JOB/GC/113  
JOB/IP/19  
 
15 December 2016  
(16-6860) Page: 1/2 
General Council  
Council for Trade -Related Aspects of  
Intellectual Property Ri ghts  Original: English  
 
  ELECTRONIC COMMERCE AND COPYRIGHT  
 
The following communication, dated 12 December 2016, is being circulated at the request of the 
delegation of Brazil . 
 
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Taking into ac count the Declaration on Global Electronic Commerce (WT/MIN(98)/DEC/2),  of 1998, 
on the establishment of a comprehensive work programme to  examine all trade -related issues 
relating to global  electronic commerce, including those issues identified  by Members, General 
Council discussions, TRIPS Council  relevant debates, and the Ministerial Decision of 19  December 
2015, deciding to continue the Work  Programme, it is important to highlight three areas of  
possible convergence for WTO on the implementation of  copyright rules and the digital 
environment. The  development of national co pyright systems in the  digital environment would 
greatly benefit from a basis  of shared understandings among member states on (a)  transparency; 
(b) balance of rights and obligations;  and (c) territoriality of copyright.  
1  TRANSPARENCY  
1.1.  Since the Declaration  on Global Electronic Commerce, innovative business models developed 
through the  progress of new technologies created new forms of  management of copyright. A 
system based on the trade  of "intellectual goods " in physical format (CDs,  Books, etc.) is 
increasin gly being transported and  transformed in the digital environment. New business  models 
are increasingly based on providing access to  digital content through streaming of data. In 2015,  
revenue from e -trade surpassed physical trade for the  first time in the music industry. In this new 
context,  authors and other rightholders complain of lack of  remuneration for their rights in the 
digital  environment, producers and cultural industry complain  of a "value gap " in the amount due 
for their rights.  
1.2.  Digital platform s affirm considerable part of their  revenues is directed to the payment of 
rights. As  policy makers, national authorities face a complex  system of many rightholders and 
users with, sometimes,  conflicting interests.  As a first possibl e decision on the manag ement of 
copyright towards the fair payment for authors and  performers , WTO Members could stress the 
increased  importance of the principle of transparency in the  remuneration of copyright and related 
rights in the  digital environment.  
2  BALANCE OF RIGHTS AN D OBLIGATIONS  
2.1.  In order to maintain  an appropriate balance between the interests of rightholders and users 
of protected  works, copyright laws allow certain limitations on  economic rights, that is, cases in 
which protected  works may be used without the author ization of the  rightholder and with or 
without payment of  compensation. In the Berne Convention and the TRIPS  agreement, a three 
step test was included to determine  the scope of exceptions and limitations to copyright.  
Exceptions and limitations must (1) b e restricted to  "certain special cases ", (2) "not conflict with a  
normal exploitation of the work " and (3) "not unreasonably prejudice the legitimate interests of 
the author ". National copyright systems are trying to  expand and update their list of excepti ons 
and limitations in ord er to keep pace with changes in technology and with new uses of intellectual 
works.  JOB/GC/113 • JOB/IP/19  
 
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  2.2.  In this direction, there is a growing concern that obligations related to the inviolability of  
technological protection measures might exclude the  possibility of enjoying exceptions and 
limitations in  the digital environment. These technologies are  essential for the normal exploitation 
of the work in  e-trade and its circumvention could be understood as a  breach of international 
obligations (step 2 o f the three step test).  
2.3.  As a second collective initiative to improve management of copyright in the digital 
environment, WTO Members should unequivocally assert the principle that exceptions and 
limitations available in physical formats should also be made  available in the digital  environment.  
3  TERRITORIALITY OF CO PYRIGHT  
3.1.  The digital environm ent is borderless by its nature while the copyright system is based on 
national laws.  These different characteristics make more challenging  the task of implementing the 
shared objective of  protecting authors, performers and other copyright  holders in the digital 
environment. Remuneration of  intellectual rights might not respect the national  law, since 
payments can be made through international  credit cards and therefore c ircumvent the law in the  
country of access to the creative content. In order to  allow for the protection of authors, Member 
states  should make their best efforts to make their national  copyright legislation applicable to 
trade relations  where content is ac cessed from within their national  borders.  
3.2.  A third collective init iative that can be envisaged to improve the business environment in the 
electronic  copyright trade is reaffirming the territoriality of  copyright in the digital environment as 
a principle of  the international trading system.   
3.3.  These three principles should be understood as  building blocks of a sound business 
environment for  international trad e of intellectual goods. Shared understandings on these basic 
features have the  possibility of increasi ng international trade of goods  and services, enhancing the 
international flow of  information and allow for the fair payment of authors  in deve loping and 
developed countries.  
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