Geographical Indication

Issues Pertaining to Geographical Indications in the Tobacco Plain Packaging Case before the WTO (Part I)


Recently, I had the opportunity to work on the Panel Report in the Tobacco Plain Packaging case at the WTO. It brought forth several interesting questions on the intersection between health, policy-making, trade and intellectual property rights. It also places TRIPS obligations relating to trademark and GIs under the scanner, with question marks raised over whether the interpretation given by the Panel supports a good faith interpretation of the treaty.

While much has been written about the issues pertaining to trademarks, (see here, here and here), not nearly as much attention has been paid to issues pertaining to GIs. The Panel discussed two issues on GIs: first, on the allegation that the Tobacco Plain Packaging Measures (‘TPP Measures’) constitute an act of unfair competition and hence violate Article 22(b) of the TRIPS Agreement and second, on the allegation that the TPP Measures reduce the level of protection afforded to GIs prior to the entering into of the TRIPS Agreement. The Panel rejected both these allegations.

Article 22.2(b): Anti-Competitive Practices related to Geographical Indications

Article 22(b) of the TRIPS Agreement seeks to protect the exploitation of GIs through anti-competitive practices as defined in Article 10bis of the Paris Convention 1987. It reads:

Protection of Geographical Indications

[…]

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

[…]

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

Article 22(b) requires members to ensure that interested parties have the legal means to prevent an act of unfair competition. Under Article 10bis of the Paris Convention 1967, an act of unfair competition is “any act of competition contrary to honest practices in industrial or commercial matters.” In deciding this issue, the Panel framed three questions.

Does ‘an act of unfair competition’ include the promulgation of laws and regulations?

On this question, the Panel relied on jurisprudence under Article 10bis of the Paris Convention 1967 to note that ‘competition’ and ‘act of competition’ are understood in light of ‘industrial or commercial matters’. They refer to the activities that competitors undertake to further their business objectives and gain arbitrage over their competitors. Promulgation of a legislation or other rules that regulate the market environment does not constitute an ‘act of unfair competition’, since it is not related to industrial or commercial matters (Tobacco Plain Packaging Case, ¶7.2858).

Do interested parties have a positive right to use GIs?

On this issue, the Panel noted that Article 22(b) only creates an obligation to ensure that interested parties are empowered to prevent third parties from using it. In keeping with its findings on the trademark-related issues, it stated that the provision creates a negative right rather than a positive right (Tobacco Plain Packaging Case, ¶7.2860).

Does a prohibition on the placement of GIs on the packaging of tobacco products result in unfair competition?

Since the TPP Measures introduced in Australia prohibit the usage of any words, indications or illustrations that do not form a part of the brand or variant name, it is not possible to mention the geographical origin of the tobacco on the packaging.

To determine whether the TPP Measures violate Article 22(b), the Panel stated that its assessment would need to be two-fold – first, a factual assessment of whether the TPP Measures have compelled market actors to engage in acts of unfair competition. If the answer to this question is in the affirmative, then an assessment into whether Australia has provided legal means for interested parties to prevent such acts. The Panel answered the first question in the negative, negating the need to examine the second question. (Tobacco Plain Packaging Case, ¶7.2863).

The complainant argued that the GIs of their tobacco, such as ‘Habanos’, do not function as an indication of a particular source of supply of the good itself as envisaged under Section 20(3)(a) of the TPP Act, but rather as an indication of the origin of the tobacco in the cigarettes. Therefore, it would not be entirely appropriate to use these GIs as trademarks, and the TPP Measures prohibit its mention as anything other than the brand or variant name. Hence, producers would be put at a competitive disadvantage compared to producers who may not be using tobacco that is protected as a GI.

The Panel noted that insofar as the geographical origin is a part of the brand or variant name, it may form a part of the packaging. There is no prohibition on the usage of GIs as brand names under Section 4 or 20(3) of the TPP Act. Further, they noted that the use of GI tobacco in the product is a strategic decision of the producer, and therefore, may be made public through other avenues if there is no other way of putting it on the package. Since the complainants failed to establish how the TPP Measures reduce a competitor’s ability to distinguish its product from others, they did not succeed with this argument (Tobacco Plain Packaging Case, ¶7.2856).

In my view, this finding of the Panel ignores the fact that GIs are not owned by individuals, but rather may be used by all producers who properly exploit the GI product. Therefore, it would be inappropriate and against the essence of GIs to allow one producer to monopolise its usage by incorporating it within a brand or variant name. The lack of an express prohibition in the TPP Act should not wash over this distinction between usage of trademarks and GIs. If GIs cannot be placed as brand or variant names, the restriction of the TPP Measures does prohibit producers from distinguishing their products through packaging, especially since advertising of tobacco is also banned in several countries.

The complainant also argued that the omission of GIs on tobacco packaging may also lead to confusion amongst consumers looking for a particular kind of tobacco. This would leave producers who use such tobacco at a disadvantage. While the Panel acknowledged that omissions may lead to confusion in certain instances, it noted that in the present case, there would be none because: first, there is no deception or false representation as to the origin of tobacco in certain products, and second, the TPP Measures are well publicised, ensuring that consumers would be aware of the plain packaging requirements and would not be confused by it (Tobacco Plain Packaging Case, ¶7.2866-68).

Therefore, the Panel found that the TPP Measures do not compel market actors to engage in acts of unfair competition related to GIs and found no violation of Article 22.

Image from here.

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