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World Trade Organization (WTO) Appellate Body Report: United States - Section 211 Omnibus Appropriations Act of 1998*

Published online by Cambridge University Press:  18 May 2017

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Judicial and Similar Proceedings
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International Legal Materials , Volume 41 , Issue 3 , May 2002 , pp. 654 - 724
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Copyright © American Society of International Law 2002

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Footnotes

*

This document was reproduced and reformatted from the text appearing at the WTO website (visited April 15, 2002) <http://www.wto.org>.

References

End notes

1 WT/DS176/R, 6 August 2001.

2 Section 211 of the Department of Commerce Appropriations Act, 1999, as included in the Omnibus Consolidated and Emergency Supplemental Appropriations Act 1999, Public Law 105-277,112 Stat. 2681, which became law in the United States on 21 October 1998, referred to in this dispute as “Section 211.“

3 Panel Report, paras. 1.1-2.13.

4 Before the Panel, the United States submitted that “trade names” and “commercial names” are synonymous under its principal federal statute on trademark protection. As in the Panel Report, a reference in this Report to trade names should be read to include commercial names. See Panel Report, para. 8.21.

5 50U.S.C.App. Iff.

6 See 31 CFR 515.305, which defines the term “designated national” as follows: § 515.305 Designated national. For the purposes of this part, the term designated national shall mean Cuba and any national thereof including any person who is a specially designated national.See also 31 CFR 515.306, which defines the term “specially designated national” as follows: (a) The term specially designated national shall mean: (1) Any person who is determined by the Secretary of Treasury to be a specially designated nationa (2) Any person who on or since the “effective date” has acted for or on behalf of the Government or authorities exercising control over a designated foreign country, or (3) Any partnership, association, corporation or other organization which on or since the “effective date” has been owned or controlled directly or indirectly by the Government or authorities exercising control over a designated foreign country or by any specially designated national.

7 See 31 CFR 515.336, which defines the term “confiscated” as follows: §515.336 Confiscated. As used in § 515.208, the term confiscated refers to: (a)The nationalization, expropriation, or other seizure by the Cuban Government of ownership or control of property, on or after January 1, 1959: (1) Without the property having been returned or adequate and effective compensation provided; or (2)Without the claim to the property having been settled pursuant to an international claims settlement agreement or other mutually accepted settlement procedure; and (b)The repudiation by the Cuban Government of, the default by the Cuban Government on, or the failure of the Cuban Government to pay, on or after January 1,1959: (1)A debt of any enterprise which has been nationalized, expropriated, or otherwise taken by the Cuban Government; (2) A debt which is a charge on property nationalized, expropriated, or otherwise taken by the Cuban Government; or (3) A debt which was incurred by the Cuban Government in satisfaction or settlement of a confiscated property claim.

8 See 31 CFR 515.201, which provides: § 515.201 Transactions involving designated foreign countries or their nationals; effective date. (a) All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him) by means of regulations, rulings, instructions, licenses, or otherwise, if either such transactions are by, or on behalf of, or pursuant to the direction of a foreign country designated under this part, or any national thereof, or such transactions involve property in which a foreign country designated under this part, or any national thereof, has at any time on or since the effective date of this section had any interest of any nature whatsoever, direct or indirect: (b) All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him) by means of regulations, rulings, instructions, licenses, or otherwise, if such transactions involve property in which any foreign country designated under this part, or any national thereof, has at any time on or since the effective date of this section had any interest of any nature whatsoever, direct or indirect: (2) All transfers outside the United States with regard to any property or property interest subject to the jurisdiction of the United States.

9 See 31 CFR 515.317, which provides: A general license is any license or authorization the terms of which are set forth in this part.

10 31 CFR 515.318.

11 15 U.S.C. § 1051 ff. The Lanham Act also defines the scope of a trademark, the process by which a federal registration for a trademark can be obtained from the United States Patent and Trademark Office (the “USPTO“), and prescribes penalties for trademark infringement. Under the law of the United States, trade names do not need to be registered.

12 Section 44 of the Lanham Act (15 U.S.C. § 1126) states, in relevant part: (b) Any person whose country of origin is a party to any convention or treaty relating to trademarks, trade or commercial names, or the repression of unfair competition, to which the United States is also a party, or extends reciprocal rights to nationals of the United States by law, shall be entitled to the benefits of this section under the conditions expressed herein to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to which any owner of a mark is otherwise entitled by this chapter. (e) A mark duly registered in the country of origin of the foreign applicant may be registered on the principal register if eligible, otherwise on the supplemental register in this chapter provided. Such applicant shall submit, within such time period as may be prescribed by the Director, a certification or a certified copy of the registration in the country of origin of the applicant. The application must state the applicant's bona fide intention to use the mark in commerce, but use in commerce shall not be required prior to registration.

13 Panel Report, para. 9.1.

14 Ibid. para. 8.41.

15 Ibid. para. 9.3.

16 Pursuant to Rule 21 of the Working Procedures .

17 Pursuant to Rule 23(1) of the Working Procedures .

18 Pursuant to Rules 22 and 23(3) of the Working Procedures .

19 The term “Paris Union” refers to the countries to which the Paris Convention (1967) applies. See Article 1 (1) of the Paris Convention (1967).

20 European Communities’ appellant's submission, para. 53.

21 Done at Vienna, 23 May 1969, 1155 U.N.T.S. 331; 8 International Legal Materials 679.

22 The European Communities cites the following provisions as express exceptions to Article 15.1 of the TRIPS Agreement contained in the Paris Convention (1967) or the TRIPS Agreement: Articles 22.3, 23.2, 24.5, and 62.1 of the TRIPS Agreement and Articles 6(2), 6ter, (6quinquies (B), C(2) and D of the Paris Convention (1967). (European Communities’ appellant's submission, para. 73; European Communities’ responses to questioning at the oral hearing.)

23 Panel Report, para. 8.111; European Communities’ appellant's submission, para. 107.

24 Havana Club Holding, S.A.v. Galleon S.A. 62 F.Supp.2d 1085 (S.D.N.Y. 1999); See also Havana Club Holding, S.A.v. Galleon S.A. 203 F.3dll6(2dCir.2OOO).

25 Panel Report, adopted 7 November 1989, BISD 36S/345.

26 European Communities’ appellant's submission, para. 22.

27 Panel Report, para. 8.102.

28 See supra footnote 2.

29 WT/DS176/2.

30 European Communities’ responses to questioning at the oral hearing.

31 United States’ responses to questioning at the oral hearing.

32 31 CFR §§ 515.101 -515.901 (1999).

33 See supra footnote 5.

34 After this, paragraph (a) of Section 515.527 became subparagraph (a)(l). The amendment entered into force on 10 May 1999. The text of Sections 515.527(a)( 1) and (a)(2) are set out in paragraphs 6 and 7 of this Report.

35 Before the Panel, the European Communities also made claims in relation to trade names, and, on appeal, the European Communities challenges the Panel's finding that trade names are not covered in the TRIPS Agreement. In Sections V-X of this Report, we address the European Communities’ appeal as it relates to trademarks. We address the issue of trade names, and the Panel's findings with respect to this issue, in Section XI below.

36 See Panel Report, paras. 8.62-8.64, where the Panel stated that: [W]e are obliged to examine first how the United States determines trademark ownership under its laws. According to the United States, trademark ownership is generally established through use and thus the owner of a trademark is generally the party who controls the nature and quality of the goods sold or services rendered under the trademark. We note that trademark ownership is generally determined by use under US law.

37 Ibid. para. 4.215.

38 Panel Report, para. 8.99.

39 Panel Report, para. 4.240. United States’ other appellant's submission, para. 24. European Communities’ responses to questioning at the oroi hearing. See also McCarthy, J. Thomas, McCarthy on Trademarks and Unfair Competition (West Publishing Group, 2000), Vol. I, p. 19-13.

40 See supra footnote 11.

41 United States’ other appellant's submission, para. 19.

42 European Communities’ responses to questioning at the oral hearing.

43 Havana Club Holding, S.A.v. Galleon S.A. 203 F.3d 116 (2d Cir. 2000); Havana Club Holding, S.A.v. Galleon S.A. 62 F.Supp.2d 1085 (S.D.N.Y. 1999j. These two decisions followed three decisions issued earlier in the same dispute, before Section 211 was enacted: Havana Club Holding, S.A.v. Galleon, S.A. 961 F.Supp. 498 (S.D.N.Y. 1997); Havana Club Holding, S.A.v. Galleon S.A. 974 F.Supp. 302 (S.D.N.Y. 1997); Havana Club Holding, S.A.v. Galleon S.A. 1998 WL 150983 (S.D.N.Y.). Because they were issued before Section 211 was enacted, these three earlier decisions are not relevant.

44 European Communities'appellant's submission, para. 145.

45 United States’ appellee's submission, paras. 19 and 20.

46 Appellate Body Report, WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:1, 135, para. 132.

47 European Communities’ responses to questioning at the oral hearing.

48 European Communities’ appellant's submission, paras. 80-81.

49 Appellate Body Report, EC —Hormones, supra footnote 46, para. 132.

50 Appellate Body Report, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:1,9, paras. 65-66 and 68.

51 Panel Report, para. 8.59.

52 Ibid. para. 8.83.

53 Panel Report, para. 8.60.

54 Ibid. para. 8.70.

55 European Communities’ appellant's submission, para. 2.

56 Ibid. para. 83.

57 Panel Report, para. 8.60.

58 European Communities’ responses to questioning at the oral hearing. At the oral hearing, in response to one question, the European Communities confirmed that, by “allocate,” in this context, the European Communities means “attribute.“

59 We refer here and throughout this Report to the term “confiscated” as it is defined in Section 515.336 of Title 31 CFR. See supra footnote 7.

60 United States’ appellee's submission, para. I.

61 Ibid. para. 16; Panel Report, para. 4.14.

62 United States’ appellee's submission, para. 23.

63 Ibid.

64 European Communities’ appellant's submission, para. 64.

65 United States’ appellee's submission, para. 23.

66 Section 21 l(a)(l) reads: Notwithstanding any other provision of law, no transaction or payment shall be authorized or approved pursuant to section 515.527 of title 31, Code of Federal Regulations, as in effect on September 9, 1998, with respect to a mark, trade name, or commercial name that is the same as or substantially similar to a mark, trade name, or commercial name that was used in connection with a business or assets that were confiscated unless the original owner of the mark, trade name, or commercial name, or the bona fide successor-in-interest has expressly consented, (emphasis and underlining added)

67 Panel Report, para. 8.111.

68 European Communities’ responses to questioning at the oral hearing; United States’ responses to questioning at the oral hearing. The United States suggested that this omission may merely be an instance of legislative “shorthand” as there is no reason to think that the framers of the measure would have wanted to omit from Section 21 l(a)(2) what is required in Section 21 l(a)(l).

69 The original Paris Convention was concluded in 1883.

70 Panel Report, paras. 8.71–8.73.

71 Panel Report, paras. 8.83 and 8.89.

72 The discretion of countries of the Paris Union to legislate conditions for filing and registration is not unlimited. It is subject to the international minimum standard of trademark disciplines provided for in other Articles of the Paris Convention (1967). These include, for example, national treatment, as well as internationally agreed reasons for denying trademark registration, such as those provided for in Article 6ter. The Paris Convention (1967) limits also the legislative discretion of countries of the Union under Article 6(1) by setting out reasons that countries cannot invoke to deny trademark registration, for example in Article 6(2).

73 Article 6(2) of the Paris Convention (1967) provides: However, an application for the registration of a mark filed by a national of a country of the Union in any country of the Union may not be refused, nor may a registration be invalidated, on the ground that filing, registration, or renewal, has not been effected in the [national's] country of origin.

74 Article 6(3) of the Paris Convention (1967) further states: A mark duly registered in a country of the Union shall be regarded as independent of marks registered in the other countries of the Union, including the country of origin, (emphasis added)

75 Article 6quinquies A(2) of the Paris Convention (1967) reads: Shall be considered the country of origin the country of the Union where the applicant has a real and effective industrial or commercial establishment, or, if he has no such establishment within the Union, the country of the Union where he has his domicile, or, if he has no domicile within the Union but is a national of a country of the Union, the country of which he is a national.

76 Article 6quinquies D of the Paris Convention (1967) states: No person may benefit from the provisions of this Article if the mark for which he claims protection is not registered in the country of origin.

77 Article 29(l)(c) of the Paris Convention (1967) provides: “In case of differences of opinion on the interpretation of the various texts, the French text shall prevail.“

78 The New Shorter Oxford English Dictionary L. Brown (ed.), (Clarendon Press, 1993), Vol. I, p. 123.

79 Le Petit Robert Dictionnaire de la Langue Française (1995), p. 2220. Or in English, as it stands; without adjustments; without modification.

80 The participants agree that the requirement of Article 6quinquies A( 1) at the very least relates to the form of the trademark, but they disagree on what else beyond form, if anything at all, that requirement includes.

81 See Bodenhausen, G.H.C, Guide to the Application of the Paris Convention for the Protection of Industrial Property as revised at Stockholm in 1967 (hereinafter “Guide to the Paris Convention“) United International Bureaux for the Protection of Intellectual Property, (1968, reprinted 1991), pp. 110-111.

82 We note that prior to the Revision Conference of Lisbon (1958), the requirements now found in Articles 6 and 6quinquies were contained in a single (original) Article 6. At the Revision Conference, it was decided to split the original Article in order to make clear the difference between the two alternative ways to obtain trademark registration explained above.

83 See supra footnote 72.

84 As far as trademark protection within the territory of the Paris Union national's country of origin is concerned, such national could not avoid being subject to national trademark law.

85 Article 6quinquies B provides: Trademarks covered by this Article may be neither denied registration nor invalidated except in the following cases: when they are of such a nature as to infringe rights acquired by third parties in the country where protection is claimed; when they are devoid of any distinctive character, or consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, place of origin, of the goods, or the time of production, or have become customary in the current language or in the bona fide and established practices of the trade of the country where protection is claimed; when they are contrary to morality or public order and, in particular, of such a nature as to deceive the public It is understood that a mark may not be considered contrary to public order for the sole reason that it does not conform to a provision of the legislation on marks, except if such provision itself relates to public order. This provision is subject, however, to the application of Article 10 bis.

86 European Communities’ appellant's submission, para. 54.

87 United States’ appellee's submission, para. 9.

88 Final Protocol of the Paris Convention (1883), para. 7.

89 See supra footnote 82.

90 Final Protocol of the Paris Convention (1883), para. 4.

91 “[I]t is not possible to conclude from this decision [at the Washington Conference of 1911] that agreement was reached regarding a different scope of application of the provision.” Bodenhausen, Guide to the Paris Convention, supra footnote 81, p. 110. Panel Report, para. 8.82.

92 Paris Centenary, 1983, WIPO Publication No. 875. Panel Report, footnote 124 to para. 8.82.

93 See supra para. 121.

94 Panel Report, para. 8.83.

95 European Communities’ appellant's submission, para. 72.

96 Panel Report, para. 8.70.

97 European Communities’ appellant's submission, para. 67

98 United States’ opening statement at the oral hearing.

99 According to Article 15.1, in respect of signs not inherently capable of distinguishing goods or services, registrability may be made dependent on distinctiveness acquired through use. In addition, Members may require, as a condition for registration, that signs be visually perceptible.

100 Panel Report, para. 8.49. We address the meaning of the latter part of Article 15.2 below, when we discuss the relevant provisions of the Paris Convention (1967).

101 Article 7 of the Paris Convention (1967) provides for a similar obligation, which is limited, however, to the nature of goods. Article 7 states: The nature of the goods to which a trademark is to be applied shall in no case form an obstacle to the registration of the mark. Our considerations with respect to Article 15.4 of the TRIPS Agreement apply mutatis mutandis to Article 7 of the Paris Convention (1967).

102 Appellate Body Report, United States —Standards/or Reformulated and Conventional Gasoline (” US —Gasoline“) WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:1,3, at 21. See also Appellate Body Report, Japan —Taxes on Alcoholic Beverages (“Japan —Alcoholic Beverages //“), WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:1,97, at 106.

103 The reservation of legislative discretion to Paris Union countries that are also WTO Members is limited by commonly agreed grounds for denying trademark registration (for example, Article 6ter) commonly agreed grounds for not denying trademark registration (for example Article 6(2)) and subject to, inter alia the national treatment obligation under the Paris Convention (1967), as well as other relevant provisions of the TRIPS Agreement. See supra footnote 72.

104 See supra para. 121.

105 Panel Report, para. 8.51.

106 European Communities’ appellant's submission, para. 72. In this respect, the European Communities refers to, inter alia Article 6(2), Article 6ter Article 6quinquies B(l) through (3), C, D and E, and Article 10 bis. Article 6(2) of the Paris Convention prohibits a Paris Union country from refusing an application for registration or invalidating registration of a mark filed by a Paris Union national in any Paris Union country other than its country of origin on the ground that filing, registration, or renewal, has not been effected in the country of origin. Article 6ter prohibits, inter alia trademarks concerning state emblems, official hallmarks and emblems of intergovernmental organizations without authorization of competent authorities. For the text of Article 6quinquies B( 1) through (3), see supra footnote 85. Article 10te(l): “Unfair Competition” provides: “The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition “ See, inter alia European Communities’ appellant's submission, para. 72, and European Communities’ responses to questioning at the oral hearing.

107 The New Shorter Oxford English Dictionary, supra footnote 78, Vol. I, p. 642.

108 European Communities’ and United States’ responses to questioning at the oral hearing.

109 The European Communities refers, inter alia to Articles 22.3 and 23.2 of the TRIPS Agreement which ensure that the protection of geographical indications is not undermined through the use of trademarks that contain or consist of geographical indications. The European Communities also mentions Article 24.5 of the TRIPS Agreement (concerning rights to trademarks — acquired through registration or use in good faith — which are identical or similar to geographical indications) and Article 62.1 of the TRIPS Agreement (concerning compliance with reasonable procedures and formalities as a condition for acquisition and maintenance of intellectual property rights and related inter panes procedures). European Communities’ appellant's submission, para. 73.

110 For example. Article 6bis (denial of registration of well-known marks) and Article 6ter (prohibition of trademarks including state emblems) contain express exceptions from the regulatory discretion conferred on Members by virtue of Article 6(1).

111 For example, Article 6(2) limits the legislative discretion of countries of the Paris Union by providing that an application for registration by a national of a country of the Paris Union may not be refused on the ground that the national has not filed for registration or renewal in its country of origin. This exception does not concern a particular ground for refusing trademark registration. Rather, it stipulates when — despite the legislative discretion granted to countries of the Union by Article 6(1) — trademark registration must not be refused.

112 See supra footnote 72.

113 Panel Report, para. 8.111.

114 Ibid.,para.8.112.

115 Panel Report, para. 8.159.

116 Ibid. para. 8.108.

117 Ibid.

118 European Communities’ appellant's submission, para. 106.

119 Ibid. para. 109.

120 Panel Report, footnote 116 to para. 8.64 and para. 8.109.

121 Ibid. para. 8.104; United States’ appellee's submission, para. 60.

122 We note that, prior to the entry into force of the TRIPS Agreement only Article 10ft«(3) of the Paris Convention (1967) provided for a prohibition of “all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities of a competitor.” See Gervais, D., The TRIPS Agreement — Drafting History and Analysis Sweet ' Maxwell, London (1998), pp. 109-110.

123 The New Shorter Oxford English Dictionary, supra footnote 78, Vol. II, p. 2059; Blacks Law Dictionary 7th ed., B.A. Gamer (ed.). (Wes! Group, 1999), p. 1130.

124 Panel Report, para. 8.108.

125 Panel Report, para. 8.108.

126 Pursuant to Article 13 of the DSU.

127 The letter from the Director-General of the International Bureau of WIPO, dated 2 March 2001, states: Even though some provisions of the Paris Convention refer to the concept of trademark ownership (Article 5C(2) and (3), and Article 6septies: “ proprietor,” Article 6ter( 1 )(c): “owner,” Article 6bis( I) “being already the mark of a person entitled to the benefits of this Convention“), no provision addresses the question how the owner of a trademark has to be determined under the domestic law of States party to the Paris Convention (emphasis added) Reproduced in relevant part in para. 6.41 of the Panel Report.

128 European Communities’ response to question 50 from the Panel. The European Communities also repeated this argument before us at the oral hearing.

129 Panel Report, para. 8.111.

130 Ibid.

131 European Communities’ appellant's submission, para. 106.

132 “Common sense would suggest that a registered trademark can only exist if there is a registration. In turn a registration must be for the benefit of an owner. Therefore the owner of the registered trademark under Article 16(1) is the holder of the registration until such time as when he ceases to hold the registration. It would make no sense to consider an ill-defined ‘original owner1 who is not in the register to be the lawful owner of the registered trademark in the sense of Article 16(1) [of the] TRIPS [Agreement].” European Communities’ appellant's submission, para. 109.

133 Panel Report, para. 8.109.

134 Panel Report, para. 8.110.

135 See supra paras. 118 and 121.

136 See supra paras. 119 and 121

137 Panel Report, para. 8.159.

138 Ibid. para. 8.102.

139 Panel Report, para. 8.162.

140 Panel Report, paras. 4.91 and 4.147.

141 Ibid. paras. 8.93 and 8.161.

142 Ibid. para. 8.100.

143 Ibid. para. 8.102.

144 Panel Report, para. 8.162.

145 The United States mentions, for example, the following: whether the trademark at issue was used in connection with a certain business or assets; whether die business or assets were confiscated; whether adequate and effective compensation was paid to the original owner; whether the person claiming ownership is a designated national or a successor-in-interest; whether the original owner expressly consents to the use of that trademark by the claimant. See United States’ other appellant's submission, para. 18.

146 United States’ other appellant's submission, para. 13.

147 These issues include: whether the original owner or bonafide successor-in-interest has expressly consented; whether a trademark which is composed of the same or substantially similar signs as a trademark which was used in connection with a business or assets that were confiscated; whether an uncompensated confiscation of a business or asset took place in Cuba. United States’ other appellant's submission, para. 18.

148 These are issues such as use of the trademark; alleged deficiency of a registration; identity or similarity of signs in general; class of goods or services covered by the trademark; existence and scope of a licence. European Communities’ appellee's submission, para. 22.

149 The New Shorter Oxford English Dictionary, supra footnote 78, Vol. 1, p.154. 150. Panel Report, para. 8.95.

151 Recital 2(c) of the Preamble to the TRIPS Agreement.

152 United States’ other appellant's submission, para. 4.

153 Panel Report, para. 8.98. In its reasoning, the Panel relied on footnote 11 to Article 42. The footnote states that “the term ‘right holder1 includes federations and associations having legal standing to assert such rights.” At the oral hearing, both participants submitted that footnote 11 does not resolve the issue on which they disagree in respect of Article 42, and submitted fürther that, in their view, that footnote was irrelevant to this dispute.

154 Panel Report, para. 8.99.

155 The New Shorter Oxford English Dictionary, supra footnote 78, Vol. II, p. 3124.

156 See supra para. 121.

157 See supra para. 195.

158 FED. R. CIV.

159 FED. R. EVID.

160 European Communities’ responses to questioning at the oral hearing.

161 Panel Report, para. 8.162.

162 See supra para. 121.

163 See supra para. 123.

164 The dates on which adhesion of the current Member States of the European Union to the Paris Union took effect, are as follows: Austria,1 January 1909;Belgium,7 July 1884;Denmark, 1 October 1894;Finland,20September 1921;France,7 July 1884;Germany, I May 1903;

165 Greece, 2 October 1924; Ireland, 4 December 1925; Italy, 7 July 1884; Luxembourg, 30 June 1922; the Netherlands, 7 July 1884; Portugal, 7July 1884; Spain, 7 July 1884;Sweden, I July 1885; and, the United Kingdom, 7 July 1884.

166 See supra para. 124.

167 Ibid.

168 See supra para. 125.

169 For example, see Article 2 of the International Convention for the Protection of Performers. Producers of Phonograms and Broadcasting Organizations (“Rome Convention (1961)“), adopted at Rome on 26 October 1961; and also Article 5 of the Treaty on Intellectual Property in Respect of Integrated Circuits (“IPIC Treaty“), adopted at Washington on 26 May 1989.

170 See supra para. 195. Panel Report, para. 8.133. Like the Panel, we note that Section 21 l(d)(l) broadened the definition of “designated national” to include, in addition to Cuba and any Cuban national, nationals of any foreign country (that is, non-United States nationals) who are successors-in-interest to a designated national. Section 21 l(d)(l) provides: The term “designated national” has the meaning given such term in section 515.305 of title 31, Code of Federal Regulations, as in effect on September 9,1998, and includes a national of any foreign country who is a successor-in-interest to a designated national.

171 For purposes of this appeal, we use the term “offset” to describe a situation in which an action counterbalances, counteracts or neutralizes the effect of a contrary action. See infra paras. 259-260.

172 Panel Report, para. 8.134.

173 Ibid.

174 Ibid. para. 4.126.

175 Panel Report, para. 8.135.

176 Panel Report, adopted 4 October 1994, BISD 41S/1/I31, para. 118.

177 Appellate Body Report, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, para. 88.

178 Panel Report, para. 8.140.

179 Ibid. para. 8.138.

180 Panel Report, para. 8.140.

181 European Communities’ appellant's submission, para. 124.

182 Ibid.

183 United States’ responses to questioning at the oral hearing.

184 United States’ responses to questioning at the oral hearing.

185 Panel Report, para. 8.133.

186 Appellate Body Report, US — 1916 Act. supra footnote 177, para. 88, quoting from Panel Report, US —Tobacco, supra footnote 176, para. 118.

187 We made a similar observation in a somewhat different context in Chile — Taxes on Alcoholic Beverages where we stated: [M]embers of the WTO should not be assumed, in any way, to have continued previous protection or discrimination through the adoption of a new measure. This would come close to a presumption of bad faith. Accordingly, we hold that the Panel committed legal error in talcing this factor into account in examining the issue of “so as to afford protection.” (footnote omitted) See Appellate Body Report, WT/DS87/AB/R, WT/DS 110/AB/R, adopted 12 January 2000, para. 74

188 Panel Report, US — Section 337, supra footnote 25. Central to that dispute was a situation where the proceedings that were applicable to imported products alleged to infringe United States patents were different in a number of respects from those applicable before a federal district court when a product of foreign origin was challenged on the grounds of patent infringement.

189 Panel Report, US —Section 337, supra footnote 25, para. 5.11.

190 Ibid. para. 5.12.

191 Ibid. para. 5.19.

192 We recall that the term “confiscated” is defined in the CACR. See supra footnote 7.

193 United States’ appellee's submission, para. 16.

194 United States’ responses to questioning at the oral hearing.

195 European Communities'appellant's submission, para. 157.

196 Panel Report, para. 8.171.

197 Panel Report, para. 8.139.

198 Ibid. para. 8.172.

199 European Communities’ appellant's submission, paras. 115 and 157; European Communities’ opening statement at the oral hearing; European Communities’ responses to questioning at the oral hearing.

200 The definition also includes successors-in-interest, but the situation discussed here does not involve successors-in-interest. Nor does it involve “specially designated nationals,” given that there is no claim that a person is acting for or on behalf of the Cuban government. The term “specially designated national” is defined in Section 515.306 of 31 CFR, see supra footnote 6.

201 United States’ appellee's submission, para. 71.

202 See supra para. 71.

203 United States’ responses to questioning at the oral hearing.

204 Section 515.527(a)( 1) of 31 CFR provides: Transactions related to the registration and renewal in the United States Patent and Trademark Office or the United States Copyright Office of patents, trademarks, and copyrights in which the Government of Cuba or a Cuban national has an interest are authorized, (emphasis added)

205 Section 1 of the Lanham Act, 15 U.S.C. § 1051. United States’ responses to questioning at the oral hearing.

206 European Communities’ responses to questioning at the oral hearing. We note also the following excerpt from a judgment by the United States District Court, Southern District New York: In 1995, Bacardi-Martini began to distribute rum in the United States which was produced in the Bahamas under the authority of Galleon, Bacardi ' Co.'s predecessor-in-interest, bearing the trademark Havana Club. Havana Club Holding, S.A.v.Galleon S.A. 62 F.Supp.2d 1085, 1090. United States’ responses to questioning at the oral hearing.

207 Section 515.505 of 31 CFR provides: (a) The following persons are hereby licensed as unblocked nationals. Any person resident in, or organized under the laws of a jurisdiction in, the United States or the authorized trade territory who or which has never been a designated national; Any individual resident in the United States who is not a specially designated national; and Any corporation, partnership or association that would be a designated national solely because of the interest therein of an individual licensed in paragraph (a) or (b) of this section as an unblocked national. (b) Individual nationals of a designated country who have taken up residence in the authorized trade territory may apply to the Office of Foreign Assets Control to be specifically licensed as unblocked nationals. (c) The licensing of any person as an unblocked national shall not suspend the requirements of any section of this chapter relating to the maintenance or production of records.

208 An “unblocked national” is defined in Section 515.307 of 31 CFR as: Any person licensed pursuant to § 515.505 licensed as an unblocked national shall, while so licensed, be regarded as a person within the United States who is not a national of any designated foreign country: Provided, however That the licensing of any person as an unblocked national shall not be deemed to suspend in any way the requirements of any section of this chapter relating to reports, or the production of books, documents, and records specified therein.

209 United States’ responses to questioning at the oral hearing.

210 We are referring here to a country which is within the “authorized trade territory,” as defined in Section 515.322 of 31 CFR. See infra. footnote 212.

211 United States’ responses to questioning at the oral hearing.

212 Section 515.322 of 31 CFR provides: § 515.322 Authorized trade territory; member of the authorized trade territory. The term authorized trade territory includes all countries, including any colony, territory, possession, or protectorate, except those countries subject to sanctions pursuant to this chapter. The term does not include the United States. The term member of the authorized trade territory shall mean any of the foreign countries or political subdivisions comprising the authorized trade territory.

213 See Panel Report, US —Section 337, supra footnote 25, paras. 5.11-5.14.

214 United States’ responses to questioning at the oral hearing.

215 United States’ appellee's submission, para. 72.

216 United States’ responses to questioning at the oral hearing.

217 United States’ appellee's submission, paras. 16 and 76; United States’ responses to questioning at the oral hearing.

218 Panel Report, para. 8.148.

219 Ibid. para. 8.176.

220 In para. 8.143, the Panel explained the parties’ position on this issue as follows: In response to the question as to whether Article 4 of the TRIPS Agreement allows a Member to have a certain policy applicable to confiscations of trademarks in one Member on the condition that all WTO Member nationals are treated similarly or whether Article 4 requires that a similar policy be applied to confiscations of trademarks in all other Members, the European Communities states that the most-favoured-nation treatment flowing from Article 4 attaches to persons and not to situations. The European Communities argues, therefore, that Article 4 requires that all nationals of other Members be treated similarly in respect of a certain event. In response to the same question, the United States submitted that because the European Communities is alleging a violation of the most-favoured-nation principle based on the first situation described by the Panel, there is no need to examine the question of whether Article 4 applies to the second situation.

221 See supra para. 276. We also note that the European Communities confirmed this in its responses to questioning at the oral hearing.

222 The situation discussed here does not involve successors-in-interest. See supra para. 279.

223 The term “designated national” also includes persons that are “specially designated nationals.” However, as we noted earlier, the situation posed by the European Communities does not involve a “specially designated national.” See supra footnote 200.

224 See supra para. 282.

225 See supra para. 283 and 284.

226 See supra para. 285 and footnote 206.

227 See supra para. 288.

228 The term “authorized trade territory” essentially includes countries that are not subject to OF AC sanctions. See supra footnote 212.

229 See supra para. 289.

230 See supra para. 290.

231 United States’ responses to questioning at the oral hearing.

232 See supra para. 294.

233 United States’ appellee's submission, para. 16.

234 See supra para. 295.

235 Panel Report, para. 8.41.

236 Ibid. paras. 8.102 and 9.l(d).

237 Ibid. paras. 8.122 and 9.1(f) and paras. 8.165 and 9.1(1).

238 Panel Report, para. 8.24.

239 Ibid. para. 8.25.

240 Ibid. para. 8.26.

241 Panel Report, para. 8.30.

242 Ibid. paras. 8.31-8.40.

243 Article 27.3(b) of the TRIPS Agreement provides: Members may also exclude from patentability: (b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement

244 Appellate Body Report, US —Gasoline, supra footnote 102, at 21. See also Appellate Body Report, Japan —Alcoholic Beverages II, supra footnote 102, at 106.

245 Panel Report, para. 8.34.

246 Ibid. para. 8.39.

247 See Article 3.2 of the DSU.

248 See Appellate Body Report, US —Gasoline, supra footnote 102, at 18ff; Appellate Body Report, Canada —Certain Measures Concerning Periodicals WT/DS31/AB/R, adopted 30 July 1997, DSR1997:1,449, at 469ff; Appellate Body Report, EC —Hormones, supra footnote 46, paras. 222ff; Appellate Body Report, European Communities — Measures Affecting the Importation of Certain Poultry Products WT/DS69/AB/R, adopted 23 July 1998, paras. 156ff; Appellate Body Report, Australia —Measures Affecting Importation of Salmon (“Australia Salmon“) WT/DS18/AB/R, adopted 6 November 1998, paras. 117ff, 193ff and 227ff; Appellate Body Report, United States —Import Prohibition of Certain Shrimp and Shrimp Products WT/DS58/AB/R, adopted 6 November 1998, paras. 123ff; Appellate Body Report, Japan —Measures Affecting Agricultural Products WT/DS76/AB/R (“Japan —Agricultural Products II“), supra footnote 102, paras. 112ff; Appellate Body Report, UnitedStates —Tax Treatmentfor “Foreign Sales Corporations,” WT/DS 108/AB/R, adopted 20March 2000, paras. 133ff; Appellate Body Report, Canada —Measures Affecting the Export of Civilian Aircraft, Recourse by Brazil to Article 21.5 of the DSU WT/DS70/AB/RW, adopted 4 August 2000, paras. 43ff; Appellate Body Report, UnitedStates —Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities WT/DS 166/AB/R, adopted 19 January 2001, paras. 80ff and 127ff, Appellate Body Report, European Communities — Measures Affecting Asbestos and Asbestos-Containing Products (“EC — Asbestos“) WT/DS 135/AB/R, adopted 5 April 2001, paras. 133ff, Appellate Body Report, UnitedStates —Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia WT/DS 177/AB/R, WT/DS 178/AB/R, adopted 16 May 2001, paras. 150ff and 172ff.

249 See Appellate Body Report, Australia —Salmon, supra footnote 248, paras. 209ff, 241 ff and 255; Appellate Body Report, Korea —Definitive Safeguard Measure on Imports of Certain Dairy Products WT/DS98/AB/R, adopted 12 January 2000, paras. 91ff and 102ff; Appellate Body Report, Canada — Certain Measures Affecting the Automotive Industry WT/DS 139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, paras. I33ff and 144ff; Appellate Body Report, Korea —Measures Affecting Imports of Fresh, Chilled and Frozen Beef WT/DSI61/AB/R, WT/DS 169/AB/R, adopted 10 January 2001, paras. 128ff; Appellate Body Report, EC —Asbestos, supra footnote 248, paras. 78ff; Appellate Body Report, Canada —Measures Affecting the Importation of Milk and the Exportation of Dairy Products, Recourse to Article 21.5 of the DSU by New Zealand and the United States WT/DS 103/AB/RW, WT/DS 113/AB/RW, adopted 18 December 2001, paras. 98ff.

250 Appellate Body Report, EC —Asbestos, supra footnote 248, para. 84.

251 European Communities’ appellant's submission, footnote 7 to para. 21, quoting the United States’ request to the Panel to review Precise aspects of the interim report.

252 Question 9 from the Panel to the United States reads: “Please explain how common law rights in relation to trademarks, trade names and commercial names are protected under US law.“

253 United States’ first submission to the Panel, para. 94. See also Panel Report, para. 4.105.

254 Panel Report, para. 4.102.

255 United States’ first submission to the Panel, para. 95. See also Panel Report, para. 4.106.

256 European Communities’ appellant's submission, footnote 7 to para. 21, quoting the United States’ request to the Panel to review Precise aspects of the interim report.

257 See supra paras. 120 and 121.

258 See supra paras. 2.

259 See supra paras. 268 and 271.

260 See supra paras. 121.

261 See supra footnote 7.