WORLD TRADE
ORGANIZATIONIP/C/W/286
22 June 2001
(01-3136)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
COMMUNICATION FROM SWITZERLAND
By means of a communication, dated 14 June 2001, the following text has been received from
the Permanent Mission of Switzerland with the request that it be circulated as an unrestricted Council
document.
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WORK PROGRAMME ON ELECTRONIC COMMERCE
A. INTRODUCTION
1. The TRIPS Council has been dealing with the su bject of electronic commerce for some time.
Basic agreement exists on the need for the TRIPS Council to investigate the questions regarding
intellectual property rights which arise from communication via the Internet and other networks.
Concrete recommendations regarding how the TRIPS Council should proceed on these questions have
been made in particular by the European Communities and their member States (IP/C/W/224,dated 17 November 2000) as well as Australia (IP/C/W/233, dated 7 December 2000).  Switzerland
generally has supported both these proposals.  This communication presents a concrete
recommendation for a next step, which should offer an overview of the current legal situation andcould serve as a decision-making basis during further discussions.
2. As the Australian communication (page 2, item II, subparagraph 8) made appropriately clear,
electronic commerce does not rescind the general principles and balance of interests under intellectualproperty law which were developed for common commerci al trade.  The Internet is just a new form of
communication which creates certain new problems due to its technical nature, but which does not
require a general re-evaluation of the interests at stake.  The core sentence of any legal discussionregarding electronic commerce must therefore be the maxim:  "what is valid off-line, is valid on-line".
B. 
GENERAL OBSERVATIONS
3. In terms of the TRIPS Agreement, the question is, to what extent does the Agreement
guarantee equal treatment for Internet versus conven tional trade activities.  It is certainly true, that
many provisions of the TRIPS Agreement are equally applicable to on-line trade because of their
technical neutrality - according to Australia, the ex isting TRIPS standards can, e.g., be applied to the
illicit reproduction of copyright protected works on the Internet.  In our view, however, it is not
enough to say that an existing TRIPS standard can be applied.  The more important question is, to
what extent the TRIPS Agreement must  be applied to electronic commerce.  In other words, what is
the minimum protection for intellectual property rights which Member States are obliged to guarantee
in the context of electronic commerce activities.  As long as a fundamental clarification of this
question is lacking, the question of whether the TRIPS Agreement is prepared for electronic
commerce or, respectively, which measures must still be taken, cannot be meaningfully discussed.IP/C/W/286
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C. EXAMPLES OF QUESTIONS TO BE STUDIED
Rights of the author in the Internet
4. Regarding the copyright provisions of the TRIPS Agreement, such a study could, for
example, come to the following result:  The protec tion of literary and artistic works granted by the
TRIPS Agreement corresponds largely to the one of the Berne Convention of 1971 to which it refersin its Article 9.  The Berne Convention is different from certain national copyright laws, which grant
the author of a work comprehensive rights through a general clause, in that it includes an exhaustive
catalogue of rights which are reserved for authors.  This catalogue does not include the right of
communication to the public, including the making available to the public of the work in such a way
that members of the public may access the work from a place and at a time individually chosen by
them.  This right is only granted by the WIPO Copyright Treaty (WCT) concluded in 1996 in the
framework of the World Intellectual Property Organization.  The same applies for the on-line rights ofperformers which were first provided for in the WIPO Performance and Phonograms Treaty
(WPPT, 1996).  Thus, in the future, the TRIPS Agreement might have to be amended to include these
two Treaties (as well as other future treaties within the framework of WIPO) or a reference to them in
order to provide for a sufficient minimal level of copyright protection also in the context of the
Internet.
Relevance of qualification of products as goods or services
5. On this question, such a study might reveal that the qualification of digital products as goods
or services for the purpose of the TRIPS Agreement is only of secondary importance.
6. Article 15, paragraph 4 of the TRIPS Agreement provides that, in the field of trademarks, the
nature of the goods or services to which a trademark is to be applied shall in no case form an obstacle
to the registration of that mark.  This could also be understood to mean that the qualification of a
product as a good or service has no influence on the registerability of a trademark.  Insofar as the
qualification in view of international registration of trademarks needs to be harmonized, this has
already been done in the framework of the Nice Classification (according to which, for example,computer programs downloaded over a ne twork are classified as Class 9 goods
1).
7. In the field of copyright, the distinction between  goods and services is relevant to whether the
principle of exhaustion, whether national or international exhaustion, applies to computer programs
downloaded from the Internet, in other words, whether such an authorized copy of a computer
program is owned in the sense of "material" property and that the owner can use it lawfully withoutrequiring additional licensing.  When examining this question in the context of the TRIPS Agreement,
however, it needs to be added that, according to its Article 6, the TRIPS Agreement is not addressing
the issue of exhaustion of intellectual property rights for the purposes of the dispute settlement.
D. 
SUGGESTION OF A WTO SECRETARIAT STUDY PAPER
8. The issues raised above are examples of questions which would need in-depth examination.
The considerations on these questions in this communication are naturally just conjectures and could
only be ascertained within the framework of a thorough clarification.  Thus, Switzerland recommendsthat the WTO Secretariat should write or have written a study clarifying exactly what level of
protection is offered by the TRIPS Agreement in the context of electronic commerce.  This study
                                                     
1 "Scientific, nautical, surveying, electrical, photographic, cinematographic, optical, weighing, measuring,
signalling, checking and monitoring, life-saving and teaching equipment and instruments;  equipment for the recording,
transmission or reproduction of sound or images;  magnetic data carriers, recording discs;  automatic vending machines and
mechanisms for coin-operated machines;  cash registers, calculators, data processing equipment and computers;
fire-extinguishing equipment."IP/C/W/286
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would then provide a basis for further discussi on in the TRIPS Council about whether a need for
action exists, and, if so, which measures would be appropriate to reach the result aspired.
9. In substance, this recommendation seconds the suggestions made by the
European Communities and their member States in their Communication, dated 17 November 2000
(IP/C/W/224), on how the TRIPS Council should pro ceed in its discussions on electronic commerce.
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