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30 July 1999

Council for Trade-Related Aspects
of Intellectual Property Rights	


Progress Report to the General Council

1. The task assigned to the Council for TRIPS under paragraph 4.1 of
the Work Programme on Electronic Commerce adopted by the General
Council on 25 September 1998 was to "examine and report on the
intellectual property issues arising in connection with electronic
commerce".  It was specified that "the issues to be examined shall
include:  protection and enforcement of copyright and related rights;
protection and enforcement of trademarks;  and new technologies and
access to technology".  It was further stated, in paragraph 1.2 of the
Work Programme, that "the bodies referred to in paragraphs 2-5 of that
Work Programme shall report or provide information to the General
Council by 30 July 1999". 2. The TRIPS Council discussed the
intellectual property issues arising in connection with electronic
commerce at its meetings of 1-2 December 1998, 17 February, 21-22
April and 7-8 July 1999.  The records of the discussions are contained
in the minutes of the relevant meetings in documents IP/C/M/21,
paragraphs 106-109, IP/C/M/22, paragraphs 108-124, IP/C/M/23,
paragraphs 71-88, and IP/C/M/24 , respectively.  A communication by
the European Communities and their member States (IP/C/W/140) was
presented to the Council at its meeting in April, and communications
from Australia, Japan and India at its meeting in July (IP/C/W/144,
IP/C/W/145 and IP/C/W/147).  Subsequently, the United States
circulated a paper (IP/C/W/149).  At its meeting in December, the
Council agreed that the Secretariat would be requested to prepare a
background factual note examining the provisions of the TRIPS
Agreement relevant to paragraph 4.1 of the Work Programme on
Electronic Commerce and that this note should also provide information
on the relevant activities of the World Intellectual Property
Organization (WIPO) and of other intergovernmental organizations. This
note was circulated in document IP/C/W/128 on 10 February 1999. In
addition, the Council invited the representative of WIPO at its
meetings in December and July to provide information on WIPO's
activities dealing with electronic commerce. 3. This report does not
purport to be a full description of the Council's work on electronic
commerce.  For that, Members should have reference to the documents
referred to in paragraph 2 above.  Rather, it seeks to summarize the
work done.  After indicating some general points that arose in the
Council's work on this matter, this report is structured around the
headings that were identified in the General Council's mandate, with
the exception that all enforcement issues are addressed under a single
heading, given that the same issues arise in different areas of
intellectual property.  In addition, a brief reference is made to
other areas of intellectual property.  The report ends by putting
emphasis on the need for further study by the international community.
General points

4. In the Council's work, the importance of intellectual property for
the development of electronic commerce was noted.  The point was made
that trade conducted electronically generally has a relatively high
intellectual property content.  It was noted that the creation of a
secure and predictable legal environment for intellectual property
rights would foster the development of electronic commerce.  The view
was also expressed that it could not be assumed that the benefits of
electronic commerce would flow automatically to developing countries
or that developments in this area would be equitable.  Another point
made was that the basic principles of intellectual property had
survived rapid technological change and that the language used in the
TRIPS Agreement was generally neutral in relation to technology.  In
this connection, it was suggested that, while the growth and
technological development of electronic commerce posed some challenges
for the protection and use of intellectual property rights, such
challenges could be addressed essentially within the established
international framework for intellectual property law.  This view of
the issue of technological neutrality was however challenged.  It was
noted that this matter could require additional analysis or debate.
The point was also made that the TRIPS Agreement had been negotiated
before the implications of global digital networks for the protection
and enforcement of intellectual property rights had become an issue
before the international community.  Attention was drawn to the
importance of multilaterally agreed approaches to intellectual
property issues arising in connection with electronic commerce, given
the global nature of digital networks.  The point was made that more
work and experience was required to identify which intellectual
property issues could be resolved by right holders themselves and
which would require governmental action at the international level.
Copyright and related rights

5. The Secretariat background note (IP/C/W/128) described a number of
issues arising out of electronic commerce in connection with copyright
and related rights, in the light of the changes that digital networks
have brought to the way that works and other protected materials are
created, produced, distributed and used.  These include the
implications of electronic commerce for the definition of publication
and the notion of country of origin;  right of reproduction;  right of
communication;  moral rights;  right holder;  protected
subject-matter;  limitations;  and collective management.  In the
discussion, individual delegations highlighted the importance of one
or more of these issues.  In connection with the role that electronic
networks could play in facilitating the collective management of
rights, particular reference was made to the potential contribution
they could make in respect of rights related to folklore and other
forms of traditional expression. 6. Note was taken of the work already
done and under way in the World Intellectual Property Organization, in
particular the adoption in December 1996 of two new treaties on
copyright and related matters, namely the WIPO Copyright Treaty and
the WIPO Performances and Phonograms Treaty, which, as stated in their
Preambles, aim to respond to the profound impact of the development
and convergence of information and communication technologies on the
creation, production and use of literary and artistic works,
performances and phonograms.  In addition, the Council was informed of
ongoing work in the WIPO on the protection of audiovisual
performances, databases and the rights of broadcasting organizations,
as well as on electronic management systems and the management of
copyright and related rights in the digital environment. Protection of

7. The issues identified in this connection in the Secretariat
background note include the use of trademarks on the Internet, in
particular in the light of the territorial nature of trademark rights
and their general specificity to particular products or services, the
protection of well-known trademarks, and the relationship between
trademarks and Internet domain names.  In connection with the latter
issue, the Council was informed of the final report of the WIPO
Internet Domain Name Process entitled "The Management of Internet
Names and Addresses:  Intellectual Property Issues" published by WIPO
on 30 April 1999 (accessible on http://wipo2.wipo.int).  The Council
was also informed of other ongoing work in WIPO in the context of its
Standing Committee on the Law of Trademarks, Industrial Designs and
Geographical Indications on issues arising from the use of trademarks
on the Internet as well as in connection with well-known marks. New
technologies and access to technology

8. Attention was drawn in the Council to the provisions of Article 7
of the TRIPS Agreement which states that the protection and
enforcement of intellectual property rights should contribute to the
promotion of technological innovation and to the transfer and
dissemination of technology.  In this connection, the Secretariat
background note referred to the role that the TRIPS Agreement and a
functioning intellectual property regime should play in promoting
technological development, including in connection with electronic
communications networks, facilitating access to technology, requiring
disclosure of new technology, requiring under Article 66.2 incentives
for promoting and encouraging technology transfer to least-developed
country Members, and providing for measures and international
cooperation to deal with anti-competitive practices relating to the
transfer of technology. 9. In the discussion as well as in the
Secretariat note, the point was made that electronic commerce
technologies were already, to an extent, facilitating access to new
technologies and had great further potential in this regard, in
particular in relation to patent information disclosed pursuant to
Article 29.1 of the TRIPS Agreement, and that this aspect should be
given due attention in technical cooperation activities.  The Council
was informed of the WIPO work programme on global network and
intellectual property information services aimed, inter alia, at
facilitating making intellectual property information available to the
public. Enforcement

10. The Secretariat background paper described a number of issues for
the enforcement of intellectual property rights, traditionally
undertaken on a territorial basis, arising out of the growing use of
global electronic networks.  These include the implications for
questions of determining the appropriate jurisdiction and applicable
law, the liability of service providers for intellectual property
infringements, the role of technological measures for facilitating
protection of copyright and related rights and the role of electronic
rights management information.  The importance of a number of these
issues was highlighted in the statements and contributions of Members.
 The Council was informed of the work under way in WIPO on a number of
these issues in its programme on intellectual property rights beyond
territoriality. Other areas

11. It was noted that, while the intellectual property issues arising
in connection with electronic commerce are mainly to be found in the
areas of copyright and related rights and trademarks, such issues
could also arise in other areas of intellectual property.  For
example, the point was made in the Secretariat note and also in the
Council's discussion that some of the same types of issues that arise
in connection with trademarks can also arise in connection with other
intellectual property rights, notably geographical indications.  The
Secretariat background note also referred to potential issues in
connection with industrial designs, patents, the layout-designs of
integrated circuits and undisclosed information. Final remarks

12. Members of the Council are of the view that the novelty and
complexity of the intellectual property issues arising in connection
with electronic commerce are such that further study is required by
the international community to better understand the issues involved.
It was noted that, as indicated earlier in this report, a great deal
of work in this connection is under way in WIPO.  In the light of its
responsibilities in the area of intellectual property, the TRIPS
Council is of the view that the WTO should continue to consider
developments in this area, including the further work of WIPO.

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