WORLD TRADE
ORGANIZATIONIP/C/18
30 July 1999
(99-3254)
Council for Trade-Related Aspects
of Intellectual Property Rights
WORK PROGRAMME ON ELECTRONIC COMMERCE
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 in clude:  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/241, 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 inDecember, 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 on10 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 referenc e to the documents referred to in paragraph 2
above.  Rather, it seeks to summarize the work done.  After indicating some general points that arosein 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.
                                                     
1 To be circulated.IP/C/18
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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 andpredictable 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 anduse 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 ofintellectual 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 theinternational level.
Copyright and related rights
5. The Secretariat background note (IP/C/W/128) de scribed a number of issues arising out of
electronic commerce in connection with copyright and related rights, in the light of the changes thatdigital 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 theycould 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 Trea ty and the WIPO Performances and Phonograms
Treaty, which, as stated in their Preambles, aim to respond to the profound impact of the developmentand convergence of information and communicati on 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 el ectronic management systems and the management of
copyright and related rights in the digital environment.
Protection of trademarks
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 latterIP/C/18
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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://wi po2.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 theInternet 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 afunctioning 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 globalnetwork 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 manageme nt 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 propertyrights 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, suchissues 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 undisclosedinformation.IP/C/18
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Final remarks
12. Members of the Council are of the view that th e 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, asindicated 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 intellec tual 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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