II.C.What are the Permissible Exceptions to Trademark Rights?
With regard to the exceptions to trademark rights that Members may provide, Article 17 of the TRIPS Agreement provides a general exception clause laying down the criteria that permitted exceptions must meet.
II.C.1.Permitted Exceptions
Article 17 of the TRIPS Agreement, entitled " Exceptions", stipulates that Members may provide for exceptions to the rights conferred by a trademark, provided that such exceptions are (1) limited, (2) take account of the legitimate interests of the owner of the trademark and of those of (3) third parties. Article 17 cites "fair use of descriptive terms" as an illustrative example of a limited exception.
Article 17 was interpreted by the panel in EC – Trademarks and Geographical Indications (DS174). In its decision, the Panel clarified that in considering what constituted a "limited exception", the number of trademark owners affected by such an exception was irrelevant, but what counted was whether the exception to the rights conferred by the trademark was limited. With regard to the legitimate interests of the trademark owner and third parties to be taken into account, it held that these interests must be something different from merely the full enjoyment of the legal rights conferred by a trademark, but would rather include the "owner's interest in the economic value of the mark arising from the reputation that it enjoys and the quality it denotes."
The Panel also noted that the formulation in Article 17 to "take account" instead of "do not unreasonably prejudice" legitimate interests, which is used in Articles 13 and 30, suggested that a lesser standard of regard for the legitimate interests of the owner of a trademark was required in the context of trademark exceptions than in the context of patents or copyright.
II.C.2.No compulsory licensing permitted
Article 21 of the TRIPS Agreement makes it clear that Members' legislation shall not permit any compulsory licensing of trademarks. This reflects the view that, unlike in the patent area, there is no public policy rationale for allowing compulsory licensing in the area of trademark rights and governments may not, therefore, permit the use of a trademark without the authorisation of the right holder.
EC – TRADEMARKS AND GEOGRAPHICAL INDICATIONs3
(DS174, DS290)
PARTIES
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AGREEMENTS
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TIMELINE OF THE DISPUTE
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Complainants
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United States
Australia
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TRIPS Art. 3, 4, 16 and 24
GATT Art. III:4
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Establishment of Panel
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2 October 2003
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Circulation of Panel Report
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15 March 2005
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Respondent
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European Communities
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Circulation of AB Report
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NA
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Adoption
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20 April 2005
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1. Measure and Product at Issue
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Measure at issue: EC Regulation related to the protection of geographical indications and designations of origin ("GIs").
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Products at issue: Agricultural products and foodstuffs affected by the EC Regulation.
2. Summary of Key Panel Findings4
National treatment (TRIPS Art. 3.1)
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Availability of protection: The Panel found that the equivalence and reciprocity conditions in respect of GI protection under the EC Regulation5 violated the national treatment obligation under TRIPS Art. 3 by according less favourable treatment to non-EC nationals than to EC nationals. By providing "formally identical", but in fact different procedures based on the location of a GI, the EC modified the "effective equality of opportunities" between different nationals to the detriment of non-EC nationals. The Regulation was also found to accord less favourable treatment to imported products inconsistently with GATT Art. III:4.
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Application procedures: The Panel found that the application procedures under the Regulation requiring non-EC nationals to file an application in the European Communities through their own government (but not directly with EC member states) for a GI registration located in their own countries, provided formally less favourable treatment to other nationals in violation of Art. 3.1. The Regulation was also found to accord less favourable treatment to imported products inconsistently with GATT Art. III:4.
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Objection procedures (verification and transmission): The Panel found that the objection procedures under the Regulation violated Art. 3.1 to the extent that it did not provide persons resident or established in non-EC countries with a right to directly object to applications for a GI registration in the European Communities.
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Inspection structures: The Panel found that the "government participation" requirement under the inspection structures violated TRIPS Art. 3.1 by providing an "extra hurdle" to third-country applicants: for a third country GI to be registered in the European Community, third-country governments were required to provide a declaration that the inspection structures were established on its territory. The Regulation was also found inconsistent with GATT Art. III:4 in respect of these third-country products.
Relationship between GIs and (prior) trademarks
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TRIPS Arts. 16.1 and 17 (trademarks): Having found that Art. 16.1 obligates Members to make available to trademark owners a right against certain uses, including uses as a GI, the Panel initially concluded that the EC Regulation was inconsistent with Art. 16.1 as it limited the availability of such a right for the owners of trademarks. However, the Panel ultimately found that the Regulation was justified under Art. 17, which permits Members to provide limited exceptions to the rights conferred by trademarks, including Art. 16.1 rights, provided that such exceptions take account of the legitimate interests of the owner of the trademark and of third parties.
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Exercises:
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What type of use is mentioned as an example for a limited exception to trademark rights in the TRIPS Agreement?
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How does the formulation of the exception provision in the Section on Trademarks differ from the exception clauses in the sections on copyright or patents?
II.D.Term of Protection
According to Article 18 of the TRIPS Agreement, the initial registration and each renewal of registration shall be for a term of no less than seven years. It also stipulates that the registration of a trademark must be renewable indefinitely. This means that trademark rights, in contrast to copyright or patent rights, can last for an indefinite period of time, provided the right owner renews the registration at the expiry of each term and pays the required renewal fees.
If Members require the actual use of a trademark in order to maintain registration, Article 19 of the TRIPS Agreement provides that cancellation of a trademark may only occur after an uninterrupted period of three years of non-use. This means that even if a country wants to require use of a trademark as a condition for renewal, it must allow for a period of at least three years of uninterrupted non-use before the trademark can be cancelled.
III.Summary
WHAT IS THE SUBJECT MATTER TO BE PROTECTED?
Signs that are capable of distinguishing the goods and services of one undertaking from those of another are eligible for trademark protection. There are no constraints on the types of signs that can be protected as a trademark (such as words, numbers, figurative elements or combinations of colours) but Members may make registration of signs dependent on visual perceptibility. Where a sign is not inherently capable of distinguishing goods and services, Members may allow distinctiveness to be acquired by use.
While the conditions for the filing and registering of a trademark are in principle determined by the domestic legislation of each Member country, there are a number of common rules that have to be observed by all Members.
WHAT ARE THE RIGHTS CONFERRED BY A TRADEMARK?
In a Member, the owner of a registered trademark must at least be able to stop the use of an identical or similar sign on similar goods or services in the course of trade, which would create a likelihood of confusion among consumers as to whether those goods or services originate from the right holder's undertaking. If the trademark is considered a well-known trademark, such protection would apply even if the trademark is not registered in the country where protection is claimed and, in certain circumstances, extend to use of such signs also on products which are not similar to those in respect of which the trademark is registered.
WHAT ARE THE PERMISSIBLE EXCEPTIONS TO THESE RIGHTS?
The TRIPS Agreement provides a general clause which sets out the criteria that permissible exceptions to trademark rights must meet. Under this provision, Members are only allowed to provide for limited exceptions to trademark rights if these take into account the legitimate interests of the right owner and those of third parties.
While Members can set conditions on how trademark rights can be licensed and transferred, they must ensure that compulsory licences are not available for trademark rights and that the transfer or assignment of a trademark is possible without (i.e. independently of) the transfer of the corresponding business.
THE TERM OF PROTECTION
The initial term of protection for trademarks in Members must be a minimum of seven years which must be renewable indefinitely. This means that protection of a trademark, provided that it is continuously renewed, may last for an indefinite period of time. If Members require the actual use of a trademark for its renewal, a period of at least three years of uninterrupted non-use must be allowed before the registration is cancelled.
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Important Notes
Note 1
A number of international treaties have been concluded under the auspices of the World Intellectual Property Organization (WIPO) in order to harmonize national and regional registration procedures (see the Trademark Law Treaty and the Singapore Treaty), to facilitate multiple registration in a number of jurisdictions (see the Madrid Agreement and the Protocol relating to the Madrid Agreement) and to establish international classification systems relevant to trademarks (see the Nice Agreement and the Vienna Agreement). These have not been incorporated into the TRIPS Agreement. Furthermore, Article 5 of the TRIPS Agreement exempts procedures relating to the acquisition and maintenance of intellectual property rights that are contained in WIPO's multilateral treaties from TRIPS MFN and national treatment obligations.
Note 2
This process also works in the opposite direction. A sign can loose its distinctiveness if the consumer no longer understands it as identifying the product of one specific enterprise, but rather to denote a type of product in general, regardless of the originating enterprise. This may happen if the trademark owner does not sufficiently take action against unauthorized use and consumers start using the term more widely, so that the term becomes generic. (e.g. zipper, escalator, thermos).
Proposed Answers:
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Examples for distinctive uses of terms:
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FEDERAL EXPRESS used for postal services.
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WESTIN used for hotel and accommodation services.
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SHANGRI-LA used for hotel and accommodation services.
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WELLA used for shampoo and cosmetics.
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TAJ used for hotel and accommodation services.
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APPLE for computers.
Examples for non-distinctive uses of terms:
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BIKES used for bicycles.
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HATCHBACK used for cars.
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LIGHT used for beverages.
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APPLE for fruit.
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According to Article 15(1) of the TRIPS Agreement, trademarks are signs or combinations of signs that are capable of distinguishing the goods and services of one undertaking from those of another undertaking. The list of examples of signs in Article 15.1 is only illustrative and does not limit the type of signs eligible as a trademark. It is called a functional definition because it emphasizes the trademark's function of distinguishing products, i.e. the distinctiveness of the signs, rather than the nature of the signs used as a trademark.
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No. According to Article 15.4 of the TRIPS Agreement, the registration of a trademark may not be refused because of the nature of the goods or services to which the mark is applied. It is worth noting, however, that the registration of a trademark for a product does not grant a positive right to use or sell the product in question, but only a negative right to stop competitors from using the term in a confusing manner. A trademark, therefore, does not relieve the owner from having to comply with all other regulations relating to his product.
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Members must refuse the registration and use of a trademark in their territory if that trademark could cause confusion with or affect the distinctiveness of another mark which – while not registered in that Member – is considered well known in that Member. Therefore, the registration of an identical sign (the term "COCA-COLA") for similar goods (such as lemonade) would have to be refused by the Member if "COCA-COLA" is considered a well-known mark in its territory.
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Under the TRIPS Agreement, Members must at least provide that a trademark owner have the possibility to prevent third parties form using in the course of trade identical or similar signs on identical or similar products in manner that could cause a likelihood of confusion. If the registered trademark is considered a well-known trademark, such protection most also extend to the use of signs on products not similar to those in respect of which the trademark is registered.
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Article 21 of the TRIPS Agreement provides that while Members are free to set conditions on trademark licensing and assignment, they may not provide for compulsory licensing of trademarks and must ensure that a trademark be transferable independently of the transfer of the corresponding business operation.
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In assessing whether the use of a sign in the market for certain products results in a likelihood of confusion with a registered trademark, the relevant authority usually takes into account
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the degree of similarity between the sign used and the sign registered as a trademark, and
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the degree of similarity between the goods or services labelled with the offending sign and those for which the trademark is registered,
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and will make an assessment on the basis of the overall impression of both aspects of the use.
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Article 17 of the TRIPS Agreement explicitly mentions "fair use of descriptive terms" as an illustrative example of a limited exception.
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While the exception provisions in the area of patents and copyright require that limited exceptions may not "unreasonably prejudice" the legitimate interests of the right holders, Article 17 on trademark exception simply requires to "take into account" the legitimate interests of the right owner and of third parties. This has been interpreted to constitute a lesser degree of recognition for those concerns than in the sections on copyright and patents.
Videos
P ublic Health, Innovation and Trade: Achievements and Challenges - http://WTO.http.internapcdn.net/WTO/flash/2011_11_23_trips.mp4
TRIPS Presentation - http://wto.streamlogics.com/trips_1.wmv
TRIPS Questions/answers - http://wto.streamlogics.com/trips_2.wmv
Other videos - http://www.youtube.com/user/WTO
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