed that an amendment to the TRIPS Agreement was necessary. China supported the proposals on conditions for patent applications based on biological materials or traditional knowledge and on the development of a multilateral database system on biological resources and traditional knowledge, which was an effective checking and approval mechanism that would allow the competent national authorities to keep track, at global level, of patent applications related to genetic resources and traditional knowledge. Further, China proposed that national laws and regulations to make retroactive the compensation system for those who did not follow the disclosure requirement should be allowed. IP/C/M/36/Add.1 Page 58

229. The representative of Canada agreed fully that the TRIPS Agreement and the CBD should be implemented in ways that were mutually supportive. The CBD, on one hand, sought to promote the conservation of biological resources, the sustainable use of its components and the sharing of benefits arising from the use of genetic resources. The TRIPS Agreement, on the other hand, sought to promote technological innovation and the dissemination of technology. However, there was nothing in any of these objectives that should bring them inherently into conflict. Canada supported fully the work of the TRIPS Council in examining the relationship between the TRIPS Agreement and the CBD, as part of the ongoing review of the provisions of Article 71 and the instructions under paragraph 19 of the Doha Declaration to continue discussions and not to undertake negotiations, as had been suggested by others. She noted that while the TRIPS Council had a role to play in examining the relationship between these two agreements, these issues and related definitions were currently being examined by WIPO. Canada believed that WIPO's work on genetic resources, as pointed out by Australia, was very important as it would help shed light and allow WTO Members to better understand the complex relationship between access to genetic resources, benefit-sharing and intellectual property rights. In addition, WIPO's decision at the third session of the IGC to create a database on sample contractual clauses and terms related to access and benefit-sharing represented a concrete step forward towards the goal of ensuring the attainment of the objectives of the CBD. In her view, the proposed database would allow donors and recipients of genetic resources to address the issue of benefit-sharing and claims for intellectual property rights in the same contractual agreement. She said that Canada supported, and would continue to support, the work of WIPO.

230. With respect to commitments under various international agreements, she believed that it was the responsibility of each party to ensure that they respected their international obligations when implementing them at the national level. Canada, along with many countries in the TRIPS Council, was bound by obligations in both the CBD and the TRIPS Agreement and would work with others in the CBD to ensure that implementation of decisions required as a result of CBD commitments and respect other international agreements, including the TRIPS Agreement. That was Canada's overall goal in the negotiations of the recently concluded FAO treaty on plant genetic resources. Canada was among the first to announce, at the World Food Summit in early June 2002, its ratification of this treaty, which contains access and benefit-sharing provisions dealing with intellectual property issues. She encouraged other Members of the TRIPS Council and the FAO to follow Canada's leadership as such activities, whether in WIPO's Intergovernmental Committee or in various working groups of the CBD, or in FAO, as it demonstrated that complicated issues could be resolved to everyone's satisfaction within the parameters of existing agreements. She said that Canada looked forward to continued discussions in all these institutions and to develop the necessary tools that would allow both donors and recipients of genetic resources to meet their objectives. Further, she agreed with Brazil that there had been some positive developments recently which would enable the TRIPS Council to move forward along the path of resolving one of the complex issues that fell under the general umbrella of traditional knowledge. Lastly, she shared the view expressed by Thailand that issues related to the CBD were only part of the overall traditional knowledge issue and said that Canada too had a number of issues of interest to indigenous peoples.

231. The representative of the United States recalled that his delegation had submitted, in 2001 and March 2002, detailed papers analysing the relationship between TRIPS and the CBD and outlining how a contract system would be both efficient and effective for granting access to genetic resources and for ensuring benefit-sharing, including through the transfer of technology. The US delegation supported Brazil's suggestion to ensure that all the information on contractual arrangements was made available during the discussions at WIPO in the IGC and had been pleased to listen to Peru's presentation and to learn that many Members were, in fact, implementing domestic regimes to provide such protection. He supported comments made by Australia that it was only after clearly determining the failure of domestic systems to provide the necessary protection and access to benefit-sharing, that Members needed to examine whether other measures were, in fact, necessary. With respect to the paper co-sponsored by Brazil, he said the last paragraph stated clearly that the proposal would only provide defensive protection for traditional communities from misappropriation of their knowledge, IP/C/M/36/Add.1 Page 59

while positive protection would have to be worked out elsewhere. In the view of his delegation, the surest and quickest way to resolve the concerns of Members brought before the TRIPS Council was for delegations to focus their efforts in working out positive systems for providing the type of protection and access to benefit-sharing, which was also an important aspect of WIPO's IGC. With respect to the proposal in the joint paper from developing countries, he said that it could only be of limited utility if there were domestic systems in place that actually required that. Finally, his delegation did not find, in its examination of paragraphs 12 and 19 of the Doha Declaration, any mandate to pursue such negotiations involving the TRIPS Agreement and certainly not to amend the Agreement to change requirements for patent applicants. Lastly, the United States was anxious to further explore, through the WIPO forum and discussions in the TRIPS Council, how contractual means could be used to address Members' concerns.

232. The representative of Korea appreciated the joint communication by Brazil and others and believed that the TRIPS Agreement and the CBD should be mutually supportive and implemented in a way that would to enhance sustainable use of genetic resources and traditional knowledge. He also noted from the information note submitted by the CBD Secretariat to the TRIPS Council that the 6th Conference of Parties to the CBD had invited WIPO to prepare a technical study on methods, consistent with obligations in treaties administered by the WIPO, on disclosure requirements in patent applications of, inter alia, the country origin and evidence of prior informed consent. In Korea's view, the outcome of the technical study would be a useful input to the debate in the TRIPS Council and Korea looked forward to the availability of the results of that study.

233. The representative of Kenya associated his country with the contents of document IP/C/W/356 and the statements expressed in support. He said that although Kenya did not appear as a co-sponsor in the document, it would like to be added as one of the co-sponsors. He reiterated Kenya's position on the need for the TRIPS Council to collaborate closely with the WIPO and the CBD Secretariats on matters relating to protection of traditional knowledge and folklore, access to genetic resources, farmer's rights and other related topics. Kenya was pleased with the progress made in collaborative efforts between the TRIPS Council and WIPO. However, his delegation was still waiting to see progress in the collaboration with the CBD Secretariat to ensure successful conclusion of the work of the TRIPS Council. Kenya joined the EC delegation in advocating that the Member opposed to this collaboration should reconsider its position. In Kenya's view, harmonizing the provisions of the CBD with those of Article 27.3(b) of TRIPS Agreement to recognize sovereignty and access to genetic resources was of great importance. There was also a need to harmonize the provisions of the FAO treaty on plant genetic resources with respect to farmers' rights. Furthermore, there was need to adequately protect traditional knowledge and folklore, to use the language of the African Ministers of trade as expressed at the 4th Ordinary Session of the OAU/AEC Conference of Ministers of Trade in the Committee on Trade, Customs and Immigration, held at Abuja, Nigeria, from 19-23 September 2001. Kenya would appreciate an amendment of the TRIPS Agreement to reflect the needs of WTO Members, in particular those which impact on social and economic development, and that a decision be reached in this regard as soon as possible.

234. The Council took note of the statements made and agreed to revert to the matter at its next meeting.

H. REVIEW OF THE IMPLEMENTATION OF THE AGREEMENT UNDER ARTICLE 71.1

235. The Chairman recalled that a substantial number of suggestions for topics to be considered under Article 71.1 review had been made prior to the Doha Ministerial Conference, but some of them overlapped with other items on the Council's post-Doha agenda. In considering how to best organize its work, the Council had invited Members to submit ideas for issues to be taken up under this agenda item by the present meeting, without prejudice to the right of Members to submit ideas at a later stage. To date, no suggestions had been tabled by any Members. IP/C/M/36/Add.1 Page 60

236. The Council agreed to revert to the matter at its next meeting.

I. IMPLEMENTATION OF ARTICLE 66.2

237. The Chairman recalled that at Doha, the Ministerial Conference had adopted a decision on Implementation-Related Issues and Concerns (WT/MIN(01)/17). Paragraph 11.2 of the Decision stated: "Reaffirming that the provisions of Article 66.2 of the TRIPS Agreement are mandatory, it is agreed that the TRIPS Council shall put in place a mechanism for ensuring the monitoring and full implementation of the obligations in question. To this end, developed country Members shall submit prior to the end of 2002 detailed reports on the functioning in practice of the incentives provided to their enterprises for the transfer of technology in pursuance of their commitments under Article 66.2. These submissions shall be subject to a review in the TRIPS Council and information shall be updated by Members annually."

238. The Doha Decision had set out a clear time frame for the submission of reports by developed country Members, namely by the end of 2002. At the Council's meeting in March, the previous Chairman had noted that since these reports were clearly a central component of the monitoring mechanism that the Council was asked to put in place, it would be logical for the Council to have decided on this mechanism prior to the submission of the reports. He had also raised the question of whether delegations would be in a position to submit proposals regarding this matter by the June meeting. The Chairman noted that the Council had just received a communication from Uganda on behalf of least-developed countries on a "Mechanism for Ensuring the Monitoring and Full Implementation of the Obligations under Article 66.2 of the TRIPS Agreement in accordance with Paragraph 11.2 of the DOHA Decision on Implementation-Related Issues and Concerns" (subsequently circulated as document IP/C/W/357).

239. The representative of Zambia, speaking on behalf of least-developed countries, said that least- developed countries as a group had made an attempt, as the potential beneficiaries of the provisions of Article 66.2, to suggest a way forward on the matter, which they had offered to the Council for consideration as a starting point. Highlighting the main points of the communication from least- developed countries, he explained that its background section gave information about where the LDC group was coming from. The second part of the communication contained considerations for establishing a monitoring mechanism under Article 66.2. It consisted of a list of about six elements which in the group's view could constitute the monitoring mechanism.

240. The representative of Senegal associated himself with the statement made by Zambia on behalf of LDCs. He added that the Council had not yet found a solution to the issue of implementation of Article 66.2 that would be satisfactory to least-developed countries. He noted that Ministers at Doha had agreed not only on the Decision on the Implementation-Related Issues and Concerns but also on a Declaration on the TRIPS Agreement and Public Health. These texts recognized the crucial importance of transfer of technology for the creation of a technological base for access to drugs and public health. Paragraphs 6 and 7 of this Declaration highlighted this particular point. This should serve as an additional incentive to complete the work that had been begun by developed countries in the interest of developing countries in terms of technology transfer. He wished to find a satisfactory solution very soon, given that the mandate had been extended and it covered public health and other areas.

241. The representative of the European Communities said that transfer of technology was an important issue and referred to a communication from the European Communities submitted to the Working Group on Trade and Transfer of Technology (WGTTT) circulated on 10 June 2002 as document WT/WGTTT/1. The Council should bear in mind the activities which took place in the WGTTT because that working group might also touch on intellectual property. Quoting from this communication, he said that "[w]here the technology in question is subject to intellectual property rights, the transfer of this technology implies transfer of the legal rights to the technology in question IP/C/M/36/Add.1 Page 61

by selling patent rights or licensing the right to make use of the right. Know-how and skills linked to the licensed technology will normally become available through the learning process of the licensee country, and might be facilitated where the licensing was linked to investment […]. The decision to license in a given country is that of the right-holder and forms part of the right holder's business strategy or, in the event of a non-profit organization holding the right, its objectives. The existence and enforcement of an IPR system in the recipient country is often a prerequisite and the confidence of the right-owner in that system is a key element. It should be noted that most existing technologies are not patented anymore and, in principle, can be exploited free of charge. In such circumstances, the core point is the access to technological information and the identification of the most appropriate technologies to each country. Other channels, such as investment or trade are relevant."5

242. He said that he would comment in more detail the communication from least-developed countries at a later stage. At this point he drew attention to two matters. Paragraph 5 of that document contained a list of issues that "the type of mechanism that is established must ensure", followed by six or seven points. In relation to point (a), which referred to what enterprises or institutions could do with regard to transfer of technology, he said that the Council should bear in mind that often the confidential character of what was being transferred played an important role. Secondly, subparagraph (f) read that, "there are measures to take against the developed country Members if they fail to comply with the reporting mechanism and if such a failure could amount to a breach of WTO obligations". He expressed his concern about such "measures to take against" certain countries in this particular context.

243. The representative of the United States, associating his delegation with the comments made by the European Communities, noted that he had an opportunity to only briefly review the paper just introduced by Zambia. Looking at various proposals to establish a monitoring system in the TRIPS Council, he had been puzzled even before Doha just what exactly the failing of the monitoring system already in place was. As many Members were aware, the US delegation had gone to great lengths at previous meetings to provide detailed information on the incentives it provided to its institutions to contribute to technology transfer. It had not received any questions or concerns or, frankly, comments on the information it had provided. It intended, regardless of how the Council proceeded to consider the various proposals that had been tabled, to continue to provide this information to the Council and to welcome reactions to it. He hoped that other developed country Members would do likewise. His delegation would benefit from a clearer understanding of why what it had provided was inadequate or why the Council's review sessions were inadequate. He wished to have a better understanding of the suggestion that "measures might be taken against" Members for failure to provide this information if they were in fact providing it.

244. Responding to the United States, the representative of Zambia said that it was true that the Council had received notifications regarding the implementation of Article 66.2. In several meetings in the Council, he had reacted to these notifications, and raised several questions regarding the notifications, questioning their validity in relation to the obligations envisaged under Article 66.2. A more important point was that these past discussions had been superseded by the paragraph 11.2 of the Decision on Implementation-Related Issues and Concerns in which Ministers had requested that the Council to establish a mechanism for ensuring the monitoring of this provision. The communication by LDCs was intended to be a proactive step towards meeting the instructions by the Ministers.

245. Reacting to the European Communities' comments on sanctions, he noted that the LDC group had made minor amendments to the proposal that had been made available at the meeting as an advance copy and that the revised paper was being made available to the Council.6 Point 4 of paragraph 4 of the revised communication read as follows: "What measures should be taken in case

5 Paragraphs 18-20 of document WT/WGTTT/1. 6 Subsequently circulated as document IP/C/W/357. IP/C/M/36/Add.1 Page 62 of failure to comply with the reporting mechanism? In this regard, it would be desirable if such failure could amount to a breach of WTO obligations." He noted that this superseded the part that was quoted by the European Communities and the United States.

246. The representative of Senegal agreed with the European Communities that transfer of technology must be accompanied by respect for intellectual property rights, but IPRs should, on the other hand, not be allowed to hinder transfer of technology. The Council could consider requesting the Secretariat to prepare, in cooperation with WIPO, an inventory relating to paragraph 6 of technologies that had fallen into the public domain. This would be a way to move forward with the mandate.

247. The representative of Brazil, expressing his support to Zambia and least-developed countries, said that he would be extremely concerned for systemic reasons if the mandate at hand was not adequately fulfilled.

248. The representative of Zambia said that the Council's task was to embark on establishing a mechanism. The LDCs had taken a step to this effect. Reporting on the implementation of Article 66.2 in accordance with the Doha Decision was actually an obligation not for LDCs but for their developed trading partners. He said that the comments received on the LDC communication did not relate to the question of whether developed countries had embarked or intended to embark on the implementation of the Doha mandate, but, instead, were going back to where the Council was before Doha.

249. The Chairman recalled that the mandate provided for the submission of reports by the end of this year. He suggested that he hold consultations on the matter prior to the Council's next meeting with a view to finding a solution that would be satisfactory to all Members concerned.

250. The Council took note of the comments made and agreed to proceed as suggested by the Chair.

J. NON-VIOLATION AND SITUATION COMPLAINTS

251. The Chairman recalled that at Doha, the Ministerial Conference had adopted a Decision on Implementation-Related Issues and Concerns (document WT/MIN(01)/17). As requested by the Council at its last meeting, the Secretariat had circulated in document IP/C/W/349 a summary note of the points raised in the substantive discussion of this agenda item so far. He had also circulated an annotated agenda in document Job(02)/66 raising a number of questions that Members might wish to address.

252. The representative of Canada thanked the Secretariat for producing document IP/C/W/349 summarizing the points raised in the discussions on issues surrounding non-violation complaints under the TRIPS Agreement. Based on previous comments by all Members, the summary note proved an organized and useful framework for the Council's ongoing examination of the issue. The Doha Ministerial Conference had directed Members of the TRIPS Council to examine and to make recommendations on the scope and modalities for these types of complaints under the dispute settlement mechanism. In that regard, she believed that continued work under the general headings that had been referred to before such as the character of non-violation, the benefits of TRIPS, the measures challenged, the legal thresholds and the remedies available continued to be a good way to move forward. She said that she would refer more substantially to the rest of her delegation's intervention in the September meeting.

253. The representative of Malaysia noted that the issue was one which was mandated by the Ministers in Doha. She looked forward to the Canadian intervention at the next meeting and her delegation hoped to also make comments by that date. IP/C/M/36/Add.1 Page 63

254. The Council took note of the statements made and agreed to revert to it at its next meeting.

K. ELECTRONIC COMMERCE

255. The Chairman recalled that the Secretariat had been requested at the TRIPS Council's March meeting to update its factual background note on intellectual property and electronic commerce as circulated in document IP/C/W/128 in February 1999. He asked the Secretariat to inform the Council on the status of the requested document.

256. A representative of the Secretariat said he regretted that because of the heavy workload over the last months and because of being below capacity in terms of staffing the Secretariat had not been able to update this paper in time.

L. OTHER OUTSTANDING IMPLEMENTATION ISSUES (TIRETS 93 AND 94 AND A PROPOSAL BY LDCS ON THEIR TRANSITION PERIOD)

257. The Chairman pointed out that the Council had covered most of the outstanding implementation issues under the previous agenda items and recalled that the remaining outstanding implementation issues referred to in paragraph 13 of the Doha Decision on Implementation-Related Issues and Concerns were the following:

- Tiret 93: The transitional period for developing countries provided for in Article 65.2 shall be extended.

- Proposal by Least-Developed Countries, 22 October 2001: The General Council agrees that the transition period for LDCs shall be extended so long as they retain the status of an LDC.

- Tiret 94: Articles 7 and 8 of the TRIPS Agreement to be operationalized by providing for transfer of technology on fair and mutually advantageous terms.

258. The representative of Cuba recalled that her delegation had stated at the Council's previous meeting that it was going to make a contribution on this matter at the present meeting. She said that her delegation continued to pay attention to tirets 93 and 94, and that transition periods for developing countries had been insufficient to meet the obligations relating to implementation. Her delegation was looking into the possibility of submitting a contribution to the Committee on Trade and Development, and might also provide further contributions to the TRIPS Council.

259. The representative of Brazil reserved the right of his delegation to revert back to these issues, particularly tiret 94, in future Council meetings.

260. The representative of Senegal, referring to the tirets regarding the extension of the transition periods for developing and least-developed countries, said that he wished to achieve through this exercise a new understanding of transitional periods. In his view, transition periods should be used not only to implement the legal provisions of the TRIPS Agreement, but, above all, to build capacity in order to apply these texts. The Council should find means to ensure that transition periods were not set arbitrarily, but were set on the basis of reliable criteria so that they could be used by developing and least-developed countries to build capacity so that they would not need transitional periods in the future.

261. The Chairman suggested that the Council take note of the statements made and agree to revert to this item at its next meeting. He also noted that it was important that the Council look not only at the substance of this item during its next meeting, but also consider how it should report to the TNC by the end of 2002. IP/C/M/36/Add.1 Page 64

262. The Council so agreed.

M. REVIEW OF THE APPLICATION OF THE PROVISIONS OF THE SECTION ON GEOGRAPHICAL INDICATIONS UNDER ARTICLE 24.2

263. The Chairman recalled that, at its last meeting, the Council had discussed how to organize the continuation of the review of the application of the provision of the Section on geographical indications under Article 24.2 of the TRIPS Agreement. The Council had urged Members that had not yet provided responses to the checklist of questions which was contained in document IP/C/13/Add.1 to do so before the present meeting. The Secretariat had issued airgram WTO/AIR/1756, dated 26 March 2002, which had reminded Council Members to provide this information. Since that meeting further responses had been received from Poland. The responses had been circulated in document IP/C/W/117/Add.23. The Council had now received responses to the checklist from 40 Members. Those responses were summarized in a Secretariat note in document IP/C/W/253. At the Council's meeting in March, some Members had indicated that they might make presentations on their responses at the present meeting. Furthermore, at the Council's informal meeting on 17 May, Australia had informed the Council of its intention to ask the Secretariat to carry out a survey compiling available information as to how Members had implemented additional protection of geographical indications for wines and spirits.

264. The representative of Australia said that, considering the length of the meeting to that point and the number of remaining agenda items, he would not give the presentation he had intended to give on how Australia had implemented the provisions of the TRIPS Agreement on geographical indications. He had hoped it would have helped all Members understand how different Members were implementing their commitments. The principle of territoriality was an important one when it came to geographical indications and also how each individual Member implemented its obligations. He recalled that the United States had noted earlier in the meeting that the European Communities had 576 names that they protected within their territory. Australia had a register which he believed contained 97 Australian geographical indications but 4,500 European indications.

265. The representative of Bulgaria referred to the statement by Australia that its industry was not content with the protection of their wines abroad. He wondered whether Australia was planning to abolish that register if it was useless and if the administrative burden resulting from it was too heavy.

266. The representative of Australia responded that Australia would not abolish the existing system due to its treaty obligations. Its administration was a burden because Australia had had to pass legislation in order to do it, but if Members got the sort of register proposed by some, it would become triply burdensome.

267. The representative of Canada said that although she came prepared to discuss Canada's protection of geographical indications under Article 22, she would revert to the issue at the Council's meeting in September.

268. The representative of the European Communities said that he was disappointed not to hear about Australia's GI legislation. His delegation had prepared some questions to Australia,7 that related to the questions and answers which had been provided in document IP/C/W/117/Add.19 of 9 July 1999. While not reading out the entire list of these questions, he nevertheless wished to give a flavour of them.

269. One of the questions was on the Australian Wine and Brandy Corporation Act of 1980 and some auxiliary acts. This Act stated in its Article 40 that a person must not knowingly sell, export or import wine with a misleading description and presentation. Article 40F(3) indicated that the

7 Subsequently circulated in document JOB(02)/97. IP/C/M/36/Add.1 Page 65 description and presentation of wine was misleading if two conditions were fulfilled: first, it included a translation of a registered geographical indication, of a registered traditional expression or of a registered ancillary protected expression; and, second, that the inclusion of the translation was likely to mislead consumers to the country, region or locality in which the wine originated. He noted that Article 23.1 of the TRIPS Agreement forbid the use of geographical indications for wines even where the geographical indications were used in translation regardless of whether there was consumer deception. That was the greatest difference between Article 22.2 and Article 22.4 and the protection of Article 23.1 of the TRIPS Agreement. The latter forbid certain conduct such as the use of a geographical indication in translated form regardless of whether the consumer was misled. This was also confirmed by the United States Patent and Trademark Office which stated on its website that "in other words, for wines and spirits, even if the public would not be deceived by use of a particular GI, a GI may not be used if the wines or spirits did not originate in the place indicated by the GI". However, he said that Article 40F(3) of the Act forbade the use of translations of geographical indications for wines only if they misled consumers. He noted the use of the word "and" between the two subparagraphs (a) and (b) of that provision. Could Australia explain how that extra requirement was compatible with Article 23.1 of the TRIPS Agreement, which appeared to establish the opposite rule? How had the provision been interpreted by Australian courts? How had the provision been interpreted by administrative authorities in Australia? Could Australia provide specific examples of the application of the provision?

270. Article 40E of the same Act provided that a person must not knowingly sell, export or import wine with a misleading description and presentation. Article 40F(2) indicated that "the description and presentation of wine was misleading if, (a) it included a registered geographical indication, a registered traditional expression or a registered and protected expression; and (b) the indication or expression was used in such a way in the description and presentation as to be likely to mislead as to the country, region or locality in which the wine originated". Article 23.1 of the TRIPS Agreement forbid the use of geographical indications for wines and vines not originating in the place indicated by the geographical indication in question, even where the true origin of the goods was indicated irrespective whether there was consumer deception. That was the greatest difference between Article 22.2 and Article 22.4 and the protection of Article 23.1 of the TRIPS Agreement that forbid certain conduct regardless of whether the consumer was misled. More importantly, indicating the true origin of the product was a typical manner to escape the test of consumer deception. While Article 23.1 of the TRIPS Agreement overtly forbade the use of a geographical indication in conjunction with the true origin of the product irrespective of consumer deception, Article 40F(2) permitted the use of geographical indications for wine if they did not mislead the consumer. He noted the use of the word "and" between subparagraphs (a) and (b). Could Australia explain how that extra requirement was compatible with Article 23.1 of the TRIPS Agreement, which appeared to establish the opposite rule? How had that provision been interpreted by the Australian courts and by the administrative authorities in Australia? Could Australia provide some examples of the application of the provision?

271. Concluding, he said that his delegation looked forward to receiving comprehensive responses to its questions by the next meeting.

272. The representative of Bulgaria said that he was not satisfied by Australia's response to his question. He could not see how treaty obligations could impose the maintenance of a register, though a treaty could give some incentives to do it. He requested for a more comprehensive response to his question at the September meeting.

273. The representative of Australia said that his delegation would be delighted to answer the questions posed by the European Communities. If all Members came prepared to discuss the implementation of obligations under the TRIPS Agreement, it would provide the Council with a better basis on which to lead to the next discussion about possible extension or about the register. It was precisely the kind of debate his delegation had hoped to spark over the last couple of years but some IP/C/M/36/Add.1 Page 66

Members had been refusing to indulge in the discussion. He said he would give a response to Bulgaria both privately and at the next meeting and that he would respond to the questions from the European Commission. He believed that it was an issue that needed more time allocated to it during the Council's meeting.

274. The Council took note of the statements made and agreed to revert to the matter at its next meeting.

N. TECHNICAL COOPERATION AND CAPACITY-BUILDING

Annual Updates on Technical Cooperation Activities

275. The Chairman recalled that the Council had traditionally undertaken the annual review of technical cooperation at its September meeting. He suggested that once again the Council invite developed country Members to supply information on their activities pursuant to Article 67 of the TRIPS Agreement. Other Members who also made available technical cooperation should be encouraged to share information on these activities if they so desired. He also suggested that the Council invite those intergovernmental organizations that had observer status in the TRIPS Council to provide information on their activities of relevance and, further, request the WTO Secretariat to report on its activities. The Council should request that this information be made available by the end of August, so that it could be circulated before the Council's meeting scheduled for 17-19 September.

276. The Council so agreed.

Joint Initiative

277. The Chairman recalled that the WIPO and WTO Secretariats had launched on 14 June 2001 a Joint Initiative on Technical Cooperation for Least-Developed Countries.

278. The representative of the Secretariat said that the Secretariat planned to submit a written report to the Council's September meeting on this topic. He recalled that the Joint Initiative had two phases. The first phase was the organization of regional workshops for least-developed countries. The first such workshop, which was for the least-developed sub-Saharan African countries, was held at the end of April 2002 in Dar Es Salaam in cooperation with the Government of Tanzania. More that 120 officials from 33 least-developed countries participated. It had been a successful and useful event. The second of the regional workshops, which would be for least-developed countries in the Asia and Pacific regions, would be held in Bangladesh during the second week of December 2002. The Secretariat had also been working out with WIPO how to respond to the bilateral requests for individual country activities under the Joint Initiative. They were planning to respond to as many as possible of these requests before the end of 2002.

279. The Council took note of this information.

O. INFORMATION ON RELEVANT DEVELOPMENTS ELSEWHERE IN THE WTO

Dispute settlement

280. The Chairman informed the Council that by means of a communication, dated 31 July 2002, the United States and Argentina had notified the Dispute Settlement Body that they had reached an agreement on all of the matters raised by the United States in document WT/DS171/1 (Argentina – Patent Protection for Pharmaceuticals and Test Date Protection for Agricultural Chemicals) and in document WT/DS196/1 (Argentina – Certain Measures on the Protection of Patents and Test Data). This communication had been circulated as document IP/D/18/Add.1 and IP/D/22/Add.1. IP/C/M/36/Add.1 Page 67

281. The Council took note of this information.

P. OBSERVER STATUS FOR INTERNATIONAL INTERGOVERNMENTAL ORGANIZATIONS

282. The Chairman said that, since its meeting in March, the Council had received one new request for observer status, namely from the African Intellectual Property Organization, known by its French acronym OAPI. The letter from OAPI together with its attachments had been faxed to all Members on 23 April 2002. The Council currently had 16 pending requests before it. An updated list of pending requests for observer status in the TRIPS Council had been circulated in document IP/C/W/52/Rev.10.

283. In addition, the Secretariat had received additional information in relation to two pending requests for observer status. A letter from the International Office of Vine and Wine, known by its French acronym OIV, provided information on the changes brought about by the Agreement of 3 April 2001 establishing the International Organisation of Vine and Wine. A letter from the Secretariat of the Convention on Biological Diversity (CBD) provided information on decisions adopted at the Conference of the Parties to the CBD held in the Hague, the Netherlands in April 2002 and contained a renewal of the CBD's pending request. This information had been passed to the Members of the Council by the aforementioned fax and a fax dated 14 June 2002.

284. As suggested at the Council's meeting in March, he had conducted consultations on the pending requests. At the Council's informal meeting of 17 May 2002, there had seemed to be agreement on the granting of ad hoc observer status to the African Regional Industrial Property Office (ARIPO), the African Intellectual Property Organization (OAPI), and the Cooperation Council for the Arab States of the Gulf (GCC). These three organizations operated regional intellectual property offices and, hence, were directly involved in implementing the TRIPS Agreement in their member countries. The Chairman reminded the Council that ARIPO provided services to sub-Saharan English speaking countries, OAPI served sub-Saharan French speaking countries and the GCC served the Arab States of the Gulf, i.e. the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. He also noted that the GCC had observer status in the Committee on Trade and Development.

285. Accordingly, he proposed that the Council grant observer status to ARIPO, OAPI and the GCC on an ad hoc basis, i.e. subject to review in the light of any further guidance from the General Council on the grant of observer status to other intergovernmental organizations.

286. The representative of Egypt said that he was ready to accept all the pending requests in the list contained in document IP/C/W/52/Rev.10. However, he was hesitant to take any selective approach by picking up specific organizations from the list. In particular, while the organizations referred to by the Chair were dear to his delegation, a selective approach that excluded other organizations with pending requests was systemically flawed. He understood that consultations were going on within the purview of the General Council, which were aimed to resolve this problem.

287. Since there did not appear to be concensus with respect to this issue, the Chairman suggested that the Council revert to it at its meeting in September, at which time he hoped the Council would be in a position to make a decision.

288. The representative of the European Communities expressed his puzzlement over the failure to reach concensus on this matter. His impression was that concensus had been reached in the informal meeting on 17 May 2002. He referred to the text of a daily bulleting released after that meeting in which it was stated that "there was agreement on the granting of ad hoc observer status" to the three organizations mentioned by the Chair and that a decision on this matter would be taken at this meeting. While noting that the Council cannot force concensus on any Member, he expressed disappointment. IP/C/M/36/Add.1 Page 68

289. The representative of Brazil referred to a request that had been made earlier by the European Communities regarding consultations concerning observer status of the CBD. It was very important that the CBD Conference of the Parties had renewed its request for observer status. He wondered if the Council would be ready to grant observer status to the CBD at the present meeting.

290. The representative of Senegal associated his delegation with the comments of the European Communities. At the informal meeting in May, it had been decided that these three organizations would be granted observer status at the present meeting. He took note of the objections raised by the representative of Egypt concerning the systemic nature of observer status, but said that this should not block the grant of observer status to these organizations.

291. The representative of China echoed the delegates of the European Communities and Brazil regarding observer status of the CBD. She hoped that there would be some decision on this matter during the present meeting.

292. The representative of Sri Lanka supported the proposal of Brazil that there would be consultations regarding the request for observer status by the CBD. Since the CBD had already renewed its application, it behoved the Council to take a decision on this issue.

293. The Chairman asked whether the representative of Egypt would be willing to reconsider his position given the comments made by other delegations and since there was an agreement at the informal meeting in May that the granting of observer status to these three organizations would be formalized by the Council at the present meeting.

294. The representative of Egypt said that his delegation had not been in attendance at the informal meeting in May, probably due to other meetings taking place at the WTO. His delegation was unfortunately not in a position to join any concensus to grant observership on a selective basis, but was willing to engage in consultations with other delegations with a view to be in a better position to reach consensus at the September meeting.

295. The representative of Mexico noted that Annex 3 to the rules of procedure applicable to the TRIPS Council contained clear-cut rules on the grant of observer status to intergovernmental international organizations and wondered, given these rules, what the delegation of Egypt was still awaiting.

296. The Chairman asked whether the Council was in a position to grant ad hoc observer status to the CBD.

297. The representative of the United States said that he had thought that his delegation was the only impediment to granting observer status to the CBD, but it seemed that the delegate of Egypt opposed any selective granting of observer status. He asked whether this was a correct understanding of Egypt's position.

298. The representative of Egypt said that he had no objection to the list contained in document IP/C/W/52/Rev.10, including the CBD. He noted that, if a Member had an objection with particular organizations in the list, it should bring it up.

299. The Chairman noted that the Council did not seem to be in a position to make any decision on observer status.

300. The representative of Brazil said that one should not conclude from the discussion that the Council was not ready to take a decision and added that his delegation was indeed ready to do so. IP/C/M/36/Add.1 Page 69

301. The representative of the European Communities associated his delegation with the comments of the representative of Brazil. If there would not be a favourable decision with regard to these organizations, and in particular with regard to the CBD, it would be a matter of regret that the Council would not be able to benefit from the expertise of the secretariat of the CBD.

302. The Council took note of the statements made and agreed to revert to the matter at its next meeting.

Q. OTHER BUSINESS

303. The representative of Canada wondered if the Chair could investigate the possibility of adding more time to the Council's meeting in September, because the Council had an overloaded agenda and all items were important and seemed to need further discussion.

304. The Chairman asked the Secretariat to look into the possibility of extending the time allotted for the Council's meeting in September. He added that it would be useful if progress could be made in the informal meeting on 24-25 July so that the agenda of the September meeting would be less burdened.

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