RESTRICTEDWORLD TRADE
ORGANIZATIONIP/C/W/140
7 May 1999
(99-1898)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
WORK PROGRAMME ON ELECTRONIC COMMERCE
Communication by the European Communities and their Member States
The following communication has been received by the Secretariat from the delegation of the
European Communities on 20 April 1999.
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I. INTRODUCTION
1. Following the Declaration on Global Electronic Commerce adopted by Ministers at the
second session of the Ministerial Conference on 20 May 1998, the General Council established a
comprehensive work programme for the relevant WTO bodies, including the TRIPS Council, toexamine all trade-related issues relating to global electronic commerce, taking into account the
economic, financial, and development needs of developing countries, and to report on the progress of
the work programme, with any recommendations for action, to the third session (WT/L/274), on 25
September 1998.  Specifically, the TRIPS Council is requested to examine and report on the
intellectual property issues arising in connectio n with electronic commerce.  The issues to be
examined shall include (the implication of electronic commerce for) (a) the protection and
enforcement of copyright and related rights, (b) the protection and enforcement of trademarks and (c)
new technologies and access to technology.
2. In order to assist WTO Members in their deliberations, the WTO Secretariat prepared a
general note discussing the relationship between WTO Agreements and global electronic commerce
(WT/GC/W/90 of 14 July 1998).  A more specific Background Note on intellectual property rightswas prepared by the WTO Secretariat for the TRIPS Council (IP/C/W/128 of 10 February 1999).  In
addition, a Memorandum on "Intellectual Property and Electronic Commerce", dated 31 July 1998,
was prepared by the Director General of WIPO.
II. GENERAL OBSERVATIONS
3. It has to be stated that the traditional objectives of the TRIPS Agreement, established for the
off-line world where intellectual property is embedded on a carrier, such as paper, tape, or CD, remain
valid, in principle, also for the on-line environment.   The TRIPS language is sufficiently technology
neutral to cover the off-line as well as the on-line world.  In this respect, it is crucial that the TRIPSAgreement is properly and timely implemented by all WTO Members to ensure the introduction by
WTO Members of the minimum standards contained in it.
4. However, new technological developments allow, for example, for the transmission of
intellectual property over communication networks, such as the Internet, without being embedded ona carrier.  Intellectual property may also be the subject of contracts concluded in the framework ofIP/C/W/140
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electronic commerce.  It, therefore, has to be examined whether these new developments may require
certain adjustments to existing rights or even the creation of new rights.
5. In that respect, several preliminary observations of a more general nature have to be borne in
mind when addressing the possible impact of new technological developments on the present system
for the protection of intellectual property rights:
- Do shortcomings exist in the present system for the protection of intellectual property
rights as laid down in the TRIPS Agreement and the relevant international
conventions as a result from the new technological developments and the emergence
of electronic commerce?
- If so, do these shortcomings relate purely to issues related to the protection of
intellectual property rights or do they address also questions of a more horizontalnature?
- Are these shortcomings already being addressed? If not, in which fora and under
which international legal instruments should such shortcomings specifically related to
the protection of intellectual property rights be addressed?
- How should identified needs be addressed? Is it enough to clarify the existing
framework for the protection of intellectual property rights or is a revision of certain
provisions contained in international conventions or the TRIPS Agreement needed?
III. SPECIFIC ISSUES
A. QUESTIONS RESULTING FROM NATIONAL DIFFERENCES IN STANDARDS OF PROTECTION AND
THE TERRITORIALITY BASED PROTECTION AND REGISTRATION SYSTEM FOR CERTAIN RIGHTS ;
QUESTIONS RELATED TO THE CHOICE OF LAW
6. There may be a need to examine the impact of the global character of communication systems
on national differences in standards of protection and on the territoriality based protection and
registration system for certain rights, including the territoriality based exceptions to certain rights.
While this is, in principle, relevant for all intellectual property rights, one can say that some areas of
intellectual property rights, in the limited experience we have to date, have shown more electronic
commerce specific problems than others.  Problems in this respect might, for example, occur in the
industrial property rights sector, i.e.  geographical indications, industrial designs and models,
layout-designs of integrated circuits, patents and trade secrets, which generally have to be registeredwith national authorities.  However, some of the subject-matter protected by these rights can be traded
electronically.
7. In the trademark sector, open questions relate to the impact of a global marketplace on the
territoriality based protection and registration system of trademarks, such as possible infringement oftrademarks through their use on the Internet and pr otection of well-known trademarks.  It has to be
recognised that WIPO is currently preparing a study which attempts to give some answers to these
questions.  However, any discussion in this area is of a fundamental nature and might result in specific
changes to adapt the present territorially based syst em to the requirements of the new technologies.
Following the outcome of the WIPO study, the TR IPS Council should further analyse how to respond
to these specific problems in the framework of the TRIPS Agreement.
8. Generally, under the TRIPS Agreement, WTO Members are requested to grant the minimum
protection to these rights.  WTO Members are free to determine the appropriate method ofIP/C/W/140
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implementing the provisions of the TRIPS Agreement.  Given that the TRIPS Agreement contains
only minimum standards and does not aim at harm onising all aspects related to the protection of
intellectual property rights, WTO Members may go beyond these standards.  This situation may lead
to national differences not only in the way protection is achieved, but also in the degree of protection.
Consequently, differences in the national protection systems are inevitable.  However, this effect isrecognised by the TRIPS Agreement (cf.  Article 1, paragraph 1) which allows WTO Members to
accord to right holders a higher degree of protection than that which they are obliged to accord under
the TRIPS Agreement.  This is not limited to the industrial property rights sector.  In the copyright
area, for example, some WTO Members accord to right-holders a term of protection beyond the
minimum term required under the TRIPS Agreement.  However, it has to be ensured that industrial
property rights continue to enjoy the same protectio n in the on-line world which they enjoy in the off-
line world.
9. Closely related to this are questions concerning the applicable law, the choice of law and the
proper forum to grant relief from infringements (including the applicable rules of procedure) which
are relevant, notably, in the areas of liability and enforcement (where questions regarding the
admissibility of "digital evidence" and availability of remedies are of importance).  The main questionremains whether or not the TRIPS Agreement can and should address these questions.  It has to be
borne in mind that the TRIPS Agreement was built on existing international conventions which hardly
address these issues.  Thus, the TRIPS Agreement is mainly silent on questions related to the
applicable law and the choice of law.  These proble ms also relate to fundamental questions of private
international law where specific conflict rules have already been developed in areas such as contractlaw, torts law, family law, etc.
10. However, the questions raised in this section dealing with the impact of global
communication networks and the basic territoriality principle of the protection of intellectual property
rights are currently being examined under the WIPO sub-programme on Intellectual Property Rightsbeyond Territoriality.  Progress in this area should be monitored in order to determine, at the
appropriate time, whether or not the TRIPS Agreement needs to be adapted aiming at a greater degree
of harmonisation between the various systems in th e WTO Members without leading to a lower level
of protection.
B. NEED FOR ADDITIONAL PROTECTION
11. On certain issues, various shortcomings in the present system can be identified with regard to
the substantive protection of right holders.  In the past, the relevant international conventions on
intellectual property rights were regularly updated to reflect new technological developments.  This isnotably the case in the area of copyright and relate d rights where, for example, the Berne Convention
has undergone several revisions to take into account new forms of transmissions of copyright
protected works.
12. A number of new technological developments resulting from the digital environment and the
emerging Information Society were addressed in two recent WIPO treaties (the WIPO Copyright
Treaty and the WIPO Performances and Phonograms Treaty) adopted in December 1996.  Theyrepresent a major step forward in recognising the need for protection for authors, performers and
phonogram producers in the digital environment.  It is essential that these treaties are ratified and
implemented as soon as possible.  At an appropriate time, one might also consider incorporating these
treaties in the TRIPS Agreement to make their im plementation subject to the review by the TRIPS
Council.
13. WIPO is currently also examining outstanding issues in the copyright area resulting from new
technological developments, such as an enhanced protection for audio-visual performances, aIP/C/W/140
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sui generis  protection for databases and rights for broadcasting organisations.  The impact of the
ongoing work in WIPO on the current TRIPS Agreement will need to be analysed with a view to
possibly adjusting the TRIPS Agreement, at the appr opriate time, in order to reflect international
consensus building in other fora, bearing in mind that duplication of work should be avoided.
C. CLARIFICATION OF CERTAIN BASIC CONCEPTS
14. Some further issues resulting from new technological developments can be identified which
may have an impact on the existing system of the protection of copyright and related rights.  They
encompass fundamental principles such as the definition of publication, of the country of origin and
of the right holder, or the treatment of transient copies.  These questions are, to some extent, being
dealt with under the WIPO sub-program on Intellectual Property Rights beyond Territoriality and
appear quite important to provide for adequate protection of creators in the on-line world.  Currently,WTO Members might adapt different ways and solutions to solve these issues.  This might lead to
differences in the various national systems.
15. The question arises whether or not the TRIPS Agreement should address these items.  While
it has to be recognised that there might be need for additional clarification and adaptation of theTRIPS Agreement and the underlying conventions, notably the Berne Convention, there might exist
various ways to agree on such clarifications without necessarily revising the TRIPS Agreement or the
Berne Convention.  However, in this respect, the observations made in paragraph 8 remain valid also
for the questions raised here.
D. I
NTERNET DOMAIN NAMES
16. With the emergence of the Internet, additional problems arose with regard to the governance
of the Internet and the Internet Domain Name Syst em.  Work in the Internet Coporation for Assigned
Names and Numbers (ICANN) has made substantial progress.  In the U.S.  White Paper of
5 June 1998, WIPO was requested to examine the questions related to Internet DNS and trademarksand to make appropriate recommendations.  Discussions in WIPO concentrate on the relationship
between these domain names and trademarks and how potential conflicts can be solved.  These
discussions are being closely monitored.  The EU has just submitted its position on this to WIPO.
However, there might be need to examine to what extent the TRIPS Agreement provides for sufficient
protection for trademarks used as domain names and some clarification in this respect might be
desirable.
E. D
ISSEMINATION OF PROTECTED SUBJECT -MATTER
17. Communication networks, such as the Internet, allow more and more for new systems and
new formats for dissemination of protected subject-matter, notably in the area of copyright and related
rights, where music or text could be transferred not only in its physical form, but also in its digitised
form.  In order to foster electronic commerce, secure transactions are crucial for the consumer and thesupplier.  Encryption, digital signatures and other means to protect the various interests, such as
privacy, confidentiality, authenticity and intellectual property, are in the process of being developed.
These are not specific issues related to the protection of intellectual property rights, but of a more
general and horizontal nature, and should consequently be dealt with in the appropriate fora or be left
to industry.
F. N
EW TECHNOLOGIES AND ACCESS TO TECHNOLOGY
18. The TRIPS Agreement contains a number of provisions which aim at the promotion of the
development of new technologies as well as the dissemination and transfer of such technologies.
While this basic objective is contained in Article 7 of the TRIPS Agreement, it has to be recognisedIP/C/W/140
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that the protection of intellectual property rights represents the basis for the development of new
technologies by technology suppliers and thus contributes to foreign direct investment, joint ventures
and licensing of technology to those who want to use technology.  Several provisions of the TRIPS
Agreement explicitly address this objective from the users' point of view, e.g.  the disclosure
requirement in Article 29, paragraph 1, for patents or the provisions dealing with anti-competitivepractices in contractual licences (Article 40).  Furthermore, Article 66, paragraph 2, makes a specific
reference to provision of incentives for technology transfer to least-developed countries.  The current
TRIPS language is not limited to a specific kind of technology and, therefore, appears to be equally
applicable to new technologies.  Communication networks might even contribute further to facilitate
technology transfer e.g.  by allowing access to info rmation in the patent area from everywhere in the
world.
IV. CONCLUSION
In summary, the following observations can be made:
- The TRIPS Agreement, together with other international conventions, already
provides for a sound basis for the protection of intellectual property rights in the off-line world and the on-line environment, which could be built upon, if necessary.
- In certain areas, shortcomings exist in the present system for the protection of
intellectual property rights.
- In other areas, it has to be recognised that the TRIPS Agreement does only provide
for minimum standards and does not aim at  harmonising all aspects of intellectual
property rights.  Consequently, differences in the national protection systems appear
to be inevitable.
- Some of the shortcomings might relate to issues which could go beyond those purely
related to the protection of intellectual property rights and, therefore, might have to be
addressed in a more horizontal manner.
- Work is already well under way in other international fora, notably WIPO.  These
developments will be closely followed.
- At an appropriate time in the future, and taking into account work done in other fora,
it might be desirable to adapt or clarify the provisions of the TRIPS Agreement to
reflect new technological developments in order to help foster a legal environment
where electronic commerce can develop to the benefit of all participants.
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