DISPUTE SETTLEMENT: DISPUTE DS176

United States — Section 211 Omnibus Appropriations Act of 1998


This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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Current status  back to top

 

Key facts  back to top

Short title:
Complainant:
Respondent:
Third Parties:
Agreements cited:
(as cited in request for consultations)
Request for Consultations received:
Panel Report circulated: 6 August 2001
Appellate Body Report circulated: 2 January 2002

 

Summary of the dispute to date  back to top

The summary below was up-to-date at
See also: One-page summary of key findings of this dispute

Consultations

Complaint by the European Communities and its Member States.

On 8 July 1999, the European Communities requested consultations with the United States in respect of Section 211 of the US Omnibus Appropriations Act. The EC and its member States alleged as follows:

  • Section 211, which was signed into law on 21 October 1998, did not allow the registration or renewal in the United States of a trademark, if it was previously abandoned by a trademark owner whose business and assets have been confiscated under Cuban law.
     
  • This law provided that no US court shall recognize or enforce any assertion of such rights.
     
  • Section 211 US Omnibus Appropriations Act was not in conformity with the US’ obligations under the TRIPS Agreement, notably its Article 2 in conjunction with the Paris Convention, Article 3, Article 4, Articles 15 to 21, Article 41, Article 42 and Article 62.

 

Panel and Appellate Body proceedings

Further to the request of the European Communities and its member States, the DSB established a panel at its meeting on 26 September 2000. Canada, Japan and Nicaragua reserved their third-party rights. On 17 October 2000, the EC and its member States requested the Director-General to determine the composition of the panel. On 26 October 2000, the panel was composed.

The panel circulated its Report on 6 August 2001. The panel rejected most of the claims by the European Communities and their Member States except that relating to the inconsistency of Section 211(a)(2) of the Omnibus Appropriations Act with Article 42 of the TRIPS Agreement. In this regard, the panel concluded that this Section is inconsistent with the relevant TRIPs Article on the grounds that it limits, under certain circumstances, right holders’ effective access to and availability of civil judicial procedures.

On 4 October 2001, the European Communities and its Member States notified their decision to appeal certain issues of law and legal interpretations developed by the panel report. The Appellate Body report was circulated to Members on 12 January 2002. The Appellate Body:

  • found, in respect of the protection of trademarks, that Sections 211(a)(2) and (b) of the Omnibus Appropriations Act violated the national treatment and most-favoured nation obligations under the TRIPS Agreement and the Paris Convention for the Protection of Industrial Property, thereby reversing the Panel’s findings to the contrary;
       
  • reversed the Panel’s finding that Section 211(a)(2) is inconsistent with Article 42 of the TRIPS Agreement and concluded that Article 42 contains procedural obligations, while Section 211 affects substantive trademark rights;
       
  • upheld the Panel’s findings that Section 211 does not violate the US’ obligations under Article 2.1 of the TRIPS Agreement in conjunction with Article 6quinquies A(1) of the Paris Convention, and Articles 15 and 16 of the TRIPS Agreement. It also upheld the Panel’s finding under Article 42 of the TRIPS Agreement in respect of Section 211(b); and
     
  • reversed the Panel’s conclusion that trade names are not a category of intellectual property protected under the TRIPS Agreement and then completed the analysis reaching the same conclusions for trade names as with respect to trademarks. It also found that Sections 211(a)(2) and (b) are not inconsistent with Article 2.1 of the TRIPS Agreement in conjunction with Article 8 of the Paris Convention (1967).

At its meeting on 2 January 2002, the DSB adopted the Appellate Body report and the Panel report, as upheld by the Appellate Body report.

 

Reasonable period of time

At the DSB meeting on 19 February 2002, the United States stated that it needed a reasonable period of time to comply with the rulings and recommendations of the DSB. On 28 March 2002, the United States and the European Communities informed the DSB that they have reached a mutual agreement on the reasonable period of time for the US to implement the recommendations and rulings of the DSB. The reasonable period of time will expire on 31 December 2002, or on the date on which the current session of the US Congress adjourns, and in no event later than 3 January 2003. On 20 December 2002, the European Communities and the United States informed the DSB that they had mutually agreed to modify the reasonable period of time for the US to implement the recommendations and rulings of the DSB, so as to expire on 30 June 2003.

On 30 June 2003, the European Communities and the United States informed the DSB that they had mutually agreed to modify the reasonable period of time for the United States to implement the recommendations and rulings of the DSB, so as to expire on 31 December 2003.

On 19 December 2003, the European Communities and the United States informed the DSB that they had mutually agreed to modify the reasonable period of time for implementation of the DSB recommendations and rulings so as to expire on 31 December 2004.

On 17 December 2004, the European Communities and the United States informed the DSB that they had mutually agreed to modify the reasonable period of time for implementation of the DSB recommendations and rulings so as to expire on 30 June 2005.

 

Implementation of adopted reports

At the expiry of the fourth extension of the reasonable period of time on 30 June 2005, the European Communities and the United States notified the DSB of their Understanding whereby the European Communities agreed not to request, at this stage, authorization from the DSB to suspend concessions or other obligations pursuant to Article 22.2 of the DSU.  However, it retained its right to request authorization from the DSB to suspend concessions or other obligations, giving the United States advance notice. In exchange, the United States agreed not to block the European Communities' request for DSB authorization on the grounds that such DSB action would not be within the time period set out in the first sentence of Article 22.6 of the DSU.

Following the notification of the Understanding between the parties, the United States has been providing status reports on its progress in the implementation of the DSB recommendations in this matter in accordance with Article 21.6 of the DSU.

 

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